<PAGE>

                                                                    Exhibit 10.3



                              SECURITY AGREEMENT

                              Dated July 5, 2001

                                     From

                        The Grantors referred to herein

                                  as Grantors
                                  -----------

                                      to

                                CITIBANK, N.A.

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

                         T A B L E  O F  C O N T E N T S
                         - - - - -  - -  - - - - - - - -

<TABLE>
<CAPTION>
Section                                                                                      Page
<S>                                                                                          <C>
Section 1.   Grant of Security..............................................................   2

Section 2.   Security for Obligations.......................................................   8

Section 3.   Grantors Remain Liable.........................................................   9

Section 4.   Perfection and Priority of Security Interests, Mortgages and Liens.............   9

Section 5.   Delivery and Control of Security Collateral....................................   9

Section 6.   Maintaining the Citibank Concentration Account and the L/C Cash Collateral
             Account........................................................................  11

Section 7.   Investing of Amounts in the L/C Cash Collateral Account........................  11

Section 8.   Maintenance of Cash Management System and the Blocked Accounts.................  11

Section 9.   Release of Amounts.............................................................  13

Section 10.  Representations and Warranties.................................................  13

Section 11.  Further Assurances.............................................................  17

Section 12.  As to Equipment and Inventory..................................................  18

Section 13.  Insurance......................................................................  18

Section 14.  Place of Perfection; Records; Collection of Receivables........................  19

Section 15.  As to Intellectual Property Collateral.........................................  20

Section 16.  Voting Rights; Dividends; Etc..................................................  22

Section 17.  Transfers and Other Liens; Additional Shares...................................  23

Section 18.  Collateral Agent Appointed Attorney-in-Fact....................................  23

Section 19.  Collateral Agent May Perform...................................................  24

Section 20.  The Collateral Agent's Duties..................................................  24

Section 21.  Remedies.......................................................................  25

Section 22.  Indemnity and Expenses.........................................................  29

Section 23.  Amendments; Waivers; Additional Grantors; Etc..................................  29
</TABLE>
<PAGE>

                                      ii

<TABLE>
<S>                                                                                     <C>
Section 24.  Notices; Etc.............................................................  30

Section 25.  Continuing Security Interest; Assignments under the Credit Agreement.....  30

Section 26.  Release; Termination.....................................................  30

Section 27.  Security Interest Absolute...............................................  31

Section 28.  Execution in Counterparts................................................  32

Section 29.  The Mortgages............................................................  32

Section 30.  Governing Law............................................................  33
</TABLE>



Schedules

Schedule I     -    Pledged Shares and Pledged Debt
Schedule II    -    Locations of Equipment and Inventory
Schedule III   -    Chief Executive Office and Federal Tax Identification Number
Schedule IV    -    Patents, Trademarks and Trade Names, Copyrights and Licenses
Schedule V     -    Blocked Accounts and Pledged Accounts
Schedule VI         Concentration Accounts

Exhibits

Exhibit A      -    Form of Security Agreement Supplement
Exhibit B      -    Form of Pledged Account Letter
Exhibit C      -    Form of Intellectual Property Agreement
Exhibit D      -    Form of Intellectual Property Agreement Supplement
<PAGE>

                              SECURITY AGREEMENT

          SECURITY AGREEMENT dated July 5, 2001 made by AMF Bowling Worldwide,
Inc., a Delaware corporation (the "Borrower"), the other Persons listed on the
signature pages hereof, each a debtor and debtor-in-possession under Chapter 11
of the U.S. Bankruptcy Code (11 U.S.C. (S)(S) 101 et seq.; the "Bankruptcy
                                                  -- ----
Code") and the Additional Grantors (as defined in Section 23) (the Borrower, the
Persons so listed and the Additional Grantors being, collectively, the
"Grantors"), to CITIBANK, N.A. ("Citibank") as collateral agent (together with
any successor collateral agent appointed pursuant to Article VII of the Credit
Agreement (as hereinafter defined), the "Collateral Agent") for the Secured
Parties (as defined in the Credit Agreement).

          PRELIMINARY STATEMENTS.

          (1)  The Borrower and the Guarantors have entered into a Senior
Secured Priming Debtor-In-Possession Credit Agreement dated as of July 3, 2001
(said Agreement, as it may hereafter be amended, amended and restated,
supplemented or otherwise modified from time to time, being the "Credit
Agreement") with the Lender Parties and the Agents (each as defined therein).

          (2)  Pursuant to the Credit Agreement, the Grantors are entering into
this Agreement in order to grant to the Collateral Agent for the ratable benefit
of the Secured Parties a security interest in all of their personal property and
fixtures now owned or hereafter acquired.

          (3)  Each Grantor is the owner of the shares (the "Initial Pledged
Shares") of stock set forth opposite such Grantor's name on and as otherwise
described in Part I of Schedule I hereto and issued by the corporations named
therein and of the indebtedness (the "Initial Pledged Debt") set forth opposite
such Grantor's name on and as otherwise described in Part II of Schedule I
hereto and issued by the obligors named therein.

          (4)  The Borrower has security entitlement (the "Pledged Security
Entitlements") with respect to all the financial assets (the "Pledged Financial
Assets") credited from time to time to the Borrower's account, Account No.
6081828 (the "Securities Account"), with the Calvert Group at its office at 4550
Montgomery Avenue, Suite 1000N, Bethesda, Maryland 20814.

          (5)  After the Effective Date, the Borrower will open a non-interest
bearing (but subject to investment pursuant to Section 7) cash collateral
account (the "L/C Collateral Account") with Citibank, in the name of the
Borrower but under the sole control and dominion of the Collateral Agent and
subject to the terms of this Agreement.

          (6)  The Borrower has opened (i) a cash concentration deposit account,
Account No. 40697957 with Citibank at its office at One Penn's Way, New Castle,
Delaware 19721 (the "Citibank Concentration Account") and (ii) a cash
concentration
<PAGE>

                                       2

deposit account, Account No. 2055303193337 with First Union National Bank at its
office at 7 North 8th Street, 3rd Floor, Richmond, Virginia 23219 (the "FUNB
Concentration Account" and together with the Citibank Concentration Account, the
"Concentration Accounts"), both such accounts in the name of the Borrower and
subject to the terms of this Agreement.

          (7)  It is a condition precedent to the making of Advances and the
issuance of Letters of Credit by the Lender Parties under the Credit Agreement
that the Grantors shall have granted the assignment and security interest and
made the pledge and assignment contemplated by this Agreement.

          (8)  Each Grantor will derive substantial direct and indirect benefit
from the transactions contemplated by the Loan Documents.

          (9)  Terms defined in the Credit Agreement and not otherwise defined
in this Agreement shall have the meanings assigned to them in the Credit
Agreement. Further, 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") and/or in the
Federal Book Entry Regulations (as defined below) are used in this Agreement as
such terms are defined in such Article 8 or 9 and/or the Federal Book Entry
Regulations. The term "Federal Book Entry Regulations" means (a) the federal
regulations contained in Subpart B ("Treasury/Reserve Automated Debt Entry
System (TRADES)") governing book-entry securities consisting of U.S. Treasury
bonds, notes and bills and Subpart D ("Additional Provisions") of 31 C.F.R. Part
357, 31 C.F.R. (S) 357.2, (S) 357.10 through (S) 357.14 and (S) 357.41 through
(S) 357.44 and (b) to the extent substantially identical to the federal
regulations referred to in clause (a) above (as in effect from time to time),
the federal regulations governing other book-entry securities.

          NOW, THEREFORE, in consideration of the premises and in order to
induce the Lender Parties to make Advances and issue Letters of Credit under the
Credit Agreement, each Grantor hereby agrees with the Collateral Agent for the
ratable benefit of the Secured Parties as follows:

          Section 1.  Grant of Security. (a)  Each Grantor hereby assigns and
                      -----------------
pledges to the Collateral Agent for the ratable benefit of the Secured Parties,
and hereby grants to the Collateral Agent for the ratable benefit of the Secured
Parties a security interest in, subject only to any valid and enforceable liens
and security interests contemplated by, and permitted under, the Credit
Agreement and the Interim Order and the Final Order, as applicable, such
Grantor's right, title and interest in and to 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 or
arising (collectively, the "Collateral"):

                  (i)  all equipment in all of its forms (including, without
          limitation, all (A) furniture, furnishings, trade fixtures, machinery
          and appliances, (B) production, manufacturing, distribution, selling,
          data
<PAGE>

                                       3

          processing, computer and office equipment and (C) trucks and other
          vehicles), all fixtures and all parts thereof and all accessions
          thereto (any and all such equipment, fixtures, parts and accessions
          being the "Equipment");

               (ii)   all inventory in all of its forms, (including, without
          limitation, (A) all bowling center equipment (including, but not
          limited to, pinspotters, wood and synthetic bowling lanes, automatic
          scoring systems, ball returns, pins, seating and lane maintenance
          equipment) and raw materials and work in process therefor, finished
          goods thereof and materials used or consumed in the manufacture,
          production, preparation or shipping thereof, (B) 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 (C) 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");

               (iii)  all accounts, chattel paper, instruments, deposit
          accounts, general intangibles and other 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 whether or not earned by
          performance, 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, chattel paper, instruments, deposit
          accounts, general intangibles or obligations (any and all such
          accounts, chattel paper, instruments, deposit accounts, general
          intangibles and obligations, to the extent not referred to in clause
          (iv) or (v) below, being the "Receivables", and any and all such
          security agreements, leases and other contracts being the "Related
          Contracts");

               (iv)   the following (the "Security Collateral"):

                      (A)  the Initial Pledged Shares and the certificates, if
               any, representing the Initial 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 the Initial Pledged Shares;

                      (B)  the Initial Pledged Debt and the instruments, if any,
               evidencing the Initial Pledged Debt, 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 the Initial Pledged Debt;
<PAGE>

                                       4

                      (C)  all additional shares of stock of any issuer of the
               Pledged Shares from time to time acquired by such Grantor in any
               manner (such shares, together with the Initial Pledged Shares,
               being the "Pledged Shares"), and the certificates, if any,
               representing such additional 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 shares, provided, however, that the
               Pledged Shares shall not include more than 65% of the issued and
               outstanding shares of the voting stock (but shall include 100% of
               the issued and outstanding shares of nonvoting stock) of any
               Foreign Subsidiary;

                      (D)  all additional indebtedness from time to time owed to
               such Grantor by any obligor of the Initial Pledged Debt (such
               indebtedness, together with the Initial Pledged Debt, being the
               "Pledged Debt") and the instruments, if any, evidencing such
               indebtedness, 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
               indebtedness; and

                      (E)  the Securities Account, all Pledged Security
               Entitlements with respect to all Pledged Financial Assets from
               time to time credited to the Securities Account, and all Pledged
               Financial Assets, 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 Pledged Security Entitlements or such Pledged Financial
               Assets; and

                      (F)  all other investment property (including, without
               limitation, all (I) securities, whether certificated or
               uncertificated, provided, however, that this subclause (I) shall
               not include more than 65% of the issued and outstanding voting
               stock of any Foreign Subsidiary, (II) security entitlements,
               (III) securities accounts, (IV) commodity contracts and (V)
               commodity accounts) in which such Grantor has now, or acquires
               from time to time hereafter, 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;

               (v)    the following (collectively, the "Account Collateral"):
<PAGE>

                                       5

                      (A)  the L/C Collateral Account, all financial assets from
               time to time credited to the L/C Collateral Account (including,
               without limitation, all Cash Equivalents from time to time
               credited to the L/C Collateral 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 financial assets;

                      (B)  all Pledged Accounts (as defined in Section 8(a)(iii)
               hereof) from time to time, all funds held therein and all
               certificates and instruments, if any, from time to time
               representing or evidencing the Pledged Accounts;

                      (C)  all other deposit accounts (including, without
               limitation, the Concentration Accounts) of such Grantor from time
               to time, all funds held therein and all certificates and
               instruments, if any, from time to time representing or evidencing
               such deposit accounts;

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

                      (E)  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

               (vi)   the following (collectively, the "Intellectual Property
          Collateral"):

                      (A)  all United States, international and foreign patents,
               patent applications and statutory invention registrations,
               including, without limitation, the patents and patent
               applications set forth in Schedule IV hereto (as such Schedule IV
               may be supplemented from time to time by supplements to this
               Agreement, each such supplement being in substantially the form
               of Exhibit D hereto (an "IP Security Agreement Supplement"),
               executed and delivered by such Grantor to the Collateral Agent
               from time to time), together with all reissues, divisions,
               continuations, continuations-in-part, extensions and
               reexaminations thereof, all inventions therein, all rights
               therein provided by international treaties or conventions and all
               improvements thereto, and all other rights of any kind
<PAGE>

                                       6

               whatsoever of such Grantor accruing thereunder or pertaining
               thereto (the "Patents");

                      (B)  all trademarks (including, without limitation,
               service marks), certification marks, collective marks, trade
               dress, logos, domain names, product configurations, trade names,
               business names, corporate names and other source identifiers,
               whether or not registered, whether currently in use or not,
               including, without limitation, all common law rights and
               registrations and applications for registration thereof,
               including, without limitation, the trademark registrations and
               trademark applications set forth in Schedule IV hereto (as such
               Schedule IV may be supplemented from time to time by IP Security
               Agreement Supplements executed and delivered by such Grantor to
               the Collateral Agent from time to time), and all other marks
               registered in the U.S. Patent and Trademark Office or in any
               office or agency of any State or Territory of the United States
               or any foreign country (but excluding any United States
               intent-to-use trademark application prior to the filing and
               acceptance of a Statement of Use or an Amendment to allege use in
               connection therewith to the extent that a valid security interest
               may not be taken in such an intent-to-use trademark application
               under applicable law), and all rights therein provided by
               international treaties or conventions, all reissues, extensions
               and renewals of any of the foregoing, together in each case with
               the goodwill of the business connected therewith and symbolized
               thereby, and all rights corresponding thereto throughout the
               world and all other rights of any kind whatsoever of such Grantor
               accruing thereunder or pertaining thereto (the "Trademarks");

