Document:

Exhibit 10.4

 

EXECUTION COPY

 

SECURITY AGREEMENT

 

THIS SECURITY AGREEMENT dated as of October 4, 2004, among JOSTENS
SECONDARY HOLDINGS CORP., a Delaware corporation (“Holdings”), JOSTENS IH
CORP., a Delaware corporation (the “Borrower”), each of the subsidiaries of the
Borrower listed on Annex A hereto (each such undersigned subsidiary being
a “Subsidiary Grantor” and, collectively, the “Subsidiary Grantors”; the
Subsidiary Grantors, Holdings and the Borrower are referred to collectively as
the “Grantors”), and CREDIT SUISSE FIRST BOSTON, as administrative agent (in
such capacity, the “Administrative Agent”) for the lenders (“Lenders”) from
time to time party to the Credit Agreement dated as of the date hereof (as the
same may be amended, supplemented or otherwise modified from time to time, the
“Credit Agreement”), among the Borrower, JOSTENS CANADA LTD., a Manitoba
corporation (the “Canadian Borrower” and, together with the Borrower, the
“Borrowers”), Holdings, the Lenders, the Administrative Agent and CREDIT SUISSE
FIRST BOSTON TORONTO BRANCH, as Canadian administrative agent (in such
capacity, the “Canadian Administrative Agent”).

 

W  I  T  N  E  S
S  E  T  H:

 

WHEREAS,
(a) pursuant to the Credit Agreement, the Lenders have severally agreed to
make Loans to the Borrowers and the Letter of Credit Issuers have agreed to
issue Letters of Credit for the account of the Borrowers (collectively, the “Extensions
of Credit”) upon the terms and subject to the conditions set forth therein
and (b) one or more Lenders or affiliates of Lenders may from time to time
enter into Hedge Agreements with the Borrowers;

 

WHEREAS,
pursuant to the US Guarantee dated as of the date hereof (the “Guarantee”)
Holdings and each Subsidiary Grantor party thereto has unconditionally and
irrevocably guaranteed, as primary obligor and not merely as surety, to the
Administrative Agent, for the ratable benefit of the Secured Parties the prompt
and complete payment and performance when due (whether at the stated maturity,
by acceleration or otherwise) of the Obligations, and pursuant to the Canadian
Guarantee dated as of the date hereof, the Borrower, Holdings and each
Subsidiary Guarantor has so guaranteed the Obligations of the Canadian
Borrower;

 

WHEREAS, each
Subsidiary Grantor is a Domestic Subsidiary of the Borrower;

 

WHEREAS, the
proceeds of the Extensions of Credit will be used in part to enable the
Borrowers to make valuable transfers to the Subsidiary Grantors in connection
with the operation of their respective businesses;

 

WHEREAS, each
Grantor acknowledges that it will derive substantial direct and indirect
benefit from the making of the Extensions of Credit; and

 

 

WHEREAS, it is
a condition precedent to the obligation of the Lenders and the Letter of Credit
Issuers to make their respective Extensions of Credit to the Borrowers under
the Credit Agreement that the Grantors shall have executed and delivered this
Security Agreement to the Administrative Agent for the ratable benefit of the
Secured Parties;

 

NOW,
THEREFORE, in consideration of the premises and to induce the Administrative
Agent, the Canadian Administrative Agent, the Lenders and the Letter of Credit
Issuers to enter into the Credit Agreement and to induce the Lenders and the
Letter of Credit Issuers to make their respective Extensions of Credit to the
Borrowers under the Credit Agreement and to induce one or more Lenders or
affiliates of Lenders to enter into Hedge Agreements with the Borrowers, the
Grantors hereby agree with the Administrative Agent, for the ratable benefit of
the Secured Parties, as follows:

 

1.  Defined Terms.

 

(a) 
Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement
and all terms defined in the Uniform Commercial Code from time to time in
effect in the State of New York (the “NY UCC”) and not defined herein
shall have the meanings specified therein.

 

(b) 
The following terms shall have the following meanings:

 

“Administrative Agent” shall have the meaning assigned to
such term in the recitals hereto.

 

“Chattel
Paper” shall mean all “chattel paper” as such term is defined in Article 9
of the NY UCC.

 

“Collateral” shall have the meaning assigned to such term in Section 2.

 

“Collateral Account” shall mean any collateral account
established by the Administrative Agent as provided in subsection 5.1.

 

“Copyright
License” shall mean any written agreement, now or hereafter in effect,
granting any right to any third party under any copyright now or hereafter
owned by any Grantor (including all Copyrights) or that any Grantor otherwise
has the right to license, or granting any right to any Grantor under any
copyright now or hereafter owned by any third party, and all rights of any
Grantor under any such agreement, including those listed on Schedule 1.

 

“copyrights”
shall mean, with respect to any Person, all of the following now owned or
hereafter acquired by such Person: 
(i) all copyright rights in any work subject to the copyright laws
of the United States or any other country, whether as author, assignee,
transferee or otherwise, and (ii) all registrations and applications for
registration of any such copyright in the United States or any other country,
including registrations, recordings, supplemental registrations and pending
applications for registration in the United States Copyright Office.

 

“Copyrights” shall mean
all copyrights now owned or hereafter acquired by any Grantor, including those
listed on Schedule 2.

 

2

 

“Deposit
Accounts” shall mean all “deposit accounts”,  as such term is defined in Article 9 of the NY UCC.

 

“Documents”
shall mean all “documents”, as such term is defined in Article 9 of the NY UCC.

 

“Equipment” shall mean all “equipment,” as such term is defined in Article 9
of the NY UCC, now or hereafter owned by any Grantor or to which any Grantor
has rights and, in any event, shall include all machinery, equipment,
furnishings, movable trade fixtures and vehicles now or hereafter owned by any
Grantor or to which any Grantor has rights and any and all additions,
substitutions and replacements of any of the foregoing, wherever located,
together with all attachments, components, parts, equipment and accessories
installed thereon or affixed thereto; but excluding Equipment to the extent it
is subject to a Lien permitted by the Credit Agreement and the terms of the
Indebtedness secured by such Lien prohibit assignment of, or granting of a
security interest in, such Grantor’s rights and interests therein (other than
to the extent that any such prohibition would be rendered ineffective pursuant
to Sections 9-406, 9-407, 9-408 or 9-409 of the Uniform Commercial Code (or any
successor provision or provisions) of any relevant jurisdiction or any other
applicable law), provided, that immediately upon the repayment of all
Indebtedness secured by such Lien, such Grantor shall be deemed to have granted
a Security Interest in all the rights and interests with respect to such
Equipment.

 

“General Intangibles” shall mean all “general intangibles”
as such term is defined in Article 9 of the NY UCC and, in any event, including
with respect to any Grantor, all contracts, agreements, instruments and
indentures in any form, and portions thereof, to which such Grantor is a party
or under which such Grantor has any right, title or interest or to which such
Grantor or any property of such Grantor is subject, as the same may from time
to time be amended, supplemented or otherwise modified, including (a) all
rights of such Grantor to receive moneys due and to become due to it thereunder
or in connection therewith, (b) all rights of such Grantor to receive
proceeds of any insurance, indemnity, warranty or guarantee with respect
thereto, (c) all claims of such Grantor for damages arising out of any
breach of or default under thereunder and (d) all rights of such Grantor
to terminate, amend, supplement, modify or exercise rights or options
thereunder, to perform thereunder and to compel performance and otherwise
exercise all remedies thereunder, in each case to the extent the grant by such
Grantor of a Security Interest pursuant to this Security Agreement in its
right, title and interest in any such contract, agreement, instrument or
indenture is not prohibited by such contract, agreement, instrument or
indenture without the consent of any other party thereto, would not give any
other party to any such contract, agreement, instrument or indenture the right
to terminate its obligations thereunder or is permitted with consent if all
necessary consents to such grant of a Security Interest have been obtained from
the other parties thereto (other than to the extent that any such prohibition
would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 of the
Uniform Commercial Code (or any successor provision or provisions) of any
relevant jurisdiction or any other applicable law) (it being understood that
the foregoing shall not be deemed to obligate such Grantor to obtain such
consents), provided, that the foregoing limitation shall not affect,
limit, restrict or impair the grant by such Grantor of a Security Interest
pursuant to this Security Agreement in any Account or any money or other
amounts due or to become due under any such contract, agreement, instrument or
indenture.

 

“Guarantors” shall mean each Grantor other than the Borrower.

 

3

 

“Grantor” shall have the meaning assigned to such term in the recitals
hereto.

 

“Instruments”
shall mean all “instruments” as
such term is defined in Article 9 of the NY UCC.

 

“Intellectual Property” shall mean all rights, priorities
and privileges relating to intellectual property, whether arising under United
States, multinational or foreign laws or otherwise now owned or hereafter
acquired, including (a) all information used or useful arising from the
business including all goodwill, trade secrets, trade secret rights, know-how,
customer lists, processes of production, ideas, confidential business
information, techniques, processes, formulas and all other proprietary
information, and (b) the Copyrights, the Patents, the Trademarks and the
Licenses and all rights to sue at law or in equity for any infringement or
other impairment thereof, including the right to receive all proceeds and
damages therefrom, in each case to the extent the grant by such Grantor of a
Security Interest pursuant to this Security Agreement in any such rights,
priorities and privileges relating to intellectual property is not prohibited
by any contract, agreement or other instrument governing such rights,
priorities and privileges without the consent of any other party thereto, would
not give any other party to any such contract, agreement or other instrument
the right to terminate its obligations thereunder or is permitted with consent
if all necessary consents to such grant of a Security Interest have been
obtained from the relevant parties (other than to the extent that any such
prohibition would be rendered ineffective pursuant to Sections 9-406, 9-407,
9-408 or 9-409 of the Uniform Commercial Code (or any successor provision or
provisions) of any relevant jurisdiction or any other applicable law) (it being
understood that the foregoing shall not be deemed to obligate such Grantor to
obtain such consents).

 

“Investment Property” shall mean all Securities (whether
certificated or uncertificated), Security Entitlements, Securities Accounts,
Commodity Contracts and Commodity Accounts of any Grantor (other than as
pledged pursuant to the Pledge Agreements), whether now or hereafter acquired
by any Grantor, in each case to the extent the grant by a Grantor of a Security
Interest therein pursuant to this Security Agreement in its right, title and
interest in any such Investment Property is not prohibited by any contract,
agreement, instrument or indenture governing such Investment Property without
the consent of any other party thereto, would not give any other party to any
such contract, agreement, instrument or indenture the right to terminate its
obligations thereunder or is permitted with consent if all necessary consents
to such grant of a Security Interest have been obtained from the other parties
thereto (other than to the extent that any such prohibition would be rendered
ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the Uniform
Commercial Code (or any successor provision or provisions) of any relevant
jurisdiction or any other applicable law) (it being understood that the
foregoing shall not be deemed to obligate such Grantor to obtain such
consents).

 

“Letter of Credit Rights” shall mean all “Letter-of-credit rights”, as such term is
defined in Article 9 of the NY UCC.

 

“License” shall mean any Patent License, Trademark License, Copyright
License or other license or sublicense to which any Grantor is a party.

 

“NY UCC”
has the meaning assigned to such term in Section 1(a).

 

4

 

“Obligations”
shall mean the collective reference to (i) the due and punctual payment of
(x) the principal of and premium, if any, and interest at the applicable rate
provided in the Credit Agreement (including interest accruing during the
pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding) on
the Loans, when and as due, whether at maturity, by acceleration, upon one or
more dates set for prepayment or otherwise, (y) each payment required to be
made by the Borrowers under the Credit Agreement in respect of any Letter of
Credit, when and as due, including payments in respect of reimbursement of
disbursements, interest thereon and obligations to provide cash collateral, and
(z) all other monetary obligations, including fees, costs, expenses and
indemnities, whether primary, secondary, direct, contingent, fixed or otherwise
(including monetary obligations incurred during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, regardless of whether
allowed or allowable in such proceeding), of the Borrowers or any other Credit
Party to any of the Secured Parties under the Credit Agreement and the other
Credit Documents, (ii) the due and punctual performance of all covenants,
agreements, obligations and liabilities of the Borrowers under or pursuant to
the Credit Agreement and the other Credit Documents, (iii) the due and punctual
payment and performance of all the covenants, agreements, obligations and
liabilities of each other Credit Party under or pursuant to this Security
Agreement or the other Credit Documents, (iv) the due and punctual payment and
performance of all obligations of each Credit Party under each Hedge Agreement
that (x) is in effect on the Closing Date with a counterparty that is a Lender
or an affiliate of a Lender as of the Closing Date or (y) is entered into after
the Closing Date with any counterparty that is a Lender or an affiliate of a
Lender at the time such Hedge Agreement is entered into and (v) the due and
punctual payment and performance of all obligations in respect of overdrafts
and related liabilities owed to the Administrative Agent or its affiliates
arising from or in connection with treasury, depositary or cash management
services or in connection with any automated clearinghouse transfer of funds.

 

“Patent
License” shall mean any written agreement, now or hereafter in effect,
granting to any third party any right to make, use or sell any invention on
which a patent, now or hereafter owned by any Grantor (including all Patents)
or that any Grantor otherwise has the right to license, is in existence, or granting
to any Grantor any right to make, use or sell any invention on which a patent,
now or hereafter owned by any third party, is in existence, and all rights of
any Grantor under any such agreement, including those listed on Schedule 3.

 

“patents”
shall mean, with respect to any Person, all of the following now owned or
hereafter acquired by such Person: 
(a) all letters patent of the United States or the equivalent
thereof in any other country, all registrations and recordings thereof, and all
applications for letters patent of the United States or the equivalent thereof
in any other country, including registrations, recordings and pending
applications in the United States Patent and Trademark Office or any similar
offices in any other country, and (b) all reissues, continuations,
divisions, continuations-in-part, renewals or extensions thereof, and the
inventions disclosed or claimed therein, including the right to make, use
and/or sell the inventions disclosed or claimed therein.

 

“Patents”
shall mean all patents now owned or hereafter acquired by any Grantor,
including those listed on Schedule 4.

 

“Proceeds” shall mean all “proceeds” as such term is defined in Article 9
of the NY UCC and, in any event, shall include with respect to any Grantor, any
consideration received from the sale, exchange, license, lease or other
disposition of any asset or property that

 

5

 

constitutes Collateral, any
value received as a consequence of the possession of any Collateral and any
payment received from any insurer or other person or entity as a result of the
destruction, loss, theft, damage or other involuntary conversion of whatever
nature of any asset or property that constitutes Collateral, and shall include
(a) all cash and negotiable instruments received by or held on behalf of the
Administrative Agent, (b) any claim of any Grantor against any third party for
(and the right to sue and recover for and the rights to damages or profits due
or accrued arising out of or in connection with) (i) past, present or future
infringement of any Patent now or hereafter owned by any Grantor, or licensed
under a Patent License, (ii) past, present or future infringement or dilution
of any Trademark now or hereafter owned by any Grantor or licensed under a
Trademark License or injury to the goodwill associated with or symbolized by
any Trademark now or hereafter owned by any Grantor, (iii) past, present or
future breach of any License and (iv) past, present or future infringement of
any Copyright now or hereafter owned by any Grantor or licensed under a
Copyright License and (c) any and all other amounts from time to time paid or
payable under or in connection with any of the Collateral.

 

“Registered
Organization” shall mean any “Registered organization” as such term is
defined in Article 9 of the NYUCC.

 

“Secured
Parties” shall mean (i) the Lenders, (ii) the Letter of Credit Issuers,
(iii) the Swingline Lender, (iv) the Administrative Agent,
(v) the Canadian Administrative Agent, (vi) the other Agents,
(vii) each counterparty to a Hedge Agreement the obligations under which
constitute Obligations, (viii) the beneficiaries of each indemnification
obligation undertaken by any Credit Party under any Credit Document and (ix)
any successors, indorsees, transferees and assigns of each of the foregoing.

 

“Security Agreement” shall mean this Security Agreement, as the same may be amended,
supplemented or otherwise modified from time to time.

 

“Security Interest” shall have the meaning assigned to
such term in Section 2.

 

“Trademark
License” shall mean any written agreement, now or hereafter in effect,
granting to any third party any right to use any trademark now or hereafter
owned by any Grantor (including any Trademark) or that any Grantor otherwise has
the right to license, or granting to any Grantor any right to use any trademark
now or hereafter owned by any third party, and all rights of any Grantor under
any such agreement, including those listed on Schedule 5.

 

“trademarks”
shall mean, with respect to any Person, all of the following now owned or
hereafter acquired by such Person: 
(i) all trademarks, service marks, trade names, corporate names,
company names, business names, fictitious business names, trade styles, trade
dress, logos, other source or business identifiers, designs and general
intangibles of like nature, now existing or hereafter adopted or acquired, all
registrations and recordings thereof (if any), and all registration and
recording applications filed in connection therewith, including registrations
and registration applications in the United States Patent and Trademark Office
or any similar offices in any State of the United States or any other country
or any political subdivision thereof, and all extensions or renewals thereof, (ii) all
goodwill associated therewith or symbolized thereby and (iii) all other
assets, rights and interests that uniquely reflect or embody such goodwill.

 

6

 

“Trademarks”
shall mean all trademarks now owned or hereafter acquired by any Grantor,
including those listed on Schedule 6 hereto.

 

“Unfunded
Advances/Participations” shall mean (a) with respect to the Administrative
Agent or the Canadian Administrative Agent, the aggregate amount, if any (i)
made available to the Borrower or the Canadian Borrower, as the case may be, on
the assumption that each Lender has made its pro rata share of the
applicable Borrowing available to the Administrative Agent or the Canadian
Administrative Agent, as the case may be, as contemplated by Section 2.4(b) of
the Credit Agreement and (ii) with respect to which a corresponding amount
shall not in fact have been made available to the Administrative Agent or the
Canadian Administrative Agent, as the case may be, by any such Lender, (b) with
respect to the Swingline Lender, the aggregate amount, if any, of
participations in respect of any outstanding Swingline Loan that shall not have
been funded by the applicable Lenders in accordance with Section 2.1(d) of the
Credit Agreement and (c) with respect to any Letter of Credit Issuer, the
aggregate amount, if any, of unreimbursed payments under any Letter of Credit
made by such Letter of Credit Issuer that shall not have been reimbursed by the
Borrower or the Canadian Borrower, as applicable, pursuant to Section 3.4(a) of
the Credit Agreement, or repaid for the account of such Letter of Credit Issuer
by the applicable L/C Participants pursuant to Section 3.3(e) of the Credit
Agreement.

 

(c) 
The words “hereof”, “herein”, “hereto” and “hereunder” and words of
similar import when used in this Security Agreement shall refer to this
Security Agreement as a whole and not to any particular provision of this
Security Agreement, and Section, subsection and Schedule references are to this
Security Agreement unless otherwise specified. 
The words “include”, “includes” and “including” shall be deemed to be
followed by the phrase “without limitation”.

 

(d) 
The meanings given to terms defined herein shall be equally applicable
to both the singular and plural forms of such terms.

 

(e) 
Where the context requires, terms relating to the Collateral or any part
thereof, when used in relation to a Grantor, shall refer to such Grantor’s
Collateral or the relevant part thereof.

 

(f) 
References to “Lenders” in this Security Agreement shall be deemed to
include affiliates of Lenders that may from time to time enter into Hedge
Agreements with the Borrowers.

 

2.  Grant of Security Interest.

 

(a) 
Each Grantor hereby bargains, sells, conveys, assigns, sets over, mortgages,
pledges, hypothecates and transfers to the Administrative Agent, for the
ratable benefit of the Secured Parties, and hereby grants to the Administrative
Agent, for the ratable benefit of the Secured Parties, a security interest (the
“Security Interest”) in all of the following property
now owned or hereafter acquired by such Grantor or in which such Grantor now
has or at any time in future may acquire any right, title or interest
(collectively, the “Collateral”), as collateral security for the
prompt and complete payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of the Obligations:

 

7

 

	
  (i)

  	
   

  	
  all Accounts;

  
	
   

  	
   

  	
   

  
	
  (ii)

  	
   

  	
  all cash;

  
	
   

  	
   

  	
   

  
	
  (iii)

  	
   

  	
  all Chattel Paper;

  
	
   

  	
   

  	
   

  
	
  (iv)

  	
   

  	
  all Deposit Accounts;

  
	
   

  	
   

  	
   

  
	
  (v)

  	
   

  	
  all Documents;

  
	
   

  	
   

  	
   

  
	
  (vi)

  	
   

  	
  all Equipment;

  
	
   

  	
   

  	
   

  
	
  (vii)

  	
   

  	
  all General Intangibles;

  
	
   

  	
   

  	
   

  
	
  (viii)

  	
   

  	
  all Instruments;

  
	
   

  	
   

  	
   

  
	
  (ix)

  	
   

  	
  all Intellectual Property;

  
	
   

  	
   

  	
   

  
	
  (x)

  	
   

  	
  all Inventory;

  
	
   

  	
   

  	
   

  
	
  (xi)

  	
   

  	
  all Investment Property;

  
	
   

  	
   

  	
   

  
	
  (xii)

  	
   

  	
  all Letter-of-Credit Rights;

  
	
   

  	
   

  	
   

  
	
  (xiii)

  	
   

  	
  all books and records pertaining to the Collateral; and

  
	
   

  	
   

  	
   

  
	
  (xiv)

  	
   

  	
  to the extent not otherwise included, all Proceeds and products of
  any and all of the foregoing.

