Document:

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                                                                   EXHIBIT 10.26

                      AMENDED AND RESTATED PLEDGE AGREEMENT

      THIS AMENDED AND RESTATED PLEDGE AGREEMENT, dated as of June 27, 2002 (as
modified from time to time, this "PLEDGE AGREEMENT") made by The Aristotle
Corporation, a Delaware corporation (the "PLEDGOR"), in favor of BANK OF AMERICA
N.A. (together with any successor(s) thereto in such capacity, the "AGENT") for
the various financial institutions (individually a "LENDER" and collectively the
"LENDERS") which are or may from time to time become, parties to the Credit
Agreements referred below.

                              W I T N E S S E T H:

      WHEREAS, the parties or their predecessors have entered into that certain
First Amendment to Amended and Restated Credit Agreement (Five Year) and
Consent, dated as of June 17, 2002 which amends the Amended and Restated Credit
Agreement (Five Year), dated as of May 29, 2001 (as amended, supplemented and
otherwise modified, the "CREDIT AGREEMENT (FIVE YEAR)"), among Nasco
International, Inc., a Wisconsin corporation (the "PARENT"), the lenders parties
thereto and the Agent; and

      WHEREAS, the parties or their predecessors have entered into that certain
Second Amendment to Amended and Restated Credit Agreement (364 Days) and
Consent, dated as of June 17, 2002 which amends the Amended and Restated Credit
Agreement (364 Days), dated as of May 29, 2001 (as amended, supplemented and
otherwise modified, the "CREDIT AGREEMENT (364 DAYS)" and together with the
Credit Agreement (Five Year), the "CREDIT AGREEMENTS"), among the Parent, the
lenders party thereto and the Agent; and

      WHEREAS, the Parent and the Agent have entered into that certain Pledge
Agreement, dated as of March 31, 2000 (the "EXISTING PLEDGE AGREEMENT"), and the
parties hereto wish to amend and restate such Existing Pledge Agreement as set
forth in this Pledge Agreement; and

      Whereas, the Parent has merged into the Pledgor; and

      WHEREAS, it is a condition precedent to the extensions of credit under the
Credit Agreements that the Pledgor enter into this Pledge Agreement to, among
other things, grant to the Agent a continuing security interest in the
Collateral;

      NOW, THEREFORE, for good and valuable consideration the receipt of which
is hereby acknowledged, in order to induce the Lenders to make Loans (including
the initial Loans) to the Pledgor from time to time pursuant to the Credit
Agreements and in order to amend and restate the Existing Pledge Agreement, the
Pledgor hereby agrees with the Agent, for its benefit and the ratable benefit of
each Lender Party, as follows:

                                    ARTICLE I

                                   DEFINITIONS

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      SECTION 1.1. CERTAIN TERMS. The following terms (whether or not
underscored) when used in this Pledge Agreement, including its preamble and
recitals, shall have the following meanings (such definitions to be equally
applicable to the singular and plural forms thereof):

      "ADDITIONAL RIGHTS" means, with respect to the Pledgor, any membership
interest, other ownership interest, dividend or other distribution and any other
right or property which the Pledgor shall receive or shall become entitled to
receive for any reason whatsoever with respect to, in substitution for or in
exchange for any portion of the Membership Interest and any membership interest,
ownership interest or right to receive any membership interest, ownership
interest or dividend or distribution in which the Pledgor now has or hereafter
acquires any right, issued by any Pledged Membership Interest Company.

      "AGENT" is defined in the PREAMBLE.

      "COLLATERAL" is defined in SECTION 2.1.

      "COLLATERAL DOCUMENTS" means the "Collateral Documents" defined in the
Credit Agreement (5 Year) and "Collateral Documents," as defined in the Credit
Agreement (364 Days).

      "CREDIT AGREEMENT" is defined in the RECITALS.

      "DEFAULT" means "Default" as defined in the Credit Agreement (5 Year) and
"Default" as defined in the Credit Agreement (364 Days).

      "DISTRIBUTIONS" means all stock dividends, liquidating dividends, shares
of stock resulting from (or in connection with the exercise of) stock splits,
reclassifications, warrants, options, non-cash dividends, mergers,
consolidations, and all other distributions (whether similar or dissimilar to
the foregoing) on or with respect to any Pledged Shares (or other shares of
capital stock constituting Collateral) or any Pledged Membership Interests, but
shall not include Dividends.

      "DIVIDENDS" means cash dividends and cash distributions with respect to
any Pledged Shares, any Pledged Membership Interests or other Pledged Property
made in the ordinary course of business and not a liquidating dividend.

      "EVENT OF DEFAULT" means an "Event of Default" as defined in the Credit
Agreement (Five Year) and "Event of Default" as defined in the Credit Agreement
(364 Days).

      "EXISTING CREDIT AGREEMENT" is defined in the PREAMBLE.

      "EXISTING PLEDGE AGREEMENT" is defined in the PREAMBLE.

      "LENDER" is defined in the PREAMBLE.

      "LENDER PARTY" means, as the context may require, any Lender or the Agent
and each of their respective successors, transferees and assigns.

      "LENDERS" is defined in the PREAMBLE.

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      "LOAN DOCUMENTS" means "Loan Documents" as defined in the Credit Agreement
(Five Year) and "Loan Documents" as defined in the Credit Agreement (364 Days).

      "MEMBERSHIP INTERESTS" means, with respect to the Pledgor, the Pledgor's
entire membership interest in each Pledged Membership Interest Company
including, without limitation, all of the Pledgor's rights in and to all
profits, proceeds and distributions of every kind and nature whatsoever due to
the Pledgor.

      "NOTES" mean "Notes" as defined in the Credit Agreement (Five Year) and
"Notes" as defined in the Credit Agreement (364 Days).

      "OBLIGATIONS" means "Obligations" as defined in the Credit Agreement (Five
Year) and "Obligations" as defined in the Credit Agreement (364 Days).

      "PLEDGE AGREEMENT" is defined in the PREAMBLE.

      "PLEDGED MEMBERSHIP INTEREST COMPANY" means each Person identified in ITEM
A of ATTACHMENT 1 hereto as the issuer of the Pledged Membership Interests
identified opposite the name of such Person.

      "PLEDGED MEMBERSHIP INTERESTS" means all Membership Interests of any
Pledged Membership Interest Company.

      "PLEDGED NOTE ISSUER" means each Person identified in ITEM C of ATTACHMENT
1 hereto as the issuer of the Pledged Note identified opposite the name of such
Person.

      "PLEDGED NOTES" means all promissory notes of any Pledged Note Issuer in
the form or substantially the form of EXHIBIT A hereto which are delivered by
the Pledgor to the Agent as Pledged Property hereunder, as such promissory
notes, in accordance with SECTION 4.5, are amended, modified or supplemented
from time to time and together with any promissory note of any Pledged Note
Issuer taken in extension or renewal thereof or substitution therefor.

      "PLEDGED PROPERTY" means all Pledged Shares, all Pledged Membership
Interests, all Pledged Notes, all Additional Rights, all other pledged shares of
capital stock or promissory notes, all other securities, all assignments of any
amounts due or to become due, and all other instruments which are now being
delivered by the Pledgor to the Agent or may from time to time hereafter be
delivered by the Pledgor to the Agent for the purpose of pledge under this
Pledge Agreement or any other Loan Document, and all proceeds of any of the
foregoing.

      "PLEDGED SHARE ISSUER" means each Person identified in ITEM B of
ATTACHMENT 1 hereto as the issuer of the Pledged Shares identified opposite the
name of such Person.

      "PLEDGED SHARES" means all shares of capital stock of any Pledged Share
Issuer.

      "PLEDGOR" is defined in the PREAMBLE.

      "SECURED OBLIGATIONS" is defined in SECTION 2.2.

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      "UCC" means the Uniform Commercial Code as in effect in the State of
Illinois.

      SECTION 1.2. UCC DEFINITIONS. Unless otherwise defined herein or the
context otherwise requires, terms for which meanings are provided in the UCC are
used in this Pledge Agreement, including its preamble and recitals, with such
meanings.

                                   ARTICLE II

                                     PLEDGE

      SECTION 2.1. CONFIRMATION AND GRANT OF SECURITY INTEREST AND PLEDGE. The
Pledgor hereby pledges, hypothecates, assigns, charges, mortgages, delivers, and
transfers to the Agent, for its benefit and the ratable benefit of the Lender
Parties, and hereby grants to the Agent, for its benefit and the ratable benefit
of the Lender Parties, a continuing pledge and security interest in and to, all
of the following property (the "COLLATERAL"):

            (a)   all Membership Interests identified in ITEM A of ATTACHMENT 1
      hereto;

            (b)   all Additional Rights;

            (c)   all issued and outstanding shares of capital stock of each
      Pledged Share Issuer identified in ITEM B of ATTACHMENT 1 hereto;

            (d)   all other Pledged Shares issued from time to time;

            (e)   all promissory notes of each Pledged Note Issuer identified in
      ITEM C of ATTACHMENT 1 hereto;

            (f)   all other Pledged Notes issued from time to time;

            (g)   all other Pledged Property, whether now or hereafter delivered
      to the Agent in connection with this Pledge Agreement;

            (h)   all Dividends, Distributions, interest, and other payments and
      rights with respect to any Pledged Property; and

            (i)   all proceeds of any and all of the foregoing.

      SECTION 2.2. SECURITY FOR OBLIGATIONS. This Pledge Agreement secures the
payment in full of all Obligations now or hereafter existing under the Credit
Agreements, the Notes, the Collateral Documents and each other Loan Document
(including this Pledge Agreement) to which the Pledgor is or may become a party,
whether for principal, interest, costs, fees, expenses or otherwise.

      SECTION 2.3. DELIVERY OF PLEDGED PROPERTY. All certificates or instruments
representing or evidencing any Collateral, including all Pledged Shares, all
Pledged Membership Interests and all Pledged Notes, shall be delivered to and
held by or on behalf of (and, in the case of the Pledged Notes, endorsed to the
order of) the Agent pursuant hereto, shall be in suitable

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form for transfer by delivery, and shall be accompanied by all necessary
instruments of transfer or assignment, duly executed in blank, and all other
necessary and appropriate action and approvals shall have been taken or received
to grant to the Agent a first priority fully perfected security interest in such
Collateral.

      SECTION 2.4. DIVIDENDS ON PLEDGED SHARES, PLEDGED MEMBERSHIP INTERESTS AND
PAYMENTS ON PLEDGED NOTES. In the event that any Dividend is to be paid on any
Pledged Share, any Pledged Membership Interest or any payment of principal or
interest is to be made on any Pledged Note at a time when (x) no Default of the
nature referred to in Section 8.1.9 of either Credit Agreement has occurred and
is continuing, and no (y) Event of Default has occurred and is continuing, such
Dividend or payment may be paid directly to and retained by the Pledgor. If any
such Default or Event of Default has occurred and is continuing, then any such
Dividend or payment shall be paid directly to the Agent (and if for any reason
the Pledgor shall receive such Dividend or payment in such circumstances, the
Pledgor shall hold the same segregated and in trust for the Agent until paid to
the Agent in accordance with SECTION 4.4 hereof).

      SECTION 2.5. CONTINUING SECURITY INTEREST; TRANSFER OF NOTE. This Pledge
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
      Obligations,

            (b)   be binding upon the Pledgor and its successors, transferees
      and assigns, and

            (c)   inure, together with the rights and remedies of the Agent
      hereunder, to the benefit of the Agent and each other Lender Party.

Without limiting the foregoing CLAUSE (C), any Lender may assign or otherwise
transfer (in whole or in part) any Note or Loan held by it to any other Person
or entity, and such other Person or entity shall thereupon become vested with
all the rights and benefits in respect thereof granted to such Lender under any
Loan Document (including this Pledge Agreement) or otherwise, subject, however,
to any contrary provisions in such assignment or transfer, and to the provisions
of Section 10.11 and Article IX of each Credit Agreement. Upon the final payment
in full of all Obligations, the security interest granted herein shall terminate
and all rights to the Collateral shall revert to the Pledgor. Upon any such
termination, the Agent will, at the Pledgor's sole expense, deliver to the
Pledgor, without any representations, warranties or recourse of any kind
whatsoever, all certificates and instruments representing or evidencing all
Pledged Shares, all Pledged Membership Interests, and all Pledged Notes,
together with all other Collateral held by the Agent hereunder, and execute and
deliver to the Pledgor such documents as the Pledgor shall reasonably request to
evidence such termination.

                                   ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

      SECTION 3.1. WARRANTIES, ETC. The Pledgor represents and warrants unto
each Lender Party, as at the date of each pledge and delivery hereunder
(including each pledge and delivery of Pledged Shares, Pledged Membership
Interests and each pledge and delivery of a Pledged Note) by the Pledgor to the
Agent of any Collateral, as set forth in this Article.

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      SECTION 3.1.1. OWNERSHIP, NO LIENS, ETC. The Pledgor is the legal and
beneficial owner of, and has good and marketable title to (and has full right
and authority to pledge and assign) such Collateral, free and clear of all
liens, security interests, options, or other charges or encumbrances, except any
lien or security interest granted pursuant hereto in favor of the Agent.

      SECTION 3.1.2. VALID SECURITY INTEREST. The delivery of such Collateral to
the Agent is effective to create a valid, perfected, first priority security
interest in such Collateral and all proceeds thereof, securing the Obligations.
No filing or other action will be necessary to perfect or protect such security
interest.

      SECTION 3.1.3. AS TO PLEDGED SHARES AND PLEDGED MEMBERSHIP INTERESTS. In
the case of any Pledged Membership Interests constituting such Collateral, all
of such Pledged Membership Interests are duly authorized and validly issued,
fully paid, and non-assessable, and constitute all of the Membership Interests
of each Pledged Membership Interest Company.

      In the case of any Pledged Shares constituting such Collateral, all of
such Pledged Shares are duly authorized and validly issued, fully paid, and
non-assessable, and constitute all of the issued and outstanding shares of
capital stock of each Pledged Share Issuer.