                      (C)  all copyrights, copyright applications, copyright
               registrations and like protections in each work of authorship,
               whether statutory or common law, whether published or
               unpublished, any renewals or extensions thereof, all copyrights
               of works based on, incorporated in, derived from, or relating to
               works covered by such copyrights, including, without limitation,
               the copyright registrations and copyright applications set forth
               in Schedule IV hereto including, without limitation, the
               trademark registrations and trademark applications set forth in
               Schedule IV hereto (as such Schedule IV may be supplemented from
               time to time by IP Security Agreement Supplements executed and
               delivered by such Grantor to the Collateral Agent from time to
               time), together with all rights corresponding thereto throughout
               the world and all other rights of any kind whatsoever of such
               Grantor accruing thereunder or pertaining thereto (the
               "Copyrights");
<PAGE>

                                       7

                      (D)  all confidential and proprietary information,
               including, without limitation, know-how, trade secrets,
               manufacturing and production processes and techniques,
               inventions, research and development information, technical data,
               financial, marketing and business data, pricing and cost
               information, business and marketing plans and customer and
               supplier lists and information (the "Trade Secrets");

                      (E)  all computer software programs and databases
               (including, without limitation, source code, object code and all
               related applications and data files), firmware, and documentation
               and materials relating thereto, and all rights with respect to
               the foregoing, together with any and all options, warranties,
               service contracts, program services, test rights, maintenance
               rights, improvement rights, renewal rights and indemnifications
               and any substitutions, replacements, additions or model
               conversions of any of the foregoing (the "Computer Software");

                      (F)  all license agreements, permits, authorizations and
               franchises, whether with respect to the Patents, Trademarks,
               Copyrights, Trade Secrets or Computer Software, or with respect
               to the patents, trademarks, copyrights, trade secrets, computer
               software or other proprietary right of any other Person,
               including, without limitation, the license agreements set forth
               in Schedule IV hereto (as such Schedule IV may be supplemented
               from time to time by IP Security Agreement Supplements executed
               and delivered by such Grantor to the Collateral Agent from time
               to time), and all income, royalties and other payments now or
               hereafter due and/or payable with respect thereto, subject, in
               each case, to the terms of such license agreements, permits,
               authorizations and franchises, (the "Licenses"); and

                      (G)  any and all claims for damages for past, present and
               future infringement, misappropriation or breach with respect to
               the Patents, Trademarks, Copyrights, Trade Secrets, Computer
               Software or Licenses, with the right, but not the obligation, to
               sue for and collect, or otherwise recover, such damages; and

                      (vii) all proceeds of any and all of the Collateral
          (including, without limitation, proceeds that constitute property of
          the types described in clauses (i) through (vi) of this Section 1(a)
          and this clause (vii)) and, to the extent not otherwise included, all
          (A) payments under insurance (whether or not the Collateral 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 (B) cash.
<PAGE>

                                       8

          (b) Notwithstanding anything to the contrary contained in any Loan
Document, none of the following shall be subject to any lien arising or created
under any Collateral Document: (a) any funds collected by a Loan Party from
Participants held on behalf of bowling leagues or bowlers who are participating
in bowling leagues or bowling tournaments ("Participants") during the term of
the league or tournaments and returned to Participants at the end of the league
or the tournament, but excluding payments for bowling or other services sold by
the Loan Party ("Prize Funds"); (b) proceeds of any lottery ticket sales held by
the Grantor or its Subsidiaries ("Lottery Proceeds"); (c) funds representing
charitable donations held by the Grantor or its Subsidiaries on behalf of
charities ("Charity Funds" and, together with Prize Funds and Lottery Proceeds,
"Third Party Funds").  Each Loan Party shall maintain accurate accounts of all
Third Party Funds.  To protect the integrity of Prize Funds, the Loan Parties
may establish and maintain escrow or trust accounts (the "League Accounts") with
banks or trust companies acceptable to the Collateral Agent (the "League
Trustees") for the benefit of Participants with whom the Loan Party has an
agreement in the form customarily used by a Loan Party (a "League Agreement").
The Loan Parties will use their best efforts to establish escrows or trust
accounts and to deposit Prize Funds promptly into such escrow or trust accounts.
For the avoidance of doubt, notwithstanding any commingling, Third Party Funds
shall not be Collateral subject to any Lien arising or created under any
Collateral Document.  Promptly following the establishment of the League
Account, the Borrower shall deliver a copy of any agreement entered into by a
Loan Party with the League Trustee with respect to the League Account or the
administration of amounts of deposit thereto.

          (c)  Notwithstanding anything to the contrary in any Loan Document:
(i) unless a Default has occurred and is continuing, no Grantor shall be
required to make any filing or take any other action to create, perfect or
otherwise maintain any Lien under any Loan Document on any asset to the extent
that the laws of any jurisdiction other than the United States or any State
thereof or the District of Columbia are applicable to the creation, perfection
or maintenance of such Lien and (ii) no covenant, representation or warranty is
made in this Agreement or any Loan Document as to any matter referred to in the
foregoing clause (i).  This Agreement and the Interim and Final Orders are
together intended to create a security interest in the Grantors' assets on
behalf of the Collateral Agent and the Loan Parties.  To the extent that this
Agreement and the Interim and Final Orders are not effective in creating a lien
in one or more of the Grantors' assets that are not located in the United States
or not created under the laws of the United States or a State of the United
States, the effectiveness and validity of this Agreement with respect to the
Grantors' other assets shall not be affected.

          Section 2.  Security for Obligations. (a) This Agreement secures, in
                      ------------------------
the case of each Grantor, the payment of all Obligations of such Grantor now or
hereafter existing under the Loan Documents, whether direct or indirect,
absolute or contingent, and whether for principal, reimbursement obligations,
interest, fees, premiums, penalties, indemnifications, contract causes of
action, costs, expenses or otherwise (all such Obligations being the "Secured
Obligations").
<PAGE>

                                       9

          (b) This Agreement shall, in the case of each Grantor that is a debtor
in a Case, be subject to the approval of the Bankruptcy Court.

          Section 3.  Grantors Remain Liable. Anything herein to the contrary
                      ----------------------
notwithstanding, (a) subject to the applicable provisions of the Bankruptcy
Code, each Grantor shall remain liable under the contracts and agreements
included in such Grantor's Collateral 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 Collateral Agent of any
of the rights hereunder shall not release any Grantor from any of its duties or
obligations under the contracts and agreements included in the Collateral (as
such duties or obligations may be modified or terminated pursuant to the
applicable provisions of the Bankruptcy Code) and (c) no Secured Party 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 Secured Party be obligated to perform any of the obligations or duties of
any Grantor thereunder or to take any action to collect or enforce any claim for
payment assigned hereunder.

          Section 4.  Perfection and Priority of Security Interests, Mortgages
          --------------------------------------------------------------------
and Liens. At the request of the Collateral Agent, the Grantors shall execute
---------
and deliver to the Lenders documentation satisfactory to the Lenders evidencing
the security interests, charges, mortgages and liens granted hereby and
providing for the perfection of such security interests, mortgages and liens,
and the automatic stay provisions of section 362 of the Bankruptcy Code (if and
to the extent applicable) are modified pursuant to the Interim Order to permit
the execution, delivery and filing of such documentation; provided, however
that no such documentation or any action on the part of any Loan Party or the
Collateral Agent shall be required as a condition to the validity,
enforceability, priority or perfection of any of the security interests,
charges, mortgages or liens created pursuant to this Agreement which security
interests, charges, mortgages and liens shall, pursuant to sections 364(c) and
364(d) of the Bankruptcy Code, be deemed valid, enforceable and properly
perfected at all times from and after entry of the Interim Order and the Final
Order, as applicable and to the extent the creation, validity, enforceability,
priority or perfection is effective with respect to assets located outside the
United States or controlled by laws other than the laws of the United States or
any State of the United States.  The claims arising under this Agreement and the
other Loan Documents shall constitute, in accordance with section 364(c)(1) of
the Bankruptcy Code, (if and to the extent possible) allowed administrative
expense claims having priority over all administrative expenses of the kind
specified in sections 503(b) or 507(b) of the Bankruptcy Code in accordance with
the terms of the Credit Agreement and, the Interim Order and the Final Order, as
applicable.  Upon the occurrence and during the continuance of an Event of
Default, such priority and security interests, charges, mortgages and liens
shall be subject to the Carve-Out.

          Section 5.  Delivery and Control of Security Collateral.  (a)  All
                      -------------------------------------------
existing certificates or instruments representing or evidencing Security
Collateral shall be delivered to and held by or on behalf of the Collateral
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
<PAGE>

                                      10

to the Collateral Agent and shall deliver to the Grantor on or prior to the
Closing Date acknowledgment of such delivery and receipt of such certificates.
To the extent any certificate or instrument representing Security Collateral is
in the possession of Citibank, Citibank shall cause such certificate or
instrument to be delivered to the Collateral Agent. The Collateral Agent shall
have the right, at any time in its discretion and without notice to any Grantor,
to transfer to or to register in the name of the Collateral Agent or any of its
nominees any or all of the Security Collateral, subject only to the revocable
rights specified in Section 16(a). In addition, the Collateral Agent shall have
the right at any time to exchange certificates or instruments representing or
evidencing Security Collateral for certificates or instruments of smaller or
larger denominations. Also, if a Default has occurred and is continuing, the
Collateral Agent shall have the right at any time to convert Security Collateral
consisting of financial assets credited to the Securities Account to Security
Collateral consisting of financial assets held directly by the Collateral Agent,
and to convert Security Collateral consisting of financial assets held directly
by the Collateral Agent to Security Collateral consisting of financial assets
credited to the Securities Account.

          (b)  With respect to any Security Collateral in which any Grantor has
any right, title or interest and that constitutes an uncertificated security,
such Grantor will, upon request of the Collateral Agent, cause the issuer
thereof either (i) to register the Collateral Agent as the registered owner of
such security or (ii) to agree in writing with such Grantor and the Collateral
Agent that such issuer will comply with instructions with respect to such
security originated by the Collateral Agent without further consent of such
Grantor, such agreement to be in form and substance satisfactory to the
Collateral Agent.

          (c)  With respect to any Security Collateral in which any Grantor has
any right, title or interest and that constitutes a security entitlement, such
Grantor will, upon request of the Collateral Agent, cause the securities
intermediary with respect to such security entitlement either (i) to identify in
its records the Collateral Agent as the entitlement holder of such security
entitlement against such securities intermediary or (ii) to agree in writing
with such Grantor and the Collateral 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 such Grantor has a security entitlement) originated by the Collateral
Agent without further consent of such Grantor, such agreement to be in form and
substance satisfactory to the Collateral Agent (such agreement being a
"Securities Account Control Agreement").

          (d)  No Grantor will change or add any securities intermediary or
commodity intermediary that maintains any securities account or commodity
account in which any of the Collateral is credited or carried, or change or add
any such securities account or commodity account, in each case without first
complying with the above provisions of this Section 5 in order to perfect the
security interest granted hereunder in such Collateral.
<PAGE>

                                      11

               Section 6. Maintaining the Concentration Accounts and the L/C
                          --------------------------------------------------
Cash Collateral Account. So long as any Advance shall remain unpaid, any Letter
-----------------------
of Credit shall be outstanding or any Lender Party shall have any Commitment
under the Credit Agreement:


               (a) The Borrower will maintain the Concentration Accounts and,
     after the Effective Date upon request of the Collateral Agent, will open
     and thereafter maintain the L/C Cash Collateral Account with Citibank or
     another commercial bank acceptable to the Collateral 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 and except as
     otherwise provided by the provisions of Section 9 and Section 21, that no
     amount (including interest on Cash Equivalents credited thereto) 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 Concentration Accounts and 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.

               Section 7. Investing of Amounts in the L/C Cash Collateral
                          -----------------------------------------------
Account. If requested by the Borrower, the Collateral Agent will direct Citibank
-------
to, subject to the provisions of Sections 9 and 21, from time to time (a) invest
amounts on deposit in the L/C Cash Collateral Account in such Cash Equivalents
in the name of the Collateral Agent or as to which all action required by
Section 11 shall have been taken as the Borrower may select and the Collateral
Agent may approve and (b) invest 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 Collateral Agent or as to which all actions required by Section 11 shall
have been taken as the Borrower may select and the Collateral Agent may approve
(the Cash Equivalents referred to in clauses (a) and (b) above 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. Maintenance of Cash Management System and the Blocked
                          -----------------------------------------------------
Accounts. (a) The Borrower shall continue to maintain a cash management system
--------
for the Loan Parties in form and substance reasonably satisfactory to the
Collateral Agent. Until the occurrence of a Default, the Borrower shall be
entitled to continue to maintain its current cash management system, which the
Loan Parties hereby acknowledge is satisfactory, as described in the "Debtors'
Motion for Order Authorizing Debtors to Continue Consolidated Cash Management
Systems Pursuant to Section 363 of the Bankruptcy Code", filed with the
Bankruptcy Court on the date hereof. Upon the
<PAGE>

                                      12

occurrence of a Default and for so long as such Default continues and any
Advance remains unpaid or any Letter of Credit remains outstanding or any Lender
Party shall have any Commitment under the Credit Agreement, each Grantor shall,
promptly and in any event within 10 days after notice from the Collateral Agent:

               (i)   enter into letter agreements, which letter agreements shall
     be in form and substance reasonably satisfactory to such Grantor and the
     Collateral Agent ("Blocked Account Letters"), with the Collateral Agent and
     each bank ("Blocked Account Banks") with which it maintains blocked deposit
     accounts ("Blocked Accounts"), provided, however that if any Grantor is
     unable to obtain a letter agreement with respect to a deposit account
     within such 10-day period, such Grantor shall have an additional 10 days to
     close such deposit account and open a replacement account at another bank
     which has entered into a Blocked Account Letter;

               (ii)  promptly instruct each Obligor (other than AMF Bowling
     Centers Holdings Inc. and its Subsidiaries) obligated at any time to make
     any payment to such Grantor with respect to the purchase or lease of
     bowling equipment or any other product manufactured, produced, prepared or
     assembled by such Grantor to make such payment to a Blocked Account or to
     the Citibank Concentration Account.  An "Obligor" means any Person
     obligated at any time to make any payment to any such Grantor for any
     reason;

               (iii) (A) with respect to each deposit account other than any
     Blocked Account (a "Pledged Account") maintained by such Grantor with any
     bank (a "Pledged Account Bank"), (I) enter into a Pledged Account Letter in
     substantially the form of Exhibit B hereto with the Pledged Account Bank
     with which such Pledged Account is maintained or (II) terminate such
     Pledged Account, (B) direct each Obligor (if not previously so directed) to
     make all payments to a Blocked Account, a Pledged Account or the Citibank
     Concentration Account and (C) on each day (or, if such day shall not be a
     Business Day, on the next succeeding Business Day), deposit all cash
     receipts and all proceeds of Collateral and all other amounts received by
     it on such day, other than petty cash required for the operation of the
     Grantors' bowling centers (including, without limitation, cash necessary to
     be paid to vendors of alcoholic beverages), into a Blocked Account, a
     Pledged Account or the Citibank Concentration Account.