  

 

Notwithstanding
the foregoing, no more than 65% of the issued and outstanding capital stock in
any Foreign Subsidiary in the aggregate shall be pledged under the Security
Documents.

 

(b) 
Each Grantor hereby irrevocably authorizes the Administrative Agent at
any time and from time to time to file in any relevant jurisdiction any initial
financing statements with respect to the Collateral or any part thereof and
amendments thereto that contain the information required by Article 9 of the
Uniform Commercial Code of each applicable jurisdiction for the filing of any
financing statement or amendment, including whether such Grantor is an
organization, the type of organization and any organizational identification
number issued to such Grantor.  Such
financing statements may describe the Collateral in the same manner as
described herein or may contain an indication or description of collateral that
describes such property in any other manner such as “all assets”, “all personal
property, whether now owned or hereafter acquired”, or words of similar effect.  Each Grantor agrees to provide such
information to the Administrative Agent promptly upon request.

 

Each Grantor
also ratifies its authorization for the Administrative Agent to file in any
relevant jurisdiction any initial financing statements or amendments thereto if
filed prior to the date hereof.

 

The
Administrative Agent is further authorized to file with the United States
Patent and Trademark Office or United States Copyright Office (or any successor
office or any similar office in any other country) such documents as may be
necessary or advisable for the

 

8

 

purpose of perfecting,
confirming, continuing, enforcing or protecting the Security Interest granted
by each Grantor, without the signature of any Grantor, and naming any Grantor
or the Grantors as debtors and the Administrative Agent as secured party.

 

The Security
Interests are granted as security only and shall not subject the Administrative
Agent or any other Secured Party to, or in any way alter or modify, any
obligation or liability of any Grantor with respect to or arising out of the
Collateral.

 

3.  Representations And Warranties.

 

Each Grantor
hereby represents and warrants to the Administrative Agent and each Secured
Party that:

 

3.1.  Title;
No Other Liens.  Except for the
Security Interest granted to the Administrative Agent for the ratable benefit
of the Secured Parties pursuant to this Security Agreement, the Liens permitted
by the Credit Agreement and any Liens securing Indebtedness which is no longer
outstanding or any Liens with respect to commitments to lend which have been
terminated, such Grantor owns each item of the Collateral free and clear of any
and all Liens or claims of others.  No
security agreement, financing statement or other public notice with respect to
all or any part of the Collateral that evidences a Lien securing any material
Indebtedness is on file or of record in any public office, except such as have
been filed in favor of the Administrative Agent, for the ratable benefit of the
Secured Parties, pursuant to this Security Agreement or are permitted by the
Credit Agreement.

 

3.2.  Perfection
Certificate; Perfected First Priority Liens.  (a) (i) The
Perfection Certificates currently set forth the exact legal name and jurisdiction
of organization of each Grantor as of the Closing Date and all other
information set forth therein is correct and complete in all material respects
as of the Closing Date; and (ii) subject to the limitations set forth in
clause (b) of this subsection 3.2, the Security Interests granted pursuant to
this Security Agreement (x) will constitute legal and valid perfected
Security Interests in the Collateral (as to which perfection may be obtained by
the filings or other actions described in clauses (A), (B) or (C) of this
paragraph) in favor of the Administrative Agent, for the ratable benefit of the
Secured Parties, as collateral security for the Obligations, upon (A) the
filing of all financing statements naming each Grantor as “debtor” and the Administrative
Agent as “secured party” and describing the Collateral in the applicable filing
offices, (B) delivery of all Instruments, Chattel Paper and Certificated
Securities, and (C) completion of the filing, registration and recording
of a fully executed agreement in the form hereof (or a supplement hereto) and
containing a description of all Collateral constituting Intellectual Property
in the United Stated Patent and Trademark Office within the three-month period
(commencing as of the date hereof) or, in the case of Collateral constituting
Intellectual Property acquired after the date hereof, thereafter pursuant to 35
USC §261 and 15 USC §1060 and the regulations thereunder with respect to United
States Patents and United States registered Trademarks and in the United States
Copyright Office within the one-month period (commencing as of the date hereof)
or, in the case of Collateral constituting Intellectual Property acquired after
the date hereof, thereafter with respect to United States registered Copyrights
pursuant to 17 USC §205 and the regulations thereunder and otherwise as may be
required pursuant to the laws of any other necessary jurisdiction to the extent
that a security interest may be perfected by such filings, registrations and
recordings, and (y) are prior to all other Liens on the Collateral other
than Liens permitted pursuant to Section 10.2 of the Credit Agreement.

 

9

 

(b) 
Notwithstanding anything to the contrary herein, no Grantor shall be
required to perfect the Security Interests granted by this Security Agreement
(including Security Interests in cash, cash accounts and Investment Property)
by any means other than by (i) filings pursuant to the Uniform Commercial
Codes of the relevant State(s), (ii) filings with the registrars of motor
vehicles or other appropriate authorities in the relevant jurisdictions,
(iii) filings approved by United States government offices with respect to
Intellectual Property or (iv) in the case of Collateral that constitutes
Tangible Chattel Paper, Instruments, Certificated Securities or Negotiable
Instruments, possession by the Administrative Agent in the United States.  No Grantor shall be required to complete any
filings or other action with respect to the perfection of Security Interests in
any jurisdiction outside the United States.

 

(c) 
It is understood and agreed that the Security Interests in cash, Deposit
Accounts and Permitted Investments created hereunder shall not prevent the
Grantors from using such assets in the ordinary course of their respective
businesses.

 

4.  Covenants.

 

Each Grantor hereby covenants
and agrees with the Administrative Agent and the Secured Parties that, from and
after the date of this Security Agreement until the Obligations under the
Credit Documents are paid in full, the Commitments are terminated and no Letter
of Credit remains outstanding:

 

4.1.  Maintenance
of Perfected Security Interest; Further Documentation.

(a)  Such Grantor shall maintain the
Security Interest created by this Security Agreement as a perfected Security
Interest having at least the priority described in subsection 3.2 and
shall defend such Security Interest against the claims and demands of all
Persons whomsoever, in each case subject to subsection 3.2(b).

 

(b) 
Such Grantor will furnish to the Administrative Agent and the Lenders
from time to time statements and schedules further identifying and describing
the assets and property of such Grantor and such other reports in connection
therewith as the Administrative Agent may reasonably request.  In addition, within 30 days after the end of
each calendar quarter, such Grantor will deliver to the Administrative Agent
(i) copies of all such certificates of title issued during such calendar
quarter with the notation thereon of the Administrative Agent’s Security
Interest created hereunder in the items of Equipment covered hereby and
(ii) a written supplement hereto substantially in the form of Annex 2
hereto with respect to any additional Copyrights, Copyright Licenses, Patents,
Patent Licenses, Trademarks and Trademark Licenses acquired by such Grantor
after the date hereof, all in reasonable detail.

 

(c) 
Subject to clause (d) below and subsection 3.2(b), each Grantor agrees
that at any time and from time to time, at the expense of such Grantor, it will
execute any and all further documents, financing statements, agreements and
instruments, and take all such further actions (including the filing and
recording of financing statements, fixture filings, mortgages, deeds of trust
and other documents), which may be required under any applicable law, or which
the Administrative Agent or the Required Lenders may reasonably request, in
order (x) to grant, preserve, protect and perfect the validity and
priority of the Security Interests created or intended to be created hereby or
(y) to enable the Administrative Agent to exercise and enforce its rights
and remedies hereunder with respect to any Collateral, including the filing of
any financing or

 

10

 

continuation statements under the Uniform Commercial Code in effect in
any jurisdiction with respect to the Security Interests created hereby, all at
the expense of such Grantor.

 

(d) 
Notwithstanding anything in this subsection 4.1 to the contrary,
(i) with respect to any assets acquired by such Grantor after the date
hereof that are required by the Credit Agreement to be subject to the Lien
created hereby or (ii) with respect to any Person that, subsequent to the
date hereof, becomes a Subsidiary of the Borrower that is required by the
Credit Agreement to become a party hereto, the relevant Grantor after the
acquisition or creation thereof shall promptly take all actions required by the
Credit Agreement or this subsection 4.1.

 

4.2.  Changes
in Locations, Name, etc.  Each
Grantor will furnish to the Administrative Agent prompt written notice of any
change (i) in its legal name, (ii) in its jurisdiction of
incorporation or organization, (iii) in the location of any office in
which it maintains books or records relating to Collateral owned by it
(including the establishment of any such new office), (iv) in its identity
or type of organization or corporate structure (v) in its Federal Taxpayer
Identification Number or organizational identification number or (vi) in
the case of any Grantor that is not a Registered Organization, in its chief
executive office or principal place of business.  Each Grantor agrees promptly to provide the Administrative Agent
with certified organizational documents reflecting any of the changes described
in the first sentence of this paragraph. 
Each Grantor agrees not to effect or permit any change referred to in
the preceding sentence unless all filings have been made under the Uniform
Commercial Code or otherwise that are required in order for the Administrative
Agent to continue at all times following such change to have a valid, legal and
perfected security interest in all the Collateral having at least the priority
described in subsection 3.2.  Each
Grantor also agrees promptly to notify the Administrative Agent if any material
portion of the Collateral is damaged or destroyed.

 

4.3.  Notices.  Each Grantor will advise the Administrative
Agent and the Lenders promptly, in reasonable detail, of any Lien of which it
has knowledge (other than the Security Interests created hereby or Liens
permitted under the Credit Agreement) on any of the Collateral which would
adversely affect, in any material respect, the ability of the Administrative
Agent to exercise any of its remedies hereunder.

 

4.4.  Special
Covenants with Respect to Equipment. 
(a)   Each Grantor shall,
promptly after the acquisition by such Grantor of any item of Equipment that is
covered by a certificate of title under a statute of any jurisdiction under the
law of which indication of a Security Interest on such certificate is required
as a condition of perfection thereof, execute and file with the registrar of
motor vehicles or other appropriate authority in such jurisdiction an
application or other document requesting the notation or other indication of
the Security Interest created hereunder on such certificate of title.

 

(b) 
Upon the occurrence and during the continuation of any Event of Default,
all insurance payments in respect of such Equipment shall be paid to and
applied by Administrative Agent as specified in subsection 5.4 hereof.

 

(c) 
At the Administrative Agent’s request at any time after the occurrence
and during the continuance of an Event of Default, each Grantor shall deliver
to the Administrative Agent the certificates of title covering each item of
Equipment the perfection of which is

 

11

 

governed by the notation on the
certificate of title of the Administrative Agent’s Security Interest created
hereunder.

 

5.  Remedial Provisions.

 

5.1.  Certain
Matters Relating to Accounts. 
(a)  At any time after the
occurrence and during the continuance of an Event of Default and after giving
reasonable notice to the Borrower and any other relevant Grantor, the
Administrative Agent shall have the right to make test verifications of the
Accounts in any manner and through any medium that it reasonably considers
advisable, and each Grantor shall furnish all such assistance and information
as the Administrative Agent may require in connection with such test
verifications.  The Administrative Agent
shall have the absolute right to share any information it gains from such
inspection or verification with any Secured Party.

 

(b) 
The Administrative Agent hereby authorizes each Grantor to collect such
Grantor’s Accounts and the Administrative Agent may curtail or terminate said
authority at any time after the occurrence and during the continuance of an
Event of Default. If required in writing by the Administrative Agent at any
time after the occurrence and during the continuance of an Event of Default,
any payments of Accounts, when collected by any Grantor, (i) shall be
forthwith (and, in any event, within two Business Days) deposited by such
Grantor in the exact form received, duly endorsed by such Grantor to the
Administrative Agent if required, in a Collateral Account maintained under the
sole dominion and control of and on terms and conditions reasonably
satisfactory to the Administrative Agent, subject to withdrawal by the
Administrative Agent for the account of the Secured Parties only as provided in
subsection 5.5, and (ii) until so turned over, shall be held by such
Grantor in trust for the Administrative Agent and the Secured Parties,
segregated from other funds of such Grantor. 
Each such deposit of Proceeds of Accounts shall be accompanied by a
report identifying in reasonable detail the nature and source of the payments
included in the deposit.

 

(c) 
At the Administrative Agent’s request at any time after the occurrence
and during the continuance of an Event of Default, each Grantor shall deliver
to the Administrative Agent all original and other documents evidencing, and
relating to, the agreements and transactions which gave rise to the Accounts,
including all original orders, invoices and shipping receipts.

 

(d) 
Upon the occurrence and during the continuance of an Event of Default, a
Grantor shall not grant any extension of the time of payment of any of the
Accounts, compromise, compound or settle the same for less than the full amount
thereof, release, wholly or partly, any Person liable for the payment thereof,
or allow any credit or discount whatsoever thereon if the Administrative Agent
shall have instructed the Grantors not to grant or make any such extension,
credit, discount, compromise, or settlement under any circumstances during the
continuance of such Event of Default.

 

5.2.  Communications
with Obligors; Grantors Remain Liable. 
(a)  The Administrative Agent in
its own name or in the name of others may at any time after the occurrence and
during the continuance of an Event of Default, after giving reasonable notice
to the relevant Grantor of its intent to do so, communicate with obligors under
the Accounts to verify with them to the Administrative Agent’s satisfaction the
existence, amount and terms of

 

12

 

any Accounts.  The
Administrative Agent shall have the absolute right to share any information it
gains from such inspection or verification with any Secured Party.

 

(b) 
Upon the written request of the Administrative Agent at any time after
the occurrence and during the continuance of an Event of Default, each Grantor
shall notify obligors on the Accounts that the Accounts have been assigned to
the Administrative Agent for the ratable benefit of the Secured Parties and
that payments in respect thereof shall be made directly to the Administrative
Agent.

 

(c) 
Anything herein to the contrary notwithstanding, each Grantor shall
remain liable under each of the Accounts to observe and perform all the
conditions and obligations to be observed and performed by it thereunder, all
in accordance with the terms of any agreement giving rise thereto.  Neither the Administrative Agent nor any
Secured Party shall have any obligation or liability under any Account (or any
agreement giving rise thereto) by reason of or arising out of this Security
Agreement or the receipt by the Administrative Agent or any Secured Party of
any payment relating thereto, nor shall the Administrative Agent or any Secured
Party be obligated in any manner to perform any of the obligations of any
Grantor under or pursuant to any Account (or any agreement giving rise
thereto), to make any payment, to make any inquiry as to the nature or the
sufficiency of any payment received by it or as to the sufficiency of any
performance by any party thereunder, to present or file any claim, to take any
action to enforce any performance or to collect the payment of any amounts
which may have been assigned to it or to which it may be entitled at any time
or times.

 

5.3.  Proceeds
to be Turned Over To Administrative Agent.  In addition to the rights of the
Administrative Agent and the Secured Parties specified in subsection 5.1 with
respect to payments of Accounts, if an Event of Default shall occur and be
continuing and the Administrative Agent so requires by notice in writing to the
relevant Grantor (it being understood that the exercise of remedies by the
Secured Parties in connection with an Event of Default under Section 11.5 of
the Credit Agreement shall be deemed to constitute a request by the
Administrative Agent for the purposes of this sentence and in such
circumstances, no such written notice shall be required), all Proceeds received
by any Grantor consisting of cash, checks and other near-cash items shall be
held by such Grantor in trust for the Administrative Agent and the Secured
Parties, segregated from other funds of such Grantor, and shall, forthwith upon
receipt by such Grantor, be turned over to the Administrative Agent in the
exact form received by such Grantor (duly endorsed by such Grantor to the
Administrative Agent, if required).  All
Proceeds received by the Administrative Agent hereunder shall be held by the
Administrative Agent in a Collateral Account maintained under its sole dominion
and control and on terms and conditions reasonably satisfactory to the
Administrative Agent.  All Proceeds
while held by the Administrative Agent in a Collateral Account (or by such
Grantor in trust for the Administrative Agent and the Secured Parties) shall
continue to be held as collateral security for all the Obligations and shall
not constitute payment thereof until applied as provided in subsection 5.4.

 

5.4.  Application
of Proceeds.  The Administrative Agent shall apply the
proceeds of any collection or sale of the Collateral as well as any Collateral
consisting of cash, at any time after receipt as follows:

 

(i) 
first, to the payment of all reasonable and documented costs and
expenses incurred by the Administrative Agent in connection with such
collection or sale or otherwise in connection with this Security Agreement, the
other Credit Documents or any of the Obligations, including all

 

13

 

court costs and the reasonable fees and expenses of its agents and
legal counsel, the repayment of all advances made by the Administrative Agent
hereunder or under any other Credit Document on behalf of any Grantor and any
other reasonable and documented costs or expenses incurred in connection with
the exercise of any right or remedy hereunder or under any other Credit
Document;

 

(ii) 
second, to the payment in full of the Unfunded Advances/Participations
(the amounts so applied to be distributed between or among the Administrative
Agent, the Canadian Administrative Agent, the Swingline Lender and any Letter
of Credit Issuer pro rata in accordance with the amounts of Unfunded
Advances/Participations owed to them on the date of any distribution);

 

(iii) 
third, to the Secured Parties, an amount equal to all Obligations owing
to them on the date of any distribution, and, if such moneys shall be
insufficient to pay such amounts in full, then ratably (without priority of any
one over any other) to such Secured Parties in proportion to the unpaid amounts
thereof; and

 

(iv) 
fourth, any surplus then remaining shall be paid to the Grantors or
their successors or assigns or to whomsoever may be lawfully entitled to
receive the same or as a court of competent jurisdiction may direct.

 

Upon any sale of the Collateral
by the Administrative Agent (including pursuant to a power of sale granted by
statute or under a judicial proceeding), the receipt of the Administrative
Agent or of the officer making the sale shall be a sufficient discharge to the
purchaser or purchasers of the Collateral so sold and such purchaser or
purchasers shall not be obligated to see to the application of any part of the
purchase money paid over to the Administrative Agent or such officer or be
answerable in any way for the misapplication thereof.

 

5.5.  Code
and Other Remedies.  If an Event of
Default shall occur and be continuing, the Administrative Agent may exercise in
respect of the Collateral, in addition to all other rights and remedies
provided for herein or otherwise available to it, all the rights and remedies
of a secured party upon default under the NY UCC or any other applicable law
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
exchange broker’s board or at any of the Administrative Agent’s offices or
elsewhere, for cash, on credit or for future delivery, at such price or prices
and upon such other terms as are commercially reasonable irrespective of the
impact of any such sales on the market price of the Collateral.  The Administrative Agent shall be authorized
at any such sale (if it deems it advisable to do so) to restrict the
prospective bidders or purchasers of Collateral to Persons who will represent
and agree that they are purchasing the Collateral for their own account for
investment and not with a view to the distribution or sale thereof, and, upon
consummation of any such sale, the Administrative Agent shall have the right to
assign, transfer and deliver to the purchaser or purchasers thereof the
Collateral so sold.  Each purchaser at
any such sale shall hold the property sold absolutely free from any claim or
right on the part of any Grantor, and each Grantor hereby waives (to the extent
permitted by law) all rights of redemption, stay and/or appraisal that it now
has or may at any time in the future have under any rule of law or statute now
existing or hereafter enacted.  The
Administrative Agent or any Secured Party shall have the right upon any such
public sale, and, to the extent permitted by law, upon any such private sale,
to purchase the whole or any part of the Collateral so sold, and the
Administrative Agent or such Secured Party may subject to (x) the satisfaction
in full in cash

 

14

 

of all payments due pursuant to subsection 5.4(i), and (y) the ratable
satisfaction of the Obligations in accordance with subsection 5.4(ii) pay the
purchase price by crediting the amount thereof against the Obligations.  Each Grantor agrees that, to the extent
notice of sale shall be required by law, at least ten days’ notice to such
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 Administrative Agent shall not be
obligated to make any sale of Collateral regardless of notice of sale having
been given.  The Administrative 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.  To the extent permitted by law, each Grantor
hereby waives any claim against the Administrative Agent arising by reason of
the fact that the price at which any Collateral may have been sold at such a
private sale was less than the price that might have been obtained at a public
sale, even if the Administrative Agent accepts the first offer received and
does not offer such Collateral to more than one offeree.  Each Grantor further agrees, at the
Administrative Agent’s request, to assemble the Collateral and make it
available to the Administrative Agent at places which the Administrative Agent
shall reasonably select, whether at such Grantor’s premises or elsewhere.  The Administrative Agent shall apply the net
proceeds of any action taken by it pursuant to this subsection 5.5 in
accordance with the provisions of subsection 5.4.

 

5.6.  Deficiency.  Each Grantor shall remain liable for any
deficiency if the proceeds of any sale or other disposition of the Collateral
are insufficient to pay its Obligations and the fees and disbursements of any
attorneys employed by the Administrative Agent or any Secured Party to collect
such deficiency.