      SECTION 3.1.4. AS TO PLEDGED NOTES. In the case of each Pledged Note, all
of such Pledged Notes have been duly authorized, executed, endorsed, issued and
delivered, and are the legal, valid and binding obligation of the issuers
thereof, and are not in default.

      SECTION 3.1.5. AUTHORIZATION, APPROVAL, ETC. No authorization, approval,
or other action by, and no notice to or filing with, any governmental authority,
regulatory body or any other Person is required either

            (a)   for the pledge by the Pledgor of any Collateral pursuant to
      this Pledge Agreement or for the execution, delivery, and performance of
      this Pledge Agreement by the Pledgor, or

            (b)   for the exercise by the Agent of the voting or other rights
      provided for in this Pledge Agreement, or, except with respect to any
      Pledged Shares or any Pledged Membership Interests, as may be required in
      connection with a disposition of such Pledged Shares or Pledged Membership
      Interests by laws affecting the offering and sale of securities and
      membership interests in limited liability companies generally, the
      remedies in respect of the Collateral pursuant to this Pledge Agreement.

      SECTION 3.1.6. COMPLIANCE WITH LAWS. The Pledgor is in compliance with the
requirements of all applicable laws, rules, regulations and orders of every
governmental authority, the non-compliance with which might materially adversely
affect the business, properties, assets, operations, condition (financial or
otherwise) or prospects of the Pledgor or the value of the Collateral or the
worth of the Collateral as collateral security.

      SECTION 3.1.7. NOT SECURITIES. The Collateral hereunder is not a
"Security" under Article 8 of the UCC.

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                                   ARTICLE IV

                                    COVENANTS

      SECTION 4.1. PROTECT COLLATERAL; FURTHER ASSURANCES, ETC. The Pledgor will
not sell, assign, transfer, pledge or encumber in any other manner the
Collateral (except in favor of the Agent hereunder). The Pledgor will warrant
and defend the right and title herein granted unto the Agent in and to the
Collateral (and all right, title and interest represented by the Collateral)
against the claims and demands of all Persons whomsoever. The Pledgor agrees
that at any time, and from time to time, at the expense of the Pledgor, the
Pledgor will promptly execute and deliver all further instruments, and take all
further action, that may be necessary or desirable, or that the Agent may
reasonably request, in order to perfect and protect any security interest
granted or purported to be granted hereby or to enable the Agent to exercise and
enforce its rights and remedies hereunder with respect to any Collateral.

      SECTION 4.2. STOCK POWERS, ETC. The Pledgor agrees that all Pledged Shares
(and all other shares of capital stock constituting Collateral) and any
applicable Pledged Membership Interests delivered by the Pledgor pursuant to
this Pledge Agreement will be accompanied by duly executed undated blank stock
powers, or other equivalent instruments of transfer acceptable to the Agent. The
Pledgor will, from time to time upon the request of the Agent, promptly deliver
to the Agent such stock powers, instruments, and similar documents, satisfactory
in form and substance to the Agent, with respect to the Collateral as the Agent
may reasonably request and will, from time to time upon the request of the Agent
after the occurrence of any Event of Default, promptly transfer any Pledged
Shares (or other shares of common stock constituting Collateral) or any Pledged
Membership Interests into the name of any nominee designated by the Agent.

      SECTION 4.3. CONTINUOUS PLEDGE. Subject to SECTION 2.4, the Pledgor will,
at all times, keep pledged to the Agent pursuant hereto all Pledged Shares (and
all other shares of capital stock constituting Collateral), all Pledged
Membership Interests, all Dividends and Distributions with respect thereto, all
Pledged Notes, all interest, principal and other proceeds received by the Agent
with respect to the Pledged Notes, and all other Collateral and other
securities, instruments, proceeds, and rights from time to time received by or
distributable to the Pledgor in respect of any Collateral, and will not permit
any Pledged Share Issuer to issue any capital stock which shall not have been
immediately duly pledged hereunder on a first perfected basis or permit any
Pledged Membership Interest Company to issue any Membership Interests which
shall not have been immediately duly pledged hereunder on a first perfected
basis.

      SECTION 4.4. VOTING RIGHTS; DIVIDENDS, ETC. The Pledgor agrees:

      (a) after any Default of the nature referred to in Section 8.1.9 of either
      Credit Agreement or an Event of Default shall have occurred and be
      continuing, promptly upon receipt thereof by the Pledgor and without any
      request therefor by the Agent, to deliver (properly endorsed where
      required hereby or requested by the Agent) to the Agent all Dividends,
      Distributions, all interest, all principal, all other cash payments, and
      all proceeds of the Collateral, all of which shall be held by the Agent as
      additional Collateral for use in accordance with SECTION 6.3; and

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      (b)   after any Event of Default shall have occurred and be continuing and
      the Agent has notified the Pledgor of the Agent's intention to exercise
      its voting power under this CLAUSE (B) of SECTION 4.4

                  (i)   the Agent may exercise (to the exclusion of the Pledgor)
            the voting power and all other incidental rights of ownership with
            respect to any Pledged Shares (or other shares of capital stock
            constituting Collateral) or Pledged Membership Interests and the
            Pledgor hereby grants the Agent an irrevocable proxy, exercisable
            under such circumstances, to vote the Pledged Shares or the Pledged
            Membership Interests and such other Collateral; and

                  (ii)  promptly to deliver to the Agent such additional proxies
            and other documents as may be necessary to allow the Agent to
            exercise such voting power.

All Dividends, Distributions, interest, principal, cash payments and proceeds
which may at any time and from time to time be held by the Pledgor but which the
Pledgor is then obligated to deliver to the Agent, shall, until delivery to the
Agent, be held by the Pledgor separate and apart from its other property in
trust for the Agent. The Agent agrees that unless an Event of Default shall have
occurred and be continuing and the Agent shall have given the notice referred to
in CLAUSE (B) of SECTION 4.4, the Pledgor shall have the exclusive voting power
with respect to any shares of capital stock or membership interests (including
any of the Pledged Shares or Pledged Membership Interests) constituting
Collateral and the Agent shall, upon the written request of the Pledgor,
promptly deliver such proxies and other documents, if any, as shall be
reasonably requested by the Pledgor which are necessary to allow the Pledgor to
exercise voting power with respect to any such share of capital stock or
membership interest (including any of the Pledged Shares or Pledged Membership
Interests) constituting Collateral; PROVIDED, HOWEVER, that no vote shall be
cast, or consent, waiver or ratification given, or action taken by the Pledgor
that would impair any Collateral or be inconsistent with or violate any
provision of the Credit Agreement or any other Loan Document (including this
Pledge Agreement).

      SECTION 4.5. ADDITIONAL UNDERTAKINGS. The Pledgor will not, without the
prior written consent of the Agent:

            (a)   enter into any agreement amending, supplementing, or waiving
      any provision of any Pledged Note (including any underlying instrument
      pursuant to which such Pledged Note is issued) or compromising or
      releasing or extending the time for payment of any obligation of the maker
      thereof;

            (b)   take or omit to take any action the taking or the omission of
      which would result in any impairment or alteration of any obligation of
      the maker of any Pledged Note or other instrument constituting Collateral;
      or

            (c)   make any demand under any Pledged Note at any time when a
      Default of the nature referred to in Section 8.1.9 of either Credit
      Agreement, or any Event of Default, has occurred and is continuing; or

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            (d)   take any action which would cause the Collateral to be treated
      as a "Security" under Article 8 of the UCC.

                                    ARTICLE V

                                    THE AGENT

      SECTION 5.1. AGENT APPOINTED ATTORNEY-IN-FACT. The Pledgor hereby
irrevocably appoints the Agent the Pledgor's attorney-in-fact, with full
authority in the place and stead of the Pledgor and in the name of the Pledgor
or otherwise, from time to time in the Agent's discretion, to take any action
and to execute any instrument which the Agent may deem necessary or advisable to
accomplish the purposes of this Pledge Agreement, including without limitation:

            (a)   to ask, demand, collect, sue for, recover, compromise, receive
      and give acquittance and receipts for moneys due and to become due under
      or in respect of any of the Collateral;

            (b)   to receive, endorse and collect any drafts or other
      instruments, documents and chattel paper, in connection with CLAUSE (A)
      above; and

            (c)   to file any claims or take any action or institute any
      proceedings which the Agent may deem necessary or desirable for the
      collection of any of the Collateral or otherwise to enforce the rights of
      the Agent with respect to any of the Collateral.

The Pledgor hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest.

      SECTION 5.2. AGENT MAY PERFORM. If the Pledgor fails to perform any
agreement contained herein, the Agent may itself perform, or cause performance
of, such agreement, and the expenses of the Agent incurred in connection
therewith shall be payable by the Pledgor pursuant to SECTION 6.4.

      SECTION 5.3. AGENT HAS NO DUTY. The powers conferred on the Agent
hereunder are solely to protect its interest (on behalf of the Lender Parties)
in the Collateral and shall not impose any duty on it to exercise any such
powers. Except for reasonable care of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, the Agent shall have no
duty as to any Collateral or responsibility for (a) ascertaining or taking
action with respect to calls, conversions, exchanges, maturities, tenders or
other matters relative to any Pledged Property, whether or not the Agent has or
is deemed to have knowledge of such matters, or (b) taking any necessary steps
to preserve rights against prior parties or any other rights pertaining to any
Collateral.

      SECTION 5.4. REASONABLE CARE. The Agent is required to exercise reasonable
care in the custody and preservation of any of the Collateral in its possession;
PROVIDED, HOWEVER, the Agent shall be deemed to have exercised reasonable care
in the custody and preservation of any of the Collateral, if it takes such
action for that purpose as the Pledgor reasonably requests in writing at times
other than upon the occurrence and during the continuance of any Event of

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Default, but failure of the Agent to comply with any such request at any time
shall not in itself be deemed a failure to exercise reasonable care.

                                   ARTICLE VI

                                    REMEDIES

      SECTION 6.1. CERTAIN REMEDIES. If any Event of Default shall have occurred
and be continuing:

            (a)   The Agent may exercise in respect of the Collateral, in
      addition to other rights and remedies provided for herein or otherwise
      available to it, all the rights and remedies of a secured party on default
      under the UCC (whether or not the UCC applies to the affected Collateral)
      and also may, without notice except as specified below, sell the
      Collateral or any part thereof in one or more parcels at public or private
      sale, at any of the Agent's offices or elsewhere, for cash, on credit or
      for future delivery, and upon such other terms as the Agent may deem
      commercially reasonable. The Pledgor agrees that, to the extent notice of
      sale shall be required by law, at least ten days' prior notice to the
      Pledgor of the time and place of any public sale or the time after which
      any private sale is to be made shall constitute reasonable notification.
      The Agent shall not be obligated to make any sale of Collateral regardless
      of notice of sale having been given. The Agent may adjourn any public or
      private sale from time to time by announcement at the time and place fixed
      therefor, and such sale may, without further notice, be made at the time
      and place to which it was so adjourned.

            (b)   The Agent may

                        (i)   transfer all or any part of the Collateral into
            the name of the Agent or its nominee, with or without disclosing
            that such Collateral is subject to the lien and security interest
            hereunder,

                        (ii)  notify the parties obligated on any of the
            Collateral to make payment to the Agent of any amount due or to
            become due thereunder,

                        (iii) enforce collection of any of the Collateral by
            suit or otherwise, and surrender, release or exchange all or any
            part thereof, or compromise or extend or renew for any period
            (whether or not longer than the original period) any obligations of
            any nature of any party with respect thereto,

                        (iv)  endorse any checks, drafts or other writings in
            the Pledgor's name to allow collection of the Collateral,

                        (v)   take control of any proceeds of the Collateral,
            and

                        (vi)  execute (in the name, place and stead of the
            Pledgor) endorsements, assignments, stock powers and other
            instruments of conveyance or transfer with respect to all or any of
            the Collateral.

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      SECTION 6.2. COMPLIANCE WITH RESTRICTIONS. The Pledgor agrees that in any
sale of any of the Collateral whenever an Event of Default shall have occurred
and be continuing, the Agent is hereby authorized to comply with any limitation
or restriction in connection with such sale as it may be advised by counsel is
necessary in order to avoid any violation of applicable law (including
compliance with such procedures as may restrict the number of prospective
bidders and purchasers, require that such prospective bidders and purchasers
have certain qualifications, and restrict such prospective bidders and
purchasers to persons who will represent and agree that they are purchasing for
their own account for investment and not with a view to the distribution or
resale of such Collateral), or in order to obtain any required approval of the
sale or of the purchaser by any governmental regulatory authority or official,
and the Pledgor further agrees that such compliance shall not result in such
sale being considered or deemed not to have been made in a commercially
reasonable manner, nor shall the Agent be liable nor accountable to the Pledgor
for any discount allowed by the reason of the fact that such Collateral is sold
in compliance with any such limitation or restriction.

      SECTION 6.3. APPLICATION OF PROCEEDS. All cash proceeds received by the
Agent in respect of any sale of, collection from, or other realization upon, all
or any part of the Collateral may, in the discretion of the Agent, be held by
the Agent as additional collateral security for, or then or at any time
thereafter be applied (after payment of any amounts payable to the Agent
pursuant to Section 10.3 of each Credit Agreement and SECTION 6.4) in whole or
in part by the Agent against, all or any part of the Obligations in such order
as the Agent shall elect.

      Any surplus of such cash or cash proceeds held by the Agent and remaining
after final payment in full of all the Obligations, and the termination of all
Commitments, shall be paid over to the Pledgor or to whomsoever may be lawfully
entitled to receive such surplus.

