THIRD AMENDED AND RESTATED CREDIT AGREEMENT

                  THIRD AMENDED AND RESTATED CREDIT AGREEMENT dated as of
November 7, 1997 among AMF BOWLING WORLDWIDE, INC. (formerly known as AMF Group
Inc.), a Delaware corporation (the "Borrower"), the banks, financial
institutions and other institutional lenders listed on the signature pages
hereof as the Initial Lenders (the "Initial Lenders") and the banks listed on
the signature pages hereof as the Initial Issuing Banks (the "Initial Issuing
Banks"), GOLDMAN SACHS CREDIT PARTNERS L.P. ("Goldman") and CITICORP SECURITIES,
INC., as arrangers (the "Arrangers"), GOLDMAN, as syndication agent (together
with any successor appointed pursuant to Article VII, the "Syndication Agent"),
CITIBANK, N.A. ("Citibank"), as administrative agent (together with any
successor appointed pursuant to Article VII, the "Administrative Agent") for the
Lender Parties (as hereinafter defined) and CITICORP USA, INC. ("Citicorp") as
collateral agent (together with any successor appointed pursuant to Article VII,
the "Collateral Agent", and together with the Syndication Agent and the
Administrative Agent, the "Agents").

PRELIMINARY STATEMENTS:

                  (1) The Borrower has previously entered into a Credit
Agreement dated as of May 1, 1996 (as amended, supplemented or otherwise
modified through but not including the Second Closing Date, the "Original Credit
Agreement") with certain Lender Parties and the Agents party thereto.

                  (2) The Borrower, certain Lender Parties and the Agents
amended and restated the Original Credit Agreement and entered into an Amended
and Restated Credit Agreement dated as of December 20, 1996 (as amended,
supplemented or otherwise modified through but not including the Third Closing
Date (as hereinafter defined), the "Second Credit Agreement").

                  (3) The Borrower, certain lenders (the "Existing Lenders"),
certain other Lender Parties and the Agents amended and restated the Second
Credit Agreement and entered into a Second Amended and Restated Credit Agreement
dated as of June 30, 1997 (as amended, supplemented or otherwise modified
through but not including the date hereof, the "Existing Credit Agreement").

                  (4) The Borrower is a direct, wholly owned Subsidiary (as
hereinafter defined) of AMF Group Holdings Inc., a Delaware corporation
("Holdings"), which is a direct, wholly owned Subsidiary of AMF Bowling, Inc.
(formerly known as AMF Holdings Inc.), a Delaware corporation ("Parent").

                  (5) Parent and Holdings were organized by GS Capital Partners
II, L.P., GS Capital Partners II Offshore, L.P. and Goldman, Sachs & Co.
Verwaltungs GmbH (collectively, together with The Goldman Sachs Group L.P.,
Stone Street Fund 1995 L.P., Stone Street Fund 1996 L.P., Bridge Street Fund



1995 L.P. and Bridge Street Fund 1996 L.P. and in each case any successor funds,
the "Goldman Investors") to acquire control, together with the other Equity
Investors (as hereinafter defined), of AMF Bowling, Inc., a Virginia
corporation, AMF Bowling Centers, Inc., a Virginia corporation, AMF Worldwide
Bowling Centers Group and their respective Subsidiaries (collectively, the
"Company").

                  (6) Pursuant to the Stock Purchase Agreement dated February
16, 1996 (as amended, supplemented or otherwise modified in accordance with its
terms, to the extent permitted in accordance with the Loan Documents (as
hereinafter defined), the "Purchase Agreement") between Holdings and the Sellers
(as defined therein), Holdings proposed to acquire all of the outstanding common
stock of the Company (the "Stock Acquisition"), in the case of AMF Bowling and
AMF Bowling Centers (each as hereinafter defined), through two intermediate
holding company Subsidiaries (the "Intermediate Companies"), and to acquire from
the Retained Entities and WBB (each as defined in the Purchase Agreement)
certain assets (the "Asset Acquisition", and together with the Stock
Acquisition, the "Acquisition"). Immediately upon the consummation of the
Acquisition, one of the Intermediate Companies was merged into AMF Bowling and
the other Intermediate Company was merged into AMF Bowling Centers.

                  (7) On August 21, 1997, Parent filed a Form S-1 with the
Securities and Exchange Commission (the "Form S-1") in connection with an
initial public offering (the "IPO") of its common stock for gross cash proceeds
of up to $250,000,000. Parent will use the Net Cash Proceeds from the IPO to
make a capital contribution to the Borrower. The Borrower has requested that the
Existing Lenders and the Agents amend the Existing Credit Agreement in order to,
among other things, permit the Borrower to convert the outstanding Acquisition
Commitments and Acquisition B Commitments and certain outstanding Term Loan
Commitments (each as defined in the Existing Credit Agreement) into Working
Capital Commitments, prepay a portion of outstanding Working Capital Advances on
a temporary basis and prepay a portion of the Subordinated Notes (as hereinafter
defined).

                  (8) The Existing Lenders and the Agents have agreed to amend
and restate the Existing Credit Agreement on the terms hereinafter set forth.

                  NOW, THEREFORE, in consideration of the premises and of the
mutual covenants and agreements contained herein, the parties hereto hereby
agree as follows:

                                   ARTICLE I

                        DEFINITIONS AND ACCOUNTING TERMS

                  SECTION 1.01. Certain Defined Terms.  As used in this
Agreement, the following terms shall have the following meanings (such meanings
to be equally applicable to both the singular and plural forms of the terms
defined):



                  "Acquisition" has the meaning specified in the Preliminary
         Statements.

                  "Adjusted EBITDA" means, at any time, in the case of any New
         Center, the product of (a) the Average EBITDA Margin calculated as of
         the end of the fiscal quarter immediately preceding the fiscal quarter
         in which the time of the acquisition or construction of such New Center
         (within the meaning of the definition of "New Center" contained in this
         Section 1.01) occurs and (b) the Specified Revenues of such New Center.

                  "Administrative Agent" has the meaning specified in the
         recital of parties to this Agreement.

                  "Administrative Agent's Account" means the account of the
         Administrative Agent maintained by the Administrative Agent with
         Citibank at its office at 399 Park Avenue, New York, New York 10043,
         Account No. 3885-8061, Attention:  Alexandra Lozovsky.

                  "Advance" means a Term Loan Advance, an AXELs Series A
         Advance, an AXELs Series B Advance, a Working Capital Advance or a
         Letter of Credit Advance.

                  "Affiliate" means, as to any Person, any other Person that,
         directly or indirectly, controls, is controlled by or is under common
         control with such Person or is a director or officer of such Person.
         For purposes of this definition, the term "control" (including the
         terms "controlling," "controlled by" and "under common control with")
         of a Person means the possession, direct or indirect, of the power to
         vote 5% or more of the Voting Stock of such Person or to direct or
         cause the direction of the management and policies of such Person,
         whether through the ownership of Voting Stock, by contract or
         otherwise.

                  "Agents" has the meaning specified in the recital of parties
         to this Agreement.

                  "AMF Bowling Centers" means AMF Bowling Centers, Inc., a
         Virginia corporation and an indirect wholly owned Subsidiary of the
         Borrower.

                  "AMF Bowling Products" means AMF Bowling Products, Inc., a
         Virginia corporation and an indirect wholly owned Subsidiary of the
         Borrower.

                  "AMF Worldwide" means AMF Worldwide Bowling Centers Holdings
         Inc., a Delaware corporation and an indirect wholly owned Subsidiary of
         the Borrower.



                  "Applicable Lending Office" means, with respect to each Lender
         Party, such Lender Party's Domestic Lending Office in the case of a
         Base Rate Advance and such Lender Party's Eurodollar Lending Office in
         the case of a Eurodollar Rate Advance.

                  "Applicable Margin" means (a) from the Fourth Closing Date
         until the one-year anniversary of the Fourth Closing Date, a percentage
         per annum determined by reference to the Total Debt/EBITDA Ratio as set
         forth below:

<TABLE>
<CAPTION>
                                                       Applicable Margin
               Facility       Total                        for Base           Applicable Margin for
                              Debt/EBITDA Ratio          Rate Advances      Eurodollar Rate Advances
         -------------------------------------------------------------------------------------------
<S>   <C>
            Working Capital   Level I
           Facility and Term  less than or equal to         0.750%                    1.750%
             Loan Facility    5.50:1

                              Level II
                              greater than 5.50:1           0.875%                    1.875%
         -------------------------------------------------------------------------------------------
             AXELs Series     Level I
              A Facility      less than or equal to         1.000%                    2.000%
                              5.50:1

                              Level II
                              greater than 5.50:1           1.125%                    2.125%
         -------------------------------------------------------------------------------------------
             AXELs Series     Level I
          B Facility and New  less than or equal to         1.250%                    2.250%
            AXELs Series B    5.50:1
               Facility
                              Level II
                              greater than 5.50:1           1.375%                    2.375%
         ===========================================================================================
</TABLE>
         and (b) thereafter, a percentage per annum determined by reference to
         the Total Debt/EBITDA Ratio as set forth below:



<TABLE>
<CAPTION>

                 Facility             Total Debt/       Applicable Margin for     Applicable Margin for
                                     EBITDA Ratio         Base Rate Advances    Eurodollar Rate Advances
           =============================================================================================
<S>   <C>
           Working               Level I
           Capital Facility      less than or equal             0.000%                   0.750%
           and Term Loan         to 3.5:1
           Facility
                                 Level II
                                 greater than 3.5:1             0.000%                   1.000%
                                 but less than or
                                 equal to 4.25:1

                                 Level III
                                 greater than 4.25:1            0.500%                   1.500%
                                 but less than or
                                 equal to 4.75:1

                                 Level IV
                                 greater than 4.75:1            0.750%                   1.750%
                                 but less than or
                                 equal to 5.50:1

                                 Level V
                                 greater than 5.50:1            0.875%                   1.875%

           ===================================================================================

</TABLE>


<TABLE>
<S>   <C>
           AXELs Series A         Level I
           Facility               less than or equal            0.875%                   1.875%
                                  to 4.00:1

                                  Level II
                                  greater than 4.00:1
                                  but less than or              1.000%                   2.000%
                                  equal to 5.50:1

                                  Level III
                                  greater than 5.50:1


                                                                1.125%                   2.125%
           ===================================================================================
           AXELs Series B         Level I
           Facility and New       less than or equal            1.125%                   2.125%
           AXELs Series B         to 4.00:1
           Facility
                                  Level II
                                  greater than 4.00:1
                                  but less than or              1.250%                   2.250%
                                  equal to 5.50:1

                                  Level III
                                  greater than 5.50:1


                                                                1.375%                   2.375%
           ===================================================================================
</TABLE>


         The Applicable Margin for each Base Rate Advance shall be determined by
         reference to the ratio in effect from time to time and the Applicable
         Margin for each Eurodollar Rate Advance shall be determined by
         reference to the ratio in effect on the first day of each Interest
         Period for such Advance; provided, however, that (A) no change in the
         Applicable Margin shall be effective until three Business Days after
         the date on which the Administrative Agent receives the relevant
         Financial Statements and a certificate of a Designated Financial
         Officer demonstrating such ratio, and (B) the Applicable Margin shall
         be at the numerically highest level then applicable for so long as the
         Borrower has not submitted to the Administrative Agent the information
         described in clause (A) of this proviso as and when required under
         Section 5.03(b) or (c), as the case may be, and provided further, that
         for purposes of determining the Applicable Margin based on the
         financial statements delivered pursuant to Section 5.03(b) for the nine
         months ended September 30, 1997, the Total Debt/EBITDA Ratio shall be
         determined after giving pro forma effect to the application of proceeds
         from the IPO to the prepayment or redemption, as the case may be, of
         the Advances hereunder and of the Subordinated Notes on or prior to
         December 31, 1997 pursuant to Sections 2.06(b)(ii)(B) and 5.02(k).

                  "Appropriate Lender" means, at any time, with respect to (a)
         any of the Term Loan Facility, the AXELs Series A Facility or the
         Working Capital Facility, a Lender that has a Commitment with respect
         to such Facility at such time, (b) the AXELs Series B Facility, (i) on
         and prior to the making of the New AXELs Series B Advances, an Existing
         AXELs Series B Lender or a New AXELs Series B Lender, as the context
         may require, and (ii) thereafter, an AXELs Series B Lender and (c) the
         Letter of Credit Facility, (i) any Issuing Bank and (ii) if the other
         Working Capital Lenders have made Letter of Credit Advances pursuant to
         Section 2.03(c) that are outstanding at such time, each such other
         Working Capital Lender.

                  "Arrangers" has the meaning specified in the recital of
         parties to this Agreement.

                  "Assignment and Acceptance" means an assignment and acceptance
         entered into by a Lender Party and an Eligible Assignee, and accepted
         by the Administrative Agent, in accordance with Section 8.07 and in
         substantially the form of Exhibit C hereto.

                  "Available Amount" of any Letter of Credit means, at any time,
         the maximum amount available to be drawn under such Letter of Credit at
         such time (assuming compliance at such time with all conditions to
         drawing).

                  "Average EBITDA Margin" means, at any time of determination,
         an amount equal to (a) the sum of Consolidated EBITDA of AMF Bowling
         Centers and its Subsidiaries and Consolidated EBITDA of AMF Worldwide
         and its Subsidiaries divided by (b) the sum of Consolidated revenues of
         AMF Bowling Centers and its Subsidiaries and Consolidated revenues of
         AMF Worldwide and its Subsidiaries, in each case for the 12-month
         period reflected in the most recent Financial Statements.



                  "AXELs Series A Advance" has the meaning specified in Section
          2.01(b).

                  "AXELs Series A Borrowing" means a borrowing consisting of
         simultaneous AXELs Series A Advances of the same Type made by the AXELs
         Series A Lenders.

                  "AXELs Series A Commitment" means, with respect to any AXELs
         Series A Lender at any time, the amount set forth opposite such
         Lender's name on Schedule I hereto under the caption "AXELs Series A
         Commitment" or, if such Lender has entered into one or more Assignments
         and Acceptances, set forth for such Lender in the Register maintained
         by the Administrative Agent pursuant to Section 8.07(d) as such
         Lender's "AXELs Series A Commitment", as such amount may be reduced at
         or prior to such time pursuant to Section 2.05.

                  "AXELs Series A Facility" means, at any time, the aggregate
         amount of the AXELs Series A Lenders' AXELs Series A Commitments at
         such time.

                  "AXELs Series A Lender" means any Lender that has an AXELs
         Series A Commitment.

                  "AXELs Series A Note" means a promissory note of the Borrower
         payable to the order of any AXELs Series A Lender, in substantially the
         form of Exhibit A-2 hereto, evidencing the indebtedness of the Borrower
         to such Lender resulting from the AXELs Series A Advance made by such
         Lender.

                  "AXELs Series B Advance" means any Existing AXELs Series B
         Advance or any New AXELs Series B Advance.

                  "AXELs Series B Borrowing" means a borrowing consisting of
         simultaneous AXELs Series B Advances of the same Type made by the AXELs
         Series B Lenders.

                  "AXELs Series B Commitment" means, with respect to any AXELs
         Series B Lender at any time, the amount set forth opposite such
         Lender's name on Schedule I hereto under the caption "AXELs Series B
         Commitment" or, if such Lender has entered into one or more Assignments
         and Acceptances, set forth for such Lender in the Register maintained
         by the Administrative Agent pursuant to Section 8.07(d) as such
         Lender's "AXELs Series B Commitment", as such amount may be reduced at
         or prior to such time pursuant to Section 2.05.

                  "AXELs Series B Facility" means, at any time, the aggregate
         amount of the AXELs Series B Lenders' AXELs Series B Commitments at
         such time.

                  "AXELs Series B Lender" means any Existing AXELs Series B
         Lender or any New AXELs Series B Lender.



                  "AXELs Series B Note" means a promissory note of the Borrower
         payable to the order of any AXELs Series B Lender, in substantially the
         form of Exhibit A-3 hereto, evidencing the indebtedness of the Borrower
         to such Lender resulting from the AXELs Series B Advance made by such
         Lender.

                  "Bank Hedge Agreement" means any Hedge Agreement required or
         permitted under Article V that is entered into by and between the
         Borrower and any Hedge Bank.

                  "Base Rate" means a fluctuating interest rate per annum in
         effect from time to time, which rate per annum shall at all times be
         equal to the highest of:

                           (a) the rate of interest announced publicly by
                  Citibank in New York, New York, from time to time, as
                  Citibank's base rate;

                           (b) the sum (adjusted to the nearest 1/4 of 1% or, if
                  there is no nearest 1/4 of 1%, to the next higher 1/4 of 1%)
                  of (i) 1/2 of 1% per annum, plus (ii) the rate obtained by
                  dividing (A) the latest three-week moving average of secondary
                  market morning offering rates in the United States for
                  three-month certificates of deposit of major United States
                  money market banks, such three-week moving average (adjusted
                  to the basis of a year of 360 days) being determined weekly on
                  each Monday (or, if such day is not a Business Day, on the
                  next succeeding Business Day) for the three-week period ending
                  on the previous Friday by Citibank on the basis of such rates
                  reported by certificate of deposit dealers to and published by
                  the Federal Reserve Bank of New York or, if such publication
                  shall be suspended or terminated, on the basis of quotations
                  for such rates received by Citibank from three New York
                  certificate of deposit dealers of recognized standing selected
                  by Citibank, by (B) a percentage equal to 100% minus the
                  average of the daily percentages specified during such
                  three-week period by the Board of Governors of the Federal
                  Reserve System (or any successor) for determining the maximum
                  reserve requirement (including, but not limited to, any
                  emergency, supplemental or other marginal reserve requirement)
                  for Citibank with respect to liabilities consisting of or
                  including (among other liabilities) three-month U.S. dollar
                  non-personal time deposits in the United States, plus (iii)
                  the average during such three-week period of the annual
                  assessment rates estimated by Citibank for determining the
                  then current annual assessment payable by Citibank to the
                  Federal Deposit Insurance Corporation (or any successor) for
                  insuring U.S. dollar deposits of Citibank in the United
                  States; and

                           (c) 1/2 of 1% per annum above the Federal Funds Rate.

                  "Base Rate Advance" means an Advance that bears interest as
         provided in Section 2.07(a)(i).

                  "Blocked Accounts" has the meaning specified in the Security
         Agreement.



                  "Borrower" has the meaning specified in the recital of parties
         to this Agreement.

                  "Borrower's Account" means the account of the Borrower
         maintained by the Borrower with The Chase Manhattan Bank, N.A. at its
         office at One Chase Plaza, New York, New York 10081, Account No.
         001-71281-9-01 or such other account of the Borrower maintained by the
         Borrower in the United States as the Borrower shall designate in
         writing to the Administrative Agent.

                  "Borrowing" means a Term Loan Borrowing, an AXELs Series A
         Borrowing, an AXELs Series B Borrowing or a Working Capital Borrowing.

                  "Business Day" means a day of the year on which banks are not
         required or authorized by law to close in New York City and, if the
         applicable Business Day relates to any Eurodollar Rate Advances, on
         which dealings in U.S. dollar deposits are carried on in the London
         interbank market.

                  "Capital Expenditures" means, for any Person for any period,
         the sum of (a) all expenditures made, directly or indirectly, by such
         Person or any of its Subsidiaries during such period for equipment,
         fixed assets, real property or improvements, or for replacements or
         substitutions therefor or additions thereto, that have been or should
         be, in accordance with GAAP, reflected as additions to property, plant
         or equipment on a Consolidated balance sheet of such Person or have a
         useful life of more than one year plus (b) the aggregate principal
         amount of all Debt (including Obligations under Capitalized Leases)
         assumed or incurred in connection with any such expenditures; provided,
         however, that the following shall in any event be excluded from the
         definition of Capital Expenditures: any such expenditures made with, or
         subsequently reimbursed out of, the proceeds of insurance, condemnation
         awards (or payments in lieu thereof), indemnity payments or payments in
         respect of judgments or settlements received from third parties for
         purposes of replacing or repairing the assets in respect of which such
         proceeds, awards or payments were received, so long as such
         expenditures are commenced within 3 months of the later of the
         occurrence of the damage to or loss of the assets being replaced or
         repaired and the receipt of such proceeds, awards or payments in
         respect thereof; provided further, however, that notwithstanding
         anything contained herein, Capital Expenditures shall not include any
         Investments.

                  "Capitalized Leases" means all leases that have been or should
         be, in accordance with GAAP, recorded as capitalized leases.

                  "Cash Collateral Account" has the meaning specified in the
         Security Agreement.



                  "Cash Equivalents" means any of the following, to the extent
         owned by the Borrower or any of its Subsidiaries free and clear of all
         Liens other than Liens created under the Collateral Documents and
         having a maturity of not greater than 90 days from the date of
         acquisition thereof: (a) readily marketable direct obligations of the
         Government of the United States or any agency or instrumentality
         thereof or obligations unconditionally guaranteed by the full faith and
         credit of the Government of the United States, (b) insured certificates
         of deposit of or time deposits with any commercial bank that is a
         Lender Party or a member of the Federal Reserve System, issues (or the
         parent of which issues) commercial paper rated as described in clause
         (c), is organized under the laws of the United States or any State
         thereof and has combined capital and surplus of at least $1 billion,
         (c) commercial paper in an aggregate amount of no more than $10,000,000
         per issuer outstanding at any time, issued by any corporation organized
         under the laws of any State of the United States and rated at least
         "Prime-1" (or the then equivalent grade) by Moody's Investors Service,
         Inc. or "A-1" (or the then equivalent grade) by Standard & Poor's
         Ratings Group or (d) Investments in money market funds that invest
         primarily in Cash Equivalents of the types described in clauses (a),
         (b) and (c) above.

                  "CERCLA" means the Comprehensive Environmental Response,
         Compensation and Liability Act of 1980, as amended from time to time.

                  "CERCLIS" means the Comprehensive Environmental Response,
         Compensation and Liability Information System maintained by the U.S.
         Environmental Protection Agency.



                  "Change of Control" means the occurrence of any of the
         following: (a) at any time prior to an IPO, the Goldman Investors shall
         at any time for any reason cease to own beneficially Voting Stock of
         Parent representing 51% or more of the combined voting power of all
         Voting Stock of Parent; (b) at any time after an IPO, the Goldman
         Investors shall at any time for any reason cease to own beneficially
         Voting Stock of Parent representing 35% or more of the combined voting
         power of all Voting Stock of Parent; (c) at any time after an IPO, any
         Person or two or more Persons acting in concert other than the Goldman
         Investors shall have acquired at any time beneficial ownership (within
         the meaning of Rule 13d-3 of the Securities and Exchange Commission
         under the Securities Exchange Act of 1934), directly or indirectly, of
         Voting Stock of Parent (or other securities convertible into such
         Voting Stock) representing more of the combined voting power of all
         Voting Stock of Parent than is beneficially owned by the Goldman
         Investors at such time; (d) during any period of up to 24 consecutive
         months, commencing after the First Closing Date, individuals who at the
         beginning of such 24-month period were directors of Parent shall cease
         for any reason to constitute a majority of the board of directors of
         Parent (except to the extent that individuals who at the beginning of
         such 24-month period were replaced by individuals (x) elected by a
         majority of the remaining members of the board of directors of Parent
         or (y) nominated for election by a majority of the remaining members of
         the board of directors of Parent and thereafter elected as directors by
         the shareholders of Parent); or (e) a "Change of Control" as defined in
         the Senior Subordinated Notes Indenture or the Senior Subordinated
         Discount Notes Indenture.

                  "China Joint Venture" means AMF Garden Hotel Bowling Center
         Company, a company organized under the laws of the People's Republic of
         China by AMF Bowling Centers (China) Company, a Subsidiary of the
         Borrower, and the Guangzhou Garden Hotel.

                  "Citibank" has the meaning specified in the recital of parties
         to this Agreement.

                  "Citicorp" has the meaning specified in the recital of parties
         to this Agreement.

                  "Collateral" means all "Collateral" referred to in the
         Collateral Documents and all other property that is or is intended to
         be subject to any Lien in favor of the Collateral Agent for the benefit
         of the Secured Parties.

                  "Collateral Agent" has the meaning specified in the recital of
         parties to this Agreement.

                  "Collateral Documents" means the Security Agreement, the
         Intellectual Property Security Agreement, the Mortgages and any other
         agreement that creates or purports to create a Lien in favor of the
         Collateral Agent for the benefit of the Secured Parties.



                  "Commitment" means a Term Loan Commitment, an AXELs Series A
         Commitment, an AXELs Series B Commitment, a Working Capital Commitment
         or a Letter of Credit Commitment.

                  "Company" has the meaning specified in the Preliminary
         Statements.

                  "Confidential Information" means information that the Borrower
         furnishes to any Agent or any Lender Party in a writing designated as
         confidential but does not include any such information that is or
         becomes generally available to the public other than as a result of a
         breach by any Agent or any Lender Party of its obligations hereunder or
         that is or becomes available to such Agent or such Lender Party from a
         source other than the Borrower that is not, to the best of such Agent's
         or such Lender Party's knowledge, acting in violation of a
         confidentiality agreement with the Borrower.

                  "Consolidated" refers to the consolidation of accounts in
         accordance with GAAP.

                  "Conversion", "Convert" and "Converted" each refer to a
         conversion of Advances of one Type into Advances of the other Type
         pursuant to Section 2.09 or 2.10.

                  "Current Assets" of any Person means all assets of such Person
         that would, in accordance with GAAP, be classified as current assets of
         a company conducting a business the same as or similar to that of such
         Person, after deducting adequate reserves in each case in which a
         reserve is proper in accordance with GAAP.

                  "Current Liabilities" of any Person means (a) all Debt of such
         Person that by its terms is payable on demand or matures within one
         year after the date of determination (excluding any Debt renewable or
         extendible, at the option of such Person, to a date more than one year
         from such date or arising under a revolving credit or similar agreement
         that obligates the lender or lenders to extend credit during a period
         of more than one year from such date), (b) all amounts of Funded Debt
         of such Person required to be paid or prepaid within one year after
         such date and (c) all other items (including taxes accrued as
         estimated) that in accordance with GAAP would be classified as current
         liabilities of such Person.



                  "Debt" of any Person means, without duplication, (a) all
         indebtedness of such Person for borrowed money, (b) all Obligations of
         such Person for the deferred purchase price of property or services
         (other than trade payables not overdue by more than 60 days incurred in
         the ordinary course of such Person's business), (c) all Obligations of
         such Person evidenced by notes, bonds, debentures or other similar
         instruments, (d) all Obligations of such Person created or arising
         under any conditional sale or other title retention agreement with
         respect to property acquired by such Person (even though the rights and
         remedies of the seller or lender under such agreement in the event of
         default are limited to repossession or sale of such property), (e) all
         Obligations of such Person as lessee under Capitalized Leases, (f) all
         Obligations, contingent or otherwise, of such Person under acceptance,
         letter of credit or similar facilities, (g) all Obligations, contingent
         or otherwise, of such Person to purchase, redeem, retire, defease or
         otherwise make any payment in respect of any capital stock of or other
         ownership or profit interest in such Person or any other Person or any
         warrants, rights or options to acquire such capital stock, valued, in
         the case of Redeemable Preferred Stock, at the greater of its voluntary
         or involuntary liquidation preference plus accrued and unpaid
         dividends, (h) all Obligations of such Person in respect of Hedge
         Agreements, (i) all Obligations of such Person in respect of long-term
         non-competition agreements or arrangements, (j) all Debt of others
         referred to in clauses (a) through (i) above or clause (k) below
         guaranteed directly or indirectly in any manner by such Person, or in
         effect guaranteed directly or indirectly by such Person through an
         agreement (i) to pay or purchase such Debt or to advance or supply
         funds for the payment or purchase of such Debt, (ii) to purchase, sell
         or lease (as lessee or lessor) property, or to purchase or sell
         services, primarily for the purpose of enabling the debtor to make
         payment of such Debt or to assure the holder of such Debt against loss,
         (iii) to supply funds to or in any other manner invest in the debtor
         (including any agreement to pay for property or services irrespective
         of whether such property is received or such services are rendered) or
         (iv) otherwise to assure a creditor against loss, and (k) all Debt
         referred to in clauses (a) through (j) above of another Person secured
         by (or for which the holder of such Debt has an existing right,
         contingent or otherwise, to be secured by) any Lien on property
         (including, without limitation, accounts and contract rights) owned by
         such Person, even though such Person has not assumed or become liable
         for the payment of such Debt.

                  "Default" means any Event of Default or any event that would
         constitute an Event of Default but for the requirement that notice be
         given or time elapse or both.



                  "Defaulted Advance" means, with respect to any Lender Party at
         any time, the portion of any Advance required to be made by such Lender
         Party to the Borrower pursuant to Section 2.01 or 2.02 at or prior to
         such time which has not been made by such Lender Party or by the
         Administrative Agent for the account of such Lender Party pursuant to
         Section 2.02(d) as of such time. In the event that a portion of a
         Defaulted Advance shall be deemed made pursuant to Section 2.15(a), the
         remaining portion of such Defaulted Advance shall be considered a
         Defaulted Advance originally required to be made pursuant to Section
         2.01 on the same date as the Defaulted Advance so deemed made in part.

                  "Defaulted Amount" means, with respect to any Lender Party at
         any time, any amount required to be paid by such Lender Party to any
         Agent or any other Lender Party hereunder or under any other Loan
         Document at or prior to such time which has not been so paid as of such
         time, including, without limitation, any amount required to be paid by
         such Lender Party to (a) any Issuing Bank pursuant to Section 2.03(c)
         to purchase a portion of a Letter of Credit Advance made by such
         Issuing Bank, (b) the Administrative Agent pursuant to Section 2.02(d)
         to reimburse the Administrative Agent for the amount of any Advance
         made by the Administrative Agent for the account of such Lender Party,
         (c) any other Lender Party pursuant to Section 2.13 to purchase any
         participation in Advances owing to such other Lender Party and (d) any
         Agent or any Issuing Bank pursuant to Section 7.05 to reimburse such
         Agent or such Issuing Bank for such Lender Party's ratable share of any
         amount required to be paid by the Lender Parties to such Agent or such
         Issuing Bank as provided therein. In the event that a portion of a
         Defaulted Amount shall be deemed paid pursuant to Section 2.15(b), the
         remaining portion of such Defaulted Amount shall be considered a
         Defaulted Amount originally required to be paid hereunder or under any
         other Loan Document on the same date as the Defaulted Amount so deemed
         paid in part.

                  "Defaulting Lender" means, at any time, any Lender Party that,
         at such time, (a) owes a Defaulted Advance or a Defaulted Amount or (b)
         shall take any action or be the subject of any action or proceeding of
         a type described in Section 6.01(f).

                  "Designated Financial Officer" means any of the President or
         Vice President-Finance of AMF Bowling Products or AMF Bowling Centers
         or the chief financial officer of the Borrower.

                  "Domestic Lending Office" means, with respect to any Lender
         Party, the office of such Lender Party specified as its "Domestic
         Lending Office" opposite its name on Schedule I hereto or in the
         Assignment and Acceptance pursuant to which it became a Lender Party,
         as the case may be, or such other office of such Lender Party as such
         Lender Party may from time to time specify to the Borrower and the
         Administrative Agent.



                  "EBITDA" means, for any Person, for any period, the sum,
         determined on a Consolidated basis and without duplication, of (a) net
         income (or net loss), (b) interest expense, (c) income tax expense, (d)
         depreciation expense, (e) amortization expense, (f) the aggregate
         amount of a one-time bonus and "phantom" stock payments (and payroll
         taxes associated therewith) made, in each case, to employees, former
         employees, former owners and former consultants of the Company and its
         Subsidiaries and the aggregate amount of professional and similar fees
         incurred by the Sellers in connection with the Acquisition, provided
         that, in each case, such amount shall have been funded by the Sellers
         at or prior to the consummation of the Acquisition, (g) non-cash
         foreign exchange losses, if any, (h) extraordinary or non-recurring
         losses, if any, included in determining such net income (or net loss),
         (i) non-cash expenses, if any, incurred in connection with the issuance
         of warrants or other equity by such Person with respect to the
         acquisition by the Borrower of MJ Golf, to the extent included in
         determining such net income (or net loss), (j) other non-operating
         expense, if any, included in determining such net income (or net loss)
         and (k) Other Additions for such period, less the sum of (i) non-cash
         foreign exchange gains, if any, (ii) extraordinary or non-recurring
         gains, if any, included in determining such net income (or net loss),
         and (iii) other non-operating income, if any, included in determining
         such net income (or net loss), in each case of such Person and its
         Subsidiaries, determined, except in the case of clause (j) above, in
         accordance with GAAP for such period.

                  "EBITDA Adjustment Amount" means, at any time of
         determination, an amount equal to 80% of the aggregate amount of the
         EBITDA of each bowling center acquired or constructed by the Borrower
         or any of its Subsidiaries after the First Closing Date and acquired or
         constructed at least 15 months prior to such time of determination, as
         reflected in the certificate most recently required to be furnished to
         the Lender Parties pursuant to Section 5.03(b) or (c), as the case may
         be, provided that for purposes hereof, the time of any such acquisition
         shall be the date of consummation of such acquisition and the time of
         any such construction shall be the date of the opening of such bowling
         center for business.



                  "Eligible Assignee" means (a) with respect to any Facility
         (other than the Letter of Credit Facility), (i) a Lender; (ii) an
         Affiliate of a Lender; (iii) a commercial bank organized under the laws
         of the United States, or any State thereof, and having a combined
         capital and surplus of at least $500,000,000, in the case of the
         Working Capital Facility, and at least $100,000,000, in the case of the
         Term Loan Facility, the AXELs Series A Facility and the AXELs Series B
         Facility; (iv) a savings and loan association or savings bank organized
         under the laws of the United States, or any State thereof, and having a
         combined capital and surplus of at least $500,000,000, in the case of
         the Working Capital Facility, and at least $100,000,000, in the case of
         the Term Loan Facility, the AXELs Series A Facility and the AXELs
         Series B Facility; (v) a commercial bank organized under the laws of
         any other country that is a member of the OECD or has concluded special
         lending arrangements with the International Monetary Fund associated
         with its General Arrangements to Borrow, or a political subdivision of
         any such country, and having a combined capital and surplus of at least
         $500,000,000, in the case of the Working Capital Facility, and at least
         $100,000,000, in the case of the Term Loan Facility, the AXELs Series A
         Facility and the AXELs Series B Facility, so long as such bank is
         acting through a branch or agency located in the United States; (vi)
         the central bank of any country that is a member of the OECD; (vii) a
         finance company, insurance company or other financial institution or
         fund (whether a corporation, partnership, trust or other entity) that
         is engaged in making, purchasing or otherwise investing in commercial
         loans in the ordinary course of its business and having a combined
         capital and surplus of at least $500,000,000, in the case of the
         Working Capital Facility, and at least $100,000,000, in the case of the
         Term Loan Facility, the AXELs Series A Facility and the AXELs Series B
         Facility; and (viii) any other Person approved by the Administrative
         Agent and the Borrower, such approval not to be unreasonably withheld
         or delayed, and (b) with respect to the Letter of Credit Facility, a
         Person that is an Eligible Assignee under subclause (iii) or (v) of
         clause (a) of this definition and is approved by the Administrative
         Agent and, so long as no Default shall have occurred and be continuing,
         by the Borrower, such approval not to be unreasonably withheld or
         delayed; provided, however, that neither any Loan Party nor any
         Affiliate of a Loan Party shall qualify as an Eligible Assignee under
         this definition.

                  "Environmental Action" means any action, suit, demand, demand
         letter, claim, notice of non-compliance or violation, notice of
         liability or potential liability, investigation, proceeding, consent
         order or consent agreement pursuant to any Environmental Law or any
         Environmental Permit or relating to any Hazardous Material, including,
         without limitation, (a) by any governmental or regulatory authority for
         enforcement, cleanup, removal, response, remedial or other actions or
         damages and (b) by any governmental or regulatory authority or third
         party for damages, contribution, indemnification, cost recovery,
         compensation or injunctive relief.



                  "Environmental Law" means any applicable federal, state, local
         or foreign statute, law, ordinance, rule, regulation, code, order,
         writ, judgment, injunction, decree, judicial decision, or agency
         interpretation, policy or guidance that has the force and effect of
         law, relating to pollution or protection of the environment, public
         health, safety or natural resources, including, without limitation,
         those relating to the use, handling, transportation, treatment,
         storage, disposal, release or discharge of Hazardous Materials.

                  "Environmental Permit" means any permit, approval,
         identification number, license or other authorization from any
         governmental or regulatory authority required under any Environmental
         Law.

                  "Equity Investors" means the Persons listed under the caption
         "Equity Investors" on Schedule 4.01(a).

                  "ERISA" means the Employee Retirement Income Security Act of
         1974, as amended from time to time, and the regulations promulgated and
         rulings issued thereunder.

                  "ERISA Affiliate" means any Person that for purposes of Title
         IV of ERISA is a member of the controlled group of any Loan Party, or
         under common control with any Loan Party, within the meaning of Section
         414 of the Internal Revenue Code.



                  "ERISA Event" means (a) (i) the occurrence of a reportable
         event, within the meaning of Section 4043 of ERISA, with respect to any
         Plan unless the 30-day notice requirement with respect to such event
         has been waived by the PBGC, or (ii) the requirements of subsection (1)
         of Section 4043(b) of ERISA (without regard to subsection (2) of such
         Section) are met with respect to a contributing sponsor, as defined in
         Section 4001(a)(13) of ERISA, of a Plan, and an event described in
         paragraph (9), (10), (11), (12) or (13) of Section 4043(c) of ERISA is
         reasonably expected to occur with respect to such Plan within the
         following 30 days; (b) the application for a minimum funding waiver
         with respect to a Plan; (c) the provision by the administrator of any
         Plan of a notice of intent to terminate such Plan, pursuant to Section
         4041(a)(2) of ERISA (including any such notice with respect to a plan
         amendment referred to in Section 4041(e) of ERISA); (d) the cessation
         of operations at a facility of any Loan Party or any ERISA Affiliate in
         the circumstances described in Section 4062(e) of ERISA; (e) the
         withdrawal by any Loan Party or any ERISA Affiliate from a Multiple
         Employer Plan during a plan year for which it was a substantial
         employer, as defined in llSection 4001(a)(2) of ERISA; (f) the
         conditions for imposition of a lien under Section 302(f) of ERISA shall
         have been met with respect to any Plan; (g) the adoption of an
         amendment to a Plan requiring the provision of security to such Plan
         pursuant to Section 307 of ERISA; or (h) the institution by the PBGC of
         proceedings to terminate a Plan pursuant to Section 4042 of ERISA, or
         the occurrence of any event or condition described in Section 4042 of
         ERISA that constitutes grounds for the termination of, or the
         appointment of a trustee to administer, such Plan.


                  "Eurocurrency Liabilities" has the meaning specified in
         Regulation D of the Board of Governors of the Federal Reserve System,
         as in effect from time to time.

                  "Eurodollar Lending Office" means, with respect to any Lender
         Party, the office of such Lender Party specified as its "Eurodollar
         Lending Office" opposite its name on Schedule I hereto or in the
         Assignment and Acceptance pursuant to which it became a Lender Party
         (or, if no such office is specified, its Domestic Lending Office), or
         such other office of such Lender Party as such Lender Party may from
         time to time specify to the Borrower and the Administrative Agent.

                  "Eurodollar Rate" means, for any Interest Period for all
         Eurodollar Rate Advances comprising part of the same Borrowing, an
         interest rate per annum equal to the rate per annum obtained by
         dividing (a) the rate per annum at which deposits in U.S. dollars are
         offered by the principal office of Citibank in London, England to prime
         banks in the London interbank market at 11:00 A.M. (London time) two
         Business Days before the first day of such Interest Period in an amount
         substantially equal to Citibank's Eurodollar Rate Advance comprising
         part of such Borrowing to be outstanding during such Interest Period
         (or, if Citibank shall not have such a Eurodollar Rate Advance,
         $1,000,000) and for a period equal to such Interest Period by (b) a
         percentage equal to 100% minus the Eurodollar Rate Reserve Percentage
         for such Interest Period.


                  "Eurodollar Rate Advance" means an Advance that bears interest
         as provided in Section 2.07(a)(ii).

                  "Eurodollar Rate Reserve Percentage" for any Interest Period
         for all Eurodollar Rate Advances comprising part of the same Borrowing
         means the reserve percentage applicable two Business Days before the
         first day of such Interest Period under regulations issued from time to
         time by the Board of Governors of the Federal Reserve System (or any
         successor) for determining the maximum reserve requirement (including,
         without limitation, any emergency, supplemental or other marginal
         reserve requirement) for a member bank of the Federal Reserve System in
         New York City with respect to liabilities or assets consisting of or
         including Eurocurrency Liabilities (or with respect to any other
         category of liabilities that includes deposits by reference to which
         the interest rate on Eurodollar Rate Advances is determined) having a
         term equal to such Interest Period.

                  "Events of Default" has the meaning specified in Section 6.01.

                  "Excess Cash Flow" means, for any Fiscal Year (which, in the
         case of the Fiscal Year ending December 31, 1996, shall mean the period
         from May 1, 1996 to December 31, 1996 for purposes of this definition),
         determined in accordance with GAAP for the Borrower and its
         Subsidiaries on a Consolidated basis and without duplication:

                           (a) Consolidated EBITDA of the Borrower and its
                  Subsidiaries for such Fiscal Year less (to the extent included
                  in the calculation of EBITDA) any Extraordinary Receipts
                  received by the Borrower or any of its Subsidiaries during
                  such Fiscal Year less extraordinary or non-recurring cash
                  losses in such Fiscal Year plus extraordinary or non-recurring
                  cash gains in such Fiscal Year, less

                           (b)      the sum of

                                    (i) Consolidated cash interest expense
                           payable by the Borrower and its Subsidiaries in such
                           Fiscal Year plus

                                    (ii) the aggregate amount of Capital
                           Expenditures made pursuant to Section 5.02(q) by the
                           Borrower and its Subsidiaries during such Fiscal Year
                           (but not exceeding the amount permitted to be made in
                           such Fiscal Year pursuant to Section 5.02(q)) plus



                                    (iii) optional prepayments and scheduled
                           payments of principal of Debt of the Borrower and its
                           Subsidiaries in such Fiscal Year (including, without
                           limitation, prepayments of the Working Capital
                           Facility to the extent that the Working Capital
                           Facility is permanently reduced) plus

                                    (iv) cash taxes paid by the Borrower and its
                           Subsidiaries in such Fiscal Year plus

                           (c) if there was a net increase in Consolidated
                  Current Liabilities of the Borrower and its Subsidiaries
                  during such Fiscal Year, the amount of such net increase plus

                           (d) if there was a net decrease in Consolidated
                  Current Assets (excluding cash and Cash Equivalents) of the
                  Borrower and its Subsidiaries during such Fiscal Year, the
                  amount of such net decrease less

                           (e) if there was a net decrease in Consolidated
                  Current Liabilities of the Borrower and its Subsidiaries
                  during such Fiscal Year, the amount of such net decrease less

                           (f) if there was a net increase in Consolidated
                  Current Assets (excluding cash and Cash Equivalents) of the
                  Borrower and its Subsidiaries during such Fiscal Year, the
                  amount of such net increase less

                           (g) (i) for any Fiscal Year ending on or prior to
                  December 31, 1997, an amount equal to the product of (A) the
                  Support Amount for such Fiscal Year and (B) 0.803654, but not,
                  under this clause (g)(i), to exceed $14,063,946.68 in the
                  aggregate from and after the First Closing Date, and (ii) for
                  any Fiscal Year ending thereafter, zero.

                  "Excess Cash Flow Amount" means (a) for each of the first two
         Fiscal Years ending after the First Closing Date, an amount equal to
         the lesser of (i) the amount by which Excess Cash Flow for such Fiscal
         Year exceeds $10,000,000 and (ii) an amount equal to 50% of Excess Cash
         Flow for such Fiscal Year, (b) for the third Fiscal Year ending after
         the First Closing Date, an amount equal to the lesser of (i) the amount
         by which Excess Cash Flow for such Fiscal Year exceeds $20,000,000 and
         (ii) an amount equal to 50% of Excess Cash Flow for such Fiscal Year
         and (c) for each Fiscal Year ending thereafter, an amount equal to 50%
         of Excess Cash Flow for such Fiscal Year.



                  "Existing Advance" means, for each Existing Lender, all of
         such Existing Lender's rights in and to, and all of its obligations
         under, the Advances (as defined in the Existing Credit Agreement)
         evidenced by the Existing Notes and owing to it under the Existing
         Credit Agreement immediately preceding the Fourth Closing Date.

                  "Existing AXELs Series B Advance" has the meaning specified in
         Section 2.01(c).

