Document:

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                                                                     Exhibit 4.6

                      IN THE UNITED STATES BANKRUPTCY COURT
                      FOR THE EASTERN DISTRICT OF VIRGINIA
                                RICHMOND DIVISION

                                           )     Chapter 11 Cases
In re:                                     )
                                           )     Case No. 01- 61119 (DHA)
AMF BOWLING WORLDWIDE, INC., et al.,       )
                             -- ---
                                           )
Debtors.                                   )     Jointly Administered
                                           )

              DEBTORS' SECOND AMENDED SECOND MODIFIED JOINT PLAN OF
             REORGANIZATION UNDER CHAPTER 11 OF THE BANKRUPTCY CODE
             ------------------------------------------------------

WILLKIE FARR & GALLAGHER
Co-Attorneys for the Debtors,
as Debtors and Debtors in Possession
787 Seventh Avenue
New York, New York 10019-6099
(212) 728-8000

MCGUIREWOODS LLP
Co-Attorneys for the Debtors,
as Debtors and Debtors in Possession
One James Center
901 East Cary Street
Richmond, Virginia 23219
(804)775-1000

Dated:    January 31, 2002

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                              TABLE OF CONTENTS
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SECTION 1.  DEFINITIONS AND INTERPRETATION...........................................1

SECTION 2.  ADMINISTRATIVE EXPENSE CLAIMS, FEE CLAIMS, PRIORITY TAX
            CLAIMS AND DIP LENDER CLAIMS.............................................11

     2.1.   Administrative Expense Claims............................................11
     2.2.   Bar Date for Administrative Expense Claims...............................12
     2.3.   Fee Claims...............................................................12
     2.4.   Priority Tax Claims......................................................12
     2.5.   DIP Lender Claims........................................................13

SECTION 3.  CLASSIFICATION OF CLAIMS AND EQUITY INTERESTS............................13

     3.1.   Subclasses for Class 1...................................................14

SECTION 4.  TREATMENT OF CLAIMS AND EQUITY INTERESTS.................................14

     4.1.   Other Secured Claims (Class 1)...........................................14
     4.2.   Senior Lender Claims (Class 2)...........................................15
     4.3.   Priority Non-Tax Claims (Class 3)........................................15
     4.4.   Unsecured Claims (Class 4)...............................................16
     4.5.   Tort Claims (Class 5)....................................................16
     4.6.   Senior Subordinated Note Claims (Class 6)................................16
     4.7.   Interdebtor Claims (Class 7).............................................16
     4.8.   AMF Affiliate Claims (Class 8)...........................................16
     4.9.   Equity Interests (Class 9)...............................................16
     4.10.  Existing Securities Law Claims (Class 10)................................16
     4.11.  510(c) Claims (Class 11).................................................17

SECTION 5.  MEANS FOR IMPLEMENTATION.................................................17

     5.1.   Deemed Consolidation of Debtors for Plan Purposes Only...................17
     5.2.   Combination Transactions.................................................17
     5.3.   Exit Facility............................................................18
     5.4.   Waiver of Subordination..................................................18
     5.5.   Management Incentive Plan................................................18
     5.6.   Cancellation of Existing Securities and Agreements.......................18
     5.7.   Release of Liens.........................................................18
     5.8.   Board of Directors.......................................................19
     5.9.   Corporate Action.........................................................19
     5.10.  Dissolution of Certain Debtors...........................................20
     5.11.  Authorization of Plan Securities.........................................20
     5.12.  Registration Rights Agreement............................................20
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SECTION 6.  DISTRIBUTIONS...........................................................20

     6.1.   Distribution Record Date................................................20
     6.2.   Date of Distributions...................................................20
     6.3.   Satisfaction of Claims..................................................21
     6.4.   Distributions to Classes 2, 4, and 6....................................21
     6.5.   Distribution to Class 5.................................................21
     6.6.   De Minimis Distributions to Classes 4, 5 and 6..........................21
     6.7.   Disbursing Agent........................................................22
     6.8.   Rights and Powers of Disbursing Agent...................................22
     6.9.   Surrender of Instruments................................................22
     6.10.  Delivery of Distributions to Classes 1, 2, 3, 4, 5, and 6...............22
     6.11.  Manner of Payment Under Plan of Reorganization..........................23
     6.12.  Fractional Shares and Fractional Warrants...............................23
     6.13.  Exemption from Securities Laws..........................................23
     6.14.  Setoffs.................................................................23
     6.15.  Compromise of Controversies.............................................23

SECTION 7.  PROCEDURES FOR DISPUTED CLAIMS..........................................24

     7.1.   Objections to Claims....................................................24
     7.2.   Payments and Distributions with Respect to Disputed Claims..............24
     7.3.   Preservation of Insurance...............................................24
     7.4.   Distributions After Allowance...........................................24
     7.5.   Estimations of Claims...................................................25
     7.6.   No Recourse.............................................................25

SECTION 8.  EXECUTORY CONTRACTS AND UNEXPIRED LEASES................................25

     8.1.   General Treatment.......................................................25
     8.2.   Cure of Defaults........................................................26
     8.3.   Rejection Claims........................................................26
     8.4.   Employment Agreement for the Chief Executive Officer of Reorganized AMF.26
     8.5.   Survival of the Debtors' Corporate Indemnities..........................27

SECTION 9.  CONDITIONS PRECEDENT TO CONFIRMATION....................................27

     9.1.   Condition Precedent.....................................................27
     9.2.   Waiver of Condition Precedent...........................................27

SECTION 10. CONDITIONS PRECEDENT TO THE EFFECTIVE DATE..............................27

     10.1.  Conditions Precedent....................................................27
     10.2.  Waiver of Conditions Precedent..........................................27

SECTION 11. EFFECT OF CONFIRMATION..................................................28

     11.1.  Vesting of Assets.......................................................28
     11.2.  Discharge of Claims and Termination of Equity Interests.................28
     11.3.  Discharge of Debtors....................................................28
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     11.4.  Term of Injunctions or Stays............................................29
     11.5.  Injunction Against Interference With Plan...............................29
     11.6.  Exculpation.............................................................29
     11.7.  Release of Claims.......................................................29
     11.8.  Injunction..............................................................29
     11.9.  Retention of Causes of Action/Reservation of Rights.....................30

SECTION 12. RETENTION OF JURISDICTION...............................................30

SECTION 13. MISCELLANEOUS PROVISIONS................................................31

     13.1.  Exemption from Certain Transfer Taxes...................................31
     13.2.  Retiree Benefits........................................................32
     13.3.  Critical Vendor and Other Payments......................................32
     13.4.  Dissolution of Creditors' Committee.....................................32
     13.5.  Substantial Consummation................................................32
     13.6.  Amendments..............................................................32
     13.7.  Revocation or Withdrawal of the Plan....................................33
     13.8.  Cramdown................................................................33
     13.9.  Confirmation Order......................................................33
     13.10. Severability............................................................33
     13.11. Governing Law...........................................................33
     13.12. Time....................................................................33
     13.13. Notices.................................................................34
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                                     (iii)

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                      IN THE UNITED STATES BANKRUPTCY COURT
                      FOR THE EASTERN DISTRICT OF VIRGINIA
                                RICHMOND DIVISION

                                                  )     Chapter 11 Cases
In re:                                            )
                                                  )     Case No. 01- 61119 (DHA)
AMF BOWLING WORLDWIDE, INC., et al.,              )
                             -- ---
                                                  )
Debtors.                                          )     Jointly Administered
                                                  )

              DEBTORS' SECOND AMENDED SECOND MODIFIED JOINT PLAN OF
             REORGANIZATION UNDER CHAPTER 11 OF THE BANKRUPTCY CODE

              AMF Bowling Worldwide, Inc., AMF Group Holdings Inc.,
AMF Bowling Holdings Inc., AMF Bowling Products, Inc., AMF Bowling Centers
Holdings Inc., AMF Worldwide Bowling Centers Holdings Inc., AMF Bowling
Centers, Inc., AMF Beverage Company of Oregon, Inc., AMF Beverage Company of
W. Va., Inc., Bush River Corporation, King Louie Lenexa, Inc., 300, Inc.,
American Recreation Centers, Inc., Michael Jordan Golf Company, Inc.,
MJG - O'Hare, Inc., AMF Bowling Centers (Aust.) International Inc.,
AMF Bowling Centers (Hong Kong) International Inc., AMF Bowling Centers
International Inc., AMF BCO-UK One, Inc., AMF BCO-UK Two, Inc.,
AMF BCO-France One, Inc., AMF BCO-France Two, Inc., AMF Bowling Centers
Spain Inc., AMF Bowling Mexico Holding, Inc., and Boliches AMF, Inc.,
the above-captioned debtors and debtors in possession, propose the following
second amended second modified joint plan of reorganization, pursuant to
section 1121(a) of title 11 of the United States Code:

         SECTION 1.        DEFINITIONS AND INTERPRETATION

         A.       Definitions.

                  The following terms shall have the respective meanings set
forth below (such meanings to be equally applicable to both the singular and
plural):

                  1.1. Administrative Bar Date means the date fixed pursuant to
section 2.2 of the Plan by which all Persons asserting certain Administrative
Expense Claims arising before the Effective Date must have filed proofs of such
Administrative Expense Claims or requests for payment of such Administrative
Expense Claims or be forever barred from asserting such Claims against the
Debtors, the Estates or the Reorganized Debtors or their property, or such
other date by which any such Claim must be filed as may be fixed by order of
the Bankruptcy Court.

                  1.2. Administrative Expense Claim means any right to payment
constituting a cost or expense of administration of any of the Reorganization
Cases (other than a Fee Claim) allowed under sections 503(b) and 507(a)(1) of
the Bankruptcy Code, including, without limitation, any actual and necessary
costs and expenses of preserving one or more of the Debtors' Estates, any
actual and necessary costs and expenses of operating one or more of the
Debtors' businesses, and any fees or charges assessed against one or more of
the Estates of the Debtors under section 1930 of chapter 123 of title 28 of the
United States Code.

<PAGE>

                  1.3. ADR Procedures means any alternative dispute resolution
procedures approved in the Reorganization Cases pursuant to an order of the
Bankruptcy Court.

                  1.4. Allowed means, with reference to any Claim: (i) subject
to section 13.3 hereof, any Claim against any Debtor which has been listed by
such Debtor in the Schedules as liquidated in amount and not disputed or
contingent and for which no contrary or inconsistent proof of claim has been
filed; (ii) any timely filed Claim (a) as to which no objection to allowance
has been interposed prior to the deadline by which such objections must be
filed in accordance with section 7.1 hereof or such other applicable period of
limitation fixed by the Bankruptcy Code, the Bankruptcy Rules, or the
Bankruptcy Court and as to which such deadline has expired, or (b) as to which
an objection has been filed and not withdrawn and such objection has been
determined by a Final Order (but only to the extent such objection has been
overruled); (iii) any Claim which is not a Disputed Claim; or (iv) any Claim
allowed hereunder. Unless otherwise specified herein or by order of the
Bankruptcy Court, Allowed Claims (including Allowed Administrative Expense
Claims) shall not, for any purpose under the Plan, include interest on such
Administrative Expense Claims or Claims on or after the Commencement Date.

                  1.5. Amended Bylaws means the Amended and Restated Bylaws of
Reorganized AMF, which bylaws shall be substantially in the form set forth in
the Plan Supplement.

                  1.6. Amended Certificate of Incorporation means the Amended
and Restated Certificate of Incorporation of Reorganized AMF, which certificate
shall be substantially in the form set forth in the Plan Supplement.

                  1.7. AMF Affiliate means a direct or indirect non-debtor
subsidiary of WINC that is incorporated in a jurisdiction other than a state or
commonwealth of the United States.

                  1.8. AMF Affiliate Claim means any Claim (other than an Other
Secured Claim) held by an AMF Affiliate against a Debtor in respect of an
intercompany loan, advance or transfer.

                  1.9. Bankruptcy Code means title 11 of the United States
Code, as amended from time to time, as applicable to the Reorganization Cases.

                  1.10. Bankruptcy Court means the United States Bankruptcy
Court for the Eastern District of Virginia, or any other court exercising
competent jurisdiction over the Reorganization Cases or any proceeding therein.

                  1.11. Bankruptcy Rules means the Federal Rules of Bankruptcy
Procedure, as promulgated by the United States Supreme Court under section 2075
of title 28 of the United States Code, as amended from time to time, applicable
to the Reorganization Cases, and any Local Rules of the Bankruptcy Court.

                  1.12. Bar Date means September 24, 2001, the date fixed in
the Bar Date Order by which all Persons asserting Claims arising before the
Commencement Date, including, but not limited to, contingent Claims held by
parties to executory contracts or unexpired leases with one or more of the
Debtors that may arise out of the rejection of such contract or lease, must
have filed proofs of such Claims or be forever barred from asserting such
Claims against the Debtors or the Estates, or such other date by which any such
Claim must be filed as may be fixed by order of the Bankruptcy Court.

                  1.13. Bar Date Order means the order(s) entered by the
Bankruptcy Court establishing the respective Bar Date(s).

         1.14.  BINC means AMF Bowling, Inc.

                                      -2-

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                  1.15. Business Day means any day other than a Saturday, a
Sunday, or any other day on which banking institutions in New York, New York
are required or authorized to close by law or executive order.

                  1.16.  Cash means legal tender of the United States of
America or a cash equivalent.

                  1.17. Catch-up Distribution means with respect to each holder
of an Allowed Claim in Class 4 or 6, the difference, as of the date calculated,
between (i) the amount of each Unsecured Security such holder would have
received if all Disputed Claims in such Class had been resolved on the
Effective Date in the amount such Disputed Claims have been resolved for as of
such calculation date and (ii) the aggregate amount of each Unsecured Security
previously received by such holder.

                  1.18.  Citibank means Citibank, N.A.

                  1.19.  Claim means "claim" as defined in section 101(5) of
the Bankruptcy Code.

                  1.20. Class means any group of Claims or Equity Interests
classified by the Plan as belonging to a single particular class pursuant to
section 1123(a)(1) of the Bankruptcy Code.

                  1.21. Class 4 Distribution means the amount of Unsecured
Securities to be allocated for payment of Class 4 Claims, which amount shall be
(i) the number of the New Series A Warrants multiplied by the Ratable Class 4
Portion plus (ii) the number of the New Series B Warrants multiplied by the
Ratable Class 4 Portion plus (iii) 750,000 shares of New AMF Common Stock
multiplied by the Ratable Class 4 Portion.

                  1.22. Class 5 Distribution means the amount of Unsecured
Securities to be allocated for payment of Class 5 Claims, which amount shall be
(i) the number of the New Series A Warrants multiplied by the Ratable Class 5
Portion plus (ii) the number of the New Series B Warrants multiplied by the
Ratable Class 5 Portion plus (iii) 750,000 shares of New AMF Common Stock
multiplied by the Ratable Class 5 Portion.

                  1.23. Class 6 Distribution means the amount of Unsecured
Securities to be allocated for payment of Class 6 Claims, which amount shall be
(i) the number of the New Series A Warrants multiplied by the Ratable Class 6
Portion plus (ii) the number of the New Series B Warrants multiplied by the
Ratable Class 6 Portion plus (iii) 750,000 shares of New AMF Common Stock
multiplied by the Ratable Class 6 Portion.

                  1.24. Combination Transaction means a consolidation, merger,
contribution of assets or other transaction in which, among other things, one
or more Debtors merges with or transfers substantially all of its assets and
liabilities to a Reorganized Debtor or AMF Affiliate, or changes legal form,
which shall occur on or as soon as reasonably practicable after the Effective
Date, as set forth in the Plan Supplement.

                  1.25.  Commencement Date means July 2, 2001.

                  1.26.  Confirmation Date means the date on which the Clerk of
the Bankruptcy Court enters the Confirmation Order on the docket.

                  1.27. Confirmation Hearing means the hearing to be held by
the Bankruptcy Court regarding confirmation of the Plan, as such hearing may be
adjourned or continued from time to time.

                                      -3-

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                  1.28. Confirmation Order means the order of the Bankruptcy
Court confirming the Plan of Reorganization pursuant to section 1129 of the
Bankruptcy Code.

                  1.29. Consolidation Order means an order of the Bankruptcy
Court, which may be the Confirmation Order, approving the consolidation of the
Estates for purposes of the Plan.

                  1.30. Creditors' Committee means the statutory committee of
unsecured creditors appointed in the Reorganization Cases in accordance with
section 1102 of the Bankruptcy Code, as the same may be reconstituted from time
to time.

                  1.31. Debtors means AMF Bowling Worldwide, Inc., AMF Group
Holdings Inc., AMF Bowling Holdings Inc., AMF Bowling Products, Inc., AMF
Bowling Centers Holdings Inc., AMF Worldwide Bowling Centers Holdings Inc., AMF
Bowling Centers, Inc., AMF Beverage Company of Oregon, Inc., AMF Beverage
Company of W.  Va., Inc., Bush River Corporation, King Louie Lenexa, Inc., 300,
Inc., American Recreation Centers, Inc., Michael Jordan Golf Company, Inc., MJG
- O'Hare, Inc., AMF Bowling Centers (Aust.) International Inc., AMF Bowling
Centers (Hong Kong) International Inc., AMF Bowling Centers International Inc.,
AMF BCO-UK One, Inc., AMF BCO-UK Two, Inc., AMF BCO-France One, Inc., AMF
BCO-France Two, Inc., AMF Bowling Centers Spain Inc., AMF Bowling Mexico
Holding, Inc., and Boliches AMF, Inc.

                  1.32. DIP Facility means that certain Senior Secured Priming
Debtor-In-Possession Credit Agreement, dated July 5, 2001, among WINC, certain
guarantors, including Holdings, and Citibank, as administrative agent, for a
group of lenders, as may be amended from time to time.

                  1.33. DIP Lender means the banks and other financial
institutions, led by Citibank, as administrative agent, who from time to time
are or were a party to the DIP Facility.

                  1.34. DIP Lender Claim means an Allowed Claim of a DIP Lender
in respect of the obligations of the Debtors arising under the DIP Facility or
the DIP Order.

                  1.35. DIP Order means that certain Final Order (I)
Authorizing Post-Petition Secured Superpriority Financing Pursuant to Sections
105(a), 362, 364(c)(1), 364(c)(2), 364(c)(3) and 364(d) of the Bankruptcy Code,
(II) Authorizing the Debtors' Use of Cash Collateral Pursuant to Section 363(c)
of the Bankruptcy Code, and (III) Granting Adequate Protection Pursuant to
Sections 361, 363 and 364 of the Bankruptcy Code, dated August 8, 2001.

                  1.36. DIP Refinancing Amount means the amount of Cash
necessary to pay all outstanding obligations under the DIP Facility pursuant to
section 2.5 of the Plan.

                  1.37. Disbursing Agent means any entity designated as such by
Reorganized AMF (including any applicable Reorganized Debtor if it acts in such
capacity) in its capacity as a disbursing agent.

                  1.38. Disclosure Statement means the Disclosure Statement
that relates to the Plan, as such Disclosure Statement may be amended,
modified, or supplemented (including all exhibits and schedules annexed thereto
or referred to therein).

                                      -4-

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                  1.39. Disclosure Statement Hearing means the hearing held by
the Bankruptcy Court to consider approval of the Disclosure Statement as
containing adequate information as required by section 1125 of the Bankruptcy
Code.

                  1.40. Disclosure Statement Order means the order of the
Bankruptcy Court approving the Disclosure Statement as containing adequate
information pursuant to section 1125 of the Bankruptcy Code.

                  1.41. Disputed Claim means any Claim that is not an Allowed
Claim as of the relevant date.

                  1.42. Distribution Record Date means the Confirmation Date or
such other date as shall be established by the Bankruptcy Court in the
Confirmation Order.

                  1.43. Effective Date means the first (1/st/) Business Day on
or after the Confirmation Date specified by the Debtors on which: (i) no stay of
the Confirmation Order is in effect; and (ii) all conditions to the
effectiveness of the Plan specified in section 10.1 hereof have been satisfied
or waived.

                  1.44. Equity Interest means the interest of any holder of an
equity security of any of the Debtors, whether or not represented by any issued
and outstanding shares of common or preferred stock or other instrument
evidencing a present ownership interest in any of the Debtors, whether or not
transferable, or any option, warrant, or right, contractual or otherwise, to
acquire any such interest.

                  1.45. Estates means the estates created in the Reorganization
Cases in accordance with section 541 of the Bankruptcy Code.

                  1.46. Estimation Order means one or more orders of the
Bankruptcy Court that (i) estimates the maximum dollar amount of Allowed and
Disputed Claims, inclusive of contingent and/or unliquidated Claims, in a
particular Class, (ii) determines and fixes the Tort Claims Estimate, and (iii)
sets the amount of any particular Claim for final allowance purposes pursuant
to sections 105 and 502(c) of the Bankruptcy Code, including, without
limitation, the Confirmation Order to the extent that the Confirmation Order
grants the same relief that otherwise would have been granted in a separate
Estimation Order.

                  1.47. Existing Securities Law Claim means a Claim against a
Debtor that is subject to subordination under section 510(b) of the Bankruptcy
Code.

                  1.48. Exit Facility means either (i) the Third Party Facility
or (ii) the Senior Lender Facility, as set forth in a notice filed with the
Bankruptcy Court prior to the date that is twenty three (23) days prior to the
Confirmation Hearing.

                  1.49. Fee Claim means a Claim for compensation,
indemnification or reimbursement of expenses pursuant to sections 327, 328,
330, 331 or 503(b) of the Bankruptcy Code in connection with the Reorganization
Cases.

                  1.50. Final Distribution Date means the date selected by the
Reorganized Debtors, in their sole and absolute discretion, for the
distribution of the balance of any Cash or securities to holders of Claims
other than the Senior Lender Claims pursuant to the Plan, provided, however,
that, such date shall be no earlier than the date on which all remaining
Disputed Claims have been resolved by Final Order.

                  1.51. Final Order means an order or judgment of the
Bankruptcy Court entered by the Clerk of the Bankruptcy Court on the docket in
the Reorganization Cases, (i) which has not been reversed, vacated, or stayed,
and as to which the time to appeal, petition for certiorari or move for a new
trial, reargument, or rehearing has expired; or (ii) which, if an appeal, writ
of certiorari, new trial, reargument, or rehearing thereof has been sought, (a)
such order or judgment of the Bankruptcy Court shall not have been stayed or
the stay has been terminated, or (b) such order or judgment, if stayed, shall
have been

                                      -5-

<PAGE>

affirmed by the highest court to which such order was appealed, or certiorari
shall have been denied, or a new trial, reargument, or rehearing shall have
been denied or resulted in no modification of such order, and the time to take
any further appeal, petition for certiorari or move for a new trial, reargument
or rehearing shall have expired; provided, however, that the filing of or the
possibility that a motion under Rule 60 of the Federal Rules of Civil
Procedure, or any analogous rule under the Federal Rules, may be filed relating
to such order or judgment shall not cause such order or judgment not to be a
Final Order.

                  1.52. 510(c) Claim means any Claim against a Debtor subject
to subordination pursuant to section 510(c) of the Bankruptcy Code.

                  1.53. Holdings means AMF Group Holdings Inc.

                  1.54. Hughes Capital Equipment Lease means that certain
Equipment and Services Agreement (as amended), dated June 22, 2000, by and
between Hughes Network Systems and AMF Bowling Centers, Inc.

                  1.55. Indenture Trustee(s) means The Bank of New York and/or
U.S. Bank Trust, N.A., as applicable, solely in their respective capacity as
Trustee under those certain indentures for the Senior Subordinated Notes.

                  1.56. Initial Distribution Date means the date that is the
later to occur of: (i) the Effective Date; and (ii) the first (1/st/) Business
Day after the date that is thirty (30) calendar days after the date the
Bankruptcy Court has entered the Estimation Order, or as soon thereafter as is
practicable.

                  1.57. Insured Claim means any Claim to the extent such Claim
arises prior to the Commencement Date from an incident or occurrence that is
covered under any of the Debtors' insurance policies, but solely to the extent
such Claim is so covered.

                  1.58. Interdebtor Claim means any Claim held by a Debtor
against another Debtor.

                  1.59. Missouri Mortgage means that certain note and purchase
money mortgage totaling approximately two million dollars ($2,000,000) granted
in connection with the purchase of a bowling center in Independence, Missouri
pursuant to a Contract of Deed, dated on or around September 30, 1988, as
amended by a certain Collection Agreement, dated April 15, 1992.

                  1.60. New AMF Common Stock means the common stock of
Reorganized AMF, par value $0.01 per share, to be authorized under the Amended
Certificate of Incorporation.

                  1.61. New AMF Notes means the 13% Senior Subordinated Notes
due 2008 having an aggregate principal amount equal to one hundred fifty
million dollars ($150,000,000), authorized and issued by Reorganized AMF on the
Effective Date, the terms of which shall be governed by the New Senior
Subordinated Note Indenture, which shall be in form and substance reasonably
satisfactory to the Senior Lender Steering Committee and substantially in the
form contained in the Plan Supplement.

                  1.62. New Employment Agreement means the employment agreement
of Roland Smith.

                  1.63. New Management Incentive Plan means the AMF Bowling
Worldwide, Inc. 2002 Stock Option Plan, which shall be in form and substance
reasonably satisfactory to the Senior Lender Steering Committee and shall be
substantially in the form contained in the Plan Supplement, pursuant to which
senior managers and certain other employees of the Reorganized Company will be
eligible to receive New Management Options.

                                      -6-

<PAGE>

                  1.64. New Management Options means seven (7) year options to
purchase up to twelve percent (12%) of the fully-diluted New AMF Common Stock
issued under the Plan, giving effect to the shares that will be issued upon
exercise of such options and upon exercise of the New Warrants.

                  1.65. New Senior Subordinated Note Indenture means that
certain Indenture, dated as of the Effective Date, between Reorganized AMF and
the trustee thereunder, which shall be in form and substance reasonably
satisfactory to the Senior Lender Steering Committee and shall be substantially
in the form contained in the Plan Supplement, relating to and governing the
issuance of the New AMF Notes.

                  1.66. New Series A Warrants means those Series A warrants,
which shall be in form and substance reasonably satisfactory to the Senior
Lender Steering Committee and shall be substantially in the form contained in
the Plan Supplement, to purchase shares of the New AMF Common Stock together
representing fifteen percent (15%) of the fully-diluted shares of New AMF
Common Stock issued under the Plan, giving effect to the shares that will be
issued upon exercise of the New Warrants in accordance with the terms of the
New Warrant Agreements relating thereto but without giving effect to the
exercise of the New Management Options.

                  1.67. New Series B Warrants means those Series B warrants,
which shall be in form and substance reasonably satisfactory to the Senior
Lender Steering Committee and shall be substantially in the form contained in
the Plan Supplement, to purchase shares of the New AMF Common Stock together
representing twelve and one half percent (12.5%) of the fully-diluted shares of
New AMF Common Stock issued under the Plan, giving effect to the shares that
will be issued upon exercise of the New Warrants in accordance with the terms
of the New Warrant Agreements relating thereto but without giving effect to the
exercise of the New Management Options.

                  1.68. New Warrant Agreements means that certain Warrant
Agreement relating to the New Series A Warrants and that certain Warrant
Agreement relating to the New Series B Warrants, each dated as of the Effective
Date, which shall each be in form and substance reasonably satisfactory to the
Senior Lender Steering Committee and shall be substantially in the forms
contained in the Plan Supplement.

                  1.69. New Warrants means the New Series A Warrants and the
New Series B Warrants.

                  1.70. Other Secured Claim means a Secured Claim against any
of the Debtors not constituting a Senior Lender Claim.

                  1.71. Other Secured Claim Note means a secured promissory
note which shall provide for amortization over a period not to exceed six (6)
years on a straight line basis, in quarterly installments, bearing interest at
the rate required by applicable law as determined by the Bankruptcy Court at or
subsequent to the Confirmation Hearing, in connection with the allowance of
such Claim or as otherwise agreed to by such holder and the applicable Debtor,
which note shall be secured by either the existing collateral or property at
least equal to the value of the existing collateral.

                  1.72. Other Secured Claim Loan Agreement means the documents
(to the extent not incorporated in the Other Secured Claim Note) to be
executed, delivered, assumed, and/or performed in conjunction with the
consummation of the Other Secured Claim Note.

                  1.73. Person means any individual, corporation, partnership,
association, indenture trustee, limited liability company, organization, joint
stock company, joint venture, Estate, trust, governmental unit or any political
subdivision thereof, the Creditors' Committee, interest holders, or any other
entity.

                                      -7-

<PAGE>

                  1.74. Plan means this second amended second modified joint
chapter 11 plan of reorganization, including, without limitation, the exhibits
and schedules hereto, as the same may be amended or modified from time to time
in accordance with the provisions of the Bankruptcy Code and the terms hereof.

                  1.75. Plan Documents means the documents (other than the
Plan) to be executed, delivered, assumed, and/or performed in
conjunction with the consummation of the Plan of Reorganization on
the Effective Date, including, but not limited to: (i) the Amended
Bylaws; (ii) the Amended Certificate of Incorporation; (iii) the New
Senior Subordinated Note Indenture, including the form of New AMF
Note; (iv) the Registration Rights Agreement; (v) the New Warrant
Agreements; (vi) the Exit Facility; (vii) the New Employment
Agreement; (viii) the New Management Incentive Plan; and (ix) forms
of the Other Secured Note and Other Secured Claim Loan Agreement.

                  1.76. Plan of Reorganization means the Plan and the Plan
Documents, as the same may be amended or modified from time to time in
accordance with the provisions of the Bankruptcy Code and the terms hereof.

                  1.77. Plan Securities means, collectively, the New AMF Notes,
the New Series A Warrants, the New Series B Warrants, the Senior Lender
Facility Notes, the New AMF Common Stock, and the New AMF Common Stock issuable
upon the exercise of the New Warrants.

                  1.78. Plan Supplement means the supplemental appendix to the
Plan, initially filed with the Bankruptcy Court on December 18, 2001 and
amended on January 18, 2002, as the same may be amended from time to time
(including through the addition of agreements or other documents to effectuate
the Plan), which shall include, as amended, the commitment letter for the Exit
Facility and draft forms of those Plan Documents listed on Exhibit B annexed
hereto, which Plan Documents will be entered into as of the Effective Date.

                  1.79. Priority Non-Tax Claim means any Claim against any of
the Debtors other than an Administrative Expense Claim or a Priority Tax Claim,
entitled to priority in payment as specified in section 507(a) of the
Bankruptcy Code.

                  1.80. Priority Tax Claim means any Claim of a governmental
unit against one or more of the Debtors of the kind entitled to priority in
payment under section 507(a)(8) of the Bankruptcy Code.

                  1.81. Ratable Class 4 Portion means a fraction, the numerator
of which is the sum of, without duplication, the amount of Claims in Class 4
that are estimated to be Allowed pursuant to the Estimation Order plus the
amount of Allowed Claims in Class 4 and the denominator of which is the
Unsecured Claim Total.

                  1.82. Ratable Class 5 Portion means a fraction, the numerator
of which is the amount set aside in the Tort Claims Estimate and the
denominator of which is the Unsecured Claim Total.

                  1.83. Ratable Class 6 Portion means a fraction, the numerator
of which is the sum of, without duplication, the amount of Claims in Class 6
that are estimated to be Allowed pursuant to the Estimation Order plus the
amount of the Allowed Claims in Class 6 and the denominator of which is the
Unsecured Claim Total.

                                      -8-

<PAGE>

                  1.84. Registration Rights Agreement means that certain
Registration Rights Agreement, dated as of the Effective Date, which shall be
in form and substance reasonably satisfactory to the Senior Lender Steering
Committee and shall be substantially in the form contained in the Plan
Supplement.

                  1.85. Reorganization Cases means the jointly administered
cases under chapter 11 of the Bankruptcy Code commenced by the Debtors on July
2, 2001 in the Bankruptcy Court and styled In re AMF Bowling Worldwide, Inc.,
et al., 01-61119 (DHA).

                  1.86. Reorganized AMF means AMF Bowling Worldwide, Inc., on
and after the Effective Date.

                  1.87. Reorganized Company means the Reorganized Debtors and
each of their non-debtor subsidiaries.

                  1.88. Reorganized Debtors means each of the Debtors that is
listed on Exhibit A hereto (or such other schedule filed prior to the Effective
Date) on and after the Effective Date.

                  1.89. Representative means, except for BINC, any officer,
director, agent, financial advisor, attorney, professional, accountant,
employee or controlling shareholder (direct or indirect) of a Debtor, in each
case, solely in their capacity as such, serving or holding interests on or
after January 1, 2001.

                  1.90. Schedules means the schedules of assets and
liabilities, lists of holders of Equity Interests, and the statement of
financial affairs filed by the Debtors under section 521 of the Bankruptcy
Code, Bankruptcy Rule 1007 and the Official Bankruptcy Forms of the Bankruptcy
Rules as such schedules and statements have been or may be supplemented or
amended: (a) through and including the date by which objections to Claims may
be filed with the Bankruptcy Court or (b) pursuant to the second sentence of
section 13.3 hereof.

                  1.91. Secured Claim means a Claim that is secured by a lien
on property in which any or all of the Estates have an interest or that is
subject to setoff under section 553 of the Bankruptcy Code, to the extent of
the value of the Claim holder's interest in the Estates' interest in such
property or to the extent of the amount subject to setoff, as applicable, as
determined pursuant to section 506(a) of the Bankruptcy Code, provided,
however, that solely for the purposes of treatment under the Plan, a Secured
Claim shall not include a Senior Subordinated Note Claim or Interdebtor Claim.

                  1.92. Senior Lender Agreements means that certain Fourth
Amended and Restated Credit Agreement, dated as of June 14, 1999, as amended,
among WINC 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, as
administrative agent, and Citicorp USA, Inc.  as collateral agent, and any of
the other documents and instruments relating thereto.

                  1.93. Senior Lender Cash Payment means (i) in the event the
Senior Lender Facility is consummated, zero ($0) and (ii) in the event the
Third Party Facility is consummated, two hundred eighty six million seven
hundred thousand dollars ($286,700,000).

                  1.94. Senior Lender Claim means (i) a Claim against any of
the Debtors based on the Senior Lender Agreements, including, without
limitation, accrued interest (including any applicable default rate), minus
(ii) all Cash payments made by the Debtors to the holders of such Claims on or
after the Commencement Date with respect thereto, including, without
limitation, any Claims of the Senior Lenders that are converted to
administrative expense status pursuant to any Order of the Bankruptcy Court
approving the provision of adequate protection to the Senior Lenders.

                  1.95. Senior Lender Distribution means: (i) the Senior Lender
Cash Payment; (ii) nine million two hundred fifty thousand (9,250,000) shares
of New AMF Common Stock; (iii) the Senior Lender Facility Notes; plus (iv) the
New AMF Notes.

                                      -9-

<PAGE>

                  1.96. Senior Lender Facility means a credit facility, which
consists of the Senior Lender Term Loan Facility and the Senior Lender
Revolving Facility, which may be entered into as of the Effective Date in
accordance with the Plan, by and among certain parties, including one or more
of the Reorganized Debtors, certain of the Senior Lenders and a syndicate of
banks, financial institutions and other accredited investors, and which
contains those terms set forth in the Plan Supplement.

                  1.97. Senior Lender Facility Notes means in the event the
Senior Lender Facility is consummated, the notes issued and distributed to the
Senior Lenders in connection with the Senior Lender Term Loan Facility.

                  1.98. Senior Lenders means Citibank, and the other lenders
who are a party to the Senior Lender Agreements, solely in their capacity as
such.

                  1.99. Senior Lender Steering Committee means those certain
Senior Lenders that Citibank, in its capacity as administrative agent under the
Senior Lender Agreements, appoints to serve as members of that certain steering
committee of Senior Lenders, as may be reconstituted from time to time.

                  1.100.  Senior Lender Revolving Facility means a revolving
credit facility of up to ninety million dollars ($90,000,000).

                  1.101. Senior Lender Term Loan Facility means the Senior
Lender Tranche A Facility and the Senior Lender Tranche B Facility, which each
shall be provided pursuant to the Senior Lender Facility.

                  1.102. Senior Lender Tranche A Facility means a term loan
facility of one hundred million dollars ($100,000,000) minus the sum of: (a)
the amounts, if any, necessary to satisfy the Reorganized Company's minimum
cash requirements of twelve million dollars ($12,000,000) on or after the
Effective Date; (b) amounts necessary to pay Allowed Claims (other than Senior
Lender Claims) hereunder, to the extent such Allowed Claims are to be paid in
Cash pursuant to the Plan, including, but not limited to, the DIP Refinancing
Amount; and (c) amounts to be reserved in respect of items (a) and (b) hereof.

                  1.103. Senior Lender Tranche B Facility means a term loan
facility of up to two hundred million dollars ($200,000,000).

                  1.104. Senior Subordinated Note Claim means a Claim against
the Debtors for an amount due under or in connection with the Senior
Subordinated Notes.

                  1.105. Senior Subordinated Notes means the 10-7/8% Series A
and Series B Senior Subordinated Notes due 2006 and the 12-1/4% Series A and
Series B Senior Subordinated Discount Notes due 2006 issued by WINC.

                  1.106. Third Party Facility means a credit facility, in an
amount not less than three hundred fifty million dollars ($350,000,000), of
which not less than three hundred million dollars ($300,000,000) would be
available to pay the DIP Refinancing Amount, Allowed Administrative Claims,
Allowed Fee Claims, the Senior Lender Cash Payment, and such other Cash amounts
as required to be paid under the Plan, entered into as of the Effective Date,
by and among certain parties, including one or more of the Reorganized Debtors,
certain third party lenders and a syndicate of banks, financial institutions
and other accredited investors, and which contains those terms, which are
reasonably satisfactory to the Senior Lender Steering Committee.

                  1.107. Tort Claims means any Claim (including punitive damage
claims to the extent permitted by the Bankruptcy Court and not otherwise
subordinated under applicable law),

                                      -10-

<PAGE>

which arose prior to the Commencement Date, related to personal injury,
property damage, products liability, wrongful death, or any other similar
Claims against any of the Debtors arising in tort, including, without
limitation, any such Claims, or portions thereof, which are Insured Claims.
Unless otherwise ordered by the Bankruptcy Court, Tort Claims shall not include
any Claim settled, allowed or disallowed pursuant to the ADR Procedures.

                  1.108. Tort Claims Estimate means the amount estimated,
pursuant to the Estimation Order, to be the maximum aggregate amount of all
Allowed Tort Claims minus the portion thereof that are estimated therein to be
Allowed Insured Claims.

                  1.109. Tort Claims Reserve means the Ratable Class 5 Portion
of the Unsecured Securities, which are reserved for issuance for, inter alia,
the payment of Tort Claims that become Allowed Claims after the Effective Date,
to the extent such Claims are not Insured Claims.

                  1.110. Unsecured Claim means any Claim against any of the
Debtors, other than an Other Secured Claim, Senior Lender Claim, AMF Affiliate
Claim, Administrative Expense Claim, Priority Tax Claim, Priority Non-Tax
Claim, Fee Claim, Senior Subordinated Note Claim, Interdebtor Claim, Tort
Claim, Existing Securities Law Claim, or 510(c) Claim.

                  1.111. Unsecured Claim Total means the sum of, without
duplication, the aggregate amount of all Allowed Claims in Classes 4 and 6,
plus the Tort Claims Estimate, plus the aggregate of all Claims in Classes 4
and 6 as set forth in the Estimation Order (except to the extent that such
Claims have been expunged or otherwise disallowed).

                  1.112. Unsecured Securities means collectively, the New
Series A Warrants, the New Series B Warrants and seven hundred fifty thousand
(750,000) shares of the New AMF Common Stock.

                  1.113. WINC means AMF Bowling Worldwide, Inc., prior to the
Effective Date.

         B.     Interpretation; Application of Definitions and Rules
                of Construction.

                Unless otherwise specified, all section or exhibit references in
the Plan are to the respective section in, or exhibit to, the Plan. The words
"herein," "hereof," "hereto," "hereunder," and other words of similar import
refer to the Plan as a whole and not to any particular section, subsection, or
clause contained therein. Any capitalized term used herein that is not defined
herein shall have the meaning assigned to that term in the Bankruptcy Code.
Except for the rule contained in section 102(5) of the Bankruptcy Code, the
rules of construction contained in section 102 of the Bankruptcy Code shall
apply to the Plan. The headings in the Plan are for convenience of reference
only and shall not limit or otherwise affect the provisions hereof. To the
extent there is an inconsistency between any of the provisions of the Plan and
any of the provisions contained in the Plan Documents to be entered into as of
the Effective Date, the Plan Documents shall control.

SECTION 2.       ADMINISTRATIVE EXPENSE CLAIMS, FEE CLAIMS, PRIORITY
                 TAX CLAIMS AND DIP LENDER CLAIMS

                  2.1.     Administrative Expense Claims.

                  Except to the extent that a holder of an Allowed
Administrative Expense Claim agrees to a different treatment, the Debtors shall
pay to each holder of an Allowed Administrative Expense Claim Cash in an amount
equal to such Claim on the later of the Effective Date and the first (1st)
Business Day after the date that is thirty (30) calendar days after the date
such Administrative Expense Claim becomes

                                      -11-

<PAGE>

an Allowed Administrative Expense Claim, or as soon thereafter as is reasonably
practicable; provided, however, that Allowed Administrative Expense Claims
representing liabilities incurred in the ordinary course of business by the
Debtors, as debtors in possession, or liabilities arising under loans or
advances to or other obligations incurred by the Debtors, as debtors in
possession, whether or not incurred in the ordinary course of business, shall
be paid by the Reorganized Debtors in the ordinary course of business,
consistent with past practice and in accordance with the terms and subject to
the conditions of any orders or agreements governing, instruments evidencing,
or other documents relating to such transactions. Any postpetition expenses of
the Indenture Trustees and the reasonable postpetition fees and expenses of
their respective counsel shall be paid to the extent such fees and expenses are
reasonable and to the extent approved by the Bankruptcy Court after notice and
hearing. The Debtors may also seek an order, which may be the Confirmation
Order, authorizing them to pay the reasonable prepetition expenses of the
Indenture Trustees and the reasonable prepetition fees and expenses of their
respective counsel.

         2.2.     Bar Date for Administrative Expense Claims.

         PROOFS OF ADMINISTRATIVE EXPENSE CLAIMS AND REQUESTS FOR PAYMENT OF
ADMINISTRATIVE EXPENSE CLAIMS THAT HAVE ARISEN ON OR AFTER JULY 2, 2001 MUST BE
FILED AND SERVED PURSUANT TO THE PROCEDURES SET FORTH IN THE CONFIRMATION ORDER
OR NOTICE OF ENTRY OF CONFIRMATION ORDER, NO LATER THAN FORTY-FIVE DAYS AFTER
THE EFFECTIVE DATE.  Notwithstanding anything to the contrary herein, no proof
of Administrative Expense Claim or application for payment of an Administrative
Expense Claim need be filed for the allowance of any: (i) expense or liability
incurred in the ordinary course of the Reorganized Debtors' businesses on or
after the Effective Date; (ii) Administrative Expense Claim held by a trade
vendor, which administrative liability was incurred in the ordinary course of
business of the Debtor and such creditor after the Commencement Date; (iii) Fee
Claims; (iv) DIP Lender Claims; or (v) fees of the United States Trustee
arising under 28 U.S.C. [double cent] 1930. All Claims described in clause (i),
(ii) and (v) of the immediately preceding sentence shall be paid by the
Reorganized Debtors in the ordinary course of business. DIP Lender Claims shall
be paid in accordance with section 2.5 herein. Fee Claims shall be paid in
accordance with section 2.3 hereof.

         Any Persons that fail to file a proof of Administrative Expense Claim
or request for payment thereof on or before the Administrative Bar Date as
required herein shall be forever barred from asserting such Claim against any
of the Debtors, the Estates, the Reorganized Debtors or their property and the
holder thereof shall be enjoined from commencing or continuing any action,
employment of process or act to collect, offset or recover such Administrative
Expense Claim.

                  2.3.     Fee Claims.

                  All Persons seeking an award by the Bankruptcy Court of a Fee
Claim incurred through and including the Effective Date shall, unless otherwise
ordered by the Bankruptcy Court: (i) file their respective final applications
for allowance of compensation for services rendered and reimbursement of
expenses incurred by the date that is no later than forty-five (45) days after
the Effective Date; and (ii) be paid in full in such amounts as are approved by
the Bankruptcy Court upon the later of (a) the date upon which the order
relating to any such Fee Claim is entered or (b) upon such other terms as may
be mutually agreed upon between the holder of such Fee Claim and the Debtors
or, on and after the Effective Date, the Reorganized Debtors.

                  2.4.     Priority Tax Claims.

                  Except to the extent that a holder of an Allowed Priority Tax
Claim agrees to a different treatment, at the sole option of the Reorganized
Debtors, each holder of an Allowed Priority Tax Claim

                                      -12-

<PAGE>

shall receive, in full and complete settlement, satisfaction and discharge of
its Allowed Priority Tax Claim: (i) Cash in an amount equal to such Allowed
Priority Tax Claim on, or as soon thereafter as is reasonably practicable, the
later of the Effective Date and the first (1/st/) Business Day after the date
that is thirty (30) calendar days after the date such Priority Tax Claim
becomes an Allowed Priority Tax Claim, or (ii) equal annual Cash payments in an
aggregate amount equal to such Allowed Priority Tax Claim, together with
interest at a fixed annual rate, which is consistent with applicable laws or as
set by order of the Bankruptcy Court, over a period not exceeding six (6) years
after the date of assessment of such Allowed Priority Tax Claim, which shall
begin on, or as soon thereafter as is reasonably practicable, the later of the
Effective Date and the first Business Day after the date that is thirty (30)
calendar days after the date such Priority Tax Claim becomes an Allowed
Priority Tax Claim. All Allowed Priority Tax Claims that are not due and
payable on or before the Effective Date shall be paid in the ordinary course of
business as such obligations become due.

                  2.5.     DIP Lender Claims.

                  All DIP Lender Claims shall be Allowed as provided in the DIP
Order and shall be paid in full, in Cash on the Effective Date; provided, that,
                                                                --------  ----
any DIP Lender Claims that do not arise until after the Effective Date shall be
paid in full in Cash by the Reorganized Debtors as soon as practicable after
such Claims become Allowed.  Without limiting the foregoing, once payments to
be made on the Effective Date have been made, the DIP Facility and any
agreements or instruments related thereto shall be deemed terminated (subject
in all respects to any carve-out approved by the Bankruptcy Court in the
Bankruptcy Court orders approving the DIP Facility and such other provisions,
which shall survive the termination thereof) and the DIP Lenders shall take all
reasonable action to confirm the removal of any liens on the properties of the
Debtors and their affiliates. On the Effective Date, any outstanding letters of
credit issued under the DIP Facility shall be either cash collateralized,
replaced or secured by letters of credit issued under the Exit Facility.

         SECTION 3.        CLASSIFICATION OF CLAIMS AND EQUITY INTERESTS

                  The following table designates the Classes of Claims against
and Equity Interests in the Debtors, and specifies which Classes are (i)
impaired or unimpaired by the Plan, (ii) entitled to vote to accept or reject
the Plan in accordance with section 1126 of the Bankruptcy Code, and (iii)
deemed to accept or reject the Plan.

                                      -13-

<PAGE>

              Classes.

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------
                                                                       Entitled
    Class        Designation                               Impairment  to Vote
    -----        -----------                               ----------  -------
    <S>          <C>                                       <C>         <C>
    Class 1A     Other Secured Claims (Missouri Mortgage)  Unimpaired  No (deemed to accept)
    Class 1B     Other Secured Claims (Hughes Capital      Unimpaired  No (deemed to accept)
                 Equipment Lease)
    Class 1C     Other Secured Claims (Other)              Impaired    Yes
    Class 2      Senior Lender Claims                      Impaired    Yes
    Class 3      Priority Non-Tax Claims                   Impaired    Yes
    Class 4      Unsecured Claims                          Impaired    Yes
    Class 5      Tort Claims                               Impaired    Yes
    Class 6      Senior Subordinated Note Claims           Impaired    Yes
    Class 7      Interdebtor Claims                        Impaired    No (deemed to reject)
    Class 8      AMF Affiliate Claims                      Impaired    Yes
    Class 9      Equity Interests                          Impaired    No (deemed to reject)
    Class 10     Existing Securities Law Claims            Impaired    No (deemed to reject)
    Class 11     510(c) Claims                             Impaired    No (deemed to reject)
    ------------ -------------------------------------------- ----------- -----------------------
</TABLE>

                  3.1.     Subclasses for Class 1.

                  For convenience of identification, the Plan describes the
Allowed Claims in Class 1 as a single Class. This Class consists of separate
subclasses, each based on the underlying property securing such Allowed Claims,
and each subclass is treated hereunder as a distinct Class for treatment and
distribution purposes.

         SECTION 4.        TREATMENT OF CLAIMS AND EQUITY INTERESTS

                  4.1.     Other Secured Claims (Class 1).

                  (a)      Class 1A (Missouri Mortgage)

                  With respect to the Claim arising under the Missouri
Mortgage, on or as soon as reasonably practicable after the later of the
Effective Date and the first (1/st/) Business Day after the date that is thirty
(30) calendar days after the date such Other Secured Claim becomes Allowed, the
holder of such Allowed Other Secured Claim shall receive such treatment that
either (i) leaves unaltered the legal, equitable, or contractual rights to
which the holder of such Allowed Other Secured Claim is entitled or (ii) leaves
such Allowed Other Secured Claim unimpaired pursuant to section 1124(2) of the
Bankruptcy Code. In accordance with section 1126(f) of the Bankruptcy Code, the
holder of such Allowed Other Secured Claim is conclusively presumed to accept
this Plan and the vote of such holder will not be solicited with respect to
such Claims.

                  (b)      Class 1B (Hughes Capital Equipment Lease)

                  With respect to the Claim arising under the Hughes Capital
Equipment Lease, on or as soon as reasonably practicable after the later of the
Effective Date and the first (1/st/) Business Day after the date that is thirty
(30) calendar days after the date such Other Secured Claim becomes Allowed, the
holder of such Allowed Other Secured Claim shall receive such treatment that
either (i) leaves unaltered the legal, equitable, or contractual rights to
which the holder of such Allowed Other Secured Claim is entitled or (ii) leaves
such Allowed Other Secured Claim unimpaired pursuant to section 1124(2) of the
Bankruptcy Code. In accordance with section 1126(f) of the Bankruptcy Code, the
holders of such Allowed Other Secured Claim is conclusively presumed to accept
this Plan and the vote of such holder will not be solicited with respect to
such Claims.

                  (c)      Class 1C (Other)

                  With respect to each Other Secured Claim (other than those
arising under the Missouri Mortgage or the Hughes Capital Equipment Lease), on
or as soon as reasonably practicable after the later of the Effective Date and
the first (1/st/) Business Day after the date that is thirty (30) calendar days
after the date such Other Secured Claim becomes Allowed, the

                                      -14-

<PAGE>

holder of such Allowed Other Secured Claim shall receive, subject to section
6.14 hereof, at the sole option of the Debtors or Reorganized Debtors, as
applicable:

                  (a) The Other Secured Claim Note in an initial
                      principal amount equal to the amount of such Allowed
                      Other Secured Claim; or

                  (b) In full satisfaction of such Allowed Other Secured
                      Claim and subject to Bankruptcy Court approval, Cash
                      in an amount mutually agreeable to both the Debtors
                      or Reorganized Debtors (as applicable) and the holder
                      of such Allowed Other Secured Claim.

                  If option (a) is selected with respect to an Allowed Other
Secured Claim, the Reorganized Debtors shall be authorized to and shall execute
and deliver the Other Secured Claim Loan Agreement relating thereto.

                  Any Allowed Claim based solely on any deficiency Claim by a
holder of an Allowed Other Secured Claim in subclass 1C shall become, and shall
be treated for all purposes under this Plan as an Allowed Unsecured Claim and
shall be classified as a Class 4 Claim.

                  4.2.     Senior Lender Claims (Class 2).

                  (a) Allowance. Senior Lender Claims shall be allowed in full
                      in an amount equal to accrued but unpaid principal under
                      the Senior Lender Agreements plus accrued but unpaid
                      interest, fees and expenses due and payable thereunder and
                      under the DIP Order.

                  (b) Treatment. On the Effective Date, each holder
                      of an Allowed Senior Lender Claim shall receive a pro rata
                      share of the Senior Lender Distribution.

                  4.3.     Priority Non-Tax Claims (Class 3).

                  Except to the extent that a holder of an Allowed Priority
Non-Tax Claim agrees to a different treatment, each such holder of an Allowed
Priority Non-Tax Claim shall receive, in full satisfaction of such Claim, Cash
in an amount equal to such Claim, on or as soon as reasonably practicable after
the later of (i) the Effective Date and (ii) the first (1/st/) Business Day
after the date that is thirty (30) calendar days after the date (a) such Claim
becomes Allowed and (b) for payment provided by any agreement or understanding
between the parties.

                                      -15-

<PAGE>

                  4.4.     Unsecured Claims (Class 4).

                  Each holder of an Allowed Unsecured Claim shall receive on
account of such Claim a pro rata share of the Class 4 Distribution.

                  4.5.     Tort Claims (Class 5).

                  To the extent that any portion of a Tort Claim is not an
Insured Claim, on the Final Distribution Date, the holders of each Tort Claim
that has become an Allowed Claim shall receive on account of such Claim a pro
rata share of the Class 5 Distribution. In addition, that portion of each
Allowed Tort Claim that is an Insured Claim shall be paid solely and
exclusively: (i) from the proceeds of insurance relating to such Insured Claim
as and when such proceeds are received; or (ii) by the applicable insurance
carrier to the extent of such insurance.

                  4.6.     Senior Subordinated Note Claims (Class 6).

                  On or as soon as reasonably practicable after the later of the
Effective Date and the first (1/st/) Business Day after the date that is thirty
(30) calendar days after the date an AMF Senior Subordinated Note Claim becomes
Allowed, each holder of such Allowed Senior Subordinated Note Claim shall
receive on account of such Claim a pro rata share of the Class 6 Distribution.

                  4.7.     Interdebtor Claims (Class 7).

                  No distributions will be made on account of Interdebtor Claims
under the Plan and such Claims shall be discharged and released on the Effective
Date. In accordance with section 1126 of the Bankruptcy Code, the holders of
such Interdebtor Claims are conclusively presumed to reject this Plan and the
votes of such holders will not be solicited with respect to such Claims.

                  4.8.     AMF Affiliate Claims (Class 8).

                  On or as soon as reasonably practicable after the later of the
Effective Date and the first (1/st/) Business Day after the date that is thirty
(30) calendar days after the date an AMF Affiliate Claim becomes Allowed, such
Allowed AMF Affiliate Claim shall be reinstated on terms and conditions that are
satisfactory to Reorganized AMF.

                  4.9.     Equity Interests (Class 9).

                  All Equity Interests in Holdings and WINC shall be deemed
cancelled as of the Effective Date. All Equity Interests in each Debtor other
than Holdings and WINC (other than any such Equity Interest held by another
Debtor or an AMF Affiliate) shall be delivered to such Debtor. Each Debtor other
than Holdings and WINC shall have the right, in its sole discretion, to cancel
or reissue Equity Interests in such Debtor in accordance with the provisions of
the Plan. In accordance with section 1126 of the Bankruptcy Code, the holders of
Equity Interests are conclusively presumed to reject this Plan and the votes of
such holders will not be solicited with respect to such Interests.

         4.10.    Existing Securities Law Claims (Class 10).

                  Each holder of an Existing Securities Law Claim shall receive
no distribution under the Plan. In accordance with section 1126 of the
Bankruptcy Code, the holders of such Existing Securities Law Claims are
conclusively presumed to reject this Plan and the votes of such holders will not
be solicited with respect to such Claims.

                                      -16-

<PAGE>

                  4.11.    510(c) Claims (Class 11).

                  Each holder of a 510(c) Claim shall receive no distribution
under the Plan. In accordance with section 1126 of the Bankruptcy Code, the
holders of such 510(c) Claims are conclusively presumed to reject this Plan and
the votes of such holders will not be solicited with respect to such Claims.

         SECTION 5.        MEANS FOR IMPLEMENTATION

                  5.1. Deemed Consolidation of Debtors for Plan Purposes Only.

                  (a) Consolidation. Subject to the occurrence of the Effective
Date, the Debtors shall be deemed consolidated for the following purposes under
the Plan: (i) no distributions shall be made under the Plan on account of the
Interdebtor Claims or any Equity Interest of a Debtor in another Debtor; (ii)
all guarantees by any of the Debtors of the obligations of any other Debtor
arising prior to the Effective Date shall be deemed eliminated so that any
Claim against any Debtor and any guarantee thereof executed by any other Debtor
and any joint and several liability of any of the Debtors shall be deemed to be
one obligation of the deemed consolidated Debtors; and (iii) each and every
Claim filed or to be filed in the Reorganization Case of any of the Debtors
shall be deemed filed against the deemed consolidated Debtors and shall be
deemed one Claim against and, to the extent Allowed, obligation of the deemed
consolidated Debtors.

                  Except as otherwise provided herein, such deemed
consolidation, however, shall not (other than for purposes related to funding
distributions under the Plan and as set forth above in this section 5.1)
affect: (i) the legal and organizational structure of the Reorganized Debtors;
or (ii) the enforceability or existence of any pre- or post-Commencement Date
guarantees, liens, and security interests that are required to be maintained
(a) in connection with executory contracts or unexpired leases that were
entered into during the Reorganization Cases or that have been or will be
assumed, (b) pursuant to the Plan, or (c) in connection with any financing
entered into by the Reorganized Debtors on the Effective Date; or (iii)
distributions out of any insurance policies or proceeds of policies.

                  (b) Order Granting Consolidation. Unless consolidation has
been approved by a prior order of the Bankruptcy Court, this Plan shall serve
as a motion seeking entry of an order substantively consolidating the
Reorganization Cases. Unless an objection to consolidation is made in writing
by any creditor affected by the Plan as herein provided on or before 4:00 p.m.
Eastern Time, on the date that is twenty (20) days before the Confirmation
Hearing, or such other date as may be fixed by the Bankruptcy Court, the
Consolidation Order may be entered by the Bankruptcy Court. In the event any
such objections are timely filed, a hearing with respect thereto shall be
scheduled by the Bankruptcy Court, which hearing may, but need not, coincide
with the Confirmation Hearing.

                  5.2.     Combination Transactions.

                  In furtherance of the restructuring of the Debtors, on or as
soon as reasonably practicable after the Effective Date each applicable Debtor
and Reorganized Debtor shall take such actions as may be necessary or
appropriate to effect the relevant Combination Transaction. Such actions may
include: (a) the execution and delivery of appropriate agreements or other
documents of merger, consolidation, dissolution or reorganization containing
terms that are consistent with the terms of this Plan and that satisfy the
requirements of applicable law; (b) the execution and delivery of appropriate
instruments of transfer, assignment, assumption or delegation of any property,
right, liability, duty or obligation on terms consistent with the terms of this
Plan; (c) the filing of appropriate certificates of merger, dissolution or
consolidation with the appropriate governmental authorities under applicable
law; and (d) all other actions that such Debtor or Reorganized Debtor
determines are necessary or appropriate, including the making of

                                      -17-

<PAGE>

filings or recordings in connection with the relevant Combination Transaction.
The form of each Combination Transaction shall be determined by the respective
Board of Directors of such Debtor, Reorganized Debtor and/or AMF Affiliate (as
applicable).

                  5.3.     Exit Facility.

                  On the Effective Date, the Reorganized Debtors shall be
authorized to enter into, execute and deliver the Exit Facility and the notes
thereunder for the purposes of, among others, funding obligations under the
Plan of Reorganization and providing for working capital requirements.

                  5.4.     Waiver of Subordination.

                  The distributions under the Plan take into account the
relative priority of the Claims in each Class in connection with any
contractual subordination provisions relating thereto. Accordingly, the
distributions to the holders of Senior Subordinated Note Claims shall not be
subject to levy, garnishment, attachment, or other legal process by any holder
of indebtedness senior to the indebtedness of the holders of the Senior
Subordinated Note Claims, by reason of claimed contractual subordination
rights. On the Effective Date, all creditors shall be deemed to have waived any
and all contractual subordination rights which they may have with respect to
such distribution, and the Confirmation Order shall permanently enjoin,
effective as of the Effective Date, all holders of Senior Lender Claims from
enforcing or attempting to enforce any such rights with respect to the
distributions under the Plan to the holders of Senior Subordinated Note Claims.

                  5.5.     Management Incentive Plan.

                  On the Effective Date, Reorganized AMF is authorized to, and
shall adopt and implement, the New Management Incentive Plan without the need
for any further corporate action. On the Effective Date, Reorganized AMF is
further authorized to issue all options to purchase shares of New AMF Common
Stock, and the shares of New AMF Common Stock issuable upon exercise of such
options, under the New Management Incentive Plan in accordance with the terms
therein.

                  5.6.     Cancellation of Existing Securities and Agreements.

                  Except for the purpose of evidencing a right to distributions
under the Plan and except as expressly provided in this Plan, on the Effective
Date, all the agreements, instruments, and other documents evidencing the Claims
or rights of any holder of a Claim against the Debtors, including options or
warrants to purchase Equity Interests, any agreement obligating the Debtors to
issue, transfer, or sell Equity Interests or any other capital stock of the
Debtors and the Senior Subordinated Notes shall be deemed cancelled and of no
force or effect.

                  5.7.     Release of Liens.

                  Except as otherwise specifically provided in or contemplated
by the Plan or in any contract, instrument or other agreement or document
created in connection with the Plan, (i) each holder of: (a) any DIP Lender
Claim, Other Secured Claim or Senior Lender Claim; (b) any Claim that is
purportedly secured; and/or (c) any judgment, personal property or ad valorem
tax, mechanics' or similar lien Claim, in each case regardless of whether such
Claim is an Allowed Claim, shall, on or immediately before the Effective Date
and regardless of whether such Claim has been scheduled or proof of such Claim
has been filed: (y) turn over and release to the Estates or the Reorganized
Debtors, as the case may be, any and all property of a Debtor or Estate that
secures or purportedly secures such Claim, or such lien and/or Claim shall
automatically, and without further action by the Debtors, the Estates or the

                                      -18-

<PAGE>

Reorganized Debtors, be deemed released; and (z) execute such documents and
instruments as the Disbursing Agent or the Reorganized Debtors, as the case may
be, require to evidence such Claim holder's release of such property or lien,
and if such holder refuses to execute appropriate documents or instruments, the
Debtors, the Estates or the Reorganized Debtors (as applicable) may, in their
discretion, file a copy of the Confirmation Order in the appropriate recording
office, which shall serve to release any Claim holder's rights in such
property; and (ii) on the Effective Date, all right, title and interest in such
property shall revert or be transferred to the respective Reorganized Debtors
or the Disbursing Agent, as applicable, free and clear of all Claims and
interests, including, without limitation, liens, escrows, charges, pledges,
encumbrances and/or security interests of any kind.

