<PAGE>

                                                                EXHIBIT 10.5

                                                                EXECUTION COPY


                              SECURITY AGREEMENT

                        Dated as of September 30, 1999

                                     From

                     BETTER MINERALS & AGGREGATES COMPANY,

                                      and

                    THE OTHER GRANTORS REFERRED TO HEREIN,

                                 as Grantors,
                                 -----------

                                      to

                          BANQUE NATIONALE DE PARIS,

                                   as Agent
                                   --------
<PAGE>

                               TABLE OF CONTENTS
                               -----------------

<TABLE>
<CAPTION>
                                                                                    Page
<S>                                                                                 <C>
SECTION 1.  Grant of Security......................................................    1

SECTION 2.  Security for Obligations...............................................    5

SECTION 3.  Grantors Remain Liable.................................................    6

SECTION 4.  Delivery and Control of Security Collateral and Account Collateral.....    6

SECTION 5.  Maintaining the L/C Cash Collateral Account............................    7

SECTION 6.  Maintaining the Blocked Accounts.......................................    7

SECTION 7.  Investing of Amounts in the L/C Cash Collateral Account................    8

SECTION 8.  Representations and Warranties.........................................    8

SECTION 9.  Further Assurances.....................................................    9

SECTION 10. As to Equipment and Inventory..........................................   10

SECTION 11. Insurance..............................................................   11

SECTION 12. Place of Perfection; Records; Collection of Receivables................   11

SECTION 13. Voting Rights; Dividends; Etc..........................................   12

SECTION 14. As to the Assigned Agreements..........................................   13

SECTION 15. Transfers and Other Liens; Additional Shares...........................   13

SECTION 16. Agent Appointed Attorney-in-Fact.......................................   14

SECTION 17. Agent May Perform......................................................   14

SECTION 18. The Agent's Duties.....................................................   14

SECTION 19. Remedies...............................................................   15

SECTION 20. Registration Rights....................................................   16
</TABLE>

                                      i
<PAGE>

<TABLE>
<S>                                                                                        <C>
SECTION 21. Indemnity and Expenses......................................................   17

SECTION 22. Security Interest Absolute..................................................   17

SECTION 23. Amendments; Waivers; Etc....................................................   17

SECTION 24. Addresses for Notices.......................................................   18

SECTION 25. Continuing Security Interest; Assignments Under the Credit Agreement........   18

SECTION 26. Release and Termination.....................................................   18

SECTION 27. Mortgages...................................................................   19

SECTION 28. Execution in Counterparts...................................................   19

SECTION 29. Governing Law...............................................................   19
</TABLE>
                                      ii
<PAGE>

                                   SCHEDULES

<TABLE>
<S>                                                      <C>
Schedule I    -  ......................................          Pledged Shares, Pledged Debt
Schedule II   -  ......................................                   Assigned Agreements
Schedule III  -  ......................................  Locations of Equipment and Inventory
Schedule IV   -  ......................................                      Blocked Accounts
Schedule V    -  ......................................                           Trade Names
</TABLE>

                                   EXHIBITS

Exhibit A     -  Form of Blocked Account Letter
Exhibit B     -  Security Agreement Supplement

                                      iii
<PAGE>


                              SECURITY AGREEMENT


          SECURITY AGREEMENT, dated as of September 30, 1999, made by Better
Minerals & Aggregates Company, a Delaware corporation formerly known as "USS
Intermediate Holdco, Inc." (the "Borrower"), and each other grantor listed on
the signature pages hereof (together with the Borrower, the "Grantors" and,
                                                             --------
individually, a "Grantor"), to Banque Nationale de Paris ("BNP"), as agent
                 -------                                   ---
(together with any successor agent appointed pursuant to Article VII of the
Credit Agreement (as defined below), the "Agent") for the Secured Parties (as
                                          -----
defined in the Credit Agreement).

          PRELIMINARY STATEMENTS:

          (1)  The Borrower, BMAC Holdings, Inc., a Delaware corporation, and
George F. Pettinos (Canada) Limited, a corporation organized and existing under
the laws of Ontario, Canada (the "Canadian Borrower"), have entered into a
                                  -----------------
Credit Agreement dated as of September 30, 1999 (said Agreement, as it may
hereafter be amended, supplemented or otherwise modified from time to time,
being the "Credit Agreement"; the terms defined therein and not otherwise
           ----------------
defined herein being used herein as therein defined) with certain Lender Parties
party thereto and Banque Nationale de Paris, as agent for such Lender Parties.

          (2)  Each Grantor is the owner of the shares of stock or other
ownership interests set forth opposite such Grantor's name and as otherwise
described in Part A of Schedule I hereto and issued by the corporations or other
entities indicated therein (collectively, the "Existing Pledged Shares"), the
                                               -----------------------
indebtedness (whether or not evidenced by instruments) set forth opposite such
Grantor's name and as otherwise described in Part B of Schedule I hereto and
issued by the obligors indicated therein (collectively, the "Existing Pledged
                                                             ----------------
Debt").
----

          (3)  The Borrower has opened a non-interest bearing cash collateral
account (the "L/C Cash Collateral Account") with BNP at its offices at 499 Park
              ---------------------------
Avenue, New York, New York 10022, Account No. 200875-001-77, in the name of the
Borrower but under the sole control and dominion of the Agent and subject to the
terms of this Agreement.

          (4)  It is a condition precedent to the making of Advances and
Drawings and the issuance of Letters of Credit by the Lender Parties and the
entry by the Hedge Banks into the Bank Hedge Agreements with the Borrower under
the Credit Agreement that the Grantors shall have executed and delivered this
Agreement.
<PAGE>

          (5)  Unless otherwise defined in this Agreement or in the Credit
Agreement, terms defined in Article 8 or 9 of the Uniform Commercial Code in
effect in the State of New York ("N.Y. Uniform Commercial Code") are used in
                                  ----------------------------
this Agreement as such terms are defined in such Article 8 or 9.

          NOW, THEREFORE, in consideration of the premises and in order to
induce the Lender Parties to make Advances and Drawings and to issue Letters of
Credit under the Credit Agreement and to induce the Hedge Banks to enter into
Bank Hedge Agreements with the Borrower from time to time, the Grantors hereby
agree with the Agent for the ratable benefit of the Secured Parties as follows:

          SECTION 1.  Grant of Security.  Each of the Grantors hereby assigns
                      -----------------
and pledges to the Agent for its benefit and the ratable benefit of the other
Secured Parties, and hereby grants to the Agent for its benefit and the ratable
benefit of the other Secured Parties, a lien on and security interest in the
following, in each case, as to each type of property described below, whether
now owned or hereafter acquired by such Grantor, wherever located and whether
now or hereafter existing (collectively, the "Collateral"; provided, however,
                                              ----------   --------  -------
there shall be excluded from Collateral, any Margin Stock (as such term is
defined in Regulation U of the Board of Governors of the Federal Reserve System)
held by any Grantor):

          (a)  all of such Grantor's right, title and interest in and to all
     equipment in all of its forms (including, without limitation, dredges,
     dozers, loaders, forklift trucks, crushing equipment, rod mills, grinding
     mills, hydrosizers, air sizers, dust collectors, automated packaging
     equipment and bulk storage silos, but excluding any motor vehicle covered
     by a certificate of title and a 1979 Beechcraft King Air C90), all fixtures
     and all parts thereof and all accessions and additions thereto, parts and
     appurtenances thereof, substitutions therefor and replacements thereof (any
     and all such equipment, fixtures, parts, accessions, additions,
     appurtenances, substitutions and replacements being the "Equipment");
                                                              ---------

          (b)  all of such Grantor's right, title and interest in and to all
     inventory (including, without limitation, silica sand, kaolin and aplite)
     in all of its forms (including, without limitation, (i) all raw materials,
     work in process therefor, parts, components, assemblies, supplies,
     materials, finished products and other goods and materials used or consumed
     in the manufacture or production thereof (including, without limitation,
     all wrapping, packaging, advertising, shipping materials, labels and other
     devices, names or marks affixed or to be affixed thereto for purposes of
     selling or of identifying the same or the seller or manufacturer thereof
     owned, consumed, used or held for use or sale, directly or indirectly, by,
     or on behalf of, or for the account of, such Grantor), (ii) goods in which
     such Grantor has an interest in mass or a joint or other interest or right
     of any kind (including, without limitation, goods in which such Grantor has
     an interest or right as consignee) and (iii) goods that are returned to or
     repossessed or stopped in transit by such Grantor) and all accessions
     thereto and products thereof and documents therefor (any and all such
     inventory, accessions, products and documents being the "Inventory");
                                                              ---------
<PAGE>

          (c)  all of such Grantor's right, title and interest in and to all
     accounts, contract rights, chattel paper, instruments, deposit accounts and
     general intangibles and all other rights and obligations of any kind,
     whether or not arising out of or in connection with the sale or lease of
     goods or the rendering of services, and all rights now or hereafter
     existing in and to all security agreements, leases and other contracts
     securing or otherwise relating to any such accounts, contract rights,
     chattel paper, instruments, deposit accounts, general intangibles, rights
     or obligations; provided, however, that in connection with any operating
                     --------  -------
     leases or other commercial agreements entered into in the ordinary course
     of business of such Grantor on a basis consistent with past practice, such
     grant shall only be effective to the extent the grant by such Grantor of a
     security interest in any such operating lease or other commercial agreement
     is not prohibited by such operating lease or other commercial agreement
     without the consent of any other party thereto or would not give any other
     party to such operating lease or other commercial agreement the right to
     terminate its obligations thereunder (any and all such accounts, contract
     rights, chattel paper, instruments, deposit accounts, general intangibles,
     rights and obligations, to the extent not referred to in clause (d), (e),
     (f) or (g) of this Section 1, being the "Receivables", and any and all such
                                              -----------
     leases, security agreements and other contracts to the extent not referred
     to in clause (e) of this Section 1, being the "Related Contracts");
                                                    -----------------

          (d)  all of such Grantor's right, title and interest in and to all of
     the following (collectively, the "Security Collateral"):
                                       -------------------

               (i)   the Existing Pledged Shares, together with the certificates
          representing such Existing Pledged Shares, and all dividends, cash,
          instruments and other property from time to time received, receivable
          or otherwise distributed in respect of or in exchange for any or all
          of such Existing Pledged Shares;

               (ii)  the Existing Pledged Debt, together with the instruments
          evidencing such Existing Pledged Debt, all security therefor and all
          interest, cash, instruments and other property from time to time
          received, receivable or otherwise distributed in respect of or in
          exchange for any or all of such Existing Pledged Debt;