                  "Existing AXELs Series B Commitment" means, with respect to
         any Existing AXELs Series B Lender at any time, the amount committed by
         such Existing AXELs Series B Lender as an "Existing AXELs Series B
         Commitment" pursuant to the Original Credit Agreement or, if such
         Lender entered into one or more Assignments and Acceptances, set forth
         for such Lender in the Register maintained by the Administrative Agent
         pursuant to Section 8.07(d) of the Existing Credit Agreement as such
         Lender's "Existing AXELs Series B Commitment", as such amount may have
         been reduced at or prior to such time pursuant to Section 2.05 of the
         Existing Credit Agreement.

                  "Existing AXELs Series B Lender" means any Lender that has an
         Existing AXELs Series B Commitment.

                  "Existing Commitment" means, for each Existing Lender, all of
         such Existing Lender's rights in and to, and all of its obligations
         under, the Commitments (as defined in the Existing Credit Agreement)
         held by it under the Existing Credit Agreement immediately preceding
         the Fourth Closing Date.


                  "Existing Credit Agreement" has the meaning specified in the
          Preliminary Statements.

                  "Existing Debt" means Debt of the Company and its Subsidiaries
         outstanding immediately before giving effect to the Acquisition.

                  "Existing Lenders" has the meaning specified in the
         Preliminary Statements.

                  "Existing Notes" means the Notes as defined in, and issued
         pursuant to, the Existing Credit Agreement.



                  "Extraordinary Receipt" means any cash received by or paid to
         or for the account of any Person consisting of tax refunds, pension
         plan reversions, proceeds of insurance (other than proceeds of business
         interruption insurance to the extent such proceeds constitute
         compensation for lost earnings), condemnation awards (and payments in
         lieu thereof), indemnity payments and payments in respect of judgments
         (including, without limitation, punitive damages); provided, however,
         that an Extraordinary Receipt shall not include cash receipts received
         from proceeds of insurance, condemnation awards (or payments in lieu
         thereof), indemnity payments or payments in respect of judgments or
         settlements (i) to the extent that such proceeds, awards or payments in
         respect of loss or damage to equipment, fixed assets or real property
         are applied to replace or repair such equipment, fixed assets or real
         property to the extent such replacement or repair is not prohibited
         under the terms of the Collateral Documents, so long as such
         application is commenced within 3 months after the later of the
         occurrence of such loss or damage and the receipt of such proceeds,
         awards or payments in respect thereof or (ii) to the extent that such
         proceeds, awards or payments reimburse such Person for the prior
         payment of out-of-pocket costs.

                  "Facility" means the Term Loan Facility, the AXELs Series A
         Facility, the AXELs Series B Facility, the Working Capital Facility or
         the Letter of Credit Facility.

                  "Federal Funds Rate" means, for any period, a fluctuating
         interest rate per annum equal for each day during such period to the
         weighted average of the rates on overnight Federal funds transactions
         with members of the Federal Reserve System arranged by Federal funds
         brokers, as published for such day (or, if such day is not a Business
         Day, for the next preceding Business Day) by the Federal Reserve Bank
         of New York, or, if such rate is not so published for any day that is a
         Business Day, the average of the quotations for such day for such
         transactions received by the Administrative Agent from three Federal
         funds brokers of recognized standing selected by it.

                  "Financial Statements" means, at any time, the most recent
         financial statements furnished, or required to be furnished, by the
         Borrower to the Lender Parties pursuant to Section 5.03(b) or (c), as
         the case may be.

                  "First Amendment" means Amendment No. 3 to the Original Credit
         Agreement dated as of December 20, 1996 among the Borrower, the Lenders
         parties thereto and the Agents, and the Consent thereto dated as of
         December 20, 1996 by the Loan Parties (other than the Borrower).



                  "First Amendment Documents" means (a) the First Amendment, (b)
         the AXELs Series B Notes payable to the New AXELs Series B Lenders and
         (c) the First Mortgage Amendments, in each case as amended,
         supplemented or otherwise modified from time to time.

                  "First Closing Date" means May 1, 1996, the date on which the
         Initial Extension of Credit occurred following satisfaction or waiver
         of the conditions set forth in Sections 3.01 and 3.02.

                  "First Mortgage Amendments" means the mortgage amendments
         executed in connection with the First Amendment.

                  "First Prepayment Date" has the meaning specified in Section
         2.06(b)(iv).

                  "Fiscal Year" means (except as otherwise stated in the
         definition of Excess Cash Flow in this Section 1.01 and in Section
         5.02(q)) a fiscal year of the Borrower and its Consolidated
         Subsidiaries ending on December 31 in any calendar year.

                  "Foreign Subsidiary" means a Subsidiary of the Borrower
         organized under the laws of a country other than the United States or
         any State thereof.

                  "Form S-1" has the meaning specified in the Preliminary
         Statements.

                  "Fourth Closing Date" means the first date on which the
         conditions set forth in Section 3.05 have been satisfied but in no
         event later than November 30, 1997.

                  "Funded Debt" of any Person means Debt in respect of the
         Advances, in the case of the Borrower, and all other Debt of such
         Person that by its terms matures more than one year after the date of
         its creation or matures within one year from such date but is renewable
         or extendible, at the option of such Person, to a date more than one
         year after such date or arises under a revolving credit or similar
         agreement that obligates the lender or lenders to extend credit during
         a period of more than one year after such date, including, without
         limitation, all amounts of Funded Debt of such Person required to be
         paid or prepaid within one year after the date of determination.

                  "GAAP" has the meaning specified in Section 1.03.

                  "Goldman" has the meaning specified in the recital of parties
         to this Agreement.

                  "Goldman Investors" has the meaning specified in the
         Preliminary Statements.


                  "Gross Cash Proceeds" means, with respect to any sale, lease,
         transfer or other disposition of any asset or the sale or issuance of
         any Debt or capital stock or other ownership or profit interest, any
         securities convertible into or exchangeable for capital stock or other
         ownership or profit interest or any warrants, rights, options or other
         securities to acquire capital stock or other ownership or profit
         interest by any Person, or any Extraordinary Receipt received by or
         paid to or for the account of any Person, the aggregate amount of cash
         proceeds receivable (whether as initial consideration or through
         payment or disposition of deferred consideration) by or on behalf of
         such Person in connection with such transaction, prior to deduction for
         brokerage commissions, underwriting fees, legal fees, finder's fees and
         other similar fees and commissions, discounts and other expenses.

                  "Guaranties" means the Holdings Guaranty, the Subsidiary
         Guaranty and any other guaranty delivered pursuant to Section 5.01(n).

                  "Guarantors" means Holdings and the Subsidiary Guarantors.

                  "Hazardous Materials" means (a) petroleum or petroleum
         products, by-products or breakdown products, radioactive materials,
         asbestos-containing materials, polychlorinated biphenyls and radon gas
         and (b) any other chemicals, materials or substances designated,
         classified or regulated as hazardous or toxic or as a pollutant or
         contaminant under any Environmental Law.

                  "Hedge Agreements" means interest rate swap, cap or collar
         agreements, interest rate future or option contracts, currency swap
         agreements, currency future or option contracts and other similar
         agreements.

                  "Hedge Bank" means any Lender Party or any of its Affiliates
         in its capacity as a party to a Bank Hedge Agreement.

                  "Holdings" has the meaning specified in the Preliminary
         Statements.

                  "Holdings Guaranty" has the meaning specified in Section
         3.01(p)(x).

                  "Indemnified Party" has the meaning specified in Section
         8.04(b).

                  "Information Memorandum" means collectively, the information
         memorandum dated February 1996 and the information memorandum dated
         August, 1997, each relating to the Borrower and the Company and used by
         the Arrangers and the Syndication Agent in connection with the original
         syndication of the Commitments and the Third Amendment, respectively,
         each as amended or supplemented from time to time in writing.


                  "Initial Extension of Credit" means the earlier to occur of
         the initial Borrowing and the initial issuance of a Letter of Credit
         under the Original Credit Agreement.

                  "Initial Issuing Banks" has the meaning specified in the
         recital of parties to this Agreement.

                  "Initial Lenders" has the meaning specified in the recital of
         parties to this Agreement.

                  "Insufficiency" means, with respect to any Plan, the amount,
         if any, of its unfunded benefit liabilities, as defined in Section
         4001(a)(18) of ERISA.

                  "Intellectual Property Security Agreement" has the meaning
         specified in Section 3.01(p)(viii).

                  "Interest Period" means, for each Eurodollar Rate Advance
         comprising part of the same Borrowing, the period commencing on the
         date of such Eurodollar Rate Advance or the date of the Conversion of
         any Base Rate Advance into such Eurodollar Rate Advance, and ending on
         the last day of the period selected by the Borrower pursuant to the
         provisions below and, thereafter, each subsequent period commencing on
         the last day of the immediately preceding Interest Period and ending on
         the last day of the period selected by the Borrower pursuant to the
         provisions below. The duration of each such Interest Period shall be
         one, two, three or six months, as the Borrower may, upon notice
         received by the Administrative Agent not later than 11:00 A.M. (New
         York City time) on the third Business Day prior to the first day of
         such Interest Period, select; provided, however, that:

                           (a) the Borrower may not select any Interest Period
                  with respect to any Eurodollar Rate Advance under a Facility
                  that ends after any principal repayment installment date for
                  such Facility unless, after giving effect to such selection,
                  the aggregate principal amount of Base Rate Advances and of
                  Eurodollar Rate Advances having Interest Periods that end on
                  or prior to such principal repayment installment date for such
                  Facility shall be at least equal to the aggregate principal
                  amount of Advances under such Facility due and payable on or
                  prior to such date;

                           (b) Interest Periods commencing on the same date for
                  Eurodollar Rate Advances comprising part of the same Borrowing
                  shall be of the same duration;


                           (c) whenever the last day of any Interest Period
                  would otherwise occur on a day other than a Business Day, the
                  last day of such Interest Period shall be extended to occur on
                  the next succeeding Business Day, provided, however, that, if
                  such extension would cause the last day of such Interest
                  Period to occur in the next following calendar month, the last
                  day of such Interest Period shall occur on the next preceding
                  Business Day; and

                           (d) whenever the first day of any Interest Period
                  occurs on a day of an initial calendar month for which there
                  is no numerically corresponding day in the calendar month that
                  succeeds such initial calendar month by the number of months
                  equal to the number of months in such Interest Period, such
                  Interest Period shall end on the last Business Day of such
                  succeeding calendar month.

                  "Internal Revenue Code" means the Internal Revenue Code of
         1986, as amended from time to time, and the regulations promulgated and
         rulings issued thereunder.

                  "Inventory" has the meaning specified in the Security
         Agreement.

                  "Investment" in any Person means any loan or advance to such
         Person, any purchase or other acquisition of any capital stock or other
         ownership or profit interest, warrants, rights, options, obligations or
         other securities or all or substantially all of the assets of such
         Person, any capital contribution to such Person or any other direct or
         indirect investment in such Person, including, without limitation, any
         arrangement pursuant to which the investor incurs Debt of the types
         referred to in clause (j) or (k) of the definition of "Debt" in respect
         of such Person, any acquisition by way of a merger or consolidation and
         any purchase or other acquisition or construction of bowling centers.

                  "IPO" has the meaning specified in the Preliminary Statements.


                  "Issuing Banks" means each Initial Issuing Bank, any other
         Working Capital Lender that has a Letter of Credit Commitment set forth
         opposite its name on Schedule I hereto, any other Working Capital
         Lender approved as an Issuing Bank by the Administrative Agent and, so
         long as no Default shall have occurred and be continuing, by the
         Borrower (such approval not to be unreasonably withheld or delayed) and
         each Eligible Assignee to which a Letter of Credit Commitment hereunder
         has been assigned pursuant to Section 8.07 so long as each such Working
         Capital Lender or Eligible Assignee expressly agrees to perform in
         accordance with their terms all of the obligations that by the terms of
         this Agreement are required to be performed by it as an Issuing Bank
         and notifies the Administrative Agent of its Applicable Lending Office
         and the amount of its Letter of Credit Commitment (which information
         shall be recorded by the Administrative Agent in the Register).

                  "L/C Cash Collateral Account" has the meaning specified in the
         Security Agreement.

                  "L/C Related Documents" has the meaning specified in Section
         2.04(e)(ii).

                  "Lender Party" means any Lender or any Issuing Bank.

                  "Lenders" means the Initial Lenders and each Person that shall
         become a Lender hereunder pursuant to Section 8.07.

                  "Letter of Credit Advance" means an advance made by any
         Issuing Bank or any Working Capital Lender pursuant to Section 2.03(c).

                  "Letter of Credit Agreement" has the meaning specified in
         Section 2.03(a).

                  "Letter of Credit Commitment" means, with respect to any
         Issuing Bank at any time, the amount set forth opposite such Issuing
         Bank's name on Schedule I hereto under the caption "Letter of Credit
         Commitment" or, if such Issuing Bank has entered into one or more
         Assignments and Acceptances, set forth for such Issuing Bank in the
         Register maintained by the Administrative Agent pursuant to Section
         8.07(d) as such Issuing Bank's "Letter of Credit Commitment", as such
         amount may be reduced at or prior to such time pursuant to Section
         2.05.

                  "Letter of Credit Facility" means, at any time, an amount
         equal to the lesser of (a) the aggregate amount of the Issuing Banks'
         Letter of Credit Commitments at such time and (b) $10,000,000, as such
         amount may be reduced at or prior to such time pursuant to Section
         2.05.

                  "Letters of Credit" has the meaning specified in Section
        2.01(e).

                  "Lien" means any lien, security interest or other charge or
         encumbrance of any kind, or any other type of preferential arrangement,
         including, without limitation, the lien or retained security title of a
         conditional vendor and any easement, right of way or other encumbrance
         on title to real property.

                  "Loan Documents" means (a) for purposes of this Agreement and
         the Notes and any amendment or modification hereof or thereof and for
         all other purposes other than for purposes of the Guaranties and the
         Collateral Documents, (i) this Agreement, (ii) the Notes, (iii) the
         Guaranties, (iv) the Collateral Documents, (v) the First Amendment
         Documents, (vi) the Second Amendment Documents, (vii) the Third
         Amendment Documents and (viii) each Letter of Credit Agreement and (b)
         for purposes of the Guaranties and the Collateral Documents, (i) this
         Agreement, (ii) the Notes, (iii) the Guaranties, (iv) the Collateral
         Documents, (v) the First Amendment Documents, (vi) the Second Amendment
         Documents, (vii) the Third Amendment Documents, (viii) each Letter of
         Credit Agreement and (ix) each Bank Hedge Agreement, in each case as
         amended, supplemented or otherwise modified from time to time.

                  "Loan Parties" means the Company, the Borrower and the
         Guarantors.

                  "Margin Stock" has the meaning specified in Regulation U.

                  "Material Adverse Change" means any material adverse change in
         the business, condition (financial or otherwise), operations,
         performance, properties or prospects of Holdings or the Borrower, in
         each case together with its respective Subsidiaries, taken as a whole.

                  "Material Adverse Effect" means a material adverse effect on
         (a) the business, condition (financial or otherwise), operations,
         performance, properties or prospects of Holdings or the Borrower, in
         each case together with its respective Subsidiaries, taken as a whole,
         (b) the rights and remedies of any Agent or any Lender Party under any
         Loan Document or Related Document or (c) the ability of any Loan Party
         to perform its Obligations under any Loan Document (excluding Mortgages
         covering Collateral which, in the aggregate, is immaterial) or Related
         Document to which it is or is to be a party.


                  "Material Subsidiary" means, at any time, a Subsidiary of the
         Borrower having at least 5% of the total Consolidated assets of the
         Borrower and its Subsidiaries (determined as of the last day of the
         most recent fiscal quarter of the Borrower) or at least 5% of the total
         Consolidated revenues or net income of the Borrower and its
         Subsidiaries for the 12-month period ending on the last day of the most
         recent fiscal quarter of the Borrower; provided, however, that any
         Subsidiary formed or acquired after the last day of the most recent
         fiscal quarter of the Borrower that would have been a Material
         Subsidiary if it had been formed or acquired on or prior to the last
         day of such fiscal quarter shall be a Material Subsidiary for purposes
         hereof from and after the date of its formation or acquisition.

                  "MJ Golf" means Michael Jordan Golf, Inc., a Delaware
         corporation.

                  "Modified Consolidated EBITDA" means, for any Rolling Period,
         Consolidated EBITDA of the Borrower and its Subsidiaries for such
         Rolling Period, provided, however, that at any time of determination,
         (i) solely with respect to any constructed New Center, Modified
         Consolidated EBITDA shall be calculated using Adjusted EBITDA of such
         New Center and (ii) solely with respect to any New Center acquired
         within the immediately preceding 15 months, Modified Consolidated
         EBITDA shall be calculated using the actual EBITDA of such New Center
         for such Rolling Period (including, without limitation, for any portion
         of such Rolling Period that is prior to the date of acquisition of such
         New Center).

                  "Mortgage Policy" has the meaning specified in Section
         3.01(p)(ix).

                  "Mortgages" has the meaning specified in Section 3.01(p)(ix).

                  "Multiemployer Plan" means a multiemployer plan, as defined in
         Section 4001(a)(3) of ERISA, that is subject to ERISA and to which any
         Loan Party or any ERISA Affiliate is making or accruing an obligation
         to make contributions, or has within any of the preceding five plan
         years made or accrued an obligation to make contributions.

                  "Multiple Employer Plan" means a single employer plan, as
         defined in Section 4001(a)(15) of ERISA, that is subject to ERISA and
         that (a) is maintained for employees of any Loan Party or any ERISA
         Affiliate and at least one Person other than the Loan Parties and the
         ERISA Affiliates or (b) was so maintained and in respect of which any
         Loan Party or any ERISA Affiliate could have liability under Section
         4064 or 4069 of ERISA in the event such plan has been or were to be
         terminated.


                  "Net Cash Proceeds" means, with respect to any sale, lease,
         transfer or other disposition of any asset or the sale or issuance of
         any Debt or capital stock or other ownership or profit interest, any
         securities convertible into or exchangeable for capital stock or other
         ownership or profit interest or any warrants, rights, options or other
         securities to acquire capital stock or other ownership or profit
         interest by any Person, or any Extraordinary Receipt received by or
         paid to or for the account of any Person, the aggregate amount of cash
         received from time to time (whether as initial consideration or through
         payment or disposition of deferred consideration) by or on behalf of
         such Person in connection with such transaction after deducting
         therefrom only (without duplication) (a) reasonable and customary
         brokerage commissions, underwriting fees and discounts, legal fees,
         finder's fees and other similar fees and commissions and other
         reasonable and customary expenses incurred in connection with such
         transaction and (b) the amount of taxes payable in connection with or
         as a result of such transaction, in each case to the extent, but only
         to the extent, that the amounts so deducted are, at or prior to the
         time of receipt of such cash, actually paid or payable to a Person that
         is not an Affiliate of such Person or any Loan Party or any Affiliate
         of any Loan Party and are properly attributable to such transaction or
         to the asset that is the subject thereof; provided, however, that in
         the case of taxes that are deductible under clause (b) but for the fact
         that at the time of receipt of such cash, such taxes have not been
         actually paid or are not then payable, such Person may deduct an amount
         (the "Reserved Amount") equal to the amount reserved in accordance with
         GAAP for such Person's reasonable estimate of such taxes, other than
         taxes for which such Person is indemnified, provided further, however,
         that at the time such taxes are paid, the Borrower shall prepay the
         Advances outstanding hereunder, in accordance with the terms of Section
         2.06(b)(ii), in an amount equal to the amount, if any, by which the
         Reserved Amount exceeds the amount of taxes actually paid.

                  "New AXELs Series B Advance" has the meaning specified in
         Section 2.01(c).

                  "New AXELs Series B Commitment" means, with respect to any New
         AXELs Series B Lender at any time, the amount committed by such New
         AXELs Series B Lender as a "New AXELs Series B Commitment" pursuant to
         the Second Credit Agreement or, if such Lender entered into one or more
         Assignments and Acceptances, set forth for such Lender in the Register
         maintained by the Administrative Agent pursuant to Section 8.07(d) of
         the Existing Credit Agreement as such Lender's "New AXELs Series B
         Commitment", as such amount may have been reduced at or prior to such
         time pursuant to Section 2.05 of the Existing Credit Agreement.

                  "New AXELs Series B Lender" means any Lender that has a New
         AXELs Series B Commitment.

                  "New Center" means, at any time of determination, any bowling
         center acquired (whether by means of a stock or asset acquisition) or
         constructed by the Borrower or any of its Subsidiaries after the First
         Closing Date and less than 15 months prior to such date of
         determination, provided that for purposes hereof, the time of any such
         acquisition shall be the date of consummation of such acquisition and
         the time of any such construction shall be the date of the opening of
         such bowling center for business.

                  "Note" means a Term Loan Note, an AXELs Series A Note, an
         AXELs Series B Note or a Working Capital Note.

                  "Notice of Borrowing" has the meaning specified in Section
         2.02(a).

                  "Notice of Issuance" has the meaning specified in Section
         2.03(a).

                  "NPL" means the National Priorities List under CERCLA.

                  "Obligation" means, with respect to any Person, any payment,
         performance or other obligation of such Person of any kind, including,
         without limitation, any liability of such Person on any claim, whether
         or not the right of any creditor to payment in respect of such claim is
         reduced to judgment, liquidated, unliquidated, fixed, contingent,
         matured, disputed, undisputed, legal, equitable, secured or unsecured,
         and whether or not such claim is discharged, stayed or otherwise
         affected by any proceeding referred to in Section 6.01(f). Without
         limiting the generality of the foregoing, the Obligations of the Loan
         Parties under the Loan Documents include (a) the obligation to pay
         principal, interest, Letter of Credit commissions, charges, expenses,
         fees, attorneys' fees and disbursements, indemnities and other amounts
         payable by any Loan Party under any Loan Document and (b) the
         obligation of any Loan Party to reimburse any amount in respect of any
         of the foregoing that any Lender Party, in its sole discretion, may
         elect to pay or advance on behalf of such Loan Party.

                  "OECD" means the Organization for Economic Cooperation and
         Development.

                  "Open Year" has the meaning specified in Section 4.01(bb).

                  "Other Additions" means, for any fiscal quarter of the
         Borrower, (a) during the period from the First Closing Date through
         December 31, 1997, an amount equal to the sum of (i) the Support Amount
         for such fiscal quarter and (ii) extraordinary, unusual or
         non-recurring, or expected to be non-recurring, expenses and expenses
         resulting from changes in the Borrower's accounting or management
         policies or practices, in each case of the Borrower and its
         Subsidiaries for such fiscal quarter, all as determined in the judgment
         of a Designated Financial Officer, in an aggregate amount, under this
         clause (ii), not to exceed $20,000,000 from and after the First Closing
         Date, and (b) thereafter, zero.

                  "Other Taxes" has the meaning specified in Section 2.12(b).

                  "Parent" has the meaning specified in the Preliminary
         Statements.

                  "PBGC" means the Pension Benefit Guaranty Corporation (or any
         successor thereto).

                  "Permitted Encumbrances" means, with respect to any real
         property, minor survey exceptions, minor title irregularities,
         easements, rights-of-way, restrictions and other similar charges or
         encumbrances not interfering with the ordinary conduct of the business
         of the Loan Parties and their Subsidiaries which were not incurred in
         connection with and do not secure Debt or other extensions of credit
         and which do not individually or in the aggregate materially adversely
         affect the value of the properties of the Loan Parties and their
         Subsidiaries taken as a whole or materially impair its use, taken as a
         whole with all other properties of the Loan Parties and their
         Subsidiaries, in the operation of the business of the Loan Parties and
         their Subsidiaries.

                  "Permitted Liens" means such of the following as to which no
         enforcement, collection, execution, levy or foreclosure proceeding
         shall have been commenced: (a) Liens for taxes, assessments and
         governmental charges or levies to the extent not required to be paid
         under Section 5.01(b); (b) Liens imposed by law, such as materialmen's,
         mechanics', carriers', landlords', workmen's and repairmen's Liens and
         other similar Liens arising in the ordinary course of business securing
         obligations that are not overdue for a period of more than 30 days or
         are being contested in good faith by proper proceedings and as to which
         appropriate reserves are being maintained; (c) pledges or deposits to
         secure obligations under workers' compensation laws or similar
         legislation or to secure public or statutory obligations; and (d)
         Permitted Encumbrances, provided, however, that no Lien in favor of the
         PBGC shall, in any event, be a Permitted Lien.


                  "Person" means an individual, partnership, corporation
         (including a business trust), limited liability company, joint stock
         company, trust, unincorporated association, joint venture or other
         entity, or a government or any political subdivision or agency thereof.

                  "Plan" means a Single Employer Plan or a Multiple Employer
         Plan.


                  "Play Center Joint Venture" means AMF Play Center S.A., a
         corporation organized under the laws of Brazil, and its successors and
         Subsidiaries, 50% of the Voting Stock of which corporation is to be
         owned directly or indirectly by the Borrower.

                  "Preferred Stock" means, with respect to any corporation,
         capital stock issued by such corporation that is entitled to a
         preference or priority over any other capital stock issued by such
         corporation upon any distribution of such corporation's assets, whether
         by dividend or upon liquidation.

                  "Pro Rata Share" of any amount means with respect to any
         Working Capital Lender at any time, the product of such amount times a
         fraction the numerator of which is the amount of such Lender's Working
         Capital Commitment at such time and the denominator of which is the
         Working Capital Facility at such time.

                  "Purchase Agreement" has the meaning specified in the
         Preliminary Statements.

                  "Redeemable" means, with respect to any capital stock or other
         ownership or profit interest, Debt or other right or Obligation, any
         such right or Obligation that (a) the issuer has undertaken to redeem
         at a fixed or determinable date or dates, whether by operation of a
         sinking fund or otherwise, or upon the occurrence of a condition not
         solely within the control of the issuer or (b) is redeemable at the
         option of the holder.

                  "Reduction Amount" has the meaning specified in Section
         2.06(b)(vii).

                  "Register" has the meaning specified in Section 8.07(d).

                  "Regulation U" means Regulation U of the Board of Governors of
         the Federal Reserve System, as in effect from time to time.

                  "Related Documents" means the Purchase Agreement, the
         Subordinated Debt Documents, the Tax Agreement, the Stockholders'
         Agreement and the Support Agreement.

                  "Required Lenders" means, at any time, (i) Lenders owed or
         holding at least a majority in interest of the sum of (a) the aggregate
         principal amount of the Term Loan Advances and Working Capital Advances
         outstanding at such time, (b) the aggregate Available Amount of all
         Letters of Credit outstanding at such time, (c) the aggregate unused
         Commitments under the Term Loan Facility at such time and (d) the
         aggregate Unused Working Capital Commitments at such time and (ii)
         Lenders owed or holding at least a majority in interest of the sum of
         (a) the aggregate principal amount of the AXELs Series A Advances and
         AXELs Series B Advances outstanding at such time and (b) the aggregate
         unused Commitments under the AXELs Series A Facility and AXELs Series B
         Facility at such time; provided, however, that if any Lender shall be a
         Defaulting Lender at such time, there shall be excluded from the
         determination of Required Lenders at such time (A) the aggregate
         principal amount of the Advances owing to such Lender (in its capacity
         as a Lender) and outstanding at such time, (B) such Lender's Pro Rata
         Share of the aggregate Available Amount of all Letters of Credit
         outstanding at such time, (C) the aggregate unused Term Loan, AXELs
         Series A and AXELs Series B Commitments of such Lender at such time and
         (D) the Unused Working Capital Commitment of such Lender at such time.
         For purposes of this definition, the aggregate principal amount of
         Letter of Credit Advances owing to any Issuing Bank and the Available
         Amount of each Letter of Credit shall be considered to be owed to the
         Working Capital Lenders ratably in accordance with their respective
         Working Capital Commitments.

                  "Responsible Officer" means any officer of any Loan Party or
         any of its Subsidiaries.

                  "Rolling Period" means, with respect to any fiscal quarter of
         the Borrower and its Subsidiaries, such fiscal quarter and the three
         consecutive immediately preceding fiscal quarters.

                  "Second Amendment" means Amendment No. 2 to the Second Credit
         Agreement dated as of June 30, 1997 among the Borrower, the Lenders
         parties thereto and the Agents, and the Consent thereto dated as of
         June 30, 1997 by the Loan Parties (other than the Borrower).

                  "Second Amendment Documents" means (a) the Second Amendment,
         (b) the Notes executed in connection therewith and (c) the Second
         Mortgage Amendments, in each case as amended, supplemented or otherwise
         modified from time to time.

                  "Second Closing Date" means the date on which the New AXELs
         Series B Advances are made by the New AXELs Series B Lenders following
         satisfaction or waiver of the conditions set forth in Sections 3.02 and
         3.04.


                  "Second Credit Agreement" has the meaning specified in the
         Preliminary Statements.

                  "Second Mortgage Amendments" means the mortgage amendments
         executed in connection with the Second Amendment.

                  "Second Prepayment Date" has the meaning specified in Section
         2.06(b)(iv).

                  "Secured Parties" means the Arrangers, the Agents, the Lender
         Parties and the Hedge Banks.

                  "Security Agreement" has the meaning specified in Section
         3.01(p)(vii).

                  "Sellers" has the meaning specified in the Preliminary
         Statements.

                  "Senior Subordinated Discount Notes" means the senior
         subordinated discounted notes of the Borrower in an aggregate principal
         amount of $452,000,000 issued pursuant to the Senior Subordinated
         Discount Notes Indenture.

                  "Senior Subordinated Discount Notes Indenture" means the
         Indenture dated as of March 21, 1996 among the Borrower, the guarantors
         party thereto and American Bank National Association, as Trustee,
         pursuant to which the Senior Subordinated Discount Notes are issued, as
         amended, supplemented or otherwise modified from time to time in
         accordance with its terms, to the extent permitted in accordance with
         the Loan Documents.

                  "Senior Subordinated Notes" means the senior subordinated
         notes of the Borrower in an aggregate principal amount of $250,000,000
         issued pursuant to the Senior Subordinated Notes Indenture.

                  "Senior Subordinated Notes Indenture" means the Indenture
         dated as of March 21, 1996 among the Borrower, the guarantors party
         thereto and IBJ Schroder Bank & Trust Company, as Trustee, pursuant to
         which the Senior Subordinated Notes are issued, as amended,
         supplemented or otherwise modified from time to time in accordance with
         its terms, to the extent permitted in accordance with the Loan
         Documents.

                  "Single Employer Plan" means a single employer plan, as
         defined in Section 4001(a)(15) of ERISA, that is subject to ERISA and
         that (a) is maintained for employees of any Loan Party or any ERISA
         Affiliate and no Person other than the Loan Parties and the ERISA
         Affiliates or (b) was so maintained and in respect of which any Loan
         Party or any ERISA Affiliate could have liability under Section 4069 of
         ERISA in the event such plan has been or were to be terminated.

                  "Solvent" and "Solvency" mean, with respect to any Person on a
         particular date, that on such date (a) the fair value of the property
         of such Person is greater than the total amount of liabilities,
         including, without limitation, contingent liabilities, of such Person,
         (b) the present fair salable value of the assets of such Person is not
         less than the amount that will be required to pay the probable
         liability of such Person on its debts as they become absolute and
         matured, (c) such Person does not intend to, and does not believe that
         it will, incur debts or liabilities beyond such Person's ability to pay
         such debts and liabilities as they mature and (d) such Person is not
         engaged in business or a transaction, and is not about to engage in
         business or a transaction, for which such Person's property would
         constitute an unreasonably small capital. The amount of contingent
         liabilities at any time shall be computed as the amount that, in the
         light of all the facts and circumstances existing at such time,
         represents the amount that can reasonably be expected to become an
         actual or matured liability.

                  "Specified Revenues" means at any time (a) in the case of any
         acquisition of a New Center, aggregate revenues of such New Center for
         the immediately preceding 12-month period, and (b) in the case of any
         construction of a New Center, an amount equal to (i) at any time during
         its first 12 full months of operations, the aggregate revenues of such
         New Center for each full month it has operated times twelve divided by
         the number of full months such New Center has operated and (ii) at any
         time thereafter, aggregate revenues of such New Center for the
         immediately preceding 12-month period.

                  "Standby Letter of Credit" means any Letter of Credit issued
         under the Letter of Credit Facility, other than a Trade Letter of
         Credit.

                  "Stockholders' Agreement" means the Stockholders' Agreement
         set forth on Schedule III hereto, as amended, supplemented or otherwise
         modified from time to time in accordance with its terms, to the extent
         permitted in accordance with the Loan Documents.

                  "Subordinated Debt" means the Subordinated Notes and any other
         Debt of any Loan Party that is subordinated to the Obligations of such
         Loan Party under the Loan Documents on, and that otherwise contains,
         terms and conditions satisfactory to the Required Lenders.


                  "Subordinated Debt Documents" means the Subordinated Notes
         Indentures and all other agreements, indentures and instruments
         pursuant to which Subordinated Debt is issued.

                  "Subordinated Notes" means the Senior Subordinated Notes and
         the Senior Subordinated Discount Notes.

                  "Subordinated Notes Indentures" means the Senior Subordinated
         Notes Indenture and the Senior Subordinated Discount Notes Indenture.

                  "Subsidiary" of any Person means any corporation, partnership,
         joint venture, limited liability company, trust or estate of which (or
         in which) more than 50% of (a) the issued and outstanding capital stock
         having ordinary voting power to elect a majority of the Board of
         Directors of such corporation (irrespective of whether at the time
         capital stock of any other class or classes of such corporation shall
         or might have voting power upon the occurrence of any contingency), (b)
         the interest in the capital or profits of such partnership, joint
         venture or limited liability company or (c) the beneficial interest in
         such trust or estate is at the time directly or indirectly owned or
         controlled by such Person, by such Person and one or more of its other
         Subsidiaries or by one or more of such Person's other Subsidiaries.

                  "Subsidiary Guarantors" means the Subsidiaries of the Borrower
         listed on Schedule II hereto and each other Subsidiary of the Borrower
         that shall be required to execute and deliver a guaranty pursuant to
         Section 5.01(n).

                  "Subsidiary Guaranty" has the meaning specified in Section
         3.01(p)(xi).

                  "Support Agreement" means the letter agreement dated April 11,
         1996 between the Sellers and Holdings, as amended, supplemented or
         otherwise modified from time to time in accordance with its terms, to
         the extent permitted in accordance with the Loan Documents.

                  "Support Amount" means, for any period, the amount that, in
         the judgment of a Designated Financial Officer, would have been payable
         to the Borrower by the Sellers during such period pursuant to the
         Support Agreement if the Support Agreement were then still in effect,
         provided, however, that the aggregate of such amounts shall not in any
         event exceed $17,500,000 from and after the First Closing Date.

                  "Surviving Debt" has the meaning specified in Section 3.01(e).


                  "Syndication Agent" has the meaning specified in the recital
         of parties to this Agreement.

                  "Tax Agreement" means the Tax Allocation Agreement dated as of
         May 1, 1996 among Parent, the Borrower and the Borrower's Subsidiaries
         (other than Foreign Subsidiaries), as amended, supplemented or
         otherwise modified from time to time in accordance with its terms, to
         the extent permitted in accordance with the Loan Documents.

                  "Tax Certificate" has the meaning specified in Section
         5.03(o).

                  "Taxes" has the meaning specified in Section 2.12(a).

                  "Term Facilities" means the Term Loan Facility, the AXELs
         Series A Facility and the AXELs Series B Facility.

                  "Term Loan Advance" has the meaning specified in Section
         2.01(a).

                  "Term Loan Borrowing" means a borrowing consisting of
         simultaneous Term Loan Advances of the same Type made by the Term Loan
         Lenders.

                  "Term Loan Commitment" means, with respect to any Term Loan
         Lender at any time, the amount set forth opposite such Lender's name on
         Schedule I hereto under the caption "Term Loan Commitment" or, if such
         Lender has entered into one or more Assignments and Acceptances, set
         forth for such Lender in the Register maintained by the Administrative
         Agent pursuant to Section 8.07(d) as such Lender's "Term Loan
         Commitment", as such amount may be reduced at or prior to such time
         pursuant to Section 2.05.

                  "Term Loan Facility" means, at any time, the aggregate amount
         of the Term Loan Lenders' Term Loan Commitments at such time.

                  "Term Loan Lender" means any Lender that has a Term Loan
         Commitment.

                  "Term Loan Note" means a promissory note of the Borrower
         payable to the order of any Term Loan Lender, in substantially the form
         of Exhibit A-1 hereto, evidencing the indebtedness of the Borrower to
         such Lender resulting from the Term Loan Advance made by such Lender.


                  "Termination Date" means (a) with respect to the Term Loan
         Facility, the Working Capital Facility and the Letter of Credit
         Facility, the earlier of March 31, 2002 and the date of termination in
         whole of the Term Loan Commitments, the Working Capital Commitments and
         the Letter of Credit Commitments pursuant to Section 2.05 or 6.01, (b)
         with respect to the AXELs Series A Facility, the earlier of March 31,
         2003 and the date of termination in whole of the AXELs Series A
         Commitments pursuant to Section 2.05 or 6.01 and (c) with respect to
         the AXELs Series B Facility, the earlier of March 31, 2004 and the date
         of termination in whole of the AXELs Series B Commitments pursuant to
         Section 2.05 or 6.01.

                  "Third Amendment" means Amendment No. 1 dated November 7, 1997
         to the Existing Credit Agreement among the Borrower, the Lenders
         parties thereto and the Agents, and the Consent thereto dated as of
         November 7, 1997 by the Loan Parties (other than the Borrower).

                  "Third Amendment Documents" means (a) the Third Amendment, (b)
         the Working Capital Notes issued pursuant to Section 3.05(f)(i) and (c)
         the Third Mortgage Amendments.

                  "Third Closing Date" means June 30, 1997.

                  "Third Mortgage Amendments" means the mortgage amendments, if
         any, executed in connection with the Third Amendment.

                  "Total Debt/EBITDA Ratio" means, at any date of determination,
         the ratio of Consolidated total Debt (other than Hedge Agreements) of
         the Borrower and its Subsidiaries as at the end of the immediately
         preceding Rolling Period to Modified Consolidated EBITDA of the
         Borrower and its Subsidiaries for such Rolling Period.

                  "Trade Letter of Credit" means any Letter of Credit that is
         issued under the Letter of Credit Facility for the benefit of a
         supplier of Inventory to the Borrower or any of its Subsidiaries to
         effect payment for such Inventory, the conditions to drawing under
         which include the presentation to the Issuing Bank that issued such
         Letter of Credit of negotiable bills of lading, invoices and related
         documents sufficient, in the judgment of such Issuing Bank, to create a
         valid and perfected lien on or security interest in such Inventory,
         bills of lading, invoices and related documents in favor of such
         Issuing Bank.

                  "Type" refers to the distinction between Advances bearing
         interest at the Base Rate and Advances bearing interest at the
         Eurodollar Rate.


                  "Unused Working Capital Commitment" means, with respect to any
         Working Capital Lender at any time, (a) such Lender's Working Capital
         Commitment at such time minus (b) the sum of (i) the aggregate
         principal amount of all Working Capital Advances and Letter of Credit
         Advances made by such Lender (in its capacity as a Lender) and
         outstanding at such time, plus (ii) such Lender's Pro Rata Share of (A)
         the aggregate Available Amount of all Letters of Credit outstanding at
         such time and (B) the aggregate principal amount of all Letter of
         Credit Advances made by the Issuing Banks pursuant to Section 2.03(c)
         and outstanding at such time.

                  "Voting Stock" means capital stock issued by a corporation, or
         equivalent interests in any other Person, the holders of which are
         ordinarily, in the absence of contingencies, entitled to vote for the
         election of directors (or persons performing similar functions) of such
         Person, even if the right so to vote has been suspended by the
         happening of such a contingency.

                  "Welfare Plan" means a welfare plan, as defined in Section
         3(1) of ERISA, that is subject to ERISA and is maintained for employees
         of any Loan Party or in respect of which any Loan Party could have
         liability.

                  "Withdrawal Liability" has the meaning specified in Part I of
         Subtitle E of Title IV of ERISA.

                  "Working Capital Advance" has the meaning specified in Section
         2.01(d).

                  "Working Capital Borrowing" means a borrowing consisting of
         simultaneous Working Capital Advances of the same Type made by the
         Working Capital Lenders.

                  "Working Capital Commitment" means, with respect to any
         Working Capital Lender at any time, the amount set forth opposite such
         Lender's name on Schedule I hereto under the caption "Working Capital
         Commitment" or, if such Lender has entered into one or more Assignments
         and Acceptances, set forth for such Lender in the Register maintained
         by the Administrative Agent pursuant to Section 8.07(d) as such
         Lender's "Working Capital Commitment", as such amount may be reduced at
         or prior to such time pursuant to Section 2.05.

                  "Working Capital Facility" means, at any time, the aggregate
         amount of the Working Capital Lenders' Working Capital Commitments at
         such time.

                  "Working Capital Lender" means any Lender that has a Working
         Capital Commitment.


                  "Working Capital Note" means a promissory note of the Borrower
         payable to the order of any Working Capital Lender, in substantially
         the form of Exhibit A-4 hereto, evidencing the aggregate indebtedness
         of the Borrower to such Lender resulting from the Working Capital
         Advances made by such Lender.

                  SECTION 1.02. Computation of Time Periods.02. Computation of
Time Periods. In this Agreement in the computation of periods of time from a
specified date to a later specified date, the word "from" means "from and
including" and the words "to" and "until" each mean "to but excluding".

                  SECTION 1.03. Accounting Terms.03. Accounting Terms. All
accounting terms not specifically defined herein shall be construed in
accordance with generally accepted accounting principles consistent with those
applied in the preparation of the financial statements referred to in Section
4.01(f) ("GAAP").


                                   ARTICLE II

                       AMOUNTS AND TERMS OF THE ADVANCES
                           AND THE LETTERS OF CREDIT

                  SECTION 2.01. The Advances. (a) The Term Loan Advances. Each
Term Loan Lender severally agrees, on the terms and conditions hereinafter set
forth, to make a single advance (a "Term Loan Advance") to the Borrower on the
First Closing Date in an amount not to exceed such Lender's Term Loan Commitment
at such time. The Term Loan Borrowing shall consist of Term Loan Advances made
simultaneously by the Term Loan Lenders ratably according to their Term Loan
Commitments. Amounts borrowed under this Section 2.01(a) and repaid or prepaid
may not be reborrowed.

                  (b) The AXELs Series A Advances. Each AXELs Series A Lender
severally agrees, on the terms and conditions hereinafter set forth, to make a
single advance (an "AXELs Series A Advance") to the Borrower on the First
Closing Date in an amount not to exceed such Lender's AXELs Series A Commitment
at such time. The AXELs Series A Borrowing shall consist of AXELs Series A
Advances made simultaneously by the AXELs Series A Lenders ratably according to
their AXELs Series A Commitments. Amounts borrowed under this Section 2.01(b)
and repaid or prepaid may not be reborrowed.

                  (c) The AXELs Series B Advances. (i) Each Existing AXELs
Series B Lender severally agrees, on the terms and conditions hereinafter set
forth, to make a single advance (an "Existing AXELs Series B Advance") to the
Borrower on the First Closing Date in an amount not to exceed such Lender's
Existing AXELs Series B Commitment at such time. The AXELs Series B Borrowing
made on the First Closing Date shall consist of Existing AXELs Series B Advances
made simultaneously by the Existing AXELs Series B Lenders ratably according to
their Existing AXELs Series B Commitments.


                  (ii) Each New AXELs Series B Lender severally agrees, on the
terms and conditions hereinafter set forth, to make a single advance (a "New
AXELs Series B Advance") to the Borrower on the Second Closing Date in an amount
not to exceed such Lender's New AXELs Series B Commitment at such time. The
AXELs Series B Borrowing made on the Second Closing Date shall consist of New
AXELs Series B Advances made simultaneously by the New AXELs Series B Lenders
ratably according to their New AXELs Series B Commitments. On the Second Closing
Date, all Existing AXELs Series B Advances then outstanding shall automatically
Convert to Advances with Interest Periods ending on the same day or days as the
Interest Period or Periods selected by the Borrower for the New AXELs Series B
Advances, in such amounts such that after giving effect to such Conversion,
AXELs Series B Advances comprising part of the same Borrowing shall be owing to
the AXELs Series B Lenders ratably according to their AXELs Series B
Commitments. The Borrower shall, on the Second Closing Date, pay any amounts
owing pursuant to Section 8.04(c) as a result of such Conversion.

                  (iii) Amounts borrowed under this Section 2.01(c) and repaid
or prepaid may not be reborrowed.