                  5.8.     Board of Directors.

                  (a) The initial Board of Directors of Reorganized AMF shall
consist of seven (7) members whose names shall be disclosed prior to the
Confirmation Hearing. Such initial Board of Directors shall be selected as
follows: the Senior Lenders shall select four (4) members; the Creditors'
Committee shall be authorized, but not required, to select one (1) member who
is reasonably satisfactory to the Debtors and the Senior Lenders; one (1)
member will be the Chief Executive Officer of Reorganized AMF; and one (1)
member will be an executive officer of Reorganized AMF who is not also the
Chief Executive Officer. At least two (2) Business Days prior to the
commencement of the Confirmation Hearing, the Debtors shall file with the
Bankruptcy Court a schedule setting forth the names of the persons to be
appointed as the directors of Reorganized AMF pursuant to this section 5.8. At
least three (3) Business Days prior to the commencement of the Confirmation
Hearing, Citibank, on behalf of the Senior Lenders, and the Creditors'
Committee will designate in writing to the Debtors' counsel the respective
members of the Board of Directors of Reorganized AMF whom they may be entitled
to designate pursuant to this section 5.8. If the member to be designated by
the Creditors' Committee has not been selected as of the date that is two (2)
Business Days prior to the commencement of the Confirmation Hearing, such
member shall be selected by the Debtors. The initial Board of Directors of
Reorganized AMF shall serve until the first annual meeting of the holders of
the New AMF Common Stock. Thereafter, the Board of Directors of Reorganized AMF
will be elected in accordance with the Amended Certificate of Incorporation and
Amended Bylaws and applicable nonbankruptcy law.

                  (b) The Board of Directors or other internal governing body,
as applicable, of each Reorganized Debtor other than Reorganized AMF shall
continue as in effect immediately prior to the Effective Date until removed or
replaced pursuant to applicable law or in accordance with such Reorganized
Debtor's corporate governance procedures.

                  (c) On the Effective Date, the officers of the Reorganized
Debtors shall be those officers in office immediately prior to the Effective
Date.

                  5.9.     Corporate Action.

                  (a) Reorganized AMF shall pay all fees incurred pursuant to
28 U.S.C. [double cent] 1930(a)(6) and file with the Bankruptcy Court and serve
on the United States Trustee monthly financial reports until such time as a
final decree is entered closing these Reorganization Cases or the Reorganization
Cases are converted or dismissed, or the Bankruptcy Court orders otherwise.

                  (b) On the Effective Date, Reorganized AMF shall file the
Amended Certificate of Incorporation and an amended certificate of
incorporation or other appropriate organization documents for each of the
Reorganized Debtors (other than Reorganized AMF) with the applicable Secretary
of State. Such amended certificates of incorporation shall prohibit the
issuance of nonvoting equity securities, as required by sections 1123(a) and
(b) of the Bankruptcy Code, subject to further amendment

                                      -19-

<PAGE>

as permitted by applicable law. The Amended Bylaws shall be deemed adopted by
the Board of Directors of Reorganized AMF as of the Effective Date.

                  5.10.    Dissolution of Certain Debtors.

                  Each Debtor that is not a Reorganized Debtor as a result of a
Combination Transaction or otherwise shall cease to exist as a separate entity
without any other action being required to effect such dissolution as of the
Effective Date or the date of any such Combination Transaction (as applicable).

                  5.11.    Authorization of Plan Securities.

                  On the Effective Date, Reorganized AMF is authorized to issue
the Plan Securities in accordance with sections 6.4 and 6.5 hereof, and to issue
the New Common Stock issuable upon the exercise of the New Warrants, without the
need for any further corporate action. Reorganized AMF shall use its reasonable
best efforts to have the New AMF Notes rated by Moody's Investors Service, Inc.
and Standard & Poor's Ratings Group within ninety (90) days of the Effective
Date.

                  5.12.    Registration Rights Agreement.

                  On the Effective Date, Reorganized AMF shall execute and
deliver the Registration Rights Agreement. Each holder of one million
(1,000,000) or more shares of the New AMF Common Stock will be entitled to
participate in the Registration Rights Agreement provided, that, such holder
executes and delivers to Reorganized AMF the Registration Rights Agreement no
later than thirty (30) days after the Effective Date.

         SECTION 6.        DISTRIBUTIONS

                  6.1.     Distribution Record Date.

                  As of the close of business on the Distribution Record Date,
the various transfer and claims registers for each of the Classes of Claims or
Equity Interests as maintained by the Debtors, their respective agents, or the
Indenture Trustees shall be deemed closed, and there shall be no further changes
in the record holders of any of the Claims or Equity Interests. The Debtors
shall have no obligation to recognize any transfer of the Claims or Equity
Interests occurring after the close of business on the Distribution Record Date.
The Debtors and the Indenture Trustees shall be entitled to recognize and deal
for all purposes hereunder only with those record holders stated on the transfer
ledgers as of the close of business on the Distribution Record Date, to the
extent applicable.

                  6.2.     Date of Distributions.

                  Unless otherwise provided herein, any distributions and
deliveries to be made hereunder shall be made on the Effective Date or as soon
thereafter as is practicable. In the event that any payment or act under the
Plan is required to be made or performed on a date that is not a Business Day,
then the making of such payment or the performance of such act may be completed
on or as soon as reasonably practicable after the next succeeding Business Day,
but shall be deemed to have been completed as of the required date.

                                      -20-

<PAGE>

                  6.3.     Satisfaction of Claims

                  Unless otherwise provided herein, any distributions and
deliveries to be made on account of Allowed Claims hereunder shall be in
complete settlement, satisfaction and discharge of such Allowed Claims.

                  6.4.     Distributions to Classes 2, 4, and 6.

                  (a) On the Effective Date, the Disbursing Agent shall
distribute the Senior Lender Distribution directly to, or issue in accordance
with instructions provided by, Citibank, as administrative agent under the
Senior Lender Agreements, for further distribution to individual holders of the
Senior Lender Claims in accordance with the Senior Lender Agreements.

                  (b) On the Initial Distribution Date, the Disbursing Agent
shall distribute the Unsecured Securities allocable to Allowed Claims held by
members of Classes 4 and 6. For the purpose of calculating the amount of
Unsecured Securities to be distributed to holders of Allowed Claims in Class 4
on the Initial Distribution Date, all Disputed Claims in Class 4 will be
treated as though such Claims will be Allowed Claims in the amounts asserted or
provided in the Estimation Order, as applicable.

                  (c) As and to the extent it is determined that the amount of
any Disputed Claim exceeds the amount of such Claim that is ultimately Allowed,
any Unsecured Securities reserved for issuance for such Disputed Claim on
account of such excess shall, pursuant to a Catch-up Distribution, be issued
and distributed pro rata to the other holders of Allowed Claims in such class.
The Disbursing Agent shall distribute to the holders of Disputed Claims that
become (in whole or in part) Allowed Claims in Classes 4 or 6 after the
Effective Date Unsecured Securities in an amount equal to the amount of the
Unsecured Securities that would have been distributed as of such date to such
holder in respect of such Allowed Claim had it been an Allowed Claim on the
Initial Distribution Date. The Disbursing Agent shall have the right to
determine, in its reasonable, sole discretion, the timing of the distributions
required to be made pursuant to this paragraph.

                  6.5.     Distribution to Class 5.

                  On the Final Distribution Date, the Disbursing Agent shall
distribute the Unsecured Securities that were reserved for issuance in the Tort
Claims Reserve, pro rata to the holders of Allowed Tort Claims, to the extent
each holder's Tort Claim is not an Insured Claim. Notwithstanding the value of
individual Allowed Tort Claims, in no event shall the Disbursing Agent or the
Reorganized Debtors distribute an aggregate amount of Unsecured Securities to
holders of Allowed Tort Claims in excess of that which was reserved for issuance
in the Tort Claims Reserve.

                  That portion of each Allowed Tort Claim that is an Insured
Claim shall be paid solely and exclusively: (i) from the proceeds of insurance
relating to such Insured Claim as and when such proceeds are received; or (ii)
by the applicable insurance carrier.

                  6.6.     De Minimis Distributions to Classes 4, 5 and 6.

                  Notwithstanding anything herein to the contrary, neither the
Debtors, the Reorganized Debtors nor the Disbursing Agent shall have any
obligation to make a distribution to a holder of an Allowed Claim in Class 4, 5
or 6 if such distribution otherwise would be less than one (1) New Series A
Warrant, one (1) New Series B Warrant or one (1) share of New AMF Common Stock.
The Debtors and the Reorganized Debtors reserve the right to distribute to such
holder such other consideration as may be directed by the Bankruptcy Court and
consented to by the Senior Lender Steering Committee.

                                      -21-

<PAGE>

                  6.7.     Disbursing Agent.

                  All distributions under the Plan initially shall be made by
the Disbursing Agent on or after the Effective Date as provided herein. The
Disbursing Agent shall not be required to give any bond or surety or other
security for the performance of its duties unless otherwise ordered by the
Bankruptcy Court; and, in the event that the Disbursing Agent is so otherwise
ordered, all costs and expenses of procuring any such bond or surety shall be
borne by the Reorganized Debtors.

                  6.8.     Rights and Powers of Disbursing Agent.

                  (a) Powers of the Disbursing Agent. The Disbursing Agent
shall be empowered to (i) effect all actions and execute all agreements,
instruments, and other documents necessary to perform its duties under the
Plan, (ii) make all distributions contemplated hereby, (iii) employ
professionals to represent it with respect to its responsibilities, and (iv)
exercise such other powers as may be vested in the Disbursing Agent by order of
the Bankruptcy Court, pursuant to the Plan, or as deemed by the Disbursing
Agent to be necessary and proper to implement the provisions hereof.

                  (b) Expenses Incurred on or After the Effective Date. Except
as otherwise ordered by the Bankruptcy Court, the amount of any reasonable fees
and expenses incurred by the Disbursing Agent on or after the Effective Date
(including, without limitation, taxes) and any reasonable compensation and
expense reimbursement claims (including, without limitation, reasonable
attorney and other professional fees and expenses) made by the Disbursing Agent
shall be paid in Cash by the Reorganized Debtors.

                  6.9.     Surrender of Instruments.

                  As a condition to receiving any distribution under the Plan,
each holder of a Claim represented by an instrument, other than a Senior Lender
Claim, including notes and certificates, must surrender such instrument held by
it to the Disbursing Agent or its designee accompanied by a letter of
transmittal substantially in the form set forth in the Plan Supplement. Any
holder that fails to (i) surrender such instrument or (ii) execute and deliver
an affidavit of loss and/or indemnity reasonably satisfactory to the Disbursing
Agent and furnish a bond in form, substance, and amount reasonably satisfactory
to the Disbursing Agent before the first anniversary of the Effective Date
shall be deemed to have forfeited all rights and Claims and may not participate
in any distribution under the Plan in respect of such Claim. Any distribution
so forfeited shall become the sole and exclusive property of Reorganized AMF.

                  6.10.  Delivery of Distributions to Classes 1, 2, 3, 4, 5,
                         and 6.

                  Subject to Bankruptcy Rule 9010, unless otherwise provided
herein, all distributions to any holder of an Allowed Claim other than a holder
of an Allowed Senior Lender Claim, shall be made at the address of such holder
as set forth on the Schedules filed with the Bankruptcy Court or on the books
and records of the Debtors or their agents, unless the Debtors have been
notified, in advance, in writing of a change of address, including, without
limitation, by the filing of a proof of claim or interest by such holder that
contains an address for such holder different from the address reflected on such
Schedules for such holder. All Cash distributions with respect to Allowed Senior
Lender Claims shall be made via wire transfer to Citibank, as administrative
agent under the Senior Lender Agreements. In the event that any distribution to
any holder is returned as undeliverable, no distribution to such holder shall be
made unless and until the Disbursing Agent has been notified of the then current
address of such holder, at which time or as soon as reasonably practicable
thereafter such distribution shall be made to such holder without interest;
provided, that, such distributions shall be deemed unclaimed property under
section 347(b) of the

                                      -22-

<PAGE>

Bankruptcy Code at the expiration of one (1) year from the later of (i) the
Effective Date and (ii) the date such holder's Claim is Allowed. After such
date, all unclaimed property or interest in property shall revert to
Reorganized AMF, and the Claim of any other holder to such property or interest
in property shall be discharged and forever barred. The Reorganized Debtors and
the Disbursing Agent shall have no obligation to attempt to locate any holder
of an Allowed Claim other than by reviewing their books and records (including
any proofs of claim filed against the Debtors).

                  6.11.    Manner of Payment Under Plan of Reorganization.

                  Except as specifically provided herein, at the option of the
Debtors, any Cash payment to be made hereunder may be made by a check or wire
transfer or as otherwise required or provided in applicable agreements.

                  6.12.    Fractional Shares and Fractional Warrants.

                  No fractional shares of New AMF Common Stock, fractional New
Series A Warrants, fractional New Series B Warrants or Cash in lieu thereof
shall be distributed. For purposes of distribution, fractional shares of New AMF
Common Stock or fractional New Warrants shall be rounded down to the next whole
number or zero, as applicable. Neither the Debtors, the Reorganized Debtors nor
the Disbursing Agent shall have any obligation to make a distribution that is
less than one (1) New Warrant. Fractional shares or New Warrants that are not
distributed in accordance with the Plan shall be returned to Reorganized AMF and
cancelled.

                  6.13.    Exemption from Securities Laws.

                  The issuance of the Plan Securities pursuant to the Plan shall
be exempt from any securities laws registration requirements to the fullest
extent permitted by section 1145 of the Bankruptcy Code.

                  6.14.    Setoffs.

                  Except with respect to the Senior Lender Claims, the Debtors
and the Reorganized Debtors may, but shall not be required to, set off against
any Claim (for purposes of determining the allowed amount of such Claim on which
distribution shall be made), including any Claim of an AMF Affiliate, any claims
of any nature whatsoever that any of the Debtors, the Estates or the Reorganized
Debtors may have against the holder of such Claim, but neither the failure to do
so nor the allowance of any Claim hereunder shall constitute a waiver or release
by the Debtors or Reorganized Debtors of any such Claim any of the Debtors, the
Estates, or the Reorganized Debtors may have against the holder of such Claim.

                  6.15.    Compromise of Controversies.

                  Pursuant to Bankruptcy Rule 9019, and in consideration for the
classification, distribution and other benefits provided under the Plan, the
provisions of this Plan shall constitute a good faith compromise and settlement
of all Claims and controversies resolved pursuant to the Plan, including,
without limitation, all Claims arising prior to the Commencement Date, whether
known or unknown, foreseen or unforeseen, asserted or unasserted, arising out
of, relating to or in connection with the business or affairs of or transactions
with the Debtors. The entry of the Confirmation Order shall constitute the
Bankruptcy Court's approval of each of the foregoing compromises or settlements,
and all other compromises and settlements provided for in the Plan of
Reorganization, and the Bankruptcy Court's findings shall constitute its
determination that such compromises and settlements are in the best

                                      -23-

<PAGE>

interests of the Debtors, the Estates, creditors and other parties in interest,
and are fair, equitable and within the range of reasonableness.

         SECTION 7.        PROCEDURES FOR DISPUTED CLAIMS

                  7.1.     Objections to Claims.

                  Other than with respect to Fee Claims, only the Reorganized
Debtors shall be entitled to object to Claims. Any objections to such Claims
shall be served and filed on or before the later of: (i) one hundred twenty
(120) days after the Effective Date; (ii) thirty (30) days after a request for
payment or proof of Claim is timely filed and properly served upon the Debtors;
or (iii) such other date as may be fixed by the Bankruptcy Court, whether fixed
before or after the date specified in clause (i), hereof. Notwithstanding any
authority to the contrary, an objection to a Claim shall be deemed properly
served on the claimant if the Debtors or the Reorganized Debtors effect service
in any of the following manners: (a) in accordance with Federal Rule of Civil
Procedure 4, as modified and made applicable by Bankruptcy Rule 7004; (b) to the
extent counsel for a claimant is unknown, by first class mail, postage prepaid,
on the signatory on the proof of claim or other representative identified in the
proof of claim or any attachment thereto; or (c) by first class mail, postage
prepaid, on any counsel that has appeared on the claimant's behalf in the
Reorganization Cases.

                  7.2.  Payments and Distributions with Respect to Disputed
                        Claims.

                  (a) General. Notwithstanding any other provision
hereof, if any portion of a Claim (other than a Fee Claim) is a
Disputed Claim, no payment or distribution provided hereunder shall
be made on account of such Claim unless and until such Disputed Claim
becomes an Allowed Claim.

                  (b) Tort Claims. Any Tort Claim as to which a proof of claim
was timely filed in the Reorganization Cases shall be determined and liquidated
in accordance with any applicable ADR Procedures. Any Tort Claim determined and
liquidated pursuant to (i) the ADR Procedures, (ii) an Order of the Bankruptcy
Court, or (iii) applicable nonbankruptcy law, which determination shall no
longer be appealable or subject to review, shall be deemed, to the extent
applicable and subject to any provision in the ADR Procedures to the contrary,
an Allowed Claim in Class 5 in such liquidated amount and satisfied from the
Tort Claims Reserve in accordance with the Plan (provided, that, to the extent
a Tort Claim is an Allowed Insured Claim, such Allowed Claim shall be paid from
the insurance proceeds available to satisfy such liquidated amount). Nothing
contained in this section 7.2 shall constitute or be deemed a waiver of any
Claim, right, or cause of action that the Debtors may have against any person
in connection with or arising out of any Tort Claim, including, without
limitation, any rights under section 157(b) of title 28 of the United States
Code.

                  7.3.     Preservation of Insurance.

                  The discharge and release of the Debtors as provided in this
Plan shall not diminish or impair the enforceability of any insurance policies
that may cover Claims against any Debtor or other Person.

                  7.4.     Distributions After Allowance.

                  After such time as a Disputed Claim (other than a Tort Claim)
becomes, in whole or in part, an Allowed Claim, the Disbursing Agent shall
distribute to the holder thereof the distributions, if any, to which such holder
is then entitled under the Plan in accordance with the provisions hereof. In

                                      -24-

<PAGE>

respect of Disputed Claims (other than Tort Claims) such distributions shall
be made prior to or on the Final Distribution Date.

                  7.5.     Estimations of Claims.

                  The Reorganized Debtors shall seek an order or orders from the
Bankruptcy Court, which may be the Estimation Order: (i) estimating the maximum
dollar amount of Allowed and Disputed Claims, inclusive of contingent and/or
unliquidated Claims in a particular Class; (ii) determining and fixing the Tort
Claims Estimate; and (iii) as determined to be necessary by the Debtors, setting
the amount of any particular Claim for final allowance purposes pursuant to
sections 105 and 502(c) of the Bankruptcy Code. This estimate shall be used to
calculate and fix distributions to holders of Allowed Claims. Such a procedure
may also be utilized for Administrative Expense Claims and/or Priority Tax
Claims. Disputed Claims reserves, including, but not limited to, the Tort Claims
Reserve, shall be calculated for each category of Claims as to which estimates
are sought. The Debtors shall calculate the Unsecured Claim Total, the Ratable
Class 4 Portion, the Ratable Class 5 Portion and the Ratable Class 6 Portion
prior to the Initial Distribution Date.

                  The Disbursing Agent shall not be obligated to physically
segregate and maintain separate accounts for reserves. Reserves may be merely
bookkeeping entries or accounting methodologies, which may be revised from time
to time, to enable the Disbursing Agent to determine: (i) available Unsecured
Securities; (ii) reserves; and (iii) amounts to be paid to parties in interest.

                  Until the Unsecured Securities that are held in any of the
Disputed Claims reserves are distributed in accordance with the Plan, such
securities shall be authorized but not issued.

                  7.6.     No Recourse.

                  Notwithstanding that the allowed amount of any particular
Disputed Claim is reconsidered under the applicable provisions of the Bankruptcy
Code and Bankruptcy Rules or is allowed in an amount for which after application
of the payment priorities established by this Plan there is insufficient value
to provide a recovery equal to that received by other holders of Allowed Claims
in the respective Class, no Claim holder shall have recourse against the
Disbursing Agent, the Debtors, the Creditors' Committee, the Senior Lenders, the
Reorganized Debtors, or any of their respective professional consultants,
attorneys, advisors, officers, directors or members or their successors or
assigns, or any of their respective property. However, nothing in the Plan shall
modify any right of a holder of a Claim under section 502(j) of the Bankruptcy
Code. THE BANKRUPTCY COURT'S ENTRY OF THE ESTIMATION ORDER MAY LIMIT THE
DISTRIBUTION TO BE MADE ON INDIVIDUAL DISPUTED CLAIMS, REGARDLESS OF THE AMOUNT
FINALLY ALLOWED ON ACCOUNT OF SUCH DISPUTED CLAIMS.

         SECTION 8.        EXECUTORY CONTRACTS AND UNEXPIRED LEASES

                  8.1.     General Treatment.

                  (a) All executory contracts and unexpired leases to which any
of the Debtors are a party are hereby rejected, except for any executory
contracts or unexpired leases that (i) have been assumed or rejected pursuant
to Final Order of the Bankruptcy Court, (ii) are designated, specifically or by
category, as a contract or lease to be assumed on the Schedule of Assumed
Contracts and Leases contained in the Plan Supplement, as such Schedule of
Assumed Contracts and Leases may be amended from time to time whether prior to
or after the Effective Date to include additional contracts and agreements, or
(iii) are the subject of a separate motion to assume or reject filed under
section 365 of the

                                      -25-

<PAGE>

Bankruptcy Code by the Debtors filed prior to the Effective Date. For purposes
hereof, each executory contract and unexpired lease that relates to the use or
occupancy of real property, whether (i) listed on the Schedule of Assumed
Contracts and Leases, (ii) previously assumed or rejected pursuant to Final
Order of the Bankruptcy Court, or (iii) rejected herein, shall include (a)
modifications, amendments, supplements, restatements, or other agreements made
directly or indirectly by any agreement, instrument, or other document that in
any manner affects such executory contract or unexpired lease, and (b)
executory contracts or unexpired leases appurtenant to the premises, excluding
any non-competition and like agreements but including all easements, licenses,
permits, rights, privileges, immunities, options, rights of first refusal,
powers, uses, usufructs, reciprocal easement agreements, vault, tunnel or
bridge agreements or franchises, and any other interests in real estate or
rights in rem relating to such premises to the extent any of the foregoing are
executory contracts or unexpired leases, unless any of the foregoing agreements
are otherwise specifically assumed or rejected.

                  (b) Subject to section 8.2 of this Plan, the executory
contracts and unexpired leases on the Schedule of Assumed Contracts and Leases
shall be assumed by the respective Debtors as indicated on such Schedule.
Except as may otherwise be ordered by the Bankruptcy Court, the Debtors shall
have the right to cause any assumed executory contract or unexpired lease to
vest in the Reorganized Debtor designated for such purpose by the Debtors.

                  8.2.     Cure of Defaults.

                  Except to the extent that different treatment has been agreed
to by the non-debtor party or parties to any executory contract or unexpired
lease to be assumed pursuant to the Schedule of Assumed Contracts and Leases,
the Debtors shall, pursuant to the provisions of sections 1123(a)(5)(G) and
1123(b)(2) of the Bankruptcy Code and consistent with the requirements of
section 365 of the Bankruptcy Code, within thirty (30) days after the Effective
Date, file and serve on parties to executory contracts or unexpired leases to be
assumed and other parties in interest a pleading with the Bankruptcy Court
listing the cure amounts of all executory contracts or unexpired leases to be
assumed. The parties to such executory contracts or unexpired leases to be
assumed by the Reorganized Debtors shall have fifteen (15) days from the date of
service to object to the cure amounts listed by the Debtors. If an objection is
filed with respect to an executory contract or unexpired lease, the Bankruptcy
Court shall hold a hearing to determine the amount of the disputed cure amount.
Notwithstanding the foregoing, at all times through the date that is five (5)
Business Days after the Bankruptcy Court enters an order resolving and fixing
the amount of a disputed cure amount, the Debtors shall have the right to reject
such executory contract or unexpired lease.

                  8.3.     Rejection Claims.

                  Except as otherwise ordered by the Bankruptcy Court, in the
event that the rejection of an executory contract or unexpired lease by any of
the Debtors pursuant to the Plan results in damages to the other party or
parties to such contract or lease, a Claim for such damages shall be forever
barred and shall not be enforceable against the Debtors, or their respective
properties or interests in property as agents, successors, or assigns, unless a
proof of claim has been filed with the Bankruptcy Court and served upon counsel
for the Debtors on or before the Bar Date.

                  8.4.  Employment Agreement for the Chief Executive Officer of
                        Reorganized AMF.

                  Reorganized AMF shall enter into the New Employment Agreement.

                                      -26-

<PAGE>

                  8.5.     Survival of the Debtors' Corporate Indemnities.

                  Any obligation of one or more of the Debtors, pursuant to
their corporate charters and bylaws or agreements entered into any time prior to
the Commencement Date, to indemnify a Representative with respect to all present
and future actions, suits, and proceedings against a Debtor or a Representative,
based upon any act or omission for or on behalf of a Debtor shall not be
discharged or impaired by confirmation or consummation of the Plan. Such
obligations shall be deemed and treated as executory contracts to be assumed by
the respective Debtor pursuant to the Plan, and shall continue as obligations of
the respective Reorganized Debtor.

         SECTION 9.        CONDITIONS PRECEDENT TO CONFIRMATION

                  9.1.     Condition Precedent.

                  Confirmation of the Plan is subject to the Debtors obtaining a
binding commitment for the Exit Facility.

                  9.2.     Waiver of Condition Precedent.

                  The Debtors shall have the right to waive the condition set
forth in section 9.1 at any time without leave of or notice to the Bankruptcy
Court and without any formal action other than proceeding with confirmation of
the Plan, subject to the consent of the Senior Lender Steering Committee, which
consent shall not be unreasonably withheld.

         SECTION 10.       CONDITIONS PRECEDENT TO THE EFFECTIVE DATE

                  10.1.    Conditions Precedent.

                  The occurrence of the Effective Date is subject to:

                  (a) the Exit Facility being executed and delivered consistent
                      with section 5.3 hereof;

                  (b) the Confirmation Order becoming a Final Order;

                  (c) the Plan Documents to be entered into (rather than
                      assumed) by the Reorganized Debtors being entered and
                      delivered;

                  (d)      the Consolidation Order being entered; and

                  (e) the Reorganized Debtors having sufficient Cash on hand
                      and/or a financing commitment to make timely
                      distributions under the Plan.

                  10.2.    Waiver of Conditions Precedent.

                  (a) The Debtors shall have the right to waive the condition
set forth in section 10.1(b) at any time without leave of or notice to the
Bankruptcy Court and without any formal action other than proceeding with
consummation of the Plan, subject to the consent of the Senior Lender Steering
Committee, which consent shall not be unreasonably withheld. Further, the stay
of the Confirmation Order, pursuant to Bankruptcy Rule 3020(e) shall be deemed
waived by entry of the Confirmation Order.

                                      -27-

<PAGE>

                  (b) If the Debtors perform such a waiver and consummation,
the Debtors' waiver of this condition will benefit from the "mootness
doctrine," and the act of consummation of the Plan will foreclose any ability
to challenge the Plan in court. The failure to satisfy or waive a condition may
be asserted by the Debtors regardless of the circumstances that give rise to
the failure of the condition to be satisfied (including, without limitation,
any act, action, failure to act, or inaction by the Debtors). The failure of
the Debtors to assert the non-satisfaction of any conditions will not be deemed
a waiver of any other rights under the Plan, and each such right will be deemed
an ongoing right that may be asserted or waived at any time or from time to
time.

         SECTION 11.       EFFECT OF CONFIRMATION

                  11.1.    Vesting of Assets.

                  On the Effective Date, pursuant to sections 1141(b) and (c) of
the Bankruptcy Code, except for leases and executory contracts that have not yet
been assumed or rejected (which leases and contracts shall be deemed vested when
and if assumed), all property of the Estates shall vest in one or more of the
Reorganized Debtors free and clear of all Claims, liens, encumbrances, charges,
and other interests, except as provided herein. Except as may otherwise be
ordered by the Bankruptcy Court, the Debtors shall have the right to cause any
property of any Estate to vest in the Reorganized Debtor designated for such
purpose by the Debtors. The Reorganized Debtors may operate their businesses and
may use, acquire, and dispose of property free of any restrictions of the
Bankruptcy Code or the Bankruptcy Rules and in all respects as if there were no
pending cases under any chapter or provision of the Bankruptcy Code, except as
provided herein.

                  11.2.  Discharge of Claims and Termination of Equity
                         Interests.

                  Except as otherwise provided herein or in the Confirmation
Order, the rights afforded in the Plan and the payments and distributions to be
made hereunder shall discharge all existing debts and Claims, and terminate all
Equity Interests of any kind, nature, or description whatsoever against or in
the Debtors or any of their assets or properties to the fullest extent permitted
by section 1141 of the Bankruptcy Code. Except as otherwise provided herein or
in the Confirmation Order, upon the Effective Date, all existing Claims against
the Debtors and Equity Interests in the Debtors, shall be, and shall be deemed
to be, discharged and terminated, and all holders of Claims and Equity Interests
shall be precluded and enjoined from asserting against the Reorganized Debtors,
or any of their assets or properties, any other or further Claim or Equity
Interest based upon any act or omission, transaction, or other activity of any
kind or nature that occurred prior to the Effective Date, whether or not such
holder has filed a proof of claim or proof of equity interest.

                  11.3.    Discharge of Debtors.

                  Upon the Effective Date and in consideration of the
distributions to be made hereunder, except as otherwise provided herein, each
holder (as well as any trustees and agents on behalf of each holder) of a Claim
or Equity Interest and any affiliate of such holder shall be deemed to have
forever waived, released, and discharged the Debtors, to the fullest extent
permitted by section 1141 of the Bankruptcy Code, of and from any and all
Claims, Equity Interests, rights, and liabilities that arose prior to the
Effective Date. Upon the Effective Date, all such persons shall be forever
precluded and enjoined, pursuant to sections 105, 524, 1141 of the Bankruptcy
Code, from prosecuting or asserting any such discharged Claim against or
terminated Equity Interest in the Debtors or Reorganized Debtors.

                                      -28-

<PAGE>

                  11.4.    Term of Injunctions or Stays.

                  Unless otherwise provided herein, all injunctions or stays
arising prior to the Confirmation Date in accordance with section 105 or 362 of
the Bankruptcy Code, or otherwise, and in existence on the Confirmation Date,
shall remain in full force and effect until the Effective Date.

                  11.5.    Injunction Against Interference With Plan.

                  Upon the entry of the Confirmation Order, all holders of
Claims and Equity Interests and other parties in interest, along with their
respective present or former affiliates, employees, agents, officers, directors,
or principals, shall be enjoined from taking any actions to interfere with the
implementation or consummation of the Plan of Reorganization.

                  11.6.    Exculpation.

                  Except with respect to obligations under the Plan and/or the
Plan Documents, neither the Debtors, the Disbursing Agent, the Senior Lender
Steering Committee, the Creditors' Committee, nor any of their respective
members, officers, directors, employees, agents, or professionals, solely in
their capacity as such, shall have or incur any liability to any holder of any
Claim or Equity Interest for any act or omission in connection with, or arising
out of, the Reorganization Cases, the confirmation of the Plan of
Reorganization, the consummation of the Plan of Reorganization, or the
administration of the Plan of Reorganization or property to be distributed
pursuant to the Plan of Reorganization, except for willful misconduct,
recklessness or gross negligence.

                  11.7.    Release of Claims.

                  As of the Effective Date, each Debtor, Reorganized Debtor and
Estate hereby waives, releases and discharges its Representatives from any
Claim arising from the beginning of time through the Confirmation Date related
to his or her acts or omissions to act (including, but not limited to, any
Claims arising out of any alleged fiduciary or other duty). To the full extent
permitted by applicable law, each holder of a Claim (whether or not Allowed)
against or Equity Interest in a Debtor shall be enjoined from commencing or
continuing any action, employment of process or act to collect, offset or
recover and shall be deemed to release any Claim against a Representative
arising from the beginning of time through the Confirmation Date related to
such Representative's acts or omissions to act (including, but not limited to,
any claims arising out of any alleged fiduciary or other duty).

                  11.8.    Injunction.

                  Except as otherwise provided in the Plan or the Confirmation
Order, as of the Confirmation Date, but subject to the occurrence of the
Effective Date, all Persons who have held, hold or may hold Claims against or
Equity Interests in any of the Debtors or the Estates are, with respect to any
such Claims or Interests, permanently enjoined from and after the Confirmation
Date from: (i) commencing, conducting or continuing in any manner, directly or
indirectly, any suit, action or other proceeding of any kind (including,
without limitation, any proceeding in a judicial, arbitral, administrative or
other forum) against or affecting the Debtors, the Estates or the Reorganized
Debtors or any of their property, or any direct or indirect transferee of any
property of, or direct or indirect successor in interest to, any of the
foregoing Persons, or any property of any such transferee or successor; (ii)
enforcing, levying, attaching (including, without limitation, any pre-judgment
attachment), collecting or otherwise recovering by any manner or means, whether
directly or indirectly, of any judgment, award, decree or order against the
Debtors, the Estates or the Reorganized Debtors or any of their property, or
any direct or indirect transferee of any property of, or direct or indirect
successor in interest to, any of the foregoing

                                      -29-

<PAGE>

Persons, or any property of any such transferee or successor; (iii) creating,
perfecting or otherwise enforcing in any manner, directly or indirectly, any
encumbrance of any kind against the Debtors, the Estates or the Reorganized
Debtors or any of their property, or any direct or indirect transferee of any
property of, or successor in interest to, any of the foregoing Persons; (iv)
asserting any right of setoff, subrogation, or recoupment of any kind, directly
or indirectly, against any obligation due the Debtors, the Estates or the
Reorganized Debtors, any of their property, or any direct or indirect
transferee of any property of, or successor in interest to, any of the
foregoing Persons; and (v) acting or proceeding in any manner, in any place
whatsoever, that does not conform to or comply with the provisions of the Plan
to the full extent permitted by applicable law. Nothing in this Plan should be
construed to preclude a governmental unit from pursuing any regulatory or
police action against any Debtor, Reorganized Debtor, or any other party to the
extent not prohibited by the automatic stay of section 362 of the Bankruptcy
Code or discharged or enjoined pursuant to Sections 524 or 1141(d) of the
Bankruptcy Code or other applicable law.

                  11.9.  Retention of Causes of Action/Reservation of Rights.

                  (a) Except as specifically provided herein, nothing contained
in the Plan or the Confirmation Order shall be deemed to be a waiver or the
relinquishment of any rights, Claims, or causes of action that the Debtors or
the Reorganized Debtors may have or which the Reorganized Debtors may choose to
assert on behalf of the Estates in accordance with any provision of the
Bankruptcy Code or any applicable nonbankruptcy law, including, without
limitation, (i) any and all Claims against any person or entity, to the extent
such person or entity asserts a crossclaim, counterclaim, and/or Claim for
setoff which seeks affirmative relief against the Debtors, the Reorganized
Debtors, their officers, directors, or representatives, (ii) the avoidance of
any transfer by or obligation of the Estates or the Debtors or the recovery of
the value of such transfer, or (iii) the turnover of any property of the
Estates.

                  (b) Nothing contained in the Plan or the Confirmation Order
shall be deemed to be a waiver or relinquishment of any claim, cause of action,
right of setoff, or other legal or equitable defense that the Debtors had
immediately prior to the Commencement Date, against or with respect to any
Claim left unimpaired by the Plan pursuant to sections 4.1 (a) or (b) hereof.
The Reorganized Debtors shall have, retain, reserve, and be entitled to assert
all such claims, causes of action, rights of setoff, or other legal or
equitable defenses which they or any of them had immediately prior to the
Commencement Date fully as if the Reorganization Cases had not been commenced,
and all legal and/or equitable rights of any Reorganized Debtor respecting any
Claim left unimpaired by the Plan of Reorganization may be asserted after the
Confirmation Date to the same extent as if the Reorganization Cases had not
been commenced.

         SECTION 12.       RETENTION OF JURISDICTION

                  On and after the Effective Date, the Bankruptcy Court shall
retain jurisdiction over all matters arising in, arising under, or related to
the Reorganization Cases for, among other things, the following purposes:

                  (a) To hear and determine applications for the assumption or
rejection of executory contracts or unexpired leases and the allowance of
Claims resulting therefrom.

                  (b) To determine any motion, adversary proceeding, avoidance
action, application, contested matter, and other litigated matter pending on or
commenced after the Confirmation Date.

                  (c) To ensure that distributions to holders of Allowed Claims
are accomplished as provided herein.

                                      -30-

<PAGE>

                  (d) To consider Claims or the allowance, classification,
priority, compromise, estimation, or payment of any Claim, Administrative
Expense Claim, or Equity Interest. (e) To enter, implement, or enforce such
orders as may be appropriate in the event the Confirmation Order is for any
reason stayed, reversed, revoked, modified, or vacated.

                  (f) To issue injunctions, enter and implement other orders,
and take such other actions as may be necessary or appropriate to restrain
interference by any person with the consummation, implementation, or
enforcement of the Plan of Reorganization, the Confirmation Order, or any other
order of the Bankruptcy Court.

                  (g) To hear and determine any application to modify the Plan
in accordance with section 1127 of the Bankruptcy Code, to remedy any defect or
omission or reconcile any inconsistency in the Plan, the Disclosure Statement,
or any order of the Bankruptcy Court, including the Confirmation Order, in such
a manner as may be necessary to carry out the purposes and effects thereof.

                  (h) To hear and determine all Fee Claims.

                  (i) To hear and determine disputes arising in connection with
the interpretation, implementation, or enforcement of the Plan, the
Confirmation Order, any transactions or payments contemplated hereby, or any
agreement, instrument, or other document governing or relating to any of the
foregoing.

                  (j) To take any action and issue such orders as may be
necessary to construe, enforce, implement, execute, and consummate the Plan,
including any release or injunction provisions set forth herein, or to maintain
the integrity of the Plan following consummation.

                  (k) To determine such other matters and for such other
purposes as may be provided in the Confirmation Order.

                  (l) To hear and determine matters concerning state, local,
and federal taxes in accordance with sections 346, 505, and 1146 of the
Bankruptcy Code.

                  (m) To hear and determine any other matters related hereto
and not inconsistent with the Bankruptcy Code and title 28 of the United States
Code.

                  (n) To enter a final decree closing the Reorganization Cases.

                  (o) To recover all assets of the Debtors and property of the
Estates, wherever located.

         SECTION 13.       MISCELLANEOUS PROVISIONS

                  13.1.    Exemption from Certain Transfer Taxes.

                  To the fullest extent permitted by applicable law, any
transfer or encumbrance of assets or any portion(s) of assets pursuant to, in
furtherance of, or in connection with the Plan shall constitute a "transfer
under a plan" within the purview of section 1146(c) of the Bankruptcy Code and
shall not be subject to transfer, stamp or similar taxes.

                                      -31-

<PAGE>

                  13.2.    Retiree Benefits.

                  On and after the Effective Date, pursuant to section
1129(a)(13) of the Bankruptcy Code, the Reorganized Debtors shall continue to
pay all retiree benefits of the Debtors (within the meaning of section 1114 of
the Bankruptcy Code), at the level established in accordance with section 1114
of the Bankruptcy Code, at any time prior to the Confirmation Date, for the
duration of the period for which the Debtors had obligated themselves to provide
such benefits. Nothing herein shall restrict the Reorganized Debtors' rights to
modify the terms and conditions of the retiree benefits as otherwise permitted
pursuant to the terms of the applicable plans or non-bankruptcy law.

                  13.3.    Critical Vendor and Other Payments.

                  Notwithstanding the contents of the Schedules, Claims listed
therein as undisputed, liquidated and not contingent shall be reduced by the
amount, if any, that was paid by one or more of the Debtors pursuant to orders
of the Bankruptcy Court, including, but not limited to, that certain Order (A)
Authorizing the Debtors to Pay Certain Prepetition Obligations to Certain
Critical Vendors and Service Providers, (B) Establishing Procedures to Obtain
Property Held by Such Entities and (C) Granting Related Relief, dated July 3,
2001. To the extent such payments are not reflected in the Schedules, such
Schedules are hereby amended and reduced to reflect that such payments were
made. Nothing in this Plan shall preclude the Reorganized Debtors from paying
Claims that the Debtors were authorized to pay pursuant to any Final Order
entered by the Bankruptcy Court prior to the Confirmation Date.

                  13.4.    Dissolution of Creditors' Committee.

                  The Creditors' Committee shall dissolve on the Effective Date.

                  13.5.    Substantial Consummation.

                  On the Effective Date, the Plan shall be deemed to be
substantially consummated pursuant to section 1101 of the Bankruptcy Code.

                  13.6.    Amendments.

                  (a) Plan of Reorganization Modifications. The Plan of
Reorganization may be amended, modified, or supplemented by the Debtors or the
Reorganized Debtors, with the prior consent of the Senior Lender Steering
Committee, which consent shall not be unreasonably withheld, in the manner
provided for by section 1127 of the Bankruptcy Code or as otherwise permitted
by law without additional disclosure pursuant to section 1125 of the Bankruptcy
Code, except as the Bankruptcy Court may otherwise direct. In addition, after
the Confirmation Date, so long as such action does not materially and adversely
affect the treatment of holders of Claims or Equity Interests pursuant to the
Plan, the Debtors may institute proceedings in the Bankruptcy Court to remedy
any defect or omission or reconcile any inconsistencies in the Plan of
Reorganization or the Confirmation Order, with respect to such matters as may
be necessary to carry out the purposes and effects of the Plan.

                  (b) Other Amendments. Prior to the Effective Date, the
Debtors may make appropriate technical adjustments and modifications to the
Plan without further order or approval of the Bankruptcy Court, with the prior
consent of the Senior Lender Steering Committee, which consent shall not be
unreasonably withheld, provided that such technical adjustments and
modifications do not adversely affect in a material way the treatment of
holders of Claims or Equity Interests.

                                      -32-

<PAGE>

                 13.7.    Revocation or Withdrawal of the Plan.

                  The Debtors reserve the right to revoke or withdraw the Plan
prior to the Effective Date. If the Debtors take such action, the Plan of
Reorganization shall be deemed null and void.

                  13.8.    Cramdown.

                  In the event a Class votes against the Plan, and the Plan is
not withdrawn as provided above, the Debtors reserve the right to effect a "cram
down" of the Plan pursuant to section 1129(b) of the Bankruptcy Code. Further,
to the extent necessary, the terms of this Plan may be modified by the Debtors
to reallocate value from all Classes at and below the level of the objecting
Class to all impaired senior Classes until such impaired senior Classes are paid
in accordance with the absolute priority rule of section 1129(b) of the
Bankruptcy Code. The Debtors may make such modifications or amendments to this
Plan, with the prior consent of the Senior Lender Steering Committee, and such
modifications or amendments shall be filed with the Bankruptcy Court and served
on all parties in interest entitled to receive notice of the hearing on the
confirmation of this Plan prior to such hearing. To the extent any Class is
deemed to reject the Plan by virtue of the treatment provided to such Class, the
Plan shall be "crammed down" on the claimants within such Class pursuant to
section 1129(b) of the Bankruptcy Code.

                  13.9.    Confirmation Order.

                  The Confirmation Order shall, and is hereby deemed to, ratify
all transactions effected by the Debtors during the period commencing on the
Commencement Date and ending on the Confirmation Date except for any acts
constituting willful misconduct, gross negligence, recklessness or fraud.

                  13.10.   Severability.

                  If, prior to the entry of the Confirmation Order, any term or
provision of the Plan is held by the Bankruptcy Court to be invalid, void, or
unenforceable, the Bankruptcy Court, at the request of the Debtors, shall have
the power to alter and interpret such term or provision to make it valid or
enforceable to the maximum extent practicable, consistent with the original
purpose of the term or provision held to be invalid, void, or unenforceable, and
such term or provision shall then be applicable as altered or interpreted.
Notwithstanding any such holding, alteration, or interpretation, the remainder
of the terms and provisions of the Plan will remain in full force and effect and
will in no way be affected, impaired, or invalidated by such holding,
alteration, or interpretation. The Confirmation Order shall constitute a
judicial determination and shall provide that each term and provision of the
Plan, as it may have been altered or interpreted in accordance with the
foregoing, is valid and enforceable pursuant to its terms.

                  13.11.   Governing Law.

                  Except to the extent that the Bankruptcy Code or other federal
law is applicable, or to the extent an Exhibit hereto or a Plan Document
provides otherwise, the rights, duties, and obligations arising under the Plan
and the Plan Documents shall be governed by, and construed and enforced in
accordance with, the laws of the State of New York, without giving effect to the
principles of conflict of laws thereof.

                  13.12.   Time.

                  In computing any period of time prescribed or allowed by the
Plan, unless otherwise set forth herein or determined by the Bankruptcy Court,
the provisions of Bankruptcy Rule 9006 shall apply.

                                      -33-

<PAGE>

13.13.   Notices.

                  All notices, requests, and demands to or upon the Debtors or
the Reorganized Debtors to be effective shall be in writing (including by
facsimile transmission) and, unless otherwise provided herein, shall be deemed
to have been duly given or made when only actually delivered or, in the case of
notice by facsimile transmission, when received and telephonically confirmed,
addressed as follows:

                           AMF Bowling Worldwide, Inc.
                           8100 AMF Drive
                           Mechanicsville, Virginia 23111
                           Attn:  Christopher Caesar
                           Senior Vice President,
                           Chief Financial Officer and Treasurer
                           Telephone:  (804) 730-4400
                           Telecopier:  (804) 559-6276

                                    - and -

                           Willkie Farr & Gallagher
                           787 Seventh Avenue
                           New York, New York  10019-6099
                           Attn:  Marc Abrams, Esq.
                           Telephone:  (212) 728-8000
                           Telecopier:  (212) 728-8111

                                    - and -

                           McGuireWoods LLP
                           One James Center
                           901 East Cary Street
                           Richmond, Virginia 23219
                           Attn:  Dion Hayes, Esq.
                           Telephone:  (804) 775-1000
                           Telecopier:  (804) 775-1061

Dated:   Richmond, Virginia
         January 31, 2002

                                             Respectfully submitted,

                                             AMF BOWLING WORLDWIDE, INC.

                                             By: /s/ Christopher F. Caesar
                                                 ------------------------------
                                                 Christopher F. Caesar,
                                                 Chief Financial Officer, Senior
                                                 Vice President and Treasurer

                                      -34-

<PAGE>

                                             AMF GROUP HOLDINGS INC.

                                             By: /s/ Christopher F. Caesar
                                                 ------------------------------
                                                 Christopher F. Caesar,
                                                 Chief Financial Officer, Senior
                                                 Vice President and Treasurer

                                             AMF BOWLING HOLDINGS INC.

                                             By: /s/ Christopher F. Caesar
                                                 ---------------------------
                                                 Christopher F. Caesar,
                                                 President, Assistant
                                                 Secretary and Treasurer

                                      -35-

<PAGE>

                                             AMF BOWLING PRODUCTS, INC.

                                             By: /s/ Christopher F. Caesar
                                                 ---------------------------
                                                 Christopher F. Caesar,
                                                 Senior Vice President,
                                                 Assistant Secretary and
                                                 Treasurer

                                             AMF BOWLING CENTERS HOLDINGS INC.

                                             By: /s/ Christopher F. Caesar
                                                 ---------------------------
                                                 Christopher F. Caesar,
                                                 President, Assistant
                                                 Secretary and Treasurer

                                             AMF WORLDWIDE BOWLING CENTERS
                                             HOLDINGS INC.

                                             By: /s/ Christopher F. Caesar
                                                 ---------------------------
                                                 Christopher F. Caesar,
                                                 President, Assistant
                                                 Secretary and Treasurer

                                             AMF BOWLING CENTERS, INC.

                                             By: /s/ Christopher F. Caesar
                                                 ---------------------------
                                                 Christopher F. Caesar,
                                                 President, Assistant
                                                 Secretary and Treasurer

                                             AMF BEVERAGE COMPANY OF OREGON,
                                             INC.

                                             By: /s/ Christopher F. Caesar
                                                 ---------------------------
                                                 Christopher F. Caesar,
                                                 President, Assistant
                                                 Secretary and Treasurer

                                             AMF BEVERAGE COMPANY OF W. VA.,
                                             INC.

                                             By: /s/ Christopher F. Caesar
                                                 ---------------------------
                                                 Christopher F. Caesar,
                                                 President, Assistant
                                                 Secretary and Treasurer

                                             BUSH RIVER CORPORATION

                                             By: /s/ Christopher F. Caesar
                                                 ---------------------------
                                                 Christopher F. Caesar
                                                 President, Assistant
                                                 Secretary and Treasurer

                                      -36-

<PAGE>

                                             KING LOUIE LENEXA, INC.

                                             By: /s/ Christopher F. Caesar
                                                 ---------------------------
                                                 Christopher F. Caesar,
                                                 President, Assistant
                                                 Secretary and Treasurer

                                             300, INC.

                                             By: /s/ Christopher F. Caesar
                                                 ---------------------------
                                                 Christopher F. Caesar,
                                                 Authorized Person

                                             AMERICAN RECREATION CENTERS,
                                             INC.

                                             By: /s/ Christopher F. Caesar
                                                 ---------------------------
                                                 Christopher F. Caesar,
                                                 President, Assistant
                                                 Secretary and Treasurer

                                             MICHAEL JORDAN GOLF
                                             COMPANY, INC.

                                             By: /s/ Christopher F. Caesar
                                                 ---------------------------
                                                 Christopher F. Caesar,
                                                 President, Assistant
                                                 Secretary and Treasurer

                                             MJG - O'HARE, INC.

                                             By: /s/ Christopher F. Caesar
                                                 ---------------------------
                                                 Christopher F. Caesar,
                                                 President, Assistant
                                                 Secretary and Treasurer

                                             AMF BOWLING CENTERS (AUST.)
                                             INTERNATIONAL INC.

                                             By: /s/ Christopher F. Caesar
                                                 ---------------------------
                                                 Christopher F. Caesar,
                                                 President, Assistant
                                                 Secretary and Treasurer

                                             AMF BOWLING CENTERS (HONG KONG)
                                             INTERNATIONAL INC.

                                             By: /s/ Christopher F. Caesar
                                                 ---------------------------
                                                 Christopher F. Caesar,
                                                 President, Assistant
                                                 Secretary and Treasurer

                                      -37-

<PAGE>

                                             AMF BOWLING CENTERS INTERNATIONAL
                                             INC.

                                             By: /s/ Christopher F. Caesar
                                                 --------------------------
                                                 Christopher F. Caesar,
                                                 President, Assistant
                                                 Secretary and Treasurer

                                             AMF BCO-UK ONE, INC.

                                             By: /s/ Christopher F. Caesar
                                                 ---------------------------
                                                 Christopher F. Caesar,
                                                 President, Assistant
                                                 Secretary and Treasurer

                                             AMF BCO-UK TWO, INC.

                                             By: /s/ Christopher F. Caesar
                                                 ---------------------------
                                                 Christopher F. Caesar,
                                                 President, Assistant
                                                 Secretary and Treasurer

                                             AMF BCO-FRANCE ONE, INC.

                                             By: /s/ Christopher F. Caesar
                                                 ---------------------------
                                                 Christopher F. Caesar,
                                                 President, Assistant
                                                 Secretary and Treasurer

                                             AMF BCO-FRANCE TWO, INC.

                                             By: /s/ Christopher F. Caesar
                                                 ---------------------------
                                                 Christopher F. Caesar,
                                                 President, Assistant
                                                 Secretary and Treasurer

                                             AMF BOWLING CENTERS SPAIN INC.

                                             By: /s/ Christopher F. Caesar
                                                 ---------------------------
                                                 Christopher F. Caesar,
                                                 President and Managing Director

                                             AMF BOWLING MEXICO HOLDINGS,
                                             INC.

                                             By: /s/ Christopher F. Caesar
                                                 ---------------------------
                                                 Christopher F. Caesar,
                                                 President, Assistant
                                                 Secretary and Treasurer

                                      -38-

<PAGE>

                                             BOLICHES AMF, INC.

                                             By: /s/ Christopher F. Caesar
                                                 ---------------------------
                                                 Christopher F. Caesar,
                                                 President, Assistant
                                                 Secretary and Treasurer

MCGUIREWOODS LLP
Co-counsel for Debtors and
  Debtors in Possession
One James Center
901 East Cary Street
Richmond, Virginia 23219
(804) 775-1000

By: /s/ Dion Hayes
    --------------------------------
    Dion Hayes (VSB# 34304)
    A Member of the Firm

          -and-

WILLKIE FARR & GALLAGHER
Co-counsel for Debtors and
  Debtors in Possession
787 Seventh Avenue
New York, New York  10019-6099
(212) 728-8000

By: /s/ Marc Abrams
    --------------------------------
    Marc Abrams
    A Member of the Firm

                                      -39-

<PAGE>

                                    EXHIBIT A

                               REORGANIZED DEBTORS

AMF Bowling Worldwide, Inc.
AMF Bowling Products, Inc.
AMF Bowling Centers Holdings Inc.
AMF Bowling Centers, Inc.
AMF Beverage Company of Oregon, Inc.
AMF Beverage Company of W. Va., Inc.
Bush River Corporation
King Louie Lenexa, Inc.
300, Inc.
American Recreation Centers, Inc.
Michael Jordan Golf Company, Inc.
MJG - O'Hare, Inc.
AMF Bowling Centers (Aust.) International Inc.
AMF Bowling Centers (Hong Kong) International Inc.
AMF Bowling Centers International Inc.
AMF Bowling Centers Spain Inc.

<PAGE>

                                EXHIBIT B

               DOCUMENTS CONTAINED WITHIN PLAN SUPPLEMENT

1.   The Amended Bylaws

2.   The Amended Certificate of Incorporation

3.   The New Senior Subordinated Note Indenture

4.   The Form of New AMF Note

5.   The Registration Rights Agreement

6.   The New Series A Warrant Agreement

7.   The New Series B Warrant Agreement

8.   The Form of New Series A Warrant

9.   The Form of New Series B Warrant

10.  The Commitment Letter for the Exit Facility

11.  The New Employment Agreement

12.  The New Management Incentive Plan

13.   The Form of the Other Secured Note

14.  The Form of the Other Secured Claim Loan Agreement

15.  The Form of Letter of Transmittal for Surrender of Instruments

16.  The Schedule of Assumed Contracts and Leases

17.  The Schedule of Combination Transactions

18.  The Debtors' Form 10-Q Relating to the Periods Ended September 30, 2001<PAGE>

                                                                    Exhibit 10.1

                         SENIOR SECURED CREDIT AGREEMENT

          This SENIOR SECURED CREDIT AGREEMENT is dated as of February 28, 2002
and entered into by and among AMF BOWLING WORLDWIDE, INC., a Delaware
corporation ("Company"), AMF BOWLING PRODUCTS, INC., a Virginia corporation
("AMF Products"), AMF BOWLING CENTERS HOLDINGS INC., a Delaware corporation
("Bowling"), AMF WORLDWIDE BOWLING CENTERS HOLDINGS INC., a Delaware corporation
("AMF Worldwide"), AMERICAN RECREATION CENTERS, INC., a California corporation
("Recreation"), AMF BOWLING HOLDINGS INC., a Delaware corporation ("AMF
Holdings"), and AMF BOWLING CENTERS, INC., a Virginia corporation ("Centers",
together with Company, AMF Products, Bowling, AMF Worldwide, Recreation and AMF
Holdings, the "Borrowers"), THE FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE
PAGES HEREOF (each individually referred to herein as a "Lender" and
collectively as "Lenders"), and BANKERS TRUST COMPANY ("BTCo"), as syndication
agent for Lenders (in such capacity, "Syndication Agent"), as documentation
agent for Lenders (in such capacity, "Documentation Agent") and as
administrative agent for Lenders (in such capacity, "Administrative Agent" or
"Agent").

                                 R E C I T A L S

          WHEREAS, pursuant to the Confirmation Order (this, and other
initially capitalized terms used but not defined in these Recitals, being used
as defined in Section 1.1 below), Borrowers and the Debtor Subsidiaries shall
have been reorganized in and have emerged from the Chapter 11 Cases on the
Effective Date; and

          WHEREAS, upon this Agreement becoming effective in accordance
with its terms, the Approved Plan of Reorganization will become effective in
accordance with its terms; and

          WHEREAS, Borrowers desire that Lenders extend certain credit
facilities to Borrowers, the proceeds of which will be used, among other things,
to make certain cash payments with respect to certain prepetition claims in the
Chapter 11 Cases, to refinance the DIP Credit Facility and to replace
outstanding letters of credit thereunder and under other credit facilities, to
refinance certain other Indebtedness and for working capital and other general
corporate purposes of Borrowers and their Subsidiaries, all in accordance with
the terms and provisions herein; and

           WHEREAS, Borrowers have agreed to secure their Obligations
hereunder and under the other Loan Documents by granting to Administrative
Agent, on behalf of Lenders, among other things, a First Priority Lien on
substantially all of their real, personal and mixed property located in the
United States and Puerto Rico other than the Excluded Assets, including a pledge
of all of the capital stock and other ownership interests of their Domestic
Subsidiaries, 66% of the capital stock and other ownership interests of their
first tier Foreign Subsidiaries; and

         WHEREAS, each Domestic Subsidiary that is not a Borrower or an
Immaterial Subsidiary has agreed to guarantee the Obligations hereunder and
under the other Loan Documents and to secure its guaranty by granting to
Administrative Agent, on behalf of Lenders,

<PAGE>

among other things, a First Priority Lien on substantially all of its real,
personal and mixed property located in the United States and Puerto Rico other
than the Excluded Assets, including a pledge of all of the capital stock and
other ownership interests of its Domestic Subsidiaries and 66% of the capital
stock and other ownership interests of its first tier Foreign Subsidiaries.

              NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, each of the Borrowers,
Lenders, Syndication Agent, Documentation Agent and Administrative Agent agree
as follows:

Section 1.    DEFINITIONS

       1.1    Certain Defined Terms.
              ---------------------

              The following terms used in this Agreement shall have the
following meanings:

              "Account" means, with respect to any Person, all present and
future rights of such Person to payment for goods sold or leased or for services
rendered (except those evidenced by instruments or chattel paper), whether now
existing or hereafter arising and wherever arising, and whether or not they have
been earned by performance.

              "Additional Mortgaged Property" has the meaning set forth in
subsection 6.9.

              "Additional Mortgages" has the meaning set forth in subsection
6.9.

              "Adjusted Eurodollar Rate" means, for any Interest Rate
Determination Date with respect to an Interest Period for a Eurodollar Rate
Loan, the rate per annum obtained by dividing (i) the offered quotation (rounded
upward to the nearest 1/16 of one percent) to first class banks in the interbank
Eurodollar market by BTCo for U.S. dollar deposits of amounts in same day funds
comparable to the principal amount of the Eurodollar Rate Loan of BTCo for which
the Adjusted Eurodollar Rate is then being determined with maturities comparable
to such Interest Period as of approximately 12:00 Noon (New York City time) on
such Interest Rate Determination Date by (ii) a percentage equal to 100% minus
the stated maximum rate of all reserve requirements (including, without
limitation, any marginal, emergency, supplemental, special or other reserves)
applicable on such Interest Rate Determination Date to any member bank of the
Federal Reserve System in respect of "Eurocurrency liabilities" as defined in
Regulation D (or any successor category of liabilities under Regulation D).

              "Administrative Agent" or "Agent" means BTCo in its capacity as
Administrative Agent hereunder and under the Loan Documents and also means and
includes any successor Administrative Agent appointed pursuant to subsection
9.5.

              "Affected Lender" has the meaning assigned to that term in
subsection 2.6C.

              "Affected Loans" has the meaning assigned to that term in
subsection 2.6C.

              "Affiliate", as applied to any Person, means any other Person
directly or indirectly controlling, controlled by, or under common control with,
that Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms

                                        2

<PAGE>

"controlling", "controlled by" and "under common control with"), as applied to
any Person, means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of that Person, whether
through the ownership of voting securities or by contract or otherwise.

          "Agents" means Administrative Agent, Syndication Agent, Documentation
Agent and Arranger.

          "Agreement" means this Senior Secured Credit Agreement dated as of
February 28, 2002, as it may be amended, supplemented or otherwise modified from
time to time.

          "AMF Group" means AMF Group Holdings Inc. a Delaware corporation, to
be dissolved on or about the Effective Date.

          "Annualized" means (i) with respect to the Fiscal Quarter of the
Borrowers ending June 30, 2002, the applicable amount for such Fiscal Quarter
multiplied by four, (ii) with respect to the Fiscal Quarter of Borrowers ending
September 30, 2002, the applicable amount for such Fiscal Quarter and the
immediately preceding Fiscal Quarter multiplied by two, and (iii) with respect
to the Fiscal Quarter of Borrowers ending December 31, 2002, the applicable
amount for such Fiscal Quarter and the immediately preceding two Fiscal Quarters
multiplied by one and one-third.

          "Approved Fund" means a Fund that is administered or managed by (i) a
Lender, (ii) an Affiliate of a Lender or (iii) an entity or an Affiliate of an
entity that administers or manages a Lender.

          "Approved Plan of Reorganization" means the Plan of Reorganization in
the form, without material modification, amendment or revision, approved by
Administrative Agent pursuant to subsection 4.1O.

          "Arranger" means Deutsche Banc Alex. Brown Inc., in its capacity as
sole book runner and lead arranger.

          "Asset Sale" means the sale by the Borrowers or any of their
Subsidiaries to any Person other than Borrowers or any of their wholly-owned
Subsidiaries of (i) any of the stock of any of the Borrowers' Subsidiaries,
except pursuant to the Restructuring Transactions, (ii) substantially all of the
assets of any division or line of business of the Borrowers or any of their
Subsidiaries, or (iii) any other assets (whether tangible or intangible) of
Borrowers or any of their Subsidiaries (other than (a) inventory, worn out or
obsolete or surplus equipment sold in the ordinary course of business, (b)
sales, assignments, transfers or dispositions of Accounts in the ordinary course
of business for purposes of collection, (c) any of the sales of assets described
on Schedule 7.7, (d) any of the sales, transfers or other dispositions of assets
permitted in subsections 7.7(i) or 7.7(vi), and (e) any such other assets to the
extent that the aggregate value of such assets sold in any single transaction or
related series of transactions is equal to $1,000,000 or less).

          "Assignment Agreement" means an Assignment Agreement in substantially
the form of Exhibit X-A or Exhibit X-B annexed hereto.
            -----------    -----------

                                        3

<PAGE>

          "Australian Dollar" and the sign "$A" means the lawful money of
Australia.

          "Backstop Letters of Credit" has the meaning assigned that term in
subsection 3.1D.

          "Bankruptcy Code" means Title 11 of the United States Code entitled
"Bankruptcy", as now and hereafter in effect, or any successor statute.

          "Bankruptcy Court" means the United States Bankruptcy Court for the
Eastern District of Virginia, Richmond Division.

          "Base Rate" means, at any time, the higher of (i) the Prime Rate or
(ii) the rate which is 1/2 of 1% in excess of the Federal Funds Effective Rate.
Any change in the Base Rate due to a change in the Prime Rate or the Federal
Funds Effective Rate shall be effective on the effective date of such change.