 

5.7.  Amendments,
etc. with Respect to the Obligations; Waiver of Rights.  Each Grantor shall remain obligated
hereunder notwithstanding that, without any reservation of rights against any
Grantor and without notice to or further assent by any Grantor, (a) any demand
for payment of any of the Obligations made by the Administrative Agent or any
other Secured Party may be rescinded by such party and any of the Obligations
continued, (b) the Obligations, or the liability of any other party upon or for
any part thereof, or any collateral security or guarantee therefor or right of
offset with respect thereto, may, from time to time, in whole or in part, be
renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered or released by the Administrative Agent or any other Secured Party,
(c) the Credit Agreement, the other Credit Documents, the Letters of
Credit and any other documents executed and delivered in connection therewith
and the Hedge Agreements and any other documents executed and delivered in
connection therewith and any documents entered into with the Administrative
Agent or any of its affiliates in connection with treasury, depositary or cash
management services or in connection with any automated clearinghouse transfer
of funds may be amended, modified, supplemented or terminated, in whole or in
part, as the Administrative Agent (or the Required Lenders, as the case may be,
or, in the case of any Hedge Agreement or documents entered into with the
Administrative Agent or any of its affiliates in connection with treasury,
depositary or cash management services or in connection with any automated
clearinghouse transfer of funds, the party thereto) may deem advisable from
time to time, and (d) any collateral security, guarantee or right of offset at
any time held by the Administrative Agent or any other Secured Party for the
payment of the Obligations may be sold, exchanged, waived, surrendered or
released.  Neither the Administrative Agent
nor any other Secured Party shall have any obligation to protect, secure,
perfect or insure any Lien at any time held by it as security for the
Obligations or for this Security Agreement or any property subject
thereto.  When making any demand hereunder
against any Grantor, the Administrative Agent or any other Secured Party

 

15

 

may, but shall be under no obligation to, make a similar demand on the
Borrower or any Grantor or grantor, and any failure by the Administrative Agent
or any other Secured Party to make any such demand or to collect any payments
from the Borrower or any Grantor or grantor or any release of the Borrower or
any Grantor or grantor shall not relieve any Grantor in respect of which a
demand or collection is not made or any Grantor not so released of its several
obligations or liabilities hereunder, and shall not impair or affect the rights
and remedies, express or implied, or as a matter of law, of the Administrative
Agent or any other Secured Party against any Grantor.  For the purposes hereof “demand” shall include the commencement
and continuance of any legal proceedings.

 

6.  The Administrative Agent.

 

6.1.  Administrative
Agent’s Appointment as Attorney-in-Fact, etc.  (a)  Each Grantor hereby
appoints, which appointment is irrevocable and coupled with an interest,
effective upon and during occurrence of an Event of Default, the Administrative
Agent and any officer or agent thereof, with full power of substitution, as its
true and lawful attorney-in-fact with full irrevocable power and authority in
the place and stead of such Grantor and in the name of such Grantor or
otherwise, for the purpose of carrying out the terms of this Security
Agreement, to take any and all appropriate action and to execute any and all
documents and instruments which may be necessary or desirable to accomplish the
purposes of this Security Agreement, and, without limiting the generality of
the foregoing, each Grantor hereby gives the Administrative Agent the power and
right, on behalf of such Grantor, either in the Administrative Agent’s name or
in the name of such Grantor or otherwise, without assent by such Grantor, to do
any or all of the following, in each case after and during the occurrence of an
Event of Default and after written notice by the Administrative Agent of its
intent to do so:

 

(i) 
take possession of and endorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of moneys due under any
Account or with respect to any other Collateral and file any claim or take any
other action or proceeding in any court of law or equity or otherwise deemed
appropriate by the Administrative Agent for the purpose of collecting any and
all such moneys due under any Account or with respect to any other Collateral
whenever payable;

 

(ii) 
in the case of any Intellectual Property, execute and deliver, and have
recorded, any and all agreements, instruments, documents and papers as the
Administrative Agent may request to evidence the Administrative Agent’s and the
Secured Parties’ Security Interest in such Intellectual Property and the
goodwill and general intangibles of such Grantor relating thereto or
represented thereby;

 

(iii) 
pay or discharge taxes and Liens levied or placed on or threatened
against the Collateral;

 

(iv) 
execute, in connection with any sale provided for in subsection 5.5, any
endorsements, assignments or other instruments of conveyance or transfer with
respect to the Collateral;

 

(v) 
obtain and adjust insurance required to be maintained by such Grantor or
paid to the Administrative Agent pursuant to subsection 4.4; and

 

16

 

(vi) 
direct any party liable for any payment under any of the Collateral to
make payment of any and all moneys due or to become due thereunder directly to
the Administrative Agent or as the Administrative Agent shall direct;

 

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

 

(viii) 
sign and endorse any invoices, freight or express bills, bills of
lading, storage or warehouse receipts, drafts against debtors, assignments,
verifications, notices and other documents in connection with any of the
Collateral;

 

(ix) 
commence and prosecute any suits, actions or proceedings at law or in
equity in any court of competent jurisdiction to collect the Collateral or any
portion thereof and to enforce any other right in respect of any Collateral;

 

(x)  defend any suit, action or proceeding brought against such Grantor
with respect to any Collateral (with such Grantor’s consent to the extent such
action or its resolution could materially affect such Grantor or any of its
Affiliates in any manner other than with respect to its continuing rights in
such Collateral);

 

(xi) 
settle, compromise or adjust any such suit, action or proceeding and, in
connection therewith, give such discharges or releases as the Administrative
Agent may deem appropriate (with such Grantor’s consent to the extent such
action or its resolution could materially affect such Grantor or any of its
Affiliates in any manner other than with respect to its continuing rights in
such Collateral);

 

(xii) 
assign any Copyright, Patent or Trademark (along with the goodwill of
the business to which any such Copyright, Patent or Trademark pertains),
throughout the world for such term or terms, on such conditions, and in such
manner, as the Administrative Agent shall in its sole discretion determine and

 

(xiii) 
generally, sell, transfer, pledge and make any agreement with respect to
or otherwise deal with any of the Collateral as fully and completely as though
the Administrative Agent were the absolute owner thereof for all purposes, and
do, at the Administrative Agent’s option and such Grantor’s expense, at any
time, or from time to time, all acts and things that the Administrative Agent
deems necessary to protect, preserve or realize upon the Collateral and the
Administrative Agent’s and the Secured Parties’ Security Interests therein and
to effect the intent of this Security Agreement, all as fully and effectively
as such Grantor might do.

 

Anything in this subsection
6.l(a) to the contrary notwithstanding, the Administrative Agent agrees that it
will not exercise any rights under the power of attorney provided for in this
subsection 6.1(a) unless an Event of Default shall have occurred and be
continuing.

 

(b) 
If any Grantor fails to perform or comply with any of its agreements
contained herein, the Administrative Agent, at its option, but without any
obligation so to do, may perform or comply, or otherwise cause performance or
compliance, with such agreement.

 

(c) 
The expenses of the Administrative Agent incurred in connection with
actions undertaken as provided in this subsection 6.1, together with interest
thereon at a rate per annum

 

17

 

equal to the highest rate per annum at which interest would then be
payable on any category of past due ABR Loans under the Credit Agreement, from
the date of payment by the Administrative Agent to the date reimbursed by the
relevant Grantor, shall be payable by such Grantor to the Administrative Agent
on demand.

 

(d) 
Each Grantor hereby ratifies all that said attorneys shall lawfully do
or cause to be done by virtue hereof. 
All powers, authorizations and agencies contained in this Security
Agreement are coupled with an interest and are irrevocable until this Security
Agreement is terminated and the Security Interests created hereby are released.

 

6.2.  Duty
of Administrative Agent.  The
Administrative Agent’s sole duty with respect to the custody, safekeeping and
physical preservation of the Collateral in its possession, under
Section 9-207 of the NY UCC or otherwise, shall be to deal with it in the
same manner as the Administrative Agent deals with similar property for its own
account.  The Administrative Agent shall
be deemed to have exercised reasonable care in the custody and preservation of
any Collateral in its possession if such Collateral is accorded treatment
substantially equal to that which the Administrative Agent accords its own
property.  Neither the Administrative
Agent, any Secured Party nor any of their respective officers, directors,
employees or agents shall be liable for failure to demand, collect or realize
upon any of the Collateral or for any delay in doing so or shall be under any
obligation to sell or otherwise dispose of any Collateral upon the request of
any Grantor or any other Person or to take any other action whatsoever with
regard to the Collateral or any part thereof. 
The powers conferred on the Administrative Agent and the Secured Parties
hereunder are solely to protect the Administrative Agent’s and the Secured
Parties’ interests in the Collateral and shall not impose any duty upon the
Administrative Agent or any Secured Party to exercise any such powers.  The Administrative Agent and the Secured
Parties shall be accountable only for amounts that they actually receive as a
result of the exercise of such powers, and neither they nor any of their
officers, directors, employees or agents shall be responsible to any Grantor
for any act or failure to act hereunder, except for their own gross negligence
or willful misconduct.

 

6.3.  Authority
of Administrative Agent.  Each
Grantor acknowledges that the rights and responsibilities of the Administrative
Agent under this Security Agreement with respect to any action taken by the
Administrative Agent or the exercise or non-exercise by the Administrative
Agent of any option, voting right, request, judgment or other right or remedy
provided for herein or resulting or arising out of this Security Agreement
shall, as between the Administrative Agent and the Secured Parties, be governed
by the Credit Agreement and by such other agreements with respect thereto as
may exist from time to time among them, but, as between the Administrative
Agent and the Grantors, the Administrative Agent shall be conclusively presumed
to be acting as agent for the Secured Parties with full and valid authority so
to act or refrain from acting, and no Grantor shall be under any obligation, or
entitlement, to make any inquiry respecting such authority.

 

6.4.  Security
Interest Absolute.  All rights of
the Administrative Agent hereunder, the security interest and all obligations
of the Grantors hereunder shall be absolute and unconditional.

 

6.5.  Continuing
Security Interest; Assignments Under the Credit Agreement; Release.  (a) 
This Security Agreement shall remain in full force and effect and be
binding in accordance with and to the extent of its terms upon each Grantor and
the successors and assigns

 

18

 

thereof and shall inure to the benefit of the Administrative Agent and
the other Secured Parties and their respective successors, indorsees,
transferees and assigns until all Obligations under the Credit Documents (other
than any contingent indemnity obligations not then due) and the obligations of
each Grantor under this Security Agreement shall have been satisfied by payment
in full, the Commitments shall be terminated and no Letters of Credit shall be
outstanding, notwithstanding that from time to time during the term of the
Credit Agreement and any Hedge Agreement the Credit Parties may be free from
any Obligations.

 

(b)  A
Subsidiary Grantor shall automatically be released from its obligations
hereunder and the Security Interest in the Collateral of such Subsidiary
Grantor shall be automatically released upon the consummation of any
transaction permitted by the Credit Agreement as a result of which such
Subsidiary Grantor ceases to be a Domestic Subsidiary of the Borrower.

 

(c) 
Upon any sale or other transfer by any Grantor of any Collateral that is
permitted under the Credit Agreement, or upon the effectiveness of any written
consent to the release of the security interest granted hereby in any
Collateral pursuant to Section 13.1 of the Credit Agreement, the Security
Interest in such Collateral shall be automatically released and such Collateral
sold free and clear of the Lien and Security Interests created hereby.

 

(d) 
In connection with any termination or release pursuant to paragraph (a),
(b) or (c), the Administrative Agent shall execute and deliver to any Grantor,
at such Grantor’s expense, all documents that such Grantor shall reasonably
request to evidence such termination or release.  Any execution and delivery of documents pursuant to this
subsection 6.5 shall be without recourse to or warranty by the Administrative
Agent.

 

6.6.  Reinstatement.  This Security Agreement shall continue to be
effective, or be reinstated, as the case may be, if at any time payment, or any
part thereof, of any of the Obligations is rescinded or must otherwise be
restored or returned by the Administrative Agent or any other Secured Party
upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of
the Borrower or any other Credit Party, or upon or as a result of the
appointment of a receiver, intervenor or conservator of, or trustee or similar
officer for, the Borrower or any other Credit Party or any substantial part of
its property, or otherwise, all as though such payments had not been made.

 

7.  Administrative Agent As Agent.

 

(a) 
Credit Suisse First Boston has been appointed to act as Administrative
Agent under the Credit Agreement by the Lenders and, by their acceptance of the
benefits hereof, the other Secured Parties. 
The Administrative Agent shall be obligated, and shall have the right
hereunder, to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking any action (including
the release or substitution of Collateral), solely in accordance with this
Security Agreement and the Credit Agreement, provided that the
Administrative Agent shall exercise, or refrain from exercising, any remedies
provided for in Section 5 in accordance with the instructions of Required
Lenders.  In furtherance of the
foregoing provisions of this subsection 7(a), each Secured Party, by its
acceptance of the benefits hereof, agrees that it shall have no right
individually to realize upon any of the Collateral hereunder, it being
understood and agreed by such Secured Party that all rights and remedies

 

19

 

hereunder may be exercised solely by the Administrative Agent for the
ratable benefit of the Lenders and Secured Parties in accordance with the terms
of this subsection 7(a).

 

(b) 
The Administrative Agent shall at all times be the same Person that is
the Administrative Agent under the Credit Agreement. Written notice of
resignation by the Administrative Agent pursuant to subsection 12.9 of the
Credit Agreement shall also constitute notice of resignation as Administrative
Agent under this Security Agreement; removal of the Administrative Agent shall
also constitute removal as Administrative Agent under this Security Agreement;
and appointment of a successor Administrative Agent pursuant to subsection 12.9
of the Credit Agreement shall also constitute appointment of a successor
Administrative Agent under this Security Agreement.  Upon the acceptance of any appointment as Administrative Agent
under subsection 12.9 of the Credit Agreement by a successor
Administrative Agent, that successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring or removed Administrative Agent under this Security Agreement,
and the retiring or removed Administrative Agent under this Security Agreement
shall promptly (i) transfer to such successor Administrative Agent all
sums, securities and other items of Collateral held hereunder, together with
all records and other documents necessary or appropriate in connection with the
performance of the duties of the successor Administrative Agent under this
Security Agreement, and (ii) execute and deliver to such successor
Administrative Agent or otherwise authorize the filing of such amendments to
financing statements and take such other actions, as may be necessary or
appropriate in connection with the assignment to such successor Administrative
Agent of the Security Interests created hereunder, whereupon such retiring or
removed Administrative Agent shall be discharged from its duties and obligations
under this Security Agreement.  After
any retiring or removed Administrative Agent’s resignation or removal hereunder
as Administrative Agent, the provisions of this Security Agreement shall inure
to its benefit as to any actions taken or omitted to be taken by it under this
Security Agreement while it was Administrative Agent hereunder.

 

(c) 
The Administrative Agent shall not be deemed to have any duty whatsoever
with respect to any Secured Party that is a counterparty to a Hedge Agreement
the obligations under which constitute Obligations, until it shall have
received written notice in form and substance satisfactory to the
Administrative Agent from a Grantor or any such Secured Party as to the
existence and terms of the applicable Hedge Agreement.

 

8.  Miscellaneous.

 

8.1.  Amendments
in Writing.  None of the terms or
provisions of this Security Agreement may be waived, amended, supplemented or
otherwise modified except by a written instrument executed by the affected
Grantor and the Administrative Agent in accordance with Section 13.1 of
the Credit Agreement.

 

8.2.  Notices.  All notices, requests and demands pursuant
hereto shall be made in accordance with Section 13.2 of the Credit
Agreement.  All communications and
notices hereunder to any Subsidiary Grantor shall be given to it in care of the
Borrower at the Borrower’s address set forth in Section 13.2 of the Credit
Agreement.

 

8.3.  No
Waiver by Course of Conduct; Cumulative Remedies.  Neither the Administrative Agent nor any Secured Party shall by any
act (except by a written instrument pursuant to subsection 8.1 hereof), delay,
indulgence, omission or otherwise be deemed to have

 

20

 

waived any right or remedy hereunder or to have acquiesced in any Default
or Event of Default or in any breach of any of the terms and conditions
hereof.  No failure to exercise, nor any
delay in exercising, on the part of the Administrative Agent or any other
Secured Party, any right, power or privilege hereunder shall operate as a
waiver thereof.  No single or partial
exercise of any right, power or privilege hereunder shall preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege.  A waiver by the
Administrative Agent or any other Secured Party of any right or remedy
hereunder on any one occasion shall not be construed as a bar to any right or
remedy that the Administrative Agent or such other Secured Party would
otherwise have on any future occasion. 
The rights, remedies, powers and privileges herein provided are
cumulative, may be exercised singly or concurrently and are not exclusive of
any other rights or remedies provided by law.

 

8.4.  Enforcement
Expenses; Indemnification.  (a)  Each Grantor agrees to pay any and all expenses
(including all reasonable fees and disbursements of counsel) that may be paid
or incurred by any Secured Party in enforcing, or obtaining advice of counsel
in respect of, any rights with respect to, or collecting, any or all of the
Obligations and/or enforcing any rights with respect to, or collecting against,
such Grantor under this Security Agreement.

 

(b) 
Each Grantor agrees to pay, and to save the Administrative Agent and the
Secured Parties harmless from, any and all liabilities with respect to, or
resulting from any delay in paying, any and all stamp, excise, sales or other
taxes which may be payable or determined to be payable with respect to any of
the Collateral or in connection with any of the transactions contemplated by
this Security Agreement.

 

(c) 
Each Grantor agrees to pay, and to save the Administrative Agent and the
Secured Parties harmless from, any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of this Security Agreement to the
extent either of the Borrowers would be required to do so pursuant to
subsection 12.7 of the Credit Agreement.

 

(d) 
The agreements in this subsection 8.4 shall survive repayment of the
Obligations and all other amounts payable under the Credit Agreement and the
other Credit Documents.

 

8.5.  Successors
and Assigns.  The provisions of this
Security Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns permitted hereby,
except that no Grantor may assign, transfer or delegate any of its rights or
obligations under this Security Agreement without the prior written consent of
the Administrative Agent except pursuant to a transaction permitted by the
Credit Agreement.

 

8.6.  Counterparts.  This Security Agreement may be executed by
one or more of the parties to this Security Agreement on any number of separate
counterparts (including by facsimile or other electronic transmission), and all
of said counterparts taken together shall be deemed to constitute one and the
same instrument.  A set of the copies of
this Security Agreement signed by all the parties shall be lodged with the
Administrative Agent and the Borrower.

 

21

 

8.7.  Severability.  Any provision of this Security Agreement
that is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.  The parties hereto shall endeavor in
good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.

 

8.8.  Section
Headings.  The Section headings used
in this Security Agreement are for convenience of reference only and are not to
affect the construction hereof or be taken into consideration in the
interpretation hereof.

 

8.9.  Integration.  This Security Agreement represents the
agreement of each of the Grantors with respect to the subject matter hereof and
there are no promises, undertakings, representations or warranties by the
Administrative Agent or any other Secured Party relative to the subject matter
hereof not expressly set forth or referred to herein or in the other Credit
Documents.

 

8.10. 
GOVERNING LAW.  THIS SECURITY AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

8.11. 
Submission To Jurisdiction Waivers.  Each Grantor hereby irrevocably and unconditionally:

 

(a) 
submits for itself and its property in any legal action or proceeding
relating to this Security Agreement and the other Credit Documents to which it
is a party, or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of the courts of the State
of New York, the courts of the United States of America for the Southern
District of New York, and appellate courts from any thereof;

 

(b) 
consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the venue
of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or
claim the same;

 

(c) 
agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to such Grantor at its
address referred to in subsection 8.2 or at such other address of which the
Administrative Agent shall have been notified pursuant thereto;

 

(d) 
agrees that nothing herein shall affect the right of the Administrative
Agent or any other Secured Party to effect service of process in any other
manner permitted by law or shall limit the right of the Administrative Agent or
any Secured Party to sue in any other jurisdiction; and

 

22

 

(e) 
waives, to the maximum extent not prohibited by law, any right it may
have to claim or recover in any legal action or proceeding referred to in this
subsection 8.11 any special, exemplary, punitive or consequential damages.

 

8.12. 
Acknowledgments.  Each
Grantor hereby acknowledges that:

 

(a) 
it has been advised by counsel in the negotiation, execution and
delivery of this Security Agreement and the other Credit Documents to which it
is a party;

 

(b) 
neither the Administrative Agent nor any other Secured Party has any
fiduciary relationship with or duty to any Grantor arising out of or in
connection with this Security Agreement or any of the other Credit Documents,
and the relationship between the Grantors, on the one hand, and the
Administrative Agent and the other Secured Parties, on the other hand, in
connection herewith or therewith is solely that of debtor and creditor; and

 

(c) 
no joint venture is created hereby or by the other Credit Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Lenders and any other Secured Party or among the Grantors and the Lenders and
any other Secured Party.

 

8.13. 
Additional Grantors.  Each
Subsidiary of the Borrower that is required to become a party to this Security
Agreement pursuant to Section 9.11 of the Credit Agreement shall become a
Grantor, with the same force and effect as if originally named as a Grantor
herein, for all purposes of this Agreement upon execution and delivery by such
Subsidiary of a Supplement substantially in the form of Annex 1 hereto.
The execution and delivery of any instrument adding an additional Grantor as a
party to this Security Agreement shall not require the consent of any other
Grantor hereunder.  The rights and
obligations of each Grantor hereunder shall remain in full force and effect
notwithstanding the addition of any new Grantor as a party to this Security
Agreement.

 

8.14. 
WAIVER OF JURY TRIAL.  EACH GRANTOR HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS SECURITY AGREEMENT, ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM
THEREIN.

 

23

 

IN WITNESS
WHEREOF, each of the undersigned has caused this Security Agreement to be duly
executed and delivered as of the date first above written.