               (iii) all security entitlements from time to time carried in any
          securities account, and all dividends, interest, cash, instruments and
          other property from time to time received, receivable or otherwise
          distributed in respect of or in exchange for any or all of such
          security entitlements;

                (iv) all securities accounts, all security entitlements from
          time to time carried in the securities accounts, and all dividends,
          interest, cash, instruments and other property from time to time
          received, receivable or otherwise distributed in respect of or in
          exchange for any or all of such security entitlements;

                (v)  all commodity contracts from time to time carried in any
          commodities account and all value, cash, instruments and other
          property from

                                       3
<PAGE>

          time to time received, receivable or otherwise distributed in respect
          of or in exchange for any or all of such commodity contracts;

               (vi)   all commodities accounts, all commodity contracts from
          time to time carried in the commodities accounts and all value, cash,
          instruments and other property from time to time received, receivable
          or otherwise distributed in respect of or in exchange for any or all
          of such commodity contracts;

               (vii)  all additional shares of stock of any issuer of any
          Existing Pledged Shares or of any other Person and all membership
          interests or other equity interests in any Person, from time to time
          acquired by the Grantors in any manner (with the exception of (i)
          partnership interests described in Section 5.02(f)(x) of the Credit
          Agreement, (ii) membership interests or other equity interests to the
          extent the underlying partnership or other agreement prohibits
          assignment and (iii) the shares of stock issued by any direct, non-
          Domestic Subsidiary of any Grantor to the extent the amount of such
          shares of stock exceeds 65% of the issued and outstanding shares of
          such non-Domestic Subsidiary), together with the certificates
          representing such additional shares, membership interests or other
          equity interests and all dividends, cash, instruments and other
          property from time to time received, receivable or otherwise
          distributed in respect of or in exchange for any or all of such
          shares, membership interests and other equity interests (together with
          the Existing Pledged Shares, the "Pledged Shares");
                                            --------------

               (viii) all additional indebtedness from time to time owed to the
          Grantors (other than loans and advances to employees permitted in the
          Loan Documents) by any obligor of the Existing Pledged Debt or any
          other Person (whether or not evidenced by instruments) and the
          instruments, if any, evidencing such indebtedness, all security
          therefor and all interest, cash, instruments and other property from
          time to time received, receivable or otherwise distributed in respect
          of or in exchange for any or all such indebtedness (together with the
          Existing Pledged Debt, the "Pledged Debt"); and
                                      ------------

               (ix)   all additional investment property (including, without
          limitation, all (A) securities, whether certificated or
          uncertificated, (B) security entitlements, as defined in Section 8-
          102(a)(17) of the N.Y. Uniform Commercial Code or, in the case of any
          U.S. Treasury book-entry securities, as defined in 31 C.F.R. Section
          357.2, or, in the case of any U.S. federal agency book-entry
          securities, as defined in the corresponding U.S. federal regulations
          governing such book-entry securities, (C) securities accounts, (D)
          commodity contracts and (E) commodity accounts) in which such Grantor
          has or acquires from time to time any right, title or interest in any
          manner, and the certificates or instruments, if any, representing or
          evidencing such investment property, and all dividends, interest,
          distributions, value, cash, instruments and other property from time
          to time received, receivable or otherwise distributed in respect of or
          in exchange for any or all of such investment property;

                                       4
<PAGE>

          (e)  all of such Grantor's right, title and interest in and to each
     Hedge Agreement to which such Grantor is now or may hereafter become a
     party and each other agreement listed on Schedule II hereto, in each case
     as such Hedge Agreement or other agreement may be amended, supplemented or
     otherwise modified from time to time (collectively, the "Assigned
                                                              --------
     Agreements"), including, without limitation, (i) all rights of such Grantor
     ----------
     to receive moneys due and to become due under or pursuant to the Assigned
     Agreements, (ii) all rights of such Grantor to receive proceeds with
     respect to the Assigned Agreements or any instruments, opinions or
     documents delivered pursuant thereto, (iii) all rights of such Grantor in
     and to all mortgages, security agreements, leases or other contracts
     securing or otherwise relating to the Assigned Agreements, (iv) all claims
     of such Grantor for damages arising out of or for breach of or default
     under the Assigned Agreements and (v) all rights of such Grantor to
     terminate any Assigned Agreement, to perform thereunder and to compel
     performance and otherwise exercise all remedies thereunder; provided,
                                                                 --------
     however, that in connection with any Assigned Agreement entered into in the
     -------
     ordinary course of business of such Grantor on a basis consistent with past
     practice, such grant shall only be effective to the extent (i) the grant by
     such Grantor of a security interest in any such Assigned Agreement is not
     prohibited by such Assigned Agreement without the consent of any other
     party thereto or would not give any other party to such Assigned Agreement
     the right to terminate its obligations thereunder or (ii) in the event that
     such grant is prohibited by such Assigned Agreement without the consent of
     such other party or would give such other party such right to terminate,
     such Grantor shall have obtained the consent of such other party to such
     grant, such Grantor hereby agreeing to use commercially reasonable efforts
     to obtain such consent (all such Collateral being the "Agreement
                                                            ---------
     Collateral");
     ----------

          (f)  all of such Grantor's right, title and interest in and to all of
     the following (collectively, the "Account Collateral"):
                                       ------------------

               (i)   the L/C Cash Collateral Account, all funds held therein and
          all certificates and instruments, if any, from time to time
          representing or evidencing the L/C Cash Collateral Account;

               (ii)  all Blocked Accounts (as hereinafter defined), all funds
          held therein and all certificates and instruments, if any, from time
          to time representing or evidencing the Blocked Accounts;

               (iii) all other deposit accounts of such Grantor, all funds held
          therein and all certificates and instruments, if any, from time to
          time representing or evidencing such deposit accounts;

               (iv)  all Collateral Investments (as hereinafter defined) from
          time to time and all certificates and instruments, if any, from time
          to time representing or evidencing the Collateral Investments;

                                       5
<PAGE>

               (v)  all notes, certificates of deposit, deposit accounts, checks
          and other instruments from time to time hereafter delivered to or
          otherwise possessed or required to be delivered to or otherwise
          possessed, by the Agent for or on behalf of such Grantor, including,
          without limitation, those delivered to or possessed in substitution
          for or in addition to any or all of the then existing Account
          Collateral; and

               (vi) all interest, dividends, distributions, cash, instruments
          and other property from time to time received, receivable or otherwise
          distributed in respect of or in exchange for any or all of the then
          existing Account Collateral;

          (g)  all of such Grantor's right, title and interest in and to all
     general intangibles of such Grantor (other than general intangibles for
     money due or to become due and described in clause (c) of this Section 1)
     including, without limitation, all trademarks, trade names, trade styles,
     trade secrets, service marks, logos, copyrights, patents, patent
     applications and all licenses, license applications, registrations and good
     will relating to or associated with any of the foregoing; provided,
                                                               --------
     however, that in connection with any operating leases or other commercial
     -------
     agreements entered into in the ordinary course of business of such Grantor
     on a basis consistent with past practice, such grant shall only be
     effective to the extent the grant by such Grantor of a security interest in
     any such operating lease or other commercial agreement is not prohibited by
     such operating lease or other commercial agreement without the consent of
     any other party thereto or would not give any other party to such operating
     lease or other commercial agreement the right to terminate its obligations
     thereunder; and

          (h)  all proceeds of any and all of the foregoing Collateral
     (including, without limitation, proceeds that constitute property of the
     types described in clauses (a) through (g) of this Section 1) and, to the
     extent not otherwise included, all (i) payments under insurance (whether or
     not the Agent is the loss payee thereof), or any indemnity, warranty or
     guaranty, payable by reason of loss or damage to or otherwise with respect
     to any of the foregoing Collateral and (ii) cash.

provided, however, that any or all of the property described in clauses (a)
through (h) located in the State of Alabama shall not constitute Collateral
unless so requested by the Agent under Section 5.01 of the Credit Agreement,
provided that such exclusion shall not be deemed to limit any of the Agent's or
the other Secured Parties' rights or interests in any such property arising
under any mortgage executed by any of the Grantors in favor of the Agent and/or
the Secured Parties and filed for record in Alabama.

          SECTION 2.  Security for Obligations.  This Agreement secures the
                      ------------------------
payment of all Obligations of the Grantors now or hereafter existing under or in
respect of the Loan Documents, whether direct or indirect, absolute or
contingent, including, without limitation, any extensions, modifications,
substitutions, amendments and renewals thereof, whether for principal,
reimbursement obligations, interest, premiums, penalties, fees,
indemnifications, contract causes of action, costs, expenses or otherwise (all
such Obligations secured hereby being

                                       6
<PAGE>

the "Secured Obligations"). Without limiting the generality of the foregoing,
     -------------------
this Agreement secures the payment of all amounts that constitute part of the
Secured Obligations and that would be owed by any Grantor to the Agent, or any
of the other Secured Parties under the Loan Documents but for the fact that such
Secured Obligations are unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving such Grantor.

          SECTION 3.  Grantors Remain Liable.  Anything contained herein to the
                      ----------------------
contrary notwithstanding, (a) each of the Grantors shall remain liable under the
contracts and agreements included in the Collateral to which it is a party to
the extent set forth therein to perform all of its duties and obligations
thereunder to the same extent as if this Agreement had not been executed, (b)
the exercise by the Agent of any of its rights hereunder shall not release any
Grantor from any of its duties or obligations under the contracts and agreements
included in the Collateral to which it is a party and (c) neither of the Agent
nor any of the other Secured Parties shall have any obligation or liability
under the contracts and agreements included in the Collateral by reason of this
Agreement or any other Loan Document, nor shall any of the Secured Parties be
obligated to perform any of the obligations or duties of the Grantors thereunder
or to take any action to collect or enforce any claim for payment assigned
hereunder.

          SECTION 4.  Delivery and Control of Security Collateral and Account
                      -------------------------------------------------------
Collateral.  (a)  Subject to Section 9 hereof, all certificates or instruments
----------
representing or evidencing Security Collateral or Account Collateral shall be
delivered to and held by or on behalf of the Agent pursuant hereto and shall be
in suitable form for transfer by delivery, or shall be accompanied by duly
executed instruments of transfer or assignment in blank, all in form and
substance satisfactory to the Agent.  Upon the occurrence and during the
continuance of an Event of Default under the Credit Agreement, the Agent shall
have the right, at any time in its discretion and without notice to the
Grantors, to transfer to or register in the name of the Agent or any of its
nominees any or all of the Security Collateral and the Account Collateral,
subject only to the revocable rights specified in Section 13(a) and shall have
the right at any time to exchange certificates or instruments representing or
evidencing Security Collateral or Account Collateral for certificates or
instruments of smaller or larger denominations.