          "Base Rate Loans" means Loans bearing interest at rates determined by
reference to the Base Rate as provided in subsection 2.2A.

          "Base Rate Margin" means the margin over the Base Rate used in
determining the rate of interest of Base Rate Loans pursuant to subsection 2.2A.

          "Blocked Account Agreement" means the Blocked Account Agreement
executed and delivered by a Concentration Bank, Administrative Agent and the
applicable Loan Party, substantially in the form of Exhibit XII annexed hereto,
                                                    -----------
as such Blocked Account Agreement may be amended, supplemented or otherwise
modified from time to time, and "Blocked Account Agreements" means all such
Blocked Account Agreements, collectively.

          "Borrowers" has the meaning assigned to that term in the introduction
to this Agreement.

          "Borrowers' Agent" means the Company, pursuant to the appointment made
by Borrowers in subsection 2.15.

          "BTCo Account" means a deposit account maintained by Administrative
Agent at BTCo into which the applicable Concentration Banks are instructed to
transfer funds on deposit in the applicable Concentration Accounts pursuant to
the terms of the applicable Blocked Account Agreement, if any.

          "BT Concentration Account" means a deposit account under the exclusive
dominion and control of Administrative Agent that is maintained by any Loan
Party with BTCo.

          "Business Day" means (i) for all purposes other than as covered by
clause (ii) below, any day excluding Saturday, Sunday and any day which is a
legal holiday under the laws of the State of New York or is a day on which
banking institutions located in such state are authorized or required by law or
other governmental action to close, and (ii) with respect to all notices,
determinations, fundings and payments in connection with the Eurodollar Rate or
any Eurodollar Rate Loans, any day that is a Business Day described in clause
(i) above and that is

                                        4

<PAGE>

also a day for trading by and between banks in Dollar deposits in the applicable
interbank eurodollar market.

          "Capital Lease", as applied to any Person, means any lease of any
property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person.

          "Capital Stock" means the capital stock or other equity interests of a
Person.

          "Cash" means money, currency or a credit balance in a Deposit Account.

          "Cash Equivalents" means, as at any date of determination, (i) United
States Dollars, (ii) securities issued or directly and fully guaranteed or
insured by the United States of America or any agency or instrumentality thereof
(provided that the full faith and credit of the United States of America is
pledged in support thereof, or, with respect to any Foreign Subsidiary, an
equivalent obligation of the government of the country in which such Foreign
Subsidiary transacts business, in each case maturing within one year after such
date, (iii) time deposits and certificates of deposit, including eurodollar time
deposits, and, with respect to any Foreign Subsidiary, time deposits in the
currency of any country in which such Foreign Subsidiary transacts business, of
any commercial bank organized in the United States having capital and surplus in
excess of $100,000,000 or, with respect to any Foreign Subsidiary, a commercial
bank organized under the laws of any other country in which such Foreign
Subsidiary transacts business having total assets in excess of $100,000,000 (or
its foreign currency equivalent) with a maturity date not more than one year
from the date of acquisition, (iv) repurchase obligations with a term of not
more than seven days for underlying securities of the types described in clauses
(i) and (ii) above entered into with any bank meeting the qualifications
specified in clause (iii) above and organized in the United States, (v) direct
obligations issued by any state of the United States of America or any political
subdivision of any state or any public instrumentality thereof maturing within
90 days after the date of acquisition thereof and, at the time of acquisition,
having one of the two highest ratings obtainable from either Standard & Poor's
Corporation or Moody's Investors Service, Inc. (or, if at any time neither
Standard & Poor's Corporation nor Moody's Investors Service, Inc. shall be
rating such obligations, then from such other nationally recognized rating
service reasonably acceptable to the Administrative Agent), (vi) commercial
paper issued by the parent corporation of any commercial bank organized in the
United States having capital and surplus in excess of $100,000,000 or, with
respect to any Foreign Subsidiary, a commercial bank organized under the laws of
any other country in which such Foreign Subsidiary transacts business having
total assets in excess of $100,000,000 (or its foreign currency equivalent), and
commercial paper issued by others having one of the two highest ratings
obtainable from either Standard & Poor's Corporation or Moody's Investors
Services, Inc. (or, if at any time neither Standard & Poor's Corporation nor
Moody's Investors Service, Inc. shall be rating such obligations, then from such
other nationally recognized rating services reasonably acceptable to the
Administrative Agent) and in each case maturing within one year after the date
of acquisition, (vii) overnight bank deposits and bankers' acceptances at any
commercial bank organized in the United States having capital and surplus in
excess of $100,000,000, or with respect to any Foreign Subsidiary, a commercial
bank organized under the laws of any other country in which such Foreign
Subsidiary transacts business having total assets in excess of $100,000,000 (or
its foreign

                                        5

<PAGE>

currency equivalent), (ix) deposits available for withdrawal on demand with
commercial banks organized in the United States having capital and surplus in
excess of $50,000,000 or, with respect to any Foreign Subsidiary, a commercial
bank organized under the laws of any other country in which such Foreign
Subsidiary transacts business having total assets in excess of $50,000,000 (or
its foreign currency equivalent); and (x) investments in money market funds
substantially all of whose assets comprise securities of the types described in
clauses (i) through (ix).

          "Cash Management System" means the system of Deposit Accounts,
Concentration Accounts and procedures for the collection and deposit of payments
in respect of Accounts of Borrowers and their Subsidiaries that is generally
described in Schedule 1.1A annexed hereto, or such other cash management system
as is reasonably satisfactory to Administrative Agent.

          "Change in Control" means any of the following, after the Effective
Date: (i) any Person (other than any member of the Initial Exempted Group),
either individually or acting in concert with one or more other Persons, shall
have acquired beneficial ownership, directly or indirectly, of Securities of the
Company (or other Securities convertible into such Securities) representing 33%
or more of the combined voting power of all Securities of the Company entitled
to vote in the election of members of the Board of Directors of the Company,
other than Securities having such power only by reason of the happening of a
contingency; (ii) any member of the Initial Exempted Group, either individually
or acting in concert with one or more other Persons, shall have acquired
beneficial ownership, directly or indirectly, of Securities of the Company (or
other Securities convertible into such Securities) representing 50% or more of
the combined voting power of all Securities of the Company entitled to vote in
the election of members of the Board of Directors of the Company, other than
Securities having such power only by reason of the happening of a contingency;
(iii) during any period of two consecutive years, individuals who at the
beginning of such period constituted the Board of Directors of Company (together
with any new directors whose election by such Board of Directors or whose
nomination for election by the shareholders of Company was approved by a vote of
a simple majority of the directors then still in office who were either
directors at the beginning of such period or whose election for nomination was
previously so approved or any new directors who were nominated to serve on
behalf of the Initial Exempted Group) cease for any reason to constitute a
majority of the Board of Directors of the Company then in office; or (iv) the
occurrence of any "Change of Control" as defined in the New Subordinated
Indenture. As used herein, the term "beneficially own" or "beneficial ownership"
shall have the meaning set forth in the Exchange Act and the rules and
regulations promulgated thereunder.

          "Chapter 11 Cases" means the cases filed by Borrowers and certain of
their Subsidiaries under Chapter 11 of the Bankruptcy Code in the Bankruptcy
Court on July 2, 2001 and jointly administered under Case No. 01-61119 (DHA).

          "Class" as applied to Lenders, means each of the following two classes
of Lenders: (i) Lenders having Revolving Loan Exposure and (ii) Lenders having
Term Loan Exposure.

          "Closing Date" means the date on which the initial Loans are made.

                                        6

<PAGE>

          "Closing Date Consolidated Adjusted EBITDA" shall have the meaning
assigned to such term in Section 4.1P.

          "Closing Date Mortgaged Property" has the meaning set forth in
subsection 4.1L.

          "Closing Date Mortgages" has the meaning set forth in subsection 4.1M.

          "Collateral" means, collectively, all of the real, personal and mixed
property (including Capital Stock and other ownership interests) in which Liens
are purported to be granted pursuant to the Collateral Documents as security for
the Obligations, provided that the Collateral shall not include the Excluded
Assets.

          "Collateral Account" has the meaning assigned to that term in the
Security Agreement.

          "Collateral Documents" means the Security Agreement, the Mortgages and
all other instruments or documents delivered by any Loan Party pursuant to this
Agreement or any of the other Loan Documents in order to grant to Administrative
Agent, on behalf of Lenders, a Lien on any real, personal or mixed property of
that Loan Party as security for the Obligations.

          "Commercial Letter of Credit" means any letter of credit or similar
instrument issued for the purpose of providing the primary payment mechanism in
connection with the purchase of any materials, goods or services by the
Borrowers or any of their Subsidiaries in the ordinary course of business of the
Borrowers or such Subsidiary.

          "Commitments" means the commitments of Lenders to make Loans as set
forth in subsection 2.1A.

          "Company" has the meaning assigned to that term in the introduction to
this Agreement.

          "Compliance Certificate" means a certificate substantially in the form
of Exhibit VII annexed hereto.
   -----------

          "Concentration Accounts" means a Deposit Account, including any
Deposit Accounts identified as concentration accounts in Schedule 1.1B annexed
hereto and such other Deposit Accounts as may be established by any of the
Borrowers or any of their Domestic Subsidiaries as concentration accounts with
the consent of the Administrative Agent, under the exclusive dominion and
control of Administrative Agent that is maintained by any of the Borrowers or
their Domestic Subsidiaries with a Bank pursuant to a Blocked Account Agreement.
Any Deposit Accounts maintained by a Borrower for payroll or similar purposes
shall not be a Concentration Account.

          "Concentration Bank" means First Union National Bank, Citibank, N.A.
or any commercial bank satisfactory to Administrative Agent at which any Loan
Party maintains a Concentration Account.

                                        7

<PAGE>

          "Confidential Information Memorandum" means that certain Confidential
Memorandum dated as of February, 2002 relating to the financing contemplated by
this Agreement.

          "Confirmation Order" means that certain Order Confirming Debtors'
Second Amended Second Modified Joint Plan of Reorganization under Chapter 11 of
the Bankruptcy Code entered by the Bankruptcy Court on February 1, 2002 in the
Chapter 11 Cases, without modification, revision or amendment.

          "Consolidated Capital Expenditures" means, for any period, the sum of
the aggregate of all expenditures (whether paid in cash or other consideration
or accrued as a liability and including that portion of Capital Leases which is
capitalized on the consolidated balance sheet of Borrowers and their
Subsidiaries) by Borrowers and their Subsidiaries during that period that, in
conformity with GAAP, are included in "additions to property, plant or
equipment" or comparable items reflected in the consolidated statement of cash
flows of Borrowers and their Subsidiaries. For purposes of this definition, the
purchase price of equipment that is purchased simultaneously with the trade-in
of existing equipment or with insurance proceeds shall be included in
Consolidated Capital Expenditures only to the extent of the gross amount of such
purchase price less the credit granted by the seller of such equipment for the
equipment being traded in at such time or the amount of such proceeds, as the
case may be.

          "Consolidated Cash Interest Expense" means, for any period,
Consolidated Interest Expense for such period excluding, however, any interest
expense not payable in Cash (including amortization of discount and amortization
of debt issuance costs).

          "Consolidated EBITDA" means, for any period, the sum, without
duplication, of the amounts for such period of (i) Consolidated Net Income, (ii)
Consolidated Interest Expense, (iii) provisions for taxes based on income, (iv)
total depreciation expense, (v) total amortization expense, (vi) extraordinary
or non-recurring losses related to a closure of Facilities or disposition of
assets to the extent such losses are deducted from Consolidated Net Income,
(vii) (a) pre-emergence reorganization expenses (in conformity with GAAP) and
(b) post-emergence reorganization expenses (in conformity with GAAP as it would
apply if such expenses were incurred pre-emergence), related to the Chapter 11
Cases for the applicable period not to exceed the amount for such period as set
forth in Schedule 1.1C annexed hereto, and (viii) other non-cash items (other
than any such non-cash item to the extent it represents an accrual of or reserve
for cash expenditures in any future period), but only, in the case of clauses
(ii)-(vii), to the extent deducted in the calculation of Consolidated Net
Income, less the sum of all extraordinary and non-recurring gains realized by
        ----
Borrowers and their Subsidiaries related to a closure of Facilities or
disposition of assets to the extent included in Consolidated Net Income and
other non-cash items added in the calculation of Consolidated Net Income (other
than any such non-cash item to the extent it will result in the receipt of cash
payments in any future period), all of the foregoing as determined on a
consolidated basis for Borrowers and their Subsidiaries in conformity with GAAP;
provided, however, that "Consolidated EBITDA" for the Fiscal Quarters set forth
--------
below shall be the correlative amounts indicated:

                                        8

<PAGE>

                 Fiscal Quarter              Consolidated EBITDA

           Third Quarter, 2001                  $16,000,000

           Fourth Quarter, 2001                 $36,200,000

          "Consolidated Excess Cash Flow" means, for any period, an amount (if
positive) equal to (i) the sum, without duplication, of the amounts for such
period of the cash flow from operations of Borrowers and their Subsidiaries on a
consolidated basis determined in accordance with GAAP minus (ii) the sum,
without duplication, of the amounts for such period of (a) voluntary and
scheduled repayments of Consolidated Total Debt (excluding repayments of
Revolving Loans except to the extent the Revolving Loan Commitments are
permanently reduced in connection with such repayments), (b) Consolidated
Capital Expenditures (net of any proceeds of any related financings with respect
to such expenditures) and (c) amounts (whether positive or negative) derived
from changes in foreign currency exchange rates during such period.

          "Consolidated Interest Coverage Ratio" means, at the last day of any
Fiscal Quarter, the ratio computed for the period consisting of such Fiscal
Quarter and each of the three immediately preceding Fiscal Quarters of (i)
Consolidated EBITDA to (ii) Consolidated Cash Interest Expense; provided that
for the Fiscal Quarters ending June 30, 2002, September 20, 2002 and December
31, 2002, Consolidated Cash Interest Expense shall be determined on an
Annualized basis.

          "Consolidated Interest Expense" means, for any period, total interest
expense (including that portion attributable to Capital Leases in accordance
with GAAP and capitalized interest) of Borrowers and their Subsidiaries on a
consolidated basis with respect to all outstanding Indebtedness of Borrowers and
their Subsidiaries, including all commissions, discounts and other fees and
charges owed with respect to letters of credit and bankers' acceptance financing
and net costs under Interest Rate Agreements, but excluding, however, any
amounts referred to in subsection 2.3 payable to Administrative Agent and
Lenders on or before the Closing Date.

          "Consolidated Leverage Ratio" means, as at the last day of any Fiscal
Quarter, the ratio of (a) Consolidated Total Debt as at such date to (b)
Consolidated EBITDA for the consecutive four Fiscal Quarters ending on the last
day of the most recently ended Fiscal Quarter.

          "Consolidated Net Income" means, for any period, the net income (or
loss) of Borrowers and their Subsidiaries on a consolidated basis for such
period taken as a single accounting period determined in conformity with GAAP;
provided that there shall be excluded (i) the income (or loss) of any Person
--------
(other than a Subsidiary of Borrowers) in which any other Person (other than
Borrowers or any of their Subsidiaries) has a joint interest, except to the
extent of the amount of dividends or other distributions actually paid to
Borrowers or any of their Subsidiaries by such Person during such period, (ii)
the income (or loss) of any Person accrued prior to the date it becomes a
Subsidiary of either of the Borrowers or is merged into or consolidated with
either of the Borrowers or any of their Subsidiaries or that Person's assets are

                                        9

<PAGE>

acquired by Borrowers or any of their Subsidiaries, (iii) the income of any
Subsidiary of the Borrowers to the extent that the declaration or payment of
dividends or similar distributions by that Subsidiary of that income is not at
the time permitted by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to that Subsidiary, (iv) any after-tax gains or losses attributable
to asset sales or returned surplus assets of any Pension Plan, and (v) (to the
extent not included in clauses (i) through (iv) above) any net extraordinary
gains or net non-cash extraordinary losses.

          "Consolidated Total Debt" means, as at any date of determination, the
aggregate stated balance sheet amount of all Indebtedness of Borrowers and their
Subsidiaries, determined on a consolidated basis in accordance with GAAP.

          "Contingent Obligation", as applied to any Person, means any direct or
indirect liability, contingent or otherwise, of that Person (i) with respect to
any Indebtedness, lease, dividend or other obligation of another if the primary
purpose or intent thereof by the Person incurring the Contingent Obligation is
to provide assurance to the obligee of such obligation of another that such
obligation of another will be paid or discharged, or that any agreements
relating thereto will be complied with, or that the holders of such obligation
will be protected (in whole or in part) against loss in respect thereof, (ii)
with respect to any letter of credit issued for the account of that Person or as
to which that Person is otherwise liable for reimbursement of drawings, or (iii)
under Hedge Agreements. Contingent Obligations shall include (a) the direct or
indirect guaranty, endorsement (otherwise than for collection or deposit in the
ordinary course of business), co-making, discounting with recourse or sale with
recourse by such Person of the obligation of another, (b) the obligation to make
take-or-pay or similar payments if required regardless of non-performance by any
other party or parties to an agreement, and (c) any liability of such Person for
the obligation of another through any agreement (contingent or otherwise) (1) to
purchase, repurchase or otherwise acquire such obligation or any security
therefor, or to provide funds for the payment or discharge of such obligation
(whether in the form of loans, advances, stock purchases, capital contributions
or otherwise) or (2) to maintain the solvency or any balance sheet item, level
of income or financial condition of another if, in the case of any agreement
described under subclauses (1) or (2) of this sentence, the primary purpose or
intent thereof is as described in the preceding sentence. The amount of any
Contingent Obligation shall be equal to the amount of the obligation so
guaranteed or otherwise supported or, if less, the amount to which such
Contingent Obligation is specifically limited.

          "Contractual Obligation", as applied to any Person, means any
provision of any Security issued by that Person or of any material indenture,
mortgage, deed of trust, contract, undertaking, agreement or other instrument to
which that Person is a party or by which it or any of its properties is bound or
to which it or any of its properties is subject.

          "Currency Agreement" means any foreign exchange contract or currency
swap agreement or any futures contract, option contract, synthetic cap or other
similar agreement or arrangement relating to currency exposure to which
Borrowers or any of their Subsidiaries is a party.

          "Daily Funding Lender" means Agent in its individual capacity as a
Lender hereunder.

                                       10

<PAGE>

          "Debtor Subsidiaries" means each of the Subsidiaries of Company (other
than such Subsidiaries that are Borrowers) that was a debtor in the Chapter 11
Cases but excluding such Subsidiaries who have been merged or dissolved out of
existence in the Restructuring Transactions.

          "Deposit Account" means a demand, time, savings, passbook or like
account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate of
deposit.

          "DIP Credit Facility" means that certain Senior Secured Priming
Debtor-In-Possession Credit Agreement, dated as of July 5, 2001, entered into by
and among Company, certain guarantors including AMF Group and the Debtor
Subsidiaries and Citibank, N.A., as administrative agent for certain banks,
financial institutions and Lenders, as may be amended to the Effective Date,
under section 364(c)(1), (2) and (3), and Section 364(d)(1) of the Bankruptcy
Code.

          "Disclosure Statement" means that certain Disclosure Statement for
Debtors' Second Amended Joint Plan of Reorganization under Chapter 11 of the
Bankruptcy Code, dated November 7, 2001 as the same may be amended, supplemented
or restated from time to time with the prior written approval of Agent.

          "Dollars" and the sign "$" mean the lawful money of the United States
of America.

          "Domestic Subsidiary" means any Subsidiary of Borrowers that is
incorporated or organized under the laws of the United States of America, any
state thereof or in the District of Columbia.

          "Effective Date" means and includes the date on which the Plan of
Reorganization is consummated and the transactions contemplated therein are
consummated, including without limitation, the occurrence of the Closing Date.

          "Eligible Assignee" means (i) any Lender, any Affiliate of any Lender
and any Approved Fund of any Lender; and (ii) (a) a commercial bank organized
under the laws of the United States or any state thereof; (b) a savings and loan
association or savings bank organized under the laws of the United States or any
state thereof; (c) a commercial bank organized under the laws of any other
country or a political subdivision thereof; provided that (1) such bank is
                                            --------
acting through a branch or agency located in the United States or (2) such bank
is organized under the laws of a country that is a member of the Organization
for Economic Cooperation and Development or a political subdivision of such
country; and (d) any other entity that is an "accredited investor" (as defined
in Regulation D under the Securities Act) that extends credit or buys loans as
one of its businesses including insurance companies, mutual funds and lease
financing companies; provided that neither Borrowers nor any Affiliate of
                     --------
Borrowers shall be an Eligible Assignee.

          "Employee Benefit Plan" means any "employee benefit plan" as defined
in Section 3(3) of ERISA which is or was maintained or contributed to by
Borrowers, any of their Subsidiaries or any of their respective ERISA
Affiliates.

                                       11

<PAGE>

          "Environmental Claim" means any investigation, notice, notice of
violation, claim, action, suit, proceeding, demand, abatement order or other
order or directive (conditional or otherwise), by any Government Authority or
any claim, action, suit, proceeding or demand by any other Person, arising (i)
pursuant to or in connection with any actual or alleged violation of any
Environmental Law, (ii) in connection with any Hazardous Materials or any actual
or alleged Hazardous Materials Activity, or (iii) in connection with any actual
or alleged damage, injury, threat or harm to health, safety, natural resources
or the environment.

          "Environmental Laws" means any and all current or future statutes,
ordinances, orders, rules, regulations, judgments, Governmental Authorizations,
or any other requirements of any Government Authority relating to (i)
environmental matters, including those relating to any Hazardous Materials
Activity, (ii) the generation, use, storage, transportation or disposal of
Hazardous Materials, or (iii) occupational safety and health, industrial
hygiene, land use or the protection of human, plant or animal health or welfare,
as applicable to Borrowers or any of their Subsidiaries or any Facility.

          "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor thereto.

          "ERISA Affiliate", as applied to any Person, means (i) any corporation
that is a member of a controlled group of corporations within the meaning of
Section 414(b) of the Internal Revenue Code of which that Person is a member;
(ii) any trade or business (whether or not incorporated) that is a member of a
group of trades or businesses under common control within the meaning of Section
414(c) of the Internal Revenue Code of which that Person is a member; and (iii)
any member of an affiliated service group within the meaning of Section 414(m)
or (o) of the Internal Revenue Code of which that Person, any corporation
described in clause (i) above or any trade or business described in clause (ii)
above is a member. Any former ERISA Affiliate of a Person or any of its
Subsidiaries shall continue to be considered an ERISA Affiliate of such Person
or such Subsidiary within the meaning of this definition with respect to the
period such entity was an ERISA Affiliate of such Person or such Subsidiary and
with respect to liabilities arising after such period for which such Person or
such Subsidiary could be liable under the Internal Revenue Code or ERISA.

          "ERISA Event" means (i) a "reportable event" within the meaning of
Section 4043 of ERISA and the regulations issued thereunder with respect to any
Pension Plan (excluding those for which the provision for 30-day notice to the
PBGC has been waived by regulation); (ii) the failure to meet the minimum
funding standard of Section 412 of the Internal Revenue Code with respect to any
Pension Plan (whether or not waived in accordance with Section 412(d) of the
Internal Revenue Code) or the failure to make by its due date a required
installment under Section 412(m) of the Internal Revenue Code with respect to
any Pension Plan or the failure to make any required contribution to a
Multiemployer Plan; (iii) the provision by the administrator of any Pension Plan
pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate such
plan in a distress termination described in Section 4041(c) of ERISA; (iv) the
withdrawal by Borrowers, any of their Subsidiaries or any of their respective
ERISA Affiliates from any Pension Plan with two or more contributing sponsors or
the termination of any such Pension Plan resulting in liability pursuant to
Section 4063 or 4064 of ERISA; (v) the institution by the PBGC of proceedings to
terminate any Pension Plan, or the occurrence of any

                                       12

<PAGE>

event or condition which might constitute grounds under ERISA for the
termination of, or the appointment of a trustee to administer, any Pension Plan;
(vi) the imposition of liability on Borrowers, any of their Subsidiaries or any
of their respective ERISA Affiliates pursuant to Section 4062(e) or 4069 of
ERISA or by reason of the application of Section 4212(c) of ERISA; (vii) the
withdrawal of Borrowers, any of their Subsidiaries or any of their respective
ERISA Affiliates in a complete or partial withdrawal (within the meaning of
Sections 4203 and 4205 of ERISA) from any Multiemployer Plan if there is any
potential liability therefor, or the receipt by Borrowers, any of their
Subsidiaries or any of their respective ERISA Affiliates of notice from any
Multiemployer Plan that it is in reorganization or insolvency pursuant to
Section 4241 or 4245 of ERISA, or that it intends to terminate or has terminated
under Section 4041A or 4042 of ERISA; (viii) the assertion of a material claim
(other than routine claims for benefits) against any Employee Benefit Plan other
than a Multiemployer Plan or the assets thereof, or against Borrowers, any of
their Subsidiaries or any of their respective ERISA Affiliates in connection
with any Employee Benefit Plan; (ix) receipt from the Internal Revenue Service
of notice of the failure of any Pension Plan (or any other Employee Benefit Plan
intended to be qualified under Section 401(a) of the Internal Revenue Code) to
qualify under Section 401(a) of the Internal Revenue Code, or the failure of any
trust forming part of any Pension Plan to qualify for exemption from taxation
under Section 501(a) of the Internal Revenue Code; or (x) the imposition of a
Lien pursuant to Section 401(a)(29) or 412(n) of the Internal Revenue Code or
pursuant to ERISA with respect to any Pension Plan.

          "Euro" means the single currency of participating member states of the
European Monetary Union.

          "Eurodollar Rate Loans" means Loans bearing interest at rates
determined by reference to the Adjusted Eurodollar Rate as provided in
subsection 2.2A.

          "Eurodollar Rate Margin" means the margin over the Adjusted Eurodollar
Rate used in determining the rate of interest of Eurodollar Rate Loans pursuant
to subsection 2.2A.

          "Event of Default" means each of the events and conditions set forth
as such in Section 8.

          "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute.

          "Exchange Rate" means, on any date when an amount expressed in a
currency other than Dollars is to be determined with respect to any Letter of
Credit, the nominal rate of exchange quoted or used by the Administrative Agent
in the New York exchange market for the sale of such currency in exchange for
Dollars, expressed as a number of units of such currency per one Dollar.

          "Excluded Assets" means (i) any real, personal or mixed property not
located in the United States of America or Puerto Rico (other than inventory and
accounts receivable of Borrowers and the Subsidiary Guarantors), (ii) any real,
personal or mixed property owned by any Foreign Subsidiary, (iii) any funds held
for the benefit of bowling leagues or customer deposits in connection with the
operation of the Borrowers' and their Subsidiaries' business, and

                                       13

<PAGE>

(iv) the property described in Schedule 1.1D. For the avoidance of doubt, the
66% of the capital stock of Foreign Subsidiaries pledged pursuant to the
Security Agreement and inventory and accounts receivable of Company and the
Subsidiary Guarantors, wherever located, shall not constitute Excluded Assets.

          "Existing Bond Debt" means (i) the 10 7/8% Series A and B Senior
Subordinated Notes Due 2006 issued by AMF Group Inc. (now AMF Bowling Worldwide,
Inc.) pursuant to an Indenture dated March 21, 1996 between IBJ Schroder Bank &
Trust Company, as trustee, and AMF Group Inc. and (ii) the 12 1/4% Series B
Senior Subordinated Discount Notes issued by AMF Group Inc. pursuant to an
Indenture dated as of March 21, 1996 between American Bank National Association,
as trustee, and AMF Group Inc.

          "Existing Credit Facilities" means the Indebtedness extended under (i)
the Prepetition Credit Facility and (ii) the DIP Credit Facility.

          "Existing Letters of Credit" means letters of credit outstanding on
the Closing Date issued under the Existing Credit Facilities, in an aggregate
amount not to exceed $7,500,000, as listed on Schedule 3.1D attached hereto.

          "Facilities" means any and all real property (including all buildings,
fixtures or other improvements located thereon) now, hereafter or heretofore
owned, leased, operated or used by Borrowers or any of their Subsidiaries or any
of their respective predecessors or Affiliates.

          "Federal Funds Effective Rate" means, for any period, a fluctuating
interest rate 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 which is a Business Day, the average of the quotations for such day on such
transactions received by Administrative Agent from three Federal funds brokers
of recognized standing selected by Administrative Agent.

          "Financial Plan" has the meaning assigned to that term in subsection
6.1(xii).

          "First Priority" means, with respect to any Lien purported to be
created in any Collateral pursuant to any Collateral Document, that (i) such
Lien is perfected and has priority over any other Lien on such Collateral (other
than Liens permitted pursuant to subsection 7.2A), to the extent such perfection
and priorities may be achieved under Article 9 of the UCC, applicable real
estate laws or other applicable federal or state laws of the United States and
Puerto Rico (other than any such laws requiring a certificate of title) and (ii)
such Lien is the only Lien (other than Liens permitted pursuant to subsection
7.2A) to which such Collateral is subject.

          "Fiscal Quarter" means a fiscal quarter of any Fiscal Year.

          "Fiscal Year" means the fiscal year of Borrowers and their
Subsidiaries, which ends on December 31/st/ of each calendar year.

                                       14

<PAGE>

          "Flood Hazard Property" means a Closing Date Mortgaged Property or an
Additional Mortgaged Property with one or more buildings located in an area
designated by the Federal Emergency Management Agency as having special flood or
mud slide hazards.

          "Foreign Plan" means any pension, employment benefit or deferred
compensation plan maintained by Borrowers or any of their Subsidiaries that is
mandated or governed by any law, rule or regulation of any Government Authority
other than the United States of America, any state thereof or any other
political subdivision thereof.

          "Foreign Subsidiary" means any Subsidiary of Borrowers that is not a
Domestic Subsidiary.

          "Fund" means any Person (other than a natural Person) that is (or will
be) engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.

          "Funding and Payment Office" means (i) the office of Administrative
Agent located at 90 Hudson Street, Jersey City, New Jersey 07302 or (ii) such
other office of Administrative Agent as may from time to time hereafter be
designated as such in a written notice delivered by Administrative Agent to
Borrowers and each Lender.

          "Funding Date" means the date of the funding of a Loan.

          "GAAP" means, subject to the limitations on the application thereof
set forth in subsection 1.2, generally accepted accounting principles set forth
in opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession, in each case as the same are applicable to the
circumstances as of the date of determination.

          "Governing Body" means the board of directors or other body having the
power to direct or cause the direction of the management and policies of a
Person that is a corporation, partnership, trust or limited liability company.

          "Government Authority" means any political subdivision or department
thereof, any other governmental or regulatory body, commission, central bank,
board, bureau, organ or instrumentality or any court, in each case whether
federal, state, local or foreign.

          "Governmental Authorization" means any permit, license, registration,
authorization, plan, directive, consent, order or consent decree of or from, or
notice to, any Government Authority.

          "Hazardous Materials" means (i) any chemical, material or substance at
any time defined as or included in the definition of "hazardous substances",
"hazardous wastes", "hazardous materials", "extremely hazardous waste", "acutely
hazardous waste", "radioactive waste", "biohazardous waste", "pollutant", "toxic
pollutant", "contaminant", "restricted hazardous waste", "infectious waste",
"toxic substances", or any other term or expression

                                       15

<PAGE>

intended to define, list or classify substances by reason of properties harmful
to health, safety or the indoor or outdoor environment (including harmful
properties such as ignitability, corrosivity, reactivity, carcinogenicity,
toxicity, reproductive toxicity, "TCLP toxicity" or "EP toxicity" or words of
similar import under any applicable Environmental Laws); (ii) any oil,
petroleum, petroleum fraction or petroleum derived substance; (iii) any drilling
fluids, produced waters and other wastes associated with the exploration,
development or production of crude oil, natural gas or geothermal resources;
(iv) any flammable substances or explosives; (v) any radioactive materials; (vi)
any asbestos-containing materials; (vii) urea formaldehyde foam insulation;
(viii) electrical equipment which contains any oil or dielectric fluid
containing polychlorinated biphenyls; (ix) pesticides; and (x) any other
chemical, material or substance, exposure to which is prohibited, limited or
regulated by any Government Authority pursuant to any Environmental Law or which
may or could pose a hazard to the health and safety of the owners, occupants or
any Persons in the vicinity of any Facility or to the indoor or outdoor
environment.

          "Hazardous Materials Activity" means any past, current, proposed or
threatened activity, event or occurrence involving any Hazardous Materials,
including the use, manufacture, possession, storage, holding, presence,
existence, location, Release, threatened Release, discharge, placement,
generation, transportation, processing, construction, treatment, abatement,
removal, remediation, disposal, disposition or handling of any Hazardous
Materials, and any corrective action or response action with respect to any of
the foregoing.

          "Hedge Agreement" means an Interest Rate Agreement or a Currency
Agreement designed to hedge against fluctuations in interest rates or currency
values, respectively.

          "Immaterial Subsidiaries" means, (a) as of the Closing Date, the
Subsidiaries of Borrowers listed on Schedule 1.1E and (b) Subsidiaries of
Borrowers formed or acquired after the Closing Date designated by Borrowers'
Agent which in the aggregate for all such Subsidiaries (i) do not collectively
own assets with an aggregate value greater than 2% of the total assets owned by
the Borrowers and their Subsidiaries, taken as a whole and (ii) do not generate
aggregate revenues greater than $1,000,000 in any Fiscal Year, or as otherwise
may be approved by Administrative Agent in its sole discretion.

          "Indebtedness", as applied to any Person, means (i) all indebtedness
for borrowed money, (ii) that portion of obligations with respect to Capital
Leases that is properly classified as a liability on a balance sheet in
conformity with GAAP, (iii) notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for borrowed money,
(iv) any obligation owed for all or any part of the deferred purchase price of
property or services (excluding trade account payables incurred in the ordinary
course of business and any such obligations incurred under ERISA), which
purchase price is (a) due more than six months from the date of incurrence of
the obligation in respect thereof or (b) evidenced by a note or similar written
instrument, and (v) all indebtedness secured by any Lien on any property or
asset owned or held by that Person regardless of whether the indebtedness
secured thereby shall have been assumed by that Person or is nonrecourse to the
credit of that Person. Obligations under Interest Rate Agreements and Currency
Agreements constitute (1) in the case of Hedge Agreements, Contingent
Obligations, and (2) in all other cases, Investments, and in neither case
constitute Indebtedness.

                                       16

<PAGE>

          "Indemnified Liabilities" has the meaning assigned to that term in
subsection 10.3.

          "Indemnitee" has the meaning assigned to that term in subsection 10.3.

          "Initial Exempted Group" means any Person, which immediately after
implementation of the Approved Plan of Reorganization beneficially owns at least
10% of the outstanding stock of the Company, or any Affiliate of such Person.

          "Intellectual Property" means all patents, trademarks, tradenames,
copyrights, technology, software, know-how and processes used in or necessary
for the conduct of the business of Borrowers and their Subsidiaries as currently
conducted that are material to the condition (financial or otherwise), business
or operations of Borrowers and their Subsidiaries, taken as a whole.

          "Interest Payment Date" means (i) with respect to any Base Rate Loan,
the first Business Day of each calendar month, commencing on the first such date
to occur after the Closing Date, and (ii) with respect to any Eurodollar Rate
Loan, the last day of each Interest Period applicable to such Loan; provided
                                                                    --------
that in the case of each Interest Period of longer than three months "Interest
Payment Date" shall also include each date that is three months after the
commencement of such Interest Period.

          "Interest Period" has the meaning assigned to that term in subsection
2.2B.

          "Interest Rate Agreement" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other similar
agreement or arrangement to which Borrowers or any of their Subsidiaries is a
party.

          "Interest Rate Determination Date", with respect to any Interest
Period, means the second Business Day prior to the first day of such Interest
Period.

          "Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter, and any successor
statute.

          "Investment" means (i) any direct or indirect purchase or other
acquisition by Borrowers or any of their Subsidiaries of, or of a beneficial
interest in, any Securities of any other Person (including any Subsidiary of
Borrowers), (ii) any direct or indirect redemption, retirement, purchase or
other acquisition for value, by any Subsidiary of Borrowers from any Person
other than Borrowers or any of their Subsidiaries, of any equity Securities of
such Subsidiary, (iii) any direct or indirect loan, advance (other than advances
to employees for moving, entertainment and travel expenses, drawing accounts and
similar expenditures in the ordinary course of business) or capital contribution
by Borrowers or any of their Subsidiaries to any other Person (other than a
wholly-owned Subsidiary of Borrowers), including all indebtedness and accounts
receivable from that other Person that are not current assets or did not arise
from sales or provision of services to that other Person in the ordinary course
of business, or (iv) Interest Rate Agreements or Currency Agreements not
constituting Hedge Agreements. The amount of any Investment shall be the
original cost of such Investment plus the cost of all additions thereto, without
                                 ----
any adjustments for increases or decreases in value, or write-ups,

                                       17

<PAGE>

write-downs or write-offs with respect to such Investment (other than
adjustments for the repayment of, or the refund of capital with respect to, the
original principal amount of any such Investment).

          "IP Collateral" means, collectively, the Intellectual Property that
constitutes Collateral under the Security Agreement.

          "Issuing Lender", with respect to any Letter of Credit, the Lender
that agrees or is otherwise obligated to issue such Letter of Credit, determined
as provided in subsection 3.1B(ii); provided that any Issuing Lender may be an
Affiliate of BTCo (including, without limitation, Deutsche Bank AG) so long as
(i) BTCo is a lender under this Agreement and (ii) such Affiliate shall have
executed a counterpart of this Agreement on or prior to the date of any issuance
of any Letter of Credit by such Affiliate.

          "Joint Venture" means a joint venture, partnership or other similar
arrangement, whether in corporate, partnership or other legal form.

          "Landlord Consent and Estoppel", with respect to any Leasehold
Property, means a letter, certificate or other instrument in writing from the
lessor under the related lease, satisfactory in form and substance to
Administrative Agent, pursuant to which such lessor agrees, for the benefit of
Administrative Agent, (i) that without any further consent of such lessor or any
further action on the part of the Loan Party holding such Leasehold Property,
such Leasehold Property may be encumbered pursuant to a Mortgage and may be
assigned to the purchaser at a foreclosure sale or in a transfer in lieu of such
a sale (and to a subsequent third party assignee if Administrative Agent, any
Lender, or an Affiliate of either so acquires such Leasehold Property), (ii)
that such lessor shall not terminate such lease as a result of a default by such
Loan Party thereunder without first giving Administrative Agent notice of such
default and at least 60 days (or, if such default cannot reasonably be cured by
Administrative Agent within such period, such longer period as may reasonably be
required) to cure such default and (iii) to such other matters relating to such
Leasehold Property as Administrative Agent may reasonably request.

          "Leasehold Property" means any leasehold interest of any Loan Party as
lessee under any lease of real property other than any such leasehold interest
designated from time to time by Administrative Agent in its sole discretion as
not being required to be included in the Collateral.

          "Lender" and "Lenders" means the Persons identified as "Lenders" and
listed on the signature pages of this Agreement, together with their successors
and permitted assigns pursuant to subsection 10.1; provided that the term
                                                   --------
"Lenders", when used in the context of a particular Commitment, shall mean
Lenders having that Commitment.

          "Letter of Credit" or "Letters of Credit" means Commercial Letters of
Credit and Standby Letters of Credit issued or to be issued by Issuing Lenders
for the account of Borrowers pursuant to subsection 3.1.

          "Letter of Credit Usage" means, as at any date of determination, the
sum of (i) the maximum aggregate amount which is or at any time thereafter may
become available for

                                       18

<PAGE>

drawing under all Letters of Credit then outstanding plus (ii) the aggregate
                                                     ----
amount of all drawings under Letters of Credit honored by Issuing Lenders and
not theretofore reimbursed out of the proceeds of Revolving Loans pursuant to
subsection 3.3B or otherwise reimbursed by Borrowers.

          "Lien" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof, and any
agreement to give any security interest) and any option, trust or other
preferential arrangement having the practical effect of any of the foregoing.

          "Loan" or "Loans" means one or more of the Term Loans or Revolving
Loans or any combination thereof.

          "Loan Documents" means this Agreement, the Notes, the Letters of
Credit (and any applications for, or reimbursement agreements or other documents
or certificates executed by Borrowers in favor of an Issuing Lender relating to,
the Letters of Credit), the Subsidiary Guaranty and the Collateral Documents.

          "Loan Party" means each of the Borrowers and any of their Subsidiaries
from time to time executing a Loan Document, and "Loan Parties" means all such
Persons, collectively.

          "Margin Stock" has the meaning assigned to that term in Regulation U
of the Board of Governors of the Federal Reserve System as in effect from time
to time.

          "Material Adverse Effect" means a material adverse effect upon (i) the
business, operations, properties, assets, condition (financial or otherwise) or
prospects of Borrowers and their Subsidiaries taken as a whole, (ii) the ability
of the Loan Parties to perform, or of Administrative Agent or Lenders to
enforce, the Obligations or (iii) the validity or enforceability of the Loan
Documents, or the rights and remedies of Administrative Agent or the Lenders
against the Loan Parties thereunder.

          "Material Contract" means any contract or other arrangement to which
Borrowers or any of their Subsidiaries is or may become a party (other than the
Loan Documents) for which breach, nonperformance, cancellation or failure to
renew could reasonably be expected to have a Material Adverse Effect.

          "Maximum Consolidated Capital Expenditures Amount" has the meaning
assigned to that term in subsection 7.8.

          "Monthly Reporting Package" means the monthly financial information
regarding the Borrowers and their Subsidiaries, substantially in the form of the
monthly reports provided to Administrative Agent before the Effective Date,
together with an Officer's Certificate stating that such information is
substantially in accordance with GAAP (subject to quarterly and year end
adjustments), which shall be provided to Administrative Agent on a monthly basis
pursuant to subsection 6.1.

                                       19

<PAGE>

          "Mortgage" means (i) a security instrument (whether designated as a
deed of trust or a mortgage or by any similar title) which shall also serve as a
fixture filing executed and delivered by any Loan Party, in form satisfactory to
Administrative Agent, or (ii) at Administrative Agent's option, in the case of
an Additional Mortgaged Property, an amendment to an existing Mortgage, in form
satisfactory to Administrative Agent, adding such Additional Mortgaged Property
to the Real Property Assets encumbered by such existing Mortgage, in either case
as such security instrument or amendment may be amended, supplemented or
otherwise modified from time to time. "Mortgages" means all such instruments,
including the Closing Date Mortgages and any Additional Mortgages, collectively.

          "Mortgaged Properties" means, collectively, the Closing Date Mortgaged
Properties and the Additional Mortgaged Properties.

          "Multiemployer Plan" means any Employee Benefit Plan that is a
"multiemployer plan" as defined in Section 3(37) of ERISA.

          "Net Asset Sale Proceeds", with respect to any Asset Sale, means Cash
payments (including any Cash received by way of deferred payment pursuant to, or
by monetization of, a note receivable or otherwise, but only as and when so
received) received from such Asset Sale, net of any bona fide direct costs
incurred in connection with such Asset Sale, including (i) income taxes
reasonably estimated to be actually payable within two years of the date of such
Asset Sale as a result of any gain recognized in connection with such Asset Sale
and (ii) payment of the outstanding principal amount of, premium or penalty, if
any, and interest on any Indebtedness (other than the Loans) that is secured by
a Lien on the stock or assets in question and that is required to be repaid
under the terms thereof as a result of such Asset Sale; provided, however, that
Net Asset Sale proceeds shall not include any cash payments received from any
Asset Sale by a Foreign Subsidiary unless such proceeds may be repatriated (by
reason of a repayment of an intercompany note or otherwise) to the United States
without (in the reasonable judgment of Borrowers) resulting in a material tax
liability to Borrowers.

          "Net Insurance/Condemnation Proceeds" means any Cash payments or
proceeds received by Borrowers or any of their Subsidiaries (i) under any
business interruption or casualty insurance policy in respect of a covered loss
thereunder or (ii) as a result of the taking of any assets of Borrowers or any
of their Subsidiaries by any Person pursuant to the power of eminent domain,
condemnation or otherwise, or pursuant to a sale of any such assets to a
purchaser with such power under threat of such a taking, in each case net of any
actual and reasonable documented costs incurred by Borrowers or any of their
Subsidiaries in connection with the adjustment or settlement of any claims of
Borrowers or such Subsidiary in respect thereof.

          "Net Securities Proceeds" means the cash proceeds (net of reasonable
and customary underwriting discounts and commissions and other reasonable costs
and expenses associated therewith, including reasonable legal fees and expenses)
from the (i) issuance of Capital Stock of or incurrence of Indebtedness by
Borrowers or any of their Subsidiaries (other than proceeds of intercompany
Indebtedness represented by intercompany notes which have been pledged to
Administrative Agent in accordance with this Agreement and proceeds received by
any wholly-owned Subsidiary of Company from the issuance of Capital Stock to, or
capital

                                       20

<PAGE>

contributions from, any Borrower or other wholly-owned Subsidiary) and (ii)
capital contributions made by a holder of Capital Stock of Company.

          "New Subordinated Debt" means the 13% Senior Subordinated Notes due
2008, issued pursuant to the New Subordinated Indenture, the Approved Plan of
Reorganization and the Confirmation Order to certain prepetition creditors of
Borrowers and/or the Debtor Subsidiaries in the Chapter 11 cases.

          "New Subordinated Indenture" means that certain Indenture dated as of
March [8], 2002, by and between Company and Wilmington Trust Company pursuant to
which the New Subordinated Debt shall be issued.

          "Non-US Lender" means a Lender that is organized under the laws of any
jurisdiction other than the United States or any state or other political
subdivision thereof.

          "Notes" means one or more of the Term Notes or Revolving Notes or any
combination thereof.

          "Notice of Borrowing" means a notice substantially in the form of
Exhibit I annexed hereto.
---------

          "Notice of Conversion/Continuation" means a notice substantially in
the form of Exhibit II annexed hereto.
            ----------

          "Obligations" means all obligations of every nature of each Loan Party
from time to time owed to Administrative Agent, Lenders or any of them under the
Loan Documents, whether for principal, interest, reimbursement of amounts drawn
under Letters of Credit, fees, expenses, indemnification or otherwise.

          "Officer" means the president, chief executive officer, a vice
president, chief financial officer, treasurer, general partner (if an
individual), managing member (if an individual) or other individual appointed by
the Governing Body or the Organizational Documents of a corporation,
partnership, trust or limited liability company to serve in a similar capacity
as the foregoing.

          "Officer's Certificate", as applied to any Person that is a
corporation, partnership, trust or limited liability company, means a
certificate executed on behalf of such Person by one or more Officers of such
Person or one or more Officers of a general partner or a managing member if such
general partner or managing member is a corporation, partnership, trust or
limited liability company.

          "Operating Lease", as applied to any Person, means any lease
(including leases that may be terminated by the lessee at any time) of any
property (whether real, personal or mixed) that is not a Capital Lease other
than any such lease under which that Person is the lessor.

          "Organizational Documents" means the documents (including Bylaws, if
applicable) pursuant to which a Person that is a corporation, partnership,
trust, limited liability company or other entity is organized.

                                       21

<PAGE>

          "Participant" means a purchaser of a participation in the rights and
obligations under this Agreement pursuant to subsection 10.1C.

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

          "Pension Plan" means any Employee Benefit Plan, other than a
Multiemployer Plan, that is subject to Section 412 of the Internal Revenue Code
or Section 302 of ERISA, and, for purposes of subsection 8.10, any Foreign Plan.

          "Permitted Encumbrances" means the following types of Liens (excluding
any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of the Internal
Revenue Code or by ERISA, any such Lien imposed by a Government Authority in
connection with any Foreign Plan, any such Lien relating to or imposed in
connection with any Environmental Claim, and any such Lien expressly prohibited
by any applicable terms of any of the Collateral Documents):

               (i)    Liens for taxes, assessments or governmental charges or
          claims the payment of which is not, at the time, required by
          subsection 6.3;

               (ii)   statutory Liens of landlords, statutory Liens and rights
          of set-off of banks, statutory Liens of carriers, warehousemen,
          mechanics, repairmen, workmen and materialmen, and other Liens imposed
          by law, in each case incurred in the ordinary course of business (a)
          for amounts not yet overdue for more than 60 days or (b) for amounts
          that are being contested in good faith, so long as (1) such reserves
          or other appropriate provisions, if any, as shall be required by GAAP
          shall have been made for any such contested amounts, and (2) in the
          case of a Lien with respect to any portion of the Collateral, such
          Lien is being contested by proceedings which conclusively operate to
          stay the sale of any portion of the Collateral on account of such Lien
          or no such proceeding is pending;

               (iii)  Liens incurred or deposits made in the ordinary course of
          business in connection with workers' compensation, unemployment
          insurance and other types of social security, or to secure the
          performance of tenders, statutory obligations, surety and appeal
          bonds, bids, leases, government contracts, trade contracts,
          performance and return-of-money bonds and other similar obligations
          (exclusive of obligations for the payment of borrowed money), so long
          as no foreclosure, sale or similar proceedings have been commenced
          (unless stayed or effectively bonded to the satisfaction of Agent)
          with respect to any portion of the Collateral on account thereof;

               (iv)   any attachment or judgment Lien not constituting an Event
          of Default under subsection 8.8;

               (v)    licenses (with respect to Intellectual Property and other
          property), leases or subleases granted to third parties in accordance
          with any applicable terms of the Collateral Documents and not
          interfering in any material respect with the ordinary conduct of the
          business of Borrowers or any of their Subsidiaries or

                                       22

<PAGE>

          resulting in a material diminution in the value of any Collateral as
          security for the Obligations;

               (vi)   easements, rights-of-way, covenants, restrictions,
          encroachments, and other minor defects or irregularities in title and
          matters that would be disclosed by an accurate survey or inspection,
          in each case which do not and will not interfere in any material
          respect with the ordinary conduct of the business of Borrowers or any
          of their Subsidiaries or result in a material diminution in the value
          of any Collateral as security for the Obligations;

               (vii)  any (a) interest or title of a lessor or sublessor under
          any lease not prohibited by this Agreement, (b) Lien, restriction or
          matter described in clause (vi) above that the interest or title of
          such lessor or sublessor may be subject to, or (c) subordination of
          the interest of the lessee or sublessee under such lease to any Lien
          or restriction referred to in the preceding clause (b), so long as the
          holder of such Lien or restriction agrees to recognize the rights of
          such lessee or sublessee under such lease, if required by
          Administrative Agent as a condition precedent under subsection 4.1;

               (viii) Liens arising from filing UCC financing statements
          relating solely to leases not prohibited by this Agreement;

               (ix)   Liens in favor of customs and revenue authorities arising
          as a matter of law to secure payment of customs duties in connection
          with the importation of goods;

               (x)    any zoning or similar law or right reserved to or vested
          in any governmental office or agency to control or regulate the use of
          any real property;

               (xi)   Liens granted pursuant to the Collateral Documents;

               (xii)  Liens securing obligations (other than obligations
          representing Indebtedness for borrowed money) under operating,
          reciprocal easement or similar agreements entered into in the ordinary
          course of business of Borrowers and their Subsidiaries;

               (xiii) the Liens and other encumbrances existing as of the
          Effective Date, which are listed in Schedule 7.2 annexed hereto; and

               (xiv)  Liens which are provided for by the Approved Plan of
          Reorganization and which are listed in Schedule 1.1F annexed hereto.

          "Person" means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, Joint Ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and governments (whether federal,
state or local, domestic or foreign, and including political subdivisions
thereof) and agencies or other administrative or regulatory bodies thereof.

                                       23

<PAGE>

          "Peso" and the sign "Ps" means the lawful money of the country of
Mexico.

          "Plan of Reorganization" means the Second Amended Second Modified
Joint Plan of Reorganization under Chapter 11 of the Bankruptcy Code dated as of
January 31, 2002, as amended and supplemented with the prior written approval of
Agent.

          "Pledged Collateral" means, collectively, the "Pledged Collateral" as
defined in the Security Agreement.

          "Potential Event of Default" means a condition or event that, after
notice or lapse of time or both, would constitute an Event of Default.

          "Pound" and the sign "(pound)" means the lawful money of the United
Kingdom.

          "Prepetition Credit Facility" means that certain Fourth Amended and
Restated Credit Agreement dated as of June 14, 1999, as amended, between and
among Company Citibank, N.A., as administrative agent, and certain banks and
other financial institutions party thereto from time to time.

          "Prime Rate" means the rate that BTCo announces from time to time as
its prime lending rate, as in effect from time to time. The Prime Rate is a
reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer. BTCo or any other Lender may make commercial
loans or other loans at rates of interest at, above or below the Prime Rate.

          "Proceedings" means any action, suit, proceeding (whether
administrative, judicial or otherwise), governmental investigation or
arbitration.

          "Pro Rata Share" means (i) with respect to all payments, computations
and other matters relating to the Term Loan Commitment or the Term Loan of any
Lender, the percentage obtained by dividing (x) the Term Loan Exposure of that
                                   --------
Lender by (y) the aggregate Term Loan Exposure of all Lenders, (ii) with respect
       --
to all payments, computations and other matters relating to the Revolving Loan
Commitment or the Revolving Loans of any Lender or any Letters of Credit issued
or participations therein deemed purchased by any Lender, the percentage
obtained by dividing (x) the Revolving Loan Exposure of that Lender by (y) the
            --------                                                --
aggregate Revolving Loan Exposure of all Lenders, and (iii) for all other
purposes with respect to each Lender, the percentage obtained by dividing (x)
                                                                 --------
the Term Loan Exposure of that Lender plus the Revolving Loan Exposure of that
                                      ----
Lender by (y) the sum of the aggregate Term Loan Exposure of all Lenders plus
       --                                                                ----
the aggregate Revolving Loan Exposure of all Lenders, in any such case as the
applicable percentage may be adjusted by assignments permitted pursuant to
subsection 10.1. The initial Pro Rata Share of each Lender for purposes of each
of clauses (i), (ii) and (iii) of the preceding sentence is set forth opposite
the name of that Lender in Schedule 2.1 annexed hereto.
                           ------------

          "PTO" means the United States Patent and Trademark Office or any
successor or substitute office in which filings are necessary or, in the opinion
of Administrative Agent, desirable in order to create or perfect Liens on any IP
Collateral.

                                       24

<PAGE>

          "Real Property Asset" means, at any time of determination, any
interest then owned by any Loan Party in any real property other than any
Excluded Assets consisting of real property.

          "Recorded Leasehold Interest" means a Leasehold Property with respect
to which a Record Document (as hereinafter defined) has been recorded in all
places necessary or desirable, in Administrative Agent's reasonable judgment, to
give constructive notice of such Leasehold Property to third-party purchasers
and encumbrancers of the affected real property. For purposes of this
definition, the term "Record Document" means, with respect to any Leasehold
Property, (a) the lease evidencing such Leasehold Property or a memorandum
thereof, executed and acknowledged by the owner of the affected real property,
as lessor, or (b) if such Leasehold Property was acquired or subleased from the
holder of a Recorded Leasehold Interest, the applicable assignment or sublease
document, executed and acknowledged by such holder, in each case in form
sufficient to give such constructive notice upon recordation and otherwise in
form reasonably satisfactory to Administrative Agent.

          "Register" has the meaning assigned to that term in subsection 2.1E.

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

          "Reimbursement Date" has the meaning assigned to that term in
subsection 3.3B.

          "Related Agreements" means, individually and collectively, the
Approved Plan of Reorganization, the Confirmation Order, the New Subordinated
Indenture and all other agreements, documents and instruments governing or
executed in connection with the New Subordinated Debt, and all other agreements
and instruments delivered pursuant to or in connection with any of the
foregoing.

          "Release" means any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping,
leaching or migration of Hazardous Materials into the indoor or outdoor
environment (including the abandonment or disposal of any barrels, containers or
other closed receptacles containing any Hazardous Materials), including the
movement of any Hazardous Materials through the air, soil, surface water or
groundwater.

          "Request for Issuance" means a request in the form of Exhibit III
                                                                -----------
annexed hereto.

          "Requisite Class Lenders" means, at any time of determination (i) for
the Class of Lenders having Revolving Loan Exposure, Lenders having or holding
more than 50% of the aggregate Revolving Loan Exposure of all Lenders, provided,
                                                                       --------
however, that while BTCo or its Affiliates hold more than 50% of the aggregate
-------
Revolving Loan Exposure of all Lenders and one or more Lenders not affiliated
with BTCo has Revolving Loan Exposure, "Requisite Class Lenders" shall mean
BTCo, together with such Affiliates and one additional unaffiliated Lender and
(ii) for the Class of Lenders having Term Loan Exposure, Lenders having or
holding more than 50% of the aggregate Term Loan Exposure of all Lenders.

                                       25

<PAGE>

          "Requisite Lenders" means Lenders having or holding more than 50% of
the sum of the aggregate Term Loan Exposure of all Lenders plus the aggregate
                                                           ----
Revolving Loan Exposure of all Lenders.

          "Restricted Junior Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of stock
of Company now or hereafter outstanding, except a dividend payable solely in
shares of that class of stock to the holders of that class, (ii) any redemption,
retirement, sinking fund or similar payment, purchase or other acquisition for
value, direct or indirect, of any shares of any class of stock of Company now or
hereafter outstanding, (iii) any payment made to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire
shares of any class of stock of Company now or hereafter outstanding, and (iv)
any payment or prepayment of principal of, premium, if any, or interest on, or
redemption, purchase, retirement, defeasance (including in-substance or legal
defeasance), sinking fund or similar payment with respect to, any Subordinated
Indebtedness.

          "Restructuring Transactions" means the corporate restructuring
transactions of Company and its Subsidiaries described in Schedule 1.1G annexed
hereto, as such Schedule may be modified or amended with Agent's approval.

          "Revolving Lender" means a Lender that has a Revolving Loan Commitment
and/or that has an outstanding Revolving Loan.

          "Revolving Loan Commitment" means the commitment of a Revolving Lender
to make Revolving Loans to Borrowers pursuant to subsection 2.1A(iii), and
"Revolving Loan Commitments" means such commitments of all Revolving Lenders in
the aggregate.

          "Revolving Loan Commitment Termination Date" means February 28, 2007.

          "Revolving Loan Exposure", with respect to any Revolving Lender,
means, as of any date of determination (i) prior to the termination of the
Revolving Loan Commitments, that Lender's Revolving Loan Commitment, and (ii)
after the termination of the Revolving Loan Commitments, the sum of (a) the
aggregate outstanding principal amount of the Revolving Loans of that Lender
plus (b) in the event that Lender is an Issuing Lender, the aggregate Letter of
----
Credit Usage in respect of all Letters of Credit issued by that Lender (in each
case net of any participations purchased by other Lenders in such Letters of
Credit or in any unreimbursed drawings thereunder) plus (c) the aggregate amount
                                                   ----
of all participations purchased by that Lender in any outstanding Letters of
Credit or any unreimbursed drawings under any Letters of Credit.

          "Revolving Loans" means the Loans made by Revolving Lenders to
Borrowers pursuant to subsection 2.1A(iii).

          "Revolving Notes" means any promissory notes of Borrowers issued
pursuant to subsection 2.1F to evidence the Revolving Loans of any Revolving
Lenders, substantially in the form of Exhibit IV annexed hereto, as they may be
                                      ----------
amended, supplemented or otherwise modified from time to time.

                                       26

<PAGE>

          "Securities" means any stock, shares, partnership interests, voting
trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds, debentures,
notes, or other evidences of indebtedness, secured or unsecured, convertible,
subordinated, certificated or uncertificated, or otherwise, or in general any
instruments commonly known as "securities" or any certificates of interest,
shares or participations in temporary or interim certificates for the purchase
or acquisition of, or any right to subscribe to, purchase or acquire, any of the
foregoing.

          "Securities Act" means the Securities Act of 1933, as amended from
time to time, and any successor statute.

          "Security Agreement" means the Security Agreement executed and
delivered on the Closing Date, substantially in the form of Exhibit VI annexed
                                                            ----------
hereto, as such Security Agreement may thereafter be amended, supplemented or
otherwise modified from time to time.

          "Senior Officer" means any of the president, chief executive officer,
executive vice president, chief financial officer, general counsel, and
treasurer of the Company and the ranking officer of the bowling products
operations, United States bowling centers operations and foreign bowling centers
operations of the Company and its Subsidiaries.

          "Solvent," with respect to any Person, means that as of the date of
determination both (i)(a) the then fair saleable value of the property (on a
going concern basis) of such Person is (1) greater than the total amount of
liabilities (including contingent liabilities other than prepetition liabilities
which have been discharged under the Approved Plan of Reorganization) of such
Person and (2) not less than the amount that will be required to pay the
probable liabilities on such Person's then existing debts as they become
absolute and due considering all financing alternatives and potential asset
sales reasonably available to such Person; (b) such Person's capital is not
unreasonably small in relation to its business or any contemplated or undertaken
transaction; and (c) such Person does not intend to incur, or believe (nor
should it reasonably believe) that it will incur, debts beyond its ability to
pay such debts as they become due; and (ii) such Person is "solvent" within the
meaning given that term and similar terms under applicable laws relating to
fraudulent transfers and conveyances. For purposes of this definition, the
amount of any contingent liability at any time shall be computed as the amount
that, in light of all of the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability.

          "Standby Letter of Credit" means any standby letter of credit or
similar instrument issued for the purpose of supporting (i) Indebtedness of
Borrowers or any of their Subsidiaries in respect of industrial revenue or
development bonds or financings, (ii) workers' compensation liabilities of
Borrowers or any of their Subsidiaries, (iii) the obligations of third party
insurers of Borrowers or any of their Subsidiaries, (iv) obligations with
respect to Capital Leases or Operating Leases of Borrowers or any of their
Subsidiaries, and (v) performance, payment, deposit or surety obligations of
Borrowers or any of their Subsidiaries, incurred in the ordinary course of
business.

                                       27

<PAGE>

          "Subordinated Indebtedness" means (i) the New Subordinated Debt and
(ii) any Indebtedness of Borrowers incurred from time to time and subordinated
in right of payment to the Obligations in form and substance satisfactory to
Administrative Agent.

          "Subsidiary", with respect to any Person, means any corporation,
partnership, trust, limited liability company, association, Joint Venture or
other business entity of which more than 50% of the total voting power of shares
of stock or other ownership interests entitled (without regard to the occurrence
of any contingency) to vote in the election of the members of the Governing Body
is at the time owned or controlled, directly or indirectly, by that Person or
one or more of the other Subsidiaries of that Person or a combination thereof.

          "Subsidiary Guarantor" means any Subsidiary of Borrowers that executes
and delivers a counterpart of the Subsidiary Guaranty on the Closing Date or
from time to time thereafter pursuant to subsection 6.8.

          "Subsidiary Guaranty" means the Subsidiary Guaranty executed and
delivered by certain existing Subsidiaries of Borrowers on the Closing Date and
to be executed and delivered by additional Subsidiaries of Borrowers from time
to time thereafter in accordance with subsection 6.8, substantially in the form
of Exhibit XI annexed hereto, as such Subsidiary Guaranty may hereafter be
   ----------
amended, supplemented or otherwise modified from time to time.

