PROMISSORY NOTE

 

“ Bankruptcy Case ” means a voluntary chapter 11 bankruptcy case(s), if any, commenced by SFI and certain of its Subsidiaries within 120 days of the Borrowing Date but such case shall be considered the Bankruptcy Case only for so long as a trustee or receiver with expanded powers has not been appointed in such case and the case has not been converted to a case under chapter 7 of the Bankruptcy Code.

 

“ Bankruptcy Code ” means the Federal Bankruptcy Code of 1978, as amended from time to time.

 

“ Borrower Bankruptcy Event ” means, as to any Borrower, the occurrence of any one or more of the following:

 

(i)                                      a proceeding or case shall be commenced, without the application or consent of such Borrower, in any court of competent jurisdiction, seeking (A) its reorganization, liquidation, dissolution, arrangement or winding up, or the composition or readjustment of its debts, (B) the appointment of a receiver, custodian, trustee, examiner, liquidator or the like of such Borrower or of all or any substantial part of such Borrower’s Property, or (C) similar relief in respect of such Borrower under any law relating to bankruptcy, insolvency, reorganization, winding up, or composition or adjustment of debts, and such proceeding or case shall continue undismissed, or an order, judgment or decree approving or ordering any of the foregoing shall be entered and continue unstayed and in effect, for a period of 30 or more days; or an order for relief against such Borrower shall be entered in an involuntary case under the Bankruptcy Code or any other applicable bankruptcy, insolvency or similar laws;

 

(ii)                                   such Borrower shall (A) apply for or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee, examiner or liquidator of itself or of all or a substantial part of its Property, (B) make a general assignment for the benefit of its creditors, (C) commence a voluntary case under the Bankruptcy Code or any other applicable bankruptcy, insolvency or similar laws, (D) file a petition seeking to take advantage of any other law relating to bankruptcy, insolvency, reorganization, liquidation, dissolution, arrangement or winding up, or composition or readjustment of debts, or (E) fail to controvert in a timely and appropriate manner, or acquiesce in writing to, any petition filed against it in an involuntary case under the Bankruptcy Code or any other applicable bankruptcy, insolvency or similar laws; or

 

(iii)                                such Borrower shall admit in writing its inability to, or be generally unable to, pay its debts as such debts become due.

 

“ Borrower Expenses ” means $50,000 per annum in respect of expenses of the Borrowers in the aggregate.

 

“Borrower Indebtedness ” of any Borrower means (i) all indebtedness of such Borrower for borrowed money or for the deferred purchase price of Property or services (including reimbursement and all other obligations with respect to surety bonds, letters of credit and bankers’ acceptances, whether or not matured, but not including obligations to trade creditors incurred in the ordinary course of business), (ii) all

 

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obligations of such Borrower evidenced by notes, bonds, debentures or similar instruments, (iii) all indebtedness created or arising under any conditional sale or other title retention agreements with respect to Property acquired by such Borrower (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such Property), (iv) all obligations under capital leases of such Borrower, (v) all Borrower Indebtedness guaranteed by such Borrower to the extent of such guarantee, (vi) all Borrower Indebtedness referred to in clause (i), (ii), (iii), (iv) or (v) above secured by (or for which the holder of such Borrower Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien upon or in Property (including accounts and contract rights) owned by such Borrower, even though such Borrower has not assumed or become liable for the payment of such Borrower Indebtedness, but only to the extent of the value of the Property, and (vii) any obligations requiring payments in excess of the counter-party obligations under any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement or other similar agreement or derivative agreement of such Borrower.

 

“ Beneficial Share Assignment Agreement ” means that certain Beneficial Share Assignment Agreement, dated as of April 1, 1998, by and among TW-SPV Co. and SFI (as successor to Premier Parks Inc.), as amended.

 

“ Borrower ” has the meaning set forth in the preamble hereto.

 

“ Borrowing Date ” means the date of this Note.

 

“ Business ” means the business operated by SFI or any of its Subsidiaries.

 

“ Business Day ” means a day other than a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to close.

 

“ Capital Stock ” means any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation) and any and all warrants, rights or options to purchase any of the foregoing.