          (b)  With respect to any Security Collateral that constitutes a
security and is not represented or evidenced by a certificate or an instrument,
the Grantors shall cause the issuer thereof either (i) to register the Agent as
the registered owner of such security or (ii) to agree in writing with the
Grantors and the Agent that such issuer will comply with instructions with
respect to such security originated by the Agent without further consent of the
Grantors, such agreement to be in form and substance satisfactory to the Agent.

          (c)  With respect to any Security Collateral that constitutes a
security entitlement, each of the Grantors shall, within 15 days of the Agent's
request therefor, cause the securities intermediary with respect to such
security entitlement either (i) to identify in its records the Agent as having
such security entitlement against such securities intermediary or (ii) to agree
in writing with such Grantor and the Agent that such securities intermediary
will comply with entitlement orders (that is, notifications communicated to such
securities intermediary directing transfer or redemption of the financial asset
to which the Grantors has a security entitlement)

                                       7
<PAGE>

originated by the Agent without further consent of the Grantors, such agreement
to be in form and substance satisfactory to the Agent.

          (d)  With respect to any Security Collateral that constitutes a
commodity contract, each Grantor shall, within 15 days of the Agent's request
therefor, cause the commodity intermediary with respect to such commodity
contract to agree in writing with such Grantor and the Agent that such commodity
intermediary will apply any value distributed on account of such commodity
contract as directed by the Agent without further consent of the Grantors, such
agreement to be in form and substance satisfactory to the Agent.

          (e)  With respect to any Security Collateral that constitutes a
securities account or a commodity account, each Grantor will, in the case of a
securities account, comply with subsection (c) of this Section 4 with respect to
all security entitlements carried in such securities account and, in the case of
a commodity account, comply with subsection (d) of this Section 4 with respect
to all commodity contracts carried in such commodity account.

          SECTION 5.  Maintaining the L/C Cash Collateral Account.  So long as
                      -------------------------------------------
any Advance shall remain unpaid, any Letter of Credit, Bankers' Acceptance or
Bank Hedge Agreement shall be outstanding or any Lender Party shall have any
Commitment under the Credit Agreement:

          (a)  The Borrower shall maintain the L/C Cash Collateral Account with
     the Agent.

          (b)  It shall be a term and condition of the L/C Cash Collateral
     Account, notwithstanding any term or condition to the contrary in any other
     agreement relating to the L/C Cash Collateral Account, as the case may be,
     and except as otherwise provided by the provisions of Section 21, that no
     amount (including, without limitation, interest on Collateral Investments)
     shall be paid or released to or for the account of, or withdrawn by or for
     the account of, the Borrower or any other Person from the L/C Cash
     Collateral Account.

The L/C Cash Collateral Account shall be subject to such applicable laws, and
such applicable regulations of the Board of Governors of the Federal Reserve
System and of any other appropriate banking or governmental authority, as may
now or hereafter be in effect.

                                       8
<PAGE>

          SECTION 6.  Maintaining the Blocked Accounts.  So long as any Advance
                      --------------------------------
shall remain unpaid or any Letter of Credit, Bankers' Acceptance or Bank Hedge
Agreement shall be outstanding or any Lender Party shall have any Commitment
under the Credit Agreement:

          (a)  The Borrower shall maintain blocked deposit accounts ("Blocked
                                                                      -------
     Accounts") only with banks ("Blocked Account Banks") that have entered into
     --------                     ---------------------
     letter agreements in substantially the form of Exhibit A (or such other
     form as the Agent shall agree) with such Grantor and the Agent ("Blocked
                                                                      -------
     Account Letters").  As of the date hereof, the Borrower shall have
     ---------------
     delivered each Blocked Account Letter to the Agent, duly executed by the
     Borrower, the Agent and the Blocked Account Bank party thereto.

          (b)  Each Grantor shall immediately instruct each Person obligated at
     any time to make any payment to such Grantor for any reason in respect of
     Receivables (an "Obligor") to make such payment to a Blocked Account and,
                      -------
     if (i) an Event of Default shall have occurred and be continuing and (ii)
     either the making of the request or the granting of the consent specified
     by Section 6.01 of the Credit Agreement to authorize the Agent to declare
     the Advances due and payable pursuant to the provisions of such Section
     6.01 or the making of any demand by the Agent pursuant to Section 6.02 of
     the Credit Agreement requiring the Borrower to pay amounts in respect of
     Letters of Credit or the Canadian Borrower to pay amounts in respect of
     Bankers' Acceptances shall have occurred, shall, at the request of the
     Agent, pay to the Agent for application as provided by the terms of the
     Credit Agreement, at the end of each Business Day, all proceeds of
     Collateral.  So long as an Event of Default shall not have occurred and be
     continuing and the Agent shall not have given the notice referred to in the
     immediately preceding sentence, the Borrower may operate its Blocked
     Accounts in accordance with its past business practices.

          (c)  Upon any termination of any Blocked Account Letter or other
     agreement with respect to the maintenance of a Blocked Account by the
     Borrower or any Blocked Account Bank, the applicable Grantor shall
     immediately notify all Obligors that were making payments to such Blocked
     Account to make all future payments to another Blocked Account.  The
     Borrowers agrees to terminate any or all Blocked Accounts and Blocked
     Account Letters upon reasonable request of the Agent.

          SECTION 7.  Investing of Amounts in the L/C Cash Collateral Account.
                      -------------------------------------------------------
If requested by the Borrower, the Agent shall, subject to the provisions of
Section 21, from time to time invest:

          (a)  amounts on deposit in the L/C Cash Collateral Account in such
     Cash Equivalents in the name of the Agent as the Borrower may select and
     the Agent may approve, which approval shall not be unreasonably withheld;
     and

          (b)  interest paid on the Cash Equivalents referred to in clause (a)
     above, and reinvest other proceeds of any such Cash Equivalents that may
     mature or be sold, in each case in such Cash Equivalents in the name of the
     Agent as the Borrower may select and

                                       9
<PAGE>

     the Agent may approve, which approval shall not unreasonably withheld (the
     Cash Equivalents referred to in clause (a) above and in this clause (b)
     being, collectively, "Collateral Investments").
                           ----------------------

Interest and proceeds that are not invested or reinvested in Collateral
Investments as provided above shall be deposited and held in the L/C Cash
Collateral Account.

          SECTION 8.  Representations and Warranties.  The Grantors represent
                      ------------------------------
and warrant as follows:

          (a) On the date hereof all of the Equipment and Inventory is located
     at the places specified beneath the Grantors' names on Schedule III hereto.
     The principal places of business and chief executive offices of the
     Grantors and the offices where the Grantors keep their records concerning
     the Receivables and all originals of all chattel paper that evidence
     Receivables, are, as of the date hereof,  located at the addresses listed
     on Schedule V hereto.  A complete copy of each Assigned Agreement has been
     delivered to the Agent.  None of the Receivables or Agreement Collateral is
     evidenced by a promissory note or other instrument other than those which
     have been delivered to the Agent and others held by the Grantors pursuant
     to Section 9 hereof.

          (b) Each Grantor is the legal and beneficial owner of its Collateral
     free and clear of any Lien, except for the Liens permitted in the Loan
     Documents.  No effective financing statement or other instrument similar in
     effect covering all or any part of the Collateral is on file in any
     recording office, except such as may have been filed in favor of the Agent
     relating to this Agreement, or as permitted in the Loan Documents.

          (c) Set forth on Schedule V hereto is a complete and accurate list as
     of the date hereof of all names under which the Grantors are doing
     business, including, without limitation, trade names, division names and
     fictitious names.

          (d) Except to the extent located on or in leased property or subject
     to operating leases, the Grantors have exclusive possession and control of
     the Equipment and Inventory other than Equipment and Inventory which in the
     ordinary course of business is not in the possession and control of the
     Grantors, the aggregate amount of which does not exceed $1,000,000.

          (e) All of the shares of stock that constitute Pledged Shares have
     been duly authorized and validly issued and are fully paid and non-
     assessable.  The Pledged Debt held by the Grantors has been duly
     authorized, authenticated or issued and delivered, is the legal, valid and
     binding obligation of the issuers thereof and is not in default.

          (f) As of the date hereof the Pledged Shares constitute the percentage
     of the issued and outstanding shares of stock of the issuers thereof
     indicated on Part A of Schedule I hereto.  The Pledged Debt constitutes all
     of the outstanding indebtedness owed to the Grantors by the issuers
     thereof.

                                       10
<PAGE>

          (g) The Grantors have no Blocked Accounts or other deposit accounts
     other than the Blocked Accounts listed on Schedule IV hereto.

          (h) Except to the extent set forth on Schedule 4.01(d) to the Credit
     Agreement, all filings and other actions necessary or desirable to perfect
     and preserve the security interest in all material respects in the
     Collateral taken as a whole created under this Agreement have been duly
     made or taken, and this Agreement, the pledge of the Security Collateral
     pursuant hereto and the pledge and assignment of the Account Collateral
     pursuant hereto, together with such filings and other actions, create a
     valid and perfected security interest in all material respects in the
     Collateral taken as a whole, securing the payment of the Secured
     Obligations subject in priority only to the liens and security interests
     permitted in the Loan Documents.

          (i) Except to the extent set forth on Schedule 4.01(d) to the Credit
     Agreement, no consent of any other Person and no authorization, approval or
     other action by, and no notice to or filing with, any governmental
     authority or regulatory body or other third party is required (i) for the
     grant by the Grantors of the assignment and security interest granted
     hereunder, for the pledge by the Grantors of the Security Collateral
     pursuant hereto or for the execution, delivery or performance of this
     Agreement by the Grantors, (ii) for the perfection or maintenance of the
     pledge, assignment and security interest created hereunder (including the
     first priority nature of such pledge, assignment or security interest
     subject only to the liens and security interests permitted in the Loan
     Documents) in all material respects, except for the filing of financing and
     continuation statements under the Uniform Commercial Code, or (iii) for the
     exercise by the Agent of its voting or other rights provided for in this
     Agreement or the remedies in respect of the Collateral pursuant to this
     Agreement, except as may be required in connection with the disposition of
     any portion of the Security Collateral by laws affecting the offering and
     sale of securities generally.

          (j) All of the investment property owned by the Grantors on the date
     hereof is listed on Schedule I hereto.

          (k) Each of the Assigned Agreements listed on Schedule II hereto to
     which any Grantor is a party and each other Bank Hedge Agreement, if any,
     to which such Grantor is a party, true and complete copies of each of which
     have been furnished the Agent, (i) has been duly authorized, executed and
     delivered by each of the Grantors party thereto, (ii) has not been amended
     or otherwise modified and is in full force, and effect, and (iii) is
     binding upon and enforceable against each of the Grantors party thereto and
     each other Person party thereto in accordance with its terms.  There exists
     no violation or default under any Assigned Agreement by any Grantor or, to
     the best of such Grantor's knowledge, any other Person party thereto.

