Exhibit 10.3

PLEDGE AND SECURITY AGREEMENT

THIS PLEDGE AND SECURITY AGREEMENT, dated as of February 29, 2008 (this
“Agreement”), is made by MULTI-COLOR AUSTRALIA ACQUISITION PTY LIMITED (ACN 129
275 181), an Australian company limited by shares and registered in Victoria
(the “Grantor”), in favor of WESTPAC BANKING CORPORATION (ABN 33 007 457 141),
as Australian Administrative Agent (“Grantee”), for the benefit of itself and
the Australian Sub-facility Lenders.

RECITALS

A. Reference is made to that certain Credit Agreement, dated as of February 29,
2008 (as amended, restated, extended, supplemented or otherwise modified in
writing from time to time, the “Credit Agreement;” the terms defined therein
being used herein as therein defined), among Multi-Color Corporation, an Ohio
corporation, Collotype International Holdings Pty Limited, an Australian company
limited by shares and registered in South Australia, the Designated Borrowers
from time to time party thereto, the Lenders from time to time party thereto,
Bank of America, N.A., as Administrative Agent, U.S. L/C Issuer and Swing Line
Lender, Westpac Banking Corporation, as Australian Administrative Agent and
Australian L/C Issuer, and BMO Capital Markets Financing, Inc. and KeyBank
National Association as Co-Documentation Agents.

B. Grantor will derive substantial benefit from the Credit Agreement.

C. Grantor owns 100% of the membership interests of Multi-Color Australia, LLC,
a Delaware limited liability company (“Multi-Color Australia”).

D. It is a condition precedent to the making of loans and other financial
accommodations under the Credit Agreement that Grantor shall have executed and
delivered this Agreement and hereby grant the security interest contemplated by
this Agreement.

AGREEMENTS

NOW, THEREFORE, in consideration of the foregoing, Grantor hereby agrees with
Grantee as follows:

1. Grant of Security. Grantor hereby assigns and pledges to Grantee, and hereby
grants to Grantee a security interest in, all of the right, title and interest
of Grantor in and to the following, whether now owned or hereafter acquired (the
“Collateral”);

(A) One hundred percent (100%) of the membership interests of Multi-Color
Australia (the “Pledged Interests”), as more fully described in Schedule I,
owned by Grantor and the certificates, if any, representing the Pledged
Interests, and all dividends, cash, instruments and other property from time to
time received, receivable or otherwise distributed in respect of or in exchange
for any or all of the Pledged Interests; and

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(B) All proceeds of any and all of the foregoing Collateral described in clause
(A) of this Section 1 and any and all payments (in any form whatsoever) made or
due and payable to Grantor from time to time in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of all or any part of the
Collateral by any governmental body, authority, bureau or agency (or any Person
acting under color of governmental authority) and, to the extent not otherwise
included, all payments under any indemnity, warranty or guaranty, payable by
reason of loss or damage to or otherwise with respect to any of the foregoing
Collateral (the “Proceeds”).

2. Security for Obligations. This Agreement and the Collateral hereunder secures
the payment of (i) all obligations of the Grantor and each Loan Party
incorporated under the Laws of Australia and any other Loan Party which is a
Foreign Subsidiary now or hereafter existing under the Credit Agreement and the
Loan Documents, whether for principal, interest, fees, expenses or otherwise,
and (ii) all obligations of Grantor now or hereafter existing under this
Agreement (all such obligations of Grantor and such Loan Parties being referred
to herein as the “Obligations”).

3. Representations and Warranties. Grantor represents and warrants as follows:

(A) The Pledged Interests have been duly authorized and validly issued and are
fully paid and nonassessable. The Pledged Interests (i) constitute one hundred
percent (100%) of the issued and outstanding shares of Multi-Color Australia and
(ii) there are no warrants, options or other rights to acquire any of the
capital stock of Multi-Color Australia.

(B) Grantor is the legal and beneficial owner of the Collateral free and clear
of any lien, security interest, option, charge or encumbrance except for the
security interest created by this Agreement. No effective financing statement or
other instrument similar in effect covering all or any part of the Collateral is
on file in any recording office, except such as may have been filed in favor of
the Grantee relating to this Agreement.

(C) The pledge and delivery of the Pledged Interests pursuant to this Agreement
create a valid and perfected first priority security interest in the Collateral,
securing the payment of the Obligations.