 

	
   

  	
  JOSTENS
  SECONDARY HOLDINGS CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Marie
  Hlavaty

  	
   

  
	
   

  	
   

  	
  Name: 
  Marie Hlavaty

  
	
   

  	
   

  	
  Title:   
  Secretary, Treasurer

  

 

 

	
   

  	
  JOSTENS IH
  CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ David A.
  Tayeh

  	
   

  
	
   

  	
   

  	
  Name: 
  David Tayeh

  
	
   

  	
   

  	
  Title:   
  Secretary

  

 

24

 

SIGNATURE PAGE TO THE
SECURITY AGREEMENT DATED AS OF OCTOBER 4, 2004, AMONG JOSTENS SECONDARY
HOLDINGS CORP., JOSTENS IH CORP. (THE “BORROWER”), THE SUBSIDIARIES OF THE
BORROWER LISTED ON ANNEX A HERETO AND CREDIT SUISSE FIRST BOSTON, AS
ADMINISTRATIVE AGENT FOR THE LENDERS FROM TIME TO TIME PARTIES TO THE CREDIT
AGREEMENT REFERRED TO THEREIN.

 

	
   

  	
  JOSTENS,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ David A.
  Tayeh

  	
   

  
	
   

  	
   

  	
  Name: 
  David Tayeh

  
	
   

  	
   

  	
  Title:   
  Senior Vice President

  

 

25

 

SIGNATURE PAGE TO THE
SECURITY AGREEMENT DATED AS OF OCTOBER 4, 2004, AMONG JOSTENS SECONDARY
HOLDINGS CORP., JOSTENS IH CORP. (THE “BORROWER”), THE SUBSIDIARIES OF THE
BORROWER LISTED ON ANNEX A HERETO AND CREDIT SUISSE FIRST BOSTON, AS
ADMINISTRATIVE AGENT FOR THE LENDERS FROM TIME TO TIME PARTIES TO THE CREDIT
AGREEMENT REFERRED TO THEREIN.

 

	
   

  	
  AKI, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Kenneth
  A. Budde

  	
   

  
	
   

  	
   

  	
  Name: 
  Kenneth A. Budde

  
	
   

  	
   

  	
  Title:   
  Secretary

  

 

26

 

SIGNATURE PAGE TO THE
SECURITY AGREEMENT DATED AS OF OCTOBER 4, 2004, AMONG JOSTENS SECONDARY HOLDINGS
CORP., JOSTENS IH CORP. (THE “BORROWER”), THE SUBSIDIARIES OF THE BORROWER
LISTED ON ANNEX A HERETO AND CREDIT SUISSE FIRST BOSTON, AS ADMINISTRATIVE
AGENT FOR THE LENDERS FROM TIME TO TIME PARTIES TO THE CREDIT AGREEMENT
REFERRED TO THEREIN.

 

	
   

  	
  AHC I ACQUISITION
  CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Kenneth
  A. Budde

  	
   

  
	
   

  	
   

  	
  Name: 
  Kenneth A. Budde

  
	
   

  	
   

  	
  Title:   
  Secretary

  

 

27

 

SIGNATURE PAGE TO THE
SECURITY AGREEMENT DATED AS OF OCTOBER 4, 2004, AMONG JOSTENS SECONDARY HOLDINGS
CORP., JOSTENS IH CORP. (THE “BORROWER”), THE SUBSIDIARIES OF THE BORROWER
LISTED ON ANNEX A HERETO AND CREDIT SUISSE FIRST BOSTON, AS ADMINISTRATIVE
AGENT FOR THE LENDERS FROM TIME TO TIME PARTIES TO THE CREDIT AGREEMENT
REFERRED TO THEREIN.

 

	
   

  	
  AKI HOLDING
  CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Kenneth
  A. Budde

  	
   

  
	
   

  	
   

  	
  Name: 
  Kenneth A. Budde

  
	
   

  	
   

  	
  Title:   
  Secretary

  

 

28

 

SIGNATURE PAGE TO THE
SECURITY AGREEMENT DATED AS OF OCTOBER 4, 2004, AMONG JOSTENS SECONDARY
HOLDINGS CORP., JOSTENS IH CORP. (THE “BORROWER”), THE SUBSIDIARIES OF THE
BORROWER LISTED ON ANNEX A HERETO AND CREDIT SUISSE FIRST BOSTON, AS
ADMINISTRATIVE AGENT FOR THE LENDERS FROM TIME TO TIME PARTIES TO THE CREDIT
AGREEMENT REFERRED TO THEREIN.

 

	
   

  	
  IST, CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Kenneth
  A. Budde

  	
   

  
	
   

  	
   

  	
  Name: 
  Kenneth A. Budde

  
	
   

  	
   

  	
  Title:   
  Secretary

  

 

29

 

SIGNATURE PAGE TO THE
SECURITY AGREEMENT DATED AS OF OCTOBER 4, 2004, AMONG JOSTENS SECONDARY
HOLDINGS CORP., JOSTENS IH CORP. (THE “BORROWER”), THE SUBSIDIARIES OF THE
BORROWER LISTED ON ANNEX A HERETO AND CREDIT SUISSE FIRST BOSTON, AS
ADMINISTRATIVE AGENT FOR THE LENDERS FROM TIME TO TIME PARTIES TO THE CREDIT
AGREEMENT REFERRED TO THEREIN.

 

	
   

  	
  PRECISION
  OFFSET PRINTING CORPORATION, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Robert
  S. Mathews

  	
   

  
	
   

  	
   

  	
  Name: 
  Robert S. Mathews

  
	
   

  	
   

  	
  Title:   
  President

  

 

30

 

SIGNATURE PAGE TO THE
SECURITY AGREEMENT DATED AS OF OCTOBER 4, 2004, AMONG JOSTENS SECONDARY
HOLDINGS CORP., JOSTENS IH CORP. (THE “BORROWER”), THE SUBSIDIARIES OF THE
BORROWER LISTED ON ANNEX A HERETO AND CREDIT SUISSE FIRST BOSTON, AS
ADMINISTRATIVE AGENT FOR THE LENDERS FROM TIME TO TIME PARTIES TO THE CREDIT
AGREEMENT REFERRED TO THEREIN.

 

	
   

  	
  ANTHOLOGY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Robert
  S. Mathews

  	
   

  
	
   

  	
   

  	
  Name: 
  Robert S. Mathews

  
	
   

  	
   

  	
  Title:   
  President

  

 

31

 

SIGNATURE PAGE TO THE
SECURITY AGREEMENT DATED AS OF OCTOBER 4, 2004, AMONG JOSTENS SECONDARY
HOLDINGS CORP., JOSTENS IH CORP. (THE “BORROWER”), THE SUBSIDIARIES OF THE
BORROWER LISTED ON ANNEX A HERETO AND CREDIT SUISSE FIRST BOSTON, AS
ADMINISTRATIVE AGENT FOR THE LENDERS FROM TIME TO TIME PARTIES TO THE CREDIT
AGREEMENT REFERRED TO THEREIN.

 

	
   

  	
  THE LEHIGH
  PRESS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Robert
  S. Mathews

  	
   

  
	
   

  	
   

  	
  Name: 
  Robert S. Mathews

  
	
   

  	
   

  	
  Title:   
  President

  

 

32

 

SIGNATURE PAGE TO THE
SECURITY AGREEMENT DATED AS OF OCTOBER 4, 2004, AMONG JOSTENS SECONDARY
HOLDINGS CORP., JOSTENS IH CORP. (THE “BORROWER”), THE SUBSIDIARIES OF THE
BORROWER LISTED ON ANNEX A HERETO AND CREDIT SUISSE FIRST BOSTON, AS
ADMINISTRATIVE AGENT FOR THE LENDERS FROM TIME TO TIME PARTIES TO THE CREDIT
AGREEMENT REFERRED TO THEREIN.

 

	
   

  	
  VON HOFFMANN
  HOLDINGS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Robert
  S. Mathews

  	
   

  
	
   

  	
   

  	
  Name: 
  Robert S. Mathews

  
	
   

  	
   

  	
  Title:   
  President

  

 

33

 

SIGNATURE PAGE TO THE
SECURITY AGREEMENT DATED AS OF OCTOBER 4, 2004, AMONG JOSTENS SECONDARY
HOLDINGS CORP., JOSTENS IH CORP. (THE “BORROWER”), THE SUBSIDIARIES OF THE
BORROWER LISTED ON ANNEX A HERETO AND CREDIT SUISSE FIRST BOSTON, AS
ADMINISTRATIVE AGENT FOR THE LENDERS FROM TIME TO TIME PARTIES TO THE CREDIT
AGREEMENT REFERRED TO THEREIN.

 

	
   

  	
  VON HOFFMANN
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Robert
  S. Mathews

  	
   

  
	
   

  	
   

  	
  Name: 
  Robert S. Mathews

  
	
   

  	
   

  	
  Title:   
  President

  

 

34

 

SIGNATURE PAGE TO THE SECURITY AGREEMENT DATED AS OF OCTOBER 4, 2004,
AMONG JOSTENS SECONDARY HOLDINGS CORP., JOSTENS IH CORP. (THE “BORROWER”),
THE SUBSIDIARIES OF THE BORROWER LISTED ON ANNEX A HERETO AND CREDIT SUISSE
FIRST BOSTON, AS ADMINISTRATIVE AGENT FOR THE LENDERS FROM TIME TO TIME PARTIES
TO THE CREDIT AGREEMENT REFERRED TO THEREIN.

 

 

	
   

  	
  CREDIT SUISSE FIRST BOSTON,

  ACTING THROUGH ITS CAYMAN

  ISLANDS BRANCH, AS

  ADMINISTRATIVE AGENT

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Robert
  Hetu

  	
   

  
	
   

  	
   

  	
  Name: 
  Robert Hetu

  
	
   

  	
   

  	
  Title:   
  Director

  
					

 

 

	
   

  	
  By

  	
  /s/ Vanessa
  Gomez

  	
   

  
	
   

  	
   

  	
  Name: 
  Vanessa Gomez

  
	
   

  	
   

  	
  Title:   
  Associate

  

 

35

 

ANNEX A TO THE

SECURITY AGREEMENT

 

SUBSIDIARY GRANTORS

 

•  Subsidiary Grantors

 

 

•  Notice Address for All Grantors

 

 

SCHEDULE 1 TO THE

SECURITY AGREEMENT

 

COPYRIGHT LICENSES

 

 

SCHEDULE 2 TO THE

SECURITY AGREEMENT

 

COPYRIGHTS 

 

	
  Registered Owner/Grantor

  	
   

  	
  Title

  	
   

  	
  Registration

  Number

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

SCHEDULE 3 TO THE

SECURITY AGREEMENT

 

PATENT LICENSES

 

 

SCHEDULE 4 TO THE

SECURITY AGREEMENT

 

PATENTS

 

 

SCHEDULE 5 TO THE

SECURITY AGREEMENT

 

TRADEMARK LICENSES

 

 

SCHEDULE 6 TO THE

SECURITY AGREEMENT

 

TRADEMARKS

 

Domestic Trademarks

 

	
  Registered

  Owner/Grantor

  	
   

  	
  Trademark

  	
   

  	
  Registration

  No.

  	
   

  	
  Application

  No.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

Foreign Trademarks

 

	
  Registered

  Owner/Grantor

  	
   

  	
  Trademark

  	
   

  	
  Registration

  No.

  	
   

  	
  Application

  No.

  	
   

  	
  Country

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

ANNEX 1 TO THE

SECURITY AGREEMENT

 

SUPPLEMENT NO. [  ] dated as of
[             ],
to the Security Agreement dated as of October 4, 2004, among JOSTENS IH CORP.,
a Delaware corporation (the “Borrower”), JOSTENS SECONDARY HOLDINGS CORP.,
a Delaware corporation (“Holdings”), each subsidiary of the Borrower
listed on Annex A thereto (each such subsidiary individually a “Subsidiary Grantor” and, collectively, the “Subsidiary Grantors”;
the Subsidiary Grantors, Holdings and the Borrower are referred to collectively
herein as the “Grantors”), CREDIT SUISSE FIRST BOSTON, as
administrative agent (in such capacity, the “Administrative Agent”)
for the lenders (the “Lenders”) from time to time parties to the Credit
Agreement referred to below.

 

A.  Reference is made to (a) the Credit
Agreement dated as of October 4, 2004 (as amended, supplemented or otherwise
modified from time to time, the “Credit Agreement”), among the Borrower,
Jostens Canada Ltd., a Manitoba corporation (the “Canadian Borrower”
and, together with the Borrower, the “Borrowers”), Holdings, the
Subsidiary Guarantors, the Lenders, the Administrative Agent, and Credit Suisse
First Boston Toronto Branch, as Canadian administrative agent (in such
capacity, the “Canadian Administrative Agent”) and (b) the US
Guarantee dated as of the date hereof and made in favor of the Administrative
Agent and the Canadian Guarantee dated as of the date hereof and made in favor
of the Canadian Administrative Agent.

 

B.  Capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned to such terms in the Security
Agreement.

 

C.  The Grantors have entered into the Security
Agreement in order to induce Administrative Agent, the Canadian Administrative
Agent, the Lenders and the Letter of Credit Issuers to enter into the Credit
Agreement and to induce the Lenders and the Letter of Credit Issuers to make
their respective Extensions of Credit to the Borrowers under the Credit
Agreement and to induce one or more Lenders or affiliates of Lenders to enter
into Hedge Agreements with the Borrowers.

 

D.  Section 9.11 of the Credit Agreement and
Section 8.13 of the Security Agreement provide that each Subsidiary of the
Borrower that is required to become a party to the Security Agreement pursuant to
Section 9.11 of the Credit Agreement shall become a Grantor, with the same
force and effect as if originally named as a Grantor therein, for all purposes
of the Security Agreement upon execution and delivery by such Subsidiary of an
instrument in the form of this Supplement. 
Each undersigned Subsidiary (each a “New Grantor”) is executing
this Supplement in accordance with the requirements of the Security Agreement
to become a Subsidiary Grantor under the Security Agreement in order to induce
the Lenders and the Letter of Credit Issuer to

 

 

make additional Extensions of
Credit and as consideration for Extensions of Credit previously made.

 

Accordingly,
the Administrative Agent and the New Grantors agree as follows:

 

SECTION
1.  In accordance with Section 8.13
of the Security Agreement, each New Grantor by its signature below becomes a
Grantor under the Security Agreement with the same force and effect as if
originally named therein as a Grantor and each New Grantor hereby (a) agrees to
all the terms and provisions of the Security Agreement applicable to it as a
Grantor thereunder and (b) represents and warrants that the
representations and warranties made by it as a Grantor thereunder are true and
correct on and as of the date hereof. 
In furtherance of the foregoing, each New Grantor, as security for the
payment and performance in full of the Obligations, does hereby bargain, sell,
convey, assign, set over, mortgage, pledge, hypothecate and transfer to the
Administrative Agent, for the ratable benefit of the Secured Parties, and
hereby grants to the Administrative Agent, for the ratable benefit of the
Secured Parties, a Security Interest in all of the Collateral of such New
Grantor, in each case whether now or hereafter existing or in which now has or
hereafter acquires an interest.  Each
reference to a “Grantor” in the Security Agreement shall be deemed to include
each New Grantor.  The Security
Agreement is hereby incorporated herein by reference.

 

SECTION
2.  Each New Grantor represents and
warrants to the Administrative Agent and the other Secured Parties that this
Supplement has been duly authorized, executed and delivered by it and
constitutes its legal, valid and binding obligation, enforceable against it in
accordance with its terms.

 

SECTION
3.  This Supplement may be executed by
one or more of the parties to this Supplement on any number of separate
counterparts (including by facsimile or other electronic transmission), and all
of said counterparts taken together shall be deemed to constitute one and the
same instrument.  A set of the copies of
this Supplement signed by all the parties shall be lodged with the
Administrative Agent and the Borrower. 
This Supplement shall become effective as to each New Grantor when the
Administrative Agent shall have received counterparts of this Supplement that,
when taken together, bear the signatures of such New Grantor and the
Administrative Agent.

 

SECTION 4.  Each New Grantor hereby represents and
warrants that (a) set forth on Schedule I attached hereto is a true
and correct schedule of the location of any and all Collateral of such New
Grantor, (b) set forth under its signature hereto is (i) the legal name of
such New Grantor, (ii) the jurisdiction of incorporation or organization of
such New Grantor, (iii) the true and correct location of the chief executive
office and principal place of business and any office in which it maintains
books or records relating to Collateral owned by it, (iv) the identity or type
of organization or corporate structure of such New Grantor and (v) the Federal
Taxpayer Identification Number and organizational number of such New Grantor
and (c) as of the date hereof (i) Schedule II hereto sets forth all of each New
Grantor’s Copyright Licenses, (ii) Schedule III hereto sets forth, in proper
form for filing with the United States Copyright Office, all of each

 

2

 

New Grantor’s Copyrights (and
all applications therefor), (iii) Schedule IV hereto sets forth all of each New
Grantor’s Patent Licenses, (iv) Schedule V hereto sets forth, in proper form
for filing with the United States Patent and Trademark Office, all of each New
Grantor’s Patents (and all applications therefor), (v) Schedule VI hereto sets
forth all of each New Grantor’s Trademark Licenses and (vi) Schedule VII hereto
sets forth, in proper form for filing with the United States Patent and
Trademark Office, all of each New Grantor’s Trademarks (and all applications
therefor).

 

SECTION
5.  Except as expressly supplemented
hereby, the Security Agreement shall remain in full force and effect.

 

SECTION 6.  THIS SUPPLEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

SECTION
7.  Any provision of this Supplement
that is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof and in
the Security Agreement, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.  The parties hereto
shall endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.

 

SECTION
8.  All notices, requests and demands
pursuant hereto shall be made in accordance with Section 13.2 of the
Credit Agreement.  All communications
and notices hereunder to each New Grantor shall be given to it in care of the
Borrower at the Borrower’s address set forth in Section 13.2 of the Credit
Agreement.

 

SECTION 9.
 Each New Grantor agrees to reimburse the Administrative Agent for its
reasonable out-of-pocket expenses in connection with this Supplement, including
the reasonable fees, other charges and disbursements of counsel for the
Administrative Agent.

 

3

 

IN WITNESS
WHEREOF, each New Grantor and the Administrative Agent have duly executed this
Supplement to the Security Agreement as of the day and year first above
written.

 

	
   

  	
  [NAME OF NEW GRANTOR]

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
				

 

	
  Legal Name

  	
   

  	
  Jurisdiction
  of

  Incorporation or

  Organization

  	
   

  	
  Location
  of Chief

  Executive Office

  and Principal

  Place of Business

  	
   

  	
  Type of

  Organization or

  Corporate

  Structure

  	
   

  	
  Federal
  Taxpayer

  Identification

  Number and

  Organizational

  Identification

  Number

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

	
   

  	
  CREDIT SUISSE FIRST BOSTON, ACTING THROUGH ITS CAYMAN ISLANDS BRANCH,
  AS ADMINISTRATIVE AGENT

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
				

 

 

	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

4

 

SCHEDULE I

TO THE SUPPLEMENT NO.    
TO THE

SECURITY
AGREEMENT

 

 

COLLATERAL

 

 

SCHEDULE II

TO SUPPLEMENT NO.     TO
THE

SECURITY
AGREEMENT

 

 

COPYRIGHT LICENSES

 

 

SCHEDULE III

TO SUPPLEMENT NO.     TO
THE

SECURITY
AGREEMENT

 

COPYRIGHTS 

 

	
  Registered Owner/Grantor

  	
   

  	
  Title

  	
   

  	
  Registration

  Number

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

SCHEDULE IV

TO SUPPLEMENT NO.     TO
THE

SECURITY
AGREEMENT

 

PATENT LICENSES

 

 

SCHEDULE V

TO SUPPLEMENT NO.     TO
THE

SECURITY
AGREEMENT

 

 

PATENTS

 

 

SCHEDULE VI

TO SUPPLEMENT NO.     TO
THE

SECURITY
AGREEMENT

 

TRADEMARK LICENSES

 

 

SCHEDULE VII

TO SUPPLEMENT NO.     TO
THE

SECURITY
AGREEMENT

 

TRADEMARKS

 

Domestic Trademarks

 

	
  Registered

  Owner/Grantor

  	
   

  	
  Trademark

  	
   

  	
  Registration

  No.

  	
   

  	
  Application

  No.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

Foreign Trademarks

 

	
  Registered

  Owner/Grantor

  	
   

  	
  Trademark

  	
   

  	
  Registration

  No.

  	
   

  	
  Application

  No.

  	
   

  	
  Country

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

ANNEX 2 TO THE

SECURITY AGREEMENT

 

 

SUPPLEMENT NO. [  ] dated as of
[             ],
to the Security Agreement dated as of October 4, 2004, among JOSTENS IH CORP.,
a Delaware corporation (the “Borrower”), JOSTENS SECONDARY HOLDINGS CORP.,
a Delaware corporation (“Holdings”), each subsidiary of the Borrower
listed on Annex A thereto (each such subsidiary individually a “Subsidiary Grantor” and, collectively, the “Subsidiary Grantors”;
the Subsidiary Grantors, Holdings and the Borrower are referred to collectively
herein as the “Grantors”), CREDIT SUISSE FIRST BOSTON, as
administrative agent (in such capacity, the “Administrative Agent”)
for the lenders (the “Lenders”) from time to time parties to the Credit
Agreement referred to below.

