SECURITY AGREEMENT


        This Security Agreement, dated as of August 31, 1995 (as the
same may be supplemented, modified, amended, restated or replaced  from
time to time in the manner provided herein, this "Agreement"), is by
and between American Bank Note Company, a New York corporation whose
chief executive office is currently located at the address set forth on
the signature page hereto (the "Borrower"), and Citibank, N.A., a
national banking association having an address at 399 Park Avenue, New
York, New York 10043 (the "Bank").

        In order to induce the Bank to permit the issuance of certain
letters of credit and make and continue lother accommodations, the
Borrower has agreed to secure the obligations of the Borrower
respecting any and all letters of credit with certain securities,
investments and other collateral, all upon the terms and provisions and
subject to the conditions hereinafter set forth.  Accordingly, in
consideration of the foregoing and the mutual covenants and agreements
hereinafter set forth, and other good and valuable consideration (the
receipt and adequacy of which is hereby acknowledged by the Borrower),
the parties hereto hereby agree as follows:

        Section 1.    Loan Documents and Obligations.  The Borrower
has executed and delivered a new credit agreement with the Bank in the
form of a letter agreement dated as of August 31, 1995, to which
American Banknote Corporation (formerly known as United States Banknote
Corporation) ("ABC") also is a party (as the same may be supplemented,
modified, amended, or restated from time to time, the "New Credit
Agreement").  Pursuant to the New Credit Agreement, the Borrower
(together with ABH) has issued a Promissory Note to the Bank (as
executed, and as the same may  be supplemented, modified, amended,
restated or replaced from time to time, the "Note").  The Borrower and
one or more other persons, including American Bank Note Holographics,
Inc. ("BH"), and any other guarantor, pledgor or surety (together with
ABH, each a "Surety"), have executed and from time to time may execute
one or more letter of credit applications, guaranties and other
instruments, applications, agreements or documents relating to the
Obligations (as hereinafter defined) in whole or in part (as executed,
and as the same may be supplemented, modified, amended, restated or
replaced from time to time, together with the Note, the New Credit
Agreement and this Agreement, individually, a "Loan Document", and
collectively, the "Loan Documents").  "Obligations" shall mean any and
all of (a) the letter of credit advances outstanding (including future
advances) under the New Credit Agreement (collectively, the "oans"),
together with accrued and unpaid interest thereon (including, without
limitation, any and all interest and other amounts accrued during the
pendency of any bankruptcy, insolvency, receivership or other similar
proceedings, irrespective of whether such interest and other amounts
are allowed or allowable as claims in such proceedings), (b) any
guaranty or other credit support by the Borrower of any letter of
credit obligation of ABC or any of its affiliates, and (c) the payment
of all of the other amounts to be paid and the performance or
satisfaction of all other obligations to be performed or otherwise
satisfied by the Borrower (1) under this Agreement or (2) with respect
to any letter of credit under the New Credit Agreement and the other
Loan Documents.  Event of Default and the other capitalized terms used
and not otherwise defined in this Agreement shall have the meanings
respectively assigned to them in the New Credit Agreement.  Each use of
a neuter, masculine, feminine or plural pronoun shall be deemed to
refer to the form of pronoun appropriate to the circumstance.
  
        Section 2.    Grant of Security Interest.  As security for the
timely and full payment and satisfaction of any and all of the
Obligations, the Borrower hereby absolutely, unconditionally and
irrevocably pledges, assigns, conveys, mortgages, transfers and
delivers to the Bank, and grants to the Bank a continuing security
interest in and to, the following:  (a) any and all governmental
obligations, notes, certificates of deposit, money, bank and other
accounts, and other securities, investments and interests held by the
Bank in the account entitled "Citibank, N.A.,  Cash Collateral Account
f/b/o American Bank Note Company, No. 40680389", any and all other
securities, investments or interests received by the Borrower on
account of or related to any of the foregoing, any and all dividends,
interest and distributions with respect thereto (whether cash, stock or
otherwise) and splits and reclassifications thereof, and any and all
options, warrants and other rights to acquire any such securities,
investments or interests (collectively, the "Pledged Deposits"); (b)
any and all of the rights, powers, privileges, remedies and interests
of the Borrower in, to and under any and all instruments, indentures,
agreements, charters, by-laws, certificates and other documents and any
statutory equivalents, in each case whether now or hereafter existing,
and irrespective of whether reduced to writing, and as each has been
and hereafter may be supplemented, modified, amended or restated from
time to time, respecting (i) any of the Pledged Deposits or the
organization or governance of any issuer of any of the Pledged Deposits
(collectively, the "Organizational Documents") or (ii) the investment
or custody of any Pledged Deposits with or by any holder thereof
(collectively, the "Custody Documents"); (c) any and all advances,
indebtedness and other amounts (including interest) directly or
indirectly owed to the Borrower on account of or related to the Pledged
Deposits; and (d) any and all accounts, instruments, chattel paper,
contract rights, warranties, casualty and other insurance policies and
rights, litigation claims and rights, tradenames, other general
intangibles and books and records of the Borrower arising from or with
respect to all or any part of the foregoing subsections;  in each case
whether any of the foregoing is now existing or hereafter acquired or
created, whether owned beneficially or of record and whether owned
individually, jointly or otherwise, together with the products and
proceeds thereof, all payments and other distributions with respect
thereto and any and all renewals, substitutions, modifications and
extensions of any and all of the foregoing (the foregoing items will be
referred to collectively as the "Collateral"). 