          SECTION 9.  Further Assurances.  (a)  Each Grantor agrees that from
                      ------------------
time to time, at its own expense, it shall promptly execute and deliver all
further instruments and

                                       11
<PAGE>

documents, and take all further action, that may be reasonably necessary,
customary or that the Agent may reasonably request, in order to perfect and
preserve any pledge, assignment or security interest granted or purported to be
granted hereby or to enable the Agent to exercise and enforce its rights and
remedies hereunder with respect to any Collateral. Without limiting the
generality of the foregoing, each Grantor shall: (i) at the request of the
Agent, mark conspicuously each chattel paper included in the Receivables in an
individual amount in excess of $75,000 and each of its records pertaining to the
Collateral with a legend, in form and substance reasonably satisfactory to the
Agent, indicating that such chattel paper or Collateral is subject to the
security interest granted hereby; (ii) if any Collateral shall be evidenced by a
promissory note or other instrument or chattel paper, and such notes or
instruments shall have an aggregate principal amount in excess of $75,000
individually, or $500,000 in the aggregate, each Grantor shall deliver and
pledge to the Agent for its benefit and the ratable benefit of the other Secured
Parties such note or instrument duly indorsed and accompanied by duly executed
instruments of transfer or assignment, all in form and substance reasonably
satisfactory to the Agent; provided, that so long as (A) no Event of Default
                           --------
shall have occurred and be continuing and (B) the Required Lenders shall not
have made the request or granted the consent specified by Section 6.01 of the
Credit Agreement to authorize the Agent to declare the Advances due and payable
pursuant to the provisions of such Section 6.01 and the Agent shall not have
made the demand specified in Section 6.02 of the Credit Agreement requiring the
Borrower to pay amounts in respect of Letters of Credit or the Canadian Borrower
to pay amounts in respect of Bankers' Acceptances, each Grantor may retain for
collection in the ordinary course any instruments received by it in the ordinary
course of business and the Agent shall, promptly upon reasonable request of the
applicable Grantor, make appropriate arrangements for making any instrument
pledged by such Grantor available to it for purposes of presentation, collection
or renewal (any such arrangement to be effected, to the extent deemed
appropriate by the Agent, against trust receipt or like document); (iii) deliver
and pledge to the Agent for its benefit and the ratable benefit of the other
Secured Parties certificates representing the Pledged Shares accompanied by
undated stock powers executed in blank and evidence that all other action that
the Agent may deem reasonably necessary or customary in order to perfect and
protect the liens and security interests created under this Agreement has been
taken; (iv) execute and file such financing or continuation statements, or
amendments thereto, and such other instruments or notices, as may be reasonably
necessary or customary as the Agent may request, in order to perfect and
preserve the pledge, assignment and security interests granted or purported to
be granted hereunder; and (v) promptly notify the Agent in writing of any change
in the information set forth on Schedule V hereto.

          (b) Each Grantor hereby authorizes the Agent to file one or more
financing or continuation statements, and amendments thereto, relating to all or
any part of the Collateral without the signature of such Grantor where permitted
by law, upon which evidence of such filing shall be sent promptly to such
Grantor.  A photocopy or other reproduction of this Agreement or any financing
statement covering the Collateral or any part thereof shall be sufficient as a
financing statement where permitted by law.

                                       12
<PAGE>

          (c) Each Grantor shall furnish to the Agent from time to time
statements and schedules further identifying and describing the Collateral and
such other reports in connection with the Collateral as the Agent may reasonably
request, all in reasonable detail.

          SECTION 10.  As to Equipment and Inventory.  (a)  Each Grantor shall
                       -----------------------------
keep its Equipment and Inventory (other than assets sold or otherwise disposed
of as permitted by the Loan Documents) at the places therefore specified in
Section 8(a) or, upon 30 days' prior written notice to the Agent, at such other
places in a jurisdiction where all action required by Section 9 shall have been
taken with respect to the Equipment and Inventory.

          (b) No Grantor shall keep in any warehouse Inventory of value of which
exceeds $500,000 at any given time (other than any such warehouses with respect
to which the Grantors have obtained landlord consents in form and substance
reasonably satisfactory to the Agent).

          SECTION 11.  Insurance.  (a)  Each Grantor shall, at its own expense,
                       ---------
maintain insurance in accordance with Section 5.01(d) of the Credit Agreement.
Each policy for liability insurance shall provide for all losses to be paid on
behalf of the Agent and the applicable Grantor as their interests may appear,
and each policy for property damage insurance shall provide for all losses to be
paid directly to the Agent, for the ratable benefit of the Secured Parties.
Each such policy shall in addition (i) name the applicable Grantor and the Agent
as insured parties thereunder (without any representation or warranty by or
obligation upon the Agent) as their interests may appear, (ii) contain the
agreement by the insurer that any loss thereunder with respect to damage to the
Grantor's property in an amount in excess of $500,000 shall be payable to the
Agent notwithstanding any action, inaction or breach of representation or
warranty by such Grantor, (iii) provide that there shall be no recourse against
the Agent for payment of premiums or other amounts with respect thereto and (iv)
provide that at least ten days' prior written notice of cancellation or of lapse
shall be given to the Agent by the insurer.  Each Grantor shall, as often as the
Agent reasonably requests, deliver to the Agent original or duplicate policies
of such insurance.  Further, each Grantor shall, at the request of the Agent,
duly execute and deliver instruments of assignment of such insurance policies to
comply with the requirements of Section 9 and use reasonable efforts to cause
the insurers to acknowledge notice of such assignment.

          (b) Reimbursement under any liability insurance maintained by any
Grantor pursuant to this Section 11 may be paid directly to the Person who shall
have incurred liability covered by such insurance.  In case of any loss
involving damage to Equipment or Inventory when Section 11(c) is not applicable,
the applicable Grantor shall be permitted to use any proceeds to make or cause
to be made the necessary repairs to or replacements or substitutions of or
additions to such Equipment, Inventory, fixed assets, real property or
improvements relating to property covered by such payments (replacements or
substitutions to be of such same type of property), and any proceeds of
insurance maintained by such Grantor pursuant to this Section 11 shall be paid
and applied pursuant to the terms of the Credit Agreement.

                                       13
<PAGE>

          (c) Upon (i) the occurrence and during the continuance of any Event of
Default and (ii) either the making of the request or the granting of the consent
specified in Section 6.01 of the Credit Agreement to authorize the Agent to
declare the Advances dues and payable pursuant to the provisions of such Section
6.01 or the making of the demand specified in Section 6.02 of the Credit
Agreement to require the Borrower to pay amounts in respect of Letters of Credit
or the Canadian Borrower to pay amounts in respect of Bankers' Acceptances, all
insurance payments in respect of such Equipment or Inventory shall be paid to
and applied by the Agent as specified in Section 19(b).

          SECTION 12.  Place of Perfection; Records; Collection of Receivables.
                       -------------------------------------------------------
(a)  Each Grantor shall keep its chief places of business and chief executive
offices and the offices where it keeps its records concerning the Collateral and
all originals of all chattel paper that evidence Receivables, at the location
therefor specified in Section 8(a) or, upon 30 days' prior written notice to the
Agent, at such other locations in a jurisdiction where all actions required by
Section 9 shall have been taken with respect to the Collateral.

          (b) Except as otherwise provided in this subsection (b), each Grantor
shall continue to collect, at its own expense, all amounts due or to become due
to such Grantor under the Receivables.  In connection with such collections,
each Grantor may take and, upon the occurrence and during the continuance of an
Event of Default, at the Agent's direction, with the approval of the Required
Lenders, shall take such action as the Agent may deem necessary or advisable to
enforce collection of the Receivables including, without limitation, (i)
extending or renewing the time or times of payment, or settling for less than
the total unpaid balance, which such Grantor finds appropriate in accordance
with sound judgment consistent with prior business practice and (ii) allowing a
refund or credit due as a result of returned or damaged merchandise, in each
such case in accordance with such Grantor's ordinary course of business
consistent with its prior collection practices; provided, however, that the
                                                --------  -------
Agent shall have the right at any time, upon (i) the occurrence of and during
the continuance of an Event of Default and (ii) either the making of the request
or the granting of the consent specified by Section 6.01 of the Credit Agreement
to authorize the Agent to declare the Advances due and payable pursuant to the
provisions of such Section 6.01 or the making of the demand specified in Section
6.02 of the Credit Agreement to require the Borrower to pay amounts in respect
of Letters of Credit or the Canadian Borrower to pay amounts in respect of
Bankers' Acceptances, upon notice to such Grantor of its intention to do so, to
notify the obligors under any Receivables of the assignment of such Receivables
to the Agent and to direct such obligors to make payment of all amounts due or
to become due to such Grantor thereunder directly to the Agent and, upon such
notification and at the expense of such Grantor, to enforce collection of any
such Receivables, and to adjust, settle or compromise the amount or payment
thereof, in the same manner and to the same extent as such Grantor might have
done.  After receipt by any Grantor of the notice from the Agent referred to in
the proviso to the immediately preceding sentence, (i) all amounts and proceeds
    -------
(including instruments) received by such Grantor in respect of the Receivables
shall be received in trust for the benefit of the Agent hereunder, shall be
segregated from other funds of such Grantor and shall be forthwith paid over to
the Agent in the same form as so received (with any necessary indorsement) to be
applied as provided by the terms of the Credit Agreement and (ii)

                                       14
<PAGE>

such Grantor shall not adjust, settle or compromise the amount or payment of any
Receivable, release wholly or partly any obligor thereof, or allow any credit or
discount thereon.

          SECTION 13.  Voting Rights; Dividends; Etc.  (a)  So long as no Event
                       -----------------------------
of Default shall have occurred and be continuing:

          (i)   Each Grantor shall be entitled to exercise any and all voting
     and other consensual rights pertaining to the Security Collateral or any
     part thereof for any purpose not inconsistent with the terms of this
     Agreement or the other Loan Documents; provided, however, that no Grantor
                                            --------  -------
     shall exercise or refrain from exercising any such right if such action is
     reasonably expected to have a Material Adverse Effect.