      SECTION 6.4. INDEMNITY AND EXPENSES. The Pledgor hereby indemnifies and
holds harmless the Agent from and against any and all claims, losses and
liabilities arising out of or resulting from this Pledge Agreement (including
enforcement of this Pledge Agreement), except claims, losses or liabilities
resulting from the Agent's gross negligence or wilful misconduct. Upon demand,
the Pledgor will pay to the Agent the amount of any and all reasonable expenses,
including the reasonable fees and disbursements of its counsel (including the
reasonable allocated cost of internal legal services and all disbursements of
internal counsel) and of any experts and agents, which the Agent may incur in
connection with:

            (a)   the administration of this Pledge Agreement, the Credit
      Agreement and each other Loan Document;

            (b)   the custody, preservation, use or operation of, or the sale
      of, collection from or other realization upon, any of the Collateral;

            (c)   the exercise or enforcement of any of the rights of the Agent
      hereunder; or

            (d)   the failure by the Pledgor to perform or observe any of the
      provisions hereof.

                                       11

<PAGE>

                                   ARTICLE VII

                            MISCELLANEOUS PROVISIONS

      SECTION 7.1. LOAN DOCUMENT. This Pledge Agreement is a Loan Document
executed pursuant to the Credit Agreements and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions thereof (including as to the WAIVER OF ANY JURY TRIAL with
respect to any litigation relating to or arising out of any matter herein).

      SECTION 7.2  CONTINUATION OF SECURITY INTEREST. This Pledge Agreement is
an amendment and restatement of the Existing Pledge Agreement and the security
interest granted thereunder shall be deemed continued hereunder.

      SECTION 7.3. AMENDMENTS, ETC. No amendment to or waiver of any provision
of this Pledge Agreement nor consent to any departure by the Pledgor herefrom
shall in any event be effective unless the same shall be in writing and signed
by the Agent, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which it is given.

      SECTION 7.4. SUBSIDIARIES. The parties agree that the entities listed on
ATTACHMENT I are "Subsidiaries" under the Credit Agreements.

      SECTION 7.5. PROTECTION OF COLLATERAL. The Agent may from time to time, at
its option, perform any act which the Pledgor agrees hereunder to perform and
which the Pledgor shall fail to perform after being requested in writing so to
perform (it being understood that no such request need be given after the
occurrence and during the continuance of an Event of Default) and the Agent may
from time to time take any other action which the Agent reasonably deems
necessary for the maintenance, preservation or protection of any of the
Collateral or of its security interest therein.

      SECTION 7.6. ADDRESSES FOR NOTICES. All notices and other communications
provided for hereunder shall be in writing (including telegraphic communication)
and, if to the Pledgor, mailed or telegraphed or delivered to it at the address
set forth below its signature hereto, if to the Agent, mailed or delivered to
it, addressed to it at the address of the Agent specified in the Credit
Agreement or, as to either party, at such other address as shall be designated
by such party in a written notice to each other party complying as to delivery
with the terms of this Section. All such notices and other communications shall,
when mailed or telegraphed, respectively, be effective when deposited in the
mails or delivered to the telegraph company, respectively, addressed as
aforesaid.

      SECTION 7.7. SECTION CAPTIONS. Section captions used in this Pledge
Agreement are for convenience of reference only, and shall not affect the
construction of this Pledge Agreement.

      SECTION 7.8. SEVERABILITY. Wherever possible each provision of this Pledge
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Pledge Agreement shall be
prohibited by or invalid under such law, such provision shall be ineffective to
the extent of such prohibition or invalidity, without invalidating the remainder
of such provision or the remaining provisions of this Pledge Agreement.

                                       12

<PAGE>

      SECTION 7.9. GOVERNING LAW, ENTIRE AGREEMENT, ETC. THIS PLEDGE AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE
STATE OF ILLINOIS, 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. THIS PLEDGE AGREEMENT AND THE OTHER LOAN DOCUMENTS CONSTITUTE THE
ENTIRE UNDERSTANDING AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER
HEREOF AND SUPERSEDE ANY PRIOR AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT
THERETO.

                             [SIGNATURES TO FOLLOW]

                                       13

<PAGE>

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

                                THE ARISTOTLE CORPORATION

                                By: /s/ Steven B. Lapin
                                    -------------------
                                  Title: President and Chief Operating Officer

                                   Address: 96 Cummings Point Road
                                              Stamford, Connecticut  06902

                                   Attention:  Steven B. Lapin
                                              President

                                     Telecopier No.:  203-348-3103

                                   Copy to:

                                   The Aristotle Corporation
                                   96 Cummings Point Road
                                   Stamford, Connecticut  06902

                                   Telecopier No.:  203-348-3103

                                   Attention:  Paul McDonald
                                              Chief Financial Officer

                                   Additional Copy to:

                                          Nasco Division
                                          901 Janesville Avenue
                                          Fort Atkinson, Wisconsin
                                          53538-0901

                                   Attention: Dean T. Johnson

                                   Telecopier No.: 414-563-0234

                                      S-1

<PAGE>

                                    ACCEPTED:

                                    BANK OF AMERICA N.A., as Agent

                                    By: /s/ David Johanson
                                        ---------------------
                                        Title: Vice President

                                         Address:       231 South LaSalle Street
                                                        Chicago, Illinois  60697

                                         Telecopier No.:  877-206-8410

                                    Attention:      David Johanson

                                      S-2

<PAGE>

                     AMENDED AND RESTATED PLEDGE AGREEMENT

Attachment I - Pledged Interests

<PAGE>

                                    EXHIBIT A
                               to Pledge Agreement

                                 PROMISSORY NOTE

$_____________                                                       _____, 20__

      FOR VALUE RECEIVED, the undersigned, ______________, a _______________
limited liability company (the "MAKER"), promises to pay to the order of The
Aristotle Corporation, a Delaware corporation (the "PAYEE"), on demand, the
principal sum of DOLLARS ($ ), or, if less, the aggregate outstanding principal
amount of all intercompany loans made by the Payee to the Maker.

      The unpaid principal amount of this promissory note (this "NOTE") from
time to time outstanding shall bear interest at a rate of interest equal to the
rate of interest payable on the Loans outstanding under the Credit Agreement
hereinafter referred to, which the Maker represents to be a lawful and
commercially reasonable rate, payable on demand or on payment of the principal
amount outstanding under this Note, and all payments of principal of and
interest on this Note shall be payable in lawful currency of the United States
of America. All such payments shall be made by the Maker to the Payee and shall
be recorded on the grid attached hereto by the holder hereof (including the
Agent as pledgee). Upon notice from the Agent (hereinafter defined) that a
Default (as defined in the Credit Agreement hereinafter referred to) of the
nature referred to in Section 8.1.9 of either Credit Agreement or an Event of
Default (as defined in either Credit Agreement) has occurred and is continuing
under the Credit Agreement, the Maker shall make such payments, in same day
funds, to such other account as the Agent shall direct in such notice.

      This Note is one of the Pledged Notes referred to in the Amended and
Restated Pledge Agreement, dated as of June 27, 2002 (together with all
amendments and other modifications, if any, from time to time hereafter made
thereto, the "PLEDGE AGREEMENT"), by the Payee in favor of Bank of America,
N.A., which has been executed and delivered pursuant to the Credit Agreements
referred to therein (the "CREDIT AGREEMENTS"). Upon the occurrence and
continuance of an Event of Default under either Credit Agreement, and notice
thereof by the Agent to the Maker, the Agent shall have all rights of the Payee
to collect and accelerate, and enforce all rights with respect to, the
indebtedness evidenced by this Note.

      Reference is made to the Pledge Agreement for a description of the terms
under which this Note has been pledged to the Agent as security for the
Obligations (as defined in the Pledge Agreement) outstanding from time to time
under the Credit Agreements and each other Loan Document (as defined in the
Pledge Agreement).

      In addition to, but not in limitation of, the foregoing, the Maker further
agrees to pay all expenses, including reasonable attorneys' fees and legal
expenses, incurred by the holder (including the Agent as pledgee) of this Note
endeavoring to collect any amounts payable hereunder which are not paid when
due, whether by acceleration or otherwise.

                                      A-1

<PAGE>

      THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF ILLINOIS.

      THE MAKER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY
RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON THIS
NOTE. THE MAKER ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT
CONSIDERATION FOR THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE PAYEE TO ACCEPT THIS NOTE.

                                     [Name of Maker]

                                     By_____________________________
                                       Title:

                                     Pay to the order of Bank of America, N.A.,
                                     as Agent

                                     THE ARISTOTLE CORPORATION

                                     By_____________________________
                                       Title:

                                      A-2

<PAGE>

                                      GRID

Intercompany Loans made by The Aristotle Corporation to ________________ and
payments of principal of such Loans.

<TABLE>
<CAPTION>
<S>                                                                           <C>

---------------------- -------------------------- ------------------------ ----------------------- ----------------------
        Date                   Amount of                  Amount of               Outstanding             Notation
                              Intercompany                Principal                Principal              Made By
                                 Loans                     Payment                  Balance
---------------------- -------------------------- ------------------------ ----------------------- ----------------------

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

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

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

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

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

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

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

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

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

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

                                      A-3<PAGE>

                                                                   EXHIBIT 10.27

                     AMENDED AND RESTATED SECURITY AGREEMENT

      THIS AMENDED AND RESTATED SECURITY AGREEMENT, dated as of June 27, 2002
(as modified from time to time, this "SECURITY AGREEMENT"), made by The
Aristotle Corporation., a Delaware corporation (the "GRANTOR"), in favor of BANK
OF AMERICA, N.A., as administrative agent (together with any successor(s)
thereto in such capacity, the "AGENT") for each of the various financial
institutions (individually a "LENDER" and collectively the "LENDERS") which are
or may from time to time become, parties to the Credit Agreements (as defined
below).

                              W I T N E S S E T H:

      WHEREAS, the parties or their predecessors have entered into that certain
First Amendment to Amended and Restated Credit Agreement (Five Year) and
Consent, dated as of June 17, 2002 which amends the Amended and Restated Credit
Agreement (Five Year), dated as of May 29, 2001 (as amended, supplemented and
otherwise modified, the "CREDIT AGREEMENT (FIVE YEAR)"), among Nasco
International, Inc., a Wisconsin corporation (the "PARENT"), the lenders parties
thereto and the Agent; and

      WHEREAS, the parties or their predecessors have entered into that certain
Second Amendment to Amended and Restated Credit Agreement (364 Days) and
Consent, dated as of June 17, 2002 which amends the Amended and Restated Credit
Agreement (364 Days), dated as of May 29, 2001 (as amended, supplemented and
otherwise modified, the "CREDIT AGREEMENT (364 DAYS)" and together with the
Credit Agreement (Five Year), the "CREDIT AGREEMENTS"), among the Parent, the
lenders party thereto and the Agent; and

      WHEREAS, the Parent and the Agent have entered into that certain Security
Agreement, dated as of March 31, 2000 (the "EXISTING SECURITY AGREEMENT"), and
the parties hereto wish to amend and restate such Existing Security Agreement as
set forth in this Security Agreement.

      WHEREAS, it is a condition precedent to the extensions of credit unler the
Credit Agreements that the Grantor enter into this Security Agreement to, among
other things, grant to the Agent a continuing security interest in the
Collateral, and, in connection with and to supplement this Security Agreement,
enter into the Agreement (Patent), Agreement (Trademark) and Agreement
(Copyright) (the "SUPPLEMENTS");

      NOW, THEREFORE, for good and valuable consideration the receipt of which
is hereby acknowledged, in order to induce the Lenders to make Loans (including
the initial Loans) to the Grantor from time to time pursuant to the Credit
Agreements and in order to amend and restate the Existing Security Agreement,
the Grantor hereby agrees with the Agent, for its benefit and the ratable
benefit of each Lender Party, as follows:

                                    ARTICLE I

                                   DEFINITIONS

      SECTION 1.1. CERTAIN TERMS. When used herein, (a) capitalized terms used
but not defined herein shall have the meanings given to them in the Credit
Agreements and (b) the following terms shall have the following meanings (such
definitions to be equally applicable to the singular and plural forms thereof):

<PAGE>

      "AGENT" is defined in the PREAMBLE.

      "COLLATERAL" is defined in SECTION 2.1.

      "COLLATERAL ACCOUNT" is defined in CLAUSE (C) of SECTION 4.1.2.

      "COMMITMENTS" means the "Commitments", as defined in the Credit Agreement
(Five Year) and the Credit Agreement (364 Day).

      "COMPUTER HARDWARE AND SOFTWARE COLLATERAL" means:

            (a)   all computer and other electronic data processing hardware,
      integrated computer systems, central processing units, memory units,
      display terminals, printers, features, computer elements, card readers,
      tape drives, hard and soft disk drives, cables, electrical supply
      hardware, generators, power equalizers, accessories and all peripheral
      devices and other related computer hardware;

            (b)   all software programs, data and databases (including both
      source code, object code and all related applications and data files),
      whether now owned, licensed or leased or hereafter acquired by the
      Grantor, designed for use on the computers and electronic data processing
      hardware described in CLAUSE (A) above;

            (c)   all firmware associated therewith;

            (d)   all documentation (including flow charts, logic diagrams,
      manuals, guides and specifications) with respect to such hardware,
      software and firmware described in the preceding CLAUSES (A) through (C);
      and

            (e)   all rights with respect to all of the foregoing, including,
      without limitation, any and all copyrights, licenses, options, warranties,
      service contracts, program services, test rights, maintenance rights,
      support rights, improvement rights, renewal rights and indemnifications
      and any substitutions, replacements, additions or model conversions of any
      of the foregoing.

      "COPYRIGHT COLLATERAL" means all copyrights and all semi-conductor chip
product mask works of the Grantor, whether statutory or common law, registered
or unregistered, now or hereafter in force throughout the world including,
without limitation, all of the Grantor's right, title and interest in and to all
copyrights and mask works registered in the United States Copyright Office or
anywhere else in the world and also including, without limitation, the
copyrights and mask works referred to in ITEM A of SCHEDULE IV attached hereto,
and all applications for registration thereof, whether pending or in
preparation, all copyright and mask work licenses, including each copyright and
mask work license referred to in ITEM B of SCHEDULE IV attached hereto, the
right to sue for past, present and future infringements of any thereof, all
rights corresponding thereto throughout the world, all extensions and renewals
of any thereof and all proceeds of the foregoing, including, without limitation,
licenses, royalties, income, payments, claims, damages and proceeds of suit.