        Section 3.    Delivery and Documentation.  The Borrower shall
deliver to the Bank any and all stock certificates and other
instruments evidencing or respecting the Collateral, which shall be
delivered with this Agreement if currently existing or delivered
promptly as hereafter received, acquired or created.  Stock
certificates shall be delivered with corresponding stock powers, duly
endorsed in blank, and other instruments shall be duly endorsed to the
order of the Bank in such manner as the Bank may specify.  Each
certificate shall be delivered free and clear of any and all
restrictive legends.  If any of the Collateral is held by a broker,
investment adviser, trader, financial intermediary, custodian, clearing
corporation or other person, has been issued by any partnership, trust
or other non-corporate person, or has been issued in uncertified form,
the Borrower shall execute and deliver such notices, transfer
instructions and other documents to, and obtain such written consents
and acknowledgments from, each holder or issuer respecting any
Collateral (and the Bank's rights, powers, privileges, remedies and
interests in and to the Collateral) as the Bank from time to time may
request (as each may be executed, acknowledged, supplemented, modified,
amended or restated from time to time, (a) if signed by the Borrower,
individually a "Collateral Notice" and collectively, the "Collateral
Notices", and (b) if signed by a holder or issuer (other than the
Bank), individually, a "Collateral Acknowledgment", and collectively,
the "Collateral Acknowledgments").  From time to time upon request of
the Bank, the Borrower shall, or shall cause the holder or issuer of
any Collateral to, deliver to the Bank such Organizational Documents
and Custody Documents as the Bank may request.  The Bank in its
discretion may at any time transfer or register any of the Collateral
into the name of the Bank or its nominee(s) without any notice to the
Borrower.  In addition to the foregoing, the Borrower from time to time
shall deliver such assignments, financing statements and other
documents as the Bank may request to further evidence, confirm, effect
or perfect any security interest granted or intended to have been
granted under this Agreement or any other Loan Document, each in such
form and substance as may be acceptable to the Bank.  The Borrower
hereby irrevocably authorizes the Bank in its discretion:  (i) to file
without the signature of the Borrower any and all financing statements,
modifications and continuations in respect of the Collateral and the
transactions contemplated by this Agreement or any other Loan Document;
(ii) to sign any such statement, modification or continuation on behalf
of such Borrower if the Bank deems such signature necessary or
desirable under applicable law; and (iii) to file a carbon,
photographic or other reproduction of any financing statement or
modification if the Bank deems such filing necessary or desirable under
applicable law.  The Bank shall send a copy of any such filing to the
Borrower; provided, however, that the failure to send that copy shall
not affect the validity or enforceability of any such filing.  The Bank
shall not be liable for any mistake in or failure to file any financing
statement, modification or continuation.

        Section 4.    The Borrower's Independent Investment Decision,
Etc.  The Borrower hereby acknowledges and agrees that:  (a) the
Borrower (i) is a sophisticated and knowledgeable investor, both
generally and with respect to each item of Collateral, (ii) has
received directly from each holder or issuer of Collateral (which for
the purpose of this Section shall be deemed to not include the Bank),
reviewed, and evaluated all financial and other information necessary
or prudent to make the Borrower's investment decision, and will
continue to do so, (iii) has made, and will continue to make,
independent investment selections and decisions respecting the
Collateral without reliance upon or regard to any evaluation or
investigation by the Bank of any Collateral or any holder or issuer of
any Collateral, and (iv) does not directly or indirectly control, and
is not an officer, director, employee, general partner or trustee of,
any holder or issuer of any Collateral; (b)neither Bank nor any of its
representatives has, and none of them shall be deemed or construed to
have, (i) made any representation, warranty or guaranty, (ii) offered
or furnished any recommendation, advice, analysis or information, or
(iii) undertaken or assumed any liability, responsibility or other
obligation whatsoever respecting any Collateral or any holder or issuer
of any Collateral, whether oral or otherwise, and whether express or
implied, including (without limitation) anything with respect to any
existing or future (A) existence, enforceability, genuineness, value or
condition of any Collateral or (B) assets, business, financial
condition, investments, prospects, reputation, or strategies of any
holder or issuer of Collateral or any other person; (c) neither Bank
nor any of its representatives shall have any liability, obligation or
responsibility whatsoever for any acts or omissions of any issuer or
holder of Collateral or any other person or any failure by anyone to
perform any of its obligations under or with respect to any of the
Collateral; and (d) neither Bank nor any of its representatives has, or
shall be deemed or construed to have, any agreement, duty or obligation
to inform the Borrower of any matter relating to any of the Collateral
or any holder or issuer of any of the Collateral or to furnish to the
Borrower any information pertaining thereto.

        Section 5.    Certain Representations and Warranties.  The
Borrower represents and warrants to the Bank that, as of the date
hereof and as of the date of each Loan or other advance or any
readvance, renewal or extension thereof:

        (a)     The Borrower is duly organized, validly existing and
in good standing under the laws of its jurisdiction of organization, or
is an individual domiciled within the state and having his or her
primary residence at, and has its chief executive office at the
addresses set forth on the signature page, below.  The Borrower has the
legal capacity, power, authority and unrestricted right to execute and
deliver this Agreement and each of the other Loan Documents to which
the Borrower is or will be a party, to grant to the Bank the security
interests respecting the Collateral contemplated hereunder and
thereunder, and to perform all of the Borrower's obligations hereunder
and thereunder.  The execution and delivery by the Borrower of this
Agreement and each of the other Loan Documents to which the Borrower is
or will be a party and the performance by the Borrower of all of the
Borrower's obligations hereunder and thereunder will not violate or be
in conflict with any term or provision of (i) any applicable law
(including, without limitation, any applicable usury or similar law),
(ii) any judgment, order, writ, injunction, decree or consent of any
court or other judicial authority applicable to the Borrower or any
material part of the Borrower's assets and properties (an "Applicable
Order"), (iii) any Organizational Document or Custody Document (taking
into account the approvals contained in the Collateral Acknowledg-
ments), or (iv) any material instrument, indenture, agreement, document
or other obligation to which the Borrower is a party or by which the
Borrower or any material part of the Borrower's assets and properties
may be bound or subject (each a "Material Document").  No consent,
approval or authorization of, or registration, declaration or filing
with, any governmental authority or other person is required as a
condition precedent, concurrent or subsequent to or in connection with
the due and valid execution, delivery and performance by the Borrower
of this Agreement or any other Loan Document to which the Borrower is
or will be a party or the legality, validity, binding effect or
enforceability of any of their respective terms and provisions, except
for (A) the approval of the issuers or holders given under the
Collateral Acknowledgments, and (B) the filing of Uniform Commercial
Code financing or modification statements with the appropriate
authorities in the State where the Borrower has the Borrower's chief
executive office and/or primary residence.  This Agreement is, and the
Note and the other Loan Documents to which the Borrower is or will be a
party when executed and delivered will be, legal, valid and binding
obligations of the Borrower, enforceable against the Borrower in
accordance with their respective terms and provisions.