          (ii)  Each Grantor shall be entitled to receive and retain any and all
     dividends and interest paid in respect of the Security Collateral;
     provided, however, that any and all
     --------  -------

                (A) dividends and interest paid or payable other than in cash in
          respect of, and instruments and other property received, receivable or
          otherwise distributed in respect of, or in exchange for, such Security
          Collateral,

                (B) dividends and other distributions paid or payable in cash in
          respect of such Security Collateral in connection with a partial or
          total liquidation or dissolution or in connection with a reduction of
          capital, capital surplus or paid-in-surplus, and

                (C) cash paid, payable or otherwise distributed in respect of
          principal of, or in redemption of, or in exchange for, any Security
          Collateral,

shall be, and shall be forthwith delivered to the Agent to hold as, Security
Collateral and shall, if received by such Grantor, be received in trust for the
benefit of the Agent, be segregated from other property or funds of such Grantor
and be forthwith delivered to the Agent as Security Collateral in the same form
as so received (with any necessary indorsement or assignment) in each case,
except to the extent such distributions are permitted by the terms of the Credit
Agreement.

          (iii) The Agent shall execute and deliver (or cause to be executed
     and delivered) to each Grantor all such proxies and other instruments as
     such Grantor may request for the purpose of enabling such Grantor to
     exercise the voting and other rights that it is entitled to exercise
     pursuant to paragraph (i) above and to receive the dividends or interest
     payments that it is authorized to receive and retain pursuant to paragraph
     (ii) above.

                                       15
<PAGE>

          (b)  Upon the occurrence and during the continuance of an Event of
Default:

          (i)  All rights of any Grantor (A) to exercise or refrain from
     exercising the voting and other consensual rights that it would otherwise
     be entitled to exercise pursuant to Section 13(a)(i) shall, upon notice to
     such Grantor by the Agent, cease and (B) to receive the dividends and
     interest payments that such Grantor would otherwise be authorized to
     receive and retain pursuant to Section 13(a)(ii) shall automatically cease,
     and all such rights shall thereupon become vested in the Agent, which shall
     thereupon have the sole right to exercise or refrain from exercising such
     voting and other consensual rights and to receive and hold as Security
     Collateral such dividends and interest payments.

          (ii) All dividends and interest payments that are received by any
     Grantor contrary to the provisions of paragraph (i) of this Section 13(b)
     shall be received in trust for the benefit of the Agent, shall be
     segregated from other funds of such Grantor and shall be forthwith paid
     over to the Agent as Security Collateral in the same form as so received
     (with any necessary indorsement).

          SECTION 14.  As to the Assigned Agreements.  (a)  Each Grantor shall,
                       -----------------------------
at its expense, perform and observe all terms and provisions of each Assigned
Agreement to be performed or observed by it, maintain the Assigned Agreements to
which it is a party in full force and effect except to the extent otherwise
permitted by the Credit Agreement and enforce each of the Assigned Agreements in
accordance with the terms thereof except to the extent the failure so to
perform, observe the terms and provisions of, or enforce, any such Assigned
Agreement other than the Purchase Agreement could reasonably be expected to have
a Material Adverse Effect; and

          (b)  Each Grantor hereby consents on its behalf and on behalf of its
     Subsidiaries to the assignment and pledge to the Agent for its benefit and
     the ratable benefit of the other Secured Parties of each Assigned Agreement
     to which such Grantor or such Subsidiary is a party by any other Grantor
     hereunder.

          SECTION 15.  Transfers and Other Liens; Additional Shares. (a) Each
                       --------------------------------------------
Grantor agrees not (i) to sell, assign (by operation of law or otherwise) or
otherwise dispose of, or grant any option with respect to, any of the Collateral
of such Grantor, except sales, assignments and dispositions otherwise permitted
under Section 5.02(e) of the Credit Agreement, or (ii) to create or suffer to
exist any Lien upon or with respect to any of the Collateral, except for the
pledge, assignment and security interest created under this Agreement and the
Liens permitted under Section 5.02(a) of the Credit Agreement.

          (b)  Each Grantor shall for the Pledged Shares and all other shares of
stock pledged hereunder that are issued by issuers which are controlled by such
Grantor, cause each issuer of the Pledged Shares and each issuer of all other
shares of stock pledged hereunder not to issue any stock or other securities in
addition to or in substitution for the Pledged Shares or such other shares
issued by any such issuer, except to such Grantor.

                                       16
<PAGE>

          SECTION 16.  Agent Appointed Attorney-in-Fact.  Each Grantor hereby
                       --------------------------------
irrevocably appoints the Agent as its attorney-in-fact, with full authority in
the place and stead of such Grantor and in the name of such Grantor or otherwise
upon (i) the occurrence and during the continuance of an Event of Default and
(ii) either the making of the request or the granting of the consent specified
by Section 6.01 of the Credit Agreement to authorize the Agent to declare the
Advances due and payable pursuant to the provisions of such Section 6.01 or the
making of the demand specified in Section 6.02 of the Credit Agreement to
require the Borrower to pay amounts in respect of Letters of Credit or the
Canadian Borrower to pay amounts in respect of Bankers' Acceptances, and upon
notice to such Grantor, to take any action and to execute any instrument that
the Agent may deem reasonably necessary or advisable to accomplish the purposes
of this Agreement, including, without limitation:

          (a)  to obtain and adjust insurance required to be paid to the Agent
pursuant to Section 11,

          (b)  to ask for, demand, collect, sue for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become due under
or in respect of any of the Collateral,

          (c)  to receive, indorse and collect any drafts or other instruments,
documents and chattel paper in connection with Section 16(a) or 16(b) above, and

          (d)  to file any claims, to take any action or to institute any
proceedings that the Agent may deem reasonably necessary or desirable for the
collection of any of the Collateral or otherwise to enforce compliance with the
terms and conditions of any Assigned Agreement or the rights of the Agent with
respect to any of the Collateral; provided, that the Agent shall act with
                                  --------
reasonable care in the exercise of the foregoing; and provided, further, that
                                                      --------  -------
the Agent shall give the Grantors not less than ten Business Days' prior written
notice of the time and place of any sale or other intended disposition of the
Collateral, except any such Collateral which is perishable or threatens to
decline speedily in value or is of a type customarily sold on a recognized
market.

          SECTION 17.  Agent May Perform.  Upon and during the continuance of an
                       -----------------
Event of Default, if any Grantor fails to perform any agreement contained
herein, the Agent may itself perform, or cause performance of, such agreement,
and the expenses of the Agent incurred in connection therewith shall be payable
by the Grantors under Section 21(b).

          SECTION 18.  The Agent's Duties.  The powers conferred on the Agent
                       ------------------
hereunder are solely to protect its and the other Secured Parties' interest in
the Collateral and, beyond the exercise of reasonable care, shall not impose any
duty upon it to exercise any such powers.  Except for the safe custody of any
Collateral in its possession and the accounting for moneys actually received by
it hereunder, the Agent shall have no duty as to any Collateral, as to
ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relative to any Security Collateral,
whether or not the Agent or any other Secured

                                       17
<PAGE>

Party has or is deemed to have knowledge of such matters, or as to the taking of
any necessary steps to preserve rights against any parties or any other rights
pertaining to any Collateral in each case, beyond the exercise of reasonable
care. The Agent shall be deemed to have exercised reasonable care in the custody
and preservation of any Collateral in its possession if such Collateral is
accorded treatment substantially equal to that which the Agent accords its own
property.

          Anything contained herein to the contrary notwithstanding, the Agent
may from time to time, when the Agent deems it to be necessary, appoint one or
more subagents (each a "Subagent") for the Agent hereunder with respect to all
                        --------
or any part of the Collateral. In the event that the Agent so appoints any
Subagent with respect to any Collateral, (1) the assignment and pledge of such
Collateral and the security interest granted in such Collateral by the Grantors
hereunder shall be deemed for purposes of this Security Agreement to have been
made to such Subagent for the ratable benefit of the Secured Parties, as
security for the Secured Obligations of the Grantors, (2) such Subagent shall
automatically be vested with all rights, powers, privileges, interests and
remedies of the Agent hereunder with respect to such Collateral and (3) the term
"Agent," when used herein in relation to any rights, powers, privileges,
interests and remedies of the Agent with respect to such Collateral, shall
include such Subagent; provided, however, that no such Subagent shall be
                       --------  -------
authorized to take any action with respect to any such Collateral unless and
except to the extent expressly authorized in writing by the Agent.

          SECTION 19.  Remedies.  If (i) any Event of Default shall have
                       --------
occurred and be continuing and (ii) either the making of the request or the
granting of the consent specified by Section 6.01 of the Credit Agreement to
authorize the Agent to declare the Advances due and payable pursuant to the
provisions of such Section 6.01 or the making of the demand specified in Section
6.02 of the Credit Agreement to require the Borrower to pay amounts in respect
of Letters of Credit or the Canadian Borrower to pay amounts in respect of
Bankers' Acceptances shall have occurred:

                                       18
<PAGE>

          (a) The Agent may exercise in respect of the Collateral, in addition
     to other rights and remedies provided for herein or otherwise available to
     it, all the rights and remedies of a secured party upon default under the
     N.Y. Uniform Commercial Code (whether or not the N.Y. Uniform Commercial
     Code applies to the affected Collateral), and also may (i) require each
     Grantor to, and such Grantor hereby agrees that it will at its expense and
     upon request of the Agent forthwith, assemble all or part of the Collateral
     as directed by the Agent (to the extent permitted by applicable law and
     without breach of the peace) and make it available to the Agent at a place
     and time to be designated by the Agent that is reasonably convenient to
     both parties, (ii) without notice except as specified below, sell the
     Collateral or any part thereof in one or more parcels at public or private
     sale, at any of the Agent's offices or elsewhere, for cash, on credit or
     for future delivery, and upon such other terms as the Agent may deem
     commercially reasonable, (iii) occupy any premises owned or leased by any
     Grantor where the Collateral 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, and (iv) exercise any and all rights and remedies of the
     Grantors under or in connection with the Assigned Agreements, the
     Receivables and the Related Contracts or otherwise in respect of the
     Collateral, including, without limitation, any and all rights of any
     Grantor to demand or otherwise require payment of any amount under, or
     performance of any provision of, the Assigned Agreements, the Receivables
     and the Related Contracts. Each Grantor agrees that, to the extent notice
     of sale shall be required by law, at least ten days' notice to such Grantor
     of the time and place of any public sale or the time after which any
     private sale is to be made shall constitute reasonable notification. The
     Agent shall not be obligated to make any sale of Collateral regardless of
     notice of sale having been given. The Agent may adjourn any public or
     private sale from time to time by announcement at the time and place fixed
     therefor, and such sale may, without further notice, be made at the time
     and place to which it was so adjourned.

          (b)  All cash proceeds received by the Agent in respect of any sale
     of, collection from, or other realization upon all or any part of the
     Collateral shall be applied (after payment of any amounts payable to the
     Agent pursuant to Section 21) in whole or in part by the Agent for its
     benefit and the ratable benefit of the other Secured Parties against, all
     or any part of the Secured Obligations in such order as the Agent shall
     elect. Any surplus of such cash or cash proceeds held by the Agent and
     remaining after payment in full of all of the Secured Obligations shall be
     paid over to the Grantors or their successors or assigns, or as a court of
     competent jurisdiction may direct.