          "Supermajority Lenders" means Lenders having or holding more than 66
2/3% of the sum of the aggregate Term Loan Exposure of all Lenders plus the
                                                                   ----
aggregate Revolving Loan Exposure of all Lenders.

          "Supplemental Collateral Agent" has the meaning assigned to that term
in subsection 9.1B.

          "Tax" or "Taxes" means any present or future tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature and whatever called, by
whomsoever, on whomsoever and wherever imposed, levied, collected, withheld or
assessed, including interest, penalties, additions to tax and any similar
liabilities with respect thereto; except that, in the case of a Lender, there
shall be excluded (i) taxes that are imposed on the overall gross or net income
or net profits (including capital gains, alternative minimum taxes and franchise
taxes and (a) by the United States, (b) by any other Government Authority under
the laws of which such Lender is organized or has its principal place of
business or maintains its applicable lending office, or (c) by any jurisdiction
solely as a result of a present or former connection between such Lender and
such jurisdiction (other than any such connection arising solely from such
Lender having executed, delivered or performed its obligations or received a
payment under, or enforced, any of the Loan Documents), and (ii) any branch
profits taxes imposed by the United States or any similar tax imposed by any
other jurisdiction in which such Lender is located; provided, however, that
there shall not be excluded (and this definition of "Tax" or "Taxes" shall
therefore include) any and all gross income or gross profits taxes imposed by
means of a deduction or withholding by any Governmental Authority.

                                       28

<PAGE>

          "Term Loan Commitment" means the commitment of a Lender to make a Term
Loan to Borrowers pursuant to subsection 2.1A(ii), and "Term Loan Commitments"
means such commitments of all Lenders in the aggregate.

          "Term Loan Exposure", with respect to any Lender, means, as of any
date of determination (i) prior to the funding of the Term Loans, that Lender's
Term Loan Commitment and (ii) after the funding of the Term Loans, the
outstanding principal amount of the Term Loan of that Lender.

          "Term Loans" means the Loans made by Lenders to Borrowers pursuant to
subsection 2.1A(ii).

          "Term Notes" means (i) the promissory notes of Borrowers issued
pursuant to subsection 2.1F on the Closing Date and (ii) any promissory notes
issued by Borrowers pursuant to the last sentence of subsection 10.1B(i) in
connection with assignments of the Term Loan Commitments or Term Loans of any
Lenders, in each case substantially in the form of Exhibit V annexed hereto, as
                                                   ---------
they may be amended, supplemented or otherwise modified from time to time.

          "Title Company" means one or more title insurance companies reasonably
satisfactory to Administrative Agent.

          "Total Utilization of Revolving Loan Commitments" means, as at any
date of determination, the sum of (i) the aggregate principal amount of all
outstanding Revolving Loans plus (ii) the Letter of Credit Usage.
                            ----

          "To The Knowledge Of" means, when modifying a representation, warranty
or other statement of any Person, that the fact or situation described therein
is known by such Person (or, in the case of a Person other than a natural
Person, known by any responsible executive officer (as defined in Rule 3b-7
promulgated under the Securities Exchange Act of 1934, as amended) making the
representation, warranty or other statement, or with the exercise of reasonable
good faith due diligence under the circumstances (in accordance with the
standard of what a reasonable Person in similar circumstances would have done)
would have been known by such Person (or, in the case of a Person other than a
natural Person, would have been known by such responsible executive officer of
such Person).

          "Transaction Costs" means the fees, costs and expenses payable by
Borrowers on or before the Closing Date in connection with the transactions
contemplated by the Loan Documents.

          "UCC" means the Uniform Commercial Code (or any similar or equivalent
legislation) as in effect in any applicable jurisdiction.

     1.2  Accounting Terms; Utilization of GAAP for Purposes of Calculations
          ------------------------------------------------------------------
          Under Agreement.
          ---------------

          Except as otherwise expressly provided in this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with

                                       29

<PAGE>

GAAP. Financial statements and other information required to be delivered by
Borrowers to Lenders pursuant to clauses (ii), (iii) and (xii) of subsection 6.1
shall be prepared in accordance with GAAP as in effect at the time of such
preparation (and delivered together with any reconciliation statements provided
for in subsection 6.1(v)). Calculations in connection with the definitions,
covenants and other provisions of this Agreement shall utilize GAAP as in effect
on the date of determination, applied in a manner consistent with that used in
preparing the financial statements referred to in subsection 5.3. If at any time
any change in GAAP would affect the computation of any financial ratio or
requirement set forth in any Loan Document, and Borrowers, Administrative Agent
or Requisite Lenders shall so request, Administrative Agent, Lenders and
Borrowers shall negotiate in good faith to amend such ratio or requirement to
preserve the original intent thereof in light of such change in GAAP (subject to
the approval of Requisite Lenders), provided that, until so amended, such ratio
or requirement shall continue to be computed in accordance with GAAP prior to
such change therein and Borrowers shall provide to Administrative Agent and
Lenders reconciliation statements provided for in subsection 6.1(v).

       1.3   Other Definitional Provisions and Rules of Construction.
             -------------------------------------------------------

             A.   Any of the terms defined herein may, unless the context
otherwise requires, be used in the singular or the plural, depending on the
reference.

             B.   References to "Sections" and "subsections" shall be to
Sections and subsections, respectively, of this Agreement unless otherwise
specifically provided.

             C.   The use in any of the Loan Documents of the word "include" or
"including", when following any general statement, term or matter, shall not be
construed to limit such statement, term or matter to the specific items or
matters set forth immediately following such word or to similar items or
matters, whether or not nonlimiting language (such as "without limitation" or
"but not limited to" or words of similar import) is used with reference thereto,
but rather shall be deemed to refer to all other items or matters that fall
within the broadest possible scope of such general statement, term or matter.

Section 2.   AMOUNTS AND TERMS OF COMMITMENTS AND LOANS

       2.1   Commitments; Making of Loans; Notes.
             -----------------------------------

             A.   Commitments. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of Borrowers
herein set forth, each Lender hereby severally agrees to make the Loans as
described in subsections 2.1A(ii) and 2.1A(iii).

             (i)  Intentionally Omitted.
                  ---------------------

             (ii) Term Loans. Each Lender that has a Term Loan Commitment
                  ----------
       severally agrees to lend to Borrowers on the Closing Date an amount not
       exceeding its Pro Rata Share of the aggregate amount of the Term Loan
       Commitments to be used for the purposes identified in subsection 2.5A.
       The amount of each Lender's Term Loan Commitment is set forth opposite
       its name on Schedule 2.1 annexed hereto and the aggregate amount of the
                   ------------
       Term Loan Commitments is $290,000,000; provided that the
                                              --------

                                       30

<PAGE>

     Term Loan Commitments of Lenders shall be adjusted to give effect to any
     assignments of the Term Loan Commitments pursuant to subsection 10.1B. Each
     Lender's Term Loan Commitment shall expire immediately and without further
     action on March 8, 2002, if the Term Loans are not made on or before that
     date. Borrowers may make only one borrowing under the Term Loan
     Commitments. Amounts borrowed under this subsection 2.1A(ii) and
     subsequently repaid or prepaid may not be reborrowed.

          (iii)  Revolving Loans. Each Revolving Lender severally agrees,
                 ---------------
     subject to the limitations set forth below with respect to the maximum
     amount of Revolving Loans permitted to be outstanding from time to time, to
     lend to Borrowers under the Revolving Credit Facilities from time to time
     after the Closing Date to but excluding the Revolving Loan Commitment
     Termination Date an aggregate amount not exceeding its Pro Rata Share of
     the aggregate amount of the Revolving Loan Commitments to be used for the
     purposes identified in subsection 2.5B. The original amount of each
     Revolving Lender's Revolving Loan Commitment is set forth opposite its name
     on Schedule 2.1 annexed hereto and the aggregate original amount of the
        ------------
     Revolving Loan Commitments is $60,000,000; provided that the Revolving Loan
                                                --------
     Commitments of Revolving Lenders shall be adjusted to give effect to any
     assignments of the Revolving Loan Commitments pursuant to subsection 10.1B
     and shall be reduced from time to time by the amount of any reductions
     thereto made pursuant to subsection 2.4. Each Revolving Lender's Revolving
     Loan Commitment shall expire on the Revolving Loan Commitment Termination
     Date and all Revolving Loans and all other amounts owed hereunder with
     respect to the Revolving Loans and the Revolving Loan Commitments shall be
     paid in full no later than that date; provided that each Revolving Lender's
                                           --------
     Revolving Loan Commitment shall expire immediately and without further
     action on March 8, 2002, if the Term Loans are not made on or before that
     date. Amounts borrowed under this subsection 2.1A(iii) may be repaid and
     reborrowed to but excluding the Revolving Loan Commitment Termination Date.

          Anything contained in this Agreement to the contrary notwithstanding,
     the Revolving Loans and the Revolving Loan Commitments shall be subject to
     the limitation that in no event shall the Total Utilization of Revolving
     Loan Commitments at any time exceed the Revolving Loan Commitments then in
     effect.

          B.     Borrowing Mechanics. Term Loans or Revolving Loans made on any
Funding Date (other than Revolving Loans made pursuant to subsection 3.3B) shall
be in an aggregate minimum amount of $1,000,000 and multiples of $500,000 in
excess of that amount; provided that Term Loans or Revolving Loans made on any
                       --------
Funding Date as Eurodollar Rate Loans with a particular Interest Period shall be
in an aggregate minimum amount of $1,000,000 and multiples of $500,000 in excess
of that amount. Whenever a Borrower desires that Lenders make Term Loans or
Revolving Loans, Borrowers' Agent shall deliver to Administrative Agent a duly
executed Notice of Borrowing no later than 10:00 A.M. (New York City time) at
least three Business Days in advance of the proposed Funding Date (in the case
of a Eurodollar Rate Loan) or on the proposed Funding Date (in the case of a
Base Rate Loan). Term Loans and Revolving Loans may be continued as or converted
into Base Rate Loans and Eurodollar Rate Loans in the manner provided in
subsection 2.2D. In lieu of delivering a Notice of Borrowing, Borrowers' Agent
may give Administrative Agent telephonic notice by the required time of any

                                       31

<PAGE>

proposed borrowing under this subsection 2.1B; provided that such notice shall
                                               --------
be promptly confirmed in writing by delivery of a duly executed Notice of
Borrowing to Administrative Agent on or before the applicable Funding Date.

          Neither Administrative Agent nor any Lender shall incur any liability
to Borrowers in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by an Officer or
other person authorized to borrow on behalf of Borrowers or for otherwise acting
in good faith under this subsection 2.1B or under subsection 2.2D, and upon
funding of Loans by Lenders, and upon conversion or continuation of the
applicable basis for determining the interest rate with respect to any Loans
pursuant to subsection 2.2D, in each case in accordance with this Agreement,
pursuant to any such telephonic notice Borrowers' Agent shall have effected
Loans or a conversion or continuation, as the case may be, hereunder.

          Borrowers' Agent shall notify Administrative Agent prior to the
funding of any Loans in the event that any of the matters to which Borrowers are
required to certify in the applicable Notice of Borrowing is no longer true and
correct as of the applicable Funding Date, and the acceptance by the Borrower or
Borrowers of the proceeds of any Loans shall constitute a re-certification by
Borrowers, as of the applicable Funding Date, as to the matters to which
Borrowers are required to certify in the applicable Notice of Borrowing.

          Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a
Notice of Borrowing for, or a Notice of Conversion/Continuation for conversion
to, or continuation of, a Eurodollar Rate Loan (or telephonic notice in lieu
thereof) shall be irrevocable on and after the related Interest Rate
Determination Date, and the Borrower or Borrowers on whose behalf such notice is
given shall be bound to make a borrowing or to effect a conversion or
continuation in accordance therewith.

          Notwithstanding the foregoing provisions of this subsection 2.1B, no
Eurodollar Rate Loans may be made and no Base Rate Loan may be converted into a
Eurodollar Rate Loan until the earlier of the sixtieth day after the Closing
Date and the date specified by Syndication Agent to Borrowers on which the
primary syndication of the Loans has been completed.

          C.    Disbursement of Funds.

          (i)   Subject to this subsection 2.1C and subsection 2.1D, all Loans
     under this Agreement shall be made by Lenders simultaneously and
     proportionately to their respective Pro Rata Shares, it being understood
     that neither Agent nor any Lender shall be responsible for any default by
     any other Lender in that other Lender's obligation to make a loan requested
     hereunder, nor shall the Commitment of any Lender to make the particular
     type of Loan requested be increased or decreased as a result of a default
     by any other Lender in that other Lender's obligation to make a Loan
     requested hereunder.

          (ii)  Upon receipt by Agent of a Notice of Borrowing pursuant to
     subsection 2.1B (or telephonic notice in lieu thereof) for Revolving Loans
     that consist of Base Rate Loans and upon satisfaction or waiver of the
     conditions precedent specified in subsection 4.1 (in the case of Loans made
     on the Closing Date) and, subject to the provisions set

                                       32

<PAGE>

     forth in the immediately succeeding paragraph, subsection 4.2 (in the case
     of all Loans), Daily Funding Lender shall, without prior notice to the
     other Lenders, make such Revolving Loans for its own account on the
     applicable Funding Date (subject to settlement with the other Lenders in
     accordance with subsection 2.1D) by making the proceeds of such Revolving
     Loans available to Borrowers' Agent on such Funding Date by causing an
     amount of same day funds equal to the proceeds of such Revolving Loans to
     be credited to the account of Borrowers' Agent at the Funding and Payment
     Office. Such Revolving Loans shall constitute Revolving Loans by Daily
     Funding Lender for all purposes under the Loan Documents, subject to
     settlement with the other Lenders pursuant to subsection 2.1D. All interest
     accrued on any such Revolving Loans from the date made by Daily Funding
     Lender to the Settlement Date with respect thereto shall be for Daily
     Funding Lender's own account. Daily Funding Lender shall make Revolving
     Loans for its own account pursuant to this subsection 2.1C(ii)
     notwithstanding the fact that the principal amount of such Revolving Loans,
     when added to the aggregate principal amount of Daily Funding Lender's
     Revolving Loans then outstanding may exceed Daily Funding Lender's
     Revolving Loan Commitment then in effect; provided that such Revolving
     Loans shall at all times be Obligations owed to Daily Funding Lender under
     this Agreement; and provided further that in no event shall the aggregate
     principal amount of all Revolving Loans, including such Revolving Loans,
     outstanding at any time exceed the aggregate Revolving Loan Commitments
     then in effect minus the Letter of Credit Usage as of such time.

          Notwithstanding anything in this Agreement to the contrary, if the
     conditions precedent specified in subsection 4.2 cannot be fulfilled with
     respect to any proposed Revolving Loans that consist of Base Rate Loans,
     Borrowers' Agent shall, in its Notice of Borrowing or otherwise, give
     immediate written notice thereof (specifying the circumstances which
     prevent the conditions precedent from being fulfilled) to Agent, with a
     copy to each Lender, and Daily Funding Lender may (and each Lender hereby
     authorizes Daily Funding Lender to), but is not obligated to, continue to
     make Revolving Loans that are Base Rate Loans for twenty (20) Business Days
     from the date Agent first receives such notice, or until sooner instructed
     by Requisite Lenders to cease making such Revolving Loans (the "Daily
     Funding Lender Discretionary Period"). Once notice is given by Borrowers'
     Agent that circumstances exist which prevent the conditions precedent to
     borrowing from being fulfilled, no additional notice with respect to the
     same circumstances will be effective to commence a new Daily Funding Lender
     Discretionary Period.

          (iii)  Promptly after receipt by Agent of a Notice of Borrowing
     pursuant to subsection 2.1B (or telephonic notice in lieu thereof) for any
     Loans (other than Revolving Loans that consist of Base Rate Loans),
     Administrative Agent shall notify each Lender of the proposed borrowing.
     Each such Lender shall make the amount of its Loan available to Agent not
     later than 12:00 Noon (New York City time) on the applicable Funding Date.
     Except as provided in subsection 3.3B with respect to Revolving Loans to
     reimburse any Issuing Lender for the amount of a drawing under a Letter of
     Credit issued by it, upon satisfaction or waiver of the conditions
     precedent specified in subsections 4.1 (in the case of Loans made on the
     Closing Date) and subject to the provisions of the immediately preceding
     paragraph, 4.2 (in the case of all Loans), Agent shall make the

                                       33

<PAGE>

     proceeds of such Loans available to Borrowers' Agent on the applicable
     Funding Date by causing an amount of same day funds in Dollars equal to the
     proceeds of all such Loans received by Agent from Lenders to be credited to
     the account of Borrowers' Agent at the Funding and Payment Office.

          Unless Administrative Agent shall have been notified by any Lender
prior to a Funding Date for any Loans pursuant to this subsection 2.1C that such
Lender does not intend to make available to Agent the amount of such Lender's
Loan requested on such Funding Date, Agent may assume that such Lender has made
such amount available to Agent on such Funding Date and Agent may, in its sole
discretion, but shall not be obligated to, make available to Borrowers a
corresponding amount on such Funding Date. If such corresponding amount is not
in fact made available to Agent by such Lender, Agent shall be entitled to
recover such corresponding amount on demand from such Lender together with
interest thereon, for each day from such Funding Date until the date such amount
is paid to Agent, at the customary rate set by Agent for the correction of
errors among banks for three Business Days and thereafter at the Base Rate. If
such Lender does not pay such corresponding amount forthwith upon Agent's demand
therefor, Agent shall promptly notify Borrowers and Borrowers shall immediately
pay such corresponding amount to Agent together with interest thereon, for each
day from such Funding Date until the date such amount is paid to Agent, at the
rate payable under this Agreement for Base Rate Loans. Nothing in this
subsection 2.1C shall be deemed to relieve any Lender from its obligation to
fulfill its Commitments hereunder or to prejudice any rights that Borrowers may
have against any Lender as a result of any default by such Lender hereunder.

          D.    Settlement Procedures.

          (i)   Daily Funding Lender will from time to time notify the other
     Lenders, not later than 12:00 Noon (New York time) (a) on at least one
     Business Day during each seven calendar-day period, (b) on each date on
     which payment of interest on any Revolving Loans is required to be made
     pursuant to subsection 2.2C, (c) on the Revolving Loan Commitment
     Termination Date, and (d) at such other times as Daily Funding Lender in
     its discretion may determine (each such notice by Daily Funding Lender
     being a "Settlement Notice" and the date of each "Settlement Date") of the
     aggregate principal amount of outstanding Revolving Loans made by Daily
     Funding Lender and each other Lender as of the close of business on the
     Business Day immediately preceding the applicable Settlement Date.

          (ii)  If a Settlement Notice indicates that the aggregate principal
     amount of outstanding Revolving Loans made by Daily Funding Lender
     (including Revolving Loans made for its own account pursuant to subsection
     2.1C(ii)) is in excess of Daily Funding Lender's Pro Rata Share of the
     aggregate principal amount of outstanding Revolving Loans made by all
     Lenders (the amount of such excess being the "Excess Funded Amount"), each
     other Lender will, not later than 4:00 P.M. (New York time) on the
     applicable Settlement Date, pay to Daily Funding Lender, by depositing same
     day funds in the account specified by Daily Funding Lender at the Funding
     and Payment Office, an amount equal to such Lender's Adjusted Pro Rata
     Share of the Excess Funded Amount, upon which payment Daily Funding Lender
     shall be deemed to have sold, and such Lender shall be deemed to have
     purchased, as of the applicable Settlement Date, a

                                       34

<PAGE>

     portion of the outstanding Revolving Loans made by Daily Funding Lender for
     its own account pursuant to subsection 2.1C(ii) on or after the immediately
     preceding Settlement Date equal to such Lender's Adjusted Pro Rata Share of
     the Excess Funded Amount. The obligation of each Lender to purchase a
     portion of any Revolving Loan made by Daily Funding Lender as provided in
     this subsection 2.1D(ii) is subject to the condition that at the time such
     Revolving Loan was made by Daily Funding Lender (a) the duly authorized
     officer of Daily Funding Lender responsible for the administration of Daily
     Funding Lender's credit relationship with Borrowers believed in good faith
     that either (X) no Event of Default had occurred and was continuing or (Y)
     any Event of Default that had occurred and was continuing had been waived
     by Requisite Lenders at the time such Revolving Loan was made or (b) a
     Daily Funding Lender Discretionary Period was in effect.

          (iii)  If a Settlement Notice indicates that the aggregate principal
     amount of outstanding Revolving Loans made by Daily Funding Lender is less
     than Daily Funding Lender's Pro Rata Share of the aggregate principal
     amount of outstanding Revolving Loans made by all Lenders (the amount of
     such difference being the "Excess Paydown Amount"), Daily Funding Lender
     will, no later than 4:00 P.M. (New York time) on the applicable Settlement
     Date, unconditionally pay to each other Lender, by depositing same day
     funds in the account specified by such Lender to Daily Funding Lender, an
     amount equal to such Lender's Adjusted Pro Rata Share of the Excess Paydown
     Amount, upon which payment such Lender shall be deemed to have sold, and
     Daily Funding Lender shall be deemed to have purchased, as of the
     applicable Settlement Date, a portion of the outstanding Revolving Loans of
     such Lender equal to such Lender's Adjusted Pro Rata Share of the Excess
     Paydown Amount.

          (iv)   Except as provided in subsection 2.1D(ii), the obligations of
     Daily Funding Lender and each other Lender pursuant to subsections 2.1D(ii)
     and 2.1D(iii) shall be absolute and unconditional and shall not be affected
     by any circumstance, including, without limitation, (a) any set-off,
     counterclaim, recoupment, defense or other right which Agent or any Lender
     may have against Agent, any other Lender, any Loan Party or any other
     Person for any reason whatsoever; (b) the occurrence or continuance of an
     Event of Default or a Potential Event of Default; (c) any adverse change in
     the condition (financial or otherwise) of Borrowers or any of their
     Subsidiaries; (d) any breach of this Agreement by Borrowers, Agent or any
     Lender; or (e) any other circumstance, happening, or event whatsoever,
     whether or not similar to any of the foregoing. In the event that any
     Person (the "Payor") obligated to make a payment to any other Person (the
     "Payee") pursuant to this subsection 2.1D fails to make available to the
     Payee the amount of such payment required to be made by the Payor, the
     Payee shall be entitled to recover such amount on demand from the Payor
     together with interest at the customary rate set by BTCo for the correction
     of errors among Lenders for three Business Days and thereafter at the sum
     of the Base Rate plus 1.50% per annum.

          (v)    In the event that all or any portion of any repayment of
     principal of the Revolving Loans is thereafter recovered by or on behalf of
     the Borrowers from Daily Funding Lender (including any such recovery in a
     proceeding under any applicable bankruptcy, insolvency or other similar law
     now or hereafter in effect) in an amount that

                                       35

<PAGE>

     is proportionately greater (based on the respective Pro Rata Shares of
     Lenders) than any such recovery from the other Lenders, the loss of the
     amount so recovered shall be ratably shared among all Lenders in the manner
     contemplated by subsection 10.5.

          E.   The Register.

          Administrative Agent, acting for these purposes solely as an agent of
Borrowers (it being acknowledged that Administrative Agent, in such capacity,
and its officers, directors, employees, agent and affiliates shall constitute
Indemnitees under subsection 10.3), shall maintain (and make available for
inspection by Borrowers and Lenders upon reasonable prior notice at reasonable
times) at its address referred to in subsection 10.8 a register for the
recordation of, and shall record, the names and addresses of Lenders and the
Term Loan Commitment, Revolving Loan Commitment, Term Loans, and Revolving Loans
of each Lender from time to time (the "Register"). Borrowers, Administrative
Agent and Lenders shall deem and treat the Persons listed as Lenders in the
Register as the holders and owners of the corresponding Commitments and Loans
listed therein for all purposes hereof; all amounts owed with respect to any
Commitment or Loan shall be owed to the Lender listed in the Register as the
owner thereof; and any request, authority or consent of any Person who, at the
time of making such request or giving such authority or consent, is listed in
the Register as a Lender shall be conclusive and binding on any subsequent
holder, assignee or transferee of the corresponding Commitments or Loans. Each
Lender shall record on its internal records the amount of its Loans and
Commitments and each payment in respect hereof, and any such recordation shall
be conclusive and binding on Borrowers, absent manifest error, subject to the
entries in the Register, which shall, absent manifest error, govern in the event
of any inconsistency with any Lender's records. Failure to make any recordation
in the Register or in any Lender's records, or any error in such recordation,
shall not affect any Loans or Commitments or any Obligations in respect of any
Loans.

          F.   Notes. Borrowers shall execute and deliver on the Closing Date
(i) to Lenders (or to Administrative Agent for Lenders) (a) Term Note
substantially in the form of Exhibit V annexed hereto to evidence each Lender's
                             ---------
Term Loan, in the principal amount of that Lender's Term Loan and with other
appropriate insertions and (b) a Revolving Note substantially in the form of
Exhibit IV annexed hereto to evidence each Revolving Lender's Revolving Loans,
----------
in the principal amount of that Lender's Revolving Loan Commitment and with
other appropriate insertions.

     2.2  Interest on the Loans.
          ---------------------

          A.   Rate of Interest. Subject to the provisions of subsections 2.6
and 2.7, each Term Loan and each Revolving Loan shall bear interest on the
unpaid principal amount thereof from the date made through maturity (whether by
acceleration or otherwise) at a rate determined by reference to the Base Rate or
the Adjusted Eurodollar Rate. The applicable basis for determining the rate of
interest with respect to any Term Loan or any Revolving Loan shall be selected
by Borrowers initially at the time a Notice of Borrowing is given with respect
to such Loan pursuant to subsection 2.1B (subject to the last sentence of
subsection 2.1B), and the basis for determining the interest rate with respect
to any Term Loan or any Revolving Loan may be changed from time to time pursuant
to subsection 2.2D (subject to the last sentence of subsection

                                       36

<PAGE>

2.1B). If on any day a Term Loan or Revolving Loan is outstanding with
respect to which notice has not been delivered to Administrative Agent in
accordance with the terms of this Agreement specifying the applicable basis for
determining the rate of interest, then for that day that Loan shall bear
interest determined by reference to the Base Rate.

          (i)  Subject to the provisions of subsections 2.2E, 2.2G and 2.7, the
          Revolving Loans shall bear interest through maturity as follows:

               (a) if a Base Rate Loan, then at the rate equal to the sum of the
          Base Rate plus the Base Rate Margin set forth in the table below
                    ----
          opposite the Consolidated Leverage Ratio for the four Fiscal Quarter
          period for which the applicable Compliance Certificate has been
          delivered pursuant to subsection 6.1(iv); or

               (b) if a Eurodollar Rate Loan, then at the rate equal to the sum
          of the Adjusted Eurodollar Rate plus the Eurodollar Rate Margin set
                                          ----
          forth in the table below opposite the Consolidated Leverage Ratio for
          the four Fiscal Quarter period for which the applicable Compliance
          Certificate has been delivered pursuant to subsection 6.1(iv):

--------------------------------------------------------------------------------
                          Consolidated      Adjusted Eurodollar         Base
                         Leverage Ratio         Rate Margin          Rate Margin
--------------------------------------------------------------------------------
Greater than
Or equal to                 3.50:1.00              4.00%              3.00%
--------------------------------------------------------------------------------
Greater than or equal       3.00:1.00
to but less than            3.50:1.00              3.75%              2.75%
--------------------------------------------------------------------------------
Greater than or equal
to but less than            2.50:1.00
                            3.00:1.00              3.50%              2.50%
--------------------------------------------------------------------------------
Less than                   2.50:1.00              3.25%              2.25%
--------------------------------------------------------------------------------

     provided that, until receipt of the Compliance Certificate for the Fiscal
     --------
     Quarter ended September 30, 2002, the applicable margin for Revolving Loans
     that are Eurodollar Rate Loans shall be 4.00% per annum and for Revolving
     Loans that are Base Rate Loans shall be 3.00% per annum.

                                       37

<PAGE>

          (ii) Subject to the provisions of subsections 2.2E, 2.2G and 2.7, the
     Term Loans shall bear interest through maturity as follows:

               (a)  if a Base Rate Loan, then at the rate equal to the sum of
          the Base Rate plus the Base Rate Margin set forth in the table below
                        ----
          opposite the Consolidated Leverage Ratio for the four Fiscal Quarter
          period for which the applicable Compliance Certificate has been
          delivered pursuant to subsection 6.1(iv); or

               (b)  if a Eurodollar Rate Loan, then at the rate equal to the sum
          of the Adjusted Eurodollar Rate plus the Eurodollar Rate Margin set
                                          ----
          forth in the table below opposite the Consolidated Leverage Ratio for
          the four Fiscal Quarter period for which the applicable Compliance
          Certificate has been delivered pursuant to subsection 6.1(iv):

--------------------------------------------------------------------------------
                        Consolidated       Adjusted Eurodollar          Base
                       Leverage Ratio         Rate Margin            Rate Margin
--------------------------------------------------------------------------------
Greater than
Or equal to               3.50:1.00               4.50%               3.50%
--------------------------------------------------------------------------------
Greater than or equal     3.00:1.00
to but less than          3.50:1.00               4.25%               3.25%
--------------------------------------------------------------------------------
Greater than or equal     2.50:1.00
to but less than          3.00:1.00               4.00%               3.00%
--------------------------------------------------------------------------------
Less than                 2.50:1.00               4.00%               3.00%
--------------------------------------------------------------------------------

     provided that, until receipt of the Compliance Certificate for the Fiscal
     --------
     Quarter ended September 30, 2002, the applicable margin for Term Loans that
     are Eurodollar Rate Loans shall be 4.50% per annum and for Term Loans that
     are Base Rate Loans shall be 3.50% per annum.

          (iii) Upon delivery of the Compliance Certificate by Borrowers to
     Administrative Agent pursuant to subsection 6.1(iv), the Base Rate Margin
     and the Eurodollar Rate Margin shall automatically be adjusted in
     accordance with such Compliance Certificate, such adjustment to become
     effective on the next succeeding Business Day following the receipt by
     Administrative Agent of such Compliance Certificate (subject to the
     provisions of the foregoing clauses (i) and (ii)); provided that, if at any
                                                        --------
     time a Compliance Certificate is not delivered at the time required
     pursuant to subsection 6.1(iv), from the time such Compliance Certificate
     was required to be

                                       38

<PAGE>

     delivered until delivery of such Compliance Certificate, the applicable
     margins shall be the maximum percentage amount for the relevant Loan set
     forth above.

          B.    Interest Periods. In connection with each Eurodollar Rate Loan,
Borrowers may, pursuant to the applicable Notice of Borrowing or Notice of
Conversion/Continuation, as the case may be, select an interest period (each an
"Interest Period") to be applicable to such Loan, which Interest Period shall
be, at Borrowers' option, either a one, two, three or, subject to Administrative
Agent's approval, six month period; provided that:
                                    --------

          (i)   the initial Interest Period for any Eurodollar Rate Loan shall
     commence on the Funding Date in respect of such Loan, in the case of a Loan
     initially made as a Eurodollar Rate Loan, or on the date specified in the
     applicable Notice of Conversion/Continuation, in the case of a Loan
     converted to a Eurodollar Rate Loan;

          (ii)  in the case of immediately successive Interest Periods
     applicable to a Eurodollar Rate Loan continued as such pursuant to a Notice
     of Conversion/Continuation, each successive Interest Period shall commence
     on the day on which the next preceding Interest Period expires;

          (iii) if an Interest Period would otherwise expire on a day that is
     not a Business Day, such Interest Period shall expire on the next
     succeeding Business Day; provided that, if any Interest Period would
                              --------
     otherwise expire on a day that is not a Business Day but is a day of the
     month after which no further Business Day occurs in such month, such
     Interest Period shall expire on the next preceding Business Day;

          (iv)  any Interest Period that begins on the last Business Day of a
     calendar month (or on a day for which there is no numerically corresponding
     day in the calendar month at the end of such Interest Period) shall,
     subject to clause (v) of this subsection 2.2B, end on the last Business Day
     of a calendar month;

          (v)   no Interest Period with respect to any portion of the Term Loans
     shall extend beyond February 28, 2008, and no Interest Period with respect
     to any portion of the Revolving Loans shall extend beyond the Revolving
     Loan Commitment Termination Date;

          (vi)  no Interest Period with respect to any type of Term Loans shall
     extend beyond a date on which Borrowers are required to make a scheduled
     payment of principal of such type of Term Loans, unless the sum of (a) the
     aggregate principal amount of such type of Term Loans that are Base Rate
     Loans plus (b) the aggregate principal amount of such type of Term Loans
           ----
     that are Eurodollar Rate Loans with Interest Periods expiring on or before
     such date equals or exceeds the principal amount required to be paid on
     such type of Term Loans on such date;

          (vii) no Interest Period with respect to any portion of the Revolving
     Loans shall extend beyond the date on which a permanent reduction of the
     Revolving Loan Commitments is scheduled to occur unless the sum of (a) the
     aggregate principal amount of Revolving Loans that are Base Rate Loans plus
                                                                            ----
     (b) the aggregate principal amount of

                                       39

<PAGE>

     Revolving Loans that are Eurodollar Rate Loans with Interest Periods
     expiring on or before such date plus (c) the excess of the Revolving Loan
                                     ----
     Commitments then in effect over the aggregate principal amount of Revolving
     Loans then outstanding equals or exceeds the permanent reduction of the
     Revolving Loan Commitments that is scheduled to occur on such date;

          (viii) there shall be no more than fifteen (15) Interest Periods
     outstanding at any time; and

          (ix)   in the event Borrowers fail to specify an Interest Period for
     any Eurodollar Rate Loan in the applicable Notice of Borrowing or Notice of
     Conversion/Continuation, Borrowers shall be deemed to have selected an
     Interest Period of one month.

          C.   Interest Payments. Subject to the provisions of subsection 2.2E,
interest on each Loan shall be payable in arrears on and to each Interest
Payment Date applicable to that Loan, upon any prepayment of that Loan (to the
extent accrued on the amount being prepaid) and at maturity (including final
maturity).

          D.   Conversion or Continuation. Subject to the provisions of
subsections 2.6 and 2.1B, Borrowers shall have the option (i) to convert at any
time all or any part of its outstanding Term Loans or Revolving Loans equal to
$1,000,000 and multiples of $500,000 in excess of that amount from Loans bearing
interest at a rate determined by reference to one basis to Loans bearing
interest at a rate determined by reference to an alternative basis or (ii) upon
the expiration of any Interest Period applicable to a Eurodollar Rate Loan, to
continue all or any portion of such Loan equal to $1,000,000 and multiples of
$500,000 in excess of that amount as a Eurodollar Rate Loan; provided, however,
                                                             --------  -------
that a Eurodollar Rate Loan may only be converted into a Base Rate Loan on the
expiration date of an Interest Period applicable thereto.

          Borrowers' Agent shall deliver a duly executed Notice of
Conversion/Continuation to Administrative Agent no later than 10:00 A.M. (New
York City time) on the proposed conversion date (in the case of a conversion to
a Base Rate Loan) and at least three Business Days in advance of the proposed
conversion/continuation date (in the case of a conversion to, or a continuation
of, a Eurodollar Rate Loan). In lieu of delivering a Notice of
Conversion/Continuation, Borrowers' Agent may give Administrative Agent
telephonic notice by the required time of any proposed conversion/continuation
under this subsection 2.2D; provided that such notice shall be promptly
                            --------
confirmed in writing by delivery of a duly executed Notice of
Conversion/Continuation to Administrative Agent on or before the proposed
conversion/continuation date. Upon receipt of written or telephonic notice of
any proposed conversion/continuation under this subsection 2.2D, Administrative
Agent shall promptly transmit such notice by telefacsimile or telephone to each
Lender of the Loan subject to the Notice of Conversion/Continuation.

          E.   Default Rate. Upon the occurrence and during the continuation of
any Event of Default, the outstanding principal amount of all Loans and, to the
extent permitted by applicable law, any interest payments thereon not paid when
due and any fees and other amounts then due and payable hereunder, shall
thereafter bear interest (including post-petition interest in any proceeding
under the Bankruptcy Code or other applicable bankruptcy laws) payable upon

                                       40

<PAGE>

demand at a rate that is 2% per annum in excess of the interest rate otherwise
payable under this Agreement with respect to the applicable Loans (or, in the
case of any such fees and other amounts, at a rate which is 2% per annum in
excess of the interest rate otherwise payable under this Agreement for Base Rate
Loans); provided that, in the case of Eurodollar Rate Loans, upon the expiration
        --------
of the Interest Period in effect at the time any such increase in interest rate
is effective such Eurodollar Rate Loans shall thereupon become Base Rate Loans
and shall thereafter bear interest payable upon demand at a rate which is 2% per
annum in excess of the interest rate otherwise payable under this Agreement for
Base Rate Loans. Payment or acceptance of the increased rates of interest
provided for in this subsection 2.2E is not a permitted alternative to timely
payment and shall not constitute a waiver of any Event of Default or otherwise
prejudice or limit any rights or remedies of Administrative Agent or any Lender.

          F. Computation of Interest. Interest on the Loans shall be computed on
the basis of a 360-day year, in each case for the actual number of days elapsed
in the period during which it accrues. In computing interest on any Loan, the
date of the making of such Loan or the first day of an Interest Period
applicable to such Loan or, with respect to a Base Rate Loan being converted
from a Eurodollar Rate Loan, the date of conversion of such Eurodollar Rate Loan
to such Base Rate Loan, as the case may be, shall be included, and the date of
payment of such Loan or the expiration date of an Interest Period applicable to
such Loan or, with respect to a Base Rate Loan being converted to a Eurodollar
Rate Loan, the date of conversion of such Base Rate Loan to such Eurodollar Rate
Loan, as the case may be, shall be excluded; provided that if a Loan is repaid
                                             --------
on the same day on which it is made, one day's interest shall be paid on that
Loan.

          G. Maximum Rate. Notwithstanding the foregoing provisions of this
subsection 2.2, in no event shall the rate of interest payable by Borrowers with
respect to any Loan exceed the maximum rate of interest permitted to be charged
under applicable law.

     2.3  Fees.
          ----

          A. Commitment Fees. Borrowers agree to pay to Administrative Agent,
for distribution to each Lender in proportion to that Lender's Pro Rata Share,
commitment fees for the period from and including the Closing Date to the
Revolving Loan Commitment Termination Date equal to the average of the daily
excess of the Revolving Loan Commitment over the Total Utilization of the
Revolving Loan Commitments multiplied by a rate equal to .50% per annum, such
                           ----------
commitment fees to be calculated on the basis of a 360-day year and the actual
number of days elapsed and to be payable quarterly in arrears on the first
Business Day of each Fiscal Quarter, commencing on the first such date to occur
after the Closing Date, and on the Revolving Loan Commitment Termination Date.

          B. Other Fees. Borrowers agree to pay to Administrative Agent such
fees in the amounts and at the times separately agreed upon between Borrowers
and Administrative Agent.

                                       41

<PAGE>

     2.4  Repayments, Prepayments and Reductions in Revolving Loan Commitments;
          ----------------------------------------------------------------------
          General Provisions Regarding Payments; Application of Proceeds of
          -----------------------------------------------------------------
          of Collateral and Payments Under Subsidiary Guaranty.
          ----------------------------------------------------

          A.   Scheduled Payments of Term Loans and Revolving Loan Commitments.

         (i)   Intentionally Omitted.
               ---------------------

         (ii)  Scheduled Payments of Term Loans.  Borrowers shall make principal
               --------------------------------
     payments on the Term Loans in installments on the dates and in the amounts
     set forth below:

     -------------------------------------------------------------------------
                  Date                           Scheduled Repayment
                  ----                           -------------------
     -------------------------------------------------------------------------
             June 30, 2002                           $2,000,000
     -------------------------------------------------------------------------
           September 30, 2002                        $2,000,000
     -------------------------------------------------------------------------
           December 31, 2002                         $6,000,000
     -------------------------------------------------------------------------
             March 31, 2003                          $6,562,500
     -------------------------------------------------------------------------
             June 30, 2003                           $2,187,500
     -------------------------------------------------------------------------
           September 30, 2003                        $2,187,500
     -------------------------------------------------------------------------
           December 31, 2003                         $6,562,500
     -------------------------------------------------------------------------
             March 31, 2004                          $8,437,500
     -------------------------------------------------------------------------
             June 30, 2004                           $2,812,500
     -------------------------------------------------------------------------
           September 30, 2004                        $2,812,500
     -------------------------------------------------------------------------
           December 31, 2004                         $8,437,500
     -------------------------------------------------------------------------
             March 31, 2005                          $11,250,000
     -------------------------------------------------------------------------
             June 30, 2005                           $3,750,000
     -------------------------------------------------------------------------
           September 30, 2005                        $3,750,000
     -------------------------------------------------------------------------
           December 31, 2005                         $11,250,000
     -------------------------------------------------------------------------
             March 31, 2006                          $11,250,000
     -------------------------------------------------------------------------
             June 30, 2006                           $3,750,000
     -------------------------------------------------------------------------
           September 30, 2006                        $3,750,000
     -------------------------------------------------------------------------
           December 31, 2006                         $11,250,000
     -------------------------------------------------------------------------
             March 31, 2007                          $11,250,000
     -------------------------------------------------------------------------
             June 30, 2007                           $3,750,000
     -------------------------------------------------------------------------
           September 30, 2007                        $3,750,000
     -------------------------------------------------------------------------
           December 31, 2007                         $11,250,000
     -------------------------------------------------------------------------
           February 28, 2008                        $150,000,000
     -------------------------------------------------------------------------

                                       42

<PAGE>

     --------------------------------------------------------------------------
                     Date                      Scheduled Repayment
                     ----                      -------------------
     --------------------------------------------------------------------------
                    Total:                        $290,000,000
     --------------------------------------------------------------------------

; provided that the scheduled installments of principal of the Term Loans set
  --------
forth above shall be reduced in connection with any voluntary or mandatory
prepayments of the Term Loans in accordance with subsection 2.4B(iv); and
provided, further that the Term Loans and all other amounts owed hereunder with
--------  -------
respect to the Term Loans shall be paid in full no later than February 28, 2008,
and the final installment payable by Borrowers in respect of the Term Loans on
such date shall be in an amount, if such amount is different from that specified
above, sufficient to repay all amounts owing by Borrowers under this Agreement
with respect to the Term Loans.

          B. Prepayments and Unscheduled Reductions in Revolving Loan
Commitments.

          (i)  Voluntary Prepayments. Borrowers may, upon not less than one
               ---------------------
     Business Day's prior written or telephonic notice, in the case of Base Rate
     Loans and three Business Days' telephonic or written notice in the case of
     Eurodollar Rate Loans, in each case given to Administrative Agent by 12:00
     Noon (New York City time) on the date required and, if given by telephone,
     promptly confirmed in writing to Administrative Agent (which original
     written or telephonic notice Administrative Agent will promptly transmit by
     telefacsimile or telephone to each Lender for the Loans to be prepaid), at
     any time and from time to time prepay any Term Loans or Revolving Loans on
     any Business Day in whole or in part, without premium or penalty, in an
     aggregate minimum amount of $1,000,000 and multiples of $500,000 in excess
     of that amount (except as otherwise provided in subsection 2.4B(iii)(a)),
     provided that Borrowers may only prepay Eurodollar Loans on the last days
     of the related Interest Periods and if the Borrowers pay all breakage costs
     associated with such prepayment as provided in subsection 2.6D. Notice of
     prepayment having been given as aforesaid, the principal amount of the
     Loans specified in such notice shall become due and payable on the
     prepayment date specified therein. Any such voluntary prepayment shall be
     applied as specified in subsection 2.4B(iv).

          (ii) Voluntary Reductions of Revolving Loan Commitments. Borrowers
               --------------------------------------------------
     may, upon not less than three Business Days' prior written or telephonic
     notice confirmed in writing to Administrative Agent (which original written
     or telephonic notice Administrative Agent will promptly transmit by
     telefacsimile or telephone to each Revolving Lender), at any time and from
     time to time terminate in whole or permanently reduce in part, without
     premium or penalty, the Revolving Loan Commitments in an amount up to the
     amount by which the Revolving Loan Commitments exceed the Total Utilization
     of Revolving Loan Commitments at the time of such proposed termination or
     reduction; provided that any such partial reduction of the Revolving Loan
                --------
     Commitments shall be in an aggregate minimum amount of $1,000,000 and
     multiples of $500,000 in excess of that amount. Borrowers' notice to
     Administrative Agent shall designate the date (which shall be a Business
     Day) of such termination or reduction and the amount of any partial
     reduction, and such termination or reduction of the Revolving Loan

                                       43

<PAGE>

     Commitments shall be effective on the date specified in Borrowers' notice
     and shall reduce the Revolving Loan Commitment of each Revolving Lender
     proportionately to its Pro Rata Share. Any such voluntary reduction of the
     Revolving Loan Commitments shall be applied as specified in subsection
     2.4B(iv).

          (iii) Mandatory Prepayments and Mandatory Reductions of Revolving Loan
                ----------------------------------------------------------------
     Commitments. The Loans shall be prepaid and/or the Revolving Loan
     -----------
     Commitments shall be permanently reduced in the amounts and under the
     circumstances set forth below, all such prepayments and/or reductions to be
     applied as set forth below or as more specifically provided in subsection
     2.4B(iv):

               (a) Prepayments and Reductions From Net Asset Sale Proceeds. No
                   -------------------------------------------------------
          later than (i) one Business Day after the date of receipt by Borrowers
          or any of their Subsidiaries of any Net Asset Sale Proceeds in respect
          of any Asset Sale with respect to assets situated in the United States
          of America and (ii) the fifth (5/th/) Business Day after receipt by
          Borrowers or any of their Subsidiaries of any Net Asset Sale Proceeds
          in respect of any Asset Sale with respect to assets situated outside
          the United States of America, Borrowers shall either (1) prepay the
          Loans and/or the Revolving Loan Commitments shall be permanently
          reduced in an aggregate amount equal to such Net Asset Sale Proceeds
          or (2), so long as no Potential Event of Default or Event of Default
          shall have occurred and be continuing deliver to Administrative Agent
          an Officer's Certificate setting forth (x) that portion of such Net
          Asset Sale Proceeds that Borrowers or such Subsidiary intends to
          reinvest in equipment, real property or other productive assets of the
          general type used in the business of Borrowers and their Subsidiaries
          within 270 days of such date of receipt and (y) the proposed use of
          such portion of the Net Asset Sale Proceeds and such other information
          with respect to such reinvestment as Administrative Agent may
          reasonably request, and Borrowers shall, or shall cause one or more of
          their Subsidiaries to, promptly and diligently apply such portion to
          such reinvestment purposes; provided, however, that, pending such
                                      --------  -------
          reinvestment, such portion of the Net Asset Sale Proceeds shall be
          applied to prepay outstanding Revolving Loans (without a reduction in
          Revolving Loan Commitments and notwithstanding any minimum prepayment
          requirement in subsection 2.4B(i)) to the full extent thereof. In
          addition, Borrowers shall, no later than 270 days after receipt of
          such Net Asset Sale Proceeds that have not theretofore been applied to
          the Obligations or that have not been so reinvested as provided above,
          make an additional prepayment of the Loans (and/or the Revolving Loan
          Commitments shall be permanently reduced) in the full amount of all
          such Net Asset Sale Proceeds.

               (b) Prepayments and Reductions from Net Insurance/Condemnation
                   ----------------------------------------------------------
          Proceeds. No later than (i) the first Business Day following the date
          --------
          of receipt by Administrative Agent or by Borrowers or any of their
          Subsidiaries of any Net Insurance/Condemnation Proceeds with respect
          to assets situated in the United States of America and (ii) the fifth
          (5th) Business Day after receipt by Borrowers or any of their
          Subsidiaries of any Net Insurance/Condemnation Proceeds with respect
          to assets situated outside the United States of America, if Borrowers
          that

                                       44

<PAGE>

          are required to be applied to prepay the Loans and/or reduce the
          Revolving Loan Commitments pursuant to the provisions of subsection
          6.4C, Borrowers shall prepay the Loans and/or the Revolving Loan
          Commitments shall be permanently reduced in an aggregate amount equal
          to 100% of such Net Insurance/Condemnation Proceeds.

               (c) Prepayments and Reductions Due to Issuance of Equity
                   ----------------------------------------------------
          Securities. On the date of receipt of the Net Securities Proceeds from
          ----------
          the issuance of any Capital Stock of Company or of any Subsidiary of
          Company (other than issuances to Company) or from any capital
          contribution to Company by any holder of Capital Stock thereof after
          the Closing Date (other than Net Securities Proceeds from the issuance
          of any Capital Stock to any employees, directors or consultants of
          Borrowers and their Subsidiaries, in connection with any benefit plans
          of Borrowers or their Subsidiaries), Borrowers shall prepay the Loans
          and/or the Revolving Loan Commitments shall be permanently reduced in
          an aggregate amount equal to 50% of such Net Securities Proceeds.

               (d) Prepayments and Reductions Due to Issuance of Indebtedness.
                   ----------------------------------------------------------
          No later than the first Business Day following the date of receipt of
          the Net Securities Proceeds from the issuance of any Indebtedness of
          Borrowers or any of their Subsidiaries after the Closing Date, other
          than Indebtedness permitted pursuant to subsection 7.1, Borrowers
          shall prepay the Loans and/or the Revolving Loan Commitments shall be
          permanently reduced in an aggregate amount equal to 100% of such Net
          Securities Proceeds.

               (e) Prepayments and Reductions from Consolidated Excess Cash
                   --------------------------------------------------------
          Flow. In the event that there shall be Consolidated Excess Cash Flow
          ----
          for any Fiscal Year (commencing with Fiscal Year 2002), Borrowers
          shall, no later than 110 days after the end of such Fiscal Year,
          prepay the Loans and/or the Revolving Loan Commitments shall be
          permanently reduced in an aggregate amount equal to (A) 75% of such
          Consolidated Excess Cash Flow, if the Consolidated Leverage Ratio on
          the last day of the applicable Fiscal Year is greater than or equal to
          3.00:1.0, (B) 50% of such Consolidated Excess Cash Flow, if the
          Consolidated Leverage Ratio on the last day of the applicable Fiscal
          Year is less than 3.00:1.00 but greater than 2.50:1.00, or (C) 25% of
          such Consolidated Excess Cash Flow, if the Consolidated Leverage Ratio
          on the last day of the applicable Fiscal Year is less than 2.50:1.00.

               (f) Calculations of Net Proceeds Amounts; Additional Prepayments
                   ------------------------------------------------------------
          and Reductions Based on Subsequent Calculations. Concurrently with any
          -----------------------------------------------
          prepayment of the Loans and/or reduction of the Revolving Loan
          Commitments pursuant to subsections 2.4B(iii)(a)-(e), Borrowers shall
          deliver to Administrative Agent an Officer's Certificate demonstrating
          the calculation of the amount of the applicable Net Asset Sale
          Proceeds, Net Insurance/Condemnation Proceeds, Net Securities
          Proceeds, or Consolidated Excess Cash Flow, as the case may be, that
          gave rise to such prepayment and/or reduction. In the event that
          Borrowers shall subsequently determine that the actual amount was
          greater than the amount set

                                       45

<PAGE>

          forth in such Officer's Certificate, Borrowers shall promptly make an
          additional prepayment of the Loans (and/or, if applicable, the
          Revolving Loan Commitments shall be permanently reduced) in an amount
          equal to the amount of such excess, and Borrowers shall concurrently
          therewith deliver to Administrative Agent an Officer's Certificate
          demonstrating the derivation of the additional amount resulting in
          such excess.

               (g) Prepayments Due to Reductions or Restrictions of Revolving
                   ----------------------------------------------------------
          Loan Commitments. Borrowers shall from time to time prepay the
          ----------------
          Revolving Loans to the extent necessary so that the Total Utilization
          of Revolving Loan Commitments shall not at any time exceed the
          Revolving Loan Commitments then in effect.

               (h) Deposit of Prepayment Amounts into Collateral Account.
                   -----------------------------------------------------
          Notwithstanding the foregoing subsections 2.4B(iii)(a) through (e) and
          the following subsection 2.4B(iii)(i), if the making of any
          prepayments required thereunder shall cause the Borrowers to prepay a
          Eurodollar Rate Loan and incur breakage and other costs pursuant to
          subsection 2.6D, then, provided that there is no Event of Default or
          Potential Event of Default on the date of such prepayment, Borrowers
          may instead deposit the amount of such required prepayment into the
          Collateral Account and Agent shall thereafter apply such funds in the
          Collateral Account to the repayment of the applicable Loans upon the
          expiration of the applicable Eurodollar Rate Loan Interest Periods;
          provided, that (a) Agent shall have no liability in the event of a
          misapplication of such funds and (b) upon the occurrence of an Event
          of Default or Potential Event of Default, Agent may apply such funds
          to the applicable Eurodollar Rate Loans without notice to Borrowers
          and Borrowers shall be liable under subsection 2.6D for any breakage
          or other costs resulting therefrom.

               (i) Prepayments of Revolving Loans from Amounts Transferred to
                   ----------------------------------------------------------
          BTCo Account. If any amounts are transferred to the BTCo Account on
          ------------
          any Business Day pursuant to the terms of any Blocked Account
          Agreement, then on such Business Day, if such amounts are transferred
          to the BTCo Account prior to 1:00 p.m. (New York time) on such
          Business Day, or on the next succeeding Business Day, if such amounts
          are transferred to the BTCo Account on or after 1:00 p.m. (New York
          time) on such Business Day, Borrowers shall prepay Borrowers'
          Revolving Loans constituting Base Rate Loans (without a reduction in
          the Revolving Loan Commitments) in an amount equal to the amount
          transferred to the BTCo Account pursuant to the terms of the
          applicable Blocked Account Agreement on such Business Day until all
          outstanding Revolving Loans constituting Base Rate Loans shall have
          been paid in full.

          (iv) Application of Prepayments and Unscheduled Reductions of
               --------------------------------------------------------
     Revolving Loan Commitments.
     --------------------------

               (a) Application of Voluntary Prepayments by Type of Loans and
                   ---------------------------------------------------------
          Order of Maturity. Any voluntary prepayments pursuant to subsection
          -----------------
          2.4B(i)

                                       46

<PAGE>

               shall be applied as specified by Borrowers in the applicable
               notice of prepayment; provided that in the event Borrowers fail
                                     --------
               to specify the Loans to which any such prepayment shall be
               applied, such prepayment shall be applied first to repay
                                                         -----
               outstanding Revolving Loans to the full extent thereof (without a
               reduction in the Revolving Loan Commitment), and second to repay
                                                                ------
               outstanding Term Loans to the full extent thereof. Subject to
               subsection 2.4B(iv)(e), any voluntary prepayments of the Term
               Loans pursuant to subsection 2.4B(i) shall be applied to prepay
               the Term Loans by reducing the remaining scheduled installments
               of principal of the Term Loans on a pro rata basis.

                    (b) Application of Mandatory Prepayments by Type of Loans.
                        -----------------------------------------------------
               Except as provided in subsection 2.4D, any amount required to be
               applied as a mandatory prepayment of the Loans and/or a reduction
               of the Revolving Loan Commitments pursuant to subsections
               2.4B(iii)(a)-(f) shall be applied first to prepay the Term Loans
                                                 -----
               to the full extent thereof and second, to the extent of any
                                              ------
               remaining portion of such amount, to prepay the Revolving Loans
               to the full extent thereof and to further permanently reduce the
               Revolving Loan Commitments by the amount of such prepayment. Any
               mandatory reduction of Revolving Commitments pursuant to this
               subsection 2.4B shall be in proportion to each Revolving Lender's
               Pro Rata Share.

                    (c) Application of Mandatory Prepayments of Term Loans and
                        ------------------------------------------------------
               the Scheduled Installments of Principal Thereof. Any mandatory
               -----------------------------------------------
               prepayments of the Term Loans pursuant to subsection 2.4B(iii),
               subject to the last sentence of subsection 2.4B(iv)(b) and
               subject to subsection 2.4B(iv)(e), shall be applied to reduce the
               remaining scheduled installments of principal of the Term Loans
               set forth in subsection 2.4A(ii) on a pro rata basis.

                    (d) Application of Prepayments to Base Rate Loans and
                        -------------------------------------------------
               Eurodollar Rate Loans. Considering that Term Loans and Revolving
               ---------------------
               Loans are being prepaid separately, any prepayment thereof shall
               be applied first to Base Rate Loans to the full extent thereof
               before application to Eurodollar Rate Loans, in each case in a
               manner which minimizes the amount of any payments required to be
               made by Borrowers pursuant to subsection 2.6D; provided, however,
                                                              --------  -------
               that Borrowers may elect that the remainder of such prepayments
               not applied to prepay Base Rate Loans be deposited in the
               Collateral Account and applied thereafter to prepay the
               Eurodollar Rate Loan or Loans with Interest Periods expiring on a
               date or dates nearest the date of deposit in accordance with this
               subsection 2.4B(iv), upon expiration of such Interest Periods.

                    (e) Waiver of Term Loan Prepayments. Notwithstanding the
                        -------------------------------
               foregoing, while any Revolving Loans or Revolving Loan
               Commitments are outstanding, in the case of any mandatory or
               optional prepayment of Term Loans under subsections 2.4B(i) and
               2.4B(iv), a Lender of a Term Loan (each a "Waiving Lender") shall
               have the option to waive its rights to receive such a prepayment
               (each a "Waived Prepayment") and instead the aggregate amount of
               any such Waived Prepayment shall be applied to the prepayment of
               the Term

                                       47

<PAGE>

          Loans of Lenders that are not Waiving Lenders (to the full extent of
          the amount of the applicable Waived Prepayment) and thereafter such
          amounts shall be applied to the prepayment of the Revolving Loans (to
          the full extent thereof) but the Revolving Commitments shall not be
          permanently reduced upon such prepayment.

          C.    General Provisions Regarding Payments.

          (i)   Manner and Time of Payment. All payments by Borrowers of
                --------------------------
     principal, interest, fees and other Obligations shall be made in Dollars in
     same day funds, without defense, setoff or counterclaim, free of any
     restriction or condition, and delivered to Agent not later than 12:00 Noon
     (New York City Time) on the date due at the Funding and Payment Office for
     the account of Lenders. Funds received by Agent after that time on such due
     date shall be deemed to have been paid by Borrowers on the next succeeding
     Business Day. In order to effect timely payment of any interest, fees,
     commissions or other amounts due hereunder, Borrowers hereby authorize
     Agent to request Daily Funding Lender to make Revolving Loans for its own
     account (subject to settlement pursuant to subsection 2.1D) in a principal
     amount equal to such interest, fees, commissions or other amounts; provided
     that Agent shall not have the right to request such Revolving Loans if,
     after giving effect to such Revolving Loans, the aggregate outstanding
     principal amount of Revolving Loans would exceed the Revolving Loan
     Commitments then in effect minus the Letter of Credit usage. Daily Funding
     Lender shall make the amount of such Revolving Loans which shall be made as
     Base Rate Loans available to Agent, in same day funds, at the Funding and
     Payment Office, not later than 1:00 P.M. (New York time) on the date
     requested by Agent, and Borrowers and Lenders hereby authorize Agent,
     whether or not the conditions specified in subsection 4.2 have been
     satisfied or waived, to apply the proceeds of such Revolving Loans directly
     to the payment of such unpaid interest, fees, commissions or other amounts.
     Borrowers hereby agree that, upon the funding of any such Revolving Loans
     by Daily Funding Lender in accordance with the provisions of this
     subsection 2.4C(i), Borrowers shall have effected Revolving Loans
     hereunder, which Revolving Loans shall for all purposes of this Agreement
     be deemed to have been made by Daily Funding Lender pursuant to and in
     accordance with the provisions of subsection 2.1C(ii). Agent shall deliver
     prompt notice to Borrowers of the amount of Revolving Loans made pursuant
     to this subsection 2.4C(i), together with copies of all invoices or other
     statements evidencing the fees, commissions or other amounts due hereunder
     (other than interest) paid with the proceeds of such Revolving Loans. In
     addition, Borrowers hereby authorize Agent to charge their accounts with
     Administrative Agent in order to cause timely payment to be made to Agent
     of all principal, interest, fees and expenses due hereunder (subject to
     sufficient funds being available in its accounts for that purpose).

          (ii)  Application of Payments to Principal and Interest. Except as
                -------------------------------------------------
     provided in subsection 2.2C, all payments in respect of the principal
     amount of any Loan shall include payment of accrued interest on the
     principal amount being repaid or prepaid, and all such payments (and, in
     any event, any payments in respect of any Loan on a date when interest is
     due and payable with respect to such Loan) shall be applied to the payment
     of interest before application to principal.

                                       48

<PAGE>

          (iii)  Apportionment of Payments. Aggregate principal and interest
                 -------------------------
     payments in respect of Term Loans and Revolving Loans shall be apportioned
     among all outstanding Loans to which such payments relate, in each case
     proportionately to Lenders' respective Pro Rata Shares; provided that (i)
     payments of principal in respect of the Revolving Loans pursuant to
     subsection 2.4B(iii)(i) shall be applied to reduce the outstanding
     Revolving Loans of Daily Funding Lender (subject to settlement pursuant to
     subsection 2.1D) prior to application to the outstanding Revolving Loans of
     any other Lender and (ii) payments of interest in respect of Revolving
     Loans which are Base Rate Loans shall be apportioned ratably among Lenders
     in proportion to the average daily amount of such Base Rate Loans of each
     Lender outstanding during the period in which such interest shall have
     accrued. Administrative Agent shall promptly distribute to each Lender, at
     its primary address set forth below its name on the appropriate signature
     page hereof or at such other address as such Lender may request, its Pro
     Rata Share of all such payments received by Administrative Agent and the
     commitment fees of such Lender, if any, when received by Administrative
     Agent pursuant to subsection 2.3. Notwithstanding the foregoing provisions
     of this subsection 2.4C(iii), if, pursuant to the provisions of subsection
     2.6C, any Notice of Conversion/Continuation is withdrawn as to any Affected
     Lender or if any Affected Lender makes Base Rate Loans in lieu of its Pro
     Rata Share of any Eurodollar Rate Loans, Administrative Agent shall give
     effect thereto in apportioning payments received thereafter.

          (iv)   Payments on Business Days. Whenever any payment to be made
                 -------------------------
     hereunder shall be stated to be due on a day that is not a Business Day,
     such payment shall be made on the next succeeding Business Day and such
     extension of time shall be included in the computation of the payment of
     interest hereunder or of the commitment fees hereunder, as the case may be.

          (v)    Notation of Payment. Each Lender agrees that before disposing
                 -------------------
     of any Note held by it, or any part thereof (other than by granting
     participations therein), that Lender will make a notation thereon of all
     Loans evidenced by that Note and all principal payments previously made
     thereon and of the date to which interest thereon has been paid; provided
                                                                      --------
     that the failure to make (or any error in the making of) a notation of any
     Loan made under such Note shall not limit or otherwise affect the
     obligations of Borrowers hereunder or under such Note with respect to any
     Loan or any payments of principal or interest on such Note.

