Document:

Exhibit
10.2

EXECUTION
COPY

	
   

  
	
   

  
	
   

  
	
  AMENDED AND RESTATED

  
	
   

  
	
  GUARANTEE AND
  COLLATERAL AGREEMENT

  
	
   

  
	
  made by

  
	
   

  
	
  SIX FLAGS
  OPERATIONS INC.,

  
	
   

  
	
  SIX FLAGS THEME
  PARKS INC.

  
	
   

  
	
  and certain
  Subsidiaries

  
	
   

  
	
  in favor of

  
	
   

  
	
  JPMORGAN CHASE
  BANK, N.A.,

  
	
   

  
	
  as
  Administrative Agent

  
	
   

  
	
  Dated as of May
  25, 2007

  
	
   

  
	
   

  

 

TABLE OF CONTENTS

	
   

  	
   

  	
  Page

  
	
  SECTION 1.

  	
  DEFINED TERMS

  	
  2

  
	
   

  	
   

  	
   

  
	
  1.1

  	
  Definitions

  	
  2

  
	
  1.2

  	
  Other Definitional Provisions

  	
  6

  
	
   

  	
   

  	
   

  
	
  SECTION 2.

  	
  GUARANTEE

  	
  6

  
	
   

  	
   

  	
   

  
	
  2.1

  	
  Guarantee

  	
  6

  
	
  2.2

  	
  Right of Contribution

  	
  7

  
	
  2.3

  	
  No Subrogation

  	
  7

  
	
  2.4

  	
  Amendments, etc. with respect to the Borrower
  Obligations

  	
  7

  
	
  2.5

  	
  Guarantee Absolute and Unconditional

  	
  8

  
	
  2.6

  	
  Reinstatement

  	
  8

  
	
  2.7

  	
  Payments

  	
  9

  
	
   

  	
   

  	
   

  
	
  SECTION 3.

  	
  GRANT OF SECURITY INTEREST

  	
  9

  
	
   

  	
   

  	
   

  
	
  SECTION 4.

  	
  REPRESENTATIONS AND WARRANTIES

  	
  10

  
	
   

  	
   

  	
   

  
	
  4.1

  	
  Investment Property

  	
  10

  
	
  4.2

  	
  Intellectual Property

  	
  10

  
	
  4.3

  	
  Commercial Tort Claims

  	
  11

  
	
  4.4

  	
  Additional Representations and Warranties

  	
  11

  
	
   

  	
   

  	
   

  
	
  SECTION 5.

  	
  COVENANTS

  	
  12

  
	
   

  	
   

  	
   

  
	
  5.1

  	
  Delivery of Pledged Securities

  	
  12

  
	
  5.2

  	
  Intellectual Property

  	
  13

  
	
  5.3

  	
  Additional Covenants

  	
  14

  
	
  5.4

  	
  Other Actions

  	
  16

  
	
   

  	
   

  	
   

  
	
  SECTION 6.

  	
  REMEDIAL PROVISIONS

  	
  17

  
	
   

  	
   

  	
   

  
	
  6.1

  	
  Registration in Nominee Name; Denominations

  	
  17

  
	
  6.2

  	
  Voting Rights; Dividends and Interest

  	
  17

  
	
  6.3

  	
  Additional Remedies upon Default

  	
  18

  
	
  6.4

  	
  Application of Proceeds

  	
  20

  
	
  6.5

  	
  Waiver; Deficiency

  	
  20

  
	
  6.6

  	
  Subordination

  	
  20

  
	
  6.7

  	
  Registration Rights

  	
  21

  
	
   

  	
   

  	
   

  
	
  SECTION 7.

  	
  THE ADMINISTRATIVE AGENT

  	
  22

  

 

 i
 

 

	
  7.1

  	
  Administrative Agent’s Appointment as
  Attorney-in-Fact, etc

  	
  22

  
	
  7.2

  	
  Duty of Administrative Agent

  	
  23

  
	
  7.3

  	
  Execution of Financing Statements

  	
  23

  
	
  7.4

  	
  Authority of Administrative Agent

  	
  24

  
	
   

  	
   

  	
   

  
	
  SECTION 8.

  	
  MISCELLANEOUS

  	
  24

  
	
   

  	
   

  	
   

  
	
  8.1

  	
  Amendments in Writing

  	
  24

  
	
  8.2

  	
  Notices

  	
  24

  
	
  8.3

  	
  No Waiver by Course of Conduct; Cumulative Remedies

  	
  24

  
	
  8.4

  	
  Enforcement Expenses; Indemnification

  	
  24

  
	
  8.5

  	
  Successors and Assigns

  	
  25

  
	
  8.6

  	
  Set-Off

  	
  25

  
	
  8.7

  	
  Counterparts

  	
  26

  
	
  8.8

  	
  Severability

  	
  26

  
	
  8.9

  	
  Section Headings

  	
  26

  
	
  8.10

  	
  Integration

  	
  26

  
	
  8.11

  	
  GOVERNING LAW

  	
  26

  
	
  8.12

  	
  Submission To Jurisdiction; Waivers

  	
  26

  
	
  8.13

  	
  Acknowledgments

  	
  27

  
	
  8.14

  	
  Additional Grantors

  	
  27

  
	
  8.15

  	
  Termination or Releases

  	
  27

  
	
  8.16

  	
  WAIVER OF JURY TRIAL

  	
  28

  

 

 ii
 

SCHEDULES

	
  Schedule 1

  	
   

  	
  Notice Addresses

  
	
  Schedule 2

  	
   

  	
  Investment Property

  
	
  Schedule 3

  	
   

  	
  Perfection Matters

  
	
  Schedule 4

  	
   

  	
  Jurisdictions of Organization and Chief Executive
  Offices

  
	
  Schedule 5

  	
   

  	
  Intellectual Property

  
	
  Schedule 6

  	
   

  	
  Material Trademarks

  

 

 iii

AMENDED AND RESTATED GUARANTEE AND COLLATERAL
AGREEMENT, dated as of May 25, 2007 made by each of the signatories hereto
(together with any other entity that may become a party hereto as provided
herein, the “Grantors”), in favor of JPMORGAN CHASE BANK, N.A., as
Administrative Agent (in such capacity, the “Administrative Agent”) for
the banks and other financial institutions or entities (the “Lenders”)
from time to time parties to the Second Amended and Restated Credit Agreement,
dated as of May 25, 2007 (as amended, supplemented or otherwise modified from
time to time, the “Credit Agreement”), among SIX FLAGS, INC., a Delaware
corporation (“Parent”), SIX FLAGS OPERATIONS INC., a Delaware
corporation (“Holdings”), SIX FLAGS THEME PARKS INC., a Delaware corporation
(the “Primary Borrower”), each FOREIGN SUBSIDIARY BORROWER (together
with the Primary Borrower, the “Borrowers”), the several banks and other
financial institutions or entities from time to time parties thereto, CREDIT
SUISSE, CAYMAN ISLANDS BRANCH and LEHMAN COMMERCIAL PAPER INC., as
co-syndication agents, and the Administrative Agent.

W
I  T  N  E  S  S  E  T  H:

WHEREAS, the Borrowers are members of an affiliated
group of companies that includes each other Grantor;

WHEREAS, the proceeds of the extensions of credit
under the Credit Agreement will be used in part to enable the Borrowers to make
valuable transfers to one or more of the other Grantors in connection with the
operation of their respective businesses;

WHEREAS, the Borrowers and the other Grantors are
engaged in related businesses, and each Grantor will derive substantial direct
and indirect benefit from the making of the extensions of credit under the
Credit Agreement;

WHEREAS, it is a condition precedent to the obligation
of the Lenders to make or continue their respective extensions of credit to the
Borrowers under the Credit Agreement that the Grantors shall have executed and
delivered this Agreement to the Administrative Agent for the ratable benefit of
the Lenders;

WHEREAS, the Primary Borrower and the other Grantors
desire to amend and restate that certain Guarantee and Collateral Agreement
dated November 5, 1999 (as amended, supplemented or otherwise modified from
time to time, the “Existing Guarantee and Collateral Agreement”) among
the Primary Borrower and certain of the Grantors;

WHEREAS, the parties hereto desire that the Parent be
released of any of its obligations under the Existing Guarantee and Collateral
Agreement; and

WHEREAS, it is intended by the Primary Borrower and
the other Grantors that all other Guarantees issued, security interests granted
and Liens perfected under the Existing Guarantee and Collateral Agreement are
ratified and confirmed to the extent provided herein;

NOW, THEREFORE, in consideration of the premises and
to induce the Administrative Agent and the Lenders to enter into the Credit
Agreement and to induce the Lenders to make their respective extensions of
credit to the Borrowers thereunder, each Grantor hereby agrees with the
Administrative Agent, for the ratable benefit of the Lenders, as follows:

SECTION 1.  DEFINED TERMS

1.1           Definitions.  (a) 
Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement,
and the following terms are used herein as defined in the New York UCC:  Accounts, Certificated Security, Chattel
Paper, Commercial Tort Claims, Documents, Equipment, Farm Products, General
Intangibles, Instruments, Inventory, Letter-of-Credit Rights and Supporting
Obligations; provided that none of the foregoing UCC terms shall be
deemed to include Excluded Assets.

(b)           The following terms
shall have the following meanings:

“Agreement”: 
this Guarantee and Collateral Agreement, as the same may be amended,
supplemented or otherwise modified from time to time.

“Borrower Obligations”:  the collective unpaid principal of and
interest on (including, without limitation, interest accruing at the then
applicable rate provided in the Credit Agreement after the maturity of the
Loans and Reimbursement Obligations and interest accruing at the then
applicable rate provided in the Credit Agreement after the filing of any
petition in bankruptcy, or the commencement of any insolvency, reorganization
or like proceeding, relating to any Borrower, whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding) the Loans,
the Reimbursement Obligations and all other obligations and liabilities of any
Borrower to the Administrative Agent or to any Lender (or, in the case of
Specified Hedge Agreements, any Qualified Counterparty), whether direct or
indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection with, this
Agreement, any other Loan Document, the Letters of Credit, any Specified Hedge
Agreement or any other document made, delivered or given by any Loan Party in
connection herewith or therewith, whether on account of principal, interest,
reimbursement obligations, fees, indemnities, costs, expenses (including,
without limitation, all fees, charges and disbursements of counsel to the
Administrative Agent or to any Lender that are required to be paid by any
Borrower pursuant hereto) or otherwise.

“Collateral”: 
as defined in Section 3.

“Copyrights”: 
(i) all works of authorship and copyrights arising under the laws of the
United States, any group of countries, other country or any political
subdivision thereof, whether registered or unregistered and whether published
or unpublished, all registrations thereof, and all applications in connection
therewith, including, without limitation, all registrations and applications in
the United States Copyright Office, including, without limitation, any of the
foregoing listed in Schedule 5, and (ii) the right to obtain all renewals
thereof.

“Copyright Licenses”:  any written or oral agreement naming any
Grantor as licensor or licensee, granting any right under any Copyright,
including, without limitation, the grant of rights to manufacture, distribute,
exploit and sell materials derived from any Copyright, including, without
limitation, any of the foregoing listed in Schedule 5.

 2
 

“Deposit Account”:  as defined in the Uniform Commercial Code of
any applicable jurisdiction and, in any event, including, without limitation,
any demand, time, savings, passbook or like account maintained with a
depositary institution.

“Excluded Assets”:  the collective reference to (i) all Capital
Stock owned by any Grantor in (A) Flags Beverages, Inc., Fiesta Texas
Hospitality LLC, Spring Beverage Holding Corp. and other Subsidiaries, if any,
which have no material assets other than a liquor license and (B) HWP
Development LLC and any other entity formed pursuant to the Great Escape
Agreements, (ii) any General Intangible representing a Grantor’s right to
receive payment in respect of any intercompany loan made by such Grantor to
Parent or to any of its Subsidiaries, which intercompany loan has been
outstanding for less than three months, (iii) any Trademark License with Warner
Bros. or its affiliates that expressly prohibits the granting of a security
interest therein (including but not limited to (A) those licenses contemplated by the German WB
Acquisition, and (B) the Amended and Restated License Agreement #5854-WB/DC
dated as of April 1, 1998 with the Primary Borrower and the License Agreement
#8898-TOON dated January 1, 1998 between the Primary Borrower and Warner Bros.
Consumer Products Division (Cartoon Network), as any of the foregoing
may be amended from time to time), except, in each case, to the extent that
such term in such license providing for such prohibition is ineffective under
applicable law, (iv) any other Trademark License that expressly prohibits the
granting of a security interest therein, except, in each case, to the extent
that such term in such license providing for such prohibition is ineffective
under applicable law, (v) that portion of the Capital Stock of any Excluded
Foreign Subsidiary that is in excess of 65% of the total outstanding Capital
Stock of such Excluded Foreign Subsidiary, (vi) the Capital Stock of a
Subsidiary acquired after the date hereof to the extent that Section 8.6(f) of
the Credit Agreement does not require the granting of a security interest
therein and (vii) the Property acquired after the date hereof of any Grantor to
the extent that Section 8.6(a)(z) of the Credit Agreement does not require the
granting of a security interest therein and (viii) the proceeds of any Asset
Sale or Recovery Event from time to time, in an aggregate amount not to exceed
$500,000,000, to the extent such proceeds are used to make the Restricted
Payments contemplated by Sections 5.5(b)(ii) and 9.5(c)(v) of the Credit
Agreement.

“Foreign Subsidiary”:  any Subsidiary organized under the laws of
any jurisdiction outside the United States of America.

“Foreign Subsidiary Voting Stock”:  the voting Capital Stock of any Foreign
Subsidiary.

“Guarantor Obligations”:  with respect to any Guarantor, all
obligations and liabilities of such Guarantor which may arise under or in
connection with this Agreement (including, without limitation, Section 2) or
any other Loan Document, or any Specified Hedge Agreements to which such
Guarantor is a party, in each case whether on account of guarantee obligations,
reimbursement obligations, fees, indemnities, costs, expenses or otherwise
(including, without limitation, all fees and disbursements of counsel to the
Administrative Agent or to the Lenders that are required to be paid by such
Guarantor pursuant to the terms of this Agreement or any other Loan Document to
which such Guarantor is a party).