                  (d) The Working Capital Advances. (i) Effective as of the
Fourth Closing Date, all Acquisition Advances and Acquisition B Advances (each
as defined in the Existing Credit Agreement) outstanding under the Existing
Credit Agreement and all but $130,000,000 of the Term Loan Advances (as defined
in the Existing Credit Agreement) outstanding under the Existing Credit
Agreement (the aggregate amount of all such Advances less the aggregate amount
of Advances prepaid pursuant to Section 2.06(b)(ii)(B) being the "Outstanding
Amount") shall automatically be converted into Working Capital Advances
hereunder and paid in full as hereinafter set forth. In connection therewith, on
the Fourth Closing Date, each Working Capital Lender shall, in accordance with
Section 2.02(a), make available for the account of its Applicable Lending Office
to the Administrative Agent at the Administrative Agent's Account, in same day
funds, such Lender's Pro Rata Share of the Outstanding Amount. Promptly upon the
Administrative Agent's receipt of the funds referred to in the immediately
preceding sentence, the Administrative Agent shall cause to be distributed like
funds to prepay the Acquisition Lenders, the Acquisition B Lenders and the Term
Lenders (each as defined in the Existing Credit Agreement) in such amounts as
may be necessary such that after giving effect thereto, the Working Capital
Advances that were, prior to conversion in accordance with the first sentence of
this Section 2.01(d)(i), Acquisition Advances, Acquisition B Advances and Term
Loan Advances shall have been paid in full. The Borrower shall, on the Fourth
Closing Date, pay any amounts owing pursuant to Section 8.04(c) as a result of
such prepayment.


                  (ii) Each Working Capital Lender severally agrees, on the
terms and conditions hereinafter set forth, to make advances (each a "Working
Capital Advance") to the Borrower from time to time on any Business Day during
the period from the First Closing Date until the Termination Date in an amount
for each such Advance not to exceed such Lender's Unused Working Capital
Commitment at such time (subject, however, to the terms of Section 2.01(f)).
Each Working Capital Borrowing shall be in an aggregate amount of $1,000,000 or
an integral multiple of $500,000 in excess thereof and shall consist of Working
Capital Advances made simultaneously by the Working Capital Lenders ratably
according to their Working Capital Commitments. Within the limits of each
Working Capital Lender's Unused Working Capital Commitment in effect from time
to time, the Borrower may borrow under this Section 2.01(d)(ii), prepay pursuant
to Section 2.06(a) and reborrow under this Section 2.01(d)(ii).

                  (e) Letters of Credit. Each Issuing Bank severally agrees, on
the terms and conditions hereinafter set forth, to issue (or cause its Affiliate
to issue on its behalf) letters of credit (the "Letters of Credit") for the
account of the Borrower from time to time on any Business Day during the period
from the First Closing Date until 60 days before the Termination Date (i) in an
aggregate Available Amount for all Letters of Credit issued by such Issuing Bank
not to exceed at any time such Issuing Bank's Letter of Credit Commitment at
such time and (ii) in an Available Amount for each such Letter of Credit not to
exceed the lesser of (x) the Letter of Credit Facility at such time and (y) the
Unused Working Capital Commitments of the Working Capital Lenders at such time.
No Letter of Credit shall have an expiration date (including all rights of the
Borrower or the beneficiary to require renewal) later than the earlier of 30
days before the Termination Date and (A) in the case of a Standby Letter of
Credit, one year after the date of issuance thereof and (B) in the case of a
Trade Letter of Credit, 60 days after the date of issuance thereof. Within the
limits of the Letter of Credit Facility, and subject to the limits referred to
above, the Borrower may request the issuance of Letters of Credit under this
Section 2.01(e), repay any Letter of Credit Advances resulting from drawings
thereunder pursuant to Section 2.03(c) and request the issuance of additional
Letters of Credit under this Section 2.01(e).

                  (f) Set Aside of Working Capital Commitments. Each Working
Capital Lender's Pro Rata Share of the aggregate Unused Working Capital
Commitments shall be reserved and shall not be available to be borrowed except
for the purpose set forth below in an amount equal to the aggregate amount of
Obligations guaranteed by the Borrower pursuant to Section 5.02(b)(i)(C) during
any time that such guaranteed Obligations exceed $1,000,000 outstanding and the
aggregate Unused Working Capital Commitments shall be less than $15,000,000, and
shall be available to be borrowed solely for purposes of financing such
guaranteed Obligations of the Borrower.

                  (g) Assignment. Effective as of the Fourth Closing Date, each
Existing Lender (other than the AXELs Series A Lenders and the AXELs Series B
Lenders) hereby sells and assigns all of its rights in and to, and all of its
obligations under, each Existing Advance owing to it and the Existing Commitment
held by it to the Initial Lenders (other than the AXELs Series A Lenders and the
AXELs Series B Lenders) and each such Initial Lender hereby purchases and
assumes, pro rata based on such Initial Lender's Commitments, all of such
Existing Lenders' rights in and to, and all of their obligations under, the
Existing Advances and the Existing Commitments, such that after giving effect to
all such assignments, each such Initial Lender's Commitment under each Facility
is in an amount equal to the amount specified as such Initial Lender's
Commitment under each such Facility on Schedule I hereto. As of the Fourth
Closing Date, immediately prior to giving effect to any assignment under this
Agreement as of such date pursuant to this Section 2.01(g), each such Existing
Lender represents and warrants, as to the assignment effected by such Existing
Lender by this Agreement, that as of the Fourth Closing Date such Existing
Lender is the legal and beneficial owner of such interest being assigned by it
hereunder and that such interest is free and clear of any adverse claim created
by such Existing Lender.


                  SECTION 2.02. Making the Advances. (a) Except as otherwise
provided in Section 2.02(b) or 2.03, each Borrowing shall be made on notice,
given not later than 11:00 A.M. (New York City time) on the third Business Day
prior to the date of the proposed Borrowing in the case of a Borrowing
consisting of Eurodollar Rate Advances, or not later than 9:00 A.M. (New York
City time) on the date of the proposed Borrowing in the case of a Borrowing
consisting of Base Rate Advances, by the Borrower to the Administrative Agent,
which shall give to each Appropriate Lender prompt notice thereof by telex or
telecopier. Each such notice of a Borrowing (a "Notice of Borrowing") shall be
by telephone, confirmed immediately in writing, or telex or telecopier, in
substantially the form of Exhibit B hereto, specifying therein the requested (i)
date of such Borrowing, (ii) Facility under which such Borrowing is to be made,
(iii) Type of Advances comprising such Borrowing, (iv) aggregate amount of such
Borrowing and (v) in the case of a Borrowing consisting of Eurodollar Rate
Advances, initial Interest Period for each such Advance. Each Appropriate Lender
shall, before 1:00 P.M. (New York City time) on the date of such Borrowing, make
available for the account of its Applicable Lending Office to the Administrative
Agent at the Administrative Agent's Account, in same day funds, such Lender's
ratable portion of such Borrowing in accordance with the respective Commitments
under the applicable Facility of such Lender and the other Appropriate Lenders.
After the Administrative Agent's receipt of such funds and upon fulfillment of
the applicable conditions set forth in Article III, the Administrative Agent
will make such funds available to the Borrower by crediting the Borrower's
Account; provided, however, that, in the case of any Working Capital Borrowing,
the Administrative Agent shall first make a portion of such funds equal to the
aggregate principal amount of any Letter of Credit Advances made by any Issuing
Bank and by any other Working Capital Lender and outstanding on the date of such
Working Capital Borrowing, plus interest accrued and unpaid thereon to and as of
such date, available to such Issuing Bank and such other Working Capital Lenders
for repayment of such Letter of Credit Advances.


                  (b) Anything in subsection (a) above to the contrary
notwithstanding, (i) the Borrower may not select Eurodollar Rate Advances for
the initial Borrowing hereunder unless the Borrower shall have agreed, in
writing, prior to or concurrently with the giving of the applicable Notice of
Borrowing, to be bound by the terms of Section 2.02(c) or for any Borrowing if
the aggregate amount of such Borrowing is less than $5,000,000 or if the
obligation of the Appropriate Lenders to make Eurodollar Rate Advances shall
then be suspended pursuant to Section 2.09 or Section 2.10 and (ii) the Term
Loan Advances may not be outstanding as part of more than 5 separate Borrowings,
the AXELs Series A Advances may not be outstanding as part of more than 5
separate Borrowings, the AXELs Series B Advances may not be outstanding as part
of more than 5 separate Borrowings and the Working Capital Advances made on any
date may not be outstanding as part of more than 25 separate Borrowings.

                  (c) Each Notice of Borrowing shall be irrevocable and binding
on the Borrower. In the case of any Borrowing that the related Notice of
Borrowing specifies is to be comprised of Eurodollar Rate Advances, the Borrower
shall indemnify each Appropriate Lender against any loss, cost or expense
incurred by such Lender as a result of any failure to fulfill on or before the
date specified in such Notice of Borrowing for such Borrowing the applicable
conditions set forth in Article III, including, without limitation, any loss
(including loss of anticipated profits), cost or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by such
Lender to fund the Advance to be made by such Lender as part of such Borrowing
when such Advance, as a result of such failure, is not made on such date.

                  (d) Unless the Administrative Agent shall have received notice
from an Appropriate Lender prior to the date of any Borrowing under a Facility
under which such Lender has a Commitment that such Lender will not make
available to the Administrative Agent such Lender's ratable portion of such
Borrowing, the Administrative Agent may assume that such Lender has made such
portion available to the Administrative Agent on the date of such Borrowing in
accordance with subsection (a) or (b) of this Section 2.02 and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower on such date a corresponding amount. If and to the extent that such
Lender shall not have so made such ratable portion available to the
Administrative Agent, such Lender and the Borrower severally agree to repay or
pay to the Administrative Agent forthwith on demand such corresponding amount
and to pay interest thereon, for each day from the date such amount is made
available to the Borrower until the date such amount is repaid or paid to the
Administrative Agent, at (i) in the case of the Borrower, the interest rate
applicable at such time under Section 2.07 to Advances comprising such Borrowing
and (ii) in the case of such Lender, the Federal Funds Rate. If such Lender
shall pay to the Administrative Agent such corresponding amount, such amount so
paid shall constitute such Lender's Advance as part of such Borrowing for all
purposes.


                  (e) The failure of any Lender to make the Advance to be made
by it as part of any Borrowing shall not relieve any other Lender of its
obligation, if any, hereunder to make its Advance on the date of such Borrowing,
but no Lender shall be responsible for the failure of any other Lender to make
the Advance to be made by such other Lender on the date of any Borrowing.

                  SECTION 2.03. Issuance of and Drawings and Reimbursement Under
Letters of Credit. (a) Request for Issuance. Each Letter of Credit shall be
issued upon notice, given not later than 11:00 A.M. (New York City time) on the
fifth Business Day prior to the date of the proposed issuance of such Letter of
Credit, by the Borrower to any Issuing Bank, which shall give to the
Administrative Agent and each Working Capital Lender prompt notice thereof by
telex or telecopier. Each such notice of issuance of a Letter of Credit (a
"Notice of Issuance") shall be by telephone, confirmed immediately in writing,
or telex or telecopier, specifying therein the requested (A) date of such
issuance (which shall be a Business Day), (B) Available Amount of such Letter of
Credit, (C) expiration date of such Letter of Credit, (D) name and address of
the beneficiary of such Letter of Credit and (E) form of such Letter of Credit,
and shall be accompanied by such application and agreement for letter of credit
as such Issuing Bank may specify to the Borrower for use in connection with such
requested Letter of Credit (a "Letter of Credit Agreement"). If (x) the
requested form of such Letter of Credit is acceptable to such Issuing Bank in
its sole discretion and (y) it has not received notice of objection to such
issuance from the Agents, such Issuing Bank will, upon fulfillment of the
applicable conditions set forth in Article III, make such Letter of Credit
available to the Borrower at its office referred to in Section 8.02 or as
otherwise agreed with the Borrower in connection with such issuance. In the
event and to the extent that the provisions of any Letter of Credit Agreement
shall conflict with this Agreement, the provisions of this Agreement shall
govern.

                  (b) Letter of Credit Reports. Each Issuing Bank shall furnish
(A) to the Administrative Agent on the first Business Day of each month a
written report summarizing issuance and expiration dates of Letters of Credit
issued by such Issuing Bank during the previous month and drawings during such
month under all Letters of Credit issued by such Issuing Bank, (B) to each
Working Capital Lender on the first Business Day of each month a written report
summarizing issuance and expiration dates of Letters of Credit issued by such
Issuing Bank during the preceding month and drawings during such month under all
Letters of Credit issued by such Issuing Bank and (C) to the Administrative
Agent and each Working Capital Lender on the first Business Day of each calendar
quarter a written report setting forth the average daily aggregate Available
Amount during the preceding calendar quarter of all Letters of Credit issued by
such Issuing Bank.


                  (c) Drawing and Reimbursement. The payment by any Issuing Bank
of a draft drawn under any Letter of Credit shall constitute for all purposes of
this Agreement the making by such Issuing Bank of a Letter of Credit Advance,
which shall be a Base Rate Advance, in the amount of such draft. Upon payment by
any Issuing Bank of a draft drawn under any Letter of Credit, such Issuing Bank
shall give prompt notice thereof to the Borrower and the Administrative Agent.
Upon written demand by any Issuing Bank with an outstanding Letter of Credit
Advance, with a copy of such demand to the Administrative Agent, each Working
Capital Lender shall purchase from such Issuing Bank, and such Issuing Bank
shall sell and assign to each such Working Capital Lender, such Lender's Pro
Rata Share of such outstanding Letter of Credit Advance as of the date of such
purchase, by making available for the account of its Applicable Lending Office
to the Administrative Agent for the account of such Issuing Bank, by deposit to
the Administrative Agent's Account, in same day funds, an amount equal to the
portion of the outstanding principal amount of such Letter of Credit Advance to
be purchased by such Lender. Promptly after receipt thereof, the Administrative
Agent shall transfer such funds to such Issuing Bank. The Borrower hereby agrees
to each such sale and assignment. Each Working Capital Lender agrees to purchase
its Pro Rata Share of an outstanding Letter of Credit Advance on (i) the
Business Day on which demand therefor is made by the Issuing Bank which made
such Advance, provided notice of such demand is given not later than 11:00 A.M.
(New York City time) on such Business Day or (ii) the first Business Day next
succeeding such demand if notice of such demand is given after such time. Upon
any such assignment by an Issuing Bank to any other Working Capital Lender of a
portion of a Letter of Credit Advance, such Issuing Bank represents and warrants
to such other Lender that such Issuing Bank is the legal and beneficial owner of
such interest being assigned by it, free and clear of any liens, but makes no
other representation or warranty and assumes no responsibility with respect to
such Letter of Credit Advance, the Loan Documents or any Loan Party. If and to
the extent that any Working Capital Lender shall not have so made the amount of
such Letter of Credit Advance available to the Administrative Agent, such
Working Capital Lender agrees to pay to the Administrative Agent forthwith on
demand such amount together with interest thereon, for each day from the date of
demand by such Issuing Bank until the date such amount is paid to the
Administrative Agent, at the Federal Funds Rate for its account or the account
of such Issuing Bank, as applicable. If any Lender shall pay to the
Administrative Agent such amount for the account of such Issuing Bank on any
Business Day, such amount so paid in respect of principal shall constitute a
Letter of Credit Advance made by such Lender on such Business Day for purposes
of this Agreement, and the outstanding principal amount of the Letter of Credit
Advance made by such Issuing Bank shall be reduced by such amount on such
Business Day.

                  (d) Failure to Make Letter of Credit Advances. The failure of
any Lender to make the Letter of Credit Advance to be made by it on the date
specified in Section 2.03(c) shall not relieve any other Lender of its
obligation hereunder to make its Letter of Credit Advance on such date, but no
Lender shall be responsible for the failure of any other Lender to make the
Letter of Credit Advance to be made by such other Lender on such date.

                  SECTION 2.04. Repayment of Advances. (a)  Term Loan Advances.
The Borrower shall repay to the Administrative Agent for the ratable account of
the Term Loan Lenders the aggregate outstanding principal amount of the Term
Loan Advances on the following dates in the amounts indicated (which amounts
shall be reduced as a result of the application of prepayments in accordance
with the order of priority set forth in Section 2.06):




                           Date                                         Amount
                           ----                                         ------

               December 31, 1997                                   $7,500,000
               March 31, 1998                                      $7,500,000
               June 30, 1998                                       $3,125,000
               September 30, 1998                                  $3,125,000
               December 31, 1998                                   $9,375,000
               March 31, 1999                                      $9,375,000
               June 30, 1999                                       $3,750,000
               September 30, 1999                                  $3,750,000
               December 31, 1999                                  $11,250,000
               March 31, 2000                                     $11,250,000
               June 30, 2000                                       $3,750,000
               September 30, 2000                                  $3,750,000
               December 31, 2000                                  $11,250,000
               March 31, 2001                                     $11,250,000
               June 30, 2001                                       $3,750,000
               September 30, 2001                                  $3,750,000
               December 31, 2001                                  $11,250,000
               March 31, 2002                                     $11,250,000

provided, however, that the final principal installment shall be repaid on the
Termination Date and in any event shall be in an amount equal to the aggregate
principal amount of the Term Loan Advances outstanding on such date.

                  (b) AXELs Series A Advances. The Borrower shall repay to the
Administrative Agent for the ratable account of the AXELs Series A Lenders the
aggregate outstanding principal amount of the AXELs Series A Advances on the
following dates in the amounts indicated (which amounts shall be reduced as a
result of the application of prepayments in accordance with the order of
priority set forth in Section 2.06):



           Date                                         Amount
           ----                                         ------

           June 30, 1996                                         $250,000
           September 30, 1996                                    $250,000
           December 31, 1996                                     $750,000
           March 31, 1997                                        $750,000
           June 30, 1997                                         $250,000
           September 30, 1997                                    $250,000
           December 31, 1997                                     $750,000
           March 31, 1998                                        $750,000
           June 30, 1998                                         $250,000
           September 30, 1998                                    $250,000
           December 31, 1998                                     $750,000
           March 31, 1999                                        $750,000
           June 30, 1999                                         $250,000
           September 30, 1999                                    $250,000
           December 31, 1999                                     $750,000
           March 31, 2000                                        $750,000
           June 30, 2000                                         $250,000
           September 30, 2000                                    $250,000
           December 31, 2000                                     $750,000
           March 31, 2001                                        $750,000
           June 30, 2001                                      $10,000,000
           September 30, 2001                                 $10,000,000
           December 31, 2001                                  $30,000,000
           March 31, 2002                                     $30,000,000
           June 30, 2002                                      $12,500,000
           September 30, 2002                                 $12,500,000
           December 31, 2002                                  $37,500,000
           March 31, 2003                                     $37,500,000

provided, however, that the final principal installment shall be repaid on the
Termination Date and in any event shall be in an amount equal to the aggregate
principal amount of the AXELs Series A Advances outstanding on such date.

                  (c) AXELs Series B Advances. The Borrower shall repay to the
Administrative Agent for the ratable account of the AXELs Series B Lenders the
aggregate outstanding principal amount of the AXELs Series B Advances on the
following dates in the amounts indicated (which amounts shall be reduced as a
result of the application of prepayments in accordance with the order of
priority set forth in Section 2.06):



             Date                                         Amount
             ----                                         ------

             June 30, 1996                                         $150,000
             September 30, 1996                                    $150,000
             December 31, 1996                                     $450,000
             March 31, 1997                                        $843,940
             June 30, 1997                                         $281,310
             September 30, 1997                                    $281,310
             December 31, 1997                                     $843,940
             March 31, 1998                                        $843,940
             June 30, 1998                                         $281,310
             September 30, 1998                                    $281,310
             December 31, 1998                                     $843,940
             March 31, 1999                                        $843,940
             June 30, 1999                                         $281,310
             September 30, 1999                                    $281,310
             December 31, 1999                                     $843,940
             March 31, 2000                                        $843,940
             June 30, 2000                                         $281,310
             September 30, 2000                                    $281,310
             December 31, 2000                                     $843,940
             March 31, 2001                                        $843,940
             June 30, 2001                                         $281,310
             September 30, 2001                                    $281,310
             December 31, 2001                                     $843,940
             March 31, 2002                                        $843,940
             June 30, 2002                                         $281,310
             September 30, 2002                                    $281,310
             December 31, 2002                                     $843,940
             March 31, 2003                                        $843,940
             June 30, 2003                                      $15,612,880
             September 30, 2003                                 $15,612,880
             December 31, 2003                                  $46,838,640
             March 31, 2004                                     $46,838,640



provided, however, that the final principal installment shall be repaid on the
Termination Date and in any event shall be in an amount equal to the aggregate
principal amount of the AXELs Series B Advances outstanding on such date.

                  (d) Working Capital Advances. The Borrower shall repay to the
Administrative Agent for the ratable account of the Working Capital Lenders on
the Termination Date the aggregate outstanding principal amount of the Working
Capital Advances then outstanding.


                  (e) Letter of Credit Advances. (i) The Borrower shall repay to
the Administrative Agent for the account of each Issuing Bank and each other
Working Capital Lender that has made a Letter of Credit Advance on the earlier
of the second Business Day following the date on which such Letter of Credit is
drawn and the Termination Date the outstanding principal amount of each Letter
of Credit Advance made by each of them.

                  (ii) The Obligations of the Borrower under this Agreement, any
Letter of Credit Agreement and any other agreement or instrument relating to any
Letter of Credit shall be unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement, such Letter of Credit
Agreement and such other agreement or instrument under all circumstances,
including, without limitation, the following circumstances (it being understood
that any such payment by the Borrower is without prejudice to, and does not
constitute a waiver of, any rights the Borrower might have or might acquire as a
result of the payment by any Issuing Bank of any draft or the reimbursement by
the Borrower thereof):

                  (A) any lack of validity or enforceability of any Loan
         Document, any Letter of Credit Agreement, any Letter of Credit or any
         other agreement or instrument relating thereto (all of the foregoing
         being, collectively, the "L/C Related Documents");

                  (B) any change in the time, manner or place of payment of, or
         in any other term of, all or any of the Obligations of the Borrower in
         respect of any L/C Related Document or any other amendment or waiver of
         or any consent to departure from all or any of the L/C Related
         Documents;

                  (C) the existence of any claim, set-off, defense or other
         right that the Borrower may have at any time against any beneficiary or
         any transferee of a Letter of Credit (or any Persons for whom any such
         beneficiary or any such transferee may be acting), any Issuing Bank or
         any other Person, whether in connection with the transactions
         contemplated by the L/C Related Documents or any unrelated transaction;

                  (D) any statement or any other document presented under a
         Letter of Credit proving to be forged, fraudulent, invalid or
         insufficient in any respect or any statement therein being untrue or
         inaccurate in any respect;

                  (E) payment by any Issuing Bank under a Letter of Credit
         against presentation of a draft or certificate that does not strictly
         comply with the terms of such Letter of Credit;

                  (F) any exchange, release or non-perfection of any Collateral
         or other collateral, or any release or amendment or waiver of or
         consent to departure from any Guaranty or any other guarantee, for all
         or any of the Obligations of the Borrower in respect of the L/C Related
         Documents; or


                  (G) any other circumstance or happening whatsoever, whether or
         not similar to any of the foregoing, including, without limitation, any
         other circumstance that might otherwise constitute a defense available
         to, or a discharge of, the Borrower or a guarantor.

                  SECTION 2.05. Termination or Reduction of the Commitments. (a)
Optional. The Borrower may, upon at least five Business Days' notice to the
Administrative Agent, terminate in whole or reduce in part the unused portions
of the Term Loan Commitments, the AXELs Series A Commitments, the AXELs Series B
Commitments, the Letter of Credit Facility or the Unused Working Capital
Commitments; provided, however, that each partial reduction of a Facility (i)
shall be in an aggregate amount of $5,000,000 or an integral multiple of
$1,000,000 in excess thereof and (ii) shall be made ratably among the
Appropriate Lenders in accordance with their Commitments with respect to such
Facility.

                  (b) Mandatory. (i) On the date of the Term Loan Borrowing,
after giving effect to such Term Loan Borrowing, and from time to time
thereafter upon each repayment or prepayment of the Term Loan Advances, the
aggregate Term Loan Commitments of the Term Loan Lenders shall be automatically
and permanently reduced, on a pro rata basis, by an amount equal to the amount
by which the aggregate Term Loan Commitments immediately prior to such reduction
exceed the aggregate unpaid principal amount of the Term Loan Advances then
outstanding.

                  (ii) On the date of the AXELs Series A Borrowing, after giving
effect to such AXELs Series A Borrowing, and from time to time thereafter upon
each repayment or prepayment of the AXELs Series A Advances, the aggregate AXELs
Series A Commitments of the AXELs Series A Lenders shall be automatically and
permanently reduced, on a pro rata basis, by an amount equal to the amount by
which the aggregate AXELs Series A Commitments immediately prior to such
reduction exceed the aggregate unpaid principal amount of the AXELs Series A
Advances then outstanding.

                  (iii) On the date of each AXELs Series B Borrowing, after
giving effect to such AXELs Series B Borrowing, and from time to time thereafter
upon each repayment or prepayment of the AXELs Series B Advances, the aggregate
AXELs Series B Commitments of the AXELs Series B Lenders shall be automatically
and permanently reduced, on a pro rata basis, by an amount equal to the amount
by which the aggregate AXELs Series B Commitments immediately prior to such
reduction exceed the aggregate unpaid principal amount of the AXELs Series B
Advances then outstanding.


                  (iv) The Working Capital Facility shall be automatically and
permanently reduced on a pro rata basis on each date on which prepayment thereof
is required to be made pursuant to Section 2.06(b)(i), (ii), (iii) or (iv)
(other than pursuant to Section 2.06(b)(i)(B) and 2.06(b)(ii)(B)) in an amount
equal to the applicable Reduction Amount, provided that each such reduction of
the Working Capital Facility shall be made ratably among the Working Capital
Lenders in accordance with their Working Capital Commitments.

                  (v) The Letter of Credit Facility shall be permanently reduced
from time to time on the date of each reduction in the Working Capital Facility
by the amount, if any, by which the amount of the Letter of Credit Facility
exceeds the Working Capital Facility after giving effect to such reduction of
the Working Capital Facility.

                  SECTION 2.06.  Prepayments.  (a)  Optional.  The Borrower may,
upon at least five Business Days' notice to the Administrative Agent stating the
proposed date and aggregate principal amount of the prepayment (including,
without limitation, as a result of any refinancing in part or in whole of
amounts outstanding under the Loan Documents), and if such notice is given the
Borrower shall, prepay the outstanding aggregate principal amount of the
Advances comprising part of the same Borrowing in whole or ratably in part,
together with (i) accrued interest to the date of such prepayment on the
aggregate principal amount prepaid and (ii) in the case of any such prepayment
of any Advances other than Term Loan Advances, Working Capital Advances and
Letter of Credit Advances prior to the first anniversary of the First Closing
Date, a premium of 1-3/4% of the aggregate principal amount so prepaid, or on or
after the first anniversary of the First Closing Date but prior to the first
anniversary of the Fourth Closing Date, a premium of 1% of the aggregate
principal amount so prepaid; provided, however, that (x) each partial prepayment
shall be in an aggregate principal amount of $5,000,000 or an integral multiple
of $1,000,000 in excess thereof, (y) if any prepayment of a Eurodollar Rate
Advance shall be made on a date other than the last day of an Interest Period
therefor the Borrower shall also pay any amounts owing pursuant to Section
8.04(c) and (z) prepayments of the Term Facilities shall be made ratably among
such Facilities, to be applied to the installments of each such Facility on a
pro rata basis.

                  (b) Mandatory. (i) The Borrower shall, on the 90th day
following the end of each Fiscal Year, (A) if the Total Debt/EBITDA Ratio is
greater than or equal to 5.50:1.00, prepay an aggregate principal amount of the
Advances comprising part of the same Borrowings outstanding under the Term
Facilities in an amount equal to the Excess Cash Flow Amount for such Fiscal
Year and (B) if the Total Debt/EBITDA Ratio is less than 5.50:1.00, prepay an
aggregate principal amount of the Working Capital Advances outstanding on such
date in an amount equal to the Excess Cash Flow Amount for such Fiscal Year.
Each prepayment made pursuant to clause (A) above shall be applied ratably to
the Term Facilities in accordance with, and subject to the terms of, clause (iv)
below and each prepayment made pursuant to clause (B) above shall be applied to
the Working Capital Facility as set forth in clause (vii) below.


                  (ii) (A) The Borrower shall, on the date of receipt of the Net
Cash Proceeds by any Loan Party or any of its Subsidiaries from (I) the sale,
lease, transfer or other disposition of any assets of any Loan Party or any of
its Subsidiaries (other than any sale, lease, transfer or other disposition of
assets pursuant to clause (i), (ii), (iii), (iv) or (v) of Section 5.02(e) and
other than the sale of assets pursuant to clause (vi) of Section 5.02(e) to the
extent that the Net Cash Proceeds of such sale do not exceed, in the aggregate
from the First Closing Date, $10,000,000), (II) the incurrence or issuance by
any Loan Party or any of its Subsidiaries of any Debt (other than Debt incurred
or issued pursuant to clause (i), (ii) or (iii) of Section 5.02(b)) and (III)
any Extraordinary Receipt received by or paid to or for the account of any Loan
Party or any of its Subsidiaries and not otherwise included in clause (I) or
(II) above, prepay an aggregate principal amount of the Advances comprising part
of the same Borrowings equal to the amount of such Net Cash Proceeds. Each such
prepayment shall be applied first ratably to the Term Facilities in accordance
with, and subject to the terms of, clause (iv) below and second to the Working
Capital Facility as set forth in clause (vii) below.

         (B) The Borrower shall, on the date of receipt of the Net Cash Proceeds
by Parent from the sale or issuance by Parent of any capital stock or other
ownership or profit interest, any securities convertible into or exchangeable
for capital stock or other ownership or profit interest or any warrants, rights
or options to acquire capital stock or other ownership or profit interest, in
each case from the IPO, prepay an aggregate principal amount of the Working
Capital Advances comprising part of the same Borrowings in an amount equal to
sum of (I) the lesser of (x) $150,000,000 and (y) the sum of (1) $100,000,000
plus (2) to the extent such Net Cash Proceeds exceed $275,000,000 (such amount
being the "Excess Amount") an amount equal to 50% of the Excess Amount plus (II)
any Net Cash Proceeds not otherwise applied to prepay the Subordinated Notes as
provided in Section 5.02(k). Each such prepayment shall be applied to the
Working Capital Facility as set forth in clause (vii) below.

         (C) The Borrower shall, on the date of receipt (or such later date as
may be specified below) of the Net Cash Proceeds by Parent from the sale or
issuance by Parent of any capital stock or other ownership or profit interest,
any securities convertible into or exchangeable for capital stock or other
ownership or profit interest or any warrants, rights or options to acquire
capital stock or other ownership or profit interest, in each case as a result of
an equity offering following the IPO, prepay an aggregate principal amount of
the Advances comprising part of the same Borrowings in an amount equal to (1) if
Total Debt/EBITDA Ratio at such time is greater than or equal to 4.00:1.00, 50%
of the amount of such Net Cash Proceeds, (2) if Total Debt/EBITDA Ratio at such
time is less than 4.00:1.00 but greater than or equal to 3.00:1.00, 50% of the
amount by which such Net Cash Proceeds exceed the amount of such Net Cash
Proceeds used by the Borrower and its Subsidiaries to make Investments in
accordance with the provisions of Section 5.02(f) during the nine months
immediately following such date, payable 30 days after the nine month
anniversary of such date and (3) if the Total Debt/EBITDA Ratio at such time is
less than 3.00:1.00, zero. Each such prepayment, if any, shall be applied first
ratably to the Term Facilities in accordance with, and subject to the terms of,
clause (iv) below and second to the Working Capital Facility as set forth in
clause (vii) below.


                  (iii) Anything contained in this Section 2.06(b) to the
contrary notwithstanding, (A) if, following the occurrence of any "Asset Sale"
(as such term is defined in the Senior Subordinated Notes Indenture or the
Senior Subordinated Discount Notes Indenture) by any Loan Party or any of its
Subsidiaries, the Borrower is required to commit by a particular date (a
"Commitment Date") to apply or cause its Subsidiaries to apply an amount equal
to any of the "Net Proceeds" (as defined in the Senior Subordinated Notes
Indenture or the Senior Subordinated Discount Notes Indenture, as the case may
be) thereof in a particular manner, or to apply by a particular date (an
"Application Date") an amount equal to any such "Net Proceeds" in a particular
manner, in either case in order to excuse the Borrower from being required to
make an "Asset Sale Offer" (as defined in the Senior Subordinated Notes
Indenture or the Senior Subordinated Discount Notes Indenture, as the case may
be) in connection with such "Asset Sale," and the Borrower shall have failed to
so commit or to so apply an amount equal to such "Net Proceeds" at least 60 days
before the Commitment Date or the Application Date, as the case may be, or (B)
if the Borrower at any other time shall have failed to apply or commit or cause
to be applied an amount equal to any such "Net Proceeds," and, within 60 days
thereafter assuming no further application or commitment of an amount equal to
such "Net Proceeds" the Borrower would otherwise be required to make an "Asset
Sale Offer" in respect thereof, then in either such case the Borrower shall
immediately apply or cause to be applied an amount equal to such "Net Proceeds"
to the payment of the Advances in the manner set forth in Section 2.06(b)(ii) in
such amounts as shall excuse the Borrower from making any such "Asset Sale
Offer".


                  (iv) Prepayments of the Term Facilities pursuant to Section
2.06(b)(i), (ii) or (iii) shall be made ratably among such Facilities, to be
applied to the installments of each such Facility on a pro rata basis until such
installments are paid in full; provided, however, that with respect to
prepayments made prior to or on the second anniversary of the First Closing
Date, once prepayments in a principal amount of $25,000,000 or more in the
aggregate since the First Closing Date shall have been applied to the AXELs
Series A Facility and the AXELs Series B Facility then the Lenders under such
Facilities, at each such Lender's option, may elect not to accept such
prepayment, in which event the provisions of the next sentence shall apply. With
respect to such prepayments made prior to or on the second anniversary of the
First Closing Date, once the AXELs Series A Facility and the AXELs Series B
Facility shall have been prepaid in a principal amount of $25,000,000 in the
aggregate since the First Closing Date, then upon receipt by the Administrative
Agent of such prepayment, the amount of the prepayment that is available to
prepay such Facilities (subject to the proviso to the immediately preceding
sentence) shall be deposited in the Cash Collateral Account (the "First
Prepayment Amount"), pending application of such amount on the First Prepayment
Date and the Second Prepayment Date as set forth below and promptly after such
receipt (the date of such receipt being the "Receipt Date"), the Administrative
Agent shall give written notice to the AXELs Series A Lenders and the AXELs
Series B Lenders of the amount available to prepay the Advances and the date on
which such prepayment shall be made (the "First Prepayment Date"), which date
shall be 10 days after the Receipt Date. Any Lender declining such prepayment (a
"First Declining Lender") shall give written notice to the Administrative Agent
by 12:00 Noon (New York City time) on the Business Day immediately preceding the
First Prepayment Date. On the First Prepayment Date, an amount equal to that
portion of the First Prepayment Amount accepted by the AXELs Series A Lenders
and the AXELs Series B Lenders other than the First Declining Lenders (such
Lenders being the "First Accepting Lenders") to prepay Advances owing to such
First Accepting Lenders shall be withdrawn from the Cash Collateral Account and
applied to prepay Advances owing to such First Accepting Lenders on a pro rata
basis and any amounts that would otherwise have been applied to prepay Advances
owing to the First Declining Lenders (the "Second Prepayment Amount") shall
instead be retained in the Cash Collateral Account and offered to the First
Accepting Lenders to prepay Advances owing to such First Accepting Lenders. The
Administrative Agent shall, on or prior to the First Prepayment Date, give
written notice to the First Accepting Lenders of the Second Prepayment Amount
that is available to prepay the Advances owing to such First Accepting Lenders
and the date on which such prepayment shall be made (the "Second Prepayment
Date"), which date shall be 10 days after the First Prepayment Date. Any First
Accepting Lender declining such prepayment (a "Second Declining Lender") shall
give written notice to the Administrative Agent by 12:00 Noon (New York City
time) on the Business Day immediately preceding the Second Prepayment Date. On
the Second Prepayment Date, an amount equal to the Second Prepayment Amount
shall be withdrawn from the Cash Collateral Account and applied to prepay
Advances owing to the First Accepting Lenders other than the Second Declining
Lenders (such Lenders being the "Second Accepting Lenders") on a pro rata basis
and any amounts that would otherwise have been applied to prepay Advances owing
to Second Declining Lenders shall instead be applied first to prepay Advances
owing to the Term Loan Lenders on a pro rata basis and to the installments
thereof on a pro rata basis and second ratably to prepay the Working Capital
Facility as set forth in clause (vii) below and, if the Term Loan Facility and
Working Capital Facility shall have been paid in full and terminated, amounts
that would have been otherwise applied to prepay Advances under such Facilities
shall be applied instead to prepay Advances owing to the Second Accepting
Lenders.

                  (v) The Borrower shall, on each Business Day, prepay an
aggregate principal amount of the Working Capital Advances comprising part of
the same Borrowings and the Letter of Credit Advances equal to the amount by
which (A) the sum of the aggregate principal amount of (x) the Working Capital
Advances and (y) the Letter of Credit Advances then outstanding plus the
aggregate Available Amount of all Letters of Credit then outstanding exceeds (B)
the Working Capital Facility on such Business Day.

                  (vi) The Borrower shall, on each Business Day, pay to the
Administrative Agent for deposit in the L/C Cash Collateral Account an amount
sufficient to cause the aggregate amount on deposit in such Account to equal the
amount by which the aggregate Available Amount of all Letters of Credit then
outstanding exceeds the Letter of Credit Facility on such Business Day.

                  (vii) Prepayments of the Working Capital Facility made
pursuant to clause (i), (ii), (iii) or (iv) above shall be first applied to
prepay Letter of Credit Advances then outstanding until such Advances are paid
in full, second applied to prepay Working Capital Advances then outstanding
comprising part of the same Borrowings until such Advances are paid in full and
third, other than with respect to amounts prepaid pursuant to Section
2.06(b)(i)(B) or Section 2.06(b)(ii)(B), deposited in the L/C Cash Collateral
Account to cash collateralize 100% of the Available Amount of the Letters of
Credit then outstanding; and, in the case of prepayments of the Working Capital
Facility required pursuant to clause (i), (ii), (iii) or (iv) above, the amount
remaining (if any) after the prepayment in full of the Advances then outstanding
and the 100% cash collateralization of the aggregate Available Amount of Letters
of Credit then outstanding (the sum of such prepayment amounts, cash
collateralization amounts and remaining amount being referred to herein as the
"Reduction Amount") may be retained by the Borrower and, other than with respect
to amounts prepaid pursuant to Section 2.06(b)(i)(B) or Section 2.06(b)(ii)(B),
the Working Capital Facility shall be permanently reduced as set forth in
Section 2.05(b)(iv). Upon the drawing of any Letter of Credit for which funds
are on deposit in the L/C Cash Collateral Account, such funds shall be applied
to reimburse the relevant Issuing Bank or Working Capital Lenders, as
applicable.

                  (viii) Notwithstanding anything to the contrary contained in
subsection (b)(ii) of this Section 2.06, so long as no Default shall have
occurred and be continuing, if, on any date on which a prepayment of Advances
would otherwise be required pursuant to subsection (b)(ii) of this Section 2.06,
the aggregate amount of Net Cash Proceeds or other amounts otherwise required by
such subsection to be applied to prepay Advances on such date are less than or
equal to $1,000,000, the Borrower may defer such prepayment until the date on
which the aggregate amount of Net Cash Proceeds or other amounts otherwise
required by such subsection to be applied to prepay Advances exceeds $1,000,000.
During such deferral period, the Borrower may apply all or any part of such
aggregate amount to prepay Working Capital Advances and may, subject to the
fulfillment of the conditions set forth in Section 3.02, reborrow such amounts
(which amounts, to the extent originally constituting Net Cash Proceeds, shall
be deemed to retain their original character as Net Cash Proceeds when so
reborrowed) for application as required by this Section 2.06. Upon the
occurrence of a Default, the Borrower shall immediately prepay Advances in the
amount of all Net Cash Proceeds received by the Borrower and other amounts, as
applicable, that are required to be applied to prepay Advances by this Section
2.06 (without giving effect to the first and second sentences of this subsection
(b)(viii)) but which have not previously been so applied.


                  (ix) All prepayments under this subsection (b) shall be made
together with accrued interest to the date of such prepayment on the principal
amount prepaid.

                  SECTION 2.07.  Interest.  (a)  Scheduled Interest.  The
Borrower shall pay interest on the unpaid principal amount of each Advance owing
to each Lender from the date of such Advance until such principal amount shall
be paid in full, at the following rates per annum:

                  (i) Base Rate Advances. During such periods as such Advance is
         a Base Rate Advance, a rate per annum equal at all times to the sum of
         (A) the Base Rate in effect from time to time plus (B) the Applicable
         Margin in effect from time to time, payable in arrears quarterly on the
         first day of each July, October, January and April during such periods
         and on the date such Base Rate Advance shall be Converted or paid in
         full.

                  (ii) Eurodollar Rate Advances. During such periods as such
         Advance is a Eurodollar Rate Advance, a rate per annum equal at all
         times during each Interest Period for such Advance to the sum of (A)
         the Eurodollar Rate for such Interest Period for such Advance plus (B)
         the Applicable Margin in effect on the first day of such Interest
         Period, payable in arrears on the last day of such Interest Period and,
         if such Interest Period has a duration of more than three months, on
         each day that occurs during such Interest Period every three months
         from the first day of such Interest Period and on the date such
         Eurodollar Rate Advance shall be Converted or paid in full.

                  (b) Default Interest. Upon the occurrence and during the
continuance of a Default, the Borrower shall pay interest on (i) the unpaid
principal amount of each Advance owing to each Lender, payable in arrears on the
dates referred to in clause (a)(i) or (a)(ii) above and on demand, at a rate per
annum equal at all times to 2% per annum above the rate per annum required to be
paid on such Advance pursuant to clause (a)(i) or (a)(ii) above and (ii) to the
fullest extent permitted by law, the amount of any interest, fee or other amount
payable hereunder that is not paid when due, from the date such amount shall be
due until such amount shall be paid in full, payable in arrears on the date such
amount shall be paid in full and on demand, at a rate per annum equal at all
times to 2% per annum above the rate per annum required to be paid, in the case
of interest, on the Type of Advance on which such interest has accrued pursuant
to clause (a)(i) or (a)(ii) above, and, in all other cases, on Base Rate
Advances pursuant to clause (a)(i) above.

                  (c) Notice of Interest Rate. Promptly after receipt of a
Notice of Borrowing pursuant to Section 2.02(a), the Administrative Agent shall
give notice to the Borrower and each Appropriate Lender of the applicable
interest rate determined by the Administrative Agent for purposes of clause
(a)(i) or (ii).


                  SECTION 2.08.  Fees.  (a)  Commitment Fee.  The Borrower shall
pay to the Administrative Agent for the account of the Lenders a commitment fee,
from the date of the acceptance of the Initial Lenders' Commitments by the
Borrower in the case of each Initial Lender and from the effective date
specified in the Assignment and Acceptance pursuant to which it became a Lender
in the case of each other Lender until the Termination Date, payable in arrears
on the date of the initial Borrowing hereunder, thereafter quarterly on the
first day of each July, October, January and April, commencing January 1, 1998,
and on the Termination Date, at a rate per annum equal to 0.375% on the average
daily Unused Working Capital Commitment of such Lender during such quarter;
provided, however, that no commitment fee shall accrue on any of the Commitments
of a Defaulting Lender so long as such Lender shall be a Defaulting Lender.

                  (b) Letter of Credit Fees, Etc. (i) The Borrower shall pay to
the Administrative Agent for the account of each Working Capital Lender a
commission, payable in arrears quarterly on the first day of each July, October,
January and April, commencing July 1, 1996, and on the earliest to occur of the
full drawing, expiration, termination or cancellation of any Letter of Credit
and on the Termination Date, on such Lender's Pro Rata Share of the average
daily aggregate Available Amount during such quarter of all Letters of Credit
outstanding from time to time at a rate per annum equal to the Applicable Margin
for Eurodollar Rate Advances in effect from time to time.

                  (ii) The Borrower shall pay to each Issuing Bank, for its own
account, such commissions, issuance fees, fronting fees, transfer fees and other
fees and charges in connection with the issuance or administration of each
Letter of Credit as the Borrower and such Issuing Bank shall agree.

                  (c) Administrative Agent's Fees. The Borrower shall pay to the
Administrative Agent for its own account such fees as may from time to time be
agreed between the Borrower and the Administrative Agent.

                  SECTION 2.09. Conversion of Advances. (a) Optional. The
Borrower may on any Business Day, upon notice given to the Administrative Agent
not later than 11:00 A.M. (New York City time) on the third Business Day prior
to the date of the proposed Conversion and subject to the provisions of Section
2.10, Convert all or any portion of the Advances of one Type comprising the same
Borrowing into Advances of the other Type; provided, however, that any
Conversion of Eurodollar Rate Advances into Base Rate Advances shall be made
only on the last day of an Interest Period for such Eurodollar Rate Advances,
any Conversion of Base Rate Advances into Eurodollar Rate Advances shall be in
an amount not less than the minimum amount specified in Section 2.02(b), no
Conversion of any Advances shall result in more separate Borrowings than
permitted under Section 2.02(b) and each Conversion of Advances comprising part
of the same Borrowing under any Facility shall be made ratably among the
Appropriate Lenders in accordance with their Commitments under such Facility.
Each such notice of Conversion shall, within the restrictions specified above,
specify (i) the date of such Conversion, (ii) the Advances to be Converted and
(iii) if such Conversion is into Eurodollar Rate Advances, the duration of the
initial Interest Period for such Advances. Each notice of Conversion shall be
irrevocable and binding on the Borrower.