          D.     Application of Proceeds of Collateral and Payments after Event
of Default.

          Upon the occurrence and during the continuation of an Event of
Default, either if requested by Requisite Lenders or upon termination of the
Revolving Loan Commitments (a) all payments received on account of the
Obligations, whether from Borrowers, from any Guarantor or otherwise, shall be
applied by Administrative Agent against the Obligations and (b) all proceeds
received by Administrative Agent in respect of any sale of, collection from, or
other realization upon all or any part of the Collateral under any Collateral
Document may, in the discretion of Administrative Agent, be held by
Administrative Agent as Collateral for, and/or (then or at any time thereafter)
applied in full or in part by Administrative Agent against, the

                                       49

<PAGE>

applicable Secured Obligations (as defined in such Collateral Document), in each
case in the following order of priority:

          (i)   to the payment of all costs and expenses of such sale,
     collection or other realization, all other expenses, liabilities and
     advances made or incurred by Administrative Agent in connection therewith,
     and all amounts for which Administrative Agent is entitled to compensation
     (including the fees described in subsection 2.3), reimbursement and
     indemnification under any Loan Document and all advances made by
     Administrative Agent thereunder for the account of the applicable Loan
     Party, and to the payment of all costs and expenses paid or incurred by
     Administrative Agent in connection with the Loan Documents, all in
     accordance with subsections 9.4, 10.2 and 10.3 and the other terms of this
     Agreement and the Loan Documents;

          (ii)  thereafter, to the extent of any excess such proceeds, to the
     payment of all other Obligations for the ratable benefit of the holders
     thereof (subject to the provisions of subsection 2.4C(ii) hereof); and

          (iii) thereafter, to the extent of any excess such proceeds, to the
     payment to or upon the order of such Loan Party or to whosoever may be
     lawfully entitled to receive the same or as a court of competent
     jurisdiction may direct.

     2.5  Use of Proceeds.
          ---------------

          A.   Term Loans and Initial Revolving Loans on Closing Date. On the
Closing Date, the proceeds of the Term Loans and not more than $10,000,000 of
Revolving Loan proceeds shall be applied by Borrowers, together with other
available funds, to make cash payments to satisfy all claims that are to be paid
in Cash on or after the Closing Date pursuant to the Approved Plan of
Reorganization, including without limitation, certain prepetition claims,
including all amounts due under the Existing Credit Facilities, administrative
priority claims and all other costs and expenses and cash payments related to
the consummation of the Approved Plan of Reorganization pursuant to its terms
and to pay Transaction Costs.

          B.   Revolving Loans. Except as provided in subsection 2.5A, in no
event shall any proceeds of any Revolving Loans be applied to make any payments
under the Plan of Reorganization other than the rollover of the Existing Letters
of Credit. Once issued, Revolving Loans shall only be available for the
Borrowers' and their Subsidiaries' working capital and general corporate
purposes not directly related to the consummation of the Approved Plan of
Reorganization needs and for the issuance of Letters of Credit. Borrowers may
advance the proceeds of Revolving Loans to Foreign Subsidiaries in an aggregate
amount not exceeding at any time outstanding the amount provided in subsection
7.1(iv)(d) or request the issuance of Letters of Credit on such Foreign
Subsidiaries' behalf and in such Foreign Subsidiaries' names.

          C.   Margin Regulations. No portion of the proceeds of any borrowing
under this Agreement shall be used by Borrowers or any of their Subsidiaries in
any manner that might cause the borrowing or the application of such proceeds to
violate Regulation U, Regulation T or Regulation X of the Board of Governors of
the Federal Reserve System or any other regulation

                                       50

<PAGE>

of such Board or to violate the Exchange Act, in each case as in effect on the
date or dates of such borrowing and such use of proceeds.

     2.6  Special Provisions Governing Eurodollar Rate Loans.
          --------------------------------------------------

          Notwithstanding any other provision of this Agreement to the contrary,
the following provisions shall govern with respect to Eurodollar Rate Loans as
to the matters covered:

          A.  Determination of Applicable Interest Rate. As soon as practicable
after 10:00 A.M. (New York City time) on each Interest Rate Determination Date,
Administrative Agent shall determine (which determination shall, absent manifest
error, be conclusive and binding upon all parties) the interest rate that shall
apply to the Eurodollar Rate Loans for which an interest rate is then being
determined for the applicable Interest Period and shall promptly give notice
thereof (in writing or by telephone confirmed in writing) to Borrowers and each
Lender.

          B.  Inability to Determine Applicable Interest Rate. In the event that
Administrative Agent shall have determined (which determination shall be
conclusive and binding upon all parties hereto), on any Interest Rate
Determination Date that by reason of circumstances affecting the interbank
Eurodollar market adequate and fair means do not exist for ascertaining the
interest rate applicable to such Loans on the basis provided for in the
definition of Adjusted Eurodollar Rate, Administrative Agent shall on such date
give notice (by telefacsimile or by telephone confirmed in writing) to Borrowers
and each Lender of such determination, whereupon (i) no Loans may be made as, or
converted to, Eurodollar Rate Loans until such time as Administrative Agent
notifies Borrowers and Lenders that the circumstances giving rise to such notice
no longer exist and (ii) any Notice of Borrowing or Notice of
Conversion/Continuation given by Borrowers with respect to the Loans in respect
of which such determination was made shall be deemed to be for a Base Rate Loan.

          C.  Illegality or Impracticability of Eurodollar Rate Loans. In the
event that on any date any Lender shall have determined (which determination
shall be conclusive and binding upon all parties hereto but shall be made only
after consultation with Borrowers and Administrative Agent) that the making,
maintaining or continuation of its Eurodollar Rate Loans (i) has become unlawful
as a result of compliance by such Lender in good faith with any law, treaty,
governmental rule, regulation, guideline or order (or would conflict with any
such treaty, governmental rule, regulation, guideline or order not having the
force of law even though the failure to comply therewith would not be unlawful)
or (ii) has become impracticable, or would cause such Lender material hardship,
as a result of contingencies occurring after the date of this Agreement which
materially and adversely affect the interbank Eurodollar market or the position
of such Lender in that market, then, and in any such event, such Lender shall be
an "Affected Lender" and it shall on that day give notice (by telefacsimile or
by telephone confirmed in writing) to Borrowers and Administrative Agent of such
determination (which notice Administrative Agent shall promptly transmit to each
other Lender). Thereafter (a) the obligation of the Affected Lender to make
Loans as, or to convert Loans to, Eurodollar Rate Loans shall be suspended until
such notice shall be withdrawn by the Affected Lender, (b) to the extent such
determination by the Affected Lender relates to a Eurodollar Rate Loan then
being

                                       51

<PAGE>

requested by Borrowers pursuant to a Notice of Borrowing or a Notice of
Conversion/Continuation, the Affected Lender shall make such Loan as (or convert
such Loan to, as the case may be) a Base Rate Loan, (c) the Affected Lender's
obligation to maintain its outstanding Eurodollar Rate Loans (the "Affected
Loans") shall be terminated at the earlier to occur of the expiration of the
Interest Period then in effect with respect to the Affected Loans or when
required by law, and (d) the Affected Loans shall automatically convert into
Base Rate Loans on the date of such termination. Notwithstanding the foregoing,
to the extent a determination by an Affected Lender as described above relates
to a Eurodollar Rate Loan then being requested by Borrowers pursuant to a Notice
of Borrowing or a Notice of Conversion/Continuation, Borrowers shall have the
option, subject to the provisions of subsection 2.6D, to rescind such Notice of
Borrowing or Notice of Conversion/Continuation as to all Lenders by giving
notice (by telefacsimile or by telephone confirmed in writing) to Administrative
Agent of such rescission on the date on which the Affected Lender gives notice
of its determination as described above (which notice of rescission
Administrative Agent shall promptly transmit to each other Lender). Except as
provided in the immediately preceding sentence, nothing in this subsection 2.6C
shall affect the obligation of any Lender other than an Affected Lender to make
or maintain Loans as, or to convert Loans to, Eurodollar Rate Loans in
accordance with the terms of this Agreement.

          D.  Compensation For Breakage or Non-Commencement of Interest Periods.
Borrowers shall compensate each Lender, upon written request by that Lender
pursuant to subsection 2.8, for all reasonable losses, expenses and liabilities
(including any interest paid by that Lender to lenders of funds borrowed by it
to make or carry its Eurodollar Rate Loans and any loss, expense or liability
sustained by that Lender in connection with the liquidation or re-employment of
such funds) which that Lender may sustain: (i) if for any reason (other than a
default by that Lender) a borrowing of any Eurodollar Rate Loan does not occur
on a date specified therefor in a Notice of Borrowing or a telephonic request
therefor, or a conversion to or continuation of any Eurodollar Rate Loan does
not occur on a date specified therefor in a Notice of Conversion/Continuation or
a telephonic request therefor, (ii) if any prepayment or other principal payment
or any conversion of any of its Eurodollar Rate Loans (including any prepayment
or conversion occasioned by the circumstances described in subsection 2.6C)
occurs on a date prior to the last day of an Interest Period applicable to that
Loan, (iii) if any prepayment of any of its Eurodollar Rate Loans is not made on
any date specified in a notice of prepayment given by Borrowers, or (iv) as a
consequence of any other default by Borrowers in the repayment of its Eurodollar
Rate Loans when required by the terms of this Agreement.

          E.  Booking of Eurodollar Rate Loans. Any Lender may make, carry or
transfer Eurodollar Rate Loans at, to, or for the account of any of its branch
offices or the office of an Affiliate of that Lender.

          F.  Assumptions Concerning Funding of Eurodollar Rate Loans.
Calculation of all amounts payable to a Lender under this subsection 2.6 and
under subsection 2.7A shall be made as though that Lender had funded each of its
Eurodollar Rate Loans through the purchase of a Eurodollar deposit bearing
interest at the rate obtained pursuant to clause (i) of the definition of
Adjusted Eurodollar Rate in an amount equal to the amount of such Eurodollar
Rate Loan and having a maturity comparable to the relevant Interest Period,
whether or not its Eurodollar Rate Loans had been funded in such manner.

                                       52

<PAGE>

          G.  Eurodollar Rate Loans After Default. After the occurrence of and
during the continuation of a Potential Event of Default or an Event of Default,
(i) Borrowers may not elect to have a Loan be made or maintained as, or
converted to, a Eurodollar Rate Loan after the expiration of any Interest Period
then in effect for that Loan and (ii) subject to the provisions of subsection
2.6D, any Notice of Borrowing or Notice of Conversion/Continuation given by
Borrowers with respect to a requested borrowing or conversion/continuation that
has not yet occurred shall be deemed to be for a Base Rate Loan or, if the
conditions to making a Loan set forth in subsection 4.2 cannot then be
satisfied, to be rescinded by Borrowers.

     2.7  Increased Costs; Taxes; Capital Adequacy.
          ----------------------------------------

          A.  Compensation for Increased Costs. Subject to the provisions of
subsection 2.7B (which shall be controlling with respect to the matters covered
thereby), in the event that any Lender (including any Issuing Lender) shall
determine (which determination shall, absent manifest error, be final and
conclusive and binding upon all parties hereto) that any law, treaty or
governmental rule, regulation or order, or any change therein or in the
interpretation, administration or application thereof (including the
introduction of any new law, treaty or governmental rule, regulation or order),
or any determination of a court or other Government Authority, in each case that
becomes effective after the date hereof, or compliance by such Lender with any
guideline, request or directive issued or made after the date hereof by any
central bank or other Government Authority (whether or not having the force of
law):

          (i)   subjects such Lender to any additional Tax with respect to this
     Agreement or any of its obligations hereunder (including with respect to
     issuing or maintaining any Letters of Credit or purchasing or maintaining
     any participations therein or maintaining any Commitment hereunder) or any
     payments to such Lender of principal, interest, fees or any other amount
     payable hereunder;

          (ii)  imposes, modifies or holds applicable any reserve, special
     deposit, compulsory loan, insurance charge or similar requirement against
     assets held by, or deposits or other liabilities in or for the account of,
     or advances or loans by, or other credit extended by, or any other
     acquisition of funds by, any office of such Lender (other than any such
     reserve or other requirements with respect to Eurodollar Rate Loans that
     are reflected in the definition of Adjusted Eurodollar Rate); or

          (iii) imposes any other condition (other than with respect to Taxes)
     on or affecting such Lender or its obligations hereunder or the interbank
     Eurodollar market;

and the result of any of the foregoing is to increase the cost to such Lender of
agreeing to make, making or maintaining its Loans or Commitments or agreeing to
issue, issuing or maintaining any Letter of Credit or agreeing to purchase,
purchasing or maintaining any participation therein or to reduce any amount
received or receivable by such Lender with respect thereto; then, in any such
case, Borrowers shall promptly pay to such Lender, upon receipt of the statement
referred to in subsection 2.8A, such additional amount or amounts (in the form
of an increased rate of, or a different method of calculating, interest or
otherwise as such Lender in its sole discretion shall determine) as may be
necessary to compensate such Lender for any such increased cost or reduction in
amounts received or receivable hereunder.

                                       53

<PAGE>

          B.   Taxes.

          (i)  Payments to Be Free and Clear. All sums payable by Borrowers
               -----------------------------
     under this Agreement and the other Loan Documents shall be paid free and
     clear of, and without any deduction or withholding on account of, any Tax
     imposed, levied, collected, withheld or assessed by or within the United
     States of America or any political subdivision in or of the United States
     of America or any other jurisdiction from or to which a payment is made by
     or on behalf of Borrower or by any federation or organization of which the
     United States of America or any such jurisdiction is a member at the time
     of payment.

          (ii) Grossing-up of Payments. If Borrowers or any other Person is
               -----------------------
     required by law to make any deduction or withholding on account of any such
     Tax from any sum paid or payable by Borrowers to Administrative Agent or
     any Lender under any of the Loan Documents:

               (a) Borrowers shall notify Administrative Agent of any such
          requirement or any change in any such requirement as soon as Borrowers
          become aware of it;

               (b) Borrowers shall pay any such Tax when such Tax is due, such
          payment to be made (if the liability to pay is imposed on Borrowers)
          for its own account or (if that liability is imposed on Administrative
          Agent or such Lender, as the case may be) on behalf of and in the name
          of Administrative Agent or such Lender;

               (c) the sum payable by Borrowers in respect of which the relevant
          deduction, withholding or payment is required shall be increased to
          the extent necessary to ensure that, after the making of that
          deduction, withholding or payment, Administrative Agent or such
          Lender, as the case may be, receives on the due date a net sum equal
          to what it would have received had no such deduction, withholding or
          payment been required or made; and

               (d) within 30 days after paying any sum from which it is required
          by law to make any deduction or withholding, and within 30 days after
          the due date of payment of any Tax which it is required by clause (b)
          above to pay, Borrowers shall deliver to Administrative Agent evidence
          satisfactory to the other affected parties of such deduction,
          withholding or payment and of the remittance thereof to the relevant
          taxing or other authority;

provided that no such additional amount shall be required to be paid to any
--------
Lender under clause (c) above except to the extent that any change after the
date on which such Lender became a Lender in any such requirement for a
deduction, withholding or payment as is mentioned therein shall result in an
increase in the rate of such deduction, withholding or payment from that in
effect on the date on which such Lender became a Lender, in respect of payments
to such Lender.

                                       54

<PAGE>

          (iii) Evidence of Exemption from U.S. Withholding Tax.
                -----------------------------------------------

                (a) Each Non-US Lender shall deliver to Administrative Agent and
          to Borrowers, on or prior to the Closing Date (in the case of each
          Lender listed on the signature pages hereof) or on or prior to the
          date of the Assignment Agreement pursuant to which it becomes a Lender
          (in the case of each other Lender), and at such other times as may be
          necessary in the determination of Borrowers or Administrative Agent
          (each in the reasonable exercise of its discretion), two original
          copies of Internal Revenue Service Form W-8BEN or W-8ECI (or any
          successor forms) properly completed and duly executed by such Lender,
          or, in the case of a Non-US Lender claiming exemption from United
          States federal withholding tax under Section 871(h) or 881(c) of the
          Internal Revenue Code with respect to payments of "portfolio
          interest", a form W-8BEN, and, in the case of a Lender that has
          certified in writing to Administrative Agent that it is not a "bank"
          (as defined in Section 881(c)(3)(A) of the Internal Revenue Code), a
          certificate of such Lender certifying that such Lender is not (i) a
          "bank" for purposes of Section 881(c) of the Internal Revenue Code,
          (ii) a ten-percent shareholder (within the meaning of Section
          871(h)(3)(B) of the Internal Revenue Code) of Borrowers or (iii) a
          controlled foreign corporation related to Borrowers (within the
          meaning of Section 864(d)(4) of the Internal Revenue Code) in each
          case together with any other certificate or statement of exemption
          required under the Internal Revenue Code or the regulations issued
          thereunder to establish that such Lender is not subject to United
          States withholding tax with respect to any payments to such Lender of
          interest payable under any of the Loan Documents.

                (b) Each Non-US Lender, to the extent it does not act or ceases
          to act for its own account with respect to any portion of any sums
          paid or payable to such Lender under any of the Loan Documents (for
          example, in the case of a typical participation by such Lender), shall
          deliver to Administrative Agent and to Borrowers, on or prior to the
          Closing Date (in the case of each Lender listed on the signatures
          pages hereof), on or prior to the date of the Assignment Agreement
          pursuant to which it becomes a Lender (in the case of each other
          Lender), or on such later date when such Lender ceases to act for its
          own account with respect to any portion of any such sums paid or
          payable, and at such other times as may be necessary in the
          determination of Borrowers or Administrative Agent (each in the
          reasonable exercise of its discretion), (1) two original copies of the
          forms or statements required to be provided by such Lender under
          subsection 2.7B(iii)(a), properly completed and duly executed by such
          Lender, to establish the portion of any such sums paid or payable with
          respect to which such Lender acts for its own account that is not
          subject to United States withholding tax, and (2) two original copies
          of Internal Revenue Service Form W-8IMY (or any successor forms)
          properly completed and duly executed by such Lender, together with any
          information, if any, such Lender chooses to transmit with such form,
          and any other certificate or statement of exemption required under the
          Internal Revenue Code or the regulations issued thereunder, to
          establish that such Lender is not acting for its own account with
          respect to a portion of any such sums payable to such Lender.

                                       55

<PAGE>

               (c) Each Non-US Lender hereby agrees, from time to time after the
          initial delivery by such Lender of such forms, whenever a lapse in
          time or change in circumstances renders such forms, certificates or
          other evidence so delivered obsolete or inaccurate in any material
          respect, that such Lender shall promptly (1) deliver to Administrative
          Agent and to Borrowers two original copies of renewals, amendments or
          additional or successor forms, properly completed and duly executed by
          such Lender, together with any other certificate or statement of
          exemption required in order to confirm or establish that such Lender
          is not subject to United States withholding tax with respect to
          payments to such Lender under the Loan Documents and, if applicable,
          that such Lender does not act for its own account with respect to any
          portion of such payment, or (2) notify Administrative Agent and
          Borrowers of its inability to deliver any such forms, certificates or
          other evidence.

               (d) Borrowers shall not be required to pay any additional amount
          to any Non-US Lender under clause (c) of subsection 2.7B(ii), (1) with
          respect to any Tax required to be deducted or withheld on the basis of
          the information, certificates or statements of exemption such Lender
          chooses to transmit with an Internal Revenue Service Form W-8IMY
          pursuant to subsection 2.7B(iii)(b)(2) or (2) if such Lender shall
          have failed to satisfy the requirements of clause (a), (b) or (c)(1)
          of this subsection 2.7B(iii); provided that if such Lender shall have
                                        --------
          satisfied the requirements of subsection 2.7B(iii)(a) on the date such
          Lender became a Lender, nothing in this subsection 2.7B(iii)(d) shall
          relieve Borrowers of their obligation to pay any amounts pursuant to
          subsection 2.7B(ii)(c) in the event that, as a result of any change in
          any applicable law, treaty or governmental rule, regulation or order,
          or any change in the interpretation, administration or application
          thereof, such Lender is no longer properly entitled to deliver forms,
          certificates or other evidence at a subsequent date establishing the
          fact that such Lender is not subject to withholding as described in
          subsection 2.7B(iii)(a).

          C.   Capital Adequacy Adjustment. If any Lender shall have determined
that the adoption, effectiveness, phase-in or applicability after the date
hereof of any law, rule or regulation (or any provision thereof) regarding
capital adequacy, or any change therein or in the interpretation or
administration thereof by any Government Authority charged with the
interpretation or administration thereof, or compliance by any Lender with any
guideline, request or directive regarding capital adequacy (whether or not
having the force of law) of any such Government Authority, has or would have the
effect of reducing the rate of return on the capital of such Lender or any
corporation controlling such Lender as a consequence of, or with reference to,
such Lender's Loans or Commitments or Letters of Credit or participations
therein or other obligations hereunder with respect to the Loans or the Letters
of Credit to a level below that which such Lender or such controlling
corporation could have achieved but for such adoption, effectiveness, phase-in,
applicability, change or compliance (taking into consideration the policies of
such Lender or such controlling corporation with regard to capital adequacy),
then from time to time, within five Business Days after receipt by Borrowers
from such Lender of the statement referred to in subsection 2.8A, Borrowers
shall pay to such Lender such additional amount or amounts as will compensate
such Lender or such controlling corporation on an after-tax basis for such
reduction.

                                       56

<PAGE>

     2.8  Statement of Lenders; Obligation of Lenders and Issuing Lenders to
          ------------------------------------------------------------------
          Mitigate.
          --------

          A. Statements. Each Lender claiming compensation or reimbursement
pursuant to subsection 2.6D, 2.7 or 2.8B shall deliver to Borrowers (with a copy
to Administrative Agent) a written statement, setting forth in reasonable detail
the basis of the calculation of such compensation or reimbursement, which
statement shall be conclusive and binding upon all parties hereto absent
manifest error.

          B. Mitigation. Each Lender and Issuing Lender agrees that, as promptly
as practicable after the officer of such Lender or Issuing Lender responsible
for administering the Loans or Letters of Credit of such Lender or Issuing
Lender, as the case may be, becomes aware of the occurrence of an event or the
existence of a condition that would cause such Lender to become an Affected
Lender or that would entitle such Lender or Issuing Lender to receive payments
under subsection 2.7, use reasonable effort to make, issue, fund or maintain the
Commitments of such Lender or the Affected Loans or Letters of Credit of such
Lender or Issuing Lender through another lending or letter of credit office of
such Lender or Issuing Lender, if (i) as a result thereof the circumstances
which would cause such Lender to be an Affected Lender would cease to exist or
the additional amounts which would otherwise be required to be paid to such
Lender or Issuing Lender pursuant to subsection 2.7 would be eliminated or
materially reduced and (ii) as determined by such Lender or Issuing Lender in
its sole discretion, such action would not otherwise be disadvantageous to such
Lender or Issuing Lender; provided that such Lender or Issuing Lender will not
                          --------
be obligated to utilize such other lending or letter of credit office pursuant
to this subsection 2.8B unless Borrowers agree to pay all incremental expenses
incurred by such Lender or Issuing Lender as a result of utilizing such other
lending or letter of credit office as described above.

     2.9  Replacement of a Lender.
          -----------------------

          If Borrowers receive a statement of amounts due pursuant to subsection
2.8A from a Lender, a Revolving Lender defaults in its obligations to fund a
Revolving Loan pursuant to this Agreement, a Lender (a "Non-Consenting Lender")
refuses to consent to an amendment, modification or waiver of this Agreement
that, pursuant to subsection 10.6, requires consent of 100% of the Lenders or
100% of the Lenders with Obligations directly affected or a Lender becomes an
Affected Lender (any such Lender, a "Subject Lender"), so long as (i) no
Potential Event of Default or Event of Default shall have occurred and be
continuing and Borrowers have obtained a commitment from another Lender or an
Eligible Assignee to purchase at par the Subject Lender's Loans and assume the
Subject Lender's Commitments and all other obligations of the Subject Lender
hereunder, (ii) such Lender is not an Issuing Lender with respect to any Letters
of Credit outstanding (unless all such Letters of Credit are terminated or
arrangements acceptable to such Issuing Lender (such as a "back-to-back" letter
of credit) are made) and (iii), if applicable, the Subject Lender is unwilling
to withdraw the notice delivered to Borrowers pursuant to subsection 2.8 and/or
is unwilling to remedy its default upon 10 days prior written notice to the
Subject Lender and Administrative Agent, Borrowers may require the Subject
Lender to assign all of its Loans and Commitments to such other Lender, Lenders,
Eligible Assignee or Eligible Assignees pursuant to the provisions of subsection
10.1B; provided that, prior to or concurrently with such replacement, (1) the
       --------
Subject Lender shall have received

                                       57

<PAGE>

payment in full of all principal, interest, fees and other amounts (including
all amounts under subsections 2.6D, 2.7 and/or 2.8B (if applicable)) through
such date of replacement and a release from its obligations under the Loan
Documents, (2) the processing fee required to be paid by subsection 10.1B(i)
shall have been paid to Administrative Agent, (3) all of the requirements for
such assignment contained in subsection 10.1B, including, without limitation,
the consent of Administrative Agent (if required) and the receipt by
Administrative Agent of an executed Assignment Agreement and other supporting
documents, have been fulfilled, and (4) in the event such Subject Lender is a
Non-Consenting Lender, each assignee shall consent, at the time of such
assignment, to each matter in respect of which such Subject Lender was a
Non-Consenting Lender and Borrowers also require each other Subject Lender that
is a Non-Consenting Lender to assign its Loans and Commitments.

     2.10 Collection, Deposit and Transfer of Payments in Respect of Accounts.
          --------------------------------------------------------------------

          Borrowers shall, and shall cause each of their Subsidiaries to,
maintain in effect at all times the system of accounts and procedures comprising
the Cash Management System, as it may be modified from time to time in a manner
reasonably satisfactory to Administrative Agent, for the collection and deposit
of payments in respect of such Person's Deposit Accounts and the transfer of
amounts so deposited to the BTCo Account. Without limiting the generality of the
foregoing:

     A. Maintenance of Concentration Accounts.

          (i)  Except as permitted under subsection 2.10A(ii), Borrowers shall,
     and shall cause each of their Subsidiaries to, at all times maintain the
     Concentration Accounts described in Schedule 1.1A annexed hereto or
     otherwise established pursuant to the terms of this Agreement and the
     Blocked Account Agreements, if any.

          (ii) Borrowers shall not, and shall not permit any of their
     Subsidiaries to, close any Concentration Account or open a new
     Concentration Account unless it shall have (a) notified Administrative
     Agent in writing at least 30 days (or such lesser number of days as may be
     agreed to by Administrative Agent) prior to the proposed closing or opening
     and (b) in the case of a new Concentration Account, entered into a Blocked
     Account Agreement with the applicable Concentration Bank.

     B. Collection and Deposit of Payments in Respect of Accounts. Borrowers
hereby agree, from and after such time, if any, as Administrative Agent shall
have notified Borrowers in writing that the provisions of this subsection 2.10B
are to become effective until such later time, if any, as Administrative Agent
shall have notified Borrowers in writing that such provisions are no longer to
be effective, not to deposit any monies into the Concentration Accounts or to
otherwise permit any monies to be deposited into any of such accounts, except
payments received in respect of Borrowers' Accounts.

     C. Transfer of Amounts Deposited in the Concentration Accounts to the BTCo
Account. If the amount on deposit in any Concentration Account on any Business
Day exceeds $1,000,000, Borrowers shall cause any amounts deposited in such
Concentration Account in excess of $1,000,000 to be transferred on such Business
Day to the BTCo Account. Any

                                       58

<PAGE>

amounts so transferred to the BTCo Account first shall be applied as provided in
subsection 2.4B(iii)(i) to the extent therein provided, and thereafter any
amounts so transferred to the BTCo Account, so long as no Event of Default or
Potential Event of Default shall have occurred and be continuing, shall be
available for disbursement to the applicable Loan Parties for working capital
and other general corporate purposes subject to the terms and provisions of this
Agreement.

     D. Treatment of Accounts. Borrowers shall not, without Administrative
Agent's prior written consent, grant any extension of the time of payment of any
Account, compromise or settle any Account for less than the full amount thereof,
release, in whole or in part, any person or property liable for the payment
thereof, or allow any credit or discount whatsoever thereon, except, prior to
the occurrence of an Event of Default, in accordance with their usual and
customary business practice, provided that no such consent shall be required
unless and until the aggregate amount of such Accounts exceeds $1,000,000
individually and $5,000,000 in the aggregate.

     E. Borrowers to Provide Information. Borrowers shall, at such intervals as
Administrative Agent may reasonably request, furnish such statements, schedules
and/or information as Administrative Agent may request relating to Borrowers'
and their Subsidiaries' Accounts and the collection, deposit and transfer of
payments in respect thereof, including, without limitation, all invoices (if
any) evidencing such Accounts.

     2.11 Joint and Several Liability.
          ---------------------------

     A. Joint and Several Liability. The Obligations shall constitute one joint
and several direct and general obligation of all of the Borrowers.
Notwithstanding anything to the contrary contained herein, each of the Borrowers
shall be jointly and severally, with the other Borrowers, directly and
unconditionally liable to the Administrative Agent and the Lenders for all
Obligations and shall have the obligations of co-maker with respect to the
Loans, the Notes and the Obligations, it being agreed that the advances to each
Borrower inure to the benefit of all of the Borrowers, and that the
Administrative Agent and the Lenders are relying on the joint and several
liability of the Borrowers as co-makers in extending the Loans hereunder and
arranging for the issuance of Letters of Credit. Each Borrower hereby
unconditionally and irrevocably agrees that upon a default in the payment when
due (whether at stated maturity, by acceleration or otherwise) of any principal
of, or interest on, any Loan or other Obligation payable to the Administrative
Agent or any Lender which constitutes an Event of Default, it will forthwith pay
the same, without notice or demand except to the extent expressly provided to
the contrary herein.

     B. No Reduction in Obligations. No payment or payments made by any of the
Borrowers or any other Person or received or collected by the Administrative
Agent or any Lender from any of the Borrowers or any other Person by virtue of
any action or proceeding or any setoff or appropriation or application at any
time or from time to time in reduction of or in payment of the Obligations shall
be deemed to modify, reduce, release or otherwise affect the liability of each
Borrower to repay any outstanding Obligations until all such outstanding
Obligations are paid in full and this Agreement is terminated.

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<PAGE>

     2.12 Obligations Absolute.
          --------------------

          Each Borrower agrees that the Obligations will be paid strictly in
accordance with the terms of the Loan Documents, regardless of any law,
regulation or order now or hereafter in effect in any jurisdiction affecting any
of such terms or the rights of the Administrative Agent or any Lender with
respect thereto. All Obligations shall be conclusively presumed to have been
created in reliance hereon. The liabilities under this Agreement shall be
absolute and unconditional irrespective of: (a) any lack of validity or
enforceability of any Loan Document or any other agreement or instrument
relating thereto; (b) any change in the time, manner or place of payments of, or
in any other term of, all or any part of the Obligations, or any other amendment
or waiver thereof or any consent to departure therefrom, including any increase
in the Obligations resulting from the extension of additional credit to any
Borrower or otherwise; (c) any taking, exchange, release or non-perfection of
any collateral, or any release or amendment or waiver of or consent to departure
from any guaranty for all or any of the Obligations; (d) any change,
restructuring or termination of the corporate structure or existence of any
Borrower; or (e) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, any Borrower. This Agreement shall
continue to be effective or be reinstated, as the case may be, if at any time
any payment of any of the Obligations is rescinded or must otherwise be returned
by the Administrative Agent or any Lender upon the insolvency, bankruptcy or
reorganization of any Borrower or otherwise, all as though such payment had not
been made.

     2.13 Waiver of Suretyship Defenses.
          -----------------------------

          Each Borrower agrees that the joint and several liability of the
Borrowers provided for in subsection 2.11 shall not be impaired or affected by
any modification, supplement, extension or amendment of any contract or
agreement to which the other Borrowers may hereafter agree (other than an
agreement signed by the Administrative Agent and, if applicable, the Lenders
specifically releasing or limiting such liability), nor by any delay, extension
of time, renewal, compromise or other indulgence granted by the Administrative
Agent or any Lender with respect to any of the Obligations, nor by any other
agreements or arrangements whatever with the other Borrowers or with anyone
else, each Borrower hereby waiving all notice of such delay, extension, release,
substitution, renewal, compromise or other indulgence, and hereby consenting to
be bound thereby as fully and effectually as if it had expressly agreed thereto
in advance. The liability of each Borrower is direct and unconditional as to all
of the Obligations, and may be enforced without requiring the Administrative
Agent or any Lender first to resort to any other right, remedy or security. Each
Borrower hereby expressly waives promptness, diligence, notice of acceptance and
any other notice (except to the extent expressly provided for herein or in
another Loan Document) with respect to any of the Obligations, the Notes, this
Agreement or any other Loan Document and any requirement that the Administrative
Agent or any Lender protect, secure, perfect or insure any Lien or any property
subject thereto or exhaust any right or take any action against any Borrower or
any other Person or any collateral.

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<PAGE>

     2.14  Contribution and Indemnification among the Borrowers.
           ----------------------------------------------------

           Each Borrower is obligated to repay the Obligations as joint and
several obligors under this Agreement. To the extent that any Borrower shall,
under this Agreement as a joint and several obligor, repay any of the
Obligations constituting Loans made to the other Borrowers hereunder or other
Obligations incurred directly and primarily by the other Borrowers (an
"Accommodation Payment"), then the Borrower making such Accommodation Payment
shall be entitled to contribution and indemnification from, and be reimbursed
by, the other Borrowers in an amount equal to such Accommodation Payment. All
rights and claims of contribution, indemnification and reimbursement under this
subsection 2.14 shall be subordinate in right of payment to the prior payment in
full in Cash of the Obligations.

     2.15  Company as Borrowers' Agent.
           ---------------------------

           Company is hereby appointed Borrowers' Agent hereunder by each
Borrower (in such capacity "Borrowers' Agent"). Each Borrower hereby irrevocably
authorizes, directs and empowers Company with full power of attorney to act for
and in the name of such Borrower and as its agent hereunder and under the other
instruments and agreements referred to herein. Company hereby accepts each such
appointment. Each Borrower hereby irrevocably authorizes Company to take such
action on such Borrower's behalf and to exercise such powers hereunder, under
the other Loan Documents, and under the other agreements and instruments
referred to herein or therein as may be contemplated being taken or exercised by
such Borrower by the terms hereof and thereof, together with such powers as may
be incidental thereto, including, without limitation, to borrow hereunder and
deliver Notices of Borrowing, Notices of Conversion/Continuation, Notices of
Issuance of Letter of Credit and Compliance Certificates hereunder, to convert,
continue, repay or prepay Loans made hereunder, to reduce the Commitments, to
pay interest, fees, costs and expenses incurred in connection with the Loans,
this Agreement, the other Loan Documents, and the other agreements and
instruments referred to herein or therein, to receive from or deliver to
Administrative Agent or any Lender any notices, statements, reports,
certificates or other documents or instruments contemplated herein, in the other
Loan Documents or in any other agreement or instrument referred to herein and to
receive from or transmit to Administrative Agent any Loan proceeds or payments.
Administrative Agent and each Lender shall be entitled to rely on the
appointment and authorization of Company with respect to all matters related to
this Agreement, the other Loan Documents and any other agreements or instruments
referred to herein or therein whether or not any particular provision hereof or
thereof specifies that such matters may or shall be undertaken by Borrowers'
Agent. In reliance hereon, Administrative Agent and each Lender shall have the
right to deal only with Company with the same effect as if Administrative Agent
or such Lender had dealt with each Borrower separately and individually.

Section 3. LETTERS OF CREDIT

     3.1   Issuance of Letters of Credit and Lenders' Purchase of Participations
           ---------------------------------------------------------------------
           Therein.
           -------

           A. Letters of Credit. In addition to Borrowers' Agent requesting that
Lenders make Revolving Loans pursuant to subsection 2.1A(iii), Borrowers' Agent
may request,

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<PAGE>

in accordance with the provisions of this subsection 3.1, from time to time
during the period from the Closing Date to 30 days prior to the Revolving Loan
Commitment Termination Date, that one or more Revolving Lenders issue Letters of
Credit payable on a sight basis for the account of the applicable Borrower for
the purposes specified in the definitions of Commercial Letters of Credit and
Standby Letters of Credit. Subject to the terms and conditions of this Agreement
and in reliance upon the representations and warranties of Borrowers herein set
forth, any one or more Lenders may, but (except as provided in subsection
3.1B(ii)) shall not be obligated to, issue such Letters of Credit in accordance
with the provisions of this subsection 3.1; provided that Borrowers' Agent shall
                                            --------
not request that any Revolving Lender issue (and no Revolving Lender shall
issue):

          (i)   any Letter of Credit if, after giving effect to such issuance,
     the Total Utilization of Revolving Loan Commitments would exceed the
     Revolving Loan Commitments then in effect;

          (ii)  any Letter of Credit if, after giving effect to such issuance,
     the Letter of Credit Usage would exceed $25,000,000 (after conversion of
     the face amount of Letters of Credit issued in a currency other than
     Dollars into Dollars at the prevailing spot rate);

          (iii) any Standby Letter of Credit having an expiration date later
     than the earlier of (a) five days prior to the Revolving Loan Commitment
     Termination Date and (b) the date which is one year after the date of
     issuance of such Standby Letter of Credit; provided that the immediately
                                                --------
     preceding clause (b) shall not prevent any Issuing Lender from agreeing
     that a Standby Letter of Credit will automatically be extended for one or
     more successive periods not to exceed one year each unless such Issuing
     Lender elects not to extend for any such additional period; and provided,
                                                                     --------
     further that such Issuing Lender shall elect not to extend such Standby
     -------
     Letter of Credit if it has knowledge that an Event of Default has occurred
     and is continuing (and has not been waived in accordance with subsection
     10.6) at the time such Issuing Lender must elect whether or not to allow
     such extension;

          (iv)  any Standby Letter of Credit issued for the purpose of
     supporting any Indebtedness constituting "antecedent debt" (as that term is
     used in Section 547 of the Bankruptcy Code), other than any renewals or
     replacements of Existing Letters of Credit;

          (v)   any Commercial Letter of Credit having an expiration date (a)
     later than the earlier of (1) 30 days prior to the Revolving Loan
     Commitment Termination Date and (2) the date which is 180 days after the
     date of issuance of such Commercial Letter of Credit, or (b) that is
     otherwise unacceptable to the applicable Issuing Lender in its reasonable
     discretion; or

          (vi)  any Letter of Credit issued in a currency other than (a)
     Dollars, (b) Euros, (c) Australian Dollars, (d) Pesos or (e) Pounds or as
     otherwise approved by Agent.

          B.    Mechanics of Issuance.

          (i)   Request for Issuance. Whenever Borrowers desire the issuance of
                --------------------
     a Letter of Credit, Borrowers' Agent shall deliver to Administrative Agen
     a Request for Issuance

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<PAGE>

     of a Letter of Credit no later than 12:00 Noon (New York City time) at
     least three Business Days (in the case of Standby Letters of Credit) or
     five Business Days (in the case of Commercial Letters of Credit), or in
     each case such shorter period as may be agreed to by the Issuing Lender in
     any particular instance, in advance of the proposed date of issuance. The
     Issuing Lender, in its reasonable discretion, may require changes in the
     text of the proposed Letter of Credit or any documents described in or
     attached to the Request for Issuance of Letter of Credit. Any Letter of
     Credit issued by BTCo or an Affiliate must provide that the only type of
     draft which may be presented thereunder is a sight draft (together with any
     required drawing certificates) in form and substance satisfactory to the
     applicable Issuing Lender.

          Borrowers' Agent shall notify the applicable Issuing Lender (and
     Administrative Agent, if Administrative Agent is not such Issuing Lender)
     prior to the issuance of any Letter of Credit in the event that any of the
     matters to which Borrowers are required to certify in the applicable
     Request for Issuance is no longer true and correct as of the proposed date
     of issuance of such Letter of Credit, and upon the issuance of any Letter
     of Credit Borrowers shall be deemed to have re-certified, as of the date of
     such issuance, as to the matters to which Borrowers are required to certify
     in the applicable Request for Issuance of Letter of Credit.

          (ii) Determination of Issuing Lender. Upon receipt by Administrative
               -------------------------------
     Agent of a Request for Issuance of Letter of Credit pursuant to subsection
     3.1B(i) requesting the issuance of a Letter of Credit, in the event
     Administrative Agent elects to issue such Letter of Credit, Administrative
     Agent shall promptly so notify Borrowers' Agent, and Administrative Agent
     shall be the Issuing Lender with respect thereto. In the event that
     Administrative Agent, in its sole discretion, elects not to issue such
     Letter of Credit, Administrative Agent shall promptly so notify Borrowers'
     Agent, whereupon Borrowers' Agent may request any other Revolving Lender to
     issue such Letter of Credit by delivering to such Revolving Lender a copy
     of the applicable Request for Issuance of Letter of Credit. Any Revolving
     Lender so requested to issue such Letter of Credit shall promptly notify
     Borrowers' Agent and Administrative Agent whether or not, in its sole
     discretion, it has elected to issue such Letter of Credit, and any such
     Revolving Lender that so elects to issue such Letter of Credit shall be the
     Issuing Lender with respect thereto. In the event that all other Revolving
     Lenders shall have declined to issue such Letter of Credit, notwithstanding
     the prior election of Administrative Agent not to issue such Letter of
     Credit, Administrative Agent shall be obligated to issue such Letter of
     Credit and shall be the Issuing Lender with respect thereto, provided that
     such Letter of Credit is a Standby Letter of Credit, notwithstanding the
     fact that the Letter of Credit Usage with respect to such Letter of Credit
     and with respect to all other Letters of Credit issued by Administrative
     Agent, when aggregated with Administrative Agent's outstanding Revolving
     Loans, may exceed Administrative Agent's Revolving Loan Commitment then in
     effect. In the event that all other Revolving Lenders shall have declined
     to issue a Commercial Letter of Credit, then Borrowers' Agent may elect to
     have a financial institution which is not a Lender issue a commercial
     letter of credit and Borrowers' Agent may request that Issuing Lender issue
     and Issuing Lender shall issue a Standby Letter of Credit as credit support
     for any such commercial letter of credit (subject to the provisions of this
     Section 3).

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<PAGE>

          (iii) Issuance of Letter of Credit. Upon satisfaction or waiver (in
                ----------------------------
     accordance with subsection 10.6) of the conditions set forth in subsection
     4.3, the Issuing Lender shall issue the requested Letter of Credit in
     accordance with the Issuing Lender's standard operating procedures.

          (iv)  Notification to Revolving Lenders. Upon the issuance of or
                ---------------------------------
     amendment to any Standby Letter of Credit the applicable Issuing Lender
     shall promptly notify Administrative Agent and Borrowers' Agent of such
     issuance or amendment in writing and such notice shall be accompanied by a
     copy of such Letter of Credit or amendment. Promptly upon receipt of such
     notice, Administrative Agent shall notify each other Lender of such
     issuance or amendment and if so requested by a Lender, the Administrative
     Agent shall furnish such Lender with a copy of such issuance or amendment.
     With regard to Commercial Letters of Credit, each Issuing Lender shall on
     the first Business Day of each week furnish the Administrative Agent (with
     a copy to Borrowers' Agent), by facsimile, with a report of the daily
     aggregate outstanding Commercial Letters of Credit issued by such Issuing
     Lender.

          C. Revolving Lenders' Purchase of Participations in Letters of Credit.
Immediately upon the issuance of each Letter of Credit, each Revolving Lender
shall be deemed to, and hereby agrees to, have irrevocably purchased from the
Issuing Lender a participation in such Letter of Credit and any drawings honored
thereunder in an amount equal to such Revolving Lender's Pro Rata Share of the
maximum amount which is or at any time may become available to be drawn
thereunder.

          D. Existing Letters of Credit; Backstop Letters of Credit. Upon
satisfaction of the conditions set forth in subsection 4.1, Issuing Lenders
shall issue Letters of Credit (the "Backstop Letters of Credit") to support
reimbursement of the Existing Letters of Credit and/or shall issue Letters of
Credit to replace the Existing Letters of Credit. Upon the issuance of the
Backstop Letters of Credit, each Lender having a Revolving Loan Commitment shall
be deemed to have irrevocably purchased from the Issuing Lender a participation
in such Backstop Letters of Credit and drawings thereunder in an amount equal to
such Lender's Pro Rata Share of the maximum amount which is or at any time may
become available to be drawn thereunder.

     3.2  Letter of Credit Fees.
          ---------------------

          Borrowers agree to pay the following amounts with respect to Letters
of Credit issued hereunder:

          (i) with respect to each Standby Letter of Credit, (a) a fronting fee,
     payable directly to the applicable Issuing Lender for its own account,
     equal to the greater of (X) $250 and (Y) 0.25% per annum of the daily
     amount available to be drawn under such Standby Letter of Credit and (b) a
     letter of credit fee, payable to Administrative Agent for the account of
     Revolving Lenders, equal to the applicable Eurodollar Rate Margin for
     Revolving Loans multiplied by the amount available to be drawn under such
                     -------------
     Standby Letter of Credit, each such fronting fee or letter of credit fee to
     be payable in arrears on

                                       64

<PAGE>

     and to (but excluding) the first Business Day of each Fiscal Quarter and
     computed on the basis of a 360-day year for the actual number of days
     elapsed;

          (ii)  with respect to each Commercial Letter of Credit, (a) a fronting
     fee, payable directly to the applicable Issuing Lender for its own account,
     equal to the greater of (X) $250 and (Y) 0.25% per annum of the daily
     amount available to be drawn under such Commercial Letter of Credit and (b)
     a letter of credit fee, payable to Administrative Agent for the account of
     Revolving Lenders, equal to the applicable Eurodollar Rate Margin for
     Revolving Loans multiplied by the amount available to be drawn under such
                     -------------
     Commercial Letter of Credit, each such fronting fee or letter of credit fee
     to be payable in arrears on and to (but excluding) the first Business Day
     of each Fiscal Quarter and computed on the basis of a 360-day year for the
     actual number of days elapsed;

          (iii) with respect to the issuance, amendment or transfer of each
     Letter of Credit and each payment of a drawing made thereunder (without
     duplication of the fees payable under clauses (i) and (ii) above),
     documentary and processing charges payable directly to the applicable
     Issuing Lender for its own account in accordance with such Issuing Lender's
     standard schedule for such charges in effect at the time of such issuance,
     amendment, transfer or payment, as the case may be; and

          (iv)  For purposes of calculating any fees payable under clauses (i)
     and (ii) of this subsection 3.2, the daily amount available to be drawn
     under any Letter of Credit shall be determined as of the close of business
     on any date of determination and any amount described in such clauses which
     is denominated in a currency other than Dollars shall be valued based on
     the applicable Exchange Rate for such currency as of the applicable date of
     determination. Promptly upon receipt by Administrative Agent of any amount
     described in clause (i)(b) or (ii)(b) of this subsection 3.2,
     Administrative Agent shall distribute to each Revolving Lender its Pro Rata
     Share of such amount. With respect to Existing Letters of Credit, the fees
     described in clause (i) above shall accrue from and including the Closing
     Date.

     3.3  Drawings and Reimbursement of Amounts Paid Under Letters of Credit.
          ------------------------------------------------------------------

          A. Responsibility of Issuing Lender With Respect to Drawings. In
determining whether to honor any drawing under any Letter of Credit by the
beneficiary thereof, the Issuing Lender shall be responsible only to examine the
documents delivered under such Letter of Credit with reasonable care so as to
ascertain whether they appear on their face to be in accordance with the terms
and conditions of such Letter of Credit.

          B. Reimbursement by Borrowers of Amounts Paid Under Letters of Credit.
In the event an Issuing Lender has determined to honor a drawing under a Letter
of Credit issued by it, such Issuing Lender shall immediately notify Borrowers
and Administrative Agent, and Borrowers shall reimburse such Issuing Lender on
or before the Business Day immediately following the date on which such drawing
is honored (the "Reimbursement Date") in an amount in Dollars and in same day
funds equal to the amount of such payment; provided that, anything contained in
                                           --------
this Agreement to the contrary notwithstanding, (i) unless Borrowers' Agent
shall have notified Administrative Agent and such Issuing Lender prior to 11:00
A.M.

                                       65

<PAGE>

(New York City time) on the date such drawing is honored that Borrowers
intend to reimburse such Issuing Lender for the amount of such payment with
funds other than the proceeds of Revolving Loans, Borrowers' Agent shall be
deemed to have given a timely Notice of Borrowing to Administrative Agent
requesting Revolving Lenders to make Revolving Loans that are Base Rate Loans on
the Reimbursement Date in an amount in Dollars equal to the amount of such
payment and (ii) subject to satisfaction or waiver of the conditions specified
in subsection 4.2B, Revolving Lenders shall, on the Reimbursement Date, make
Revolving Loans that are Base Rate Loans in the amount of such payment, the
proceeds of which shall be applied directly by Administrative Agent to reimburse
such Issuing Lender for the amount of such payment; and provided, further that
                                                        --------  -------
if for any reason proceeds of Revolving Loans are not received by such Issuing
Lender on the Reimbursement Date in an amount equal to the amount of such
payment, Borrowers shall reimburse such Issuing Lender, on demand, in an amount
in same day funds equal to the excess of the amount of such payment over the
aggregate amount of such Revolving Loans, if any, which are so received. Nothing
in this subsection 3.3B shall be deemed to relieve any Revolving Lender from its
obligation to make Revolving Loans on the terms and conditions set forth in this
Agreement, and Borrowers shall retain any and all rights it may have against any
Revolving Lender resulting from the failure of such Revolving Lender to make
such Revolving Loans under this subsection 3.3B.

          C.   Payment by Lenders of Unreimbursed Amounts Paid Under Letters of
Credit.

          (i)  Payment by Revolving Lenders. In the event that Borrowers shall
               ----------------------------
     fail for any reason to reimburse any Issuing Lender as provided in
     subsection 3.3B in an amount equal to the amount of any payment by such
     Issuing Lender under a Letter of Credit issued by it, such Issuing Lender
     shall promptly notify each other Lender of the unreimbursed amount of such
     honored drawing and of such other Revolving Lender's respective
     participation therein based on such Revolving Lender's Pro Rata Share. Each
     Revolving Lender shall make available to such Issuing Lender an amount
     equal to its respective participation, in Dollars and in same day funds, at
     the office of such Issuing Lender specified in such notice, not later than
     12:00 Noon (New York City time) on the first business day (under the laws
     of the jurisdiction in which such office of such Issuing Lender is located)
     after the date notified by such Issuing Lender. In the event that any
     Revolving Lender fails to make available to such Issuing Lender on such
     business day the amount of such Revolving Lender's participation in such
     Letter of Credit as provided in this subsection 3.3C, such Issuing Lender
     shall be entitled to recover such amount on demand from such Revolving
     Lender together with interest thereon at the rate customarily used by such
     Issuing Lender for the correction of errors among banks for three Business
     Days and thereafter at the Base Rate. Nothing in this subsection 3.3C shall
     be deemed to prejudice the right of any Lender to recover from any Issuing
     Lender any amounts made available by such Revolving Lender to such Issuing
     Lender pursuant to this subsection 3.3C in the event that it is determined
     by the final judgment of a court of competent jurisdiction that the payment
     with respect to a Letter of Credit by such Issuing Lender in respect of
     which payment was made by such Revolving Lender constituted gross
     negligence or willful misconduct on the part of such Issuing Lender.

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<PAGE>

          (ii) Distribution to Lenders of Reimbursements Received From
               -------------------------------------------------------
     Borrowers. In the event any Issuing Lender shall have been reimbursed by
     ---------
     other Revolving Lenders pursuant to subsection 3.3C(i) for all or any
     portion of any payment by such Issuing Lender under a Letter of Credit
     issued by it, such Issuing Lender shall distribute to each other Revolving
     Lender that has paid all amounts payable by it under subsection 3.3C(i)
     with respect to such payment such other Revolving Lender's Pro Rata Share
     of all payments subsequently received by such Issuing Lender from Borrowers
     in reimbursement of such payment under the Letter of Credit when such
     payments are received. Any such distribution shall be made to a Revolving
     Lender at its primary address set forth below its name on the appropriate
     signature page hereof or at such other address as such Revolving Lender may
     request.

          D.   Interest on Amounts Paid Under Letters of Credit.

          (i)  Payment of Interest by Borrowers. Borrowers agree to pay to each
               --------------------------------
     Issuing Lender, with respect to payments under any Letters of Credit issued
     by it, interest on the amount paid by such Issuing Lender in respect of
     each such payment from the date a drawing is honored to but excluding the
     date such amount is reimbursed by Borrowers (including any such
     reimbursement out of the proceeds of Revolving Loans pursuant to subsection
     3.3B) at a rate equal to (a) for the period from the date such drawing is
     honored to but excluding the Reimbursement Date, the rate then in effect
     under this Agreement with respect to Revolving Loans that are Base Rate
     Loans and (b) thereafter, a rate which is 2% per annum in excess of the
     rate of interest otherwise payable under this Agreement with respect to
     Revolving Loans that are Base Rate Loans. Interest payable pursuant to this
     subsection 3.3D(i) shall be computed on the basis of a 360-day year for the
     actual number of days elapsed in the period during which it accrues and
     shall be payable on demand or, if no demand is made, on the date on which
     the related drawing under a Letter of Credit is reimbursed in full.

          (ii) Distribution of Interest Payments by Issuing Lender. Promptly
               ---------------------------------------------------
     upon receipt by any Issuing Lender of any payment of interest pursuant to
     subsection 3.3D(i) with respect to a payment under a Letter of Credit
     issued by it, (a) such Issuing Lender shall distribute to each other
     Revolving Lender, out of the interest received by such Issuing Lender in
     respect of the period from the date such drawing is honored to but
     excluding the date on which such Issuing Lender is reimbursed for the
     amount of such payment (including any such reimbursement out of the
     proceeds of Revolving Loans pursuant to subsection 3.3B), the amount that
     such other Revolving Lender would have been entitled to receive in respect
     of the letter of credit fee that would have been payable in respect of such
     Letter of Credit for such period pursuant to subsection 3.2 if no drawing
     had been honored under such Letter of Credit, and (b) in the event such
     Issuing Lender shall have been reimbursed by other Revolving Lenders
     pursuant to subsection 3.3C(i) for all or any portion of such payment, such
     Issuing Lender shall distribute to each other Revolving Lender that has
     paid all amounts payable by it under subsection 3.3C(i) with respect to
     such payment such other Revolving Lender's Pro Rata Share of any interest
     received by such Issuing Lender in respect of that portion of such payment
     so reimbursed by other Revolving Lenders for the period from the date on
     which such Issuing Lender was so reimbursed by other Revolving Lenders to
     but excluding the date

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<PAGE>

     on which such portion of such payment is reimbursed by Borrowers. Any such
     distribution shall be made to a Revolving Lender at its primary address set
     forth below its name on the appropriate signature page hereof or at such
     other address as such Revolving Lender may request.

     3.4   Obligations Absolute.
           --------------------

           The obligation of Borrowers to reimburse each Issuing Lender for
payments under the Letters of Credit issued by it and to repay any Revolving
Loans made by Revolving Lenders pursuant to subsection 3.3B and the obligations
of Revolving Lenders under subsection 3.3C(i) shall be unconditional and
irrevocable and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances including any of the following circumstances:

           (i)    any lack of validity or enforceability of any Letter of
     Credit;

           (ii)   the existence of any claim, set-off, defense or other right
     which Borrowers or any Lender may have at any time against a beneficiary or
     any transferee of any Letter of Credit (or any Persons for whom any such
     transferee may be acting), any Issuing Lender or other Revolving Lender or
     any other Person or, in the case of a Revolving Lender, against Borrowers,
     whether in connection with this Agreement, the transactions contemplated
     herein or any unrelated transaction (including any underlying transaction
     between Borrowers or one of their Subsidiaries and the beneficiary for
     which any Letter of Credit was procured);

           (iii)  any draft or other document presented under any 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;

           (iv)   payment by the applicable Issuing Lender under any Letter of
     Credit against presentation of a draft or other document which does not
     substantially comply with the terms of such Letter of Credit;

           (v)    any adverse change in the business, operations, properties,
     assets, condition (financial or otherwise) or prospects of Borrowers or any
     of their Subsidiaries;

           (vi)   any breach of this Agreement or any other Loan Document by any
     party thereto;

           (vii)  any other circumstance or happening whatsoever, whether or not
     similar to any of the foregoing; or

           (viii) the fact that an Event of Default or a Potential Event of
     Default shall have occurred and be continuing;

provided, in each case, that payment by the applicable Issuing Lender under the
--------
applicable Letter of Credit shall not have constituted gross negligence or
willful misconduct of such Issuing Lender under the circumstances in question
(as determined by a final judgment of a court of competent jurisdiction).

                                       68

<PAGE>

     3.5   Indemnification; Nature of Issuing Lenders' Duties.
           --------------------------------------------------

           A.  Indemnification. In addition to amounts payable as provided in
subsection 2.7, Borrowers hereby agree to protect, indemnify, pay and save
harmless each Issuing Lender from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
fees, expenses and disbursements of outside counsel and, after the occurrence
and during the continuance of an Event of Default, allocated costs of internal
counsel) which such Issuing Lender may incur or be subject to as a consequence,
direct or indirect, of (i) the issuance of any Letter of Credit by such Issuing
Lender, other than as a result of (a) the gross negligence or willful misconduct
of such Issuing Lender as determined by a final judgment of a court of competent
jurisdiction or (b) subject to the following clause (ii), the wrongful dishonor
by such Issuing Lender of a proper demand for payment made under any Letter of
Credit issued by it or (ii) the failure of such Issuing Lender to honor a
drawing under any such Letter of Credit as a result of any act or omission,
whether rightful or wrongful, of any present or future de jure or de facto
Government Authority.

           B.  Nature of Issuing Lenders' Duties. As between Borrowers and any
Issuing Lender, Borrowers assume all risks of the acts and omissions of, or
misuse of the Letters of Credit issued by such Issuing Lender by, the respective
beneficiaries of such Letters of Credit. In furtherance and not in limitation of
the foregoing, such Issuing Lender shall not be responsible for: (i) the form,
validity, sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for and issuance of
any such Letter of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove to
be invalid or ineffective for any reason; (iii) failure of the beneficiary of
any such Letter of Credit to comply fully with any conditions required in order
to draw upon such Letter of Credit; (iv) errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable, telegraph,
telex or otherwise, whether or not they be in cipher; (v) errors in
interpretation of technical terms; (vi) any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under any such
Letter of Credit or of the proceeds thereof; (vii) the misapplication by the
beneficiary of any such Letter of Credit of the proceeds of any drawing under
such Letter of Credit; or (viii) any consequences arising from causes beyond the
control of such Issuing Lender, including any act or omission by a Government
Authority specified in subsection 3.5A, and none of the above shall affect or
impair, or prevent the vesting of, any of such Issuing Lender's rights or powers
hereunder.

           In furtherance and extension and not in limitation of the specific
provisions set forth in the first paragraph of this subsection 3.5B, any action
taken or omitted by any Issuing Lender under or in connection with the Letters
of Credit issued by it or any documents and certificates delivered thereunder,
if taken or omitted in good faith, shall not put such Issuing Lender under any
resulting liability to Borrowers.

           Notwithstanding anything to the contrary contained in this subsection
3.5, Borrowers shall retain any and all rights it may have against any Issuing
Lender for any liability

                                       69

<PAGE>

arising solely out of the gross negligence or willful misconduct of such Issuing
Lender, as determined by a final judgment of a court of competent jurisdiction.

Section 4. CONDITIONS TO LOANS AND LETTERS OF CREDIT

           The obligations of Lenders to make Loans and the issuance of Letters
of Credit hereunder are subject to the satisfaction of the following conditions.

     4.1   Conditions to Term Loans and Initial Revolving Loans.
           ----------------------------------------------------

           The obligations of Lenders to make the Term Loans and the initial
Revolving Loans to be made on the Closing Date are, in addition to the
conditions precedent specified in subsection 4.2, subject to prior or concurrent
satisfaction of the following conditions:

           A.  Loan Party Documents. On or before the Closing Date, Borrowers
shall, and shall cause each other Loan Party to, deliver to Lenders (or to
Administrative Agent with sufficient originally executed copies, where
appropriate, for each Lender) the following with respect to Borrowers or such
Loan Party, as the case may be, each, unless otherwise noted, dated the Closing
Date:

           (i)   Copies of the Organizational Documents of such Person,
     certified by the Secretary of State of its jurisdiction of organization or,
     if such document is of a type that may not be so certified, certified by
     the secretary or similar officer of the applicable Loan Party, together
     with a good standing certificate from the Secretary of State of its
     jurisdiction of organization and each other state in which such Person is
     qualified to do business and, to the extent generally available, a
     certificate or other evidence of good standing as to payment of any
     applicable franchise or similar taxes from the appropriate taxing authority
     of each of such jurisdictions, each dated a recent date prior to the
     Closing Date;

           (ii)  Resolutions of the Governing Body of such Person approving and
     authorizing the execution, delivery and performance of the Loan Documents
     to which it is a party, certified as of the Closing Date by the secretary
     or similar officer of such Person as being in full force and effect without
     modification or amendment;

           (iii) Signature and incumbency certificates of the officers of such
     Person executing the Loan Documents to which it is a party;

           (iv)  Executed originals of the Loan Documents to which such Person
     is a party; and

           (v)   Such other documents as Administrative Agent may reasonably
     request.

           B.    Fees. Borrowers shall have paid to Administrative Agent, for
distribution (as appropriate) to Administrative Agent and Lenders, the fees
payable on the Closing Date referred to in subsection 2.3.

                                       70

<PAGE>

          C.   Corporate and Capital Structure; Ownership

          (i)  Corporate Structure. The corporate organizational structure of
               -------------------
     Borrowers and their Subsidiaries upon the Effective Date (other than
     changes from Restructuring Transactions occurring after the Effective Date
     on Schedule 4.1C) shall be as set forth on Schedule 4.1C annexed hereto and
        -------------                           -------------
     otherwise satisfactory to Administrative Agent.

          (ii) Capital Structure and Ownership. The capital structure and
               -------------------------------
     ownership of Borrowers upon the Effective Date (other than changes from
     Restructuring Transactions occurring after the Effective Date as shown on
     Schedule 5.1) shall be as set forth on Schedule 5.1 annexed hereto and
                                            ------------
     otherwise satisfactory to Administrative Agent.

          D.   Representations and Warranties; Performance of Agreements.
Borrowers shall have delivered to Administrative Agent an Officer's Certificate,
in form and substance satisfactory to Administrative Agent, to the effect that
the representations and warranties in Section 5 are true, correct and complete
in all material respects on and as of the Closing Date to the same extent as
though made on and as of that date (or, to the extent such representations and
warranties specifically relate to an earlier date, that such representations and
warranties were true, correct and complete in all material respects on and as of
such earlier date) and that Borrowers shall have performed in all material
respects all agreements and satisfied all conditions which this Agreement
provides shall be performed or satisfied by it on or before the Closing Date
except as otherwise disclosed to and agreed to in writing by Administrative
Agent.