 3
 

“Guarantors”: 
the collective reference to each Grantor other than the Primary
Borrower; provided, however, that with respect to Borrower
Obligations of Foreign Subsidiary Borrowers, “Guarantors” shall mean the
collective reference to each Grantor (including the Primary Borrower).

“Infringement”:  infringement, misappropriation, dilution or
other impairment or violation.

“Intellectual Property”:  the collective reference to all rights,
priorities and privileges relating to intellectual property, whether arising
under United States, multinational or foreign laws or otherwise, including,
without limitation, the Copyrights, the Copyright Licenses, the Patents, the Patent
Licenses, the Trademarks, and the Trademark Licenses, and all rights to sue at
law or in equity for any Infringement thereof, including the right to receive
all proceeds and damages therefrom; provided that Intellectual Property
excludes any Excluded Assets.

“Intercompany Note”:  any promissory note evidencing loans made by
any Grantor to Parent or any of its Subsidiaries.

“Investment Property”:  the collective reference to (i) all “investment
property” as such term is defined in Section 9-102(a)(49) of the New York UCC
(other than any Foreign Subsidiary Voting Stock excluded from the definition of
“Pledged Stock”) and (ii) whether or not constituting “investment property” as
so defined, all Pledged Notes and all Pledged Stock; provided that
Investment Property excludes any Excluded Assets.

“Issuers”: 
the collective reference to each issuer of any Investment Property.

“Material Trademarks”:  the Trademarks listed in Schedule 6 hereto,
as such schedule may be amended, supplemented or otherwise modified from time
to time.

“New York UCC”: 
the Uniform Commercial Code as from time to time in effect in the State
of New York.

“Obligations”: 
(i) in the case of the Borrowers, the Borrower Obligations, and (ii) in
the case of each Guarantor, its Guarantor Obligations.

“Patents”: 
(i) all letters patent of the United States, any group of countries,
other country or any political subdivision thereof, all reissues and extensions
thereof, (ii) all applications for letters patent of the United States or any
group of countries, other country or any political subdivision thereof, and all
reissues, divisions, extensions, continuations and continuations-in-part
thereof, similar legal protections related thereto, or rights to obtain the
foregoing, including, without limitation, any of the foregoing listed in
Schedule 5.

“Patent License”:  any written or oral agreement providing for
the grant by or to any Grantor of any right to make, have made, manufacture,
use or sell (directly or indirectly), offer to sell, import or dispose of any
invention or practice any method covered in whole or in part by a Patent,
including, without limitation, any of the foregoing listed in Schedule 5.

 4
 

“Pledged Notes”:  all promissory notes listed on Schedule 2,
all Intercompany Notes at any time issued to any Grantor and all other
promissory notes issued to or held by any Grantor (other than promissory notes
issued in connection with extensions of trade credit by any Grantor in the
ordinary course of business), excluding any Excluded Assets.

“Pledged Securities”:  means any Instruments, Certificated
Securities, Chattel Paper and Investment Property.

“Pledged Stock”:  the shares of Capital Stock listed on
Schedule 2, together with any other shares, stock certificates, options,
interests or rights of any nature whatsoever in respect of the Capital Stock of
any Person that may be issued or granted to, or held by, any Grantor while this
Agreement is in effect, excluding any Excluded Assets; provided that in
no event shall more than 65% of the total outstanding Foreign Subsidiary Voting
Stock of any Foreign Subsidiary be required to be pledged hereunder.

“Proceeds”: 
all “proceeds” as such term is defined in Section 9-102(a)(64) of the
New York UCC and, in any event, shall include, without limitation, all dividends
or other income from the Investment Property, collections thereon or
distributions or payments with respect thereto.

“Receivable”: 
any right to payment for goods sold or leased or for services rendered,
whether or not such right is evidenced by an Instrument or Chattel Paper and
whether or not it has been earned by performance (including, without
limitation, any Account).

“Registered Intellectual Property”:  all registrations and applications for
registration of Trademarks, Patents and Copyrights.

“Securities Act”:  the Securities Act of 1933, as amended.

“Subsidiary Guarantor”:  each Grantor other than Holdings and the
Primary Borrower.

“Trademarks”: 
(i) all trademarks, trade names, brand names, corporate names, company
names, business names, fictitious business names, trade styles, trade dress,
domain names, service marks, logos and other source or business identifiers,
and all goodwill associated therewith or symbolized thereby, now existing or
hereafter adopted or acquired, all registrations thereof, and all applications
in connection therewith, whether in the United States Patent and Trademark
Office or in any similar office or agency of the United States, any State
thereof or any group of countries, other country or any political subdivision thereof,
or otherwise, and all common-law rights related thereto, including, without
limitation, any of the foregoing listed in Schedule 5, and (ii) the right to
obtain all renewals thereof.

“Trademark License”:  any written or oral agreement providing for the
grant by or to any Grantor of any right to use any Trademark, including,
without limitation, any of the foregoing listed in Schedule 5, but excluding
the Excluded Assets.

 5
 

“Vehicles”: 
all cars, trucks, trailers, construction and earth moving equipment and
other vehicles covered by a certificate of title law of any state and all tires
and other appurtenances to any of the foregoing.

1.2           Other Definitional
Provisions.  (a)  The words “hereof,” “herein”, “hereto” and “hereunder”
and words of similar import when used in this Agreement shall refer to this
Agreement as a whole as amended from time to time and not to any particular
provision of this Agreement, and Section and Schedule references are to this
Agreement unless otherwise specified.

(b)           The meanings given to
terms defined herein shall be equally applicable to both the singular and
plural forms of such terms.

(c)           Where the context
requires, terms relating to the Collateral or any part thereof, when used in
relation to a Grantor, shall refer to such Grantor’s Collateral or the relevant
part thereof.

SECTION 2.  GUARANTEE

2.1           Guarantee.  (a) 
Each of the Guarantors hereby, jointly and severally, unconditionally
and irrevocably, guarantees to the Administrative Agent, for the ratable
benefit of the Lenders, and their respective successors, indorsees, transferees
and assigns, the prompt and complete payment and performance by the Borrowers
when due (whether at the stated maturity, by acceleration or otherwise) of the
Borrower Obligations.

(b)           Anything herein or in
any other Loan Document to the contrary notwithstanding, the maximum liability
of each Guarantor hereunder and under the other Security Documents and the
maximum amount which may be secured by the Liens granted with respect to the
Collateral hereunder and the Collateral under the other Security Documents, in
each case, shall in no event exceed the amount which can be guaranteed by such
Guarantor, or secured by assets of such Guarantor, under applicable federal and
state laws relating to the insolvency of debtors (after giving effect to the
right of contribution established in Section 2.2).

(c)           Each Guarantor agrees
that the Borrower Obligations may at any time and from time to time exceed the
amount of the liability of such Guarantor hereunder without impairing the
guarantee contained in this Section 2 or affecting the rights and remedies of
the Administrative Agent or any Lender hereunder.

(d)           The guarantee contained
in this Section 2 shall remain in full force and effect until all the Borrower
Obligations and the obligations of each Guarantor under the guarantee contained
in this Section 2 shall have been satisfied by payment in full, no Letter of
Credit shall be outstanding and the Commitments shall be terminated,
notwithstanding that from time to time the Borrowers may be free from any
Obligations.

(e)           No payment made by any
Borrower, any of the Guarantors, any other guarantor or any other Person or
received or collected by the Administrative Agent or any Lender from any
Borrower, any of the Guarantors, any other guarantor or any other Person by
virtue of any action or proceeding or any set-off or appropriation or
application at any time or from time to time in reduction of or in payment of
the Borrower Obligations shall be deemed to modify, reduce, release or
otherwise affect the liability of any Guarantor hereunder which shall,

 6
 

notwithstanding any such payment (other than any
payment made by such Guarantor in respect of the Borrower Obligations or any
payment received or collected from such Guarantor in respect of the Borrower
Obligations), remain liable for the Borrower Obligations up to the maximum
liability of such Guarantor hereunder until the Borrower Obligations are paid
in full, no Letter of Credit shall be outstanding and the Commitments are
terminated.

2.2           Right of
Contribution.  Each Subsidiary
Guarantor hereby agrees that to the extent that a Subsidiary Guarantor shall
have paid more than its proportionate share of any payment made hereunder, such
Subsidiary Guarantor shall be entitled to seek and receive contribution from
and against any other Subsidiary Guarantor hereunder which has not paid its
proportionate share of such payment. 
Each Subsidiary Guarantor’s right of contribution shall be subject to
the terms and conditions of Section 2.3. 
The provisions of this Section 2.2 shall in no respect limit the
obligations and liabilities of any Subsidiary Guarantor to the Administrative
Agent and the Lenders, and each Subsidiary Guarantor shall remain liable to the
Administrative Agent and the Lenders for the full amount guaranteed by such
Subsidiary Guarantor hereunder.

2.3           No Subrogation.  Notwithstanding any payment made by any
Guarantor hereunder or any set-off or application of funds of any Guarantor by
the Administrative Agent or any Lender, no Guarantor shall be entitled to be
subrogated to any of the rights of the Administrative Agent or any Lender
against any Borrower or any other Guarantor or any collateral security or
guarantee or right of offset held by the Administrative Agent or any Lender for
the payment of the Borrower Obligations, nor shall any Guarantor seek or be
entitled to seek any contribution or reimbursement from any Borrower or any
other Guarantor in respect of payments made by such Guarantor hereunder, until
all amounts owing to the Administrative Agent and the Lenders by the Borrower
on account of the Borrower Obligations are paid in full, no Letter of Credit
shall be outstanding and the Commitments are terminated.  If any amount shall be paid to any Guarantor
on account of such subrogation rights at any time when all of the Borrower
Obligations shall not have been paid in full, such amount shall be held by such
Guarantor in trust for the Administrative Agent and the Lenders, segregated
from other funds of such Guarantor, and shall, forthwith upon receipt by such
Guarantor, be turned over to the Administrative Agent in the exact form
received by such Guarantor (duly indorsed by such Guarantor to the
Administrative Agent, if required), to be applied against the Borrower Obligations,
whether matured or unmatured, in such order as the Administrative Agent may
determine.

2.4           Amendments, etc.
with respect to the Borrower Obligations. 
Each Guarantor shall remain obligated hereunder notwithstanding that,
without any reservation of rights against any Guarantor and without notice to
or further assent by any Guarantor, any demand for payment of any of the
Borrower Obligations made by the Administrative Agent or any Lender may be
rescinded by the Administrative Agent or such Lender and any of the Borrower
Obligations continued, and the Borrower Obligations, or the liability of any
other Person upon or for any part thereof, or any collateral security or
guarantee therefor or right of offset with respect thereto, may, from time to
time, in whole or in part, be renewed, extended, amended, modified,
accelerated, compromised, waived, surrendered or released by the Administrative
Agent or any Lender, and the Credit Agreement and the other Loan Documents and
any other documents executed and delivered in connection therewith may be
amended, modified, supplemented or terminated, in whole or in part, as the
Administrative Agent (or the Required Lenders or all Lenders, as the case may
be) may deem advisable from time to time, and any collateral security,
guarantee or right of offset at any time held by the Administrative Agent

 7
 

or any Lender for the payment of the Borrower Obligations may be sold,
exchanged, waived, surrendered or released. 
Neither the Administrative Agent nor any Lender shall have any
obligation to protect, secure, perfect or insure any Lien at any time held by
it as security for the Borrower Obligations or for the guarantee contained in
this Section 2 or any property subject thereto.

2.5           Guarantee Absolute
and Unconditional.  Each Guarantor
waives any and all notice of the creation, renewal, extension or accrual of any
of the Borrower Obligations and notice of or proof of reliance by the
Administrative Agent or any Lender upon the guarantee contained in this Section
2 or acceptance of the guarantee contained in this Section 2; the Borrower
Obligations, and any of them, shall conclusively be deemed to have been
created, contracted or incurred, or renewed, extended, amended or waived, in
reliance upon the guarantee contained in this Section 2; and all dealings
between any of the Borrowers and any of the Guarantors, on the one hand, and
the Administrative Agent and the Lenders, on the other hand, likewise shall be
conclusively presumed to have been had or consummated in reliance upon the
guarantee contained in this Section 2. 
Each Guarantor waives diligence, presentment, protest, demand for
payment and notice of default or nonpayment to or upon any of the Borrowers or
any of the Guarantors with respect to the Borrower Obligations to the extent
permitted by law.  Each Guarantor
understands and agrees that the guarantee contained in this Section 2 shall be
construed as a continuing, absolute and unconditional guarantee of payment
without regard to (a) the validity or enforceability of the Credit Agreement or
any other Loan Document, any of the Borrower Obligations or any other
collateral security therefor or guarantee or right of offset with respect
thereto at any time or from time to time held by the Administrative Agent or
any Lender, (b) any defense, set-off or counterclaim (other than a defense of
payment or performance) which may at any time be available to or be asserted by
any Borrower or any other Person against the Administrative Agent or any
Lender, or (c) any other circumstance whatsoever (with or without notice to or
knowledge of such Borrower or such Guarantor) which constitutes, or might be
construed to constitute, an equitable or legal discharge of the Borrowers for
the Borrower Obligations, or of such Guarantor under the guarantee contained in
this Section 2, in bankruptcy or in any other instance.  When making any demand hereunder or otherwise
pursuing its rights and remedies hereunder against any Guarantor, the
Administrative Agent or any Lender may, but shall be under no obligation to,
make a similar demand on or otherwise pursue such rights and remedies as it may
have against the relevant Borrower, any other Guarantor or any other Person or
against any collateral security or guarantee for the Borrower Obligations or
any right of offset with respect thereto, and any failure by the Administrative
Agent or any Lender to make any such demand, to pursue such other rights or
remedies or to collect any payments from such Borrower, any other Guarantor or
any other Person or to realize upon any such collateral security or guarantee
or to exercise any such right of offset, or any release of such Borrower, any
other Guarantor or any other Person or any such collateral security, guarantee
or right of offset, shall not relieve any Guarantor of any obligation or
liability hereunder, and shall not impair or affect the rights and remedies,
whether express, implied or available as a matter of law, of the Administrative
Agent or any Lender against any Guarantor. 
For the purposes hereof “demand” shall include the commencement and
continuance of any legal proceedings.