          (c)  All payments received by the Grantors under or in connection with
     any Assigned Agreement or otherwise in respect of the Collateral shall be
     received in trust for the benefit of the Agent, shall be segregated from
     other funds of the Grantors and shall be forthwith paid over to the Agent
     in the same form as so received (with any necessary indorsement).

                                       19
<PAGE>

          (d)  The Agent may, without notice to any Grantor, except as required
     by law, and at any time or from time to time, charge, set-off and otherwise
     apply all or any part of the L/C Cash Collateral Account against the
     Secured Obligations or any part thereof.

          (e)  To the extent the Collateral is located in the State of
     Louisiana, upon (i) the occurrence and during the continuance of an Event
     of Default and (ii) either the making of the request or the granting of the
     consent specified by Section 6.01 of the Credit Agreement to authorize the
     Agent to declare the Advances due and payable pursuant to the provisions of
     such Section 6.01 or the making of the demand specified in Section 6.02 of
     the Credit Agreement to require the Borrower to pay amounts in respect of
     Letters of Credit or the Canadian Borrower to pay amounts in respect of
     Bankers' Acceptances, it shall be lawful for the Agent, and the Agent is
     hereby authorized by the Grantor without making a demand or putting in
     default (a putting in default being expressly waived), to cause all and
     singular the Collateral to be seized and sold by executory of ordinary
     process, at the Agent's sole option, with or without appraisement
     (appraisement being expressly waived), either as an entirety or in lots or
     parcels, all as the Agent may determine, to the highest bidder for cash (or
     such other terms as the Agent may elect), and otherwise exercise the
     rights, powers and remedies provided for herein and under applicable law.
     The Agent is hereby appointed agent and attorney-in-fact for the Grantor
     and is hereby authorized and empowered to carry out and enforce all
     incorporeal rights pledged by the Grantor hereunder. This power, being
     coupled with an interest, is irrevocable so long as any of the Secured
     Obligations remain outstanding. For purposes of Louisiana executory
     process, the Grantor acknowledges the liens, security interests and the
     Secured Obligations and does hereby confess judgment in favor of the Agent
     for the full amount of the Secured Obligations not paid when due. Any and
     all declarations of fact made by authentic act before a notary public in
     the presence of two witnesses by a person declaring that such facts lie
     within his knowledge shall constitute authentic evidence of such facts for
     the purpose of executory process. Upon (i) the occurrence and during the
     continuance of an Event of Default and (ii) either the making of the
     request or the granting of the consent specified by Section 6.01 of the
     Credit Agreement to authorize the Agent to declare the Advances due and
     payable pursuant to the provisions of such Section 6.01 or the making of
     the demand specified in Section 6.02 of the Credit Agreement to require the
     Borrower to pay amounts in respect of Letters of Credit or the Canadian
     Borrower to pay the amounts in respect of Bankers' Acceptances, in addition
     to all other rights herein conferred on Agent, the Grantor hereby expressly
     designates the Agent, or any agents, servants, employees or other person
     named by the Agent at that time, as "Keeper" of each and all the Collateral
     pending the judicial sale thereof, with all the powers set forth in La.
     R.S. 9:5131 et seq. (as hereinafter amended). The designation of a Keeper
     made herein shall not be deemed to require the Agent to provoke the
     appointment of such a Keeper. The Grantor waives to the fullest extent
     permitted by law: (a) the benefit of appraisement provided for in Louisiana
     Code of Civil Procedure articles 2332, 2336, 2723, and 2724, and all other
     laws conferring the same; (b) the demand and three days' delay provided for
     in Louisiana Code of Civil Procedure articles 2639 and 2721; (c) the notice
     of seizure provided for in Louisiana Code of Civil Procedure articles 2293
     and 2721; (d) the three days' delay provided for in Louisiana

                                       20
<PAGE>

     Code of Civil Procedure articles 2331 and 2772; and (e) the other benefits
     provided in Louisiana Code of Civil Procedure articles 2331, 2722 and 2723.

     SECTION 20.  Registration Rights.  If the Agent shall determine to exercise
                  -------------------
its right to sell all or any of the Security Collateral pursuant to Section 19,
each Grantor agrees that, upon request of the Agent, such Grantors will, at its
own expense:

     (a)  execute and deliver, and cause each issuer of the Security Collateral
contemplated to be sold and the directors and officers thereof to execute and
deliver, all such instruments and documents, and do or cause to be done all such
other acts and things, as may be reasonably necessary or, in the opinion of the
Agent, customary to register such Security Collateral under the provisions of
the Securities Act of 1933, (as amended from time to time, the "Securities
                                                                ----------
Act"), to cause the registration statement relating thereto to become effective
---
and to remain effective for such period as prospectuses are required by law to
be furnished and to make all amendments and supplements thereto and to the
related prospectus that, in the opinion of the Agent, are reasonably necessary
or customary, all in conformity with the requirements of the Securities Act and
the rules and regulations of the Securities and Exchange Commission applicable
thereto;

     (b)  use its best efforts to qualify the Security Collateral under the
state securities or "Blue Sky" laws and to obtain all necessary governmental
approvals for the sale of the Security Collateral, as reasonably requested by
the Agent;

     (c)  cause each such issuer to make available to its security holders, as
soon as practicable, an earnings statement that will satisfy the provisions of
Section 11(a) of the Securities Act;

     (d)  provide the Agent with such other information (including, without
limitation, forward looking information) as may be reasonably necessary or, in
the opinion of the Agent, customary to enable the Agent to effect the sale of
such Security Collateral; and

     (e)  do or cause to be done all such other acts and things as may be
reasonably necessary to make such sale of the Security Collateral or any part
thereof valid and binding and in compliance with applicable law.

The Agent is authorized, in connection with any sale of the Collateral pursuant
to Section 19, to deliver or otherwise disclose to any prospective purchaser of
the Security Collateral (i) any registration statement or prospectus, and all
supplements and amendments thereto, prepared pursuant to clause (a) above, (ii)
any information and projections provided to it pursuant to clause (d) above and
(iii) any other information in its possession relating to the Security
Collateral (not subject to a confidentiality).

     SECTION 21.  Indemnity and Expenses.  (a)  Each Grantor agrees jointly and
                  ----------------------
severally to indemnify the Secured Parties in connection with any claims, losses
and liabilities resulting from

                                       21
<PAGE>

this Agreement to the extent required by, and in accordance with the provisions
of, Section 8.04(b) of the Credit Agreement as if such Grantor were a party to
the Credit Agreement.

     (b) Each Grantor agrees jointly and severally to pay the Agent such amounts
of any fees and expenses incurred by the Agent in connection with the
administration of this Agreement as is required by, and in accordance with the
provisions of, Sections 8.04(a) and (b) of the Credit Agreement as if such
Grantor were a party to the Credit Agreement.

     SECTION 22.  Security Interest Absolute.  The obligations of the Grantors
                  --------------------------
under this Agreement are independent of the Secured Obligations and a separate
action or actions may be brought and prosecuted against any Grantor to enforce
this Agreement, irrespective of whether any action is brought against any other
Loan Party or whether any other Loan Party is joined in any such action or
actions.  All rights of the Agent and the pledge, assignment and security
interest hereunder, and all obligations of the Grantors hereunder, shall be
absolute and unconditional, irrespective of:

     (i)       any lack of validity or enforceability of any Loan Document, any
 Bank Hedge Agreement or any other agreement or instrument relating thereto;

     (ii)      any change in the time, manner or place of payment of, or in any
 other term of, all or any of the Secured Obligations, or any other amendment or
 waiver of or any consent to any departure from any Loan Document or any Bank
 Hedge Agreement, including, without limitation, any increase in the Secured
 Obligations resulting from the extension of additional credit to any Loan Party
 or otherwise;

     (iii)     any taking, exchange, release or nonperfection of any collateral,
 or any taking, release or amendment or waiver of or consent to departure from
 any guaranty, for all or any of the Secured Obligations;

     (iv)      any manner of application of collateral, or proceeds thereof, to
 all or any of the Secured Obligations, or any manner of sale or other
 disposition of any collateral for all or any of the Secured Obligations or any
 other assets of any Grantor or any of its Subsidiaries;

     (v)       any change, restructuring or termination of the corporate
 structure or existence of any Grantor or any of its Subsidiaries; or

     (vi)      any other circumstance that might otherwise constitute a defense
 available to, or a discharge of, any Grantor or a third-party grantor of a
 security interest.

This Agreement shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Secured Obligations is rescinded or
must otherwise be returned by any Secured Party or by any other Person upon the
insolvency, bankruptcy or reorganization of any Loan Party or otherwise, all as
though such payment had not been made.

                                       22
<PAGE>

     SECTION 23.  Amendments; Waivers; Etc.  (a)  No amendment or waiver of any
                  ------------------------
provision of this Agreement, and no consent to any departure by any Grantor
herefrom, shall in any event be effective unless the same shall be in writing
and signed by the Agent, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given.

     (b) No failure on the part of the Agent, any Lender Party or any Hedge Bank
to exercise, and no delay in exercising, any right, power or privilege hereunder
shall operate as a waiver thereof or consent thereto; nor shall any single or
partial exercise of any such right, power or privilege preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.

     (c) Upon the execution and delivery by any Person of a security agreement
supplement in substantially the form of Exhibit B hereto (each a "Security
                                                                  --------
Agreement Supplement"), (i) such Person shall be referred to as an "Additional
--------------------
Grantor" and shall be and become a Grantor, and each reference in this Agreement
to "Grantor" or "Grantors" shall also mean and be a reference to such Additional
Grantor and (ii) the schedules attached to such Security Agreement Supplement
shall be incorporated into and become a part of and supplement Schedules I
through V hereto, and the Agent may attach such Schedules as supplements to such
Schedules, and each reference to such Schedules shall mean and be a reference to
such Schedules, as supplemented pursuant hereto.

     (d) Delivery by telecopier of an executed counterpart of any amendment or
waiver of any provision of this Agreement or of any Supplement or Schedule
hereto shall be effective as delivery of a manually executed counterpart
thereof.

     SECTION 24.  Addresses for Notices.  All notices and other communications
                  ---------------------
provided for hereunder shall be in writing (including telecopier, telegraphic or
communication) and mailed, telecopied, telegraphed, cabled or delivered, if to
any Grantor, c/o Better Minerals & Aggregates Company, Route 522 North, P.O. Box
187, Berkeley Springs, WV 25411, Attention: Chief Financial Officer, telecopier
number (304) 258-3500, and if to the Agent, any Lender Party or any Hedge Bank,
addressed to it at its address set forth in Section 8.02 of the Credit Agreement
or, as to any party, at such other address as shall be designated by such party
in a written notice to each other party complying as to delivery with the terms
of this Section 24.  All such notices and other communications shall, when
mailed, telecopied or telegraphed, be effective when received by the addressee.