          E.   Financial Statements. On or before the Closing Date, Lenders
shall have received from Borrowers (i) audited financial statements of Company
and its Subsidiaries for the Fiscal Years ended December 31, 2000, 1999 and
1998, (ii) unaudited financial statements of Company and its Subsidiaries for
the Fiscal Quarters ended March 30, June 30 and September 30, 2001, (iii)
projected financial statements (including balance sheets and statements of
operations and cash flows) and a pro forma balance sheet of the Company and its
Subsidiaries as of the Closing Date after giving effect to the Approved Plan of
Reorganization and the financing contemplated hereby, for the Company and its
Subsidiaries for the period after the Closing Date ending December 31, 2005, all
of the foregoing to be (x) substantially consistent with any financial
statements for the same periods previously delivered to the Administrative Agent
prior to November 14, 2001 and (y) otherwise in form and substance reasonably
satisfactory to the Administrative Agent and the Lenders, subject to reasonable
changes acceptable to Administrative Agent to accommodate "fresh start"
accounting.

          F.   Opinions of Counsel to Loan Parties. Lenders shall have received
originally executed copies of one or more favorable written opinions of
McGuireWoods LLP, counsel for Loan Parties, in form and substance reasonably
satisfactory to Administrative Agent and its counsel, dated as of the Closing
Date and setting forth substantially the matters in the opinions designated in
Exhibit VIII annexed hereto and as to such other matters as Administrative Agent
------------
acting on behalf of Lenders may reasonably request (this Credit Agreement
constituting a written request by Borrowers to such counsel to deliver such
opinions to Lenders).

                                       71

<PAGE>

          G.   Opinions of Administrative Agent's Counsel. Lenders shall have
received originally executed copies of one or more favorable written opinions of
O'Melveny & Myers LLP, counsel to Administrative Agent, dated as of the Closing
Date, substantially in the form of Exhibit IX annexed hereto.
                                   ----------

          H.   Evidence of Insurance. Administrative Agent shall have received a
certificate from Borrowers' insurance broker or other evidence satisfactory to
it that all insurance required to be maintained pursuant to subsection 6.4 is in
full force and effect and that Administrative Agent on behalf of Lenders has
been named as additional insured and/or loss payee thereunder to the extent
required under subsection 6.4.

          I.   Necessary Governmental Authorizations and Consents; Expiration of
Waiting Periods, Etc. Borrowers shall have obtained all Governmental
Authorizations and all consents of other Persons, in each case that are
necessary or advisable in connection with the transactions contemplated by the
Loan Documents and the continued operation of the business conducted by
Borrowers and their Subsidiaries in substantially the same manner as conducted
prior to the Closing Date. Each such Governmental Authorization and consent
shall be in full force and effect, except in a case where the failure to obtain
or maintain a Governmental Authorization or consent, either individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse
Effect. All applicable waiting periods shall have expired without any action
being taken or threatened by any competent authority that would restrain,
prevent or otherwise impose adverse conditions on the transactions contemplated
by the Loan Documents or the financing thereof. No action, request for stay,
petition for review or rehearing, reconsideration, or appeal with respect to any
of the foregoing shall be pending, and the time for any applicable Government
Authority to take action to set aside its consent on its own motion shall have
expired.

          J.   Environmental Reports. If requested by Administrative Agent in
its reasonable discretion, the Administrative Agent and the Lenders shall have
received reports and other information, in form, scope and substance
satisfactory to Administrative Agent, regarding environmental matters relating
to Borrowers and their Subsidiaries and the Facilities.

          K.   Security Interests in Personal and Mixed Property. To the extent
not otherwise satisfied pursuant to subsection 4.1L, Administrative Agent shall
have received evidence satisfactory to it that Borrowers and Subsidiary
Guarantors shall have taken or caused to be taken all such actions, executed and
delivered or caused to be executed and delivered all such agreements, documents
and instruments, and made or caused to be made all such filings and recordings
(other than the filing or recording of items described in clauses (ii), (iii)
and (iv) below) that may be necessary or, in the opinion of Administrative
Agent, desirable in order to create in favor of Administrative Agent, for the
benefit of Lenders, a valid and (upon such filing and recording) perfected First
Priority security interest in the entire personal and mixed property Collateral.
Such actions shall include the following:

          (i)  Stock Certificates and Instruments. Delivery to Administrative
               ----------------------------------
     Agent of (a) certificates (which certificates shall be accompanied by
     irrevocable undated stock powers, duly endorsed in blank and otherwise
     satisfactory in form and substance to Administrative Agent) representing
     all Capital Stock pledged pursuant to the Security

                                       72

<PAGE>

     Agreement and any Foreign Pledge Agreement and (b) all promissory notes or
     other instruments (duly endorsed, where appropriate, in a manner
     satisfactory to Administrative Agent) evidencing any Collateral;

          (ii)  UCC Financing Statements. Delivery to Administrative Agent of
                ------------------------
     UCC financing statements duly executed by each applicable Loan Party (if
     required) with respect to all personal and mixed property Collateral of
     such Loan Party, for filing in all jurisdictions as may be necessary or, in
     the opinion of Administrative Agent, desirable to perfect the security
     interests created in such Collateral pursuant to the Collateral Documents;

          (iii) PTO Cover Sheets, Etc.  Delivery to Administrative Agent of all
                ---------------------
     cover sheets or other documents or instruments required to be filed with
     the PTO in order to create or perfect Liens in respect of any IP
     Collateral;

          (iv)  Cash Management. Delivery to Administrative Agent of a Blocked
                ---------------
     Account Agreement executed by each Person that is a party thereto with
     respect to each Deposit Account listed on Schedule I annexed to the
     Security Agreement and Administrative Agent's approval in its reasonable
     discretion of Borrowers' and their Subsidiaries' cash management systems;

          (v)   Opinions of Local Counsel. Delivery to Administrative Agent of
                -------------------------
     an opinion of counsel (which counsel shall be reasonably satisfactory to
     Administrative Agent) under the laws of each jurisdiction in which any Loan
     Party is located (within the meaning of Section 9-301 of the UCC) with
     respect to the creation and perfection of the security interests in favor
     of Administrative Agent in the Collateral owned by such Loan Party and such
     other matters governed by the laws of such jurisdiction regarding such
     security interests as Administrative Agent may reasonably request, in each
     case in form and substance reasonably satisfactory to Administrative Agent.

          L.    Closing Date Mortgages; Closing Date Mortgage Policies; Etc.
Administrative Agent shall have received from Borrowers and each applicable
Subsidiary Guarantor:

          (i)   Closing Date Mortgages. Fully executed and notarized Mortgages
                ----------------------
     (each a "Closing Date Mortgage" and, collectively, the "Closing Date
     Mortgages"), duly recorded in all appropriate places in all applicable
     jurisdictions, encumbering each Real Property Asset listed in Schedule
                                                                   --------
     4.1L(i) annexed hereto (each a "Closing Date Mortgaged Property" and,
     -------
     collectively, the "Closing Date Mortgaged Properties");

          (ii)  Opinions of Local Counsel. An opinion of counsel (which counsel
                -------------------------
     shall be reasonably satisfactory to Administrative Agent) in each state in
     which a Closing Date Mortgaged Property is located with respect to the
     enforceability of the form(s) of Closing Date Mortgages to be recorded in
     such state and such other matters as Administrative Agent may reasonably
     request, in each case in form and substance reasonably satisfactory to
     Administrative Agent;

                                       73

<PAGE>

          (iii) Landlord Consents and Estoppels; Recorded Leasehold Interests.
                -------------------------------------------------------------
     In the case of each Closing Date Mortgaged Property consisting of a
     Leasehold Property identified on Schedule 4.lL(iii), (a) a Landlord Consent
     and Estoppel with respect thereto and (b) evidence that such Leasehold
     Property is a Recorded Leasehold Interest;

          (iv)  Title Insurance. If requested by Administrative Agent, (a) ALTA
                ---------------
     mortgagee title insurance policies or unconditional commitments therefor
     (the "Closing Date Mortgage Policies") issued by the Title Borrowers with
     respect to the Closing Date Mortgaged Properties, in an amount satisfactory
     to Administrative Agent (not exceeding the fair market value of the Closing
     Date Mortgage Properties), insuring fee simple title to, or a valid
     leasehold interest in, each such Closing Date Mortgaged Property vested in
     such Loan Party and assuring Administrative Agent that the applicable
     Closing Date Mortgages create valid and enforceable First Priority mortgage
     Liens on the respective Closing Date Mortgaged Properties encumbered
     thereby, subject only to a standard survey exception, which Closing Date
     Mortgage Policies (1) shall include an endorsement for mechanics' liens,
     for future advances under this Agreement and for any other matters
     reasonably requested by Administrative Agent and (2) shall provide for
     affirmative insurance and such reinsurance as Administrative Agent may
     reasonably request, all of the foregoing in form and substance reasonably
     satisfactory to Administrative Agent; and (b) evidence satisfactory to
     Administrative Agent that such Loan Party has (i) delivered to the Title
     Company all certificates and affidavits required by the Title Company in
     connection with the issuance of the Closing Date Mortgage Policies and (ii)
     paid to the Title Borrowers or to the appropriate governmental authorities
     all expenses and premiums of the Title Borrowers in connection with the
     issuance of the Closing Date Mortgage Policies and all recording and stamp
     taxes (including mortgage recording and intangible taxes) payable in
     connection with recording the Closing Date Mortgages in the appropriate
     real estate records;

          (v)   Title Commitments. If requested by Agent, with respect to each
                -----------------
     Real Property Asset listed in Schedule 4.1L(i) annexed hereto, a title
                                   ----------------
     insurance commitment issued by the Title Company with respect thereto,
     dated not more than 90 days prior to the Closing Date and satisfactory in
     form and substance to Administrative Agent;

          (vi)  Copies of Documents Relating to Title Exceptions. If requested
                ------------------------------------------------
     by Agent, copies of all recorded documents listed as exceptions to title or
     otherwise referred to in the Closing Date Mortgage Policies or in the title
     commitments delivered pursuant to subsection 4.1L(v);

          (vii) Matters Relating to Flood Hazard Properties. (a) Evidence, which
                -------------------------------------------
     may be in the form of a letter from an insurance broker or a municipal
     engineer, as to whether (1) any Closing Date Mortgaged Property is a Flood
     Hazard Property and (2) the community in which any such Flood Hazard
     Property is located is participating in the National Flood Insurance
     Program, (b) if there are any such Flood Hazard Properties, such Loan
     Party's written acknowledgement of receipt of written notification from
     Administrative Agent (1) as to the existence of each such Flood Hazard
     Property and (2) as to whether the community in which each such Flood
     Hazard Property is located is participating in the National Flood Insurance
     Program, and (c) in the event any such

                                       74

<PAGE>

     Flood Hazard Property is located in a community that participates in the
     National Flood Insurance Program, evidence that Borrowers have obtained
     flood insurance in respect of such Flood Hazard Property to the extent
     required under the applicable regulations of the Board of Governors of the
     Federal Reserve System; and

          M.    Matters Relating to Existing Indebtedness of Borrowers and their
Subsidiaries.

          (i)   Termination of Existing Credit Facilities and Related Liens;
                -----------------------------------------------------------
     Existing Letters of Credit. On the Closing Date, Borrowers and their
     --------------------------
     Subsidiaries shall have (a) no Indebtedness outstanding under the DIP
     Credit Facility and (b) discharged Indebtedness under the Prepetition
     Credit Facility as provided in the Approved Plan of Reorganization, (c)
     terminated any commitments to lend or make other extensions of credit under
     the Existing Credit Facilities, (d) delivered to Administrative Agent all
     documents or instruments necessary to release all Liens securing
     Indebtedness or other obligations of Borrowers and their Subsidiaries under
     Existing Credit Facilities to the extent required by the Administrative
     Agent, and (e) made arrangements satisfactory to Administrative Agent with
     respect to the cancellation of any Existing Letters of Credit or the
     issuance of Letters of Credit to support the obligations of Borrowers and
     their Subsidiaries with respect to the Existing Credit Facilities.

          (ii)  Discharge of Existing Bond Debt. Borrowers shall have discharged
                -------------------------------
     all of the Existing Bond Debt.

          (iii) Existing Indebtedness to Remain Outstanding. Administrative
                -------------------------------------------
     Agent shall have received an Officer's Certificate of Borrowers stating
     that, after giving effect to the transactions described in this subsection
     4.1M, the Indebtedness of Loan Parties (other than Indebtedness under the
     Loan Documents and under the New Subordinated Indenture) shall consist
     solely of approximately $3,100,000 in aggregate principal amount and
     outstanding Indebtedness described in Schedule 7.1(iv), (v) and (viii). The
                                           -------------------------------
     terms and conditions of all such Indebtedness shall be in form and in
     substance satisfactory to Administrative Agent.

          N.    Completion of Proceedings. All corporate and other proceedings
taken or to be taken in connection with the transactions contemplated hereby and
all documents incidental thereto not previously found acceptable by
Administrative Agent, acting on behalf of Lenders, and its counsel shall be
satisfactory in form and substance to Administrative Agent and such counsel, and
Administrative Agent and such counsel shall have received all such counterpart
originals or certified copies of such documents as Administrative Agent may
reasonably request.

          O.    Plan of Reorganization; Confirmation Order; Discharge of
Existing Credit Facilities.

          (i)   Plan of Reorganization. The Plan of Reorganization and all
                ----------------------
     amendments, modifications, revisions and restatements thereof, if any,
     shall have been delivered to Administrative Agent and shall be in form and
     substance acceptable to Administrative

                                       75

<PAGE>

     Agent (in such form approved by Administrative Agent, the "Approved Plan of
     Reorganization"). Except as set forth in modification motions filed with
     the Bankruptcy Court and served upon and approved by Administrative Agent,
     there shall have been no modifications, amendments, revisions or
     restatements of the Approved Plan of Reorganization. Any representation and
     warranty made by Borrowers or any Debtor Subsidiary in the Approved Plan of
     Reorganization shall be accurate, true, correct and complete in all
     material respects as of the Closing Date. The Approved Plan of
     Reorganization (A) shall provide for the payments described in subsection
     2.5A and the issuance of the New Subordinated Debt; and (B) upon
     satisfaction of all conditions to the effectiveness of this Agreement,
     shall become effective in accordance with its terms without waiver of any
     condition to such effectiveness that, in Administrative Agent's reasonable
     judgment, is material.

          (ii)   Confirmation Order. The Confirmation Order shall have been
                 ------------------
     delivered to Administrative Agent, shall address the matters set forth in
     subsection 4.1M, the issuance of the Loans and Commitments under this
     Agreement and the terms hereof and the granting of all liens, encumbrances,
     consents and security interests required under this Agreement and the other
     Loan Documents and otherwise be in form and substance satisfactory to
     Administrative Agent. The Confirmation Order shall be in full force and
     effect and shall not have been stayed pending any appeal, no appeal or
     petition for review or for rehearing shall have been taken or shall be
     pending, not less than 11 days shall have elapsed since entry of the
     Confirmation Order and Administrative Agent shall have received evidence
     satisfactory to it demonstrating such facts.

          (iii)  Approval of Fees Related to Exit Financing. The Bankruptcy
                 ------------------------------------------
     Court order approving the fees payable to Administrative Agent and Arranger
     under those certain letter agreements dated November 14, 2001 between
     Company and BTCo concerning the credit facilities described in this
     Agreement, shall be in full force and effect, without modification or
     amendment except to the extent approved by Agent.

          (iv)   Material Agreements. The Lenders shall be satisfied with the
                 -------------------
     terms and conditions of any agreements to be entered into by the Borrowers
     or any of their Subsidiaries pursuant to the Plan of Reorganization.

          P.     Minimum Closing Date Consolidated Adjusted EBITDA. The
Administrative Agent shall have received satisfactory evidence on the Closing
Date, that for the prior twelve month period for which financial statements are
available (a) the Borrowers' Consolidated EBITDA ("Closing Date Consolidated
Adjusted EBITDA") is not less than $116,000,000 and (b) the Closing Date
Consolidated Adjusted EBITDA for the AMF Products shall not be less than or
equal to negative $1,000,000, which Closing Date Consolidated Adjusted EBITDA
shall be determined as provided in Schedule 4.1P attached hereto.

          Q.     Minimum Cash on Hand. After giving effect to the consummation
of the Approved Plan of Reorganization and the payments contemplated thereby,
the Borrowers and their Subsidiaries shall have not less than $12,000,000 in
Cash on hand.

                                       76

<PAGE>

          R.     Subordinated Indebtedness. Prior to or concurrently with the
Closing Date, pursuant to the Approved Plan of Reorganization, Company shall
have issued $150,000,000 of Subordinated Indebtedness pursuant to the New
Subordinated Indenture.

          S.     Employment Arrangements. Administrative Agent shall be
satisfied with respect to arrangements for the retention of key senior
management personnel, including evidence of the execution and delivery of
satisfactory employment agreements with respect to such key personnel, and shall
be satisfied with the composition of the boards of directors of the Loan
Parties.

     4.2  Conditions to All Loans.
          -----------------------

          The obligations of Lenders to make Loans on each Funding Date are
subject to the following further conditions precedent:

          A.     Administrative Agent shall have received before that Funding
Date, in accordance with the provisions of subsection 2.1B, an originally
executed Notice of Borrowing, in each case signed by a duly authorized Officer
of Borrowers.

          B.     As of that Funding Date:

          (i)    The representations and warranties contained herein and in the
     other Loan Documents shall be true, correct and complete in all material
     respects on and as of that Funding Date to the same extent as though made
     on and as of that date, except to the extent such representations and
     warranties specifically relate to an earlier date, in which case such
     representations and warranties shall have been true, correct and complete
     in all material respects on and as of such earlier date;

          (ii)   No event or condition shall have occurred and be continuing or
     would result from the consummation of the borrowing contemplated by such
     Notice of Borrowing that would constitute an Event of Default or a
     Potential Event of Default;

          (iii)  Each Loan Party shall have performed in all material respects
     all agreements and satisfied all conditions which this Agreement provides
     shall be performed or satisfied by it on or before that Funding Date; and

          (iv)   No order, judgment or decree of any arbitrator or Government
     Authority shall purport to enjoin or restrain any Lender from making the
     Loans to be made by it on that Funding Date.

          (v)    The aggregate amount of Cash constituting available and
     collected balances in a Deposit Account and Cash Equivalents held by
     Borrowers, minus the amount of payments reasonably expected to be made
     within the next three Business Days shall not exceed $25,000,000 or such
     greater amount as may be approved by Agent.

                                       77

<PAGE>

     4.3   Conditions to Letters of Credit.
           -------------------------------

           The issuance of any Letter of Credit hereunder (whether or not the
applicable Issuing Lender is obligated to issue such Letter of Credit) is
subject to the following conditions precedent:

           A.    On or before the date of issuance of the initial Letter of
Credit pursuant to this Agreement, the initial Loans shall have been made.

           B.    On or before the date of issuance of such Letter of Credit,
Administrative Agent shall have received, in accordance with the provisions of
subsection 3.1B(i), an originally executed Request for Issuance (or a facsimile
copy thereof) in each case signed by a duly authorized Officer of Borrowers,
together with all other information specified in subsection 3.1B(i) and such
other documents or information as the applicable Issuing Lender may reasonably
require in connection with the issuance of such Letter of Credit.

           C.    On the date of issuance of such Letter of Credit, all
conditions precedent described in subsection 4.2B shall be satisfied to the same
extent as if the issuance of such Letter of Credit were the making of a Loan and
the date of issuance of such Letter of Credit were a Funding Date.

Section 5. BORROWERS' REPRESENTATIONS AND WARRANTIES

           In order to induce Lenders to enter into this Agreement and to make
the Loans, to induce Issuing Lenders to issue Letters of Credit and to induce
Revolving Lenders to purchase participations therein, Borrowers represent and
warrant to each Lender:

     5.1   Organization, Powers, Qualification, Good Standing, Business and
           ----------------------------------------------------------------
           Subsidiaries.
           ------------

           A.    Organization and Powers. Each of the Loan Parties is a
corporation, partnership or limited liability company duly organized or formed,
validly existing and in good standing under the laws of its jurisdiction of
organization or formation as specified in Schedule 5.1 annexed hereto. Each of
                                          ------------
the Loan Parties has all requisite corporate, partnership or limited liability
company, as applicable, power and authority to own and operate its properties,
to carry on its business as now conducted and as proposed to be conducted, to
enter into the Loan Documents to which it is a party and to carry out the
transactions contemplated thereby.

          B.     Qualification and Good Standing. Each of the Loan Parties is
qualified to do business and in good standing in every jurisdiction where its
assets are located and wherever necessary to carry out its business and
operations, except in jurisdictions where the failure to be so qualified or in
good standing has not had and could not reasonably be expected to result in a
Material Adverse Effect.

          C.     Conduct of Business.  Borrowers and their Subsidiaries are
engaged only in the businesses permitted to be engaged in pursuant to subsection
7.11.

                                       78

<PAGE>

          D.     Subsidiaries. All of the Subsidiaries of the Company and their
jurisdictions of organization are identified in Schedule 5.1 annexed hereto, as
                                                ------------
said Schedule 5.1 may be supplemented from time to time pursuant to the
     ------------
provisions of subsection 6.1(xv). The Capital Stock of each of the Domestic
Subsidiaries of Borrowers is duly authorized, validly issued, fully paid and
nonassessable, and none of such Capital Stock constitutes Margin Stock. Each of
the Subsidiaries of Borrowers identified in Schedule 5.1 annexed hereto (as so
                                            ------------
supplemented), other than the Foreign Subsidiaries, is a corporation,
partnership, trust or limited liability company or other entity duly organized,
validly existing under the laws of its respective jurisdiction of organization
set forth therein, has all requisite power and authority under the applicable
law governing its existence as a legal entity to own and operate its properties
and to carry on its business as now conducted and as proposed to be conducted,
and is qualified to do business in every jurisdiction where its assets are
located and wherever necessary to carry out its business and operations, in each
case except where failure to be so qualified or in good standing or a lack of
such power and authority has not had and could not reasonably be expected to
result in a Material Adverse Effect. Schedule 5.1 annexed hereto (as so
                                     ------------
supplemented) correctly sets forth the ownership interest of each of the
Subsidiaries of the Company both before and after giving effect to the Plan of
Reorganization and the related transactions contemplated in connection
therewith.

          E.     Initial Exempted Group.  To the actual knowledge of each Senior
Officer, without any independent investigation, Schedule 5.1E annexed hereto
sets forth the Persons who, on the Closing Date, constitute the Initial Exempted
Group through their ownership of an interest in the global common stock
certificate registered in the name of Depository Trust Company, which
certificate represents all shares of Capital Stock of Company issued and
outstanding as of the Closing Date.

     5.2  Authorization of Borrowing, etc.
          -------------------------------

          A.     Authorization of Borrowing. The execution, delivery and
performance of the Loan Documents have been duly authorized by all necessary
action on the part of each Loan Party that is a party thereto.

          B.     No Conflict. The execution, delivery and performance by Loan
Parties of the Loan Documents to which they are parties and the consummation of
the transactions contemplated by the Loan Documents do not and will not (i)
violate any provision of any law or any governmental rule or regulation
applicable to Borrowers or any of their Subsidiaries, the Organizational
Documents of Borrowers or any of their Subsidiaries or any order, judgment or
decree of any court or other Government Authority binding on Borrowers or any of
their Subsidiaries, (ii) conflict with, result in a breach of or constitute
(with due notice or lapse of time or both) a default under any Contractual
Obligation of Borrowers or any of their Subsidiaries except where such conflict,
breach or default could not reasonably be expected to have a Material Adverse
Effect, (iii) result in or require the creation or imposition of any Lien upon
any of the properties or assets of Borrowers or any of their Subsidiaries (other
than any Liens created under any of the Loan Documents in favor of
Administrative Agent on behalf of Lenders), or (iv) require any approval of
stockholders or any approval or consent of any Person under any Contractual
Obligation of Borrowers or any of their Subsidiaries, except for such approvals
or consents which will be obtained on or before the Closing Date and disclosed
in writing to

                                       79

<PAGE>

Lenders. The foregoing representations and warranties as they pertain to Foreign
Subsidiaries are made To The Knowledge of Borrowers.

          C.     Governmental Consents. The execution, delivery and performance
by Loan Parties of the Loan Documents to which they are parties and the
consummation of the transactions contemplated by the Loan Documents do not and
will not require any Governmental Authorization except for such Governmental
Authorizations which will be obtained on or before the Closing Date or except
where the failure to obtain such Governmental Authorization could not reasonably
be expected to have a Material Adverse Effect.

          D.     Binding Obligation.  Each of the Loan Documents has been duly
executed and delivered by each Loan Party that is a party thereto and is the
legally valid and binding obligation of such Loan Party, enforceable against
such Loan Party in accordance with its respective terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors' rights generally or by equitable principles
relating to enforceability.

     5.3  Financial Condition.
          -------------------

          Borrowers have heretofore delivered to Lenders, at Lenders' request,
unaudited financial statements and information regarding Borrowers and their
Subsidiaries for the period ended September 30, 2001. All such statements were
prepared in conformity with GAAP and fairly present, in all material respects,
the financial position (on a consolidated basis) of the entities described in
such financial statements as at the respective dates thereof and the results of
operations and cash flows (on a consolidated basis) of the entities described
therein for each of the periods then ended, subject, to changes resulting from
audit and normal year-end adjustments. Except as disclosed on Schedule 7.4
                                                              ------------
annexed hereto, neither Borrowers nor any of their Subsidiaries has (and will
not have following the funding of the initial Loans) any Contingent Obligation,
contingent liability or liability for taxes, long-term lease or unusual forward
or long-term commitment that, as of the Closing Date, is not reflected in the
foregoing financial statements or the notes thereto or contemplated by the
Approved Plan of Reorganization and, as of any Funding Date subsequent to the
Closing Date, is not reflected in the most recent financial statements delivered
to Lenders pursuant to subsection 6.1 or the notes thereto and that, in any such
case, is material in relation to the business, operations, properties, assets,
condition (financial or otherwise) or prospects of Borrowers and their
Subsidiaries taken as a whole.

     5.4  No Material Adverse Change; No Restricted Junior Payments.
          ---------------------------------------------------------

          Since September 30, 2001, no event or change has occurred that has
resulted in or evidences, either in any case or in the aggregate, a Material
Adverse Effect, other than (i) reasonable changes relating to "fresh start"
accounting, (ii) as disclosed in the Disclosure Statement, the Plan of
Reorganization or Company's Report on Form 10-Q for the Fiscal Quarter ended
September 30, 2001, (iii) the write down of goodwill pursuant to Financial
Accounting Standards Board Rule 142 or (iv) the proceeding referred to in
Schedule 5.6 with respect to Harbin Haiheng Bowling Entertainment Co., Ltd.
Neither Borrowers nor any of their Subsidiaries has directly or indirectly
declared, ordered, paid or made, or set apart any sum or

                                       80

<PAGE>

property for, any Restricted Junior Payment or agreed to do so except as
permitted by subsection 7.5.

     5.5  Title to Properties; Liens; Real Property; Intellectual Property.
          ----------------------------------------------------------------

          A.   Title to Properties; Liens. Borrowers and their Subsidiaries have
(i) good, sufficient and legal title to (in the case of fee interests in real
property), (ii) valid leasehold interests in (in the case of leasehold interests
in real or personal property), or (iii) good title to (in the case of all other
personal property), all of their respective properties and assets reflected in
the financial statements referred to in subsection 5.3 or in the most recent
financial statements delivered pursuant to subsection 6.1, in each case except
for (i) assets disposed of since the date of such financial statements in the
ordinary course of business (ii) as disclosed in Schedule 5.5A or (iii) as
                                                 -------------
otherwise permitted under subsection 7.7. Except as permitted by this Agreement,
all such properties and assets are free and clear of Liens other than Liens
permitted under subsection 7.2.

          B.   Real Property. As of the Closing Date, (i) Schedule 5.5B(i)
                                                          ----------------
annexed hereto contains a true, accurate and complete list of all fee interests
and Leasehold interests constituting any Real Property Assets and (ii) Schedule
                                                                       --------
5.5B(ii) contains a true account and complete list of all leases, subleases or
--------
assignments of leases affecting each Real Property Asset, in which a Loan Party
is the landlord (whether directly or as an assignee or successor in interest)
under such lease, sublease or assignment. Except as specified in Part C of
Schedule 5.5B(ii) annexed hereto, each agreement described in clause (ii) of the
-----------------
immediately preceding sentence is in full force and effect and Borrowers do not
have knowledge of any default that has occurred and is continuing thereunder,
and each such agreement constitutes the legally valid and binding obligation of
each applicable Loan Party, enforceable against such Loan Party in accordance
with its terms, except as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting creditors'
rights generally or by equitable principles and except to the extent that the
failure to be in full force and effect, the occurrence of any such default or
the failure to be valid and binding and enforceable could not reasonably be
expected to have a Material Adverse Effect.

          C.   Intellectual Property. As of the Closing Date, Borrowers and
their Subsidiaries own or have the right to use, all Intellectual Property used
in the conduct of their business, except where the failure to own or have such
right to use in the aggregate could not reasonably be expected to result in a
Material Adverse Effect. No claim has been asserted and is pending by any Person
challenging or questioning the use of any such Intellectual Property or the
validity or effectiveness of any such Intellectual Property, nor do Borrowers
know of any valid basis for any such claim, except for such claims that in the
aggregate could not reasonably be expected to result in a Material Adverse
Effect. To The Knowledge Of Borrowers, the use of such Intellectual Property by
Borrowers and their Subsidiaries does not infringe on the rights of any Person,
except for such claims and infringements that, in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect. All federal and
state and all foreign registrations of and applications for Intellectual
Property, and all unregistered Intellectual Property, that are owned or licensed
by Borrowers or any of its Subsidiaries on the Closing Date, other than
mass-marketed software, are described on Schedule 5.5C annexed hereto.
                                         -------------

                                       81

<PAGE>

     5.6  Litigation; Adverse Facts.
          -------------------------

          Except as set forth in Schedule 5.6 annexed hereto, there are no
                                 ------------
Proceedings (whether or not purportedly on behalf of Borrowers or any of their
Subsidiaries) at law or in equity, or before or by any court or other Government
Authority (including any Environmental Claims) that are pending or, to the
knowledge of Borrowers, threatened against or affecting Borrowers or any of
their Subsidiaries or any property of Borrowers or any of their Subsidiaries and
(i) under which claims have been asserted against Borrowers or any of their
Subsidiaries that will not be discharged in accordance with the terms of the
Approved Plan of Reorganization or (ii) that, individually or in the aggregate,
after giving effect to available insurance, could reasonably be expected to
result in a Material Adverse Effect. Except as set forth in Schedule 5.6 annexed
                                                            ------------
hereto, neither Borrowers nor any of their Subsidiaries (i) is in violation of
any applicable laws (including Environmental Laws) that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect,
or (ii) is subject to or in default with respect to any final judgments, writs,
injunctions, decrees, rules or regulations of any court or other Government
Authority that, individually or in the aggregate, could reasonably be expected
to result in a Material Adverse Effect.

     5.7 Payment of Taxes.
         ----------------

          Except to the extent permitted by subsection 6.3, all tax returns and
reports of Borrowers and their Subsidiaries required to be filed by any of them
have been timely filed, and all taxes shown on such tax returns to be due and
payable and all assessments, fees and other governmental charges upon Borrowers
and their Subsidiaries and upon their respective properties, assets, income,
businesses and franchises that are due and payable have been paid when due and
payable except to the extent otherwise specifically provided for in the Approved
Plan of Reorganization; provided, however, that this sentence shall not apply to
tax returns and reports, or to assessments, fees or other charges the non-filing
or nonpayment of which could not reasonably be expected to have a Material
Adverse Effect or which could not reasonably be expected to have a Material
Adverse Effect. To The Knowledge Of Borrowers, there is no proposed tax
assessment against Borrowers or any of their Subsidiaries that if made could
reasonably be expected to have a Material Adverse Effect is not being actively
contested by Borrowers or such Subsidiary in good faith and by appropriate
proceedings; provided that such reserves or other appropriate provisions, if
             --------
any, as shall be required in conformity with GAAP shall have been made or
provided therefor.

     5.8  Performance of Agreements; Material Contracts.
          ---------------------------------------------

          A.   To The Knowledge Of Borrowers, neither Borrowers nor any of their
Subsidiaries are in default in the performance, observance or fulfillment of any
of the obligations, covenants or conditions contained in any of its Contractual
Obligations except as disclosed on Schedule 5.8A, and no condition exists that,
with the giving of notice or the lapse of time or both, would constitute such a
default, except where the consequences, direct or indirect, of such default or
defaults, if any, could not reasonably be expected to result in a Material
Adverse Effect or which will be satisfied upon the effectiveness of the Approved
Plan of Reorganization.

                                       82

<PAGE>

          B.   Schedule 5.8B contains a true, correct and complete list of all
               -------------
the Material Contracts in effect on the Closing Date, if any. To The Knowledge
of Borrowers, all such Material Contracts are in full force and effect and no
material defaults currently exist thereunder. To the extent that a default under
a Material Contract has resulted, or will result, in a claim against Borrowers'
bankruptcy estates which will be satisfied in accordance with the terms of the
Plan of Reorganization, or to the extent that such default will be cured as part
of Borrowers' assumption of a particular Material Contract or group of Material
Contracts in accordance with 11 U.S.C. ss.365 and the Plan of Reorganization,
such default shall not be considered a material default for purposes of this
subsection 5.8.

     5.9  Governmental Regulation.
          -----------------------

          Neither Borrowers nor any of their Subsidiaries is subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Interstate Commerce Act or the Investment Company Act of 1940 or
under any other United States federal or state statute or regulation which may
limit its ability to incur Indebtedness or which may otherwise render all or any
portion of the Obligations unenforceable.

     5.10 Securities Activities.
          ---------------------

          A.   Neither Borrowers nor any of their Subsidiaries is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying any Margin Stock.

          B.   Following application of the proceeds of each Loan, not more than
25% of the value of the assets (either of Borrowers only or of Borrowers and
their Subsidiaries on a consolidated basis) subject to the provisions of
subsection 7.2 or 7.7 or subject to any restriction contained in any agreement
or instrument, between Borrowers and any Lender or any Affiliate of any Lender,
relating to Indebtedness and within the scope of subsection 8.2, will be Margin
Stock.

     5.11 Employee Benefit Plans.
          ----------------------

          A.   Except as set forth in Schedule 5.11, Borrowers, each of their
                                      -------------
Subsidiaries and each of their respective ERISA Affiliates are in compliance
with all applicable provisions and requirements of ERISA and the regulations and
published interpretations thereunder with respect to each Employee Benefit Plan,
and have performed all their obligations under each Employee Benefit Plan except
where the failure to be in compliance or to perform any of such obligations
could not reasonably be expected to have a Material Adverse Effect. Each
Employee Benefit Plan that is intended to qualify under Section 401(a) of the
Internal Revenue Code has received a favorable determination letter from the
Internal Revenue Service to the effect that it does so qualify and To The
Knowledge Of Borrowers, each Employee Benefit Plan has not been operated in any
way that would result in the Employee Benefit Plan no longer being so qualified.

          B.   No ERISA Event has occurred or is reasonably expected to occur.

          C.   Except to the extent required under Section 4980B of the Internal
Revenue Code, there are no Employee Benefit Plans that provide health or welfare
benefits (through the

                                       83

<PAGE>

purchase of insurance or otherwise) for any retired or former employee of
Borrowers, any of their Subsidiaries or any of their respective ERISA
Affiliates.

            D.    No Employee Benefit Plan is subject to Section 412 of the
Internal Revenue Code or Section 302 of ERISA.

            E.    No Employee Benefit Plan is a Multiemployer Plan.

            F.    As of the date hereof, Borrowers and their Subsidiaries have
made full payment when due of all required contributions to any Foreign Plan.

      5.12  Certain Fees.
            ------------

            No broker's or finder's fee or commission will be payable with
respect to this Agreement or any of the transactions contemplated hereby as a
result of any action by or on behalf of Borrowers or their Affiliates, and
Borrowers hereby indemnify Lenders against, and agrees that it will hold Lenders
harmless from, any claim, demand or liability for any such broker's or finder's
fees alleged to have been incurred in connection herewith or therewith and any
expenses (including reasonable fees, expenses and disbursements of counsel)
arising in connection with any such claim, demand or liability.

      5.13  Environmental Protection.
            ------------------------

            (i)    neither Borrowers nor any of their Subsidiaries nor any of
      their respective Facilities or operations are subject to any outstanding
      written order, consent decree or settlement agreement with any Person
      relating to (a) any Environmental Law, (b) any Environmental Claim, or (c)
      any Hazardous Materials Activity that, individually or in the aggregate,
      could reasonably be expected to result in a Material Adverse Effect;

            (ii)   except as disclosed in any reports delivered to the Agent
      pursuant to subsection 4.1J or otherwise or as disclosed in Schedule 5.13
                                                                  -------------
      annexed hereto, neither Borrowers nor any of their Subsidiaries has
      received any letter or request for information under Section 104 of the
      Comprehensive Environmental Response, Compensation, and Liability Act (42
      U.S.C. (S) 9604) or any comparable state law;

            (iii)  To The Knowledge Of Borrowers' there have been no conditions,
      occurrences, or Hazardous Materials Activities that could reasonably be
      expected to form the basis of an Environmental Claim against Borrowers or
      any of their Subsidiaries that, individually or in the aggregate, could
      reasonably be expected to result in a Material Adverse Effect;

            (iv)   except as disclosed in any reports delivered to the Agent
      pursuant to subsection 4.1J or as disclosed in Schedule 5.13 annexed
      hereto, neither Borrowers nor any of their Subsidiaries nor, to Borrowers'
      knowledge, any predecessor of Borrowers or any of their Subsidiaries has
      filed any notice under any Environmental Law indicating past or present
      treatment of Hazardous Materials at any Facility, and none of Borrowers'
      or any of their Subsidiaries' operations involves the generation,
      transportation, treatment,

                                       84

<PAGE>

      storage or disposal of hazardous waste, as defined under 40 C.F.R. Parts
      260-270 or any state equivalent;

            (v)    compliance with all current or reasonably foreseeable future
      requirements pursuant to or under Environmental Laws applicable to any
      Facility would not, individually or in the aggregate, be reasonably
      expected to result in a Material Adverse Effect.

      5.14  Employee Matters.
            ----------------

            There is no strike or work stoppage in existence or, To The
Knowledge Of Borrowers, threatened involving Borrowers or any of their
Subsidiaries that could reasonably be expected to result in a Material Adverse
Effect.

      5.15  Matters Relating to Collateral.
            ------------------------------

            A.    Creation, Perfection and Priority of Liens. The execution and
delivery of the Collateral Documents by Loan Parties, together with (i) the
actions taken on or prior to the date hereof pursuant to subsections 4.1K and
4.1L, and (ii) the delivery to Administrative Agent of any Pledged Collateral
not delivered to Administrative Agent at the time of execution and delivery of
the applicable Collateral Document (all of which Pledged Collateral has been so
delivered) are effective to create in favor of Administrative Agent for the
benefit of Lenders, as security for the respective Secured Obligations (as
defined in the applicable Collateral Document in respect of any Collateral), the
security interests described in the Collateral Documents.

            B.    Governmental Authorizations. No authorization, approval or
other action by, and no notice to or filing with, any Government Authority in
the United States is required for the pledge or grant by any Loan Party of the
Liens purported to be created in favor of Administrative Agent pursuant to any
of the Collateral Documents.

            C.    Absence of Third-Party Filings. Except such as may have been
filed in favor of Administrative Agent as contemplated by the Collateral
Documents and to evidence permitted lease obligations and other Liens permitted
pursuant to subsection 7.2, (i) no effective UCC financing statement, fixture
filing or other instrument similar in effect covering all or any part of the
Collateral is on file in any filing or recording office in the United States and
(ii) no effective filing covering all or any part of the IP Collateral is on
file in the PTO.

            D.    Margin Regulations. The pledge of the Pledged Collateral
pursuant to the Collateral Documents does not violate Regulation T, U or X of
the Board of Governors of the Federal Reserve System.

      5.16  Disclosure.
            ----------

            No information concerning Borrowers or any of their Subsidiaries
contained in the Confidential Information Memorandum or in any Loan Document or
in any other document, certificate or written statement furnished to Lenders by
or on behalf of Borrowers or any of their Subsidiaries for use in connection
with the transactions contemplated by this Agreement contains any untrue
statement of a material fact or omits to state a material fact (known to
Borrowers, in

                                       85

<PAGE>

the case of any document not furnished by it) necessary in order to make the
statements contained therein not misleading in light of the circumstances in
which the same were made. Any projections and pro forma financial information
contained in such materials are based upon good faith estimates and assumptions
believed by Borrowers to be reasonable at the time made, it being recognized by
Lenders that such projections as to future events are not to be viewed as facts
and that actual results during the period or periods covered by any such
projections may differ from the projected results. There are no facts known (or
which should upon the reasonable exercise of diligence be known) to Borrowers
(other than matters of a general economic nature) that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect
and that have not been disclosed herein or in such other documents, certificates
and statements furnished to Lenders for use in connection with the transactions
contemplated hereby.

     5.17  Subordinated Indebtedness.
           -------------------------

           The Obligations constitute "Designated Senior Debt" under the New
Subordinated Indenture that is entitled to the benefits of all the subordination
provisions thereof.

     5.18  Matters Relating to Borrowers Bankruptcy Proceedings.
           ----------------------------------------------------

           A. Plan of Reorganization. There have been no material modifications,
amendments revisions or restatements of the Approved Plan of Reorganization. Any
representation and warranty made by Borrowers or any Debtor Subsidiary in the
Approved Plan of Reorganization is accurate, true and correct in all material
respects as of the Closing Date (or, to the extent such representations and
warranties specifically relate to an earlier date, that such representations and
warranties were accurate, true and correct in all material respects as of such
earlier date).

           B. Confirmation Order. The Confirmation Order is the final order of
the Bankruptcy Court and has been entered by the Bankruptcy Court at least 11
days prior to the Effective Date. As of the Effective Date, the Confirmation
Order has not been stayed pending any appeal, and no appeal or petition for
review or for rehearing has been taken or, to Borrowers' knowledge, is pending.

     5.19  Solvency.
           --------

           After consummation of the Approved Plan of Reorganization and, upon
the incurrence of the Obligations as contemplated by this Agreement, Company and
its Subsidiaries taken as a whole will be Solvent.

Section 6. BORROWERS' AFFIRMATIVE COVENANTS

           Borrowers covenant and agree that, so long as any of the Commitments
hereunder shall remain in effect and until payment in full of all of the Loans
and other Obligations and the cancellation or expiration of all Letters of
Credit, unless Requisite Lenders shall otherwise give prior written consent,
Borrowers shall perform, and shall cause each of their Subsidiaries to perform,
all covenants in this Section 6.

                                       86

<PAGE>

     6.1   Financial Statements and Other Reports.
           --------------------------------------

           Borrowers will maintain, and cause each of their Subsidiaries to
maintain, a system of accounting established and administered in accordance with
sound business practices to permit preparation of financial statements in
conformity with GAAP, provided, that Subsidiaries with operations in
jurisdictions not in the United States of America shall also maintain a system
of accounting in accordance with the rules, customs and practices of such
jurisdictions. Borrowers will deliver to Administrative Agent and Lenders:

           (i)   Events of Default, etc.: promptly upon any Senior Officer
                 -----------------------
     obtaining knowledge (a) of any condition or event that constitutes an Event
     of Default or Potential Event of Default, or becoming aware that any Lender
     has given any notice (other than to Administrative Agent) or taken any
     other action with respect to a claimed Event of Default or Potential Event
     of Default, (b) that any Person has given any notice to Borrowers or any of
     their Subsidiaries or taken any other action with respect to a claimed
     default or event or condition of the type referred to in subsection 8.2,
     (c) of any condition or event that would be required to be disclosed in a
     current report filed by Borrowers with the Securities and Exchange
     Commission on Form 8-K if Borrowers were required to file such reports
     under the Exchange Act, or (d) of the occurrence of any event or change
     that has caused or evidences, either in any case or in the aggregate, a
     Material Adverse Effect, an Officer's Certificate specifying the nature and
     period of existence of such condition, event or change, or specifying the
     notice given or action taken by any such Person and the nature of such
     claimed Event of Default, Potential Event of Default, default, event or
     condition, and what action Borrowers have taken, are taking and propose to
     take with respect thereto;

          (ii)   Monthly and Quarterly Financials: (a) as soon as available, and
                 --------------------------------
     in any event within 30 days after the end of each month ending after the
     Closing Date, the Monthly Reporting Package and (b) within 50 days after
     the end of each Fiscal Quarter of each Fiscal Year (other than the fourth
     Fiscal Quarter of the Fiscal Year), (i) the consolidated balance sheets of
     the Company and its Subsidiaries as at the end of such fiscal period and
     the related consolidated statements of operations and cash flows of the
     Company and its Subsidiaries for such fiscal period and for the period from
     the beginning of the then current Fiscal Year to the end of such fiscal
     period, setting forth for such quarterly information in comparative form
     the corresponding figures for the corresponding periods of the previous
     Fiscal Year and the corresponding figures from the Financial Plan for the
     current Fiscal Year, to the extent prepared for such fiscal period, all in
     reasonable detail and certified by the Company's chief financial officer
     that they fairly present, in all material respects, the financial condition
     of Company and its Subsidiaries as at the dates indicated and the results
     of their operations and their cash flows for the periods indicated, subject
     to changes resulting from audit and normal year-end adjustments, and (ii) a
     narrative report describing the operations of the Company and its
     Subsidiaries in the form prepared for presentation to senior management for
     such Fiscal Quarter and for the period from the beginning of the then
     current Fiscal Year to the end of such Fiscal Quarter, which requirement
     may be satisfied by the delivery to Agent and Lenders of the Company's
     Quarterly Report on Form 10-Q, filed pursuant to the Securities Act;

                                       87

<PAGE>

          (iii)  Year-End Financials: as soon as available and in any event
                 -------------------
     within 110 days after the end of each Fiscal Year, (a) the consolidated
     balance sheets of the Company and its Subsidiaries as at the end of such
     Fiscal Year and the related consolidated statements of operations and cash
     flows of the Company and its Subsidiaries for such Fiscal Year, setting
     forth in each case in comparative form the corresponding figures for the
     previous Fiscal Year and the corresponding figures from the Financial Plan
     for the Fiscal Year covered by such financial statements, all in reasonable
     detail and certified by the chief financial officer of the Company that
     they fairly present, in all material respects, the financial condition of
     the Company and its Subsidiaries as at the dates indicated and the results
     of their operations and their cash flows for the periods indicated, (b) a
     narrative report describing the operations of the Company and its
     Subsidiaries in the form prepared for presentation to senior management for
     such Fiscal Year, which requirement may be satisfied by the delivery to
     Agent and Lenders of the Company's Annual Report on Form 10-K, filed
     pursuant to the Securities Act; and (c) in the case of such consolidated
     financial statements, a report thereon of independent certified public
     accountants of recognized national standing selected by Borrowers and
     satisfactory to Administrative Agent, which report shall be unqualified,
     for Fiscal Years ending after December 31, 2001, shall express no doubts
     about the ability of the Company and its Subsidiaries to continue as a
     going concern, and shall state that such consolidated financial statements
     fairly present, in all material respects, the consolidated financial
     position of the Company and its Subsidiaries as at the dates indicated and
     the results of their operations and their cash flows for the periods
     indicated in conformity with GAAP applied on a basis consistent with prior
     years (except as otherwise disclosed in such financial statements) and that
     the examination by such accountants in connection with such consolidated
     financial statements has been made in accordance with generally accepted
     auditing standards;

          (iv)   Compliance Certificates: together with each delivery of
                 -----------------------
     financial statements of the Company and its Subsidiaries pursuant to
     subdivisions (ii)(b) and (iii) above, (a) an Officer's Certificate of
     Borrowers' Agent stating that the signers have reviewed the terms of this
     Agreement and have made, or caused to be made under their supervision, a
     review in reasonable detail of the transactions and condition of the
     Company and its Subsidiaries during the accounting period covered by such
     financial statements and that such review has not disclosed the existence
     during or at the end of such accounting period, and that the signers do not
     have knowledge of the existence as at the date of such Officer's
     Certificate, of any condition or event that constitutes an Event of Default
     or Potential Event of Default, or, if any such condition or event existed
     or exists, specifying the nature and period of existence thereof and what
     action Borrowers have taken, are taking and propose to take with respect
     thereto; and (b) a Compliance Certificate demonstrating in reasonable
     detail compliance during and at the end of the applicable accounting
     periods with the restrictions contained in Section 7, in each case to the
     extent compliance with such restrictions is required to be tested at the
     end of the applicable accounting period;

          (v)    Reconciliation Statements: if, as a result of any change in
                 -------------------------
     accounting principles and policies from those used in the preparation of
     the audited financial statements referred to in subsection 5.3, other than
     changes from "fresh start" accounting,

                                       88

<PAGE>

          the consolidated financial statements of the Company and its
          Subsidiaries delivered pursuant to subdivision (ii), (iii) or (xii) of
          this subsection 6.1 will differ in any material respect from the
          consolidated financial statements that would have been delivered
          pursuant to such subdivisions had no such change in accounting
          principles and policies been made, then (a) together with the first
          delivery of financial statements pursuant to subdivision (ii), (iii)
          or (xii) of this subsection 6.1 following such change, consolidated
          financial statements of the Company and its Subsidiaries for (y) the
          current Fiscal Year to the effective date of such change and (z) the
          two full Fiscal Years immediately preceding the Fiscal Year in which
          such change is made, in each case prepared on a pro forma basis as if
          such change had been in effect during such periods, and (b) together
          with each delivery of financial statements pursuant to subdivision
          (ii), (iii) or (xii) of this subsection 6.1 following such change, if
          required pursuant to subsection 1.2, a written statement of the chief
          accounting officer or the chief financial officer of the Company
          setting forth the differences (including any differences that would
          affect any calculations relating to the financial covenants set forth
          in subsection 7.6) which would have resulted if such financial
          statements had been prepared without giving effect to such change;

               (vi)   Accountants' Certification: together with each delivery of
                      --------------------------
          consolidated financial statements of the Company and its Subsidiaries
          pursuant to subdivision (iii) above, a written statement by the
          independent certified public accountants giving the report thereon (a)
          stating that their audit examination has included a review of the
          terms of this Agreement and the other Loan Documents as they relate to
          accounting matters, (b) stating whether, in connection with their
          audit examination, any condition or event that constitutes an Event of
          Default or Potential Event of Default has come to their attention and,
          if such a condition or event has come to their attention, specifying
          the nature and period of existence thereof; provided that such
                                                      --------
          accountants shall not be liable by reason of any failure to obtain
          knowledge of any such Event of Default or Potential Event of Default
          that would not be disclosed in the course of their audit examination,
          and (c) stating that based on their audit examination nothing has come
          to their attention that causes them to believe either or both that the
          information contained in the certificates delivered therewith pursuant
          to subdivision (iv) above is not correct or that the matters set forth
          in the Compliance Certificates delivered therewith pursuant to clause
          (b) of subdivision (iv) above for the applicable Fiscal Year are not
          stated in accordance with the terms of this Agreement;

               (vii)  Accountants' Reports: promptly upon receipt thereof
                      --------------------
          (unless restricted by applicable professional standards), copies of
          all reports submitted to Borrowers by independent certified public
          accountants in connection with each annual, interim or special audit
          of the financial statements of the Company and its Subsidiaries made
          by such accountants, including any comment letter submitted by such
          accountants to management in connection with their annual audit;

               (viii) SEC Filings and Press Releases: promptly upon their
                      ------------------------------
          becoming available, copies of (a) all financial statements, reports,
          notices and proxy statements sent or made available generally by the
          Company to its security holders or by any Subsidiary of the Company to
          its security holders other than Borrowers or another Subsidiary of
          Borrowers, (b) all regular and periodic reports and all registration
          statements (other than

                                       89

<PAGE>

          on Form S-8 or a similar form) and prospectuses, if any, filed by
          Borrowers or any of their Subsidiaries with any securities exchange or
          with the Securities and Exchange Commission or any governmental or
          private regulatory authority, and (c) all press releases and other
          statements made available generally by Borrowers or any of their
          Subsidiaries to the public concerning material developments in the
          business of Borrowers and their Subsidiaries considered as a whole;

               (ix)   Litigation or Other Proceedings: (a) promptly upon any
                      -------------------------------
          Senior Officer obtaining knowledge of (1) the institution of, or
          non-frivolous threat of, any Proceeding against or affecting Borrowers
          or any of their Subsidiaries or any property of Borrowers or any of
          their Subsidiaries not previously disclosed in writing by Borrowers to
          Lenders or (2) any material development in any Proceeding that, in any
          such case:

                         (x) if adversely determined, has a reasonable
                    possibility of giving rise to a Material Adverse Effect; or

                         (y) seeks to enjoin or otherwise prevent the
                    consummation of, or to recover any damages or obtain relief
                    as a result of, the transactions contemplated hereby;

written notice thereof together with such other information as may be reasonably
available to Borrowers to enable Lenders and their counsel to evaluate such
matters; and (b) within twenty days after the end of each Fiscal Quarter, a
schedule of all Proceedings involving an alleged liability of, or claims against
or affecting, Borrowers or any of their Subsidiaries equal to or greater than
$5,000,000 and promptly after request by Administrative Agent such other
information as may be reasonably requested by Administrative Agent to enable
Administrative Agent and its counsel to evaluate any of such Proceedings;

               (x)    ERISA Events: promptly upon becoming aware of the
                      ------------
          occurrence of or forthcoming occurrence of any ERISA Event, a written
          notice specifying the nature thereof, what action Borrowers, any of
          their Subsidiaries or any of their respective ERISA Affiliates has
          taken, is taking or proposes to take with respect thereto and, when
          known, any action taken or threatened by the Internal Revenue Service,
          the Department of Labor or the PBGC with respect thereto;

               (xi)   ERISA Notices: with reasonable promptness, copies of (a)
                      -------------
          all notices received by Borrowers, any of their Subsidiaries or any of
          their respective ERISA Affiliates from a Multiemployer Plan sponsor
          concerning an ERISA Event; and (b) copies of such other documents or
          governmental reports or filings relating to any Employee Benefit Plan
          as Administrative Agent shall reasonably request;

               (xii)  Financial Plans: as soon as practicable and in any event
                      ---------------
          no later than 30 days after the beginning of each Fiscal Year,
          commencing with the Fiscal Year beginning January 1, 2003, a
          consolidated plan and financial forecast for such Fiscal Year and the
          next three succeeding Fiscal Years (the "Financial Plan" for such
          Fiscal Years), including (a) a forecasted consolidated balance sheet
          and forecasted consolidated statement of operations and cash flows of
          Borrowers and their Subsidiaries for each such

                                       90

<PAGE>

     Fiscal Year, together with a pro forma calculation of the financial
                                  --- -----
     covenants contained in Section 7 for each such Fiscal Year and a summary of
     the assumptions on which such forecasts are based, (b) forecasted
     consolidated statements of operations and cash flows of Borrowers and their
     Subsidiaries for each Fiscal Quarter for the immediately succeeding Fiscal
     Year and a pro forma calculation of the financial covenants contained in
     Section 7 for each such Fiscal Quarter and a summary of the assumptions on
     which such forecasts are based, and (c) such other information and
     projections as Administrative Agent may reasonably request;

          (xiii)  Insurance: as soon as practicable after any material change in
                  ---------
     insurance coverage maintained by Borrowers and their Subsidiaries notice
     thereof to Administrative Agent specifying the changes and reasons
     therefor;

          (xiv)   Governing Body: with reasonable promptness, written notice of
                  --------------
     any change in the Governing Body of Borrowers;

          (xv)    New Subsidiaries: promptly upon any Person becoming a
                  ----------------
     Subsidiary of any Borrower, a written notice setting forth with respect to
     such Person (a) the date on which such Person became a Subsidiary of any of
     the Borrowers and (b) all of the data required to be set forth in Schedule
                                                                       --------
     5.1 annexed hereto with respect to all Subsidiaries of Borrowers (it being
     ---
     understood that such written notice shall be deemed to supplement Schedule
                                                                       --------
     5.1 annexed hereto for all purposes of this Agreement);
     ---

          (xvi)   Material Contracts: promptly, and in any event within ten
                  ------------------
     Business Days after any Material Contract of Borrowers or any of their
     Subsidiaries is terminated or amended in a manner that is materially
     adverse to Borrowers or such Subsidiary, as the case may be, or any new
     Material Contract is entered into, a written statement describing such
     event with copies of such material amendments or new contracts, and an
     explanation of any actions being taken with respect thereto;

          (xvii)  International Inventory: with reasonable promptness, whenever
                  -----------------------
     the aggregate amount of inventory accumulated in countries other than the
     United State of America exceeds the historical levels for the Borrowers and
     their Subsidiaries (including any Foreign Subsidiaries) or amounts
     satisfactory to Administrative Agent in its reasonable discretion,
     information and data with respect to such inventory, including an
     explanation of the reasons for such accumulation; and

          (xviii) Other Information: with reasonable promptness, such other
                  -----------------
     information and data with respect to Borrowers or any of their Subsidiaries
     as from time to time may be reasonably requested by the Administrative
     Agent.

     6.2  Existence, etc.
          ---------------

          Except as permitted under subsection 7.7 and except for Immaterial
Subsidiaries, Borrowers will, and will cause each of their Subsidiaries to, at
all times preserve and keep in full force and effect its existence and all
rights and franchises material to its business; provided, however that neither
                                                --------  -------
Borrowers nor any of their Subsidiaries shall be required to preserve any such
right or franchise if the Governing Body of Borrowers or such Subsidiary shall
determine

                                       91

<PAGE>

that the preservation thereof is no longer desirable in the conduct of the
business of Borrowers or such Subsidiary, as the case may be, and that the loss
thereof would not reasonably be expected to have a Material Adverse Effect.

     6.3  Payment of Taxes and Claims; Tax.
          ---------------------------------

          A.   Borrowers will, and will cause each of their Subsidiaries to, pay
all taxes, assessments and other governmental charges imposed upon it or any of
its properties or assets or in respect of any of its income, businesses or
franchises before any penalty accrues thereon, and all claims (including claims
for labor, services, materials and supplies) for sums that have become due and
payable and that by law have or may become a Lien upon any of its properties or
assets, prior to the time when any penalty or fine shall be incurred with
respect thereto (other than charges or claims the nonpayment of which could not
reasonably be expected to have a Material Adverse Effect); provided that no such
                                                           --------
charge or claim need be paid if it is being contested in good faith by
appropriate proceedings promptly instituted and diligently conducted, so long as
(i) such reserve or other appropriate provision, if any, as shall be required in
conformity with GAAP shall have been made therefor and (ii) in the case of a
charge or claim which has or may become a Lien against any of the Collateral,
such proceedings conclusively operate to stay the sale of any portion of the
Collateral to satisfy such charge or claim.

          B.   Borrowers will not, nor will they permit any of their
Subsidiaries to, file or consent to the filing of any consolidated income tax
return with any Person (other than Borrowers or any of their Subsidiaries).

     6.4  Maintenance of Properties; Insurance; Application of Net Insurance/
          -------------------------------------------------------------------
          Condemnation Proceeds.
          ---------------------

          A.   Maintenance of Properties. Borrowers will, and will cause each of
their Subsidiaries to, maintain or cause to be maintained in working order and
condition consistent with past practices, ordinary wear and tear excepted, all
material properties used or useful in the business of Borrowers and their
Subsidiaries (including all Intellectual Property) and from time to time will
make or cause to be made all repairs, renewals and replacements thereof as
necessary to maintain such property in such order.

          B.   Insurance. Borrowers will maintain or cause to be maintained,
with financially sound and reputable insurers, such public liability insurance,
third party property damage insurance, and casualty insurance with respect to
liabilities, losses or damage in respect of the assets, properties and
businesses of Borrowers and their Subsidiaries as determined by senior officers
in good faith to be prudent and consistent with past practices and reasonably
acceptable to Administrative Agent. Each such policy of insurance shall (a) name
Administrative Agent for the benefit of Lenders as an additional insured
thereunder as its interests may appear and (b) in the case of each casualty
insurance policy, contain a loss payable clause or endorsement, satisfactory in
form and substance to Administrative Agent, that names Agent for the benefit of
Lenders as the loss payee thereunder for any covered loss in excess of $250,000
and provides for at least 30 days prior written notice to Administrative Agent
of any modification or cancellation of such policy.

                                       92

<PAGE>

          C.     Application of Net Insurance/Condemnation Proceeds.

          (i)    Business Interruption Insurance. Upon receipt by Borrowers or
                 -------------------------------
     any of their Subsidiaries or Agent of any business interruption insurance
     proceeds constituting Net Insurance/Condemnation Proceeds, (a) so long as
     no Event of Default or Potential Event of Default shall have occurred and
     be continuing, Borrowers or such Subsidiary may retain and apply (or if
     applicable Agent shall disburse the same to Borrowers for their
     application) such Net Insurance/Condemnation Proceeds for working capital
     purposes, and (b) if an Event of Default or Potential Event of Default
     shall have occurred and be continuing, Borrowers, or Agent, as applicable,
     shall apply an amount equal to such Net Insurance/Condemnation Proceeds to
     prepay the Loans (and/or the Revolving Loan Commitments shall be reduced)
     as provided in subsection 2.4B;

          (ii)   Net Insurance/Condemnation Proceeds Received by Borrowers. Upon
                 ---------------------------------------------------------
     receipt by Borrowers or any of their Subsidiaries of any Net
     Insurance/Condemnation Proceeds other than from business interruption
     insurance, (a) so long as no Event of Default or Potential Event of Default
     shall have occurred and be continuing, Borrowers shall, or shall cause one
     or more of their Subsidiaries to, promptly and diligently apply such Net
     Insurance/Condemnation Proceeds (1) to pay or reimburse the costs of
     repairing, restoring or replacing the assets in respect of which such Net
     Insurance/Condemnation Proceeds were received or, (2) to acquire and/or
     construct promptly but in all events within 270 days after the occurrence
     of the event giving rise to the Net Insurance/Condemnation Proceeds,
     equipment, real estate (or interests therein) or other productive property
     used in the business of Borrowers or their Subsidiaries or (3) to the
     extent not so applied as provided in clause (1) or (2), to prepay the Loans
     (and/or the Revolving Loan Commitments shall be reduced) as provided in
     subsection 2.4B, and (b) if an Event of Default or Potential Event of
     Default shall have occurred and be continuing, Borrowers shall apply an
     amount equal to such Net Insurance/Condemnation Proceeds to prepay the
     Loans (and/or the Revolving Loan Commitments shall be reduced) as provided
     in subsection 2.4B.