2.6           Reinstatement.  The guarantee contained in this Section 2
shall continue to be effective, or be reinstated, as the case may be, if at any
time payment, or any part thereof, of any of the Borrower Obligations is
rescinded or must otherwise be restored or returned by the Administrative Agent
or any Lender upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of any Borrower or any Guarantor, or upon or as a result of the
appointment of a

 8
 

receiver, intervenor or conservator of, or trustee or similar officer
for, any Borrower or any Guarantor or any substantial part of its property, or
otherwise, all as though such payments had not been made.

2.7           Payments.  Each Guarantor hereby guarantees that
payments hereunder will be paid to the Administrative Agent without set-off or
counterclaim, in immediately available funds in the currency in which the
relevant Obligation is denominated, at the applicable Payment Office.

SECTION 3.  GRANT OF SECURITY
INTEREST

Each Grantor hereby assigns and transfers to the
Administrative Agent, and hereby grants to the Administrative Agent, for the
ratable benefit of the Lenders, a security interest in, all of the following
property now owned or at any time hereafter acquired by such Grantor or in
which such Grantor now has or at any time in the future may acquire any right,
title or interest (collectively, the “Collateral”), as collateral
security for the prompt and complete payment and performance when due (whether
at the stated maturity, by acceleration or otherwise) of such Grantor’s
Obligations:

(a)           all Accounts;

(b)           all Chattel Paper;

(c)           all Deposit Accounts;

(d)           all Documents;

(e)           all Equipment;

(f)            all Fixtures;

(g)           all General Intangibles;

(h)           all Instruments;

(i)            all Intellectual
Property;

(j)            all Inventory;

(k)           all Investment
Property;

(l)            all other personal
property not otherwise described above;

(m)          all books and records
pertaining to the Collateral; and

(n)           to the extent not otherwise
included, all Proceeds, Supporting Obligations and products of any and all of
the foregoing and all collateral security and guarantees given by any Person
with respect to any of the foregoing.

Notwithstanding the foregoing, the Collateral shall not
include the Excluded Assets.

 9
 

SECTION 4.    REPRESENTATIONS AND WARRANTIES

To induce the Administrative Agent and the Lenders to
enter into the Credit Agreement and to induce the Lenders to make their
respective extensions of credit to the Borrowers thereunder, each Grantor
hereby represents and warrants to the Administrative Agent and each Lender
that:

4.1           Investment Property.  (a) 
The shares of Pledged Stock pledged by such Grantor hereunder constitute
all the issued and outstanding shares of all classes of the Capital Stock of
each Issuer owned by such Grantor or, in the case of Foreign Subsidiary Voting
Stock, if less, 65% of the outstanding Foreign Subsidiary Voting Stock of each
relevant Issuer.

(b)           All the shares of the
Pledged Stock issued by each Issuer (other than any Issuer that is a Foreign
Subsidiary, a partnership or a limited liability company) have been duly and
validly issued and are fully paid and nonassessable.

(c)           Each of the Pledged
Notes, to the knowledge of the Grantors, constitutes the legal, valid and
binding obligation of the obligor with respect thereto, enforceable in
accordance with its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors’ rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.

(d)           Such Grantor is the
record and beneficial owner of, and has good and marketable title to, the
Investment Property pledged by it hereunder, free of any and all Liens or
options in favor of, or claims of, any other Person, except the security
interest created by this Agreement.

4.2           Intellectual
Property.  (a) Schedule 5 lists all
(i) Registered Intellectual Property owned by such Grantor in its own name on
the date hereof and (ii) all Registered Intellectual Property exclusively
licensed by such Grantor as of the date hereof, noting in each case the
relevant registration, application or serial number, the jurisdiction of
registration or application, and, in the case of (ii), the title of the
license, the counterparty to such license and the date of such license.

(b)           Except as set forth in
Schedule 5 and except for joint marketing and sponsorship agreements entered
into by such Grantor in the ordinary course of its business, on the date
hereof, none of the Intellectual Property is the subject of any licensing or
franchise agreement pursuant to which such Grantor is the licensor or
franchisor.

(c)           Such Grantor owns, or is licensed to use, all Intellectual Property
material to the conduct of its business as currently conducted, free and clear
of all Liens other than Permitted Liens, and takes reasonable actions to
protect, preserve and maintain such Intellectual Property. 
Except as could not reasonably be expected to have a Material Adverse
Effect, (i) all such Intellectual Property is valid and enforceable and (ii)
all Registered Intellectual Property has not expired or been abandoned.   No action or proceeding is pending by any
Person or, to the knowledge of such Grantor, threatened, or imminent, on
the date hereof, and no holding, decision or judgment has been rendered by any
Governmental Authority or arbitrator which may limit, cancel or challenge the
validity, enforceability, ownership or use of, or such material

 10
 

Intellectual Property in any material respect, nor does such Grantor know of any valid basis
for any such claim except for claims, actions, proceedings, holdings, decisions
or judgments which, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect. 
The operation of the business of such Grantor does not Infringe the
rights of any Person to an extent which could reasonably be expected to have a
Material Adverse Effect, and, to the knowledge of such Grantor, no Person is
Infringing any Intellectual Property owned by such Grantor to an extent which
could reasonably be expected to have a Material Adverse Effect.

(d)           Schedule 6 lists all
Trademarks that, as of the date of the most recent Compliance Certificate
delivered pursuant to the Credit Agreement, are material to the business and
operations of the Grantors, taken as a whole, and the loss of which could
reasonably be expected to be materially adverse to any Grantor.

4.3           Commercial Tort
Claims.  On the date hereof, no
Grantor has rights in any Commercial Tort Claim with potential value in excess
of $100,000.

4.4           Additional
Representations and Warranties.

(a)           On the date of this Agreement,
such Grantor’s jurisdiction of organization, identification number from the
jurisdiction of organization (if any) and the location of such Grantor’s chief
executive office or sole place of business or principal residence, as the case
may be, are specified on Schedule 4. 
Such Grantor has furnished to the Administrative Agent a certified
charter, certificate of incorporation or other organization document and good
standing certificate as of a date which is recent to the date hereof.

(b)           Each Grantor has good
and valid rights in and title to the Collateral with respect to which it has
purported to grant a security interest hereunder and has full power and
authority to grant to the Administrative Agent a security interest in such
Collateral pursuant hereto and to execute, deliver and perform its obligations
in accordance with the terms of this Agreement, without the consent or approval
of any other Person other than any consent or approval that has been obtained
and is in full force and effect.

(c)           The UCC financing
statements (including fixture filings, as applicable) or other appropriate
filings, recordings or registrations for filing in each governmental, municipal
or other office specified in Schedule 3 hereto, are all the filings, recordings
and registrations that are necessary to establish a legal, valid and perfected
security interest in favor of the Administrative Agent (for the benefit of the
Lenders) in respect of all Collateral in which a security interest may be
perfected by filing, recording or registration in the United States (or any
political subdivision thereof) and its territories and possessions, and no
further or subsequent filing, refiling, recording, rerecording, registration or
reregistration is necessary in any such jurisdiction, except as provided under
applicable law with respect to the filing of continuation statements.

(d)           The security interest
granted to the Administrative Agent constitutes (i) a legal and valid security
interest in all the Collateral securing the payment and performance of the
Obligations and (ii) subject to the filings described in Section 4.3(c), a
perfected security interest in all Collateral in which a security interest may
be perfected by filing, recording or registering a financing statement or
analogous document in the United States (or any political subdivision thereof)
and its territories and possessions pursuant to the Uniform Commercial Code in
the

 11
 

relevant jurisdiction. The security interest granted
to the Administrative Agent is and shall be prior to any other Lien on any of
the Collateral, other than Liens expressly permitted under the Credit
Agreement.

(e)           The Collateral is owned
by the Grantors free and clear of any Lien, except for Permitted Liens under
the Credit Agreement.  None of the
Grantors has filed or consented to the filing of (i) any financing statement or
analogous document under the New York UCC or any other applicable laws covering
any Collateral or (ii) any assignment in which any Grantor assigns any
Collateral or any security agreement or similar instrument covering any
Collateral with any foreign governmental, municipal or other office, which
financing statement or analogous document, assignment, security agreement or
similar instrument is still in effect, except, in each case, for Liens
expressly permitted under the Credit Agreement or created pursuant to the
Existing Credit Agreement, or those which are for notice purposes only.

SECTION 5.  COVENANTS

Each Grantor covenants and agrees with the
Administrative Agent and the Lenders that, from and after the date of this
Agreement until the Obligations shall have been paid in full (other than
Obligations under Specified Hedge Agreements that are not yet due and payable,
and contingent indemnification obligations not yet accrued and payable), no
Letter of Credit shall be outstanding and the Commitments shall have
terminated:

5.1           Delivery of Pledged
Securities.

(a)           Each Grantor agrees
promptly to deliver or cause to be delivered to the Administrative Agent, for
the benefit of the Lenders, any and all Pledged Securities (other than any
uncertificated Capital Stock, but only for so long as such Capital Stock
remains uncertificated) to the extent such Pledged Securities, in the case of
promissory notes or other instruments evidencing Indebtedness, are required to
be delivered pursuant to paragraph (b) of this Section 5.1.

(b)           Each Grantor will cause
(i) any Indebtedness for borrowed money (other than intercompany loans referred
to in clause (ii) below) having an aggregate principal amount in excess of
$1,000,000 owed to such Grantor by any Person and (ii) any intercompany loans
made by such Grantor to any Person that is not a Loan Party to be evidenced by
a duly executed promissory note (or pursuant to a global note) that is pledged
and delivered to the Administrative Agent, for the benefit of the Lenders,
pursuant to the terms hereof.

(c)           Upon delivery to the
Administrative Agent, (i) any Pledged Securities shall be accompanied by stock
powers duly executed in blank or other instruments of transfer reasonably
satisfactory to the Administrative Agent and by such other instruments and
documents as the Administrative Agent may reasonably request and (ii) all other
property comprising part of the Pledged Securities shall be accompanied by
proper instruments of assignment duly executed by the applicable Grantor and
such other instruments or documents as the Administrative Agent may reasonably
request.  Each delivery of Pledged
Securities shall be accompanied by a schedule describing such Pledged Securities,
which schedule shall be attached hereto as Schedule 2 and made a part hereof; provided
that failure to attach any such schedule hereto shall not affect the validity
of such pledge of such Pledged Securities. 
Each schedule so delivered shall supplement any prior schedules so
delivered.

 12
 

(d)           At any time and from
time to time, upon the written request of the Administrative Agent, and at the
sole expense of such Grantor, such Grantor will promptly and duly execute and
deliver, and have recorded, such further instruments and documents and take
such further actions as the Administrative Agent may reasonably request for the
purpose of obtaining or preserving the full benefits of this Agreement and of
the rights and powers herein granted, including, without limitation, (i) filing
any financing or continuation statements under the Uniform Commercial Code (or
other similar laws) in effect in any jurisdiction with respect to the security
interests created hereby and (ii) in the case of Investment Property, Deposit
Accounts, Letter-of-Credit Rights and any other relevant Collateral, taking any
actions necessary to enable the Administrative Agent to obtain “control”
(within the meaning of the applicable Uniform Commercial Code) with respect
thereto.

(e)           In the case of each
Grantor which is an Issuer, such Issuer agrees that (i) it will be bound by the
terms of this Agreement relating to the Investment Property issued by it and
will comply with such terms insofar as such terms are applicable to it, (ii) it
will notify the Administrative Agent promptly in writing of the occurrence of
any of the events described in Section 5.4(b) with respect to the Investment
Property issued by it and (iii) the terms of Sections 6.2(d) and 6.7 shall
apply to it, mutatis  mutandis, with respect to all actions that
may be required of it pursuant to Section 6.2(d) or 6.7 with respect to the
Investment Property issued by it.

5.2           Intellectual
Property.  (a) Such Grantor
(either itself or through licensees) will (i) continue to use each Trademark in
order to maintain such Trademark in full force free from any claim of
abandonment for non-use, (ii) maintain in all material respects as in the past
the quality of all products and services offered under any Trademark, (iii) use
each Trademark with all appropriate notices of registration and all other
notices and legends required by applicable Requirements of Law, (iv) not adopt
or use any new mark, or any mark which is confusingly similar or a colorable
imitation of a Trademark unless the Administrative Agent, for the ratable
benefit of the Lenders, shall obtain a perfected security interest in such mark
pursuant to this Agreement, and (v) not (and will use commercially reasonable
efforts to prohibit any licensee or sublicensee thereof to) do any act or
knowingly omit to do any act whereby a Trademark could reasonably be expected
to become invalidated or diluted in any way, except, in each case with respect
to the Trademarks (other than the Material Trademarks), as could not reasonably
be expected to have a Material Adverse Effect.

(b)           Such Grantor will not
do any act, or omit to do any act (and will use commercially reasonable efforts
to ensure that any licensee or sublicensee does not do any act or omit to do
any act) whereby any material Patent is forfeited, abandoned or dedicated to
the public.

(c)           Such Grantor will not
do any act or knowingly omit to do any act (and will use commercially
reasonable efforts to ensure that any licensee or sublicensee does not do any
act or omit to do any act) whereby any material portion of the Copyrights could
reasonably be expected to become invalidated or otherwise materially
impaired.  Such Grantor will not do any
act (and will use commercially reasonable efforts to ensure that any licensee
or sublicensee does not do any act) whereby a material portion of any Copyright
falls into the public domain.

(d)           Such Grantor will not
(and will use commercially reasonable efforts to ensure that any licensee or
sublicense does not) knowingly Infringe in any material respect upon the
intellectual property rights of any other Person.

 13
 

(e)           Such Grantor will
notify the Administrative Agent promptly if it knows, or has reason to know,
that any material Registered Intellectual Property may become forfeited,
abandoned or dedicated to the public, or of any adverse determination or
development (including, without limitation, the institution of, or any such
determination or development in, any proceeding in the United States Patent and
Trademark Office, the United States Copyright Office or any similar office or
agency, or any court or tribunal in any country) regarding such Grantor’s
rights in, or the validity, enforceability, ownership or use of, any material
Intellectual Property, including, without limitation, such Grantor’s right to
register or maintain same.