(D) No authorization, approval or other action by, and no notice to or filing
with any governmental authority or regulatory body is required either (i) for
the grant by Grantor of the security interest granted hereby or for the
execution, delivery or performance of this Agreement by Grantor or (ii) for the
perfection of or the exercise by Grantee of its rights and remedies hereunder or
for the exercise by Grantee of the voting or other rights provided for in this
Agreement or the remedies in respect of the Collateral pursuant to this
Agreement (except any filing in connection with judicial proceedings to enforce
such rights and remedies and except as may be required in connection with such
disposition by laws affecting the offering and sale of securities generally).

 

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4. Further Assurances. Grantor hereby agrees that:

(A) From time to time, at the expense of Grantor, Grantor will promptly execute
and deliver all further instruments and documents, and take all further action
that Grantee may reasonably request, in order to perfect and protect the
security interest granted or purported to be granted hereby or to enable Grantee
to exercise and enforce its right and remedies hereunder with respect to any
Collateral.

(B) Grantor will furnish to Grantee from time to time statements and schedules
further identifying and describing the Collateral and such other reports in
connection with the Collateral as Grantee may reasonably request.

5. Voting Rights; Dividends; Etc. with Respect to Pledged Interests. (A)(i) So
long as no Event of Default shall have occurred, Grantor shall be entitled to
exercise any and all voting and other consensual rights pertaining to the
Pledged Interests or any part thereof owned by Grantor for any purpose not
inconsistent with the terms of this Agreement and shall be entitled to receive
all dividends and other distributions with respect thereto; provided, however,
that Grantor shall not exercise or refrain from exercising any such right if, in
the judgment of Grantee, such action or inaction would have a material adverse
effect on the value of the Pledged Interests.

(ii) Grantee shall execute and deliver (or cause to be executed and delivered)
to Grantor all such proxies and other instruments as Grantor may reasonably
request for the purpose of enabling Grantor to exercise the voting and other
rights that it is entitled to exercise pursuant to paragraph (i) above.

(B) Upon the occurrence and during the continuance of an Event of Default, all
rights of Grantor to receive dividends or disbursements or to exercise the
voting and other consensual rights that it would otherwise be entitled to
exercise pursuant to Section 5(A)(i) shall cease, and all such rights shall
thereupon become vested in Grantee, who shall thereupon have the sole right to
exercise such voting and other consensual rights.

6. Grantor’s Covenants.

(A) Transfers and Other Liens. Grantor shall not:

 

  (i) Sell, assign (by operation of law or otherwise) or otherwise dispose of
any of the Collateral; or

 

  (ii) Create or suffer to exist any lien, security interest or other charge or
encumbrance upon or with respect to any of the Collateral to secure Indebtedness
of any person or entity, except for the security interest created by this
Agreement and any security interest in favor of Grantee under the Credit
Agreement or the Loan Documents.

(B) No Redemptions. Grantor shall not cause or permit any partial or complete
redemptions of any shares in Multi-Color Australia without the prior written
consent of Grantee.

 

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(C) Preservation of Existence of Multi-Color Australia. Grantor shall preserve
the existence of Multi-Color Australia as a Delaware limited liability company
and shall not change the state of its organization.

7. Appointment as Attorney-in-Fact. (A) Effective upon and during the
continuance of an Event of Default under the Credit Agreement or in breach of
this Agreement, Grantor hereby irrevocably constitutes and appoints Grantee and
any officer or agent thereof, with full power of substitution, as its true and
lawful attorney-in-fact with full irrevocable power and authority in its place
and stead and in its name or in its own name, from time to time, in Grantee’s
discretion, for the purpose of carrying out the terms of this Agreement and any
related documents to the extent permitted by applicable law, to take any and all
appropriate action and to execute any and all documents and instruments which
may be necessary or desirable to accomplish the purposes of this Agreement and
any related documents, and, without limiting the generality of the foregoing,
hereby gives Grantee, subject to the other terms of this Agreement, the power
and right, on behalf of Grantor without notice to or assent by Grantor to do the
following:

(i) to pay or discharge taxes, liens, security interests or other encumbrances
levied or placed on or threatened against the Collateral which are not permitted
by the terms hereof;

(ii) to receive payment of and receipt for any and all moneys, claims and other
amounts due or to become due at any time in respect of or arising out of any
Collateral; and