 

A.  Reference is made to (a) the Credit
Agreement dated as of October 4, 2004 (as amended, supplemented or otherwise
modified from time to time, the “Credit Agreement”), among the Borrower,
Jostens Canada Ltd., a Manitoba corporation (the “Canadian Borrower”
and, together with the Borrower, the “Borrowers”), Holdings, the
Subsidiary Guarantors, the Lenders, the Administrative Agent, and Credit Suisse
First Boston Toronto Branch, as Canadian administrative agent (in such
capacity, the “Canadian Administrative Agent”) and (b) the US
Guarantee dated as of the date hereof and made in favor of the Administrative
Agent and the Canadian Guarantee dated as of the date hereof and made in favor
of the Administrative Agent.

 

B.  Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to such terms in the
Security Agreement.

 

C.  The Grantors have entered into the Security
Agreement in order to induce Administrative Agent, the Canadian Administrative
Agent, the Lenders and the Letter of Credit Issuers to enter into the Credit
Agreement and to induce the Lenders and the Letter of Credit Issuers to make
their respective Extensions of Credit to the Borrowers under the Credit
Agreement and to induce one or more Lenders or affiliates of Lenders to enter
into Hedge Agreements with the Borrowers. 
Pursuant to Section 4.1(b) of the Security Agreement, within 30 days
after the end of each calendar quarter, each Grantor has agreed to deliver to
the Administrative Agent a written supplement substantially in the form of
Annex 2 thereto with respect to any additional Copyrights, Copyright Licenses,
Patents, Patent Licenses, Trademarks and Trademark Licenses acquired by such Grantor
after the date of the Credit Agreement. 
The Grantors have identified the additional Copyrights, Copyright
Licenses, Patents, Patent Licenses, Trademarks and Trademark Licenses acquired
by such Grantors after the date of the Credit Agreement set forth on Schedule
I, II, III, IV, V and VI hereto.  The
undersigned Grantors are executing this Supplement in order to facilitate
supplemental filings to be made by the Collateral Agent with the United States
Copyright Office and the United States Patent and Trademark Office.

 

 

Accordingly,
the Administrative Agent and the Grantors agree as follows:

 

SECTION 1.  (a)
Schedule 1 of the Security Agreement is hereby supplemented, as
applicable, by the information set forth in the Schedule I hereto, (b)
Schedule 2 of the Security Agreement is hereby supplemented, as
applicable, by the information set forth in the Schedule II hereto, (c)
Schedule 3 of the Security Agreement is hereby supplemented, as
applicable, by the information set forth in the Schedule III hereto, (d)
Schedule 4 of the Security Agreement is hereby supplemented, as
applicable, by the information set forth in the Schedule IV hereto, (e)
Schedule 5 of the Security Agreement is hereby supplemented, as
applicable, by the information set forth in the Schedule V hereto and (f)
Schedule 6 of the Security Agreement is hereby supplemented, as
applicable, by the information set forth in the Schedule VI hereto.

 

SECTION 3.  Each Grantor hereby represents and warrants
that the information set forth on Schedules I, II, III, IV, V and VI hereto is
true and correct.

 

SECTION
2.  This Supplement may be executed by
one or more of the parties to this Supplement on any number of separate
counterparts (including by facsimile or other electronic transmission), and all
of said counterparts taken together shall be deemed to constitute one and the
same instrument.  A set of the copies of
this Supplement signed by all the parties shall be lodged with the
Administrative Agent and the Borrower. 
This Supplement shall become effective as to each Grantor when the
Administrative Agent shall have received counterparts of this Supplement that,
when taken together, bear the signatures of such Grantor and the Administrative
Agent.

 

SECTION
4.  Except as expressly supplemented
hereby, the Security Agreement shall remain in full force and effect.

 

SECTION 5.  THIS SUPPLEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

SECTION
6.  Any provision of this Supplement
that is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof and in
the Security Agreement, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.  The parties hereto
shall endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.

 

SECTION
7.  All notices, requests and demands
pursuant hereto shall be made in accordance with Section 13.2 of the
Credit Agreement.  All communications
and notices hereunder to each Grantor shall be given to it in care of the
Borrower at the Borrower’s address set forth in Section 13.2 of the Credit
Agreement.

 

2

 

SECTION 8.
 Each Grantor agrees to reimburse the Administrative Agent for its
reasonable out-of-pocket expenses in connection with this Supplement, including
the reasonable fees, other charges and disbursements of counsel for the
Administrative Agent.

 

3

 

IN WITNESS
WHEREOF, each Grantor and the Administrative Agent have duly executed this
Supplement to the Security Agreement as of the day and year first above
written.

 

 

	
   

  	
  [GRANTOR]

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
				

 

	
   

  	
  CREDIT SUISSE FIRST BOSTON,

  ACTING THROUGH ITS CAYMAN

  ISLANDS BRANCH, AS

  ADMINISTRATIVE AGENT

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
				

 

	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

4

 

SCHEDULE I

TO SUPPLEMENT NO.     TO
THE

SECURITY
AGREEMENT

 

COPYRIGHT LICENSES

 

 

SCHEDULE II

TO SUPPLEMENT NO.     TO
THE

SECURITY
AGREEMENT

 

COPYRIGHTS 

 

	
  Registered Owner/Grantor

  	
   

  	
  Title

  	
   

  	
  Registration

  Number

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

SCHEDULE III

TO SUPPLEMENT NO.     TO
THE

SECURITY
AGREEMENT

 

PATENT LICENSES

 

 

SCHEDULE IV

TO SUPPLEMENT NO.     TO
THE

SECURITY
AGREEMENT

 

PATENTS

 

 

SCHEDULE V

TO SUPPLEMENT NO.     TO
THE

SECURITY
AGREEMENT

 

TRADEMARK LICENSES

 

 

SCHEDULE VI

TO SUPPLEMENT NO.     TO
THE

SECURITY
AGREEMENT

 

TRADEMARKS

 

Domestic Trademarks

 

	
  Registered

  Owner/Grantor

  	
   

  	
  Trademark

  	
   

  	
  Registration

  No.

  	
   

  	
  Application

  No.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

Foreign Trademarks

 

	
  Registered

  Owner/Grantor

  	
   

  	
  Trademark

  	
   

  	
  Registration

  No.

  	
   

  	
  Application

  No.

  	
   

  	
  CountryExhibit 10.5

 

EXECUTION COPY

 

CANADIAN SECURITY AGREEMENT

 

THIS CANADIAN SECURITY AGREEMENT (this “Security Agreement”)
dated as of October 4, 2004, among, JOSTENS CANADA LTD., a Manitoba
corporation (the “Canadian Borrower”), together with each other Person
who from time to time is required to become a party hereto pursuant to
Section 9.11 of the Credit Agreement referenced below (each a “Guarantor”
and, collectively, the “Guarantors”; the Canadian Borrower and the
Guarantors are referred to collectively as the “Grantors”) and CREDIT
SUISSE FIRST BOSTON TORONTO BRANCH, as Canadian administrative agent (in such
capacity, the “Canadian Administrative Agent”) for the lenders (“Lenders”)
from time to time party to the Credit Agreement dated as of the date hereof (as
the same may be amended, supplemented or otherwise modified from time to time,
the “Credit Agreement”), among JOSTENS IH CORP., a Delaware corporation
(the “Borrower”; the Canadian Borrower and the Borrower are referred to
collectively as the “Borrowers”), the Canadian Borrower, JOSTENS
SECONDARY HOLDINGS CORP., a Delaware Corporation, the Lenders, CREDIT SUISSE
FIRST BOSTON, as administrative agent (in such capacity, the “Administrative
Agent”) and the Canadian Administrative Agent.

 

W  I  T  N  E  S  S
E  T  H:

 

WHEREAS,
(a) pursuant to the Credit Agreement, the Canadian Lenders have severally
agreed to make Loans to the Canadian Borrower and the Canadian Letter of Credit
Issuer has agreed to issue Canadian Letters of Credit for the account of the
Canadian Borrower (collectively, the “Extensions of Credit”) upon the
terms and subject to the conditions set forth therein and (b) one or more
Lenders or affiliates of Lenders may from time to time enter into Hedge
Agreements with the Canadian Borrower;

 

WHEREAS, pursuant
to the Canadian Guarantee (the “Canadian Guarantee”) dated as of the
date hereof, the Borrower and each Guarantor has unconditionally and
irrevocably guaranteed to the Canadian Administrative Agent, for the ratable
benefit of the Secured Parties the prompt and complete payment and performance
when due (whether at the stated maturity, by acceleration or otherwise) of the
Obligations;

 

WHEREAS, each
Guarantor is a Subsidiary of the Canadian Borrower;

 

WHEREAS, each
Guarantor acknowledges that it will derive substantial direct and indirect
benefit from the making of the Extensions of Credit; and

 

WHEREAS, it is
a condition precedent to the obligation of the Canadian Lenders and the
Canadian Letter of Credit Issuer to make their respective Extensions of Credit
to the Canadian Borrower under the Credit Agreement that the Grantors shall
have 

 

 

executed and delivered this Security Agreement to the Canadian
Administrative Agent for the ratable benefit of the Secured Parties;

 

NOW,
THEREFORE, in consideration of the premises and to induce the Administrative
Agent, the Canadian Administrative Agent, the Lenders and the Letter of Credit
Issuers to enter into the Credit Agreement and to induce the Canadian Lenders
and the Canadian Letter of Credit Issuer to make their respective Extensions of
Credit to the Canadian Borrower under the Credit Agreement and to induce one or
more Lenders or affiliates of Lenders to enter into Hedge Agreements with the
Canadian Borrower, the Grantors hereby agree with the Canadian Administrative
Agent, for the ratable benefit of the Secured Parties, as follows:

 

1.  Defined Terms.

 

(a)  Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein shall have the meanings given
to them in the Credit Agreement and the terms “Goods”, “Security”, “Accession”,
“Money”, “financing statement” and “financing change statement” whenever used
herein shall be interpreted in accordance with their respective meanings when
used in the Personal Property Security Act (Ontario), as amended from time to
time (the “PPSA”).  The term
“Goods” when used herein shall not include “consumer goods” of the Grantors as
that term is defined in the PPSA.

 

(b)  The following terms shall have the following
meanings:

 

“Accounts”
shall mean all “accounts” as such term is defined in the PPSA.

 

“Administrative Agent” shall have the meaning assigned to
such term in the recitals hereto.

 

“Canadian
Administrative Agent” shall have the meaning assigned to such term in the
recitals hereto.

 

“Chattel
Paper” shall mean all “chattel paper” as such term is defined in the PPSA.

 

“Collateral” shall have the meaning assigned to such term in Section 2.

 

“Collateral Account” shall mean any collateral account
established by the Canadian Administrative Agent as provided in
subsection 5.1.

 

“Copyright
License” shall mean any written agreement, now or hereafter in effect,
granting any right to any third party under any copyright now or hereafter
owned by any Grantor (including all Copyrights) or that any Grantor otherwise
has the right to license, or granting any right to any Grantor under any
copyright now or hereafter owned by any third party, and all rights of any
Grantor under any such agreement, including those listed on Schedule 1.

 

2

 

“copyrights”
shall mean, with respect to any Person, all of the following now owned or
hereafter acquired by such Person: 
(i) all copyright rights in any work subject to the copyright laws
of Canada, the United States or any other country, whether as author, assignee,
transferee or otherwise, and (ii) all registrations and applications for
registration of any such copyright in Canada, the United States or any other
country, including registrations, recordings, supplemental registrations and
pending applications for registration in the Canadian Intellectual Property
Office.

 

“Copyrights”
shall mean all copyrights now owned or hereafter acquired by any Grantor,
including those listed on Schedule 2.

 

“Documents
of Title” shall mean all “documents of title,” as such term is defined in
the PPSA.

 

“Equipment” shall mean all “equipment,” as such term is defined in the PPSA,
now or hereafter owned by any Grantor or to which any Grantor has rights and,
in any event, shall include all machinery, equipment, furnishings, movable
trade fixtures and vehicles now or hereafter owned by any Grantor or to which
any Grantor has rights and any and all additions, substitutions and
replacements of any of the foregoing, wherever located, together with all attachments,
components, parts, equipment and accessories installed thereon or affixed
thereto; but excluding Equipment to the extent it is subject to a Permitted
Lien and the terms of the Indebtedness secured by such Permitted Lien prohibit
assignment of, or granting of a security interest in, such Grantor’s rights and
interests therein (other than to the extent that any such prohibition would be
rendered ineffective pursuant to any applicable law), provided, that
immediately upon the repayment of all Indebtedness secured by such Permitted
Lien, such Grantor shall be deemed to have granted a Security Interest in all
the rights and interests with respect to such Equipment.

 

“Grantors”
shall have the meaning assigned to such term in the recitals hereto.

 

“Guarantors” shall mean each Grantor other than the Canadian Borrower.

 

“Industrial
Designs” shall mean all industrial designs, design patents and other
designs that Grantors now or hereafter own or use, including, without
limitation (i) all registrations and recordings thereof and all applications in
connection therewith including all registrations, recordings and applications
that have been or shall be made or filed in the Canadian Industrial Design
Office or any similar office in any country in the world and all records
thereof and all reissues, extensions or renewals thereof; (ii) ,the Industrial Designs listed on
Schedule 7,  and (iii) all
common law and other rights in the above.

 

“Industrial
Design License” shall mean any written agreement , including, without
limitation those listed on Schedule 8, now or hereafter in effect,
granting any right to any third party under any industrial design now or
hereafter owned by any Grantor (including all Industrial Designs) or that any
Grantor otherwise has the right to

 

3

 

license, or granting any right to any Grantor under any industrial
design now or hereafter owned by any third party, and all rights of any Grantor
under any such agreement.

 

“Instruments”
shall mean all “instruments,” as such term is defined in the PPSA.

 

“Intangibles” shall mean all “intangibles” as such term is defined in the PPSA
and, in any event, including with respect to any Grantor, all contracts,
agreements, instruments and indentures in any form, and portions thereof, to
which such Grantor is a party or under which such Grantor has any right, title
or interest or to which such Grantor or any property of such Grantor is
subject, as the same may from time to time be amended, supplemented or otherwise
modified, including (a) all rights of such Grantor to receive moneys due
and to become due to it thereunder or in connection therewith, (b) all
rights of such Grantor to receive proceeds of any insurance, indemnity,
warranty or guarantee with respect thereto, (c) all claims of such Grantor
for damages arising out of any breach of or default thereunder and (d) all
rights of such Grantor to terminate, amend, supplement, modify or exercise
rights or options thereunder, to perform thereunder and to compel performance
and otherwise exercise all remedies thereunder, in each case to the extent the
grant by such Grantor of a Security Interest pursuant to this Security
Agreement in its right, title and interest in any such contract, agreement,
instrument or indenture is not prohibited by such contract, agreement,
instrument or indenture without the consent of any other party thereto, would
not give any other party to any such contract, agreement, instrument or
indenture the right to terminate its obligations thereunder or is permitted
with consent if all necessary consents to such grant of a Security Interest
have been obtained from the other parties thereto (other than to the extent
that any such prohibition would be rendered ineffective pursuant to any
applicable law) (it being understood that the foregoing shall not be deemed to
obligate such Grantor to obtain such consents), provided, that the
foregoing limitation shall not affect, limit, restrict or impair the grant by
such Grantor of a Security Interest pursuant to this Security Agreement in any
Account or any money or other amounts due or to become due under any such
contract, agreement, instrument or indenture.

 

“Intellectual Property” shall mean all rights, priorities
and privileges relating to intellectual property, whether arising under
Canadian, United States, multinational or foreign laws or otherwise now owned
or hereafter acquired, including (a) all information used or useful
arising from the business including all goodwill, trade secrets, trade secret
rights, know-how, customer lists, processes of production, ideas, confidential
business information, techniques, processes, formulas and all other proprietary
information, and (b) the Copyrights, the Patents, the Trademarks, the
Industrial Designs and the Licenses and all rights to sue at law or in equity
for any infringement or other impairment thereof, including the right to
receive all proceeds and damages therefrom, in each case to the extent the
grant by such Grantor of a Security Interest pursuant to this Security
Agreement in any such rights, priorities and privileges relating to
intellectual property is not prohibited by any contract, agreement or other
instrument governing such rights, priorities and privileges without the consent
of any other party thereto, would not give any other party to any such
contract, agreement or other instrument the right to terminate its obligations
thereunder or is permitted with

 

4

 

consent if all necessary consents to such grant of a Security Interest
have been obtained from the relevant parties (other than to the extent that any
such prohibition would be rendered ineffective pursuant to any applicable law)
(it being understood that the foregoing shall not be deemed to obligate such
Grantor to obtain such consents).

 

“Inventory”
shall mean all “inventory,” as such term is defined in the PPSA.

 

“License” shall mean any Patent License, Trademark License, Copyright
License, Industrial Design License or other license or sublicense to which any
Grantor is a party.

 

“Obligations”
shall mean the collective reference to (i) the due and punctual payment
required to be made by the Canadian Borrower of (x) the principal of and
premium, if any, and interest at the applicable rate provided in the Credit
Agreement (including interest accruing during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, regardless of whether
allowed or allowable in such proceeding) on the Loans, when and as due, whether
at maturity, by acceleration, upon one or more dates set for prepayment or
otherwise, (y) each payment required to be made by the Canadian Borrower under
the Credit Agreement in respect of any Letter of Credit, when and as due,
including payments in respect of reimbursement of disbursements, interest
thereon and obligations to provide cash collateral, and (z) all other monetary
obligations, including fees, costs, expenses and indemnities, whether primary,
secondary, direct, contingent, fixed or otherwise (including monetary
obligations incurred during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding), of the Canadian Borrower or any other Grantor to
any of the Secured Parties under the Credit Agreement and the other Credit
Documents, including, without limitation, the Canadian Guarantee, (ii) the due
and punctual performance of all covenants, agreements, obligations and
liabilities of the Canadian Borrower under or pursuant to the Credit Agreement
and the other Credit Documents, (iii) the due and punctual payment and
performance of all the covenants, agreements, obligations and liabilities of
each other Grantor under or pursuant to this Security Agreement or the other Credit
Documents, including, without limitation the Canadian Guarantee, (iv) the due
and punctual payment and performance of all obligations of each Grantor under
each Hedge Agreement that (x) is in effect on the Closing Date with a
counterparty that is a Lender or an affiliate of a Lender as of the Closing
Date or (y) is entered into after the Closing Date with any counterparty that
is a Lender or an affiliate of a Lender at the time such Hedge Agreement is
entered into and (v) the due and punctual payment and performance of all
obligations of the Canadian Borrower or any Grantor in respect of overdrafts
and related liabilities owed to the Canadian Administrative Agent or its
affiliates arising from or in connection with treasury, depositary or cash
management services or in connection with any automated clearinghouse transfer
of funds.

 

“Patent
License” shall mean any written agreement, now or hereafter in effect,
granting to any third party any right to make, use or sell any invention on
which a patent, now or hereafter owned by any Grantor (including all Patents)
or that any Grantor

 

5

 

otherwise has the right to license, is in existence, or granting to any
Grantor any right to make, use or sell any invention on which a patent, now or
hereafter owned by any third party, is in existence, and all rights of any
Grantor under any such agreement, including those listed on Schedule 3.

 

“patents”
shall mean, with respect to any Person, all of the following now owned or hereafter
acquired by such Person:  (a) all
letters patent of Canada, the United States or the equivalent thereof in any
other country, all registrations and recordings thereof, and all applications
for letters patent of Canada, the United States or the equivalent thereof in
any other country, including registrations, recordings and pending applications
in the Canadian Intellectual Property Office, the United States Patent and
Trademark Office or any similar offices in any other country, and (b) all reissues,
continuations, divisions, continuations-in-part, renewals or extensions
thereof, and the inventions disclosed or claimed therein, including the right
to make, use and/or sell the inventions disclosed or claimed therein.

 

“Patents”
shall mean all patents now owned or hereafter acquired by any Grantor,
including those listed on Schedule 4.

 

“Proceeds” shall mean all “proceeds” as such term is defined in the PPSA
and, in any event, shall include with respect to any Grantor, any consideration
received from the sale, exchange, license, lease or other disposition of any
asset or property that constitutes Collateral, any value received as a
consequence of the possession of any Collateral and any payment received from
any insurer or other Person or entity as a result of the destruction, loss,
theft, damage or other involuntary conversion of whatever nature of any asset
or property that constitutes Collateral, and shall include (a) all cash and
negotiable instruments received by or held on behalf of the Canadian Administrative
Agent, (b) any claim of any Grantor against any third party for (and the right
to sue and recover for and the rights to damages or profits due or accrued
arising out of or in connection with) (i) past, present or future
infringement of any Patent now or hereafter owned by any Grantor, or licensed
under a Patent License, (ii) past, present or future infringement or dilution
of any Trademark now or hereafter owned by 
any Grantor or licensed under a Trademark License or injury to the
goodwill associated with or symbolized by any Trademark now or hereafter owned
by any Grantor, (iii) past, present or future breach of any License, (iv) past,
present or future infringement of any Copyright now or hereafter owned by any
Grantor or licensed under a Copyright License, and (v) past, present or future
infringement of any Industrial Design now or hereafter owned by any Grantor,
and (c) any and all other amounts from time to time paid or payable under or in
connection with any of the Collateral.