               (b)   Upon any termination of any Blocked Account Letter or other
     agreement with respect to the maintenance of a Blocked Account by any
     Grantor or any Blocked Account Bank, or of a Pledged Account by any Grantor
     or any Pledged Account Bank, the applicable Grantor shall immediately
     notify all Obligors that were making payments to such Blocked Account or
     Pledged Account, as the case may be, to make all future payments to another
     Blocked Account or Pledged Account with respect to which a Blocked Account
     Letter is then in effect or to the Citibank Concentration Account.  Each
     Grantor agrees to terminate any or all Blocked Accounts, Pledged Accounts
     and Blocked Account
<PAGE>

                                      13

     Letters upon request by the Collateral Agent given during the continuance
     of an Event of Default.

               Section 9.  Release of Amounts. So long as no Event of Default
                           ------------------
shall have occurred and be continuing, the Collateral Agent will, at the request
of the Borrower, pay and release to the Borrower or at its order or, at the
request of the Borrower, to the Administrative Agent to be applied to the
Obligations of the Borrower under the Loan Documents, such amount, if any, as is
then on deposit in the L/C Collateral Account to the extent permitted to be
released under the terms of the Credit Agreement.

               Section 10. Representations and Warranties.  Each Grantor
                           ------------------------------
represents and warrants as follows:

               (a) All of the Equipment and Inventory of such Grantor are
     located at the places specified therefor in Schedule II hereto, as such
     Schedule II may be amended from time to time pursuant to Section 12(a). The
     chief executive office of such Grantor, and the original copies of each
     Related Contract to which such Grantor is a party and all originals of all
     chattel paper that evidence Receivables of such Grantor, are located at the
     address specified therefor in Schedule III hereto, as such Schedule III may
     be amended from time to time pursuant to Section 14(a). Such Grantor's
     federal tax identification number is set forth opposite such Grantor's name
     in Schedule III hereto. All Security Collateral consisting of certificated
     securities and instruments have been delivered to the Collateral Agent.
     Originals of all chattel paper that evidence Receivables have been
     delivered to the Collateral Agent, in each case to the extent that delivery
     thereof to the Collateral Agent is required under Section 5. None of the
     Receivables or Agreement Collateral is evidenced by a promissory note or
     other instrument that has not been delivered to the Collateral Agent.

               (b) Such Grantor is the legal and beneficial owner of the
     Collateral of such Grantor free and clear of any Lien, claim, option or
     right of others, except for the security interests created under this
     Agreement or Liens permitted under the Credit Agreement. To the best
     knowledge of each Grantor and without having made a lien search, no
     effective financing statement or other instrument similar in effect
     covering all or any part of such Collateral or listing such Grantor or any
     trade name of such Grantor as debtor is on file in any recording office,
     except such as may have been filed in favor of the Collateral Agent
     relating to the Loan Documents or relating to Liens otherwise permitted
     under the Credit Agreement. Such Grantor has the trade names listed on
     Schedule IV hereto.

               (c)  Such Grantor has exclusive possession and control of such
     Grantor's Equipment and Inventory other than Inventory in transit and
     salespersons' sample products.

               (d)  The Pledged Shares pledged by such Grantor hereunder have
     been duly authorized and validly issued and are fully paid and non-
     assessable. The
<PAGE>

                                      14

     Pledged Debt pledged by such Grantor hereunder has been duly authorized,
     authenticated or issued and delivered, is the legal, valid and binding
     obligation of the issuers thereof, is evidenced by one or more promissory
     notes (which notes have been delivered to the Collateral Agent).

               (e)  The Initial Pledged Shares constitute the percentage of the
     issued and outstanding shares of stock of the issuers thereof indicated on
     Schedule I hereto as of the date hereof. The Initial Pledged Debt
     constitutes all of the outstanding indebtedness owed to such Grantor by the
     issuers thereof and is outstanding, as of the date hereof, in the principal
     amount indicated on Schedule I hereto as of the date hereof which Schedule
     is attached in preliminary form on the date hereof and which the Borrower
     shall amend within 30 Business Days of the Filing Date.

               (f)  All of the investment property owned by such Grantor as of
     the date hereof is listed on Schedule I hereto.

               (g)  Such Grantor has no Blocked Accounts or Pledged Accounts or
     other deposit accounts other than the Blocked Accounts and the Pledged
     Accounts listed on Schedule V hereto, as such Schedule V may be amended
     from time to time, including the Concentration Accounts, listed on Schedule
     VI hereto, as such Schedule VI may be amended from time to time.

               (h)  This Agreement and the Interim Order and the Final Order, as
     applicable, create in favor of the Collateral Agent for the benefit of the
     Secured Parties a valid and, together with such filings and other actions,
     perfected first priority (subject to the Liens permitted by the Credit
     Agreement) security interest in the Collateral of such Grantor, securing
     the payment of the Secured Obligations, provided, however, that
     notwithstanding anything otherwise to the contrary, no representation or
     warranty is made with respect to the creation or perfection of any lien or
     security interest (x) in assets not located in the United States or (y)
     created under laws other than the laws of the United States or any State of
     the United States.

               (i)  Except for the Interim Order and the Final Order, as
     applicable, and except as otherwise set forth in Schedule 4.01(c) to the
     Credit Agreement, no authorization or approval or other action by, and no
     notice to or filing with, any governmental authority or regulatory body or
     any other third party is required for (i) the grant by such Grantor of the
     assignment, pledge and security interest granted hereunder or for the
     execution, delivery or performance of this Agreement by such Grantor, (ii)
     the perfection or maintenance of the assignment, pledge and security
     interest created hereunder (including the first priority nature of such
     assignment, pledge or security interest (subject only to the Liens
     permitted by the Credit Agreement), or (iii) for the exercise by the
     Collateral 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, provided, however that notwithstanding
<PAGE>

                                      15

     anything otherwise to the contrary, no representation or warranty is made
     with respect to the creation or perfection of any lien or security interest
     (x) in assets not located in the United States or (y) created under laws
     other than the laws of the United States or any State of the United States.

               (j)  The Inventory that has been produced or distributed by such
     Grantor has been produced in compliance in all material respects with
     requirements of applicable law, including, without limitation, the Fair
     Labor Standards Act.

               (k)  As to itself and its Intellectual Property Collateral that
     is material to the business of the Borrower and its Subsidiaries taken as a
     whole ("Material Intellectual Property Collateral"):

                    (i)   The rights of such Grantor in or to the Material
               Intellectual Property Collateral do not conflict with,
               misappropriate or infringe upon the intellectual property rights
               of any third party, and no claim has been asserted that the use
               of such Intellectual Property Collateral does or may infringe
               upon the intellectual property rights of any third party.

                    (ii)  Such Grantor is the exclusive owner of the entire and
               unencumbered right, title and interest in and to the Material
               Intellectual Property Collateral and is entitled to use all such
               Intellectual Property Collateral without limitation, subject only
               to the license terms of the Licenses.

                    (iii) The Material Intellectual Property Collateral set
               forth on Schedule IV hereto includes all of the patents, patent
               applications, trademark registrations and applications, copyright
               registrations and applications and Licenses owned by such
               Grantor.

                    (iv)  The Material Intellectual Property Collateral is
               subsisting and has not been adjudged invalid or unenforceable in
               whole or part, and to the best of such Grantor's knowledge, is
               valid and enforceable. Such Grantor is not aware of any uses of
               any item of Intellectual Property Collateral that could be
               expected to lead to such item becoming invalid or unenforceable.

                    (v)   Except to the extent a failure to do so would not be
               reasonably likely to have a Material Adverse Effect, such Grantor
               has made or performed all filings, recordings and other acts and
               has paid all required fees and taxes to maintain and protect its
               interest in each and every item of Material Intellectual Property
               Collateral in full force and effect throughout the world, and to
               protect and maintain its interest therein including, without
               limitation, recordations of any of its interests in the Patents
               and Trademarks with the U.S. Patent and Trademark Office and in
               corresponding national and international patent offices, and
               recordation of any of its interests in the Copyrights with the
               U.S. Copyright Office and in
<PAGE>

                                      16



               corresponding national and international copyright offices. Such
               Grantor has used proper statutory notice in connection with its
               use of each patent, trademark and copyright of the Intellectual
               Property Collateral.

                    (vi)   No action, suit, investigation, litigation or
               proceeding has been asserted or is pending or, to the best of
               such Grantor's knowledge, threatened against such Grantor (i)
               based upon or challenging or seeking to deny or restrict the use
               of any of the Material Intellectual Property Collateral, or (ii)
               alleging that any services provided by, processes used by, or
               products manufactured or sold by, such Grantor infringe upon or
               misappropriate any patent, trademark, copyright or any other
               proprietary right of any third party. To the best of such
               Grantor's knowledge, no Person is engaging in any activity that
               infringes upon or misappropriates the Material Intellectual
               Property Collateral or upon the rights of such Grantor therein.
               Except as set forth on Schedule IV hereto, such Grantor has not
               granted any license, release, covenant not to sue, non-assertion
               assurance, or other right to any Person with respect to any part
               of the Material Intellectual Property Collateral. The
               consummation of the transactions contemplated by the Transaction
               Documents will not result in the termination or impairment of any
               of the Material Intellectual Property Collateral.

                    (vii)  With respect to each License relating to material
               Intellectual Property (a "Material License"): (A) such Material
               License is valid and binding and in full force and effect and
               represents the entire agreement between the respective licensor
               and licensee with respect to the subject matter of such License;
               (B) such Material License will not cease to be valid and binding
               and in full force and effect on terms identical to those
               currently in effect as a result of the rights and interest
               granted herein, nor will the grant of such rights and interest
               constitute a breach or default under such Material License or
               otherwise give the licensor or licensee a right to terminate such
               Material License; (C) such Grantor has not received any notice of
               termination or cancellation under such Material License; (D) such
               Grantor has not received any notice of a breach or default under
               such Material License, which breach or default has not been
               cured; (E) such Grantor has not granted to any other third party
               any rights, adverse or otherwise, under such Material License;
               and (F) neither such Grantor nor, to the best of such Grantor's
               knowledge, any other party to such Material License is in breach
               or default in any material respect, and no event has occurred
               that, with notice or lapse of time or both, would constitute such
               a breach or default or permit termination, modification or
               acceleration under such License.

                    (viii) To the best of such Grantor's knowledge, and except
               to the extent that any of the following matters could not
               reasonably be expected to have a Material Adverse Effect, (A)
               none of the Trade Secrets of such Grantor has been used,
               divulged, disclosed or appropriated to the
<PAGE>

                                    17

               detriment of such Grantor for the benefit of any other Person
               other than such Grantor; (B) no employee, independent contractor
               or agent of such Grantor has misappropriated any trade secrets of
               any other Person in the course of the performance of his or her
               duties as an employee, independent contractor or agent of such
               Grantor; and (C) no employee, independent contractor or agent of
               such Grantor is in default or breach of any term of any
               employment agreement, non-disclosure agreement, assignment of
               inventions agreement or similar agreement or contract relating in
               any way to the protection, ownership, development, use or
               transfer of such Grantor's Material Intellectual Property
               Collateral.

               Section 11. Further Assurances. (a) Each Grantor agrees that from
                           ------------------
time to time, at the expense of such Grantor, such Grantor will promptly execute
and deliver all further instruments and documents, and take all further action,
that may be necessary or desirable, or that the Collateral Agent may request, in
order to perfect and protect any pledge, assignment or security interest granted
or purported to be granted by such Grantor hereunder or to enable the Collateral
Agent to exercise and enforce its rights and remedies hereunder with respect to
any Collateral of such Grantor. Without limiting the generality of the
foregoing, each Grantor will promptly with respect to Collateral of such
Grantor, at the request of the Collateral Agent: (i) mark conspicuously each
document included in Inventory, each chattel paper included in Receivables, each
Related Contract and each of its records pertaining to such Collateral with a
legend, in form and substance satisfactory to the Collateral Agent, indicating
that such document, chattel paper, Related Contract or Collateral is subject to
the security interest granted hereby; (ii) if any such Collateral shall be
evidenced by a promissory note or other instrument, deliver and pledge to the
Collateral Agent hereunder such note or instrument duly indorsed and accompanied
by duly executed instruments of transfer or assignment, all in form and
substance satisfactory to the Collateral Agent; (iii) execute and file such
financing or continuation statements, or amendments thereto, and such other
instruments or notices, as may be necessary or desirable, or as the Collateral
Agent may request, in order to perfect and preserve the security interest
granted or purported to be granted by such Grantor hereunder; (iv) deliver and
pledge to the Collateral Agent for the benefit of the Secured Parties
certificates representing Security Collateral that constitutes certificated
securities, accompanied by undated stock or bond powers executed in blank; and
(v) deliver to the Collateral Agent evidence that all other action that the
Collateral Agent may deem reasonably necessary or desirable in order to perfect
and protect the security interest created by such Grantor under this Agreement
has been taken.