                  (b) Mandatory. (i) On the date on which the aggregate unpaid
principal amount of Eurodollar Rate Advances comprising any Borrowing shall be
reduced, by payment or prepayment or otherwise, to less than $5,000,000, such
Advances shall automatically Convert into Base Rate Advances.

                  (ii) If the Borrower shall fail to select the duration of any
Interest Period for any Eurodollar Rate Advances in accordance with the
provisions contained in the definition of "Interest Period" in Section 1.01, the
Administrative Agent will forthwith so notify the Borrower and the Appropriate
Lenders, whereupon each such Eurodollar Rate Advance will automatically, on the
last day of the then existing Interest Period therefor, Convert into a
Eurodollar Rate Advance with an Interest Period of one month.

                  (iii) Upon the occurrence and during the continuance of any
Default, (x) each Eurodollar Rate Advance will automatically, on the last day of
the then existing Interest Period therefor, Convert into a Base Rate Advance and
(y) the obligation of the Lenders to make, or to Convert Advances into,
Eurodollar Rate Advances shall be suspended.

                  SECTION 2.10. Increased Costs, Etc. (a) If, due to either (i)
the introduction of or any change in or in the interpretation of any law or
regulation or (ii) the compliance with any guideline or request from any central
bank or other governmental authority (whether or not having the force of law),
there shall be any increase in the cost to any Lender Party of agreeing to make
or of making, funding or maintaining Eurodollar Rate Advances or of agreeing to
issue or of issuing or maintaining or participating in Letters of Credit or of
agreeing to make or of making or maintaining Letter of Credit Advances
(excluding for purposes of this Section 2.10 any such increased costs resulting
from (i) Taxes or Other Taxes (as to which Section 2.12 shall govern) and (ii)
changes in the basis of taxation of overall net income or overall gross income
by the United States or by the foreign jurisdiction or state under the laws of
which such Lender Party is organized or has its Applicable Lending Office or any
political subdivision thereof), then the Borrower shall from time to time, upon
demand by such Lender Party (with a copy of such demand to the Administrative
Agent), pay to the Administrative Agent for the account of such Lender Party
additional amounts sufficient to compensate such Lender Party for such increased
cost; provided, however, that, before making any such demand, each Lender Party
agrees to use reasonable efforts (consistent with its internal policy and legal
and regulatory restrictions) to designate a different Applicable Lending Office
if the making of such a designation would avoid the need for, or reduce the
amount of, such increased cost and would not, in the reasonable judgment of such
Lender Party, be otherwise disadvantageous to such Lender Party. A certificate
as to the amount of such increased cost, submitted to the Borrower by such
Lender Party, shall be conclusive and binding for all purposes, absent manifest
error.


                  (b) If any Lender Party determines that either (i) the
enactment of or any change in or in the interpretation of any law or regulation
or (ii) the compliance with any guideline or request from any central bank or
other governmental authority (whether or not having the force of law) affects or
would affect the amount of capital required or expected to be maintained by such
Lender Party or any corporation controlling such Lender Party and that the
amount of such capital is increased by or based upon the existence of such
Lender Party's commitment to lend or to issue or participate in Letters of
Credit hereunder and other commitments of such type or the issuance or
maintenance of or participation in the Letters of Credit (or similar contingent
obligations), then, upon demand by such Lender Party or such corporation (with a
copy of such demand to the Administrative Agent), the Borrower shall pay to the
Administrative Agent for the account of such Lender Party, from time to time as
specified by such Lender Party, additional amounts sufficient to compensate such
Lender Party in the light of such circumstances, to the extent that such Lender
Party reasonably determines such increase in capital to be allocable to the
existence of such Lender Party's commitment to lend or to issue or participate
in Letters of Credit hereunder or to the issuance or maintenance of or
participation in any Letters of Credit; provided, however, that, before making
any such demand, each Lender Party agrees to use reasonable efforts (consistent
with its internal policy and legal and regulatory restrictions) to designate a
different Applicable Lending Office if the making of such a designation would
avoid the need for, or reduce the amount of, such additional amounts payable
under this subsection (b) and would not, in the reasonable judgment of such
Lender Party, be otherwise disadvantageous to such Lender Party. A certificate
as to such amounts submitted to the Borrower by such Lender Party shall be
conclusive and binding for all purposes, absent manifest error.

                  (c) If, with respect to any Eurodollar Rate Advances under any
Facility, Lenders owed at least 25% of the then aggregate unpaid principal
amount thereof notify the Administrative Agent that the Eurodollar Rate for any
Interest Period for such Advances will not adequately reflect the cost to such
Lenders of making, funding or maintaining their Eurodollar Rate Advances for
such Interest Period, the Administrative Agent shall forthwith so notify the
Borrower and the Appropriate Lenders, whereupon (i) each such Eurodollar Rate
Advance under any Facility will automatically, on the last day of the then
existing Interest Period therefor, Convert into a Base Rate Advance and (ii) the
obligation of the Appropriate Lenders to make, or to Convert Advances into,
Eurodollar Rate Advances shall be suspended until the Administrative Agent shall
notify the Borrower that such Lenders have determined that the circumstances
causing such suspension no longer exist.


                  (d) Notwithstanding any other provision of this Agreement, if
the introduction of or any change in or in the interpretation of any law or
regulation shall make it unlawful, or any central bank or other governmental
authority shall assert that it is unlawful, for any Lender or its Eurodollar
Lending Office to perform its obligations hereunder to make Eurodollar Rate
Advances or to continue to fund or maintain Eurodollar Rate Advances hereunder,
then, on notice thereof and demand therefor by such Lender to the Borrower
through the Administrative Agent, (i) each Eurodollar Rate Advance under each
Facility under which such Lender has a Commitment will automatically, upon such
demand, Convert into a Base Rate Advance and (ii) the obligation of the
Appropriate Lenders to make, or to Convert Advances into, Eurodollar Rate
Advances shall be suspended until the Administrative Agent shall notify the
Borrower that such Lender has determined that the circumstances causing such
suspension no longer exist.

                  SECTION 2.11. Payments and Computations. (a) The Borrower
shall make each payment hereunder and under the Notes, irrespective of any right
of counterclaim or set-off (except as otherwise provided in Section 2.15), not
later than 11:00 A.M. (New York City time) on the day when due in U.S. dollars
to the Administrative Agent at the Administrative Agent's Account in same day
funds, with payments being received by the Administrative Agent after such time
being deemed to have been received on the next succeeding Business Day. The
Administrative Agent will promptly thereafter cause like funds to be distributed
(i) if such payment by the Borrower is in respect of principal, interest,
commitment fees or any other Obligation then payable hereunder and under the
Notes to more than one Lender Party, to such Lender Parties for the account of
their respective Applicable Lending Offices ratably in accordance with the
amounts of such respective Obligations then payable to such Lender Parties and
(ii) if such payment by the Borrower is in respect of any Obligation then
payable hereunder to one Lender Party, to such Lender Party for the account of
its Applicable Lending Office, in each case to be applied in accordance with the
terms of this Agreement. Upon its acceptance of an Assignment and Acceptance and
recording of the information contained therein in the Register pursuant to
Section 8.07(d), from and after the effective date of such Assignment and
Acceptance, the Administrative Agent shall make all payments hereunder and under
the Notes in respect of the interest assigned thereby to the Lender Party
assignee thereunder, and the parties to such Assignment and Acceptance shall
make all appropriate adjustments in such payments for periods prior to such
effective date directly between themselves.

                  (b) If the Administrative Agent receives funds for application
to the Obligations under the Loan Documents under circumstances for which the
Loan Documents do not specify the Advances or the Facility to which, or the
manner in which, such funds are to be applied, the Administrative Agent may, but
shall not be obligated to, elect to distribute such funds to each Lender Party
ratably in accordance with such Lender Party's proportionate share of the
principal amount of all outstanding Advances and the Available Amount of all
Letters of Credit then outstanding, in repayment or prepayment of such of the
outstanding Advances or other Obligations owed to such Lender Party, and for
application to such principal installments, as the Administrative Agent shall
direct.


                  (c) The Borrower hereby authorizes each Lender Party, if and
to the extent payment owed to such Lender Party is not made when due hereunder
or, in the case of a Lender, under the Note held by such Lender, to charge from
time to time against any or all of the Borrower's accounts with such Lender
Party any amount so due.

                  (d) All computations of interest, fees and Letter of Credit
commissions shall be made by the Administrative Agent on the basis of a year of
360 days, in each case for the actual number of days (including the first day
but excluding the last day) occurring in the period for which such interest,
fees or commissions are payable. Each determination by the Administrative Agent
of an interest rate, fee or commission hereunder shall be conclusive and binding
for all purposes, absent manifest error.

                  (e) Whenever any payment hereunder or under the Notes shall be
stated to be due on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day, and such extension of time shall in such
case be included in the computation of payment of interest or commitment fee, as
the case may be; provided, however, that, if such extension would cause payment
of interest on or principal of Eurodollar Rate Advances to be made in the next
following calendar month, such payment shall be made on the next preceding
Business Day.

                  (f) Unless the Administrative Agent shall have received notice
from the Borrower prior to the date on which any payment is due to any Lender
Party hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in full
to the Administrative Agent on such date and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to such Lender Party on
such due date an amount equal to the amount then due such Lender Party. If and
to the extent the Borrower shall not have so made such payment in full to the
Administrative Agent, each such Lender Party shall repay to the Administrative
Agent forthwith on demand such amount distributed to such Lender Party together
with interest thereon, for each day from the date such amount is distributed to
such Lender Party until the date such Lender Party repays such amount to the
Administrative Agent, at the Federal Funds Rate.


                  SECTION 2.12. Taxes. (a) Any and all payments by the
Borrower hereunder or under the Notes shall be made, in accordance with Section
2.11, free and clear of and without deduction for any and all present or future
taxes, levies, imposts, deductions, charges or withholdings, and all liabilities
with respect thereto, excluding, in the case of each Lender Party and each
Agent, taxes that are imposed on its overall net income by the United States and
taxes that are imposed on its overall net income (and franchise taxes imposed in
lieu thereof) by the state or foreign jurisdiction under the laws of which such
Lender Party or such Agent (as the case may be) is organized or any political
subdivision thereof and, in the case of each Lender Party, taxes that are
imposed on its overall net income (and franchise taxes imposed in lieu thereof)
by the state or foreign jurisdiction of such Lender Party's Applicable Lending
Office or any political subdivision thereof (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities in respect of
payments hereunder or under the Notes being hereinafter referred to as "Taxes").
If the Borrower shall be required by law to deduct any Taxes from or in respect
of any sum payable hereunder or under any Note to any Lender Party or any Agent,
(i) the sum payable shall be increased as may be necessary so that after making
all required deductions (including deductions applicable to additional sums
payable under this Section 2.12) such Lender Party or such Agent (as the case
may be) receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions and (iii) the
Borrower shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable law.

                  (b) In addition, the Borrower shall pay any present or future
stamp, documentary, excise, property or similar taxes, charges or levies that
arise from any payment made hereunder or under the Notes or from the execution,
delivery or registration of, performing under, or otherwise with respect to,
this Agreement or the Notes (hereinafter referred to as "Other Taxes").

                  (c) The Borrower shall indemnify each Lender Party and each
Agent for and hold it harmless against the full amount of Taxes and Other Taxes,
and the full amount of taxes of any kind imposed by any jurisdiction on amounts
payable under this Section 2.12, imposed on or paid by such Lender Party or such
Agent (as the case may be) and any liability (including penalties, additions to
tax, interest and expenses) arising therefrom or with respect thereto. This
indemnification shall be made within 30 days from the date such Lender Party or
such Agent (as the case may be) makes written demand therefor.

                  (d) Within 30 days after the date of any payment of Taxes, the
Borrower shall furnish to the Administrative Agent, at its address referred to
in Section 8.02, the original or a certified copy of a receipt evidencing such
payment. In the case of any payment hereunder or under the Notes by or on behalf
of the Borrower through an account or branch outside the United States or by or
on behalf of the Borrower by a payor that is not a United States person, if the
Borrower determines that no Taxes are payable in respect thereof, the Borrower
shall furnish, or shall cause such payor to furnish, to the Administrative
Agent, at such address, an opinion of counsel acceptable to the Administrative
Agent stating that such payment is exempt from Taxes. For purposes of this
subsection (d) and subsection (e), the terms "United States" and "United States
person" shall have the meanings specified in Section 7701 of the Internal
Revenue Code.


                  (e) Each Lender Party organized under the laws of a
jurisdiction outside the United States shall, on or prior to the date of its
execution and delivery of this Agreement in the case of each Initial Lender or
Initial Issuing Bank, as the case may be, and on the date of the Assignment and
Acceptance pursuant to which it becomes a Lender Party in the case of each other
Lender Party, and from time to time thereafter as requested in writing by the
Borrower (but only so long thereafter as such Lender Party remains lawfully able
to do so), provide each of the Administrative Agent and the Borrower with two
original Internal Revenue Service forms 1001 or 4224 or (in the case of a Lender
Party that is claiming exemption from United States withholding tax under
Section 871(h) or 881(c) of the Internal Revenue Code with respect to payments
of "portfolio interest") form W-8 (and, if such Lender Party delivers a form
W-8, a certificate representing that such Lender Party is not a "bank" for
purposes of Section 881(c) of the Internal Revenue Code, is not a 10-percent
shareholder (within the meaning of Section 871(h)(3)(B) of the Internal Revenue
Code) of the Borrower and is not a controlled foreign corporation related to the
Borrower (within the meaning of Section 864(d)(4) of the Internal Revenue
Code)), as appropriate, or any successor or other form prescribed by the
Internal Revenue Service, certifying that such Lender Party is exempt from or
entitled to a reduced rate of United States withholding tax on payments pursuant
to this Agreement or the Notes or, in the case of a Lender Party providing a
form W-8, certifying that such Lender Party is a foreign corporation,
partnership, estate or trust. If the forms provided by a Lender Party at the
time such Lender Party first becomes a party to this Agreement indicates a
United States interest withholding tax rate in excess of zero, withholding tax
at such rate shall be considered excluded from the definition of Taxes hereunder
unless and until such Lender Party provides the appropriate form certifying that
a lesser rate applies, whereupon withholding tax at such lesser rate only shall
be considered excluded from the definition of Taxes hereunder for periods
governed by such form; provided, however, that, if at the date of the Assignment
and Acceptance pursuant to which a Lender Party becomes a party to this
Agreement, the Lender Party assignor was entitled to payments under subsection
(a) in respect of United States withholding tax with respect to interest paid at
such date, then, to such extent, the term Taxes shall include (in addition to
withholding taxes that may be imposed in the future or other amounts otherwise
includible in Taxes) United States withholding tax, if any, applicable with
respect to the Lender Party assignee on such date.

                  (f) For any period with respect to which a Lender Party has
failed to provide the Borrower with the appropriate form described in subsection
(e) above (other than if such failure is due to a change in law occurring after
the date on which a form originally was required to be provided or if such form
otherwise is not required under subsection (e) above), such Lender Party shall
not be entitled to indemnification under subsection (a) or (c) with respect to
Taxes imposed by the United States by reason of such failure; provided, however,
that should a Lender Party become subject to Taxes because of its failure to
deliver a form required hereunder, the Borrower shall take such steps as such
Lender Party shall reasonably request to assist such Lender Party to recover
such Taxes.


                  (g) Any Lender Party claiming any additional amounts payable
pursuant to this Section 2.12 shall use reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to change the
jurisdiction of its Applicable Lending Office if the making of such a change
would avoid the need for, or reduce the amount of, any such additional amounts
that may thereafter accrue and would not, in the reasonable judgment of such
Lender Party, be otherwise disadvantageous to such Lender Party.

                  SECTION 2.13. Sharing of Payments, Etc. If any Lender Party
shall obtain at any time any payment (whether voluntary, involuntary, through
the exercise of any right of set-off, or otherwise, other than as a result of an
assignment pursuant to Section 8.07) (a) on account of Obligations due and
payable to such Lender Party hereunder and under the Notes at such time in
excess of its ratable share (according to the proportion of (i) the amount of
such Obligations due and payable to such Lender Party at such time to (ii) the
aggregate amount of the Obligations due and payable to all Lender Parties
hereunder and under the Notes at such time) of payments on account of the
Obligations due and payable to all Lender Parties hereunder and under the Notes
at such time obtained by all the Lender Parties at such time or (b) on account
of Obligations owing (but not due and payable) to such Lender Party hereunder
and under the Notes at such time in excess of its ratable share (according to
the proportion of (i) the amount of such Obligations owing to such Lender Party
at such time to (ii) the aggregate amount of the Obligations owing (but not due
and payable) to all Lender Parties hereunder and under the Notes at such time)
of payments on account of the Obligations owing (but not due and payable) to all
Lender Parties hereunder and under the Notes at such time obtained by all of the
Lender Parties at such time, such Lender Party shall forthwith purchase from the
other Lender Parties such interests or participating interests in the
Obligations due and payable or owing to them, as the case may be, as shall be
necessary to cause such purchasing Lender Party to share the excess payment
ratably with each of them; provided, however, that if all or any portion of such
excess payment is thereafter recovered from such purchasing Lender Party, such
purchase from each other Lender Party shall be rescinded and such other Lender
Party shall repay to the purchasing Lender Party the purchase price to the
extent of such Lender Party's ratable share (according to the proportion of (i)
the purchase price paid to such Lender Party to (ii) the aggregate purchase
price paid to all Lender Parties) of such recovery together with an amount equal
to such Lender Party's ratable share (according to the proportion of (i) the
amount of such other Lender Party's required repayment to (ii) the total amount
so recovered from the purchasing Lender Party) of any interest or other amount
paid or payable by the purchasing Lender Party in respect of the total amount so
recovered; provided further that, so long as the Obligations under the Loan
Documents shall not have been accelerated, any excess payment received by any
Appropriate Lender shall be shared on a pro rata basis only with other
Appropriate Lenders. The Borrower agrees that any Lender Party so purchasing an
interest or participating interest from another Lender Party pursuant to this
Section 2.13 may, to the fullest extent permitted by law, exercise all its
rights of payment (including the right of set-off) with respect to such interest
or participating interest, as the case may be, as fully as if such Lender Party
were the direct creditor of the Borrower in the amount of such interest or
participating interest, as the case may be.


                  SECTION 2.14. Use of Proceeds. The proceeds of (i) the Term
Loan Advances, the AXELs Series A Advances and the Existing AXELs Series B
Advances shall be available (and the Borrower agrees that it shall use such
proceeds) solely to pay to the Sellers the cash consideration for the
Acquisition, pay transaction fees and expenses and refinance certain Existing
Debt, (ii) the New AXELs Series B Advances shall be available (and the Borrower
agrees that it shall use such proceeds) solely to prepay outstanding Acquisition
Advances pursuant to and as defined in the Second Credit Agreement and to pay
transaction fees and expenses incurred in connection with the First Amendment,
and (iii) the Working Capital Advances and the issuances of Letters of Credit
shall be available (and the Borrower agrees that it shall use such proceeds and
Letters of Credit) solely (a) to provide working capital for the Borrower and
its Subsidiaries, (b) to finance certain acquisitions to the extent permitted
hereunder and to refinance construction costs of new bowling centers after the
completion of the construction thereof, (c) to make any payments required under
the Support Agreement, (d) to pay to the Sellers the "purchase price adjustment"
(if any) required to be paid pursuant to the Purchase Agreement, (e) to finance
payments required under guarantees permitted by Section 5.02(b)(iii)(I) and (f)
for other general corporate purposes.

                  SECTION 2.15. Defaulting Lenders. (a) In the event that, at
any one time, (i) any Lender Party shall be a Defaulting Lender, (ii) such
Defaulting Lender shall owe a Defaulted Advance to the Borrower and (iii) the
Borrower shall be required to make any payment hereunder or under any other Loan
Document to or for the account of such Defaulting Lender, then the Borrower may,
so long as no Default shall occur or be continuing at such time and to the
fullest extent permitted by applicable law, set off and otherwise apply the
Obligation of the Borrower to make such payment to or for the account of such
Defaulting Lender against the obligation of such Defaulting Lender to make such
Defaulted Advance. In the event that, on any date, the Borrower shall so set off
and otherwise apply its obligation to make any such payment against the
obligation of such Defaulting Lender to make any such Defaulted Advance on or
prior to such date, the amount so set off and otherwise applied by the Borrower
shall constitute for all purposes of this Agreement and the other Loan Documents
an Advance by such Defaulting Lender made on the date under the Facility
pursuant to which such Defaulted Advance was originally required to have been
made pursuant to Section 2.01. Such Advance shall be a Base Rate Advance and
shall be considered, for all purposes of this Agreement, to comprise part of the
Borrowing in connection with which such Defaulted Advance was originally
required to have been made pursuant to Section 2.01, even if the other Advances
comprising such Borrowing shall be Eurodollar Rate Advances on the date such
Advance is deemed to be made pursuant to this subsection (a). The Borrower shall
notify the Administrative Agent at any time the Borrower exercises its right of
set-off pursuant to this subsection (a) and shall set forth in such notice (A)
the name of the Defaulting Lender and the Defaulted Advance required to be made
by such Defaulting Lender and (B) the amount set off and otherwise applied in
respect of such Defaulted Advance pursuant to this subsection (a). Any portion
of such payment otherwise required to be made by the Borrower to or for the
account of such Defaulting Lender which is paid by the Borrower, after giving
effect to the amount set off and otherwise applied by the Borrower pursuant to
this subsection (a), shall be applied by the Administrative Agent as specified
in subsection (b) or (c) of this Section 2.15.



                  (b) In the event that, at any one time, (i) any Lender Party
shall be a Defaulting Lender, (ii) such Defaulting Lender shall owe a Defaulted
Amount to any Agent or any of the other Lender Parties and (iii) the Borrower
shall make any payment hereunder or under any other Loan Document to the
Administrative Agent for the account of such Defaulting Lender, then the
Administrative Agent may, on its behalf or on behalf of such other Lender
Parties and to the fullest extent permitted by applicable law, apply at such
time the amount so paid by the Borrower to or for the account of such Defaulting
Lender to the payment of each such Defaulted Amount to the extent required to
pay such Defaulted Amount. In the event that the Administrative Agent shall so
apply any such amount to the payment of any such Defaulted Amount on any date,
the amount so applied by the Administrative Agent shall constitute for all
purposes of this Agreement and the other Loan Documents payment, to such extent,
of such Defaulted Amount on such date. Any such amount so applied by the
Administrative Agent shall be retained by the Administrative Agent or
distributed by the Administrative Agent to such other Agents or Lender Parties,
ratably in accordance with the respective portions of such Defaulted Amounts
payable at such time to the Administrative Agent and such other Agents and
Lender Parties and, if the amount of such payment made by the Borrower shall at
such time be insufficient to pay all Defaulted Amounts owing at such time to the
Administrative Agent and the other Agents and Lender Parties, in the following
order of priority:

                  (i) first, to the Agents for any Defaulted Amount then owing
         to the Agents, ratably in accordance with such respective Defaulted
         Amounts then owing to the Agents; and

                  (ii) second, to any other Lender Parties for any Defaulted
         Amounts then owing to such other Lender Parties, ratably in accordance
         with such respective Defaulted Amounts then owing to such other Lender
         Parties.

Any portion of such amount paid by the Borrower for the account of such
Defaulting Lender remaining, after giving effect to the amount applied by the
Administrative Agent pursuant to this subsection (b), shall be applied by the
Administrative Agent as specified in subsection (c) of this Section 2.15.


                  (c) In the event that, at any one time, (i) any Lender Party
shall be a Defaulting Lender, (ii) such Defaulting Lender shall not owe a
Defaulted Advance or a Defaulted Amount and (iii) the Borrower, any Agent or any
other Lender Party shall be required to pay or distribute any amount hereunder
or under any other Loan Document to or for the account of such Defaulting
Lender, then the Borrower or such other Lender Party shall pay such amount to
the Administrative Agent to be held by the Administrative Agent, to the fullest
extent permitted by applicable law, in escrow or the Administrative Agent shall,
to the fullest extent permitted by applicable law, hold in escrow such amount
otherwise held by it. Any funds held by the Administrative Agent in escrow under
this subsection (c) shall be deposited by the Administrative Agent in an account
with Citibank, in the name and under the control of the Administrative Agent,
but subject to the provisions of this subsection (c). The terms applicable to
such account, including the rate of interest payable with respect to the credit
balance of such account from time to time, shall be Citibank's standard terms
applicable to escrow accounts maintained with it. Any interest credited to such
account from time to time shall be held by the Administrative Agent in escrow
under, and applied by the Administrative Agent from time to time in accordance
with the provisions of, this subsection (c). The Administrative Agent shall, to
the fullest extent permitted by applicable law, apply all funds so held in
escrow from time to time to the extent necessary to make any Advances required
to be made by such Defaulting Lender and to pay any amount payable by such
Defaulting Lender hereunder and under the other Loan Documents to the
Administrative Agent or any other Agent or Lender Party, as and when such
Advances or amounts are required to be made or paid and, if the amount so held
in escrow shall at any time be insufficient to make and pay all such Advances
and amounts required to be made or paid at such time, in the following order of
priority:

                  (i) first, to the Agents for any amount then due and payable
         by such Defaulting Lender to the Agents under the Loan Documents,
         ratably in accordance with such respective amounts then due and payable
         to the Agents;

                  (ii) second, to any other Lender Parties for any amount then
         due and payable by such Defaulting Lender to such other Lender Parties
         hereunder, ratably in accordance with such respective amounts then due
         and payable to such other Lender Parties; and

                  (iii) third, to the Borrower for any Advance then required to
         be made by such Defaulting Lender pursuant to a Commitment of such
         Defaulting Lender.

In the event that any Lender Party that is a Defaulting Lender shall, at any
time, cease to be a Defaulting Lender, any funds held by the Administrative
Agent in escrow at such time with respect to such Lender Party shall be
distributed by the Administrative Agent to such Lender Party and applied by such
Lender Party to the Obligations owing to such Lender Party at such time under
this Agreement and the other Loan Documents ratably in accordance with the
respective amounts of such Obligations outstanding at such time.

                  (d) The rights and remedies against a Defaulting Lender under
this Section 2.15 are in addition to other rights and remedies that the Borrower
may have against such Defaulting Lender with respect to any Defaulted Advance
and that any Agent or any Lender Party may have against such Defaulting Lender
with respect to any Defaulted Amount.



                                  ARTICLE III

                             CONDITIONS OF LENDING

                  SECTION 3.01. Conditions Precedent to Initial Extension of
Credit. The obligation of each Lender to make an Advance or of any Issuing Bank
to issue a Letter of Credit on the occasion of the Initial Extension of Credit
hereunder is subject to the satisfaction of the following conditions precedent
before or concurrently with the Initial Extension of Credit:

                  (a) The Acquisition shall have been consummated in accordance
         with the terms of the Purchase Agreement, without any waiver or
         amendment not consented to by the Agents of any material term,
         provision or condition set forth therein, and in compliance with all
         applicable laws.

                  (b) The Purchase Agreement shall be in full force and effect.

                  (c) Parent shall have received at least $375,000,000 in Net
         Cash Proceeds of the sale of equity to the Equity Investors, and such
         Net Cash Proceeds shall have been contributed, directly or indirectly,
         to the Borrower as a capital contribution and the Borrower shall have
         received $500,000,000 (less an underwriting spread of 3.5% on the first
         $350,000,000 and 4.5% on the remaining $150,000,000) in gross cash
         proceeds of the issuance of the Subordinated Notes.

                  (d) The Lender Parties shall be satisfied with the corporate
         and legal structure and capitalization of each Loan Party and each of
         its Subsidiaries, including the terms and conditions of the charter,
         bylaws and each class of capital stock of each Loan Party and each such
         Subsidiary and of each agreement or instrument relating to such
         structure or capitalization.

                  (e) The Agents shall be satisfied that all Existing Debt,
         other than the Debt identified on Schedule 3.01(e) (the "Surviving
         Debt"), has been prepaid, redeemed or defeased in full or otherwise
         satisfied and extinguished and that all Surviving Debt shall be on
         terms and conditions satisfactory to the Lender Parties.

                  (f) Before giving effect to the Acquisition and the other
         transactions contemplated by this Agreement, there shall have occurred
         no Material Adverse Change since December 31, 1995.


                  (g) There shall exist no action, suit, investigation,
         litigation or proceeding affecting any Loan Party or any of its
         Subsidiaries pending or threatened before any court, governmental
         agency or arbitrator that (i) would be reasonably likely to have a
         Material Adverse Effect or (ii) purports to affect the legality,
         validity or enforceability of the Acquisition, this Agreement, any
         Note, any other Loan Document, any Related Document or the consummation
         of the transactions contemplated hereby.

                  (h) Nothing shall have come to the attention of the Lender
         Parties during the course of their due diligence investigation to lead
         them to believe (i) that the Information Memorandum was or has become
         misleading, incorrect or incomplete in any material respect, (ii) that,
         following the consummation of the Acquisition, the Borrower and its
         Subsidiaries would not have good and marketable title to all material
         assets of the Company and its Subsidiaries reflected in the Information
         Memorandum (other than those disposed of in the ordinary course of
         business) and (iii) that the Acquisition will have a Material Adverse
         Effect; without limiting the generality of the foregoing, the Agents
         shall have been given such access to the management, records, books of
         account, contracts and properties of the Loan Parties and their
         Subsidiaries as they shall have requested.

                  (i) All governmental and third party consents and approvals
         necessary in connection with the Acquisition, the Loan Documents and
         the Related Documents and the transactions contemplated thereby shall
         have been obtained (without the imposition of any conditions that are
         not reasonably acceptable to the Agents) and shall remain in effect
         other than such governmental or third party consents and approvals the
         failure to obtain which shall not (x) be materially adverse to Holdings
         or the Borrower, in each case together with its respective
         Subsidiaries, taken as a whole, (y) affect the enforceability, validity
         or binding effect of any of the Loan Documents required to be executed
         and delivered prior to or on the First Closing Date or (z) expose the
         Arrangers, the Agents or the Lender Parties to personal liability;
         provided, however, that with respect to the receipt of licenses to sell
         or serve alcoholic beverages or to engage in gaming, lottery or
         gambling activities (or the necessary consents or approvals with
         respect thereto), such condition shall be satisfied if the Agents are
         reasonably satisfied that licenses have been obtained or that other
         appropriate mechanisms which will not result in denial or loss of a
         license or penalties (other than immaterial civil penalties) or put the
         Borrower or its Subsidiaries at risk of an enforcement action for a
         violation are in place and, in each case, are expected to remain in
         place for the foreseeable future without material risk or expectation
         of losing such ability in the future (other than the risk that any
         holder of a liquor license or a gaming, lottery or gambling license
         that complies with the terms and requirements of such license and the
         relevant law generally bears of nonrenewal) so that after the First
         Closing Date, alcoholic beverages can continue to be sold or served and
         gaming activities can continue to be conducted in essentially the same
         manner and on essentially the same terms (and without any additional
         material restrictions) as before the First Closing Date and in
         compliance in all material respects with all applicable laws and rules,
         regulations, statutes, licenses and orders of any governmental
         authority relating to the sale or service of alcoholic beverages or
         engaging in gaming, lottery and gambling activities at bowling centers
         (or related premises) which would reasonably be expected to enable the
         Borrower and its Subsidiaries to derive, during a 10-month period
         beginning on the First Closing Date, at least 90% of the total revenues
         from the sale and/or service of alcoholic beverages and, other than in
         the State of Washington, gaming, lottery and gambling activities (and
         from any related management service agreements and leases) during the
         10-month period ended October 31, 1995; all applicable waiting periods
         shall have expired without any action being taken by any competent
         authority; and no law or regulation shall be applicable in the judgment
         of the Agents that restrains, prevents or imposes materially adverse
         conditions upon the Acquisition, the Loan Documents and the Related
         Documents and the transactions contemplated thereby.


                  (j) The Agents shall be satisfied with all contractual and
         other arrangements with the Borrower's management.

                  (k) All capital stock of the Borrower shall be owned by
         Holdings, all capital stock of Holdings shall be owned by Parent and
         all capital stock of Parent shall be owned by the Equity Investors, and
         all of the stock of the Borrower's Subsidiaries shall be owned by the
         Borrower or one or more of the Borrower's Subsidiaries, in each case
         free and clear of any lien, charge or encumbrance, other than Liens in
         favor of the Secured Parties.

                  (l) The Agents shall be satisfied that the Borrower and its
         Subsidiaries will be able to meet their obligations under all Plans,
         that the Borrower's and its Subsidiaries' Plans are, in all material
         respects, funded in accordance with the minimum statutory requirements,
         that no material "reportable event" (as defined in ERISA, but excluding
         events for which reporting has been waived) has occurred as to any such
         Plan and that no termination of, or withdrawal from, any such Plan has
         occurred or is contemplated that could result in a material liability.

                  (m) The Agents shall be satisfied (i) with the sources, terms
         and conditions of the equity and the other debt financing for the
         Acquisition and the other transactions contemplated by the Loan
         Documents and the Related Documents, (ii) that the amount of committed
         equity and debt financing shall be sufficient to meet the financing
         requirements of the Acquisition and the other transactions contemplated
         by the Loan Documents and the Related Documents and (iii) that the
         amount of transaction fees and expenses payable in connection with the
         closing of the Acquisition and the other transactions contemplated by
         the Loan Documents and the Related Documents does not exceed the
         maximum amount previously disclosed to the Initial Lenders.



                  (n) The Lender Parties shall have received audited financial
         statements of the Borrower and its Subsidiaries for the year ended
         December 31, 1995, from which financial statements shall be derived a
         Consolidated pro forma EBITDA of the Borrower and its Subsidiaries of
         at least $165,000,000 (as reflected in the offering circular for the
         Subordinated Notes).

                  (o) The Borrower shall have paid all accrued fees of the
         Lender Parties and all accrued fees and expenses of the Agents and the
         Arrangers (including the accrued fees and expenses of counsel to the
         Agents and the Arrangers and local, foreign and intellectual property
         counsel to, and of other experts and advisors retained by, the Agents
         for the Lender Parties).

                  (p) The Administrative Agent shall have received on or before
         the day of the Initial Extension of Credit the following, each dated
         such day (unless otherwise specified), in form and substance
         satisfactory to the Agents (unless otherwise specified) and (except for
         the Notes) in sufficient copies for each Lender Party:

                           (i)      The Notes payable to the order of the
                  Lenders.

                           (ii) Certified copies of the resolutions of the Board
                  of Directors of the Borrower, the Company and each other Loan
                  Party approving the Acquisition, this Agreement, the Notes,
                  each other Loan Document and each Related Document to which it
                  is or is to be a party, and of all documents evidencing other
                  necessary corporate action and governmental and other third
                  party approvals and consents, if any, with respect to the
                  Acquisition, this Agreement, the Notes, each other Loan
                  Document and each Related Document.

                           (iii) A copy of a certificate of the Secretary of
                  State of the jurisdiction of its incorporation, dated
                  reasonably near the date of the Initial Extension of Credit,
                  listing the charter of the Borrower, the Company and each
                  other Loan Party and each amendment thereto on file in his
                  office and certifying that (A) such amendments are the only
                  amendments to the Borrower's, the Company's or such other Loan
                  Party's charter on file in his office, (B) the Borrower, the
                  Company and each other Loan Party have paid all franchise
                  taxes to the date of such certificate and (C) the Borrower,
                  the Company and each other Loan Party are duly incorporated
                  and in good standing under the laws of the jurisdiction of its
                  incorporation.



                           (iv) A copy of a certificate of the Secretary of
                  State of such states as the Administrative Agent may require,
                  dated reasonably near the date of the Initial Extension of
                  Credit, stating that the Borrower, the Company and each other
                  Loan Party are duly qualified and in good standing as foreign
                  corporations in such State and have filed all annual reports
                  required to be filed to the date of such certificate.

                           (v) A certificate of the Borrower, the Company and
                  each other Loan Party, signed on behalf of the Borrower, the
                  Company and such other Loan Party by its President or a Vice
                  President and its Secretary or any Assistant Secretary, dated
                  the date of the Initial Extension of Credit (the statements
                  made in which certificate shall be true on and as of the date
                  of the Initial Extension of Credit), certifying as to (A) the
                  absence of any amendments to the charter of the Borrower, the
                  Company or such other Loan Party since the date of the
                  Secretary of State's certificate referred to in Section
                  3.01(p)(iii), (B) a true and correct copy of the bylaws of the
                  Borrower, the Company and such other Loan Party as in effect
                  on the date of the Initial Extension of Credit, (C) the due
                  incorporation and good standing of the Borrower, the Company
                  and such other Loan Party as a corporation organized under the
                  laws of the state of its incorporation, and the absence of any
                  proceeding for the dissolution or liquidation of the Borrower,
                  the Company or such other Loan Party, (D) the truth of the
                  representations and warranties contained in the Loan Documents
                  as though made on and as of the date of the Initial Extension
                  of Credit and (E) the absence of any event occurring and
                  continuing, or resulting from the Initial Extension of Credit,
                  that constitutes a Default.

                           (vi) A certificate of the Secretary or an Assistant
                  Secretary of the Borrower, the Company and each other Loan
                  Party certifying the names and true signatures of the officers
                  of the Borrower, the Company and such other Loan Party
                  authorized to sign this Agreement, the Notes, each other Loan
                  Document and each Related Document to which they are or are to
                  be parties and the other documents to be delivered hereunder
                  and thereunder.

                           (vii) A security agreement in substantially the form
                  of Exhibit D hereto (together with each other security
                  agreement delivered or to be delivered pursuant to Section
                  5.01(n), in each case as amended, supplemented or otherwise
                  modified from time to time in accordance with its terms, the
                  "Security Agreement"), duly executed by the Borrower and each
                  other Loan Party, together with:

                                    (A) certificates representing the Pledged
                           Shares referred to therein accompanied by undated
                           stock powers executed in blank and instruments
                           evidencing the Pledged Debt referred to therein
                           indorsed in blank,



                                    (B) duly executed proper financing
                           statements, to be filed under the Uniform Commercial
                           Code of all jurisdictions that the Collateral Agent
                           may deem necessary or desirable in order to perfect
                           and protect the first priority liens and security
                           interests created under the Security Agreement,
                           covering the Collateral described in the Security
                           Agreement,

                                    (C) completed requests for information,
                           dated on or before the date of the Initial Extension
                           of Credit, listing all effective financing statements
                           filed in the jurisdictions referred to in clause (B)
                           above that name the Borrower, the Company or any
                           other Loan Party as debtor, together with copies of
                           such other financing statements,

                                    (D) evidence of the completion of all other
                           recordings and filings of or with respect to the
                           Security Agreement that the Collateral Agent may deem
                           necessary or desirable in order to perfect and
                           protect the Liens created thereby,

                                    (E)     evidence of the insurance required
                           by the terms of the Security Agreement,

                                    (F) copies of the Assigned Agreements
                           referred to in the Security Agreement, together with
                           a consent to such assignment (to the extent required
                           by the terms of the Security Agreement), in
                           substantially the form of Exhibit B to the Security
                           Agreement, duly executed by each party to such
                           Assigned Agreements other than the Loan Parties,

                                    (G) the Blocked Account Letters referred to
                           in the Security Agreement (to the extent required by
                           the terms of the Security Agreement), duly executed
                           by each Blocked Account Bank referred to in the
                           Security Agreement, and

                                    (H) evidence that all other action that the
                           Collateral Agent may deem necessary or desirable in
                           order to perfect and protect the first priority liens
                           and security interests created under the Security
                           Agreement has been taken.



                           (viii) An intellectual property security agreement in
                  substantially the form of Exhibit E hereto (together with each
                  other intellectual property security agreement delivered or to
                  be delivered pursuant to Section 5.01(n), in each case as
                  amended, supplemented or otherwise modified from time to time
                  in accordance with its terms, the "Intellectual Property
                  Security Agreement"), duly executed by the Borrower and each
                  other Loan Party, together with evidence that all action that
                  the Collateral Agent may deem necessary or desirable in order
                  to perfect and protect the first priority liens and security
                  interests created under the Intellectual Property Security
                  Agreement has been taken.

                           (ix) Deeds of trust, trust deeds, mortgages,
                  leasehold mortgages and leasehold deeds of trust in
                  substantially the form of Exhibit F hereto and covering
                  properties listed on Part I of Schedule 4.01(kk) and Part I of
                  Schedule 4.01(ll) (together with each other mortgage delivered
                  or to be delivered pursuant to Section 5.01(n), in each case
                  as amended, supplemented or otherwise modified from time to
                  time in accordance with their terms, the "Mortgages"), duly
                  executed by the appropriate Loan Party, together with:

                                    (A) fully paid American Land Title
                           Association Lender's Extended Coverage title
                           insurance policies (the "Mortgage Policies") in form
                           and substance, with endorsements and in amount
                           acceptable to the Collateral Agent, issued, coinsured
                           and reinsured by title insurers acceptable to the
                           Collateral Agent, insuring the Mortgages covering the
                           manufacturing facilities listed on Schedules 4.01(ll)
                           and 4.01(kk) to be valid first and subsisting Liens
                           on the property described therein, free and clear of
                           all defects (including, but not limited to,
                           mechanics' and materialmen's Liens) and encumbrances,
                           excepting only Permitted Encumbrances, and providing
                           for such other affirmative insurance (including
                           endorsements for future advances under the Loan
                           Documents and for mechanics' and materialmen's Liens)
                           and such coinsurance and direct access reinsurance as
                           the Collateral Agent may deem necessary or desirable,

                                    (B) title reports, prepared by one or more
                           nationally recognized title insurance companies, with
                           respect to each of the properties covered by the
                           Mortgages, reflecting that such properties are free
                           and clear of all defects (including, but not limited
                           to, mechanics' and materialmen's Liens) and
                           encumbrances, excepting only Permitted Encumbrances,



                                    (C) Surveys in form and substance
                           satisfactory to the Collateral Agent with respect to
                           the manufacturing plants located in Lowville, New
                           York and Richmond, Virginia, each dated no more than
                           30 days before the day of the Initial Extension of
                           Credit, certified to the Collateral Agent and the
                           issuer of the Mortgage Policies in a manner
                           satisfactory to the Collateral Agent by a land
                           surveyor duly registered and licensed in the States
                           in which the respective property described in such
                           surveys is located and acceptable to the Collateral
                           Agent, showing all buildings and other improvements,
                           any off-site improvements, the location of any
                           easements, parking spaces, rights of way, building
                           set-back lines and other dimensional regulations and
                           the absence of encroachments, either by such
                           improvements or on to such property, and other
                           defects, other than encroachments and other defects
                           acceptable to the Collateral Agent, and

                                    (D) evidence of the insurance required by
                           the terms of the Mortgages.

                           (x) A guaranty in substantially the form of Exhibit G
                  hereto (as amended, supplemented or otherwise modified in
                  accordance with its terms, the "Holdings Guaranty"), duly
                  executed by Holdings.

                           (xi) A guaranty in substantially the form of Exhibit
                  H hereto (together with each other guaranty delivered or to be
                  delivered pursuant to Section 5.01(n), in each case as
                  amended, supplemented or otherwise modified from time to time
                  in accordance with its terms, the "Subsidiary Guaranty"), duly
                  executed by the Subsidiary Guarantors.

                           (xii) Certified copies of each of the Related
                  Documents, duly executed by the parties thereto and in form
                  and substance satisfactory to the Lender Parties, together
                  with all agreements, instruments and other documents delivered
                  in connection therewith.

                           (xiii) Such financial, business and other information
                  regarding each Loan Party and its Subsidiaries as the Agents
                  shall have requested, including, without limitation,
                  information as to possible contingent liabilities, tax
                  matters, environmental matters, obligations under Plans,
                  Multiemployer Plans and Welfare Plans, collective bargaining
                  agreements and other arrangements with employees, audited
                  annual financial statements dated December 31, 1995, draft
                  financial statements dated March 31, 1996 (or, in the event
                  the Agents' due diligence review reveals material changes
                  since such financial statements, as of a later date within 45
                  days of the day of the Initial Extension of Credit), annual
                  financial statements dated December 31, 1995 reflecting
                  revenues and EBITDA by business segment, a business plan for
                  the Borrower prepared by management of the Borrower, pro forma
                  financial statements as to the Borrower and forecasts prepared
                  by management of the Borrower, in form and substance
                  satisfactory to the Agents, of balance sheets, income
                  statements and cash flow statements on an annual basis for
                  each year following the day of the Initial Extension of Credit
                  until the Termination Date for the AXELs Series B Facility.