        (b)     The Borrower is, jointly or severally, the legal,
record and beneficial owner of, and has good title to, the Collateral
being, or purported to be, pledged by the Borrower.  The Bank has
legal, valid, binding, enforceable and perfected security interests in
and to the Collateral pursuant to this Agreement and the other Loan
Documents.  Except as otherwise disclosed in writing to and approved
(in its sole discretion) by the Bank:  (i) no part of the Collateral is
subject to any security interest, filed financing statement, mortgage,
or other lien or encumbrance or any adverse claim of any kind
whatsoever (including, without limitation, any defense, counterclaim,
setoff, right of recoupment, abatement, or community property right),
except those in favor of the Bank; and (ii) no part of the Collateral
was purchased or is being carried directly or indirectly, in whole or
in part, with the proceeds of any indebtedness or other credit other
than the Loans (except for indebtedness wholly refinanced with the
Loans or wholly repaid prior to the pledge of the relevant Collateral). 
Each of the Pledged Deposits is owned beneficially and of record solely
by the Borrower, is assignable (with the approvals contained in the
Collateral Acknowledgments), and has been duly assigned and transferred
as collateral to the Bank.  Each of the Pledged Deposits was duly
authorized and validly issued, is fully paid and non-assessable, and
was acquired from the issuer in a transaction in compliance with and
either registered or exempt from registration under the Securities Act
(as hereinafter defined) and other applicable laws.  Except as
otherwise contained in the Organizational Documents or Custody
Documents and waived in the Collateral Acknowledgments, none of those
Pledged Deposits (i) is subject to any warrant, option, put, call or
other right to acquire, redeem, sell, transfer or encumber it, (ii) is
governed by or otherwise subject to any shareholders agreement, voting
trust or similar agreement or arrangement, or (iii) is limited or
otherwise restricted in any way respecting assignability, transferabil-
ity or any voting, dividend, distribution or other ownership right
(whether or not reflected in any of the Organizational Documents).

        Section 6.    Certain Covenants of the Borrower.  The Borrower
covenants and agrees that, from the date hereof and until the
Obligations have been fully paid and satisfied, unless the Bank (in its
sole discretion) shall consent otherwise in writing:

        (a)     The Borrower shall give, or cause to be given,
immediate written notice to the Bank of: (i) any change in the name,
domicile, primary residence, employer or chief executive office of the
Borrower, as applicable, or, to the best knowledge of the Borrower, the
name or chief executive office of any issuer or holder of any
Collateral; (ii) the institution or threat of, or any adverse
determination or change in, any action, suit, investigation or
proceeding (whether or not purportedly on behalf of the Borrower or any
issuer or holder of any Collateral) at law, in equity, in arbitration
or by or before any other authority involving or affecting (A) the
Borrower or, to the best knowledge of the Borrower, any issuer or
holder of any Collateral that, if adversely determined, would be
reasonably likely to have a Material Adverse Effect (individually or in
the aggregate with other events), (B) any alleged criminal act or
activity (other than a traffic misdemeanor or lesser traffic violation)
on the part of the Borrower, (c) any part of the Collateral or
Obligations, or (D) any of the transactions contemplated in this
Agreement and the other Loan Documents; (iii) any change in location or
any loss of or other material and adverse change in the Collateral;
(iv) any act or event known to the Borrower that in any material
respect violates, is in conflict with, results in a breach of or
constitutes a default (with or without the giving of notice or the
passage of time or both) under any term or provision of any of the
Organizational Documents, Custody Documents or Collateral
Acknowledgments; (v) any material change known to the Borrower in the
trading policies, trading strategies, business, management or control
of any investment company, fund or adviser respecting any of the
Collateral; (vi) any attachment, confiscation, detention, levy,
requisition, seizure or other taking of any part of the Collateral,
whether through process of law or otherwise, or any filing or other
imposition of any financing statement or other lien or encumbrance
against any part of the Collateral; (vii) any Event of Default ;  or
(viii) any other event if such event would be reasonably likely to have
or has had any material and adverse effect, individually or in the
aggregate, upon (1) the assets, business, employment, properties or
financial condition of the Borrower, (2) the ability of the Borrower to
make payment as and when due of all or any part of the Borrower's
obligations under this Agreement or any other Loan Document, or (3) any
of the Collateral or its value or the validity, enforceability,
perfection or priority of any security interest of the Bank therein (a
"Material Adverse Effect").

        (b)     The Borrower shall provide to the Bank such financial
statements, accounts, reports, certificates, tax returns, statements,
documents and other information as the Bank from time to time may
request, each in such form and substance as may be acceptable to the
Bank.  From time to time upon the request of  the Bank, the Borrower
(upon receipt) will furnish copies to the Bank, and will direct such
other persons (including the issuers and prepares) as the Bank may
request to furnish copies directly to the Bank, of any and all
financial statements, account statements, notices and other reports and
information pertaining to the Collateral as the Bank may request.  At
all reasonable times and as often as the Bank reasonably may request,
the Borrower shall permit representatives designated by the Bank to (A)
have complete and unrestricted access to the premises of the Borrower
and the books and records of the Borrower pertaining to the Collateral,
(B) make copies of, or excerpts from, those books and records and (c)
discuss the Collateral or the accounts, assets, business, operations,
properties or condition, financial or otherwise, of the Borrower with
the Borrower's accountants and other representatives.

        (c)     The Borrower shall not directly or indirectly (other
than pursuant to this Agreement):  (i) make, create, incur, assume or
permit to exist any assignment, pledge, mortgage, security interest or
other lien or encumbrance of any nature in, to or against any part of
the Collateral; (ii) assign, pledge or in any way transfer or encumber
the Borrower's right to receive any income or other distribution or
proceeds from any part of the Collateral; (iii) sell, lease, sublease,
transfer, exchange, abandon or otherwise dispose of, surrender physical
possession or control of, physically alter or relocate all or any
portion of the Collateral, other than as may be otherwise provided in
any Custody Agreement with respect to the Pledged Deposits covered
thereby; (iv) cause, suffer or permit any supplement, modification or
amendment to, or any waiver of any term or provisions of, any stock
certificate, instrument, contract or other intangible included in the
Collateral; (v) enter into any shareholders' agreement, voting trust or
similar agreement or arrangement or any other restriction or limitation
in any way respecting assignability, transferability or any voting,
dividend, distribution or other ownership right with respect to any of
the Collateral; (vi) covenant or agree to a "negative pledge"
respecting the Collateral with any other person (i.e., that the
Borrower will not do any one or more of the foregoing); or (vii) offer
or agree to do or cause or assist the inception or continuation of any
of the foregoing.