               (b)  Each Grantor hereby authorizes the Collateral Agent to file
one or more financing or continuation statements, and amendments thereto,
relating to all or any part of the Collateral of such Grantor without the
signature of such Grantor where permitted by law. 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.

               (c)  Each Grantor will furnish to the Collateral Agent from time
to time statements and schedules further identifying and describing the
Collateral of such Grantor
<PAGE>

                                      18

and such other reports in connection with such Collateral as the Collateral
Agent may reasonably request, all in reasonable detail.

               Section 12.  As to Equipment and Inventory. (a) Each Grantor will
                            -----------------------------
keep the Equipment and Inventory of such Grantor (other than Inventory sold in
the ordinary course of business) at the places therefor specified in Section
10(a) or, upon 30 days' prior written notice to the Collateral Agent, at such
other places in a jurisdiction where all action required by Section 11 shall
have been taken with respect to such Equipment and Inventory (and, upon the
taking of such action in such jurisdiction, Schedule II hereto shall be
automatically amended to include such other places).

               (b)  Each Grantor will cause the Equipment of such Grantor to be
maintained and preserved in the same condition, repair and working order as
existing as of the date of this Agreement, ordinary wear and tear excepted, and
in accordance with any manufacturer's manual, and will forthwith, or in the case
of any loss or damage to any of such Equipment as soon as practicable after the
occurrence thereof, make or cause to be made all repairs, replacements and other
improvements in connection therewith that are necessary or desirable to such
end. Each Grantor will promptly furnish to the Collateral Agent a statement
respecting any loss or damage exceeding $2,000,000 to any of the Equipment or
Inventory of such Grantor.

               (c)  Except to the extent they are Pre-Petition Obligations, or
as may be restricted by the Bankruptcy Code or in connection with the Cases,
each Grantor will pay promptly when due all property and other taxes,
assessments and governmental charges or levies imposed upon, and all claims
(including, without limitation, claims for labor, materials and supplies)
against, the Equipment and Inventory of such Grantor, other than any thereof
being contested in good faith by appropriate proceedings. In producing its
Inventory, each Grantor will comply in all material respects with all
requirements of applicable law, including, without limitation, the Fair Labor
Standards Act.

               Section 13. Insurance. (a) Each Grantor will, at its own
                           ---------
expense, maintain insurance with respect to the Equipment and Inventory of such
Grantor in such amounts, against such risks, in such form and with such
insurers, as shall be satisfactory to the Collateral Agent from time to time.
Each policy of each Grantor for liability insurance shall provide for all losses
to be paid on behalf of the Collateral Agent and such Grantor as their interests
may appear. Each such policy shall in addition (i) name such Grantor and the
Collateral Agent as insured parties thereunder (without any representation or
warranty by or obligation upon the Collateral Agent) as their interests may
appear, (ii) provide that there shall be no recourse against the Collateral
Agent for payment of premiums or other amounts with respect thereto and (iii)
provide that at least 10 days' prior written notice of cancellation or of lapse
shall be given to the Collateral Agent by the insurer. Each Grantor will, if so
requested by the Collateral Agent, deliver to the Collateral Agent original or
duplicate policies of such insurance and, as often as the Collateral Agent may
reasonably request, a report of a reputable insurance broker with respect to
such insurance. Further, each Grantor will, at the request of the Collateral
Agent, duly execute and deliver instruments of assignment of such insurance
policies to
<PAGE>

                                      19

comply with the requirements of Section 10 and use its best 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 13 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 subsection (c) of this Section 13 is not
applicable, the applicable Grantor will, to the extent required by the Credit
Agreement, make or cause to be made the necessary repairs to or replacements of
such Equipment or Inventory, and any proceeds of insurance properly received by
or released to such Grantor shall be used by such Grantor, except as otherwise
required hereunder or by the Credit Agreement, to pay or as reimbursement for
the costs of such repairs or replacements.

               (c) So long as no Event of Default shall have occurred and be
continuing, all insurance payments received by the Collateral Agent in
connection with any loss, damage or destruction of any Inventory or Equipment
will be applied as provided in the Credit Agreement.

               Section 14. Place of Perfection; Records; Collection of
                           -------------------------------------------
Receivables. (a) Each Grantor will keep its chief executive office, and
-----------
originals of the Assigned Agreements, and Related Contracts to which such
Grantor is a party and all originals of all chattel paper that evidence
Receivables of such Grantor, at the location therefor specified in Section 10(a)
or, upon 30 days' prior written notice to the Collateral Agent, at such other
location in a jurisdiction where all actions required by Section 10 shall have
been taken with respect to the Collateral of such Grantor (and, upon the taking
of such action in such jurisdiction, Schedule III hereto shall be automatically
amended to include such other location). Each Grantor will hold and preserve its
records relating to the Collateral, the Assigned Agreements, the Related
Contracts and chattel paper and will permit representatives of the Collateral
Agent at any time during normal business hours to inspect and make abstracts
from such records and other documents.

               (b)  Except as otherwise provided in this subsection (b), each
Grantor will continue to collect, at its own expense, all amounts due or to
become due such Grantor under the Receivables and the Related Contracts. In
connection with such collections, such Grantor may take (and, at the Collateral
Agent's direction if a Default has occurred and is continuing, will take) such
action as such Grantor or the Collateral Agent may deem necessary or advisable
to enforce collection of the Receivables and the Related Contracts; provided,
however, that the Collateral Agent shall have the right at any time, upon the
occurrence and during the continuance of an Event of Default and upon written
notice to such Grantor of its intention to do so, to notify the Obligors under
any Receivables or Related Contracts of the assignment of such Receivables or
Related Contracts to the Collateral Agent and to direct such Obligors to make
payment of all amounts due or to become due to such Grantor thereunder directly
to the Collateral Agent and, upon such notification and at the expense of such
Grantor, to enforce collection of any such Receivables or Related Contracts, 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 Collateral Agent
<PAGE>

                                      20

referred to in the proviso to the preceding sentence, (i) all amounts and
proceeds (including instruments) received by such Grantor in respect of the
Receivables and the Related Contracts of such Grantor shall be received in trust
for the benefit of the Collateral Agent hereunder, shall be segregated from
other funds of such Grantor and shall be forthwith paid over to the Collateral
Agent in the same form as so received (with any necessary indorsement) to be
deposited in the Citibank Concentration Account and either (A) released to such
Grantor on the terms set forth in this Agreement so long as no Default shall
have occurred and be continuing or (B) if any Default shall have occurred and be
continuing, applied as provided in Section 21(b) and (ii) such Grantor will 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.
No Grantor will permit or consent to the subordination of its right to payment
under any of the Receivables or the Related Contracts to any other indebtedness
or obligations of the Obligor thereof.

               Section 15. As to Material Intellectual Property Collateral. (a)
                           -----------------------------------------------
With respect to each item of its Material Intellectual Property Collateral, each
Grantor agrees to take, at its expense, all necessary steps, including, without
limitation, in the U.S. Patent and Trademark Office, the U.S. Copyright Office
and any other governmental authority, to (i) maintain the validity and
enforceability of each such item of Material Intellectual Property Collateral
and maintain each such item of Material Intellectual Property Collateral in full
force and effect, and (ii) pursue the registration and maintenance of each
patent, trademark, or copyright registration or application, now or hereafter
included in the Material Intellectual Property Collateral of such Grantor,
including, without limitation, the payment of required fees and taxes, the
filing of responses to office actions issued by the U.S. Patent and Trademark
Office, the U.S. Copyright Office or other governmental authorities, the filing
of applications for renewal or extension, the filing of affidavits under
Sections 8 and 15 of the U.S. Trademark Act, the filing of divisional,
continuation, continuation-in-part, reissue and renewal applications or
extensions, the payment of maintenance fees and the participation in
interference, reexamination, opposition, cancellation, infringement and
misappropriation proceedings. No Grantor shall, without the written consent of
the Collateral Agent, discontinue use of or otherwise abandon any Material
Intellectual Property Collateral, or abandon any right to file an application
for letters patent, trademark, or copyright, unless such Grantor shall have
previously determined that such use or the pursuit or maintenance of such
Intellectual Property Collateral is no longer desirable in the conduct of such
Grantor's business and that the loss thereof would not be reasonably likely to
have a Material Adverse Effect, in which case, such Grantor will give prompt
notice of any such abandonment to the Collateral Agent.

               (b) Each Grantor agrees promptly to notify the Collateral Agent
if such Grantor learns (i) that any item of the Material Intellectual Property
Collateral may have become abandoned, placed in the public domain, invalid or
unenforceable, or of any adverse determination or development regarding such
Grantor's ownership of any of the Material Intellectual Property Collateral or
its right to register the same or to keep and maintain and enforce the same, or
(ii) of any adverse determination or the institution of any proceeding
(including, without limitation, the institution of any proceeding in the
<PAGE>

                                      21

U.S. Patent and Trademark Office or any court) regarding any item of the
Material Intellectual Property Collateral.

               (c) In the event that any Grantor becomes aware that any item of
the Material Intellectual Property Collateral is being infringed or
misappropriated by a third party, such Grantor shall promptly notify the
Collateral Agent and shall take such actions, at its expense, as such Grantor or
the Collateral Agent deems reasonable and appropriate under the circumstances to
protect such Material Intellectual Property Collateral, including, without
limitation, suing for infringement or misappropriation and for an injunction
against such infringement or misappropriation.

               (d) Each Grantor shall use proper statutory notice in connection
with its use of each item of its Material Intellectual Property Collateral. No
Grantor shall do or permit any act or knowingly omit to do any act whereby any
of its Material Intellectual Property Collateral may lapse or become invalid or
unenforceable or placed in the public domain.

               (e) Each Grantor shall take all steps which it or the Collateral
Agent deems reasonable and appropriate under the circumstances to preserve and
protect each item of its Material Intellectual Property Collateral, including,
without limitation, maintaining the quality of any and all products or services
used or provided in connection with any of the Trademarks, consistent with the
quality of the products and services as of the date hereof, and taking all steps
necessary to ensure that all licensed users of any of the Trademarks use such
consistent standards of quality.

               (f) With respect to its Material Intellectual Property
Collateral, each Grantor agrees, at the request of the Collateral Agent, to
execute an agreement, in substantially the form set forth in Exhibit C hereto
(an "Intellectual Property Security Agreement"), for recording the security
interest granted hereunder to the Collateral Agent in such Intellectual Property
Collateral with the U.S. Patent and Trademark Office, the U.S. Copyright Office
and any other governmental authorities necessary to perfect the security
interest hereunder in such Intellectual Property Collateral.

               (g) Each Grantor agrees that, should it obtain an ownership
interest in any item of the type set forth in Section 1(a)(vi) which is not on
the date hereof a part of the Intellectual Property Collateral (the "After-
Acquired Intellectual Property"), (i) the provisions of Section 1 shall
automatically apply thereto, (ii) any such After-Acquired Intellectual Property
and, in the case of trademarks, the goodwill of the business connected therewith
or symbolized thereby, shall automatically become part of the Intellectual
Property Collateral subject to the terms and conditions of this Agreement with
respect thereto, (iii) in the case of Material Intellectual Property Collateral,
such Grantor shall give prompt written notice thereof to the Collateral Agent in
accordance herewith and (iv) in the case of Material Intellectual Property
Collateral, such Grantor shall, at the request of the Collateral Agent, execute
and deliver to the Collateral Agent an IP Security Agreement Supplement covering
such After-Acquired Intellectual Property as "Additional Collateral" thereunder
and as defined therein, and shall record such IP Security Agreement Supplement
with the U.S. Patent and Trademark Office, the
<PAGE>

                                      22

U.S. Copyright Office and any other governmental authorities necessary to
perfect the security interest hereunder in such After-Acquired Intellectual
Property.

          Section 16. Voting Rights; Dividends; Etc. (a) So long as no Default
                      -----------------------------
under Section 6.01(a) of the Credit Agreement or 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 of such
     Grantor or any part thereof for any purpose other than originate
     Entitlement Orders (as defined in any Control Agreement) with respect to
     the Securities Account; provided however, that such Grantor will not
     exercise or refrain from exercising any such right if such action would
     have a material adverse effect on the value of the Security Collateral or
     any part thereof.

          (ii) Each Grantor shall be entitled to receive and retain any and all
     dividends, interest and other distributions paid in respect of the Security
     Collateral of such Grantor if and to the extent that the payment thereof is
     not otherwise prohibited by the terms of the Loan Documents; provided,
     however, that any and all

               (A)  dividends, interest and other distributions 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, any Security Collateral,

               (B)  dividends and other distributions paid or payable in cash in
          respect of any 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 Collateral Agent to hold
     as, Security Collateral and shall, if received by such Grantor, be received
     in trust for the benefit of the Collateral Agent, be segregated from the
     other property or funds of such Grantor and be forthwith delivered to the
     Collateral Agent as Security Collateral in the same form as so received
     (with any necessary indorsement).

          (iii)  The Collateral Agent will execute and deliver (or cause to be
     executed and delivered) to each Grantor all such proxies and other
     instruments as such Grantor may reasonably 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.
<PAGE>

                                      23

               (b)  Upon the occurrence and during the continuance of a Default
     under Section 6.01(a) of the Credit Agreement or an Event of Default:

               (i)   All rights of each Grantor (x) to exercise or refrain from
     exercising the voting and other consensual rights that it would otherwise
     be entitled to exercise pursuant to Section 16(a)(i) shall, upon notice to
     such Grantor by the Collateral Agent, cease and (y) to receive the
     dividends, interest and other distributions that it would otherwise be
     authorized to receive and retain pursuant to Section 16(a)(ii) shall
     automatically cease, and all such rights shall thereupon become vested in
     the Collateral 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, interest and other
     distributions.