                           (xiv) Letters and certificates, in substantially the
                  form of Exhibits I and J hereto, respectively, attesting to
                  the Solvency of Holdings, the Borrower and each of the
                  Borrower's first tier and second tier Subsidiaries (other than
                  any such Subsidiary the primary business of which is to hold
                  liquor licenses) after giving effect to the Acquisition and
                  the other transactions contemplated hereby, from a Designated
                  Financial Officer and Houlihan Lokey Howard & Zukin.

                           (xv) An environmental assessment report, in form and
                  substance satisfactory to the Lender Parties, from Dames &
                  Moore, as to any risks, costs or liabilities under
                  Environmental Laws to which any Loan Party or any of its
                  Subsidiaries may be subject, the amount and nature of which
                  and the Borrower's plans with respect to which shall be
                  acceptable to the Lender Parties, together with evidence, in
                  form and substance satisfactory to the Lender Parties, that
                  all applicable Environmental Laws shall have been materially
                  complied with.

                           (xvi) A letter, in form and substance satisfactory to
                  the Administrative Agent, from the Borrower to Arthur
                  Andersen, L.L.P., its independent certified public
                  accountants, advising such accountants that the Administrative
                  Agent and the Lender Parties have been authorized to exercise
                  all rights of the Borrower to require such accountants to
                  disclose any and all financial statements and any other
                  information of any kind that they may have with respect to the
                  Borrower and its Subsidiaries and directing such accountants
                  to comply with any reasonable request of the Administrative
                  Agent or any Lender Party for such information.

                           (xvii) Evidence of insurance naming the Collateral
                  Agent for the benefit of the Secured Parties as insured and
                  loss payee with such responsible and reputable insurance
                  companies or associations, and in such amounts and covering
                  such risks, as is satisfactory to the Collateral Agent.

                           (xviii) Certified copies of each employment agreement
                  and other compensation arrangement with each executive officer
                  of any Loan Party or any of its Subsidiaries.

                           (xix) A favorable opinion of Wachtell, Lipton, Rosen
                  & Katz, counsel for the Loan Parties, in substantially the
                  form of Exhibit K hereto and as to such other matters as any
                  Lender Party through the Administrative Agent may reasonably
                  request.

                           (xx) A favorable opinion of local counsel listed on
                  Schedule 3.01(p)(xx), in the jurisdictions listed on Schedule
                  3.01(p)(xx), in form and substance satisfactory to the
                  Administrative Agent and as to such other matters as any
                  Lender Party through the Administrative Agent may reasonably
                  request.


                           (xxi) A favorable opinion of Pennie & Edmonds,
                  intellectual property counsel to the Lender Parties, in
                  substantially the form of Exhibit L hereto and as to such
                  other matters as any Lender Party through the Administrative
                  Agent may reasonably request.

                           (xxii) A favorable opinion of Shearman & Sterling,
                  counsel for the Arrangers and the Agents, in form and
                  substance satisfactory to the Arrangers and the Agents.

                  SECTION 3.02. Conditions Precedent to Each Borrowing and
Issuance. The obligation of each Appropriate Lender to make an Advance (other
than a Letter of Credit Advance made by an Issuing Bank or a Working Capital
Lender pursuant to Section 2.03(c)) on the occasion of each Borrowing (including
the initial Borrowing), and the obligation of each Issuing Bank to issue a
Letter of Credit (including the initial issuance), shall be subject to the
further conditions precedent that on the date of such Borrowing or issuance (a)
the following statements shall be true (and each of the giving of the applicable
Notice of Borrowing or Notice of Issuance and the acceptance by the Borrower of
the proceeds of such Borrowing or of such Letter of Credit shall constitute a
representation and warranty by the Borrower that both on the date of such notice
and on the date of such Borrowing or issuance such statements are true):

                  (i) the representations and warranties contained in each Loan
         Document are correct on and as of such date, before and after giving
         effect to such Borrowing or issuance and to the application of the
         proceeds therefrom, as though made on and as of such date;

                  (ii) no event has occurred and is continuing, or would result
         from such Borrowing or issuance or from the application of the proceeds
         therefrom, that constitutes a Default; and

                  (iii) in the case of any Working Capital Borrowing the
         proceeds of which are to be used to make an acquisition or to refinance
         the costs of construction of a New Center, (A) after giving effect to
         the acquisition to be made, or costs of construction to be refinanced,
         with the proceeds of such Borrowing, the Borrower shall be in pro forma
         compliance with the covenants contained in Section 5.04, calculated
         based on the most recent Financial Statements (and including, for
         purposes of determining such pro forma compliance, the Debt and
         Modified Consolidated EBITDA attributable to the bowling center being
         so acquired or refinanced as though such acquisition or construction
         had occurred at the beginning of the 12-month period covered by such
         Financial Statements), and (B) the Borrower shall have delivered a
         certificate to the Administrative Agent and the Lender Parties in form
         satisfactory to the Administrative Agent demonstrating compliance with
         clause (A) above;



and (b) the Administrative Agent shall have received such other approvals,
opinions or documents as any Appropriate Lender through the Administrative Agent
may reasonably request.

                  SECTION 3.03. Determinations Under Section 3.01. For purposes
of determining compliance with the conditions specified in Section 3.01, each
Lender Party shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to the Lender Parties unless an
officer of the Administrative Agent responsible for the transactions
contemplated by the Loan Documents shall have received notice from such Lender
Party prior to the Initial Extension of Credit specifying its objection thereto
and if the Initial Extension of Credit consists of a Borrowing, such Lender
Party shall not have made available to the Administrative Agent such Lender
Party's ratable portion of such Borrowing.

                  SECTION 3.04. Conditions Precedent to the Making of the New
AXELs Series B Advances. The obligation of each New AXELs Series B Lender to
make a New AXELs Series B Advance hereunder is subject to the satisfaction of
the following conditions precedent before or concurrently with the making of
such New AXELs Series B Advance:

                  (a) Before and after giving effect to the First Amendment and
         the transactions contemplated thereby, there shall have occurred no
         Material Adverse Change since December 31, 1995.

                  (b) There shall exist no action, suit, investigation,
         litigation or proceeding affecting any Loan Party or any of its
         Subsidiaries pending or threatened before any court, governmental
         agency or arbitrator that (i) would be reasonably likely to have a
         Material Adverse Effect or (ii) purports to affect the legality,
         validity or enforceability of this Agreement, any Note, any other Loan
         Document, any First Amendment Document, any Related Document or the
         consummation of the transactions contemplated hereby.



                  (c) All governmental and third party consents and approvals
         necessary in connection with the First Amendment Documents and the
         transactions contemplated thereby shall have been obtained (without the
         imposition of any conditions that are not reasonably acceptable to the
         Agents) and shall remain in effect other than such governmental or
         third party consents and approvals the failure to obtain which shall
         not (x) be materially adverse to Holdings or the Borrower, in each case
         together with its respective Subsidiaries, taken as a whole, (y) affect
         the enforceability, validity or binding effect of any of the First
         Amendment Documents required to be executed and delivered prior to or
         on the Second Closing Date or (z) expose the Arrangers, the Agents or
         the Lender Parties to personal liability; and no law or regulation
         shall be applicable in the judgment of the Agents that restrains,
         prevents or imposes materially adverse conditions upon the First
         Amendment Documents and the transactions contemplated thereby.

                  (d) The Borrower shall have paid all accrued fees of the
         Lender Parties and all accrued fees and expenses of the Agents and the
         Arrangers (including the accrued fees and expenses of counsel to the
         Agents and the Arrangers and local counsel to, and of other experts and
         advisors retained by, the Agents for the Lender Parties).

                  (e) The Administrative Agent shall have received on or before
         the day of the making of the New AXELs Series B Advances the following,
         each dated such day (unless otherwise specified), in form and substance
         satisfactory to the Agents (unless otherwise specified) and (except for
         the AXELs Series B Notes) in sufficient copies for each Lender Party:

                           (i) AXELs Series B Notes payable to the order of the
                  New AXELs Series B Lenders.

                           (ii) Certified copies of the resolutions of the Board
                  of Directors of the Borrower and each other Loan Party
                  approving this Agreement, the New AXELs Series B Notes, each
                  other First Amendment Document to which it is or is to be a
                  party, and of all documents evidencing other necessary
                  corporate action and governmental and other third party
                  approvals and consents, if any, with respect to this
                  Agreement, the AXELs Series B Notes and each other First
                  Amendment Document.

                           (iii) A copy of a certificate of the Secretary of
                  State of the jurisdiction of its incorporation, dated
                  reasonably near the Second Closing Date, certifying that (A)
                  the Borrower and each other Loan Party have paid all franchise
                  taxes to the date of such certificate and (B) the Borrower and
                  each other Loan Party are duly incorporated and in good
                  standing under the laws of the jurisdiction of its
                  incorporation.

                           (iv) A copy of a certificate of the Secretary of
                  State or Commonwealth, as the case may be, of the State of New
                  York and the Commonwealth of Virginia, dated reasonably near
                  the Second Closing Date, stating that the Borrower and each
                  other Loan Party that was so qualified as of the First Closing
                  Date are duly qualified and in good standing as foreign
                  corporations in such States and have filed all annual reports
                  required to be filed to the date of such certificate.



                           (v) A certificate of the Borrower and each other Loan
                  Party, signed on behalf of the Borrower and such other Loan
                  Party by its President or a Vice President and its Secretary
                  or any Assistant Secretary, dated the Second Closing Date (the
                  statements made in which certificate shall be true on and as
                  of the Second Closing Date), certifying as to (A) the absence
                  of any amendments to the charter of the Borrower or such other
                  Loan Party since the date of the Secretary of State's
                  certificate referred to in Section 3.01(p)(iii), (B) the
                  absence of any amendments to the bylaws of the Borrower or
                  such other Loan Party delivered pursuant to Section
                  3.01(p)(v), (C) the due incorporation and good standing of the
                  Borrower and such other Loan Party as a corporation organized
                  under the laws of the state of its incorporation, and the
                  absence of any proceeding for the dissolution or liquidation
                  of the Borrower or such other Loan Party, (D) the truth of the
                  representations and warranties contained in the Loan Documents
                  as though made on and as of the Second Closing Date and (E)
                  the absence of any event occurring and continuing, or
                  resulting from the making of the New AXELs Series B Advances,
                  that constitutes a Default.

                           (vi) A certificate of the Secretary or an Assistant
                  Secretary of the Borrower and each other Loan Party certifying
                  the names and true signatures of the officers of the Borrower
                  and such other Loan Party authorized to sign First Amendment,
                  the AXELs Series B Notes and each other First Amendment
                  Document to which they are or are to be parties and the other
                  documents to be delivered hereunder and thereunder.

                           (vii) Amendments to the Mortgages in substantially
                  the form of Exhibit M hereto and covering the properties
                  listed on Part I of Schedule 4.01(kk) and Part I of Schedule
                  4.01(ll), duly executed by the appropriate Loan Party.

                           (viii) A favorable opinion of Wachtell, Lipton, Rosen
                  & Katz, special counsel for the Loan Parties, in substantially
                  the form of Exhibit N hereto and as to such other matters as
                  any Lender Party through the Administrative Agent may
                  reasonably request.

                           (ix) A favorable opinion of Daniel McCormack, General
                  Counsel of the Borrower, in substantially the form of Exhibit
                  O hereto and as to such other matters as any Lender Party
                  through the Administrative Agent may reasonably request.



                           (x) A favorable opinion of local counsel in the
                  Commonwealth of Virginia, in form and substance satisfactory
                  to the Administrative Agent and as to such other matters as
                  any Lender Party through the Administrative Agent may
                  reasonably request.

                           (xi) A favorable opinion of Shearman & Sterling,
                  counsel for the Arrangers and the Agents, in form and
                  substance satisfactory to the Arrangers and the Agents.

                  SECTION 3.05.  Conditions Precedent to the Effectiveness of
the Third Amendment.  The effectiveness of the Third Amendment is subject to the
satisfaction of the following conditions precedent:

                  (a) Before and after giving effect to the Third Amendment and
         the transactions contemplated thereby, there shall have occurred no
         Material Adverse Change since December 31, 1996.

                  (b) There shall exist no action, suit, investigation,
         litigation or proceeding affecting any Loan Party or any of its
         Subsidiaries pending or threatened before any court, governmental
         agency or arbitrator that (i) would be reasonably likely to have a
         Material Adverse Effect or (ii) purports to affect the legality,
         validity or enforceability of this Agreement, any Note, any other Loan
         Document, any Third Amendment Document, any Related Document or the
         consummation of the transactions contemplated hereby.

                  (c) All governmental and third party consents and approvals
         necessary in connection with the Third Amendment Documents, the IPO and
         the other transactions contemplated thereby shall have been obtained
         (without the imposition of any conditions that are not reasonably
         acceptable to the Agents) and shall remain in effect other than such
         governmental or third party consents and approvals the failure to
         obtain which shall not (x) be materially adverse to Holdings or the
         Borrower, in each case together with its respective Subsidiaries, taken
         as a whole, (y) affect the enforceability, validity or binding effect
         of any of the Third Amendment Documents required to be executed and
         delivered prior to or on the Fourth Closing Date or (z) expose the
         Arrangers, the Agents or the Lender Parties to personal liability; and
         no law or regulation shall be applicable in the judgment of the Agents
         that restrains, prevents or imposes materially adverse conditions upon
         the Third Amendment Documents and the transactions contemplated
         thereby.

                  (d) Nothing shall have come to the attention of the Lender
         Parties during the course of their due diligence investigation to lead
         them to believe that the Information Memorandum was or has become
         misleading, incorrect or incomplete in any material respect; the IPO
         shall have been consummated and Parent shall have received Gross Cash
         Proceeds therefrom of at least $200,000,000; and Parent shall have
         contributed the Net Cash Proceeds therefrom to the Borrower as common
         equity.



                  (e) The Borrower shall have paid all accrued fees of the
         Existing Lenders and the Lender Parties and all accrued fees and
         expenses of the Agents and the Arrangers (including the accrued fees
         and expenses of counsel to the Agents and the Arrangers and local
         counsel to, and of other experts and advisors retained by, the Agents
         for the Lender Parties).

                  (f) The Administrative Agent shall have received on or before
         the Fourth Closing Date, each dated such day (unless otherwise
         specified), in form and substance satisfactory to the Agents the
         following (unless otherwise specified) and (except for the Working
         Capital Notes) in sufficient copies for each Lender Party:

                           (i)      Working Capital Notes payable to the order
                           of the Working Capital Lenders;

                           (ii) Certified copies of the resolutions of the Board
                  of Directors of the Borrower and each other Loan Party
                  approving this Agreement, the Working Capital Notes, each
                  other Third Amendment Document to which it is or is to be a
                  party and, in the case of Parent, approving the IPO, and of
                  all documents evidencing other necessary corporate action and
                  governmental and other third party approvals and consents, if
                  any, with respect to the IPO, this Agreement, the Working
                  Capital Notes and each other Third Amendment Document.

                           (iii) (A) In the case of Parent, the Borrower and AMF
                  Bowling Products, a copy of a certificate of the Secretary of
                  State of the jurisdiction of its incorporation, dated
                  reasonably near the Fourth Closing Date, listing the charter
                  of each such entity and each amendment thereto on file in his
                  office and certifying that (1) such amendments are the only
                  amendments to such entity's charter on file in his office, (2)
                  each such entity has paid all franchise taxes to the date of
                  such certificate and (3) each such entity is duly incorporated
                  and in good standing under the laws of the jurisdiction of its
                  incorporation and (B) in the case of each Loan Party other
                  than the Borrower and AMF Bowling Products, a copy of a
                  certificate of the Secretary of State of the jurisdiction of
                  its incorporation, dated reasonably near the Fourth Closing
                  Date, certifying that (1) such Loan Party has paid all
                  franchise taxes to the date of such certificate and (2) such
                  Loan Party is duly incorporated and in good standing under the
                  laws of the jurisdiction of its incorporation.



                           (iv) A copy of a certificate of the Secretary of
                  State or Commonwealth, as the case may be, of the State of New
                  York and the Commonwealth of Virginia, dated reasonably near
                  the Fourth Closing Date, stating that (A) the Borrower and
                  each other Loan Party that owns property or conducts business
                  in such State or Commonwealth are duly qualified and in good
                  standing as foreign corporations in such State or Commonwealth
                  and (B) have filed all annual reports required to be filed to
                  the date of such certificate.

                           (v) A certificate of the Borrower and each other Loan
                  Party, signed on behalf of the Borrower and such other Loan
                  Party by its President or a Vice President and its Secretary
                  or any Assistant Secretary, dated the Fourth Closing Date (the
                  statements made in which certificate shall be true on and as
                  of the Fourth Closing Date), certifying as to (A) the absence
                  of any amendments to the charter of the Borrower or such other
                  Loan Party since the date of the Secretary of State's
                  certificate referred to in Section 3.01(p)(iii) or
                  3.05(f)(iii), as applicable, (B) the absence of any amendments
                  to the bylaws of the Borrower or such other Loan Party
                  delivered pursuant to Section 3.01(p)(v), (C) the due
                  incorporation and good standing of the Borrower and such other
                  Loan Party as a corporation organized under the laws of the
                  state of its incorporation, and the absence of any proceeding
                  for the dissolution or liquidation of the Borrower or such
                  other Loan Party, (D) the truth of the representations and
                  warranties contained in the Loan Documents as though made on
                  and as of the Fourth Closing Date and (E) the absence of any
                  event occurring and continuing, or resulting from the
                  consummation of the IPO or the other transactions contemplated
                  by the Loan Documents, that constitutes a Default.

                           (vi) A certificate of the Secretary or an Assistant
                  Secretary of the Borrower and each other Loan Party certifying
                  the names and true signatures of the officers of the Borrower
                  and such other Loan Party authorized to sign the Third
                  Amendment, the Working Capital Notes and each other Third
                  Amendment Document to which they are or are to be parties and
                  the other documents to be delivered hereunder and thereunder.

                           (vii) With respect to each state in which Mortgages
have been filed, either:



                                    (A) A letter of local counsel in each state
                           in which Mortgages have been filed (such local
                           counsel to be acceptable to the Administrative Agent)
                           to the effect that, under the law of such state and
                           assuming that, after giving effect to the Third
                           Amendment and the transactions contemplated thereby,
                           so long as (i) the aggregate principal amount of
                           Obligations secured by the Mortgages has not been
                           increased, and (ii) the latest Termination Date for
                           the Facilities has not been extended, no amendment to
                           any Mortgage filed in such state shall be required to
                           perfect and maintain the validity, effectiveness and
                           priority of such Mortgage and the Mortgage liens and
                           security interests created thereunder, or

                                    (B) amendments to the Mortgages in form and
                           substance satisfactory to the Collateral Agent and
                           covering the properties located in such state, duly
                           executed by the appropriate Loan Party.

                           (viii) duly executed financing statements and
                  amendments to the financing statements referred to in Section
                  3.01(p)(vii)(B), to be filed in all jurisdictions that the
                  Collateral Agent may deem necessary or desirable in order to
                  preserve and protect the first priority liens and security
                  interests created under the Collateral Documents.

                           (ix) evidence that Parent, the Borrower and AMF
                  Bowling Products have each filed appropriate forms with the
                  Patent and Trademark Office registering their respective name
                  changes.

                           (x) a revised Schedule 4.01(mm) supplementing the
                  Schedule 4.01(mm) delivered on the First Closing Date in order
                  to properly reflect the information contained in such Schedule
                  as of the Fourth Closing Date.

                           (xi) A favorable opinion of Wachtell, Lipton, Rosen &
                  Katz, special counsel for the Loan Parties, in substantially
                  the form of Exhibit R hereto and as to such other matters as
                  any Lender Party through the Administrative Agent may
                  reasonably request.

                           (xii) A favorable opinion of local counsel in the
                  Commonwealth of Virginia in form and substance satisfactory to
                  the Administrative Agent and as to such other matters as any
                  Lender Party through the Administrative Agent may reasonably
                  request.

                           (xiii) A favorable opinion of Shearman & Sterling,
                  counsel for the Arrangers and the Agents, in form and
                  substance satisfactory to the Arrangers and the Agents.



                  SECTION 3.06. Determinations Under Sections 3.04 and 3.05. For
purposes of determining compliance with the conditions specified in Sections
3.04 and 3.05, each Appropriate Lender shall be deemed to have consented to,
approved or accepted or to be satisfied with each document or other matter
required thereunder to be consented to or approved by or acceptable or
satisfactory to the Appropriate Lenders unless an officer of the Administrative
Agent responsible for the transactions contemplated by the Loan Documents shall
have received notice from such Lender Party prior to the making of the New AXELs
Series B Advances or the Fourth Closing Date, as the case may be, specifying its
objection thereto and, in the case of Section 3.04, such Lender Party shall not
have made available to the Administrative Agent such Lender Party's ratable
portion of such AXELs Series B Borrowing.


                                   ARTICLE IV

                         REPRESENTATIONS AND WARRANTIES

                  SECTION 4.01.  Representations and Warranties of the Borrower.
The Borrower represents and warrants as follows:

                  (a) Each Loan Party (i) is a corporation duly organized,
         validly existing and in good standing under the laws of the
         jurisdiction of its incorporation, (ii) is duly qualified and in good
         standing as a foreign corporation in each other jurisdiction in which
         it owns or leases property or in which the conduct of its business
         requires it to so qualify or be licensed except where the failure to so
         qualify or be licensed could not be reasonably likely to have a
         Material Adverse Effect and (iii) has all requisite corporate power and
         authority (including, without limitation, all governmental licenses,
         permits and other approvals) to own or lease and operate its properties
         and to carry on its business as now conducted and as proposed to be
         conducted. All of the outstanding capital stock of Parent, Holdings and
         the Borrower has been validly issued, is fully paid and non-assessable
         and, as of the First Closing Date, or from and after the delivery of an
         updated Schedule pursuant to Section 5.01(t)(iii), as of the Fourth
         Closing Date, is owned by the Equity Investors in the amounts specified
         on Schedule 4.01(a) or by Parent or Holdings, as the case may be. All
         of the outstanding capital stock of Parent is owned, as of the First
         Closing Date, or from and after the delivery of an updated Schedule
         pursuant to Section 5.01(t)(iii), as of the Fourth Closing Date, free
         and clear of all Liens, except the pledge of such capital stock as is
         owned by management of the Borrower to secure obligations of such
         management owing to Parent. All of the outstanding capital stock of
         Holdings and the Borrower is owned, in each case free and clear of all
         Liens, except, in the case of the capital stock of the Borrower, those
         created under the Collateral Documents.



                  (b) Set forth on Schedule 4.01(b) hereto is a complete and
         accurate list of all Subsidiaries of each Loan Party, showing as of the
         First Closing Date, or from and after the delivery of an updated
         Schedule pursuant to Section 5.01(t)(iii), as of the Fourth Closing
         Date, (as to each such Subsidiary) the jurisdiction of its
         incorporation, the number of shares of each class of capital stock
         authorized, and the number outstanding, on the First Closing Date, or
         from and after the delivery of an updated Schedule pursuant to Section
         5.01(t)(iii), on the Fourth Closing Date, and the percentage of the
         outstanding shares of each such class owned (directly or indirectly) by
         such Loan Party and the number of shares covered by all outstanding
         options, warrants, rights of conversion or purchase and similar rights
         at the First Closing Date, or from and after the delivery of an updated
         Schedule pursuant to Section 5.01(t)(iii), at the Fourth Closing Date.
         All of the outstanding capital stock of all of such Subsidiaries has
         been validly issued and is fully paid and non-assessable; and such
         capital stock (other than directors' qualifying shares), as of the
         First Closing Date, or from and after the delivery of an updated
         Schedule pursuant to Section 5.01(t)(iii), as of the Fourth Closing
         Date, is owned by such Loan Party or one or more of its Subsidiaries,
         other than the China Joint Venture, the capital stock of which is owned
         by a Loan Party or one or more of its Subsidiaries in the amount and
         percentage ownership set forth on Schedule 4.01(b) hereto. All of such
         outstanding capital stock to the extent owned by a Loan Party is owned
         in each case free and clear of all Liens, except those created under
         the Loan Documents. Each such Subsidiary (i) is a corporation duly
         organized, validly existing and in good standing under the laws of the
         jurisdiction of its incorporation, (ii) is duly qualified and in good
         standing as a foreign corporation in each other jurisdiction in which
         it owns or leases property or in which the conduct of its business
         requires it to so qualify or be licensed except where the failure to so
         qualify or be licensed could not be reasonably likely to have a
         Material Adverse Effect and (iii) has all requisite corporate power and
         authority (including, without limitation, all governmental licenses,
         permits and other approvals) to own or lease and operate its properties
         and to carry on its business as now conducted and as proposed to be
         conducted.

                  (c) The execution, delivery and performance by each Loan Party
         of this Agreement, the Notes, each other Loan Document and each Related
         Document to which it is or is to be a party (after the execution and
         delivery thereof as and when required under this Agreement), and the
         consummation of the Acquisition and the other transactions contemplated
         hereby, are within such Loan Party's corporate powers, have been duly
         authorized by all necessary corporate action, and do not (i) contravene
         such Loan Party's charter or bylaws, (ii) violate any law (including,
         without limitation, the Securities Exchange Act of 1934 and the
         Racketeer Influenced and Corrupt Organizations Chapter of the Organized
         Crime Control Act of 1970), rule, regulation (including, without
         limitation, Regulation X of the Board of Governors of the Federal
         Reserve System), order, writ, judgment, injunction, decree,
         determination or award, (iii) conflict with or result in the breach of,
         or constitute a default under, any loan agreement, indenture, mortgage,
         deed of trust or other instrument or material contract or material
         lease binding on or affecting any Loan Party, any of its Subsidiaries
         or any of their properties or (iv) except for the Liens created under
         the Loan Documents, result in or require the creation or imposition of
         any Lien upon or with respect to any of the properties of any Loan
         Party or any of its Subsidiaries. No Loan Party or any of its
         Subsidiaries is in violation of any such law, rule, regulation, order,
         writ, judgment, injunction, decree, determination or award or in breach
         of any such contract, loan agreement, indenture, mortgage, deed of
         trust, lease or other instrument, the violation or breach of which
         could be reasonably likely to have a Material Adverse Effect.



                  (d) 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 due execution,
         delivery, recordation, filing or performance by any Loan Party of this
         Agreement, the Notes, any other Loan Document or any Related Document
         to which it is or is to be a party, or for the consummation of the
         Acquisition or the other transactions contemplated hereby, (ii) the
         grant by any Loan Party of the Liens granted by it pursuant to the
         Collateral Documents, (iii) the perfection or maintenance of the Liens
         created by the Collateral Documents (including the first priority
         nature thereof) or (iv) the exercise by any Agent or any Lender Party
         of its rights under the Loan Documents or the remedies in respect of
         the Collateral pursuant to the Collateral Documents, except for the
         authorizations, approvals, actions, notices and filings listed on
         Schedule 4.01(d) hereto, all of which have been duly obtained, taken,
         given or made and are in full force and effect except as otherwise set
         forth on Schedule 4.01(d) hereto and except those authorizations,
         approvals, actions, notices and filings the failure to obtain, take,
         give or make which, either individually or in the aggregate, could not
         be reasonably expected to have a Material Adverse Effect. All
         applicable waiting periods in connection with the Acquisition and the
         other transactions contemplated hereby have expired or been terminated
         without any action having been taken by any competent authority
         restraining, preventing or imposing materially adverse conditions upon
         the Acquisition or the rights of the Loan Parties or their Subsidiaries
         freely to transfer or otherwise dispose of, or to create any Lien on,
         any properties now owned or hereafter acquired by any of them except
         where, in the case of any such waiting period other than any waiting
         period required under the Hart-Scott-Rodino Antitrust Improvements Act
         of 1976, as amended, the failure of such waiting period to have expired
         without any such action having been taken could not be reasonably
         likely to have a Material Adverse Effect.

                  (e) This Agreement has been, and each of the Notes, each other
         Loan Document and each Related Document when delivered hereunder will
         have been, duly executed and delivered by each Loan Party party
         thereto. This Agreement is, and each of the Notes, each other Loan
         Document and each Related Document when delivered hereunder will be,
         the legal, valid and binding obligation of each Loan Party party
         thereto, enforceable against such Loan Party in accordance with its
         terms.



                  (f) (i) The Consolidated balance sheet of the Company and its
         Subsidiaries as at December 31, 1996, and the related Consolidated
         statements of income and cash flows of the Company and its Subsidiaries
         for the fiscal year then ended, accompanied by an opinion of Arthur
         Andersen, L.L.P, independent public accountants, copies of which have
         been furnished to each Lender Party, fairly present the Consolidated
         financial condition of the Company and its Subsidiaries as at such date
         and the Consolidated results of the operations of the Company and its
         Subsidiaries for the period ended on such date, all in accordance with
         generally accepted accounting principles applied on a consistent basis,
         and since December 31, 1996, there has been no Material Adverse Change.

                           (ii) The Consolidated balance sheets of the Borrower
                  and its Subsidiaries as at June 30, 1997, and the related
                  Consolidated statements of income and cash flows of the
                  Borrower and its Subsidiaries for the six months then ended,
                  certified by a Designated Financial Officer, copies of which
                  have been furnished to each Lender Party, fairly present,
                  subject to year-end audit adjustments, the Consolidated
                  financial condition of the Borrower and its Subsidiaries as at
                  such date and the Consolidated results of operations of the
                  Borrower and its Subsidiaries for the period ended on such
                  date, all in accordance with generally accepted accounting
                  principles applied on a consistent basis.

                  (g) The Consolidated pro forma balance sheet of the Borrower
         and its Subsidiaries as at December 31, 1995, and the related
         Consolidated pro forma statements of income and cash flows of the
         Borrower and its Subsidiaries for the year then ended, certified by a
         Designated Financial Officer, copies of which have been furnished to
         each Lender Party, fairly present the Consolidated pro forma financial
         condition of the Borrower and its Subsidiaries as at such date and the
         Consolidated pro forma results of operations of the Borrower and its
         Subsidiaries for the period ended on such date, in each case giving
         effect to the Acquisition and the other transactions contemplated
         hereby, all in accordance with GAAP.

                  (h) The Consolidated forecasted balance sheets, income
         statements and cash flows statements of the Borrower and its
         Subsidiaries delivered to the Lender Parties pursuant to Section
         3.01(p)(xiii) or 5.03 were prepared in good faith on the basis of the
         assumptions stated therein, which assumptions were fair in the light of
         conditions existing at the time of delivery of such forecasts, and
         represented, at the time of delivery, the Borrower's best estimate of
         its future financial performance.

                  (i) Neither the Information Memorandum nor any other
         information, exhibit or report furnished by any Loan Party to any Agent
         or any Lender Party in connection with the negotiation and syndication
         of the Loan Documents or pursuant to the terms of the Loan Documents
         contained any untrue statement of a material fact or omitted to state a
         material fact necessary to make the statements made therein not
         misleading.



                  (j) There is no action, suit, investigation, litigation or
         proceeding affecting any Loan Party or any of its Subsidiaries,
         including any Environmental Action, pending or threatened before any
         court, governmental agency or arbitrator that (i) would be reasonably
         likely to have a Material Adverse Effect or (ii) purports to affect the
         legality, validity or enforceability of the Acquisition, this
         Agreement, any Note, any other Loan Document or any Related Document or
         the consummation of the transactions contemplated hereby (other than
         any such action, suit, investigation, litigation or proceeding that, in
         the judgment of the Agents, is frivolous).

                  (k) No proceeds of any Advance or drawings under any Letter of
         Credit will be used to acquire any equity security of a class that is
         registered pursuant to Section 12 of the Securities Exchange Act of
         1934.

                  (l) The Borrower is not engaged in the business of extending
         credit for the purpose of purchasing or carrying Margin Stock, and no
         proceeds of any Advance or drawings under any Letter of Credit will be
         used to purchase or carry any Margin Stock or to extend credit to
         others for the purpose of purchasing or carrying any Margin Stock.

                  (m) Set forth on Schedule 4.01(m) hereto is a complete and
         accurate list, as of the First Closing Date, or from and after the
         delivery of an updated Schedule pursuant to Section 5.01(t)(iii), as of
         the Fourth Closing Date, of all Plans, Multiemployer Plans and Welfare
         Plans.

                  (n) No ERISA Event has occurred or is reasonably expected to
         occur with respect to any Plan that could be reasonably expected to
         have a Material Adverse Effect.

                  (o) As of the last annual actuarial valuation date, the funded
         current liability percentage, as defined in Section 302(d)(8) of ERISA,
         of each Plan exceeds 90% and there has been no material adverse change
         in the funding status of such Plan since such date.

                  (p) Schedule B (Actuarial Information) to the most recent
         annual report (Form 5500 Series) for each Plan, copies of which have
         been filed with the Internal Revenue Service and furnished to the
         Lender Parties, is complete and accurate and fairly presents the
         funding status of such Plan, and since the date of such Schedule B
         there has been no material adverse change in such funding status.



                  (q) Neither any Loan Party nor any ERISA Affiliate has
         incurred or is reasonably expected to incur any Withdrawal Liability to
         any Multiemployer Plan that could be reasonably expected to have a
         Material Adverse Effect.

                  (r) Neither any Loan Party nor any ERISA Affiliate has been
         notified by the sponsor of a Multiemployer Plan that such Multiemployer
         Plan is in reorganization or has been terminated, within the meaning of
         Title IV of ERISA, and no such Multiemployer Plan is reasonably
         expected to be in reorganization or to be terminated, within the
         meaning of Title IV of ERISA, except to the extent that any such
         reorganization or termination could not be reasonably expected to have
         a Material Adverse Effect.

                  (s) With respect to each scheme or arrangement mandated by a
         government other than the United States (a "Foreign Government Scheme
         or Arrangement") and with respect to each employee benefit plan
         maintained or contributed to by any Loan Party or any Subsidiary of any
         Loan Party that is not subject to United States law (a "Foreign Plan")
         to the extent that there could reasonably be expected to be a Material
         Adverse Effect:

                           (i) Any employer and employee contributions required
                  by law or by the terms of any Foreign Government Scheme or
                  Arrangement or any Foreign Plan have been made, or, if
                  applicable, accrued, in accordance with normal accounting
                  practices.

                           (ii) The fair market value of the assets of each
                  funded Foreign Plan, the liability of each insurer for any
                  Foreign Plan funded through insurance or the book reserve
                  established for any Foreign Plan, together with any accrued
                  contributions, is sufficient to procure or provide for the
                  accrued benefit obligations, as of the First Closing Date, or
                  from and after the delivery of an updated Schedule pursuant to
                  Section 5.01(t)(iii), as of the Fourth Closing Date, with
                  respect to all current and former participants in such Foreign
                  Plan according to the actuarial assumptions and valuations
                  most recently used to determine employer contributions to such
                  Foreign Plan.

                           (iii) Each Foreign Plan required to be registered has
                  been registered and has been maintained in good standing with
                  applicable regulatory authorities.

                  (t) Except as set forth in the financial statements referred
         to in this Section 4.01 and in Section 5.03, the Loan Parties and their
         respective Subsidiaries have no material liability with respect to
         "expected post retirement benefit obligations" within the meaning of
         Statement of Financial Accounting Standards No. 106.



                  (u) Neither the business nor the properties of any Loan Party
         or any of its Subsidiaries have been affected by any fire, explosion,
         accident, strike, lockout or other labor dispute, drought, storm, hail,
         earthquake, embargo, act of God or of the public enemy or other
         casualty (whether or not covered by insurance) that could be reasonably
         likely to have a Material Adverse Effect.

                  (v) Except as set forth on Schedule 4.01(v) hereto or as could
         not reasonably be expected to have, individually or in the aggregate, a
         Material Adverse Effect, the operations and properties of each Loan
         Party and each of its Subsidiaries comply with all applicable
         Environmental Laws and Environmental Permits, and (except as aforesaid)
         all past non-compliance with such Environmental Laws and Environmental
         Permits has been resolved without ongoing obligations or costs, and no
         circumstances exist that could be reasonably likely to (i) form the
         basis of an Environmental Action against any Loan Party or any of its
         Subsidiaries or any of their properties that could have a Material
         Adverse Effect or (ii) cause any such property to be subject to any
         material restrictions on ownership, occupancy, use or transferability
         under any Environmental Law.

                  (w) Except as set forth on Schedule 4.01(w) hereto or as could
         not reasonably be expected to have, individually or in the aggregate, a
         Material Adverse Effect, (i) none of the properties currently owned or
         operated by any Loan Party or any of its Subsidiaries or, to the best
         knowledge of any Loan Party or any of its Subsidiaries, none of the
         properties formerly owned or operated by any of them, is listed or
         proposed for listing on the NPL or on the CERCLIS or any analogous
         foreign, state or local list or is adjacent to any such property; (ii)
         there are no and never have been any underground or aboveground storage
         tanks or any surface impoundments, septic tanks, pits, sumps or lagoons
         in which Hazardous Materials are being or have been treated, stored or
         disposed on any property currently owned or operated by any Loan Party
         or any of its Subsidiaries or, to the best of its knowledge, on any
         property formerly owned or operated by any Loan Party or any of its
         Subsidiaries; (iii) there is no asbestos or asbestos-containing
         material on any property currently owned or operated by any Loan Party
         or any of its Subsidiaries; and (iv) Hazardous Materials have not been
         released, discharged or disposed of on any property currently or
         formerly owned or operated by any Loan Party or any of its
         Subsidiaries.



                  (x) Except as set forth on Schedule 4.01(x) hereto or as could
         not reasonably be expected to have, individually or in the aggregate, a
         Material Adverse Effect, neither any Loan Party nor any of its
         Subsidiaries is undertaking, or has failed to complete, either
         individually or together with other potentially responsible parties,
         any investigation or assessment or remedial or response action relating
         to any actual or threatened release, discharge or disposal of Hazardous
         Materials at any site, location or operation, either voluntarily or
         pursuant to the order of any governmental or regulatory authority or
         the requirements of any Environmental Law; and all Hazardous Materials
         generated, used, treated, handled or stored at, or transported to or
         from, any property currently or formerly owned or operated by any Loan
         Party or any of its Subsidiaries, and that have been disposed of in any
         manner, have been disposed of only in a manner not reasonably expected
         to result in a Material Adverse Effect.

                  (y) Neither any Loan Party nor any of its Subsidiaries is a
         party to any indenture, loan or credit agreement or any lease or other
         agreement or instrument or subject to any charter or corporate
         restriction that could be reasonably likely to have a Material Adverse
         Effect.

                  (z) The Collateral Documents create a valid and perfected
         first priority security interest in the Collateral subject only to
         Permitted Encumbrances, securing the payment of the Secured Obligations
         (as defined in the Collateral Documents), and all filings and other
         actions necessary or desirable to perfect and protect such security
         interest have been duly taken. The Loan Parties are the legal and
         beneficial owners of the Collateral free and clear of any Lien, except
         for the liens and security interests created or permitted under the
         Loan Documents.

                  (aa) Each Loan Party and each of its Subsidiaries has filed,
         has caused to be filed or has been included in all federal income and
         other material tax returns (Federal, state, local and foreign) required
         to be filed and has paid all income and other material taxes shown
         thereon to be due, together with applicable interest and penalties.

                  (bb) Set forth on Schedule 4.01(bb) hereto is a complete and
         accurate list, as of the First Closing Date, or from and after the
         delivery of an updated Schedule pursuant to Section 5.01(t)(iii), as of
         the Fourth Closing Date, of each taxable year of each Loan Party and
         each of its Subsidiaries for which Federal income tax returns have been
         filed and for which the expiration of the applicable statute of
         limitations for assessment or collection has not occurred by reason of
         extension or otherwise (an "Open Year").

                  (cc) As of the First Closing Date, or from and after the
         delivery of an updated Schedule pursuant to Section 5.01(t)(iii), as of
         the Fourth Closing Date, there are no adjustments to the Federal income
         tax liability of each Loan Party and each of its Subsidiaries proposed
         by the Internal Revenue Service with respect to Open Years that,
         individually or in the aggregate, could be reasonably likely to have a
         Material Adverse Effect. No issues have been raised by the Internal
         Revenue Service in respect of Open Years that, in the aggregate, could
         be reasonably likely to have a Material Adverse Effect.



                  (dd) As of the First Closing Date, or from and after the
         delivery of an updated Schedule pursuant to Section 5.01(t)(iii), as of
         the Fourth Closing Date, there are no adjustments to the state, local
         and foreign tax liability of each Loan Party and its Subsidiaries
         proposed by all state, local and foreign taxing authorities (other than
         amounts arising from adjustments to Federal income tax returns) that,
         individually or in the aggregate, could be reasonably likely to have a
         Material Adverse Effect. No issues have been raised by such taxing
         authorities that, in the aggregate, could be reasonably likely to have
         a Material Adverse Effect.

                  (ee) The Acquisition will not result in the imposition of
         federal income taxes on or with respect to the Borrower.

                  (ff) Except as a direct result of the Acquisition and the
         acquisition by AMF Bowling Centers of the companies set forth on
         Schedule 4.01(ff) hereto, no "ownership change" as defined in Section
         382(g) of the Internal Revenue Code, and no event that would result in
         the application of the "separate return limitation year" or
         "consolidated return change of ownership" limitations under the Federal
         income tax consolidated return regulations, has occurred with respect
         to the Borrower or the Company since May 1, 1993.

                  (gg) Neither any Loan Party nor any of its Subsidiaries is an
         "investment company," or "promoter" or "principal underwriter" for, an
         "investment company," as such terms are defined in the Investment
         Company Act of 1940, as amended. Neither the making of any Advances,
         nor the issuance of any Letters of Credit, nor the application of the
         proceeds or repayment thereof by the Borrower, nor the consummation of
         the other transactions contemplated hereby, will violate any provision
         of such Act or any rule, regulation or order of the Securities and
         Exchange Commission thereunder.

                  (hh) Each Loan Party is, individually and together with its
         Subsidiaries, Solvent.

                  (ii) Set forth on Schedule 4.01(ii) hereto is a complete and
         accurate list of all Existing Debt (other than Surviving Debt), showing
         as of the First Closing Date, or from and after the delivery of an
         updated Schedule pursuant to Section 5.01(t)(iii), as of the Fourth
         Closing Date, the principal amount outstanding thereunder.

                  (jj) Set forth on Schedule 3.01(e) hereto is a complete and
         accurate list of all Surviving Debt, showing as of the First Closing
         Date, or from and after the delivery of an updated Schedule pursuant to
         Section 5.01(t)(iii), as of the Fourth Closing Date, the principal
         amount outstanding thereunder, the maturity date thereof and the
         amortization schedule therefor.



                  (kk) Set forth on Schedule 4.01(kk) hereto is a complete and
         accurate list of all real property owned by any Loan Party or any of
         its Subsidiaries, showing as of the First Closing Date, or from and
         after the delivery of an updated Schedule pursuant to Section
         5.01(t)(iii), as of the Fourth Closing Date, the street address, county
         or other relevant jurisdiction, state, record owner and book value
         thereof. Each Loan Party or such Subsidiary has good, marketable and
         insurable fee simple title to such real property, free and clear of all
         Liens, other than Liens created or permitted by the Loan Documents.

                  (ll) Set forth on Schedule 4.01(ll) hereto is a complete and
         accurate (in the case of leases of real property outside the United
         States, in all material respects) list of all leases of real property
         under which any Loan Party or any of its Subsidiaries is the lessee,
         showing as of the First Closing Date, or from and after the delivery of
         an updated Schedule pursuant to Section 5.01(t)(iii), as of the Fourth
         Closing Date, the street address, county or other relevant
         jurisdiction, state, lessor, lessee, expiration date and annual rental
         cost thereof. Each such lease is the legal, valid and binding
         obligation of the lessee thereof, enforceable in accordance with its
         terms.

                  (mm) Set forth on Schedule 4.01(mm) hereto is a complete and
         accurate list of all Investments held by any Loan Party or any of its
         Subsidiaries, showing as of the Fourth Closing Date, the amount,
         obligor or issuer and maturity, if any, thereof.

                  (nn) Set forth on Schedule 4.01(nn) hereto is a complete and
         accurate list of all patents, trademarks, trade names, service marks
         and copyrights, and all applications therefor and licenses thereof, of
         each Loan Party or any of its Subsidiaries, showing as of the First
         Closing Date, or from and after the delivery of an updated Schedule
         pursuant to Section 5.01(t)(iii), as of the Fourth Closing Date, the
         jurisdiction in which registered, the registration number, the date of
         registration and the expiration date, and the Loan Parties and their
         Subsidiaries own or have a license to use all patents, trademarks,
         trade names, service marks and copyrights reasonably necessary to carry
         on their business as now conducted and as proposed to be conducted.

                  (oo) The Debt of the Loan Parties under the Loan Documents
         constitutes "Senior Debt" as such term is defined in the Subordinated
         Notes Indentures.