        (d)     If at any time for any reason (i) the value of any
Collateral is insufficient to satisfy any minimum value or maximum
advance rate (however expressed) established by the Bank in making or
continuing any Letters of Credit or Loan(s) respecting any Collateral
(whether established by item, class or type or otherwise), (ii) the
value of any Collateral declines in any material respect, (iii) the
aggregate value of all Collateral declines to less than the amount
necessary to support the Letters of Credit, Loans and other Obliga-
tions, or (iv) the validity, enforceability, perfection or priority of
any security interest of the Bank in any Collateral is invalidated,
lapses, is challenged or repudiated or is otherwise lost or impaired
(in each case whether through any change in value, any loss,
destruction, termination, foreclosure or other impairment,
deterioration or diminution, any new or newly discovered security
interests or other encumbrances or adverse claims, or otherwise), which
events and resulting effects and amounts may be determined at any time
and from time to time by the Bank (in its sole discretion), then
promptly, but in any event within three business days, after notice
from the Bank, the Borrower shall repay or prepay the Letters of
Credit, Loans and other Obligations or deliver additional Collateral to
the Bank in such amount(s) as may have been requested by the Bank in
such notice in order to correct or compensate for any such decline or
deficiency in value or loss or impairment of security interest.  For
the purposes of this subsection, the Bank (in its sole discretion) may
include as Collateral any and all security interests granted to the
Bank to secure any of the Letters of Credit, Loans or other Obligations
or any guaranty thereof by any person(s) other than the Borrower.

        Section 7.    Performance and Protection of Collateral by the
Bank.  In the event the Borrower fails to pay or otherwise perform or
satisfy any of the Borrower's obligations to others or under or in
respect of any of the Collateral, the Bank shall have the right in its
sole and absolute discretion (but shall be under no duty or obligation)
to make any such payment or cause the performance or satisfaction of
any other such obligation, including (without limitation) the payment
of any tax, claim or insurance premium, the maintenance or defense of
any part of the Collateral or the purchase or discharge of any lien on
any part of the Collateral.  The Bank will endeavor to give the
Borrower prior notice (which may be by telephone or telecopy) of any
such payment or action; provided, however, that the failure to give
such notice shall not affect the validity of the payment or action or
the Borrower's reimbursement obligations with respect thereto.  The
Borrower shall pay or reimburse on demand any and all amounts advanced
or expenses incurred by the Bank or its designee under this subsection,
which shall constitute additional Loans under (and secured by) this
Agreement and shall bear interest at the rate applicable to the Loans. 
No payment made or action taken by the Bank or its designee shall be
deemed or construed to be a waiver, cure or satisfaction of the
underlying default, which default shall be deemed to be continuing
until such time (if ever) as the Borrower has, prior to the Maturity
Date, (i) resumed the payment, performance and satisfaction required by
this Agreement and the other Loan Documents and (ii) repaid all Loans
advanced for such payments and actions, together with interest thereon,
and paid all others to whom the Bank has requested direct payment
respecting such payments and actions.

        Section 8.    Power of Attorney to the Bank.  With respect to
the various assets and properties included or required to be included
in the Collateral hereunder, the Borrower hereby irrevocably makes,
constitutes and appoints the Bank and the Bank's executive officers
(Vice President or above), and each of them, with full power of
substitution, as such Borrower's true and lawful attorney-in-fact, with
full power and authority from time to time in such Borrower's name,
place and stead to:  (a) take possession of and execute or endorse (to
the Bank or otherwise) any one or more contracts, pledges, assignments
and other documents, and any one or more Note, checks, or other
instruments received in payment for or on account of those assets and
properties; (b) demand, collect and receive any monies due on account
of those assets and properties and give receipts and acquittances in
connection therewith; (c) negotiate and compromise any claim, and
commence, prosecute, defend, settle or withdraw any claims, suits or
proceedings, pertaining to or arising out of those assets and
properties; and (d) sign, execute, acknowledge, swear to, verify,
deliver, file, record and publish any one or more of the foregoing;
provided, however, that the above-named attorneys-in-fact may exercise
the powers set forth in this Section only during the continuance of an
Event of Default, whether or not any notice is given under Section 9
hereof or any reference to this Power of Attorney is made in that
notice, and without regard to whether the Bank has taken any other
action under this Agreement or any other Loan Document.  This Power of
Attorney is hereby declared to be irrevocable, with full power of
substitution and coupled with an interest.  This Power of Attorney
shall survive the dissolution, reorganization or bankruptcy of the
Borrower and shall extend to and be binding upon the Borrower's
successors, assigns, heirs and legal representatives.  A facsimile
signature shall be effective if so affixed.  The Bank shall  be liable
for any failure to collect or enforce the payment of any of those
assets and properties.