(iii) during the continuance of an Event of Default, (a) to commence and
prosecute any suits, actions or proceedings at law or in equity in any court of
competent jurisdiction and to collect the Collateral or any Proceeds thereof and
to enforce any other right in respect of any Collateral; (b) to defend any suit,
action or proceeding brought against Grantor with respect to any Collateral;
(c) to settle, compromise or adjust any suit, action or proceeding described
above and, in connection therewith, to give such discharges or releases as
Grantee may deem appropriate; (d) except to the extent prohibited by law,
generally to sell, transfer, pledge, make any agreement with respect to or
otherwise deal with any of the Collateral as fully and completely as though
Grantee were the absolute owner thereof for all purposes; and (e) to do, at
Grantee’s option and Grantor’s expense, at any time, or from time to time, all
acts and things which Grantee reasonably deems necessary to protect, preserve or
realize upon the Collateral and Grantee’s security interest therein, in order to
effect the intent of this Agreement, all as fully and effectively as Grantor
might do.

Grantor hereby ratifies all that said attorneys shall lawfully do or cause to be
done by virtue hereof and in accordance herewith. This power of attorney is a
power coupled with an interest and shall be irrevocable.

(B) Grantor also authorizes Grantee at any time and from time to time to
execute, in connection with any sale provided for in Section 10 of this
Agreement, any endorsements, assignments or other instruments of conveyance or
transfer with respect to the Collateral.

 

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8. Grantee May Perform. If Grantor fails to perform any agreement contained
herein within a reasonable time after notice of such failure has been provided
by Grantee, Grantee may perform, or cause performance of, such agreement, and
the expenses of Grantee incurred in connection therewith shall be payable by
Grantor.

9. Duties of Grantee. The powers conferred on Grantee hereunder are solely to
protect Grantee’s interest in the Collateral and shall not impose any duty upon
it to exercise any such powers. Except to the extent required by the Uniform
Commercial Code (the “Code”), Grantee shall not have any duty as to any
Collateral or as to the taking of any necessary steps to preserve rights against
prior parties or any other rights pertaining to any Collateral.

10. Remedies. If any Event of Default shall have occurred and be continuing:

(A) Grantee may exercise in respect of the Collateral, in addition to other
rights and remedies provided for herein or otherwise available to it, all the
rights and remedies of a secured party on default under the Code (whether or not
the Code applies to the affected Collateral) and also may (i) exercise any and
all rights and remedies of Grantor in respect of the Collateral, (ii) manage and
control the Collateral and do any acts which it deems necessary or desirable to
preserve the value or marketability of the Collateral, or any part thereof or
interest therein, and (iii) sell the Collateral or any part thereof in one or
more parcels at public or private sale, at any of Grantee’s offices or
elsewhere, for cash, on credit or for future delivery, and upon such other terms
as Grantee may deem commercially reasonable. Grantor agrees that, to the extent
notice of sale shall be required by law, at least ten (10) days’ notice to
Grantor of the time and place of any public sale or the time after which any
private sale is to be made shall constitute reasonable notification.

(B) Grantor recognizes and acknowledges that Grantee may be unable to effect a
public sale of all or a part of the Collateral by reason of certain prohibitions
contained in the Securities Act of 1933, as amended, as now or hereafter in
effect, or in applicable Blue Sky or other state securities laws, as now or
hereafter in effect, but may be compelled to resort to one or more private sales
to a restricted group of purchasers who will be obliged to agree, among other
things, to acquire such Collateral for their own account, for investment and not
with a view to the distribution or resale thereof. Grantor agrees that private
sales so made may be at prices and other terms less favorable to the seller than
if such Collateral were sold at public sales, and that Grantee has no obligation
to delay sale of any such Collateral for the period of time necessary to permit
Grantor, even if Grantor would agree, to register such collateral for public
sale under such applicable securities laws. Grantor agrees that private sales
made under the foregoing circumstances shall not be deemed to have been made in
a commercially unreasonable manner by that fact alone.

(C) Promptly upon receipt of written notice thereof from Grantee, all payments
received by Grantor under or in connection with any Collateral shall be received
in trust for the benefit of Grantee, shall be segregated from other funds of
Grantor and shall be forthwith paid over to Grantee in the same form as so
received (with any necessary endorsement).

 

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(D) All payments made under or in connection with any collateral and all cash
proceeds received by Grantee in respect of any sale of, collection from, or
other realization upon all or any part of the Collateral shall be applied in
accordance with the applicable terms of the Credit Agreement. Any surplus of
such cash or cash proceeds held by Grantee and remaining after payment in full
of all the Obligations shall be paid over to Grantor or to whomsoever may be
lawfully entitled to receive such surplus.