                                   ARTICLE V

                           COVENANTS OF THE BORROWER

                  SECTION 5.01.  Affirmative Covenants.  So long as any Advance
shall remain unpaid, any Letter of Credit shall be outstanding or any Lender
Party shall have any Commitment hereunder, the Borrower will:



                  (a) Compliance with Laws, Etc. Comply, and cause each of its
         Subsidiaries to comply, in all material respects, with all applicable
         laws, rules, regulations and orders, such compliance to include,
         without limitation, compliance with ERISA and the Racketeer Influenced
         and Corrupt Organizations Chapter of the Organized Crime Control Act of
         1970, except, in any case, where the failure so to comply, either
         individually or in the aggregate, could not be reasonably expected to
         have a Material Adverse Effect and would not be reasonably likely to
         subject any Loan Party or any of its Subsidiaries to any criminal
         penalties or any Lender Party to any civil or criminal penalties.

                  (b) Payment of Taxes, Etc. Pay and discharge, and cause each
         of its Subsidiaries to pay and discharge, before the same shall become
         delinquent, (i) all federal income and other material taxes,
         assessments and governmental charges or levies imposed upon it or upon
         its property and (ii) all lawful claims that, if unpaid, might by law
         become a Lien upon its property; provided, however, that neither the
         Borrower nor any of its Subsidiaries shall be required to pay or
         discharge any such tax, assessment, charge or claim (x) that is being
         contested in good faith and by proper proceedings and as to which
         appropriate reserves are being maintained or (y) in respect of which
         the Lien resulting therefrom, if any, attaches to its property and
         becomes enforceable against its other creditors, to the extent that the
         aggregate amount of all such taxes, assessments, charges or claims does
         not exceed $3,000,000.

                  (c) Compliance with Environmental Laws. Comply, and cause each
         of its Subsidiaries and all lessees and other Persons operating or
         occupying its properties to comply, in all material respects, with all
         Environmental Laws and Environmental Permits; obtain and renew and
         cause each of its Subsidiaries to obtain and renew, when legally
         required, all Environmental Permits necessary for its operations and
         properties; and conduct, and cause each of its Subsidiaries to conduct,
         any required investigation, study, sampling and testing, and undertake
         any required cleanup, removal, remedial or other action necessary to
         remove and clean up all Hazardous Materials from any of its properties,
         only in accordance with the requirements of all Environmental Laws;
         except, in any case under this subsection (c), where the failure to so
         comply with or perform any of the foregoing, either individually or in
         the aggregate, could not be reasonably expected to have a Material
         Adverse Effect and would not be reasonably likely to subject any Loan
         Party or any of its Subsidiaries to any criminal penalties or any
         Lender Party to any civil or criminal penalties; provided, however,
         that neither the Borrower nor any of its Subsidiaries shall be required
         to undertake any such cleanup, removal, remedial or other action to the
         extent that its obligation to do so is being contested in good faith
         and by proper proceedings and appropriate reserves are being maintained
         with respect to such circumstances.



                  (d) Maintenance of Insurance. Maintain, and cause each of its
         Subsidiaries to maintain, insurance with responsible and reputable
         insurance companies or associations in such amounts and covering such
         risks as is usually carried by companies engaged in similar businesses
         and owning similar properties in the same general areas in which the
         Borrower or such Subsidiary operates.

                  (e) Preservation of Corporate Existence, Etc. Preserve and
         maintain, and cause each of its Subsidiaries to preserve and maintain,
         its existence, legal structure, legal name, rights (charter and
         statutory), permits, licenses, approvals, privileges and franchises;
         provided, however, that the Borrower and its Subsidiaries may
         consummate any merger or consolidation permitted under Section 5.02(d);
         provided further that neither the Borrower nor any of its Subsidiaries
         shall be required to preserve any right, permit, license, approval,
         privilege or franchise if the Borrower or such Subsidiary shall
         determine that the preservation thereof is no longer desirable in the
         conduct of the business of the Borrower or such Subsidiary, as the case
         may be, and that the loss thereof is not disadvantageous in any
         material respect to the Borrower, such Subsidiary or the Lender Parties
         or, with respect to permits, licenses, approvals, privileges and
         franchises, that the loss thereof could not be reasonably expected to
         have a Material Adverse Effect.

                  (f) Visitation Rights. At any reasonable time and from time to
         time, permit any Agent or any of the Lender Parties or any agents or
         representatives thereof, to examine and make copies of and abstracts
         from the records and books of account of, and visit the properties of,
         the Borrower and any of its Subsidiaries, and to discuss the affairs,
         finances and accounts of the Borrower and any of its Subsidiaries with
         any of their officers or directors and with their independent certified
         public accountants.

                  (g) Preparation of Environmental Reports. At the request of
         the Administrative Agent upon the occurrence and during the continuance
         of a Default or upon the reasonable belief of the Required Lenders or
         the Administrative Agent that Hazardous Materials contamination of a
         nature or to an extent not set forth on Schedule 4.01(v), 4.01(w) or
         4.01(x) hereto may be present on any property described in the
         Mortgages in a manner or condition that could reasonably be expected to
         have a Material Adverse Effect, provide to the Lender Parties within 60
         days after such request, at the expense of the Borrower, an
         environmental site assessment report for any of its or its
         Subsidiaries' properties described in the Mortgages, prepared by an
         environmental consulting firm acceptable to the Administrative Agent,
         indicating the presence or absence of Hazardous Materials and the
         estimated cost of any compliance, removal or remedial action in
         connection with any Hazardous Materials on such properties; without
         limiting the generality of the foregoing, if the Required Lenders
         reasonably determine at any time that a material risk exists that any
         such report will not be provided within the time referred to above, the
         Required Lenders may retain an environmental consulting firm to prepare
         such report at the expense of the Borrower, and the Borrower hereby
         grants and agrees to cause any Subsidiary that owns any property
         described in the Mortgages to grant at the time of such request, to the
         Agents, the Lender Parties, such firm and any agents or representatives
         thereof an irrevocable non-exclusive license, subject to the rights of
         tenants, to enter onto their respective properties to undertake such an
         assessment at any reasonable time and upon reasonable prior notice.



                  (h) Keeping of Books. Keep, and cause each of its Subsidiaries
         to keep, proper books of record and account, in which full and correct
         entries shall be made of all financial transactions and the assets and
         business of the Borrower and each such Subsidiary in accordance with
         generally accepted accounting principles in effect from time to time.

                  (i) Maintenance of Properties, Etc. Maintain and preserve, and
         cause each of its Subsidiaries to maintain and preserve, all of its
         properties that are used or useful in the conduct of its business in
         good working order and condition, ordinary wear and tear excepted,
         except where the failure to do so, either individually or in the
         aggregate, could not be reasonably expected to have a Material Adverse
         Effect.

                  (j) Compliance with Terms of Leaseholds. Make all payments and
         otherwise perform all obligations in respect of all leases of real
         property to which the Borrower or any of its Subsidiaries is a party,
         keep such leases in full force and effect and not allow such leases to
         lapse or be terminated or any rights to renew such leases to be
         forfeited or cancelled, notify the Administrative Agent of any default
         by any party with respect to such leases and cooperate with the
         Administrative Agent in all respects to cure any such default, and
         cause each of its Subsidiaries to do so, except, in any case, where the
         failure to do so, either individually or in the aggregate, could not be
         reasonably expected to have a Material Adverse Effect.

                  (k) Performance of Related Documents. Perform and observe all
         of the terms and provisions of each Related Document to be performed or
         observed by it, maintain each such Related Document in full force and
         effect, enforce such Related Document in accordance with its terms
         (other than Section 1.5 of the Stockholders' Agreement), take all such
         action to such end as may be from time to time requested by the
         Administrative Agent and, upon request of the Administrative Agent,
         make to each other party to each such Related Document such demands and
         requests for information and reports or for action as the Borrower is
         entitled to make under such Related Document, and cause each of its
         Subsidiaries to do so, except, in any case, where the failure to do so,
         either individually or in the aggregate, could not be reasonably
         expected to have a Material Adverse Effect.



                  (l) Transactions with Affiliates. Conduct, and cause each of
         its Subsidiaries to conduct, all transactions otherwise permitted under
         the Loan Documents with any of their Affiliates on terms that are fair
         and reasonable and no less favorable to the Borrower or such Subsidiary
         than it would obtain in a comparable arm's-length transaction with a
         Person not an Affiliate, other than transactions between or among Loan
         Parties and other transactions described on Schedule 5.01(l) hereto.

                  (m) Cash Concentration Accounts. Maintain main cash
         concentration accounts with Citibank and Blocked Accounts into which
         substantially all proceeds of Collateral are paid with Citibank or one
         or more banks acceptable to the Collateral Agent that have accepted the
         assignment of such accounts to the Collateral Agent for the benefit of
         the Secured Parties pursuant to the Security Agreement.

                  (n) Covenant to Guarantee Obligations and Give Security. At
         any time (x) upon the request of the Collateral Agent following the
         occurrence and during the continuance of a Default, (y) at such time as
         any new direct or indirect Subsidiaries of the Borrower are formed or
         acquired by any Loan Party or (z) any property is acquired by any Loan
         Party, in each case at the expense of the Borrower:

                           (i) within 10 days after such request, formation or
                  acquisition, cause each such Subsidiary (other than any
                  Foreign Subsidiary), and cause each direct and indirect parent
                  (other than the Borrower and any Foreign Subsidiary) of such
                  Subsidiary (if it has not already done so), to duly execute
                  and deliver to the Collateral Agent a guaranty, in form and
                  substance satisfactory to the Collateral Agent, guaranteeing
                  the other Loan Parties' Obligations under the Loan Documents,

                           (ii) within 10 days after such request, formation or
                  acquisition, furnish to the Collateral Agent a description of
                  the real and personal properties of the Borrower and its
                  Subsidiaries in detail satisfactory to the Collateral Agent,

                           (iii) within 15 days after such request, formation or
                  acquisition, duly execute and deliver, and cause each such
                  Subsidiary (other than any Foreign Subsidiary) and each direct
                  and indirect parent of such Subsidiary (if it has not already
                  done so) (other than any Foreign Subsidiary except to the
                  extent permitted in the fourth proviso below) to duly execute
                  and deliver, to the Collateral Agent mortgages, pledges,
                  assignments and other security agreements, as specified by and
                  in form and substance satisfactory to the Collateral Agent,
                  securing payment of all the Obligations of the Borrower, such
                  Subsidiary or such parent, as the case may be, under the Loan
                  Documents and constituting Liens on all such properties;
                  provided that with respect to any leasehold, the Borrower
                  shall use, and shall cause its Subsidiaries to use, best
                  efforts to acquire such leasehold in a way such that consent
                  of the landlord thereof shall not be required in connection
                  with the mortgaging thereof; provided further, however, that
                  such leasehold shall not be required to be mortgaged if, after
                  the applicable Loan Party has used its best efforts as set
                  forth in the immediately preceding proviso and to obtain
                  landlord consents to the extent required by Section 5.01(p),
                  such Loan Party is unable to obtain such consent; provided
                  still further that, so long as no Event of Default shall have
                  occurred and be continuing, such leasehold shall not be
                  required to be mortgaged if the Collateral Agent shall
                  determine, in its sole discretion, not to require the
                  mortgaging of such leasehold because such leasehold has an
                  immaterial value or constitutes an immaterial portion of the
                  property of the Person owning such leasehold; provided still
                  further that, with respect to the pledge of the capital stock
                  of any Foreign Subsidiary, such pledge shall cover not more
                  than 66% of the outstanding capital stock of such Foreign
                  Subsidiary if it is directly owned by a Loan Party and not
                  cover any of the outstanding capital stock of such Foreign
                  Subsidiary if it is directly or indirectly owned by another
                  Foreign Subsidiary,



                           (iv) within 30 days after such request, formation or
                  acquisition, take, and cause such Subsidiary (other than any
                  Foreign Subsidiary) or such parent (other than any Foreign
                  Subsidiary) to take, whatever action (including, without
                  limitation, the recording of mortgages, the filing of Uniform
                  Commercial Code financing statements, the giving of notices
                  and the endorsement of notices on title documents) may be
                  necessary or advisable in the opinion of the Collateral Agent
                  to vest in the Collateral Agent (or in any representative of
                  the Collateral Agent designated by it) valid and subsisting
                  Liens on the properties purported to be subject to the
                  mortgages, pledges, assignments and security agreements
                  delivered pursuant to this Section 5.01(n), enforceable
                  against all third parties in accordance with their terms,

                           (v) within 60 days after such request, formation or
                  acquisition, deliver to the Collateral Agent, upon the request
                  of the Collateral Agent in its sole discretion, a signed copy
                  of a favorable opinion, addressed to the Collateral Agent and
                  the other Secured Parties, of counsel for the Loan Parties
                  acceptable to the Collateral Agent as to the matters contained
                  in clauses (i), (iii) and (iv) above, as to such guaranties,
                  mortgages, pledges, assignments and security agreements being
                  legal, valid and binding obligations of each Loan Party party
                  thereto enforceable in accordance with their terms and as to
                  such other matters as the Collateral Agent may reasonably
                  request,

                           (vi) as promptly as practicable after such request,
                  formation or acquisition, deliver, upon the request of the
                  Collateral Agent in its sole discretion, to the Collateral
                  Agent (x) with respect to each parcel of real property owned
                  or held by the entity (other than any Foreign Subsidiary) that
                  is the subject of such request, formation or acquisition and
                  on which a manufacturing facility is located, surveys and
                  engineering, soils and other reports meeting the criteria
                  specified in Section 3.01(p)(ix)(C) or (D), as the case may
                  be, Mortgage Policies and an environmental assessment report
                  meeting the criteria specified in Section 3.01(p)(xv) and (y)
                  with respect to each other parcel of real property owned by
                  the entity that is the subject of such request, formation or
                  acquisition, title reports meeting the criteria specified in
                  Section 3.01(p)(ix)(B), provided, however, that to the extent
                  that the Borrower or any of its Subsidiaries shall have
                  otherwise received any of the foregoing items with respect to
                  such real property, such items shall promptly after the
                  receipt thereof be delivered to the Collateral Agent,


                           (vii) upon the occurrence and during the continuance
                  of a Default, promptly cause to be deposited, and cause each
                  of its Subsidiaries to cause to be promptly deposited, any and
                  all cash dividends paid or payable to it or any of its
                  Subsidiaries from any of its Subsidiaries from time to time
                  into the Cash Collateral Account, and with respect to all
                  other dividends paid or payable to it or any of its
                  Subsidiaries from time to time, promptly execute and deliver,
                  or cause such Subsidiary to promptly execute and deliver, as
                  the case may be, any and all further instruments and take or
                  cause such Subsidiary to take, as the case may be, all such
                  other action as the Collateral Agent may deem necessary or
                  desirable in order to obtain and maintain from and after the
                  time such dividend is paid or payable a perfected, first
                  priority lien on and security interest in such dividends, and

                           (viii) at any time and from time to time, promptly
                  execute and deliver any and all further instruments and
                  documents and take all such other action as the Collateral
                  Agent may deem necessary or desirable in obtaining the full
                  benefits of, or in perfecting and preserving the Liens of,
                  such guaranties, mortgages, pledges, assignments and security
                  agreements.

                  (o) Interest Rate Hedging. Maintain at all times, until such
         time as the aggregate outstanding amount under the Term Facilities
         shall be less than $400,000,000, interest rate Hedge Agreements with
         Persons acceptable to the Administrative Agent, covering a notional
         amount of not less than 50% of the Commitments under all of the
         Facilities and the other floating rate Debt of the Loan Parties and
         providing for such Persons to make payments thereunder for a period of
         no less than one year to the extent of increases in interest rates
         greater than 3% above the weighted average Eurodollar Rate on the First
         Closing Date.



                  (p) Landlord's Consents, Etc. With respect to leaseholds set
         forth on Part II of Schedule 4.01(ll) hereto, for a reasonable period
         of time after the First Closing Date, and with respect to any leasehold
         acquired after the First Closing Date (other than by a Foreign
         Subsidiary) for a reasonable period of time after the acquisition
         thereof, use, and cause its Subsidiaries to use, its best efforts to
         cure any technical defect as may be required or, in the judgment of the
         Collateral Agent, necessary or desirable (as notified to such Loan
         Party by the Collateral Agent) to be cured in order to permit the
         mortgaging of any leasehold under which any Loan Party is a lessee and,
         if a Default shall have occurred and be continuing, use, and cause its
         Subsidiaries to use, its best efforts to obtain any consent required
         or, in the judgment of the Collateral Agent, necessary or desirable (as
         notified to such Loan Party by the Collateral Agent) to permit the
         mortgaging of any leasehold under which any Loan Party is a lessee,
         and, in either case, use its best efforts to deliver and cause each of
         its Subsidiaries to use its best efforts to deliver, such documents and
         other items referred to in Section 5.01(n) as may be applicable in
         connection with the mortgaging of such leasehold.

                  (q) Conditions Subsequent to Initial Extension of Credit.
         Deliver to the Collateral Agent, in form and substance satisfactory to
         the Collateral Agent and in sufficient copies for each Lender Party, as
         soon as possible and in any event within 60 days after the Initial
         Extension of Credit (or such later date as may be agreed by the
         Borrower and the Collateral Agent):

                           (i) acknowledgment copies of proper financing
                  statements, duly filed under the Uniform Commercial Code of
                  all jurisdictions that the Collateral Agent may deem necessary
                  or desirable in order to perfect and protect the first
                  priority liens and security interests created under the
                  Security Agreement, covering the Collateral described in the
                  Security Agreement,

                           (ii) completed requests for information, listing the
                  financing statements referred to in clause (i) above and all
                  other effective financing statements filed in the
                  jurisdictions referred to in clause (i) above that name any
                  Loan Party as debtor, together with copies of such financing
                  statements,

                           (iii) evidence that counterparts of the Mortgages
                  have been duly recorded in all filing or recording offices
                  that the Collateral Agent may deem necessary or desirable in
                  order to create a valid first and subsisting Lien on the
                  property described therein in favor of the Secured Parties
                  subject only to Permitted Encumbrances and that all filing and
                  recording taxes and fees have been paid,

                           (iv) evidence of the completion of all recordings and
                  filings of or with respect to the Intellectual Property
                  Security Agreement that the Collateral Agent may deem
                  necessary or desirable in order to perfect and protect the
                  Liens created thereunder,


                           (v) evidence that such action as the Collateral Agent
                  may deem necessary or desirable in order to perfect and
                  protect the Liens on the capital stock held by any Loan Party
                  in any of its Foreign Subsidiaries has been taken (including,
                  without limitation, the execution and delivery by the
                  applicable Loan Party of such agreements or instruments of
                  pledge as may be necessary to perfect and protect Liens in
                  favor of the Collateral Agent for the benefit of the Secured
                  Parties on capital stock of each of the Borrower's
                  Subsidiaries organized under the laws of Australia), provided
                  that in any event such Liens shall cover not more than 66% of
                  the outstanding capital stock of Foreign Subsidiaries directly
                  owned by such Loan Party and shall not cover any capital stock
                  of any Foreign Subsidiary directly or indirectly owned by a
                  Foreign Subsidiary,

                           (vi) a signed copy of a favorable opinion addressed
                  to the Collateral Agent and the other Secured Parties, of
                  counsel for the Loan Parties acceptable to the Collateral
                  Agent, as to the agreements and instruments of pledge referred
                  to in clause (v) above being the legal, valid and binding
                  obligation of the Loan Party thereto, enforceable in
                  accordance with their terms and as to such other matters as
                  the Collateral Agent may reasonably request,

                           (vii) evidence that all other action as the
                  Collateral Agent may deem necessary or desirable in order to
                  perfect and protect the first priority liens and security
                  interests created under the Collateral Documents has been
                  taken,

                           (viii) evidence of business interruption insurance
                  naming the Collateral Agent for the benefit of the Secured
                  Parties as insured, as is satisfactory to the Collateral
                  Agent, and

                           (ix) evidence that the Borrower shall have applied to
                  Standard & Poor's Ratings Group's CUSIP Service Bureau for the
                  assignment of private placement numbers to the Notes.

                  (r) Conditions Subsequent to the Making of the New AXELS
         Series B Advances. Deliver to the Collateral Agent, in form and
         substance satisfactory to the Collateral Agent and in sufficient copies
         for each Lender Party, as soon as possible, and in any event within 60
         days after the making of the New AXELs Series B Advances (or such later
         date as may be agreed by the Borrower and the Collateral Agent):




                           (i) evidence that the First Mortgage Amendments have
                  been duly recorded in all filing and recording offices that
                  the Collateral Agent may deem necessary or desirable in order
                  to maintain a valid first and subsisting lien on the property
                  described therein in favor of the Secured Parties subject only
                  to Permitted Encumbrances and that all filing and recording
                  taxes and fees have been paid;

                           (ii) evidence that either (x) endorsements to the
                  Mortgage Policies have been provided which update the Mortgage
                  Policies to the Second Closing Date and which indicate no
                  additional exceptions to coverage under such Mortgage Policies
                  from those specified on the First Closing Date, or (y) such
                  other satisfactory assurances have been given to the
                  Collateral Agent that the lien priority of the Mortgages will
                  not be affected by the recording of the First Mortgage
                  Amendments and that Mortgage Policies continue to insure the
                  Mortgages as amended by the First Mortgage Amendments; and

                           (iii) signed copies of favorable opinions of such
                  local counsel as the Administrative Agent may require, in form
                  and substance satisfactory to the Arrangers and the Agents.

                  (s) Conditions Subsequent to the Third Closing Date. Deliver
         to the Collateral Agent, in form and substance satisfactory to the
         Collateral Agent and in sufficient copies for each Lender Party, as
         soon as possible, and in any event within 120 days after the Third
         Closing Date (or such later date as may be agreed by the Borrower and
         the Collateral Agent), with respect to each jurisdiction in which the
         Second Mortgage Amendments were required to be delivered.

                           (i) evidence that the Second Mortgage Amendments have
                  been duly recorded in all filing and recording offices that
                  the Collateral Agent may deem necessary or desirable in order
                  to maintain a valid first and subsisting lien on the property
                  described therein in favor of the Secured Parties subject only
                  to Permitted Encumbrances and that all filing and recording
                  taxes and fees have been paid; and

                           (ii) evidence that either (x) endorsements to the
                  Mortgage Policies have been provided which update the Mortgage
                  Policies to the Third Closing Date and which indicate no
                  additional exceptions to coverage under such Mortgage Policies
                  from those specified on the First Closing Date, or (y) such
                  other satisfactory assurances have been given to the
                  Collateral Agent that the lien priority of the Mortgages will
                  not be affected by the recording of the Second Mortgage
                  Amendments and that Mortgage Policies continue to insure the
                  Mortgages as amended by the Second Mortgage Amendments.



                  (t) Conditions Subsequent to the Fourth Closing Date. Deliver
         to the Collateral Agent, in form and substance satisfactory to the
         Collateral Agent and in sufficient copies for each Lender Party, as
         soon as possible, and in any event within 120 days after the Fourth
         Closing Date (or such later date as may be agreed by the Borrower and
         the Collateral Agent), with respect to each jurisdiction in which the
         Third Mortgage Amendments were required to be delivered.

                           (i) evidence that the Third Mortgage Amendments have
                  been duly recorded in all filing and recording offices that
                  the Collateral Agent may deem necessary or desirable in order
                  to maintain a valid first and subsisting lien on the property
                  described therein in favor of the Secured Parties subject only
                  to Permitted Encumbrances and that all filing and recording
                  taxes and fees have been paid;

                           (ii) evidence that either (x) endorsements to the
                  Mortgage Policies have been provided which update the Mortgage
                  Policies to the Fourth Closing Date and which indicate no
                  additional exceptions to coverage under such Mortgage Policies
                  from those specified on the First Closing Date, or (y) such
                  other satisfactory assurances have been given to the
                  Collateral Agent that the lien priority of the Mortgages will
                  not be affected by the recording of the Third Mortgage
                  Amendments and that Mortgage Policies continue to insure the
                  Mortgages as amended by the Third Mortgage Amendments; and

                           (iii) revised Schedules 4.01(a), 4.01(b), 4.01(d),
                  4.01(m), 4.01(bb), 4.01(ff), 4.01(ii), 4.01(kk), 4.01(ll) and
                  4.01(nn) supplementing such Schedules delivered on the First
                  Closing Date in order to properly reflect the information
                  contained in such Schedules as of the Fourth Closing Date.

                  (u) Further Assurances. (i) Promptly upon request by the
         Administrative Agent, or any Lender Party through the Administrative
         Agent, correct, and cause each of its Subsidiaries promptly to correct,
         any material defect or error that may be discovered in any Loan
         Document or in the execution, acknowledgment, filing or recordation
         thereof, and

                  (ii) Promptly upon request by the Collateral Agent, or any
         Lender Party through the Collateral Agent, do, execute, acknowledge,
         deliver, record, re-record, file, re-file, register and re-register,
         and cause each of its Subsidiaries promptly to do, execute,
         acknowledge, deliver, record, re-record, file, re-file, register and
         re-register, any and all such further acts, deeds, conveyances, pledge
         agreements, mortgages, deeds of trust, trust deeds, assignments,
         financing statements and continuations thereof, termination statements,
         notices of assignment, transfers, certificates, assurances and other
         instruments as the Collateral Agent, or any Lender Party through the
         Collateral Agent, may reasonably require from time to time in order to
         (A) carry out more effectively the purposes of this Agreement, the
         Notes or any other Loan Document, (B) to the fullest extent permitted
         by applicable law, subject any of the Borrower's or any of its
         Subsidiaries' properties, assets, rights or interests to the Liens now
         or hereafter intended to be covered by any of the Collateral Documents,
         (C) perfect and maintain the validity, effectiveness and priority of
         any of the Collateral Documents and any of the Liens intended to be
         created thereunder and (D) assure, convey, grant, assign, transfer,
         preserve, protect and confirm more effectively unto the Agents and the
         Lender Parties the rights granted or now or hereafter intended to be
         granted to the Agents and the Lender Parties under any Loan Document or
         under any other instrument executed in connection with any Loan
         Document to which any Loan Party or any of its Subsidiaries is or is to
         be a party; provided, however, that in any event this Section 5.01(u)
         shall not require Liens on, and the execution and delivery of
         Collateral Documents covering, any property to the extent not otherwise
         required by the terms of the Loan Documents.



                  SECTION 5.02. Negative Covenants. So long as any Advance shall
remain unpaid, any Letter of Credit shall be outstanding or any Lender Party
shall have any Commitment hereunder, the Borrower will not, at any time:

                  (a) Liens, Etc. Create, incur, assume or suffer to exist, or
         permit any of its Subsidiaries to create, incur, assume or suffer to
         exist, any Lien on or with respect to any of its properties of any
         character (including, without limitation, accounts) whether now owned
         or hereafter acquired, or sign or file or suffer to exist, or permit
         any of its Subsidiaries to sign or file or suffer to exist, under the
         Uniform Commercial Code of any jurisdiction, a financing statement that
         names the Borrower or any of its Subsidiaries as debtor, or sign or
         suffer to exist, or permit any of its Subsidiaries to sign or suffer to
         exist, any security agreement authorizing any secured party thereunder
         to file such financing statement, or assign, or permit any of its
         Subsidiaries to assign, any accounts or other right to receive income,
         excluding, however, from the operation of the foregoing restrictions
         the following:

                           (i)      Liens created under the Loan Documents;

                           (ii)     Permitted Liens;

                           (iii) Liens existing on the First Closing Date and
                  described on Schedule 5.02(a) hereto;

                           (iv) purchase money Liens upon or in real property or
                  equipment acquired or held by the Borrower or any of its
                  Subsidiaries in the ordinary course of business to secure the
                  purchase price of such property or equipment or to secure Debt
                  incurred solely for the purpose of financing the acquisition,
                  construction or improvement of any such property or equipment
                  to be subject to such Liens, or Liens existing on any such
                  property or equipment at the time of acquisition (other than
                  any such Liens created in contemplation of such acquisition
                  that do not secure the purchase price), or extensions,
                  renewals or replacements of any of the foregoing for the same
                  or a lesser amount; provided, however, that no such Lien shall
                  extend to or cover any property other than the property or
                  equipment being acquired, constructed or improved, and no such
                  extension, renewal or replacement shall extend to or cover any
                  property not theretofore subject to the Lien being extended,
                  renewed or replaced; and provided further that the aggregate
                  principal amount of the Debt secured by Liens permitted by
                  this clause (iv) shall not exceed the amount permitted under
                  Section 5.02(b)(iii)(B) at any time outstanding and that any
                  such Debt shall not otherwise be prohibited by the terms of
                  the Loan Documents;


                           (v) Liens arising in connection with Capitalized
                  Leases permitted under Section 5.02(b)(iii)(C); provided that
                  no such Lien shall extend to or cover any Collateral or assets
                  other than the assets subject to such Capitalized Leases;

                           (vi) Liens on property of a Person existing at the
                  time such Person is merged into or consolidated with the
                  Borrower or any Subsidiary of the Borrower or becomes a
                  Subsidiary of the Borrower; provided that such Liens were not
                  created in contemplation of such merger, consolidation or
                  investment and do not extend to any assets other than those of
                  the Person merged into or consolidated with the Borrower or
                  such Subsidiary or acquired by the Borrower or such
                  Subsidiary;

                           (vii) Liens securing Obligations of the Borrower or
                  any of its Subsidiaries in an aggregate amount not to exceed
                  $5,000,000 at any time outstanding;

                           (viii) Liens arising in connection with any lease
                  permitted under Section 5.02(c), provided that no such Lien
                  shall extend to or cover any assets other than the assets
                  subject to such lease;

                           (ix) Liens on the capital stock of the Play Center
                  Joint Venture securing Obligations of the Play Center Joint
                  Venture; and

                           (x) the replacement, extension or renewal of any Lien
                  permitted by clauses (iii) and (vi) above upon or in the same
                  property theretofore subject thereto or the replacement,
                  extension or renewal (without increase in the amount or change
                  in any direct or contingent obligor) of the Debt secured
                  thereby.



                  (b) Debt. Create, incur, assume or suffer to exist, or permit
         any of its Subsidiaries to create, incur, assume or suffer to exist,
         any Debt other than:

                           (i)      in the case of the Borrower,

                                    (A) Debt owed to its Subsidiaries; so long
                           as at the time of incurrence of such Debt,
                           foreclosure proceedings shall not have been commenced
                           with respect to any stock or assets of such
                           Subsidiaries,

                                    (B) Debt in respect of Hedge Agreements not
                           entered into for speculative purposes and designed to
                           hedge against fluctuations in interest rates or
                           foreign exchange rates incurred in the ordinary
                           course of business and consistent with prudent
                           business practice, and

                                    (C) Debt in respect of guarantees by the
                           Borrower of the Obligations of Foreign Subsidiaries
                           under bank overdraft facilities permitted under
                           Section 5.02(b)(iii)(I),

                           (ii) in the case of any of its Subsidiaries, Debt
                  owed to the Borrower or to a wholly owned Subsidiary of the
                  Borrower to the extent permitted under Section 5.02(f); and

                           (iii)    in the case of the Borrower and any of its
                  Subsidiaries,

                                    (A)     Debt under the Loan Documents,

                                    (B) Debt secured by Liens permitted by
                           Section 5.02(a)(iv) not to exceed in the aggregate
                           $10,000,000 at any time outstanding,

                                    (C) Capitalized Leases in an aggregate
                           amount, calculated in accordance with GAAP, not to
                           exceed in the aggregate $10,000,000 at any time
                           outstanding,

                                    (D) the Surviving Debt, and any Debt
                           extending the maturity of, or refunding or
                           refinancing, in whole or in part, any Surviving Debt,
                           provided that the terms of any such extending,
                           refunding or refinancing Debt, and of any agreement
                           entered into and of any instrument issued in
                           connection therewith, are otherwise permitted by the
                           Loan Documents and provided further that the
                           principal amount of such Surviving Debt shall not be
                           increased above the principal amount thereof
                           outstanding immediately prior to such extension,
                           refunding or refinancing, and the direct and
                           contingent obligors therefor shall not be changed, as
                           a result of or in connection with such extension,
                           refunding or refinancing,



                                    (E)     Subordinated Debt under the
                           Subordinated Notes Indentures,

                                    (F) Debt of any Person that becomes a
                           Subsidiary of the Borrower after the First Closing
                           Date in accordance with the terms of Section 5.02(f)
                           that is existing at the time such Person becomes a
                           Subsidiary of the Borrower,

                                    (G) Debt in an aggregate principal amount
                           not to exceed $5,000,000 outstanding at any time and
                           consisting of letters of credit (other than Letters
                           of Credit issued hereunder) and reimbursement
                           obligations in respect thereof,

                                    (H)     other Debt in an aggregate amount
                           not to exceed $5,000,000 at any time outstanding,

                                    (I) in the case of Foreign Subsidiaries,
                           Debt under bank overdraft facilities in an aggregate
                           amount not to exceed $10,000,000 at any time
                           outstanding,

                                    (J) indorsement of negotiable instruments
                           for deposit or collection or similar transactions in
                           the ordinary course of business, and

                                    (K) Debt consisting of repurchase
                           arrangements in connection with the financing of
                           bowling equipment sales by the Borrower and its
                           Subsidiaries.

                  (c) Lease Obligations. Create, incur, assume or suffer to
         exist, or permit any of its Subsidiaries to create, incur, assume or
         suffer to exist, any obligations as lessee for the rental or hire of
         real or personal property of any kind under leases or agreements to
         lease (including Capitalized Leases) having an original term of one
         year or more that would cause the direct and contingent liabilities of
         the Borrower and its Subsidiaries, on a Consolidated basis, in respect
         of all such obligations to exceed an amount payable in any period of 12
         consecutive months equal to the sum of (i) $25,000,000, (ii) an amount
         equal to the product of (x) $200,000 and (y) the number of leased
         bowling centers acquired by the Borrower or any of its Subsidiaries
         after the First Closing Date and (iii) in each calendar year occurring
         after 1996, an amount equal to 4% of the amount permitted under this
         Section 5.02(c) in the immediately preceding calendar year, calculated
         as at the end of such preceding calendar year.



                  (d) Mergers, Etc. Merge into or consolidate with any Person or
         permit any Person to merge into it, or permit any of its Subsidiaries
         to do so, except that (i) any Subsidiary of the Borrower may merge into
         or consolidate with the Borrower (in the case of any merger or
         consolidation to which the Borrower is a party), or any other
         Subsidiary of the Borrower; provided that, in the case of any such
         merger or consolidation, the Person surviving such merger or
         consolidation shall be the Borrower (in the case of any merger or
         consolidation to which the Borrower is a party), or a wholly owned
         Subsidiary of the Borrower, (ii) in connection with any acquisition
         permitted under Section 5.02(f), any Subsidiary of the Borrower may
         merge into or consolidate with any other Person or permit any other
         Person to merge into or consolidate with it; provided that the Person
         surviving such merger shall be a wholly owned Subsidiary of the
         Borrower and (iii) in connection with any sale or other disposition
         permitted under Section 5.02(e) (other than clause (ii) thereof), any
         Subsidiary of the Borrower may merge into or consolidate with any other
         Person or permit any other Person to merge into or consolidate with it;
         provided, however, that in each case, immediately after giving effect
         thereto, no event shall occur and be continuing that constitutes a
         Default.

                  (e) Sales, Etc. of Assets. Sell, lease, transfer or otherwise
         dispose of, or permit any of its Subsidiaries to sell, lease, transfer
         or otherwise dispose of, any assets, or grant any option or other right
         to purchase, lease or otherwise acquire any assets other than inventory
         to be sold in the ordinary course of its business, except:

                           (i)      sales of Inventory in the ordinary course of
                           its business,

                           (ii)     in a transaction authorized by subsection
                           (d)(i) or (ii) of this Section 5.02,

                           (iii) the sale or other disposition of damaged, worn
                  out or obsolete property that is no longer necessary for the
                  proper conduct of the business of the Borrower and its
                  Subsidiaries in the ordinary course of business, provided that
                  the fair value of the assets so sold or otherwise disposed of
                  shall not exceed $1,000,000 in the aggregate in any Fiscal
                  Year,

                           (iv) the sale or other disposition of assets by any
                  Loan Party to any other Loan Party,

                           (v) the sale of assets or properties for fair value
                  in an aggregate amount for any one such transaction or series
                  of related transactions not to exceed $10,000,



                           (vi) sales or exchanges of assets by the Borrower or
                  any of its Subsidiaries for fair value and for cash or senior
                  promissory notes or equity of the seller thereof or like-kind
                  assets (including, without limitation, the stock of the Person
                  owning such assets) to be used in the business of the Borrower
                  and its Subsidiaries or any other assets, provided that the
                  fair value of the assets so sold or exchanged shall not exceed
                  $25,000,000 in the aggregate in any Fiscal Year, provided
                  further that any notes or equity or other non-cash assets
                  received in connection with any sale or exchange of assets
                  pursuant to this clause (vi) shall be pledged as Collateral
                  securing the Obligations of the Borrower or such Subsidiary,
                  as the case may be, under the Loan Documents and the Secured
                  Parties' lien and security interest therein shall be perfected
                  (and the Borrower shall, and shall cause any such Subsidiary
                  to, take such action as the Collateral Agent may deem
                  necessary or desirable to effect such perfection) in
                  accordance with the terms of the Loan Documents,

                           (vii) sale of the Borrower's billiards equipment
                  manufacturing business for fair value, and

                           (viii) the lease by the Borrower and its
                  Subsidiaries, as lessors, in the ordinary course of their
                  respective business and on an arm's-length basis, of real
                  property consisting of space located in their respective
                  bowling centers, and other leasing arrangements entered into
                  by the Borrower and its Subsidiaries in the ordinary course of
                  business and without significant economic cost to the Borrower
                  and its Subsidiaries in order to permit the service of
                  alcoholic beverages and gaming operations pursuant to
                  applicable law,

         provided that in the case of sales or exchanges of assets pursuant to
         clauses (vi) and (vii) above, the Borrower shall, on the date of
         receipt by any Loan Party or any of its Subsidiaries of any Net Cash
         Proceeds from such sale, prepay the Advances pursuant to, and in the
         amount and order of priority set forth in, Section 2.06(b)(ii), as
         specified therein.

                  (f) Investments in Other Persons. Make or hold, or permit any
         of its Subsidiaries to make or hold, any Investment in any Person other
         than:

                           (i) (A) Investments by the Borrower and its
                  Subsidiaries in their Subsidiaries outstanding on the First
                  Closing Date, (B) additional Investments in their wholly owned
                  Subsidiaries that are Loan Parties and (C) additional
                  Investments in their wholly owned Subsidiaries that are not
                  Loan Parties and the China Joint Venture, in the case of this
                  clause (C), in an aggregate amount invested not to exceed an
                  amount in any Fiscal Year equal to the sum of (x) $10,000,000,
                  (y) the aggregate amount of capital contributions made after
                  the Fourth Closing Date by the Equity Investors and new third
                  party equity investors in Parent in any Fiscal Year to the
                  extent such amount was contributed to such Subsidiary as a
                  capital contribution in such Fiscal Year (without duplication
                  of amounts contributed pursuant to clause (ii) below) and (z)
                  any amount available for Investments pursuant to Section
                  5.02(f)(ii)(x) but not so invested, provided that, to the
                  extent that any amount permitted to be invested in any Fiscal
                  Year pursuant to this clause (C) shall not have been so
                  invested, such amount may be invested pursuant to this
                  subsection (i) in the next succeeding Fiscal Year and any
                  amounts invested in the next succeeding Fiscal Year shall be
                  deemed to be applied first against the amount so carried over
                  from the preceding Fiscal Year;



                           (ii) Investments by the Borrower and its Subsidiaries
                  in their non-wholly owned Subsidiaries and in other Persons
                  that are not their Subsidiaries in an aggregate amount
                  invested from the Fourth Closing Date not to exceed the sum of
                  (x) $65,000,000 and (y) the aggregate amount of capital
                  contributions made after the Fourth Closing Date by the Equity
                  Investors and new third party equity investors in Parent in
                  any Fiscal Year to the extent such amount was contributed to
                  such Subsidiary as a capital contribution in such Fiscal Year
                  (without duplication of amounts contributed or invested
                  pursuant to clause (i) above);

                           (iii) Loans and advances to employees in the ordinary
                  course of business of the Borrower and its Subsidiaries as
                  presently conducted in an aggregate principal amount not to
                  exceed $7,500,000 for the purpose of purchasing common stock
                  of Parent and an additional $2,000,000 at any time
                  outstanding;

                           (iv)     Investments by the Borrower and its
                           Subsidiaries in Cash Equivalents;

                           (v)      Investments by the Borrower in Hedge
                  Agreements permitted under Section 5.02(b)(i)(B);

                           (vi) Investments consisting of intercompany Debt
                  permitted under Section 5.02(b)(i)(A);

                           (vii) Investments existing on the Fourth Closing Date
                  and described on Schedule 4.01(mm) hereto;

                           (viii) Investments consisting of notes and equity
                  received pursuant to Section 5.02(e)(vi) or (vii); and

                           (ix) other Investments made in connection with the
                  acquisition of all or any part of the assets or stock or other
                  equity interest of any Person or the acquisition or
                  construction of New Centers; provided that with respect to
                  Investments made under this clause (ix): (1) any newly
                  acquired or created Subsidiary of the Borrower or any of its
                  Subsidiaries shall be a wholly owned Subsidiary thereof and
                  such Subsidiary (unless such Subsidiary is a Foreign
                  Subsidiary) shall become a Subsidiary Guarantor and execute
                  and deliver the documents referred to in Section 5.01(n); (2)
                  immediately before and after giving effect thereto, no Default
                  shall have occurred and be continuing or would result
                  therefrom; (3) substantially all of any business acquired or
                  invested in pursuant to this clause (ix) shall be in the same
                  or a substantially related line of business as the business of
                  the Borrower or any of its Subsidiaries (after giving effect
                  to permitted expansion by the Borrower and its Subsidiaries
                  into golf-related business pursuant to Section 5.02(h)); and
                  (4) immediately after giving effect to the acquisition of a
                  company or business pursuant to this clause (ix), the Borrower
                  shall be in pro forma compliance with the covenants contained
                  in Section 5.04, calculated based on the relevant Financial
                  Statements, as though such acquisition had occurred at the
                  beginning of the 12-month period covered thereby, as evidenced
                  by a certificate of a Designated Financial Officer furnished
                  to the Lender Parties, demonstrating such compliance and
                  reflecting the Adjusted EBITDA of any bowling center so
                  acquired for the immediately preceding 12-month period.

                  (g) Dividends, Etc. Declare or pay any dividends, purchase,
         redeem, retire, defease or otherwise acquire for value any of its
         capital stock or any warrants, rights or options to acquire such
         capital stock, now or hereafter outstanding, return any capital to its
         stockholders as such, make any distribution of assets, capital stock,
         warrants, rights, options, obligations or securities to its
         stockholders as such or issue or sell any capital stock or any
         warrants, rights or options to acquire such capital stock, or permit
         any of its Subsidiaries to do any of the foregoing or permit any of its
         Subsidiaries to purchase, redeem, retire, defease or otherwise acquire
         for value any capital stock of the Borrower or any warrants, rights or
         options to acquire such capital stock or to issue or sell any capital
         stock or any warrants, rights or options to acquire such capital stock,
         except that:

                           (i) so long as no Default shall have occurred and be
                  continuing or would result therefrom, the Borrower may (A)
                  declare and pay dividends and distributions payable only in
                  common stock of the Borrower and (B) declare and pay cash
                  dividends to Holdings solely to the extent necessary to (x)
                  make payments required under the non-competition agreements
                  listed on Schedule 5.02(g) hereto and (y) declare and pay cash
                  dividends to Parent to the extent permitted under, and in
                  accordance with the terms of, the Holdings Guaranty, and



                           (ii) so long as foreclosure proceedings shall not
                  have been commenced with respect to any stock or assets of any
                  Subsidiary of the Borrower, any such Subsidiary may (A)
                  declare and pay cash dividends to the Borrower and (B) declare
                  and pay cash dividends to any other wholly owned Subsidiary of
                  the Borrower of which it is a Subsidiary.

                  (h) Change in Nature of Business. Make, or permit any of its
         Subsidiaries to make, any material change in the nature of its business
         as carried on at the First Closing Date, except that the Borrower and
         its Subsidiaries may own and operate golf driving ranges and engage in
         other golf-related businesses to the extent that the aggregate amount
         invested by the Borrower and its Subsidiaries in golf driving ranges
         and other golf-related businesses does not exceed $50,000,000 at any
         time outstanding.

                  (i) Charter Amendments. Amend, or permit any of its
         Subsidiaries to amend, its certificate of incorporation or bylaws in
         any material respect.

                  (j) Accounting Changes. Make or permit, or permit any of its
         Subsidiaries to make or permit, any change in (i) accounting policies
         or reporting practices, except as required by generally accepted
         accounting principles or (ii) its Fiscal Year.