          (iii)  Net Insurance/Condemnation Proceeds Received by Administrative
                 --------------------------------------------------------------
     Agent. Upon receipt by Administrative Agent of any Net
     -----
     Insurance/Condemnation Proceeds as loss payee other than for business
     interruption insurance, (a) so long as no event of Default or Potential
     Event of Default or Event of Default shall have occurred and be continuing,
     Administrative Agent shall deliver such Net Insurance/Condemnation Proceeds
     to Borrowers and Borrowers shall, or shall cause one or more of their
     Subsidiaries to, promptly and diligently apply such Net
     Insurance/Condemnation Proceeds (1) to pay or reimburse the costs of
     repairing, restoring or replacing the assets in respect of which such Net
     Insurance/Condemnation Proceeds were received, (2) to acquire and/or
     construct promptly but in all events within 270 days after the occurrence
     of the event giving rise to the Net Insurance/Condemnation Proceeds,
     equipment, real estate (or interests therein) or other productive property
     used in the business of Borrowers' or their Subsidiaries, or (3) to the
     extent not applied as provided in clause (1) or (2), to prepay the Loans
     (and/or the Revolving Loan Commitments shall be reduced) as provided in
     subsection 2.4B, and (b) if an Event of Default or Potential Event of
     Default shall have occurred and be continuing, Administrative Agent shall
     apply an

                                       93

<PAGE>

     amount equal to such Net Insurance/Condemnation Proceeds to prepay the
     Loans (and/or the Revolving Loan Commitments shall be reduced) as provided
     in subsection 2.4B.

     6.5  Inspection Rights; Lender Meeting.
          ---------------------------------

          A.    Inspection Rights. Borrowers shall, and shall cause each of its
Subsidiaries to, permit any authorized representatives designated by any Lender
to visit and inspect any of the properties of Borrowers or of any of their
Subsidiaries, to inspect, copy and take extracts from its and their financial
and accounting records and corporate minutes, and to discuss its and their
affairs, finances and accounts with its and their officers and independent
public accountants (provided that Borrowers may, if they so choose, be present
at or participate in any such discussion), all upon reasonable notice and at
such reasonable times during normal business hours and as often as may
reasonably be requested.

          B.    Lender Meeting. Borrowers will, upon the request of
Administrative Agent or Requisite Lenders, participate in a meeting of
Administrative Agent and Lenders once during each Fiscal Year to be held at
Borrowers' principal offices (or at such other location as may be agreed to by
Borrowers and Administrative Agent) at such time as may be agreed to by
Borrowers and Administrative Agent.

     6.6  Compliance with Laws, etc.
          --------------------------

          Borrowers shall comply, and shall cause each of their Subsidiaries and
shall make reasonable efforts to cause all other Persons on or occupying any
Facilities to comply, with the requirements of all applicable laws, rules,
regulations and orders of any Government Authority (including all Environmental
Laws), noncompliance with which could reasonably be expected to result in,
individually or in the aggregate, a Material Adverse Effect.

     6.7  Environmental Matters.
          ---------------------

          A.    Environmental Disclosure. Borrowers will deliver to
Administrative Agent and Lenders:

          (i)   Environmental Audits and Reports. As soon as practicable
                --------------------------------
     following receipt thereof, copies of all environmental audits,
     investigations, analyses and reports of any kind or character, whether
     prepared by personnel of Borrowers (other than Borrowers' counsel) or any
     of their Subsidiaries or by independent consultants, governmental
     authorities or any other Persons, with respect to significant environmental
     matters at any Facility that, individually or in the aggregate, could
     reasonably be expected to result in a Material Adverse Effect or with
     respect to any Environmental Claims that, individually or in the aggregate,
     could reasonably be expected to result in a Material Adverse Effect;

          (ii)  Notice of Certain Releases, Remedial Actions, Etc. Promptly upon
                --------------------------------------------------
     the occurrence thereof, written notice describing in reasonable detail (a)
     any Release required to be reported to any federal, state or local
     governmental or regulatory agency under any applicable Environmental Laws
     which Release could reasonably be expected to have a Material Adverse
     Effect, (b) any remedial action taken by Borrowers or any other Person

                                       94

<PAGE>

     in response to (1) any Hazardous Materials Activities the existence of
     which could reasonably be expected to result in one or more Environmental
     Claims having, individually or in the aggregate, a Material Adverse Effect,
     or (2) any Environmental Claims that, individually or in the aggregate,
     could reasonably be expected to result in a Material Adverse Effect, and
     (c) Borrowers' discovery of any occurrence or condition on any real
     property adjoining or in the vicinity of any Facility that could cause such
     Facility or any part thereof to be subject to any material restrictions on
     the ownership, occupancy, transferability or use thereof under any
     Environmental Laws which could reasonably be expected to cause an
     Environmental Claim that would have a Material Adverse Effect.

          (iii) Written Communications Regarding Environmental Claims, Releases,
                ----------------------------------------------------------------
     Etc. As soon as practicable following the sending or receipt thereof by
     ----
     Borrowers or any of their Subsidiaries, a copy of any and all written
     communications with respect to (a) any Environmental Claims that,
     individually or in the aggregate, could reasonably be expected to result in
     a Material Adverse Effect, (b) any Release required to be reported to any
     federal, state or local governmental or regulatory agency, which Release
     could reasonably be expected to have a Material Adverse Effect, and (c) any
     request for information from any governmental agency that suggests such
     agency is investigating whether Borrowers or any of their Subsidiaries may
     be potentially responsible for any Hazardous Materials Activity which could
     reasonably be expected to cause an Environmental Claim that would have a
     Material Adverse Effect.

          (iv)  Notice of Certain Proposed Actions Having Environmental Impact.
                --------------------------------------------------------------
     Prompt written notice describing in reasonable detail (a) any proposed
     acquisition of stock, assets, or property by Borrowers or any of their
     Subsidiaries that could reasonably be expected to (1) expose Borrowers or
     any of their Subsidiaries to, or result in, Environmental Claims that could
     reasonably be expected to result in, individually or in the aggregate, a
     Material Adverse Effect or (2) affect the ability of Borrowers or any of
     their Subsidiaries to maintain in full force and effect all material
     Governmental Authorizations required under any Environmental Laws for their
     respective operations and (b) any proposed action to be taken by Borrowers
     or any of their Subsidiaries to commence manufacturing or other industrial
     operations or] to modify current operations in a manner that could
     reasonably be expected to subject Borrowers or any of their Subsidiaries to
     any material additional obligations or requirements under any Environmental
     Laws that could reasonably be expected to result in, individually or in the
     aggregate, a Material Adverse Effect.

          B.    Borrowers' Actions Regarding Hazardous Materials Activities,
Environmental Claims and Violations of Environmental Laws.

          (i)   Remedial Actions Relating to Hazardous Materials Activities.
                -----------------------------------------------------------
     Borrowers shall, in compliance with all applicable Environmental Laws,
     promptly undertake, and shall cause each of their Subsidiaries promptly to
     undertake, any and all investigations, studies, sampling, testing,
     abatement, cleanup, removal, remediation or other response actions
     necessary to remove, remediate, clean up or abate any Hazardous Materials
     Activity on, under or about any Facility that is in violation of any
     Environmental Laws or that presents a material risk of giving rise to an
     Environmental Claim, in each case where

                                       95

<PAGE>

     the failure to undertake the same could reasonably be expected to have
     individually or in the aggregate, a Material Adverse Effect; provided that
     no such undertaking need be commenced if Borrowers are contesting any
     requirement for such undertaking in good faith by appropriate proceedings
     promptly instituted and diligently conducted, so long as (i) such reserve
     or other appropriate provision, if any, as shall be required in conformity
     with GAAP shall have been made therefor and (ii) in the case of a Hazardous
     Materials Activity which has or may become a Lien against any of the
     Collateral, such proceedings conclusively operate to stay the sale of any
     portion of the Collateral to satisfy such Lien or proceedings for such sale
     have not commenced.

          (ii)  Actions with Respect to Environmental Claims and Violations of
                --------------------------------------------------------------
     Environmental Laws. Borrowers shall promptly take, and shall cause each of
     ------------------
     their Subsidiaries promptly to take, any and all actions necessary to (i)
     cure any material violation of applicable Environmental Laws by Borrowers
     or its Subsidiaries that could reasonably be expected to result in,
     individually or in the aggregate, a Material Adverse Effect and (ii) make
     an appropriate response to any Environmental Claim against Borrowers or any
     of their Subsidiaries and discharge any obligations it may have to any
     Person thereunder where failure to do so could reasonably be expected to
     result in, individually or in the aggregate, a Material Adverse Effect;
     provided that no such undertaking need be commenced if Borrowers are
     contesting any requirement for such undertaking in good faith by
     appropriate proceedings promptly instituted and diligently conducted, so
     long as (i) such reserve or other appropriate provision, if any, as shall
     be required in conformity with GAAP shall have been made therefor and (ii)
     in the case of a Hazardous Materials Activity which has or may become a
     Lien against any of the Collateral, such proceedings conclusively operate
     to stay the sale of any portion of the Collateral to satisfy such Lien or
     proceedings for such sale have not commenced.

          C.    Environmental Review and Investigation. Borrowers agree that
     Administrative Agent may, from time to time and in its reasonable
     discretion, (i) retain, at Borrowers' expense, an independent professional
     consultant to review any environmental audits, investigations, analyses and
     reports relating to Hazardous Materials prepared by or for Borrowers and
     (ii) in the event (a) Administrative Agent reasonably believes that
     Borrowers have breached any representation, warranty or covenant contained
     in subsection 5.6, 5.13, 6.6 or 6.7 or that there has been a material
     violation of Environmental Laws at any Facility or by Borrowers or any of
     their Subsidiaries at any other location or (b) an Event of Default has
     occurred and is continuing, conduct its own investigation of any Facility;
     provided that, in the case of any Facility no longer owned, leased,
     --------
     operated or used by Borrowers or any of their Subsidiaries, Borrowers shall
     use their best efforts to obtain permission for Administrative Agent's
     professional consultant to conduct an investigation of such Facility. For
     purposes of conducting such a review and/or investigation, Borrowers hereby
     grant to Administrative Agent and its Administrative Agents, employees,
     consultants and contractors the right to enter into or onto any Facilities
     currently owned, leased, operated or used by Borrowers or any of their
     Subsidiaries and to perform such tests on such property (including taking
     samples of soil, groundwater and suspected asbestos-containing materials)
     as are reasonably necessary in connection therewith. Any such investigation
     of any Facility shall be conducted, unless otherwise agreed to by Borrowers
     and Administrative Agent, during normal business

                                       96

<PAGE>

     hours and, to the extent reasonably practicable, shall be conducted so as
     not to interfere with the ongoing operations at such Facility or to cause
     any damage or loss to any property at such Facility. Borrowers and
     Administrative Agent hereby acknowledge and agree that any report of any
     investigation conducted at the request of Administrative Agent pursuant to
     this subsection 6.7C will be obtained and shall be used by Administrative
     Agent and Lenders for the purposes of Lenders' internal credit decisions,
     to monitor and police the Loans and to protect Lenders' security interests,
     if any, created by the Loan Documents. Administrative Agent agrees to
     deliver a copy of any such report to Borrowers with the understanding that
     Borrowers acknowledge and agree that (x) they will indemnify and hold
     harmless Administrative Agent and each Lender from any costs, losses or
     liabilities relating to Borrowers' use of or reliance on such report, (y)
     neither Administrative Agent nor any Lender makes any representation or
     warranty with respect to such report, and (z) by delivering such report to
     Borrowers, neither Administrative Agent nor any Lender is requiring or
     recommending the implementation of any suggestions or recommendations
     contained in such report. Provided there is no Potential Event of Default
     or Event of Default, Administrative Agent shall request that its
     consultants and contractors state in such report or other written summary
     that Borrowers may use and rely thereon subject to the limitations imposed
     by such consultant and contractor on Administrative Agent's and Lenders'
     use and reliance.

     6.8  Execution of Subsidiary Guaranty and Collateral Documents After the
          -------------------------------------------------------------------
          Closing Date.
          ------------

          A.   Execution of Subsidiary Guaranty and Collateral Documents. In the
event that any Person becomes a Domestic Subsidiary of Borrowers after the date
hereof, Borrowers will promptly notify Administrative Agent of that fact and
cause each such Domestic Subsidiary which is not an Immaterial Subsidiary to
execute and deliver to Administrative Agent a counterpart of the Subsidiary
Guaranty and Security Agreement and to take all such further actions and execute
all such further documents and instruments (including actions, documents and
instruments comparable to those described in subsection 4.1K) as may be
necessary or, in the opinion of Administrative Agent, desirable to create in
favor of Administrative Agent, for the benefit of Lenders, a valid and perfected
First Priority Lien on all of the personal and mixed property assets (other than
Excluded Assets) of such Domestic Subsidiary described in the applicable forms
of Collateral Documents. In addition, as provided in the Security Agreement,
Borrowers shall, or shall cause the Subsidiary that owns the Capital Stock of
such Person, to execute and deliver to Administrative Agent a supplement to the
Security Agreement and to deliver to Administrative Agent all certificates
representing such Capital Stock of such Person (accompanied by irrevocable
undated stock powers, duly endorsed in blank).

          B.   Foreign Subsidiaries. In the event that any Person becomes a
Foreign Subsidiary of Borrowers which is not an Immaterial Subsidiary after the
date hereof, Borrowers will promptly notify Administrative Agent of that fact
and cause such Subsidiary to execute and deliver to Administrative Agent such
documents and instruments and take such further actions (including actions,
documents and instruments comparable to those described in subsection 4.1K) as
may be necessary, or in the reasonable opinion of Administrative Agent,
desirable to create in favor of Administrative Agent, for the benefit of
Lenders, a valid and perfected First Priority Lien on 66% of the capital stock
of such Foreign Subsidiary. In the event that any

                                       97

<PAGE>

Domestic Subsidiary on the date hereof (other than an Immaterial Subsidiary)
converts to a Foreign Subsidiary after the date hereof, the pledge of capital
stock and ownership interests of such Subsidiary shall be deemed to be a pledge
of 66% of the capital stock and ownership interests of such Subsidiary, and
Administrative Agent, without Requisite Lender consent, shall take such actions
Administrative Agent deems necessary to modify or release Liens pursuant to the
Collateral Documents in connection therewith. At all times, including after the
consummation of the Restructuring Transactions, Borrowers shall cause 100% of
the Capital Stock or other ownership interests of each first tier Foreign
Subsidiary to be owned by Borrowers or a Domestic Subsidiary which is a
Subsidiary Guarantor or will become a Subsidiary Guarantor under this subsection
6.8.

          C.   Subsidiary Organizational Documents, Legal Opinions, Etc.
Borrowers shall deliver to Administrative Agent, together with the Loan
Documents referred to in subsections 6.8A and 6.8B, (i) certified copies of the
Organizational Documents of any Subsidiaries referred to in subsections 6.8A and
6.8B, together with, if such Subsidiary is a Domestic Subsidiary, a good
standing certificate from the Secretary of State of the jurisdiction of its
organization and each other state in which such Person is qualified to do
business and, to the extent generally available, a certificate or other evidence
of good standing as to payment of any applicable franchise or similar taxes from
the appropriate taxing authority of each of such jurisdictions, each to be dated
a recent date prior to their delivery to Administrative Agent, (ii) a
certificate executed by the secretary or similar officer of such Subsidiary as
to (a) the fact that the attached resolutions of the Governing Body of such
Subsidiary approving and authorizing the execution, delivery and performance of
such Loan Documents are in full force and effect and have not been modified or
amended and (b) the incumbency and signatures of the officers of such Subsidiary
executing such Loan Documents, (iii) an executed supplement to the Security
Agreement evidencing the pledge of the Capital Stock of such Subsidiary by
Borrowers or a Subsidiary of Borrowers that owns such Capital Stock, accompanied
by certificate evidencing such Capital Stock, together with an irrevocable
undated stock powers duly endorsed in blank and satisfactory in form and
substance to Administrative Agent, and (iv) a favorable opinion of counsel to
such Subsidiary, in form and substance satisfactory to Administrative Agent and
its counsel, as to (a) the due organization and good standing of such
Subsidiary, (b) the due authorization, execution and delivery by such Subsidiary
of such Loan Documents, (c) the enforceability of such Loan Documents against
such Subsidiary and (d) such other matters (including matters relating to the
creation and perfection of Liens in any Collateral pursuant to such Loan
Documents) as Administrative Agent may reasonably request, all of the foregoing
to be satisfactory in form and substance to Administrative Agent and its
counsel.

     6.9  Matters Relating to Additional Real Property Collateral.
          -------------------------------------------------------

          A.   From and after the Closing Date, in the event that (i) Borrowers
or any Subsidiary Guarantor acquires any fee interest in real property or any
Leasehold Property or (ii) at the time any Person becomes a Subsidiary
Guarantor, such Person owns or holds any fee interest in real property or any
Leasehold Property, in either case excluding (A) any such Real Property Asset
the encumbrancing of which requires the consent of any applicable lessor, where
Borrowers and their Subsidiaries have attempted in good faith, but are unable,
to obtain such lessor's consent and (B) any Real Property Assets located outside
the United States of America and Puerto Rico (any such non-excluded Real
Property Asset described in the foregoing clause

                                       98

<PAGE>

(i) or (ii) being an "Additional Mortgaged Property"), Borrowers or such
Subsidiary Guarantor shall deliver to Administrative Agent, as soon as
practicable after such Person acquires such Additional Mortgaged Property or
becomes a Subsidiary Guarantor, as the case may be, a fully executed and
notarized Mortgage or other appropriate instrument with respect to Real Property
Assets located outside the United States of America (an "Additional Mortgage"),
in proper form for recording in all appropriate places in all applicable
jurisdictions, encumbering the interest of such Loan Party in such Additional
Mortgaged Property; and such opinions, documents, title insurance (if
applicable), environmental reports that would have been delivered on the Closing
Date if such Additional Mortgaged Property were a Closing Date Mortgaged
Property or that may be reasonably required by Administrative Agent.

     6.10   Interest Rate Protection.
            ------------------------

            At all times after the date that is 90 days after the Closing Date
and if required by Administrative Agent in its sole discretion, Borrowers shall
maintain in effect one or more Interest Rate Agreements with respect to the Term
Loans, in an aggregate notional principal amount of not less than 33% of the
aggregate outstanding principal balance of the Term Loans, which Interest Rate
Agreements shall effectively limit that component of the interest costs to
Borrowers in respect of a Eurodollar Rate Loan for a period of not less than one
year.

     6.11   Deposit Accounts and Cash Management Systems.
            --------------------------------------------

            Borrowers shall, and shall cause each of its Domestic Subsidiaries
to, use and maintain its Deposit Accounts and cash management systems in a
manner reasonably satisfactory to Administrative Agent pursuant to Section 2.10.

     6.12   Lottery, Prize and Bowling League Accounts.
            ------------------------------------------

            Borrowers shall maintain or cause their Subsidiaries to maintain all
lottery, prize or bowling league accounts in accordance with applicable laws,
rules and regulations in the jurisdictions in which such accounts are
maintained. Upon the request of Agent, Borrowers shall provide Agent with a
written report of the amounts in such lottery, prize and bowling league accounts
together with evidence satisfactory to Agent of the sources of such funds and
that the balances thereof are adequate to satisfy the lottery, prize and bowling
league commitments to be funded therefrom.

Section 7.  BORROWERS' NEGATIVE COVENANTS

            Borrowers covenant and agree that, so long as any of the Commitments
hereunder shall remain in effect and until payment in full of all of the Loans
and other Obligations and the cancellation or expiration of all Letters of
Credit, unless Requisite Lenders shall otherwise give prior written consent,
Borrowers shall perform, and shall cause each of their Subsidiaries to perform,
all covenants in this Section 7.

                                       99

<PAGE>

     7.1   Indebtedness.
           ------------

           Borrowers shall not, and shall not permit any of their Subsidiaries
to, directly or indirectly, create, incur, assume or guaranty, or otherwise
become or remain directly or indirectly liable with respect to, any
Indebtedness, except:

           (i)    Borrowers and their Subsidiaries may become and remain liable
     with respect to the Obligations;

           (ii)   Borrowers and their Subsidiaries may become and remain liable
     with respect to Contingent Obligations permitted by subsection 7.4 and,
     upon any matured obligations actually arising pursuant thereto, the
     Indebtedness corresponding to the Contingent Obligations so extinguished;

           (iii)  Borrowers and their Subsidiaries may become and remain liable
     with respect to Indebtedness in respect of Capital Leases aggregating not
     in excess of $10,000,000 at any one time outstanding;

           (iv)   Borrowers may become and remain liable with respect to
     Indebtedness to any of their wholly-owned Subsidiaries, and any
     wholly-owned Subsidiary of Borrowers may become and remain liable with
     respect to Indebtedness to Borrowers or any other wholly-owned Subsidiary
     of Borrowers; provided that (a) all such intercompany Indebtedness shall be
                   --------
     evidenced by promissory notes, (b) all such intercompany Indebtedness owed
     by Borrowers to any of their Subsidiaries shall be subordinated in right of
     payment to the payment in full of the Obligations pursuant to the terms of
     the applicable promissory notes or an intercompany subordination agreement,
     (c) any payment by any Subsidiary of Borrowers under any guaranty of the
     Obligations shall result in a pro tanto reduction of the amount of any
                                   --- -----
     intercompany Indebtedness owed by such Subsidiary to Borrowers or to any of
     their Subsidiaries for whose benefit such payment is made, and (d) the
     aggregate principal amount of all Indebtedness of all Foreign Subsidiaries
     of Borrowers to Borrowers and their Domestic Subsidiaries at any time
     outstanding shall not exceed $8,000,000 plus the principal amount
     outstanding as of the Closing Date of such types of Indebtedness identified
     in Schedule 7.1(iv) annexed hereto;
        ----------------

           (v)    Borrowers and their Subsidiaries, as applicable, may remain
     liable with respect to Indebtedness described in Schedule 7.1(v) annexed
                                                      ---------------
     hereto;

          (vi)    Borrowers may remain liable with respect to Indebtedness
     evidenced by the New Subordinated Debt in an aggregate principal amount not
     to exceed $150,000,000 and

          (vii)   Borrowers and Subsidiaries of Borrowers may become and remain
     liable with respect to Indebtedness of any Person assumed in connection
     with any acquisition of such Person permitted under subsection 7.3 and a
     Person that becomes a direct or indirect wholly-owned Subsidiary of
     Borrowers as a result of any acquisition permitted under subsection 7.3 may
     remain liable with respect to Indebtedness existing on the date of

                                       100

<PAGE>

         such acquisition; provided that such Indebtedness is not created in
         anticipation of such acquisition; and

               (viii) Foreign Subsidiaries of Borrowers may become and remain
         liable with respect to other Indebtedness not otherwise permitted by
         this Section 7.1 in an aggregate principal amount at any time
         outstanding not to exceed an amount equal to $2,500,000 plus the
         aggregate principal amount of such types of Indebtedness identified in
         Schedule 7.1(viii) annexed hereto;
         -----------------

               (ix)   Borrowers and their Domestic Subsidiaries may become and
         remain liable with respect to other Indebtedness not otherwise
         permitted by this Section 7.1 in an aggregate principal amount not to
         exceed $5,000,000 at any time outstanding; and

               (x)    Borrowers and their Subsidiaries may become and remain
         liable with respect to any modification, extension, renewal,
         replacement or refinancing of any of the foregoing Indebtedness,
         provided that the aggregate principal amount of the Indebtedness so
         modified, extended, renewed, replaced or refinanced shall not exceed
         the aggregate principal amount, have a tenor or maturity any shorter
         than such Indebtedness or a higher interest rate than such Indebtedness
         otherwise permitted under this subsection 7.1.

         7.2   Liens and Related Matters.
               -------------------------

               A.    Prohibition on Liens. Borrowers shall not, and shall not
permit any of their Subsidiaries to, directly or indirectly, create, incur,
assume or permit to exist any Lien on or with respect to any property or asset
of any kind (including any document or instrument in respect of goods or
accounts receivable) of Borrowers or any of their Subsidiaries, whether now
owned or hereafter acquired, or any income or profits therefrom, or file or
permit the filing of, or permit to remain in effect, any financing statement or
other similar notice of any Lien with respect to any such property, asset,
income or profits under the UCC or under any similar recording or notice
statute, except:

               (i)   Permitted Encumbrances;

               (ii)  Liens on any asset existing at the time of acquisition of
     such asset or of the Person owning such asset by Borrowers or a Subsidiary,
     or Liens to secure the payment of all or any part of the purchase price of
     an asset or Person owning such asset upon the acquisition of such asset or
     Person by Borrowers or a Subsidiary or to secure any Indebtedness permitted
     hereby incurred by Borrowers or a Subsidiary at the time of or within
     ninety days after the acquisition of such asset or Person, which
     Indebtedness is incurred for the purpose of financing all or any part of
     the purchase price thereof; provided, however, that the Lien shall apply
                                 --------  -------
     only to the asset so acquired or the assets of such Person so acquired and
     proceeds thereof; and provided further, that all such Liens do not in the
                           -------- -------
     aggregate secure Indebtedness in excess of $5,000,000 at any time
     outstanding;

               (iii) Liens existing on the Effective Date which are described in
     Schedule 7.2 annexed hereto;
     ------------

                                       101

<PAGE>

           (iv) Liens securing any other Indebtedness which is permitted to be
     secured from time to time under subsections 7.1(ii), (iii), (vii), (viii)
     and (ix); and

           (v)  Liens securing any modification, extension, renewal, replacement
     or refinancing of the Indebtedness secured by a Lien described above.

           B.   Equitable Lien in Favor of Lenders. If Borrowers or any of their
Subsidiaries shall create or assume any Lien upon any of its properties or
assets, whether now owned or hereafter acquired, other than Liens excepted by
the provisions of subsection 7.2A, it shall make or cause to be made effective
provision whereby the Obligations will be secured by such Lien equally and
ratably with any and all other Indebtedness secured thereby as long as any such
Indebtedness shall be so secured; provided that, notwithstanding the foregoing,
                                  --------
this covenant shall not be construed as a consent by Requisite Lenders to the
creation or assumption of any such Lien not permitted by the provisions of
subsection 7.2A.

           C.   No Further Negative Pledges. Neither Borrowers nor any of their
Subsidiaries shall enter into any agreement (other than an agreement prohibiting
only the creation of Liens securing Subordinated Indebtedness) prohibiting the
creation or assumption of any Lien upon any of its properties or assets, whether
now owned or hereafter acquired to secure Indebtedness under any senior credit
facility, including this Agreement, except with respect to (i) specific property
encumbered to secure payment of particular Indebtedness or to be sold pursuant
to an executed agreement with respect to such specific property, (ii) customary
non-assignment provisions in leases and licenses and (iii) Section 4.12 of the
New Subordinated Indenture.

           D.   No Restrictions on Subsidiary Distributions to Borrowers or
Other Subsidiaries. Borrowers will not, and will not permit any of their
Subsidiaries to, create or otherwise cause or suffer to exist or become
effective any consensual encumbrance or restriction of any kind on the ability
of any such Subsidiary to (i) pay dividends or make any other distributions on
any of such Subsidiary's Capital Stock owned by Borrowers or any other
Subsidiary of Borrowers, (ii) repay or prepay any Indebtedness owed by such
Subsidiary to Borrowers or any other Subsidiary of Borrowers, (iii) make loans
or advances to Borrowers or any other Subsidiary of Borrowers, or (iv) transfer
any of its property or assets to Borrowers or any other Subsidiary of Borrowers,
except (a) as provided in this Agreement and (b) as may be provided in an
agreement with respect to a sale or other disposition of assets permitted under
this Agreement.

     7.3   Investments; Acquisitions.
           -------------------------

           Borrowers shall not, and shall not permit any of their Subsidiaries
to, directly or indirectly, make or own any Investment in any Person, including
any Joint Venture, or acquire, by purchase or otherwise, all or substantially
all the business, property or fixed assets of, or Capital Stock or other
ownership interest of any Person, or any division or line of business of any
Person except:

           (i)  Borrowers and their Subsidiaries may make and own Investments in
Cash Equivalents;

                                       102

<PAGE>

           (ii)    Borrowers and their Subsidiaries may continue to own the
     Investments owned by them as of the Closing Date in any Subsidiaries of
     Borrowers and Borrowers and their wholly-owned Domestic Subsidiaries may
     make and own additional equity Investments in their respective wholly-owned
     Domestic Subsidiaries;

           (iii)   Borrowers and their Subsidiaries may make intercompany loans
     to the extent permitted under subsection 7.1(iv);

           (iv)    Borrowers and their Subsidiaries may make Consolidated
     Capital Expenditures permitted by subsection 7.8;

           (v)     Borrowers and their Subsidiaries may continue to own the
     Investments owned by them and described in Schedule 7.3 annexed hereto;
                                                ------------

           (vi)    Borrowers and their Domestic Subsidiaries may acquire assets
     (including Capital Stock and including Capital Stock of Subsidiaries formed
     in connection with any such acquisition) having a fair market value not in
     excess of $5,000,000 in any one Fiscal Year (the "Maximum Annual Domestic
     Investment Amount") and $20,000,000 in the aggregate and continue to own
     such assets after the acquisition thereof; provided that Borrowers shall,
                                                --------
     and shall cause their Domestic Subsidiaries to, comply with the
     requirements of subsections 6.8 and 6.9 with respect to each such
     acquisition that results in a Person becoming a Subsidiary; and provided
                                                                     --------
     further, that if Borrowers and their Domestic Subsidiaries do not acquire
     -------
     assets as described above in any Fiscal Year in the full amount of the
     Maximum Annual Domestic Investment Amount, then 50% of the amount by which
     the actual fair market value of such assets acquired is less than the
     Maximum Annual Domestic Investment Amount may be expended in any subsequent
     Fiscal Year for the acquisition of such assets in addition to the Maximum
     Annual Domestic Investment Amount provided for such subsequent Fiscal Year;

           (vii)   Borrowers and their wholly-owned Subsidiaries may make
     additional Investments in their respective wholly-owned Foreign
     Subsidiaries; provided that (a) the amount of all such Investments
                   --------
     constituting equity Investments does not exceed $2,000,000 in the aggregate
     for all such Investments since the Closing Date and (b) the amount of all
     such Investments constituting loans or advances is that permitted under
     subsection 7.1(iv);

           (viii)  Borrowers may acquire and hold obligations of one or more
     officers or other employees of Borrowers or their Subsidiaries in
     connection with such officers' or employees' acquisition of shares of
     Borrowers' common stock, so long as no cash is actually advanced by
     Borrowers or any of their Subsidiaries to such officers or employees in
     connection with the acquisition of any such obligations;

           (ix)    Borrowers and their Subsidiaries may acquire Securities in
     connection with the satisfaction or enforcement of Indebtedness or claims
     due or owing to Borrowers or any of their Subsidiaries or as security for
     any such Indebtedness or claim;

           (x)     Foreign Subsidiaries of Borrowers may acquire assets
     (including Capital Stock and including Capital Stock of Subsidiaries formed
     in connection with any such

                                       103

<PAGE>

          acquisition) having a fair market value not in excess of $2,000,000 in
          any one Fiscal Year (the "Maximum Annual Foreign Investment Amount")
          and $8,000,000 in the aggregate and continue to own such assets after
          the acquisition thereof; provided that if such Foreign Subsidiaries do
                                   --------
          not acquire assets as described above in any Fiscal Year in the full
          amount of the Maximum Annual Foreign Investment Amount, then 50% of
          the amount by which the actual fair market value of such assets
          acquired is less than the Maximum Annual Foreign Investment Amount may
          be expended in any subsequent Fiscal Year for the acquisition of such
          assets in addition to the Maximum Annual Foreign Investment Amount
          provided for such subsequent Fiscal Year; and

               (xi)    Borrowers and their Domestic Subsidiaries may make and
          own Investments not otherwise described in this subsection 7.3 in an
          aggregate amount not to exceed at any time outstanding $10,000,000
          plus the principal amount outstanding as of the Closing Date of such
          Investments described in Schedule 7.3 annexed hereto.
                                   ------------

          7.4  Contingent Obligations.
               ----------------------

               Borrowers shall not, and shall not permit any of their
Subsidiaries to, directly or indirectly, create or become or remain liable with
respect to any Contingent Obligation, except:

               (i)     Subsidiaries of Borrowers may become and remain liable
          with respect to Contingent Obligations in respect of the Subsidiary
          Guaranty;

               (ii)    Borrowers and their Subsidiaries may become and remain
          liable with respect to Contingent Obligations in respect of Letters of
          Credit issued pursuant to this Agreement in an aggregate amount not to
          exceed at any time $25,000,000 and in respect to other letters of
          credit, surety bonds, appeal bonds or other similar obligations issued
          in the ordinary course of the business of the Borrowers and their
          Subsidiaries in an aggregate amount not to exceed at any time
          $5,000,000;

               (iii)   Borrowers and their Subsidiaries may become and remain
          liable with respect to Contingent Obligations under Hedge Agreements
          required under subsection 6.10 and under other Hedge Agreements
          entered into in the ordinary course of business;

               (iv)    Borrowers and their Subsidiaries may become and remain
          liable with respect to Contingent Obligations in respect of customary
          indemnification and purchase price adjustment obligations incurred in
          connection with Asset Sales or other sales of assets;

               (v)     Borrowers and their Subsidiaries may become and remain
          liable with respect to Contingent Obligations under guarantees and
          warranties in the ordinary course of business of the obligations of
          suppliers, customers, franchisees and licensees of Borrowers and their
          Subsidiaries (other than repurchase agreements described in subsection
          7.4(x));

               (vi)    Borrowers and their Subsidiaries may become and remain
          liable with respect to Contingent Obligations in respect of any
          Indebtedness of Borrowers or any of its Subsidiaries permitted by
          subsection 7.1;

                                       104

<PAGE>

               (vii)   Borrowers and their Subsidiaries, as applicable, may
          remain liable with respect to Contingent Obligations described in
          Schedule 7.4 annexed hereto;
          ------------

               (viii)  Subsidiary Guarantors may become and remain liable with
          respect to Contingent Obligations arising under subordinated
          guaranties solely in connection with the New Subordinated Debt as
          required by the indenture relating thereto in effect on the Closing
          Date;

               (ix)    Borrowers and their Subsidiaries may become and remain
          liable with respect to Contingent Obligations in respect of
          endorsement of negotiable instruments for deposit or collection or
          similar transactions in the ordinary course of business;

               (x)     Borrowers and their Subsidiaries may become and remain
          liable for Contingent Obligations incurred in the ordinary course of
          business under repurchase arrangements in connection with the
          financing of bowling equipment sales in an aggregate amount
          outstanding at any time not to exceed $25,000,000;

               (xi)    Borrowers and their Subsidiaries may become and remain
          liable for Contingent Obligations incurred in connection with
          guarantees of rental payments under Leases for the benefit of lessors
          in an aggregate amount outstanding at any time not to exceed an amount
          equal to the sum of $10,000,000;

               (xii)   Borrowers and their Subsidiaries may become and remain
          liable with respect to Contingent Obligations consisting of
          indemnification obligations to their respective officers and directors
          under their organizational documents; and

               (xiii)  Borrowers and their Subsidiaries may become and remain
          liable with respect to other Contingent Obligations not provided
          above; provided that the maximum aggregate liability, contingent or
          otherwise, of Borrowers and their Subsidiaries in respect of all such
          other Contingent Obligations shall at no time exceed $2,000,000.

          7.5  Restricted Junior Payments.
               --------------------------

               Borrowers shall not, and shall not permit any of their
Subsidiaries to, directly or indirectly, declare, order, pay, make or set apart
any sum for any Restricted Junior Payment; provided that Borrowers may make
                                           --------
regularly scheduled payments of interest in respect of any Subordinated
Indebtedness in accordance with the terms of, and only to the extent required
by, and subject to the subordination provisions contained in, the indenture or
other agreement pursuant to which such Subordinated Indebtedness was issued, as
such indenture or other agreement may be amended from time to time to the extent
permitted under subsection 7.12B.

          7.6  Financial Covenants.
               -------------------

               A.   Minimum Interest Coverage Ratio. Borrowers shall not permit
the Consolidated Interest Coverage Ratio as of the last day of any Fiscal
Quarter ending during the periods set forth below, beginning with the Fiscal
Quarter ending June 30, 2002, to be less than the correlative ratio indicated:

                                       105

<PAGE>

                      Fiscal Quarter                 Minimum Interest
                      --------------                 ----------------
                    Ending on or about                Coverage Ratio
                    ------------------                --------------

     June 30, 2002                                      2.25:1:00
     September 30, 2002                                 2.25:1:00
     December 31, 2002                                  2.25:1:00

     March 31, 2003                                     2.50:1:00
     June 30, 2003                                      2.50:1:00
     September 30, 2003                                 2.50:1.00
     December 31, 2003                                  2.50:1:00

     March 31, 2004                                     2.75:1:00
     June 30, 2004                                      2.75:1:00
     September 30, 2004                                 3.00:1.00
     December 31, 2004                                  3.00:1:00

     March 31, 2005                                     3.00:1:00
     June 30, 2005                                      3.00:1:00
     September 30, 2005                                 3.25:1.00
     December 31, 2005                                  3.25:1:00

     March 31, 2006                                     3.50:1:00
     June 30, 2006                                      3.50:1:00
     September 30, 2006                                 3.50:1.00
     December 31, 2006                                  3.50:1:00

     March 31, 2007                                     4.00:1:00
     June 30, 2007                                      4.00:1:00
     September 30, 2007                                 4.75:1.00
     December 31, 2007                                  4.75:1:00

          B. Maximum Leverage Ratio. Borrowers shall not permit the Consolidated
Leverage Ratio as of the last day of the most recently ended Fiscal Quarter
ending during any of the periods set forth below to exceed the correlative ratio
indicated:

                      Fiscal Quarter                 Maximum Leverage
                      --------------                 ----------------
                    Ending on or about                     Ratio
                    ------------------                     -----
     June 30, 2002                                       4.25:1:00
     September 30, 2002                                  4.25:1:00
     December 31, 2002                                   4.25:1:00

                                       106

<PAGE>

                      Fiscal Quarter                 Maximum Leverage
                      --------------                 ----------------
                    Ending on or about                     Ratio
                    ------------------                     -----

      March 31, 2003                                     4.00:1:00
      June 30, 2003                                      4.00:1:00
      September 30, 2003                                 3.75:1.00
      December 31, 2003                                  3.75:1:00

      March 31, 2004                                     3.50:1:00
      June 30, 2004                                      3.50:1:00
      September 30, 2004                                 3.25:1.00
      December 31, 2004                                  3.25:1:00

      March 31, 2005                                     3.25:1:00
      June 30, 2005                                      3.25:1:00
      September 30, 2005                                 3.00:1.00
      December 31, 2005                                  3.00:1:00

      March 31, 2006                                     2.75:1:00
      June 30, 2006                                      2.75:1:00
      September 30, 2006                                 2.50:1.00
      December 31, 2006                                  2.50:1:00

      March 31, 2007                                     2.50:1:00
      June 30, 2007                                      2.50:1:00
      September 30, 2007                                 2.00:1.00
      December 31, 2007                                  2.00:1:00

          C. Minimum Consolidated EBITDA. Borrowers shall not permit
Consolidated EBITDA for the four Fiscal Quarters ending on the last day of the
periods set forth below to be less than the correlative amount indicated:

                      Fiscal Quarter              Minimum Consolidated
                      --------------              --------------------
                    Ending on or about                   EBIDTA
                    ------------------                   ------

     June 30, 2002                                     $110,000,00
     September 30, 2002                                $110,000,00
     December 31, 2002                                 $110,000,00

     March 31, 2003                                   $112,500,000
     June 30, 2003                                    $112,500,000
     September 30, 2003                               $115,000,000
     December 31, 2003                                $115,000,000

                                       107

<PAGE>

                      Fiscal Quarter              Minimum Consolidated
                      --------------              --------------------
                    Ending on or about                   EBIDTA
                    ------------------                   ------

      March 31, 2004                                  $120,000,000
      June 30, 2004                                   $125,000,000
      September 30, 2004                              $127,500,000
      December 31, 2004                               $130,000,000

      March 31, 2005                                  $135,000,000
      June 30, 2005                                   $135,000,000
      September 30, 2005                              $135,000,000
      December 31, 2005                               $135,000,000

      March 31, 2006                                  $140,000,000
      June 30, 2006                                   $140,000,000
      September 30, 2006                              $140,000,000
      December 31, 2006                               $140,000,000

      March 31, 2007                                  $145,000,000
      June 30, 2007                                   $145,000,000
      September 30, 2007                              $145,000,000
      December 31, 2007                               $145,000,000

    7.7  Restriction on Fundamental Changes; Asset Sales.
         -----------------------------------------------

          Borrowers shall not, and shall not permit any of their Subsidiaries
to, alter the corporate, capital or legal structure of Borrowers or any of their
Subsidiaries, or enter into any transaction of merger or consolidation, or
liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution), or convey, sell, lease or sub-lease (as lessor or sublessor),
transfer or otherwise dispose of, in one transaction or a series of
transactions, all or any part of its business, property or assets (including its
notes or receivables and Capital Stock of a Subsidiary, whether newly issued or
outstanding), whether now owned or hereafter acquired, except:

          (i)  any Subsidiary of Borrowers may be merged with or into a Borrower
     or any Subsidiary of a Borrower, or be liquidated, wound up or dissolved,
     or all or any part of its business, property or assets may be conveyed,
     sold, leased, transferred or otherwise disposed of, in one transaction or a
     series of transactions, to a Borrower or any Subsidiary; provided that, in
                                                              --------
     the case of such a merger, a Borrower or such wholly-owned Subsidiary
     Guarantor shall be the continuing or surviving Person if any of the
     entities involved in such transaction was a Borrower or a Subsidiary
     Guarantor;

          (ii) Borrowers and their Subsidiaries may sell or otherwise dispose of
     assets in transactions that do not constitute Asset Sales; provided that
                                                                --------
     the consideration received for such assets shall be in an amount at least
     equal to the fair market value thereof;

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<PAGE>

          (iii) Borrowers and their Subsidiaries may dispose of obsolete, worn
     out or surplus property in the ordinary course of business;

          (iv)  Borrowers and their Subsidiaries may make Asset Sales in any
     Fiscal Year having a fair market value not in excess of $20,000,000 in the
     aggregate; provided that (a) the consideration received for such assets
     shall be in an amount at least equal to the fair market value thereof; (b)
     the sole consideration received shall be cash unless otherwise approved by
     Administrative Agent in its sole discretion; and (c) the proceeds of such
     Asset Sales shall be applied as required by subsection 2.4B(iii)(a) or
     subsection 2.4D, if applicable to such Asset Sales;

          (v)   in order to resolve disputes that occur in the ordinary course
     of business, Borrowers and their Subsidiaries may discount or otherwise
     compromise for less than the face value thereof, notes or accounts
     receivable;

          (vi)   Borrowers or a Subsidiary may sell or dispose of shares of
     Capital Stock of any of its Subsidiaries in order to qualify members of the
     Governing Body of the Subsidiary if required by applicable law;

          (vii)  Borrowers and their Subsidiaries may transfer assets in any
     Fiscal Year having a fair market value not in excess of $10,000,000 in the
     aggregate in connection with an exchange pursuant to Internal Revenue Code
     Section 1031 of such assets for like-kind assets to be used in the business
     of Borrowers or their Subsidiaries; provided, that the replacement assets
     shall be pledged as Collateral securing the Obligations in accordance with
     this Agreement;

          (viii) Any Person may be merged with or into a Borrower or any
     Subsidiary if the acquisition of the Capital Stock of such Person by such
     Borrower or such Subsidiary would have been permitted pursuant to
     subsection 7.3; provided that (a) such Borrower or Subsidiary shall be the
                     --------
     continuing or surviving Person, (b) if a Subsidiary is not the surviving or
     continuing Person, the surviving Person becomes a Subsidiary and complies
     with the provisions of subsection 6.8 and (c) no Potential Event of Default
     or Event of Default shall have occurred or be continuing after giving
     effect thereto;

          (ix)   Borrowers and their Subsidiaries may undertake and consummate
     the Restructuring Transactions;

          (x)   Borrowers and their Subsidiaries may grant any Lien permitted
     under subsection 7.2; and

          (xi)   Borrowers and their Subsidiaries may undertake the sales of
assets identified in Schedule 7.7.
                     ------------

     7.8  Consolidated Capital Expenditures.
          ---------------------------------

     A. Borrowers shall not, and shall not permit their Subsidiaries to, make or
incur Consolidated Capital Expenditures, in any calendar year period ending on
the dates indicated below, in an aggregate amount in excess of the corresponding
amount (the "Maximum

                                       109

<PAGE>

Consolidated Capital Expenditures Amount") set forth below opposite such
calendar year; provided that the Maximum Consolidated Capital Expenditures
               --------
Amount for any calendar year shall be increased by an amount equal to the
excess, if any, of the Maximum Consolidated Capital Expenditures Amount for the
previous calendar year over the actual amount of Consolidated Capital
Expenditures for such previous calendar year; provided further that in no event
                                              --------
shall the amount of such increase exceed 50% of the Maximum Consolidated Capital
Expenditures Amount set forth in the table below for such previous calendar
year:

                                                  Maximum Consolidated
                 Calendar Year Ending             Capital Expenditures
                 --------------------             --------------------
                   December 31, 2002                  $52,500,000
                   December 31, 2003                  $52,500,000
                   December 31, 2004                  $55,000,000
                   December 31, 2005                  $60,000,000
                   December 31, 2006                  $60,000,000
                   December 31, 2007                  $60,000,000

     B.  To the extent that the Borrowers and their Subsidiaries are permitted
to reinvest and do reinvest Net Asset Sales Proceeds pursuant to subsection
2.4B(iii)(a) or Net Insurance/Condemnation Proceeds pursuant to subsection 6.4C
in the repair, restoration or construction of replacement assets, the amount of
such Net Asset Sales Proceeds or Net Insurance/Condemnation Proceeds so
reinvested shall not be included in the Maximum Consolidated Capital
Expenditures Amount provided in subsection 7.8A above.

     7.9 Transactions with Shareholders and Affiliates.
         ---------------------------------------------

         Borrowers shall not, and shall not permit any of their Subsidiaries to,
directly or indirectly, enter into or permit to exist any transaction (including
the purchase, sale, lease or exchange of any property or the rendering of any
service) with any holder of 5% or more of any class of equity Securities of
Borrowers or with any Affiliate of Borrowers or of any such holder, on terms
that are less favorable to Borrowers or that Subsidiary, as the case may be,
than those that might be obtained at the time from Persons who are not such a
holder or Affiliate; provided that the foregoing restriction shall not apply to
                     --------
(i) any transaction between Borrowers and any of their wholly-owned Subsidiaries
or between any of their wholly-owned Subsidiaries, (ii) reasonable and customary
fees paid to members of the Governing Bodies of Borrowers and their
Subsidiaries, or (iii) transactions with Persons (each a "Liquor License
Affiliate") that hold licenses for the sale of alcoholic beverages at bowling
center Facilities operated by Borrowers or their Subsidiaries and which Liquor
License Affiliates are all disclosed on Schedule 7.9 annexed hereto, as such
                                        ------------
Schedule may be supplemented from time to time with the approval of
Administrative Agent; provided that Borrowers and their Subsidiaries shall have
                      --------
granted Agent a First Priority security interest in all management, lease or
operating agreements pursuant to which such Liquor License Affiliates manage,
lease or operate concession areas in such bowling centers.

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<PAGE>

     7.10   Sales and Lease-Backs.
            ---------------------

            Borrowers shall not, and shall not permit any of their Subsidiaries
to, directly or indirectly, become or remain liable as lessee or as a guarantor
or other surety with respect to any lease, whether an Operating Lease or a
Capital Lease, of any property (whether real, personal or mixed), whether now
owned or hereafter acquired, (i) that Borrowers or any of their Subsidiaries has
sold or transferred or is to sell or transfer to any other Person (other than
Borrowers or any of their Subsidiaries) or (ii) that Borrowers or any of their
Subsidiaries intends to use for substantially the same purpose as any other
property that has been or is to be sold or transferred by Borrowers or any of
their Subsidiaries to any Person (other than Borrowers or any of their
Subsidiaries) in connection with such lease; provided that Borrowers and their
                                             --------
Subsidiaries may become and remain liable as lessee, guarantor or other surety
with respect to any such lease if and to the extent that Borrowers or any of
their Subsidiaries would be permitted to enter into, and remain liable under,
such lease to the extent that the transaction would be permitted under
subsection 7.1, assuming the sale and lease back transaction constituted
Indebtedness in a principal amount equal to the gross proceeds of the sale.

     7.11   Change in Nature of Business.
            ----------------------------

            From and after the Closing Date, Borrowers shall not, and shall not
permit any of their Subsidiaries to (i) engage in any business other than (i)
the operation, management, franchising and ownership or renting of bowling
centers and other businesses related or incidental thereto, (ii) the manufacture
and distribution of all types of bowling, and bowling center related, products
and equipment, billiards products and equipment and ownership and operation of
golf centers and other businesses related or incidental thereto, and activities
related thereto, (iii) ownership of companies engaged in such businesses and
(iv) other businesses engaged in by Company or its Subsidiaries on the date
hereof or similar lines of business to those engaged in by Company or its
Subsidiaries on the date hereof, including, but not limited to, the manufacture
and distribution of plastics and related products.

     7.12   Amendments or Waivers of Certain Agreements; Amendments of Documents
            --------------------------------------------------------------------
            Relating to Subordinated Indebtedness.
            --------------------------------------

            A. Amendments or Waivers of Certain Agreements. Neither Borrowers
nor any of their Subsidiaries will agree to any material amendment to, or waive
any of its material rights under, any of the Related Agreements after the
Closing Date without in each case obtaining the prior written consent of
Requisite Lenders to such amendment or waiver.

            B. Amendments of Documents Relating to Subordinated Indebtedness.
Borrowers shall not, and shall not permit any of their Subsidiaries to, amend or
otherwise change the terms of any Subordinated Indebtedness, or make any payment
consistent with an amendment thereof or change thereto, if the effect of such
amendment or change is to increase the interest rate on such Subordinated
Indebtedness, change (to earlier dates) any dates upon which payments of
principal or interest are due thereon, change any event of default or condition
to an event of default with respect thereto (other than to eliminate any such
event of default or increase any grace period related thereto), change the
redemption, prepayment or defeasance provisions thereof, change the
subordination provisions thereof (or of any guaranty thereof), or

                                       111

<PAGE>

change any collateral therefor (other than to release such collateral), or if
the effect of such amendment or change, together with all other amendments or
changes made, is to increase materially the obligations of the obligor
thereunder or to confer any additional rights on the holders of such
Subordinated Indebtedness (or a trustee or other representative on their behalf)
which would be adverse to Borrowers or Lenders.

     7.13   Fiscal Year.
            -----------

            Borrowers shall not change their Fiscal Year-end from December 31,
without providing Agent with 90 days' prior written notice and subject to
Administrative Agent's approval which shall not be unreasonably withheld.

Section 8.  EVENTS OF DEFAULT

            If any of the following conditions or events ("Events of Default")
shall occur:

     8.1    Failure to Make Payments When Due.
            ---------------------------------

            Failure by Borrowers to pay (i) any installment of principal of any
Loan when due or (ii) any installment of interest on any Loan or the commitment
fee referred to in subsection 2.3A within five (5) days after the date when due,
whether at stated maturity, by acceleration, by notice of voluntary prepayment,
by mandatory prepayment or otherwise; failure by Borrowers to pay when due any
amount payable to an Issuing Lender in reimbursement of any drawing under a
Letter of Credit; or failure by Borrowers to pay any other amount due under this
Agreement within five days after notice from the Administrative Agent or any
Lender; or

     8.2    Default in Other Agreements.
            ---------------------------

            (i)   Failure of Borrowers or any of their Subsidiaries to pay when
     due any principal of or interest on or any other amount payable in respect
     of one or more items of Indebtedness (other than Indebtedness referred to
     in subsection 8.1) or Contingent Obligations in an aggregate principal
     amount of $5,000,000 or more, in each case beyond the end of any grace
     period provided therefor; or

            (ii)  breach or default by Borrowers or any of their Subsidiaries
     with respect to any other material term of (a) one or more items of
     Indebtedness or Contingent Obligations in the individual or aggregate
     principal amounts referred to in clause (i) above or (b) any loan
     agreement, mortgage, indenture or other agreement relating to such item(s)
     of Indebtedness or Contingent Obligation(s), if the effect of such breach
     or default is to cause, or to permit the holder or holders of that
     Indebtedness or Contingent Obligation(s) (or a trustee on behalf of such
     holder or holders) to cause, that Indebtedness or Contingent Obligation(s)
     to become or be declared due and payable prior to its stated maturity or
     the stated maturity of any underlying obligation, as the case may be (upon
     the giving or receiving of notice, lapse of time, both, or otherwise); or

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<PAGE>

     8.3    Breach of Certain Covenants.
            ---------------------------

            Failure of Borrowers to perform or comply with any term or condition
contained in subsection 2.5 or 6.2 or Section 7 of this Agreement; or

     8.4    Breach of Warranty.
            ------------------

            Any representation, warranty, certification or other statement made
by Borrowers or any of their Subsidiaries in any Loan Document or in any
statement or certificate at any time given by Borrowers or any of their
Subsidiaries in writing pursuant hereto or thereto or in connection herewith or
therewith shall be false in any material respect on the date as of which made;
or

     8.5    Other Defaults Under Loan Documents.
            -----------------------------------

            Any Loan Party shall default in the performance of or compliance
with any term contained in this Agreement or any of the other Loan Documents,
other than any such term referred to in any other subsection of this Section 8,
and such default shall not have been remedied or waived within 15 days after the
earlier of (i) a Senior Officer becoming aware of such default or (ii) receipt
by Borrowers and such Loan Party of notice from Administrative Agent or any
Lender of such default; or

     8.6    Involuntary Bankruptcy; Appointment of Receiver, etc..
            -----------------------------------------------------

            (i)  A court having jurisdiction in the premises shall enter a
     decree or order for relief in respect of Borrowers or any of their
     Subsidiaries (other than Immaterial Subsidiaries) in an involuntary case
     under the Bankruptcy Code or under any other applicable bankruptcy,
     insolvency or similar law now or hereafter in effect, which decree or order
     is not stayed; or any other similar relief shall be granted under any
     applicable federal or state law; or

            (ii) an involuntary case shall be commenced against Borrowers or
     any of their Subsidiaries (other than Immaterial Subsidiaries) under the
     Bankruptcy Code or under any other applicable bankruptcy, insolvency or
     similar law now or hereafter in effect; or a decree or order of a court
     having jurisdiction in the premises for the appointment of a receiver,
     liquidator, sequestrator, trustee, custodian or other officer having
     similar powers over Borrowers or any of their Subsidiaries (other than
     Immaterial Subsidiaries), or over all or a substantial part of its
     property, shall have been entered; or there shall have occurred the
     involuntary appointment of an interim receiver, trustee or other custodian
     of Borrowers or any of their Subsidiaries (other than Immaterial
     Subsidiaries) for all or a substantial part of its property; or a warrant
     of attachment, execution or similar process shall have been issued against
     any substantial part of the property of Borrowers or any of their
     Subsidiaries (other than Immaterial Subsidiaries), and any such event
     described in this clause (ii) shall continue for 60 days unless dismissed,
     bonded or discharged; or

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<PAGE>

     8.7    Voluntary Bankruptcy; Appointment of Receiver, etc..
            ---------------------------------------------------

            (i)  Borrowers or any of their Subsidiaries (other than Immaterial
     Subsidiaries) shall have an order for relief entered with respect to it or
     commence a voluntary case under the Bankruptcy Code or under any other
     applicable bankruptcy, insolvency or similar law now or hereafter in
     effect, or shall consent to the entry of an order for relief in an
     involuntary case, or to the conversion of an involuntary case to a
     voluntary case, under any such law, or shall consent to the appointment of
     or taking possession by a receiver, trustee or other custodian for all or a
     substantial part of its property; or Borrowers or any of their Subsidiaries
     (other than Immaterial Subsidiaries) shall make any assignment for the
     benefit of creditors other than pursuant to the Approved Plan of
     Reorganization; or

            (ii) Borrowers or any of their Subsidiaries (other than Immaterial
     Subsidiaries) shall be unable, or shall fail generally, or shall admit in
     writing its inability, to pay its debts as such debts become due; or the
     Governing Body of Borrowers or any of their Subsidiaries (other than
     Immaterial Subsidiaries) (or any committee thereof) shall adopt any
     resolution or otherwise authorize any action to approve any of the actions
     referred to in clause (i) above or this clause (ii); or

     8.8    Judgments and Attachments.
            -------------------------

            Any money judgment, writ or warrant of attachment or similar process
involving in the aggregate at any time an amount in excess of $5,000,000 (in
either case not adequately covered by insurance as to which a solvent and
unaffiliated insurance company has acknowledged coverage) shall be entered or
filed against Borrowers or any of their Subsidiaries or any of their respective
assets and shall remain undischarged, unvacated, unbonded or unstayed for a
period of 60 days (or in any event later than five days prior to the date of any
proposed sale thereunder); or

     8.9    Dissolution.
            -----------

            Any order, judgment or decree shall be entered against Borrowers or
any of their Subsidiaries decreeing the dissolution or split up of Borrowers or
that Subsidiary and such order shall remain undischarged or unstayed for a
period in excess of 30 days; or

     8.10   Employee Benefit Plans.
            ----------------------

            There shall occur one or more ERISA Events or similar events in
respect of any Foreign Plans, that individually or in the aggregate results in
or might reasonably be expected to result in liability of Borrowers, any of
their Subsidiaries or any of their respective ERISA Affiliates in excess of
$10,000,000 during the term of this Agreement; or there shall exist an amount of
unfunded benefit liabilities (as defined in Section 4001(a)(18) of ERISA) and
unfunded liabilities (using reasonable actuarial assumptions) with respect to or
past-due required contributions to Foreign Plans, individually or in the
aggregate for all Pension Plans (excluding for purposes of such computation any
Pension Plans with respect to which assets exceed benefit liabilities), which
exceeds $10,000,000; or

                                       114

<PAGE>

8.11     Change in Control.
         -----------------

         A Change in Control shall have occurred; or

8.12     Invalidity of Subsidiary Guaranty; Failure of Security; Repudiation of
         ----------------------------------------------------------------------
         Obligations.
         ------------

         At any time after the execution and delivery thereof, (i) the
Subsidiary Guaranty for any reason, other than the satisfaction in full of all
Obligations, shall cease to be in full force and effect (other than in
accordance with its terms) or shall be declared to be null and void, (ii) any
Collateral Document shall cease to be in full force and effect (other than by
reason of a release of Collateral thereunder in accordance with the terms hereof
or thereof, the satisfaction in full of the Obligations or any other termination
of such Collateral Document in accordance with the terms hereof or thereof) or
shall be declared null and void, or Administrative Agent shall not have or shall
cease to have a valid and perfected First Priority Lien in any Collateral
purported to be covered thereby having a value in excess of $1,000,000, in each
case for any reason other than the failure of Administrative Agent or any Lender
to take any action within its control, or (iii) any Loan Party shall contest the
validity or enforceability of any Loan Document in writing or deny in writing
that it has any further liability, including with respect to future advances by
Lenders, under any Loan Document to which it is a party:

THEN (i) upon the occurrence of any Event of Default described in subsection 8.6
or 8.7, each of (a) the unpaid principal amount of and accrued interest on the
Loans, (b) an amount equal to the maximum amount that may at any time be drawn
under all Letters of Credit then outstanding (whether or not any beneficiary
under any such Letter of Credit shall have presented, or shall be entitled at
such time to present, the drafts or other documents or certificates required to
draw under such Letter of Credit), and (c) all other Obligations shall
automatically become immediately due and payable, without presentment, demand,
protest or other requirements of any kind, all of which are hereby expressly
waived by Borrowers, and the obligation of each Lender to make any Loan, the
obligation of Administrative Agent to issue any Letter of Credit and the right
of any Lender to issue any Letter of Credit hereunder shall thereupon terminate,
and (ii) upon the occurrence and during the continuation of any other Event of
Default, Administrative Agent shall, upon the written request or with the
written consent of Requisite Lenders, by written notice to Borrowers, declare
all or any portion of the amounts described in clauses (a) through (c) above to
be, and the same shall forthwith become, immediately due and payable, and the
obligation of each Lender to make any Loan, the obligation of Administrative
Agent to issue any Letter of Credit and the right of any Lender to issue any
Letter of Credit hereunder shall thereupon terminate; provided that the
                                                      --------
foregoing shall not affect in any way the obligations of Revolving Lenders under
subsection 3.3C(i).

            Any amounts described in clause (b) above, when received by
Administrative Agent, shall be held by Administrative Agent pursuant to the
terms of the Security Agreement and shall be applied as therein provided.

            Notwithstanding anything contained in the second preceding
paragraph, if at any time within 60 days after an acceleration of the Loans
pursuant to clause (ii) of such paragraph Borrowers shall pay all arrears of
interest and all payments on account of principal which shall

                                       115

<PAGE>

have become due otherwise than as a result of such acceleration (with interest
on principal and, to the extent permitted by law, on overdue interest, at the
rates specified in this Agreement) and all Events of Default and Potential
Events of Default (other than non-payment of the principal of and accrued
interest on the Loans, in each case which is due and payable solely by virtue of
acceleration) shall be remedied or waived pursuant to subsection 10.6, then
Requisite Lenders, by written notice to Borrowers, may at their option rescind
and annul such acceleration and its consequences; but such action shall not
affect any subsequent Event of Default or Potential Event of Default or impair
any right consequent thereon. The provisions of this paragraph are intended
merely to bind Lenders to a decision which may be made at the election of
Requisite Lenders and are not intended, directly or indirectly, to benefit
Borrowers, and such provisions shall not at any time be construed so as to grant
Borrowers the right to require Lenders to rescind or annul any acceleration
hereunder or to preclude Administrative Agent or Lenders from exercising any of
the rights or remedies available to them under any of the Loan Documents, even
if the conditions set forth in this paragraph are met.

Section 9.    ADMINISTRATIVE AGENT

    9.1       Appointment.
              -----------

              A. Appointment of Administrative Agent. BTCo is hereby appointed
Administrative Agent hereunder and under the other Loan Documents. Each Lender
hereby authorizes Administrative Agent to act as its agent in accordance with
the terms of this Agreement and the other Loan Documents. Administrative Agent
agrees to act upon the express conditions contained in this Agreement and the
other Loan Documents, as applicable. The provisions of this Section 9 are solely
for the benefit of Administrative Agent and Lenders and no Loan Party shall have
rights as a third party beneficiary of any of the provisions thereof. In
performing its functions and duties under this Agreement, Administrative Agent
(other than as provided in subsection 2.1E) shall act solely as an agent of
Lenders and does not assume and shall not be deemed to have assumed any
obligation towards or relationship of agency or trust with or for Borrowers or
any other Loan Party.

              B. Appointment of Supplemental Collateral Agents. It is the
purpose of this Agreement and the other Loan Documents that there shall be no
violation of any law of any jurisdiction denying or restricting the right of
banking corporations or associations to transact business as agent or trustee in
such jurisdiction. It is recognized that in case of litigation under this
Agreement or any of the other Loan Documents, and in particular in case of the
enforcement of any of the Loan Documents, or in case Administrative Agent deems
that by reason of any present or future law of any jurisdiction it may not
exercise any of the rights, powers or remedies granted herein or in any of the
other Loan Documents or take any other action which may be desirable or
necessary in connection therewith, it may be necessary that Administrative Agent
appoint an additional individual or institution as a separate trustee,
co-trustee, collateral agent or collateral co-agent (any such additional
individual or institution being referred to herein individually as a
"Supplemental Collateral Agent" and collectively as "Supplemental Collateral
Agents").