                                       2

<PAGE>

      "CREDIT AGREEMENTS" is defined in the RECITALS.

      "GRANTOR" is defined in the PREAMBLE.

      "INTELLECTUAL PROPERTY COLLATERAL" means, collectively, the Computer
Hardware and Software Collateral, the Copyright Collateral, the Patent
Collateral, the Trademark Collateral and the Trade Secrets Collateral.

      "LENDER" is defined in the PREAMBLE.

      "LENDER PARTY" means, as the context may require, any Lender or the Agent
and each of its respective successors, transferees and assigns.

      "LENDERS" is defined in the PREAMBLE.

      "LOAN DOCUMENTS" means "Loan Documents" as defined in the Credit Agreement
(Five Year) and "Loan Documents" as defined in the Credit Agreement (364 Day).

      "NOTES" means the "Notes" as defined in the Credit Agreement (Five Year)
and "Notes" as defined in the Credit Agreement (364 Day).

      "OBLIGATIONS" means "Obligations" as defined in the Credit Agreement (Five
Year) and "Obligations" as defined in the Credit Agreement (364 Day).

      "PATENT COLLATERAL" means:

            (a)   all letters patent and applications for letters patent
      throughout the world, including all patent applications in preparation for
      filing anywhere in the world and including each patent and patent
      application referred to in ITEM A of SCHEDULE II attached hereto;

            (b)   all patent licenses, including each patent license referred to
      in ITEM B of SCHEDULE II attached hereto;

            (c)   all reissues, divisions, continuations, continuations-in-part,
      extensions, renewals and reexaminations of any of the items described in
      CLAUSES (A) and (B); and

            (d)   all proceeds of, and rights associated with, the foregoing
      (including license royalties and proceeds of infringement suits), the
      right to sue third parties for past, present or future infringements of
      any patent or patent application, including any patent or patent
      application referred to in ITEM A of SCHEDULE II attached hereto, and for
      breach or enforcement of any patent license, including any patent license
      referred to in ITEM B of SCHEDULE II attached hereto, and all rights
      corresponding thereto throughout the world.

      "RECEIVABLE" means any and all Accounts, Chattel Paper, Commercial Tort
Claims, Documents, General Intangibles, Instruments and Letter of Credit Rights
of the Grantor.

      "RELATED CONTRACT" means all rights of the Grantor now or hereafter
existing in and to all security agreements, guaranties, leases and other
contracts securing or otherwise relating to any Collateral.

      "SECURITY AGREEMENT" is defined in the PREAMBLE.

                                       3

<PAGE>

      "SUPPLEMENTS" is defined in the RECITALS.

      "TRADEMARK COLLATERAL" means:

            (a)   all trademarks, trade names, corporate names, company names,
      business names, fictitious business names, trade styles, service marks,
      certification marks, collective marks, logos, other source of business
      identifiers, prints and labels on which any of the foregoing have appeared
      or appear, designs and general intangibles of a like nature (all of the
      foregoing items in this CLAUSE (A) being collectively called a
      "TRADEMARK"), now existing anywhere in the world or hereafter adopted or
      acquired, whether currently in use or not, all registrations and
      recordings thereof and all applications in connection therewith, whether
      pending or in preparation for filing, including registrations, recordings
      and applications in the United States Patent and Trademark Office or in
      any office or agency of the United States of America or any State thereof
      or any foreign country, including those referred to in ITEM A of SCHEDULE
      III attached hereto;

            (b)   all Trademark licenses, including each Trademark license
      referred to in ITEM B of SCHEDULE III attached hereto;

            (c)   all reissues, extensions or renewals of any of the items
      described in CLAUSES (A) and (B);

            (d)   all of the goodwill of the business connected with the use of,
      and symbolized by the items described in, CLAUSES (A) and (B); and

            (e)   all proceeds of, and rights associated with, the foregoing,
      including any claim by the Grantor against third parties for past, present
      or future infringement or dilution of any Trademark, Trademark
      registration or Trademark license, including any Trademark, Trademark
      registration or Trademark license referred to in ITEM A and ITEM B of
      SCHEDULE III attached hereto, or for any injury to the goodwill associated
      with the use of any such Trademark or for breach or enforcement of any
      Trademark license.

      "TRADE SECRETS COLLATERAL" means common law and statutory trade secrets
and all other confidential or proprietary or useful information and all know-how
obtained by or used in or contemplated at any time for use in the business of
the Grantor (all of the foregoing being collectively called a "TRADE SECRET"),
whether or not such Trade Secret has been reduced to a writing or other tangible
form, including all documents and things embodying, incorporating or referring
in any way to such Trade Secret, all Trade Secret licenses, including each Trade
Secret license referred to in SCHEDULE V attached hereto, and including the
right to sue for and to enjoin and to collect damages for the actual or
threatened misappropriation of any Trade Secret and for the breach or
enforcement of any such Trade Secret license.

      "UCC" means the Uniform Commercial Code, as in effect in the State of
Illinois.

      SECTION 1.2. UCC DEFINITIONS. Unless otherwise defined herein or the
context otherwise requires, terms for which meanings are provided in the UCC are
used in this Security Agreement, including its preamble and recitals, with such
meanings.

                                       4

<PAGE>

                                   ARTICLE II

                                SECURITY INTEREST

      SECTION 2.1. CONFIRMATION AND GRANT OF SECURITY INTEREST. The Grantor
hereby pledges, assigns and grants, to the Agent for its benefit and the ratable
benefit of each of the Lender Parties, and hereby grants to the Agent for its
benefit and the ratable benefit of each of the Lender Parties, a continuing
security interest in, whether now or hereafter existing or acquired, all of the
Grantor's (the "COLLATERAL"):

            (a)   Accounts;

            (b)   Chattel Paper;

            (c)   Commercial Tort Claims;

            (d)   Deposit Accounts;

            (e)   Documents;

            (f)   General Intangibles;

            (g)   Goods (including all Equipment, Fixtures and Inventory), and
      all accessions, additions, attachments, improvements, substitutions and
      replacements thereto and therefore;

            (h)   Instruments;

            (i)   Intellectual Property Collateral;

            (j)   Investment Property;

            (k)   Letter of Credit Rights and letters of credit (as such term is
      defined in Article 5 of the UCC);

            (l)   to the extent not included in the foregoing, all books,
      records, writings, data bases, information and other property relating to,
      used or useful in connection with, evidencing, embodying, incorporating or
      referring to, any of the foregoing in this SECTION 2.1;

            (m)   other property and rights of every kind and description and
      interests therein, including all rights in any bank or other accounts and
      in all monies from time to time therein; and

            (n)   to the extent not included in the foregoing, all Proceeds,
      products, offspring, rents, issues, profits, returns, and income of and
      from any and all of the foregoing Collateral (including proceeds which
      constitute property of the types described in CLAUSES (A) through (M)
      above, proceeds deposited from time to time in the Collateral Account and
      in any lock boxes of the Grantor, and, to the extent not otherwise
      included, all payments under insurance (whether or not the Agent is the
      loss payee thereof), or any indemnity, warranty or guaranty, payable by
      reason of loss or damage to or otherwise with respect to any of the
      foregoing Collateral).

                                       5

<PAGE>

The Collateral shall not include any of the Non-Pledged Assets. The Non-Pledged
Assets shall be held in the accounts indicated on SCHEDULE VI or such other
accounts as the Grantor may notify to the Agent in writing from time to time.
Notwithstanding the foregoing, the Agent shall not enforce the security interest
granted pursuant to this Security Agreement in rights arising under contracts as
to which such enforcement would constitute a violation of a valid and
enforceable restriction thereon, unless any required consents shall have been
obtained or such restriction shall have become or be rendered ineffective by
reason of law, court proceedings or otherwise. The Grantor agrees to use its
best efforts to obtain any such required consent.

      SECTION 2.2. SECURITY FOR OBLIGATIONS. This Security Agreement secures the
payment of all Obligations now or hereafter existing under the Credit
Agreements, the Notes and each other Loan Document (including this Security
Agreement) to which the Grantor is or may become a party, whether for principal,
interest, costs, fees, expenses or otherwise.

      SECTION 2.3. CONTINUING SECURITY INTEREST; TRANSFER OF NOTES. This
Security 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
      Obligations and the termination of all Commitments,

            (b)   be binding upon the Grantor, its successors, transferees and
      assigns, and

            (c)   inure, together with the rights and remedies of the Agent
      hereunder, to the benefit of the Agent and each other Lender Party.

Without limiting the generality of the foregoing CLAUSE (C), any Lender may
assign or otherwise transfer (in whole or in part) any Note or Loan held by it
to any other Person or entity, and such other Person or entity shall thereupon
become vested with all the rights and benefits in respect thereof granted to
such Lender under any Loan Document (including this Security Agreement) or
otherwise, subject, however, to any contrary provisions in such assignment or
transfer, and to the provisions of Section 10.11 and Article IX of either Credit
Agreement. Upon the final payment in full of all Obligations, the security
interest granted herein shall terminate and all rights to the Collateral shall
revert to the Grantor. Upon any such termination, the Agent will, at the
Grantor's sole expense, execute and deliver to the Grantor such documents as the
Grantor shall reasonably request to evidence such termination.

      SECTION 2.4. GRANTOR REMAINS LIABLE. Anything herein to the contrary
notwithstanding,

            (a)   the Grantor shall remain liable under the contracts and
      agreements included in the Collateral to the extent set forth therein, and
      shall perform all of its duties and obligations under such contracts and
      agreements to the same extent as if this Security Agreement had not been
      executed,

            (b)   the exercise by the Agent of any of its rights hereunder shall
      not release the Grantor from any of its duties or obligations under any
      such contracts or agreements included in the Collateral, and

            (c)   neither the Agent nor any other Lender Party shall have any
      obligation or liability under any such contracts or agreements included in
      the Collateral by reason of this Security Agreement, nor shall the Agent
      or any other Lender Party be obligated to

                                       6

<PAGE>

      perform any of the obligations or duties of the Grantor thereunder or to
      take any action to collect or enforce any claim for payment assigned
      hereunder.

                                   ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

      SECTION 3.1. REPRESENTATIONS AND WARRANTIES. The Grantor represents and
warrants unto each Lender Party as set forth in this Article.

      SECTION 3.1.1. LOCATION OF COLLATERAL, ETC. All of the Equipment and
Inventory of the Grantor are located at the places specified in ITEM A and ITEM
B, respectively, of SCHEDULE I hereto. None of the Equipment and Inventory has,
within the four months preceding the date of this Security Agreement, been
located at any place other than the places specified in ITEM A and ITEM B,
respectively, of SCHEDULE I hereto. The place(s) of business and chief executive
office of the Grantor and the offices) where the Grantor keeps its records
concerning the Receivables, and all originals of all chattel paper which
evidence Receivables, are located at the address set forth below the name of the
Grantor on the signature page hereof. The Grantor has no trade names other than
the name listed in the RECITALS. The Grantor has not been known by any legal
name different from the one set forth on the signature page hereto. None of the
Receivables is evidenced by a promissory note or other instrument. The Grantor
is not a party to any Federal, state or local government contract, although it
does sell materials to various municipalities from time to time on ordinary
trade terms.

      SECTION 3.1.2. OWNERSHIP, NO LIENS, ETC. The Grantor owns the Collateral
free and clear of any Lien, security interest, charge or encumbrance except for
the security interest created by this Security Agreement and except as permitted
by the Credit Agreements. 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 Agent
relating to this Security Agreement and the Credit Agreements.

      SECTION 3.1.3. POSSESSION AND CONTROL. The Grantor has exclusive
possession and control of the Equipment and Inventory.

      SECTION 3.1.4. NEGOTIABLE DOCUMENTS, INSTRUMENTS AND CHATTEL PAPER. The
Grantor has previously delivered to the Agent possession of all originals of all
negotiable documents, instruments and chattel paper currently owned or held by
the Grantor (duly endorsed in blank, if requested by the Agent).

      SECTION 3.1.5. INTELLECTUAL PROPERTY COLLATERAL. With respect to any
Intellectual Property Collateral the loss, impairment or infringement of which
might have a materially adverse effect on the financial condition, operation,
assets, business, properties or prospects of the Grantor:

            (a)   such Intellectual Property Collateral is subsisting and has
      not been adjudged invalid or unenforceable, in whole or in part;

            (b)   such Intellectual Property Collateral is valid and
      enforceable;

                                       7

<PAGE>

            (c)   the Grantor has made all necessary filings and recordations to
      protect its interest in such Intellectual Property Collateral, including,
      without limitation, recordations of all of its interests in the Patent
      Collateral and Trademark Collateral in the United States Patent and
      Trademark Office and in corresponding offices throughout the world and its
      claims to the Copyright Collateral in the United States Copyright Office
      and in corresponding offices throughout the world;

            (d)   the Grantor is the exclusive owner of the entire and
      unencumbered right, title and interest in and to such Intellectual
      Property Collateral and no claim has been made that the use of such
      Intellectual Property Collateral does or may violate the asserted rights
      of any third party; and

            (e)   the Grantor has performed and will continue to perform all
      acts and has paid and will continue to pay all required fees and taxes to
      maintain each and every item of Intellectual Property Collateral in full
      force and effect throughout the world, as applicable.

The Grantor owns directly or is entitled to use by license or otherwise, all
patents, Trademarks, Trade Secrets, copyrights, mask works, licenses,
technology, know-how, processes and rights with respect to any of the foregoing
used in, necessary for or of importance to the conduct of the Grantor's
business. The Schedules hereto contain true and complete listings and
descriptions of all of the Grantor's trademarks, trademark licenses, patents,
patent licenses, copyrights, copyright licenses and trade secrets.