        Section 9.    Rights of the Bank to the Collateral.  Upon the
occurrence and during the continuance of any Event of Default, the Bank
may take (and/or may cause one or more of its designees to take) any or
all of the following actions, all without notice to the Borrower or any
other person except as may otherwise be required by applicable law,
with a single notice (if required or otherwise given) being sufficient
to entitle the Bank from time to time thereafter to take any one or
more of the actions described below:  (a) prohibit the Borrower from
taking any action otherwise permitted by this Agreement and the other
Loan Documents; (b) notify each of the obligors, lessees, issuers,
custodians and other parties with respect to or interested in any item
of the Collateral of the interest of the Bank therein or of any action
proposed to be taken with respect thereto, and direct one or more of
those parties to make all payments, distributions and proceeds
otherwise payable to the Borrower with respect thereto directly to the
Bank or its order until notified by the Bank that all of the Obli-
gations have been fully paid and satisfied;  (c) receive and retain all
payments, distributions and proceeds of any kind with respect to any
and all of the Collateral;  (d) take any action with respect to the
offer, sale, lease or other disposition, and delivery of the whole of,
or from time to time any one or more items of, the Collateral,
including, without limitation, (i) to sell, assign, lease or otherwise
dispose of the whole of, or from time to time any part of, the
Collateral, or offer or agree to do so, in any established market or at
any broker's board, private sale or public auction or sale (with or
without demand on the Borrower or any advertisement or other notice of
the time, place or terms of sale) for cash, credit or any other asset
or property, for immediate or future delivery, and for such
consideration and upon such terms and subject to such conditions as the
Bank in its sole and absolute discretion may determine, and the Bank
may purchase (the consideration for which may consist in whole or in
part of cancellation of indebtedness) or any other person may purchase
the whole or any one or more items of the Collateral, and all items
purchased shall be free and clear of any and all rights, powers,
privileges, remedies and interests of the Borrower (whether individual,
joint, several or otherwise), which the Borrower has expressly waived
pursuant to Section 11 hereof, (ii) to postpone or adjourn any such
auction, sale or other disposition or cause the same to be postponed or
adjourned from time to time to a subsequent time and place, or to
abandon or cause the abandonment of the same, all without any
advertisement or other notice thereof, and  (iii) to carry out any
agreement to sell any item or items of the Collateral in accordance
with the terms and provisions of such agreement, notwithstanding that,
after the Bank shall have entered into such an agreement, all of the
Obligations may have been paid and satisfied in full;  (e) exercise any
voting, consent, enforcement or other right, power, privilege, remedy
or interest of the Borrower pertaining to any item of Collateral to the
same extent as if the Bank were the outright owner thereof, including
(without limitation) any right that a record or beneficial owner of any
Collateral may have, provided that the Bank shall not be entitled to
exercise any of the voting rights of the Borrower pertaining to any
equity interest in any affiliate of the Borrower unless and until the
Bank has given specific written notice to the Borrower, apart from the
notice first referred to in this subsection, of the Bank's election to
exercise one or more, or all, such voting rights;  (f) take possession
of and thereafter deal with or use from time to time all or any part of
the Collateral in all respects as if the Bank were the outright owner
thereof;  (g) transfer or cause the transfer of the ownership of all or
any part of the Collateral to its own name and have such transfer
recorded in any jurisdiction(s) and publicized in any manner deemed
appropriate by the Bank; and  (h) in addition to, and not by way of
limitation of, any of the rights specified above, exercise or enforce
any and all rights, powers, privileges, remedies and interests afforded
to the Bank under this Agreement, any relevant Collateral
Acknowledgment, the other Loan Documents and any and all provisions of
applicable law (including, without limitation, the Uniform Commercial
Code), whether as a secured party or mortgagee in possession of
collateral or otherwise.

        Section 10.   Application of Proceeds, Etc.  The Bank shall
collect the cash proceeds received from any sale or other disposition
or from any other source contemplated by Section 9 hereof, and, after
deducting all costs and expenses incurred by the Bank and any person
designated by the Bank to take any of the actions enumerated in Section
9 hereof in connection with such collection and sale or disposition
(including attorneys' disbursements, expenses and fees), the Bank in
its discretion may retain the same as additional or substitute
Collateral or may apply the same to the Obligations in accordance with
the terms and provisions of the Note, this Agreement and the other Loan
Documents.  In the event any funds remain after satisfaction in full of
all such obligations, then the remainder shall be returned to the
Borrower, subject, however, to any other rights or interests the Bank
may have therein under any other instrument, agreement or document or
applicable law.  If the amount of all proceeds received with respect to
and in liquidation of the Collateral that shall be applied to payment
of the Obligations shall be insufficient to pay and satisfy all of the
Obligations in full, the Borrower acknowledges and agrees that the
Borrower shall remain and be liable for any deficiency.

        Section 11.   Certain Acknowledgments and Waivers of the
Borrower.  The Borrower acknowledges and agrees that the rights,
powers, privileges, remedies and interests granted to or conferred upon
the Bank in respect of the Collateral by this Agreement, the other Loan
Documents and applicable law are purely discretionary and shall not,
and shall not be deemed or construed to, impose upon the Bank any duty
or other obligation  (a) to sell, foreclose or otherwise realize upon
any Collateral,  (b) to protect or preserve any of the Collateral, (c)
to perform or satisfy any obligation under or respecting any of the
Collateral or the Borrower,  (d) to mitigate or otherwise reduce any
damage or other loss, or  (e) to otherwise exercise or enforce any such
right, power, privilege, remedy or interest.  Any sale, foreclosure or
other realization upon the Collateral, or any other exercise or
enforcement of any such right, power, privilege, remedy or interest, if
undertaken by the Bank in its discretion, may be delayed, discontinued
or otherwise not pursued or exhausted for any reason whatsoever
(whether intentionally or otherwise).  Without limiting the generality
of the foregoing, to the extent waiver is not limited under applicable
law, the Borrower hereby expressly waives each and every claim or
defense, and agrees that the Borrower will not assert or pursue (by
action, suit, counterclaim or otherwise) any claim or defense,
respecting  (i) any settlement or compromise with any obligor or other
third party under any account receivable, note, instrument, agreement,
document or general intangible included in the Collateral, irrespective
of any reduction in the potential proceeds therefrom,  (ii) the
selection or order of disposition of the Collateral (which may be at
random or in any order(s) the Bank may select in its sole and absolute
discretion),  (iii) the private sale of any Collateral, whether or not
any public market exists, or the sale or other disposition of any
Collateral pursuant to the relevant Collateral Acknowledgment,  (iv)
the choice or timing of any sale date (which the Bank may select in its
sole and absolute discretion), irrespective of whether greater sale
proceeds would be realizable on a different sale date,  (v) the
adequacy of the sale price of any Collateral,  (vi) any insufficiency
of the proceeds to fully satisfy the Obligations,  (vii) any sale of
Collateral to the first person to receive an offer or make a bid, 
(viii) the selection of any purchaser of any Collateral, or  (ix) any
default by any purchaser of any Collateral.  The Borrower hereby
expressly waives the applicability of any and all applicable laws that
are or may be in conflict with the terms and provisions of this
Agreement and the other Loan Documents now or at any time in the future
to the extent waiver is not limited under applicable law, including
(without limitation) those pertaining to notice (other than notices
required by this Agreement or any other Loan Document), appraisal,
valuation, stay, extension, moratorium, marshaling of assets, exemption
and equity of redemption; provided, however, that the preceding
provision is not intended to confer upon the Bank any right, power,
privilege, remedy or interest not permissible under applicable law
notwithstanding the foregoing waivers.  Neither the Bank nor any of its
representatives shall incur any liability in connection with any sale
of or other action taken respecting any Collateral in accordance with
the provisions of this Agreement, the Collateral Acknowledgments, any
other Loan Document or applicable law.