              In the event that Administrative Agent appoints a Supplemental
Collateral Agent with respect to any Collateral, (i) each and every right,
power, privilege or duty expressed or

                                       116

<PAGE>

intended by this Agreement or any of the other Loan Documents to be exercised by
or vested in or conveyed to Administrative Agent with respect to such Collateral
shall be exercisable by and vest in such Supplemental Collateral Agent to the
extent, and only to the extent, necessary to enable such Supplemental Collateral
Agent to exercise such rights, powers and privileges with respect to such
Collateral and to perform such duties with respect to such Collateral, and every
covenant and obligation contained in the Loan Documents and necessary to the
exercise or performance thereof by such Supplemental Collateral Agent shall run
to and be enforceable by either Administrative Agent or such Supplemental
Collateral Agent, and (ii) the provisions of this Section 9 and of subsections
10.2 and 10.3 that refer to Administrative Agent shall inure to the benefit of
such Supplemental Collateral Agent and all references therein to Administrative
Agent shall be deemed to be references to Administrative Agent and/or such
Supplemental Collateral Agent, as the context may require.

              Should any instrument in writing from Borrowers or any other Loan
Party be required by any Supplemental Collateral Agent so appointed by
Administrative Agent for more fully and certainly vesting in and confirming to
him or it such rights, powers, privileges and duties, Borrowers shall, or shall
cause such Loan Party to, execute, acknowledge and deliver any and all such
instruments promptly upon request by Administrative Agent. In case any
Supplemental Collateral Agent, or a successor thereto, shall die, become
incapable of acting, resign or be removed, all the rights, powers, privileges
and duties of such Supplemental Collateral Agent, to the extent permitted by
law, shall vest in and be exercised by Administrative Agent until the
appointment of a new Supplemental Collateral Agent.

    9.2       Powers and Duties; General Immunity.
              -----------------------------------

              A. Powers; Duties Specified. Each Lender irrevocably authorizes
Administrative Agent to take such action on such Lender's behalf and to exercise
such powers, rights and remedies hereunder and under the other Loan Documents as
are specifically delegated or granted to Administrative Agent by the terms
hereof and thereof, together with such powers, rights and remedies as are
reasonably incidental thereto. Administrative Agent shall have only those duties
and responsibilities that are expressly specified in this Agreement and the
other Loan Documents. Administrative Agent may exercise such powers, rights and
remedies and perform such duties by or through its agents or employees.
Administrative Agent shall not have, by reason of this Agreement or any of the
other Loan Documents, a fiduciary relationship in respect of any Lender or
Borrowers; and nothing in this Agreement or any of the other Loan Documents,
expressed or implied, is intended to or shall be so construed as to impose upon
Administrative Agent any obligations in respect of this Agreement or any of the
other Loan Documents except as expressly set forth herein or therein.

              B. No Responsibility for Certain Matters. No Agent shall be
responsible to any Lender for the execution, effectiveness, genuineness,
validity, enforceability, collectibility or sufficiency of this Agreement or any
other Loan Document or for any representations, warranties, recitals or
statements made herein or therein or made in any written or oral statements or
in any financial or other statements, instruments, reports or certificates or
any other documents furnished or made by such Agent to Lenders or by or on
behalf of Borrowers to such Agent or any Lender in connection with the Loan
Documents and the transactions contemplated thereby or for the financial
condition or business affairs of Borrowers or any other Person liable

                                       117

<PAGE>

for the payment of any Obligations, nor shall such Agent be required to
ascertain or inquire as to the performance or observance of any of the terms,
conditions, provisions, covenants or agreements contained in any of the Loan
Documents or as to the use of the proceeds of the Loans or the use of the
Letters of Credit or as to the existence or possible existence of any Event of
Default or Potential Event of Default. Anything contained in this Agreement to
the contrary notwithstanding, Administrative Agent shall not have any liability
arising from confirmations of the amount of outstanding Loans or the Letter of
Credit Usage or the component amounts thereof.

              C. Exculpatory Provisions. No Agent or any of its officers,
directors, employees or agents shall be liable to Lenders for any action taken
or omitted by such Agent under or in connection with any of the Loan Documents
except to the extent caused by such Agent's gross negligence or willful
misconduct. An Agent shall be entitled to refrain from any act or the taking of
any action (including the failure to take an action) in connection with this
Agreement or any of the other Loan Documents or from the exercise of any power,
discretion or authority vested in it hereunder or thereunder unless and until
such Agent shall have received instructions in respect thereof from Requisite
Lenders (or such other Lenders as may be required to give such instructions
under subsection 10.6) and, upon receipt of such instructions from Requisite
Lenders (or such other Lenders, as the case may be), such Agent shall be
entitled to act or (where so instructed) refrain from acting, or to exercise
such power, discretion or authority, in accordance with such instructions.
Without prejudice to the generality of the foregoing, (i) each Agent shall be
entitled to rely, and shall be fully protected in relying, upon any
communication, instrument or document believed by it to be genuine and correct
and to have been signed or sent by the proper person or persons, and shall be
entitled to rely and shall be protected in relying on opinions and judgments of
attorneys (who may be attorneys for Borrowers and their Subsidiaries),
accountants, experts and other professional advisors selected by it; and (ii) no
Lender shall have any right of action whatsoever against an Agent as a result of
such Agent acting or (where so instructed) refraining from acting under this
Agreement or any of the other Loan Documents in accordance with the instructions
of Requisite Lenders (or such other Lenders as may be required to give such
instructions under subsection 10.6).

              D. Agents Entitled to Act as Lender. The agency hereby created
shall in no way impair or affect any of the rights and powers of, or impose any
duties or obligations upon, an Agent in its individual capacity as a Lender
hereunder. With respect to its participation in the Loans and the Letters of
Credit, an Agent shall have the same rights and powers hereunder as any other
Lender and may exercise the same as though it were not performing the duties and
functions delegated to it hereunder, and the term "Lender" or "Lenders" or any
similar term shall, unless the context clearly otherwise indicates, include each
Agent in its individual capacity. An Agent and its Affiliates may accept
deposits from, lend money to, acquire equity interests in and generally engage
in any kind of commercial banking, investment banking, trust, financial advisory
or other business with Borrowers or any of their Affiliates as if it were not
performing the duties specified herein, and may accept fees and other
consideration from Borrowers for services in connection with this Agreement and
otherwise without having to account for the same to Lenders.

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    9.3       Independent Investigation by Lenders; No Responsibility For
              -----------------------------------------------------------
              Appraisal  of Creditworthiness.
              ------------------------------

              Each Lender agrees that it has made its own independent
investigation of the financial condition and affairs of Borrowers and their
Subsidiaries in connection with the making of the Loans and the issuance of
Letters of Credit hereunder and that it has made and shall continue to make its
own appraisal of the creditworthiness of Borrowers and their Subsidiaries. No
Agent shall have any duty or responsibility, either initially or on a continuing
basis, to make any such investigation or any such appraisal on behalf of Lenders
or to provide any Lender with any credit or other information with respect
thereto, whether coming into its possession before the making of the Loans or at
any time or times thereafter, and no Agent shall have any responsibility with
respect to the accuracy of or the completeness of any information provided to
Lenders.

    9.4       Right to Indemnity.
              ------------------

              Each Lender, in proportion to its Pro Rata Share, severally agrees
to indemnify each Agent and its officers, directors, employees, agents,
attorneys, professional advisors and Affiliates to the extent that any such
Person shall not have been reimbursed by Borrowers, for and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including counsel fees and disbursements and fees and
disbursements of any financial advisor engaged by Agents) or disbursements of
any kind or nature whatsoever which may be imposed on, incurred by or asserted
against an Agent or and other such Persons in exercising the powers, rights and
remedies of an Agent or performing duties of an Agent hereunder or under the
other Loan Documents or otherwise in its capacity as Agent in any way relating
to or arising out of this Agreement or the other Loan Documents; provided that
no Lender shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of an Agent resulting from such Agent's gross negligence or
willful misconduct. If any indemnity furnished to an Agent or any other such
Person for any purpose shall, in the opinion of such Agent, be insufficient or
become impaired, such Agent may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such additional indemnity is
furnished.

    9.5       Successor Administrative Agent .
              -------------------------------

              Any Agent may resign at any time by giving 30 days' prior written
notice thereof to Lenders and Borrowers. Upon any such notice of resignation,
Requisite Lenders shall have the right, upon five Business Days' notice to
Borrowers, to appoint a successor Administrative Agent, who, if no Event of
Default or Potential Event of Default shall have occurred and is continuing,
shall be subject to Borrowers' Agent's prior approval (not to be unreasonably
withheld). Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, that successor Administrative
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent and the retiring
Administrative Agent shall be discharged from its duties and obligations under
this Agreement. After any retiring Agent's resignation hereunder as an Agent,
the provisions of this Section 9 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was an Agent under this Agreement.

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    9.6       Collateral Documents and Subsidiary Guaranty.
              --------------------------------------------

              Each Lender hereby further authorizes Administrative Agent, on
behalf of and for the benefit of Lenders, to enter into each Collateral Document
as secured party and to be the agent for and representative of Lenders under the
Subsidiary Guaranty, and each Lender agrees to be bound by the terms of each
Collateral Document and the Subsidiary Guaranty; provided that Administrative
Agent shall not (i) enter into or consent to any material amendment,
modification, termination or waiver of any provision contained in any Collateral
Document or the Subsidiary Guaranty or (ii) release any Collateral (except as
otherwise expressly permitted or required pursuant to the terms of this
Agreement or the applicable Collateral Document), in each case without the prior
consent of Requisite Lenders (or, if required pursuant to subsection 10.6, all
Lenders); provided further, however, that, without further written consent or
          -------- -------  -------
authorization from Lenders, Administrative Agent may execute any documents or
instruments necessary to (a) release any Lien encumbering any item of Collateral
that is the subject of a sale or other disposition of assets permitted by this
Agreement or to which Requisite Lenders have otherwise consented, (b) release
any Subsidiary Guarantor from the Subsidiary Guaranty if all of the Capital
Stock of such Subsidiary Guarantor is sold to any Person (other than an
Affiliate of Borrowers) pursuant to a sale or other disposition permitted
hereunder or to which Requisite Lenders have otherwise consented or (c)
subordinate the Liens of Administrative Agent, on behalf of Lenders, to any
Liens permitted by subsection 7.2. Anything contained in any of the Loan
Documents to the contrary notwithstanding, Borrowers, Administrative Agent and
each Lender hereby agree that (1) no Lender shall have any right individually to
realize upon any of the Collateral under any Collateral Document or to enforce
the Subsidiary Guaranty, it being understood and agreed that all powers, rights
and remedies under the Collateral Documents and the Subsidiary Guaranty may be
exercised solely by Administrative Agent for the benefit of Lenders in
accordance with the terms thereof, and (2) in the event of a foreclosure by
Administrative Agent on any of the Collateral pursuant to a public or private
sale, Administrative Agent or any Lender may be the purchaser of any or all of
such Collateral at any such sale and Administrative Agent, as agent for and
representative of Lenders (but not any Lender or Lenders in its or their
respective individual capacities unless Requisite Lenders shall otherwise agree
in writing) shall be entitled, for the purpose of bidding and making settlement
or payment of the purchase price for all or any portion of the Collateral sold
at any such public sale, to use and apply any of the Obligations as a credit on
account of the purchase price for any collateral payable by Administrative Agent
at such sale.

    9.7       Duties of Other Agents; Designation of Agents.
              ---------------------------------------------

              None of the Lenders identified in this Agreement as a
Documentation Agent or Syndication Agent shall have any right, power,
obligation, liability, responsibility or duty under this Agreement other than
those applicable to all Lenders as such. Without limiting the foregoing, none of
such Lenders shall have or be deemed to have a fiduciary relationship with any
Lender. Notwithstanding that BTCo is designated as Documentation Agent and
Syndication Agent on the Closing Date, at any time and from time to time, BTCo
may assign such titles to other Lenders in its sole discretion.

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<PAGE>

     9.8  Administrative Agent May File Proofs of Claim.
          ---------------------------------------------

          In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to Borrowers or any of their Subsidiaries of
Borrowers, Administrative Agent (irrespective of whether the principal of any
Loan shall then be due and payable as herein expressed or by declaration or
otherwise and irrespective of whether Administrative Agent shall have made any
demand on Borrowers) shall be entitled and empowered, by intervention in such
proceeding or otherwise

          (i)    to file and prove a claim for the whole amount of principal and
     interest owing and unpaid in respect of the Loans and any other Obligations
     that are owing and unpaid and to file such other papers or documents as may
     be necessary or advisable in order to have the claims of Lenders and Agents
     (including any claim for the reasonable compensation, expenses,
     disbursements and advances of Lenders and Agents and their agents and
     counsel and all other amounts due Lenders and Agents under subsections 2.3
     and 10.2) allowed in such judicial proceeding, and

          (ii)   to collect and receive any moneys or other property payable or
     deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to Administrative Agent and, in the event that
Administrative Agent shall consent to the making of such payments directly to
Lenders, to pay to Administrative Agent any amount due for the reasonable
compensation, expenses, disbursements and advances of Agents and their agents
and counsel, and any other amounts due Agents under subsections 2.3 and 10.2.

     Nothing herein contained shall be deemed to authorize Administrative Agent
to authorize or consent to or accept or adopt on behalf of any Lender any plan
of reorganization, arrangement, adjustment or composition affecting the
Obligations or the rights of any Lenders or to authorize Administrative Agent to
vote in respect of the claim of any Lender in any such proceeding.

Section 10.  MISCELLANEOUS

     10.1 Successors and Assigns; Assignments and Participations in Loans and
          -------------------------------------------------------------------
          Letters of Credit.
          -----------------

          A.     General. This Agreement shall be binding upon the parties
hereto and their respective successors and assigns and shall inure to the
benefit of the parties hereto and the successors and assigns of Lenders (it
being understood that Lenders' rights of assignment are subject to the further
provisions of this subsection 10.1). Neither Borrowers' rights or obligations
hereunder nor any interest therein may be assigned or delegated by Borrowers
without the prior written consent of all Lenders (and any attempted assignment
or transfer by Borrowers without such consent shall be null and void). No sale,
assignment or transfer or participation of any Letter of Credit or any
participation therein may be made separately from a sale, assignment, transfer
or participation of a corresponding interest in the Revolving Loan

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<PAGE>

Commitment and the Revolving Loans of the Revolving Lender effecting such
sale, assignment, transfer or participation. Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person (other than
the parties hereto, their respective successors and assigns permitted hereby
and, to the extent expressly contemplated hereby, the Affiliates of each of
Administrative Agent and Lenders) any legal or equitable right, remedy or claim
under or by reason of this Agreement.

          B.     Assignments.

          (i)    Amounts and Terms of Assignments. Any Lender may assign to one
                 --------------------------------
     or more Eligible Assignees all or any portion of its rights and obligations
     under this Agreement; provided that (a), except (1) in the case of an
                           --------
     assignment of the entire remaining amount of the assigning Lender's rights
     and obligations under this Agreement or (2) in the case of an assignment to
     a Lender or an Affiliate of a Lender or an Approved Fund of a Lender, the
     aggregate amount of the Revolving Loan Exposure or Term Loan Exposure, as
     the case may be, of the assigning Lender and the assignee subject to each
     such assignment shall not be less than $5,000,000, in the case of any
     assignment of a Revolving Loan, or $1,000,000, in the case of any
     assignment of a Term Loan, (b) except in the case of an assignment to a
     Lender or an Affiliate of a Lender or an Approved Fund of a Lender,
     Administrative Agent and any Issuing Lender consents (such consent not to
     be unreasonably withheld or delayed) and, with respect to any assignment of
     a Revolving Loan or Revolving Loan Commitment, while there is no Potential
     Event of Default or Event of Default outstanding, the Borrowers' Agent
     consents (such consent not to be unreasonably withheld or delayed) to the
     assignment, (c) each partial assignment shall be made as an assignment of a
     proportionate part of all the assigning Lender's rights and obligations
     under this Agreement with respect to the Loan or the Commitment assigned
     and (d) the parties to each assignment shall execute and deliver to
     Administrative Agent an Assignment Agreement, together with a processing
     and recordation fee of $3,500 (unless the assignee is an Affiliate or an
     Approved Fund of the assignor, in which case no fee shall be required), and
     the Eligible Assignee, if it shall not be a Lender, shall deliver to
     Administrative Agent information reasonably requested by Administrative
     Agent, including such forms, certificates or other evidence, if any, with
     respect to United States federal income tax withholding matters as the
     assignee under such Assignment Agreement may be required to deliver to
     Administrative Agent pursuant to subsection 2.7B(iii). Upon such execution,
     and delivery, from and after the effective date specified in such
     Assignment Agreement, (y) 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 Agreement, shall have the rights and
     obligations of a Lender hereunder and (z) the assigning Lender thereunder
     shall, to the extent that rights and obligations hereunder have been
     assigned by it pursuant to such Assignment Agreement, relinquish its rights
     (other than any rights which survive the termination of this Agreement
     under subsection 10.9B) and be released from its obligations under this
     Agreement (and, in the case of an Assignment Agreement covering all or the
     remaining portion of an assigning Lender's rights and obligations under
     this Agreement, such Lender shall cease to be a party hereto; provided
                                                                   --------
     that, anything contained in any of the Loan Documents to the contrary
     notwithstanding, if such Lender is the Issuing Lender with respect to any
     outstanding Letters of Credit such Lender shall continue to have all rights
     and obligations

                                       122

<PAGE>

     of an Issuing Lender with respect to such Letters of Credit until the
     cancellation or expiration of such Letters of Credit and the reimbursement
     of any amounts drawn thereunder). The assigning Lender shall, upon the
     effectiveness of such assignment or as promptly thereafter as practicable,
     surrender its Notes to Administrative Agent for cancellation, and thereupon
     new Notes shall, if so requested by the assignee and/or the assigning
     Lender in accordance with subsection 2.1F, be issued to the assignee and/or
     to the assigning Lender, substantially in the form of Exhibit IV or Exhibit
                                                           ----------    -------
     V annexed hereto, as the case may be, with appropriate insertions, to
     -
     reflect the new Commitments and/or outstanding Revolving Loans and/or
     outstanding Term Loans, as the case may be, of the assignee and/or the
     assigning Lender. Other than as provided in subsection 2.1A(iv) and
     subsection 10.5, any assignment or transfer by a Lender of rights or
     obligations under this Agreement that does not comply with this subsection
     10.1B shall be treated for purposes of this Agreement as a sale by such
     Lender of a participation in such rights and obligations in accordance with
     subsection 10.1C.

          (ii)   Acceptance by Administrative Agent; Recordation in Register.
                 -----------------------------------------------------------
     Upon its receipt of an Assignment Agreement executed by an assigning Lender
     and an assignee representing that it is an Eligible Assignee, together with
     the processing fee referred to in subsection 10.1B(i) and any forms,
     certificates or other evidence with respect to United States federal income
     tax withholding matters that such assignee may be required to deliver to
     Administrative Agent pursuant to subsection 2.7B(iii), Administrative Agent
     shall, if Administrative Agent has consented to the assignment evidenced
     thereby (to the extent such consent is required pursuant to subsection
     10.1B(i)), (a) accept such Assignment Agreement by executing a counterpart
     thereof as provided therein (which acceptance shall evidence any required
     consent of Administrative Agent to such assignment) and (b) give prompt
     notice thereof to Borrowers. Administrative Agent shall maintain a copy of
     each Assignment Agreement delivered to and accepted by it as provided in
     this subsection 10.1B(ii).

          C.     Participations. Any Lender may, without the consent of, or
notice to, Borrowers or Administrative Agent, sell participations to one or more
Persons (other than a natural Person or Borrowers or any of their Affiliates) in
all or a portion of such Lender's rights and/or obligations under this
Agreement; provided that (i) such Lender's obligations under this Agreement
           --------
shall remain unchanged, (ii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations and (iii)
Borrowers, Administrative Agent and Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement. Any agreement or instrument pursuant to which
a Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement; provided that such
                                                           --------
agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, modification or waiver
directly affecting (i) the extension of the scheduled final maturity date of any
Loan allocated to such participation or (ii) a reduction of the principal amount
of or the rate of interest payable on any Loan allocated to such participation.
Subject to the further provisions of this subsection 10.1C, Borrowers agree that
each Participant shall be entitled to the benefits of subsections 2.6D and 2.7
to the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to subsection 10.1B. To the extent permitted by law, each
Participant also

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<PAGE>

shall be entitled to the benefits of subsection 10.4 as though it were a
Lender, provided such Participant agrees to be subject to subsection 10.5 as
though it were a Lender. A Participant shall not be entitled to receive any
greater payment under subsections 2.6D and 2.7 than the applicable Lender would
have been entitled to receive with respect to the participation sold to such
Participant unless the sale of the participation to such Participant is made
with Borrowers' prior written consent. A Participant that would be a Non-US
Lender if it were a Lender shall not be entitled to the benefits of subsection
2.7 unless Borrowers are notified of the participation sold to such Participant
and such Participant agrees, for the benefit of Borrowers, to comply with
subsection 2.7B(iii) as though it were a Lender.

          D.     Pledges and Assignments. Any Lender may at any time pledge or
assign a security interest in all or any portion of its Loans, and the other
Obligations owed to such Lender, to secure obligations of such Lender, including
without limitation any pledge or assignment to secure obligations to any Federal
Reserve Bank; provided that (i) no Lender shall be relieved of any of its
              --------
obligations hereunder as a result of any such assignment or pledge and (ii) in
no event shall any assignee or pledgee be considered to be a "Lender" or be
entitled to require the assigning Lender to take or omit to take any action
hereunder.

          E.     Information.  Each Lender may furnish any information
concerning Borrowers and their Subsidiaries in the possession of that Lender
from time to time to assignees and participants (including prospective assignees
and participants), subject to subsection 10.19.

          F.     Agreements of Lenders. Each Lender listed on the signature
pages hereof hereby agrees (i) that it is an Eligible Assignee described in
clause (ii) of the definition thereof; (ii) that it has experience and expertise
in the making of loans such as the Loans; and (iii) that it will make its Loans
for its own account in the ordinary course of its business and without a view to
distribution of such Loans within the meaning of the Securities Act or the
Exchange Act or other federal securities laws (it being understood that, subject
to the provisions of this subsection 10.1, the disposition of such Loans or any
interests therein shall at all times remain within its exclusive control). Each
Lender that becomes a party hereto pursuant to an Assignment Agreement shall be
deemed to agree that the agreements of such Lender contained in Section 2(c) of
such Assignment Agreement are incorporated herein by this reference.

     10.2 Expenses.
          --------

          Whether or not the transactions contemplated hereby shall be
consummated, Borrowers agree to pay promptly (i) all the actual and reasonable
costs and expenses of negotiation, preparation and execution of the Loan
Documents and any consents, amendments, waivers or other modifications thereto;
(ii) all the costs of furnishing all opinions by counsel for Borrowers
(including any opinions requested by Agents or Lenders as to any legal matters
arising hereunder) and of Borrowers' performance of and compliance with all
agreements and conditions on its part to be performed or complied with under
this Agreement and the other Loan Documents including with respect to confirming
compliance with environmental, insurance and solvency requirements; (iii) the
reasonable fees, expenses and disbursements of outside counsel to Administrative
Agent in connection with the negotiation, preparation, execution and
administration of the Loan Documents and any consents, amendments, waivers or
other modifications thereto and any other documents or matters requested by
Borrowers; (iv) all the

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<PAGE>

actual costs and reasonable expenses of creating and perfecting Liens in favor
of Administrative Agent on behalf of Lenders pursuant to any Collateral
Document, including filing and recording fees, expenses and taxes, stamp or
documentary taxes, search fees, title insurance premiums, and reasonable fees,
expenses and disbursements of counsel to Administrative Agent and of counsel
providing any opinions that Administrative Agent or Requisite Lenders may
request in respect of the Collateral Documents or the Liens created pursuant
thereto; (v) all the actual costs and reasonable expenses (including the
reasonable fees, expenses and disbursements of any auditors, accountants or
appraisers and any environmental or other consultants, advisors and agents
employed or retained by Administrative Agent or its counsel) of obtaining and
reviewing any environmental audits or reports provided for under subsection 4.1J
or 6.7A; (vi) the costs incurred by Administrative Agent in connection with the
custody or preservation of any of the Collateral; (vii) all other actual and
reasonable costs and expenses incurred by Administrative Agent in connection
with the syndication of the Commitments; and (viii) all costs and expenses,
including reasonable attorneys' fees (including allocated costs of internal
counsel) and costs of settlement, incurred by Administrative Agent and Lenders
in enforcing any Obligations of or in collecting any payments due from any Loan
Party hereunder or under the other Loan Documents (including in connection with
the sale of, collection from, or other realization upon any of the Collateral or
the enforcement of the Subsidiary Guaranty) or in connection with any
refinancing or restructuring of the credit arrangements provided under this
Agreement in the nature of a "work-out" or pursuant to any insolvency or
bankruptcy proceedings.

     10.3 Indemnity.
          ---------

          In addition to the payment of expenses pursuant to subsection 10.2,
whether or not the transactions contemplated hereby shall be consummated,
Borrowers agree to defend (subject to Indemnitees' selection of counsel unless
there is no Event of Default or Potential Event of Default, in which event
Borrowers shall have the right to select such counsel, subject to Indemnitees'
approval), indemnify, pay and hold harmless Administrative Agent and Lenders
(including Issuing Lenders), and the officers, directors, employees, agents and
Affiliates of Administrative Agent and Lenders (collectively called the
"Indemnitees"), from and against any and all Indemnified Liabilities (as
hereinafter defined); provided that Borrowers shall not have any obligation to
                      --------
any Indemnitee hereunder with respect to any Indemnified Liabilities to the
extent such Indemnified Liabilities arise solely from the gross negligence or
willful misconduct of that Indemnitee as determined by a final judgment of a
court of competent jurisdiction.

As used herein, "Indemnified Liabilities" means, collectively, any and all
liabilities, obligations, losses, damages (including natural resource damages),
penalties, actions, judgments, suits, claims (including Environmental Claims),
costs (including the costs of any investigation, study, sampling, testing,
abatement, cleanup, removal, remediation or other response action necessary to
remove, remediate, clean up or abate any Hazardous Materials Activity), expenses
and disbursements of any kind or nature whatsoever (including the reasonable
fees and disbursements of counsel for Indemnitees in connection with any
investigative, administrative or judicial proceeding commenced or threatened by
any Person, whether or not any such Indemnitee shall be designated as a party or
a potential party thereto, and any fees or expenses incurred by Indemnitees in
enforcing this indemnity), whether direct, indirect or consequential and whether
based on any federal, state or foreign laws, statutes, rules or regulations
(including securities and commercial laws, statutes, rules or regulations and
Environmental Laws), on

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<PAGE>

common law or equitable cause or on contract or otherwise, that may be imposed
on, incurred by, or asserted against any such Indemnitee, in any manner relating
to or arising out of (i) this Agreement or the other Loan Documents or the
transactions contemplated hereby or thereby (including Lenders' agreement to
make the Loans hereunder or the use or intended use of the proceeds thereof or
the issuance of Letters of Credit hereunder or the use or intended use of any
thereof, the failure of an Issuing Lender to honor a drawing under a Letter of
Credit as a result of any act or omission, whether rightful or wrongful, of any
present or future de jure or de facto Government Authority, or any enforcement
of any of the Loan Documents (including any sale of, collection from, or other
realization upon any of the Collateral or the enforcement of the Subsidiary
Guaranty)), (ii) the statements contained in the commitment letter delivered by
any Lender to Borrowers with respect thereto, or (iii) any Environmental Claim
or any Hazardous Materials Activity relating to or arising from, directly or
indirectly, any past or present activity, operation, land ownership, or practice
of Borrowers or any of their Subsidiaries.

     To the extent that the undertakings to defend, indemnify, pay and hold
harmless set forth in this subsection 10.3 may be unenforceable in whole or in
part because they are violative of any law or public policy, Borrowers shall
contribute the maximum portion that it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all Indemnified Liabilities
incurred by Indemnitees or any of them.

     10.4  Set-Off; Security Interest in Deposit Accounts.
           ----------------------------------------------

           In addition to any rights now or hereafter granted under applicable
law and not by way of limitation of any such rights, upon the occurrence and
during the continuance of any Event of Default each Lender is hereby authorized
by Borrowers at any time or from time to time, without notice to Borrowers or to
any other Person, any such notice being hereby expressly waived, to set off and
to appropriate and to apply any and all deposits (general or special, including
Indebtedness evidenced by certificates of deposit, whether matured or unmatured,
but not including trust accounts) and any other Indebtedness at any time held or
owing by that Lender or any Affiliate of such Lender to or for the credit or the
account of Borrowers and each other Loan Party against and on account of the
obligations and liabilities of Borrowers or any other Loan Party to that Lender
(or any Affiliate of such Lender) or to any other Lender (or any Affiliate of
any other Lender) under this Agreement, the Letters of Credit and participations
therein and the other Loan Documents, including all claims of any nature or
description arising out of or connected with this Agreement, the Letters of
Credit and participations therein or any other Loan Document, irrespective of
whether or not (i) that Lender shall have made any demand hereunder or (ii) the
principal of or the interest on the Loans or any amounts in respect of the
Letters of Credit or any other amounts due hereunder shall have become due and
payable pursuant to Section 8 and although said obligations and liabilities, or
any of them, may be contingent or unmatured. Borrowers hereby further grant to
Administrative Agent and each Lender a security interest in all deposits and
accounts maintained with Administrative Agent or such Lender as security for the
Obligations.

     10.5  Ratable Sharing.
           ---------------

           Lenders hereby agree among themselves that if any of them shall,
whether by voluntary payment (other than a voluntary prepayment of Loans made
and applied in accordance

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<PAGE>

with the terms of this Agreement), by realization upon security, through the
exercise of any right of set-off or banker's lien, by counterclaim or cross
action or by the enforcement of any right under the Loan Documents or otherwise,
or as adequate protection of a deposit treated as cash collateral under the
Bankruptcy Code, receive payment or reduction of a proportion of the aggregate
amount of principal, interest, amounts payable in respect of Letters of Credit,
fees and other amounts then due and owing to that Lender hereunder or under the
other Loan Documents (collectively, the "Aggregate Amounts Due" to such Lender)
that is greater than the proportion received by any other Lender in respect of
the Aggregate Amounts Due to such other Lender, then the Lender receiving such
proportionately greater payment shall (i) notify Administrative Agent and each
other Lender of the receipt of such payment and (ii) apply a portion of such
payment to purchase assignments (which it shall be deemed to have purchased from
each seller of an assignment simultaneously upon the receipt by such seller of
its portion of such payment) of the Aggregate Amounts Due to the other Lenders
so that all such recoveries of Aggregate Amounts Due shall be shared by all
Lenders in proportion to the Aggregate Amounts Due to them; provided that if all
                                                            --------
or part of such proportionately greater payment received by such purchasing
Lender is thereafter recovered from such Lender upon the bankruptcy or
reorganization of Borrowers or otherwise, those purchases shall be rescinded and
the purchase prices paid for such assignments shall be returned to such
purchasing Lender ratably to the extent of such recovery, but without interest.
Borrowers expressly consent to the foregoing arrangement and agree that any
purchaser of an assignment so purchased may exercise any and all rights of a
Lender as to such assignment as fully as if that Lender had complied with the
provisions of subsection 10.1B with respect to such assignment. In order to
further evidence such assignment (and without prejudice to the effectiveness of
the assignment provisions set forth above), each purchasing Lender and each
selling Lender agree to enter into an Assignment Agreement at the request of a
selling Lender or a purchasing Lender, as the case may be, in form and substance
reasonably satisfactory to each such Lender.

     10.6  Amendments and Waivers.
           ----------------------

           No amendment, modification, termination or waiver of any provision of
this Agreement or of the Notes, and no consent to any departure by Borrowers
therefrom, shall in any event be effective without the written concurrence of
Requisite Lenders and, other than with respect to waivers for which no consent
of Borrowers is required hereunder, Borrowers; provided that no such amendment,
modification, termination, waiver or consent shall, without the consent of (a)
each Lender with Obligations directly affected (whose consent shall be
sufficient for any such amendment, modification, termination or waiver without
the consent of Requisite Lenders) (1) reduce the principal amount of any Loan,
(2) increase the maximum aggregate amount of Letters of Credit, (3) postpone the
scheduled final maturity date of any Loan, postpone the date or reduce the
amount of any scheduled payment (other than the amount of any interim scheduled
payment or any prepayment, each of which shall require Requisite Lender consent)
of principal of any Loan, (4) postpone the date or reduce the amount of any
scheduled reduction of the Revolving Loan Commitments, (5) postpone the date on
which any interest or any fees are payable, (6) decrease the interest rate borne
by any Loan (other than any waiver of any increase in the interest rate
applicable to any of the Loans pursuant to subsection 2.2E) or the amount of any
fees payable hereunder (including any change in the manner in which any
financial ratio used in determining any interest rate or fee is calculated that
would result in a reduction of any such rate or fee), (7) reduce the amount or
postpone the due date of any amount payable in

                                       127

<PAGE>

respect of any Letter of Credit, (8) extend the expiration date of any Letter of
Credit beyond the Revolving Loan Commitment Termination Date or (9) change in
any manner the obligations of Revolving Lenders relating to the purchase of
participations in Letters of Credit; (b) each Lender, (1) change in any manner
the definition of "Class" or the definition of "Pro Rata Share" or the
definition of "Requisite Class Lenders" or the definition of "Requisite Lenders"
or the definition of "Supermajority Lenders" (except for any changes resulting
solely from an increase in Commitments approved by Requisite Lenders), (2)
change in any manner any provision of this Agreement that, by its terms,
expressly requires the approval or concurrence of all Lenders, (3) increase the
maximum duration of Interest Periods permitted hereunder, (4) release any Lien
granted in favor of Administrative Agent with respect to all or substantially
all of the Collateral or more in aggregate fair market value of the Collateral
or release any Subsidiary Guarantor from its obligations under the Subsidiary
Guaranty, in each case other than in accordance with the terms of the Loan
Documents, (5) increase the amount of any of the Commitments; or (6) change in
any manner or waive the provisions contained in subsection 8.1 or this
subsection 10.6.

     In addition, (i) any amendment, modification, termination or waiver of any
of the provisions contained in Section 4 shall be effective only if evidenced by
a writing signed by or on behalf of Administrative Agent and Requisite Lenders,
(ii) no amendment, modification, termination or waiver of any provision of any
Note shall be effective without the written concurrence of the Lender which is
the holder of that Note, (iii) no amendment, modification, termination or waiver
of any provision of Section 3 shall be effective without the written concurrence
of Administrative Agent and, with respect to the purchase of participations in
Letters of Credit, without the written concurrence of each Issuing Lender that
has issued an outstanding Letter of Credit or has not been reimbursed for a
payment under a Letter of Credit, (iv) no amendment, modification, termination
or waiver of any provision of Section 9 or of any other provision of this
Agreement which, by its terms, expressly requires the approval or concurrence of
Administrative Agent shall be effective without the written concurrence of
Administrative Agent, (v) no amendment, modification, termination or waiver of
any provision of subsections 2.4 which has the effect of (x) extending or
reducing any interim scheduled payments, applicable to any Class or (y) changing
any interim scheduled payments or voluntary and mandatory prepayments,
applicable to any Class (the "Affected Class") in a manner that
disproportionately disadvantages such Class relative to any other Class shall be
effective without the written concurrence of Requisite Class Lenders of such
Class or such Affected Class (it being understood and agreed that any amendment,
modification, termination or waiver of voluntary or mandatory prepayment from
those set forth in subsection 2.4 with respect to one Class but not the other
Class, shall be deemed to disproportionately disadvantage such one Class but not
to disproportionately disadvantage any such other Class for purposes of this
clause (v)), (vi) no amendment, modification, termination or waiver of any
provision of subsections 7.6 shall be effective without the written concurrence
of Requisite Class Lenders holding Revolving Loans and Requisite Lenders.
Administrative Agent may, but shall have no obligation to, with the concurrence
of any Lender, execute amendments, modifications, waivers or consents on behalf
of that Lender and (vi) no amendment, modification, termination or waiver of
subsections 7.3 or 7.5 shall be effective without the consent of Supermajority
Lenders. Any waiver or consent shall be effective only in the specific instance
and for the specific purpose for which it was given. No notice to or demand on
Borrowers in any case shall entitle Borrowers to any other or further notice or
demand in similar or other circumstances. Any amendment, modification,
termination,

                                       128

<PAGE>

waiver or consent effected in accordance with this subsection 10.6 shall be
binding upon each Lender at the time outstanding, each future Lender and, if
signed by Borrowers, on Borrowers.

     10.7  Independence of Covenants.
           -------------------------

           All covenants hereunder shall be given independent effect so that if
a particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or would otherwise be within
the limitations of, another covenant shall not avoid the occurrence of an Event
of Default or Potential Event of Default if such action is taken or condition
exists.

     10.8  Notices; Effectiveness of Signatures.
           ------------------------------------

           Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served, or sent by telefacsimile or United States mail or
courier service and shall be deemed to have been given when delivered in person
or by courier service, upon receipt of telefacsimile in complete and legible
form, or three Business Days after depositing it in the United States mail with
postage prepaid and properly addressed; provided that notices to Administrative
                                        --------
Agent and any Issuing Lender shall not be effective until received. For the
purposes hereof, the address of each party hereto shall be as set forth under
such party's name on the signature pages hereof (or in the case of Lenders that
become a Lender by assignment, as set forth in the applicable Assignment
Agreement) or (i) as to Borrowers and Administrative Agent, such other address
as shall be designated by such Person in a written notice delivered to the other
parties hereto and (ii) as to each other party, such other address as shall be
designated by such party in a written notice delivered to Administrative Agent.
Electronic mail and Internet and intranet websites may be used to distribute
routine communications, such as financial statements and other information;
provided, however, that no signature with respect to any notice, request,
--------  -------
agreement, waiver, amendment or other document or any notice that is intended to
have binding effect may be sent by electronic mail.

           Loan Documents and notices under the Loan Documents may be
transmitted and/or signed by telefacsimile. The effectiveness of any such
documents and signatures shall, subject to applicable law, have the same force
and effect as an original copy with manual signatures and shall be binding on
all Loan Parties, Agents and Lenders. Administrative Agent may also require that
any such documents and signature be confirmed by a manually-signed copy thereof;
provided, however, that the failure to request or deliver any such
--------  -------
manually-signed copy shall not affect the effectiveness of any facsimile
document or signature.

     10.9  Survival of Representations, Warranties and Agreements.
           ------------------------------------------------------

           A.  All representations, warranties and agreements made herein shall
survive the execution and delivery of this Agreement and the making of the Loans
and the issuance of the Letters of Credit hereunder.

           B.  Notwithstanding anything in this Agreement or implied by law to
the contrary, the agreements of Borrowers set forth in subsections 2.6D, 2.7,
3.5A, 10.2, 10.3, 10.4, 10.17 and 10.18 and the agreements of Lenders set forth
in subsections 9.2C, 9.4, 10.5 and 10.18

                                       129

<PAGE>

shall survive the payment of the Loans, the cancellation or expiration of the
Letters of Credit and the reimbursement of any amounts drawn thereunder, and the
termination of this Agreement.

     10.10  Failure or Indulgence Not Waiver; Remedies Cumulative.
            -----------------------------------------------------

            No failure or delay on the part of an Agent or any Lender in the
exercise of any power, right or privilege hereunder or under any other Loan
Document shall impair such power, right or privilege or be construed to be a
waiver of any default or acquiescence therein, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other power, right or privilege. All rights and
remedies existing under this Agreement and the other Loan Documents are
cumulative to, and not exclusive of, any rights or remedies otherwise available.

     10.11  Marshalling; Payments Set Aside.
            -------------------------------

            Neither any Agent nor any Lender shall be under any obligation to
marshal any assets in favor of Borrowers or any other party or against or in
payment of any or all of the Obligations. To the extent that Borrowers make a
payment or payments to Administrative Agent or Lenders (or to Administrative
Agent for the benefit of Lenders), or Agents or Lenders enforce any security
interests or exercise their rights of setoff, and such payment or payments or
the proceeds of such enforcement or setoff or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside and/or
required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, any other state or federal law, common law or any equitable
cause, then, to the extent of such recovery, the obligation or part thereof
originally intended to be satisfied, and all Liens, rights and remedies therefor
or related thereto, shall be revived and continued in full force and effect as
if such payment or payments had not been made or such enforcement or setoff had
not occurred.

     10.12  Severability.
            ------------

            In case any provision in or obligation under this Agreement or the
Notes shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.

     10.13  Obligations Several; Independent Nature of Lenders' Rights; Damage
            ------------------------------------------------------------------
            Waiver.
            ------

            The obligations of Lenders hereunder are several and no Lender shall
be responsible for the obligations or Commitments of any other Lender hereunder.
Nothing contained herein or in any other Loan Document, and no action taken by
Lenders pursuant hereto or thereto, shall be deemed to constitute Lenders, or
Lenders and Borrowers, as a partnership, an association, a Joint Venture or any
other kind of entity. The amounts payable at any time hereunder to each Lender
shall be a separate and independent debt, and each Lender shall be entitled to
protect and enforce its rights arising out of this Agreement and it shall not be
necessary for any other Lender to be joined as an additional party in any
proceeding for such purpose.

                                       130

<PAGE>

            To the extent permitted by law, Borrowers shall not assert, and
hereby waive, any claim against any Indemnitee, on any theory of liability, for
special, indirect, consequential or punitive damages (as opposed to direct or
actual damages) arising out of, in connection with or as a result of this
Agreement (including, without limitation, subsection 2.1C hereof), any other
Loan Document, any transaction contemplated by the Loan Documents, any Loan or
the use of proceeds thereof.

     10.14  Headings.
            --------

            Section and subsection headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.

     10.15  Applicable Law.
            --------------

            THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES THAT WOULD REQUIRE APPLICATION OF ANOTHER LAW.

     10.16  Construction of Agreement; Nature of Relationship.
            -------------------------------------------------

            Each of the parties hereto acknowledges that (i) it has been
represented by counsel in the negotiation and documentation of the terms of this
Agreement, (ii) it has had full and fair opportunity to review and revise the
terms of this Agreement, (iii) this Agreement has been drafted jointly by all of
the parties hereto, and (iv) neither Administrative Agent nor any Lender or
other Agent has any fiduciary relationship with or duty to Borrowers arising out
of or in connection with this Agreement or any of the other Loan Documents, and
the relationship between Administrative Agent, the other Agents and Lenders, on
one hand, and Borrowers, on the other hand, in connection herewith or therewith
is solely that of debtor and creditor. Accordingly, each of the parties hereto
acknowledges and agrees that the terms of this Agreement shall not be construed
against or in favor of another party.

     10.17  Consent to Jurisdiction and Service of Process.
            ----------------------------------------------

            ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST BORROWERS ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY OBLIGATIONS
THEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW YORK. BY EXECUTING AND
DELIVERING THIS AGREEMENT, EACH BORROWER, FOR ITSELF AND IN CONNECTION WITH ITS
PROPERTIES, IRREVOCABLY

            (I)  ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE
     JURISDICTION AND VENUE OF SUCH COURTS;

                                       131

<PAGE>

            (II)    WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;

            (III)   AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN
     ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT
     REQUESTED, TO BORROWERS AT THEIR ADDRESSES PROVIDED IN ACCORDANCE WITH
     SUBSECTION 10.8;

            (IV)    AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS
     SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER BORROWERS IN ANY SUCH
     PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND
     BINDING SERVICE IN EVERY RESPECT;

            (V)     AGREES THAT LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY
     OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST BORROWERS IN
     THE COURTS OF ANY OTHER JURISDICTION; AND

            (VI)    AGREES THAT THE PROVISIONS OF THIS SUBSECTION 10.17 RELATING
     TO JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE FULLEST
     EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1402 OR
     OTHERWISE.

     10.18  Waiver of Jury Trial.
            --------------------

            EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY DEALINGS
BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE
LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of this waiver
is intended to be all-encompassing of any and all disputes that may be filed in
any court and that relate to the subject matter of this transaction, including
contract claims, tort claims, breach of duty claims and all other common law and
statutory claims. Each party hereto acknowledges that this waiver is a material
inducement to enter into a business relationship, that each has already relied
on this waiver in entering into this Agreement, and that each will continue to
rely on this waiver in their related future dealings. Each party hereto further
warrants and represents that it has reviewed this waiver with its legal counsel
and that it knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN
WAIVER SPECIFICALLY REFERRING TO THIS SUBSECTION 10.18 AND EXECUTED BY EACH OF
THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS
MADE HEREUNDER. In the event of litigation, this Agreement may be filed as a
written consent to a trial by the court.

                                       132

<PAGE>

     10.19  Confidentiality.
            ---------------

            Each Lender shall hold all non-public information obtained pursuant
to the requirements of this Agreement that has been identified in writing as
confidential by Borrowers in accordance with such Lender's customary procedures
for handling confidential information of this nature, it being understood and
agreed by Borrowers that in any event a Lender may make disclosures (a) to its
and its Affiliates' directors, officers, employees and agents, including
accountants, legal counsel and other advisors (it being understood that the
Persons to whom such disclosure is made will be informed of the confidential
nature of such information and instructed to keep such information
confidential), (b) to the extent requested by any Government Authority, (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (d) to any other party to this Agreement, (e) in
connection with the exercise of any remedies hereunder or any suit, action or
proceeding relating to this Agreement or the enforcement of rights hereunder,
(f) subject to an agreement containing provisions substantially the same as
those of this subsection 10.19, to (i) any Eligible Assignee of or participant
in, or any prospective Eligible Assignee of or Participant in, any of its rights
or obligations under this Agreement or (ii) any direct or indirect contractual
counterparty or prospective counterparty (or such contractual counterparty's or
prospective counterparty's professional advisor) to any credit derivative
transaction relating to obligations of Borrowers, (g) with the consent of
Borrowers, (h) to the extent such information (i) becomes publicly available
other than as a result of a breach of this subsection 10.19 or (ii) becomes
available to Administrative Agent or any Lender on a nonconfidential basis from
a source other than Borrowers or (i) to the National Association of Insurance
Commissioners or any other similar organization or any nationally recognized
rating agency that requires access to information about a Lender's or its
Affiliates' investment portfolio in connection with ratings issued with respect
to such Lender or its Affiliates and that no written or oral communications from
counsel to an Agent and no information that is or is designated as privileged or
as attorney work product may be disclosed to any Person unless such Person is a
Lender or a participant hereunder; provided that, unless specifically prohibited
                                   --------
by applicable law or court order, each Lender shall notify Borrowers of any
request by any Government Authority or representative thereof (other than any
such request in connection with any examination of the financial condition of
such Lender by such Government Authority) for disclosure of any such non-public
information prior to disclosure of such information; and provided, further that
                                                         --------  -------
in no event shall any Lender be obligated or required to return any materials
furnished by Borrowers or any of its Subsidiaries. In addition, Administrative
Agent and Lenders may disclose the existence of this Agreement and information
about this Agreement to market data collectors, similar service providers to the
lending industry, and service providers to Administrative Agent and Lenders.

     10.20  Counterparts; Effectiveness.
            ---------------------------

            This Agreement and any amendments, waivers, consents or supplements
hereto or in connection herewith may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document. This

                                       133

<PAGE>

Agreement shall become effective upon the execution of a counterpart hereof by
each of the parties hereto.

     10.21  Judgment Currency.
            -----------------

            (a)  If, for the purposes of obtaining judgment in any court, it is
necessary to convert a sum due hereunder in Dollars into another currency, the
parties hereto agree, to the fullest extend permitted by law, that the rate of
exchange used shall be that at which in accordance with normal banking
procedures Agent or a Lender could purchase the Dollars with such other currency
in New York, New York on the Business Day immediately preceding the day on which
any such judgment, or any relevant part thereof, is given.

            (b)  The obligations of Borrowers in respect of any sum due from it
to Agent or any Lender hereunder shall, notwithstanding any judgment in a
currency other than Dollars, be discharged only to the extent that on the
Business Day following receipt by Administrative Agent or such Lender of any sum
adjudged to be so due in such other currency Agent or such Lender may in
accordance with normal banking procedures purchase Dollars with such other
currency; if the Dollars so purchased are less than the sum originally due
Administrative Agent or such Lenders in Dollars, Borrowers agree, as a separate
obligation and notwithstanding any such judgment, to indemnify Agent or such
Lender against such loss, and if the Dollars so purchased exceed the sum
originally due to Administrative Agent or such Lender in Dollars, Lender shall
remit such excess to Borrowers.

                  [Remainder of page intentionally left blank]

                                       134

<PAGE>

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

                                   BORROWERS:

                                   AMF BOWLING WORLDWIDE, INC.

                                   By:      ________________________
                                   Title:   ________________________

                                   AMF BOWLING PRODUCTS, INC.

                                   By:      ________________________
                                   Title:   ________________________

                                   AMF BOWLING CENTERS
                                   HOLDINGS INC.

                                   By:      ________________________
                                   Title:   ________________________

                                   AMF WORLDWIDE BOWLING
                                   CENTERS HOLDINGS INC.

                                   By:      ________________________
                                   Title:   ________________________

                                   AMERICAN RECREATION CENTERS, INC.

                                   By:      ________________________
                                   Title:   ________________________

                                      S-1

<PAGE>

                                              AMF BOWLING CENTERS, INC.

                                              By:      ________________________
                                              Title:   ________________________

                                              AMF BOWLING HOLDINGS INC.

                                              By:      ________________________
                                              Title:   ________________________

                                      S-2

<PAGE>

                  LENDERS:

                                       BANKERS TRUST COMPANY,
                                       individually and as Administrative Agent

                                       By:      ________________________
                                       Title:   ________________________

                                       Notice Address:
                                       _______________________________________
                                       _______________________________________
                                       _______________________________________

                                      S-3

<PAGE>

                                  By:  _______________________________
                                  Title:  ____________________________

                                  Notice Address:
                                  _____________________________________________
                                  _____________________________________________
                                  _____________________________________________
                                  _____________________________________________

                                  By:  _______________________________
                                  Title:  ____________________________

                                  Notice Address:
                                  _____________________________________________
                                  _____________________________________________
                                  _____________________________________________
                                  _____________________________________________

                                  By:  _______________________________
                                  Title:  ____________________________

                                  Notice Address:
                                  _____________________________________________
                                  _____________________________________________
                                  _____________________________________________
                                  _____________________________________________

                                      S-4

<PAGE>

                              [SCHEDULES TO FOLLOW]

                                   Schedule-2

<PAGE>

                         SENIOR SECURED CREDIT AGREEMENT

                          DATED AS OF FEBRUARY 28, 2002

                                      AMONG

                          AMF BOWLING WORLDWIDE, INC.,
                           AMF BOWLING PRODUCTS, INC.,
                       AMF BOWLING CENTERS HOLDINGS INC.,
                  AMF WORLDWIDE BOWLING CENTERS HOLDINGS INC.,
                       AMERICAN RECREATION CENTERS, INC.,
                         AMF BOWLING CENTERS, INC., AND
                           AMF BOWLING HOLDINGS, INC.

                                  as Borrowers,

                           THE LENDERS LISTED HEREIN,
                                   as Lenders,

                             BANKERS TRUST COMPANY,
       as Administrative Agent, Documentation Agent and Syndication Agent

                         DEUTSCHE BANC ALEX.BROWN INC.,
                 as Lead Arranger and Sole Book Running Manager

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                  Page No.
                                                                                                  --------
<S>                                                                                               <C>
Section 1.     DEFINITIONS ....................................................................      2

       1.1     Certain Defined Terms ..........................................................      2

       1.2     Accounting Terms; Utilization of GAAP for Purposes of
               Calculations Under Agreement ...................................................     29
       1.3     Other Definitional Provisions and Rules of Construction ........................     30

Section 2.     AMOUNTS AND TERMS OF COMMITMENTS AND LOANS .....................................     30

       2.1     Commitments; Making of Loans; Notes ............................................     30
       2.2     Interest on the Loans ..........................................................     36
       2.3     Fees ...........................................................................     41
       2.4     Repayments, Prepayments and Reductions in Revolving Loan
               Commitments; General Provisions Regarding Payments;
               Application of Proceeds of Collateral and Payments
               Under Subsidiary Guaranty ......................................................     42
       2.5     Use of Proceeds ................................................................     50
       2.6     Special Provisions Governing Eurodollar Rate Loans .............................     51
       2.7     Increased Costs; Taxes; Capital Adequacy .......................................     53
       2.8     Statement of Lenders; Obligation of Lenders and Issuing Lenders
               to Mitigate ....................................................................     57
       2.9     Replacement of a Lender ........................................................     57
       2.10    Collection, Deposit and Transfer of Payments in Respect of Accounts. ...........     58
       2.11    Joint and Several Liability. ...................................................     59
       2.12    Obligations Absolute ...........................................................     60
       2.13    Waiver of Suretyship Defenses ..................................................     60
       2.14    Contribution and Indemnification among the Borrowers ...........................     61
       2.15    Company as Borrowers' Agent ....................................................     61

Section 3.     LETTERS OF CREDIT ..............................................................     61

       3.1     Issuance of Letters of Credit and Lenders' Purchase of
               Participations Therein .........................................................     61
       3.2     Letter of Credit Fees ..........................................................     64
</TABLE>

                                       i

<PAGE>

<TABLE>
<S>                                                                                              <C>
       3.3       Drawings and Reimbursement of Amounts Paid Under Letters of Credit ..........   65
       3.4       Obligations Absolute ........................................................   68
       3.5       Indemnification; Nature of Issuing Lenders' Duties ..........................   69

Section 4.       CONDITIONS TO LOANS AND LETTERS OF CREDIT ...................................   70

       4.1       Conditions to Term Loans and Initial Revolving Loans ........................   70
       4.2       Conditions to All Loans .....................................................   77
       4.3       Conditions to Letters of Credit .............................................   78

Section 5.       BORROWERS' REPRESENTATIONS AND WARRANTIES ...................................   78

       5.1       Organization, Powers, Qualification, Good Standing, Business
                 and Subsidiaries ............................................................   78
       5.2       Authorization of Borrowing, etc .............................................   79
       5.3       Financial Condition .........................................................   80
       5.4       No Material Adverse Change; No Restricted Junior Payments ...................   80
       5.5       Title to Properties; Liens; Real Property; Intellectual Property ............   81
       5.6       Litigation; Adverse Facts ...................................................   82
       5.7       Payment of Taxes ............................................................   82
       5.8       Performance of Agreements; Material Contracts ...............................   82
       5.9       Governmental Regulation .....................................................   83
       5.10      Securities Activities .......................................................   83
       5.11      Employee Benefit Plans ......................................................   83
       5.12      Certain Fees ................................................................   84
       5.13      Environmental Protection ....................................................   84
       5.14      Employee Matters ............................................................   85
       5.15      Matters Relating to Collateral ..............................................   85
       5.16      Disclosure ..................................................................   85
       5.17      Subordinated Indebtedness ...................................................   86
       5.18      Matters Relating to Borrowers Bankruptcy Proceedings. .......................   86
       5.19      Solvency ....................................................................   86

Section 6.       BORROWERS' AFFIRMATIVE COVENANTS ............................................   86

       6.1       Financial Statements and Other Reports ......................................   87
</TABLE>

                                       ii

<PAGE>

<TABLE>
<S>                                                                                                  <C>
       6.2       Existence, etc. ..................................................................   91
       6.3       Payment of Taxes and Claims; Tax .................................................   92
       6.4       Maintenance of Properties; Insurance; Application of Net Insurance/
                 Condemnation Proceeds ............................................................   92
       6.5       Inspection Rights; Lender Meeting ................................................   94
       6.6       Compliance with Laws, etc. .......................................................   94
       6.7       Environmental Matters ............................................................   94
       6.8       Execution of Subsidiary Guaranty and Collateral Documents After the
                 Closing Date .....................................................................   97
       6.9       Matters Relating to Additional Real Property Collateral ..........................   98
       6.10      Interest Rate Protection .........................................................   99
       6.11      Deposit Accounts and Cash Management Systems .....................................   99
       6.12      Lottery, Prize and Bowling League Accounts .......................................   99

Section 7.       BORROWERS' NEGATIVE COVENANTS ....................................................   99

       7.1       Indebtedness .....................................................................  100
       7.2       Liens and Related Matters ........................................................  101
       7.3       Investments; Acquisitions ........................................................  102
       7.4       Contingent Obligations ...........................................................  104
       7.5       Restricted Junior Payments .......................................................  105
       7.6       Financial Covenants ..............................................................  105
       7.7       Restriction on Fundamental Changes; Asset Sales ..................................  108
       7.8       Consolidated Capital Expenditures ................................................  109
       7.9       Transactions with Shareholders and Affiliates ....................................  110
       7.10      Sales and Lease-Backs ............................................................  111
       7.11      Change in Nature of Business .....................................................  111
       7.12      Amendments or Waivers of Certain Agreements; Amendments of Documents
                 Relating to Subordinated Indebtedness ............................................  111
       7.13      Fiscal Year ......................................................................  112

Section 8.       EVENTS OF DEFAULT ................................................................  112

       8.1       Failure to Make Payments When Due ................................................  112
       8.2       Default in Other Agreements ......................................................  112
       8.3       Breach of Certain Covenants ......................................................  113
</TABLE>

                                      iii

<PAGE>

<TABLE>
<S>                                                                                            <C>
       8.4       Breach of Warranty ........................................................   113
       8.5       Other Defaults Under Loan Documents .......................................   113
       8.6       Involuntary Bankruptcy; Appointment of Receiver, etc. .....................   113
       8.7       Voluntary Bankruptcy; Appointment of Receiver, etc. .......................   114
       8.8       Judgments and Attachments .................................................   114
       8.9       Dissolution ...............................................................   114
       8.10      Employee Benefit Plans ....................................................   114
       8.11      Change in Control .........................................................   115
       8.12      Invalidity of Subsidiary Guaranty; Failure of Security;
                 Repudiation of Obligations ................................................   115

Section 9.       ADMINISTRATIVE AGENT ......................................................   116

       9.1       Appointment ...............................................................   116
       9.2       Powers and Duties; General Immunity .......................................   117
       9.3       Independent Investigation by Lenders; No Responsibility For
                 Appraisal of Creditworthiness .............................................   119
       9.4       Right to Indemnity ........................................................   119
       9.5       Successor Administrative Agent ............................................   119
       9.6       Collateral Documents and Subsidiary Guaranty ..............................   120
       9.7       Duties of Other Agents; Designation of Agents .............................   120
       9.8       Administrative Agent May File Proofs of Claim .............................   121

Section 10.      MISCELLANEOUS .............................................................   121

       10.1      Successors and Assigns; Assignments and Participations in Loans
                 and Letters of Credit .....................................................   121
       10.2      Expenses ..................................................................   124
       10.3      Indemnity .................................................................   125
       10.4      Set-Off; Security Interest in Deposit Accounts ............................   126
       10.5      Ratable Sharing ...........................................................   126
       10.6      Amendments and Waivers ....................................................   127
       10.7      Independence of Covenants .................................................   129
       10.8      Notices; Effectiveness of Signatures ......................................   129
       10.9      Survival of Representations, Warranties and Agreements ....................   129
       10.10     Failure or Indulgence Not Waiver; Remedies Cumulative .....................   130
</TABLE>

                                       iv

<PAGE>

<TABLE>
<S>                                                                                         <C>
       10.11    Marshalling; Payments Set Aside .........................................   130
       10.12    Severability ............................................................   130
       10.13    Obligations Several; Independent Nature of Lenders' Rights;
                Damage Waiver ...........................................................   130
       10.14    Headings ................................................................   131
       10.15    Applicable Law ..........................................................   131
       10.16    Construction of Agreement; Nature of Relationship .......................   131
       10.17    Consent to Jurisdiction and Service of Process ..........................   131
       10.18    Waiver of Jury Trial ....................................................   132
       10.19    Confidentiality .........................................................   133
       10.20    Counterparts; Effectiveness .............................................   133
       10.21    Judgment Currency .......................................................   134
</TABLE>

Signature pages                                                              S-1

                                       v

<PAGE>

                                    EXHIBITS

            I        FORM OF NOTICE OF BORROWING

            II       FORM OF NOTICE OF CONVERSION/CONTINUATION

            III      FORM OF REQUEST FOR ISSUANCE

            IV       FORM OF REVOLVING NOTE

            V        FORM OF TERM NOTE

            VI       FORM OF SECURITY AGREEMENT

            VII      FORM OF COMPLIANCE CERTIFICATE

            VIII     FORM OF OPINION OF COUNSEL FOR LOAN PARTIES

            IX       FORM OF OPINION OF O'MELVENY & MYERS LLP

            X        FORM OF ASSIGNMENT AGREEMENT

            XA       FORM OF ASSIGNMENT AGREEMENT (RELATED FUNDS)

            XI       FORM OF SUBSIDIARY GUARANTY

            XII      FORM OF BLOCKED ACCOUNT AGREEMENT

                                       vi

<PAGE>

                                    SCHEDULES

              1.1A         CASH MANAGEMENT SYSTEM

              1.1B         CONCENTRATION ACCOUNTS

              1.1C         REORGANIZATION EXPENSES

              1.1D         EXCLUDED ASSETS

              1.1E         IMMATERIAL SUBSIDIARIES

              1.1F         LIENS PERMITTED BY APPROVED PLAN OF REORGANIZATION

              1.1G         RESTRUCTURING TRANSACTIONS

              2.1          LENDERS' COMMITMENTS AND PRO RATA SHARES

              3.1D         EXISTING LETTERS OF CREDIT

              4.1C         CORPORATE AND CAPITAL STRUCTURE; OWNERSHIP

              4.1L(i)      REAL PROPERTY ASSETS

              4.1L(iii)    LEASEHOLD PROPERTIES

              4.1P         CLOSING DATE CONSOLIDATED ADJUSTED EBITDA

              5.1          LOAN PARTIES AND SUBSIDIARIES

              5.1E         INITIAL EXEMPTED GROUP

              5.4          MATERIAL ADVERSE EFFECT CONDITIONS

              5.5A         TITLE TO PROPERTIES; LIENS

              5.5B(i)      REAL PROPERTY ASSETS

              5.5B(ii)     LEASES

              5.5C         INTELLECTUAL PROPERTY

              5.6          LITIGATION

              5.8A         DEFAULTED CONTRACTUAL OBLIGATIONS

                                       vii

<PAGE>

             5.8B      MATERIAL CONTRACTS

             5.11      EMPLOYEE BENEFIT PLANS

             5.13      ENVIRONMENTAL MATTERS

             7.1       CERTAIN EXISTING INDEBTEDNESS

             7.2       CERTAIN EXISTING LIENS

             7.3       CERTAIN EXISTING INVESTMENTS

             7.4       CONTINGENT OBLIGATIONS

             7.7       PERMITTED ASSET SALES

             7.9       LIQUOR LICENSE AFFILIATES

                                 viii

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