      SECTION 3.1.6. VALIDITY, ETC. This Security Agreement creates a valid
first priority security interest in the Collateral, securing the payment of the
Obligations, and all filings and other actions necessary or desirable to perfect
and protect such security interest have been duly taken.

      SECTION 3.1.7. AUTHORIZATION, APPROVAL, ETC. No authorization, approval or
other action by, and no notice to or filing with, any governmental authority or
regulatory body is required either

            (a)   for the grant by the Grantor of the security interest granted
      hereby or for the execution, delivery and performance of this Security
      Agreement by the Grantor, or

            (b)   for the perfection of or the exercise by the Agent of its
      rights and remedies hereunder.

      SECTION 3.1.8. COMPLIANCE WITH LAWS. The Grantor is in compliance with the
requirements of all applicable laws, rules, regulations and orders of every
governmental authority, the non-compliance with which might materially adversely
affect the business, properties, assets, operations, condition (financial or
otherwise) or prospects of the Grantor or the value of the Collateral or the
worth of the Collateral as collateral security.

                                   ARTICLE IV

                                    COVENANTS

                                       8

<PAGE>

      SECTION 4.1. CERTAIN COVENANTS. The Grantor covenants and agrees that, so
long as any portion of the Obligations shall remain unpaid, the Grantor will,
unless the Required Lenders shall otherwise consent in writing, perform the
obligations set forth in this Section.

      SECTION 4.1.1. AS TO EQUIPMENT AND INVENTORY. The Grantor hereby agrees
that it shall

            (a)   keep all the Equipment and Inventory (other than Inventory
      sold in the ordinary course of business) at the places therefor specified
      in SECTION 3.1.1 or, upon 30 days' prior written notice to the Agent, at
      such other places in a jurisdiction where all representations and
      warranties set forth in ARTICLE III (including SECTION 3.1.6) shall be
      true and correct, and all action required pursuant to the FIRST SENTENCE
      of SECTION 4.1.7 shall have been taken with respect to the Equipment and
      Inventory;

            (b)   cause the Equipment to be maintained and preserved in the same
      condition, repair and working order as when new, ordinary wear and tear
      excepted, and in accordance with any manufacturer's manual; and forthwith,
      or in the case of any loss or damage to any of the Equipment, as quickly
      as practicable after the occurrence thereof, make or cause to be made all
      repairs, replacements and other improvements in connection therewith which
      are necessary or desirable to such end; and promptly furnish to the Agent
      a statement respecting any loss or damage to any of the Equipment; and

            (c)   pay promptly when due all property and other taxes,
      assessments and governmental charges or levies imposed upon, and all
      claims (including claims for labor, materials and supplies) against, the
      Equipment and Inventory, except to the extent the validity thereof is
      being contested in good faith by appropriate proceedings and for which
      adequate reserves in accordance with GAAP have been set aside.

      SECTION 4.1.2. AS TO RECEIVABLES AND INVESTMENT PROPERTY.

            (a)   The Grantor shall keep its place(s) of business and chief
      executive office and the offices) where it keeps its records concerning
      the Receivables, and all originals of all chattel paper which evidenced
      Receivables, located at the address set forth in SECTION 3.1.1, or, upon
      30 days' prior written notice to the Agent, at such other locations in a
      jurisdiction where all actions required by the FIRST SENTENCE of SECTION
      4.1.7 shall have been taken with respect to the Receivables; not change
      its name except upon 30 days' prior written notice to the Agent; hold and
      preserve such records and chattel paper; and permit representatives of the
      Agent at any time during normal business hours to inspect and make
      abstracts from such records and chattel paper.

            (b)   Promptly upon the written request of the Agent, the Grantor
      will direct all obligors under any Receivables to make all payments to one
      or more lock boxes. Each lock box will be maintained only pursuant to a
      lock box agreement which is in all respects satisfactory to the Agent and
      which provides, among other things, that (i) until the lock box bank shall
      have received written notice to the contrary from the Agent, the lock box
      bank will make all payments from the lock box to those accounts of the
      Grantor designated by the Grantor, and, after any such notice, the lock
      box bank will make all payments from the lock box to the Agent for credit
      to the Collateral Account, (ii) the lock box bank (if other than the Agent
      or a Lender) waives all set off rights, and (iii) such lock box agreement
      may not be amended without the written consent of the Agent. The Agent
      will not give the notice referred to in the preceding CLAUSE (I) unless it
      has given, or is contemporaneously giving, notice pursuant to CLAUSE (C)
      of this SECTION 4.1.2. No funds,

                                       9

<PAGE>

      other than proceeds of Collateral, will be paid to the lock boxes. The
      Grantor will not open any new lock box, or terminate any existing lock
      box, except upon 10 days' prior written notice to the Agent.

            (c)   Upon written notice by the Agent to the Grantor pursuant to
      this CLAUSE (C) of this SECTION 4.1.2, all proceeds of Collateral received
      by the Grantor shall be delivered in kind to the Agent for deposit to a
      deposit account (the "COLLATERAL ACCOUNT") of the Grantor maintained with
      the Agent, and the Grantor shall not commingle any such proceeds, and
      shall hold separate and apart from all other property, all such proceeds
      in express trust for the benefit of the Agent until delivery thereof is
      made to the Agent. The Agent will not give the notice referred to in the
      preceding sentence unless there shall have occurred and be continuing a
      Default. No funds, other than proceeds of Collateral, will be deposited in
      the Collateral Account.

            (d)   The Agent shall have the right to apply any amount in the
      Collateral Account to the payment of any Obligations which are due and
      payable or payable upon demand, or to the payment of any Obligations at
      any time that an Event of Default shall exist. Subject to the rights of
      the Agent, the Grantor shall have the right, with respect to and to the
      extent of collected funds in the Collateral Account, as long as there
      shall be no Default, to require the Agent to permit to be transferred upon
      the direction of the Grantor any or all of such collected funds. The Agent
      may at any time transfer to the Grantor's general demand deposit accounts
      any or all of the collected funds in the Collateral Account; PROVIDED,
      HOWEVER, that any such transfer shall not be deemed to be a waiver or
      modification of any of the Agent's rights under CLAUSE (D) of this SECTION
      4.1.2.

            (e)   The Grantor will, at the Agent's request, enter into such
      agreements and cause any securities intermediary to enter into such
      agreements as may be necessary to provide the Agent control of all
      investment property.

      SECTION 4.1.3.  AS TO COLLATERAL.
            (a)   Until such time as the Agent shall notify the Grantor of the
      revocation of such power and authority the Grantor (i) may in the ordinary
      course of its business, at its own expense, sell, lease or furnish under
      the contracts of service any of the Inventory normally held by the Grantor
      for such purpose, and use and consume, in the ordinary course of its
      business, any raw materials, work in process or materials normally held by
      the Grantor for such purpose, (ii) will, at its own expense, endeavor to
      collect, as and when due, all amounts due with respect to any of the
      Collateral, including the taking of such action with respect to such
      collection as the Agent may reasonably request or, in the absence of such
      request, as the Grantor may deem advisable, and (iii) may grant, in the
      ordinary course of business, to any party obligated on any of the
      Collateral, any rebate, refund or allowance to which such party may be
      lawfully entitled, and may accept, in connection therewith, the return of
      goods, the sale or lease of which shall have given rise to such
      Collateral. The Agent, however, may, at any time, after the occurrence and
      during the continuance of a Default, whether before or after any
      revocation of such power and authority or the maturity of any of the
      Obligations, notify any parties obligated on any of the Collateral to make
      payment to the Agent of any amounts due or to become due thereunder and
      enforce collection of any of the Collateral by suit or otherwise and
      surrender, release or exchange all or any part thereof, or compromise or
      extend or renew for any period (whether or not longer than the original
      period) any indebtedness thereunder or evidenced thereby. Upon request of
      the Agent, the Grantor will, at its own

                                       10

<PAGE>

      expense, notify any parties obligated on any of the Collateral to make
      payment to the Agent of any amounts due or to become due thereunder.

            (b)   The Agent is authorized to endorse, in the name of the
      Grantor, any item, howsoever received by the Agent, representing any
      payment on or other proceeds of any of the Collateral.

      SECTION 4.1.4.  AS TO INTELLECTUAL PROPERTY COLLATERAL.

            (a)   The Grantor shall not, unless the Grantor shall either (i)
      reasonably and in good faith determine (and notice of such determination
      shall have been delivered to the Agent) that any of the Patent Collateral
      is of negligible economic value to the Grantor, or (ii) have a valid
      business purpose to do otherwise, do any act, or omit to do any act,
      whereby any of the Patent Collateral may lapse or become abandoned or
      dedicated to the public or unenforceable.

            (b)   The Grantor shall not, and the Grantor shall not permit any of
      its licensees to, unless the Grantor shall either (i) reasonably and in
      good faith determine (and notice of such determination shall have been
      delivered to the Agent) that any of the Trademark Collateral is of
      negligible economic value to the Grantor, or (ii) have a valid business
      purpose to do otherwise,

                  (i)   fail to continue to use any of the Trademark Collateral
            in order to maintain all of the Trademark Collateral in full force
            free from any claim of abandonment for non-use,

                  (ii)  fail to maintain as in the past the quality of products
            and services offered under all of the Trademark Collateral,

                  (iii) fail to employ all of the Trademark Collateral
            registered with any Federal or state or foreign authority with an
            appropriate notice of such registration,

                  (iv)  adopt or use any other Trademark which is confusingly
            similar or a colorable imitation of any of the Trademark Collateral,

                  (v)   use any of the Trademark Collateral registered with any
            Federal or state or foreign authority except for the uses for which
            registration or application for registration of all of the Trademark
            Collateral has been made, and

                  (vi)  do or permit any act or knowingly omit to do any act
            whereby any of the Trademark Collateral may lapse or become invalid
            or unenforceable.

            (c)   The Grantor shall not, unless the Grantor shall either

                  (i)   reasonably and in good faith determine (and notice of
            such determination shall have been delivered to the Agent) that any
            of the Copyright Collateral or any of the Trade Secrets Collateral
            is of negligible economic value to the Grantor, or

                  (ii)  have a valid business purpose to do otherwise, do or
            permit any act or knowingly omit to do any act whereby any of the
            Copyright Collateral or any of

                                       11

<PAGE>

            the Trade Secrets Collateral may lapse or become invalid or
            unenforceable or placed in the public domain except upon expiration
            of the end of an unrenewable term of a registration thereof.

            (d)   The Grantor shall notify the Agent immediately if it knows, or
      has reason to know, that any application or registration relating to any
      material item of the Intellectual Property Collateral may become abandoned
      or dedicated to the public or placed in the public domain or invalid or
      unenforceable, or of any adverse determination or development (including
      the institution of, or any such determination or development in, any
      proceeding in the United States Patent and Trademark Office, the United
      States Copyright Office or any foreign counterpart thereof or any court)
      regarding the Grantor's ownership of any of the Intellectual Property
      Collateral, its right to register the same or to keep and maintain and
      enforce the same.

            (e)   In no event shall the Grantor or any of its agents, employees,
      designees or licensees file an application for the registration of any
      Intellectual Property Collateral with the United States Patent and
      Trademark Office, the United States Copyright Office or any similar office
      or agency in any other country or any political subdivision thereof,
      unless it informs the Agent in writing at least 30 days prior to the
      intended making of such filing, and upon request of the Agent, executes
      and delivers any and all agreements, instruments, documents and papers as
      the Agent may reasonably request to evidence the Agent's security interest
      in such Intellectual Property Collateral and the goodwill and general
      intangibles of the Grantor relating thereto or represented thereby.

            (f)   The Grantor shall take all necessary steps, including in any
      proceeding before the United States Patent and Trademark Office, the
      United States Copyright Office or any similar office or agency in any
      other country or any political subdivision thereof, to maintain and pursue
      any application (and to obtain the relevant registration) filed with
      respect to, and to maintain any registration of, the Intellectual Property
      Collateral, including the filing of applications for renewal, affidavits
      of use, affidavits of incontestability and opposition, interference and
      cancellation proceedings and the payment of fees and taxes (except to the
      extent that dedication, abandonment or invalidation is permitted under the
      foregoing CLAUSES (A), (B) and (C)).

            (g)   The Grantor shall, contemporaneously herewith, execute and
      deliver to the Agent an Agreement (Patent), an Agreement (Trademark) and
      an Agreement (Copyright) in the forms of EXHIBIT A, EXHIBIT B and EXHIBIT
      C hereto, respectively, amending and restating, in their entirety,
      respectively, each of the Supplements, and shall execute and deliver to
      the Agent any other document required to acknowledge or register or
      perfect the Agent's interest in any part of the Intellectual Property
      Collateral.

      SECTION 4.1.5. INSURANCE. The Grantor will maintain or cause to be
maintained with responsible insurance companies insurance with respect to the
Equipment and Inventory against such casualties and contingencies and of such
types and in such amounts as is customary in the case of similar businesses and
will, upon the request of the Agent, furnish a certificate of a reputable
insurance broker setting forth the nature and extent of all insurance maintained
by the Grantor in accordance with this Section. Without limiting the foregoing,
the Grantor further agrees as follows:

            (a)   Each policy for property insurance shall show the Agent as a
      loss payee.

                                       12

<PAGE>

            (b)   Each policy for liability insurance shall show the Agent as an
      additional insured.

            (c)   With respect to each life insurance policy, the Grantor shall
      execute and deliver to the Agent a collateral assignment, notice of which
      has been acknowledged in writing by the insurer.

            (d)   Each insurance policy shall provide that at least 30 days'
      prior written notice of cancellation or of lapse shall be given to the
      Agent by the insured.

            (e)   The Grantor shall, if so requested by the Agent, deliver to
      the Agent a copy of each insurance policy.

            (f)   All payments in respect of property insurance and life
      insurance shall be deposited to the Collateral Account and if there shall
      be no Collateral Account shall be paid to the Grantor.