                  (k) Prepayments, Etc. of Debt. (i) Prepay, redeem, purchase,
         defease or otherwise satisfy prior to the scheduled maturity thereof in
         any manner, or make any payment in violation of any subordination terms
         of, any Debt, other than (A) the prepayment of the Advances in
         accordance with the terms of this Agreement, (B) regularly scheduled or
         required repayments or redemptions of Surviving Debt, (C) in connection
         with any acquisition of a company or business pursuant to Section
         5.02(f)(ix), the prepayment, redemption, purchase, defeasance or other
         satisfaction of existing Debt of such company or business to the extent
         required by the terms of such Debt and (D) the prepayment of any
         portion of the Subordinated Notes (including, without limitation, any
         premium thereon and expenses incurred in connection therewith) with a
         portion of the Net Cash Proceeds received by the Borrower from the IPO
         to the extent such Net Cash Proceeds are not required to be used to
         prepay Working Capital Advances in accordance with Section
         2.06(b)(ii)(B) or (ii) amend, modify or change any term or condition of
         any Surviving Debt or Subordinated Debt in any manner that would impair
         in any material respect the value of the interests or rights of the
         Borrower or any of its Subsidiaries thereunder or that would impair in
         any material respect the rights or interests of any Agent or any Lender
         Party, or permit any of its Subsidiaries to do any of the foregoing
         other than to prepay any Debt payable to the Borrower or any other Loan
         Party.



                  (l) Amendment, Etc. of Related Documents. Cancel or terminate
         any Related Document or consent to or accept any cancellation or
         termination thereof, amend, modify or change in any manner any term or
         condition of any Related Document or give any consent, waiver or
         approval thereunder, waive any default under or any breach of any term
         or condition of any Related Document, agree in any manner to any other
         amendment, modification or change of any term or condition of any
         Related Document or take any other action in connection with any
         Related Document, in each case that would impair in any material
         respect the value of the interests or rights of the Borrower thereunder
         or that would impair in any material respect the rights or interests of
         any Agent or any Lender Party, or permit any of its Subsidiaries to do
         any of the foregoing.

                  (m) Ownership Change. Take, or permit any of its Subsidiaries
         to take, any action that would result in an "ownership change" (as
         defined in Section 382 of the Internal Revenue Code) with respect to
         the Borrower or any of its Subsidiaries or the application of the
         "separate return limitation year" or "consolidated return change of
         ownership" limitations under the Federal income tax consolidated return
         regulations with respect to the Borrower or any of its Subsidiaries
         (other than as a direct result of the Acquisition and the acquisition
         by AMF Bowling Centers of the companies set forth on Schedule 4.01(ff)
         hereto) that could be reasonably likely to have a Material Adverse
         Effect.

                  (n) Negative Pledge. Enter into or suffer to exist, or permit
         any of its Subsidiaries to enter into or suffer to exist, any agreement
         prohibiting or conditioning the creation or assumption of any Lien upon
         any of its property or assets other than (i) in favor of the Secured
         Parties, (ii) in connection with any Surviving Debt and any Debt
         outstanding on the date such Subsidiary first becomes a Subsidiary (so
         long as such agreement was not entered into solely in contemplation of
         such Subsidiary becoming a Subsidiary) or (iii) in connection with any
         lease permitted under Section 5.02(c) solely to the extent that such
         lease prohibits a Lien on the lease or the property subject to such
         lease.

                  (o) Partnerships, Etc. Become a general partner in any general
         or limited partnership or joint venture, or permit any of its
         Subsidiaries to do so, other than any such Subsidiary the sole assets
         of which consist of its interest in such partnership or joint venture.



                  (p) Speculative Transactions. Engage, or permit any of its
         Subsidiaries to engage, in any transaction involving commodity options
         or futures contracts or any similar speculative transactions except for
         Hedge Agreements permitted under Section 5.02(b)(i)(B).

                  (q) Capital Expenditures. Make, or permit any of its
         Subsidiaries to make, any Capital Expenditures that would cause the
         aggregate of all such Capital Expenditures made by the Borrower and its
         Subsidiaries to exceed $60,000,000 during the Fiscal Year ending
         December 31, 1997, $80,000,000 during the Fiscal Year ending December
         31, 1998 and $100,000,000 during each Fiscal Year thereafter, provided,
         that to the extent that any Capital Expenditures permitted to be made
         in any Fiscal Year shall not have been so made, such Capital
         Expenditures may be made in the immediately succeeding Fiscal Year; and
         provided further, that for purposes of calculating the aggregate amount
         of Capital Expenditures permitted in any Fiscal Year, any amounts so
         carried over from the immediately preceding Fiscal Year shall be deemed
         to be spent after amounts otherwise permitted to be spent in such
         Fiscal Year.

                  (r) Payment Restrictions Affecting Subsidiaries. Directly or
         indirectly, create or otherwise cause or suffer to exist or become
         effective, or permit any of its Subsidiaries to, directly or
         indirectly, create or otherwise cause or suffer to exist or become
         effective, any encumbrance or restriction on the ability of any of its
         Subsidiaries to pay dividends or make any other distributions to the
         Borrower or any of its Subsidiaries on its capital stock or with
         respect to any other interest or participation, or measured by its
         profits, or pay any Debt owed to the Borrower or any of its
         Subsidiaries, except for such encumbrances or restrictions existing
         under or by reason of the Loan Documents, Surviving Debt as in effect
         on the First Closing Date and applicable law.

                  SECTION 5.03. Reporting Requirements. So long as any Advance
shall remain unpaid, any Letter of Credit shall be outstanding or any Lender
Party shall have any Commitment hereunder, the Borrower will furnish to the
Administrative Agent and the Lender Parties:


                  (a) Default Notice. As soon as possible and in any event
         within two days after any officer of the Borrower or Holdings obtains
         knowledge of any Default or any event, development or occurrence
         reasonably likely to have a Material Adverse Effect continuing on the
         date of such statement, a statement of a Designated Financial Officer
         setting forth details of such Default, event, development or occurrence
         and the action that the Borrower has taken and proposes to take with
         respect thereto.



                  (b) Quarterly Financials. As soon as available and in any
         event within 45 days after the end of each of the first three quarters
         of each Fiscal Year, Consolidated and consolidating balance sheets of
         the Borrower and its Subsidiaries as of the end of such quarter and
         Consolidated and consolidating statements of income and a Consolidated
         statement of cash flows of the Borrower and its Subsidiaries for the
         period commencing at the end of the previous fiscal quarter and ending
         with the end of such fiscal quarter and Consolidated and consolidating
         statements of income and a Consolidated statement of cash flows of the
         Borrower and its Subsidiaries for the period commencing at the end of
         the previous Fiscal Year and ending with the end of such quarter,
         setting forth in each case in comparative form the corresponding
         figures for the corresponding date or period of the preceding Fiscal
         Year, all in reasonable detail and duly certified (subject to normal
         year-end audit adjustments) by a Designated Financial Officer as having
         been prepared in accordance with GAAP, together with (i) a certificate
         of said officer (A) stating that no Default has occurred and is
         continuing or, if a Default has occurred and is continuing, a statement
         as to the nature thereof and the action that the Borrower has taken and
         proposes to take with respect thereto and (B) setting forth, for the
         Rolling Period ending at the end of such fiscal quarter, the Adjusted
         EBITDA (and the calculation thereof) of each New Center constructed
         within the preceding 15 months, EBITDA of each bowling center acquired
         or constructed by the Borrower or any of its Subsidiaries after the
         First Closing Date and acquired or constructed at least 15 months prior
         to the end of such Rolling Period and all Other Additions, if any, for
         such Rolling Period and (ii) a schedule in form satisfactory to the
         Administrative Agent of the computations used by the Borrower in
         determining compliance with the covenants contained in Section 5.04,
         provided that in the event of any change in GAAP used in the
         preparation of such financial statements, the Borrower shall also
         provide, if necessary for the determination of compliance with Section
         5.04, a statement of reconciliation conforming such financial
         statements to GAAP.

                  (c) Annual Financials. As soon as available and in any event
         within 90 days after the end of each Fiscal Year, a copy of the annual
         audit report for such year for the Borrower and its Subsidiaries,
         including therein Consolidated and consolidating balance sheets of the
         Borrower and its Subsidiaries as of the end of such Fiscal Year and
         Consolidated and consolidating statements of income and a Consolidated
         statement of cash flows of the Borrower and its Subsidiaries for such
         Fiscal Year, in each case accompanied by an opinion not qualified as to
         scope or going concern of Arthur Andersen, L.L.P. or other independent
         public accountants of nationally recognized standing acceptable to the
         Administrative Agent, together with (i) a certificate of such
         accounting firm to the Lender Parties stating that in the course of the
         regular audit of the business of the Borrower and its Subsidiaries,
         which audit was conducted by such accounting firm in accordance with
         generally accepted auditing standards, such accounting firm has
         obtained no knowledge that a Default has occurred and is continuing, or
         if, in the opinion of such accounting firm, a Default has occurred and
         is continuing, a statement as to the nature thereof, (ii) a schedule in
         form satisfactory to the Administrative Agent of the computations used
         by such accountants in determining, as of the end of such Fiscal Year,
         compliance with the covenants contained in Section 5.04, provided that
         in the event of any change in GAAP used in the preparation of such
         financial statements, the Borrower shall also provide, if necessary for
         the determination of compliance with Section 5.04, a statement of
         reconciliation conforming such financial statements to GAAP and (iii) a
         certificate of a Designated Financial Officer (A) stating that no
         Default has occurred and is continuing or, if a default has occurred
         and is continuing, a statement as to the nature thereof and the action
         that the Borrower has taken and proposes to take with respect thereto
         and (B) setting forth, for the Rolling Period ending at the end of such
         Fiscal Year, the Adjusted EBITDA (and the calculation thereof) of each
         New Center constructed within the preceding 15 months, EBITDA of each
         bowling center acquired or constructed by the Borrower or any of its
         Subsidiaries after the First Closing Date and acquired or constructed
         at least 15 months prior to the end of such Rolling Period and all
         Other Additions, if any, for such Rolling Period.



                  (d) Annual Forecasts. As soon as available and in any event no
         later than 15 days after the end of each Fiscal Year, forecasts
         prepared by management of the Borrower, in form satisfactory to the
         Administrative Agent, of balance sheets, income statements and cash
         flow statements on a monthly basis for the Fiscal Year following such
         Fiscal Year and on an annual basis for each Fiscal Year thereafter
         until the Termination Date for the AXELs Series B Facility.

                  (e) ERISA Events and ERISA Reports. (i) Promptly and in any
         event within 20 days after any Loan Party or any ERISA Affiliate knows
         or has reason to know that any ERISA Event has occurred, a statement of
         a Designated Financial Officer describing such ERISA Event and the
         action, if any, that such Loan Party or such ERISA Affiliate has taken
         and proposes to take with respect thereto and (ii) on the date any
         records, documents or other information must be furnished to the PBGC
         with respect to any Plan pursuant to Section 4010 of ERISA, a copy of
         such records, documents and information.

                  (f) Plan Terminations. Promptly and in any event within 10
         Business Days after receipt thereof by any Loan Party or any ERISA
         Affiliate, copies of each notice from the PBGC stating its intention to
         terminate any Plan or to have a trustee appointed to administer any
         Plan.

                  (g) Actuarial Reports. Within 20 Business Days after receipt
         thereof by any Loan Party or any ERISA Affiliate, a copy of the annual
         actuarial valuation report for each Plan the funded current liability
         percentage (as defined in Section 302(d)(8) of ERISA) of which is less
         than 90% or the unfunded current liability of which exceeds $2,000,000.



                  (h) Plan Annual Reports. Within 30 days after the filing
         thereof with the Internal Revenue Service, copies of each Schedule B
         (Actuarial Information) to the annual report (Form 5500 Series) with
         respect to each Plan.

                  (i) Multiemployer Plan Notices. Promptly and in any event
         within 10 Business Days after receipt thereof by any Loan Party or any
         ERISA Affiliate from the sponsor of a Multiemployer Plan, copies of
         each notice concerning (i) the imposition of Withdrawal Liability by
         any such Multiemployer Plan, (ii) the reorganization or termination,
         within the meaning of Title IV of ERISA, of any such Multiemployer Plan
         or (iii) the amount of liability incurred, or that may be incurred, by
         such Loan Party or any ERISA Affiliate in connection with any event
         described in clause (i) or (ii).

                  (j) Litigation. Promptly after the commencement thereof,
         notice of all actions, suits, investigations, litigation and
         proceedings before any court or governmental department, commission,
         board, bureau, agency or instrumentality, domestic or foreign,
         affecting any Loan Party or any of its Subsidiaries of the type
         required to be disclosed in Section 4.01(j).

                  (k) Securities Reports. Promptly after the sending or filing
         thereof, copies of all proxy statements, financial statements and
         reports that Parent or any Loan Party or any of its Subsidiaries sends
         to all of its stockholders, and copies of all regular, periodic and
         special reports, and all registration statements, that Parent or any
         Loan Party or any of its Subsidiaries files with the Securities and
         Exchange Commission or any governmental authority that may be
         substituted therefor, or with any national securities exchange.

                  (l) Creditor Reports. Promptly after the furnishing thereof,
         copies of any statement or report furnished to any other holder of the
         securities of any Loan Party or of any of its Subsidiaries pursuant to
         the terms of any indenture, loan or credit or similar agreement and not
         otherwise required to be furnished to the Lender Parties pursuant to
         any other clause of this Section 5.03.

                  (m) Agreement Notices. Promptly upon receipt thereof, copies
         of all notices of any default or breach and all other material requests
         and other documents received by any Loan Party or any of its
         Subsidiaries under or pursuant to any Related Document or indenture,
         loan or credit or similar agreement and, from time to time upon request
         by the Administrative Agent, such information and reports regarding the
         Related Documents as the Administrative Agent may reasonably request.

                  (n) Revenue Agent Reports. Within 10 days after receipt,
         copies of all Revenue Agent Reports (Internal Revenue Service Form
         886), or other written proposals of the Internal Revenue Service, that
         propose, determine or otherwise set forth positive adjustments to the
         Federal income tax liability of the affiliated group (within the
         meaning of Section 1504(a)(1) of the Internal Revenue Code) of which
         the Borrower is a member aggregating $2,000,000 or more.



                  (o) Tax Certificates. Promptly, and in any event within five
         Business Days after the due date (with extensions) for filing the final
         Federal income tax return in respect of each taxable year, a
         certificate (a "Tax Certificate"), signed by the President of the
         Borrower or a Designated Financial Officer, stating that the common
         parent of the affiliated group (within the meaning of Section
         1504(a)(1) of the Internal Revenue Code) of which the Borrower is a
         member has paid to the Internal Revenue Service or other taxing
         authority, or to the Borrower, the full amount that such affiliated
         group is required to pay in respect of Federal income tax for such year
         and that the Borrower and its Subsidiaries have received any amounts
         payable to them, and have not paid amounts in respect of taxes
         (Federal, state, local or foreign) in excess of the amount they are
         required to pay, under the Tax Agreements in respect of such taxable
         year.

                  (p) Notification of Tax Adjustments. Promptly, and in any
         event within five Business Days after receipt of notice thereof, notice
         of any adjustment that has been proposed formally or informally by any
         tax authority relating to any tax return (Federal, state, local and
         foreign) filed by any Loan Party or any of its Subsidiaries and
         Affiliates in excess of $1,000,000.

                  (q) Environmental Conditions. Notice of any Environmental
         Action against, or of any noncompliance with any Environmental Law or
         Environmental Permit by, any Loan Party or any of its Subsidiaries that
         could (i) reasonably be expected to have a Material Adverse Effect or
         (ii) reasonably be expected to cause any property described in the
         Mortgages to be subject to any restrictions on ownership, occupancy,
         use or transferability under any Environmental Law that could
         reasonably be expected to have, individually or in the aggregate, a
         Material Adverse Effect, such notice to be furnished promptly after
         such Environmental Action or noncompliance meets the criteria set forth
         in either subsection (i) or subsection (ii) of this Section 5.03(q).

                  (r) Real Property. As soon as available and in any event
         within 60 days after the end of each Fiscal Year, a report
         supplementing Schedules 4.01(kk) and 4.01(ll) hereto, including an
         identification of all real and leased property disposed of by the
         Borrower or any of its Subsidiaries during such Fiscal Year, a list and
         description (including the street address, county or other relevant
         jurisdiction, state, record owner, book value thereof, and in the case
         of leases of property, lessor, lessee, expiration date and annual
         rental cost thereof) of all real property acquired or leased during
         such Fiscal Year and a description of such other changes in the
         information included in such Schedules as may be necessary for such
         Schedules to be accurate and complete, provided that so long as no
         Default shall have occurred and be continuing, updated asset appraisals
         shall not be required pursuant to this subsection (r).



                  (s) Insurance. As soon as available and in any event within 60
         days after the end of each Fiscal Year, a report summarizing the
         insurance coverage (specifying type, amount and carrier) in effect for
         each Loan Party and its Subsidiaries and containing such additional
         information as any Lender Party (through the Administrative Agent) may
         reasonably specify.

                  (t) Guarantees of Overdraft Facilities of Foreign
         Subsidiaries. On the first Business Day of each week, during such times
         as the aggregate Unused Working Capital Commitments shall be less than
         $15,000,000, a report specifying the amount of Debt of the Borrower
         outstanding under Section 5.02(b)(i)(C) as of the last Business Day of
         the prior week.

                  (u) Other Information. Such other information respecting the
         business, condition (financial or otherwise), operations, performance,
         properties or prospects of any Loan Party or any of its Subsidiaries as
         any Lender Party (through the Administrative Agent) may from time to
         time reasonably request.

                  SECTION 5.04.  Financial Covenants.  So long as any Advance
shall remain unpaid, any Letter of Credit shall be outstanding or any Lender
Party shall have any Commitment hereunder, the Borrower will:

                  (a) Minimum EBITDA. Maintain at all times (calculated at the
         end of each fiscal quarter of the Borrower) Modified Consolidated
         EBITDA of not less than the sum of (i) the amount set forth below for
         each Rolling Period set forth below and (ii) the EBITDA Adjustment
         Amount for such Rolling Period:



Rolling Period Ending                                              Amount
---------------------                                              ------

September 30, 1996                                            $140,000,000
December 31, 1996                                             $145,000,000
March 31, 1997                                                $150,000,000
June 30, 1997                                                 $150,000,000
September 30, 1997                                            $150,000,000
December 31, 1997                                             $150,000,000
March 31, 1998                                                $150,000,000
June 30, 1998                                                 $150,000,000
September 30, 1998                                            $155,000,000
December 31, 1998                                             $155,000,000
March 31, 1999                                                $155,000,000
June 30, 1999                                                 $155,000,000
September 30, 1999                                            $165,000,000
December 31, 1999                                             $165,000,000
March 31, 2000                                                $165,000,000
June 30, 2000                                                 $165,000,000
September 30, 2000                                            $175,000,000
December 31, 2000                                             $175,000,000
March 31, 2001                                                $175,000,000
June 30, 2001                                                 $175,000,000
September 30, 2001                                            $185,000,000
December 31, 2001                                             $185,000,000
March 31, 2002                                                $185,000,000
June 30, 2002                                                 $185,000,000
September 30, 2002                                            $195,000,000
December 31, 2002                                             $195,000,000
March 31, 2003                                                $195,000,000
June 30, 2003                                                 $195,000,000
September 30, 2003 and thereafter                             $200,000,000



                  (b) Cash Interest Coverage Ratio. Maintain at all times
         (calculated at the end of each fiscal quarter of the Borrower) a ratio
         of Modified Consolidated EBITDA to cash interest payable on all Debt of
         the Borrower and its Subsidiaries on a Consolidated basis, in each case
         for such Rolling Period of not less than the amount set forth below for
         each Rolling Period set forth below:

Rolling Period Ending                                               Ratio
---------------------                                               -----

September 30, 1996                                                 2.00:1
December 31, 1996                                                  2.00:1
March 31, 1997                                                     2.00:1
June 30, 1997                                                      2.00:1
September 30, 1997                                                 2.25:1
December 31, 1997                                                  2.25:1
March 31, 1998                                                     2.25:1
June 30, 1998                                                      2.25:1
September 30, 1998                                                 2.25:1
December 31, 1998                                                  2.25:1
March 31, 1999                                                     2.35:1
June 30, 1999                                                      2.35:1
September 30, 1999                                                 2.35:1
December 31, 1999                                                  2.35:1
March 31, 2000                                                     2.75:1
June 30, 2000                                                      2.75:1
September 30, 2000                                                 2.75:1
December 31, 2000                                                  2.75:1
March 31, 2001                                                     2.75:1
June 30, 2001                                                      2.75:1
September 30, 2001                                                 2.50:1
December 31, 2001                                                  2.50:1
March 31, 2002                                                     2.50:1
June 30, 2002                                                      2.50:1
September 30, 2002 and thereafter                                  2.75:1



                  (c) Fixed Charge Coverage Ratio. Maintain at all times
         (calculated at the end of each fiscal quarter of the Borrower) a ratio
         of (A) Modified Consolidated EBITDA during such Rolling Period less the
         sum of (I) cash taxes paid plus (II) Capital Expenditures made, in each
         case, by the Borrower and its Subsidiaries during such Rolling Period
         to (B) the sum of (i) cash interest payable on all Debt plus (ii)
         principal amounts of all Debt under the Term Facilities payable by the
         Borrower during such Rolling Period of not less than the amount set
         forth below for each Rolling Period set forth below:

Rolling Period Ending                                               Ratio
---------------------                                               -----

September 30, 1996                                                  1.05:1
December 31, 1996                                                   1.05:1
March 31, 1997                                                      1.05:1
June 30, 1997                                                       1.05:1
September 30, 1997                                                  1.10:1
December 31, 1997                                                   1.10:1
March 31, 1998                                                      1.10:1
June 30, 1998                                                       1.10:1
September 30, 1998                                                  1.10:1
December 31, 1998                                                   1.10:1
March 31, 1999                                                      1.15:1
June 30, 1999                                                       1.15:1
September 30, 1999                                                  1.15:1
December 31, 1999                                                   1.15:1
March 31, 2000                                                      1.20:1
June 30, 2000                                                       1.20:1
September 30, 2000                                                  1.20:1
December 31, 2000                                                   1.20:1
March 31, 2001                                                      1.20:1
June 30, 2001                                                       1.20:1
September 30, 2001                                                  1.10:1
December 31, 2001                                                   1.10:1
March 31, 2002 and thereafter                                       1.00:1

                  (d) Senior Debt to EBITDA Ratio. Maintain at all times
         (calculated at the end of each fiscal quarter of the Borrower) a ratio
         of Consolidated Debt (other than Subordinated Debt and Hedge
         Agreements) of the Borrower and its Subsidiaries to Modified
         Consolidated EBITDA of not more than the amount set forth below for
         each Rolling Period set forth below:



Rolling Period Ending                                               Ratio
---------------------                                               -----

September 30, 1996                                                   3.50:1
December 31, 1996                                                    3.50:1
March 31, 1997                                                       3.50:1
June 30, 1997                                                        3.75:1
September 30, 1997                                                   3.75:1
December 31, 1997                                                    3.60:1
March 31, 1998                                                       3.60:1
June 30, 1998                                                        3.60:1
September 30, 1998                                                   3.60:1
December 31, 1998                                                    3.60:1
March 31, 1999                                                       3.60:1
June 30, 1999                                                        3.60:1
September 30, 1999                                                   3.60:1
December 31, 1999                                                    3.60:1
March 31, 2000                                                       3.25:1
June 30, 2000                                                        3.25:1
September 30, 2000                                                   3.25:1
December 31, 2000                                                    3.25:1
March 31, 2001                                                       3.00:1
June 30, 2001                                                        3.00:1
September 30, 2001                                                   3.00:1
December 31, 2001                                                    3.00:1
March 31, 2002 and thereafter                                        2.50:1

                  (e) Total Debt/EBITDA Ratio. Maintain at all times (calculated
         at the end of each fiscal quarter of the Borrower) a ratio of
         Consolidated total Debt (other than Hedge Agreements) of the Borrower
         and its Subsidiaries to Modified Consolidated EBITDA of not more than
         the amount set forth below for each Rolling Period set forth below:



Rolling Period Ending                                               Ratio
---------------------                                               -----

September 30, 1996                                                  6.95:1
December 31, 1996                                                   6.95:1
March 31, 1997                                                      6.75:1
June 30, 1997                                                       6.50:1
September 30, 1997                                                  6.50:1
December 31, 1997                                                   6.00:1
March 31, 1998                                                      6.00:1
June 30, 1998                                                       6.00:1
September 30, 1998                                                  6.00:1
December 31, 1998                                                   6.00:1
March 31, 1999                                                      6.00:1
June 30, 1999                                                       6.00:1
September 30, 1999                                                  6.00:1
December 31, 1999                                                   6.00:1
March 31, 2000                                                      5.50:1
June 30, 2000                                                       5.50:1
September 30, 2000                                                  5.50:1
December 31, 2000                                                   5.50:1
March 31, 2001                                                      5.00:1
June 30, 2001                                                       5.00:1
September 30, 2001                                                  5.00:1
December 31, 2001                                                   5.00:1
March 31, 2002 and thereafter                                       4.50:1




                                   ARTICLE VI

                               EVENTS OF DEFAULT

                  SECTION 6.01.  Events of Default.  If any of the following
events ("Events of Default") shall occur and be continuing:

                  (a) (i) the Borrower shall fail to pay any principal of any
         Advance when the same shall become due and payable or (ii) the Borrower
         shall fail to pay any interest on any Advance, or any Loan Party shall
         fail to make any other payment under any Loan Document, in each case
         under this clause (ii) within three days after the same becomes due and
         payable; or

                  (b) any representation or warranty made by any Loan Party (or
         any of its officers) under or in connection with any Loan Document
         shall prove to have been incorrect in any material respect when made;
         or

                  (c) the Borrower shall fail to perform or observe any term,
         covenant or agreement contained in Section 2.14, 5.01(e), (f), (m),
         (n)(i) or (n)(ii), (p), (q), (r), (s) (t) or (u), 5.02, 5.03(a) or
         5.04; or

                  (d) any Loan Party shall fail to perform any other term,
         covenant or agreement contained in any Loan Document on its part to be
         performed or observed if such failure shall remain unremedied for 15
         days after the earlier of the date on which (A) a Responsible Officer
         becomes aware of such failure or (B) written notice thereof shall have
         been given to the Borrower by the Administrative Agent or any Lender
         Party; or



                  (e) any Loan Party or any of its Material Subsidiaries shall
         fail to pay any principal of, premium or interest on or any other
         amount payable in respect of any Debt that is outstanding in a
         principal amount of at least $25,000,000 either individually or in the
         aggregate (but excluding Debt outstanding hereunder) of such Loan Party
         or such Material Subsidiary (as the case may be), when the same becomes
         due and payable (whether by scheduled maturity, required prepayment,
         acceleration, demand or otherwise), and such failure shall continue
         after the applicable grace period, if any, specified in the agreement
         or instrument relating to such Debt; or any other event shall occur or
         condition shall exist under any agreement or instrument relating to any
         such Debt and shall continue after the applicable grace period, if any,
         specified in such agreement or instrument, if the effect of such event
         or condition is to accelerate, or to permit the acceleration of, the
         maturity of such Debt or otherwise to cause, or to permit the holder
         thereof to cause, such Debt to mature; or any such Debt shall be
         declared to be due and payable or required to be prepaid or redeemed
         (other than by a regularly scheduled required prepayment or
         redemption), purchased or defeased, or an offer to prepay, redeem,
         purchase or defease such Debt shall be required to be made, in each
         case prior to the stated maturity thereof; or

                  (f) any Loan Party or any of its Material Subsidiaries shall
         generally not pay its debts as such debts become due, or shall admit in
         writing its inability to pay its debts generally, or shall make a
         general assignment for the benefit of creditors; or any proceeding
         shall be instituted by or against any Loan Party or any of its Material
         Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or
         seeking liquidation, winding up, reorganization, arrangement,
         adjustment, protection, relief, or composition of it or its debts under
         any law relating to bankruptcy, insolvency or reorganization or relief
         of debtors, or seeking the entry of an order for relief or the
         appointment of a receiver, trustee, or other similar official for it or
         for any substantial part of its property and, in the case of any such
         proceeding instituted against it (but not instituted by it) that is
         being diligently contested by it in good faith, either such proceeding
         shall remain undismissed or unstayed for a period of 30 days or any of
         the actions sought in such proceeding (including, without limitation,
         the entry of an order for relief against, or the appointment of a
         receiver, trustee, custodian or other similar official for, it or any
         substantial part of its property) shall occur; or any Loan Party or any
         of its Material Subsidiaries shall take any corporate action to
         authorize any of the actions set forth above in this subsection (f); or


                  (g) any judgment or order for the payment of money in excess
         of $25,000,000 shall be rendered against any Loan Party or any of its
         Material Subsidiaries and either (i) enforcement proceedings shall have
         been commenced by any creditor upon such judgment or order or (ii)
         there shall be any period of 15 consecutive days during which a stay of
         enforcement of such judgment or order, by reason of a pending appeal or
         otherwise, shall not be in effect; provided, however, that any such
         judgment or order shall not be an Event of Default under this Section
         6.01(g) if and to the extent that the amount of such judgment or order
         is covered by a valid and binding policy of insurance between the
         defendant and the insurer covering payment thereof so long as such
         insurer, which shall be rated at least "A" by A.M. Best Company, has
         been notified of, and has not disputed the claim made for payment of,
         the amount of such judgment or order; or

                  (h) any non-monetary judgment or order shall be rendered
         against any Loan Party or any of its Material Subsidiaries that could
         be reasonably likely to have a Material Adverse Effect, and there shall
         be any period of 15 consecutive days during which a stay of enforcement
         of such judgment or order, by reason of a pending appeal or otherwise,
         shall not be in effect; or

                  (i) any provision of any Loan Document after delivery thereof
         pursuant to Section 3.01, 3.04, 3.05 or 5.01(n) shall for any reason
         cease to be valid and binding on or enforceable against any Loan Party
         party to it, or any such Loan Party shall so state in writing; or

                  (j) any provision relating to the subordination of any
         Subordinated Debt to the Obligations of the Loan Parties under the Loan
         Documents contained in any Subordinated Debt Document shall for any
         reason cease to be valid and binding on or enforceable against any Loan
         Party party to it or any holder of Subordinated Debt issued pursuant to
         such Subordinated Debt Document, or any such Loan Party or holder shall
         so state in writing; or

                  (k) any Collateral Document (excluding Mortgages covering
         Collateral which, in the aggregate, is immaterial) after delivery
         thereof pursuant to Section 3.01, 3.04, 3.05 or 5.01(n) shall for any
         reason (other than pursuant to the terms thereof or as a result of
         action taken or failure to take action by any Agent or Lender Party)
         cease to create a valid and perfected first priority lien on and
         security interest in the Collateral purported to be covered thereby; or

                  (l) Parent ceases to own and control legally and beneficially
         all of the outstanding shares of the capital stock of Holdings; or


                  (m) Holdings ceases to own and control legally and
         beneficially all of the outstanding shares of the capital stock of the
         Borrower; or

                  (n)      a Change of Control shall occur; or

                  (o) any ERISA Event shall have occurred with respect to a Plan
         and the sum (determined as of the date of occurrence of such ERISA
         Event) of the Insufficiency of such Plan and the Insufficiency of any
         and all other Plans with respect to which an ERISA Event shall have
         occurred and then exist (or the liability of the Loan Parties and the
         ERISA Affiliates related to such ERISA Event) exceeds $25,000,000; or

                  (p) any Loan Party or any ERISA Affiliate shall have been
         notified by the sponsor of a Multiemployer Plan that it has incurred
         Withdrawal Liability to such Multiemployer Plan in an amount that, when
         aggregated with all other amounts required to be paid to Multiemployer
         Plans by the Loan Parties and the ERISA Affiliates as Withdrawal
         Liability (determined as of the date of such notification), exceeds
         $25,000,000 or requires payments exceeding $7,500,000 per annum; or

                  (q) any Loan Party or any ERISA Affiliate shall have been
         notified by the sponsor of a Multiemployer Plan that such Multiemployer
         Plan is in reorganization or is being terminated, within the meaning of
         Title IV of ERISA, and as a result of such reorganization or
         termination the aggregate annual contributions of the Loan Parties and
         the ERISA Affiliates to all Multiemployer Plans that are then in
         reorganization or being terminated have been or will be increased over
         the amounts contributed to such Multiemployer Plans for the plan years
         of such Multiemployer Plans immediately preceding the plan year in
         which such reorganization or termination occurs by an amount exceeding
         $7,500,000;


then, and in any such event, the Administrative Agent (i) shall at the request,
or may with the consent, of the Required Lenders, by notice to the Borrower,
declare the Commitments of the Lender Parties and the obligation of each
Appropriate Lender to make Advances (other than Letter of Credit Advances by an
Issuing Bank or a Working Capital Lender pursuant to Section 2.03(c)) and of
each Issuing Bank to issue Letters of Credit to be terminated, whereupon the
same shall forthwith terminate, and (ii) shall at the request, or may with the
consent, of the Required Lenders, by notice to the Borrower, declare the Notes,
all interest thereon and all other amounts payable under this Agreement and the
other Loan Documents to be forthwith due and payable, whereupon the Notes, all
such interest and all such amounts shall become and be forthwith due and
payable, without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by the Borrower; provided, however, that in
the event of an actual or deemed entry of an order for relief with respect to
any Loan Party or any of its Subsidiaries under the Federal Bankruptcy Code, (x)
the obligation of each Lender to make Advances (other than Letter of Credit
Advances by an Issuing Bank or a Working Capital Lender pursuant to Section
2.03(c)) and of each Issuing Bank to issue Letters of Credit shall automatically
be terminated and (y) the Notes, all such interest and all such amounts shall
automatically become and be due and payable, without presentment, demand,
protest or any notice of any kind, all of which are hereby expressly waived by
the Borrower.

                  SECTION 6.02. Actions in Respect of the Letters of Credit upon
Default. If any Event of Default shall have occurred and be continuing, the
Administrative Agent may, or shall at the request of the Required Lenders,
irrespective of whether it is taking any of the actions described in Section
6.01 or otherwise, make demand upon the Borrower to, and forthwith upon such
demand the Borrower will, pay to the Administrative Agent on behalf of the
Lender Parties in same day funds at the Administrative Agent's office designated
in such demand, for deposit in the L/C Cash Collateral Account, an amount equal
to the aggregate Available Amount of all Letters of Credit then outstanding. If
at any time the Administrative Agent determines that any funds held in the L/C
Cash Collateral Account are subject to any right or claim of any Person other
than the Administrative Agent and the Lender Parties or that the total amount of
such funds is less than the aggregate Available Amount of all Letters of Credit,
the Borrower will, forthwith upon demand by the Administrative Agent, pay to the
Administrative Agent, as additional funds to be deposited and held in the L/C
Cash Collateral Account, an amount equal to the excess of (a) such aggregate
Available Amount over (b) the total amount of funds, if any, then held in the
L/C Cash Collateral Account that the Administrative Agent determines to be free
and clear of any such right and claim.


                                  ARTICLE VII

                                   THE AGENTS


                  SECTION 7.01. Authorization and Action. Each Lender Party (in
its capacities as a Lender, an Issuing Bank (if applicable) and a potential
Hedge Bank) hereby appoints and authorizes each Agent to take such action as
agent on its behalf and to exercise such powers and discretion under this
Agreement and the other Loan Documents as are delegated to such Agent by the
terms hereof and thereof, together with such powers and discretion as are
reasonably incidental thereto. As to any matters expressly provided for in the
Loan Documents as being subject to the discretion of any Agent, such matters
shall be subject to the sole discretion of such Agent, its directors, officers,
agents and employees. As to any matters not expressly provided for by the Loan
Documents (including, without limitation, enforcement or collection of the
Notes), no Agent shall be required to exercise any discretion or take any
action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Required Lenders, and such instructions shall be binding upon all Lender
Parties and all holders of Notes; provided, however, that no Agent shall be
required to take any action that exposes such Agent to personal liability or
that is contrary to this Agreement or applicable law. Each Agent agrees to give
to each Lender Party and each other Agent prompt notice of each notice given to
it by the Borrower pursuant to the terms of this Agreement.



                  SECTION 7.02. Agents' Reliance, Etc. Neither the Agents nor
any of their respective directors, officers, agents or employees shall be liable
for any action taken or omitted to be taken by it or them under or in connection
with the Loan Documents, except for its or their own gross negligence or willful
misconduct. Without limitation of the generality of the foregoing, each Agent:
(a) may treat the payee of any Note as the holder thereof until, in the case of
the Administrative Agent, the Administrative Agent receives and accepts an
Assignment and Acceptance entered into by the Lender that is the payee of such
Note, as assignor, and an Eligible Assignee, as assignee, or, in the case of any
other Agent, such Agent has received notice from the Administrative Agent that
it has received and accepted such Assignment and Acceptance, in each case as
provided in Section 8.07; (b) may consult with legal counsel (including counsel
for any Loan Party), independent public accountants and other experts selected
by it and shall not be liable for any action taken or omitted to be taken in
good faith by it in accordance with the advice of such counsel, accountants or
experts; (c) makes no warranty or representation to any Lender Party and shall
not be responsible to any Lender Party for any statements, warranties or
representations (whether written or oral) made in or in connection with the Loan
Documents; (d) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of any
Loan Document on the part of any Loan Party or to inspect the property
(including the books and records) of any Loan Party; (e) shall not be
responsible to any Lender Party for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any lien or security interest created or purported to be created
under or in connection with, any Loan Document or any other instrument or
document furnished pursuant thereto; and (f) shall incur no liability under or
in respect of any Loan Document by acting upon any notice, consent, certificate
or other instrument or writing (which may be by telegram, telecopy or telex)
believed by it to be genuine and signed or sent by the proper party or parties.

                  SECTION 7.03. Citibank, Citicorp, Goldman and Affiliates. With
respect to its Commitments, the Advances made by it and the Notes issued to it,
each of Citibank, Citicorp and Goldman shall have the same rights and powers
under the Loan Documents as any other Lender Party and may exercise the same as
though it were not an Agent; and the term "Lender Party" or "Lender Parties"
shall, unless otherwise expressly indicated, include each of Citibank, Citicorp
and Goldman in its individual capacity. Each of Citibank, Citicorp and Goldman
and its affiliates may accept deposits from, lend money to, act as trustee under
indentures of, accept investment banking engagements from and generally engage
in any kind of business with, any Loan Party, any of its Subsidiaries and any
Person who may do business with or own securities of any Loan Party or any such
Subsidiary, all as if Citibank, Citicorp or Goldman, as the case may be, were
not an Agent and without any duty to account therefor to the Lender Parties.



                  SECTION 7.04. Lender Party Credit Decision. Each Lender Party
acknowledges that it has, independently and without reliance upon the Agents or
any other Lender Party and based on the financial statements referred to in
Section 4.01 and such other documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender Party also acknowledges that it will, independently and
without reliance upon the Agents or any other Lender Party and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement.



                  SECTION 7.05. Indemnification. (a) Each Lender Party severally
agrees to indemnify each Agent (to the extent not promptly reimbursed by the
Borrower) from and against such Lender Party's ratable share (determined as
provided below) of any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever that may be imposed on, incurred by, or asserted
against such Agent in any way relating to or arising out of the Loan Documents
or any action taken or omitted by such Agent under the Loan Documents; provided,
however, that no Lender Party shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from such Agent's gross negligence or
willful misconduct. Without limitation of the foregoing, each Lender Party
agrees to reimburse such Agent promptly upon demand for its ratable share of any
costs and expenses (including, without limitation, reasonable fees and expenses
of counsel) payable by the Borrower under Section 8.04, to the extent that such
Agent is not promptly reimbursed for such costs and expenses by the Borrower.
For purposes of this Section 7.05(a), the Lender Parties' respective ratable
shares of any amount shall be determined, at any time, according to the sum of
(a) the aggregate principal amount of the Advances outstanding at such time and
owing to the respective Lender Parties, (b) their respective Pro Rata Shares of
the aggregate Available Amount of all Letters of Credit outstanding at such
time, (c) the aggregate unused portions of their respective Term Loan
Commitments, AXELs Series A Commitments and AXELs Series B Commitments at such
time and (d) their respective Unused Working Capital Commitments at such time;
provided that the aggregate principal amount of Letter of Credit Advances owing
to any Issuing Bank shall be considered to be owed to the Working Capital
Lenders ratably in accordance with their respective Working Capital Commitments.
In the event that any Defaulted Advance shall be owing by any Defaulting Lender
at any time, such Lender Party's Commitment with respect to the Facility under
which such Defaulted Advance was required to have been made shall be considered
to be unused for purposes of this Section 7.05(a) to the extent of the amount of
such Defaulted Advance. The failure of any Lender Party to reimburse an Agent
promptly upon demand for its ratable share of any amount required to be paid by
the Lender Party to such Agent as provided herein shall not relieve any other
Lender Party of its obligation hereunder to reimburse such Agent for its ratable
share of such amount, but no Lender Party shall be responsible for the failure
of any other Lender Party to reimburse such Agent for such other Lender Party's
ratable share of such amount. Without prejudice to the survival of any other
agreement of any Lender Party hereunder, the agreement and obligations of each
Lender Party contained in this Section 7.05(a) shall survive the payment in full
of principal, interest and all other amounts payable hereunder and under the
other Loan Documents.



                  (b) Each Working Capital Lender severally agrees to indemnify
each Issuing Bank (to the extent not promptly reimbursed by the Borrower) from
and against such Working Capital Lender's ratable share (determined as provided
below) of any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever that may be imposed on, incurred by, or asserted against such
Issuing Bank in any way relating to or arising out of the Loan Documents or any
action taken or omitted by such Issuing Bank under the Loan Documents; provided,
however, that no Working Capital Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from such Issuing Bank's gross
negligence or willful misconduct. Without limitation of the foregoing, each
Working Capital Lender agrees to reimburse such Issuing Bank promptly upon
demand for its ratable share of any costs and expenses (including, without
limitation, reasonable fees and expenses of counsel) payable by the Borrower
under Section 8.04, to the extent that such Issuing Bank is not promptly
reimbursed for such costs and expenses by the Borrower. For purposes of this
Section 7.05(b), the Working Capital Lenders' respective ratable shares of any
amount shall be determined, at any time, according to the sum of (a) the
aggregate principal amount of the Advances outstanding at such time and owing to
the respective Working Capital Lenders, (b) their respective Pro Rata Shares of
the aggregate Available Amount of all Letters of Credit outstanding at such
time, and (c) their respective Unused Working Capital Commitments at such time;
provided that the aggregate principal amount of Letter of Credit Advances owing
to any Issuing Bank shall be considered to be owed to the Working Capital
Lenders ratably in accordance with their respective Working Capital Commitments.
In the event that any Defaulted Advance shall be owing by any Defaulting Lender
at any time, such Lender Party's Commitment with respect to the Facility under
which such Defaulted Advance was required to have been made shall be considered
to be unused for purposes of this Section 7.05(b) to the extent of the amount of
such Defaulted Advance. The failure of any Working Capital Lender to reimburse
such Issuing Bank promptly upon demand for its ratable share of any amount
required to be paid by the Working Capital Lenders to such Issuing Bank as
provided herein shall not relieve any other Working Capital Lender of its
obligation hereunder to reimburse such Issuing Bank for its ratable share of
such amount, but no Working Capital Lender shall be responsible for the failure
of any other Working Capital Lender to reimburse such Issuing Bank for such
other Working Capital Lender's ratable share of such amount. Without prejudice
to the survival of any other agreement of any Working Capital Lender hereunder,
the agreement and obligations of each Working Capital Lender contained in this
Section 7.05(b) shall survive the payment in full of principal, interest and all
other amounts payable hereunder and under the other Loan Documents.



                  SECTION 7.06. Successor Agents. Any Agent may resign as to any
or all of the Facilities at any time by giving written notice thereof to the
Lender Parties and the Borrower and may be removed as to all of the Facilities
at any time with or without cause by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint a
successor Agent as to such of the Facilities as to which such Agent has resigned
or been removed subject, so long as no Default shall have occurred and be
continuing, to the consent of the Borrower, such consent not to be unreasonably
withheld or delayed. If no successor Agent shall have been so appointed by the
Required Lenders, and shall have accepted such appointment, within 30 days after
such retiring Agent's giving of notice of resignation or the Required Lenders'
removal of such retiring Agent, then such retiring Agent may, on behalf of the
Lender Parties, appoint a successor Agent subject, so long as no Default shall
have occurred and be continuing, to the consent of the Borrower, such consent
not to be unreasonably withheld or delayed, which shall be a commercial bank
organized or licensed under the laws of the United States or of any State
thereof and having a combined capital and surplus of at least $250,000,000. Upon
the acceptance of any appointment as an Agent hereunder by a successor Agent as
to all of the Facilities and upon the execution and filing or recording of such
financing statements, or amendments thereto, and such amendments or supplements
to the Mortgages, and such other instruments or notices, as may be necessary or
desirable, or as the Required Lenders may request, in order to continue the
perfection of the Liens granted or purported to be granted by the Collateral
Documents, such successor Agent shall succeed to and become vested with all the
rights, powers, discretion, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations under the
Loan Documents. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent as to less than all of the Facilities and upon the execution and
filing or recording of such financing statements, or amendments thereto, and
such amendments or supplements to the Mortgages, and such other instruments or
notices, as may be necessary or desirable, or as the Required Lenders may
request, in order to continue the perfection of the Liens granted or purported
to be granted by the Collateral Documents, such successor Agent shall succeed to
and become vested with all the rights, powers, discretion, privileges and duties
of the retiring Agent as to such Facilities, other than with respect to funds
transfers and other similar aspects of the administration of Borrowings under
such Facilities, issuances of Letters of Credit (notwithstanding any resignation
as Agent with respect to the Letter of Credit Facility) and payments by the
Borrower in respect of such Facilities, and the retiring Agent shall be
discharged from its duties and obligations under this Agreement as to such
Facilities, other than as aforesaid. After any retiring Agent's resignation or
removal hereunder as Agent as to all of the Facilities, the provisions of this
Article VII shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent as to any Facilities under this Agreement.