 

“Secured Parties”
shall mean any of the following to whom an Obligation is outstanding (i) the
Lenders, (ii) the Letter of Credit Issuers, (iii) the Swingline Lender, (iv)
the Administrative Agent, (v) the Canadian Administrative Agent, (vi) the other
Agents, (vii) each counterparty to a Hedge Agreement the obligations under
which constitute Obligations, (viii) the beneficiaries of each indemnification
obligation undertaken by any Credit Party under any Credit Document, and
(ix) any successors, indorsees, transferees and assigns of each of the
foregoing.

 

6

 

“Securities” shall mean all “securities” as such term is defined in the PPSA
(whether certificated or uncertificated) of any Grantor, whether now or
hereafter acquired by any Grantor, in each case to the extent the grant by a
Grantor of a Security Interest therein pursuant to this Security Agreement in
its right, title and interest in any such Security is not prohibited by any
contract, agreement, instrument or indenture governing such Security without
the consent of any other party thereto, would not give any other party to any
such contract, agreement, instrument or indenture the right to terminate its
obligations thereunder or is permitted with consent if all necessary consents
to such grant of a Security Interest have been obtained from the other parties
thereto (other than to the extent that any such prohibition would be rendered
ineffective pursuant to any applicable law) (it being understood that the
foregoing shall not be deemed to obligate such Grantor to obtain such
consents).

 

“Security Agreement” shall mean this Security Agreement, as the same may be amended,
supplemented or otherwise modified from time to time.

 

“Security Interest” shall have the meaning assigned to
such term in Section 2.

 

“Trademark
License” shall mean any written agreement, now or hereafter in effect,
granting to any third party any right to use any trademark now or hereafter
owned by any Grantor (including any Trademark) or that any Grantor otherwise
has the right to license, or granting to any Grantor any right to use any
trademark now or hereafter owned by any third party, and all rights of any
Grantor under any such agreement, including those listed on Schedule 5.

 

“trademarks”
shall mean, with respect to any Person, all of the following now owned or
hereafter acquired by such Person: 
(i) all trademarks, service marks, trade names, corporate names,
company names, business names, fictitious business names, trade styles, trade
dress, logos, other source or business identifiers, designs and intangibles of
like nature, now existing or hereafter adopted or acquired, all registrations
and recordings thereof (if any), and all registration and recording
applications filed in connection therewith, including registrations and
registration applications in the Canadian Intellectual Property Office, the
United States Patent and Trademark Office or any similar offices in any
Province of Canada, State of the United States or any other country or any political
subdivision thereof, and all extensions or renewals thereof, (ii) all
goodwill associated therewith or symbolized thereby and (iii) all other
assets, rights and interests that uniquely reflect or embody such goodwill.

 

“Trademarks”
shall mean all trademarks now owned or hereafter acquired by any Grantor,
including those listed on Schedule 6 hereto.

 

“Unfunded
Advances/Participations” shall mean (a) with respect to the Canadian
Administrative Agent, the aggregate amount, if any (i) made available to the
Canadian Borrower on the assumption that each Lender has made its pro rata
share of the applicable Borrowing available to the Canadian Administrative
Agent as contemplated by Section 2.4(b) of the Credit Agreement and (ii)
with respect to which a corresponding

 

7

 

amount shall not in fact have been made available to the Canadian
Administrative Agent, by any such Lender and (b) with respect to the Canadian
Letter of Credit Issuer, the aggregate amount, if any, of unreimbursed payments
under any Letter of Credit made by such Letter of Credit Issuer that shall not
have been reimbursed by the Canadian Borrower pursuant to Section 3.4(a)
of the Credit Agreement, or repaid for the account of such Letter of Credit Issuer
by the applicable L/C Participants pursuant to Section 3.3(e) of the
Credit Agreement.

 

(c)  The words “hereof”, “herein”, “hereto” and
“hereunder” and words of similar import when used in this Security Agreement
shall refer to this Security Agreement as a whole and not to any particular
provision of this Security Agreement, and Section, subsection and
Schedule references are to this Security Agreement unless otherwise
specified.  The words “include”,
“includes” and “including” shall be deemed to be followed by the phrase
“without limitation”.

 

(d)  The meanings given to terms defined herein
shall be equally applicable to both the singular and plural forms of such
terms.

 

(e)  Where the context requires, terms relating
to the Collateral or any part thereof, when used in relation to a Grantor,
shall refer to such Grantor’s Collateral or the relevant part thereof.

 

(f)  References to “Lenders” in this Security
Agreement shall be deemed to include affiliates of Lenders that may from time
to time enter into Hedge Agreements with the Canadian Borrower.

 

2.  Grant of Security
Interest.

 

(a)  Each Grantor hereby bargains, sells,
conveys, sets over, mortgages, pledges, hypothecates and transfers to the
Canadian Administrative Agent, for the ratable benefit of the Secured Parties,
and hereby grants to the Canadian Administrative Agent, for the ratable benefit
of the Secured Parties, a security interest (the “Security Interest”) in
all of the following property now owned or hereafter acquired by such Grantor
or in which such Grantor now has or at any time in future may acquire any
right, title or interest (collectively, the “Collateral”), as collateral
security for the prompt and complete payment and performance when due (whether
at the stated maturity, by acceleration or otherwise) of the Obligations:

 

(i)  all Accounts;

 

(ii)  all cash;

 

(iii)  all Chattel Paper;

 

(iv)  all Documents of Title;

 

(v)  all Equipment;

 

8

 

(vi)  all Goods

 

(vii)  all Intangibles;

 

(viii)  all Instruments;

 

(ix)  all Intellectual Property;

 

(x)  all Inventory;

 

(xi)  all Securities;

 

(xii)  all books and records pertaining to the Collateral;
and

 

(xiii)  to the extent not otherwise
included, all Proceeds and products of any and all of the foregoing.

 

Notwithstanding
the foregoing, (i) the Collateral shall not include shares in the capital stock
of an unlimited liability company, (ii) the Collateral shall not include the
last day of the term of any lease or agreement therefore but upon the enforcement
of the security interest granted hereby in the Collateral, the applicable
Grantor shall stand possessed of such last day in trust to assign the same to
any Person acquiring such term, and (iii) each Grantor’s grant of security in
trademarks (as defined in the Trademarks Act (Canada)) under this Security
Agreement shall be limited to a grant by such Grantor of a security interest in
all of such Grantor’s right, title and interest in such trademarks.

 

(b)  Each Grantor hereby irrevocably authorizes the
Canadian Administrative Agent at any time and from time to time to file in any
relevant jurisdiction any financing statements and any financing change
statements with respect to the Collateral or any part thereof and amendments
thereto that contain the information required by the PPSA or any other personal
property security legislation for the filing of any financing statement,
financing change statement or amendment, including whether such Grantor is an
organization, the type of organization and any organizational identification
number issued to such Grantor.  Such
financing statements and financing change statements may describe the
Collateral in the same manner as described herein or may contain an indication
or description of collateral that describes such property in any other manner
such as “all assets” or “all personal property, whether now owned or hereafter
acquired.”  Each Grantor agrees to
provide such information to the Canadian Administrative Agent promptly upon
request.

 

Each Grantor
also ratifies its authorization for the Canadian Administrative Agent to file
in any relevant jurisdiction any financing statements, financing change
statements or amendments thereto if filed prior to the date hereof.

 

The Canadian
Administrative Agent is further authorized to file with the United States
Patent and Trademark Office, United States Copyright Office, or the Canadian
Intellectual Property Office (or any successor office or any similar office in
any other country) such documents as may be necessary or advisable for the
purpose of

 

9

 

perfecting, confirming, continuing, enforcing or protecting the
Security Interest granted by each Grantor, without the signature of any
Grantor, and naming any Grantor or the Grantors as debtors and the Canadian
Administrative Agent as secured party.

 

The Security
Interests are granted as security only and shall not subject the Canadian
Administrative Agent or any other Secured Party to, or in any way alter or
modify, any obligation or liability of any Grantor with respect to or arising
out of the Collateral.

 

(c)  Notwithstanding anything to the contrary in
this Security Agreement, the liability of any Grantor in respect of the
Obligations of the Canadian Borrower shall not exceed the amount provided for
in the Canadian Guarantee.

 

3.  Representations And
Warranties.

 

Each Grantor
hereby represents and warrants to the Canadian Administrative Agent and each
Secured Party that:

 

3.1.  Title; No Other Liens.  Except for the Security Interest granted to
the Canadian Administrative Agent for the ratable benefit of the Secured
Parties pursuant to this Security Agreement, the Liens permitted by the Credit
Agreement and any Liens securing Indebtedness which is no longer outstanding or
any Liens with respect to commitments to lend which have been terminated, such
Grantor has rights to each item of the Collateral free and clear of any and all
Liens or claims of others.  No security
agreement, financing statement, financing change statement or other public
notice with respect to all or any part of the Collateral that evidences a Lien
securing any material Indebtedness is on file or of record in any public
office, except such as have been filed in favor of the Canadian Administrative
Agent, for the ratable benefit of the Secured Parties, pursuant to this
Security Agreement or are permitted by the Credit Agreement.

 

3.2.  Perfected First Priority Liens.   (a) 
Subject to the limitations set forth in clause (b) of this
subsection 3.2, the Security Interests granted pursuant to this Security
Agreement (i) will constitute legal and valid perfected Security Interests
in the Collateral in favor of the Canadian Administrative Agent, for the
ratable benefit of the Secured Parties, as collateral security for the
Obligations, upon (A) the filing of all financing statements naming each
Grantor as “debtor” and the Canadian Administrative Agent as “secured party”
and describing the Collateral in the applicable filing offices, (B) delivery of
all Instruments, Chattel Paper and certificated Securities, and (C) in the
case of Equipment that is covered by a certificate of title, the filing with
the registrar of motor vehicles or other appropriate authority in the
applicable jurisdiction (as specified in the Perfection Certificate (as such
information is updated pursuant to Section 9.1(d) of the Credit
Agreement)) of an application requesting the notation of the Security Interest
created hereunder on such certificate of title and otherwise as may be required
pursuant to the laws of any other necessary jurisdiction to the extent that a
security interest may be perfected by such filings, registrations and
recordings, and (ii) are prior to all other Liens on the Collateral other
than Liens permitted pursuant to Section 10.2 of the Credit Agreement.

 

10

 

(b)  Notwithstanding anything to the contrary
herein, no Grantor shall be required to perfect the Security Interests granted
by this Security Agreement (including Security Interests in cash, cash accounts
and Securities) by any means other than by (i) filings pursuant to the
PPSA, (ii) filings with other appropriate authorities in the relevant
jurisdictions, (iii) filings approved by government offices with respect
to Intellectual Property, or (iv) in the case of Collateral that
constitutes tangible Chattel Paper, Instruments, Certificated Securities or
Negotiable Instruments, possession by the Canadian Administrative Agent.

 

(c)  It is understood and agreed that the
Security Interests in cash and Accounts created hereunder shall not prevent the
Grantors from using such assets in the ordinary course of their respective
businesses.

 

4.  Covenants.

 

Each Grantor
hereby covenants and agrees with the Canadian Administrative Agent and the
Secured Parties that, from and after the date of this Security Agreement until
the Obligations under the Credit Documents are paid in full, the Commitments
are terminated and no Letter of Credit remains outstanding:

 

4.1.  Maintenance of Perfected Security
Interest; Further Documentation.

 

(a)  Such Grantor shall maintain the Security
Interest created by this Security Agreement as a perfected Security Interest
having at least the priority described in subsection 3.2 and shall defend
such Security Interest against the claims and demands of all Persons
whomsoever, in each case subject to subsection 3.2(b).

 

(b)  Such Grantor will furnish to the Canadian
Administrative Agent and the Lenders from time to time statements and schedules
further identifying and describing the assets and property of such Grantor and
such other reports in connection therewith as the Canadian Administrative Agent
may reasonably request.  In addition,
within 30 days after the end of each calendar quarter, such Grantor will
deliver to the Canadian Administrative Agent (i) copies of all such
certificates of title issued during such calendar quarter with the notation
thereon of the Canadian Administrative Agent’s Security Interest (if any)
created hereunder in the items of Equipment covered hereby, and (ii) a
written supplement hereto substantially in the form of Annex 2 hereto with
respect to any additional Copyrights, Copyright Licenses, Industrial Designs,
Industrial Design Licenses, Patents, Patent Licenses, Trademarks and Trademark
Licenses acquired by such Grantor after the date hereof, all in reasonable
detail.

 

(c)  Subject to clause (d) below and
subsection 3.2(b), each Grantor agrees that at any time and from time to
time, at the expense of such Grantor, it will execute any and all further
documents, financing statements, financing change statements, agreements and
instruments, and take all such further actions (including the filing and
recording of financing statements, financing change statements, fixture
filings, mortgages, deeds of trust and other documents), which may be required
under any applicable law, or which the Canadian Administrative Agent or the
Required Lenders may reasonably request, in

 

11

 

order (x) to grant, preserve,
protect and perfect the validity and priority of the Security Interests created
or intended to be created hereby or (y) to enable the Canadian
Administrative Agent to exercise and enforce its rights and remedies hereunder
with respect to any Collateral, including the filing of any financing
statements, continuation statements or financing change statements under the
PPSA and any other applicable personal property security legislation in any
other jurisdiction with respect to the Security Interests created hereby, all
at the expense of such Grantor.

 

(d)  Notwithstanding anything in this
subsection 4.1 to the contrary, (i) with respect to any assets
acquired by such Grantor after the date hereof that are required by the Credit
Agreement to be subject to the Lien created hereby or (ii) with respect to
any Person that, subsequent to the date hereof, becomes a Subsidiary of the
Canadian Borrower that is required by the Credit Agreement to become a party
hereto, the relevant Grantor after the acquisition or creation thereof shall
promptly take all actions required by the Credit Agreement or this
subsection 4.1.

 

4.2.  Changes in Locations, Name, etc.  Each Grantor will furnish to the Canadian
Administrative Agent prompt written notice of any change (i) in its legal
name, (ii) in its jurisdiction of incorporation or organization,
(iii) in the location of its chief executive office, its principal place
of business, any office in which it maintains books or records relating to
Collateral owned by it (including the establishment of any such new office),
(iv) in its identity or type of organization or corporate structure or
(v) in its organizational identification number (if any).  Each Grantor agrees promptly to provide the
Canadian Administrative Agent with certified organizational documents
reflecting any of the changes described in the first sentence of this
paragraph.  Each Grantor agrees not to
effect or permit any change referred to in the preceding sentence unless all filings
have been made under the PPSA, any other personal property security legislation
or otherwise that are required in order for the Canadian Administrative Agent
to continue at all times following such change to have a valid, legal and
perfected security interest in all the Collateral having at least the priority
described in subsection 3.2.  Each
Grantor also agrees promptly to notify the Canadian Administrative Agent if any
material portion of the Collateral is damaged or destroyed.

 

4.3.  Notices.  Each Grantor will advise the Canadian Administrative
Agent and the Lenders promptly, in reasonable detail, of any Lien of which it
has knowledge (other than the Security Interests created hereby or Liens
permitted under the Credit Agreement) on any of the Collateral which would
adversely affect, in any material respect, the ability of the Canadian
Administrative Agent to exercise any of its remedies hereunder.

 

4.4.  Special Covenants with Respect to Equipment.  (a) 
Each Grantor shall, promptly after the acquisition by such Grantor of
any item of Equipment that is covered by a certificate of title under a statute
of any jurisdiction under the law of which indication of a Security Interest on
such certificate is required as a condition of perfection thereof, execute and
file with the registrar of motor vehicles or other appropriate authority in
such jurisdiction an application or other document requesting the notation or
other indication of the Security Interest created hereunder on such certificate
of title.

 

12

 

(b)  Upon the occurrence and during the
continuation of any Event of Default, all insurance payments in respect of such
Equipment shall be paid to and applied by the Canadian Administrative Agent as
specified in subsection 5.4 hereof.

 

(c)  At the Canadian Administrative Agent’s
request at any time after the occurrence and during the continuance of an Event
of Default, each Grantor shall deliver to the Canadian Administrative Agent the
certificates of title covering each item of Equipment the perfection of which
is governed by the notation on the certificate of title of the Canadian
Administrative Agent’s Security Interest created hereunder.

 

5.  Remedial Provisions.

 

5.1.  Certain Matters Relating to Accounts.   (a) 
At any time after the occurrence and during the continuance of an Event
of Default, the Canadian Administrative Agent shall have the right to make test
verifications of the Accounts in any manner and through any medium that it
reasonably considers advisable, and each Grantor shall furnish all such
assistance and information as the Canadian Administrative Agent may require in
connection with such test verifications. 
The Canadian Administrative Agent shall have the absolute right to share
any information it gains from such inspection or verification with any Secured
Party.

 

(b)  The Canadian Administrative Agent hereby
authorizes each Grantor to collect such Grantor’s Accounts and the Canadian
Administrative Agent may curtail or terminate said authority at any time after
the occurrence and during the continuance of an Event of Default. If required
in writing by the Canadian Administrative Agent at any time after the
occurrence and during the continuance of an Event of Default, any payments of
Accounts, when collected by any Grantor, (i) shall be forthwith (and, in
any event, within two Business Days) deposited by such Grantor in the exact
form received, duly endorsed by such Grantor to the Canadian Administrative
Agent if required, in a Collateral Account maintained under the sole dominion
and control of and on terms and conditions reasonably satisfactory to the
Canadian Administrative Agent, subject to withdrawal by the Canadian
Administrative Agent for the account of the Secured Parties only as provided in
subsection 5.5, and (ii) until so turned over, shall be held by such
Grantor in trust for the Canadian Administrative Agent and the Secured Parties,
segregated from other funds of such Grantor. 
Each such deposit of Proceeds of Accounts shall be accompanied by a
report identifying in reasonable detail the nature and source of the payments
included in the deposit.

 

(c)  At the Canadian Administrative Agent’s
request at any time after the occurrence and during the continuance of an Event
of Default, each Grantor shall deliver to the Canadian Administrative Agent all
original and other documents evidencing, and relating to, the agreements and
transactions which gave rise to the Accounts, including all original orders,
invoices and shipping receipts.

 

(d)  Upon the occurrence and during the continuance
of an Event of Default, a Grantor shall not grant any extension of the time of
payment of any of the Accounts, compromise, compound or settle the same for
less than the full amount thereof,

 

13

 

release, wholly or partly, any
Person liable for the payment thereof, or allow any credit or discount
whatsoever thereon if the Canadian Administrative Agent shall have instructed
the Grantors not to grant or make any such extension, credit, discount, compromise,
or settlement under any circumstances during the continuance of such Event of
Default.

 

5.2.  Communications with Obligors; Grantors Remain
Liable.   (a)  The Canadian Administrative Agent in its own
name or in the name of others may at any time after the occurrence and during
the continuance of an Event of Default, after giving reasonable notice to the
relevant Grantor of its intent to do so, communicate with obligors under the
Accounts to verify with them to the Canadian Administrative Agent’s satisfaction
the existence, amount and terms of any Accounts.  The Canadian Administrative Agent shall have the absolute right
to share any information it gains from such inspection or verification with any
Secured Party.

 

(b)  Upon the written request of the Administrative
Agent at any time after the occurrence and during the continuance of an Event
of Default, each Grantor shall notify obligors on the Accounts that the
Accounts have been assigned to the Canadian Administrative Agent for the
ratable benefit of the Secured Parties and that payments in respect thereof
shall be made directly to the Canadian Administrative Agent.

 

(c)  Anything herein to the contrary
notwithstanding, each Grantor shall remain liable under each of the Accounts to
observe and perform all the conditions and obligations to be observed and
performed by it thereunder, all in accordance with the terms of any agreement
giving rise thereto.  Neither the
Canadian Administrative Agent nor any Secured Party shall have any obligation
or liability under any Account (or any agreement giving rise thereto) by reason
of or arising out of this Security Agreement or the receipt by the Canadian
Administrative Agent or any Secured Party of any payment relating thereto, nor
shall the Canadian Administrative Agent or any Secured Party be obligated in
any manner to perform any of the obligations of any Grantor under or pursuant
to any Account (or any agreement giving rise thereto), to make any payment, to
make any inquiry as to the nature or the sufficiency of any payment received by
it or as to the sufficiency of any performance by any party thereunder, to
present or file any claim, to take any action to enforce any performance or to
collect the payment of any amounts which may have been assigned to it or to which
it may be entitled at any time or times.

 

5.3.  Proceeds to be Turned Over To Canadian
Administrative Agent.  In addition to the rights of the Canadian Administrative Agent
and the Secured Parties specified in subsection 5.1 with respect to
payments of Accounts, if an Event of Default shall occur and be continuing and
the Canadian Administrative Agent so requires by notice in writing to the
relevant Grantor (it being understood that the exercise of remedies by the
Secured Parties in connection with an Event of Default under Section 11.5
of the Credit Agreement shall be deemed to constitute a request by the Canadian
Administrative Agent for the purposes of this sentence and in such
circumstances, no such written notice shall be required), all Proceeds received
by any Grantor consisting of cash, cheques and other near-cash items shall be
held by such Grantor in trust for the Canadian Administrative Agent and the
Secured Parties, segregated from other funds of such Grantor, and shall,
forthwith upon receipt by such Grantor, be turned over to the

 

14

 

Canadian Administrative Agent
in the exact form received by such Grantor (duly endorsed by such Grantor to
the Canadian Administrative Agent, if required).  All Proceeds received by the Canadian Administrative Agent
hereunder shall be held by the Canadian Administrative Agent in a Collateral
Account maintained under its sole dominion and control and on terms and
conditions reasonably satisfactory to the Canadian Administrative Agent.  All Proceeds while held by the Canadian
Administrative Agent in a Collateral Account (or by such Grantor in trust for
the Canadian Administrative Agent and the Secured Parties) shall continue to be
held as collateral security for all the Obligations and shall not constitute
payment thereof until applied as provided in subsection 5.4.