               (ii)  All dividends, interest and other distributions that are
     received by any Grantor contrary to the provisions of paragraph (i) of this
     Section 16(b) shall be received in trust for the benefit of the Collateral
     Agent, shall be segregated from other funds of such Grantor and shall be
     forthwith paid over to the Collateral Agent as Security Collateral in the
     same form as so received (with any necessary indorsement).

               (iii) The Collateral Agent shall be authorized to send to each
     Securities Intermediary as defined in and under any Control Agreement a
     Notice of Exclusive Control as defined in and under such Control Agreement.

               Section 17. Transfers and Other Liens; Additional Shares. (a)
                           --------------------------------------------
     Each Grantor agrees that it will not (i) sell, assign or otherwise dispose
     of, or grant any option with respect to, any of the Collateral, other than
     sales, assignments and other dispositions of Collateral, and options
     relating to Collateral, permitted under the terms of the Credit Agreement,
     or (ii) create or suffer to exist any Lien upon or with respect to any of
     the Collateral of such Grantor except for the pledge, assignment and
     security interest created under this Agreement and Liens permitted under
     the Credit Agreement.

               (b)  Each Grantor agrees that it will (i) cause each issuer of
     the Pledged Shares pledged by such Grantor not to issue any stock or other
     securities in addition to or in substitution for the Pledged Shares issued
     by such issuer, except to such Grantor, and (ii) pledge hereunder,
     immediately upon its acquisition (directly or indirectly) thereof, any and
     all additional shares of stock or other securities of each issuer of the
     Pledged Shares.

               Section 18. Collateral Agent Appointed Attorney-in-Fact. Each
                           -------------------------------------------
     Grantor hereby irrevocably appoints the Collateral Agent such Grantor's
     attorney-in-fact, with full authority in the place and stead of such
     Grantor and in the name of such Grantor or otherwise, from time to time,
     upon the occurrence and during the continuance of a Default, in the
     Collateral Agent's discretion, to take any action and to execute any
     instrument that the Collateral Agent may deem necessary or advisable to
     accomplish the purposes of this Agreement, including, without limitation:
<PAGE>

                                      24

               (a) to obtain and adjust insurance required to be paid to the
          Collateral Agent pursuant to Section 13,

               (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 clause
          (a) or (b) above, and

               (d) to file any claims or take any action or institute any
          proceedings that the Collateral Agent may deem 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 Collateral Agent with respect to any of the
          Collateral.

               Section 19. Collateral Agent May Perform. If any Grantor fails
                           ----------------------------
     to perform any agreement contained herein, the Collateral Agent may, but
     without any obligation to do so and without notice, itself perform, or
     cause performance of, such agreement, and the expenses of the Collateral
     Agent incurred in connection therewith shall be payable by such Grantor
     under Section 22(b).

               Section 20. The Collateral Agent's Duties. (a) The powers
                           -----------------------------
     conferred on the Collateral Agent hereunder are solely to protect the
     Secured Parties' interest in the Collateral and 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 Collateral 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 Collateral, whether or not any Secured 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. The Collateral 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 it accords its own property.

               (b)  Anything contained herein to the contrary notwithstanding,
     the Collateral Agent may from time to time, when the Collateral Agent deems
     it to be necessary, appoint one or more subagents (each a "Subagent") for
     the Collateral Agent hereunder with respect to all or any part of the
     Collateral. In the event that the Collateral Agent so appoints any Subagent
     with respect to any Collateral, (i) the assignment and pledge of such
     Collateral and the security interest granted in such Collateral by each
     Grantor hereunder shall be deemed for purposes of this Security Agreement
     to have been made to such Subagent, in addition to the Collateral Agent,
     for the ratable benefit of the Secured Parties, as security for the Secured
     Obligations of such Grantor, (ii) such Subagent shall automatically be
     vested, in addition to the Collateral Agent, with all rights, powers,
     privileges, interests and remedies of the Collateral Agent hereunder with
<PAGE>

                                      25

     respect to such Collateral, and (iii) the term "Collateral Agent," when
     used herein in relation to any rights, powers, privileges, interests and
     remedies of the Collateral 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 Collateral
     Agent.

               Section 21. Remedies. If any Event of Default shall have
                           --------
occurred and be continuing:

               (a) The Collateral 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
          each Grantor hereby agrees that it will at its expense and upon
          request of the Collateral Agent forthwith, assemble all or part of the
          Collateral as directed by the Collateral Agent and make it available
          to the Collateral Agent at a place and time to be designated by the
          Collateral 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 Collateral Agent's offices or elsewhere, for cash, on credit or
          for future delivery, and upon such other terms as the Collateral Agent
          may deem commercially reasonable; (iii) occupy any premises owned or
          leased by any of the Grantors 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 any 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 such 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 Collateral Agent shall not be obligated to make any sale of
          Collateral regardless of notice of sale having been given. The
          Collateral 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. To the extent that any rights and remedies
          under this Section 21 would otherwise be in violation of the automatic
          stay of Section 362 of the Bankruptcy Code, such stay shall be deemed
          modified, as set forth in the Interim Order or the Final Order, as
          applicable, to the extent necessary to permit the Collateral Agent to
          exercise such rights and remedies.

               (b) Any cash held by or on behalf of the Collateral Agent and all
          cash proceeds received by or on behalf of the Collateral Agent in
          respect of any sale of,
<PAGE>

                                      26


          collection from, or other realization upon all or any part of the
          Collateral may, in the discretion of the Collateral Agent, be held by
          the Collateral Agent as collateral for, and/or then or at any time
          thereafter applied in whole or in part by the Collateral Agent for the
          ratable benefit of the Secured Parties against, all or any part of the
          Secured Obligations, in the following manner:

                    (i)   first, to the payment of all of the fees,
               indemnification payments, costs and expenses that are due and
               payable to the Agents (solely in their respective capacities as
               Agents) under or in respect of this Agreement and the other Loan
               Documents on such date, ratably based upon the respective
               aggregate amounts of all such fees, indemnification payments,
               costs and expenses owing to the Agents on such date;

                    (ii)  second, to the payment of all of the fees,
               indemnification payments, costs and expenses that are due and
               payable to the Issuing Bank (solely in its capacity as such)
               under or in respect of this Agreement and the other Loan
               Documents on such date, ratably based upon the respective
               aggregate amounts of all such fees, indemnification payments,
               costs and expenses owing to the Issuing Bank on such date;

                    (iii) third, to the payment of all of the indemnification
               payments, costs and expenses that are due and payable to the
               Lenders under Sections 9.04 of the Credit Agreement, Section 22
               hereof and any similar section of any of the other Loan Documents
               on such date, ratably based upon the respective aggregate amounts
               of all such indemnification payments, costs and expenses owing to
               the Lenders on such date;

                    (iv)  fourth, to the payment of all of the amounts that are
               due and payable to the Administrative Agent and the Lender
               Parties under Sections 2.10 and 2.12 of the Credit Agreement on
               such date, ratably based upon the respective aggregate amounts
               thereof owing to the Administrative Agent and the Lender Parties
               on such date;

                    (v)   fifth, to the payment of all of the fees that are due
               and payable to the Lenders under Section 2.08(a) of the Credit
               Agreement on such date, ratably based upon the respective
               aggregate Commitments of the Lenders under the Facilities on such
               date;

                    (vi)  sixth, to the payment of all of the accrued and unpaid
               interest on the Obligations of the Borrower under or in respect
               of the Loan Documents that is due and payable to the
               Administrative Agent and the Lender Parties under Section 2.07(b)
               of the Credit Agreement on such date, ratably based upon the
               respective aggregate amounts of all such interest owing to the
               Administrative Agent and the Lender Parties on such date;
<PAGE>

                                      27

                    (vii)  seventh, to the payment of all of the accrued and
               unpaid interest on the Advances that is due and payable to the
               Administrative Agent and the Lender Parties under Section 2.07(a)
               of the Credit Agreement on such date, ratably based upon the
               respective aggregate amounts of all such interest owing to the
               Administrative Agent and the Lender Parties on such date;

                    (viii) eighth, to the payment of the principal amount of all
               of the outstanding Advances that is due and payable to the
               Administrative Agent and the Lender Parties on such date, ratably
               based upon the respective aggregate amounts of all such principal
               owing to the Administrative Agent and the Lender Parties on such
               date; and

                    (ix)   ninth, to the payment of all other Obligations of the
               Loan Parties owing under or in respect of the Loan Documents that
               are due and payable to the Administrative Agent and the other
               Secured Parties on such date, ratably based upon the respective
               aggregate amounts of all such Obligations owing to the
               Administrative Agent and the other Secured Parties on such date.

     Any surplus of such cash or cash proceeds held by or on the behalf of the
     Collateral Agent and remaining after payment in full of all the Secured
     Obligations shall be paid over to the applicable Grantor or to whomsoever
     may be lawfully entitled to receive such surplus.

               (c)  All payments received by any Grantor 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 Collateral Agent, shall be
     segregated from other funds of such Grantor and shall be forthwith paid
     over to the Collateral Agent in the same form as so received (with any
     necessary indorsement).

               (d)  The Collateral 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 Secured Obligations
     against any funds held in the L/C Collateral Account or in any deposit
     account related thereto.

               (e)  In the event of any sale or other disposition of any of the
     Intellectual Property Collateral of any Grantor, the goodwill of the
     business connected with and symbolized by any Trademarks subject to such
     sale or other disposition shall be included therein, and such Grantor shall
     supply to the Collateral Agent or its designee such Grantor's know-how and
     expertise, and documents and things relating to any Intellectual Property
     Collateral subject to such sale or other disposition, and such Grantor's
     customer lists and other records and documents relating to such
     Intellectual Property Collateral and to the manufacture, distribution,
     advertising and sale of products and services of such Grantor.
<PAGE>

                                      28

               (f) If the Collateral Agent shall determine to exercise its right
     to sell all or any of the Security Collateral of any Grantor pursuant to
     this Section 21, each Grantor agrees that, upon request of the Collateral
     Agent, such Grantor will, at its own expense:

                    (i)   execute and deliver, and use its best efforts to cause
               each issuer of such 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 necessary or, in the
               opinion of the Collateral Agent, advisable 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 Collateral Agent, are necessary or advisable,
               all in conformity with the requirements of the Securities Act and
               the rules and regulations of the Securities and Exchange
               Commission applicable thereto;

                    (ii)  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 such
               Security Collateral, as requested by the Collateral Agent;

                    (iii) cause each such issuer of such Security Collateral 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;

                    (iv)  provide the Collateral Agent with such other
               information and projections as may be necessary or, in the
               opinion of the Collateral Agent, advisable to enable the
               Collateral Agent to effect the sale of such Security Collateral;
               and

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

               (g)  The Collateral Agent is authorized, in connection with any
          sale of the Security Collateral pursuant to this Section 21, 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
          subsection (f)(i) above; (ii) any information and projections provided
          to it pursuant to subsection (f)(iv) above; and (iii) any other
          information in its possession relating to such Security Collateral.
<PAGE>

                                      29

               (h)  Each Grantor acknowledges the impossibility of ascertaining
          the amount of damages that would be suffered by the Secured Parties by
          reason of the failure by such Grantor to perform any of the covenants
          contained in subsection (f) above and, consequently, agrees that, if
          such Grantor shall fail to perform any of such covenants, it will pay,
          as liquidated damages and not as a penalty, an amount equal to the
          value of the Security Collateral on the date the Collateral Agent
          shall demand compliance with subsection (f) above.

               Section 22. Indemnity and Expenses. (a) Each Grantor agrees to
                           ----------------------
indemnify, defend and save and hold harmless each Secured Party and each of
their Affiliates and their respective officers, directors, employees, agents and
advisors (each, an "Indemnified Party") from and against, and shall pay on
demand, any and all claims, damages, losses, liabilities and expenses
(including, without limitation, reasonable fees and expenses of counsel) that
may be incurred by or asserted or awarded against any Indemnified Party, in each
case arising out of or in connection with or resulting from this Agreement
(including, without limitation, enforcement of this Agreement), except to the
extent such claim, damage, loss, liability or expense is found in a final, non-
appealable judgment by a court of competent jurisdiction to have resulted from
such Indemnified Party's gross negligence or willful misconduct.

               (b) Each Grantor will upon demand pay to the Collateral Agent the
amount of any and all reasonable expenses, including, without limitation, the
reasonable fees and expenses of its counsel and of any experts and agents, that
the Collateral Agent may incur in connection with (i) the administration of this
Agreement, (ii) the custody, preservation, use or operation of, or the sale of,
collection from or other realization upon, any of the Collateral of such
Grantor, (iii) the exercise or enforcement of any of the rights of the
Collateral Agent or the other Secured Parties hereunder or (iv) the failure by
such Grantor to perform or observe any of the provisions hereof.

               Section 23. Amendments; Waivers; Additional Grantors; 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 Collateral Agent and, in the case of
an amendment, by each Grantor affected thereby, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given. No failure on the part of the Collateral Agent or any other
Secured Party to exercise, and no delay in exercising any right hereunder, shall
operate as a waiver thereof; nor shall any single or partial exercise of any
such right preclude any other or further exercise thereof or the exercise of any
other right.

               (b)  Upon the execution and delivery by any Person of a security
agreement supplement in substantially the form of Exhibit A hereto (each a
"Security Agreement Supplement"), (i) such Person shall be referred to as an
"Additional Grantor" and shall be and become a Grantor hereunder and each
reference in this Agreement and the other Loan Documents to "Grantor" shall also
mean and be a reference to such Additional Grantor, and (ii) the supplemental
schedules I, II, III, IV, V and VI attached to each Security Agreement
Supplement shall be incorporated into and
<PAGE>

                                      30

become a part of and supplement Schedules I, II, III, IV, V and VI,
respectively, hereto, and the Collateral Agent may attach such supplemental
schedules to such Schedules; and each reference to such Schedules shall mean and
be a reference to such Schedules as supplemented pursuant to each Security
Agreement Supplement.