(f)            Whenever such Grantor,
either by itself or through any agent, employee, licensee or designee, shall
acquire, become the exclusive licensee of, or file an application for the
registration of, any Registered Intellectual Property with the United States
Copyright Office or the United States Patent and Trademark Office, or any
similar office or agency in any group of countries, other country or any
political subdivision thereof, such Grantor shall report such filing to the
Administrative Agent on the first Compliance Certificate delivered pursuant to
Section 8.1(f) of the Credit Agreement after such acquisition, licensing, or
filing.   Such Compliance Certificate
shall also list any Material Trademark that has not been previously listed on
Schedule 6.  Upon request of the
Administrative Agent, such Grantor shall execute and deliver, and have
recorded, any and all agreements, instruments, documents, and papers as the
Administrative Agent may reasonably request to evidence the Administrative
Agent’s and the Lenders’ security interest in any Registered Intellectual
Property.

(g)           Such Grantor will take
such actions as it reasonably deems appropriate under the circumstances, to
maintain and pursue each application (and to obtain the relevant registration)
and to maintain each registration of all Registered Intellectual Property,
including, without limitation, filing of applications for renewal, affidavits
of use and affidavits of incontestability.

(h)           In the event that any
material Intellectual Property is Infringed by a third party, such Grantor
shall (i) take such actions as such Grantor shall reasonably deem appropriate
under the circumstances to protect such Intellectual Property and (ii) if such
Intellectual Property is of material economic value to the Grantors as a whole,
promptly notify the Administrative Agent after it learns thereof and, after
taking reasonable and customary measures to stop such Infringement and where
appropriate in such Grantor’s reasonable business judgment, sue for
Infringement, seek injunctive relief and to recover any and all damages for
such Infringement.

5.3           Additional Covenants.

(a)           The Primary Borrower
agrees, on its own behalf and on behalf of each Grantor, to notify the
Administrative Agent in writing of any change (i) in legal name of any Grantor,
(ii) in the identity or type of organization or corporate structure of any
Grantor, or (iii) in the jurisdiction of organization of any Grantor, within 15
days of any such change.

(b)           Each Grantor shall, at
its own expense, take any and all commercially reasonable actions necessary to
defend title to the Collateral against all Persons and to defend the security
interest of the Administrative Agent in the Collateral and the priority thereof
against any Lien not expressly permitted by the Credit Agreement.

 14

(c)           The Primary Borrower agrees, on its
own behalf and on behalf of each other Grantor, at its own expense, to execute,
acknowledge, deliver and cause to be duly filed all such further instruments
and documents and take all such actions as the Administrative Agent may from
time to time reasonably request to better assure, preserve, protect and perfect
its security interest and the rights and remedies created hereby, including the
payment of any fees and taxes required in connection with the execution and delivery
of this Agreement, the granting to the Administrative Agent of a security
interest and the filing of any financing statements (including fixture filings)
or other documents in connection herewith or therewith.  If any amount payable under or in connection
with any of the Collateral that is in excess of $1,000,000 shall be or become
evidenced by any promissory note or other instrument, such note or instrument
shall be promptly pledged and delivered to the Administrative Agent, for the
benefit of the Lenders, duly endorsed in a manner reasonably satisfactory to
the Administrative Agent.

(d)           At its option, the Administrative
Agent may discharge past due taxes, assessments, charges, fees, Liens, security
interests or other encumbrances at any time levied or placed on the Collateral
and not permitted under the Credit Agreement, and may pay for the maintenance
and preservation of the Collateral to the extent any Grantor fails to do so as
required by the Credit Agreement or this Agreement and within a reasonable
period of time after the Administrative Agent has requested that it do so, and
each Grantor jointly and severally agrees to reimburse the Administrative Agent
within 10 days after demand for any payment made or any reasonable expense
incurred by the Administrative Agent pursuant to the foregoing
authorization.  Nothing in this paragraph
shall be interpreted as excusing any Grantor from the performance of, or
imposing any obligation on the Administrative Agent or any Lender to cure or
perform, any covenants or other promises of any Grantor with respect to taxes,
assessments, charges, fees, Liens, security interests or other encumbrances and
maintenance as set forth herein, in the other Loan Documents.

(e)           If at any time any Grantor shall take
a security interest in any property of any Person who is or who may become
obligated to any Grantor under, with respect to or on account of an Account (an
“Account Debtor”), or any other Person, the value of which is in excess
of $1,000,000, to secure payment and performance of an Account, such Grantor
shall promptly assign such security interest to the Administrative Agent for
the benefit of the Lenders.  Such
assignment need not be filed of public record unless necessary to continue the
perfected status of the security interest against creditors of and transferees
from the Account Debtor or other Person granting the security interest.

(f)            Each Grantor (rather than the
Administrative Agent or any Lender) shall remain liable (as between itself and
any relevant counterparty) to observe and perform all the conditions and
obligations to be observed and performed by it under each contract, agreement
or instrument relating to the Collateral, all in accordance with the terms and
conditions thereof, and each Grantor jointly and severally agrees to indemnify
and hold harmless the Administrative Agent and the Lenders from and against any
and all liability for such performance.

(g)           If any Grantor shall at any time hold
or acquire a Commercial Tort Claim with a value in excess of $1,000,000, such
Grantor shall promptly notify the Administrative Agent in writing signed by
such Grantor of the brief details thereof and grant to the Administrative Agent
a security interest therein and in the proceeds thereof, all upon the terms of
this Agreement pursuant to a document in form and substance reasonably
satisfactory to the Administrative Agent.

 15
 

(h)           The aggregate book value of all
Vehicles owned by all such Grantors will not exceed $10,000,000 or such higher
book value as shall be reasonably satisfactory to the Administrative Agent.

5.4           Other Actions.  In order to further insure the attachment,
perfection and priority of, and the ability of the Administrative Agent to
enforce its security interest, each Grantor agrees, in each case at such Grantor’s
own expense, to take the following actions with respect to the following
Collateral:

(a)           Instruments.  If any Grantor shall at any time hold or
acquire any Instruments constituting Collateral and evidencing an amount in
excess of $1,000,000, such Grantor shall forthwith endorse, assign and deliver
the same to the Administrative Agent for the benefit of the Lenders,
accompanied by such instruments of transfer or assignment duly executed in
blank as the Administrative Agent may from time to time reasonably request.

(b)           Investment Property.  If any Grantor shall at any time hold or
acquire any certificated Capital Stock, such Grantor shall forthwith endorse,
assign and deliver the same to the Administrative Agent for the benefit of the
Lenders, accompanied by such instruments of transfer or assignment duly
executed in blank as the Administrative Agent may from time to time reasonably
request.  If any Capital Stock now or
hereafter acquired by any Grantor are uncertificated and are issued to such
Grantor or its nominee directly by the issuer thereof, such Grantor shall
promptly notify the Administrative Agent thereof and, at the Administrative
Agent’s reasonable request and option, pursuant to an agreement in form and
substance reasonably satisfactory to the Administrative Agent, either (i) cause
the Issuer to agree to comply with instructions from the Administrative Agent
as to such securities, without further consent of any Grantor or such nominee,
or (ii) arrange for the Administrative Agent to become the registered owner of
the securities.  If any Capital Stock,
whether certificated or uncertificated, or other Investment Property are held
by any Grantor or its nominee through a securities intermediary or commodity intermediary,
such Grantor shall promptly notify the Administrative Agent thereof and at the
Administrative Agent’s request and option, pursuant to an agreement in form and
substance reasonably satisfactory to the Administrative Agent shall either (i)
cause such securities intermediary or (as the case may be) commodity
intermediary to agree to comply with entitlement orders or other instructions
from the Administrative Agent to such securities intermediary as to such
security entitlements, or (as the case may be) to apply any value distributed on
account of any commodity contract as directed by the Administrative Agent to
such commodity intermediary, in each case without further consent of any
Grantor or such nominee, or (ii) in the case of financial assets or other
Investment Property held through a securities intermediary, arrange for the
Administrative Agent to become the entitlement holder with respect to such
Investment Property, with the Grantor being permitted, only with the consent of
the Administrative Agent, to exercise rights to withdraw or otherwise deal with
such Investment Property.  The
Administrative Agent agrees with each of the Grantors that the Administrative
Agent shall not give any such entitlement orders or instructions or directions
to any such Issuer, securities intermediary or commodity intermediary, and
shall not withhold its consent to the exercise of any withdrawal or dealing
rights by any Grantor, unless an Event of Default has occurred and is
continuing. The provisions of this paragraph shall not apply to any financial assets
credited to a securities account for which the Administrative Agent is the
securities intermediary.

 16
 

SECTION 6.  REMEDIAL PROVISIONS

6.1           Registration in Nominee Name;
Denominations. If an Event of Default shall occur and be continuing,
(a) the Administrative Agent, on behalf of the Lenders, shall have the
right (in its sole and absolute discretion) to hold the Pledged Securities in
its own name as pledgee, the name of its nominee (as pledgee or as sub-agent)
or the name of the applicable Grantor, endorsed or assigned in blank or in
favor of the Administrative Agent, and each Grantor will promptly give to the
Administrative Agent copies of any notices or other communications received by
it with respect to Pledged Securities registered in the name of such Grantor
and (b) the Administrative Agent shall have the right to exchange the
certificates representing Pledged Securities for certificates of smaller or
larger denominations for any purpose consistent with this Agreement.

6.2           Voting Rights; Dividends and
Interest.

(a)           Unless and until an Event of Default
shall have occurred and be continuing and the Administrative Agent shall have
notified the Borrowers that the rights of the Grantors under this
Section 6.2 are being suspended:

(i)            Each Grantor shall be entitled to
exercise any and all voting and/or other consensual rights and powers inuring
to an owner of Pledged Securities or any part thereof for any purpose
consistent with the terms of this Agreement, the Credit Agreement and the other
Loan Documents; provided
that such rights and powers shall not be exercised in any manner that could
materially and adversely affect the rights inuring to a holder of any Pledged
Securities or the rights and remedies of any of the Administrative Agent or the
other Lenders under this Agreement, the Credit Agreement or any other Loan
Document or the ability of the Lenders to exercise the same.

(ii)           Each Grantor shall be entitled to
receive and retain any and all dividends, interest, principal and other
distributions paid on or distributed in respect of the Pledged Securities to
the extent and only to the extent that such dividends, interest, principal and
other distributions are permitted by, and otherwise paid or distributed in
accordance with, the terms and conditions of the Credit Agreement, the other
Loan Documents and applicable Laws; provided
that any noncash dividends, interest, principal or other distributions, whether
resulting from a subdivision, combination or reclassification of the
outstanding equity interests of the issuer of any Pledged Securities or
received in exchange for Pledged Securities or any part thereof, or in
redemption thereof, or as a result of any merger, consolidation, acquisition or
other exchange of assets to which such issuer may be a party or otherwise,
shall be and become part of the Collateral, and, if received by any Grantor,
shall not be commingled by such Grantor with any of its other funds or property
but shall be held separate and apart therefrom, shall be held in trust for the
benefit of the Administrative Agent and the Lenders and shall be forthwith
delivered to the Administrative Agent in the same form as so received (with any
necessary endorsement reasonably requested by the Administrative Agent).

(b)           Upon the occurrence and during the
continuance of an Event of Default, after the Administrative Agent shall have
notified the Borrowers of the suspension of the rights of the Grantors under
paragraph (a)(ii) of this Section 6.2, then all rights of any Grantor to
dividends, interest, principal or other distributions that such Grantor is
authorized to receive pursuant to paragraph (a)(ii) of this Section 6.2
shall cease, and all such rights shall thereupon become vested in the
Administrative Agent, which shall have the sole and exclusive right and
authority to receive and retain such dividends, interest, principal or other
distributions.  All

 17
 

dividends, interest,
principal or other distributions received by any Grantor contrary to the
provisions of this Section 6.2 shall be held in trust for the benefit of
the Administrative Agent, shall be segregated from other property or funds of
such Grantor and shall be forthwith delivered to the Administrative Agent in
the same form as so received (with any necessary endorsement reasonably
requested by the Administrative Agent). 
Any and all money and other property paid over to or received by the
Administrative Agent pursuant to the provisions of this paragraph
(b) shall be retained by the Administrative Agent in an account to be
established by the Administrative Agent upon receipt of such money or other
property and shall be applied in accordance with the provisions of
Section 6.4.  After all Events of
Default have been cured or waived, the Administrative Agent shall promptly
repay to each Grantor (without interest) all dividends, interest, principal or
other distributions that such Grantor would otherwise be permitted to retain
pursuant to the terms of paragraph (a)(ii) of this Section 6.2 and that
remain in such account.

(c)           Upon the occurrence and during the
continuance of an Event of Default, after the Administrative Agent shall
have notified the Primary Borrower of the suspension of the rights of the
Grantors under paragraph (a)(i) of this Section 6.2, then all rights of
any Grantor to exercise the voting and consensual rights and powers it is
entitled to exercise pursuant to paragraph (a)(i) of this Section 6.2
shall cease, and all such rights shall thereupon become vested in
the Administrative Agent, which shall have the sole and exclusive right
and authority to exercise such voting and consensual rights and powers; provided that, unless otherwise
directed by the Required Lenders, the Administrative Agent shall have the
right from time to time following and during the continuance of an Event of
Default to permit the Grantors to exercise such rights.  After all Events
of Default have been cured or waived, each Grantor shall have the exclusive
right to exercise the voting and/or consensual rights and powers that such
Grantor would otherwise be entitled to exercise pursuant to the terms of
paragraph (a)(i) of this Section 6.2.

(d)           Each Grantor hereby authorizes and
instructs each Issuer of any Investment Property pledged by such Grantor
hereunder to (i) comply with any instruction received by it from the Administrative
Agent in writing that (x) states that an Event of Default has occurred and is
continuing and (y) is otherwise in accordance with the terms of this Agreement,
without any other or further instructions from such Grantor, and each Grantor
agrees that each Issuer shall be fully protected in so complying, and (ii) pay
any non-cash dividends or other non-cash payments with respect to the
Investment Property directly to the Administrative Agent and, after such Issuer
receives notice from the Administrative Agent that an Event of Default has
occurred, pay any cash dividends or other payments with respect to the
Investment Property directly to the Administrative Agent.