 

“ Change of Control ” means, as to SFI, the occurrence of any one or more of the following: (i) any “Person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a person shall be deemed to have “beneficial ownership” of all shares that any such person has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than 35% of the voting stock of SFI; (ii) during any period of two consecutive years, individuals who at the beginning of such period constituted the board of directors of SFI (together with any new directors whose election by such board of directors or whose nomination for election by SFI’s shareholders was approved by a vote of a majority of SFI’s directors then still in office who either were directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of SFI’s directors then in office; (iii) any

 

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change in control with respect to SFI (or similar event, however denominated) shall occur under and as defined in any SFI Indenture, the SFI Convertible Indenture or any other agreement in respect of Guarantor Indebtedness in an aggregate principal amount of at least $25,000,000 to which SFI or any of its Subsidiaries is a party, or (iv) SFI shall cease to own directly or indirectly 100% of the Capital Stock of SFO or SFTP.

 

“ Contractual Obligation ” means, as to any Person, any provision of any security issued by such Person or of any material agreement, lease, instrument or other undertaking to which such Person is a party or by which it or any of its Property is bound.

 

“ Dollar ” and the symbol “ $ ” mean lawful money of the United States of America.

 

“ Escrow Account ” has the meaning set forth in the Subordinated Indemnity Escrow Agreement.

 

“ Event of Default ” has the meaning set forth in Section 11 hereto.

 

“ Excess Proceeds ” means any and all proceeds received by the Borrowers (i) in respect of the Units held thereby or (ii) from any other sources, less (x) Borrower Expenses, (y) the amount of any interest paid or payable in accordance with Section 2(a) hereof, and (z) amounts necessary to pay Expenses owing from time to time after the Borrowing Date under Section 6.

 

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended.

 

“ Exchange Offer ” means (a) the Exchange Offer and the Consent Solicitation relating to the debt securities of SFI, filed with the Securities and Exchange Commission on April 20, 2009, and (b) the Exchange Offer and the Consent Solicitation relating to the convertible securities of SFI, filed with the Securities and Exchange Commission on May 6, 2009, each as amended, modified or extended as permitted hereunder.

 

“ Expenses ” has the meaning set forth in Section 6 hereto.

 

“ GA Fund ” means Six Flags Fund, Ltd. (L.P.), a Georgia limited partnership.

 

“ GA Overall Agreement” means that certain Overall Agreement, dated as of February 15, 1997, by and among GA Fund, the Salkin Family Trust, SFG, Inc., SFG-I, LLC, SFG-II, LLC, Six Flags Over Georgia, Ltd. (now known as Six Flags Over Georgia, LLC), SFOG Acquisition A, Inc., SFOG Acquisition B, L.L.C., Six Flags Over Georgia, Inc., SFOG II, Inc., SFOG II Employee, Inc., Six Flags Services of Georgia, Inc., SFTP, and SFO (as successor to Six Flags Entertainment Corporation).

 

“ GAAP ” means generally accepted accounting principles in the United States set forth from time to time in the opinions and pronouncements of the Accounting

 

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Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board (or agencies with similar functions of comparable stature and authority within the U.S. accounting profession), which are applicable to the circumstances as of the date of determination.

 

“ Georgia Park ” has the meaning set forth in the Subordinated Indemnity Agreement.

 

“ Governmental Authority ” means any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative functions of or pertaining to government, any securities exchange and any self-regulatory organization (including the National Association of Insurance Commissioners) having jurisdiction over the Business or the Property of the Loan Parties and their respective Subsidiaries.

 

“ Guarantee ” means the Guarantee Agreement to be executed and delivered by the Guarantors in favor of the Lender, substantially in the form attached hereto as Exhibit A , as the same may be amended, supplemented or otherwise modified from time to time.

 

“ Guaranteed Obligations ” means the collective reference to the unpaid principal of and interest on the Loan and all other obligations, expenses and liabilities of the Borrowers to the Lender (including the Expenses and interest accruing at the then applicable rate provided in this Note after the maturity of the Loan and interest accruing at the then applicable rate provided in this Note after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Borrowers whether or not a claim for post-filing or post-petition interest is allowed in such proceeding), 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 Note, in each case whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses or otherwise (including all fees and disbursements of counsel to the Lender that are required to be paid by the Borrowers pursuant to the terms of this Note).