               Section 24. Notices; Etc. All notices and other communications
                           ------------
provided for hereunder shall be in writing (including telegraphic, telecopier or
telex communication) and mailed, telegraphed, telecopied, telexed or delivered
to, in the case of the Borrower or the Collateral Agent, addressed to it at its
address specified in the Credit Agreement and, in the case of each Grantor other
than the Borrower, addressed to it at its address set forth opposite such
Grantor's name on the signature pages hereto or on the signature page to the
Security Agreement Supplement pursuant to which it became a party hereto; or, as
to any party, at such other address as shall be designated by such party in a
written notice to the other parties. All such notices and other communications
shall, when mailed, telegraphed, telecopied or telexed, be effective when
deposited in the mails, delivered to the telegraph company, telecopied or
confirmed by telex answerback, respectively, addressed as aforesaid; except that
notices and other communications to the Collateral Agent shall not be effective
until received by the Collateral Agent. Delivery by telecopier of an executed
counterpart of any amendment or waiver of any provision of this Agreement or of
any Security Agreement Supplement or Schedule hereto shall be effective as
delivery of an original executed counterpart thereof.

               Section 25. Continuing Security Interest; Assignments under the
                           ---------------------------------------------------
Credit Agreement. This Agreement and the Interim Order and the Final Order, as
----------------
applicable, shall create a continuing security interest in the Collateral and
shall (a) remain in full force and effect until the latest of (i) the payment in
full in cash of the Secured Obligations, (ii) the Termination Date and (iii) the
termination or expiration of all Letters of Credit (unless such Letters of
Credit are cash collateralized in accordance with the provisions of the Credit
Agreement), (b) be binding upon each Grantor, its successors and assigns and (c)
inure, together with the rights and remedies of the Collateral Agent hereunder,
to the benefit of the Secured Parties and their respective successors,
transferees and assigns. Without limiting the 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
the Note or Notes, if any, 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 9.07 of the Credit Agreement.

               Section 26. Release; Termination. (a) Upon any sale, lease,
                           --------------------
transfer or other disposition of any item of Collateral of any Grantor in
accordance with the terms of the Loan Documents (other than sales of Inventory
in the ordinary course of business), the Collateral Agent will, at such
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) such Grantor shall have
delivered to the Collateral
<PAGE>

                                      31

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 Collateral Agent and a
certificate of such Grantor to the effect that the transaction is in compliance
with the Loan Documents and as to such other matters as the Collateral Agent may
request and (iii) the proceeds of any such sale, lease, transfer or other
disposition required to be applied, or any payment to be made in connection
therewith, in accordance with Section 2.06 of the Credit Agreement shall, to the
extent so required, be paid or made to, or in accordance with the instructions
of, the Collateral Agent when and as required under Section 2.06 of the Credit
Agreement.

          (b) Upon the latest of (i) the payment in full in cash of the Secured
Obligations, (ii) the Termination Date and (iii) the termination or expiration
of all Letters of Credit (unless such Letters of Credit are cash collateralized
in accordance with the provisions of the Credit Agreement), the pledge,
assignment and security interest granted hereby shall terminate and all rights
to the Collateral shall revert to the applicable Grantor. Upon any such
termination, the Collateral 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.

          Section 27. Security Interest Absolute. The obligations of each
                      --------------------------
Grantor under this Agreement are independent of the Secured Obligations or any
other Obligations of any other Loan Party under or in respect of the Loan
Documents, and a separate action or actions may be brought and prosecuted
against each Grantor to enforce this Agreement, irrespective of whether any
action is brought against such Grantor or any other Loan Party or whether such
Grantor or any other Loan Party is joined in any such action or actions. All
rights of the Collateral Agent and the other Secured Parties and the pledge,
assignment and security interest hereunder, and all obligations of each Grantor
hereunder, shall be irrevocable, absolute and unconditional irrespective of, and
each Grantor hereby irrevocably waives (to the maximum extent permitted by
applicable law) any defenses it may now have or may hereafter acquire in any way
relating to, any or all of the following:

          (a) any lack of validity or enforceability of any Loan Document or any
     other agreement or instrument relating thereto;

          (b) 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
     Obligations of any other Loan Party under or in respect of the Loan
     Documents or any other amendment or waiver of or any consent to any
     departure from any Loan Document, including, without limitation, any
     increase in the Secured Obligations resulting from the extension of
     additional credit to any Loan Party or any of its Subsidiaries or
     otherwise;
<PAGE>

                                      32

          (c) any taking, exchange, release or non-perfection of any Collateral
     or any other 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;

          (d) any manner of application of any Collateral or any other
     collateral, or proceeds thereof, to all or any of the Secured Obligations,
     or any manner of sale or other disposition of any Collateral or any other
     collateral for all or any of the Secured Obligations or any other
     Obligations of any other Loan Party under or in respect of the Loan
     Documents or any other assets of any Loan Party or any of its Subsidiaries;

          (e) any change, restructuring or termination of the corporate
     structure or existence of any Loan Party or any of its Subsidiaries;

          (f) any failure of any Secured Party to disclose to any Loan Party any
     information relating to the business, condition (financial or otherwise),
     operations, performance, assets, nature of assets, liabilities or prospects
     of any other Loan Party now or hereafter known to such Secured Party (each
     Grantor waiving any duty on the part of the Secured Parties to disclose
     such information);

          (g) the failure of any other Person to execute this Agreement or any
     other Collateral Document, guaranty or agreement or the release or
     reduction of liability of any Grantor or other grantor or surety with
     respect to the Secured Obligations; or

          (h) any other circumstance (including, without limitation, any statute
     of limitations) or any existence of or reliance on any representation by
     any Secured Party that might otherwise constitute a defense available to,
     or a discharge of, such Grantor or any other 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.

          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 by telecopier of an executed counterpart of a signature page
to this Agreement shall be effective as delivery of an original executed
counterpart of this Agreement.

          Section 29. The 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 real estate leases, letting and
licenses of, and contracts and
<PAGE>

                                      33

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 30. Governing Law. This Agreement shall be governed by, and
                      -------------
construed in accordance with, the laws of the State of New York and, to the
extent applicable, the Bankruptcy Code.
<PAGE>

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

                              AMF GROUP HOLDINGS INC.

                              By /s/ Stephen E. Hare
                                 ------------------------------
                                 Name:  Stephen E. Hare
                                 Title:  Chief Financial Officer

                              Address for Notices:
                              8100 AMF Drive
                              Mechanicsville, Virginia  23111
                              Attention:  General Counsel

                              AMF BOWLING WORLDWIDE, INC.

                              By /s/ Stephen E. Hare
                                 ------------------------------
                                 Name:  Stephen E. Hare
                                 Title:  Chief Financial Officer

                              Address for Notices:
                              8100 AMF Drive
                              Mechanicsville, Virginia  23111
                              Attention:  General Counsel

                              AMF BOWLING HOLDINGS INC.

                              By /s/ Stephen E. Hare
                                 ------------------------------
                                 Name:  Stephen E. Hare
                                 Title:  President

                              Address for Notices:
                              8100 AMF Drive
                              Mechanicsville, Virginia  23111
                              Attention:  General Counsel
<PAGE>

                              AMF BOWLING CENTERS HOLDINGS
                               INC.

                              By /s/ Stephen E. Hare
                                 --------------------------------
                                 Name:  Stephen E. Hare
                                 Title:  President

                              Address for Notices:
                              8100 AMF Drive
                              Mechanicsville, Virginia  23111
                              Attention:  General Counsel

                              AMF WORLDWIDE BOWLING
                               CENTERS HOLDINGS INC.

                              By /s/ Stephen E. Hare
                                 --------------------------------
                                 Name:  Stephen E. Hare
                                 Title:  President

                              Address for Notices:
                              8100 AMF Drive
                              Mechanicsville, Virginia  23111
                              Attention:  General Counsel

                              AMF BOWLING PRODUCTS, INC.

                              By /s/ Stephen E. Hare
                                 --------------------------------
                                 Name:  Stephen E. Hare
                                 Title:  Executive Vice President

                              Address for Notices:
                              8100 AMF Drive
                              Mechanicsville, Virginia  23111
                              Attention:  General Counsel
<PAGE>

                              AMF BOWLING CENTERS, INC.

                              By /s/ Stephen E. Hare
                                 -----------------------------
                                 Name:  Stephen E. Hare
                                 Title:  President

                              Address for Notices:
                              8100 AMF Drive
                              Mechanicsville, Virginia  23111
                              Attention:  General Counsel

                              AMERICAN RECREATION CENTERS,
                               INC.

                              By /s/ Stephen E. Hare
                                 -----------------------------
                                 Name:  Stephen E. Hare
                                 Title:  President

                              Address for Notices:
                              8100 AMF Drive
                              Mechanicsville, Virginia  23111
                              Attention:  General Counsel

                              AMF BEVERAGE COMPANY OF
                               OREGON, INC.

                              By /s/ Stephen E. Hare
                                 -----------------------------
                                 Name:  Stephen E. Hare
                                 Title:  President

                              Address for Notices:
                              8100 AMF Drive
                              Mechanicsville, Virginia  23111
                              Attention:  General Counsel
<PAGE>

                              AMF BEVERAGE COMPANY OF W.VA.,
                               INC.

                              By /s/ Stephen E. Hare
                                --------------------------------
                                Name:  Stephen E. Hare
                                Title:  President

                              Address for Notices:
                              8100 AMF Drive
                              Mechanicsville, Virginia  23111
                              Attention:  General Counsel

                              BUSH RIVER CORPORATION

                              By /s/ Stephen E. Hare
                                --------------------------------
                                Name:  Stephen E. Hare
                                Title:  President

                              Address for Notices:
                              8100 AMF Drive
                              Mechanicsville, Virginia  23111
                              Attention:  General Counsel

                              300, INC.

                              By /s/ William Dufour
                                --------------------------------
                                Name:  William Dufour
                                Title:  President

                              Address for Notices:
                              8100 AMF Drive
                              Mechanicsville, Virginia  23111
                              Attention:  General Counsel
<PAGE>

                              KING LOUIE LENEXA, INC.

                              By /s/ Stephen E. Hare
                                --------------------------------
                                Name:  Stephen E. Hare
                                Title:  President

                              Address for Notices:
                              8100 AMF Drive
                              Mechanicsville, Virginia  23111
                              Attention:  General Counsel

                              MICHAEL JORDAN GOLF COMPANY,
                               INC.

                              By /s/ Stephen E. Hare
                                --------------------------------
                                Name:  Stephen E. Hare
                                Title:  President

                              Address for Notices:
                              8100 AMF Drive
                              Mechanicsville, Virginia  23111
                              Attention:  General Counsel

                              MJG - O'HARE, INC.

                              By /s/ Stephen E. Hare
                                --------------------------------
                                Name:  Stephen E. Hare
                                Title:  President

                              Address for Notices:
                              8100 AMF Drive
                              Mechanicsville, Virginia  23111
                              Attention:  General Counsel
<PAGE>

                              AMF BOWLING CENTERS (AUST)
                               INTERNATIONAL INC.

                              By /s/ Stephen E. Hare
                                --------------------------------
                                Name:  Stephen E. Hare
                                Title:  President

                              Address for Notices:
                              8100 AMF Drive
                              Mechanicsville, Virginia  23111
                              Attention:  General Counsel

                              AMF BOWLING CENTERS
                               INTERNATIONAL INC.

                              By /s/ Stephen E. Hare
                                --------------------------------
                                Name:  Stephen E. Hare
                                Title:  Vice President

                              Address for Notices:
                              8100 AMF Drive
                              Mechanicsville, Virginia  23111
                              Attention:  General Counsel

                              AMF BCO-UK ONE, INC.

                              By /s/ Stephen E. Hare
                                --------------------------------
                                Name:  Stephen E. Hare
                                Title:  President

                              Address for Notices:
                              8100 AMF Drive
                              Mechanicsville, Virginia  23111
                              Attention:  General Counsel
<PAGE>

                              AMF BCO-UK TWO, INC.

                              By /s/ Stephen E. Hare
                                --------------------------------
                                Name:  Stephen E. Hare
                                Title:  President

                              Address for Notices:
                              8100 AMF Drive
                              Mechanicsville, Virginia  23111
                              Attention:  General Counsel

                              AMF BOWLING MEXICO HOLDING,
                               INC.

                              By /s/ Stephen E. Hare
                                --------------------------------
                                Name:  Stephen E. Hare
                                Title:  President

                              Address for Notices:
                              8100 AMF Drive
                              Mechanicsville, Virginia  23111
                              Attention:  General Counsel

                              BOLICHES AMF, INC..

                              By /s/ Stephen E. Hare
                                --------------------------------
                                Name:  Stephen E. Hare
                                Title:  President

                              Address for Notices:
                              8100 AMF Drive
                              Mechanicsville, Virginia  23111
                              Attention:  General Counsel
<PAGE>

                              AMF BCO-FRANCE ONE, INC.

                              By /s/ Stephen E. Hare
                                 -----------------------------
                                 Name:  Stephen E. Hare
                                 Title:  President

                              Address for Notices:
                              8100 AMF Drive
                              Mechanicsville, Virginia  23111
                              Attention:  General Counsel

                              AMF BCO-FRANCE TWO, INC.

                              By /s/ Stephen E. Hare
                                 -----------------------------
                                 Name:  Stephen E. Hare
                                 Title:  President

                              Address for Notices:
                              8100 AMF Drive
                              Mechanicsville, Virginia  23111
                              Attention:  General Counsel

                              AMF BOWLING CENTERS (HONG
                                KONG) INTERNATIONAL INC.

                              By /s/ Stephen E. Hare
                                 -----------------------------
                                 Name:  Stephen E. Hare
                                 Title:  President

                              Address for Notices:
                              8100 AMF Drive
                              Mechanicsville, Virginia  23111
                              Attention:  General Counsel

<PAGE>

                              AMF BOWLING CENTERS SPAIN, INC.