6.3           Additional Remedies upon Default.

(a)           Upon the occurrence and during the
continuance of an Event of Default, it is agreed that the Administrative Agent
shall have the right to exercise any and all rights afforded to a Lender with
respect to the Obligations under the Uniform Commercial Code or other
applicable law and also may (i) require each Grantor to, and each Grantor
agrees that it will at its expense and upon request of the Administrative Agent
forthwith, assemble all or part of the Collateral as directed by the
Administrative Agent and make it available to the Administrative Agent at a
place and time to be designated by the Administrative Agent; (ii) occupy any
premises owned or, to the extent lawful and permitted, leased by any of the
Grantors where the Collateral

 18
 

or any part thereof is
assembled or located for a reasonable period in order to effectuate its rights
and remedies hereunder or under law, without obligation to such Grantor in
respect of such occupation; (iii) exercise any and all rights and remedies of
any of the Grantors under or in connection with the Collateral, or otherwise in
respect of the Collateral, provided that, with respect to any Collateral
consisting of Pledged Stock of any Issuer that is not a Wholly Owned
Subsidiary, such exercise shall be subject to any limitations or prohibitions
of any Contractual Obligations among the holders of such Issuer’s Capital
Stock; and (iv) subject to the mandatory requirements of applicable law, sell
or otherwise dispose of all or any part of the Collateral securing the
Obligations at a public or private sale or at any broker’s board or on any
securities exchange, for cash, upon credit or for future delivery as the
Administrative Agent shall deem appropriate. 
The Administrative Agent shall be authorized at any such sale of
securities (if it deems it advisable to do so) to restrict the prospective
bidders or purchasers to Persons who will represent and agree that they are
purchasing the Collateral for their own account for investment and not with a
view to the distribution or sale thereof, and upon consummation of any such sale
the Administrative Agent shall have the right to assign, transfer and deliver
to the purchaser or purchasers thereof the Collateral so sold.  Each such purchaser at any sale of Collateral
shall hold the property sold absolutely, free from any claim or right on the
part of any Grantor, and each Grantor hereby waives (to the extent not
prohibited by law) all rights of redemption, stay and appraisal which such
Grantor now has or may at any time in the future have under any rule of law or
statute now existing or hereafter enacted.

(b)           The Administrative Agent shall give
the applicable Grantors 10 days’ written notice (which each Grantor agrees is
reasonable notice within the meaning of Section 9-611 of the New York UCC or
its equivalent in other jurisdictions) of the Administrative Agent’s intention
to make any sale of Collateral.  Such
notice, in the case of a public sale, shall state the time and place for such
sale and, in the case of a sale at a broker’s board or on a securities
exchange, shall state the board or exchange at which such sale is to be made
and the day on which the Collateral, or portion thereof, will first be offered
for sale at such board or exchange. Any such public sale shall be held at such
time or times within ordinary business hours and at such place or places as the
Administrative Agent may fix and state in the notice (if any) of such
sale.  At any such sale, the Collateral,
or portion thereof, to be sold may be sold in one lot as an entirety or in separate
parcels, as the Administrative Agent may (in its sole and absolute discretion)
determine.  The Administrative Agent
shall not be obligated to make any sale of any Collateral if it shall determine
not to do so, regardless of the fact that notice of sale of such Collateral
shall have been given.  The
Administrative Agent may, without notice or publication, adjourn any public or
private sale or cause the same to be adjourned from time to time by
announcement at the time and place fixed for sale, and such sale may, without
further notice, be made at the time and place to which the same was so
adjourned.  In case any sale of all or
any part of the Collateral is made on credit or for future delivery, the
Collateral so sold may be retained by the Administrative Agent until the sale
price is paid by the purchaser or purchasers thereof, but the Administrative
Agent shall not incur any liability in case any such purchaser or purchasers
shall fail to take up and pay for the Collateral so sold and, in case of any
such failure, such Collateral may be sold again upon like notice.  At any public or private sale made pursuant
to this Agreement, any Lender may bid for or purchase, free from any right of
redemption, stay, valuation or appraisal on the part of any Grantor (all said
rights being also hereby waived and released to the extent not prohibited by
law), the Collateral or any part thereof offered for sale and may make payment
on account thereof by using any claim then due and payable to such Lender from
any Grantor as a credit against the purchase price, and such Lender may, upon

 19
 

compliance with the terms
of sale, hold, retain and dispose of such property without further
accountability to any Grantor therefor. 
For purposes hereof, a written agreement to purchase the Collateral or
any portion thereof shall be treated as a sale thereof; the Administrative
Agent shall be free to carry out such sale pursuant to such agreement and no
Grantor shall be entitled to the return of the Collateral or any portion
thereof subject thereto, notwithstanding the fact that, after the
Administrative Agent shall have entered into such an agreement, all Events of
Default shall have been remedied and the Obligations paid in full.  As an alternative to exercising the power of
sale herein conferred upon it, the Administrative Agent may proceed by a suit
or suits at law or in equity to foreclose this Agreement and to sell the
Collateral or any portion thereof pursuant to a judgment or decree of a court
or courts having competent jurisdiction or pursuant to a proceeding by a court
appointed receiver.  Any sale pursuant to
the provisions of this Section 6.3 shall be deemed to conform to the
commercially reasonable standards as provided in Section 9-610(b) of the New
York UCC or its equivalent in other jurisdictions.

6.4           Application of Proceeds.  At such intervals as may be agreed upon by
the Primary Borrower and the Administrative Agent, or, if an Event of Default
shall have occurred and be continuing, at any time at the Administrative Agent’s
election, the Administrative Agent may apply all or any part of Proceeds of any
collection or sale of Collateral, including any Collateral consisting of cash,
and any proceeds of the guarantee set forth in Section 2 in payment of the
Obligations in the following order:

First, to pay incurred and unpaid
fees and expenses of the Administrative Agent under the Loan Documents;

Second, to the Administrative Agent,
for application by it towards payment of amounts then due and owing and remaining
unpaid in respect of the Obligations, pro rata among the Lenders according to
the amounts of the Obligations then due and owing and remaining unpaid to the
Lenders;

Third, to the Administrative Agent,
for application by it towards prepayment of the Obligations, pro rata among the
Lenders according to the amounts of the Obligations then held by the Lenders,
with any such prepayment of Loans being applied, first, to Base Rate Loans and,
second, to Eurocurrency Loans; and

Fourth, any balance of such Proceeds
remaining after the Obligations shall have been paid in full, no Letters of
Credit shall be outstanding and the Commitments shall have terminated shall be
paid over to the Primary Borrower or to whomsoever may be lawfully entitled to
receive the same.

6.5           Waiver; Deficiency.  Each Grantor shall remain liable for any
deficiency if the proceeds of any sale or other disposition of the Collateral
are insufficient to pay its Obligations and the fees and disbursements of any
attorneys employed by the Administrative Agent to collect such deficiency.

6.6           Subordination.  Each Grantor hereby agrees that, upon the
occurrence and during the continuance of an Event of Default, unless otherwise
agreed by the Administrative Agent, all Indebtedness owing by it to any
Subsidiary of a Borrower shall be fully subordinated to the indefeasible
payment in full in cash of such Grantor’s Obligations.

 20
 

6.7           Registration Rights.  (a) 
Upon the occurrence and during the continuance of an Event of Default,
(x) if the Loans (with accrued interest thereon) and all other amounts owing
under the Loan Documents have become due and payable in accordance with the
Credit Agreement and (y) if the Administrative Agent shall determine to
exercise its right to sell any or all of the Pledged Stock pursuant to Section
6.3, and if in the opinion of the Administrative Agent it is necessary or
advisable to have the Pledged Stock, or that portion thereof to be sold,
registered under the provisions of the Securities Act, the relevant Grantor
will cause the Issuer thereof to (i) execute and deliver, and cause the directors
and officers of such Issuer to execute and deliver, all such instruments and
documents, and do or cause to be done all such other acts as may be, in the
opinion of the Administrative Agent, necessary or advisable to register the
Pledged Stock, or that portion thereof to be sold, under the provisions of the
Securities Act, (ii) use its commercially reasonable efforts to cause the
registration statement relating thereto to become effective and to remain
effective for a period of one year from the date of the first public offering
of the Pledged Stock, or that portion thereof to be sold, and (iii) make all
amendments thereto and/or to the related prospectus which, in the opinion of
the Administrative Agent, are necessary or advisable, all in conformity with
the requirements of the Securities Act and the rules and regulations of the
Securities and Exchange Commission applicable thereto.  Each Grantor agrees to cause such Issuer to
comply with the provisions of the securities or “Blue Sky” laws of any and all
jurisdictions which the Administrative Agent shall designate and to make
available to its security holders, as soon as practicable, an earnings
statement (which need not be audited) which will satisfy the provisions of
Section 11(a) of the Securities Act.

(b)           Each Grantor recognizes that the
Administrative Agent may be unable to effect a public sale of any or all the
Pledged Stock, by reason of certain prohibitions contained in the Securities
Act and applicable state securities laws or otherwise, and may be compelled to
resort to one or more private sales thereof to a restricted group of purchasers
which will be obliged to agree, among other things, to acquire such securities
for their own account for investment and not with a view to the distribution or
resale thereof.  Each Grantor
acknowledges and agrees that any such private sale may result in prices and
other terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall be deemed
to have been made in a commercially reasonable manner.  The Administrative Agent shall be under no
obligation to delay a sale of any of the Pledged Stock for the period of time
necessary to permit the Issuer thereof to register such securities for public
sale under the Securities Act, or under applicable state securities laws, even
if such Issuer would agree to do so.

(c)           Each Grantor agrees to use its
commercially reasonable efforts to do or cause to be done all such other acts
as may be necessary to make such sale or sales of all or any portion of the
Pledged Stock pursuant to this Section 6.7 valid and binding and in compliance
with any and all other applicable Requirements of Law.  Each Grantor further agrees that a breach of
any of the covenants contained in this Section 6.7 will cause irreparable
injury to the Administrative Agent and the Lenders, that the Administrative
Agent and the Lenders have no adequate remedy at law in respect of such breach
and, as a consequence, that each and every covenant contained in this Section
6.7 shall be specifically enforceable against such Grantor, and such Grantor
hereby waives and agrees not to assert any defenses against an action for
specific performance of such covenants except for a defense that no Event of
Default has occurred and is continuing under the Credit Agreement.

 21
 

SECTION 7.  THE ADMINISTRATIVE
AGENT

7.1           Administrative Agent’s Appointment
as Attorney-in-Fact, etc.  (a)  Each Grantor hereby irrevocably constitutes
and appoints the Administrative Agent and any officer or agent thereof, with
full power of substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of such Grantor and in
the name of such Grantor or in its own name, for the purpose of carrying out
the terms of this Agreement, to take any and all appropriate action and to
execute any and all documents and instruments which may be necessary or
desirable to accomplish the purposes of this Agreement, and, without limiting
the generality of the foregoing, each Grantor hereby gives the Administrative
Agent the power and right, on behalf of such Grantor, without notice to or
assent by such Grantor, to do any or all of the following:

(i)  
in the name of such Grantor or its own name, or otherwise, take possession of
and indorse and collect any checks, drafts, notes, acceptances or other
instruments for the payment of moneys due under any Receivable or with respect
to any other Collateral and file any claim or take any other action or proceeding
in any court of law or equity or otherwise deemed appropriate by the
Administrative Agent for the purpose of collecting any and all such moneys due
under any Receivable or with respect to any other Collateral whenever payable;

(ii)  
in the case of any Intellectual Property, execute and deliver, and record  or have recorded, any and all agreements,
instruments, financing statements, documents and papers as the Administrative
Agent may request (A) to evidence the Administrative Agent’s and the Lenders’
security interest in such Intellectual Property, and (B) to perfect such
security interest;

(iii)  
pay or discharge taxes and Liens levied or placed on or threatened against the
Collateral, effect any repairs or any insurance called for by the terms of this
Agreement and pay all or any part of the premiums therefor and the costs
thereof;

(iv)  
execute, in connection with any sale provided for in Section 6.3 or 6.7, any
indorsements, assignments or other instruments of conveyance or transfer with
respect to the Collateral; and

(v)  
(1)  direct any party liable for any
payment under any of the Collateral to make payment of any and all moneys due
or to become due thereunder directly to the Administrative Agent or as the
Administrative Agent shall direct; (2) ask or demand for, collect, and receive
payment of and receipt for, any and all moneys, claims and other amounts due or
to become due at any time in respect of or arising out of any Collateral; (3)
sign and indorse any invoices, freight or express bills, bills of lading,
storage or warehouse receipts, drafts against debtors, assignments,
verifications, notices and other documents in connection with any of the
Collateral; (4) commence and prosecute any suits, actions or proceedings at law
or in equity in any court of competent jurisdiction to collect the Collateral
or any portion thereof and to enforce any other right in respect of any
Collateral; (5) defend any suit, action or proceeding brought against such
Grantor with respect to any Collateral; (6) settle, compromise or adjust any
such suit, action or proceeding and, in connection therewith, give such
discharges or releases as the Administrative Agent may deem appropriate; (7)
assign any Intellectual Property, throughout the world for such term or terms,
on such conditions, and in such manner, as the Administrative Agent shall in
its sole discretion determine; and (8) generally, sell,

 22
 

transfer, pledge and make any agreement with
respect to or otherwise deal with any of the Collateral as fully and completely
as though the Administrative Agent were the absolute owner thereof for all
purposes, and do, at the Administrative Agent’s option and such Grantor’s
expense, at any time, or from time to time, all acts and things which the
Administrative Agent deems necessary to protect, preserve or realize upon the
Collateral and the Administrative Agent’s and the Lenders’ security interests
therein and to effect the intent of this Agreement, all as fully and
effectively as such Grantor might do.

Anything in this Section 7.1(a) to the contrary
notwithstanding, the Administrative Agent agrees that it will not exercise any
rights under the power of attorney provided for in this Section 7.1(a)  (other than any rights set forth in clause
(ii) of Section 7.1(a)) unless an Event of Default shall have occurred and be
continuing.

(b)           If any Grantor fails to perform or
comply with any of its agreements contained herein, the Administrative Agent,
at its option, but without any obligation so to do, may perform or comply, or
otherwise cause performance or compliance, with such agreement.