        Section 12.   Further Assurances; Termination.  The Borrower
agrees to do such further acts and things and to execute and deliver
such statements, assignments, agreements, instruments and other
documents as the  from time to time reasonably may request in
connection with the administration, maintenance, enforcement or
adjudication of this Agreement and the other Loan Documents in order
(a) to evidence, confirm, perfect or protect any lien or security
interest granted or required to have been granted under this Agreement
and the other Loan Documents, (b) to give the Bank or its designee
confirmation and assurance of the Bank's rights, powers, privileges,
remedies and interests under this Agreement, the other Loan Documents
and applicable law, (c) to better enable the Bank to exercise any such
right, power, privilege or remedy, or (d) to otherwise effectuate the
purpose and the terms and provisions of this Agreement and the other
Loan Documents, each in such form and substance as may be acceptable to
the Bank.  Upon full payment and satisfaction of the Obligations:  the
Bank shall reassign, release and/or deliver to the Borrower all Collat-
eral then held by or at the direction of the Bank; and, if requested by
the Borrower, the Bank shall execute and deliver to the Borrower for
filing in each office in which any financing statement, mortgage, or
lease, or assignment thereof, relating to the Collateral, or any part
thereof, shall have been filed, a termination statement under the
Uniform Commercial Code or an appropriate satisfaction, release,
reconveyance or reassignment releasing the Bank's interest therein, and
any other instrument or document that the Borrower deems reasonably
necessary to evidence the termination of the Bank's security interest,
each in such form and substance as may be acceptable to the Bank.  Any
and all actions under this Section shall be without any recourse to or
representation or warranty by the Bank and shall be at the sole cost
and expense of the Borrower.

        Section 13.   Survival of Representations.  Each of the
representations, warranties, covenants and other obligations and
agreements of the Borrower contained in this Agreement and the other
Loan Documents:  (a) shall be absolute and unconditional; (b) shall
survive the execution and delivery of this Agreement and the other Loan
Documents, and any and all advances, repayments and readvances there-
under; (c) shall remain and continue in full force and effect without
regard (i) to any waiver, modification, extension, renewal,
consolidation, spreading, amendment or restatement of any other term or
provision of any Loan Document, (ii) to any full, partial or
non-exercise of any of the  rights, powers, privileges, remedies and
interests of the Bank under any Loan Document or applicable law,
against any person or with respect to any collateral, which exercise or
enforcement may be delayed, discontinued or otherwise not pursued or
exhausted for any or no reason whatsoever, or which may be waived,
omitted or otherwise not exercised or enforced (whether intentionally
or otherwise), (iii) to any surrender, repossession, sequestration,
foreclosure, conveyance or assignment (by deed in lieu or otherwise),
sale, lease or other realization, dealing or disposition respecting any
collateral, (iv) to any release, subordination or impairment of all or
any part of any obligations or collateral or any security interest
therein (whether intentionally or otherwise), (v) to any extension,
stay, moratorium or statute of limitations or similar time constraint
under any applicable law, (vi) to any investigation, analysis or
evaluation by the Bank or its designees of the assets, business,
operations, properties or condition (financial or otherwise) of the
Borrower, any co-obligor or Surety or any other person, (vii) to any
act or omission on the part of  the Bank, any co-obligor or Surety or
any other person, or (viii) to any other event that otherwise might
constitute a legal or equitable counterclaim, defense or discharge of a
borrower, surety or pledgor; (d) shall not be subject to any defense,
counterclaim, setoff, right of recoupment, abatement, reduction or
other claim or determination that the Borrower may have against the
Bank, any co-obligor or Surety or any other person; (e) shall not be
diminished or qualified by the death, disability, dissolution,
reorganization, insolvency, bankruptcy, custodianship or receivership
of the Borrower, any co-obligor or Surety or any other person, or the
inability of any of them to pay its debts or perform or otherwise
satisfy its obligations as they become due for any reason whatsoever;
and (f) shall remain and continue in full force and effect (i) until
all of the Obligations have been fully paid and satisfied and (ii)
thereafter with respect to events occurring prior to such payment and
satisfaction.

        Section 14.    Enforcement.  The Bank, in its sole discretion,
may proceed to exercise or enforce any right, power, privilege, remedy
or interest that the Bank may have under this Agreement, any other Loan
Document or applicable law:  (a) at law, in equity, in rem or in any
other forum available under applicable law; (b) without notice except
as otherwise expressly provided herein; (c) without pursuing,
exhausting or otherwise exercising or enforcing any other right, power,
privilege, remedy or interest that the Bank may have against or in
respect of the Borrower, any Surety or any other person or thing; and
(d) without regard to any act or omission of the Bank or any other
person.  The Bank may institute one or more proceedings (which may be
separate proceedings) with respect to this Agreement and each of the
other Loan Documents in such order and at such times as the Bank may
elect in its sole and absolute discretion.  This Agreement and the
other Loan Documents may be enforced: (i) without  possession of the
Note or its production in any action, suit or proceeding; and (ii) 
without the presence or participation of any co-obligor (joint or
several) or Surety, whether through lack of jurisdiction, venue or
service or otherwise; and the Borrower will not raise and hereby waives
any objection or defense respecting the need for any such production,
presence or participation.

        Section 15.   Consent to Jurisdiction, Etc.  The Borrower
hereby consents and agrees that the Supreme Court of the State of New
York for the County of New York and the United States District Court
for the Southern District of New York each shall have personal
jurisdiction and proper venue with respect to any dispute between the
Bank and the Borrower; provided that the foregoing consent shall not
deprive the Bank of the right in its discretion to voluntarily commence
or participate in any action, suit or proceeding in any other court
having jurisdiction and venue over the Borrower.  In any dispute with
the Bank, the Borrower will not raise, and hereby expressly waives, any
objection or defense to any such jurisdiction as an inconvenient forum. 
The Borrower hereby waives personal service of any summons, complaint
or other process, which may be delivered by any of the means permitted
for notices under this Agreement or any other Loan Document.

        Section 16.   Waiver of Jury Trial.  In any action, suit or
proceeding in any jurisdiction brought by the Bank against the
Borrower, or vice versa, the Borrower waives trial by jury.