     SECTION 25.  Continuing Security Interest; Assignments Under the Credit
                  ----------------------------------------------------------
Agreement.  This Agreement shall create a continuing security interest in the
---------
Collateral and shall (a) remain in full force and effect until the latest of the
payment in full in cash of the Secured Obligations, constituting an Advance or
other Secured Obligations then due and payable, the Termination Date and the
termination or expiration of all Bank Hedge Agreements or as otherwise permitted
under the Loan Documents,  (b) be binding upon the Grantors, their successors
and assigns and (c) inure, together with the rights and remedies of the Agent
hereunder, to the benefit of the Secured Parties and their respective
successors, transferees and assigns.  Without limiting the

                                       23
<PAGE>

generality of the foregoing clause (c), any Lender Party may assign or otherwise
transfer all or any portion of its rights and obligations under the Credit
Agreement (including, without limitation, all or any portion of its Commitment,
the Advances owing to it and any Note or Notes held by it) to any other Person,
and such other Person shall thereupon become vested with all the benefits in
respect thereof granted to such Lender Party herein or otherwise, in each case
as provided in Section 8.07 of the Credit Agreement.

     SECTION 26.  Release and Termination.  (a)  Upon any sale, lease, transfer
                  -----------------------
or other disposition of any item of Collateral in accordance with the terms of
the Loan Documents, the Agent will, at the applicable Grantor's expense, execute
and deliver to such Grantor such documents as such Grantor shall reasonably
request to evidence the release of such item of Collateral from the assignment
and security interest granted hereby; provided, however, that (i) at the time of
                                      --------  -------
such request and such release, no Event of Default shall have occurred and be
continuing, (ii) except to the extent such sale, lease or transfer or other
disposition is permitted under Section 5.02(e) of the Credit Agreement, such
Grantor shall have delivered to the Agent, at least ten Business Days prior to
the date of the proposed release, a written request for release describing the
item of Collateral and the terms of the sale, lease, transfer or other
disposition in reasonable detail, including, without limitation, the price
thereof and any expenses in connection therewith, together with a form of
release for execution by the Agent and a certification by such Grantor to the
effect that the transaction is in compliance with the Loan Documents and as to
such other matters as the Agent may reasonably request and (iii) the proceeds of
any such sale, lease, transfer or other disposition required to be applied in
accordance with Section 2.07 of the Credit Agreement shall be paid to, or in
accordance with the instructions of, the Agent at the closing.

     (b) Upon the latest of the payment in full in cash of the Secured
Obligations constituting an Advance or other Secured Obligations then due and
payable, the Termination Date and the termination or expiration of all Bank
Hedge Agreements, the pledge, assignment and security interest granted hereby
shall terminate and all rights to the Collateral shall revert to the Grantors.
Upon any such termination, the Agent will, at the applicable Grantor's expense,
execute and deliver to such Grantor such documents as such Grantor shall
reasonably request to evidence such termination and promptly release and return
Collateral in its possession.

     SECTION 27.  Mortgages.  In the event that any of the Collateral hereunder
                  ---------
is also subject to a valid and enforceable Lien under the terms of any mortgage
and the terms of such mortgage are inconsistent with the terms of this
Agreement, then with respect to such Collateral, the terms of such mortgage
shall be controlling in the case of fixtures and leases, letting and licenses
of, and contracts and agreements relating to, the lease of real property, and
the terms of this Agreement shall be controlling in the case of all other
Collateral.

     SECTION 28.  Execution in Counterparts.  This Agreement may be executed in
                  -------------------------
any number of counterparts, each of which when so executed shall be deemed to be
an original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.

                                       24
<PAGE>

     SECTION 29.  Governing Law.  (a)  This Agreement shall be governed by and
                  -------------
construed in accordance with the laws of the State of New York, except to the
extent that the validity or perfection of the security interest hereunder, or
remedies hereunder, in respect of any particular Collateral are governed by the
laws of a jurisdiction other than the State of New York.

     (b)  Each Grantor hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of any New York State
court or federal court of the United States of America sitting in New York City,
and any appellate court from any thereof, in any action or proceeding arising
out of or relating to this Agreement or any other Loan Document or Bank Hedge
Agreement to which it is or is to be a party, or for recognition and enforcement
of any judgment, and each Grantor hereby irrevocably and unconditionally agrees
that all claims in respect of any such action or proceeding may be heard and
determined in any such New York State or, to the extent permitted by law, in
such federal court. Each Grantor irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection or defense
that it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any of the other Loan
Documents to which it is or is to be a party in any New York State or federal
court. Each Grantor hereby irrevocably waives, to the fullest extent permitted
by law, the defense of an inconvenient forum to the maintenance of such action
or proceeding in any such court. Each Grantor agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing herein shall affect the right that any party may otherwise have to
commence or participate in any action, suit or proceeding relating to this
Agreement, any of the other Loan Documents or any Bank Hedge Agreement to which
it is or is to be a party, or otherwise to proceed against any Grantor, in any
other jurisdiction.

     (c)  Each Grantor irrevocably consents to the service of any and all
process in any such action, suit or proceeding at the address set forth below
its name on the signature page hereof, by any method permitted by law. Each
Grantor agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law.

     (d)  To the extent that any Grantor has or hereafter may acquire immunity
from jurisdiction of any court or from any legal process (whether through
service or notice, attachment prior to judgment, attachment in aid of execution,
execution or otherwise) with respect to themselves or their property, such
Grantor hereby irrevocably waives such immunity in respect of its Obligations
under this Agreement, any other Loan Document and any Bank Hedge Agreement to
which it is or is to be a party.

                                       25
<PAGE>

     (e)  Each Grantor irrevocably waives all right to trial by jury in any
action, proceeding or counterclaim (whether based on contract, tort or
otherwise) arising out of or relating to this Agreement, any other Loan Document
or any Bank Hedge Agreement or the actions of the Agent, any Lender Party or any
Hedge Bank in the negotiation, administration, performance or enforcement
thereof.

     IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
duly executed and delivered by its officer thereunto duly authorized as of the
date first above written.

                                        BETTER MINERALS & AGGREGATES COMPANY


                                        By: /s/ Richard Nick
                                           -------------------------------
                                            Name: Richard Nick
                                            Title: Vice President


                                        PENNSYLVANIA GLASS SAND CORPORATION


                                        By: /s/ Richard Nick
                                           -------------------------------
                                            Name: Richard Nick
                                            Title: Vice President


                                        THE FULTON LAND AND TIMBER COMPANY


                                        By: /s/ Richard Nick
                                           -------------------------------
                                            Name: Richard Nick
                                            Title: Vice President


                                        OTTAWA SILICA COMPANY


                                        By: /s/ John A. Ulizio
                                           -------------------------------
                                            Name:
                                            Title:

                                       26
<PAGE>

                                        GEORGE F. PETTINOS, INC.


                                        By: /s/ Richard Nick
                                           -------------------------------
                                            Name: Richard Nick
                                            Title: Vice President


                                        ELLEN JAY, INC.


                                        By: /s/ Richard Nick
                                           -------------------------------
                                            Name: Richard Nick
                                            Title: Vice President


                                        U.S. SILICA COMPANY


                                        By: /s/ Richard Nick
                                           -------------------------------
                                            Name: Richard Nick
                                            Title: Vice President


                                        BETTER MATERIALS CORPORATION


                                        By: /s/ Richard Nick
                                           -------------------------------
                                            Name: Richard Nick
                                            Title: Vice President


                                        BMC TRUCKING, INC.


                                        By: /s/ Richard Nick
                                           -------------------------------
                                            Name: Richard Nick
                                            Title: Vice President

                                       27
<PAGE>

                                        BUCKS COUNTY CRUSHED STONE COMPANY


                                        By: /s/ Richard Nick
                                           -------------------------------
                                            Name: Richard Nick
                                            Title: Vice President


                                        CHIPPEWA FARMS CORPORATION


                                        By: /s/ Richard Nick
                                           -------------------------------
                                           Name: Richard Nick
                                           Title: Vice President


                                        SHORE STONE COMPANY, INC.


                                        By: /s/ Richard Nick
                                           -------------------------------
                                            Name: Richard Nick
                                            Title: Vice President


                                        COMMERCIAL STONE CO., INC.


                                        By: /s/ Richard Nick
                                           -------------------------------
                                            Name: Richard Nick
                                            Title: Vice President


                                        STONE MATERIALS COMPANY, LLC

                                        By: Better Minerals & Aggregates
                                             Company, as Manager


                                        By: /s/ Richard Nick
                                           -------------------------------
                                            Name: Richard Nick
                                            Title: Vice President

                                       28
<PAGE>

                                        COMMERCIAL AGGREGATES TRANSPORTATION
                                        AND SALES, LLC

                                        By: Stone Materials Company, LLC, as
                                              Manager


                                        By: /s/ Richard Nick
                                           -------------------------------
                                            Name: Richard Nick
                                            Title: Vice President

                                       29
<PAGE>

                                        BANQUE NATIONALE DE PARIS,
                                        as Agent


                                        By: /s/ Richard Cushing
                                           -------------------------------
                                           Name: Richard Cushing
                                           Title: Director


                                        By: /s/ Paul Barnes
                                           -------------------------------
                                           Name: Paul Barnes
                                           Title: Assistant Vice President

                                       30
<PAGE>

                                   SCHEDULE I
                                       to
                               Security Agreement


                                     Part A
                                     ------

                                 Pledged Shares



                                                               Percentage of
                                     Stock                     Issued and
                  Class of   Par     Certificate   Number      Outstanding
Grantor  Issuer   Stock      Value   Number        of Shares   Shares of Issuer











                                    Part B
                                    ------

                                 Pledged Debt



                                                           Outstanding
Grantor  Issuer   Description of Debt   Final Maturity     Principal Amount








<PAGE>

                                  SCHEDULE II
                                      to
                              Security Agreement

                              Assigned Agreements
                              -------------------
<PAGE>

                                 SCHEDULE III
                                      to
                              Security Agreement

                     Locations of Equipment and Inventory
                     ------------------------------------
<PAGE>

                                  SCHEDULE IV
                                      to
                              Security Agreement

                               Blocked Accounts
                               ----------------
<PAGE>

                                  SCHEDULE V
                                      to
                              Security Agreement