(c)           The expenses of the Administrative
Agent incurred in connection with actions undertaken as provided in this
Section 7.1, together with interest thereon at a rate per annum equal to the
highest rate per annum at which interest would then be payable on any category
of past due Revolving Credit Loans that are Base Rate Loans under the Credit
Agreement, from the date of payment by the Administrative Agent to the date
reimbursed by the relevant Grantor, shall be payable by such Grantor to the
Administrative Agent on demand.

(d)           Each Grantor hereby ratifies all that
said attorneys shall lawfully do or cause to be done by virtue hereof.  All powers, authorizations and agencies
contained in this Agreement are coupled with an interest and are irrevocable
until this Agreement is terminated and the security interests created hereby
are released.

7.2           Duty
of Administrative Agent.  The
Administrative Agent’s sole duty with respect to the custody, safekeeping and
physical preservation of the Collateral in its possession, under Section 9-207
of the New York UCC or otherwise, shall be to deal with it in the same manner
as the Administrative Agent deals with similar property for its own account.  Neither the Administrative Agent, any Lender
nor any of their respective officers, directors, employees or agents shall be
liable for failure to demand, collect or realize upon any of the Collateral or
for any delay in doing so or shall be under any obligation to sell or otherwise
dispose of any Collateral upon the request of any Grantor or any other Person
or to take any other action whatsoever with regard to the Collateral or any
part thereof unless such failure constitutes gross negligence, willful
misconduct or fraud.  The powers
conferred on the Administrative Agent and the Lenders hereunder are solely to
protect the Administrative Agent’s and the Lenders’ interests in the Collateral
and shall not impose any duty upon the Administrative Agent or any Lender to
exercise any such powers.  The
Administrative Agent and the Lenders shall be accountable only for amounts that
they actually receive as a result of the exercise of such powers, and neither
they nor any of their officers, directors, employees or agents shall be
responsible to any Grantor for any act or failure to act hereunder, except for
their (or their officers, directors, employees or agents’) own gross negligence
or willful misconduct.

7.3           Execution
of Financing Statements.  Pursuant
any applicable law, each Grantor authorizes the Administrative Agent to file or
record financing statements and other

 23
 

filing or recording documents or instruments with
respect to the Collateral without the signature of such Grantor in such form
and in such offices as the Administrative Agent determines appropriate to
perfect the security interests of the Administrative Agent under this
Agreement.  Each Grantor authorizes the Administrative
Agent to use the collateral description “all personal property” in any such
financing statements.  Each Grantor
hereby ratifies and authorizes the filing by the Administrative Agent of any
financing statement with respect to the Collateral made prior to the date
hereof.

7.4           Authority
of Administrative Agent.  Each
Grantor acknowledges that the rights and responsibilities of the Administrative
Agent under this Agreement with respect to any action taken by the
Administrative Agent or the exercise or non-exercise by the Administrative
Agent of any option, voting right, request, judgment or other right or remedy
provided for herein or resulting or arising out of this Agreement shall, as
between the Administrative Agent and the Lenders, be governed by the Credit
Agreement and by such other agreements with respect thereto as may exist from
time to time among them, but, as between the Administrative Agent and the
Grantors, the Administrative Agent shall be conclusively presumed to be acting
as agent for the Lenders with full and valid authority so to act or refrain
from acting, and no Grantor shall be under any obligation, or entitlement, to
make any inquiry respecting such authority.

SECTION 8.  MISCELLANEOUS

8.1           Amendments in Writing.  None of the terms or provisions of this
Agreement may be waived, amended, supplemented or otherwise modified except in
accordance with Sections 8.6 and 12.1 of the Credit Agreement.

8.2           Notices.  All notices, requests and demands to or upon
the Administrative Agent or any Grantor hereunder shall be effected in the
manner provided for in Section 12.2 of the Credit Agreement; provided
that any such notice, request or demand to or upon any Guarantor shall be
addressed to such Guarantor at its notice address set forth on Schedule 1.

8.3           No Waiver by Course of Conduct;
Cumulative Remedies.  Neither the
Administrative Agent nor any Lender shall by any act (except by a written
instrument pursuant to Section 8.1), delay, indulgence, omission or otherwise
be deemed to have waived any right or remedy hereunder or to have acquiesced in
any Default or Event of Default.  No
failure to exercise, nor any delay in exercising, on the part of the
Administrative Agent or any Lender, any right, power or privilege hereunder
shall operate as a waiver thereof.  No
single or partial exercise of any right, power or privilege hereunder shall
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege.  A waiver by
the Administrative Agent or any Lender of any right or remedy hereunder on any
one occasion shall not be construed as a bar to any right or remedy which the
Administrative Agent or such Lender would otherwise have on any future
occasion.  The rights and remedies herein
provided are cumulative, may be exercised singly or concurrently and are not
exclusive of any other rights or remedies provided by law.

8.4           Enforcement Expenses;
Indemnification.  (a)  Subject to the limitations set forth in
Section 12.5 of the Credit Agreement, each Guarantor agrees to pay or reimburse
each Lender and the Administrative Agent for all its costs and expenses
incurred in collecting against such Guarantor under the guarantee contained in
Section 2 or otherwise enforcing or preserving any rights under this Agreement
and the other Loan Documents to which such Guarantor is a

 24
 

party, including, without limitation, the fees and disbursements of
counsel to the Administrative Agent.

(b)           Each Guarantor agrees to pay, and to
save the Administrative Agent and the Lenders harmless from, any and all
liabilities with respect to, or resulting from any delay in paying, any and all
stamp, excise, sales or other taxes which may be payable or determined to be
payable with respect to any of the Collateral or in connection with any of the
transactions contemplated by this Agreement.

(c)           Each Guarantor agrees to pay, and to
save the Administrative Agent and the Lenders harmless from, any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever with
respect to the execution, delivery, enforcement, performance and administration
of this Agreement to the extent the Primary Borrower would be required to do so
pursuant to Section 12.5 of the Credit Agreement.

(d)           The agreements in this Section 8.4
shall survive repayment of the Obligations and all other amounts payable under
the Credit Agreement and the other Loan Documents.

8.5           Successors and Assigns.  This Agreement shall be binding upon the
successors and assigns of each Grantor and shall inure to the benefit of the
Administrative Agent and the Lenders and their successors and assigns; provided
that no Grantor may assign, transfer or delegate any of its rights or
obligations under this Agreement without the prior written consent of the
Administrative Agent.

8.6           Set-Off.  Each Grantor hereby irrevocably authorizes
the Administrative Agent and each Lender at any time and from time to time
while an Event of Default pursuant to Section 10(a) of the Credit Agreement
shall have occurred and be continuing without notice to such Grantor or any
other Grantor, any such notice being expressly waived by each Grantor, to
set-off and appropriate and apply any and all deposits (general or special,
time or demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by the Administrative Agent or such Lender to or for the credit or the
account of such Grantor, or any part thereof in such amounts as the
Administrative Agent or such Lender may elect, against and on account of the
obligations and liabilities of such Grantor to the Administrative Agent or such
Lender hereunder and claims of every nature and description of the
Administrative Agent or such Lender against such Grantor, in any currency,
whether arising hereunder, under the Credit Agreement, any other Loan Document
or otherwise, as the Administrative Agent or such Lender may elect, whether or
not the Administrative Agent or any Lender has made any demand for payment and
although such obligations, liabilities and claims may be contingent or
unmatured.  The Administrative Agent and
each Lender shall notify such Grantor promptly of any such set-off and the
application made by the Administrative Agent or such Lender of the proceeds
thereof, provided that the failure to give such notice shall not affect
the validity of such set-off and application. 
The rights of the Administrative Agent and each Lender under this
Section 8.6 are in addition to other rights and remedies (including, without
limitation, other rights of set-off) which the Administrative Agent or such
Lender may have.

 25
 

8.7           Counterparts.  This Agreement may be executed by one or more
of the parties to this Agreement on any number of separate counterparts
(including by telecopy), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.

8.8           Severability.  Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

8.9           Section Headings.  The Section headings used in this Agreement
are for convenience of reference only and are not to affect the construction
hereof or be taken into consideration in the interpretation hereof.

8.10         Integration.  This Agreement and the other Loan Documents
represent the agreement of the Grantors, the Administrative Agent and the
Lenders with respect to the subject matter hereof and thereof, and there are no
promises, undertakings, representations or warranties by the Administrative
Agent or any Lender relative to subject matter hereof and thereof not expressly
set forth or referred to herein or in the other Loan Documents.  In the event of any conflict between the
terms of this Agreement and the provisions of the Credit Agreement, the
provisions of the Credit Agreement shall control.  With respect to the pledge of any Foreign
Subsidiary Voting Stock, in the event of any conflict between the terms of this
Agreement and the provisions of any pledge agreement covering such Foreign
Subsidiary Voting Stock, the provisions of such pledge agreement shall control.

8.11         GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

8.12         Submission To Jurisdiction; Waivers.  Each Grantor hereby irrevocably and
unconditionally:

(a)           submits for itself and its property
in any legal action or proceeding relating to this Agreement and the other Loan
Documents to which it is a party, or for recognition and enforcement of any
judgment in respect thereof, to the non exclusive general jurisdiction of the
Courts of the State of New York, the courts of the United States of America for
the Southern District of New York, and appellate courts from any thereof;

(b)           consents that any such action or
proceeding may be brought in such courts and waives any objection that it may
now or hereafter have to the venue of any such action or proceeding in any such
court or that such action or proceeding was brought in an inconvenient court
and agrees not to plead or claim the same;

(c)           agrees that service of process in any
such action or proceeding may be effected by mailing a copy thereof by
registered or certified mail (or any substantially similar form of mail),
postage prepaid, to such Grantor at its address referred to in Section 8.2 or
at such other address of which the Administrative Agent shall have been
notified pursuant thereto;

(d)           agrees that nothing herein shall
affect the right to effect service of process in any other manner permitted by
law or shall limit the right to sue in any other jurisdiction; and

 26
 

(e)           waives, to the maximum extent not
prohibited by law, any right it may have to claim or recover in any legal
action or proceeding referred to in this Section any special, exemplary,
punitive or consequential damages.

8.13         Acknowledgments.  Each Grantor hereby acknowledges that:

(a)           it has been advised by counsel in the
negotiation, execution and delivery of this Agreement and the other Loan
Documents to which it is a party;

(b)           neither the Administrative Agent nor
any Lender has any fiduciary relationship with or duty to any Grantor arising
out of or in connection with this Agreement or any of the other Loan Documents,
and the relationship between the Grantors, on the one hand, and the
Administrative Agent and Lenders, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor; and

(c)           no joint venture is created hereby or
by the other Loan Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among the Grantors and the Lenders.

8.14         Additional Grantors.  Parent and each Subsidiary of Holdings that
is required to become a party to this Agreement pursuant to Section 8.6 of the
Credit Agreement shall become a Grantor for all purposes of this Agreement upon
execution and delivery by Parent or such Subsidiary, as applicable, of an
Assumption Agreement substantially in the form of Annex 1 hereto.

8.15         Termination, Releases or
Subordination.

(a)           This Agreement, the security interest
granted to the Administrative Agent and all other security interests granted
hereby shall terminate with respect to all Obligations when all the outstanding
Obligations (other than (x) obligations under Specified Hedge Agreements not
yet due and payable and (y) contingent indemnification obligations not yet
accrued and payable) have been indefeasibly paid in full and the Lenders have
no further commitment to lend under the Credit Agreement, the L/C Obligations
have been reduced to zero and the Issuing Lenders have no further obligations
to issue Letters of Credit under the Credit Agreement.

(b)           A Grantor shall automatically be
released from its obligations hereunder, and the security interest granted to
the Administrative Agent in the Collateral of such Grantor shall be
automatically released, upon the consummation of any transaction permitted by
the Credit Agreement as a result of which such Grantor ceases to be a
Subsidiary; provided that the Required Lenders (or all Lenders, as the
case may be) shall have consented to such transaction (to the extent required
by the Credit Agreement) and the terms of such consent did not provide
otherwise.

(c)           Upon any Disposition by any Grantor
of any Collateral that is permitted under the Credit Agreement, or upon the
effectiveness of any written consent of the Required Lenders (or all Lenders,
as the case may be) to the release of the security interest granted hereby in
any Collateral, the security interest of such Grantor in such Collateral shall
be automatically released or, to the extent permitted under Section 12.16(a) of
the Credit Agreement, subordinated.

 27
 

(d)           In connection with any termination,
release or subordination pursuant to paragraph (a), (b) or (c) of this Section
8.15, the Administrative Agent shall execute and deliver to any Grantor, at
such Grantor’s expense, all documents that such Grantor shall reasonably
request to evidence such termination, release or subordination, as
applicable.  Any execution and delivery
of documents pursuant to this Section 8.15 shall be without recourse to or
warranty by the Administrative Agent.

8.16         WAIVER OF JURY TRIAL.  EACH GRANTOR HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

 28

IN WITNESS WHEREOF, each of the undersigned has caused
this Amended and Restated Guarantee and Collateral Agreement to be duly
executed and delivered as of the date first above written.

	
  

  	
  SIX FLAGS OPERATIONS INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey R.
  Speed

  
	
   

  	
   

  	
  Name: 

  	
  Jeffrey R. Speed

  
	
   

  	
   

  	
  Title: 

  	
  Executive Vice President and

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SIX FLAGS THEME PARK INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey R.
  Speed

  
	
   

  	
   

  	
  Name: 

  	
  Jeffrey R. Speed

  
	
   

  	
   

  	
  Title: 

  	
  Executive Vice President and

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

  

 

[Signature Page to
Guarantee and Collateral Agreement]

 

	
  

  	
  FIESTA TEXAS,
  INC.

  
	
   

  	
  FUNTIME, INC.

  
	
   

  	
  FUNTIME PARKS,
  INC.

  
	
   

  	
  GREAT AMERICA
  LLC

  
	
   

  	
  GREAT ESCAPE
  HOLDING INC.

  
	
   

  	
  GREAT ESCAPE LLC

  
	
   

  	
  GREAT ESCAPE
  THEME PARK LLC

  
	
   

  	
  HURRICANE HARBOR
  GP LLC

  
	
   

  	
  HURRICANE HARBOR
  LP LLC

  
	
   

  	
  KKI, LLC

  
	
   

  	
  MAGIC MOUNTAIN
  LLC

  
	
   

  	
  PARK MANAGEMENT
  CORP.