                                  ARTICLE VIII

                                 MISCELLANEOUS



                  SECTION 8.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement or the Notes or any other Loan Document, nor consent
to any departure by the Borrower therefrom, shall in any event be effective
unless the same shall be in writing and signed (or, in the case of the
Collateral Documents, consented to) by the Required Lenders, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that (a) no amendment,
waiver or consent shall, unless in writing and signed by all of the Lender
Parties (other than any Lender Party that is, at such time, a Defaulting
Lender), do any of the following at any time: (i) waive any of the conditions
specified in Section 3.01 or, in the case of the Initial Extension of Credit,
Section 3.02, (ii) change the number of Lenders or the percentage of (x) the
Commitments, (y) the aggregate unpaid principal amount of the Advances or (z)
the aggregate Available Amount of outstanding Letters of Credit that, in each
case, shall be required for the Lenders or any of them to take any action
hereunder, (iii) reduce or limit the obligations of any Guarantor under Section
1 of any Guaranty or release such Guarantor or otherwise limit such Guarantor's
liability with respect to the Obligations owing to the Administrative Agent and
the Lender Parties other than, in the case of any Subsidiary Guarantor, to the
extent permitted under the Subsidiary Guaranty, (iv) release any material
portion of the Collateral in any transaction or series of related transactions
(except to the extent permitted by Section 5.02(e)) or permit the creation,
incurrence, assumption or existence of any Lien (other than Liens permitted
under Section 5.02(a)) on any material portion of the Collateral in any
transaction or series of related transactions to secure any Obligations other
than Obligations owing to the Secured Parties under the Loan Documents and other
than Debt owing to any other Person, provided that, in the case of any Lien on
any material portion of the Collateral to secure Debt owing to any other Person
(other than Liens permitted under Section 5.02(a)), (A) the Borrower shall, on
the date such Debt shall be incurred or issued, prepay the Advances pursuant to,
and in the order of priority set forth in, Section 2.06(b)(ii) in an aggregate
principal amount equal to the amount of the Net Cash Proceeds thereof to the
extent required to do so under Section 2.06(b)(ii), (B) such Lien shall be
subordinated to the Liens created under the Loan Documents on terms acceptable
to the Required Lenders and (C) the Required Lenders shall otherwise permit the
creation, incurrence, assumption or existence of such Lien and, to the extent
not otherwise permitted under Section 5.02(b), of such Debt, (v) amend this
Section 8.01, or (vi) limit the liability of any Loan Party under any of the
Loan Documents, (b) no amendment, waiver or consent shall, unless in writing and
signed by the Required Lenders and each Lender that has a Commitment under the
Term Loan Facility, AXELs Series A Facility, AXELs Series B Facility or Working
Capital Facility if affected by such amendment, waiver or consent, (i) increase
the Commitments of such Lender or subject such Lender to any additional
obligations, (ii) reduce the principal of, or interest on, the Notes held by
such Lender or any fees or other amounts payable hereunder to such Lender, (iii)
postpone any date fixed for any payment of principal of, or interest on, the
Notes held by such Lender or any fees or other amounts payable hereunder to such
Lender or (iv) change the allocation or the order of application of any
prepayment set forth in Section 2.06 in any manner that materially affects such
Lender and (c) no amendment, waiver or consent shall, unless in writing and
signed by (i) the Required Lenders and each New AXELs Series B Lender, waive any
of the conditions specified in Section 3.04 or, in the case of the making of New
AXELs Series B Advances, Section 3.02 or (ii) the Required Lenders waive any of
the conditions specified in Section 3.05; provided further that no amendment,
waiver or consent shall, unless in writing and signed by each Issuing Bank in
addition to the Lenders required above to take such action, affect the rights or
obligations of the Issuing Banks under this Agreement; and provided further that
no amendment, waiver or consent shall, unless in writing and signed by an Agent
in addition to the Lenders required above to take such action, affect the rights
or duties of such Agent under this Agreement.



                  SECTION 8.02. Notices, Etc. All notices and other
communications provided for hereunder shall be in writing (including
telegraphic, telecopy or telex communication) and mailed, telegraphed,
telecopied, telexed or delivered, if to the Borrower, at its address at AMF
Bowling Worldwide, Inc., 8100 AMF Drive, Mechanicsville, Virginia 23111,
Attention: Stephen E. Hare, with a copy to Goldman, Sachs & Co., 85 Broad
Street, New York, New York 10004, Attention: David Greenwald, Esq.; if to any
Initial Lender or any Initial Issuing Bank, at its Domestic Lending Office
specified opposite its name on Schedule I hereto; if to any other Lender Party,
at its Domestic Lending Office specified in the Assignment and Acceptance
pursuant to which it became a Lender Party; if to the Collateral Agent, at its
address at 399 Park Avenue, New York, New York 10043, Attention: Charles Foster;
and if to the Administrative Agent, at its address at 399 Park Avenue, 6th
Floor, New York, New York 10043, Attention: Charles Foster; or, as to the
Borrower or the Administrative Agent, at such other address as shall be
designated by such party in a written notice to the other parties and, as to
each other party, at such other address as shall be designated by such party in
a written notice to the Borrower and the Administrative Agent. All such notices
and communications shall (a) when mailed, be effective three Business Days after
the same is deposited in the mails, (b) when mailed for next day delivery by a
reputable freight company or reputable overnight courier service, be effective
one Business Day thereafter, and (c) when sent by telegraph, telecopier or
telex, be effective when the same is confirmed by telephone, telecopier
confirmation or return telecopy or telex answerback, respectively, except that
notices and communications to the Administrative Agent pursuant to Article II,
III or VII shall not be effective until received by the Administrative Agent.
Delivery by telecopier of an executed counterpart of any amendment or waiver of
any provision of this Agreement or the Notes or of any Exhibit hereto to be
executed and delivered hereunder shall be effective as delivery of a manually
executed counterpart thereof.

                  SECTION 8.03. No Waiver; Remedies. No failure on the part of
any Lender Party or any Agent to exercise, and no delay in exercising, any right
hereunder or under any Note 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. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.




                  SECTION 8.04. Costs and Expenses. (a)
The Borrower agrees to pay on demand (i) all costs and expenses of the Arrangers
and the Agents in connection with the preparation, execution, delivery,
administration, modification and amendment of the Loan Documents (including,
without limitation, (A) all due diligence, collateral review, syndication,
transportation, computer, duplication, appraisal, audit, insurance, consultant,
search, filing and recording fees and expenses and (B) the reasonable fees and
expenses of counsel (including, without limitation, local or foreign counsel)
for the Arrangers and the Agents with respect thereto, with respect to advising
each of the Administrative Agent and the Collateral Agent as to its rights and
responsibilities, or the perfection, protection or preservation of rights or
interests, under the Loan Documents, with respect to negotiations with any Loan
Party or with other creditors of any Loan Party or any of its Subsidiaries
arising out of any Default or any events or circumstances that may give rise to
a Default and with respect to presenting claims in or otherwise participating in
or monitoring any bankruptcy, insolvency or other similar proceeding involving
creditors' rights generally and any proceeding ancillary thereto) and (ii) all
costs and expenses of the Agents and the Lender Parties in connection with the
enforcement of the Loan Documents, whether in any action, suit or litigation,
any bankruptcy, insolvency or other similar proceeding affecting creditors'
rights generally (including, without limitation, the reasonable fees and
expenses of counsel (including, without limitation, local or foreign counsel)
for each Agent and each Lender Party with respect thereto).




                  (b) The Borrower agrees to indemnify and hold harmless each
Agent, each Arranger, each Lender Party and each of their Affiliates and their
officers, trustees, directors, employees, agents and advisors (each, an
"Indemnified Party") from and against 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 by
reason of, or in connection with the preparation for a defense of, any
investigation, litigation or proceeding arising out of, related to or in
connection with (i) the Facilities, the actual or proposed use of the proceeds
of the Advances or the Letters of Credit, the Loan Documents or any of the
transactions contemplated thereby, including, without limitation, any
acquisition or proposed acquisition (including, without limitation, the
Acquisition and any of the other transactions contemplated hereby) by the Equity
Investors or any of their Subsidiaries or Affiliates of all or any portion of
the stock or substantially all the assets of the Company or any of its
Subsidiaries or (ii) the actual or alleged presence of Hazardous Materials on
any property of any Loan Party or any of its Subsidiaries or any Environmental
Action relating in any way to any Loan Party or any of its Subsidiaries, in each
case whether or not such investigation, litigation or proceeding is brought by
any Loan Party, its directors, shareholders or creditors or an Indemnified Party
or any Indemnified Party is otherwise a party thereto and whether or not the
transactions contemplated hereby are consummated (but excluding any such claims,
damages, losses, liabilities and expenses (A) of any Indemnified Party 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 or (B)
arising from disputes among two or more Lender Parties (but not including any
such dispute that involves a Lender Party to the extent that such Lender Party
is acting in any different capacity (such as an Agent or Arranger) or to the
extent it involves syndication activities). The Borrower also agrees not to
assert any claim against any Agent, any Lender Party or any of their Affiliates,
or any of their respective officers, directors, trustees, employees, attorneys
and agents, on any theory of liability, for special, indirect, consequential or
punitive damages arising out of or otherwise relating to the Facilities, the
actual or proposed use of the proceeds of the Advances or the Letters of Credit,
the Loan Documents or any of the transactions contemplated thereby.




                  (c) If any payment of principal of, or Conversion of, any
Eurodollar Rate Advance is made by the Borrower to or for the account of a
Lender Party other than on the last day of the Interest Period for such Advance,
as a result of a payment or Conversion pursuant to Section 2.01(c), 2.06,
2.09(b)(i) or 2.10(d), acceleration of the maturity of the Notes pursuant to
Section 6.01 or for any other reason, or by an Eligible Assignee to a Lender
Party other than on the last day of the Interest Period for such Advance upon an
assignment of rights and obligations under this Agreement pursuant to Section
8.07 as a result of a demand by the Borrower pursuant to Section 8.07(a), the
Borrower shall, upon demand by such Lender Party (with a copy of such demand to
the Administrative Agent), pay to the Administrative Agent for the account of
such Lender Party any amounts required to compensate such Lender Party for any
additional losses, costs or expenses that it may reasonably incur as a result of
such payment, including, without limitation, any loss (including loss of
anticipated profits), cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by any Lender Party to fund or
maintain such Advance.

                  (d) If any Loan Party fails to pay when due any costs,
expenses or other amounts payable by it under any Loan Document, including,
without limitation, fees and expenses of counsel and indemnities, such amount
may be paid on behalf of such Loan Party by the Administrative Agent or any
Lender Party, in its sole discretion.

                  (e) Without prejudice to the survival of any other agreement
of any Loan Party hereunder or under any other Loan Document, the agreements and
obligations of the Borrower contained in Sections 2.10 and 2.12 and this Section
8.04 shall survive the payment in full of principal, interest and all other
amounts payable hereunder and under any of the other Loan Documents.



                  SECTION 8.05. Right of Set-off. Upon (a) the occurrence and
during the continuance of any Event of Default and (b) the making of the request
or the granting of the consent specified by Section 6.01 to authorize the
Administrative Agent to declare the Notes due and payable pursuant to the
provisions of Section 6.01, each Lender Party and each of its respective
Affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and otherwise apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Lender Party or such
Affiliate to or for the credit or the account of the Borrower against any and
all of the Obligations of the Borrower now or hereafter existing under this
Agreement and the Note or Notes (if any) held by such Lender Party, irrespective
of whether such Lender Party shall have made any demand under this Agreement or
such Note or Notes and although such obligations may be unmatured. Each Lender
Party agrees promptly to notify the Borrower after any such set-off and
application; provided, however, that the failure to give such notice shall not
affect the validity of such set-off and application. The rights of each Lender
Party and its respective Affiliates under this Section are in addition to other
rights and remedies (including, without limitation, other rights of set-off)
that such Lender Party and its respective Affiliates may have.

                  SECTION 8.06. Binding Effect. This Agreement shall become
effective when the Third Amendment shall have been executed by the Borrower and
the Agents and when the Administrative Agent shall have been notified by the
Required Lenders that such Lender Parties have executed the Third Amendment and
the conditions precedent set forth in the Third Amendment and in Section 3.05
have been satisfied in full, and thereafter shall be binding upon and inure to
the benefit of the Borrower, each Agent and each Lender Party and their
respective successors and assigns, except that the Borrower shall not have the
right to assign its rights hereunder or any interest herein without the prior
written consent of the Lender Parties.



                  SECTION 8.07. Assignments and Participations. (a) Each Lender
may (and, so long as no Default shall have occurred and be continuing, if
demanded by the Borrower (following a demand by such Lender pursuant to Section
2.10 or 2.12 or if such Lender shall be a Defaulting Lender) upon at least 5
Business Days' notice to such Lender and the Administrative Agent, will) assign
to one or more Eligible Assignees all or a portion of its rights and obligations
under this Agreement and the other Loan Documents (including, without
limitation, all or a portion of its Commitment or Commitments, the Advances
owing to it and the Note or Notes held by it); provided, however, that (i) each
such assignment shall be of a uniform, and not a varying, percentage of all
rights and obligations under and in respect of one or more Facilities, (ii)
except in the case of an assignment to a Person that, immediately prior to such
assignment, was a Lender or an assignment of all of a Lender's rights and
obligations under this Agreement, the amount of the Commitment or Commitments of
the assigning Lender being assigned pursuant to each such assignment (determined
as of the date of the Assignment and Acceptance with respect to such assignment)
shall in no event be less than $5,000,000, (iii) each such assignment shall be
to an Eligible Assignee, (iv) each such assignment made as a result of a demand
by the Borrower pursuant to this Section 8.07(a) shall be arranged by the
Borrower after consultation with the Administrative Agent and shall be either an
assignment of all of the rights and obligations of the assigning Lender under
this Agreement and the other Loan Documents or an assignment of a portion of
such rights and obligations made concurrently with another such assignment or
other such assignments that together cover all of the rights and obligations of
the assigning Lender under this Agreement and the other Loan Documents, (v) no
Lender shall be obligated to make any such assignment as a result of a demand by
the Borrower pursuant to this Section 8.07(a) unless and until such Lender shall
have received one or more payments from either the Borrower or one or more
Eligible Assignees in an aggregate amount at least equal to the aggregate
outstanding principal amount of the Advances owing to such Lender, together with
accrued interest thereon to the date of payment of such principal amount and all
other amounts payable to such Lender under this Agreement, and (vi) the parties
to each such assignment shall execute and deliver to the Administrative Agent,
for its acceptance and recording in the Register, an Assignment and Acceptance,
together with any Note or Notes subject to such assignment and a processing and
recordation fee of $1,500 for each Assignment and Acceptance between a Lender
and one of its Affiliates or another Lender or $3,000 for each other Assignment
and Acceptance, provided, however, that for each such assignment made as a
result of a demand by the Borrower pursuant to this Section 8.07(a), the
Borrower shall pay to the Administrative Agent the applicable processing and
recordation fee.


                  (b) Upon such execution, delivery, acceptance and recording,
from and after the effective date specified in such Assignment and Acceptance,
(x) the assignee thereunder shall be a party hereto and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, have the rights and obligations of a Lender or
Issuing Bank, as the case may be, hereunder and (y) the Lender or Issuing Bank
assignor thereunder shall, to the extent that rights and obligations hereunder
have been assigned by it pursuant to such Assignment and Acceptance, relinquish
its rights (other than its rights under Sections 2.10, 2.12 and 8.04 to the
extent any claim thereunder relates to an event arising prior to such
assignment) and be released from its obligations under this Agreement (and, in
the case of an Assignment and Acceptance covering all or the remaining portion
of an assigning Lender's or Issuing Bank's rights and obligations under this
Agreement, such Lender or Issuing Bank shall cease to be a party hereto).

                  (c) By executing and delivering an Assignment and Acceptance,
the Lender Party assignor thereunder and the assignee thereunder confirm to and
agree with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Lender Party makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or any other Loan Document or any other instrument or document
furnished pursuant hereto or thereto or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any lien or security interest created or purported to be created
under or in connection with, this Agreement or any other Loan Document or any
other instrument or document furnished pursuant hereto or thereto; (ii) such
assigning Lender Party makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or any
other Loan Party or the performance or observance by any Loan Party of any of
its obligations under any Loan Document or any other instrument or document
furnished pursuant thereto; (iii) such assignee confirms that it has received a
copy of this Agreement, together with copies of the financial statements
referred to in Section 4.01 and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
such Assignment and Acceptance; (iv) such assignee will, independently and
without reliance upon any Agent, such assigning Lender Party or any other Lender
Party and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under this Agreement; (v) such assignee confirms that it is an Eligible
Assignee; (vi) such assignee appoints and authorizes each Agent to take such
action as agent on its behalf and to exercise such powers and discretion under
the Loan Documents as are delegated to such Agent by the terms hereof, together
with such powers and discretion as are reasonably incidental thereto; and (vii)
such assignee agrees that it will perform in accordance with their terms all of
the obligations which by the terms of this Agreement are required to be
performed by it as a Lender or Issuing Bank, as the case may be.


                  (d) The Administrative Agent, acting for this purpose (but
only for this purpose) as the agent of the Borrower, shall maintain at its
address referred to in Section 8.02 a copy of each Assignment and Acceptance
delivered to and accepted by it and a register for the recordation of the names
and addresses of the Lender Parties and the Commitment under each Facility of,
and principal amount of the Advances owing under each Facility to, each Lender
Party from time to time (the "Register"). The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Agents and the Lender Parties shall treat each Person whose name
is recorded in the Register as a Lender Party hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrower or any
Lender Party at any reasonable time and from time to time upon reasonable prior
notice.

                  (e) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender Party and an assignee, together with any Note or Notes
subject to such assignment, the Administrative Agent shall, if such Assignment
and Acceptance has been completed and is in substantially the form of Exhibit C
hereto, (i) accept such Assignment and Acceptance, (ii) record the information
contained therein in the Register and (iii) give prompt notice thereof to the
Borrower and the other Agents. In the case of any assignment by a Lender, within
five Business Days after its receipt of such notice, the Borrower, at its own
expense, shall execute and deliver to the Administrative Agent in exchange for
the surrendered Note or Notes a new Note to the order of such Eligible Assignee
in an amount equal to the Commitment assumed by it under a Facility pursuant to
such Assignment and Acceptance and, if the assigning Lender has retained a
Commitment hereunder under such Facility, a new Note to the order of the
assigning Lender in an amount equal to the Commitment retained by it hereunder.
Such new Note or Notes shall be in an aggregate principal amount equal to the
aggregate principal amount of such surrendered Note or Notes, shall be dated the
effective date of such Assignment and Acceptance and shall otherwise be in
substantially the form of Exhibit A-1, A-2, A-3 or A-4 hereto, as the case may
be.

                   (f) Each Issuing Bank may assign to one or more Eligible
Assignees all or a portion of its rights and obligations under the undrawn
portion of its Letter of Credit Commitment at any time; provided, however, that
(i) except in the case of an assignment to a Person that immediately prior to
such assignment was an Issuing Bank or an assignment of all of an Issuing Bank's
rights and obligations under this Agreement, the amount of the Letter of Credit
Commitment of the assigning Issuing Bank being assigned pursuant to each such
assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event be less than $5,000,000 and shall
be in an integral multiple of $1,000,000 in excess thereof, (ii) each such
assignment shall be to an Eligible Assignee and (iii) the parties to each such
assignment shall execute and deliver to the Administrative Agent, for its
acceptance and recording in the Register, an Assignment and Acceptance, together
with a processing and recordation fee of $3,000.


                  (g) Each Lender Party may sell participations to one or more
Persons (other than any Loan Party or any of its Affiliates) in or to all or a
portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitments, the Advances owing to it and
the Note or Notes (if any) held by it); provided, however, that (i) such Lender
Party's obligations under this Agreement (including, without limitation, its
Commitments) shall remain unchanged, (ii) such Lender Party shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) such Lender Party shall remain the holder of any such Note for all
purposes of this Agreement, (iv) the Borrower, the Administrative Agent and the
other Lender Parties shall continue to deal solely and directly with such Lender
Party in connection with such Lender Party's rights and obligations under this
Agreement and (v) no participant under any such participation shall have any
right to approve any amendment or waiver of any provision of any Loan Document,
or any consent to any departure by any Loan Party therefrom, except to the
extent that such amendment, waiver or consent would reduce the principal of, or
interest on, the Notes or any fees or other amounts payable hereunder, in each
case to the extent subject to such participation, postpone any date fixed for
any payment of principal of, or interest on, the Notes or any fees or other
amounts payable hereunder, in each case to the extent subject to such
participation, release any Guarantor or Guarantors to the extent that such
release would have the effect of releasing all or substantially all of the
Collateral, or release all or substantially all of the Collateral.

                  (h) Any Lender Party may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
8.07, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Borrower furnished to such Lender
Party by or on behalf of the Borrower; provided, however, that, prior to any
such disclosure, the assignee or participant or proposed assignee or participant
shall agree to preserve the confidentiality of any Confidential Information
received by it from such Lender Party.

                  (i) Notwithstanding any other provision set forth in this
Agreement, any Lender Party may at any time create a security interest in all or
any portion of its rights under this Agreement (including, without limitation,
the Advances owing to it and the Note or Notes held by it) in favor of any
Federal Reserve Bank in accordance with Regulation A of the Board of Governors
of the Federal Reserve System.

                  SECTION 8.08. Execution in Counterparts. This 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 taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.


                  SECTION 8.09. No Liability of the Issuing Banks. The Borrower
assumes all risks of the acts or omissions of any beneficiary or transferee of
any Letter of Credit with respect to its use of such Letter of Credit. Neither
any Issuing Bank nor any other Lender Party nor any of their respective officers
or directors shall be liable or responsible for: (a) the use that may be made of
any Letter of Credit or any acts or omissions of any beneficiary or transferee
in connection therewith; (b) the validity, sufficiency or genuineness of
documents, or of any endorsement thereon, even if such documents should prove to
be in any or all respects invalid, insufficient, fraudulent or forged; (c)
payment by such Issuing Bank against presentation of documents that do not
comply with the terms of a Letter of Credit, including failure of any documents
to bear any reference or adequate reference to the Letter of Credit; or (d) any
other circumstances whatsoever in making or failing to make payment under any
Letter of Credit, except that the Borrower shall have a claim against such
Issuing Bank, and such Issuing Bank shall be liable to the Borrower, to the
extent of any direct, but not consequential, damages suffered by the Borrower
that the Borrower proves were caused by (i) such Issuing Bank's willful
misconduct or gross negligence in determining whether documents presented under
any Letter of Credit comply with the terms of such Letter of Credit or (ii) such
Issuing Bank's willful failure to make lawful payment under a Letter of Credit
after the presentation to it of a draft and certificates strictly complying with
the terms and conditions of the Letter of Credit. In furtherance and not in
limitation of the foregoing, such Issuing Bank may accept documents that appear
on their face to be in order, without responsibility for further investigation,
regardless of any notice or information to the contrary.

                  SECTION 8.10. Confidentiality. Neither any Agent nor any
Lender Party shall disclose any Confidential Information to any Person without
the consent of the Borrower, other than (a) to such Agent's or such Lender
Party's Affiliates and their officers, directors, partners, employees, agents
and advisors and to actual or prospective Eligible Assignees and participants,
and then only on a confidential basis, (b) as required by any law, rule or
regulation or judicial process, provided that, other than with respect to
Confidential Information otherwise permitted to be disclosed pursuant to clause
(d) below, such Agent or Lender Party shall, unless prohibited by applicable law
or regulation or court order, give notice to the Borrower of any such
requirement to disclose such Confidential Information, and, if practicable, such
notice shall be given prior to such disclosure, provided, however, that the
failure to give such notice shall not prohibit such disclosure, (c) to any
rating agency when required by it, provided that, prior to any such disclosure,
such rating agency shall undertake to preserve the confidentiality of any
Confidential Information relating to the Borrower received by it from such
Lender Party and (d) as requested or required by any state, federal or foreign
authority or examiner or the National Association of Insurance Commissioners or
any state or federal authority regulating such Lender Party.



                  SECTION 8.11. Jurisdiction, Etc. (a) Each of the parties
hereto hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or any of the other Loan Documents to which it is a
party, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in any such
New York State court or, to the extent permitted by law, in such federal court.
Each of the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement shall affect any right that any party may otherwise have to bring any
action or proceeding relating to this Agreement or any of the other Loan
Documents in the courts of any jurisdiction.

                  (b) Each of the parties hereto irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or any of the
other Loan Documents to which it is a party in any New York State or federal
court. Each of the parties hereto hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the maintenance
of such action or proceeding in any such court.

                  SECTION 8.12. Release of Collateral. Upon the sale, lease,
transfer or other disposition of any item of Collateral of any Loan Party
(including, without limitation, as a result of the sale, in accordance with the
terms of the Loan Documents, of the Loan Party that owns such Collateral) in
accordance with the terms of the Loan Documents, the Collateral Agent will, at
the Borrower's expense, execute and deliver to such Loan Party such documents as
such Loan Party may reasonably request to evidence the release of such item of
Collateral from the assignment and security interest granted under the
Collateral Documents in accordance with the terms of the Loan Documents.

                  SECTION 8.13. Governing Law; Waiver of Jury Trial. This
Agreement and the Notes shall be governed by, and construed in accordance with,
the laws of the State of New York. Each of the Borrower, the Agents and the
Lender Parties irrevocably waives all right to trial by jury in any action,
proceeding or counterclaim (whether based on contract, tort or otherwise)
arising out of or relating to any of the Loan Documents, the Advances or the
actions of any Agent or any Lender Party in the negotiation, administration,
performance or enforcement thereof.



                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.


                                 AMF BOWLING WORLDWIDE, INC.
                                          (f/k/a AMF Group Inc.)


                                 By   /s/ Michael P. Bardaro
                                    -------------------------------
                                      Title: Vice President, Secretary


                                 GOLDMAN SACHS CREDIT

                                    as Syndication Agent


                                 By   /s/ ILLEGIBLE
                                     --------------------------
                                      Title:


                                 CITIBANK, N.A.,
                                    as Administrative Agent


                                 By  /s/ Judith [ ] Minter
                                     --------------------------
                                      Title: Attorney-in-fact


                                 CITICORP USA, INC.,
                                    as Collateral Agent


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




                                    Lenders


                               GOLDMAN SACHS CREDIT
                                  PARTNERS,  L.P.


                               By  /s/ ILLEGIBLE
                                   ------------------------------
                                   Title:


                               CITICORP USA, INC.


                               By   /s/ Judith [ ] Minter
                                  ------------------------------
                                   Title: Attorney-in-fact


                               ABN AMRO BANK N.V.


                               By  /s/ David J. Kraut
                                  -------------------------------
                                   Title: Assistant Vice President


                               By  /s/ Lisa Megeaski
                                 -----------------------------------
                                   Title: Vice President


                               AERIES FINANCE LTD.


                               By   /s/ ILLEGIBLE
                                  -------------------------------
                                   Title: Director




                               ALLSTATE LIFE INSURANCE COMPANY


                             By  /s/ Charles D. Mires
                                --------------------------------
                                 Title: Authorized Signatory


                             By  /s/ Jerry D. Zinkula
                                -----------------------------------
                                 Title: Authorized Signatory


                             AMARA - 2 FINANCE LTD.


                             By  /s/ Andrew Ian Wignall
                                ------------------------------------
                                 Title: Director


                             AMSOUTH BANK


                             By   /s/ ILLEGIBLE
                                 ------------------------------------
                                 Title: Commerical Banking Officer


                             BANK OF AMERICA NT&SA


                             By  /s/ Jonathan M. Kitei
                                ---------------------------
                                 Title: Attorney-in-Fact


                              BANKBOSTON, N.A.


                             By   /s/ ILLEGIBLE
                                 -------------------------------------
                                 Title: Commercial Banking Officer



                             BANK OF HAWAII


                             By  /s/ Donna R. Parker
                                 ------------------------------
                                 Title: Vice President


                             THE BANK OF NOVA SCOTIA


                             By  /s/ J.R. Trimble
                                -------------------------------
                                 Title: Senior Relationship Manager


                             BANK OF SCOTLAND


                             By  /s/ Annie Chin Tat
                                ----------------------------------
                                 Title: Vice President


                             BANKERS TRUST COMPANY


                             By    /s/ ILLEGIBLE
                                --------------------------------
                                 Title: Managing Director


                             CAPTIVA II FINANCE LTD.


                             By  /s/ David Egglishaw
                                ----------------------------
                                 Title:


                             CIBC INC.


                             By  /s/ Timothy E. Doyle
                                -----------------------------
                                 Title: Managing Director, CIBC Wood Gundy
                                        Securities Corp., as Agent



                             COMERICA BANK


                             By     /s/ ILLEGIBLE
                                 ---------------------------
                                 Title: First Vice President



                                 COMMERCIAL LOAN FUNDING TRUST I

                                 By    Lehman Commercial Paper Inc., not in its
                                       individual capacity but solely as
                                       Administrative Agent


                                 By  s/ Michele Swanson
                                    -----------------------------
                                     Title: Authorized Signatory



                                 COMPAGNIE FINANCIERE DE CIC ET
                                   DE L'UNION EUROPEENNE


                                 By  /s/ Brian O'Leary
                                   -----------------------------------
                                     Title: Vice President


                                 By  /s/ Anthony Rock
                                   ------------------------------------
                                     Title: Vice President


                                 CORESTATES BANK N.A.


                                 By  /s/ ILLEGIBLE
                                    ---------------------------
                                     Title: Vice President



                                 CREDIT AGRICOLE INDOSUEZ



                                 By  /s/ David Bouhl, F.V.P.
                                    ------------------------------------
                                     Title: Head of Corporate Banking
                                            Chicago



                                 CREDITANSTALT BANKVEREIN


                                 By  /s/ Geoffrey Headington
                                    -------------------------------------
                                     Title: Associate


                                 By   /s/ Clifford L. Wells
                                    -------------------------------------
                                     Title: Vice President


                                 CRESTAR BANK


                                 By  /s/ ILLEGIBLE
                                     --------------------------
                                     Title: VP



                                 DEBT STRATEGIES FUND, INC.


                                 By  /s/ Lynn Callicott Baranski
                                    ----------------------------------
                                     Title: Authorized Signatory






                                 DRESDNER BANK AG, NEW YORK
                                 AND GRAND CAYMAN
                                 BRANCHES


                                 By  /s/ Richard W. Conroy
                                    ----------------------------------
                                     Title: Vice President


                                 By   /s/ Ben Marzouk
                                    ----------------------------------
                                     Title: Vice President


                                 FIRST SOURCE FINANCIAL LLP

                                 By       First Source Financial, Inc.,
                          its agent/manager

                                 By  /s/ ILLEGIBLE
                                     ------------------------
                                     Title: VP


                                 GENERAL ELECTRIC CAPITAL
                                 CORPORATION


                                 By  /s/ ILLEGIBLE
                                     ------------------------
                                     Title: Manager Operations


                                 THE INDUSTRIAL BANK OF JAPAN,
                                 LIMITED


                                 By  /s/ Takuya Honjo
                                    --------------------------------
                                     Title: Senior Vice President



                                 KEYPORT LIFE INSURANCE COMPANY

                                 By  Chancellor LGT Senior Secured Management,
                                     Inc., as Portfolio Advisor


                                 By  /s/ ILLEGIBLE
                                     --------------------------
                                     Title: AVP


                                 LEHMAN COMMERCIAL PAPER INC.



                                 By  /s/ Michelle Swanson
                                    -----------------------------
                                     Title: Authorized Signatory


                                 MARINE MIDLAND BANK


                                 By  /s/ ILLEGIBLE
                                     --------------------------
                                     Title: Authorized Signatory (8891)


                                 MELLON BANK, N.A.


                                 By  /s/ ILLEGIBLE
                                     --------------------------
                                     Title: First Vice President




                                 MERITA BANK LTD, NEW YORK
                                 BRANCH


                                 By  /s/ Frank Maffei
                                    ----------------------------------
                                     Title: Vice President

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


                                 MERRILL LYNCH PRIME RATE
                                 PORTFOLIO

                                 By   Merrill Lynch Asset Management, L.P., as
                                      Investment Advisor


                                 By  /s/ Lynn Callicott Baranski
                                   ---------------------------------------
                                     Title: Authorized Signatory



                                 MERRILL LYNCH SENIOR FLOATING
                                 RATE FUND, INC.


                                 By  /s/ Lynn Callicott Baranski
                                     -----------------------------
                                     Title:  Authorized Signatory


                                 METROPOLITAN LIFE INSURANCE
                                    COMPANY


                                 By  /s/ ILLEGIBLE
                                     ----------------------------
                                     Title: Assistant Vice President




                                THE MITSUBISHI TRUST AND
                                    BANKING CORPORATION


                                 By  /s/ ILLEGIBLE
                                     ---------------------------
                                     Title: Senior Vice President

                                 ML CBO IV (CAYMAN) LTD.

                                 By       Protective Asset Management L.L.C., as
                                          Collateral Agent


                                 By  /s/ James Dondero CFA, CPA
                                    -------------------------------------
                                     Title: President and Protective Asset
                                            Management Company


                                 MORGAN STANLEY SENIOR FUNDING, INC.


                                 By  /s/ Christopher A. Pucillo
                                    ----------------------------------
                                     Title: Vice President


                                 NATEXIS BANQUE BFCE


                                 By  /s/ G. K. Doover
                                    ---------------------------------
                                     Title: Vice President


                                 By  /s/ William C. Maier
                                   ------------------------------------
                                     Title: Vice President-Group Manager





                                  OCTAGON CREDIT INVESTORS
                                  LOAN PORTFOLIO
                                  (a unit of Chase Manhattan Bank)


                                  By  /s/ Andrew D. Gordon
                                     -----------------------------------
                                      Title: Managing Director


                                  PAMCO CAYMAN LTD.

                                  By    Protective Asset Management Company, as
                                        Collateral Manager

                                  By  /s/ James Dondero CFA, CPA
                                     -------------------------------------
                                      Title: President Protective Asset
                                             Management Company


                                  PILGRIM AMERICA PRIME RATE
                                  TRUST


                                  By /s/ Michael J. Bacevich
                                     -----------------------------
                                      Title: Vice President


                                  PNC BANK, NATIONAL ASSOCIATION


                                  By  /s/ Gary W. Tyrrell
                                     -----------------------------
                                      Title: Vice President


                                  PPM AMERICA, INC., as attorney-in
                                  fact, on behalf of Jackson National Life
                                        Insurance Company


                                  By  /s/ ILLEGIBLE
                                      ---------------------------
                                      Title: Managing Director



                                   ROYALTON COMPANY

                                   By  Pacific Investment Management Company, as
                                       its Investment Advisor


                                   By  /s/ ILLEGIBLE
                                       ---------------------------
                                       Title: Vice President


                                   THE SAKURA BANK, LIMITED


                                   By  /s/ Yasuhiro Terada
                                       ---------------------------
                                       Title: Senior Vice President


                                   SENIOR DEBT PORTFOLIO

                                   By      Boston Management and Research,
                                            as Investment Advisor


                                   By  /s/ Scott H. Page
                                      -----------------------------
                                       Title: Vice President



                                   SENIOR HIGH INCOME PORTFOLIO


                                   By  /s/ Lynn Callicott Baranski
                                      ----------------------------------
                                       Title: Authorized Signatory



                                   SIGNET BANK


                                   By  /s/ J. Charles Link
                                       ----------------------------
                                       Title: SVP



                                   SOCIETE GENERALE


                                   By  /s/ ILLEGIBLE
                                       ----------------------------
                                       Title: Vice President


                                   THE TRAVELERS INSURANCE
                                   COMPANY


                                   By  /s/ Teresa M. Torrey
                                      ----------------------------------
                                       Title: Second Vice President


                                   UNITED STATES NATIONAL BANK
                               OF OREGON


                                   By  /s/ ILLEGIBLE
                                       ---------------------------
                                       Title: Vice President


                                   VAN KAMPEN AMERICAN CAPITAL
                               PRIME RATE INCOME TRUST


                                   By  /s/ ILLEGIBLE
                                       ---------------------------
                                       Title:












                                                           Exhibit A to
                                                           Amendment No. 1



                   THIRD AMENDED AND RESTATED CREDIT AGREEMENT

                          Dated as of November 7, 1997

                                      Among

                           AMF BOWLING WORLDWIDE, INC.

                                   as Borrower
                                   -- --------

                                       and

                  THE INITIAL LENDERS AND INITIAL ISSUING BANKS

                                       and

                       GOLDMAN SACHS CREDIT PARTNERS L.P.

                                       and

                            CITICORP SECURITIES, INC.

                                  as Arrangers
                                  -- ---------

                                       and

                       GOLDMAN SACHS CREDIT PARTNERS L.P.

                              as Syndication Agent
                              -- ----------- -----

                                       and

                                 CITIBANK, N.A.

                             as Administrative Agent
                             -- -------------- -----

                                       and

                               CITICORP USA, INC.

                               as Collateral Agent
                               -- ---------- -----




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

<TABLE>
<CAPTION>

         Section                                                                                               Page

<S> <C>
                                   ARTICLE I

                        DEFINITIONS AND ACCOUNTING TERMS

         1.01.  Certain Defined Terms...........................................................................  3
         1.02.  Computation of Time Periods..................................................................... 39
         1.03.  Accounting Terms................................................................................ 39

                                   ARTICLE II

                       AMOUNTS AND TERMS OF THE ADVANCES
                           AND THE LETTERS OF CREDIT

         2.01.  The Advances.................................................................................... 40
         2.02.  Making the Advances............................................................................. 43
         2.03.  Issuance of and Drawings and Reimbursement Under Letters of Credit.............................. 44
         2.04.  Repayment of Advances........................................................................... 46
         2.05.  Termination or Reduction of the Commitments..................................................... 51
         2.06.  Prepayments..................................................................................... 52
         2.07.  Interest........................................................................................ 57
         2.08.  Fees............................................................................................ 58
         2.09.  Conversion of Advances.......................................................................... 59
         2.10.  Increased Costs, Etc............................................................................ 60
         2.11.  Payments and Computations....................................................................... 61
         2.12.  Taxes........................................................................................... 63
         2.13.  Sharing of Payments, Etc........................................................................ 65
         2.14.  Use of Proceeds................................................................................. 66
         2.15.  Defaulting Lenders.............................................................................. 67

                                  ARTICLE III

                             CONDITIONS OF LENDING

         3.01.  Conditions Precedent to Initial Extension of Credit............................................. 70
         3.02.  Conditions Precedent to Each Borrowing and Issuance............................................. 80
         3.03.  Determinations Under Section 3.01............................................................... 81
         3.04.  Conditions Precedent to the Making of the New AXELs Series B Advances........................... 81
         3.05.  Conditions Precedent to the Effectiveness of the Third Amendment................................ 84
         3.06.  Determinations Under Sections 3.04 and 3.05..................................................... 88

</TABLE>


                                       ii

<TABLE>
<CAPTION>


         Section                                                                                               Page

<S> <C>
                                   ARTICLE IV

                         REPRESENTATIONS AND WARRANTIES

         4.01.  Representations and Warranties of the Borrower.................................................. 88

                                   ARTICLE V

                           COVENANTS OF THE BORROWER

         5.01.  Affirmative Covenants........................................................................... 98
         5.02.  Negative Covenants..............................................................................109
         5.03.  Reporting Requirements..........................................................................119
         5.04.  Financial Covenants.............................................................................124

                                   ARTICLE VI

                               EVENTS OF DEFAULT

         6.01.  Events of Default...............................................................................129
         6.02.  Actions in Respect of the Letters of Credit upon Default........................................133

                                  ARTICLE VII

                                   THE AGENTS

         7.01.  Authorization and Action........................................................................133
         7.02.  Agents' Reliance, Etc...........................................................................134
         7.03.  Citibank, Citicorp, Goldman and Affiliates......................................................134
         7.04.  Lender Party Credit Decision....................................................................135
         7.05.  Indemnification.................................................................................135
         7.06.  Successor Agents................................................................................137

</TABLE>



<TABLE>
<CAPTION>


         Section                                                                                               Page

<S> <C>

                                  ARTICLE VIII

                                 MISCELLANEOUS

         8.01.  Amendments, Etc.................................................................................138
         8.02.  Notices, Etc....................................................................................139
         8.03.  No Waiver; Remedies.............................................................................140
         8.04.  Costs and Expenses..............................................................................140
         8.05.  Right of Set-off................................................................................142
         8.06.  Binding Effect..................................................................................143
         8.07.  Assignments and Participations..................................................................143
         8.08.  Execution in Counterparts.......................................................................147
         8.09.  No Liability of the Issuing Banks...............................................................147
         8.10.  Confidentiality.................................................................................148
         8.11.  Jurisdiction, Etc...............................................................................148
         8.12.  Release of Collateral...........................................................................149
         8.13.  Governing Law; Waiver of Jury Trial.............................................................149

</TABLE>

<TABLE>
<CAPTION>

SCHEDULES
<S> <C>
Schedule I                   -   Commitments and Applicable Lending Offices
Schedule II                  -   Subsidiary Guarantors
Schedule III                 -   Stockholders' Agreement
Schedule 3.01(e)             -   Surviving Debt
Schedule 3.01(p)(xx)         -  Local Counsel
Schedule 4.01(a)             -   Equity Investors' Ownership of Parent
Schedule 4.01(b)             -   Subsidiaries
Schedule 4.01(d)             -   Authorizations, Approvals, Actions, Notices and Filings
Schedule 4.01(m)             -   Plans, Multiemployer Plans and Welfare Plans
Schedule 4.01(v)             -   Environmental Laws Disclosure
Schedule 4.01(w)             -   Environmental Disclosure
Schedule 4.01(x)             -   Hazardous Materials Disclosure
Schedule 4.01(bb)            -   Open Years
Schedule 4.01(ff)            -   Acquisitions by AMF Bowling Centers
Schedule 4.01(ii)            -   Existing Debt
Schedule 4.01(kk)            -   Owned Real Property
Schedule 4.01(ll)            -   Leased Real Property
Schedule 4.01(mm)            -   Investments
Schedule 4.01(nn)            -   Intellectual Property
Schedule 5.01(l)             -   Transactions with Affiliates
Schedule 5.02(a)             -   Existing Liens
Schedule 5.02(g)             -   Non-competition Agreements



                                       iv


EXHIBITS

Exhibit A-1                  -   Form of Term Loan Note
Exhibit A-2                  -   Form of AXELs Series A Note
Exhibit A-3                  -   Form of AXELs Series B Note
Exhibit A-4                  -   Form of Working Capital Note
Exhibit B                    -   Form of Notice of Borrowing
Exhibit C                    -   Form of Assignment and Acceptance
Exhibit D                    -   Form of Security Agreement
Exhibit E                    -   Form of Intellectual Property Security Agreement
Exhibit F                    -   Form of Mortgage
Exhibit G                    -   Form of Holdings Guaranty
Exhibit H                    -   Form of Subsidiary Guaranty
Exhibit I                    -   Form of Solvency Opinion
Exhibit J                    -   Form of Solvency Certificate
Exhibit K                    -   Form of Opinion of Counsel to the Loan Parties
Exhibit L                    -   Form of Opinion of Intellectual Property Counsel
Exhibit M                    -   Form of Mortgage Amendment
Exhibit N                    -   Form of Opinion of Counsel to the Loan Parties regarding Amendment No. 3 to the
                                 Original Credit Agreement
Exhibit O                    -   Form of Opinion of Daniel McCormack, General Counsel for the Borrower regarding
                                 Amendment No. 3 to the Original Credit Agreement
Exhibit P                    -   Form of Second Mortgage Amendment
Exhibit Q                    -   Form of Opinion of Counsel to the Loan Parties regarding Amendment No. 2 to the
                                 Second Credit Agreement
Exhibit R                    -   Form of Opinion of Counsel to the Loan Parties regarding Amendment No. 1 to the
                                 Existing Credit Agreement

</TABLE>