                              By /s/ Stephen E. Hare
                                 -----------------------------
                                 Name:  Stephen E. Hare
                                 Title:  President

                              Address for Notices:
                              8100 AMF Drive
                              Mechanicsville, Virginia  23111
                              Attention:  General Counsel
<PAGE>

                                                               Schedule I to the
                                                              Security Agreement

                        PLEDGED SHARES AND PLEDGED DEBT

                                     Part I


<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------
                                                                                             Percentage
                                                                    Stock                        of
                                                                 Certificate     Number      Outstanding
   Grantor      Stock Issuer     Class of Stock    Par Value        No(s)       of Shares     Shares
---------------------------------------------------------------------------------------------------------------
<S>            <C>              <C>               <C>          <C>               <C>            <C>
---------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------------
</TABLE>



                                    Part II

           Debt          Description of          Final
Grantor    Issuer             Debt             Maturity
-----------------------------------------------------------------

-----------------------------------------------------------------

-----------------------------------------------------------------

-----------------------------------------------------------------

-----------------------------------------------------------------

-----------------------------------------------------------------

-----------------------------------------------------------------
<PAGE>

                                                            Schedule II to the
                                                            Security Agreement

                      LOCATIONS OF EQUIPMENT AND INVENTORY

[Name of Grantor]
 ---------------

     Locations of Equipment:

     Locations of Inventory:

[Name of Grantor]
 ---------------

     Locations of Equipment:

     Locations of Inventory:

[Etc.]
<PAGE>

                                                             Schedule III to the
                                                              Security Agreement

                             CHIEF EXECUTIVE OFFICE
                     AND FEDERAL TAX IDENTIFICATION NUMBER

                                             Federal Tax
Grantor         Chief Executive Office       Identification Number
-------         ----------------------       ---------------------

<PAGE>

                                                              Schedule IV to the
                                                              Security Agreement

                            PATENTS, TRADEMARKS AND
                      TRADE NAMES, COPYRIGHTS AND LICENSES

<TABLE>
<CAPTION>
Grantor        Patents       Country       Patent No.      Applic. No.      Filing Date     Issue Date
-------        -------       -------       ----------      -----------      -----------     ----------
<S>            <C>            <C>          <C>              <C>            <C>             <C>
</TABLE>

<TABLE>
<CAPTION>
               Trademarks and                       Reg.     Applic.    Filing     Issue
               --------------                       ----     -------    ------     -----
Grantor        Trade Names      Country     Mark    No.      No.        Date       Date
-------        -----------      -------     ----    ---      ---        ----       ----
<S>            <C>            <C>            <C>  <C>       <C>       <C>          <C>
</TABLE>

<TABLE>
<CAPTION>
                                                                  Filing      Issue
                                                                  ------      -----
Grantor  Copyrights  Country  Title  Reg. No.      Applic. No.     Date       Date
-------  ----------  -------  -----  --------     ------------     ----       ----
<S>     <C>         <C>       <C>   <C>            <C>           <C>          <C>
</TABLE>

<TABLE>
<CAPTION>
Grantor         Licenses           Title            Date            Parties
-------         --------           -----            ----            -------
<S>            <C>                 <C>              <C>              <C>
</TABLE>

<PAGE>

                                                               Schedule V to the
                                                              Security Agreement

                                PLEDGED ACCOUNTS




<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------
                     Name and Address of           Mailing Address of
      Grantor        Pledged Account Bank             Lockbox                Account Number
------------------------------------------------------------------------------------------------------
<S>                  <C>                        <C>                          <C>
------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>

                                                                Exhibit A to the
                                                              Security Agreement

                     FORM OF SECURITY AGREEMENT SUPPLEMENT

                                    [Date of Security Agreement Supplement]

CITIBANK, N.A.,
 as the Collateral Agent for the
 Secured Parties referred to in the
 Credit Agreement referred to below
 388 Greenwich Street
 New York, New York 10013
 Attn: Jeffrey Nitz

                          AMF Bowling Worldwide, Inc.
                          ---------------------------

Ladies and Gentlemen:

          Reference is made to (i) the Senior Secured Priming Debtor-In-
Possession Credit Agreement dated as of July 3, 2001 (as amended, amended and
restated, supplemented or otherwise modified from time to time, the "Credit
Agreement"), among AMF Bowling Worldwide, Inc., a Delaware corporation, as the
Borrower, AMF Group Holdings, Inc., a Delaware corporation, as the Parent
Guarantor, each a debtor and debtor in possession under Chapter 11 of the
Bankruptcy Code, the Subsidiary Guarantors, the Lender Parties party thereto,
Citibank, N.A., as collateral agent (together with any successor collateral
agent appointed pursuant to Article VIII of the Credit Agreement, the
"Collateral Agent"), and Citibank, N.A., as administrative agent for the Lender
Parties, and (ii) the Security Agreement dated July 3, 2001 (as amended, amended
and restated, supplemented or otherwise modified from time to time, the
"Security Agreement") made by the Grantors from time to time party thereto in
favor of the Collateral Agent for the Secured Parties.  Terms defined in the
Credit Agreement or the Security Agreement and not otherwise defined herein are
used herein as defined in the Credit Agreement or the Security Agreement.

          Section 1. Grant of Security. (a) The undersigned hereby assigns and
                     -----------------
pledges to the Collateral Agent for the ratable benefit of the Secured Parties,
and hereby grants to the Collateral Agent for the ratable benefit of the Secured
Parties, a security interest in, all of its right, title and interest in and to
all of the Collateral of the undersigned, whether now owned or hereafter
acquired by the undersigned, wherever located and whether now or hereafter
existing or arising, including, without limitation, the property and assets of
the undersigned set forth on the attached supplemental schedules to the
Schedules to the Security Agreement.

          (b) Notwithstanding anything to the contrary contained in any Loan
Document, none of the following shall be subject to any lien arising or created
under any
<PAGE>

                                       2

Collateral Document: (a) any funds collected by a Loan Party from Participants
held on behalf of bowling leagues or bowlers who are participating in bowling
leagues or bowling tournaments ("Participants") during the term of the league or
tournaments and returned to Participants at the end of the league or the
tournament, but excluding payments for bowling or other services sold by the
Loan Party ("Prize Funds"); (b) proceeds of any lottery ticket sales held by the
Grantor or its Subsidiaries ("Lottery Proceeds"); (c) funds representing
charitable donations held by the Grantor or its Subsidiaries on behalf of
charities ("Charity Funds" and, together with Prize Funds and Lottery Proceeds,
"Third Party Funds"). Each Loan Party shall maintain accurate accounts of all
Third Party Funds. To protect the integrity of Prize Funds, the Loan Parties may
establish and maintain escrow or trust accounts (the "League Accounts") with
banks or trust companies acceptable to the Collateral Agent (the "League
Trustees") for the benefit of Participants with whom the Loan Party has an
agreement in the form customarily used by a Loan Party (a "League Agreement").
The Loan Parties will use their best efforts to establish escrows or trust
accounts and to deposit Prize Funds promptly into such escrow or trust accounts.
For the avoidance of doubt, notwithstanding any commingling, Third Party Funds
shall not be Collateral subject to any Lien arising or created under any
Collateral Document. Promptly following the establishment of the League Account,
the Borrower shall deliver a copy of any agreement entered into by a Loan Party
with the League Trustee with respect to the League Account or the administration
of amounts of deposit thereto.

          (c) Notwithstanding anything to the contrary in any Loan Document: (i)
unless a Default has occurred and is continuing, no Grantor shall be required to
make any filing or take any other action to create, perfect or otherwise
maintain any Lien under any Loan Document on any asset to the extent that the
laws of any jurisdiction other than the United States or any State thereof or
the District of Columbia are applicable to the creation, perfection or
maintenance of such Lien and (ii) no covenant, representation or warranty is
made in this Agreement as to any matter referred to in the foregoing clause (i).
This Agreement and the Interim and Final Orders are together intended to create
a security interest in the Grantors' assets on behalf of the Collateral Agent
and the Loan Parties.  To the extent that this Agreement and the Interim and
Final Orders are not effective in creating a lien in one or more of the
Grantors' assets that are not located in the United States or not created under
the laws of the United States or any State of the United States, the
effectiveness and validity of this Agreement with respect to the Grantors' other
assets shall not be affected.

          Section 2. Security for Obligations. The pledge and assignment of, and
                     ------------------------
the grant of a security interest in, the Collateral by the undersigned under
this Security Agreement Supplement and the Security Agreement secures the
payment of all Obligations of the undersigned now or hereafter existing under or
in respect of the Loan Documents, whether direct or indirect, absolute or
contingent, and whether for principal, reimbursement obligations, interest,
premiums, penalties, fees, indemnifications, contract causes of action, costs,
expenses or otherwise.

          Section 3. Supplements to Security Agreement Schedules. The
                     -------------------------------------------
undersigned has attached hereto supplemental Schedules I, II, III, IV, V and VI
to Schedules I, II, III, IV, V and VI, respectively, to the Security Agreement,
and the undersigned hereby certifies, as of the date first above written, that
such supplemental schedules have been prepared by the undersigned
<PAGE>

                                       3

in substantially the form of the equivalent Schedules to the Security Agreement
and are complete and correct in all material respects.

          Section 4.  Representations and Warranties. The undersigned hereby
                      ------------------------------
makes each representation and warranty set forth in Section 10 of the Security
Agreement (as supplemented by the attached supplemental schedules) to the same
extent as each other Grantor.

          Section 5. Obligations Under the Security Agreement. The undersigned
                     ----------------------------------------
hereby agrees, as of the date first above written, to be bound as a Grantor by
all of the terms and provisions of the Security Agreement to the same extent as
each of the other Grantors. The undersigned further agrees, as of the date first
above written, that each reference in the Security Agreement to an "Additional
Grantor" or a "Grantor" shall also mean and be a reference to the undersigned.

          Section 6. Governing Law. This Security Agreement Supplement shall be
                     -------------
governed by, and construed in accordance with, the laws of the State of New York
and, to the extent applicable, the Bankruptcy Code.

                                    Very truly yours,

                                    [NAME OF ADDITIONAL GRANTOR]

                                    By_______________________________
                                      Title:

                                         Address for notices:
                                         _______________________
                                         _______________________
                                         _______________________
<PAGE>

                                                                Exhibit B to the
                                                              Security Agreement

                         FORM OF PLEDGED ACCOUNT LETTER

                                    _______________, ____

[Name and address
of Pledged Account Bank]

                             [Name of the Grantor]

Gentlemen/women:

          Reference is made to the lockboxes listed on Schedule I hereto into
which certain monies, instruments and other properties are deposited from time
to time and the deposit accounts listed on Schedule I hereto (such lockboxes and
deposit accounts being, collectively, the "Pledged Accounts") maintained with
you by ____________________ (the "Grantor").  Pursuant to the Security Agreement
dated July 3, 2001 (as amended, amended and restated, supplemented or otherwise
modified from time to time, the "Security Agreement"), the Grantor has granted
to Citibank, N.A., as Collateral Agent (together with any successor collateral
agent appointed pursuant to Article VIII of the Credit Agreement, the
"Collateral Agent") for the Secured Parties referred to in the Credit Agreement
dated as of July 3, 2001, with [__________] [the Grantor], a security interest
in, and sole dominion and control of, certain property of the Grantor,
including, among other things, the following (the "Account Collateral"):  each
Pledged Account, all funds held therein and all certificates and instruments, if
any, from time to time representing or evidencing such Pledged Account, 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 and all proceeds
of any and all of the foregoing Account Collateral.  It is a condition to the
continued maintenance of the Pledged Accounts with you that you agree to this
letter agreement.

          By executing this letter agreement, you acknowledge notice of, and
consent to the grant of the security interest in, and the pledge and assignment
of, the Account Collateral to the Collateral Agent for the benefit of the
Secured Parties and you confirm to the Collateral Agent that the description of
the Pledged Accounts set forth on Schedule I hereto is correct and that you have
not received any notice of any other security interest in, pledge or assignment
of, or other claim (other than that of the Grantor) on, any of the Pledged
Accounts.  Further, you hereby agree with the Collateral Agent that:

          (a) Notwithstanding anything to the contrary in any other agreement
     relating to any Pledged Account, each Pledged Account is and will be
     subject to the security interest, pledge and assignment created under the
     Security Agreement, will be maintained solely for the benefit of the
     Secured Parties, will have the title set forth opposite the account number
     therefor on Schedule I hereto and will be subject to written instructions
<PAGE>

                                       2

     only from an officer of the Collateral Agent. Only the Collateral Agent is
     authorized to withdraw amounts from, to draw upon, or, except as otherwise
     set forth herein, to otherwise exercise any powers with respect to the
     Pledged Accounts and the funds deposited therein. The Collateral Agent
     authorizes and directs that the sole signatories authorized to act on
     behalf of the Collateral Agent with respect to the Pledged Accounts are and
     shall be such officers of the Collateral Agent as the Collateral Agent may
     from time to time designate in a writing acceptable to you. You may rely
     without liability on any such written designation, absent manifest error,
     unless and until you receive a written designation to the contrary. Any
     such written designation shall include the specimen signature of each
     authorized officer of the Collateral Agent.

          (b)  You will collect mail from each Pledged Account on each of your
     business days at times that coincide with the delivery of mail thereto.

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

          (d)  You will endorse and process all eligible checks and other
     remittance items not covered by paragraph (c) and deposit such checks and
     remittance items in the Pledged Accounts.

          (e)  You will maintain a record of all checks and other remittance
     items received in each Pledged Account and, in addition to providing the
     Grantor with photostats, vouchers, enclosures, etc. of such checks and
     remittance items on a daily basis, furnish to the Collateral Agent (i) a
     monthly statement of each Pledged Account and (ii) a daily collection and
     check float report, to be mailed or telecopied to the Collateral Agent at:
     Citibank, N.A., 399 Park Avenue, New York, New York 10043, Telecopier No.
     __________, Attention: Charles Foster.