 

“ Guarantor Bankruptcy Event ” means, as to any Guarantor, the occurrence of any one or more of the following:

 

(i)                                      a proceeding or case shall be commenced, without the application or consent of such Guarantor, in any court of competent jurisdiction, seeking (A) its reorganization, liquidation, dissolution, arrangement or winding up, or the composition or readjustment of its debts, (B) the appointment of a receiver, custodian, trustee, examiner, liquidator or the like of such Guarantor or of all or any substantial part of such Guarantor’s Property, or (C) similar relief in respect of such Guarantor under any law relating to bankruptcy, insolvency, reorganization, winding up, or composition or adjustment of debts, and such proceeding or case shall continue undismissed, or an order,

 

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judgment or decree approving or ordering any of the foregoing shall be entered and continue unstayed and in effect, for a period of 60 or more days; or an order for relief against such Guarantor shall be entered in an involuntary case under the Bankruptcy Code or any other applicable bankruptcy, insolvency or similar laws;

 

(ii)                                   such Guarantor shall (A) apply for or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee, examiner or liquidator of itself or of all or a substantial part of its Property, (B) make a general assignment for the benefit of its creditors, (C) commence a voluntary case under the Bankruptcy Code or any other applicable bankruptcy, insolvency or similar laws, (D) file a petition seeking to take advantage of any other law relating to bankruptcy, insolvency, reorganization, liquidation, dissolution, arrangement or winding up, or composition or readjustment of debts, or (E) fail to controvert in a timely and appropriate manner, or acquiesce in writing to, any petition filed against it in an involuntary case under the Bankruptcy Code or any other applicable bankruptcy, insolvency or similar laws; or

 

(iii)                                such Guarantor shall admit in writing its inability to, or be generally unable to, pay its debts as such debts become due.

 

“Guarantor Indebtedness” of any Guarantor means (i) all indebtedness of such Guarantor for borrowed money or for the deferred purchase price of Property or services (including reimbursement and all other obligations with respect to surety bonds, letters of credit and bankers’ acceptances, whether or not matured, but not including obligations to trade creditors and accrued expenses incurred in the ordinary course of business), (ii) all obligations of such Guarantor evidenced by notes, bonds, debentures or similar instruments, (iii) all indebtedness created or arising under any conditional sale or other title retention agreements with respect to Property acquired by such Guarantor (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such Property), (iv) all obligations under capital leases of such Guarantor, (v) all Guarantor Indebtedness guaranteed by such Guarantor to the extent of such guarantee, and (vi) all Guarantor Indebtedness referred to in clause (i), (ii), (iii), (iv) or (v) above secured by (or for which the holder of such Guarantor Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien upon or in Property (including accounts and contract rights) owned by such Guarantor, even though such Guarantor has not assumed or become liable for the payment of such Guarantor Indebtedness, but only to the extent of the value of the Property; provided , that all references to “Guarantor Indebtedness” shall not include any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement or other similar agreement or derivative agreement of any Guarantor.

 

“ Guarantors ” means SFI, SFO and SFTP, collectively; and “ Guarantor ” means any of them.

 

“ Indemnified Parties ” has the meaning set forth in Section 14 hereto.

 

“ Interest Rate ” has the meaning set forth in Section 2(a) hereto.

 

“ Lender ” has the meaning set forth in the preamble hereto.

 

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“ Liabilities ” has the meaning set forth in Section 8(d) hereto.

 

“ License Agreements ” means, collectively, the Retail License (#8898-TOON), dated as of January 1, 1998, by and between Warner Bros. Consumer Products Inc. (as successor to Warner Bros. Consumer Products Division, a division of Time Warner Entertainment Company, L.P.) and SFTP, and the Amended and Restated License Agreement #5854-WB/DC, dated as of April 1, 1998, by and among Warner Bros. Consumer Products Inc. (as successor to Warner Bros. Consumer Products Division, a division of Time Warner Entertainment Company, L.P.), DC Comics, SFI (as successor to Premier Parks Inc.) and SFTP, in each case, as amended.