 

5.4.  Application of Proceeds.  The Canadian Administrative Agent shall
apply the proceeds of any collection or sale of the Collateral as well as any
Collateral consisting of cash, at any time after receipt as follows:

 

(i)  first, to the payment of all reasonable and
documented costs and expenses incurred by the Canadian Administrative Agent in
connection with such collection or sale or otherwise in connection with this
Security Agreement, the other Credit Documents or any of the Obligations,
including all court costs and the reasonable fees and expenses of its agents
and legal counsel, the repayment of all advances made by the Canadian
Administrative Agent hereunder or under any other Credit Document on behalf of
any Grantor and any other reasonable and documented costs or expenses incurred
in connection with the exercise of any right or remedy hereunder or under any
other Credit Document;

 

(ii)  second, to the payment in full of the Unfunded
Advances/Participations (the amounts so applied to be distributed between or
among the Canadian Administrative Agent and the Canadian Letter of Credit
Issuer pro
rata in accordance with the amounts of Unfunded Advances/Participations
owed to them on the date of any distribution);

 

(iii)  third, to the Secured Parties, an amount equal to
all Obligations owing to them on the date of any distribution, and, if such
moneys shall be insufficient to pay such amounts in full, then ratably (without
priority of any one over any other) to such Secured Parties in proportion to
the unpaid amounts thereof; and

 

(iv)  fourth, any surplus then remaining shall be paid to
the Grantors or their successors or assigns or to whomsoever may be lawfully
entitled to receive the same or as a court of competent jurisdiction may
direct.

 

Upon any sale
of the Collateral by the Canadian Administrative Agent (including pursuant to a
power of sale granted by statute or under a judicial proceeding), the receipt
of the Canadian Administrative Agent or of the officer making the sale shall be
a sufficient discharge to the purchaser or purchasers of the Collateral so sold
and such purchaser or purchasers shall not be obligated to see to the
application of any part of the

 

15

 

purchase money
paid over to the Canadian Administrative Agent or such officer or be answerable
in any way for the misapplication thereof.

 

5.5.  PPSA and Other Remedies.  If an Event of Default shall occur and be
continuing, the Canadian Administrative Agent may exercise in respect of the
Collateral, in addition to all other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured party upon default
under the PPSA or any other applicable law 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 exchange broker’s board or at any of
the Canadian Administrative Agent’s offices or elsewhere, for cash, on credit
or for future delivery, at such price or prices and upon such other terms as
are commercially reasonable irrespective of the impact of any such sales on the
market price of the Collateral.  The Canadian
Administrative Agent shall be authorized at any such sale (if it deems it
advisable to do so) to restrict the prospective bidders or purchasers of
Collateral to Persons who will represent and agree that they are purchasing the
Collateral for their own account for investment and not with a view to the
distribution or sale thereof, and, upon consummation of any such sale, the
Canadian Administrative Agent shall have the right to assign, transfer and
deliver to the purchaser or purchasers thereof the Collateral so sold.  Each purchaser at any such sale shall hold
the property sold absolutely free from any claim or right on the part of any
Grantor, and each Grantor hereby waives (to the extent permitted by law) all
rights of redemption, stay and/or appraisal that it now has or may at any time
in the future have under any rule of law or statute now existing or hereafter
enacted.  The Canadian Administrative
Agent or any Secured Party shall have the right upon any such public sale, and,
to the extent permitted by law, upon any such private sale, to purchase the
whole or any part of the Collateral so sold, and the Canadian Administrative
Agent or such Secured Party may subject to (x) the satisfaction in full in cash
of all payments due pursuant to subsection 5.4(i), and (y) the ratable
satisfaction of the Obligations in accordance with subsection 5.4(ii) pay
the purchase price by crediting the amount thereof against the
Obligations.  Each Grantor agrees that,
to the extent notice of sale shall be required by law, at least ten days’
notice to such 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 Canadian
Administrative Agent shall not be obligated to make any sale of Collateral
regardless of notice of sale having been given.  The Canadian Administrative 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.  To
the extent permitted by law, each Grantor hereby waives any claim against the
Canadian Administrative Agent arising by reason of the fact that the price at
which any Collateral may have been sold at such a private sale was less than
the price that might have been obtained at a public sale, even if the Canadian
Administrative Agent accepts the first offer received and does not offer such
Collateral to more than one offeree. 
Each Grantor further agrees, at the Canadian Administrative Agent’s
request, to assemble the Collateral and make it available to the Canadian
Administrative Agent at places which the Canadian Administrative Agent shall
reasonably select, whether at such Grantor’s premises or elsewhere.  The Canadian Administrative Agent shall
apply the net proceeds of any action taken by it pursuant to this
subsection 5.5 in accordance with the provisions of subsection 5.4.

 

16

 

5.6.  Deficiency.  Each Grantor shall remain liable for any
deficiency if the proceeds of any sale or other disposition of the Collateral
are insufficient to pay its Obligations and the fees and disbursements of any
attorneys employed by the Canadian Administrative Agent or any Secured Party to
collect such deficiency.

 

5.7.  Amendments, etc. with Respect to the
Obligations; Waiver of Rights.  Each Grantor shall remain obligated hereunder notwithstanding
that, without any reservation of rights against any Grantor and without notice
to or further assent by any Grantor, (a) any demand for payment of any of the
Obligations made by the Canadian Administrative Agent or any other Secured
Party may be rescinded by such party and any of the Obligations continued, (b)
the Obligations, or the liability of any other party upon or for any part
thereof, or any collateral security or guarantee therefor or right of offset
with respect thereto, may, from time to time, in whole or in part, be renewed,
extended, amended, modified, accelerated, compromised, waived, surrendered or
released by the Canadian Administrative Agent or any other Secured Party,
(c) the Credit Agreement, the other Credit Documents, the Canadian Letters
of Credit and any other documents executed and delivered in connection therewith
and the Hedge Agreements and any other documents executed and delivered in
connection therewith and any documents entered into with the Canadian
Administrative Agent or any of its affiliates in connection with treasury,
depositary or cash management services or in connection with any automated
clearinghouse transfer of funds may be amended, modified, supplemented or
terminated, in whole or in part, as the Canadian Administrative Agent (or the
Required Lenders, as the case may be, or, in the case of any Hedge Agreement or
documents entered into with the Canadian Administrative Agent or any of its
affiliates in connection with treasury, depositary or cash management services
or in connection with any automated clearinghouse transfer of funds, the party
thereto) may deem advisable from time to time, and (d) any collateral security,
guarantee or right of offset at any time held by the Canadian Administrative
Agent or any other Secured Party for the payment of the Obligations may be
sold, exchanged, waived, surrendered or released.  Neither the Canadian Administrative Agent nor any other Secured
Party shall have any obligation to protect, secure, perfect or insure any Lien
at any time held by it as security for the Obligations or for this Security
Agreement or any property subject thereto. 
When making any demand hereunder against any Grantor, the Canadian
Administrative Agent or any other Secured Party may, but shall be under no
obligation to, make a similar demand on the Borrower or any Grantor or grantor,
and any failure by the Canadian Administrative Agent or any other Secured Party
to make any such demand or to collect any payments from the Borrower or any
Grantor or grantor or any release of the Borrower or any Grantor or grantor
shall not relieve any Grantor in respect of which a demand or collection is not
made or any Grantor not so released of its several obligations or liabilities
hereunder, and shall not impair or affect the rights and remedies, express or
implied, or as a matter of law, of the Canadian Administrative Agent or any
other Secured Party against any Grantor. 
For the purposes hereof “demand” shall include the commencement and
continuance of any legal proceedings.

 

5.8.  Appointment of Receiver.  The Canadian Administrative Agent may appoint,
remove and reappoint any Person or Persons, including an employee or agent of
the Canadian Administrative Agent to be a receiver (the “Receiver”)
which term shall

 

17

 

include a receiver and manager
of, or agent for, all or any part of the Collateral.  Any such Receiver shall, as far as concerns responsibility for
its acts, be deemed to be the agent of Grantors and not of the Canadian
Administrative Agent or any other Secured Party, and the Canadian Administrative
Agent and other Secured Parties shall not in any way be responsible for any
misconduct, negligence or nonfeasance of such Receiver, its employees or
agents.  Except as otherwise directed by
the Canadian Administrative Agent, all money received by such Receiver shall be
received in trust for and paid to the Canadian Administrative Agent.  Such Receiver shall have all of the powers
and rights of the Canadian Administrative Agent described in this Section l
or as otherwise provided under the PPSA or the Bankruptcy and Insolvency Act
(Canada) (“BIA”).  The Canadian
Administrative Agent may, either directly or through its agents or nominees,
exercise any or all powers and rights of a Receiver.

 

Grantors shall
pay all costs, charges and expenses incurred by the Canadian Administrative
Agent or any Receiver or any nominee or agent of the Canadian Administrative
Agent, whether directly or for services rendered (including, without
limitation, solicitor’s costs on a solicitor and its own client basis, auditor’s
costs, other legal expenses and Receiver remuneration) in enforcing this
Security Agreement or any of the other Credit Documents and in enforcing the
Obligations and all such expenses together with any money owing as a result of
any borrowing permitted hereby or pursuant to any applicable law shall be a
charge on the proceeds of realization and shall be secured hereby.

 

6.  The Canadian
Administrative Agent.

 

6.1.  Canadian Administrative Agent’s Appointment
as Attorney-in-Fact, etc.       (a)  Each Grantor
hereby appoints, which appointment is irrevocable and coupled with an interest,
effective upon and during occurrence of an Event of Default, the Canadian
Administrative Agent and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of such Grantor and in the name of
such Grantor or otherwise, for the purpose of carrying out the terms of this
Security Agreement, to take any and all appropriate action and to execute any
and all documents and instruments which may be necessary or desirable to
accomplish the purposes of this Security Agreement, and, without limiting the
generality of the foregoing, each Grantor hereby gives the Canadian Administrative
Agent the power and right, on behalf of such Grantor, either in the Canadian
Administrative Agent’s name or in the name of such Grantor or otherwise,
without assent by such Grantor, to do any or all of the following, in each case
after and during the occurrence of an Event of Default and after written notice
by the Canadian Administrative Agent of its intent to do so:

 

(i)  take possession of and endorse and collect any
cheques, drafts, notes, acceptances or other instruments for the payment of moneys
due under any Account or with respect to any other Collateral and file any
claim or take any other action or proceeding in any court of law or equity or
otherwise deemed appropriate by the Canadian Administrative Agent for the
purpose of collecting

 

18

 

any and all
such moneys due under any Account or with respect to any other Collateral
whenever payable;

 

(ii)  in the case of any Intellectual Property, execute
and deliver, and have recorded, any and all agreements, instruments, documents
and papers as the Canadian Administrative Agent may request to evidence the
Canadian Administrative Agent’s and the Secured Parties’ Security Interest in
such Intellectual Property and the goodwill and intangibles of such Grantor
relating thereto or represented thereby;

 

(iii)  pay or discharge taxes and Liens levied or placed
on or threatened against the Collateral;

 

(iv)  execute, in connection with any sale provided for
in subsection 5.5, any endorsements, assignments or other instruments of
conveyance or transfer with respect to the Collateral;

 

(v)  obtain and adjust insurance required to be
maintained by such Grantor or paid to the Canadian Administrative Agent
pursuant to subsection 4.4;

 

(vi)  direct any party liable for any payment under any
of the Collateral to make payment of any and all moneys due or to become due
thereunder directly to the Canadian Administrative Agent or as the Canadian
Administrative Agent shall direct;

 

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

 

(viii)  sign and endorse any invoices,
freight or express bills, bills of lading, storage or warehouse receipts,
drafts against debtors, assignments, verifications, notices and other documents
in connection with any of the Collateral;

 

(ix)  commence and prosecute any suits, actions or
proceedings at law or in equity in any court of competent jurisdiction to
collect the Collateral or any portion thereof and to enforce any other right in
respect of any Collateral;

 

(x)  defend any suit, action or proceeding brought
against such Grantor with respect to any Collateral (with such Grantor’s
consent to the extent such action or its resolution could materially affect
such Grantor or any of its Affiliates in any manner other than with respect to
its continuing rights in such Collateral);

 

(xi)  settle, compromise or adjust any such suit, action
or proceeding and, in connection therewith, give such discharges or releases as
the Canadian Administrative Agent may deem appropriate (with such Grantor’s
consent to the extent such action or its resolution could materially affect
such Grantor or any of

 

19

 

its Affiliates
in any manner other than with respect to its continuing rights in such
Collateral);

 

(xii)  assign any Copyright, Industrial Design, Patent or
Trademark (along with the goodwill of the business to which any such Copyright,
Industrial Design, Patent or Trademark pertains), throughout the world for such
term or terms, on such conditions, and in such manner, as the Canadian
Administrative Agent shall in its sole discretion determine; and

 

(xiii)  generally, sell, transfer,
pledge and make any agreement with respect to or otherwise deal with any of the
Collateral as fully and completely as though the Canadian Administrative Agent
were the absolute owner thereof for all purposes, and do, at the Canadian Administrative
Agent’s option and such Grantor’s expense, at any time, or from time to time,
all acts and things that the Canadian Administrative Agent deems necessary to
protect, preserve or realize upon the Collateral and the Canadian
Administrative Agent’s and the Secured Parties’ Security Interests therein and
to effect the intent of this Security Agreement, all as fully and effectively
as such Grantor might do.

 

Anything in
this subsection 6.l(a) to the contrary notwithstanding, the Canadian
Administrative Agent agrees that it will not exercise any rights under the
power of attorney provided for in this subsection 6.1(a) unless an Event
of Default shall have occurred and be continuing.

 

(b)  If any Grantor fails to perform or comply
with any of its agreements contained herein, the Canadian Administrative Agent,
at its option, but without any obligation so to do, may perform or comply, or
otherwise cause performance or compliance, with such agreement.

 

(c)  The expenses of the Canadian Administrative
Agent incurred in connection with actions undertaken as provided in this
subsection 6.1, together with interest thereon at a rate per annum equal
to the highest rate per annum at which interest would then be payable on any
category of past due ABR Loans under the Credit Agreement, from the date of
payment by the Canadian Administrative Agent to the date reimbursed by the
relevant Grantor, shall be payable by such Grantor to the Canadian
Administrative Agent on demand.

 

(d)  Each Grantor hereby ratifies all that said attorneys
shall lawfully do or cause to be done by virtue hereof.  All powers, authorizations and agencies
contained in this Security Agreement are coupled with an interest and are
irrevocable until this Security Agreement is terminated and the Security Interests
created hereby are released.

 

6.2.  Duty of Canadian Administrative Agent.  The Canadian Administrative Agent’s sole
duty with respect to the custody, safekeeping and physical preservation of the
Collateral in its possession shall be to deal with it in the same manner as the
Canadian Administrative Agent deals with similar property for its own
account.  The Canadian Administrative
Agent shall be deemed to have exercised reasonable care in

 

20

 

the custody and preservation of
any Collateral in its possession if such Collateral is accorded treatment
substantially equal to that which the Canadian Administrative Agent accords its
own property.  Neither the Canadian Administrative
Agent, any Secured Party nor any of their respective officers, directors,
employees or agents shall be liable for failure to demand, collect or realize
upon any of the Collateral or for any delay in doing so or shall be under any
obligation to sell or otherwise dispose of any Collateral upon the request of
any Grantor or any other Person or to take any other action whatsoever with
regard to the Collateral or any part thereof. 
The powers conferred on the Canadian Administrative Agent and the Secured
Parties hereunder are solely to protect the Canadian Administrative Agent’s and
the Secured Parties’ interests in the Collateral and shall not impose any duty
upon the Canadian Administrative Agent or any Secured Party to exercise any
such powers.  The Canadian
Administrative Agent and the Secured Parties shall be accountable only for
amounts that they actually receive as a result of the exercise of such powers,
and neither they nor any of their officers, directors, employees or agents
shall be responsible to any Grantor for any act or failure to act hereunder,
except for their own gross negligence or willful misconduct.

 

6.3.  Authority of Canadian Administrative Agent.  Each Grantor acknowledges that the rights
and responsibilities of the Canadian Administrative Agent under this Security
Agreement with respect to any action taken by the Canadian Administrative Agent
or the exercise or non-exercise by the Canadian Administrative Agent of any
option, voting right, request, judgment or other right or remedy provided for
herein or resulting or arising out of this Security Agreement shall, as between
the Canadian Administrative Agent and the Secured Parties, be governed by the
Credit Agreement and by such other agreements with respect thereto as may exist
from time to time among them, but, as between the Canadian Administrative Agent
and the Grantors, the Canadian Administrative Agent shall be conclusively
presumed to be acting as agent for the Secured Parties with full and valid
authority so to act or refrain from acting, and no Grantor shall be under any
obligation, or entitlement, to make any inquiry respecting such authority.

 

6.4.  Security Interest Absolute.  All rights of the Canadian Administrative
Agent hereunder, the security interest and all obligations of the Grantors
hereunder shall be absolute and unconditional.

 

6.5.  Continuing Security Interest; Assignments
Under the Credit Agreement; Release.  (a) 
This Security Agreement shall remain in full force and effect and be
binding in accordance with and to the extent of its terms upon each Grantor and
the successors and permitted assigns thereof in accordance with the terms of
the Credit Agreement and shall inure to the benefit of the Canadian
Administrative Agent and the other Secured Parties and their respective
successors, indorsees, transferees and assigns until all Obligations under the
Credit Documents and the obligations of each Grantor under this Security
Agreement shall have been satisfied by payment in full, the Commitments shall
be terminated and no Letters of Credit shall be outstanding, notwithstanding
that from time to time during the term of the Credit Agreement and any Hedge
Agreement the Credit Parties may be free from any Obligations.

 

21

 

(b)  Upon any sale or other transfer by any
Grantor of any Collateral that is permitted under the Credit Agreement, or upon
the effectiveness of any written consent to the release of the security
interest granted hereby in any Collateral pursuant to Section 13.1 of the
Credit Agreement, the Security Interest in such Collateral shall be
automatically released and such Collateral sold free and clear of the Lien and
Security Interests created hereby.

 

(c)  In connection with any termination or
release pursuant to paragraph (a) or (b), the Canadian Administrative Agent
shall execute and deliver to any Grantor, at such Grantor’s expense, all
documents that such Grantor shall reasonably request to evidence such
termination or release.  Any execution
and delivery of documents pursuant to this subsection 6.5 shall be without
recourse to or warranty by the Canadian Administrative Agent.

 

6.6.  Reinstatement.  This Security Agreement shall continue to be
effective, or be reinstated, as the case may be, if at any time payment, or any
part thereof, of any of the Obligations is rescinded or must otherwise be
restored or returned by the Canadian Administrative Agent or any other Secured
Party upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of any of the Borrowers or any other Credit Party, or upon or as
a result of the appointment of a receiver, interim receiver, receiver and
manager, intervenor or conservator of, or trustee or similar officer for, any
of the Borrowers or any other Credit Party or any substantial part of its
property, or otherwise, all as though such payments had not been made.

 

7.  Canadian Administrative
Agent As Agent.

 

(a)  Credit Suisse First Boston Toronto Branch
has been appointed to act as Canadian Administrative Agent under the Credit
Agreement by the Canadian Lenders and, by their acceptance of the benefits
hereof, the other Secured Parties.  The
Canadian Administrative Agent shall be obligated, and shall have the right
hereunder, to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking any action (including
the release or substitution of Collateral), solely in accordance with this
Security Agreement, the Canadian Guarantee and the Credit Agreement, provided
that the Canadian Administrative Agent shall exercise, or refrain from
exercising, any remedies provided for in Section 5 in accordance with the
instructions of Required Lenders. 
In furtherance of the foregoing provisions of this subsection 7(a),
each Secured Party, by its acceptance of the benefits hereof, agrees that it
shall have no right individually to realize upon any of the Collateral
hereunder or to appoint a Receiver, it being understood and agreed by such
Secured Party that all rights and remedies hereunder may be exercised solely by
the Canadian Administrative Agent for the ratable benefit of the Canadian
Lenders and Secured Parties in accordance with the terms of this
subsection 7(a).

 

(b)  The Canadian Administrative Agent shall at
all times be the same Person that is the Canadian Administrative Agent under
the Credit Agreement. Written notice of resignation by the Canadian
Administrative Agent pursuant to subsection 12.9 of the Credit Agreement
shall also constitute notice of resignation as Canadian

 

22

 

Administrative Agent under this
Security Agreement; removal of the Canadian Administrative Agent shall also
constitute removal as Canadian Administrative Agent under this Security
Agreement; and appointment of a successor Canadian Administrative Agent
pursuant to subsection 12.9 of the Credit Agreement shall also constitute
appointment of a successor Canadian Administrative Agent under this Security
Agreement.  Upon the acceptance of any
appointment as Canadian Administrative Agent under subsection 12.9 of the
Credit Agreement by a successor Canadian Administrative Agent, that successor
Canadian Administrative Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring or removed Canadian
Administrative Agent under this Security Agreement, and the retiring or removed
Canadian Administrative Agent under this Security Agreement shall promptly
(i) transfer to such successor Canadian Administrative Agent all sums,
securities and other items of Collateral held hereunder, together with all
records and other documents necessary or appropriate in connection with the
performance of the duties of the successor Canadian Administrative Agent under
this Security Agreement, and (ii) execute and deliver to such successor
Canadian Administrative Agent or otherwise authorize the filing of such
amendments to financing statements and financing change statements and take
such other actions, as may be necessary or appropriate in connection with the
assignment to such successor Canadian Administrative Agent of the Security
Interests created hereunder, whereupon such retiring or removed Canadian
Administrative Agent shall be discharged from its duties and obligations under
this Security Agreement.  After any retiring
or removed Canadian Administrative Agent’s resignation or removal hereunder as
Canadian Administrative Agent, the provisions of this Security Agreement shall
inure to its benefit as to any actions taken or omitted to be taken by it under
this Security Agreement while it was Canadian Administrative Agent hereunder.