        Section 17.   Waiver of Setoff, Etc.  The Borrower hereby
waives, and agrees that it will not exercise, any and all rights of
extension, stay, moratorium, setoff, counterclaim, recoupment,
abatement or reduction or other claim or determination respecting any
payment due under this Agreement or any other Loan Document that may
now or hereafter be accorded to the Borrower under applicable law or
otherwise.  To the extent not required as a compulsory counterclaim,
the Borrower (a) shall pursue separate exercise and enforcement of any
right, power, privilege, remedy or interest retained (and not waived)
by the Borrower under this Agreement, the other Loan Documents and
applicable law, and (b) shall not seek to exercise or enforce any such
right, power, privilege, remedy or interest in any proceeding
instituted by the Bank under or in respect of this Agreement or any
other Loan Document, whether through joinder, consolidation, setoff,
recoupment, abatement, reduction, counterclaim, defense or otherwise. 
In any dispute with the Bank, the Borrower covenants and agrees that it
will not seek, recover or retain any, and the Borrower hereby expressly
waives any and all, special, exemplary, punitive and/or consequential
damages (whether through action, suit, counterclaim or otherwise) to
the extent waiver is not limited under applicable law.

        Section 18.   Relationship of the Borrower and the Bank, Etc. 
The Borrower represents, warrants, acknowledges and agrees that:  (a)
the Bank is acting solely in the capacity of lender respecting this
Agreement, the other Loan Documents, and the Collateral; (b) the
Borrower's sole relationship with the Bank is that of debtor and
creditor, respectively, and no term or provision of this Agreement or
any other Loan Document is intended to create, nor shall any such term
or provision be deemed or construed to have created, any joint venture,
partnership, trust, agency or other fiduciary or advisory relationship
with the Borrower; and (c) the Borrower has independently and fully
reviewed and evaluated the Loan Documents, the transactions
contemplated thereunder and the potential effects of such transactions
on the assets, business, operations, properties and condition
(financial or otherwise) of each of the Borrower and its subsidiaries
and affiliates (if any), which review and evaluation was made (i)
together with counsel and (to the extent deemed prudent by the
Borrower) financial and other advisors to the Borrower, and (ii)
without any reliance upon any oral or written advice, analysis or
assurance of any kind whatsoever from the Bank.

        Section 19.   Exculpation and Indemnification. The Bank and
its  respective participants, affiliates, custodians and designees, and
their respective directors, officers, employees, attorneys and agents
(together with the Bank, an "indemnitee"), shall not incur any
liability for any acts or omissions (and the Borrower hereby expressly
waives any and all related claims and actions against each indemnitee),
and each indemnitee shall be indemnified, reimbursed and held harmless
by the Borrower on demand, and (at the request of the Bank) defended at
the expense of the Borrower with counsel selected by the Bank, from and
against any and all claims, liabilities, losses and expenses (includ-
ing, without limitation, the disbursements, expenses and fees of their
respective attorneys) that may be imposed upon, incurred by, or
asserted against any indemnitee, in each case arising out of or related
directly or indirectly to this Agreement, any other Loan Document, any
of the Collateral, any of the Loans or the application of any proceeds
thereof, or any environmental claim, except to the extent occasioned by
the indemnitee's own acts or omissions breaching a duty owed to the
Borrower and amounting to gross negligence or willful misconduct as
finally determined pursuant to applicable law by a governmental
authority having jurisdiction. The preceding general exculpation and
indemnification is not intended (and shall not be deemed or construed)
to in any way qualify, condition, diminish, restrict, limit or
otherwise affect any (and is in addition to each) other release,
waiver, consent, acknowledgment, agreement or other term or provision
of this Agreement or any other Loan Document.

        Section 20.   Notices.  Except as otherwise expressly
provided, any notice, request, demand or other communication permitted
or required to be given under this Agreement or any other Loan Document
shall be in writing, shall be sent by one of the following means to the
addressee at the address set forth above or below (or at such other
address as shall be designated hereunder by notice to the other parties
and persons receiving copies, effective upon actual receipt) and shall
be deemed conclusively to have been given:  (a) on the first Business
Day following the day timely deposited with Federal Express (or other
equivalent national overnight courier) or United States Express Mail,
with the cost of delivery prepaid or for the account of the sender; (b)
on the fifth Business Day following the day duly sent by certified or
registered United States mail, postage prepaid and return receipt
requested; or (c) when otherwise actually received by the addressee on
a Business Day (or on the next Business Day if received after the close
of normal business hours or on any non-Business Day), including
(without limitation) any telecopy.  Notices also may be given by tele-
phone to the extent and for the purposes provided in this Agreement or
any other Loan Document.  The Borrower acknowledges and agrees that the
Bank may record any and all telephone calls with the Borrower and its
representatives without any further or specific notice of such
recording.

        Section 21.   Bank's Right of Set Off, Etc.  Upon the
occurrence and during the continuance of any Event of Default, the Bank
hereby is authorized at any time and from time to time, without notice
to the Borrower (any such notice being hereby expressly waived by the
Borrower), to set off and apply, directly or through any of its
affiliates, custodians, participants and designees, any and all
deposits (whether general or special, time or demand, provisional or
final, or individual or joint) and other assets and properties at any
time held in the possession, custody or control of the Bank and any of
its affiliates, custodians, participants and designees (including,
without limitation, any items held in any investment management or
custody account), and any indebtedness or other amount or obligation at
any time owing by the Bank or any of its affiliates or participants, to
or for the credit, account or benefit of the Borrower against any and
all of the Obligations now or hereafter existing under this Agreement
or the other Loan Documents, whether or not the Bank shall have
declared a default, accelerated the obligations or made any demand or
taken any other action under this Agreement or any other Loan Document,
and although such obligations may be contingent or unmatured. Without
limiting the foregoing, the Borrower hereby grants to the Bank a
continuing security interest in and to all such deposits, assets,
properties and indebtedness in the possession of the Bank and its
affiliates, custodians, participants and designees; and the Borrower
hereby authorizes each such person to so set off and apply such amounts
at such times and in such manner as the Bank may direct pursuant to
this Section, in each case to the fullest extent possible as if the
person making the Set off were a direct creditor of the Borrower in the
full amount of the Obligations.  The debiting Bank shall notify the
Borrower after any such Set off and application; provided, however,
that the failure to give such notice shall not affect the validity of
such Set off and application.  In debiting any such account, the
Obligations shall be deemed to have been paid or repaid only to the
extent of the funds actually available in that account notwithstanding
any internal procedure of the debiting Bank or any of its affiliates,
custodians, participants and designees to the contrary.  The rights of 
the Bank under this Section are in addition to and without limitation
of any other rights, powers, privileges, remedies and other interests
(including, without limitation, other rights of set off and security
interests) that the Bank may have under this Agreement, the other Loan
Documents and applicable law.