  
	
   

  	
  PP DATA SERVICES
  INC.

  
	
   

  	
  PREMIER
  INTERNATIONAL HOLDINGS INC.

  
	
   

  	
  PREMIER PARKS
  HOLDINGS INC.

  
	
   

  	
  PREMIER PARKS OF
  COLORADO INC.

  
	
   

  	
  RIVERSIDE PARK
  ENTERPRISES, INC.

  
	
   

  	
  SAN ANTONIO PARK GP, LLC

  
	
   

  	
  SFJ MANAGEMENT INC.

  
	
   

  	
  SFTP INC.

  
	
   

  	
  SFTP SAN ANTONIO GP, INC.

  
	
   

  	
  SFTP SAN ANTONIO II, INC.

  
	
   

  	
  SFTP SAN
  ANTONIO, INC.

  
	
   

  	
  SIX FLAGS GREAT
  ADVENTURE LLC

  
	
   

  	
  SIX FLAGS
  SERVICES OF ILLINOIS, INC.

  
	
   

  	
  SIX FLAGS
  SERVICES, INC.

  
	
   

  	
  SIX FLAGS ST.
  LOUIS LLC

  
	
   

  	
  SOUTH STREET
  HOLDINGS LLC

  
	
   

  	
  STUART AMUSEMENT
  COMPANY

  
	
   

  	
  TIERCO MARYLAND,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey R.
  Speed

  
	
   

  	
   

  	
  Name: 

  	
  Jeffrey R. Speed

  
	
   

  	
   

  	
  Title: 

  	
  Executive Vice President and

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HURRICANE HARBOR LP

  
	
   

  	
  By:

  	
  Hurricane Harbor
  GP LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey R.
  Speed

  
	
   

  	
   

  	
  Name: 

  	
  Jeffrey R. Speed

  
	
   

  	
   

  	
  Title: 

  	
  Executive Vice President and

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

  
					

 

[Signature Page to
Guarantee and Collateral Agreement]

 

	
  

  	
  SAN ANTONIO
  THEME PARK, L.P.

  
	
   

  	
  By:

  	
  San Antonio Park GP, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey R.
  Speed

  
	
   

  	
   

  	
  Name: 

  	
  Jeffrey R. Speed

  
	
   

  	
   

  	
  Title: 

  	
  Executive Vice President and

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SIX FLAGS GREAT ESCAPE L.P.

  
	
   

  	
  By:

  	
  Funtime, Inc.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey R.
  Speed

  
	
   

  	
   

  	
  Name: 

  	
  Jeffrey R. Speed

  
	
   

  	
   

  	
  Title: 

  	
  Executive Vice President and

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SIX FLAGS SAN ANTONIO, L.P.

  
	
   

  	
  By:

  	
  SFTP San Antonio GP, Inc.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey R.
  Speed

  
	
   

  	
   

  	
  Name: 

  	
  Jeffrey R. Speed

  
	
   

  	
   

  	
  Title: 

  	
  Executive Vice President and

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

  
					

 

[Signature Page to
Guarantee and Collateral Agreement]

 

	
  

  	
  ASTROWORLD GP
  LLC

  
	
   

  	
  ASTROWORLD GP
  LLC

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James M.
  Coughlin

  
	
   

  	
   

  	
  Name: 

  	
  James M. Coughlin

  
	
   

  	
   

  	
  Title: 

  	
  General Counsel and Authorized

  
	
   

  	
   

  	
   

  	
  Signatory

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ASTROWORLD LP

  
	
   

  	
  By:

  	
  AstroWorld GP
  LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James M.
  Coughlin

  
	
   

  	
   

  	
  Name: 

  	
  James M. Coughlin

  
	
   

  	
   

  	
  Title: 

  	
  General Counsel and Authorized

  
	
   

  	
   

  	
   

  	
  Signatory

  
					

 

[Signature Page to Guarantee and Collateral Agreement]

ACKNOWLEDGMENT AND CONSENT

                                                            ,
a                             
corporation (the “Issuer”), hereby acknowledges receipt of a copy of the
Amended and Restated Guarantee and Collateral Agreement, dated as of May 25,
2007 (the “Agreement”), made by the Grantors parties thereto for the
benefit of JPMorgan Chase Bank, N.A., as Administrative Agent.  Issuer agrees for the benefit of the
Administrative Agent and the Lenders as follows:

1.  Issuer will be bound by the terms of the
Agreement and will comply with such terms insofar as such terms are applicable
to the Issuer.

2.  Issuer will notify the Administrative
Agent promptly in writing of the occurrence of any of the events described in
Section 5.4(b) of the Agreement.

3.  The terms of Sections 6.2(d) and 6.7 of
the Agreement shall apply to it, mutatis  mutandis, with respect
to all actions that may be required of it, and all prohibited actions, pursuant
to Section 6.2(d) or 6.7 of the Agreement.

IN WITNESS WHEREOF, the
Issuer has caused this Acknowledgment and Consent to be duly executed and
delivered by its proper and duly authorized officer as of the       
day of                     ,
    .

[NAME OF ISSUER]

	
  By

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

Address for Notices:

Fax:

Annex 1 to

Guarantee and
Collateral Agreement

ASSUMPTION AGREEMENT, dated as of                                 ,  ,
made by                                                             ,
a                             
corporation (the “Additional Grantor”), in favor of JPMORGAN CHASE BANK,
N.A., as administrative agent (in such capacity, the “Administrative Agent”)
for the banks and other financial institutions (the “Lenders”) parties
to the Credit Agreement referred to below. 
All capitalized terms not defined herein shall have the meaning ascribed
to them in such Credit Agreement.

W
I  T  N  E  S  S  E  T  H
:

WHEREAS, Six Flags, Inc., Six Flags Operations Inc.,
Six Flags Theme Parks Inc., the Lenders, the Administrative Agent and others
have entered into a Second Amended and Restated Credit Agreement, dated as of
May 25, 2007 (as amended, supplemented or otherwise modified from time to time,
the “Credit Agreement”);

WHEREAS, in connection with the Credit Agreement, Six
Flags, Inc., Six Flags Operations Inc., Six Flags Theme Parks Inc. and certain
of its Affiliates (other than the Additional Grantor) have entered into the
Amended and Restated Guarantee and Collateral Agreement, dated as of May 25,
2007 (as amended, supplemented or otherwise modified from time to time, the “Guarantee
and Collateral Agreement”) in favor of the Administrative Agent for the
benefit of the Lenders;

WHEREAS, the Credit Agreement requires the Additional
Grantor to become a party to the Guarantee and Collateral Agreement; and

WHEREAS, the Additional Grantor has agreed to execute
and deliver this Assumption Agreement in order to become a party to the
Guarantee and Collateral Agreement;

NOW, THEREFORE, IT IS AGREED:

1.  Guarantee and Collateral Agreement.  By executing and delivering this Assumption
Agreement, the Additional Grantor, as provided in Section 8.14 of the Guarantee
and Collateral Agreement, hereby becomes a party to the Guarantee and
Collateral Agreement as a Grantor thereunder with the same force and effect as
if originally named therein as a Grantor and, without limiting the generality
of the foregoing, hereby expressly assumes all obligations and liabilities of a
Grantor thereunder, including, without limitation, the grant, assignment and
transfer to the Administrative Agent, for the ratable benefit of the Lenders,
of a security interest in the Collateral now owned or at anytime hereafter
acquired by the Additional Grantor, as provided in Section 3 of the Guarantee
and Collateral Agreement.  The
information set forth in Annex 1-A hereto is hereby added to the information
set forth in the Schedules to the Guarantee and Collateral Agreement.  The Additional Grantor hereby represents and
warrants that each of the representations and warranties contained in Section 4
of the Guarantee and Collateral Agreement applicable to it is true and correct
on and as the date hereof (after giving effect to this Assumption Agreement) as
if made on and as of such date.

2.  Governing Law.  THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK.

 2
 

IN WITNESS WHEREOF, the undersigned has caused this
Assumption Agreement to be duly executed and delivered as of the date first
above written.

	
   

  	
  [ADDITIONAL GRANTOR]

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 3

Annex 1-A to

Assumption
Agreement

Supplement to Schedule 1

Supplement to Schedule 2

Supplement to Schedule 3

Supplement to Schedule 4

Supplement to Schedule 5

SCHEDULE 5

INTELLECTUAL PROPERTY RIGHTS

ISSUED PATENTS AND PATENT APPLICATIONS

	
  Name of Grantor

  	
   

  	
  Patent Title

  	
   

  	
  Patent or Application

  Number

  	
   

  	
  Jurisdiction

  
	
          

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
           

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

TRADEMARK REGISTRATIONS AND APPLICATIONS

	
  Name of Grantor

  	
   

  	
  Trademark

  	
   

  	
  Registration or Serial

  Number

  	
   

  	
  Jurisdiction

  
	
           

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
           

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
           

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

COPYRIGHT REGISTRATIONS AND APPLICATIONS

	
  Name of Grantor

  	
   

  	
  Copyright Title

  	
   

  	
  Registration or

  Application Number

  	
   

  	
  Jurisdiction

  
	
           

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
           

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
           

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

EXCLUSIVE PATENT LICENSES

	
  Title of 

  License

  	
   

  	
  Licensor/s

  	
   

  	
  Licensee/s

  	
   

  	
  Date of

  License

  	
   

  	
  Patent Title

  	
   

  	
  Patent or

  Application

  Number

  
	
           

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

EXCLUSIVE TRADEMARK LICENSES

	
  Title of 

  License

  	
   

  	
  Licensor/s

  	
   

  	
  Licensee/s

  	
   

  	
  Date of

  License

  	
   

  	
  Trademark

  	
   

  	
  Serial or

  Registration

  Number

  
	
           

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

EXCLUSIVE COPYRIGHT LICENSES

	
  Title of 

  License

  	
   

  	
  Licensor/s

  	
   

  	
  Licensee/s

  	
   

  	
  Date of

  License

  	
   

  	
  Copyright
  Title

  	
   

  	
  Registration

  or

  Application

  Number

  
	
           

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

INTELLECTUAL PROPERTY LICENSES IN WHICH A GRANTOR IS THE LICENSOR OR
FRANCHISOR

	
  Title of 

  License

  	
   

  	
  Licensor/s or

  Franchisor/s

  	
   

  	
  Licensee/s 

  or

  Franchisee/s

  	
   

  	
  Date of

  License

  	
   

  	
  Description
  of Licensed

  Intellectual Property

  
	
           

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 2Exhibit 10.1

    
      

    

    EMPLOYMENT
      AGREEMENT

    

    This
      Employment Agreement (the "Agreement"), entered into effective as of the 30th
      day of May, 2007, by and between RICK'S
      CABARET INTERNATIONAL, INC.,
      a Texas
      corporation (the "Company"), and PHIL
      MARSHALL ("Executive").

    

    W
      I T N E S S E T H:

    

    WHEREAS,
      Company
      desires to employ Executive as provided herein; and 

    

    WHEREAS,
      Executive desires to accept such employment.

    

    NOW,
      THEREFORE, for and in consideration of the mutual covenants and agreements
      contained herein, and for other good and valuable consideration, the receipt
      and
      sufficiency of which are hereby acknowledged, the parties hereto agree as
      follows:

    

    1.
   Employment.
      Company
      hereby employs Executive and Executive hereby accepts employment with Company
      upon the terms and conditions hereinafter set forth.

    

    2.
   Duties.
      Subject
      to the power of the Board of Directors of Company to elect and remove officers,
      Executive will serve the Company as its Chief Financial Officer and will
      faithfully and diligently perform the services and functions relating to such
      office or otherwise reasonably incident to such office, provided that all such
      services and functions will be reasonable and within Executive's area of
      expertise. Executive will, during the term of this Agreement (or any extension
      thereof), devote his full business time, attention and skills and best efforts
      to the promotion of the business of Company. The foregoing will not be construed
      as preventing Executive from making investments in other businesses or
      enterprises provided that (a) Executive agrees not to become engaged in any
      other business activity that interferes with his ability to discharge his duties
      and responsibilities to Company and (b) Executive does not violate any other
      provision of this Agreement.

    

    3.
   Term.
      Subject
      to the terms and conditions hereof, the term of employment of Executive will
      commence as of the date hereof (the "Commencement Date") and will end on that
      date in the year 2009, unless earlier terminated by either party pursuant to
      the
      terms hereof. The term of this Agreement is referred to herein as the
      "Term."

    

    4.
   Compensation
      and Benefits During the Employment Term.

    

    
      	 	
              (a)

            	
              Salary.
                Commencing upon the date of this Agreement, Executive will be paid
                an
                annual base salary of $175,000, payable bi-weekly (the "Salary").
                At any
                time and from time to time the Salary may be increased for the remaining
                portion of the term if so determined by the Board of Directors of
                Company
                after a review of Executive's performance of his duties
                hereunder.

            

    

    

    
      	 	
              (b)

            	
              Bonus.
                As further compensation, Executive will be eligible for bonuses as
                determined from time to time by the Board of
                Directors.

            

    

    
      
        
        

      

      
        Employment
          Agreement - Page 1

        
          

        

      

      
        
        

      

    

    
      	 	
              (c)

            	
              Expenses.
                Upon submission of a detailed statement and reasonable documentation,
                Company will reimburse Executive in the same manner as other executive
                officers for all reasonable and necessary or appropriate out-of-pocket
                travel and other expenses incurred by Executive in rendering services
                required under this Agreement.

            

    

    

    
      	 	
              (d)

            	
              Benefits;
                Insurance.

            

    

    

    
      	 	
              (i)

            	
              Medical,
                Dental and Vision Benefits.
                During this Agreement, Executive and his dependents will be entitled
                to
                receive such group medical, dental and vision benefits as Company
                may
                provide to its other executives, provided such coverage is reasonably
                available, or be reimbursed if Executive is carrying his own similar
                insurance.

            

    

    

    
      	 	
              (ii)

            	
              Benefit
                Plans.
                The Executive will be entitled to participate in any benefit plan
                or
                program of the Company which may currently be in place or implemented
                in
                the future.

            

    

    

    
      	 	
              (iii)

            	
              Other
                Benefits.
                During the Term, Executive will be entitled to receive, in addition
                to and
                not in lieu of base salary, bonus or other compensation, such other
                benefits and normal perquisites as Company currently provides or
                such
                additional benefits as Company may provide for its executive officers
                in
                the future.