 

“ Lien ” means, with respect to any Property, any mortgage, lien, pledge, charge, security interest or encumbrance having the effect of security in respect of such Property.  For purposes of the Loan Documents, a Person shall be deemed to own subject to a Lien any Property that it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement (other than an operating lease) relating to such Property.

 

“ Liquidity Put ” has the meaning as set forth in the GA Overall Agreement and the TX Overall Agreement, respectively and as applicable.

 

“ Loan ” means the loan made by the Lender to the Borrowers to fund their obligations with respect to the 2009 Liquidity Put and evidenced by this Note.

 

“ Loan Documents ” means this Note and the Guarantee.

 

“ Loan Parties ” means, collectively, the Borrowers and the Guarantors, and “ Loan Party ” means any one of them.

 

“ Losses ” has the meaning set forth in Section 14 hereto.

 

“ Material Adverse Effect ” means any change, event, circumstance, fact, condition or development that does or could reasonably be expected to have a material adverse effect upon (i) the Business, Property or financial condition of SFI and its Subsidiaries, taken as a whole, (ii) the validity or enforceability of this Note or the Guarantee or the rights or remedies of the Lender hereunder or thereunder, (iii) the ability of a Borrower to perform the Obligations or (iv) the ability of a Guarantor to pay the Guaranteed Obligations.

 

“ Maturity Date ” means March 15, 2011.

 

“ Obligations ” means (i) the unpaid principal of and interest on the Loan (including any interest accruing after the Maturity Date and after any Borrower Bankruptcy Event, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding), (ii) all other obligations of the Borrowers under or with respect to this Note and (iii) the obligations of each other Loan Party under or with respect to the Loan Documents.

 

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“ Partnership Parks Agreements ” means the GA Overall Agreement, the TX Overall Agreement and the Related Agreements (as such term is defined in the GA Overall Agreement and the TX Overall Agreement, respectively).

 

“ Person ” means an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Authority or other entity of whatever nature.

 

“ Property ” means any right or interest in or to property of any kind whatsoever, whether real property, personal or mixed and whether tangible or intangible, including Capital Stock.

 

“ Related Indemnity Agreements ” means the Subordinated Indemnity Escrow Agreement and the Beneficial Share Assignment Agreement.

 

“ Requirement of Law ” means, as to any Person, the certificate of incorporation and by-laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its Property or to which such Person or any of its Property is subject.

 

“ Responsible Officer ” means, as to any Person, the chief executive officer, president, chief financial officer, senior vice president or treasurer of such Person, but in any event, with respect to financial matters, the chief financial officer, senior vice president-finance or treasurer of such Person.

 

“ SFI ” means Six Flags, Inc., a Delaware corporation.

 

“ SFI Indentures ” means, collectively, (i) the Indentures dated as of December 5, 2003, April 16, 2003 and February 11, 2002, respectively, between SFI and The Bank of New York, as trustee, in each case as amended, supplemented or otherwise modified through the Borrowing Date and thereafter as permitted by the Loan Documents, (ii) any loan agreement, indenture, note purchase agreement or other instrument or agreement relating to any Guarantor Indebtedness that is meant to refinance any Guarantor Indebtedness incurred under any SFI Indenture, in each case as amended in accordance with the Loan Documents.

 

“ SFI Convertible Indenture ” means the Indenture dated as of June 30, 1999, between SFI and The Bank of New York, as trustee, as amended, supplemented or otherwise modified through the Borrowing Date and thereafter as permitted by the Loan Documents.

 

“ SFO ” means Six Flags Operations Inc., a Delaware corporation.

 

“ SFTP ” means Six Flags Theme Parks Inc., a Delaware corporation.

 

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“ Six Flags Credit Agreement ” means the Second Amended and Restated Credit Agreement, dated as of May 25, 2007, among SFI, SFO and SFTP, as primary borrower, certain of its subsidiaries named therein, the several banks and other financial institutions or entities from time to time party thereto, and JPMorgan Chase Bank, N.A., as administrative agent, as amended, supplemented, restated or otherwise modified in accordance with the Loan Documents.

 

“ Six Flags Guarantees ” means, collectively, the General and Continuing Guarantee of SFTP and SFO (as successor to Six Flags Entertainment Corporation), dated as of March 18, 1997, in respect of the Georgia Park, and the General and Continuing Guarantee of SFTP and SFO (as successor to Six Flags Entertainment Corporation), dated as of January 6, 1998, in respect of the Texas Park.