      SECTION 4.1.6.  TRANSFERS AND OTHER LIENS.  The Grantor shall not:

            (a)   sell, assign (by operation of law or otherwise) or otherwise
      dispose of any of the Collateral, except Inventory in the ordinary course
      of business or as permitted by the Credit Agreements; or

            (b)   create or suffer to exist any Lien 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 Security Agreement and except as permitted by the Credit
      Agreements.

            (c)   The Grantor will defend the right, title and interest of the
      Agent in and to any of the Grantor's rights under the Related Contracts
      and to the Inventory and Equipment and all other Collateral and in and to
      the Proceeds and products thereof against the claims and demands of all
      persons whomsoever.

      SECTION 4.1.7. NOTICES. The Grantor will, upon obtaining knowledge
thereof, advise the Agent promptly, in reasonable detail, (a) of any lien,
security interest, encumbrance or claims made or asserted against any of the
Collateral, (b) of any material change in the value of the Collateral, and (c)
of the occurrence of any other event which would have a Materially Adverse
Effect on the aggregate value of the Collateral or on the security interests
created hereunder.

      SECTION 4.1.8. CONTINUOUS PERFECTION. The Grantor will not change its
name, identity or corporate structure in any manner which might make any
financing or continuation statement filed hereunder seriously misleading within
the meaning of Section 9-506 of the UCC (or any other then applicable provision
of the UCC) unless the Grantor shall have given the Agent at least 90 days'
prior written notice thereof or shall have delivered to the Agent (i)
acknowledgement copies of UCC-3 financing statements duly executed and duly
filed in each jurisdiction in which UCC filings were required in order to
perfect the security interest granted by this Agreement in the Collateral and
shall have taken all action (or made arrangements to take such action
substantially simultaneously with such change if it is impossible to take such
action in advance) necessary or reasonably requested by the Agent to amend such
financing statement or continuation statement so that it is not seriously
misleading, and (ii), with respect to the Patent Collateral, Trademark
Collateral and Copyright Collateral, make all filings necessary in the United
States Patent and Trademark Office and the

                                       13

<PAGE>

United States Copyright Office, as applicable necessary to reflect such name
change.

      SECTION 4.1.9. FURTHER ASSURANCES, ETC. The Grantor agrees that, from time
to time at its own expense, the Grantor will promptly execute and deliver all
further instruments and documents, and take all further action, that may be
necessary or desirable, or that the Agent may request, in order to perfect,
preserve and protect any security interest granted or purported to be granted
hereby or to enable the Agent to exercise and enforce its rights and remedies
hereunder with respect to any Collateral. Without limiting the generality of the
foregoing, the Grantor will

            (a)   mark conspicuously each document included in the Inventory,
      each chattel paper included in the Receivables and each Related Contract
      and, at the request of the Agent, each of its records pertaining to the
      Collateral with a legend, in form and substance satisfactory to the Agent,
      indicating that such document, chattel paper, Related Contract or
      Collateral is subject to the security interest granted hereby;

            (b)   if any Receivable shall be evidenced by a promissory note or
      other instrument, negotiable document or chattel paper, deliver and pledge
      to the Agent hereunder such promissory note, instrument, negotiable
      document or chattel paper duly endorsed and accompanied by duly executed
      instruments of transfer or assignment, all in form and substance
      satisfactory to the Agent;

            (c)   execute and file such financing or continuation statements, or
      amendments thereto, and such other instruments or notices, as may be
      necessary or desirable, or as the Agent may request, in order to perfect
      and preserve the security interests and other rights granted or purported
      to be granted to the Agent hereby; and

            (d)   furnish to the Agent, from time to time at the Agent's
      request, statements and schedules further identifying and describing the
      Collateral and such other reports in connection with the Collateral as the
      Agent may reasonably request, all in reasonable detail.

With respect to the foregoing and the grant of the security interest hereunder,
the Grantor hereby authorizes the Agent to file one or more financing or
continuation statements, and amendments thereto, relative to all or any part of
the Collateral without the signature of the Grantor where permitted by law. A
carbon, photographic or other reproduction of this Security Agreement or any
financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law.

         The Grantor agrees to take all necessary action to permit the Agent to
identify the Non-Pledged Assets and to avoid commingling Non-Pledged Assets with
Collateral.

                                    ARTICLE V

                                    THE AGENT

      SECTION 5.1. AGENT APPOINTED ATTORNEY-IN-FACT. The Grantor hereby
irrevocably appoints the Agent the Grantor's attorney-in-fact, with full
authority in the place and stead of the Grantor and in the name of the Grantor
or otherwise, from time to time in the Agent's discretion, to take any action
and to execute any instrument which the Agent may deem necessary or advisable to
accomplish the purposes of this Security Agreement, including, without
limitation:

                                       14

<PAGE>

            (a)   to ask, demand, collect, sue for, recover, compromise, receive
      and give acquittance and receipts for moneys due and to become due under
      or in respect of any of the Collateral;

            (b)   to receive, endorse, and collect any drafts or other
      instruments, documents and chattel paper, in connection with CLAUSE (A)
      above;

            (c)   to file any claims or take any action or institute any
      proceedings which the Agent may deem necessary or desirable for the
      collection of any of the Collateral or otherwise to enforce the rights of
      the Agent with respect to any of the Collateral; and

            (d)   to perform the affirmative obligations of the Grantor
      hereunder (including all obligations of the Grantor pursuant to SECTION
      4.1.7).

The Grantor hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest.

      SECTION 5.2. AGENT MAY PERFORM. If the Grantor fails to perform any
agreement contained herein, the Agent may itself perform, or cause performance
of, such agreement, and the expenses of the Agent incurred in connection
therewith shall be payable by the Grantor pursuant to SECTION 6.2.

      SECTION 5.3. AGENT HAS NO DUTY. In addition to, and not in limitation of,
SECTION 2.4, the powers conferred on the Agent hereunder are solely to protect
its interest (on behalf of the Lender Parties) in the Collateral and shall not
impose any duty on it to exercise any such powers. Except for reasonable care of
any Collateral in its possession and the accounting for moneys actually received
by it hereunder, the Agent shall have no 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.

      SECTION 5.4. REASONABLE CARE. The Agent is required to exercise reasonable
care in the custody and preservation of any of the Collateral in its possession;
PROVIDED, HOWEVER, the Agent shall be deemed to have exercised reasonable care
in the custody and preservation of any of the Collateral, if it takes such
action for that purpose as the Grantor reasonably requests in writing at times
other than upon the occurrence and during the continuance of any Event of
Default, but failure of the Agent to comply with any such request at any time
shall not in itself be deemed a failure to exercise reasonable care.

                                   ARTICLE VI

                                    REMEDIES

      SECTION 6.1. CERTAIN REMEDIES. (a) If any Event of Default shall have
occurred and be continuing:

            (i)   The Agent may exercise in respect of the Collateral, in
      addition to other rights and remedies provided for herein or otherwise
      available to it, all the rights and remedies of a secured party on default
      under the UCC (whether or not the UCC applies to the affected Collateral)
      and also may

                        (A)   require the Grantor to, and the Grantor hereby
            agrees that it will, at its expense and upon request of the Agent
            forthwith, assemble all or part of the

                                       15

<PAGE>

            Collateral as directed by the Agent and make it available to the
            Agent at a place to be designated by the Agent which is reasonably
            convenient to both parties and

                        (B)   without notice except as specified below, sell the
            Collateral or any part thereof in one or more parcels at public or
            private sale, at any of the Agent's offices or elsewhere, for cash,
            on credit or for future delivery, and upon such other terms as the
            Agent may deem commercially reasonable. The Grantor agrees that, to
            the extent notice of sale shall be required by law, at least ten
            days' prior notice to the Grantor of the time and place of any
            public sale or the time after which any private sale is to be made
            shall constitute reasonable notification. The Agent shall not be
            obligated to make any sale of Collateral regardless of notice of
            sale having been given. The Agent may adjourn any public or private
            sale from time to time by announcement at the time and place fixed
            therefor, and such sale may, without further notice, be made at the
            time and place to which it was so adjourned.

            (ii)  All cash proceeds received by the Agent in respect of any sale
      of, collection from, or other realization upon all or any part of the
      Collateral may, in the discretion of the Agent, be held by the Agent as
      collateral for, and/or then or at any time thereafter applied (after
      payment of any amounts payable to the Agent pursuant to SECTION 6.2) in
      whole or in part by the Agent for the ratable benefit of the Lender
      Parties against, all or any part of the Obligations in such order as the
      Agent shall elect. Any surplus of such cash or cash proceeds held by the
      Agent and remaining after final payment in full of all the Obligations
      shall be paid over to the Grantor or to whomsoever may be lawfully
      entitled to receive such surplus.

            (b)   In furtherance of, and not in limitation of, the foregoing,
the Agent, without demand of performance or other demand, advertisements or
notice of any kind (except the notice specified below of time and place of
public or private sale) to or upon the Grantor or any other Person (all and each
of which demands, advertisements and/or notices are hereby expressly waived),
may, whenever an Event of Default shall have occurred and be continuing, in a
commercially reasonable manner, forthwith collect, receive, appropriate and
realize upon the Collateral, or any part thereof, and/or may forthwith sell,
assign, give option or options to purchase, contract to sell or otherwise
dispose of and deliver said Collateral, or any part thereof, in one or more
parcels at public or private sale or sales, at any exchange, broker's board or
at any of the Agent's offices or elsewhere upon such terms and conditions as it
may deem advisable and at such prices as it may deem best, for cash or on credit
or for future delivery without assumption of any credit risk, with the right to
the Agent upon any such sale or sales, public or private, to purchase the whole
or any part of said Collateral so sold, free of any right or equity of
redemption in the Grantor, which right or equity is hereby expressly waived or
released. The Agent shall apply the net proceeds of any such collection,
recovery, receipt, appropriation, realization or sale, after deducting all
reasonable costs and expenses of every kind incurred therein or incidental to
the care, safekeeping or otherwise of any and all of the Collateral or in any
way relating to the rights of the Agent hereunder, including reasonable
attorneys' fees and legal expenses, to the payment in whole or in part of the
Obligations in such order as the Agent may elect, the Grantor remaining liable
for any deficiency remaining unpaid after such application and all fees and
expenses incurred by the Agent in collecting such deficiency, and only after so
paying over such net proceeds and after the payment by the Agent of any other
amount required by any provision of law, including, without limitation, Section
9-615 of the UCC, need the Agent account for the surplus, if any, to the
Grantor. Unless the Collateral is

                                       16

<PAGE>

perishable or threatens to decline speedily in value or is of a type customarily
sold on a recognized market, in which event no notification is required, the
Grantor agrees that the Agent need not give more than ten days' notice of the
time and place of any public sale or of the time after which a private sale or
other intended disposition is to take place and that such notice is reasonable
notification of such matters. No notification need be given to the Grantor if it
has signed after default a statement renouncing or modifying any right to
notification of sale or other intended disposition. The Grantor further agrees
to waive and agrees not to assert any rights or privileges which it may acquire
under Section 9-615 of the UCC

      For the purpose of enabling the Agent to exercise rights and remedies
under this Agreement and any Security Agreement Supplements, at such time as the
Agent shall be lawfully entitled to exercise such rights and remedies, and for
no other purpose, but as a supplement to and not in limitation of any and all
other rights and remedies available to the Agent and to the extent the Agent
chooses to avail itself of the following, the grants, to the extent not
prohibited by applicable law or existing licenses granted in the ordinary course
of business (unless and until appropriate consents have been obtained), to the
Agent an irrevocable, non-exclusive license (exercisable without payment of
royalty or other compensation to the Borrower), which license shall be
exercisable by the Agent upon and subject to the occurrence and during the
continuance of an Event of Default, to use, license or sublicense and to
enhance, alter or otherwise modify any Patent Collateral, Copyright Collateral
and, subject the maintenance of quality standards comparable to those heretofore
maintained by the Grantor in connection with the same or similar goods and
services, Trademark Collateral, now owned or hereafter acquired by the Grantor
(including, in the case of a license with respect to Copyright Collateral,
reasonable access to all media in which any of the licensed items may be
recorded or stored and to all computer hardware used for the compilation,
storage or printout thereof); PROVIDED, HOWEVER, that (i) to the extent such
Patent Collateral consists of patent licenses or other agreements that provide
the Grantor with the right to use patented technology, the non-exclusive license
granted hereby to the Agent shall be subject to the terms and conditions
contained in such patent licenses or such other agreements, including without
limitation restrictions on the right to sub-license, (ii) to the extent such
Copyright Collateral consists of copyright and/or mask work licenses or other
agreements that provide the Grantor with the right to use any of the types of
items referred to in CLAUSE (I) of the definition of "Copyright Collateral", the
non-exclusive license granted hereby to the Agent shall be subject to the terms
and conditions contained in such copyright and/or mask work licenses or such
other agreements, including without limitation restrictions on the right to
sub-license, as the case may be, and (iii) to the extent such Trademark
Collateral consists of trademark licenses or other agreements that provide the
Grantor with the right to use any of the types of items referred to in CLAUSE
(I) of the definition of "Trademark Collateral", the non-exclusive license
granted hereby to the Agent shall be subject to the terms and conditions
contained in such trademark license or other agreements, including without
limitation, restrictions on the right to sub-license, as the case may be.

      SECTION 6.2. INDEMNITY AND EXPENSES.

            (a)   The Grantor agrees to indemnify the Agent from and against any
      and all claims, losses and liabilities arising out of or resulting from
      this Security Agreement (including, without limitation, enforcement of
      this Security Agreement), except claims, losses or liabilities resulting
      from the Agent's gross negligence or wilful misconduct.