            

    

    

    
      	 	
              (e)

            	
              Vacation.
                Executive will be entitled to two weeks paid vacation each year of
                this
                Agreement.

            

    

    

    5.
   Confidentiality
      and Non-Competition. 

    

    
      	 	
              (a)

            	
              Confidentiality.
                In
                the course of the performance of Executive's duties hereunder, Executive
                recognizes and acknowledges that Executive may have access to certain
                confidential and proprietary information of Company or any of its
                affiliates. Without the prior written consent of Company, Executive
                shall
                not disclose any such confidential or proprietary information to
                any
                person or firm, corporation, association, or other entity for any
                reason
                or purpose whatsoever, and shall not use such information, directly
                or
                indirectly, for Executive's own behalf or on behalf of any other
                party.
                Executive agrees and affirms that all such information is the sole
                property of Company and that at the termination and/or expiration
                of this
                Agreement, at Company's written request, Executive shall promptly
                return
                to Company any and all such information so requested by
                Company.

            

    

    

    The
      provisions of this Section 5 shall not, however, prohibit Executive from
      disclosing to others or using in any manner information that: 

    

    
      	 	
              (i)

            	
              has
                been published or has become part of the public domain other than
                by acts,
                omissions or fault of
                Executive;

            

    

    
      
        
        

      

      
        Employment
          Agreement - Page 2

        
          

        

      

      
        
        

      

    

    
      	 	
              (ii)

            	
              has
                been furnished or made known to Executive by third parties (other
                than
                those acting directly or indirectly for or on behalf of Executive)
                as a
                matter of legal right without restriction on its use or disclosure;
                

            

    

    

    
      	 	
              (iii)

            	
              was
                in the possession of Executive prior to obtaining such information
                from
                Company in connection with the performance of this Agreement;
                or

            

    

    

    
      	 	
              (iv)

            	
              is
                required to be disclosed by law.

            

    

    

    
      	 	
              (b)

            	
              Non-Competition.
                Executive agrees that he will not, for himself, on behalf of, or
                in
                conjunction with any person, firm, corporation or entity, either
                as
                principal, employee, shareholder, member, director, partner, consultant,
                owner or part-owner of any corporation, partnership or any other
                type of
                business entity, directly or indirectly, own, manage, operate, control,
                be
                employed by, participate in, or be connected in any manner with the
                ownership, management, operation, or control of any establishment
                which
                has live female nude or semi-nude entertainment (“Adult Entertainment
                Business”) or is in any business similar to or competitive with the Adult
                Entertainment Business presently conducted by the Company anywhere
                in the
                United States within a twenty (20) mile radius of any Adult Entertainment
                Business of the Company or any Adult Entertainment Business of the
                Company
                under construction, under contract, in development or leased by or
                to the
                Company, for a period of one year (the “Non-Compete Period”) from the
                termination of this Agreement. However, in the event of the termination
                of
                Executive's employment pursuant to Section 7(d) or 7(f), the Non-Compete
                Period shall be six months. 

            

    

    

    Executive
      agrees not to hire, solicit or attempt to solicit for employment by Executive
      or
      any company to which he may be involved, either directly or indirectly, any
      party who is an employee or independent contractor of the Company or any entity
      which is affiliated with the Company, or any person who was an employee or
      independent contractor of the Company or any entity which is affiliated with
      the
      Company within the one year period immediately following the termination of
      this
      Agreement.

    

    Executive
      acknowledges that he has carefully read and considered all provisions of this
      Agreement and agrees that:

    

    
      	 	
              (i)

            	
              Due
                to the nature of the Company's business, the foregoing covenants
                place no
                greater restraint upon Executive than is reasonably necessary to
                protect
                the business and goodwill of the Company;

            

    

    

    
      	 	
              (ii)

            	
              These
                covenants protect the legitimate interests of the Company and do
                not serve
                solely to limit the Company's future
                competition;

            

    

    

    
      	 	
              (iii)

            	
              This
                Agreement is not an invalid or unreasonable restraint of
                trade;

            

    

    
      
        
        

      

      
        Employment
          Agreement - Page 3

        
          

        

      

      
        
        

      

    

    
      	 	
              (iv)

            	
              A
                breach of these covenants by Executive would cause irreparable damage
                to
                the Company;

            

    

    

    
      	 	
              (v)

            	
              These
                covenants are reasonable in scope and are reasonably necessary to
                protect
                the Company's business and goodwill which the Company has established
                through its own expense and effort;
                and

            

    

    

    
      	 	
              (vi)

            	
              The
                signing of this Agreement is necessary as part of the consummation
                of the
                transactions described in the preamble.

            

    

    

    6.
   Indemnification.
      The
      Corporation shall to the full extent permitted by law or as set forth in the
      Articles of Incorporation and the Bylaws of the Company, indemnify, defend
      and
      hold harmless Executive from and against any and all claims, demands,
      liabilities, damages, loses and expenses (including reasonable attorney's fees,
      court costs and disbursements) arising out of the performance by him of his
      duties hereunder except in the case of his willful misconduct.

    

    7.
   Termination.
      This
      Agreement and the employment relationship created hereby will terminate (i)
      upon
      the death or disability of Executive under section 7(a) or 7(b); (ii) with
      cause
      under Section 7(c); (iii) for good reason under Section 7(d); (iv) upon the
      voluntary termination of employment by Executive under Section7(e); or without
      cause under Section 7(f).

     

    
      	 	
              (a)

            	
              Disability.
                The Company shall have the right to terminate the employment of the
                Executive under this Agreement for disability in the event Executive
                suffers an injury, illness, or incapacity of such character as to
                substantially disable him from performing his duties without reasonable
                accommodation by the Company hereunder for a period of more than
                one
                hundred eighty (180) consecutive days upon the Company giving at
                least
                thirty (30) days written notice of
                termination.

            

    

    

    
      	 	
              (b)

            	
              Death.
                This Agreement will terminate on the Death of the
                Executive.

            

    

    

    
      	 	
              (c)

            	
              With
                Cause.
                The Company may terminate this Agreement at any time because of (i)
                Executive's material breach of any term of the Agreement, (ii) the
                determination by the Board of Directors in the exercise of its reasonable
                judgment that Executive has committed an act or acts constituting
                a felony
                or other crime involving moral turpitude, dishonesty or theft or
                fraud; or
                (iii) Executive's gross negligence in the performance of his duties
                hereunder, provided, in each case, however, that the Company shall
                not
                terminate this Agreement pursuant to this Section 7(c) unless the
                Company
                shall first have delivered to the Executive, a notice which specifically
                identifies such breach or misconduct and the executive shall not
                have
                cured the same within fifteen (15) days after receipt of such
                notice.

            

    

    

    
      	 	
              (d)

            	
              Good
                Reason.
                The Executive may terminate his employment for "Good Reason"
                if:

            

    

    
      
        
        

      

      
        Employment
          Agreement - Page 4

        
          

        

      

      
        
        

      

    

    
      	 	
              (i)

            	
              he
                is assigned, without his express written consent, any duties materially
                inconsistent with his positions, duties, responsibilities, or status
                with
                the Company as of the date hereof, or a change in his reporting
                responsibilities or titles as in effect as of the date hereof; provided,
                however, that Executive must provide the Company with written notice
                of
                his dispute of such re-assignment of duties or change in his reporting
                responsibilities under this Section 7(d)(i) and give the Company
                opportunity to cure such inconsistency. If such dispute is not resolved
                within thirty (30) days, the Company shall submit such dispute to
                arbitration under Section 14. 

            

    

    

    
      	 	
              (ii)

            	
              his
                compensation is reduced;

            

    

    

    
      	 	
              (iii)

            	
              the
                Company does not pay any material amount of compensation due hereunder
                and
                then fails either to pay such amount within ten (10) days of written
                notice or to contest in good faith such notice. Further, if such
                contest
                is not resolved within thirty (30) days, the Company shall submit
                such
                dispute to arbitration under Section
                14.

            

    

    

    
      	 	
              (e)

            	
              Voluntary
                Termination.
                The Executive may terminate his employment
                voluntarily.

            

    

    

    
      	 	
              (f)

            	
              Without
                Cause.
                The Company may terminate this Agreement without
                cause.

            

    

    

    8.
   Obligations
      of Company Upon Termination.

    

    
      	 	
              (a)

            	
              In
                the event of the termination of Executive's employment pursuant to
                Section
                7 (a), (b), (c) or (e), Executive will be entitled only to the
                compensation earned by him hereunder as of the date of such termination
                (plus life insurance or disability benefits if applicable and provided
                for
                pursuant to Section 4(c)).

            

    

    

    
      	 	
              (b)

            	
              In
                the event of the termination of Executive’s employment pursuant to Section
                7 (d) or (f), Executive will be entitled to receive one lump sum
                payment
                of $15,000.

            

    

     

    9.
   Waiver
      of Breach.
      The
      waiver by any party hereto of a breach of any provision of this Agreement will
      not operate or be construed as a waiver of any subsequent breach by any
      party.

    

    10.   Costs.
      If any
      action at law or in equity is necessary to enforce or interpret the terms of
      this Agreement, the prevailing party will be entitled to reasonable attorney's
      fees, costs and necessary disbursements in addition to any other relief to
      which
      he or it may be entitled.

    

    11.   Notices.
      Any
      notices, consents, demands, requests, approvals and other communications to
      be
      given under this Agreement by either party to the other will be deemed to have
      been duly given if given in writing and personally delivered or within two
      days
      if sent by mail, registered or certified, postage prepaid with return receipt
      requested, as follows:

    

    
      
        
        

      

      
        Employment
          Agreement - Page 5

        
          

        

      

      
        
        

      

       

    

    
      	
              If
                to Company:

            	
              Rick's
                Cabaret International, Inc.

            
	 	
              10959
                Cutten Road

            
	 	
              Houston,
                Texas 77066

            
	 	
              Attention:
                Eric Langan, CEO/President

            
	 	 
	
              If
                to Executive:

            	
              Phil
                Marshall

            
	 	 
	 	 

    

    

    Notices
      delivered personally will be deemed communicated as of actual
      receipt.

    

    12.   Entire
      Agreement.
      This
      Agreement and the agreements contemplated hereby constitute the entire agreement
      of the parties regarding the subject matter hereof, and supersede all prior
      agreements and understanding, both written and oral, among the parties, or
      any
      of them, with respect to the subject matter hereof.

    

    13.   Severability.
      If any
      provision of this Agreement is held to be illegal, invalid or unenforceable
      under present or future laws effective during this Agreement, such provision
      will be fully severable and this Agreement will be construed and enforced as
      if
      such illegal, invalid or unenforceable provision never comprised a part hereof;
      and the remaining provisions hereof will remain in full force and effect and
      will not be affected by the illegal, invalid or unenforceable provision or
      by
      its severance herefrom. Furthermore, in lieu of such illegal, invalid or
      unenforceable provision there will be added automatically as part of this
      Agreement a provision as similar in its terms to such illegal, invalid or
      unenforceable provision as may be possible and be legal, valid and
      enforceable.

    

    14.   Arbitration.
      If a
      dispute should arise regarding this Agreement the parties agree that all claims,
      disputes, controversies, differences or other matters in question arising out
      of
      this relationship shall be settled finally, completely and conclusively by
      arbitration in Houston, Texas in accordance with the Commercial Arbitration
      Rules of the American Arbitration Association (the "Rules"). The governing
      law
      of this Agreement shall be the substantive law of the State of Texas, without
      giving effect to conflict of laws. A decision of the arbitrator shall be final,
      conclusive and binding on the Company and Executive. Any arbitration held in
      accordance with this paragraph shall be private and confidential and no person
      shall be entitled to attend the hearings except the arbitrator, Executive,
      Executive's attorneys, a representative of the Company, the Company's attorneys,
      and advisors to or witnesses for any party. The matters submitted to
      arbitration, the hearings and proceedings and the arbitration award shall be
      kept and maintained in the strictest confidence by Executive and the Company
      and
      shall not be discussed, disclosed or communicated to any persons except as
      may
      be required for the preparation of expert testimony. On request of any party,
      the record of the proceeding shall be sealed and may not be disclosed except
      insofar, and only insofar, as may be necessary to enforce the award of the
      arbitrator and any judgement enforcing an award. The prevailing party shall
      be
      entitled to recover reasonable and necessary attorneys' fees and costs from
      the
      non-prevailing party and the determination of such fees and costs and the award
      thereof shall be included in the claims to be resolved by the arbitrator
      hereunder.

    
      
        
        

      

      
        Employment
          Agreement - Page 6

        
          

        

      

      
        
        

      

    

    15.   Captions.
      The
      captions in this Agreement are for convenience of reference only and will not
      limit or otherwise affect any of the terms or provisions hereof.

    

    16.   Gender
      and Number.
      When the
      context requires, the gender of all words used herein will include the
      masculine, feminine and neuter and the number of all words will include the
      singular and plural.

    

    17.   Execution.
      This
      Agreement may be executed in two or more counterparts, all of which when taken
      together shall be considered one and the same agreement and shall become
      effective when counterparts have been signed by each party and delivered to
      the
      other party, it being understood that both parties need not sign the same
      counterpart. In the event that any signature is delivered by facsimile
      transmission or by e-mail delivery of a “.pdf” format data file, such signature
      shall create a valid and binding obligation of the party executing (or on whose
      behalf such signature is executed) with the same force and effect as if such
      facsimile or “.pdf” signature page were an original thereof.

    

    18.   Company
      Authorization.
      The
      Company represents that the Board of Directors has approved this
      Agreement.

    

    IN
      WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
      the
      day and year first above written.

    

    
      	 	
              COMPANY:

            
	 	 	 
	 	
              RICK'S
                CABARET INTERNATIONAL, INC.

            
	 	 	 
	 	 	 
	 	
              By:
                

            	
              /s/
                Eric Langan

            
	 	 	
              Eric
                Langan, CEO/President

            
	 	 	 
	 	 	 
	 	
              EXECUTIVE:

            
	 	 	 
	 	 	 
	 	
              By:

            	
              /s/
                Phil Marshall

            
	 	 	
              Phil
                Marshall

            

    

     

     

    Employment
      Agreement - Page 7

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