 

(c)  The Canadian Administrative Agent shall not
be deemed to have any duty whatsoever with respect to any Secured Party that is
a counterparty to a Hedge Agreement the obligations under which constitute
Obligations, until it shall have received written notice in form and substance
satisfactory to the Canadian Administrative Agent from a Grantor or any such
Secured Party as to the existence and terms of the applicable Hedge Agreement.

 

8.  Miscellaneous.

 

8.1.  Amendments in Writing.  None of the terms or provisions of this
Security Agreement may be waived, amended, supplemented or otherwise modified
except by a written instrument executed by the affected Grantor and the
Canadian Administrative Agent in accordance with Section 13.1 of the
Credit Agreement.

 

8.2.  Notices.  All notices, requests and demands pursuant
hereto shall be made in accordance with Section 13.2 of the Credit
Agreement.  All communications and
notices hereunder to any Guarantor shall be given to it in care of the Canadian
Borrower at the Canadian Borrower’s address set forth in Section 13.2 of
the Credit Agreement.

 

23

 

8.3.  No Waiver by Course of Conduct; Cumulative
Remedies.  Neither the
Canadian Administrative Agent nor any Secured Party shall by any act (except by
a written instrument pursuant to subsection 8.1 hereof), delay,
indulgence, omission or otherwise be deemed to have waived any right or remedy
hereunder or to have acquiesced in any Default or Event of Default or in any
breach of any of the terms and conditions hereof.  No failure to exercise, nor any delay in exercising, on the part
of the Canadian Administrative Agent or any other Secured Party, any right, power
or privilege hereunder shall operate as a waiver thereof.  No single or partial exercise of any right,
power or privilege hereunder shall preclude any other or further exercise
thereof or the exercise of any other right, power or privilege.  A waiver by the Canadian Administrative
Agent or any other Secured Party of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy that the
Canadian Administrative Agent or such other Secured Party would otherwise have
on any future occasion.  The rights,
remedies, powers and privileges herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any other rights or
remedies provided by law.

 

8.4.  Enforcement Expenses; Indemnification.   (a) 
Each Grantor agrees to pay any and all expenses (including all
reasonable fees and disbursements of counsel) that may be paid or incurred by
any Secured Party in enforcing, or obtaining advice of counsel in respect of,
any rights with respect to, or collecting, any or all of the Obligations and/or
enforcing any rights with respect to, or collecting against, such Grantor under
this Security Agreement.

 

(b)  Each Grantor agrees to pay, and to save the
Canadian Administrative Agent and the Secured Parties harmless from, any and
all liabilities with respect to, or resulting from any delay in paying, any and
all stamp, excise, sales or other transfer taxes which may be payable or
determined to be payable with respect to any of the Collateral or in connection
with any of the transactions contemplated by this Security Agreement.

 

(c)  Each Grantor agrees to pay, and to save the
Canadian Administrative Agent and the Secured Parties harmless from, any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever with
respect to the execution, delivery, enforcement, performance and administration
of this Security Agreement to the extent the Canadian Borrower would be
required to do so pursuant to subsection 12.7 of the Credit Agreement.

 

(d)  Any amount payable as provided under this
Section 8.4 shall be additional Obligations secured hereby and by the
other Security Documents, shall be payable upon demand and shall bear interest
at the rate specified in subsection 6.1(c).  The agreements in this subsection 8.4 shall survive
repayment of the Obligations and all other amounts payable under the Credit
Agreement and the other Credit Documents.

 

8.5.  Successors and Assigns.  The provisions of this Security Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that no Grantor may
assign, transfer or

 

24

 

delegate any of its rights or
obligations under this Security Agreement without the prior written consent of
the Canadian Administrative Agent except pursuant to a transaction permitted by
the Credit Agreement.

 

8.6.  Counterparts.  This Security Agreement may be executed by
one or more of the parties to this Security Agreement on any number of separate
counterparts (including by facsimile or other electronic transmission), and all
of said counterparts taken together shall be deemed to constitute one and the
same instrument.  A set of the copies of
this Security Agreement signed by all the parties shall be lodged with the
Canadian Administrative Agent and the Canadian Borrower.

 

8.7.  Severability.  Any provision of this Security Agreement
that is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.  The parties hereto shall endeavor in
good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.

 

8.8.  Section Headings.  The Section headings used in this
Security Agreement are for convenience of reference only and are not to affect
the construction hereof or be taken into consideration in the interpretation
hereof.

 

8.9.  Integration.  This Security Agreement represents the
agreement of each of the Grantors with respect to the subject matter hereof and
there are no promises, undertakings, representations or warranties by the
Canadian Administrative Agent or any other Secured Party relative to the
subject matter hereof not expressly set forth or referred to herein or in the
other Credit Documents.

 

8.10.  GOVERNING LAW.  THIS
SECURITY AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE
LAWS OF THE PROVINCE OF ONTARIO AND THE LAWS OF CANADA APPLICABLE IN THE
PROVINCE OF ONTARIO.

 

8.11.  Submission To Jurisdiction Waivers.  Each Grantor hereby irrevocably and
unconditionally:

 

(a)  submits for itself and its property in any
legal action or proceeding relating to this Security Agreement and the other
Credit Documents to which it is a party, or for recognition and enforcement of
any judgment in respect thereof, to the non-exclusive general jurisdiction of
the courts of the Province of Ontario and appellate courts from any thereof;

 

(b)  consents that any such action or proceeding
may be brought in such courts and waives any objection that it may now or
hereafter have to the venue of any

 

25

 

such action or proceeding in
any such court or that such action or proceeding was brought in an inconvenient
court and agrees not to plead or claim the same;

 

(c)  agrees that service of process in any such
action or proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage prepaid, to
such Grantor at its address referred to in subsection 8.2 or at such other
address of which the Canadian Administrative Agent shall have been notified
pursuant thereto;

 

(d)  agrees that nothing herein shall affect the
right of the Canadian Administrative Agent or any other Secured Party to effect
service of process in any other manner permitted by law or shall limit the
right of the Canadian Administrative Agent or any Secured Party to sue in any
other jurisdiction; and

 

(e)  waives, to the maximum extent not prohibited
by law, any right it may have to claim or recover in any legal action or
proceeding referred to in this subsection 8.11 any special, exemplary,
punitive or consequential damages.

 

8.12.  Acknowledgments.  Each Grantor hereby acknowledges that:

 

(a)  it has been advised by counsel in the
negotiation, execution and delivery of this Security Agreement and the other
Credit Documents to which it is a party;

 

(b)  neither the Canadian Administrative Agent
nor any other Secured Party has any fiduciary relationship with or duty to any
Grantor arising out of or in connection with this Security Agreement or any of
the other Credit Documents, and the relationship between the Grantors, on the
one hand, and the Canadian Administrative Agent and the other Secured Parties,
on the other hand, in connection herewith or therewith is solely that of debtor
and creditor; and

 

(c)  no joint venture is created hereby or by the
other Credit Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders and any other Secured Party or among the
Grantors and the Lenders and any other Secured Party.

 

8.13.  Additional Grantors.  Each Subsidiary of the Canadian Borrower
that is required to become a party to this Security Agreement pursuant to Section 9.11
of the Credit Agreement shall become a Grantor, with the same force and effect
as if originally named as a Grantor herein, for all purposes of this Agreement
upon execution and delivery by such Subsidiary of a Supplement substantially in
the form of Annex 1 hereto. The execution and delivery of any instrument
adding an additional Grantor as a party to this Security Agreement shall not
require the consent of any other Grantor hereunder.  The rights and obligations of each Grantor hereunder shall remain
in full force and effect notwithstanding the addition of any new Grantor as a
party to this Security Agreement.

 

26

 

8.14.  WAIVER OF JURY TRIAL.  EACH GRANTOR HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS SECURITY AGREEMENT, ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM
THEREIN.

 

27

 

IN WITNESS
WHEREOF, each of the undersigned has caused this Security Agreement to be duly
executed and delivered as of the date first above written.

 

 

	
   

  	
  JOSTENS CANADA LTD.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
  /s/ Michael Bailey

  
	
   

  	
   

  	
   

  	
  Name: 
  Michael Bailey

  
	
   

  	
   

  	
   

  	
  Title:   
  Senior Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  CREDIT SUISSE FIRST BOSTON

  TORONTO BRANCH, AS CANADIAN

  ADMINISTRATIVE AGENT

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
  /s/ Peter Chauvin

  
	
   

  	
   

  	
   

  	
  Name: 
  Peter Chauvin

  
	
   

  	
   

  	
   

  	
  Title:   
  Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
  /s/ Alain Daoust

  
	
   

  	
   

  	
   

  	
  Name: 
  Alain Daoust

  
	
   

  	
   

  	
   

  	
  Title:   
  Director

  

 

 

SCHEDULE 1 TO THE

CANADIAN
SECURITY AGREEMENT

 

COPYRIGHT LICENSES

 

 

SCHEDULE 2 TO THE

CANADIAN
SECURITY AGREEMENT

 

COPYRIGHTS

 

	
  Registered
  Owner/Grantor

  	
   

  	
  Title

  	
   

  	
  Registration

  Number

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

SCHEDULE 3 TO THE

CANADIAN
SECURITY AGREEMENT

 

PATENT LICENSES

 

 

SCHEDULE 4 TO THE

CANADIAN
SECURITY AGREEMENT

 

PATENTS

 

 

SCHEDULE 5 TO THE

CANADIAN
SECURITY AGREEMENT

 

TRADEMARK LICENSES

 

 

SCHEDULE 6 TO THE

CANADIAN
SECURITY AGREEMENT

 

TRADEMARKS

 

Domestic Trademarks

 

	
  Registered

  Owner/Grantor

  	
   

  	
  Trademark

  	
   

  	
  Registration

  No.

  	
   

  	
  Application

  No.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Foreign Trademarks

 

 

	
  Registered

  Owner/Grantor

  	
   

  	
  Trademark

  	
   

  	
  Registration

  No.

  	
   

  	
  Application

  No.

  	
   

  	
  Country

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

SCHEDULE 7 TO THE

CANADIAN
SECURITY AGREEMENT

 

INDUSTRIAL DESIGNS

 

 

SCHEDULE 8 TO THE

CANADIAN SECURITY
AGREEMENT

 

INDUSTRIAL DESIGN LICENSES

 

 

ANNEX 1 TO THE

CANADIAN
SECURITY AGREEMENT

 

SUPPLEMENT NO. [  ] dated as of
[             ],
to the Security Agreement (the “Canadian
Security Agreement”)  dated as of October 4, 2004, among,
JOSTENS CANADA LTD., (the “Canadian Borrower”), together with each other Person
who from time to time is required to become a party hereto pursuant to
Section 9.11 of the Credit Agreement referenced below (each a “Guarantor”
and, collectively, the “Guarantors”; the Canadian Borrower and the
Guarantors are referred to collectively as the “Grantors”), and
CREDIT SUISSE FIRST BOSTON TORONTO BRANCH, as Canadian administrative agent (in
such capacity, the “Canadian Administrative Agent”) for the lenders (“Lenders”)
from time to time party to the Credit Agreement referred to below.

 

A.  Reference is made to (a) Credit Agreement
dated as of the date hereof (as the same may be amended, supplemented or
otherwise modified from time to time, the “Credit Agreement”), among
JOSTENS IH CORP., a Delaware corporation (the “Borrower”), the Canadian
Borrower, JOSTENS SECONDARY HOLDINGS CORP. a Delaware Corporation, the Lenders
referred to therein, CREDIT SUISSE FIRST BOSTON (the “Administrative Agent”)
and the Canadian Administrative Agent and (b) the Canadian Guarantee dated
as of October 4, 2004 (as amended, supplemented or otherwise modified from
time to time, the “Canadian Guarantee”), among the Borrower, the
Guarantors and the Canadian Administrative Agent.

 

B.  Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to such terms in the
Canadian Security Agreement.

 

C.  The Grantors have entered into the Canadian
Security Agreement in order to induce the Administrative Agent, the Canadian
Administrative Agent, the Lenders and the Letter of Credit Issuers to enter
into the Credit Agreement and to induce the Canadian Lenders and the Canadian
Letter of Credit Issuer to make their respective Extensions of Credit to the
Canadian Borrower under the Credit Agreement and to induce one or more Lenders
or affiliates of Lenders to enter into Hedge Agreements with the Canadian
Borrower.

 

D.  Section 9.11 of the Credit Agreement
and Section 8.13 of the Canadian Security Agreement provide that each
Subsidiary of the Canadian Borrower that is required to become a party to the
Canadian Security Agreement pursuant to Section 9.11 of the Credit
Agreement shall become a Grantor, with the same force and effect as if
originally named as a Grantor therein, for all purposes of the Canadian
Security Agreement upon execution and delivery by such Subsidiary of an
instrument in the form of this Supplement. 
Each undersigned Subsidiary (each a “New Grantor” and,
collectively, the “New Guarantors”) is executing this Supplement in accordance
with the requirements of the Canadian Security Agreement to become a Grantor
under the

 

 

Security Agreement in order to induce the Canadian Lenders and the
Canadian Letter of Credit Issuer to make additional Extensions of Credit and as
consideration for Extensions of Credit previously made.

 

Accordingly,
the Canadian Administrative Agent and the New Grantors agree as follows:

 

SECTION 1.  In accordance with subsection 8.13 of
the Canadian Security Agreement, each New Grantor by its signature below
becomes a Grantor under the Canadian Security Agreement with the same force and
effect as if originally named therein as a Grantor and each New Grantor hereby
(a) agrees to all the terms and provisions of the Canadian Security Agreement
applicable to it as a Grantor thereunder and (b) represents and warrants
that the representations and warranties made by it as a Grantor thereunder are
true and correct on and as of the date hereof. 
In furtherance of the foregoing, each New Grantor, as security for the
payment and performance in full of the Obligations, does hereby bargain, sell,
convey, assign, set over, mortgage, pledge, hypothecate and transfer to the
Canadian Administrative Agent, for the ratable benefit of the Secured Parties,
and hereby grants to the Canadian Administrative Agent, for the ratable benefit
of the Secured Parties, a Security Interest in all of the Collateral of such
New Grantor, in each case whether now or hereafter existing or in which now has
or hereafter acquires an interest.  Each
reference to a “Grantor” in the Canadian Security Agreement shall be deemed to
include each New Grantor.  The Canadian
Security Agreement is hereby incorporated herein by reference.

 

SECTION 2.  Each New Grantor represents and warrants to
the Canadian Administrative Agent and the other Secured Parties that this
Supplement has been duly authorized, executed and delivered by it and
constitutes its legal, valid and binding obligation, enforceable against it in
accordance with its terms.

 

SECTION 3.  This Supplement may be executed by one or
more of the parties to this Supplement on any number of separate counterparts
(including by facsimile or other electronic transmission), and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.  A set of the copies of this
Supplement signed by all the parties shall be lodged with the Canadian
Administrative Agent and the Canadian Borrower.  This Supplement shall become effective as to each New Grantor
when the Canadian Administrative Agent shall have received counterparts of this
Supplement that, when taken together, bear the signatures of such New Grantor
and the Canadian Administrative Agent.

 

SECTION 4.  Each New Grantor hereby represents and
warrants that (a) set forth on Schedule I attached hereto is a true
and correct schedule of the location of any and all Collateral of such New
Grantor, (b) set forth under its signature hereto is (i) the legal name of
such New Grantor, (ii) the jurisdiction of incorporation or organization of such
New Grantor, (iii) the true and correct location of the chief executive office
and principal place of business and any office in which it maintains books or
records relating to Collateral owned by it, and (iv) the identity or type of
organization or corporate structure of such New Grantor, and (c) as of the date
hereof (i) Schedule II hereto sets

 

2

 

forth all of each New Grantor’s Copyright Licenses, (ii)
Schedule III hereto sets forth, in proper form for filing with the
Canadian Intellectual Property Office, all of each New Grantor’s Copyrights
(and all applications therefor), (iii) Schedule IV hereto sets forth, in
proper form for filing with the Canadian Intellectual Property Office all of
each New Grantor’s Patent Licenses, (iv) Schedule V hereto sets forth, in
proper form for filing with the Canadian Intellectual Property Office, all of
each New Grantor’s Patents (and all applications therefor), (v)
Schedule VI hereto sets forth, in proper form for filing with the Canadian
Intellectual Property Office, all of each New Grantor’s Trademark Licenses,
(vi) Schedule VII hereto sets forth, in proper form for filing with the
Canadian Intellectual Property Office, all of each New Grantor’s Trademarks (and
all applications therefor), (vii) Schedule VIII hereto sets forth, in
proper form for filing with the Canadian Intellectual Property Office all of
each New Grantor’s Industrial Designs (and all applications therefore), and
(viii) Schedule IX hereto sets forth all of each New Grantor’s Industrial
Design Licenses.

 

SECTION 5.  Except as expressly supplemented hereby, the
Canadian Security Agreement shall remain in full force and effect.

 

SECTION 6.  THIS SUPPLEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE
LAWS OF THE PROVINCE OF ONTARIO AND THE LAWS OF CANADA APPLICABLE IN THE
PROVINCE OF ONTARIO.

 

SECTION 7.  Any provision of this Supplement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof and in the Canadian Security
Agreement, and any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction.  The parties hereto shall
endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.

 

SECTION 8.  All notices, requests and demands pursuant
hereto shall be made in accordance with Section 13.2 of the Credit
Agreement.  All communications and
notices hereunder to each New Grantor shall be given to it in care of the
Canadian Borrower at the Canadian Borrower’s address set forth in
Section 13.2 of the Credit Agreement.

 

SECTION 9.
 Each New Grantor agrees to reimburse the Canadian Administrative Agent
for its reasonable out-of-pocket expenses in connection with this Supplement,
including the reasonable fees, other charges and disbursements of counsel for
the Canadian Administrative Agent.

 

3

 

IN WITNESS
WHEREOF, each New Grantor and the Canadian Administrative Agent have duly
executed this Supplement to the Canadian Security Agreement as of the day and
year first above written.

 

	
   

  	
  [NAME OF NEW GRANTOR]

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  

 

 

	
  Legal Name

  	
   

  	
  Jurisdiction of

  Incorporation or

  Organization

  	
   

  	
  Location of Chief

  Executive Office

  and Principal

  Place of Business

  	
   

  	
  Type of

  Organization or

  Corporate

  Structure

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

	
   

  	
  CREDIT SUISSE FIRST BOSTON

  TORONTO BRANCH, AS CANADIAN

  ADMINISTRATIVE AGENT

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  

 

4

 

SCHEDULE I

TO THE SUPPLEMENT NO.
       TO THE

CANADIAN
SECURITY AGREEMENT

 

COLLATERAL

 

 

SCHEDULE II

TO SUPPLEMENT
NO.     TO THE

CANADIAN SECURITY AGREEMENT

 

COPYRIGHT LICENSES

 

 

SCHEDULE III

TO SUPPLEMENT
NO.     TO THE

CANADIAN SECURITY AGREEMENT

 

COPYRIGHTS

 

	
  Registered
  Owner/Grantor

  	
   

  	
  Title

  	
   

  	
  Registration

  Number

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

SCHEDULE IV

TO SUPPLEMENT
NO.      TO THE

CANADIAN SECURITY AGREEMENT

 

PATENT LICENSES

 

 

SCHEDULE V

TO SUPPLEMENT
NO.    TO THE

CANADIAN SECURITY AGREEMENT

 

PATENTS

 

 

SCHEDULE VI

TO SUPPLEMENT
NO.     TO THE

CANADIAN SECURITY AGREEMENT

 

TRADEMARK LICENSES

 

 

SCHEDULE VII

TO SUPPLEMENT
NO.     TO THE

CANADIAN SECURITY AGREEMENT

 

TRADEMARKS

 

Domestic Trademarks

 

	
  Registered

  Owner/Grantor

  	
   

  	
  Trademark

  	
   

  	
  Registration

  No.

  	
   

  	
  Application

  No.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Foreign Trademarks

 

 

	
  Registered

  Owner/Grantor

  	
   

  	
  Trademark

  	
   

  	
  Registration

  No.

  	
   

  	
  Application

  No.

  	
   

  	
  Country

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

SCHEDULE VIII

TO THE SUPPLEMENT NO.
     TO THE

CANADIAN
SECURITY AGREEMENT

 

INDUSTRIAL DESIGNS

 

 

SCHEDULE IX

TO THE SUPPLEMENT NO.
     TO THE

CANADIAN
SECURITY AGREEMENT

 

INDUSTRIAL DESIGN LICENSES

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