        Section 22.   Expenses, Etc.  The Borrower shall pay or
reimburse on demand any and all costs and expenses incurred by the
Bank, whether directly or indirectly, in connection with the
preparation, execution and delivery of this Agreement and the other
Loan Documents, all waivers, releases, satisfactions, modifications,
amendments and consents, all payments made and actions taken in the
name of or on behalf of the Borrower or any Surety, and the
administration, maintenance, enforcement and adjudication of this
Agreement, any other Loan Document and the rights, powers, privileges
and other interests of the Bank under this Agreement, the other Loan
Documents and applicable law, including (without limitation) the
disbursements, expenses and fees of all counsel to the Bank (including
allocated costs of in-house counsel).

        Section 23.   Severability.  In the event that any term or
provision of this Agreement or any other Loan Document shall be finally
determined to be superseded, invalid, illegal or otherwise
unenforceable pursuant to applicable law by a governmental authority
having jurisdiction and venue, that determination shall not impair or
otherwise affect the validity, legality or enforceability (a) by or
before that authority of the remaining terms and provisions of this
Agreement and the other Loan Documents, which shall be enforced as if
the unenforceable term or provision were deleted, or (b) by or before
any other authority of any of the terms and provisions of this
Agreement and the other Loan Documents.

        Section 24.   No Waiver by Action, Cumulative Rights, Etc. 
Any waiver or consent respecting this Agreement or any other Loan
Document shall be effective only if in writing and signed by the Bank
and then only in the specific instance and for the specific purpose for
which given.  No waiver or consent shall be deemed (regardless of
frequency given) to be a further or continuing waiver or consent.  The
failure or delay of the Bank to require performance of, or to exercise
their rights with respect to, any term or provision of this Agreement
or any other Loan Document in no manner shall affect its right at a
later time to enforce any such term or provision.  No notice to or
demand on the Borrower or any Surety in any case shall entitle such
party to an or further notice or demand.  All rights, powers,
privileges, remedies and other interests of  the Bank under this y
otherAgreement, the other Loan Documents and applicable law are
cumulative and not alternatives.

        Section 25.   Successors and Assigns, Assignment and Intended
Beneficiaries.  Whenever in this Agreement or any other Loan Document
reference is made to any party, such reference shall be deemed to
include the successors, assigns, heirs and legal representatives of
such party, and, without limiting the generality of the foregoing, all
representations, warranties, covenants and other agreements made by or
on behalf of the Borrower in this Agreement and the other Loan
Documents shall inure to the benefit of the participants and other
successors and assigns of  the Bank; provided, however, that nothing
herein shall be deemed to authorize or permit the Borrower to assign
any of its rights or obligations under this Agreement or any other Loan
Document to any other person (whether or not an affiliate of the
Borrower), and the Borrower covenants and agrees that it shall not make
any such assignment.  The Bank from time to time may assign to one or
more banks or other persons all or any portion(s) of its rights and
interests and/or obligations under this Agreement and the other Loan
Documents, including (without limitation) the assignment to any Federal
Reserve Bank (as collateral or otherwise) of all or any portion(s) of
its rights to payments of principal and/or interest under the
Agreement(s), and may take any and all reasonable actions necessary or
appropriate in connection with any such assignment, all without notice
to or consent of the Borrower or any other person.  The Bank from time
to time also may sell to one or more financial institutions or
institutional investors a participation interest in all or any
undivided portion of its rights, powers, privileges, remedies and
interests under this Agreement and the other Loan Documents.  The Bank
from time to time may furnish and disclose financial statements,
documents and other information pertaining to the Borrower to any
potential assignee or participant.  The representations, warranties and
other terms and provisions of this Agreement and the other Loan
Documents are for the exclusive benefit of the parties hereto, and,
except as otherwise expressly provided herein, no other person,
including creditors of any party hereto, shall have any right or claim
against any party by reason of any of those terms and provisions or be
entitled to enforce any of those terms and provisions against any
party.

        Section 26.   Counterparts, Governing Law, Amendments, Etc. 
This Agreement shall be effective on the date (the "Effective Date") as
of which this Agreement shall be executed by all the parties hereto and
delivered to the Bank.  This Agreement or any other Loan Document may
be executed in two or more counterpart copies of the entire document or
of signature pages to the document, each of which may be executed by
one or more of the parties hereto, but all of which, when taken
together, shall constitute a single agreement binding upon all of the
parties hereto or thereto, as applicable. This Agreement and the other
Loan Documents have been executed and delivered, and shall be governed
by and construed in accordance with the applicable laws pertaining, in
the State of New York (other than those that would defer to the
substantive laws of another jurisdiction).  The section headings
contained in this Agreement and the other Loan Documents are for
reference purposes only and shall not affect the meaning or
interpretation of this Agreement or any other Loan Document. Except as
otherwise provided in this Agreement or any other Loan Document with
respect hereto or thereto, respectively, each and every modification
and amendment of this Agreement or any other Loan Document shall be in
writing and signed by all of the parties hereto or thereto, as
applicable, and each and every waiver of, or consent to any departure
from, any representation, warranty, covenant or other term or provision
of this Agreement or any other Loan Document shall be in writing and
signed by each affected party hereto or thereto, as applicable.  This
Agreement and the other Loan Documents contain the entire agreement of
the parties and supersede all other representations, warranties,
agreements and understandings, oral or otherwise, among the parties
with respect to the matters contained herein and therein.


        In Witness Whereof, the parties hereto have executed and
delivered this Agreement as of the date first written above.

American Bank Note Company

By:s/Ward A.S. Urban, Vice President and Treasurer

                                     

ADDRESS FOR NOTICES AND SERVICE:
51 West 52nd Street, 14th Floor
New York, New York 10019

Citibank, N.A.

By:s/William G. Marten III, Managing Director
                                     

ADDRESS FOR NOTICES AND SERVICE:
399 Park Avenue
New York, New York 10043