                                       17

<PAGE>

            (b)   The Grantor will upon demand pay to the Agent the amount of
      any and all reasonable expenses, including the reasonable fees and
      disbursements of its counsel and of any experts and agents, which the
      Agent may incur in connection with

                  (i)   the administration of this Security Agreement,

                  (ii)  the custody, preservation, use or operation of, or the
            sale of, collection from, or other realization upon, any of the
            Collateral,

                  (iii) the exercise or enforcement of any of the rights of the
            Agent or the Lender Parties hereunder, and

                  (iv)  the failure by the Grantor to perform or observe any of
            the provisions hereof.

                                   ARTICLE VII

                            MISCELLANEOUS PROVISIONS

      SECTION 7.1. LOAN DOCUMENT. This Security Agreement is a Loan Document
executed pursuant to the Credit Agreements and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions thereof (including as to the WAIVER OF JURY TRIAL with
respect to any litigation relating to or arising out of any matter herein).

      SECTION 7.2 CONTINUATION OF SECURITY INTEREST. This Security Agreement is
an amendment and restatement of the Existing Security Agreement and the security
interest granted thereunder shall be deemed continued hereunder.

      SECTION 7.3. AMENDMENTS; ETC. No amendment to or waiver of any provision
of this Security Agreement nor consent to any departure by the Grantor herefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Agent, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.

      SECTION 7.4. ADDRESSES FOR NOTICES. All notices and other communications
provided for hereunder shall be in writing (including telegraphic communication)
and, if to the Grantor, mailed or telegraphed or delivered to it, addressed to
it at the address set forth below its signature hereto, if to the Agent, mailed
or delivered to it, addressed to it at the address of the Agent specified in the
Credit Agreements, or as to either party at such other address as shall be
designated by such party in a written notice to each other party complying as to
delivery with the terms of this Section. All such notices and other
communications shall, when mailed or telegraphed, respectively, be effective
when deposited in the mails or delivered to the telegraph company, respectively,
addressed as aforesaid.

      SECTION 7.5. SECTION CAPTIONS. Section captions used in this Security
Agreement are for convenience of reference only, and shall not affect the
construction of this Security Agreement.

      SECTION 7.6. SEVERABILITY. Wherever possible each provision of this
Security Agreement shall be interpreted in such manner as to be effective and
valid under applicable law,

                                       18

<PAGE>

but if any provision of this Security Agreement shall be prohibited by or
invalid under such law, such provision shall be ineffective to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Security Agreement.

      SECTION 7.7. GOVERNING LAW, ENTIRE AGREEMENT, ETC. THIS SECURITY AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE
STATE OF ILLINOIS, 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
ILLINOIS. THIS SECURITY AGREEMENT AND THE OTHER LOAN DOCUMENTS CONSTITUTE THE
ENTIRE UNDERSTANDING AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER
HEREOF AND SUPERSEDE ANY PRIOR AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT
THERETO.

                             [SIGNATURES TO FOLLOW]

                                       19

<PAGE>

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

                                 THE ARISTOTLE CORPORATION

                                 By:/s/ Steven B. Lapin
                                    --------------------
                                   Title: President and Chief Operating Officer

                                    Address: 96 Cummings Point Road
                                               Stamford, Connecticut  06902

                                    Attention:  Steven B. Lapin
                                               President

                                      Telecopier No.:  203-348-3103

                                    Copy to:

                                    The Aristotle Corporation
                                    96 Cummings Point Road
                                    Stamford, Connecticut  06902

                                    Telecopier No.:  203-348-3103

                                    Attention:  Paul McDonald
                                               Chief Financial Officer

                                    Additional Copy to:

                                           Nasco Division
                                           901 Janesville Avenue
                                           Fort Atkinson, Wisconsin
                                           53538-0901

                                    Attention: Dean T. Johnson

                                    Telecopier No.: 414-563-0234

                                      S-1

<PAGE>

                                  ACCEPTED:

                                  BANK OF AMERICA, N.A., as Agent

                                  By: /S/ DAVID JOHANSON
                                      Title: Vice President

                                      Address:  231 South LaSalle Street
                                                Chicago, Illinois  60697

                                                Attention: David Johanson

                                      Telecopier No.:  877-206-8410

                                      S-2
<PAGE>

                    AMENDED AND RESTATED SECURITY AGREEMENT

Schedule I - Location of Collateral

Schedule II - Patents

Schedule III - Trademarks

Schedule IV - Copyrights

Schedule V - Trade Secrets

Schedule VI - Accounts

<PAGE>

                                    EXHIBIT A
                                       to
                               Security Agreement

                     AMENDED AND RESTATED AGREEMENT (PATENT)

      THIS AMENDED AND RESTATED AGREEMENT (PATENT), dated as of June 27, 2002
(as modified from time to time, this "AGREEMENT"), made by The Aristotle
Corporation, a Delaware corporation (the "COMPANY"), EACH OTHER PERSON OR ENTITY
WHICH FROM TIME TO TIME BECOMES A PARTY HERETO (collectively, including the
Company, the "GRANTORS" and individually each a "GRANTOR"), in favor of BANK OF
AMERICA, N.A., as administrative agent (together with any successor(s) thereto
in such capacity, the "AGENT") for each of the financial institutions
(individually a "Lender" and collectively the "LENDERS") which are or may from
time to time become, parties to the Credit Agreements referred to below.

                               W I T N E S S E T H

      WHEREAS, the parties or their predecessors have entered into that certain
First Amendment to Amended and Restated Credit Agreement (Five Year) and
Consent, dated as of June 17, 2002 which amends the Amended and Restated Credit
Agreement (Five Year), dated as of May 29, 2001 (as amended, supplemented and
otherwise modified, the "CREDIT AGREEMENT (FIVE YEAR)"), among Nasco
International, Inc., a Wisconsin corporation (the "PARENT"), the lenders parties
thereto and the Agent; and

      WHEREAS, the parties or their predecessors have entered into that certain
Second Amendment to Amended and Restated Credit Agreement (364 Days) and
Consent, dated as of June 17, 2002 which amends the Amended and Restated Credit
Agreement (364 Days), dated as of May 29, 2001 (as amended, supplemented and
otherwise modified, the "CREDIT AGREEMENT (364 DAYS)" and together with the
Credit Agreement (Five Year), the "CREDIT AGREEMENTS"), among the Parent, the
lenders party thereto and the Agent; and

      WHEREAS, the Parent and the Agent have entered into that certain Agreement
(Patent), dated as of March 31, 2000 (the "EXISTING AGREEMENT (PATENT)"), and
the parties hereto wish to amend and restate such Existing Agreement (Patent) as
set forth in this Agreement.

      WHEREAS, it is a condition precedent to any extension of credit under the
Credit Agreements, that the Grantors enter into the Security Agreement to grant
to the Agent a continuing security interest in all of the "Collateral"
identified therein, and, in connection with and to supplement the Security
Agreement, enter into this Agreement, to, among other things, confirm and ratify
its grant to the Agent of a continuing security interest in the Patent
Collateral;

      NOW, THEREFORE, for good and valuable consideration the receipt of which
is hereby acknowledged, in order to induce the Lenders to make Loans (including
the initial Loans) to the Parent from time to time pursuant to the Credit
Agreements and in order to amend and restate the

                                      A-1

<PAGE>

Existing Agreement (Patent), the Grantors hereby agrees with the Agent, for its
benefit and the ratable benefit of each Lender Party, as follows:

      SECTION 1. DEFINITIONS. Unless otherwise defined herein or the context
otherwise requires, terms used in this Agreement, including its preamble and
recitals, have the meanings provided in the Security Agreement.

      SECTION 2. CONFIRMATION AND GRANT OF SECURITY INTEREST. For good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Grantor hereby pledges and assigns to the Agent, for its
benefit and the ratable benefit of the Lender Parties, and granted to the Agent,
for its benefit and the ratable benefit of the Lender Parties, a continuing
security interest in and to, all of the Patent Collateral, as defined herein.
The Grantor hereby ratifies and restates such pledge, assignment and grant, and
with greater specificity hereby assigns and pledges to the Agent for its benefit
and the ratable benefit of each of the Lender Parties, and does hereby grant,
mortgage, pledge and hypothecate to the Agent for its benefit and the ratable
benefit of each of the Lender Parties, a continuing security interest in and to
all of the following, whether now or hereafter existing or acquired (the "PATENT
COLLATERAL"):

                  (a)   all letters patent and applications for letters patent
      throughout the world, including all patent applications in preparation for
      filing anywhere in the world and including each patent and patent
      application referred to in ITEM A of ATTACHMENT 1 hereto;

                  (b)   all patent licenses, including each patent license
      referred to in ITEM B of ATTACHMENT 1 hereto;

                  (c)   all reissues, divisions, continuations,
      continuations-in-part, extensions, renewals and reexaminations of any of
      the items described in the foregoing CLAUSES (A) and (B); and

                  (d)   all proceeds of, and rights associated with, the
      foregoing (including license royalties and proceeds of infringement
      suits), the right to sue third parties for past, present or future
      infringements of any patent or patent application, including any patent or
      patent application referred to in ITEM A of ATTACHMENT 1 hereto, and for
      breach or enforcement of any patent license, including any patent license
      referred to in ITEM B of ATTACHMENT 1 hereto, and all rights corresponding
      thereto throughout the world.

      SECTION 3. SECURITY AGREEMENT. This Agreement has been executed and
delivered by the Grantor for the purpose of, among other things, ratifying and
confirming the grant of the Patent Collateral to the Agent for the benefit of
the Lender Parties and registering (and confirming the recordation pursuant to
the Security Agreement of) the security interest of the Agent in the Patent
Collateral with the United States Patent and Trademark Office and corresponding
offices in other countries of the world. The security interest confirmed and
granted hereby has been confirmed and granted as a supplement to, and not in
limitation of, the security interest granted to the Agent for its benefit and
the benefit of each Lender Party under

                                      A-2

<PAGE>

the Security Agreement. The Security Agreement (and all rights and remedies of
the Agent and each Lender Party thereunder) shall remain in full force and
effect in accordance with its terms.

      SECTION 4. RELEASE OF SECURITY INTEREST. Upon payment in full of all
Obligations, the Agent shall, at the Grantor's expense, execute and deliver to
the Grantor all instruments and other documents as may be necessary or proper to
release the lien on and security interest in the Patent Collateral which has
been granted hereunder.

      SECTION 5. ACKNOWLEDGMENT. The Grantor does hereby further acknowledge and
affirm that the rights and remedies of the Agent with respect to the security
interest in the Patent Collateral granted and confirmed hereby are more fully
set forth in the Security Agreement, the terms and provisions of which
(including the remedies provided for therein) are incorporated by reference
herein as if fully set forth herein.

      SECTION 6. LOAN DOCUMENT, ETC. This Agreement is a Loan Document executed
pursuant to the Credit Agreements and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions of the Credit Agreements.

      SECTION 7. COUNTERPARTS. This Agreement may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
and all of which shall constitute together but one and the same agreement.

                                      A-3

<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 day and year first above written.

                                   The Aristotle Corporation

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

                                   Address: 96 Cummings Point Road
                                              Stamford, Connecticut  06902

                                   Attention:  Steven B. Lapin
                                              President

                                     Telecopier No.:  203-348-3103

                                Copy to:

                                   The Aristotle Corporation
                                   96 Cummings Point Road
                                   Stamford, Connecticut  06902

                                   Telecopier No.:  203-348-3103

                                   Attention:  Paul McDonald
                                              Chief Financial Officer

                                   Additional Copy to:

                                          Nasco Division
                                          901 Janesville Avenue
                                          Fort Atkinson, Wisconsin
                                          53538-0901

                                   Attention: Dean T. Johnson

                                   Telecopier No.: 414-563-0234

                                      A-4

<PAGE>

                                   Accepted:

                                   BANK OF AMERICA, N.A., as Agent

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

                                   Address:  231 South LaSalle Street
                                            Chicago, Illinois  60697

                                            Attention: David Johanson

                                     Telecopier No.:  877-206-8410

                                      A-5

<PAGE>

                                    EXHIBIT B
                                       to
                               Security Agreement

                   AMENDED AND RESTATED AGREEMENT (TRADEMARK)

      THIS AMENDED AND RESTATED AGREEMENT (TRADEMARK), dated as of June 27, 2002
(as modified from time to time, this "AGREEMENT"), made by The Aristotle
Corporation, a Delaware corporation (the "COMPANY"), EACH OTHER PERSON OR ENTITY
WHICH FROM TIME TO TIME BECOMES A PARTY HERETO (collectively, including the
Company, the "GRANTORS" and individually each a "GRANTOR"), in favor of BANK OF
AMERICA, N.A., as administrative agent (together with any successor(s) thereto
in such capacity, the "AGENT") for each of the financial institutions
(individually a "LENDER" and collectively the "LENDERS") which are or may from
time to time become, parties to the Credit Agreements referred to below.

                               W I T N E S S E T H

      WHEREAS, the parties or their predecessors have entered into that certain
First Amendment to Amended and Restated Credit Agreement (Five Year) and
Consent, dated as of June 17, 2002 which amends the Amended and Restated Credit
Agreement (Five Year), dated as of May 29, 2001 (as amended, supplemented and
otherwise modified, the "CREDIT AGREEMENT (FIVE YEAR)"), among Nasco
International, Inc., a Wisconsin corporation (the "PARENT"), the lenders parties
thereto and the Agent; and

      WHEREAS, the parties or their predecessors have entered into that certain
Second Amendment to Amended and Restated Credit Agreement (364 Days) and
Consent, dated as of June 17, 2002 which amends the Amended and Restated Credit
Agreement (364 Days), dated as of May 29, 2001 (as amended, supplemented and
otherwise modified, the "CREDIT AGREEMENT (364 DAYS)" and together with the
Credit Agreement (Five Year), the "CREDIT AGREEMENTS"), among the Parent, the
lenders party thereto and the Agent; and

      WHEREAS, the Parent and the Agent have entered into that certain Agreement
(Trademark), dated as of March 31, 2000 (the "EXISTING AGREEMENT (TRADEMARK)"),
and the parties hereto wish to amend and restate such Existing Agreement
(Trademark) as set forth in this Agreement.