          (f)  You will transfer, in same day funds, on each of your business
     days, all amounts collected from each Pledged Account on such day to the
     following account (the "Citibank Concentration Account"):

               AMF Bowling Worldwide, Inc.
               Account No. 40697957
               Citibank, N.A.
               One Penn's Way
               New Castle, Delaware 19721
               Attention:  ____________________

     Each such transfer of funds shall neither comprise only part of a
     remittance nor reflect the rounding off of any funds so transferred.

          (g)  All transfers referred to in paragraph (f) above shall be made by
     you irrespective of, and without deduction for, any counterclaim, defense,
     recoupment or
<PAGE>

                                       3

     set-off and shall be final, and you will not seek to recover from the
     Collateral Agent for any reason any such payment once made.

          (h)  All service charges and fees with respect to any Pledged Account
     shall be payable by the Grantor, and deposited checks returned for any
     reason shall not be charged to the applicable Pledged Account, but may be
     charged to another account maintained by the Grantor with you.

          (i)  The Collateral Agent shall be entitled to exercise any and all
     rights of the Grantor in respect of the Pledged Accounts and the other
     Account Collateral in accordance with the terms of the Security Agreement,
     and you shall comply in all respects with such exercise.

          You hereby represent and warrant that the person executing this letter
agreement on your behalf is duly authorized to do so.

          No amendment or waiver of any provision of this letter agreement, nor
consent to any departures by you or the Grantor herefrom, shall be effective
unless the same shall be in writing as signed by you, the Grantor and the
Collateral Agent.

          This letter agreement shall be binding upon you and your successors
and assigns and shall inure to the benefit of the Secured Parties and their
successors, transferees and assigns. You may terminate this letter agreement
upon thirty days' prior written notice to the Grantor and the Collateral Agent.
Upon such termination you shall close the Pledged Accounts and transfer all
funds in the Pledged Accounts to the Citibank Concentration Account or another
account as instructed by the Collateral Agent at such time. After any such
termination, you shall nonetheless remain obligated promptly to transfer to the
Citibank Concentration Account or to such other account as instructed by the
Collateral Agent at such time all funds and other property received in respect
of the Pledged Accounts.

          This letter agreement may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which when taken together
shall constitute one and the same agreement. Delivery of an executed counterpart
of a signature page to this letter agreement by telecopier shall be effective as
delivery of an original executed counterpart of this letter agreement.

          Please indicate your acknowledgment of and agreement to the provisions
of this letter agreement by signing in the appropriate space provided below and
returning this letter agreement to Citibank, N.A., 388 Greenwich Street, New
York, New York 10013, Telecopier No.: (212) 816-2613, Attention: Jeff Nitz. If
you elect to deliver this letter agreement by telecopier, please arrange for the
executed original to follow by next-day courier.
<PAGE>

          This letter agreement shall be governed by and construed in accordance
with the laws of the State of New York and, to the extent applicable, the
Bankruptcy Code.

                                    Very truly yours,

                                    [NAME OF GRANTOR]

                                    By______________________________________
                                      Title:

                                    CITIBANK, N.A., as Collateral Agent

                                    By______________________________________
                                      Title:

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

[NAME OF PLEDGED ACCOUNT BANK]

By________________________________
  Title:
<PAGE>

                                                               Schedule I to the
                                                          Pledged Account Letter


[Lockbox/]Account Number       [Lockbox/]Account Name
------------------------       ----------------------
<PAGE>

                                                                Exhibit C to the
                                                              Security Agreement

               FORM OF INTELLECTUAL PROPERTY SECURITY AGREEMENT

          This INTELLECTUAL PROPERTY SECURITY AGREEMENT (as amended, amended and
restated, supplemented or otherwise modified from time to time, the "IP Security
Agreement") dated July 3, 2001, is made by the Persons listed on the signature
pages hereof, each a debtor and debtor in possession under Chapter 11 of the
Bankruptcy Code (collectively, the "Grantors") in favor of Citibank, N.A.
("Citibank"), as collateral agent (the "Collateral Agent") for the Secured
Parties (as defined in the Credit Agreement referred to below).

          WHEREAS, AMF Bowling Worldwide, Inc., a Delaware corporation, AMF
Group Holdings, Inc., a Delaware corporation and the Subsidiary Guarantors have
entered into a Credit Agreement dated as of July 3, 2001 (as amended, amended
and restated, supplemented or otherwise modified from time to time, the "Credit
Agreement"), with Citibank, N.A., as Administrative Agent, Citibank, N.A., as
Collateral Agent, and the Lender Parties party thereto. Terms defined in the
Credit Agreement and not otherwise defined herein are used herein as defined in
the Credit Agreement.

          WHEREAS, as a condition precedent to the making of Advances and the
issuance of Letters of Credit by the Lender Parties under the Credit Agreement,
each Grantor has executed and delivered that certain Security Agreement dated
July 3, 2001 made by the Grantors to the Collateral Agent (as amended, amended
and restated, supplemented or otherwise modified from time to time, the
"Security Agreement").

          WHEREAS, under the terms of the Security Agreement, Grantors have
granted a security interest in, among other property, certain intellectual
property of the Grantors to the Collateral Agent for the ratable benefit of the
Secured Parties, and have agreed as a condition thereof to execute this IP
Security Agreement covering such intellectual property for recording with the
U.S. Patent and Trademark Office, the United States Copyright Office and other
governmental authorities.

          NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each Grantor agrees as follows:

          SECTION 1. Grant of Security. Each Grantor hereby grants to the
                     -----------------
Collateral Agent for the ratable benefit of the Secured Parties a security
interest in and to all of such Grantor's right, title and interest in and to the
following (the "Collateral"):

               (i)  the United States, international, and foreign patents,
          patent applications and patent licenses set forth in Schedule A hereto
          (as such Schedule A may be supplemented from time to time by
          supplements to the Security Agreement and this IP Security Agreement,
          each such supplement being in substantially the form of Exhibit D to
          the Security Agreement (an "IP Security Agreement Supplement"),
          executed and delivered by such Grantor to the
<PAGE>

                                       2

          Collateral Agent from time to time), together with all reissues,
          divisions, continuations, continuations-in-part, extensions and
          reexaminations thereof, and all rights therein provided by
          international treaties or conventions (the "Patents");

               (ii)   the United States and foreign trademark and service mark
          registrations, applications, and licenses set forth in Schedule B
          hereto (as such Schedule B may be supplemented from time to time by IP
          Security Agreement Supplements executed and delivered by such Grantor
          to the Collateral Agent from time to time) (the "Trademarks");

               (iii)  the copyrights, United States and foreign copyright
          registrations and applications and copyright licenses set forth in
          Schedule C hereto (as such Schedule C may be supplemented from time to
          time by IP Security Agreement Supplements executed and delivered by
          such Grantor to the Collateral Agent from time to time) (the
          "Copyrights");

               (iv)   any and all claims for damages for past, present and
          future infringement, misappropriation or breach with respect to the
          Patents, Trademarks and Copyrights, with the right, but not the
          obligation, to sue for and collect, or otherwise recover, such
          damages; and

               (v)    any and all proceeds of the foregoing.

          SECTION 2. Security for Obligations. The pledge and assignment of, and
                     ------------------------
the grant of a security interest in, the Collateral by each Grantor under this
IP Security Agreement secures the payment of all Obligations of such Grantor now
or hereafter existing under or in respect of the Loan Documents, whether direct
or indirect, absolute or contingent, and whether for principal, reimbursement
obligations, interest, premiums, penalties, fees, indemnifications, contract
causes of action, costs, expenses or otherwise. Without limiting the generality
of the foregoing, this Agreement secures, as to each Grantor, the payment of all
amounts that constitute part of the Secured Obligations and would be owed by
such Grantor to any Secured Party under the Loan Documents.

          SECTION 3. Recordation. Each Grantor authorizes and requests that the
                     -----------
Register of Copyrights, the Commissioner of Patents and Trademarks and any other
applicable government officer record this IP Security Agreement.

          SECTION 4. 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.

          SECTION 5. Grants, Rights and Remedies. This IP Security Agreement has
                     ---------------------------
been entered into in conjunction with the provisions of the Security Agreement.
Each Grantor does hereby acknowledge and confirm that the grant of the security
interest hereunder to, and the rights and remedies of, the Collateral Agent with
respect to the Collateral are more fully set forth in the Security Agreement,
the terms and provisions of which are incorporated herein by reference as if
fully set forth herein.
<PAGE>

          SECTION 6. Governing Law. This IP Security Agreement shall be governed
                     -------------
by, and construed in accordance with, the laws of the State of New York and, to
the extent applicable, the Bankruptcy Code.

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

                                    AMF BOWLING WORLDWIDE, INC.

                                    By_______________________________________
                                     Name:
                                     Title:

                                    Address for Notices:
                                    _________________________________________
                                    _________________________________________
                                    _________________________________________


                                    [NAME OF GRANTOR]

                                    By_______________________________________
                                     Name:
                                     Title:

                                    Address for Notices:
                                    _________________________________________
                                    _________________________________________
                                    _________________________________________

                                    [NAME OF GRANTOR]

                                    By_______________________________________
                                     Name:
                                     Title:

                                    Address for Notices:
                                    _________________________________________
                                    _________________________________________
                                    _________________________________________

                                          [ETC.]

                      [ADD ACKNOWLEDGMENT FORM IF NEEDED]
<PAGE>

                                                                Exhibit D to the
                                                              Security Agreement

          FORM OF INTELLECTUAL PROPERTY SECURITY AGREEMENT SUPPLEMENT

               This INTELLECTUAL PROPERTY SECURITY AGREEMENT SUPPLEMENT (this
"IP Security Agreement Supplement") dated ________, ____, is made by the Person
listed on the signature page hereof (the "Grantor") in favor of Citibank, N.A.,
as collateral agent (the "Collateral Agent") for the Secured Parties (as defined
in the Credit Agreement referred to below).

               WHEREAS, AMF Bowling Worldwide, Inc., a Delaware corporation, AMF
Group Holdings, Inc., a Delaware corporation and the Subsidiary Guarantors, have
entered into a Senior Secured Priming Debtor-In-Possession Credit Agreement
dated as of July 3, 2001 (as amended, amended and restated, supplemented or
otherwise modified from time to time, the "Credit Agreement"), with Citibank,
N.A., as Administrative Agent, Citibank, N.A., as Collateral Agent, and the
Lender Parties party thereto. Terms defined in the Credit Agreement and not
otherwise defined herein are used herein as defined in the Credit Agreement.

               WHEREAS, pursuant to the Credit Agreement, the Grantor and
certain other Persons have executed and delivered that certain Security
Agreement dated July 3, 2001 made by the Grantor and such other Persons to the
Collateral Agent (as amended, amended and restated, supplemented or otherwise
modified from time to time, the "Security Agreement"). To create a short form
version of the Security Agreement covering certain intellectual property of the
Grantor and such other Persons for recording with the U.S. Patent and Trademark
Office, the United States Copyright Office and other governmental authorities,
the Grantor and such other Persons have executed and delivered that certain
Intellectual Property Security Agreement made by the Grantor and such other
Persons to the Collateral Agent dated July 3, 2001 (as amended, amended and
restated, supplemented or otherwise modified from time to time, the "IP Security
Agreement").

               WHEREAS, under the terms of the Security Agreement and the IP
Security Agreement, the Grantor has granted a security interest in the
Additional Collateral (as defined in Section 1 below) of the Grantor to the
Collateral Agent for the ratable benefit of the Secured Parties and has agreed
as a condition thereof to execute this IP Security Agreement Supplement for
recording with the U.S. Patent and Trademark Office, the United States Copyright
Office and other governmental authorities.

               NOW, THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Grantor agrees as follows:

               SECTION 1. Confirmation of Grant of Security. The Grantor hereby
                          ---------------------------------
acknowledges and confirms the grant of a security interest to the Collateral
Agent for the ratable benefit of the Secured Parties under the Security
Agreement and the IP Security Agreement in and to all of the Grantor's right,
title and interest in and to the following (the "Additional Collateral"):
<PAGE>

                                       2

               (i)    The United States, international, and foreign patents,
     patent applications, and patent licenses set forth in Schedule A hereto,
     together with all reissues, divisions, continuations, continuations-in-
     part, extensions and reexaminations thereof, and all rights therein
     provided by international treaties or conventions (the "Patents");

               (ii)   The United States and foreign trademark and service mark
     registrations, applications, and licenses set forth in Schedule B hereto
     (the "Trademarks");

               (iii)  The copyrights, United States and foreign copyright
     registrations and applications and copyright licenses set forth in Schedule
     C hereto (the "Copyrights");

               (iv)   any and all claims for damages for past, present and
     future infringement, misappropriation or breach with respect to the
     Patents, Trademarks and Copyrights, with the right, but not the obligation,
     to sue for and collect, or otherwise recover, such damages; and

               (v)    any and all proceeds of the foregoing.

     SECTION 2. Supplement to Security Agreement and IP Security Agreement.
                ----------------------------------------------------------
Schedule IV to the Security Agreement and Schedule[s] [A,] [B and] [C] to the IP
Security Agreement are each, effective as of the date hereof, hereby
supplemented to add to such Schedules the Additional Collateral.

     SECTION 3. Recordation. The Grantor authorizes and requests that the
                -----------
Register of Copyrights, the Commissioner of Patents and Trademarks and any other
applicable government officer to record this IP Security Agreement Supplement.

     SECTION 4.  Governing Law. This IP Security Agreement Supplement shall be
                 -------------
governed by, and construed in accordance with, the laws of the State of New York
and, to the extent applicable, the Bankruptcy Code.
<PAGE>

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

                                [NAME OF GRANTOR]

                                By
                                   ---------------------------------
                                   Name:
                                     Title:

                                Address for Notices:

                                ------------------------------------
                                ------------------------------------
                                ------------------------------------


                    [ADD ACKNOWLEDGEMENT FORM IF NEEDED]