 

“ Subordinated Indemnity Agreement ” means that certain Subordinated Indemnity Agreement, dated as of April 1, 1998, by and among SFO (as successor to Six Flags Entertainment Corporation), SFTP, SFOG II, Inc., SFT Holdings, Inc., Historic TW Inc. (formerly known as Time Warner Inc.), Warner Bros. Entertainment Inc. (as successor to Time Warner Entertainment Company, L.P.), TW-SPV Co., SFI (as successor to Premier Parks Inc.) and GP Holdings Inc., as amended in accordance with the terms thereof.

 

“ Subordinated Indemnity Escrow Agreement ” means that certain Subordinated Indemnity Escrow Agreement, dated as of September 28, 2006, by and among SFI, Warner Bros. Entertainment Inc. (as successor to Time Warner Entertainment Company, L.P.), Historic TW Inc. (formerly known as Time Warner Inc.), the Bank of New York Mellon and, as of the date hereof, the Borrowers, as amended in accordance with the terms thereof.

 

“ Subsidiary ” means, with respect to any Person (the “ parent ”) at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held; provided , that all references to a “Subsidiary” or to “Subsidiaries” in the Loan Documents shall not include the joint venture established pursuant to the Great Escape Agreements or any Inactive Subsidiary (each as defined in the Six Flags Credit Agreement).

 

“ Texas Park ” has the meaning set forth in the Subordinated Indemnity Agreement.

 

“ Transactions ” means (i) the execution, delivery and performance by the Loan Parties of the Loan Documents and the amendments described in Section 7(a) and (ii) the borrowing of the Loan.

 

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“ Triggering Default ” has the meaning set forth in the Subordinated Indemnity Agreement.

 

“ TX Fund ” means Six Flags Over Texas Fund, Ltd., a Texas limited partnership.

 

“ TX Overall Agreement ” means, that certain Overall Agreement, dated as of November 24, 1997, by and among TX Fund, Flags’ Directors L.L.C., FD-II, L.L.C., Texas Flags, Ltd., SFOT Employee, Inc., SFOT Acquisition I, Inc., SFOT Acquisition II, Inc., Six Flags Over Texas, Inc., SFTP, and SFO (as successor to Six Flags Entertainment Corporation), as amended through the Borrowing Date.

 

“ Units ” has the meaning as set forth in the GA Overall Agreement and the TX Overall Agreement, respectively.

 

(b)           Unless the context requires otherwise, (i) the words “hereof”, “herein” and “hereunder” and words of similar import when used in this Note shall refer to this Note as a whole and not to any particular provision of this Note, and (ii) all Section, Schedule and Exhibit references are to this Note unless otherwise specified.

 

(c)           Except as specifically provided herein, the meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  The words, “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.”  The word “will” shall be construed to have the same meaning and effect as the word “shall.”

 

(d)           When the payment of any obligation or the performance of any covenant, duty or obligation is stated to be due or performance required on a day which is not a Business Day, the date of such payment or performance shall extend to the immediately succeeding Business Day.

 

SECTION 2.              Interest Rate .

 

(a)           The Loan shall bear interest on the unpaid principal amount thereof from the Borrowing Date until payment in full in cash at a rate per annum equal to 14% (the “ Interest Rate ”) and shall be payable in arrears from time to time, as soon as practicable and in no event later than two (2) Business Days after the Borrowers have cash or cash equivalents on hand in excess of (i) amounts used or to be used to pay Borrower Expenses for which demand has been made, plus (i) $20,000. All accrued and unpaid interest shall also be payable in full in cash on the Maturity Date.  Interest shall be calculated on the basis of a 360-day year for the actual number of days elapsed.

 

(b)           Notwithstanding the foregoing, but subject to applicable law, upon the occurrence of any Event of Default, this Note shall bear interest which shall accrue during the continuance of such Event of Default and shall be payable (subject to Section 11(b)) in immediately available funds, for each day during the continuance of such Event

 

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of Default, at a rate equal to the Interest Rate plus 2% per annum.  Such default interest shall be payabl