11. Amendments; Etc. No amendment or waiver of any provision of this Agreement
nor consent to any departure by Grantor herefrom, shall in any event be
effective unless the same shall be in writing and executed by each party hereto,
and then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given.

12. Notices. Any notice or notification required, permitted or contemplated
hereunder shall be governed by the notice provisions of the Credit Agreement.

13. Continuing Security Interest. This Agreement shall create a continuing
security interest in the Collateral and shall (A) remain in full force and
effect until payment in full of all of the Obligations, (B) be binding upon
Grantor, its successors and assigns and (C) inure, together with the rights and
remedies of Grantee hereunder, to Grantee and its successors, transferees and
assigns. Upon the payment in full of all Obligations, the security interest
granted hereby shall terminate and all rights to the Collateral shall revert to
Grantor. Upon any such termination, Grantee will, at Grantor’s expense, promptly
return to Grantor any certificates representing any of the collateral and
execute and deliver to Grantor such documents as Grantor shall reasonably
request to evidence such termination.

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

15. Limitation of Liability. Despite any provision to the contrary in this
Agreement or any other Loan Document, the obligations of the Grantor will be
limited to the extent necessary to ensure that the Grantor does not contravene
Part 2J.3 of the Corporations Act 2001 (Cth).

16. Prospective Liability.

(A) Subject to paragraph (D), below, for the purpose of the Corporations Act
2001 the maximum prospective liability (as defined in the Corporations Act 2001)
secured by this Agreement is A$125,000,000 or its equivalent but this clause
does not limit the amount of actual liability at any time secured by or
recoverable under this Agreement.

(B) In addition to that prospective liability, this Agreement also secures a
prospective liability (as defined in the Corporations Act 2001) of an
unspecified amount, being all other money which may become due or owing or
payable to the Grantee or any Australian Sub-facility Lender under this
Agreement and, except for the purposes of s282(3) of the Corporations Act 2001,
this Agreement is not in any way limited to the amount in paragraph (a).

 

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(C) The nature of that prospective liability is advances, interest, fees, costs,
indemnities and other amounts included in the definition of Obligations.

(D) From time to time, the Grantee may lodge a notice under s268(2) of the
Corporations Act 2001 on behalf of the Grantor specifying an increase in the
maximum prospective liability secured by this Agreement. From the date of
lodgement the sum specified in paragraph (A) will be taken to be varied to the
sum specified in the notice.

17. Appointment of Process Agent.

(A) Grantor irrevocably:

(i) nominates Multi-Color Australia as its agent to receive service of process
or other documents with respect to any legal action or proceedings relating to
this Agreement or any transaction contemplated in this Agreement; and

(ii) agrees that service on that agent or any other person appointed under
paragraph (B), below, will be sufficient service on it.

Multi-Color Australia irrevocably and unconditionally accepts that appointment.

(B) Grantor shall ensure that Multi-Color Australia remains authorized to accept
service on its behalf. If Multi-Color Australia ceases to have an office in the
United States, Grantor shall ensure that there is another person in the United
States acceptable to Grantee to receive process on its behalf. Grantor shall
promptly notify Grantee of the appointment of such other person.

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

 

“GRANTOR” MULTI-COLOR AUSTRALIA ACQUISITION PTY LIMITED By:  

/s/ Mary T. Fetch

Name:   Mary T. Fetch Title:   Director By:  

/s/ Dawn H. Bertsche

Name:   Dawn H. Bertsche Title:   Director “GRANTEE” WESTPAC BANKING
CORPORATION, as Australian Administrative Agent By:  

/s/ Matthew Steinert

Name:   Matthew Steinert Title:   Attorney

IN WITNESS WHEREOF, Multi-Color Australia, LLC has caused this Pledge and
Security Agreement to be duly executed and delivered by its officer thereunto
duly authorized as to the date first above written solely with respect to its
appointment as process agent pursuant to Section 17 and for no other reason.

 

MULTI-COLOR AUSTRALIA, LLC By:  

/s/ James H. Reynolds

Name:   James H. Reynolds Title:   Vice President, Corporate Controller

 

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SCHEDULE I

To

Pledge and Security Agreement

Pledged Interests

 

Entity

   Percentage Ownership     Certificate No.

Multi-Color Australia, LLC

   100 %   1

 

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