      WHEREAS, it is a condition precedent to any extension of credit under the
Credit Agreements, that the Grantors enter into the Security Agreement to grant
to the Agent a continuing security interest in all of the "Collateral"
identified therein, and, in connection with and to supplement the Security
Agreement, enter into this Agreement, to, among other things, confirm and ratify
its grant to the Agent of a continuing security interest in the Trademark
Collateral;

      NOW, THEREFORE, for good and valuable consideration the receipt of which
is hereby acknowledged, in order to induce the Lenders to make Loans (including
the initial Loans) to the

                                      B-1

<PAGE>

Parent from time to time pursuant to the Credit Agreements and in order to amend
and restate the Existing Agreement (Trademark), the Grantors hereby agrees with
the Agent, for its benefit and the ratable benefit of each Lender Party, as
follows:

      SECTION 1. DEFINITIONS. Unless otherwise defined herein or the context
otherwise requires, terms used in this Agreement, including its preamble and
recitals, have the meanings provided in the Security Agreement.

      SECTION 2. CONFIRMATION AND GRANT OF SECURITY INTEREST. For good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Grantor hereby pledges and assigns to the Agent, for its
benefit and the ratable benefit of the Lender Parties, and granted to the Agent,
for its benefit and the ratable benefit of the Lender Parties, a continuing
security interest in and to, all of the Trademark Collateral, as defined
therein. The Grantor hereby ratifies and restates such pledge, assignment and
grant, and with greater specificity hereby assigns and pledges to the Agent for
its benefit and the ratable benefit of each of the Lender Parties, and does
hereby grant, mortgage, pledge and hypothecate to the Agent for its benefit and
the ratable benefit of each of the Lender Parties, a continuing security
interest in and to all of the following, whether now or hereafter existing or
acquired (the "TRADEMARK COLLATERAL"):

            (a)   all trademarks, trade names, corporate names, company names,
      business names, fictitious business names, trade styles, service marks,
      certification marks, collective marks, logos, other source of business
      identifiers, prints and labels on which any of the foregoing have appeared
      or appear, designs and general intangibles of a like nature (all of the
      foregoing items in this CLAUSE (A) being collectively called a
      "TRADEMARK"), now existing anywhere in the world or hereafter adopted or
      acquired, whether currently in use or not, all registrations and
      recordings thereof and all applications in connection therewith, whether
      pending or in preparation for filing, including registrations, recordings
      and applications in the United States Patent and Trademark Office or in
      any office or agency of the United States of America or any State thereof
      or any foreign country, including those referred to in ITEM A of
      ATTACHMENT 1 hereto;

            (b)   all Trademark licenses, including each Trademark license
      referred to in ITEM B of ATTACHMENT 1 hereto;

            (c)   all reissues, extensions or renewals of any of the items
      described in CLAUSES (A) and (B);

            (d)   all of the goodwill of the business connected with the use of,
      and symbolized by the items described in, CLAUSES (A) and (B); and

            (e)   all proceeds of, and rights associated with, the foregoing,
      including any claim by the Grantor against third parties for past,
      present, or future infringement or dilution of any Trademark, Trademark
      registration or Trademark license, including any Trademark, Trademark
      registration or Trademark license referred to in ITEM A and ITEM B of

                                      B-2

<PAGE>

      ATTACHMENT 1 hereto, or for any injury to the goodwill associated with the
      use of any Trademark or for breach or enforcement of any Trademark
      license.

      SECTION 3. SECURITY AGREEMENT. This Agreement has been executed and
delivered by the Grantor for the purpose of, among other things, ratifying and
confirming the grant of the Trademark Collateral to the Agent for the benefit of
the Lender Parties and registering (and confirming the recordation pursuant to
the Security Agreement of) the security interest of the Agent in the Trademark
Collateral with the United States Patent and Trademark Office and corresponding
offices in other countries of the world. The security interest confirmed and
granted hereby has been confirmed and granted as a supplement to, and not in
limitation of, the security interest confirmed and granted to the Agent for its
benefit and the benefit of each Lender Party under the Security Agreement. The
Security Agreement (and all rights and remedies of the Agent and each Lender
Party thereunder) shall remain in full force and effect in accordance with its
terms.

      SECTION 4. RELEASE OF SECURITY INTEREST. Upon payment in full of all
Obligations, the Agent shall, at the Grantor's expense, execute and deliver to
the Grantor all instruments and other documents as may be necessary or proper to
release the lien on and security interest in the Trademark Collateral which has
been granted hereunder.

      SECTION 5. ACKNOWLEDGMENT. The Grantor does hereby further acknowledge and
affirm that the rights and remedies of the Agent with respect to the security
interes| in the Trademark Collateral granted and confirmed hereby are more fully
set forth in the Security Agreement, the terms and provisions of which
(including the remedies provided for therein) are incorporated by reference
herein as if fully set forth herein.

      SECTION 6. LOAN DOCUMENT, ETC. This Agreement is a Loan Document executed
pursuant to the Credit Agreement and shall (unless otherwise expressly indicated
herein) be construed, administered and applied in accordance with the terms and
provisions of the Credit Agreements.

      SECTION 7. COUNTERPARTS. This Agreement may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
and all of which shall constitute together but one and the same agreement.

                                      B-3

<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 day and year first above written.

                                    The Aristotle Corporation

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

                                  Address: 96 Cummings Point Road
                                             Stamford, Connecticut  06902

                                  Attention:  Steven B. Lapin
                                             President

                                    Telecopier No.:  203-348-3103

                               Copy to:

                                  The Aristotle Corporation
                                  96 Cummings Point Road
                                  Stamford, Connecticut  06902

                                  Telecopier No.:  203-348-3103

                                  Attention:  Paul McDonald
                                             Chief Financial Officer

                                  Additional Copy to:

                                         Nasco Division
                                         901 Janesville Avenue
                                         Fort Atkinson, Wisconsin
                                         53538-0901

                                  Attention: Dean T. Johnson

                                  Telecopier No.: 414-563-0234

                                      B-4

<PAGE>

                                      Accepted:

                                      BANK OF AMERICA, N.A., as Agent

                                      By:
                                          ------------------
                                      Title:
                                            ---------------
                                   Address:  231 South LaSalle Street
                                              Chicago, Illinois  60697

                                               Attention: David Johanson

                                       Telecopier No.:  877-206-8410

                                      B-5

<PAGE>

                                    EXHIBIT C
                                       to
                               Security Agreement

                   AMENDED AND RESTATED AGREEMENT (COPYRIGHT)

      THIS AMENDED AND RESTATED AGREEMENT (COPYRIGHT), dated as of June 27, 2002
(as modified from time to time, this "AGREEMENT"), made by The Aristotle
Corporation, a Delaware corporation (the "COMPANY"), EACH OTHER PERSON OR ENTITY
WHICH FROM TIME TO TIME BECOMES A PARTY HERETO (collectively, including the
Company, the "GRANTORS" and individually each a "GRANTOR"), in favor of BANK OF
AMERICA, N.A., as administrative agent (together with any successor(s) thereto
in such capacity, the "AGENT") for each of the financial institutions
(individually a "LENDER" and collectively the "LENDERS") which are or may from
time to time become, parties to the Credit Agreements referred to below.

                               W I T N E S S E T H

      WHEREAS, the parties or their predecessors have entered into that certain
First Amendment to Amended and Restated Credit Agreement (Five Year) and
Consent, dated as of June 17, 2002 which amends the Amended and Restated Credit
Agreement (Five Year), dated as of May 29, 2001 (as amended, supplemented and
otherwise modified, the "CREDIT AGREEMENT (FIVE YEAR)"), among Nasco
International, Inc., a Wisconsin corporation (the "PARENT"), the lenders parties
thereto and the Agent; and

      WHEREAS, the parties or their predecessors have entered into that certain
Second Amendment to Amended and Restated Credit Agreement (364 Days) and
Consent, dated as of June 17, 2002 which amends the Amended and Restated Credit
Agreement (364 Days), dated as of May 29, 2001 (as amended, supplemented and
otherwise modified, the "CREDIT AGREEMENT (364 DAYS)" and together with the
Credit Agreement (Five Year), the "CREDIT AGREEMENTS"), among the Parent, the
lenders party thereto and the Agent; and

      WHEREAS, the Parent and the Agent have entered into that certain Agreement
(Copyright), dated as of March 31, 2000 (the "EXISTING AGREEMENT (COPYRIGHT)"),
and the parties hereto wish to amend and restate such Existing Agreement
(Copyright) as set forth in this Agreement.

      WHEREAS, it is a condition precedent to any extension of credit under the
Credit Agreements, that the Grantors enter into the Security Agreement to grant
to the Agent a continuing security interest in all of the "Collateral"
identified therein, and, in connection with and to supplement the Security
Agreement, enter into this Agreement, to, among other things, confirm and ratify
its grant to the Agent of a continuing security interest in the Copyright
Collateral;

      NOW, THEREFORE, for good and valuable consideration the receipt of which
is hereby acknowledged, in order to induce the Lenders to make Loans (including
the initial Loans) to the

                                      C-1

<PAGE>

Parent from time to time pursuant to the Credit Agreements and in order to amend
and restate the Existing Agreement (Copyright), the Grantors hereby agrees with
the Agent, for its benefit and the ratable benefit of each Lender Party, as
follows:

      SECTION 1. DEFINITIONS. Unless otherwise defined herein or the context
otherwise requires, terms used in this Agreement, including its preamble and
recitals, have the meanings provided in the Security Agreement.

      SECTION 2. GRANT OF SECURITY INTEREST. For good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Grantor hereby confirms that pursuant to the Existing Agreement (Copyright), the
Grantor has pledged and assigned to the Agent, for its benefit and the ratable
benefit of the Lender Parties, and granted to the Agent, for its benefit and the
ratable benefit of the Lender Parties, a continuing security interest in and to,
all of the Copyright Collateral, as defined therein. The Grantor hereby ratifies
and restates such pledge, assignment and grant, and with greater specificity
hereby assigns and pledges to the Agent for its benefit and the ratable benefit
of each of the Lender Parties, and does hereby grant, mortgage, pledge and
hypothecate to the Agent for its benefit and the ratable benefit of each of the
Lender Parties, a continuing security interest in and to all of the following,
whether now or hereafter existing or acquired (the "COPYRIGHT COLLATERAL"): all
copyrights and all semi-conductor chip product mask works of the Grantor,
whether statutory or common law, registered or unregistered, now or hereafter in
force throughout the world including, without limitation, all of the Grantor's
right, title and interest in and to all copyrights and mask works registered in
the United States Copyright Office or anywhere else in the world and also
including, without limitation, the copyrights and mask works referred to in ITEM
A of ATTACHMENT 1 attached hereto, and all applications for registration
thereof, whether pending or in preparation, all copyright and mask work
licenses, including each copyright and mask work license referred to in ITEM B
of ATTACHMENT 1 attached hereto, the right to sue for past, present and future
infringements of any thereof, all rights corresponding thereto throughout the
world, all extensions and renewals of any thereof and all proceeds of the
foregoing, including, without limitation, licenses, royalties, income, payments,
claims, damages and proceeds of suit.

      SECTION 3. SECURITY AGREEMENT. This Agreement has been executed and
delivered by the Grantor for the purpose of, among other things, ratifying and
confirming the grant of the Copyright Collateral to the Agent for the benefit of
the Lender Parties and registering (and confirming the recordation pursuant to
the Security Agreement of) the security interest of the Agent in the Copyright
Collateral with the United States Copyright Office and corresponding offices in
other countries of the world. The security interest confirmed and granted hereby
has been confirmed and granted as a supplement to, and not in limitation of, the
security interest granted to the Agent for its benefit and the benefit of each
Lender Party under the Security Agreement. The Security Agreement (and all
rights and remedies of the Agent and each Lender Party thereunder) shall remain
in full force and effect in accordance with its terms.

      SECTION 4. RELEASE OF SECURITY INTEREST. Upon payment in full of all
Obligations, the Agent shall, at the Grantor's expense, execute and deliver to
the Grantor all instruments and other

                                      C-2

<PAGE>

documents as may be necessary or proper to release the lien on and security
interest in the Copyright Collateral which has been granted hereunder.

      SECTION 5. ACKNOWLEDGMENT. The Grantor does hereby further acknowledge and
affirm that the rights and remedies of the Agent with respect to the security
interest in the Copyright Collateral granted and confirmed hereby are more fully
set forth in the Security Agreement, the terms and provisions of which
(including the remedies provided for therein) are incorporated by reference
herein as if fully set forth herein.

      SECTION 6. LOAN DOCUMENT, ETC. This Agreement is a Loan Document executed
pursuant to the Credit Agreements and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions of the Credit Agreements.

      SECTION 7. COUNTERPARTS. This Agreement may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
and all of which shall constitute together but one and the same agreement.

                                      C-3

<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 day and year first above written.

                                      THE ARISTOTLE CORPORATION

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

                                    Address: 96 Cummings Point Road
                                               Stamford, Connecticut  06902

                                    Attention:  Steven B. Lapin
                                               President

                                      Telecopier No.:  203-348-3103

                                 Copy to:

                                    The Aristotle Corporation
                                    96 Cummings Point Road
                                    Stamford, Connecticut  06902

                                    Telecopier No.:  203-348-3103

                                    Attention:  Paul McDonald
                                               Chief Financial Officer

                                    Additional Copy to:

                                           Nasco Division
                                           901 Janesville Avenue
                                           Fort Atkinson, Wisconsin
                                           53538-0901

                                    Attention: Dean T. Johnson

                                    Telecopier No.: 414-563-0234

                                      C-4

<PAGE>

                                       Accepted:

                                       BANK OF AMERICA, N.A., as Agent

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

                                    Address:  231 South LaSalle Street
                                               Chicago, Illinois  60697

                                                Attention: David Johanson

                                        Telecopier No.:  877-206-8410

                                      C-5

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