                Principal Places of Business, Trade Names, Etc.
                -----------------------------------------------
<PAGE>

                                   EXHIBIT A
                                      to
                              Security Agreement



                            BLOCKED ACCOUNT LETTER


                           ______ __, [199_] [20__]



[Blocked Account Bank Address]

Attn:  [          ]


                      Better Minerals & Aggregates Company

Ladies and Gentlemen:

     Reference is made to the deposit accounts listed on the attached Schedule I
into which certain monies, instruments and other properties are deposited from
time to time (the "Accounts") maintained with you by [Name of Grantor] (the
                   --------
"Company").  Pursuant to the Security Agreement dated as of  [September 30],
 -------
1999 (the "Security Agreement"), the Company has granted to Banque Nationale de
           ------------------
Paris, as agent (the "Agent") for the Secured Parties referred to in the Credit
                      -----
Agreement dated as of [September 30], 1999 (the "Credit Agreement") with Better
                                                 ----------------
Minerals & Aggregates Company, BMAC Holdings, Inc. and George F. Pettinos
(Canada) Limited, a security interest in certain property of the Company,
including, among other things, the following (the "Account Collateral"):  the
                                                   ------------------
Accounts, all funds held therein and all certificates and instruments, if any,
from time to time representing or evidencing the Accounts, all interest,
dividends, cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of the then existing Account Collateral and all proceeds of any and all of the
foregoing Account Collateral and, to the extent not otherwise included, all (i)
payments under insurance (whether or not the Agent is the loss payee thereof),
or any indemnity, warranty or guaranty, payable by reason of loss or damage to
or otherwise with respect to any of the foregoing Account Collateral and (ii)
cash.  It is a condition to the continued maintenance of the Accounts with you
that you agree to this letter agreement.
<PAGE>

     By signing this letter agreement, you acknowledge notice of the Security
Agreement as it pertains to this Blocked Account Letter and confirm to the Agent
that you have received no notice of any other pledge or assignment of the
Accounts at this time.  Further, you hereby agree with the Agent that:

     (a)  Notwithstanding anything to the contrary in any other agreement
relating to the Accounts, the Accounts are and will be subject to the terms and
conditions of the Security Agreement as it pertains to this Blocked Account
Letter, will be maintained solely for the benefit of the Agent, will be entitled
"[Name of Grantor], Banque Nationale de Paris, as Agent" and will be subject to
written instructions only from an officer of the Agent. You are hereby permitted
to follow the instructions of the Company until such time as you receive written
instructions to the contrary from the Agent.

     (b)  Upon the written request of the Agent to you, which request shall
specify that an "Event of Default" under the Credit Agreement has occurred and
is continuing (which writing may be by telex or telecopy and upon which you may
conclusively rely, absent manifest error), you shall immediately transfer (at
the cost and expense of the Company) subject to your usual deposit terms, all
available funds then or thereafter deposited in the Accounts by wire transfer
into the Agent's Account at the Federal Reserve Bank of New York, 33 Liberty
Street, New York, NY, 10048, [ABA No. 026007689, for further credit to Account
No. 750420-701-03].

     (c)  From and after the date that the Agent shall have sent to you a
written notice (which writing may be by telex or telecopy and upon which you may
conclusively rely, absent manifest error) that an "Event of Default" under the
Credit Agreement has occurred and until the date, if any, that the Agent shall
have advised you in writing (which writing may be by telex or telecopy and upon
which you may conclusively rely, absent manifest error) that no Event of Default
is continuing, you shall not honor any withdrawal or transfer from, or any
check, draft or other item of payment on, the Accounts, other than any
withdrawal, transfer, check, draft or other item made in writing by the Agent or
bearing the written consent of the Agent, and, to the extent of available funds
in the Accounts, you shall honor each such withdrawal, transfer, check, draft or
other item made in writing by the Agent or bearing the written consent of the
Agent.

     (d)  You will follow your usual operating procedures for the handling of
the Accounts, including any remittance received in the Accounts that contains
restrictive endorsements, irregularities (such as a variance between the written
and numerical amounts), undated or postdated items, missing signatures,
incorrect payees, etc.

     (e)  You shall furnish to the Agent, promptly upon the reasonable written
request of the Agent in each instance, all information regarding the Accounts,
to the extent the same is provided to the Company, for the period of time
specified in such written notice, and the Company hereby authorizes you to
furnish same.

     (f)  You agree that you will not make, and you hereby waive all of your
rights to make, any charge, debit or offset to the Accounts for any reason
whatsoever, and waive any and all liens, whether contractual or provided under
law, which you may have or hereafter acquire on
<PAGE>

the Accounts or funds therein, in each case, other than any charge, offset,
debit or lien in respect of your customary service charges, such as reversed or
returned credits, items not collected or other charges, expenses and commissions
incurred by you in providing the service, and returned items relating to the
Accounts.

     (g)  All service charges and fees with respect to the Accounts shall be
payable by the Company.

     (h)  After the giving of notice referred to in paragraphs (b) and (c)
above, the Agent shall be entitled to exercise any and all rights of the Company
in respect of the Accounts, and the undersigned shall comply in all respects
with such exercise.

     (i)  Notwithstanding any other provision contained herein, unless you are
grossly negligent or engage in willful misconduct in performance or non-
performance  in connection with this letter agreement and the Accounts, the
Agent and the Company agree to hold you harmless from any claims, damages,
losses or expenses incurred by any party in connection herewith; in the event
you breach the standard of care set forth herein, the Company and the Agent
expressly agree that your liability shall be limited to damages directly caused
by such breach and in no event shall you be liable for any incidental, indirect,
punitive or consequential damages or attorneys' fees whatsoever.

     (j)  Notwithstanding any other provision of this letter agreement, you
shall not be liable for any failure, inability to perform, or delay in
performance hereunder, if such failure, inability, or delay is due to acts of
God, war, civil commotion, governmental action, fire, explosion, strikes, other
industrial disturbances, equipment malfunction, action, non-action or delayed
action on the part of the Company or the Agent or any other entity or any other
causes that are beyond your reasonable control.

     (k)  The Company and the Agent agree that you may debit the Account for any
items (including, but not limited to, checks, drafts, Automatic Clearinghouse
(ACH) credits or wire transfers) deposited or credit to the Accounts which may
be returned or otherwise not collected and for all charges, fees, commissions
and expenses incurred by you in providing services or otherwise in connection
herewith; you may charge the Accounts as permitted herein at such times as are
in accordance with your customary practices for the chargeback of returned items
and expenses.  In the event you are unable to obtain sufficient funds from such
charges to cover returned items, or reversed or returned credits, or items not
collected and any other charges, expenses, or commissions incurred by you in
providing the services, the Company and the Agent shall indemnify you for all
amounts described above incurred by you.

     (l)  This letter agreement may not be modified or terminated by the Company
unless the prior written consent of you and the Agent are obtained.  This letter
agreement may be terminated:  (i) immediately for cause or (ii) upon thirty (30)
days' prior written notice to the Company or the Agent, as the case may be,
without cause.  Upon such termination you shall close the Accounts and transfer
all funds as they become available in the Accounts to the Agent's

                                       3
<PAGE>

Account specified in paragraph (b) above. Paragraph (k) above shall survive any
such termination and closure of the Accounts for fifteen (15) days.

     This letter agreement shall be binding upon you and your successors and
assigns and shall inure to the benefit of the Agent, the Lenders and their
successors, transferees and assigns.

     This letter agreement shall become effective immediately upon its execution
by all parties hereto.  Any notice permitted or required hereunder shall be in
writing and shall be deemed to have been duly given if sent by personal
delivery, express or first class mail, or facsimile addressed, in the case of
notice to you at your address listed on the signature page hereof.

                                       4
<PAGE>

     This letter agreement shall be governed by and construed in accordance with
the laws of the State of New York.

                                   Very truly yours,

                                   [NAME OF GRANTOR]
                                   Address:
                                   Attention:
                                   Telecopier Number:


                                   By:________________________________
                                      Name:
                                      Title:


                                   BANQUE NATIONALE DE PARIS,
                                    as Agent
                                   499 Park Avenue
                                   New York, NY 10022
                                   Attention: Mr. Eric Deram
                                   Telecopier Number:
                                   (212) 418-8269


                                   By:________________________________
                                      Name:
                                      Title:


Acknowledged and agreed to as of
the date first above written:

[BLOCKED ACCOUNT BANK NAME]


By:____________________________
   Name:
   Title:

                                       5
<PAGE>

                                  SCHEDULE I
                                      to
                            Blocked Account Letter

Blocked Accounts:
----------------
<PAGE>

                                   EXHIBIT B
                                       to
                               Security Agreement


                     FORM OF SECURITY AGREEMENT SUPPLEMENT



                                                       ________________ __, ____


Banque National de Paris, New York Branch,
  as Agent
499 Park Avenue
New York, New York  10022
Attention:


            Security Agreement dated as of September 30, 1999 among
                    Better Minerals & Aggregates Company and
 additional grantors named therein, as Grantors, and Banque Nationale de Paris,
                                    as Agent

Ladies and Gentlemen:

     Reference is made to the above-captioned Security Agreement (as amended,
supplemented or otherwise modified from time to time, the "Security Agreement").
                                                           ------------------
Unless otherwise defined herein, terms defined in the Security Agreement are
used herein as therein defined.

     The undersigned hereby agrees, as of the date first above written, to
become a Grantor under the Security Agreement as if it were an original party
thereto and agrees that each reference in the Security Agreement to a "Grantor"
or the "Grantors" shall also mean and be a reference to the undersigned.

     The undersigned hereby assigns and pledges to the Agent for its benefit and
the ratable benefit of the Secured Parties and hereby grants to the Agent for
its benefit and the ratable benefit of the Secured Parties as collateral for the
Secured Obligations a pledge and assignment of, and a security interest in, all
of the right, title and interest of the undersigned in and to its Collateral,
whether now owned or hereafter acquired.

     The undersigned has attached hereto supplements to Schedules I through V to
the Security Agreement, and the undersigned hereby certifies that such
supplements have been prepared by the undersigned in substantially the form of
the Schedules to the Security Agreement and are accurate and complete as of the
date first above written.
<PAGE>

     The undersigned hereby makes each representation and warranty set forth in
Section 8 of the Security Agreement as to itself and as to its Collateral to the
same extent as each other Grantor and hereby agrees to be bound as a Grantor by
all of the terms and provisions of the Security Agreement to the same extent as
any other Grantor.

     This letter shall be governed by and construed in accordance with the laws
of the State of New York.


                                    Very truly yours,

                                    [NAME OF ADDITIONAL
                                      GRANTOR]


                                   By_________________________________
                                     Name:
                                     Title:
                                     Address: