Exhibit 10.1

EXECUTION COPY

AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT

dated as of October 24, 2006

among

AGC FUNDING CORPORATION,

as Seller,

AMERICAN GREETINGS CORPORATION,

as Servicer,

THE MEMBERS OF VARIOUS PURCHASER GROUPS

FROM TIME TO TIME PARTY HERETO

and

PNC BANK, NATIONAL ASSOCIATION,

as Administrator and as LC Bank

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TABLE OF CONTENTS

 

          Page

ARTICLE I          AMOUNTS AND TERMS OF THE PURCHASES

   2

Section 1.1

   Purchase Facility    2

Section 1.2

   Making Purchases    3

Section 1.3

   Purchased Interest Computation    6

Section 1.4

   Settlement Procedures    6

Section 1.5

   Fees    11

Section 1.6

   Payments and Computations, Etc    11

Section 1.7

   Increased Costs    12

Section 1.8

   Requirements of Law    13

Section 1.9

   Inability to Determine Euro-Rate    14

Section 1.10

   Taxes    15

Section 1.11

   Letters of Credit    15

Section 1.12

   Issuance of Letters of Credit    15

Section 1.13

   Requirements For Issuance of Letters of Credit    16

Section 1.14

   Disbursements, Reimbursement    16

Section 1.15

   Documentation    16

Section 1.16

   Determination to Honor Drawing Request    17

Section 1.17

   Nature of Reimbursement Obligations    17

Section 1.18

   Indemnity    18

Section 1.19

   Liability for Acts and Omissions    19

Section 1.20

   Extension of Termination Date    20

ARTICLE II         REPRESENTATIONS AND WARRANTIES; COVENANTS; TERMINATION EVENTS

   21

Section 2.1

   Representations and Warranties; Covenants    21

Section 2.2

   Termination Events    21

ARTICLE III       INDEMNIFICATION

   21

Section 3.1

   Indemnities by the Seller    21

Section 3.2

   Indemnities by the Servicer    23

ARTICLE IV       ADMINISTRATION AND COLLECTIONS

   23

Section 4.1

   Appointment of the Servicer    23

Section 4.2

   Duties of the Servicer    24

 

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TABLE OF CONTENTS

(continued)

 

          Page

Section 4.3

   Lock-Box Account Arrangements    25

Section 4.4

   Enforcement Rights    26

Section 4.5

   Responsibilities of the Seller    27

Section 4.6

   Servicing Fee    27

ARTICLE V         THE AGENTS

   28

Section 5.1

   Appointment and Authorization    28

Section 5.2

   Delegation of Duties    29

Section 5.3

   Exculpatory Provisions    29

Section 5.4

   Reliance by Agents    30

Section 5.5

   Notice of Termination Events    30

Section 5.6

   Non-Reliance on Administrator, Purchaser Agents and Other Purchasers    31

Section 5.7

   Administrators and Affiliates    31

Section 5.8

   Indemnification    31

Section 5.9

   Successor Administrator    32

Section 5.10

   Covenant of the Administrator    32

ARTICLE VI       MISCELLANEOUS

   32

Section 6.1

   Amendments, Etc    32

Section 6.2

   Notices, Etc    33

Section 6.3

   Successors and Assigns; Participations; Assignments    33

Section 6.4

   Costs, Expenses and Taxes    35

Section 6.5

   No Proceedings; Limitation on Payments    36

Section 6.6

   Confidentiality    36

Section 6.7

   GOVERNING LAW AND JURISDICTION    38

Section 6.8

   Execution in Counterparts    39

Section 6.9

   Survival of Termination    39

Section 6.10

   WAIVER OF JURY TRIAL    39

Section 6.11

   Sharing of Recoveries    39

Section 6.12

   Right of Setoff    40

Section 6.13

   Entire Agreement    40

Section 6.14

   Headings    40

 

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TABLE OF CONTENTS

(continued)

 

          Page

Section 6.15

   Purchaser Groups’ Liabilities    40

Section 6.16

   Call Option    40

 

EXHIBIT I    Definitions EXHIBIT II    Conditions of Purchases EXHIBIT III   
Representations and Warranties EXHIBIT IV    Covenants EXHIBIT V    Termination
Events SCHEDULE 1.2(b)    Purchase Payment Accounts SCHEDULE I    Credit and
Collection Policy SCHEDULE II    Lock-Box Banks and Lock-Box Accounts
SCHEDULE III    Trade Names ANNEX A    Form of Information Package ANNEX B   
Form of Purchase Notice ANNEX C    Form of Assumption Agreement ANNEX D    Form
of Transfer Supplement ANNEX E    Form of Paydown Notice ANNEX F    Form of
Letter of Credit Application

 

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This AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT (as amended,
supplemented or otherwise modified from time to time, this “Agreement”) is
entered into as of October 24, 2006, among AGC FUNDING CORPORATION, a Delaware
corporation, as seller (the “Seller”), AMERICAN GREETINGS CORPORATION, an Ohio
corporation (“Greetings”), as servicer (in such capacity, together with its
successors and permitted assigns in such capacity, the “Servicer”), THE MEMBERS
OF VARIOUS PURCHASER GROUPS FROM TIME TO TIME PARTIES HERETO, PNC BANK, NATIONAL
ASSOCIATION (“PNC”), as Administrator for each Purchaser Group (in such
capacity, the “Administrator”) and as issuer of Letters of Credit (in such
capacity, together with its successors and permitted assigns in such capacity,
the “LC Bank”), and each of the other members of each Purchaser Group party
hereto or that become parties hereto by executing an Assumption Agreement or a
Transfer Supplement.

PRELIMINARY STATEMENTS. Certain terms that are capitalized and used throughout
this Agreement are defined in Exhibit I. References in the Exhibits hereto to
the “Agreement” refer to this Agreement, as amended, supplemented or otherwise
modified from time to time.

The Seller (i) desires to sell, transfer and assign an undivided variable
percentage interest in a pool of receivables, and the Purchasers desire to
acquire such undivided variable percentage interest, as such percentage interest
shall be adjusted from time to time based upon, in part, reinvestment payments
that are made by such Purchasers and (ii) may, subject to the terms and
conditions hereof, request that the LC Bank issue or cause the issuance of
Letters of Credit.

This Agreement amends and restates in its entirety, as of the Closing Date, the
Receivables Purchase Agreement, dated as of August 7, 2001 (as amended,
restated, supplemented or otherwise modified prior to the date hereof, the
“Original Agreement”), among the Seller, the Servicer, the financial
institutions party thereto from time to time and the Administrator.
Notwithstanding the amendment and restatement of the Original Agreement by this
Agreement, the Seller and Servicer shall continue to be liable to PNC, each of
the financial institutions party to the Original Agreement from time to time or
any other Indemnified Party or Affected Person (as such terms are defined in the
Original Agreement) for fees and expenses which are accrued and unpaid under the
Original Agreement on the date hereof, as notified by each Purchaser Agent to
the Seller and the Servicer (collectively, the “Original Agreement Outstanding
Amounts”), and all agreements to indemnify such parties in connection with
events or conditions arising or existing prior to the effective date of this
Agreement. Upon the effectiveness of this Agreement, PNC as LC Bank shall become
a party to this Agreement and each reference to the Original Agreement in any
other document, instrument or agreement shall mean and be a reference to this
Agreement. Nothing contained herein, unless expressly herein stated to the
contrary, is intended to amend, modify or otherwise affect any other instrument,
document or agreement executed and/or delivered in connection with the Original
Agreement.

In consideration of the mutual agreements, provisions and covenants contained
herein, the parties hereto agree as follows:

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ARTICLE I

AMOUNTS AND TERMS OF THE PURCHASES

Section 1.1 Purchase Facility.

(a) On the terms and subject to the conditions hereof, the Seller may, from time
to time before the Facility Termination Date, request that the Conduit
Purchasers, or, only if a Conduit Purchaser denies such request or is unable to
fund (and provides notice of such denial or inability to the Seller, the
Administrator and its Purchaser Agent), ratably request that the Related
Committed Purchasers, make purchases of and reinvestments in and, if so
requested in accordance with and subject to the terms of this Agreement, the LC
Bank hereby agrees to issue Letters of Credit in return for undivided percentage
ownership interests with regard to the Purchased Interest from the Seller from
time to time from the date hereof to the Facility Termination Date. Subject to
Section 1.4(b), concerning reinvestments, at no time will a Conduit Purchaser
that is not also a Related Committed Purchaser have any obligation to make a
Purchase. Each Related Committed Purchaser severally hereby agrees, on the terms
and subject to the conditions hereof, to make Purchases before the Facility
Termination Date, based on the applicable Purchaser Group’s Ratable Share of
each purchase requested pursuant to Section 1.2(a) (each a “Purchase”) (and, in
the case of each Related Committed Purchaser, its Commitment Percentage of its
Purchaser Group’s Ratable Share of such Purchase) to the extent its Investment
would not thereby exceed its Commitment and the Aggregate Investment would not
(after giving effect to all Purchases on such date) exceed the Purchase Limit.

The Seller may, subject to the remainder of this paragraph (a) and the other
requirements and conditions herein, use the proceeds of any purchase or
reinvestment by the Purchasers hereunder to satisfy its Reimbursement Obligation
to the LC Bank pursuant to Section 1.14 below.

In addition, in the event the Seller fails to reimburse the LC Bank for the full
amount of any drawing under any Letter of Credit on the applicable Drawing Date
(out of its own funds available therefor, or otherwise, at such time), pursuant
to Section 1.14 below, then the Seller shall, automatically (and without the
requirement of any further action on the part of any Person hereunder), be
deemed to have requested a new Purchase from the Purchasers on such date,
pursuant to the terms hereof, in an amount equal to the amount of such
Reimbursement Obligation that is due and owing at such time. Subject to the
limitations on funding set forth in the remainder of this paragraph (a) below
(and the other requirements and conditions herein), the Purchasers shall fund
such deemed purchase request and deliver the proceeds thereof directly to the
Administrator to be immediately distributed to the LC Bank in satisfaction of
the Seller’s Reimbursement Obligation pursuant to Section 1.14 below, to the
extent of the amounts permitted to be funded by the Purchasers, at such time,
hereunder.

Notwithstanding anything set forth in this paragraph (a) or otherwise herein to
the contrary, under no circumstances shall any Purchaser make any such purchase
or

 

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reinvestment (including, without limitation, any deemed purchases by the
Purchasers pursuant to the immediately preceding paragraphs of this
Section 1.1(a)), or issue any Letter of Credit, as applicable, if, after giving
effect to such purchase, reinvestment or issuance, (i) the aggregate outstanding
amount of the Investment funded by such Purchaser shall exceed (A) its Purchaser
Group’s Group Commitment, as the same may be reduced from time to time pursuant
to Section 1.1(b), minus (B) in the case of the LC Bank, the face amount of any
outstanding Letters of Credit or (ii) the Aggregate Investment plus the LC
Amount would exceed the Purchase Limit.

(b) The Seller may, upon at least 60 days’ written notice to the Administrator
and each Purchaser Agent terminate the purchase facility provided for in this
Section in whole or, upon 30 days’ written notice to the Administrator and each
Purchaser Agent, from time to time, irrevocably reduce in part the unfunded
portion of the Purchase Limit (but not below the amount which would cause the
Investment of any Purchaser Group to exceed its Group Commitment (after giving
effect to such reduction)); provided that each partial reduction shall be in the
amount of at least $10,000,000, or an integral multiple of $1,000,000 in excess
thereof and unless terminated in whole, the Purchase Limit shall in no event be
reduced below $50,000,000. Such reduction shall, at the option of the Seller, be
applied to reduce the Group Commitment of the Purchaser Group to which Liberty
Street Funding Corporation is a member. The Administrator shall promptly advise
the Purchaser Agents of any notice received by it pursuant to this
Section 1.1(b); it being understood that (in addition to and without limiting
any other requirements for termination, prepayment and/or funding of the LC
Collateral Account hereunder) no such termination or reduction shall be
effective unless and until (i) in the case of a termination, the amount on
deposit in the LC Collateral Account is at least equal to the then outstanding
LC Amount and (ii) in the case of a partial reduction, the amount on deposit in
the LC Collateral Account is at least equal to the positive difference between
the then outstanding LC Amount minus the Purchase Limit as so reduced by such
partial reduction.

Section 1.2 Making Purchases.

(a) Each Funded Purchase (but not reinvestment) of undivided percentage
ownership interests with regard to the Purchased Interest hereunder shall be
made upon the Seller’s irrevocable written notice in the form of Annex B
delivered to the Administrator and each Purchaser Agent in accordance with
Section 6.2 (which notice must be received by the Administrator and each
Purchaser Agent before 11:00 a.m., New York City time) at least two Business
Days before the requested Purchase Date, which notice shall specify: (A) solely
in the case of a Funded Purchase to be made by a Conduit Purchaser or a Related
Committed Purchaser, the amount requested to be paid to the Seller (such amount,
which shall not be less than $300,000 (or an integral multiple of $100,000 in
excess thereof), or such lesser amount as is agreed to by the Administrator and
each Purchaser Agent, with respect to each Purchaser Group, being the aggregate
of the Investments of each Purchaser within such Purchaser Group, relating to
the undivided percentage ownership interest then being purchased), (B) the date
of such Funded Purchase (which shall be a Business Day), and (C) a pro forma
calculation of the Purchased Interest after giving effect to the increase in the
Aggregate

 

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Investment. If the Purchase is requested from a Conduit Purchaser and such
Conduit Purchaser determines, in its sole discretion, to make the requested
Purchase, such Conduit Purchaser shall transfer to the account of the Seller
described in Section 1.2(b), below (the “Disbursement Account”), an amount equal
to such Conduit Purchaser’s Purchaser Group Ratable Share of such Purchase by no
later than 4:00 p.m. (New York time) on the requested Purchase Date. If the
Purchase is requested from the Related Committed Purchasers for a Purchaser
Group (in the case where the related Conduit Purchaser determined not to or was
unable to make such Purchase), subject to the terms and conditions hereof, such
Related Committed Purchasers for a Purchaser Group shall transfer the applicable
Purchaser Group’s Ratable Share of each Purchase (and, in the case of each
Related Committed Purchaser, its Commitment Percentage of its Purchaser Group’s
Ratable Share of such Purchase) into the Disbursement Account by no later than
4:00 p.m. (New York time) on the requested Purchase Date.

(b) On the date of each Funded Purchase (but not reinvestment or issuance of a
Letter of Credit) of undivided percentage ownership interests with regard to the
Purchased Interest hereunder, each Purchaser (or the related Purchaser Agent on
its behalf) shall make available to the Seller, at or prior to the time set
forth above, in same day funds, in the bank account set forth on Schedule
1.2(b), an amount equal to the proceeds of such Purchase.

(c) Effective on the date of each Funded Purchase pursuant to this Section 1.2
and each reinvestment pursuant to Section 1.4, the Seller hereby sells and
assigns to the Administrator for the benefit of the applicable Purchasers
(ratably, according to each such Purchaser’s Investment plus the LC Amount
outstanding at such time) an undivided percentage ownership interest in:
(i) each Pool Receivable then existing, (ii) all Related Security with respect
to such Pool Receivables, and (iii) all Collections with respect to, and other
proceeds of, such Pool Receivables and Related Security.

(d) To secure all of the Seller’s obligations (monetary or otherwise) under this
Agreement and the other Transaction Documents to which it is a party, whether
now or hereafter existing or arising, due or to become due, direct or indirect,
absolute or contingent, the Seller hereby grants to the Administrator for the
benefit of the Purchasers a security interest in all of the Seller’s right,
title and interest (including any undivided interest of the Seller) in, to and
under all of the following, whether now or hereafter owned, existing or arising:
(i) all Pool Receivables, (ii) all Related Security with respect to such Pool
Receivables, (iii) all Collections with respect to such Pool Receivables,
(iv) the Lock-Box Accounts and all amounts on deposit therein, and all
certificates and instruments, if any, from time to time evidencing such Lock-Box
Accounts and amounts on deposit therein, (v) all books and records of each Pool
Receivable, and all Transaction Documents to which the Seller is a party,
together with all rights (but none of the obligations) of the Seller thereunder
and (vi) all proceeds and products of, and all amounts received or receivable
under any or all of, the foregoing (collectively, the “Pool Assets”). The
Administrator, for the benefit of the Purchasers, shall have, with respect to
the Pool Assets, and in addition to all the other rights and remedies available
to the Administrator and the Purchasers, all the rights and remedies of a
secured party under any applicable UCC.

 

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(e) Whenever the LC Bank issues a Letter of Credit pursuant to Section 1.12
hereof, the LC Bank shall, automatically and without further action of any kind
being required on the effective date of issuance of such Letter of Credit,
irrevocably be deemed to have made a Funded Purchase hereunder in the event that
such Letter of Credit is subsequently drawn and such drawn amount shall not have
been reimbursed pursuant to Section 1.14 upon such draw. All such Funded
Purchases shall comprise Base Rate Portions of Investment in an amount equal to
the amount of such draw (without regard to the numerical requirements set forth
in Section 1.2(a)) and shall accrue Discount from the date of such draw. In the
event that any Letter of Credit expires or is surrendered without being drawn
(in whole or in part) then, in such event, the LC Bank’s commitment to make
Funded Purchases shall expire with respect to such Letter of Credit and the LC
Amount shall automatically reduce by the amount of the Letter of Credit which is
no longer outstanding.

(f) The Seller may, with the written consent of the Administrator and each
Purchaser Agent, add additional Persons as Purchasers (either to an existing
Purchaser Group or by creating new Purchaser Groups) or cause an existing
Purchaser to increase its Commitment in connection with a corresponding increase
in the Purchase Limit; provided, however, that the Commitment of any Purchaser
may only be increased with the consent of such Purchaser. Each new Purchaser (or
Purchaser Group) and each Purchaser increasing its Commitment shall become a
party hereto or increase its Commitment, as the case may be, by executing and
delivering to the Administrator and the Seller an Assumption Agreement in the
form of Annex C hereto (which Assumption Agreement shall, in the case of any new
Purchaser or Purchasers, be executed by each Person in such new Purchaser’s
Purchaser Group).

(g) Each Related Committed Purchaser’s obligation hereunder shall be several,
such that the failure of any Related Committed Purchaser to make a payment in
connection with any Funded Purchase hereunder shall not relieve any other
Related Committed Purchaser of its obligation hereunder to make payment for any
Purchase. Further, in the event any Related Committed Purchaser fails to satisfy
its obligation to make a Funded Purchase as required hereunder, upon receipt of
notice of such failure from the Administrator (or any relevant Purchaser Agent),
subject to the limitations set forth herein, the non-defaulting Related
Committed Purchasers in such defaulting Related Committed Purchaser’s Purchaser
Group shall purchase the defaulting Related Committed Purchaser’s Commitment
Percentage of the related Purchase pro rata in proportion to their relative
Commitment Percentages (determined without regard to the Commitment Percentage
of the defaulting Related Committed Purchaser; it being understood that a
defaulting Related Committed Purchaser’s Commitment Percentage of any Purchase
shall be first put to the Related Committed Purchasers in such defaulting
Related Committed Purchaser’s Purchaser Group and thereafter if there are no
other Related Committed Purchasers in such Purchaser Group or if such other
Related Committed Purchasers are also defaulting Related Committed Purchasers,
then such defaulting Related Committed Purchaser’s Commitment Percentage of such
Funded Purchase shall be put to each other Purchaser Group ratably and applied
in accordance with this paragraph (g)). Notwithstanding anything in this
paragraph (g) to the contrary, no Related Committed Purchaser shall be required
to make a Purchase pursuant to this

 

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paragraph for an amount which would cause (i) the Investment of such Related
Committed Purchaser (after giving effect to such Funded Purchase) to exceed its
Commitment or (ii) the sum of the aggregate Investments of all Purchasers in the
Purchaser Group of such Related Committed Purchaser (after giving effect to such
Funded Purchase) to exceed the sum of the Commitments of all of the Purchasers
in such Purchaser Group.

Section 1.3 Purchased Interest Computation. The Purchased Interest shall be
initially computed on the date of the initial Purchase hereunder. Thereafter,
until the Facility Termination Date, such Purchased Interest shall be
automatically recomputed (or deemed to be recomputed) on each Business Day other
than a Termination Day. From and after the occurrence of any Termination Day,
the Purchased Interest shall (until the event(s) giving rise to such Termination
Day are satisfied or are waived by the Administrator and the Majority Purchaser
Agents) be deemed to be 100%. The Purchased Interest shall become zero when the
Aggregate Investment thereof and Aggregate Discount thereon shall have been paid
in full, an amount equal to 100% of the LC Amount has been deposited in the LC
Collateral Account, all the amounts owed by the Seller, each Originator,
Greetings and the Servicer hereunder or under any other Transaction Document to
each Purchaser, each Purchaser Agent, the Administrator and any other
Indemnified Party or Affected Person are paid in full, and the Servicer shall
have received the accrued Servicing Fee thereon.

Section 1.4 Settlement Procedures.

(a) The collection of the Pool Receivables shall be administered by the Servicer
in accordance with this Agreement. The Seller shall provide to the Servicer on a
timely basis all information needed for such administration, including notice of
the occurrence of any Termination Day and current computations of the Purchased
Interest.

(b) The Servicer shall, on each day on which Collections of Pool Receivables are
received (or deemed received) by the Seller or the Servicer:

(i) set aside and hold in trust (and shall, at the request of the Administrator
(with the consent or at the direction of the Majority Purchaser Agents),
segregate in a separate account approved by the Administrator if, at the time of
such request, there exists an Unmatured Termination Event or a Termination Event
(or if the failure to so segregate reasonably could be expected to cause a
Material Adverse Effect)) for the benefit of each Purchaser Group, out of the
Purchasers’ Share of such Collections, first, an amount equal to the Aggregate
Discount accrued through such day for each Portion of Investment and not
previously set aside, second, an amount equal to the fees set forth in each
Purchaser Group Fee Letter accrued and unpaid through such day, and third, to
the extent funds are available therefor, an amount equal to the aggregate of
each Purchaser Group’s Ratable Share of the Purchasers’ Share of the Servicing
Fee accrued through such day and not previously set aside,

(ii) subject to Section 1.4(f), if such day is not a Termination Day, remit to
the Seller, ratably, on behalf of each Purchaser Group, the remainder of

 

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the Purchasers’ Share of such Collections. Such remainder shall, to the extent
representing a return on the Aggregate Investment, ratably, according to each
Purchaser’s Investment, be automatically reinvested in Pool Receivables, and in
the Related Security, Collections and other proceeds with respect thereto;
provided, however, that if the Purchased Interest would exceed 100%, then the
Servicer shall not reinvest, but shall set aside and hold in trust for the
benefit of the Purchasers (and shall, at the request of the Administrator (with
the consent or at the direction of the Majority Purchaser Agents), segregate in
a separate account approved by the Administrator if, at the time of such
request, there exists an Unmatured Termination Event or a Termination Event (or
if the failure to so segregate reasonably could be expected to cause a Material
Adverse Effect)) a portion of such Collections that, together with the other
Collections set aside pursuant to this paragraph, shall equal the amount
necessary to reduce the Purchased Interest to 100%; provided, further, that in
the case of any Purchaser that has provided notice (an “Exiting Notice”) to its
Purchaser Agent of its refusal, pursuant to Section 1.20, to extend its
Commitment hereunder (an “Exiting Purchaser”), then such Purchaser’s ratable
share of such Collections based on its Investment shall not be reinvested and
shall instead be held in trust for the benefit of such Purchaser and applied in
accordance with clause (iii) below,

(iii) if such day is a Termination Day (or any day following the provision of an
Exiting Notice), set aside, segregate and hold in trust (and shall, at the
request of the Administrator (with the consent or at the direction of the
Majority Purchaser Agents), segregate in a separate account approved by the
Administrator) for the benefit of each Purchaser Group the entire remainder of
the Purchasers’ Share of the Collections (or in the case of an Exiting Purchaser
an amount equal to such Purchaser’s ratable share of such Collections based on
its Investment; provided, that solely for the purpose of determining such
Purchaser’s ratable share of such Collections, such Purchaser’s Investment shall
be deemed to remain constant from the date of the provision of an Exiting Notice
until the date such Purchaser’s Investment has been paid in full; it being
understood that if such day is also a Termination Day, such Exiting Purchaser’s
Investment shall be recalculated taking into account amounts received by such
Purchaser in respect of this parenthetical and thereafter Collections shall be
set aside for such Purchaser ratably in respect of its Investment (as
recalculated)); provided, that if amounts are set aside and held in trust on any
Termination Day of the type described in clause (a) of the definition of
“Termination Day” (or any day following the provision of an Exiting Notice) and,
thereafter, the conditions set forth in Section 2 of Exhibit II are satisfied or
waived by the Administrator and the Majority Purchaser Agents (or in the case of
an Exiting Notice, such Exiting Notice has been revoked by the related Exiting
Purchaser, and written notice thereof has been provided to the Administrator,
the related Purchaser Agent and the Servicer), such previously set-aside amounts
shall, to the extent representing a return on Aggregate Investment (or the
Investment of the Exiting Purchaser) and ratably in accordance with each
Purchaser’s Investment, be reinvested in accordance with

 

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clause (ii) on the day of such subsequent satisfaction or waiver of conditions
or revocation of Exiting Notice, and

(iv) release to the Seller (subject to Section 1.4(f)) for its own account any
Collections in excess of: (w) amounts required to be reinvested in accordance
with clause (ii) or the proviso to clause (iii) plus (x) the amounts that are
required to be set aside pursuant to clause (i) and the provisos to clause
(ii) and clause (iii) plus (y) the Seller’s Share of the Servicing Fee accrued
and unpaid through such day and all reasonable and appropriate out-of-pocket
costs and expenses of the Servicer for servicing, collecting and administering
the Pool Receivables plus (z) all other amounts then due and owing by the Seller
under this Agreement to the applicable Conduit Purchaser, the LC Bank, the
Administrator and any other Indemnified Party or Affected Person.

(c) The Servicer shall, in accordance with the priorities set forth in
Section 1.4(d), below, deposit into each applicable Purchaser’s account (or such
other account designated by such applicable Purchaser or its Purchaser Agent),
on each Settlement Date, Collections held for each Purchaser with respect to
such Purchaser’s Portion(s) of Investment pursuant to clause (b)(i) or (f) of
Section 1.4 plus the amount of Collections then held for such Purchaser pursuant
to clauses (b)(ii) and (iii) of Section 1.4; provided, that if Greetings, any
Originator, AGSC or an Affiliate thereof is the Servicer, such day is not a
Termination Day and the Administrator has not notified Greetings, AGSC or such
Originator (or such Affiliate) that such right is revoked, Greetings, AGSC or
such Originator (or such Affiliate) may retain the portion of the Collections
set aside pursuant to clause (b)(i) that represents the aggregate of each
Purchaser Group’s Ratable Share of the Purchasers’ Share of the Servicing Fee.
On or before the last day of each Yield Period with respect to any Portion of
Investment, the applicable Purchaser Agent will notify the Servicer by facsimile
of the amount of the Discount accrued with respect to each such Portion of
Investment during the related Yield Period then ending.

(d) The Servicer shall distribute the amounts described (and at the times set
forth) in Section 1.4(c), as follows:

(i) if such distribution occurs on a day that is not a Termination Day and the
Purchased Interest does not exceed 100%, first to each Purchaser Agent ratably
according to the Discount accrued during such Yield Period (for the benefit of
the relevant Purchasers within such Purchaser Agent’s Purchaser Group) in
payment in full of all accrued Discount and fees (other than Servicing Fees)
with respect to each Portion of Investment maintained by such Purchasers; it
being understood that each Purchaser Agent shall distribute such amounts to the
Purchasers within its Purchaser Group ratably according to Discount with respect
to each Portion of Investment maintained by such Purchaser, and second, if the
Servicer has set aside amounts in respect of the Servicing Fee pursuant to
clause (b)(i) and has not retained such amounts pursuant to clause (c), to the
Servicer’s own account (payable in arrears on each Settlement Date) in payment
in full of

 

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the aggregate of each Purchaser Group’s Ratable Share of the Purchasers’ Share
of accrued Servicing Fees so set aside, and

(ii) if such distribution occurs on a Termination Day or on a day when the
Purchased Interest exceeds 100%, first if Greetings, AGSC or any Originator or
an Affiliate thereof is not the Servicer, to the Servicer’s own account in
payment in full of all accrued Servicing Fees, second to each Purchaser Agent
ratably according to Discount (for the benefit of the relevant Purchasers within
such Purchaser Agent’s Purchaser Group) in payment in full of all accrued
Discount with respect to each Portion of Investment funded or maintained by the
Purchasers within such Purchaser Agent’s Purchaser Group, third to each
Purchaser Agent ratably according to the aggregate of the Investment of each
Purchaser in each such Purchaser Agent’s Purchaser Group (for the benefit of the
relevant Purchasers within such Purchaser Agent’s Purchaser Group) in payment in
full of each Purchaser’s Investment (or, if such day is not a Termination Day,
the amount necessary to reduce the Purchased Interest to 100%) and to the LC
Collateral Account for the benefit of the LC Bank, until the amount of cash
collateral held in such LC Collateral Account equals the aggregate outstanding
amount of the LC Amount, fourth, it being understood that each Purchaser Agent
shall distribute the amounts described in the second and third clauses of this
Section 1.4(d)(ii) to the Purchasers within its Purchaser Group ratably
according to Discount and Investment, respectively, fifth, if the Aggregate
Investment and accrued Aggregate Discount with respect to each Portion of
Investment for all Purchaser Groups have been reduced to zero or if such day is
not a Termination Day, the Purchased Interest is reduced to 100%, and all
accrued Servicing Fees payable to the Servicer (if other than Greetings, AGSC or
any Originator or an Affiliate thereof) have been paid in full, to each
Purchaser Group ratably (for the benefit of the Purchasers within such Purchaser
Group) in accordance with its Ratable Share, the Administrator and any other
Indemnified Party or Affected Person in payment in full of any other amounts
owed thereto by the Seller or Servicer hereunder and, sixth, to the Servicer’s
own account (if the Servicer is Greetings, AGSC or any Originator or an
Affiliate thereof) in payment in full of the aggregate of each Purchaser Group’s
Ratable Share of all accrued Servicing Fees.

After the Aggregate Investment, Aggregate Discount, fees payable pursuant to
each Purchaser Group Fee Letter and Servicing Fees with respect to the Purchased
Interest, and any other amounts payable by the Seller and the Servicer to each
Purchaser Group, the Administrator or any other Indemnified Party or Affected
Person hereunder, have been paid in full, and (on and after a Termination Day)
after an amount equal to 100% of the LC Amount has been deposited in the LC
Collateral Account, all additional Collections with respect to the Purchased
Interest shall be paid to the Seller for its own account.

 

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(e) For the purposes of this Section 1.4:

(i) if on any day the Outstanding Balance of any Pool Receivable is reduced or
adjusted as a result of any defective, rejected, returned, repossessed or
foreclosed goods or services, or any revision, cancellation, allowance, discount
or other adjustment made by the Seller or any Affiliate of the Seller, or the
Servicer or any Affiliate of the Servicer, or any setoff or dispute between the
Seller or any Affiliate of the Seller, or the Servicer or any Affiliate of the
Servicer and an Obligor, the Seller shall be deemed to have received on such day
a Collection of such Pool Receivable in the amount of such reduction or
adjustment; provided that Seller shall be deemed to have received a Collection
due to a reduction or adjustment made to the Outstanding Balance of a Seasonal
Receivable in connection with the return of unsold goods only to the extent
Seller shall have a claim under Section 3.3(c) of the Sale and Contribution
Agreement in connection with such Seasonal Receivable.

(ii) if on any day any of the representations or warranties in Section 1(g) or
(n) of Exhibit III is not true with respect to any Pool Receivable, the Seller
shall be deemed to have received on such day a Collection of such Pool
Receivable in full;

(iii) except as provided in clause (i) or (ii), or as otherwise required by
applicable law or the relevant Contract, all Collections received from an
Obligor of any Receivable shall be applied to the Receivables of such Obligor in
the order of the age of such Receivables, starting with the oldest such
Receivable, unless such Obligor designates in writing its payment for
application to specific Receivables; and

(iv) if and to the extent the Administrator, any Purchaser Agent or any
Purchaser shall be required for any reason to pay over to an Obligor (or any
trustee, receiver, custodian or similar official in any Insolvency Proceeding)
any amount received by it hereunder, such amount shall be deemed not to have
been so received by such Person but rather to have been retained by the Seller
and, accordingly, such Person shall have a claim against the Seller for such
amount, payable when and to the extent that any distribution from or on behalf
of such Obligor is made in respect thereof.

(f) If at any time the Seller shall wish to cause the reduction of the Aggregate
Investment (but not to commence the liquidation, or reduction to zero, of the
entire Aggregate Investment), the Seller may do so as follows:

(i) the Seller shall give the Administrator, each Purchaser Agent and the
Servicer (A) at least two Business Days’ prior written notice thereof for any
reduction of Aggregate Investment less than or equal to $10,000,000 and (B) at
least ten Business Days’ prior written notice thereof for any reduction of
Aggregate Investment greater than $10,000,000 (in each case such notice shall

 

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include the amount of such proposed reduction and the proposed date on which
such reduction will commence);

(ii) on the proposed date of commencement of such reduction and on each day
thereafter, the Servicer shall cause Collections not to be reinvested until the
amount thereof not so reinvested shall equal the desired amount of reduction;
and

(iii) the Servicer shall hold such Collections in trust for the benefit of each
Purchaser ratably according to its Investment, for payment to each such
Purchaser (or its related Purchaser Agent for the benefit of such Purchaser) on
the (i) next Settlement Date with respect to any Portions of Investment
maintained by such Purchaser immediately following the related current Yield
Period or (ii) such other date approved by the Administrator, and the Aggregate
Investment (together with the Investment of any related Purchaser) shall be
deemed reduced in the amount to be paid to such Purchaser (or its related
Purchaser Agent for the benefit of such Purchaser) only when in fact finally so
paid;

provided, that:

(A) the amount of any such reduction shall be not less than $1,000,000 for each
Purchaser Group and shall be an integral multiple of $100,000, and the entire
Aggregate Investment after giving effect to such reduction shall be an integral
multiple of $1,000,000 (unless the Aggregate Investment shall have been reduced
to zero); and

(B) with respect to any Portion of Investment, the Seller shall choose a
reduction amount, and the date of commencement thereof, so that to the extent
practicable such reduction shall commence and conclude in the same Yield Period.

Section 1.5 Fees. The Seller shall pay to each Purchaser Agent for the benefit
of the related Purchasers certain fees in the amounts and on the dates set forth
in letters, dated the date hereof (or dated the date that the Purchasers in the
related Purchaser Group become party to this Agreement; each such letter, as
amended, supplemented, or otherwise modified from time to time, a “Purchaser
Group Fee Letter”) in each case among the Seller, the Servicer and the related
Purchaser Agent.

Section 1.6 Payments and Computations, Etc. All amounts to be paid or deposited
by the Seller or the Servicer hereunder shall be made without reduction for
offset or counterclaim and shall be paid or deposited no later than noon (New
York City time) on the day when due in same day funds to the applicable
Purchaser’s account (as such account is identified in the related Purchaser
Group Fee Letter). All amounts received after noon (New York City time) will be
deemed to have been received on the next Business Day.

(a) The Seller or the Servicer, as the case may be, shall, to the extent
permitted by law, pay interest on any amount not paid or deposited by the Seller
or the Servicer, as the case may be, when due hereunder, at an interest rate
equal to the Base Rate, payable on demand.

 

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(b) All computations of interest under clause (b) and all computations of
Discount, fees and other amounts hereunder shall be made on the basis of a year
of 360 (or 365 or 366, as applicable, with respect to Discount or other amounts
calculated by reference to the Base Rate) days for the actual number of days
elapsed. Whenever any payment or deposit to be made hereunder shall be due on a
day other than a Business Day, such payment or deposit shall be made on the next
Business Day and such extension of time shall be included in the computation of
such payment or deposit.

(c) Each Affected Person will notify Seller and the applicable Purchaser Agent
promptly after it has actual knowledge of any event which will entitle such
Affected Person to such additional amounts as compensation pursuant to
Section 1.7. and Section 1.8. Such additional amounts shall accrue from the date
as to which such Affected Person becomes subject to such additional costs as a
result of such event (or if such notice of such event is not given to Seller by
such Affected Person within 90 days after such Affected Person has actual
knowledge of such event, from the date which is 90 days prior to the date such
notice is given to Seller by such Affected Person).

Section 1.7 Increased Costs.

(a) If any Purchaser Agent, Purchaser, Liquidity Provider, the Administrator or
any other Program Support Provider or any of their respective Affiliates (each
an “Affected Person”) reasonably determines that the existence of or compliance
with: (i) any law, rule or regulation (including any applicable law, rule or
regulation regarding capital adequacy) or any change therein or in the
interpretation or application thereof, in each case adopted, issued or occurring
after the date hereof, or (ii) any request, guideline or directive from
Financial Accounting Standards Board (“FASB”), or any central bank or other
Governmental Authority (whether or not having the force of law) issued or
occurring after the date of this Agreement, affects or would affect the amount
of capital required or expected to be maintained by such Affected Person, and
such Affected Person determines that the amount of such capital is increased by
or based upon the existence of any commitment to make purchases of (or otherwise
to maintain the investment in) Pool Receivables or to issue any Letter of
Credit, in each case, related to this Agreement or any related liquidity
facility, credit enhancement facility or other commitments of the same type,
then, upon demand by such Affected Person (with a copy to the Administrator),
the Seller shall promptly pay to the Administrator, for the account of such
Affected Person, from time to time as specified by such Affected Person,
additional amounts sufficient to compensate such Affected Person in the light of
such circumstances, to the extent that such Affected Person reasonably
determines such increase in capital to be allocable to the existence of any of
such commitments. For the avoidance of doubt, if the issuance of FASB
Interpretation No. 46, or any other change in accounting standards or the
issuance of any other pronouncement, release or interpretation, guideline or
directive from FASB or any central bank or other Governmental Authority (whether
or not having the force of law), causes or requires the consolidation of all or
a portion of the assets and liabilities of the Seller or the applicable Conduit
Purchaser with the assets and liabilities of such Affected Person, and such
consolidation affects or would affect the amount of capital required or expected
to be maintained by such Affected Person, such event shall constitute a
circumstance on

 

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which such Person may base a claim for reimbursement under this Section 1.7. A
certificate as to such amounts submitted to the Seller and the Administrator by
such Affected Person shall be conclusive and binding for all purposes, absent
manifest error.

(b) If, due to either: (i) the introduction of or any change in or in the
interpretation of any law or regulation or (ii) compliance with any guideline or
request from any central bank or other Governmental Authority (whether or not
having the force of law), there shall be any increase in the cost to any
Affected Person of agreeing to purchase or purchasing, or maintaining the
ownership of, the Purchased Interest or any portion thereof in respect of which
Discount is computed by reference to the Euro-Rate, then, upon demand by such
Affected Person, the Seller shall promptly pay to such Affected Person, from
time to time as specified by such Affected Person, additional amounts sufficient
to compensate such Affected Person for such increased costs. A certificate as to
such amounts submitted to the Seller and the Administrator by such Affected
Person shall be conclusive and binding for all purposes, absent manifest error.

(c) If such increased costs affect the related Affected Person’s portfolio of
financing transactions, such Affected Person shall use reasonable averaging and
attribution methods to allocate such increased costs to the transactions
contemplated by this Agreement.

Section 1.8 Requirements of Law. If any Affected Person reasonably determines
that the existence of or compliance with: (a) any law, rule or regulation or any
change therein or in the interpretation or application thereof, in each case
adopted, issued or occurring after the date hereof, or (b) any request,
guideline or directive from any central bank or other Governmental Authority
(whether or not having the force of law) issued or occurring after the date of
this Agreement:

(i) does or shall subject such Affected Person to any tax of any kind whatsoever
with respect to this Agreement, any increase in the Purchased Interest or any
portion thereof or in the amount of such Person’s Investment relating thereto,
or does or shall change the basis of taxation of payments to such Affected
Person on account of Collections, Discount or any other amounts payable
hereunder (excluding, in each case, taxes imposed on the overall pre-tax net
income of such Affected Person, and franchise taxes imposed on such Affected
Person, by the jurisdiction under the laws of which such Affected Person is
organized or a political subdivision thereof),

(ii) does or shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by, or
deposits or other liabilities in or for the account of, purchases, advances or
loans by, or other credit extended by, or any other acquisition of funds by, any
office of such Affected Person that are not otherwise included in the
determination of the Euro-Rate or the Base Rate hereunder, or

(iii) does or shall impose on such Affected Person any other condition,

 

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and the result of any of the foregoing is: (A) to increase the cost to such
Affected Person of acting as Administrator or as a Purchaser Agent, or of
agreeing to purchase or purchasing or maintaining the ownership of undivided
percentage ownership interests with regard to, or issuing any Letter of Credit
in respect of, the Purchased Interest (or interests therein) or any Portion of
Investment, or (B) to reduce any amount receivable hereunder (whether directly
or indirectly), then, in any such case, upon written demand by such Affected
Person, the Seller shall promptly pay to such Affected Person additional amounts
necessary to compensate such Affected Person for such additional cost or reduced
amount receivable. All such amounts shall be payable as incurred. A certificate
from such Affected Person to the Seller and the Administrator certifying, in
reasonably specific detail, the basis for, calculation of, and amount of such
additional costs or reduced amount receivable shall be conclusive and binding
for all purposes, absent manifest error; provided, however, that no Affected
Person shall be required to disclose any confidential or tax planning
information in any such certificate.

Section 1.9 Inability to Determine Euro-Rate.

(a) If the Administrator (or any Purchaser Agent) determines before the first
day of any Yield Period (which determination shall be final and conclusive)
that, by reason of circumstances affecting the interbank eurodollar market
generally, deposits in dollars (in the relevant amounts for such Yield Period)
are not being offered to banks in the interbank eurodollar market for such Yield
Period, or adequate means do not exist for ascertaining the Euro-Rate for such
Yield Period, then the Administrator shall give notice thereof to the Seller.
Thereafter, until the Administrator or such Purchaser Agent notifies the Seller
that the circumstances giving rise to such suspension no longer exist, (a) no
Portion of Investment shall be funded at the Yield Rate determined by reference
to the Euro-Rate and (b) the Discount for any outstanding Portions of Investment
then funded at the Yield Rate determined by reference to the Euro-Rate shall, on
the last day of the then current Yield Period, be converted to the Yield Rate
determined by reference to the Base Rate.

(b) If, on or before the first day of any Yield Period, the Administrator shall
have been notified by any Purchaser, Purchaser Agent or Liquidity Provider that,
such Person has determined (which determination shall be final and conclusive)
that, any enactment, promulgation or adoption of or any change in any applicable
law, rule or regulation, or any change in the interpretation or administration
thereof by a Governmental Authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by such Person
with any guideline, request or directive (whether or not having the force of
law) of any such authority, central bank or comparable agency shall make it
unlawful or impossible for such Person to fund or maintain any Portion of
Investment at the Yield Rate and based upon the Euro-Rate, the Administrator
shall notify the Seller thereof. Upon receipt of such notice, until the
Administrator notifies the Seller that the circumstances giving rise to such
determination no longer apply, (a) no Portion of Investment shall be funded at
the Yield Rate determined by reference to the Euro-Rate and (b) the Discount for
any outstanding Portions of Investment then funded at the Yield Rate determined
by reference to the Euro-Rate shall be converted to the Yield Rate determined by
reference to the Base Rate either (i) on the last day of the then current Yield
Period if such Person

 

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may lawfully continue to maintain such Portion of Investment at the Yield Rate
determined by reference to the Euro-Rate to such day, or (ii) immediately, if
such Person may not lawfully continue to maintain such Portion of Investment at
the Yield Rate determined by reference to the Euro-Rate to such day.

Section 1.10 Taxes. The Seller agrees that any and all payments by the Seller
under this Agreement shall be made free and clear of and without deduction for
any and all current or future taxes, stamp or other taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding overall income or franchise taxes, in either case, imposed on the
Person receiving such payment by the Seller hereunder by the jurisdiction under
whose laws such Person is organized or any political subdivision thereof (all
such nonexcluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as “Taxes”). If the Seller shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder to any Affected Person, then the sum payable shall be increased by the
amount necessary to yield to such Person (after payment of all Taxes) an amount
equal to the sum it would have received had no such deductions been made.
Whenever any Taxes are payable by the Seller, the Seller agrees that, as
promptly as possible thereafter, the Seller shall send to the Administrator for
its own account or for the account of any Affected Person, as the case may be, a
certified copy of an original official receipt showing payment thereof or such
other evidence of such payment as may be available to the Seller and acceptable
to the taxing authorities having jurisdiction over such Person. If the Seller
fails to pay any Taxes when due to the appropriate taxing authority or fails to
remit to the Administrator the required receipts or other required documentary
evidence, the Seller shall indemnify the Administrator and/or any other Affected
Person, as applicable, for any incremental taxes, interest or penalties that may
become payable by such party as a result of any such failure.

Section 1.11 Letters of Credit. Subject to the terms and conditions hereof, the
LC Bank shall issue or cause the issuance of Letters of Credit (“Letters of
Credit”) on behalf of Seller (and, if applicable, on behalf of, or for the
account of, Greetings, as the Originator under the Sale and Contribution
Agreement, in favor of such beneficiaries as Greetings, as the Originator under
the Sale and Contribution Agreement, may elect); provided, however, that the LC
Bank will not be required to issue or cause to be issued any Letters of Credit
to the extent that the issuance of such Letters of Credit would then cause
either (a) the sum of (i) the Aggregate Investment plus (ii) the LC Amount to
exceed the Purchase Limit or (b) the Investment for Purchasers in the LC Bank’s
Purchaser Group to exceed the Group Commitment for such Purchaser Group. The LC
Amount shall not exceed in the aggregate, at any time, the aggregate of the
Commitments of the Purchaser Group of which the LC Bank is a member. All amounts
drawn upon Letters of Credit shall accrue Discount until reimbursed through a
deemed Purchase or otherwise. Letters of Credit that have not been drawn upon
shall not accrue Discount.

Section 1.12 Issuance of Letters of Credit.

(a) The Seller may request the LC Bank, upon two (2) Business Days’ prior
written notice submitted on or before 11:00 a.m., New York time, to issue a
Letter of Credit by delivering to the Administrator, the LC Bank’s form of
Letter of Credit Application (the “Letter of Credit Application”), substantially
in the form of Annex F attached hereto, completed to the satisfaction of the
Administrator and the LC Bank;

 

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and, such other certificates, documents and other papers and information as the
Administrator may reasonably request. The Seller also has the right to give
instructions and make agreements with respect to any Letter of Credit
Application and the disposition of documents, and to agree with the
Administrator upon any amendment, extension or renewal of any Letter of Credit.

(b) Each Letter of Credit shall, among other things, (i) provide for the payment
of sight drafts or other written demands for payment when presented for honor
thereunder in accordance with the terms thereof and when accompanied by the
documents described therein and (ii) have an expiry date not later than twelve
(12) months after such Letter of Credit’s date of issuance. Each Letter of
Credit shall be subject either to the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500, and any amendments or revisions thereof adhered to by the
LC Bank (“UCP 500”) or the International Standby Practices (ISP98-International
Chamber of Commerce Publication Number 590), and any amendments or revisions
thereof adhered to by the LC Bank (the “ISP98 Rules”), as determined by the LC
Bank.

(c) The Administrator shall promptly notify the LC Bank, at its address for
notices hereunder, of the request by the Seller for a Letter of Credit
hereunder, and shall provide the LC Bank with the Letter of Credit Application
delivered to the Administrator by the Seller pursuant to paragraph (a), above,
by the close of business on the day received or if received on a day that is not
a Business Day or on any Business Day after 11:00 a.m., New York time, on the
next Business Day.

Section 1.13 Requirements For Issuance of Letters of Credit. The Seller shall
authorize and direct the LC Bank to name the Seller as the “Applicant” or
“Account Party” of each Letter of Credit.

Section 1.14 Disbursements, Reimbursement. In the event of any request for a
drawing under a Letter of Credit by the beneficiary or transferee thereof, the
LC Bank will promptly notify the Administrator and the Seller of such request.
Provided that it shall have received such notice prior to 12:00 p.m., New York
time, on the Drawing Date, the Seller shall reimburse (such obligation to
reimburse the LC Bank shall sometimes be referred to as a “Reimbursement
Obligation”) the LC Bank prior to 1:00 p.m., New York time, on each date that an
amount is paid by the LC Bank under any Letter of Credit (each such date, a
“Drawing Date”) in an amount equal to the amount so paid by the LC Bank. In the
event the Seller fails to reimburse the LC Bank for the full amount of any
drawing under any Letter of Credit by 1:00 p.m., New York time, on the Drawing
Date, the Seller shall be deemed to have requested that a Funded Purchase be
made by Purchasers in the Purchaser Group for the LC Bank to be disbursed on the
Drawing Date under such Letter of Credit, subject to the amount of the
unutilized portion of the Group Commitment for such Purchaser Group.

Section 1.15 Documentation. The Seller agrees to be bound by the terms of the
Letter of Credit Application and by the LC Bank’s interpretations of any Letter
of Credit issued for the Seller and by the LC Bank’s written regulations and
customary practices relating to letters of credit, though the LC Bank’s
interpretation of such regulations and practices may be different

 

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from the Seller’s own. In the event of a conflict between the Letter of Credit
Application and this Agreement, this Agreement shall govern. It is understood
and agreed that, except in the case of gross negligence or willful misconduct by
the LC Bank, the LC Bank shall not be liable for any error, negligence and/or
mistakes, whether of omission or commission, in following the Seller’s
instructions or those contained in the Letters of Credit or any modifications,
amendments or supplements thereto.

Section 1.16 Determination to Honor Drawing Request. In determining whether to
honor any request for drawing under any Letter of Credit by the beneficiary
thereof, the LC Bank shall be responsible only to determine that the documents
and certificates required to be delivered under such Letter of Credit have been
delivered and that they comply on their face with the requirements of such
Letter of Credit and that any other drawing condition appearing on the face of
such Letter of Credit has been satisfied in the manner so set forth.

Section 1.17 Nature of Reimbursement Obligations. The obligations of the Seller
to reimburse the LC Bank upon a draw under a Letter of Credit, shall be
absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Article I under all circumstances, including
the following circumstances:

(i) any set-off, counterclaim, recoupment, defense or other right which the
Seller may have against the LC Bank, the Administrator, any Purchaser or any
other Person for any reason whatsoever;

(ii) the failure of the Seller or any other Person to comply with the conditions
set forth in this Agreement for the making of a purchase, reinvestments,
requests for Letters of Credit or otherwise, it being acknowledged that such
conditions are not required for the making of participation advances hereunder;

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

(iv) any claim of breach of warranty that might be made by the Seller or the LC
Bank against the beneficiary of a Letter of Credit, or the existence of any
claim, set-off, defense or other right which the Seller or the LC Bank may have
at any time against a beneficiary, any successor beneficiary or any transferee
of any Letter of Credit or the proceeds thereof (or any Persons for whom any
such transferee may be acting), the Administrator, any Purchaser or any other
Person, whether in connection with this Agreement, the transactions contemplated
herein or any unrelated transaction (including any underlying transaction
between the Seller or any Subsidiaries of the Seller or any Affiliates of the
Seller and the beneficiary for which any Letter of Credit was procured);

(v) the lack of power or authority of any signer of, or lack of validity,
sufficiency, accuracy, enforceability or genuineness of, any draft, demand,
instrument, certificate or other document presented under any Letter of Credit,
or any such draft, demand, instrument, certificate or other document proving to
be forged, fraudulent, invalid, defective or insufficient in any respect or any

 

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statement therein being untrue or inaccurate in any respect, even if the
Administrator or the LC Bank has been notified thereof;

(vi) payment by the LC Bank under any Letter of Credit against presentation of a
demand, draft or certificate or other document which does not comply with the
terms of such Letter of Credit other than as a result of the gross negligence or
willful misconduct of the LC Bank;

(vii) the solvency of, or any acts or omissions by, any beneficiary of any
Letter of Credit, or any other Person (other than the LC Bank) having a role in
any transaction or obligation relating to a Letter of Credit, or the existence,
nature, quality, quantity, condition, value or other characteristic of any
property or services relating to a Letter of Credit;

(viii) any failure by the LC Bank or any of the LC Bank’s Affiliates to issue
any Letter of Credit in the form requested by the Seller, unless the LC Bank has
received written notice from the Seller of such failure within three Business
Days after the LC Bank shall have furnished the Seller a copy of such Letter of
Credit and such error is material and no drawing has been made thereon prior to
receipt of such notice;

(ix) any Material Adverse Effect on the Seller, any Originator or any Affiliates
thereof;

(x) any breach of this Agreement or any Transaction Document by any party
thereto;

(xi) the occurrence or continuance of an Insolvency Proceeding with respect to
the Seller, any Originator or any Affiliate thereof (other than a Permitted
Holder);

(xii) the fact that a Termination Event or an Unmatured Termination Event shall
have occurred and be continuing;

(xiii) the fact that this Agreement or the obligations of Seller or Servicer
hereunder shall have been terminated; and

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

Section 1.18 Indemnity. In addition to other amounts payable hereunder, the
Seller hereby agrees to protect, indemnify, pay and save harmless the
Administrator, the LC Bank and any of the LC Bank’s Affiliates that have issued
a Letter of Credit from and against any and all claims, demands, liabilities,
damages, taxes, penalties, interest, judgments, losses, costs, charges and
expenses (including Attorney Costs) which the Administrator, the LC Bank or any
of their respective Affiliates may incur or be subject to as a consequence,
direct or indirect, of the issuance of any Letter of Credit, except to the
extent resulting from (a) the gross negligence or willful misconduct of the
party to be indemnified as determined by a final judgment of a court of

 

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competent jurisdiction or (b) the wrongful dishonor by the LC Bank of a proper
demand for payment made under any Letter of Credit, except if such dishonor
resulted from any act or omission, whether rightful or wrongful, of any present
or future de jure or de facto Governmental Authority (all such acts or omissions
herein called “Governmental Acts”).

Section 1.19 Liability for Acts and Omissions. As between the Seller, on the one
hand, and the Administrator, the LC Bank and the other Purchasers, on the other,
the Seller assumes all risks of the acts and omissions of, or misuse of the
Letters of Credit by, the respective beneficiaries of such Letters of Credit. In
furtherance and not in limitation of the foregoing, none of the Administrator,
the LC Bank or any other Purchaser shall be responsible for: (i) the form,
validity, sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for an issuance of any
such Letter of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged (even if the LC
Bank shall have been notified thereof); (ii) the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign any
such Letter of Credit or the rights or benefits thereunder or proceeds thereof,
in whole or in part, which may prove to be invalid or ineffective for any
reason; (iii) the failure of the beneficiary of any such Letter of Credit, or
any other party to which such Letter of Credit may be transferred, to comply
fully with any conditions required in order to draw upon such Letter of Credit
or any other claim of the Seller against any beneficiary of such Letter of
Credit, or any such transferee, or any dispute between or among the Seller and
any beneficiary of any Letter of Credit or any such transferee; (iv) errors,
omissions, interruptions or delays in transmission or delivery of any messages,
by mail, cable, telegraph, telex or otherwise, whether or not they be in cipher;
(v) errors in interpretation of technical terms; (vi) any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under any such Letter of Credit or of the proceeds thereof; (vii) the
misapplication by the beneficiary of any such Letter of Credit of the proceeds
of any drawing under such Letter of Credit; or (viii) any consequences arising
from causes beyond the control of the Administrator, the LC Bank and any Conduit
Purchaser, including any Governmental Acts, and none of the above shall affect
or impair, or prevent the vesting of, any of the LC Bank’s rights or powers
hereunder. Nothing in Sections 1.17, 1.18 or 1.19 of this Agreement shall
relieve the LC Bank from liability for its gross negligence or willful
misconduct, as determined by a final non-appealable judgment of a court of
competent jurisdiction, in connection with actions or omissions described in
such Sections. In no event shall the Administrator, the LC Bank, any Conduit
Purchaser or their respective Affiliates, be liable to the Seller or any other
Person for any indirect, consequential, incidental, punitive, exemplary or
special damages or expenses (including without limitation Attorney Costs), or
for any damages resulting from any change in the value of any property relating
to a Letter of Credit.

Without limiting the generality of the foregoing, the Administrator, the LC Bank
and any Conduit Purchaser and each of their respective Affiliates (i) may rely
on any written communication believed in good faith by such Person to have been
authorized or given by or on behalf of the applicant for a Letter of Credit;
(ii) may honor any presentation if the documents presented appear on their face
to comply with the terms and conditions of the relevant Letter of Credit;
(iii) may honor a previously dishonored presentation under a Letter of Credit
where such dishonor is the subject of disagreement, dispute or litigation,
whether such dishonor was pursuant to a court order, to settle or compromise any
claim of wrongful dishonor, or otherwise, and shall be entitled to reimbursement
to the same extent as if such presentation had initially

 

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been honored, together with any interest paid by the LC Bank or its Affiliates;
(iv) may honor any drawing that is payable upon presentation of a statement
advising negotiation or payment, upon receipt of such statement (even if such
statement indicates that a draft or other document is being delivered
separately), and shall not be liable for any failure of any such draft or other
document to arrive, or to conform in any way with the relevant Letter of Credit;
(v) may pay any paying or negotiating bank claiming that it rightfully honored
under the laws or practices of the place where such bank is located; and
(vi) may settle or adjust any claim or demand made on the Administrator, the LC
Bank, any Conduit Purchaser or their respective Affiliates, in any way related
to any order issued at the applicant’s request to an air carrier, a letter of
guarantee or of indemnity issued to a carrier or any similar document (each an
“Order”) and may honor any drawing in connection with any Letter of Credit that
is the subject of such Order, notwithstanding that any drafts or other documents
presented in connection with such Letter of Credit fail to conform in any way
with such Letter of Credit.

In furtherance and extension and not in limitation of the specific provisions
set forth above, any action taken or omitted by the LC Bank under or in
connection with the Letters of Credit issued by it or any documents and
certificates delivered thereunder, if taken or omitted in good faith and without
gross negligence or willful misconduct, as determined by a final non-appealable
judgment of a court of competent jurisdiction, shall not put the LC Bank under
any resulting liability to the Seller or any other Person.

Section 1.20 Extension of Termination Date. The Seller may advise the
Administrator and each Purchaser Agent in writing of its desire to extend the
Facility Termination Date, provided such request is made not more than 90 days
prior to, and not less than 60 days prior to, the then current Facility
Termination Date. In the event that the Purchaser Agents are all agreeable to
such extension, the Administrator shall so notify the Seller in writing (it
being understood that the Purchaser Agents may accept or decline such a request
in their sole discretion and on such terms as they may elect) not less than 30
days prior to the then current Facility Termination Date and the Seller, the
Administrator, the Purchaser Agents and the Purchasers shall enter into such
documents as the Purchasers may deem necessary or appropriate to reflect such
extension, and all reasonable costs and expenses incurred by the Purchasers, the
Administrator and the Purchaser Agents in connection therewith (including
reasonable Attorney Costs) shall be paid by the Seller. In the event the
Purchaser Agents decline the request for such extension, the Administrator shall
so notify the Seller of such determination; provided, however, that the failure
of the Administrator to notify the Seller of the determination to decline such
extension shall not affect the understanding and agreement that the Purchaser
Agents shall be deemed to have refused to grant the requested extension in the
event the Administrator fails to affirmatively notify the Seller, in writing, of
their agreement to accept the requested extension.

 

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ARTICLE II

REPRESENTATIONS AND WARRANTIES; COVENANTS;

TERMINATION EVENTS

Section 2.1 Representations and Warranties; Covenants. Each of the Seller,
Greetings and the Servicer hereby makes the representations and warranties, and
hereby agrees to perform and observe the covenants, applicable to it set forth
in Exhibits III and IV, respectively.

Section 2.2 Termination Events. If any of the Termination Events set forth in
Exhibit V shall occur, the Administrator may (with the consent of the Majority
Purchaser Agents) or shall (at the direction of the Majority Purchaser Agents),
by notice to the Seller, declare the Facility Termination Date to have occurred
(in which case the Facility Termination Date shall be deemed to have occurred);
provided, that automatically upon the occurrence of any event described in
paragraph (f) of Exhibit V or upon the occurrence of the event described in
paragraph (i) of Exhibit V (upon the expiration of the period set forth
therein), the Facility Termination Date shall occur. Upon any such declaration,
occurrence or deemed occurrence of the Facility Termination Date, the
Administrator, each Purchaser Agent and each Purchaser shall have, in addition
to the rights and remedies that they may have under this Agreement, all other
rights and remedies provided after default under the New York UCC and under
other applicable law, which rights and remedies shall be cumulative.

ARTICLE III

INDEMNIFICATION

Section 3.1 Indemnities by the Seller. Without limiting any other rights that
any Purchaser Agent, Purchaser, Liquidity Provider, the Administrator or any
Program Support Provider or any of their respective Affiliates, employees,
officers, directors, agents, counsel, successors, transferees or assigns (each,
an “Indemnified Party”) may have hereunder or under applicable law, the Seller
hereby agrees to indemnify each Indemnified Party from and against any and all
claims, damages, expenses, costs, losses, liabilities, penalties and Taxes
(including Attorney Costs) (all of the foregoing being collectively referred to
as “Indemnified Amounts”) arising out of or resulting from this Agreement
(whether directly or indirectly), the use of proceeds of Purchases or
reinvestments, the ownership of the Purchased Interest, or any interest therein,
or in respect of any Receivable, Related Security or Contract, excluding,
however: (a) Indemnified Amounts to the extent resulting from gross negligence
or willful misconduct on the part of such Indemnified Party or its officers,
directors, agents or counsel, (b) recourse with respect to any Receivable to the
extent that such Receivable is uncollectible on account of the insolvency,
bankruptcy or lack of credit worthiness of the related Obligor, or (c) any
overall net income taxes or franchise taxes imposed on such Indemnified Party by
the jurisdiction under the laws of which such Indemnified Party is organized or
otherwise is considered doing business (unless the Indemnified Party would not
be considered doing business in such jurisdiction, but for having entered into,
or engaged in the transactions in connection with this Agreement or any other
Transaction Document) or any political subdivision thereof. Without limiting or
being limited by the foregoing, and subject to the exclusions set forth in the
preceding sentence, the

 

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Seller shall pay on written demand (which demand shall be accompanied by
documentation of the Indemnified Amounts, in reasonable detail) to each
Indemnified Party any and all amounts necessary to indemnify such Indemnified
Party from and against any and all Indemnified Amounts relating to or resulting
from any of the following:

(i) the failure of any Receivable included in the calculation of the Net
Receivables Pool Balance as an Eligible Receivable to be an Eligible Receivable,
the failure of any information contained in an Information Package to be true
and correct, or the failure of any other information provided to such
Indemnified Party by the Seller or Servicer with respect to Receivables or this
Agreement to be true and correct,

(ii) the failure of any representation, warranty or statement made or deemed
made by the Seller (or any of its officers) under or in connection with this
Agreement to have been true and correct as of the date made or deemed made in
all respects when made,

(iii) the failure by the Seller to comply with any applicable law, rule or
regulation with respect to any Pool Receivable or the related Contract, or the
failure of any Pool Receivable or the related Contract to conform to any such
applicable law, rule or regulation,

(iv) the failure to vest in the Administrator (for the benefit of the
Purchasers) a valid and enforceable: (A) perfected undivided percentage
ownership interest, to the extent of the Purchased Interest, in the Receivables
in, or purporting to be in, the Receivables Pool and the other Pool Assets, or
(B) first priority perfected security interest in the Pool Assets, in each case,
free and clear of any Adverse Claim,

(v) the failure to have filed, or any delay in filing, financing statements or
other similar instruments or documents under the UCC of any applicable
jurisdiction or other applicable laws with respect to any Receivables in, or
purporting to be in, the Receivables Pool and the other Pool Assets, whether at
the time of any purchase or reinvestment or at any subsequent time,

(vi) any dispute, claim, offset or defense (other than any reduction, revision
or discharge in bankruptcy of or other Insolvency Event in respect of the
Obligor) of the Obligor to the payment of any Receivable in, or purporting to be
in, the Receivables Pool (including a defense (not connected with any Insolvency
Event) based on such Receivable or the related Contract not being a legal, valid
and binding obligation of such Obligor enforceable against it in accordance with
its terms), or any other claim resulting from the sale of the goods or services
related to such Receivable or the furnishing or failure to furnish such goods or
services or relating to collection activities with respect to such Receivable,

 

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(vii) any failure of the Seller, any Affiliate of the Seller or the Servicer to
perform its duties or obligations in accordance with the provisions hereof or
under the Contracts,

(viii) any products liability or other claim, investigation, litigation or
proceeding arising out of or in connection with merchandise, insurance or
services that are the subject of any Contract,

(ix) the commingling of Collections at any time with other funds,

(x) the use of proceeds of purchases or reinvestments or the issuance of any
Letter of Credit, or

(xi) any reduction in the Aggregate Investment as a result of the distribution
of Collections pursuant to Section 1.4(d), if all or a portion of such
distributions shall thereafter be rescinded or otherwise must be returned for
any reason.

Section 3.2 Indemnities by the Servicer. Without limiting any other rights that
any Indemnified Party may have hereunder or under applicable law, the Servicer
hereby agrees to indemnify each Indemnified Party from and against any and all
Indemnified Amounts arising out of or resulting from (whether directly or
indirectly): (a) the failure of any information contained in an Information
Package to be true and correct, or the failure of any other information provided
to such Indemnified Party by, or on behalf of, the Servicer to be true and
correct, (b) the failure of any representation, warranty or statement made or
deemed made by the Servicer (or any of its officers) under or in connection with
this Agreement or any other Transaction Document to which it is a party to have
been true and correct as of the date made or deemed made in all respects when
made, (c) the failure by the Servicer to comply with any applicable law, rule or
regulation with respect to any Pool Receivable or the related Contract, (d) any
dispute, claim, offset or defense of the Obligor to the payment of any
Receivable in, or purporting to be in, the Receivables Pool resulting from or
related to the collection activities with respect to such Receivable, (e) any
failure of the Servicer to perform its duties or obligations in accordance with
the provisions hereof or any other Transaction Document to which it is a party
in its capacity as Servicer, (f) the failure to have filed, or any delay in
filing, financing statements or other similar instruments or documents under the
UCC of any applicable jurisdiction or other applicable laws with respect to any
Receivables in, or purporting to be in, the Receivables Pool and the other Pool
Assets, whether at the time of any purchase or reinvestment or at any subsequent
time, or (g) any commingling by the Servicer of Collections at any time with
other funds.

ARTICLE IV

ADMINISTRATION AND COLLECTIONS

Section 4.1 Appointment of the Servicer.

(a) The servicing, administering and collection of the Pool Receivables shall be
conducted by the Person so designated from time to time as the Servicer in
accordance with this Section. Until the Administrator gives notice to Greetings
(in

 

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accordance with this Section 4.1) of the designation of a new Servicer,
Greetings is hereby designated as, and hereby agrees to perform the duties and
obligations of, the Servicer pursuant to the terms hereof. Upon the occurrence
of a Termination Event, the Administrator may (with the consent of the Majority
Purchaser Agents) or shall (at the direction of the Majority Purchaser Agents)
designate as Servicer any Person (including itself) to succeed Greetings or any
successor Servicer, on the condition in each case that any such Person so
designated shall agree to perform the duties and obligations of the Servicer
pursuant to the terms hereof.

(b) Upon the designation of a successor Servicer as set forth in clause (a),
Greetings agrees that it will terminate its activities as Servicer hereunder in
a manner that the Administrator determines will facilitate the transition of the
performance of such activities to the new Servicer, and Greetings shall
cooperate with and assist such new Servicer. Such cooperation shall include
access to and transfer of related records (including all Contracts) and use by
the new Servicer of all licenses, hardware or software necessary or desirable to
collect the Pool Receivables and the Related Security.

(c) Greetings acknowledges that, in making their decision to execute and deliver
this Agreement, the Administrator and each Purchaser Group have relied on
Greetings’ agreement to act as Servicer hereunder. Accordingly, Greetings agrees
that it will not voluntarily resign as Servicer without the consent of the
Majority Purchaser Agents.

(d) The Servicer may delegate its duties and obligations hereunder to any
subservicer (each a “Sub-Servicer”); provided, that, in each such delegation:
(i) such Sub-Servicer shall agree in writing to perform the duties and
obligations of the Servicer pursuant to the terms hereof, (ii) the Servicer
shall remain primarily liable for the performance of the duties and obligations
so delegated, (iii) the Seller, the Administrator and each Purchaser Group shall
have the right to look solely to the Servicer for performance, and (iv) the
terms of any agreement with any Sub-Servicer shall provide that the
Administrator may terminate such agreement upon the termination of the Servicer
hereunder by giving notice of its desire to terminate such agreement to the
Servicer (and the Servicer shall provide appropriate notice to each such
Sub-Servicer); provided, however, that if any such delegation is to any Person
other than an Originator or an Affiliate thereof, the Administrator and the
Majority Purchaser Agents shall have consented in writing in advance to such
delegation; provided further that the parties agree that AGSC and each
Originator shall serve as initial Sub-Servicers.

Section 4.2 Duties of the Servicer.

(a) The Servicer shall take or cause to be taken all such action as may be
necessary or advisable to administer and collect each Pool Receivable from time
to time, all in accordance with this Agreement and all applicable laws, rules
and regulations, with reasonable care and diligence, and in accordance with the
Credit and Collection Policies. The Servicer shall set aside, for the account of
each Purchaser Group, the amount of the Collections to which each such Purchaser
Group is entitled in accordance with Article I. The Servicer may, in accordance
with the applicable Credit and

 

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Collection Policy, take such action as the Servicer may determine to be
appropriate to maximize Collections thereof or reflect adjustments required
under the applicable Contract; provided, however, that: (i) such action shall
not change the number of days such Pool Receivable has remained unpaid from the
date of the original due date related to such Pool Receivable and (ii) such
action shall not alter the status of such Pool Receivable as a Delinquent
Receivable or a Defaulted Receivable or limit the rights of the Administrator or
any Purchaser Group under this Agreement. The Seller shall deliver to the
Servicer and the Servicer shall hold for the benefit of the Seller and the
Administrator (individually and for the benefit of each Purchaser Group), in
accordance with their respective interests, all records and documents (including
computer tapes or disks) with respect to each Pool Receivable. Notwithstanding
anything to the contrary contained herein, the Administrator may direct the
Servicer (whether the Servicer is Greetings, AGSC, any Originator or any other
Person) to commence or settle any legal action to enforce collection of any Pool
Receivable or to foreclose upon or repossess any Related Security; provided,
however, that no such direction may be given unless either: (A) a Termination
Event has occurred or (B) the Administrator believes in good faith that failure
to commence, settle or effect such legal action, foreclosure or repossession
could adversely affect Receivables constituting a material portion of the Pool
Receivables.

(b) The Servicer shall, as soon as practicable following actual receipt of
collected funds, turn over to the Seller the collections of any indebtedness
that is not a Pool Receivable, less, if Greetings, AGSC, any Originator or an
Affiliate thereof is not the Servicer, all reasonable and appropriate
out-of-pocket costs and expenses of such Servicer of servicing, collecting and
administering such collections. The Servicer, if other than Greetings, AGSC, any
Originator or an Affiliate thereof, shall, as soon as practicable upon demand,
deliver to the Seller all records in its possession that evidence or relate to
any indebtedness that is not a Pool Receivable, and copies of records in its
possession that evidence or relate to any indebtedness that is a Pool
Receivable.

(c) The Servicer’s obligations hereunder shall terminate on the later of:
(i) the Facility Termination Date, (ii) the date on which no Investment of or
Discount in respect of the Purchased Interest shall be outstanding, (iii) the
date on which an amount equal to 100% of the LC Amount has been deposited in the
LC Collateral Account and (iv) the date on which all amounts required to be paid
to the Purchaser Agents, each Purchaser, the Administrator and any other
Indemnified Party or Affected Person hereunder shall have been paid in full.

After such termination, if Greetings, AGSC, any Originator or an Affiliate
thereof was not the Servicer on the date of such termination, the Servicer shall
promptly deliver to the Seller all books, records and related materials that the
Seller previously provided to the Servicer, or that have been obtained by the
Servicer, in connection with this Agreement.

Section 4.3 Lock-Box Account Arrangements. On the Closing Date, the Seller shall
have entered into Lock-Box Agreements with all of the Lock-Box Banks and
delivered original counterparts of each to the Administrator and each Purchaser
Agent. Upon the occurrence of a Termination Event, the Administrator may (with
the consent of the Majority Purchaser Agents)

 

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or shall (upon the direction of the Majority Purchaser Agents) at any time
thereafter give notice to each Lock-Box Bank that the Administrator is
exercising its rights under the Lock-Box Agreements to do any or all of the
following: (a) to have the exclusive ownership and control of the Lock-Box
Accounts transferred to the Administrator (for the benefit of the Purchasers)
and to exercise exclusive dominion and control over the funds deposited therein,
(b) to have the proceeds that are sent to the respective Lock-Box Accounts
redirected pursuant to the Administrator’s instructions rather than deposited in
the applicable Lock-Box Account, and (c) to take any or all other actions
permitted under the applicable Lock-Box Agreement. The Seller hereby agrees that
if the Administrator at any time takes any action set forth in the preceding
sentence, the Administrator shall have exclusive control (for the benefit of the
Purchasers) of the proceeds (including Collections) of all Pool Receivables and
the Seller hereby further agrees to take any other action that the Administrator
or any Purchaser Agent may reasonably request to transfer such control. Any
proceeds of Pool Receivables received by the Seller or the Servicer thereafter
shall be sent immediately to the Administrator. The parties hereto hereby
acknowledge that if at any time the Administrator takes control of any Lock-Box
Account, the Administrator shall not have any rights to the funds therein in
excess of the unpaid amounts due to the Administrator, the Purchaser Groups, any
Indemnified Party or any other Person hereunder, and the Administrator shall
distribute or cause to be distributed such funds in accordance with
Section 4.2(b) and Article I (in each case as if such funds were held by the
Servicer thereunder).

Section 4.4 Enforcement Rights.

(a) At any time following the occurrence of a Termination Event:

(i) the Administrator may (with the consent or at the direction of the Majority
Purchaser Agents) direct the Obligors that payment of all amounts payable under
any Pool Receivable is to be made directly to the Administrator or its designee,

(ii) the Administrator may (with the consent or at the direction of the Majority
Purchaser Agents) instruct the Seller or the Servicer to give notice of the
Purchaser Groups’ interest in Pool Receivables to each Obligor, which notice
shall direct that payments be made directly to the Administrator or its designee
(on behalf of such Purchaser Groups), and the Seller or the Servicer, as the
case may be, shall give such notice at the expense of the Seller or the
Servicer, as the case may be; provided, that if the Seller or the Servicer, as
the case may be, fails to so notify each Obligor, the Administrator (at the
Seller’s or the Servicer’s, as the case may be, expense) may so notify the
Obligors, and

(iii) the Administrator may (with the consent or at the direction of the
Majority Purchaser Agents) request the Servicer to, and upon such request the
Servicer shall: (A) assemble all of the records necessary or desirable to
collect the Pool Receivables and the Related Security, and transfer or license
to a successor Servicer the use of all software necessary or desirable to
collect the Pool Receivables and the Related Security, and make the same
available to the Administrator or its designee (for the benefit of the
Purchasers) at a place selected

 

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by the Administrator, and (B) segregate all cash, checks and other instruments
received by it from time to time constituting Collections in a manner acceptable
to the Administrator and, promptly upon receipt, remit all such cash, checks and
instruments, duly endorsed or with duly executed instruments of transfer, to the
Administrator or its designee.

(b) The Seller hereby authorizes the Administrator (on behalf of each Purchaser
Group), and irrevocably appoints the Administrator as its attorney-in-fact with
full power of substitution and with full authority in the place and stead of the
Seller, which appointment is coupled with an interest, to take any and all steps
in the name of the Seller and on behalf of the Seller necessary or desirable, in
the determination of the Administrator, after the occurrence of a Termination
Event, to collect any and all amounts or portions thereof due under any and all
Pool Assets, including endorsing the name of the Seller on checks and other
instruments representing Collections and enforcing such Pool Assets.
Notwithstanding anything to the contrary contained in this subsection, none of
the powers conferred upon such attorney-in-fact pursuant to the preceding
sentence shall subject such attorney-in-fact to any liability if any action
taken by it shall prove to be inadequate or invalid, nor shall they confer any
obligations upon such attorney-in-fact in any manner whatsoever.

Section 4.5 Responsibilities of the Seller.

(a) Anything herein to the contrary notwithstanding, the Seller shall:
(i) perform all of its obligations, if any, under the Contracts related to the
Pool Receivables to the same extent as if interests in such Pool Receivables had
not been transferred hereunder, and the exercise by the Administrator, the
Purchaser Agents or the Purchasers of their respective rights hereunder shall
not relieve the Seller from such obligations, and (ii) pay when due any taxes,
including any sales taxes payable in connection with the Pool Receivables and
their creation and satisfaction. The Administrator, the Purchaser Agents or any
of the Purchasers shall not have any obligation or liability with respect to any
Pool Asset, nor shall any of them be obligated to perform any of the obligations
of the Seller, Servicer, Greetings, AGSC or the Originators thereunder.

(b) Greetings hereby irrevocably agrees that if at any time it shall cease to be
the Servicer hereunder, it shall act, and shall cause any former or current
Sub-Servicers to act, (if the then-current Servicer so requests) as the
data-processing agent of the Servicer and, in such capacity, Greetings shall
conduct, and shall cause the former or current Sub-Servicers to conduct, the
data-processing functions of the administration of the Pool Receivables and the
Collections thereon in substantially the same way that Greetings conducted such
data-processing functions while it acted as the Servicer.

Section 4.6 Servicing Fee.

(a) Subject to clause (b), the Servicer shall be paid a fee (the “Servicing
Fee”) equal to the lesser of (i) 1.00% per annum on the daily average aggregate
Outstanding Balance of the Pool Receivables and (ii) 110% of the aggregate
reasonable

 

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costs and expenses incurred by Servicer in connection with the performance of
its obligations as Servicer. The aggregate of each Purchaser Group’s Ratable
Share of such fee shall be paid through the distributions contemplated by
Section 1.4(d), and the Seller’s Share of such fee shall be paid by the Seller.

(b) If the Servicer ceases to be Greetings or an Affiliate thereof, the
servicing fee shall be the greater of: (i) the amount calculated pursuant to
clause (a), and (ii) an alternative amount specified by the successor Servicer
not to exceed 110% of the aggregate reasonable costs and expenses incurred by
such successor Servicer in connection with the performance of its obligations as
Servicer.

ARTICLE V

THE AGENTS

Section 5.1 Appointment and Authorization.

(a) Each Purchaser and Purchaser Agent hereby irrevocably designates and
appoints PNC as the “Administrator” hereunder and authorizes the Administrator
to take such actions and to exercise such powers as are delegated to the
Administrator hereby and to exercise such other powers as are reasonably
incidental thereto. The Administrator shall hold, in its name, for the benefit
of each Purchaser, ratably, the Purchased Interest. The Administrator shall not
have any duties other than those expressly set forth herein or any fiduciary
relationship with any Purchaser or Purchaser Agent, and no implied obligations
or liabilities shall be read into this Agreement, or otherwise exist, against
the Administrator. The Administrator does not assume, nor shall it be deemed to
have assumed, any obligation to, or relationship of trust or agency with, the
Seller or Servicer. Notwithstanding any provision of this Agreement or any other
Transaction Document to the contrary, in no event shall the Administrator ever
be required to take any action which exposes the Administrator to personal
liability or which is contrary to the provision of any Transaction Document or
applicable law. The appointment and authority of the Administrator hereunder
shall terminate on the later of (i) the Facility Termination Date, (ii) the date
on which no Investment of or Discount in respect of the Purchased Interest shall
be outstanding, (iii) the date on which an amount equal to 100% of the LC Amount
has been deposited in the LC Collateral Account and (iv) the date on which all
amounts required to be paid by the Seller under this Agreement to any Purchaser,
the Administrator and any other Indemnified Party or Affected Person shall have
been paid in full.

(b) Each Purchaser hereby irrevocably designates and appoints the respective
institution identified as the Purchaser Agent for such Purchaser’s Purchaser
Group on the signature pages hereto or in the Assumption Agreement or Transfer
Supplement pursuant to which such Purchaser becomes a party hereto, and each
authorizes such Purchaser Agent to take such action on its behalf under the
provisions of this Agreement and to exercise such powers and perform such duties
as are expressly delegated to such Purchaser Agent by the terms of this
Agreement, if any, together with such other powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary

 

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elsewhere in this Agreement, no Purchaser Agent shall have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Purchaser or other Purchaser Agent or the Administrator,
and no implied covenants, functions, responsibilities, duties, obligations or
liabilities on the part of such Purchaser Agent shall be read into this
Agreement or otherwise exist against such Purchaser Agent.

(c) Except as otherwise specifically provided in this Agreement, the provisions
of this Article V are solely for the benefit of the Purchaser Agents, the
Administrator and the Purchasers, and none of the Seller or Servicer shall have
any rights as a third-party beneficiary or otherwise under any of the provisions
of this Article V, except that this Article V shall not affect any obligations
which any Purchaser Agent, the Administrator or any Purchaser may have to the
Seller or the Servicer under the other provisions of this Agreement.
Furthermore, no Purchaser shall have any rights as a third-party beneficiary or
otherwise under any of the provisions hereof in respect of a Purchaser Agent
which is not the Purchaser Agent for such Purchaser.

(d) In performing its functions and duties hereunder, the Administrator shall
act solely as the agent of the Purchasers and the Purchaser Agents and does not
assume nor shall be deemed to have assumed any obligation or relationship of
trust or agency with or for the Seller or Servicer or any of their successors
and assigns. In performing its functions and duties hereunder, each Purchaser
Agent shall act solely as the agent of its respective Purchaser and does not
assume nor shall be deemed to have assumed any obligation or relationship of
trust or agency with or for the Seller, the Servicer, any other Purchaser, any
other Purchaser Agent or the Administrator, or any of their respective
successors and assigns.

Section 5.2 Delegation of Duties. The Administrator may execute any of its
duties through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Administrator
shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.

Section 5.3 Exculpatory Provisions. None of the Purchaser Agents, the
Administrator or any of their directors, officers, agents or employees shall be
liable for any action taken or omitted (i) with the consent or at the direction
of the Majority Purchaser Agents (or in the case of any Purchaser Agent, the
Purchasers within its Purchaser Group that have a majority of the Group
Commitment of such Purchaser Group) or (ii) in the absence of such Person’s
gross negligence or willful misconduct. The Administrator shall not be
responsible to any Purchaser, Purchaser Agent or other Person for (i) any
recitals, representations, warranties or other statements made by the Seller,
Servicer, or any of their Affiliates, (ii) the value, validity, effectiveness,
genuineness, enforceability or sufficiency of any Transaction Document,
(iii) any failure of the Seller, AGSC, any Originator, Greetings or any of their
Affiliates to perform any obligation or (iv) the satisfaction of any condition
specified in Exhibit II. The Administrator shall not have any obligation to any
Purchaser or Purchaser Agent to ascertain or inquire about the observance or
performance of any agreement contained in any Transaction Document or to inspect
the properties, books or records of the Seller, Greetings, Servicer, AGSC, any
Originator or any of their Affiliates.

 

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Section 5.4 Reliance by Agents.

(a) Each Purchaser Agent and the Administrator shall in all cases be entitled to
rely, and shall be fully protected in relying, upon any document or other
writing or conversation believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person and upon advice and statements of
legal counsel (including counsel to the Seller), independent accountants and
other experts selected by the Administrator. Each Purchaser Agent and the
Administrator shall in all cases be fully justified in failing or refusing to
take any action under any Transaction Document unless it shall first receive
such advice or concurrence of the Majority Purchaser Agents (or in the case of
any Purchaser Agent, the Purchasers within its Purchaser Group that have a
majority of the Group Commitment of such Purchaser Group), and assurance of its
indemnification, as it deems appropriate.

(b) The Administrator shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement in accordance with a request of the
Majority Purchaser Agents or the Purchaser Agents, and such request and any
action taken or failure to act pursuant thereto shall be binding upon all
Purchasers, the Administrator and Purchaser Agents.

(c) The Purchasers within each Purchaser Group with a majority of the Group
Commitment of such Purchaser Group shall be entitled to request or direct the
related Purchaser Agent to take action, or refrain from taking action, under
this Agreement on behalf of such Purchasers. Such Purchaser Agent shall in all
cases be fully protected in acting, or in refraining from acting, under this
Agreement in accordance with a request of such majority Purchasers, and such
request and any action taken or failure to act pursuant thereto shall be binding
upon all of such Purchaser Agent’s Purchasers.

(d) Unless otherwise advised in writing by a Purchaser Agent or by any Purchaser
on whose behalf such Purchaser Agent is purportedly acting, each party to this
Agreement may assume that (i) such Purchaser Agent is acting for the benefit of
each of the Purchasers in respect of which such Purchaser Agent is identified as
being the “Purchaser Agent” in the definition of “Purchaser Agent” hereto, as
well as for the benefit of each assignee or other transferee from any such
Person, and (ii) each action taken by such Purchaser Agent has been duly
authorized and approved by all necessary action on the part of the Purchasers on
whose behalf it is purportedly acting. Each Purchaser Agent and its Purchaser(s)
shall agree amongst themselves as to the circumstances and procedures for
removal, resignation and replacement of such Purchaser Agent.

Section 5.5 Notice of Termination Events. Neither any Purchaser Agent nor the
Administrator shall be deemed to have knowledge or notice of the occurrence of
any Termination Event or Unmatured Termination Event unless such Administrator
has received notice from any Purchaser, Purchaser Agent, the Servicer or the
Seller stating that a Termination Event or Unmatured Termination Event has
occurred hereunder and describing such Termination Event or Unmatured
Termination Event. In the event that the Administrator receives such a

 

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notice, it shall promptly give notice thereof to each Purchaser Agent whereupon
each such Purchaser Agent shall promptly give notice thereof to its Purchasers.
In the event that a Purchaser Agent receives such a notice (other than from the
Administrator), it shall promptly give notice thereof to the Administrator. The
Administrator shall take such action concerning a Termination Event or Unmatured
Termination Event as may be directed by the Majority Purchaser Agents unless
such action otherwise requires the consent of all Purchasers and/or the LC Bank,
but until the Administrator receives such directions, the Administrator may (but
shall not be obligated to) take such action, or refrain from taking such action,
as the Administrator deems advisable and in the best interests of the Purchasers
and Purchaser Agents.

Section 5.6 Non-Reliance on Administrator, Purchaser Agents and Other
Purchasers. Each Purchaser expressly acknowledges that none of the
Administrator, the Purchaser Agents nor any of their respective officers,
directors, employees, agents, attorneys-in-fact or Affiliates has made any
representations or warranties to it and that no act by the Administrator, or any
Purchaser Agent hereafter taken, including any review of the affairs of the
Seller, Greetings, Servicer, AGSC or any Originator, shall be deemed to
constitute any representation or warranty by the Administrator or such Purchaser
Agent, as applicable. Each Purchaser represents and warrants to the
Administrator and the Purchaser Agents that, independently and without reliance
upon the Administrator, Purchaser Agents or any other Purchaser and based on
such documents and information as it has deemed appropriate, it has made and
will continue to make its own appraisal of and investigation into the business,
operations, property, prospects, financial and other conditions and
creditworthiness of the Seller, Greetings, AGSC, Servicer or the Originators,
and the Receivables and its own decision to enter into this Agreement and to
take, or omit, action under any Transaction Document. Except for items
specifically required to be delivered hereunder, the Administrator shall not
have any duty or responsibility to provide any Purchaser Agent with any
information concerning the Seller, Greetings, AGSC, Servicer or the Originators
or any of their Affiliates that comes into the possession of the Administrator
or any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates.

Section 5.7 Administrators and Affiliates. Each of the Purchasers and the
Administrator and their Affiliates may extend credit to, accept deposits from
and generally engage in any kind of banking, trust, debt, equity or other
business with the Seller, Greetings, AGSC, Servicer or any Originator or any of
their Affiliates and PNC may exercise or refrain from exercising its rights and
powers as if it were not the Administrator. With respect to the acquisition of
the Eligible Receivables pursuant to this Agreement, each of the Purchaser
Agents and the Administrator, to the extent they are also a Purchaser, shall
have the same rights and powers under this Agreement as any Purchaser and may
exercise the same as though it were not such an agent, and the terms “Purchaser”
and “Purchasers” shall include each of the Purchaser Agents and the
Administrator in their individual capacities.

Section 5.8 Indemnification. Each Purchaser Group shall indemnify and hold
harmless the Administrator (but solely in its capacity as Administrator) and the
LC Bank and the officers, directors, employees, representatives and agents of
the Administrator and the LC Bank (to the extent not reimbursed by the Seller,
Greetings, AGSC, the Servicer or any Originator and without limiting the
obligation of the Seller, Greetings, AGSC, the Servicer or the Originators to do
so), ratably in accordance with its Ratable Share from and against any and all
liabilities, obligations, losses, damages, penalties, judgments, settlements,
costs, expenses and

 

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disbursements of any kind whatsoever (including in connection with any
investigative or threatened proceeding, whether or not the Administrator, the LC
Bank or such Person shall be designated a party thereto) that may at any time be
imposed on, incurred by or asserted against the Administrator, the LC Bank or
such Person as a result of, or related to, any of the transactions contemplated
by the Transaction Documents or the execution, delivery or performance of the
Transaction Documents or any other document furnished in connection therewith
(but excluding any such liabilities, obligations, losses, damages, penalties,
judgments, settlements, costs, expenses or disbursements resulting solely from
the Administrator’s, the LC Bank’s or such Person’s gross negligence or willful
misconduct, as determined by a court of competent jurisdiction); provided, that
in the case of each Purchaser that is a commercial paper conduit, such indemnity
shall be provided solely to the extent of amounts received by such Purchaser
under this Agreement which exceed the amounts required to repay such Purchaser’s
outstanding Notes. Notwithstanding anything in this Section 5.8 to the contrary,
each of the Administrator, each Purchaser Agent and each Purchaser hereby
covenants and agrees that it shall not institute against, or join any other
Person in instituting against, any Conduit Purchaser any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding or other
proceedings under any federal or state bankruptcy or similar law, for one year
and a day after the latest maturing Note issued by such Conduit Purchaser is
paid in full.

Section 5.9 Successor Administrator. The Administrator may, upon at least five
(5) days notice to the Seller and each Purchaser and Purchaser Agent, resign as
Administrator. Such resignation shall not become effective until a successor
agent is appointed by the Majority Purchaser Agents and has accepted such
appointment. Upon such acceptance of its appointment as Administrator hereunder
by a successor Administrator, such successor Administrator shall succeed to and
become vested with all the rights and duties of the retiring Administrator, and
the retiring Administrator shall be discharged from its duties and obligations
under the Transaction Documents. After any retiring Administrator’s resignation
hereunder, the provisions of Sections 3.1 and 3.2 and this Article V shall inure
to its benefit as to any actions taken or omitted to be taken by it while it was
the Administrator.

Section 5.10 Covenant of the Administrator. The Administrator covenants and
agrees that it will not consent to any addition of a new Person as Originator
under Section 1.6 of the Receivables Sale Agreement without the consent of the
Majority Purchaser Agents.

ARTICLE VI

MISCELLANEOUS

Section 6.1 Amendments, Etc. No amendment or waiver of any provision of this
Agreement or any other Transaction Document (including, but not limited to, the
addition of any Originator under the Receivables Sale Agreement), or consent to
any departure by the Seller or the Servicer therefrom, shall be effective unless
in a writing signed by the Administrator and each of the Majority Purchaser
Agents, and, in the case of any amendment, by the other parties thereto and then
such amendment, waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given; provided, however, that
no such amendment or waiver shall (i) waive any Termination Event arising from
an Insolvency Proceeding with respect to Seller, the Servicer or any Originator
without the prior written

 

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consent of the LC Bank, (ii) amend, modify or otherwise affect the rights or
duties of the Administrator or the LC Bank hereunder without the prior written
consent of the Administrator or the LC Bank, as the case may be, or
(iii) without the consent of each affected Purchaser, (A) extend the date of any
payment or deposit of Collections by the Seller or the Servicer, (B) reduce the
rate or extend the time of payment of Yield, (C) reduce any fees payable to the
Administrator, any Purchaser Agent or any Purchaser pursuant to the applicable
Purchaser Group Fee Letter, (D) change (except as contemplated by Section 1.4)
the amount of Investment of any Purchaser, any Purchaser’s pro rata share of the
Purchased Interest or (except as contemplated by Section 1.2(g)) any Related
Committed Purchaser’s Commitment, (E) amend, modify or waive any provision of
the definition of “Majority Purchaser Agents” or this Section 6.1, (F) consent
to or permit the assignment or transfer by the Seller of any of its rights and
obligations under this Agreement, (G) change the definition of “Concentration
Percentage,” “Specifically Reserved Dilution Amount,” “Sales Based Loss Reserve
Percentage,” “Receivables Based Loss Reserve Percentage,” “Eligible Receivable,”
“Loss Reserve,” “Loss Reserve Percentage,” “Dilution Reserve,” “Dilution Reserve
Percentage,” “Termination Event,” “Total Reserve,” “Yield Reserve,” or “Yield
Reserve Percentage”, (H) amend or modify any defined term (or any defined term
used directly or indirectly in such defined term) used in clauses (A) through
(G) above in a manner that would circumvent the intention of the restrictions
set forth in such clauses, or (I) otherwise materially and adversely affect the
rights of any such Purchaser hereunder; provided further, however, that, if
required by any Conduit Purchaser, no such material amendment shall be effective
until both Moody’s and Standard & Poor’s have notified the related Purchaser
Agent in writing that such action will not result in a reduction or withdrawal
of the rating of any Notes. The Administrator hereby agrees to provide executed
copies of any material amendment to or waiver of any provision of this Agreement
to the Rating Agencies. No failure on the part of the Purchasers or the
Administrator to exercise, and no delay in exercising any right hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise thereof or the exercise
of any other right.

Section 6.2 Notices, Etc. All notices and other communications hereunder shall,
unless otherwise stated herein, be in writing (which shall include facsimile
communication) and be sent or delivered to each party hereto at its address set
forth under its name on the signature pages hereof (or in any Assumption
Agreement pursuant to which it became a party hereto) or at such other address
as shall be designated by such party in a written notice to the other parties
hereto. Notices and communications by facsimile shall be effective when sent
(and shall be followed by hard copy sent by first class mail), and notices and
communications sent by other means shall be effective when received.

Section 6.3 Successors and Assigns; Participations; Assignments.

(a) Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns.
Except as otherwise provided herein, the Seller may not assign or transfer any
of its rights or delegate any of its duties hereunder or under any Transaction
Document without the prior consent of the Administrator and the Purchaser
Agents.

(b) Participations. Any Purchaser may sell to one or more Persons (each a
“Participant”) participating interests in the interests of such Purchaser
hereunder;

 

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provided, however, that no Purchaser shall grant any participation under which
the Participant shall have rights to approve any amendment to or waiver of this
Agreement or any other Transaction Document. Such Purchaser shall remain solely
responsible for performing its obligations hereunder, and the Seller, each
Purchaser Agent and the Administrator shall continue to deal solely and directly
with such Purchaser in connection with such Purchaser’s rights and obligations
hereunder. A Purchaser shall not agree with a Participant to restrict such
Purchaser’s right to agree to any amendment hereto, except amendments that
require the consent of all Purchasers.

(c) Assignments by Certain Related Committed Purchasers. Any Related Committed
Purchaser may assign to one or more Persons (each a “Purchasing Related
Committed Purchaser”), reasonably acceptable to the related Purchaser Agent in
its sole discretion, any portion of its Commitment pursuant to a supplement
hereto, substantially in the form of Annex D with any changes as have been
approved by the parties thereto (a “Transfer Supplement”), executed by each such
Purchasing Related Committed Purchaser, such selling Related Committed Purchaser
and such related Purchaser Agent. Any such assignment by a Related Committed
Purchaser cannot be for an amount less than $10,000,000. Upon (i) the execution
of the Transfer Supplement, (ii) delivery of an executed copy thereof to the
Seller, such related Purchaser Agent and the Administrator and (iii) payment by
the Purchasing Related Committed Purchaser to the selling Related Committed
Purchaser of the agreed purchase price, such selling Related Committed Purchaser
shall be released from its obligations hereunder to the extent of such
assignment and such Purchasing Related Committed Purchaser shall for all
purposes be a Related Committed Purchaser party hereto and shall have all the
rights and obligations of a Related Committed Purchaser hereunder to the same
extent as if it were an original party hereto. The amount of the Commitment of
the selling Related Committed Purchaser allocable to such Purchasing Related
Committed Purchaser shall be equal to the amount of the Commitment of the
selling Related Committed Purchaser transferred regardless of the purchase price
paid therefor. The Transfer Supplement shall be an amendment hereof only to the
extent necessary to reflect the addition of such Purchasing Related Committed
Purchaser as a “Related Committed Purchaser” and any resulting adjustment of the
selling Related Committed Purchaser’s Commitment.

(d) Replaceable Related Committed Purchaser. If any Related Committed Purchaser
(a “Replaceable Related Committed Purchaser”) shall (i) petition the Seller for
any amounts under Section 1.7 or 1.8 or (ii) cease to have a short-term debt
rating of “A-1” by Standard & Poor’s and “P-1” by Moody’s (if such a rating is
required by the related Purchaser’s securitization program), the related
Purchaser Agent or the Administrator may designate a replacement financial
institution (a “Replacement Related Committed Purchaser”), to which such
Replaceable Related Committed Purchaser shall, subject to its receipt of an
amount equal to the aggregate outstanding principal balance of its Investment
and accrued and unpaid Discount thereon (and, if applicable, its receipt (unless
a later date for the remittance thereof shall be agreed upon by the Seller and
such Replaceable Related Committed Purchaser) of all amounts claimed under
Section 1.7 and/or 1.8), promptly assign all of its rights, obligations and
Commitment hereunder, together with all of its right, title and interest in, to
and under the Purchased Interest allocable to it, to the Replacement Related
Committed Purchaser

 

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in accordance with Section 6.3(c), above. Once such assignment becomes
effective, the Replacement Related Committed Purchaser shall be deemed to be a
“Related Committed Purchaser” for all purposes hereof and such Replaceable
Related Committed Purchaser shall cease to be a “Related Committed Purchaser”
for all purposes hereof and shall have no further rights or obligations
hereunder.

(e) Assignment by Conduit Purchasers. Each party hereto agrees and consents
(i) to any Conduit Purchaser’s assignment, participation, grant of security
interests in or other transfers of any portion of, or any of its beneficial
interest in, the Purchased Interest (or portion thereof), including without
limitation to any Liquidity Provider or to any collateral agent in connection
with its commercial paper program and (ii) to the complete assignment by any
Conduit Purchaser of all of its rights and obligations hereunder to any other
Person, and upon such assignment such Conduit Purchaser shall be released from
all obligations and duties, if any, hereunder; provided, however, that such
Conduit Purchaser may not, without the prior consent of its Related Committed
Purchasers, make any such transfer of its rights hereunder unless the assignee
(i) is principally engaged in the purchase of assets similar to the assets being
purchased hereunder, (ii) has as its Purchaser Agent the Purchaser Agent of the
assigning Conduit Purchaser and (iii) issues commercial paper or other Notes
with credit ratings substantially comparable to the ratings of the assigning
Conduit Purchaser. Any assigning Conduit Purchaser shall deliver to any assignee
a supplement hereto, substantially in the form of Annex D with any changes as
have been approved by the parties thereto (also, a “Transfer Supplement”), duly
executed by such Conduit Purchaser, assigning any portion of its interest in the
Purchased Interest to its assignee. Such Conduit Purchaser shall promptly
(i) notify each of the other parties hereto of such assignment and (ii) take all
further action that the assignee reasonably requests in order to evidence the
assignee’s right, title and interest in such interest in the Purchased Interest
and to enable the assignee to exercise or enforce any rights of such Conduit
Purchaser hereunder. Upon the assignment of any portion of its interest in the
Purchased Interest, the assignee shall have all of the rights hereunder with
respect to such interest (except that the Discount therefor shall thereafter
accrue at the rate, determined with respect to the assigning Conduit Purchaser
unless the Seller, the related Purchaser Agent and the assignee shall have
agreed upon a different Discount).

(f) Opinions of Counsel. If required by the Administrator or the applicable
Purchaser Agent or to maintain the ratings of any Conduit Purchaser, each
Transfer Supplement must be accompanied by an opinion of counsel of the assignee
as to such matters as the Administrator or such Purchaser Agent may reasonably
request.

Section 6.4 Costs, Expenses and Taxes. In addition to the rights of
indemnification granted under Section 3.1, the Seller agrees to pay on written
demand (which demand shall be accompanied by documentation thereof in reasonable
detail) all reasonable costs and expenses in connection with the preparation,
execution, delivery and administration (including periodic internal audits by
the Administrator of Pool Receivables) of this Agreement, the other Transaction
Documents and the other documents and agreements to be delivered hereunder (and
all reasonable costs and expenses in connection with any amendment, waiver or
modification of any thereof), including: (i) Attorney Costs for the
Administrator, each Purchaser Group and their

 

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respective Affiliates and agents with respect thereto, as the case may be, and
with respect to advising the Administrator, each Purchaser Group or their
respective Affiliates and agents as to their rights and remedies under this
Agreement and the other Transaction Documents, and (ii) all reasonable costs and
expenses (including Attorney Costs), if any, of the Administrator, each
Purchaser Group or their respective Affiliates and agents, as the case may be,
in connection with the enforcement of this Agreement and the other Transaction
Documents.

(a) In addition, the Seller shall pay on written demand any and all stamp and
other taxes and fees payable in connection with the execution, delivery, filing
and recording of this Agreement or the other documents or agreements to be
delivered hereunder, and agrees to save each Indemnified Party harmless from and
against any liabilities with respect to or resulting from any delay in paying or
omission to pay such taxes and fees.

Section 6.5 No Proceedings; Limitation on Payments.

(a) Each of the Seller, Greetings, the Servicer, the Administrator, the
Purchaser Agents, the Purchasers, each assignee of the Purchased Interest or any
interest therein, and each Person that enters into a commitment to purchase the
Purchased Interest or interests therein, hereby covenants and agrees that it
will not institute against, or join any other Person in instituting against, any
Conduit Purchaser any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceeding, or other proceeding under any federal or state
bankruptcy or similar law, for one year and one day after the latest maturing
Note issued by such Conduit Purchaser is paid in full. The provision of this
Section 6.5 shall survive any termination of this Agreement.

(b) Notwithstanding any provisions contained in this Agreement to the contrary,
no Conduit Purchaser shall be obligated to pay any amount, if any, payable by it
pursuant to this Agreement or any other Transaction Document unless (i) it has
received funds which may be used to make such payment and which funds are not
required to repay the Notes when due and (ii) after giving effect to such
payment, either (x) it could issue Notes to refinance all outstanding Notes
(assuming such outstanding Notes matured at such time) in accordance with the
program documents governing its securitization program or (y) all Notes are paid
in full. Any amount which a Conduit Purchaser does not pay pursuant to the
operation of the preceding sentence shall not constitute a claim (as defined in
§101 of the Bankruptcy Code) against or company obligation of the applicable
Conduit Purchaser for any such insufficiency unless and until the applicable
Conduit Purchaser satisfies the provisions of clauses (i) and (ii) above. The
provisions of this paragraph shall survive any termination of this Agreement.

Section 6.6 Confidentiality.

(a) Unless otherwise required by applicable law, each of the Seller and the
Servicer agrees to maintain the confidentiality of this Agreement and the other
Transaction Documents (and all drafts thereof) in communications with third
parties and otherwise; provided, that this Agreement and the other Transaction
Documents may be

 

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disclosed: (i) to third parties to the extent such disclosure is made pursuant
to a written agreement of confidentiality in form and substance reasonably
satisfactory to the Administrator and each Purchaser Agent, (ii) to the Seller’s
legal counsel, accountants and other advisors (it being understood that the
Persons to whom such disclosure is made will be informed of the confidential
nature of such documents and be instructed to keep such documents confidential),
(iii) in connection with any legal proceeding arising out of or in connection
with this Agreement or any other Transaction Document or the preservation or
maintenance of that party’s rights hereunder or thereunder, (iv) if required to
do so by a court of competent jurisdiction whether in pursuance of any procedure
for discovering documents or otherwise, (v) pursuant to any law in accordance
with which that party is required or accustomed to act (including applicable SEC
requirements), (vi) to any Governmental Authority and (vii) to any Person in
connection with any credit agreement or other financing transaction. The
restrictions in the preceding sentence shall not apply to disclosures to any
party to this Agreement by any other party hereto, information already known to
a recipient otherwise than in breach of this Section, information also received
from another source on terms not requiring it to be kept confidential, or
information that is or becomes publicly available otherwise than in breach of
this Section.

(b) Each of the Administrator, each Purchaser Agent, the LC Bank and each
Purchaser agrees to maintain the confidentiality of the Confidential
Information, except that Confidential Information may be disclosed (i) to its
Affiliates and its Affiliates’ directors, officers, employees and agents,
including accountants, auditors, legal counsel and other advisors (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Confidential Information and be instructed to
keep such Confidential Information confidential), (ii) to the extent requested
by any regulatory authority or required by applicable laws or regulations
(including applicable SEC requirements) or by any subpoena or similar legal
process, provided that unless specifically prohibited by applicable law,
regulation or court order, each of the Administrator, each Purchaser Agent, the
LC Bank and each Purchaser, as applicable, shall make reasonable efforts to
notify Greetings of any such request or requirement prior to disclosure of such
information (other than any request in connection with any examination of the
financial condition or other routine examination of the Administrator, the LC
Bank, such Purchaser Agent or such Purchaser by such Governmental Authority),
(iii) to any other party to this Agreement, (iv) subject to an agreement
containing provisions substantially the same as those of this Section, to any
assignee of or participant in, or any prospective assignee of or participant in,
any of its rights or obligations under this Agreement, (v) with the consent of
Greetings, (vi) to (A) third parties to the extent such disclosure is made
pursuant to a written agreement of confidentiality in form and substance
reasonably satisfactory to Greetings, (B) if applicable, the rating agencies
rating the Notes of the applicable Conduit Purchaser (it being understood that
the Person making such disclosure shall give Greetings prompt notice thereof and
the Persons to whom such disclosure is made will be informed of the confidential
nature of such Confidential Information and be instructed to keep such
Confidential Information confidential), (C) any Program Support Provider or
potential Program Support Provider (it being understood that the Person making
such disclosure shall give Greetings prompt notice thereof and the Persons to
whom such disclosure is

 

37

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made will be informed of the confidential nature of such Confidential
Information and be instructed to keep such Confidential Information
confidential), (D) any placement agency placing the Notes (it being understood
that the Person making such disclosure shall give Greetings prompt notice
thereof and the Persons to whom such disclosure is made will be informed of the
confidential nature of such Confidential Information and be instructed to keep
such Confidential Information confidential) and (E) any regulatory authorities
or Governmental Authority having jurisdiction over the Administrator, any
Purchaser, any Program Support Provider or any Liquidity Provider, (vii) to the
extent such Confidential Information (A) is or becomes publicly available other
than as a result of a breach of this Section, or (B) becomes available to the
Administrator, any Purchaser Agent, any Purchaser or the LC Bank on a
non-confidential basis from a source other than Greetings, the Seller or any
Originator and (viii) not otherwise in violation of this Section.

(c) As used in this Section, “Confidential Information” shall mean all
information received from Greetings, any of its Subsidiaries or The Hatchery LLC
relating to such Person or its business, other than any such information that is
available to the Administrator, the LC Bank, any Purchaser Agent or any
Purchaser on a non-confidential basis prior to disclosure by such Person;
provided, however, that, in the case of information received from such Person
after the Closing Date, such information is clearly identified at the time of
delivery as confidential.

(d) Any Person required to maintain the confidentiality of Confidential
Information as provided in this Section shall be considered to have complied
with its obligation to do so if such Person has exercised the same degree of
care to maintain the confidentiality of such Confidential Information as such
Person would accord to its own confidential information. The Seller, the
Servicer, AGSC and each Originator hereby agree that the failure of the
Administrator, the LC Bank, any Purchaser Agent or any Purchaser to comply with
the provisions of this Section shall not relieve the Seller, Greetings, AGSC or
any Originator of any of its obligations under this Agreement or any of the
other Transaction Documents.

Section 6.7 GOVERNING LAW AND JURISDICTION.

(a) THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS
5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK)
EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF A SECURITY INTEREST OR
REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE
LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.

(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT
IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN
DISTRICT OF NEW YORK; AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH

 

38

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OF THE PARTIES HERETO CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO
THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE PARTIES HERETO
IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY LAW, ANY OBJECTION,
INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM
NON CONVENIENS, THAT IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION
OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT
RELATED HERETO. EACH OF THE PARTIES HERETO WAIVES PERSONAL SERVICE OF ANY
SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH SERVICE MAY BE MADE BY ANY OTHER
MEANS PERMITTED BY NEW YORK LAW.

Section 6.8 Execution in Counterparts. This Agreement may be executed in any
number of counterparts, each of which, when so executed, shall be deemed to be
an original, and all of which, when taken together, shall constitute one and the
same agreement.

Section 6.9 Survival of Termination. The provisions of Sections 1.7, 1.8, 3.1,
3.2, 6.4, 6.5, 6.7, 6.10 and 6.15 shall survive any termination of this
Agreement.

Section 6.10 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO WAIVES THEIR
RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY
OF THE PARTIES AGAINST ANY OTHER PARTY OR PARTIES, WHETHER WITH RESPECT TO
CONTRACT CLAIMS, TORT CLAIMS OR OTHERWISE. EACH OF THE PARTIES HERETO AGREES
THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A
JURY. WITHOUT LIMITING THE FOREGOING, EACH OF THE PARTIES HERETO FURTHER AGREES
THAT ITS RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS
SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING THAT SEEKS, IN WHOLE
OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR ANY
PROVISION HEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.

Section 6.11 Sharing of Recoveries. Each Purchaser (other than the LC Bank)
agrees that if it receives any recovery, through set-off, judicial action or
otherwise, on any amount payable or recoverable hereunder in a greater
proportion than should have been received hereunder or otherwise inconsistent
with the provisions hereof, then the recipient of such recovery shall purchase
for cash an interest in amounts owing to the other Purchasers (as return of
Investment or otherwise), without representation or warranty except for the
representation and warranty that such interest is being sold by each such other
Purchaser free and clear of any Adverse Claim created or granted by such other
Purchaser, in the amount necessary to create proportional participation by the
Purchaser in such recovery. If all or any portion of such

 

39

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amount is thereafter recovered from the recipient, such purchase shall be
rescinded and the purchase price restored to the extent of such recovery, but
without interest.

Section 6.12 Right of Setoff. During a Termination Event, each Purchaser is
hereby authorized (in addition to any other rights it may have) to setoff,
appropriate and apply (without presentment, demand, protest or other notice
which are hereby expressly waived) any deposits and any other indebtedness held
or owing by such Purchaser (including by any branches or agencies of such
Purchaser) to, or for the account of, the Seller against amounts owing by the
Seller hereunder (even if contingent or unmatured).

Section 6.13 Entire Agreement. This Agreement and the other Transaction
Documents embody the entire agreement and understanding between the parties
hereto, and supersede all prior or contemporaneous agreements and understandings
of such Persons, verbal or written, relating to the subject matter hereof and
thereof.

Section 6.14 Headings. The captions and headings of this Agreement and any
Exhibit, Schedule or Annex hereto are for convenience of reference only and
shall not affect the interpretation hereof or thereof.

Section 6.15 Purchaser Groups’ Liabilities. The obligations of each Purchaser
Agent and each Purchaser under the Transaction Documents are solely the
corporate obligations of such Person. Except with respect to any claim arising
out of the willful misconduct or gross negligence of the Administrator, any
Purchaser Agent or any Purchaser, no claim may be made by the Seller or the
Servicer or any other Person against the Administrator, any Purchaser Agent or
any Purchaser or their respective Affiliates, directors, officers, employees,
attorneys or agents for any special, indirect, consequential or punitive damages
in respect of any claim for breach of contract or any other theory of liability
arising out of or related to the transactions contemplated by the Agreement or
any other Transaction Document, or any act, omission or event occurring in
connection therewith; and each of Seller and Servicer hereby waives, releases,
and agrees not to sue upon any claim for any such damages, whether or not
accrued and whether or not known or suspected to exist in its favor.

Section 6.16 Call Option. The Seller shall have the right to repurchase the
Purchased Interest from the Purchasers on any Settlement Date on the terms
hereinafter set forth in this Section 6.16. The Seller shall give the
Administrator at least ten Business Days’ prior written notice of such
repurchase and upon payment of the repurchase price for the Purchased Interest,
as hereinafter provided, the Purchasers shall be deemed to have reconveyed the
Purchased Interest to the Seller without recourse, representation or warranty
except for a representation from each Purchaser that the Purchased Interest
assigned is (or concurrently with the Administrator’s receipt of such repurchase
price shall become) free of any Adverse Claim created by such Purchaser. The
Seller shall pay such repurchase price for the Purchased Interest in immediately
available funds to the Administrator (for the benefit of the Purchasers or the
Administrator, as the case may be) in an amount equal to the sum of (i) the
aggregate of the Aggregate Discount accrued for each Portion of Investment for
each Purchaser accrued to and including the repurchase date, (ii) the Aggregate
Investment for each Purchaser, (iii) the amounts payable pursuant to Sections
1.5, 1.7 and 1.8, or Article III (of which the Seller has notice) related to the
Purchased Interest accrued to and including the repurchase date, (iv) all other

 

40

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obligations that are then due and payable and (v) if Greetings is not the
Servicer, the Servicing Fee allocated to the Purchased Interest that has accrued
to and including the repurchase date.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their respective officers thereunto duly authorized, as of the date first above
written.

 

AGC FUNDING CORPORATION, as Seller By:  

/s/ Stephen J. Smith

Name:   Stephen J. Smith Title:   Treasurer

 

Address:

AGC Funding Corporation

One American Road

Cleveland, OH 44144

Attention: Treasurer

Telephone: (216) 252-7300

Facsimile: (216) 252-6791

 

AMERICAN GREETINGS CORPORATION, as Servicer By:  

/s/ Stephen J. Smith

Name:   Stephen J. Smith Title:   Vice President, Treasurer and
Investor Relations

 

Address:

American Greetings Corporation

One American Road

Cleveland, OH 44144

Attention: Treasurer

Telephone: (216) 252-7300

Facsimile: (216) 252-6791

 

   S-1    American Greetings Amended and Restated RPA

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

PNC BANK, NATIONAL ASSOCIATION, as Administrator By:  

/s/ John T. Smathers

Name:  

John T. Smathers

Title:  

Vice President

 

Address:

PNC Bank, National Association

One PNC Plaza

249 Fifth Avenue

Pittsburgh, Pennsylvania 15222-2707

Attention: John Smathers

Telephone No.: (412) 762-6440

Facsimile No.: (412) 762-9184

 

   S-2    American Greetings Amended and Restated RPA

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PURCHASERS: MARKET STREET FUNDING LLC, as a Conduit Purchaser and as a Related
Committed Purchaser By:  

/s/ Doris J. Hearn

Name:  

Doris J. Hearn

Title:  

Vice President

 

Address:

Market Street Funding LLC

c/o AMACAR Group LLC

6525 Morrison Blvd., Suite 318

Charlotte, North Carolina 28211

Attention: Douglas K. Johnson

Telephone No.: (704) 365-0569

Facsimile No.: (704) 365-1362

 

With a copy to:

PNC Bank, National Association

One PNC Plaza

249 Fifth Avenue

Pittsburgh, Pennsylvania 15222-2707

Attention: John Smathers

Telephone No.: (412) 762-6440

Facsimile No.: (412) 762-9184

 

   S-3    American Greetings Amended and Restated RPA

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

PNC BANK, NATIONAL ASSOCIATION, as Purchaser Agent for Market Street Funding LLC
By:  

/s/ John T. Smathers

Name:  

John T. Smathers

Title:   Vice President

 

Address:

PNC Bank, National Association

One PNC Plaza

249 Fifth Avenue

Pittsburgh, Pennsylvania 15222-2707

Attention: John Smathers

Telephone No.: (412) 762-6440

Facsimile No.: (412) 762-9184

Commitment: $100,000,000

 

   S-4    American Greetings Amended and Restated RPA

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

PNC BANK, NATIONAL ASSOCIATION, as Administrator By:  

/s/ John T. Smathers

Name:   John T. Smathers Title:   Vice President

 

Address:

PNC Bank, National Association

One PNC Plaza, 26th Floor

249 Fifth Avenue

Pittsburgh, PA 15222-2707

Attention: John T. Smathers

Telephone No.: 412-762-6440

Facsimile No.: 412-762-9184

 

PNC BANK, NATIONAL ASSOCIATION, as the LC Bank By:  

/s/ Joseph G. Moran

Name:   Joseph G. Moran Title:   Managing Director

 

Address:

PNC Bank, National Association

One PNC Plaza, 26th Floor

249 Fifth Avenue

Pittsburgh, PA 15222-2707

Attention: John Smathers

Telephone No.: 412-762-6440

Facsimile No.: 412-762-9184

Commitment: $100,000,000

Pro Rata Share: 100%

 

   S-5    American Greetings Amended and Restated RPA

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

THE BANK OF NOVA SCOTIA, as a Related Committed Purchaser and as Purchaser Agent
for itself and Liberty Street Funding Corp. By:  

/s/ Norman Lasi

Name:   Norman Lasi Title:   Managing Director

 

Commitment: $50,000,000

LIBERTY STREET FUNDING CORP.,

as a Conduit Purchaser

By:  

/s/ Bernard J. Angelo

Name:   Bernard J. Angelo Title:   Vice President

 

   S-6    American Greetings Amended and Restated RPA

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

EXHIBIT I

DEFINITIONS

As used in the Agreement (including its Exhibits, Schedules and Annexes), the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined). Unless
otherwise indicated, all Section, Annex, Exhibit and Schedule references in this
Exhibit are to Sections of and Annexes, Exhibits and Schedules to the Agreement.

“Administrator” has the meaning set forth in the preamble to the Agreement.

“Administrator’s Account” means the account (account number 1002422076 ABA
043000096) of the Administrator maintained at the office of PNC at One PNC
Plaza, 249 Fifth Avenue, Pittsburgh, Pennsylvania 15222-2707, or such other
account as may be so designated in writing by the Administrator to the Servicer.

“Adverse Claim” means a lien, security interest or other charge or encumbrance,
or any other type of preferential arrangement; it being understood that any
thereof in favor of the Administrator (for the benefit of the Purchasers) shall
not constitute an Adverse Claim.

“Affected Person” has the meaning set forth in Section 1.7 of the Agreement.

“Affiliate” means, as to any Person: (a) any Person that, directly or
indirectly, is in control of, is controlled by or is under common control with
such Person, or (b) who is a director or officer: (i) of such Person or (ii) of
any Person described in clause (a), except that, in the case of each Conduit
Purchaser, Affiliate shall mean the holder of its capital stock. For purposes of
this definition, control of a Person shall mean the power, direct or indirect:
(x) to vote 25% or more of the securities having ordinary voting power for the
election of directors of such Person, or (y) to direct or cause the direction of
the management and policies of such Person, in either case whether by ownership
of securities, contract, proxy or otherwise.

“Aggregate Discount” at any time, means the sum of the aggregate for each
Purchaser of the accrued and unpaid Discount with respect to each such
Purchaser’s Investment at such time.

“Aggregate Investment” means the amount paid to the Seller in connection with
Funded Purchases in respect of the Purchased Interest or portion thereof by all
Purchasers pursuant to the Agreement, as reduced from time to time by
Collections distributed and applied on account of such Aggregate Investment
pursuant to Section 1.4(d) of the Agreement; provided, that if such Aggregate
Investment shall have been reduced by any distribution, and thereafter all or a
portion of such distribution is rescinded or must otherwise be returned for any
reason, such Aggregate Investment shall be increased by the amount of such
rescinded or returned distribution as though it had not been made.

“Agreement” has the meaning set forth in the preamble to the Agreement.

“AGSC” means American Greetings Services Corporation.

 

Exh. I - 1

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“Assumption Agreement” means an agreement substantially in the form set forth in
Annex C to the Agreement.

“Attorney Costs” means and includes all reasonable fees and disbursements of any
law firm or other external counsel.

“Bankruptcy Code” means the United States Bankruptcy Reform Act of 1978 (11
U.S.C. § 101, et seq.), as amended from time to time.

“Base Rate” means, for any day, (i) in the case of the Purchaser Group including
Market Street, the Market Street Base Rate and (ii) in the case of each other
Purchaser Group, shall mean the rate set forth as the Base Rate for such
Purchaser Group in the related Purchaser Group Fee Letter.

“BBA” means the British Bankers’ Association.

“Benefit Plan” means any employee benefit pension plan as defined in
Section 3(2) of ERISA in respect of which the Seller, any Originator, Greetings,
AGSC or any ERISA Affiliate is, or at any time during the immediately preceding
six years was, an “employer” as defined in Section 3(5) of ERISA.

“Business Day” means any day (other than a Saturday or Sunday) on which:
(a) banks are not authorized or required to close in New York City, New York or
Pittsburgh, Pennsylvania and (b) if this definition of “Business Day” is
utilized in connection with the Euro-Rate, dealings are carried out in the
London interbank market.

“Change in Control” means (i) with respect to Seller, that at any time Greetings
shall fail to own, directly or indirectly through one or more wholly-owned
Subsidiaries free and clear of any Adverse Claim, 100% of the shares of
outstanding voting stock of the Seller on a fully diluted basis, (ii) with
respect to AGSC, that at any time Greetings shall fail to own, directly or
indirectly through one or more wholly-owned Subsidiaries, free and clear of any
Adverse Claim (other than the pledge of such Person’s stock under the Credit
Agreement and the related documents), 100% of the shares of outstanding voting
stock of AGSC on a fully-diluted basis, (iii) with respect to any Originator
other than Greetings, that at any time Greetings shall fail to own, directly or
indirectly through one or more wholly-owned Subsidiaries, free and clear of any
Adverse Claim (other than the pledge of such Person’s stock under the Credit
Agreement and the related documents), 100% of the share of outstanding voting
stock of such Originator on a fully diluted basis, and (iv) with respect to
Greetings, the acquisition by any Person or its Affiliates of more than 33% of
the stock (or equivalent ownership or controlling interest) having by the terms
thereof ordinary voting power to elect a majority of the directors of Greetings
(irrespective of whether or not at the time the stock of any class or classes of
Greetings will have or might have voting power by reason of the happening or any
contingency) provided, that the foregoing restriction shall not apply to the
Permitted Holders so long as the acquisition by the Permitted Holders of such
voting power shall not result, directly or indirectly, in a “going private
transaction” within the meaning of the Exchange Act of 1934.

“Closing Date” means October 24, 2006.

 

Exh. I - 2

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“Collections” means, with respect to any Pool Receivable: (a) all funds that are
received by any Originator, Greetings, the Seller or the Servicer in payment of
any amounts owed in respect of such Receivable (including purchase price,
finance charges, interest and all other charges), or that are applied to amounts
owed in respect of such Receivable (including insurance payments and net
proceeds of the sale or other disposition of repossessed goods or other
collateral or property of the related Obligor or any other Person directly or
indirectly liable for the payment of such Pool Receivable and available to be
applied thereon), (b) all amounts deemed to have been received pursuant to
Section 1.4(e) of the Agreement and (c) all other proceeds of such Pool
Receivable.

“Commitment” means, as to each Related Committed Purchaser, that dollar amount
set forth as the “Commitment” under the name of its Purchaser Agent on the
signature pages to the Agreement or in the Assumption Agreement pursuant to
which it became a Purchaser, as such amount may be modified in connection with
any subsequent assignment pursuant to the Agreement.

“Commitment Percentage” means, for each Related Committed Purchaser in a
Purchaser Group, such Related Committed Purchaser’s Commitment divided by the
total of all Commitments of all Related Committed Purchasers in such Purchaser
Group.

“Company Note” means “Sale and Contribution Note” as such term is defined in
Section 3.1 of the Sale and Contribution Agreement.

“Concentration Percentage” means, at any time, the percentages set forth below:

 

Obligor

   Concentration
Percentage  

Target Corporation, so long as it is a Group A Obligor

   40 %

Any Group A Obligor other than Target

   23 %

Any Group B Obligor

   23 %

Sum of the two (2) largest Group C Obligors

   23 %

Any other Group C Obligor

   5 %

Sum of the four (4) largest Group D Obligors

   23 %

Any other Group D Obligor

   5 %

“Conduit Purchasers” means each commercial paper conduit that is a party to the
Agreement, as a purchaser, or that becomes a party to the Agreement, as a
purchaser pursuant to an Assumption Agreement.

“Contract” means, with respect to any Receivable, any and all contracts,
instruments, agreements, leases, invoices, notes or other writings pursuant to
which such Receivable arises or that evidence such Receivable or under which an
Obligor becomes or is obligated to make payment in respect of such Receivable.

 

Exh. I - 3

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“CP Rate” for any Yield Period for any Portion of Investment (i) in the case of
the Purchaser Group including Market Street, means the Market Street CP Rate,
and (ii) in the case of each other Purchaser Group, shall mean the rate set
forth as the CP Rate for such Purchaser Group in the related Purchaser Group Fee
Letter.

“Credit Agreement” means the Credit Agreement dated as of April 4, 2006 among
American Greetings Corporation, as Borrower, the foreign subsidiaries from time
to time party thereto, as Foreign Subsidiary Borrowers, the financial
institutions named therein, as Lenders, National City Bank, as Global Agent and
Collateral Agent, UBS Securities LLC, as Syndication Agent, and KeyBank National
Association, JPMorgan Chase Bank, N.A. and LaSalle Bank National Association, as
Co-Documentation Agents, as it may be amended, amended and restated,
supplemented or otherwise modified from time to time; provided that, if such
Credit Agreement shall cease to be effective or shall be terminated, all
references herein and in the other Transaction Documents shall be references to
the Credit Agreement, as in effect for purposes of this Agreement and the other
Transaction Documents, immediately prior to such failure to be effective or
termination.

“Credit and Collection Policy” means, as the context may require, those
receivables credit and collection policies and practices of the Originators in
effect on the date of the Agreement and described in Schedule I to the
Agreement, as modified in compliance with the Agreement.

“Days’ Sales Outstanding” means, at any time, an amount computed as of the last
day of each calendar month equal to: (a) the average of the Outstanding Balance
of all Pool Receivables as of the last day of each of the three most recent
calendar months ended on the last day of such calendar month divided by (b)(i)
the aggregate credit sales made by the Originator during the three calendar
months ended on or before the last day of such calendar month divided by
(ii) 90.

“Debt” means: (a) indebtedness for borrowed money, (b) obligations evidenced by
bonds, debentures, notes or other similar instruments, (c) obligations to pay
the deferred purchase price of property or services, (d) obligations as lessee
under leases that shall have been or should be, in accordance with generally
accepted accounting principles, recorded as capital leases, and (e) obligations
under direct or indirect guaranties in respect of, and obligations (contingent
or otherwise) to purchase or otherwise acquire, or otherwise to assure a
creditor against loss in respect of, indebtedness or obligations of others of
the kinds referred to in clauses (a) through (d); provided, however, that no
trade payables, deferred revenue, taxes or other similar accrued expenses, in
each case, arising out of the ordinary course of business, obligations in
respect of insurance policies or performance or surety bonds that themselves are
not guarantees of Debt (nor drafts, acceptances or similar instruments
evidencing the same nor obligations in respect of letters of credit supporting
the payment of same) or obligations to pay royalty fees or other payments under
license agreements, shall constitute Debt.

“Defaulted Receivable” means a Receivable:

(a) as to which any payment, or part thereof, remains unpaid for more than 150
days, in each case from the due date for such payment, or

 

Exh. I - 4

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

(b) without duplication (i) as to which an Insolvency Proceeding shall have
occurred with respect to the Obligor thereof or any other Person obligated
thereon or owning any Related Security with respect thereto, (ii) that has been
charged-off as uncollectible or (iii) that should have been charged-off as
uncollectible pursuant to the Credit and Collection Policy.

“Delinquency Ratio” means the ratio (expressed as a percentage and rounded to
the nearest 1/100 of 1%, with 5/1000th of 1% rounded upward) computed as of the
last day of each calendar month by dividing: (a) the aggregate Outstanding
Balance of all Pool Receivables that were Delinquent Receivables on such day by
(b) the aggregate Outstanding Balance of all Pool Receivables on such day.

“Delinquent Receivable” means a Receivable (a) as to which any payment, or part
thereof, remains unpaid for more than 90 days from the due date for such payment
or (b) without duplication, which has been (or consistent with the Credit and
Collection Policy, would be) classified as a Delinquent Receivable by the
applicable Originator.

“Dilution Ratio” means the ratio (expressed as a percentage and rounded to the
nearest 1/100th of 1%, with 5/1000th of 1% rounded upward), computed as of the
last day of each calendar month by dividing: (a) the aggregate amount of
payments made or owed by the Seller pursuant to Section 1.4(e)(i) of the
Agreement (other than Specifically Reserved Dilution Amounts) during such
calendar month, by (b) the aggregate credit sales made by the Originators during
the calendar months that are two and three months prior to such calendar month.

“Dilution Reserve” means, on any day, an amount equal to: (a) the sum of the
Aggregate Investment and the LC Amount at the close of business of the Servicer
on such date multiplied by (b) (i) the Dilution Reserve Percentage on such date,
divided by (ii) 100% minus the Dilution Reserve Percentage on such date.

“Dilution Reserve Percentage” means, on any date, the greater of (a) 8%, or
(b) the percentage determined by the following formula:

(2.0 x ED) + ((DS-ED) x DS/ED)) x DHR + (0.02 x CS)

 

  ED    =    the “Expected Dilution,” which shall be equal to the 12-month
rolling average Dilution Ratio, expressed as a percentage;   DS    =    the
“Dilution Spike,” which shall be equal to the highest one month Dilution Ratio
over the immediately preceding 12 months, expressed as a percentage;   CS    =
   the aggregate credit sales made by the Originators during the most recent
calendar month divided by the Net Receivables Pool Balance as of the last day of
such calendar month, expressed as a percentage; and   DHR    =    the “Dilution
Horizon Ratio,” which shall be equal to the aggregate credit sales made by the
Originators during the two preceding calendar months

 

Exh. I - 5

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

divided by the Net Receivables Pool Balance as of the last day of the most
recent calendar month, expressed as a percentage.

“Discount” means with respect to any Purchaser:

(a) for any Portion of Investment for any Yield Period with respect to any
Purchaser to the extent such Portion of Investment will be funded by such
Purchaser during such Yield Period through the issuance of Notes:

CPR x I x ED/360

(b) for any Portion of Investment for any Yield Period with respect to any
Purchaser to the extent such Portion of Investment will not be funded by such
Purchaser during such Yield Period through the issuance of Notes or, to the
extent the LC Bank has made a Funded Purchase, in connection with any drawing
under a Letter of Credit that has not been reimbursed pursuant to Section 1.14
of the Agreement, which accrues Discount pursuant to Section 1.2(e) of the
Agreement:

YR x I x ED/Year + TF

where:

 

  YR    =    the Yield Rate, as applicable, for such Portion of Investment for
such Yield Period with respect to such Purchaser,   I    =    the Investment
with respect to such Portion of Investment during such Yield Period with respect
to such Purchaser,   CPR    =    the CP Rate for the Portion of Investment for
such Yield Period with respect to such Purchaser,   ED    =    the actual number
of days during such Yield Period,   Year    =    if such Portion of Investment
is funded based upon: (i) the Euro-Rate, 360 days, and (ii) the Base Rate, 365
or 366 days, as applicable, and   TF    =    the Termination Fee, if any, for
the Portion of Investment for such Yield Period with respect to such Purchaser;

provided, that no provision of the Agreement shall require the payment or permit
the collection of Discount in excess of the maximum permitted by applicable law;
and provided further, that Discount for any Portion of Investment shall not be
considered paid by any distribution to the extent that at any time all or a
portion of such distribution is rescinded or must otherwise be returned for any
reason.

“Disputed Default Ratio” means the ratio (expressed as a percentage and rounded
to the nearest 1/100th of 1% with 5/1000th of 1% rounded upwards) computed as of
the last day of

 

Exh. I - 6

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each calendar month by dividing: (a) the aggregate Outstanding Balance of all
Pool Receivables identified by the Seller or Servicer on the most recent
Information Package as Receivables relating to amounts categorized as
“deductions” or “recharges” that became Defaulted Receivables during such month,
by (b) the aggregate Outstanding Balance of all Pool Receivables as of the last
day of the sixth calendar month prior to such month.

“Drawing Date” has the meaning set forth in Section 1.14 of the Agreement.

“Eligible Assignee” means any bank or financial institution acceptable to the LC
Bank and the Administrator.

“Eligible Foreign Obligor” means an Obligor which is a resident (i) of any
country (other than the United States of America) that has a foreign currency
rating of at least “A” by Standard & Poor’s and “A2” by Moody’s or (ii) of a
territory of the United States.

“Eligible Receivable” means, at any time, a Pool Receivable:

(a) the Obligor of which is (i) a United States resident or an Eligible Foreign
Obligor, (ii) not subject to any action of the type described in paragraph
(f) of Exhibit V to the Agreement and (iii) not an Affiliate of Greetings,

(b) that is denominated and payable only in U.S. dollars in the United States,

(c) that is either a Seasonal Sale or a Receivable in which the Obligor is
Target Corporation or a Governmental Entity, or does not have a stated maturity
which is more than 68 days after the original invoice date of such Receivable.

(d) that arises under a duly authorized Contract for the sale and delivery of
goods and services in the ordinary course of an Originator’s business,

(e) that arises under a duly authorized Contract that is in full force and
effect and that is a legal, valid and binding obligation of the related Obligor,
enforceable against such Obligor in accordance with its terms,

(f) that conforms in all material respects with all applicable laws, rulings and
regulations in effect,

(g) that is not the subject of any asserted dispute or offset (but only to the
extent of the disputed or offset amount, and only to the extent such amount has
not been deemed a Collection pursuant to Section 1.4(e)) or any hold back
defense, Adverse Claim or other similar claim (provided that, solely for
calculating and reporting this item in connection with an Information Package,
the Seller and/or Servicer may calculate and report such amounts relating to
this item based on a methodology satisfactory to the Administrator),

(h) that satisfies all applicable requirements of the applicable Credit and
Collection Policy,

 

Exh. I - 7

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(i) that has not been modified, waived or restructured since its creation,
except as permitted pursuant to Section 4.2 of the Agreement and Section 2(d) of
Exhibit IV to the Agreement,

(j) in which the Seller owns good and marketable title, free and clear of any
Adverse Claims, and that is freely assignable by the Seller (including without
any consent of the related Obligor),

(k) for which the Administrator (for the benefit of each Purchaser) shall have a
valid and enforceable undivided percentage ownership or security interest, to
the extent of the Purchased Interest, and a valid and enforceable first priority
perfected security interest therein and in the Related Security and Collections
with respect thereto, in each case free and clear of any Adverse Claim,

(l) that constitutes an account as defined in the UCC, and that is not evidenced
by instruments or chattel paper,

(m) that is not a Defaulted Receivable or a Delinquent Receivable,

(n) for which none of the Originator thereof, the Seller and the Servicer has
established any offset arrangements with the related Obligor,

(o) for which Defaulted Receivables of the related Obligor do not exceed 35% of
the Outstanding Balance of all such Obligor’s Receivables; provided that solely
for purposes of making such determination, amounts that would otherwise be
considered Defaulted Receivables which are the subject of disputes between the
Obligor and the Seller or Servicer which continue to be investigated and
negotiated, shall not be considered Defaulted Receivables, and

(p) that represents amounts earned and payable by the Obligor that are not
subject to the performance of additional services by the Originator or Servicer
thereof.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and any successor statute of similar import, together with
the regulations thereunder, in each case as in effect from time to time.
References to sections of ERISA also refer to any successor sections.

“ERISA Affiliate” means: (a) any corporation that is a member of the same
controlled group of corporations (within the meaning of Section 414(b) of the
Internal Revenue Code) as the Seller, any Originator, AGSC or Greetings, (b) a
trade or business (whether or not incorporated) under common control (within the
meaning of Section 414(c) of the Internal Revenue Code) with the Seller, any
Originator, AGSC or Greetings, or (c) a member of the same affiliated service
group (within the meaning of Section 414(m) of the Internal Revenue Code) as
Greetings, the Seller, any Originator, AGSC, any corporation described in
clause (a) or any trade or business described in clause (b).

“Euro-Rate” means with respect to any Yield Period, the interest rate per annum
determined by the Administrator by dividing (the resulting quotient rounded
upwards, if

 

Exh. I - 8

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necessary, to the nearest 1/100th of 1% per annum) (i) the rate of interest
determined by the applicable Purchaser Agent in accordance with its usual
procedures (which determination shall be conclusive absent manifest error) to be
the average of the London interbank market offered rates for U.S. dollars quoted
by the BBA as set forth on Dow Jones Markets Service (formerly known as
Telerate) (or appropriate successor or, if BBA or its successor ceases to
provide display page 3750 (or such other display page on the Dow Jones Markets
Service system as may replace display page 3750) at or about 11:00 a.m. (London
time) on the Business Day which is two (2) Business Days prior to the first day
of such Yield Period for an amount comparable to the Portion of Investment to be
funded at the Yield Rate and based upon the Euro-Rate during such Yield Period
by (ii) a number equal to 1.00 minus the Euro-Rate Reserve Percentage. The
Euro-Rate may also be expressed by the following formula:

 

Euro-Rate =

 

  

Average of London interbank offered rates quoted by BBA as shown on Dow Jones
Markets Service display page 3750 or appropriate successor

 

     

 

1.00 - Euro-Rate Reserve Percentage

  

where “Euro-Rate Reserve Percentage” means, the maximum effective percentage in
effect on such day as prescribed by the Board of Governors of the Federal
Reserve System (or any successor) for determining the reserve requirements
(including without limitation, supplemental, marginal, and emergency reserve
requirements) with respect to eurocurrency funding (currently referred to as
“Eurocurrency Liabilities”). The Euro-Rate shall be adjusted with respect to any
Portion of Investment funded at the Yield Rate and based upon the Euro-Rate that
is outstanding on the effective date of any change in the Euro-Rate Reserve
Percentage as of such effective date. The applicable Purchaser Agent shall give
prompt notice to the Seller of the Euro-Rate as determined or adjusted in
accordance herewith (which determination shall be conclusive absent manifest
error).

“Everyday Default Ratio” means the ratio (expressed as a percentage and rounded
to the nearest 1/100 of 1%, with 5/1000th of 1% rounded upward) computed as of
the last day of each calendar month by dividing: (a) the aggregate Outstanding
Balance of all Pool Receivables identified by the Seller or the Servicer on the
most recent Information Package as Receivables relating to everyday invoices and
manual invoices that became Defaulted Receivables during such month by (b) the
aggregate credit sales other than Seasonal Sales made by the Originators during
the month that is six months before such month.

“Excess Concentration” means, on any date, the sum of the following amounts:

(i) the amount by which the Outstanding Balance of Eligible Receivables of each
Obligor then in the Receivables Pool exceeds an amount equal to: (a) the
applicable Concentration Percentage for such Obligor multiplied by (b) the
Outstanding Balance of all Eligible Receivables on such date, plus

(ii) the amount by which the Outstanding Balance of all Eligible Receivables of
the largest Group D Obligor exceeds 50% of the sum of the Outstanding Balance of
all Eligible

 

Exh. I - 9

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Receivables of the four largest Group D Obligors (in each case after taking into
account any deduction for amounts relating to clause (i) of this definition),
plus

(iii) the amount by which the Outstanding Balance of all Eligible Receivables
then in the Receivables Pool the Obligor of which is a Governmental Entity
exceeds 5.0% of the Outstanding Balance of all Eligible Receivables then in the
Receivables Pool, plus

(iv) the amount by which the Outstanding Balance of all Eligible Receivables
then in the Receivables Pool the Obligor of which is an Eligible Foreign Obligor
exceeds 2% of the Outstanding Balance of all Eligible Receivables then in the
Receivables Pool.

“Exiting Purchaser” has the meaning set forth in Section 1.4(b)(ii).

“Facility Termination Date” means the earliest to occur of: (a) with respect to
each Purchaser, October 23, 2009, in each case subject to any extension pursuant
to Section 1.20 of the Agreement (it being understood that if any such Purchaser
does not extend its Commitment hereunder then the Purchase Limit shall be
reduced by an amount equal to the Commitment of such Exiting Purchaser and the
Commitment Percentages of the Purchasers within each remaining Purchaser Group
shall be appropriately adjusted), (b) the date determined pursuant to
Section 2.2 of the Agreement, (c) the date the Purchase Limit reduces to zero
pursuant to Section 1.1(b) of the Agreement, (d) with respect to each Purchaser
Group, the date that the commitments of all of the Liquidity Providers terminate
under the related Liquidity Agreements or the date one or more of such Purchaser
Group’s Program Support Agreements terminate (it being understood and agreed
that the date set forth in the related Liquidity Agreement as the scheduled
“purchase termination date” (or other similar term) shall not be amended by the
applicable Purchasers and the related Liquidity Providers to be a date earlier
than October 23, 2009) and (e) with respect to each Purchaser Group, the date
that the commitments of all of the Related Committed Purchasers of such
Purchaser Group terminate.

“Federal Funds Rate” means, for any day, the per annum rate set forth in the
weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Board (including any such
successor, “H.15(519)”) for such day opposite the caption “Federal Funds
(Effective).” If on any relevant day such rate is not yet published in
H.15(519), the rate for such day will be the rate set forth in the daily
statistical release designated as the Composite 3:30 p.m. Quotations for U.S.
Government Securities, or any successor publication, published by the Federal
Reserve Bank of New York (including any such successor, the “Composite 3:30 p.m.
Quotations”) for such day under the caption “Federal Funds Effective Rate.” If
on any relevant day the appropriate rate is not yet published in either
H.15(519) or the Composite 3:30 p.m. Quotations, the rate for such day will be
the arithmetic mean as determined by the applicable Purchaser Agent of the rates
for the last transaction in overnight Federal funds arranged before 9:00 a.m.
(New York time) on that day by each of three leading brokers of Federal funds
transactions in New York City selected by such Purchaser Agent.

“Federal Reserve Board” means the Board of Governors of the Federal Reserve
System, or any entity succeeding to any of its principal functions.

 

Exh. I - 10

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“Fees” means the fees payable by the Seller to each Purchaser Group pursuant to
the applicable Purchaser Group Fee Letter.

“Funded Purchase” shall mean a purchase or deemed purchase of undivided
interests in the Purchased Interest under the Agreement which (i) is paid for in
cash (other than through reinvestment of Collections pursuant to Section 1.4(b)
of the Agreement), (ii) is treated as a Funded Purchase pursuant to
Section 1.2(e) of the Agreement and/or any of the provisions set forth in
Sections 1.11 through 1.19 of the Agreement or (iii) without double counting any
of the amounts described in clause (i) or (ii), above, is funded by the issuance
of Notes by the applicable Conduit Purchaser, pursuant to the Agreement or
otherwise, and the proceeds of which are used to reimburse the LC Bank for each
draw under any Letter of Credit, whether on, prior to or after the date any such
draw is treated as or deemed to be a Funded Purchase under the Agreement.

“GAAP” means the generally accepted accounting principles and practices in the
United States, consistently applied.

“Governmental Acts” has the meaning set forth in Section 1.19 of the Agreement.

“Governmental Authority” means any nation or government, any state or other
political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any body or entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, including any court, and any Person owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.

“Governmental Entity” means a federal agency, branch, or other governmental
entity or authority of the United States or a state agency, branch, or
governmental entity or authority of any state in the United States.

“Greetings” has the meaning set forth in the preamble to the Agreement.

“Group A Obligor” means an Obligor with a short-term senior unsecured
indebtedness rating (or, if such Obligor does not have such a short-term rating,
a long-term senior unsecured indebtedness rating) of at least “A-1” (or “A+”) by
Standard & Poor’s and “P-1” (or “A1”) by Moody’s.

“Group B Obligor” means an Obligor with a short-term senior unsecured
indebtedness rating (or, if such Obligor does not have such a short-term rating,
a long-term senior unsecured indebtedness rating) of at least “A-2” (or “BBB+”)
by Standard & Poor’s and “P-2” (or “Baa1”) by Moody’s, that is not a Group A
Obligor.

“Group C Obligor” means an Obligor with a short-term senior unsecured
indebtedness rating (or, if such Obligor does not have such a short-term rating,
a long-term senior unsecured indebtedness rating) of at least “A-3” (or “BBB-”)
by Standard & Poor’s and “P-3” (or “Baa3”) by Moody’s, that is not a Group A
Obligor or a Group B Obligor.

“Group Commitment” means with respect to any Purchaser Group the aggregate of
the Commitments of each Purchaser within such Purchaser Group.

 

Exh. I - 11

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“Group D Obligor” means an Obligor which is not a Group A Obligor, a Group B
Obligor or a Group C Obligor.

“Indemnified Amounts” has the meaning set forth in Section 3.1 of the Agreement.

“Indemnified Party” has the meaning set forth in Section 3.1 of the Agreement.

“Independent Director” has the meaning set forth in paragraph 3(c) of Exhibit IV
to the Agreement.

“Information Package” means a report, in substantially the form of Annex A to
the Agreement, furnished to the Administrator pursuant to the Agreement.

“Insolvency Proceeding” means: (a) any case, action or proceeding before any
court or other Governmental Authority relating to bankruptcy, reorganization,
insolvency, liquidation, receivership, dissolution, winding-up or relief of
debtors, or (b) any general assignment for the benefit of creditors of a Person
or, composition, marshaling of assets for creditors of a Person, or other,
similar arrangement in respect of its creditors generally or any substantial
portion of its creditors, in each of cases (a) and (b) undertaken under U.S.
Federal, state or foreign law, including the Bankruptcy Code.

“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended from
time to time, and any successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time to time. References
to sections of the Internal Revenue Code also refer to any successor sections.

“Investment” means the aggregate amounts paid to the Seller in connection with
Funded Purchases in respect of the Purchased Interest by each Purchaser pursuant
to Section 1.2 of the Agreement (including Section 1.2(e)), as reduced from time
to time by Collections distributed and applied on account of such Investment
pursuant to Section 1.4(d) of the Agreement; provided, that if such Investment
shall have been reduced by any distribution and thereafter all or a portion of
such distribution is rescinded or must otherwise be returned for any reason,
such Investment shall be increased by the amount of such rescinded or returned
distribution as though it had not been made.

“ISP98 Rules” has the meaning set forth in Section 1.12 of the Agreement.

“LC Amount” shall mean, at any time, the sum, without duplication, of the then
aggregate maximum amount available to be drawn under each outstanding Letter of
Credit and the aggregate amount of all unreimbursed drawings with respect to
each outstanding Letter of Credit..

“LC Bank” has the meaning set forth in the preamble to the Agreement.

“LC Collateral Account” means the account designated as the LC Collateral
Account established and maintained by the Administrator (for the benefit of the
LC Bank), or such other account as may be so designated as such by the
Administrator.

 

Exh. I - 12

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“LC Commitment” means, the “Commitment” of the LC Bank as set forth under its
name on the signature pages to the Agreement or as set forth in any assignment
agreement pursuant to which it became a party hereto.

“Letter of Credit” shall mean any stand-by letter of credit issued by the LC
Bank for the account of the Seller pursuant to the Agreement.

“Letter of Credit Application” has the meaning set forth in Section 1.12 of the
Agreement.

“Liquidity Agent” means each of the banks acting as agent for the various
Liquidity Banks under each Liquidity Agreement.

“Liquidity Agreement” means any agreement entered into in connection with the
Agreement pursuant to which a Liquidity Provider agrees to make purchases or
advances to, or purchase assets from, any Conduit Purchaser in order to provide
liquidity for such Conduit Purchaser’s Purchases.

“Liquidity Provider” means each bank or other financial institution that
provides liquidity support to any Conduit Purchaser pursuant to the terms of a
Liquidity Agreement.

“Lock-Box Account” means an account maintained at a bank or other financial
institution for the purpose of, directly or indirectly, receiving Collections.

“Lock-Box Agreement” means an agreement among the Seller, the applicable
Originator, the Servicer, the Administrator and a Lock-Box Bank.

“Lock-Box Bank” means any of the banks or other financial institutions holding
one or more Lock-Box Accounts.

“Loss Reserve” means, on any date, an amount equal to (a) the sum of the
Aggregate Investment plus the LC Amount at the close of business of the Servicer
on such date multiplied by (b) (i) the Loss Reserve Percentage on such date
divided by (ii) 100% minus the Loss Reserve Percentage on such date.

“Loss Reserve Percentage” means, on any date, the greater of 15% or the sum of
the Sales Based Loss Reserve Percentage and the Receivables Based Loss Reserve
Percentage.

“Majority Purchaser Agents” means, at any time, the Purchaser Agents whose Group
Commitments aggregate 2/3rds or more of the aggregate of the Group Commitments
of all Purchaser Groups; provided, however, that so long as any Purchaser
Group’s Group Commitment is greater than 50% of the aggregate Group Commitments,
then “Majority Purchaser Agents” shall mean a minimum of two Purchaser Agents
whose Group Commitments aggregate more than 50% of the aggregate Group
Commitments.

“Market Street” has the meaning set forth in the preamble to the Agreement.

 

Exh. I - 13

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“Market Street Base Rate” means, in the case of Market Street or any Purchaser
in its Purchaser Group, for any day, a fluctuating interest rate per annum as
shall be in effect from time to time, which rate shall be at all times equal to
the higher of:

(a) the rate of interest in effect for such day as publicly announced from time
to time by PNC in Pittsburgh, Pennsylvania as its “prime rate.” Such “prime
rate” is set by PNC based upon various factors, including PNC’s costs and
desired return, general economic conditions and other factors, and is used as a
reference point for pricing some loans, which may be priced at, above or below
such announced rate, and

(b) 0.50% per annum above the latest Federal Funds Rate.

“Market Street CP Rate” means, with respect to Market Street for any Yield
Period with respect to any Portion of Investment, the per annum rate equivalent
to the “weighted average cost” (as defined below) related to the issuance of
Market Street’s Notes that are allocated, in whole or in part, by Market Street
(or by its Purchaser Agent) to fund or maintain such Portion of Investment (and
which may also be allocated in part to the funding of other Portions of
Investment hereunder or of other assets of Market Street); provided, however,
that if any component of such rate is a discount rate, in calculating the
“Market Street CP Rate” for such Portion of Investment for such Yield Period,
Market Street shall for such component use the rate resulting from converting
such discount rate to an interest bearing equivalent rate per annum. As used in
this definition, Market Street’s “weighted average cost” shall consist of
(x) the actual interest rate (or discount) paid to purchasers of Market Street’s
Notes, together with the commissions of placement agents and dealers in respect
of such Notes, to the extent such commissions are allocated, in whole or in
part, to such Notes by Market Street (or by its Purchaser Agent) and (y) any
incremental carrying costs incurred with respect to Market Street’s Notes
maturing on dates other than those on which corresponding funds are received by
Market Street. Notwithstanding the foregoing, the “Market Street CP Rate” for
any day while a Termination Event exists shall be an interest rate equal to 2%
above the Base Rate in effect on such day.

“Market Street Yield Rate” for any Yield Period for any Portion of Investment of
the Purchased Interest in the case of Market Street or any Purchaser in its
Purchaser Group, means an interest rate per annum equal to, at Seller’s option:
(a) the rate set forth as the “Applicable Margin” in the Purchaser Group Fee
Letter relating to Market Street above the Euro-Rate for such Yield Period, or
(b) the Base Rate for such Yield Period; provided, however, that in the case of:

(i) any Yield Period on or before the first day of which the Administrator shall
have been notified by any Purchaser or other Program Support Provider that the
introduction of or any change in or in the interpretation of any law or
regulation makes it unlawful, or any central bank or other Governmental
Authority asserts that it is unlawful, for such Person, to fund any Euro-Rate
Portion of Investment (and such Person shall not have subsequently notified the
Administrator that such circumstances no longer exist),

(ii) any Yield Period of one to (and including) 29 days,

 

Exh. I - 14

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(iii) any Yield Period as to which the Administrator does not receive notice
before noon (New York City time) on the second Business Day preceding the first
day of such Yield Period that the Seller desires that the related Portion of
Investment be a Euro-Rate Portion of Investment, or

(iv) any Yield Period relating to a Portion of Investment that is less than
$5,000,000,

the “Yield Rate” for each such Yield Period shall be an interest rate per annum
equal to the Base Rate in effect on each day of such Yield Period. The “Yield
Rate” for any day while a Termination Event exists shall be an interest rate
equal to 2% per annum above the applicable Base Rate in effect on such day.

“Material Adverse Effect” means a material adverse effect on:

(a) the assets, operations, business or financial condition of the Seller, the
Servicer, any Originator or Greetings.

(b) the ability of Seller, Servicer, Originator or Greetings to perform its
obligations under the Agreement or any other Transaction Document to which it is
a party,

(c) as to Seller, Servicer, any Originator or Greetings, the validity or
enforceability of any other Transaction Document, or the validity,
enforceability or collectibility of a material portion of the Pool Receivables,
or

(d) the status, perfection, enforceability or priority of any Purchaser’s or the
Seller’s interest in the Pool Assets.

“Moody’s” means Moody’s Investors Service, Inc.

“Net Receivables Pool Balance” means, at any time: (a) the Outstanding Balance
of Eligible Receivables then in the Receivables Pool minus (b) the Excess
Concentration; provided that such calculation shall exclude the Receivables for
which the related Obligor has a net credit balance.

“Notes” means short-term promissory notes issued, or to be issued, by each
Conduit Purchaser to fund its investments in accounts receivable or other
financial assets.

“Obligor” means, with respect to any Receivable, the Person obligated to make
payments pursuant to the Contract relating to such Receivable.

“Order” has the meaning set forth in Section 1.20 of the Agreement.

“Originator” means the “Originators” party in such capacity to the Receivables
Sale Agreement and Greetings in its capacity as “Originator” under the Sale and
Contribution Agreement from time to time.

 

Exh. I - 15

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“Outstanding Balance” of any Receivable at any time means the then outstanding
principal balance thereof.

“Permitted Holders” means Morry Weiss, Judith S. Weiss, Harry H. Stone, Gary
Weiss, Jeffrey Weiss, Zev Weiss, Elie Weiss, the Irving I. Stone Limited
Liability Co., The Irving Stone Irrevocable Trust originally dated April 21,
1947, as amended, the Irving I. Stone Oversight Trust, the Irving Stone Support
Foundation, The Irving I. Stone Foundation, the 540 Investment Company Limited
Partnership and the American Greetings Corporation Retirement Profit Sharing and
Savings Plan or any Person controlled by, or any successor Person to, any of the
foregoing.

“Permitted Lock-Box Bank” means any of the Banks listed on Schedule II and
identified as such.

“Person” means an individual, partnership, corporation (including a business
trust), joint stock company, trust, unincorporated association, joint venture,
limited liability company or other entity, or a government or any political
subdivision or agency thereof.

“PNC” has the meaning set forth in the preamble to the Agreement.

“Pool Assets” has the meaning set forth in Section 1.2(d) of the Agreement.

“Pool Receivable” means a Receivable in the Receivables Pool.

“Portion of Investment” means, with respect to any Purchaser and its related
Investment, the portion of such Investment being funded or maintained by such
Purchaser by reference to a particular interest rate basis. In addition, at any
time when the Investment of the Purchased Interest is not divided into two or
more such portions, “Portion of Investment” means 100% of the Investment.

“Program Support Agreement” means and includes any Liquidity Agreement and any
other agreement entered into by any Program Support Provider providing for:
(a) the issuance of one or more letters of credit for the account of any Conduit
Purchaser, (b) the issuance of one or more surety bonds for which the such
Conduit Purchaser is obligated to reimburse the applicable Program Support
Provider for any drawings thereunder, (c) the sale by such Conduit Purchaser to
any Program Support Provider of the Purchased Interest (or portions thereof)
maintained by such Conduit Purchaser and/or (d) the making of loans and/or other
extensions of credit to any Conduit Purchaser in connection with such Conduit
Purchaser’s securitization program contemplated in the Agreement, together with
any letter of credit, surety bond or other instrument issued thereunder (but
excluding any discretionary advance facility provided by the Administrator).

“Program Support Provider” means and includes with respect to each Conduit
Purchaser any Liquidity Provider and any other Person (other than any customer
of such Conduit Purchaser) now or hereafter extending credit or having a
commitment to extend credit to or for the account of, or to make purchases from,
such Conduit Purchaser pursuant to any Program Support Agreement.

 

Exh. I - 16

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“Purchase” is defined in Section 1.1(a).

“Purchase Date” means the date on which a Funded Purchase or a reinvestment is
made pursuant to the Agreement.

“Purchase Limit” means $150,000,000, as such amount may be reduced pursuant to
Section 1.1(b) of the Agreement or increased pursuant to Section 1.2(f) of the
Agreement. References to the unused portion of the Purchase Limit shall mean, at
any time, the Purchase Limit minus the sum of the then-outstanding Aggregate
Investment plus the LC Amount.

“Purchased Interest” means, at any time, the undivided percentage ownership
interest in: (a) each and every Pool Receivable now existing or hereafter
arising, (b) all Related Security with respect to such Pool Receivables and
(c) all Collections with respect to, and other proceeds of, such Pool
Receivables and Related Security. Such undivided percentage interest shall be
computed as:

Aggregate Investment + LC Amount + Total Reserves

Net Receivables Pool Balance

The Purchased Interest shall be determined from time to time pursuant to
Section 1.3 of the Agreement.

“Purchaser Agent” means each Person acting as agent on behalf of a Purchaser
Group and designated as a Purchaser Agent for such Purchaser Group on the
signature pages to the Agreement or any other Person who becomes a party to the
Agreement as a Purchaser Agent pursuant to an Assumption Agreement or a Transfer
Supplement.

“Purchaser Group” means, for each Conduit Purchaser, such Conduit Purchaser, its
Related Committed Purchasers and its related Purchaser Agent and, in the case of
Market Street Funding LLC, the LC Bank, in addition to itself and its Related
Committed Purchasers and Purchaser Agent.

“Purchaser Group Fee Letter” has the meaning set forth in Section 1.5 of the
Agreement.

“Purchasers” means each Conduit Purchaser, each Related Committed Purchaser and
the LC Bank.

“Purchasers’ Share” of any amount means such amount multiplied by the Purchased
Interest at the time of determination.

“Ratable Share” means, for each Purchaser Group, such Purchaser Group’s Group
Commitment divided by the aggregate Group Commitments of all Purchaser Groups.

“Rating Agency Condition” means, if appropriate with respect to any material
event or occurrence, receipt by the Administrator (or the applicable Purchaser
Agent) of written confirmation from each of Standard & Poor’s and Moody’s that
such event or occurrence shall not cause the rating on the then outstanding
Notes of any applicable Purchaser to be downgraded or withdrawn.

 

Exh. I - 17

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“Receivable” means any indebtedness and other obligations owed to the Seller or
any Originator by, or any right of the Seller or any Originator to payment from
or on behalf of, an Obligor, whether constituting an account, chattel paper,
instrument or general intangible, arising in connection with the sale of goods
or the rendering of services by an Originator and includes the obligation to pay
any finance charges, fees and other charges with respect thereto. Indebtedness
and other obligations arising from any one transaction, including indebtedness
and other obligations represented by an individual invoice or agreement, shall
constitute a Receivable separate from a Receivable consisting of the
indebtedness and other obligations arising from any other transaction provided
that Receivables shall not include obligations in respect of payments
denominated in Canadian dollars due and owing from or on behalf of Obligors in
respect of businesses located in Canada.

“Receivables Based Loss Reserve Percentage” means, on any date the percentage
determined by the following formula:

2.0 x (DDR x RP) ÷ NRPB

 

  DDR    =    the highest average of the Disputed Default Ratio for any three
consecutive calendar months during the twelve most recent calendar months   RP
   =    the aggregate Outstanding Balance of all Pool Receivables as of the date
of such calculation   NRPB    =    the Net Receivables Pool Balance as of the
date of such calculation

“Receivables Pool” means, at any time, all of the then outstanding Receivables
purchased by the Seller pursuant to the Sale and Contribution Agreement prior to
the Facility Termination Date.

“Receivables Sale Agreement” means the Amended and Restated Receivables Sale
Agreement, dated as of October 24, 2006, among Greetings and the Originators
party thereto as such agreement may be amended, amended and restated,
supplemented or otherwise modified from time to time.

“Receivables Sale Indemnified Amounts” has the meaning set forth in Section 9.1
of the Receivables and Sale Agreement.

“Receivables Sale Indemnified Party” has the meaning set forth in Section 9.1 of
the Receivables Sale Agreement.

“Receivables Sale Termination Date” has the meaning set forth in Section 1.4 of
the Receivables Sale Agreement.

“Receivables Sale Termination Event” has the meaning set forth in Section 8.1 of
the Receivables Sale Agreement.

 

Exh. I - 18

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“Related Committed Purchaser” means each Person listed as such (with its
respective Commitment) for each Conduit Purchaser as set forth on the signature
pages of the Agreement or in any Assumption Agreement or Transfer Supplement.

“Related Rights” has the meaning set forth in Section 1.1 of the Sale and
Contribution Agreement.

“Related Security” means, with respect to any Receivable:

(a) all of the Seller’s and the Originator thereof’s interest in any goods
(including returned goods), and documentation of title evidencing the shipment
or storage of any goods (including returned goods), relating to any sale giving
rise to such Receivable,

(b) all instruments and chattel paper that may evidence such Receivable,

(c) all other security interests or liens and property subject thereto from time
to time purporting to secure payment of such Receivable, whether pursuant to the
Contract related to such Receivable or otherwise, together with all UCC
financing statements or similar filings relating thereto, and

(d) all of the Seller’s and the Originator thereof’s rights, interests and
claims under the Contracts and all guaranties, indemnities, insurance and other
agreements (including the related Contract) or arrangements of whatever
character from time to time supporting or securing payment of such Receivable or
otherwise relating to such Receivable, whether pursuant to the Contract related
to such Receivable or otherwise.

“Sale and Contribution Agreement” means the Amended and Restated Sale and
Contribution Agreement, dated as of the date hereof, among the Originators party
thereto and Seller as such agreement may be amended, amended and restated,
supplemented or otherwise modified from time to time.

“Sale and Contribution Indemnified Amounts” has the meaning set forth in
Section 9.1 of the Sale and Contribution Agreement.

“Sale and Contribution Indemnified Party” has the meaning set forth in
Section 9.1 of the Sale and Contribution Agreement.

“Sale and Contribution Termination Date” has the meaning set forth in
Section 1.4 of the Sale and Contribution Agreement.

“Sale and Contribution Termination Event” has the meaning set forth in
Section 8.1 of the Sale and Contribution Agreement.

“Sales Based Loss Reserve Percentage” means, on any date the percentage
determined by the following formula:

2.0 x ((EDR x ESDH) + (SDR x SSDH)) ÷ NRPB

 

Exh. I - 19

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  EDR    =    the highest average of the Everyday Default Ratio for any three
consecutive calendar months during the twelve most recent calendar months   ESDH
   =    the aggregate credit sales, other than Seasonal Sales, made by the
Originators during the seven most recent calendar months   SDR    =    the
highest average of the Seasonal Default Ratio for any three consecutive calendar
months during the twelve most recent calendar months   SSDH    =    the
aggregate Seasonal Sales made by the Originators during the seven most recent
calendar months   NRPB    =    the Net Receivables Pool Balance as of the date
of such calculation

“Seasonal Default Ratio” means the ratio (expressed as a percentage and rounded
to the nearest 1/100th of 1% with 5/1000th of 1% rounded upwards) computed as of
the last day of each calendar month by dividing (a) the aggregate Outstanding
Balance of all Seasonal Sales that became Defaulted Receivables during such
month, by (b) the aggregate Outstanding Balance of all Seasonal Sales made by
the Originators during the two months that are seven and eight months before
such month.

“Seasonal Dilution Estimate” means, at any time, the balance as of the most
recent calendar month-end of reserves or liabilities maintained on the books and
records of the Seller or Servicer in the ordinary course of business according
to policies consistently applied and reported on the Information Package related
to, or in anticipation of, seasonal returns affecting the Receivables.

“Seasonal Receivable” means a Pool Receivable sold pursuant to the Sale and
Contribution Agreement which was included, should have been included or should
be included in the calculation of Seasonal Sales.

“Seasonal Sales” means those amounts identified by the Seller or Servicer on the
periodic Information Packages as invoices related to specific seasonal
shipments.

“Seller” has the meaning set forth in the preamble to the Agreement.

“Seller’s Share” of any amount means the greater of: (a) $0 and (b) such amount
minus the product of (i) such amount multiplied by (ii) the Purchased Interest.

“Servicer” has the meaning set forth in the preamble to the Agreement.

“Servicing Fee” shall mean the fee referred to in Section 4.6 of the Agreement.

“Settlement Date” means the 22nd Day of each calendar month or, if such day is
not a Business Day, the first Business Day thereafter or such other Business Day
as otherwise consented to by the Administrator, the Purchasers, the Seller and
the Servicer.

 

Exh. I - 20

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“Solvent” means, with respect to any Person at any time, a condition under
which:

(i) the fair value and present fair saleable value of such Person’s total assets
is, on the date of determination, greater than such Person’s total liabilities
(including contingent and unliquidated liabilities) at such time;

(ii) the fair value and present fair saleable value of such Person’s assets is
greater than the amount that will be required to pay such Person’s probable
liability on its existing debts as they become absolute and matured (“debts,”
for this purpose, includes all legal liabilities, whether matured or unmatured,
liquidated or unliquidated, absolute, fixed, or contingent);

(iii) such Person is and shall continue to be able to pay all of its liabilities
as such liabilities mature; and

(iv) such Person does not have unreasonably small capital with which to engage
in its current and in its anticipated business.

For purposes of this definition:

(A) the amount of a Person’s contingent or unliquidated liabilities at any time
shall be that amount which, in light of all the facts and circumstances then
existing, represents the amount which can reasonably be expected to become an
actual or matured liability;

(B) the “fair value” of an asset shall be the amount which may be realized
within a reasonable time either through collection or sale of such asset at its
regular market value;

(C) the “regular market value” of an asset shall be the amount which a capable
and diligent business person could obtain for such asset from an interested
buyer who is willing to Purchase such asset under ordinary selling conditions;
and

(D) the “present fair saleable value” of an asset means the amount which can be
obtained if such asset is sold with reasonable promptness in an arm’s-length
transaction in an existing and not theoretical market.

“Specifically Reserved Dilution Amount” means the greater of (A) the sum of
(i) $15,000,000 and (ii) 75% of the total credits issued for seasonal returns in
the 10th and 11th months prior to the current month or (B) the balance as of the
most recent calendar month-end of reserves or liabilities maintained on the
books and records of the Seller or Servicer and reported on the Information
Package related to, or in anticipation of, (a) advertising allowances,
(b) volume rebates and (c) Plus Mark, Inc. specific factors affecting the
Receivables plus (ii) the Seasonal Dilution Estimate.

“Standard & Poor’s” means Standard & Poor’s, a division of The McGraw-Hill
Companies, Inc.

 

Exh. I - 21

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“Subsidiary” means, as to any Person, a corporation, partnership, limited
liability company or other entity of which shares of stock of each class or
other interests having ordinary voting power (other than stock or other
interests having such power only by reason of the happening of a contingency) to
elect a majority of the Board of Directors or other managers of such entity are
at the time owned, or management of which is otherwise controlled: (a) by such
Person, (b) by one or more Subsidiaries of such Person or (c) by such Person and
one or more Subsidiaries of such Person; provided, however, that The Hatchery,
LLC shall not be deemed a Subsidiary hereunder unless and/or until Greetings or
any of its Subsidiaries owns at least 80% of its equity interests and it has
total assets of $5,000,000 or more.

“Tangible Net Worth” means, with respect to any Person, the tangible net worth
of such Person as determined in accordance with GAAP.

“Taxes” has the meaning set forth in Section 1.10 of the Agreement.

“Termination Day” means: (a) each day on which the conditions set forth in
Section 2 of Exhibit II to the Agreement are not satisfied or (b) each day that
occurs on or after the Facility Termination Date.

“Termination Event” has the meaning specified in Exhibit V to the Agreement.

“Termination Fee” means, for any Yield Period, with respect to any Purchaser,
the amount, if any, by which: (a) the additional Discount related to such
Purchaser’s Investment (calculated without taking into account any Termination
Fee or any shortened duration of such Yield Period) that would have accrued
during such Yield Period on the reductions of Investment relating to such Yield
Period had such reductions not been made, exceeds (b) the income, if any,
received by such Purchaser from investing the proceeds of such reductions of
Investment, as determined by the such Purchaser’s Purchaser Agent, which
determination shall be binding and conclusive for all purposes, absent manifest
error.

“Total Reserves” means, at any time, the sum of (a) the Yield Reserve, (b) the
sum of the Loss Reserve and the Dilution Reserve and (c) the Specifically
Reserved Dilution Amount.

“Transaction Documents” means the Agreement, the Lock-Box Agreements, each
Purchaser Group Fee Letter, the Receivables Sale Agreement, the Sale and
Contribution Agreement and all other certificates, instruments, UCC financing
statements, reports, notices, agreements and documents executed or delivered
under or in connection with any of the foregoing, in each case as the same may
be amended, supplemented or otherwise modified from time to time in accordance
with the Agreement.

“Transfer Supplement” has the respective meanings set forth in Sections 6.3(c)
and 6.3(e). of the Agreement.

“UCC” means the Uniform Commercial Code as from time to time in effect in the
applicable jurisdiction.

“Unmatured Receivables Sale Termination Event” means any event which, with the
giving of notice or lapse of time, or both, would become a Receivables Sale
Termination Event.

 

Exh. I - 22

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“Unmatured Sale and Contribution Termination Event” means any event which, with
the giving of notice or lapse of time, or both, would become a Sale and
Contribution Termination Event.

“Unmatured Termination Event” means an event that, with the giving of notice or
lapse of time, or both, would constitute a Termination Event.

“Yield Period” means, with respect to each Portion of Investment: (a) before the
Facility Termination Date: (i) initially the period commencing on the date of
the initial Purchase pursuant to Section 1.2 of the Agreement (or in the case of
any fees payable hereunder, commencing on the Closing Date) and ending on (but
not including) the next Settlement Date, and (ii) thereafter, each period
commencing on such Settlement Date and ending on (but not including) the next
Settlement Date, and (b) on and after the Facility Termination Date, such period
(including a period of one day) as shall be selected from time to time by the
Administrator or, in the absence of any such selection, each period of 30 days
from the last day of the preceding Yield Period.

“Yield Rate” for any Yield Period for any Portion of Investment of the Purchased
Interest (i) in the case of the Purchaser Group including Market Street, means
the Market Street Yield Rate, and (ii) in the case of each other Purchaser
Group, shall mean the rate set forth as the Yield Rate for such Purchaser Group
in the related Purchaser Group Fee Letter.

“Yield Reserve” shall be equal to (i) the sum of the Aggregate Investment and
the LC Amount multiplied by (ii) a percentage equal to (A) the Yield Reserve
Percentage divided by (B) 100% minus the Yield Reserve Percentage.

“Yield Reserve Percentage” means, on any date, an amount equal to (i) the sum of
the Base Rate as of the end of the most recent period plus 1.5%, multiplied by
(ii) the product of 1.5 times the Days Sales Outstanding, divided by (iii) 360.

Other Terms. All accounting terms not specifically defined herein shall be
construed in accordance with generally accepted accounting principles. All terms
used in Article 9 of the UCC in the State of New York, and not specifically
defined herein, are used herein as defined in such Article 9. Unless the context
otherwise requires, “or” means “and/or,” and “including” (and with correlative
meaning “include” and “includes”) means including without limiting the
generality of any description preceding such term.

 

Exh. I - 23

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EXHIBIT II

CONDITIONS OF PURCHASES

1. Conditions Precedent to Initial Purchase. The initial Purchase under this
Agreement is subject to the following conditions precedent that the
Administrator and each Purchaser Agent shall have received on or before the date
of such Purchase, each in form and substance (including the date thereof)
satisfactory to the Administrator and each Purchaser Agent:

(a) A counterpart of the Agreement and the other Transaction Documents executed
by the parties thereto.

(b) Certified copies of: (i) the resolutions of the Board of Directors of each
of the Seller, the Originators and Greetings authorizing the execution, delivery
and performance by the Seller, such Originators and Greetings, as the case may
be, of the Agreement and the other Transaction Documents to which it is a party;
(ii) all documents evidencing other necessary organizational action and
governmental approvals, if any, with respect to the Agreement and the other
Transaction Documents and (iii) the certificate of incorporation and by-laws or
code of regulations or certificate of formation and limited liability company
agreement or any other organizational document, as applicable, of the Seller,
each Originator and Greetings.

(c) A certificate of the Secretary or Assistant Secretary of the Seller, the
Originators and Greetings certifying the names and true signatures of its
officers who are authorized to sign the Agreement and the other Transaction
Documents. Until the Administrator and each Purchaser Agent receives a
subsequent incumbency certificate from the Seller, an Originator or Greetings,
as the case may be, the Administrator and each Purchaser Agent shall be entitled
to rely on the last such certificate delivered to it by the Seller, such
Originator or Greetings, as the case may be.

(d) Acknowledgment copies, or time stamped receipt copies, of proper financing
statements, duly filed on or before the date of such initial purchase under the
UCC of all jurisdictions that the Administrator may deem necessary or desirable
in order to perfect the interests of the Seller, Greetings and the Administrator
(on behalf of each Purchaser) contemplated by the Agreement, the Sale and
Contribution Agreement and the Receivables Sale Agreement.

(e) Acknowledgment copies, or time-stamped receipt copies, of proper financing
statements, if any, necessary to release all security interests and other rights
of any Person in the Receivables, Contracts or Related Security previously
granted by the Originators, Greetings or the Seller (other than those in favor
of the Administrator).

(f) Completed UCC search reports, dated on or shortly before the date of the
initial purchase hereunder, listing the financing statements filed in all
applicable jurisdictions referred to in subsection (e) above that name the
Originators or the Seller as debtor, together with copies of such other
financing statements, and similar search

 

Exh. II - 1

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reports with respect to judgment liens, federal tax liens and liens of the
Pension Benefit Guaranty Corporation in such jurisdictions, as the Administrator
or any Purchaser Agent may request, showing no Adverse Claims on any Pool
Assets.

(g) Copies of executed Lock-Box Agreements with each Lock-Box Bank.

(h) Favorable opinions of Thompson Hine LLP, counsel for the Seller, the
Originators, Greetings and the Servicer, in form and substance reasonably
satisfactory to the Administrator and each Purchaser Agent.

(i) Satisfactory results of a review and audit (performed by representatives of
each Purchaser Agent) of the Servicer’s collection, operating and reporting
systems, the Credit and Collection Policy of each Originator, historical
receivables data and accounts, including satisfactory results of a review of the
Servicer’s operating location(s).

(j) A pro forma Information Package representing the performance of the
Receivables Pool for the calendar month before closing.

(k) Evidence of payment by the Seller of all accrued and unpaid fees (including
those contemplated by each Purchaser Group Fee Letter), costs and expenses to
the extent then due and payable on the date thereof, including any such costs,
fees and expenses arising under or referenced in Section 6.4 of the Agreement
and the Fee Letter.

(l) Each Purchaser Group Fee Letter (received only by the related Purchaser
Group Agent) duly executed by the Seller and the Servicer.

(m) Good standing certificates with respect to each of the Seller, the
Originators and the Servicer issued by the Secretary of State (or similar
official) of the state of each such Person’s organization and principal place of
business.

(n) To the extent required by each Conduit Purchaser’s commercial paper program,
letters from each of the rating agencies then rating the Notes confirming the
rating of such Notes after giving effect to the transaction contemplated by the
Agreement.

(o) Each Liquidity Agreement (received only by the related Purchaser Group
Agent) and all other Transaction Documents duly executed by the parties thereto.

(p) A computer file containing all information with respect to the Receivables
as the Administrator or any Purchaser Agent may reasonably request.

(q) Such other approvals, opinions or documents as the Administrator or any
Purchaser Agent may reasonably request.

2. Conditions Precedent to All Funded Purchases, Issuances of Letters of Credit
and Reinvestments. Each Funded Purchase (including the initial Funded Purchase)
and the issuance

 

Exh. II - 2

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of any Letters of Credit and each reinvestment shall be subject to the further
conditions precedent that:

(a) in the case of each Funded Purchase and the issuance of any Letters of
Credit, the Servicer shall have delivered to the Administrator and each
Purchaser Agent on or before such purchase or issuance, as the case may be, in
form and substance satisfactory to the Administrator and such Purchaser Agent, a
completed pro forma Information Package to reflect the level of Investment, the
LC Amount and related reserves and the calculation of the Purchased Interest
after such subsequent purchase or issuance, as the case may be, and a completed
purchase notice in the form of Annex B; and

(b) on the date of such Funded Purchase, issuance or reinvestment the following
statements shall be true (and acceptance of the proceeds of such Funded
Purchase, issuance or reinvestment shall be deemed a representation and warranty
by the Seller that such statements are then true):

(i) the representations and warranties contained in Exhibit III to the Agreement
are true and correct in all material respects on and as of the date of such
Funded Purchase, issuance or reinvestment as though made on and as of such date
(except to the extent that such representations and warranties relate expressly
to an earlier date, and in which case such representations and warranties shall
be true and correct in all material respects as of such earlier date);

(ii) no event has occurred and is continuing, or would result from such Funded
Purchase, issuance or reinvestment, that constitutes a Termination Event or an
Unmatured Termination Event;

(iii) the sum of the Investment plus the LC Amount, after giving effect to any
such Funded Purchase, issuance or reinvestment, as the case may be, shall not
exceed the Purchase Limit; and

(iv) the Facility Termination Date has not occurred.

 

Exh. II - 3

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EXHIBIT III

REPRESENTATIONS AND WARRANTIES

1. Representations and Warranties of the Seller. The Seller represents and
warrants as follows:

(a) The Seller is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Delaware, and is duly qualified to do
business and is in good standing as a foreign corporation in every jurisdiction
where the nature of its business requires it to be so qualified, except where
the failure to be so qualified would not have a Material Adverse Effect.

(b) The execution, delivery and performance by the Seller of the Agreement and
the other Transaction Documents to which it is a party, including its use of the
proceeds of purchases and reinvestments: (i) are within its corporate powers;
(ii) have been duly authorized by all necessary corporate action; (iii) do not
contravene or result in a default under or conflict with: (A) its charter or
bylaws or code of regulations, as applicable (B) any law, rule or regulation
applicable to it, (C) any indenture, loan agreement, mortgage, deed of trust or
other material agreement or instrument to which it is a party or by which it is
bound, or (D) any order, writ, judgment, award, injunction or decree binding on
or affecting it or any of its property; and (iv) do not result in or require the
creation of any Adverse Claim upon or with respect to any of its properties. The
Agreement and the other Transaction Documents to which it is a party have been
duly executed and delivered by the Seller.

(c) No authorization, approval or other action by, and no notice to or filing
with, any Governmental Authority or other Person is required for its due
execution, delivery and performance by the Seller of the Agreement or any other
Transaction Document to which it is a party, other than the Uniform Commercial
Code filings referred to in Exhibit II to the Agreement, all of which shall have
been filed on or before the date of the first purchase hereunder and such
approvals that have been obtained.

(d) Each of the Agreement and the other Transaction Documents to which the
Seller is a party constitutes the legal, valid and binding obligation of the
Seller enforceable against the Seller in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization or other
similar laws from time to time in effect affecting the enforcement of creditors’
rights generally and by general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law.

(e) There is no pending or, to the Seller’s best knowledge, threatened action or
proceeding affecting the Seller or any of its properties before any Governmental
Authority or arbitrator.

(f) No proceeds of any purchase or reinvestment will be used to acquire any
equity security of a class that is registered pursuant to Section 12 of the
Securities Exchange Act of 1934.

 

Exh. III - 1

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(g) The Seller is the legal and beneficial owner of the Pool Receivables and
Related Security, free and clear of any Adverse Claim. Upon each Purchase or
reinvestment, the Administrator (for the benefit of each Purchaser) shall
acquire a valid and enforceable perfected undivided percentage ownership or
security interest, to the extent of the Purchased Interest, in each Pool
Receivable then existing or thereafter arising and in the Related Security,
Collections and other proceeds with respect thereto, free and clear of any
Adverse Claim. The Agreement creates a security interest in favor of the
Administrator (for the benefit of each Purchaser) in the Pool Assets, and the
Administrator (for the benefit of each Purchaser) has a first priority perfected
security interest in the Pool Assets, free and clear of any Adverse Claims. No
effective financing statement or other instrument similar in effect covering any
Pool Asset is on file in any recording office, except those filed in favor of
Greetings pursuant to the Receivables Sale Agreement, AGSC pursuant to the
Purchase and Sale Agreement, the Seller pursuant to the Sale and Contribution
Agreement and the Administrator (for the benefit of each Purchaser) pursuant to
the Agreement, or in respect of which the Administrator has received evidence
satisfactory to the Administrator of acknowledgment copies, or time-stamped
receipt copies, of proper financing statements releasing or terminating, as
applicable, all security interests and other rights of any Person in such Pool
Asset.

(h) Each Information Package (if prepared by the Seller or one of its
Affiliates, or to the extent that information contained therein is supplied by
the Seller or an Affiliate of the Seller), information, exhibit, financial
statement, document, book, record or report furnished or to be furnished, in
each case, in writing, at any time by or on behalf of the Seller to the
Administrator or any Purchaser Agent in connection with the Agreement or any
other Transaction Document to which it is a party is or will be complete and
accurate in all material respects as of its date or as of the date so furnished,
and does not and will not contain any material misstatement of fact or omit to
state a material fact or any fact necessary to make the statements contained
therein not misleading.

(i) [RESERVED].

(j) The names and addresses of all the Lock-Box Banks, together with the account
numbers of the Lock-Box Accounts at such Lock-Box Banks, are specified in
Schedule II to the Agreement (or at such other Lock-Box Banks and/or with such
other Lock-Box Accounts as have been notified to the Administrator in accordance
with the Agreement) and all Lock-Box Accounts are subject to Lock-Box Agreements
(except as otherwise agreed to in writing by the Administrator and each
Purchaser Agent or as provided in Section 4.3). Seller has not granted to any
Person, other than the Administrator as contemplated by the Agreement, dominion
and control of any Lock-Box Account, or the right to take dominion and control
of any such account at a future time or upon the occurrence of a future event.

(k) The Seller is not in violation of any order applicable to it of any court,
arbitrator or Governmental Authority.

 

Exh. III - 2

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(l) The Seller does not have any direct or indirect ownership or other financial
interest in any Purchaser.

(m) No proceeds of any purchase or reinvestment will be used for any purpose
that violates any applicable law, rule or regulation, including Regulations T, U
or X of the Federal Reserve Board.

(n) Each Pool Receivable included as an Eligible Receivable in the calculation
of the Net Receivables Pool Balance is an Eligible Receivable.

(o) No event has occurred and is continuing that constitutes a Termination Event
or an Unmatured Termination Event and no event would result from a purchase in
respect of, or reinvestment in respect of, the Purchased Interest or from the
application of the proceeds therefrom that constitutes a Termination Event or an
Unmatured Termination Event.

(p) The Seller has complied in all material respects with the applicable Credit
and Collection Policy.

(q) The Seller has complied in all material respects with all of the terms,
covenants and agreements contained in the Agreement and the other Transaction
Documents that are applicable to it and all laws, rules, regulations and orders
that are applicable to it.

(r) The Seller’s complete corporate name is set forth in the preamble to the
Agreement, and it does not use and has not during the last six years used any
other corporate name, trade name, doing-business name or fictitious name, except
as set forth on Schedule III to the Agreement and except for names first used
after the date of the Agreement and set forth in a notice delivered to the
Administrator pursuant to Section 1(k)(iv) of Exhibit IV to the Agreement.

(s) The Seller is not an “investment company,” or a company “controlled” by an
“investment company” within the meaning of the Investment Company Act of 1940,
as amended.

(t) Each Contract with respect to each Receivable is effective to create, and
has created, a legal, valid and binding obligation of the related Obligor to pay
the Outstanding Balance of the Receivable created thereunder and any accrued
interest thereon, enforceable against the Obligor in accordance with its terms,
except as such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws relating to or limiting creditors’ rights
generally and by general principles of equity (regardless of whether enforcement
is sought in a proceeding in equity or at law).

(u) Since its most recent fiscal year end, there has been no material adverse
change in the business, operations, financial condition, properties or assets of
the Seller.

 

Exh. III - 3

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2. Representations and Warranties of Greetings (including in its capacity as the
Servicer). Greetings, individually and in its capacity as the Servicer,
represents and warrants as follows:

(a) Greetings is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Ohio, and is duly qualified to do
business and is in good standing as a foreign corporation in every jurisdiction
where the nature of its business requires it to be so qualified, except where
the failure to be so qualified would not have a Material Adverse Effect.

(b) The execution, delivery and performance by Greetings, of the Agreement and
the other Transaction Documents to which it is a party, including the Servicer’s
use of the proceeds of purchases and reinvestments: (i) are within its corporate
powers; (ii) have been duly authorized by all necessary corporate action;
(iii) do not contravene or result in a default under or conflict with: (A) its
charter or code of regulations, (B) any law, rule or regulation applicable to
it, (C) any material indenture, loan agreement, mortgage, deed of trust or other
material agreement or instrument to which it is a party or by which it is bound,
or (D) any order, writ, judgment, award, injunction or decree binding on or
affecting it or any of its property; and (iv) do not result in or require the
creation of any Adverse Claim upon or with respect to any of its properties. The
Agreement and the other Transaction Documents to which Greetings is a party have
been duly executed and delivered by Greetings.

(c) No authorization, approval or other action by, and no notice to or filing
with any Governmental Authority or other Person, is required for the due
execution, delivery and performance by Greetings of the Agreement or any other
Transaction Document to which it is a party, other than those that have been
made or obtained.

(d) Each of the Agreement and the other Transaction Documents to which Greetings
is a party constitutes the legal, valid and binding obligation of Greetings
enforceable against Greetings in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization or other
similar laws from time to time in effect affecting the enforcement of creditors’
rights generally and by general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law.

(e) The balance sheets of Greetings and its consolidated Subsidiaries as at
February 28, 2006, and the related statements of income and retained earnings
for the fiscal year then ended, copies of which have been furnished to the
Administrator and each Purchaser Agent, fairly present the financial condition
of Greetings and its consolidated Subsidiaries as at such date and the results
of the operations of Greetings and its Subsidiaries for the period ended on such
date, all in accordance with generally accepted accounting principles
consistently applied, and since August 25, 2006, there has been no event or
circumstances which have had a Material Adverse Effect.

(f) Except as disclosed in the most recent audited financial statements of
Greetings furnished to the Administrator and each Purchaser Agent, there is no
pending

 

Exh. III - 4

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or, to its best knowledge, threatened action or proceeding affecting it or any
of its Subsidiaries before any Governmental Authority or arbitrator that could
reasonably be expected to have a Material Adverse Effect.

(g) No proceeds of any purchase or reinvestment will be used to acquire any
equity security of a class that is registered pursuant to Section 12 of the
Securities Exchange Act of 1934.

(h) Each Information Package (if prepared by Greetings or one of its Affiliates,
or to the extent that information contained therein is supplied by Greetings or
an Affiliate of Greetings), information, exhibit, financial statement, document,
book, record or report furnished or to be furnished, in each case, in writing,
at any time by or on behalf of the Servicer to the Administrator, any Purchaser
or any Purchaser Agent in connection with the Agreement is or will be complete
and accurate in all material respects as of its date or as of the date so
furnished and does not and will not contain any material misstatement of fact or
omit to state a material fact or any fact necessary to make the statements
contained therein not materially misleading.

(i) The principal place of business and chief executive office (as such terms
are used in the UCC) of Greetings and the office where it keeps its records
concerning the Pool Receivables are located at the address referred to in
Section 2(b) of Exhibit IV to the Agreement.

(j) Greetings is not in violation of any order applicable to it of any court,
arbitrator or Governmental Authority, which could reasonably be expected to have
a Material Adverse Effect.

(k) [Reserved.]

(l) The Servicer has complied in all material respects with the applicable
Credit and Collection Policy.

(m) Greetings has complied in all material respects with all of the terms,
covenants and agreements contained in the Agreement and the other Transaction
Documents that are applicable to it.

(n) Greetings is not an “investment company” or a company “controlled” by an
“investment company” within the meaning of the Investment Company Act of 1940,
as amended.

(o) Since its most recent fiscal year end, there has been no change in the
business, operations, financial condition, properties or assets of the Servicer
which would have a Material Adverse Effect on its ability to perform its
obligations under the Agreement or any other Transaction Document to which it is
a party or would materially and adversely affect the transactions contemplated
under the Agreement or such other Transaction Documents.

 

Exh. III - 5

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(p) No license or approval is required for the Administrator or any successor
Servicer to use any program used by the Servicer in the servicing of the
Receivables, other than such licenses and approvals that have been obtained and
are in full force and effect.

 

Exh. III - 6

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EXHIBIT IV

COVENANTS

1. Covenants of the Seller. Until the latest of the Facility Termination Date,
the date on which no Investment of or Discount in respect of the Purchased
Interest shall be outstanding, the date on which an amount equal to 100% of the
LC Amount has been deposited in the LC Collateral Account or the date all other
amounts owed by the Seller under the Agreement to any Purchaser, Purchaser
Agent, the Administrator and any other Indemnified Party or Affected Person
shall be paid in full:

(a) Compliance with Laws, Etc. The Seller shall comply with all applicable laws,
rules, regulations and orders, and preserve and maintain its corporate
existence, rights, franchises, qualifications and privileges, except to the
extent that the failure so to comply with such laws, rules, regulations and
orders or the failure so to preserve and maintain such rights, franchises,
qualifications and privileges would not have a Material Adverse Effect.

(b) Offices, Records and Books of Account, Etc. The Seller: (i) shall not move
its principal place of business and chief executive office (as such terms or
similar terms are used in the UCC) and the office where it keeps its records
concerning the Pool Receivables to an address other than the address of the
Seller set forth under its name on the signature page to the Agreement or,
pursuant to clause (k)(iv) below, at any other locations in jurisdictions where
all actions reasonably requested by the Administrator to protect and perfect the
interest of the Administrator (for the benefit of the Purchasers) in the Pool
Receivables and related items (including the Pool Assets) have been taken and
completed and (ii) shall provide the Administrator with at least 30 days’
written notice before making any change in the Seller’s name or making any other
change in the Seller’s identity or corporate structure (including a Change in
Control) that could render any UCC financing statement filed in connection with
this Agreement “seriously misleading” as such term (or similar term) is used in
the UCC; each notice to the Administrator pursuant to this sentence shall set
forth the applicable change and the effective date thereof. The Seller also will
maintain and implement (or cause the Servicer to maintain and implement)
administrative and operating procedures (including an ability to recreate
records evidencing Pool Receivables and related Contracts in the event of the
destruction of the originals thereof), and keep and maintain (or cause the
Servicer to keep and maintain) all documents, books, records, computer tapes and
disks and other information reasonably necessary or advisable for the collection
of all Pool Receivables (including records adequate to permit the daily
identification of each Pool Receivable and all Collections of and adjustments to
each existing Pool Receivable). The Seller will (and will cause each Originator
to) on or prior to the date of the Agreement, mark its master data processing
records and other books and records relating to the Purchased Interest (and at
all times thereafter (until the latest of the Facility Termination Date or the
date all other amounts owed by the Seller under the Agreement shall be paid in
full) continue to maintain such records) with a legend, acceptable to the
Administrator, describing the Purchased Interest.

 

Exh. IV - 1

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(c) Performance and Compliance with Contracts and Credit and Collection Policy.
The Seller shall (and shall cause the Servicer to), at its expense, (i) timely
perform and comply in all material respects with all provisions, covenants and
other promises required to be observed by it under the Contracts related to the
Pool Receivables unless the failure to so perform or comply does not involve a
material portion of such Pool Receivables, and the Seller shall have complied
with its obligations with respect to such Pool Receivables set forth in
Section 1.4(e), and (ii) timely comply in all material respects with the
applicable Credit and Collection Policies with regard to each Pool Receivable.

(d) Ownership Interest, Etc. The Seller shall (and shall cause the Servicer to),
at its expense, take all action necessary or desirable to establish and maintain
a valid and enforceable undivided percentage ownership or security interest, to
the extent of the Purchased Interest which shall not be greater than 100%, in
the Pool Receivables, the Related Security and Collections with respect thereto,
and a first priority perfected security interest in the Pool Assets, in each
case free and clear of any Adverse Claim, in favor of the Administrator (for the
benefit of the Purchasers), including taking such action to perfect, protect or
more fully evidence the interest of the Administrator (for the benefit of the
Purchasers) as the Administrator may reasonably request.

(e) Sales, Liens, Etc. The Seller shall not sell, assign (by operation of law or
otherwise) or otherwise dispose of, or create or suffer to exist any Adverse
Claim upon or with respect to, any or all of its right, title or interest in, to
or under any Pool Assets (including the Seller’s undivided interest in any Pool
Receivable, Related Security or Collections, or upon or with respect to any
account to which any Collections of any Pool Receivables are sent), or assign
any right to receive income in respect of any items contemplated by this
paragraph.

(f) Extension or Amendment of Pool Receivables. Except as provided in the
Agreement, the Seller shall not, and shall not permit the Servicer to, extend
the maturity or adjust the Outstanding Balance or otherwise modify the terms of
any Pool Receivable, or amend, modify or waive any term or condition of any
related Contract in any manner that would modify the terms of any Pool
Receivable.

(g) Change in Business or Credit and Collection Policy. The Seller shall not
make (or permit any Originator to make) any change in the character of its
business or any change in any Credit and Collection Policy that would have a
Material Adverse Effect with respect to the Pool Receivables. The Seller shall
not make (or permit any Originator to make) any other change in any Credit and
Collection Policy without giving prior written notice thereof to the
Administrator and each Purchaser Agent.

(h) Audits. The Seller shall (and shall cause each Originator to), from time to
time during regular business hours, as reasonably requested in advance (unless a
Termination Event or Unmatured Termination Event exists) by the Administrator or
any Purchaser Agent, permit the Administrator, any Purchaser, any Purchaser
Agent, or any agent or representatives of the foregoing: (i) to examine and make
copies of and abstracts from all books, records and documents (including
computer tapes and disks) in

 

Exh. IV - 2

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the possession or under the control of the Seller (or any such Originator)
relating to Pool Receivables and the Related Security, including the related
Contracts, and (ii) to visit the offices and properties of the Seller and the
Originators for the purpose of examining such materials described in clause
(i) above, and to discuss matters relating to Pool Receivables and the Related
Security or the Seller’s, Greetings’ or an Originator’s performance under the
Transaction Documents or under the Contracts with any of the officers,
employees, agents or contractors of the Seller, Greetings or an Originator
having knowledge of such matters and (iii) without limiting clauses (i) and
(ii) above, to engage certified public accountants or other auditors acceptable
to the Seller and the Administrator to conduct, at the Seller’s expense, a
review of the Seller’s books and records with respect to such Pool Receivables.

(i) Change in Lock-Box Banks, Lock-Box Accounts and Payment Instructions to
Obligors. The Seller shall not, and shall not permit the Servicer or any
Originator to, add or terminate any bank as a Lock-Box Bank or any account as a
Lock-Box Account from those listed in Schedule II to the Agreement, or make any
change in its instructions to Obligors regarding payments to be made to the
Seller, the Originators, the Servicer or any Lock-Box Account (or related post
office box), unless the Administrator and the Majority Purchaser Agents shall
have consented thereto in writing, which consent shall not be unreasonably
withheld or delayed, and the Administrator shall have received copies of all
agreements and documents (including Lock-Box Agreements) that it may request in
connection therewith. Notwithstanding anything contained in this paragraph
(i) to the contrary, the Seller may add an account as a Lock-Box Account at a
Lock-Box Bank, without the consent of the Administrator and the Purchasers upon
delivery to the Administrator of a Lock-Box Agreement in form and substance
reasonably acceptable to the Administrator.

(j) Deposits to Lock-Box Accounts. The Seller shall (or shall cause the Servicer
to): (i) mail, wire or otherwise transfer, or cause to be so transferred, any
Collections received by it, the Servicer or any Originator to Lock-Box Accounts
not later than one Business Day after receipt thereof and (ii) instruct all
Obligors to make payments of all Receivables to one or more Lock-Box Accounts or
to post office boxes to which only Lock-Box Banks have access (and shall
instruct the Lock-Box Banks to cause all items and amounts relating to such
Receivables received in such post office boxes to be removed and deposited into
a Lock-Box Account on a daily basis). Except as otherwise agreed to in writing
by the Administrator and the Majority Purchaser Agents, each Lock-Box Account
shall at all times be subject to a Lock-Box Agreement. The Seller will not (and
will not permit the Servicer to) deposit or otherwise credit, or cause or permit
to be so deposited or credited, to any Lock-Box Account cash or cash proceeds
other than Collections.

(k) Reporting Requirements. The Seller will provide to the Administrator (in
multiple copies, if requested by the Administrator) and each Purchaser Agent the
following:

 

Exh. IV - 3

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(i) as soon as available and in any event within 120 days after the end of each
fiscal year of the Seller, unaudited financial statements for such year
certified as to accuracy by the president or treasurer of the Seller;

(ii) as soon as possible and in any event within five days after the occurrence
of each Termination Event or Unmatured Termination Event, a statement of the
president or any vice president of the Seller setting forth details of such
Termination Event or Unmatured Termination Event and the action that the Seller
has taken or proposes to take with respect thereto;

(iii) promptly after the filing or receiving thereof, copies of all reports and
notices that the Seller or any Affiliate other than a Permitted Holder files
under ERISA with the Internal Revenue Service, the Pension Benefit Guaranty
Corporation or the U.S. Department of Labor or that the Seller or any Affiliate
other than a Permitted Holder receives from any of the foregoing or from any
multiemployer plan (within the meaning of Section 4001(a)(3) of ERISA) to which
the Seller or any of its Affiliates other than a Permitted Holder is or was,
within the preceding five years, a contributing employer, in each case in
respect of the assessment of withdrawal liability or an event or condition that
could result in the imposition of liability on the Seller and/or any such
Affiliate;

(iv) at least 30 days before any change in the Seller’s name or any other change
requiring the amendment of UCC financing statements, a notice setting forth such
changes and the effective date thereof;

(v) promptly after the Seller obtains knowledge thereof, notice of any:
(A) adverse litigation, investigation or proceeding that may exist at any time
between the Seller and any Person or (B) material litigation or proceeding
relating to any Transaction Document;

(vi) promptly after the occurrence thereof, notice of a Material Adverse Effect
in the business, operations, property or financial or other condition of the
Seller, the Servicer, any Originator or Greetings; and

(vii) such other information respecting the Receivables or the condition or
operations, financial or otherwise, of the Seller, the Servicer, any Originator
or any of their Affiliates other than a Permitted Holder as the Administrator or
any Purchaser Agent may from time to time reasonably request.

(l) Certain Agreements. Without the prior written consent of the Administrator
and the Majority Purchaser Agents, the Seller will not amend, modify, waive,
revoke or terminate any Transaction Document to which it is a party or any
provision of Seller’s certificate of incorporation, by-laws or code of
regulations, as applicable.

(m) Restricted Payments. (i) Except pursuant to clause (ii) below, the Seller
will not: (A) purchase or redeem any shares of its capital stock, (B) declare or
pay any dividend or set aside any funds for any such purpose, (C) prepay,
purchase or redeem

 

Exh. IV - 4

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any Debt, (D) lend or advance any funds or (E) repay any loans or advances to,
for or from any of its Affiliates (the amounts described in clauses (A) through
(E) being referred to as “Restricted Payments”).

(ii) Subject to the limitations set forth in clause (iii) below, the Seller may
make Restricted Payments so long as such Restricted Payments are made only in
one or more of the following ways: (A) the Seller may make cash payments
(including prepayments) on the Company Notes in accordance with their terms, and
(B) if no amounts are then outstanding under any Company Note, the Seller may
declare and pay dividends.

(iii) The Seller may make Restricted Payments only out of the funds it receives
pursuant to Sections 1.4(b)(ii) and (iv) of the Agreement or from the proceeds
of capital contributions made to it. Furthermore, the Seller shall not pay, make
or declare: (A) any dividend if, after giving effect thereto, the Seller’s
tangible net worth would be less than $10,000,000 or (B) any Restricted Payment
(including any dividend) if, after giving effect thereto, any Termination Event
or Unmatured Termination Event shall have occurred and be continuing.

(n) Other Business. The Seller will not: (i) engage in any business other than
the transactions contemplated by the Transaction Documents; (ii) create, incur
or permit to exist any Debt of any kind (or cause or permit to be issued for its
account any letters of credit or bankers’ acceptances) other than pursuant to
this Agreement or the Company Notes; or (iii) form any Subsidiary or make any
investments in any other Person; provided, however, that the Seller shall be
permitted to incur minimal obligations to the extent necessary for the
day-to-day operations of the Seller (such as expenses for stationery, audits,
maintenance of legal status, etc.).

(o) [Reserved].

(p) Tangible Net Worth. The Seller will not permit its tangible net worth, at
any time, to be less than $10,000,000.

2. Covenants of the Servicer and Greetings. Until the latest of the Facility
Termination Date, the date on which no Investment of or Discount in respect of
the Purchased Interest shall be outstanding, the date on which an amount equal
to 100% of the LC Amount has been deposited in the LC Collateral Account or the
date all other amounts owed by the Seller under the Agreement to the Purchaser
Agents, the Purchasers, the Administrator and any other Indemnified Party or
Affected Person shall be paid in full:

(a) Compliance with Laws, Etc. The Servicer and, to the extent that it ceases to
be the Servicer, Greetings shall comply (and shall cause each Originator to
comply) in all material respects with all applicable laws, rules, regulations
and orders, and preserve and maintain its corporate existence, rights,
franchises, qualifications and privileges, except to the extent that the failure
so to comply with such laws, rules, regulations and orders or the failure so to
preserve and maintain such existence, rights, franchises, qualifications and
privileges would not have a Material Adverse Effect.

 

Exh. IV - 5

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(b) Offices, Records and Books of Account, Etc. Servicer and, to the extent that
it ceases to be the Servicer, Greetings, shall keep (and shall cause each
Originator to keep) its principal place of business and chief executive office
(as such terms or similar terms are used in the applicable UCC) and the office
where it keeps its records concerning the Pool Receivables at the address of the
Servicer set forth under its name on the signature page to the Agreement or,
upon at least 30 days’ prior written notice of a proposed change to the
Administrator, at any other locations in jurisdictions where all actions
reasonably requested by the Administrator to protect and perfect the interest of
the Administrator (for the benefit of each Purchaser) in the Pool Receivables
and related items (including the Pool Assets) have been taken and completed. The
Servicer and, to the extent that it ceases to be the Servicer, Greetings, also
will (and will cause each Originator to) maintain and implement administrative
and operating procedures (including an ability to recreate records evidencing
Pool Receivables and related Contracts in the event of the destruction of the
originals thereof), and keep and maintain all documents, books, records,
computer tapes and disks and other information reasonably necessary or advisable
for the collection of all Pool Receivables (including records adequate to permit
the daily identification of each Pool Receivable and all Collections of and
adjustments to each existing Pool Receivable).

(c) Performance and Compliance with Contracts and Credit and Collection Policy.
The Servicer and, to the extent that it ceases to be the Servicer, Greetings,
shall (and shall cause each Originator to), at its expense, (i) timely perform
and comply in all material respects with all provisions, covenants and other
promises required to be observed by it under the Contracts related to the Pool
Receivables unless the failure to so perform or comply does not involve a
material portion of such Pool Receivables, and the Seller shall have complied
with its obligations with respect to such Pool Receivables set forth in
Section 1.4(e), and (ii) timely comply in all material respects with the
applicable Credit and Collection Policies with regard to each Pool Receivable.

(d) Extension or Amendment of Pool Receivables. Except as provided in the
Agreement, the Servicer and, to the extent that it ceases to be the Servicer,
Greetings, shall not extend (and shall not permit any Originator to extend), the
maturity or adjust the Outstanding Balance or otherwise modify the terms of any
Pool Receivable, or amend, modify or waive any term or condition of any related
Contract in any manner that would modify the terms of any Pool Receivable.

(e) Change in Business or Credit and Collection Policy. The Servicer and, to the
extent that it ceases to be the Servicer, Greetings, shall not make (and shall
not permit any Originator to make) any change in the character of its business
or in any Credit and Collection Policy that would have a Material Adverse
Effect. The Servicer and, to the extent that it ceases to be the Servicer,
Greetings, shall not make (and shall not permit any Originator to make) any
other change in any Credit and Collection Policy without giving prior written
notice thereof to the Administrator and each Purchaser Agent.

(f) Audits. The Servicer and, to the extent that it ceases to be the Servicer,
Greetings, shall (and shall cause each Originator to), from time to time during
regular

 

Exh. IV - 6

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business hours as reasonably requested in advance (unless a Termination Event or
Unmatured Termination Event exists) by the Administrator, Purchaser or any
Purchaser Agent, permit (and cause each Originator) the Administrator, any
Purchaser, any Purchaser Agent or any agent or representative of the foregoing:
(i) to examine and make copies of and abstracts from all books, records and
documents (including computer tapes and disks) in its possession or under its
control (or the control of an Originator) relating to Pool Receivables and the
Related Security, including the related Contracts; and (ii) to visit its offices
and properties (and the offices and property of the Originators) for the purpose
of examining such materials described in clause (i) above, and to discuss
matters relating to Pool Receivables and the Related Security or Greetings’ or
any Originator’s performance under the Transaction Documents or under the
Contracts with any of their respective officers, employees, agents or
contractors having knowledge of such matters and (iii) without limiting clauses
(i) and (ii) above, to engage certified public accountants or other auditors
acceptable to the Servicer and the Administrator to conduct, at the Servicer’s
expense, a review of the Servicer’s books and records with respect to such Pool
Receivables.

(g) Change in Lock-Box Banks, Lock-Box Accounts and Payment Instructions to
Obligors. The Servicer and, to the extent that it ceases to be the Servicer,
Greetings, shall not (and shall not permit any Originator to) add or terminate
any bank as a Lock-Box Bank or any account as a Lock-Box Account from those
listed in Schedule II to the Agreement, or make any change in its instructions
to Obligors regarding payments to be made to the Servicer or any Lock-Box
Account (or related post office box), unless the Administrator and the Majority
Purchaser Agents shall have consented thereto in writing, which consent shall
not be unreasonably withheld or delayed, and the Administrator shall have
received copies of all agreements and documents (including Lock-Box Agreements)
that it may request in connection therewith. Notwithstanding anything contained
in this paragraph (g) to the contrary, the Servicer may add an account as a
Lock-Box Account at a Lock-Box Bank, without the consent of the Administrator
and the Purchasers upon delivery to the Administrator of a Lock-Box Agreement in
form and substance reasonably acceptable to the Administrator.

(h) Deposits to Lock-Box Accounts. The Servicer shall: (i) mail, wire or
otherwise transfer, or cause to be so transferred, any Collections received by
it to Lock-Box Accounts not later than one Business Day after receipt thereof
and (ii) instruct all Obligors to make payments of all Receivables to one or
more Lock-Box Accounts or to post office boxes to which only Lock-Box Banks have
access (and shall instruct the Lock-Box Banks to cause all items and amounts
relating to such Receivables received in such post office boxes to be removed
and deposited into a Lock-Box Account on a daily basis). Except as otherwise
agreed to in writing by the Administrator and the Majority Purchaser Agents,
each Lock-Box Account shall at all times be subject to a Lock-Box Agreement. The
Servicer will not deposit or otherwise credit, or cause or permit to be so
deposited or credited, to any Lock-Box Account cash or cash proceeds other than
Collections.

 

Exh. IV - 7

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(i) Reporting Requirements. Greetings shall provide to the Administrator (in
multiple copies, if requested by the Administrator) and each Purchaser Agent the
following:

(i) as soon as available and in any event within 60 days after the end of the
first three quarters of each fiscal year of Greetings, balance sheets of
Greetings and its consolidated Subsidiaries and Seller as of the end of such
quarter and statements of income, retained earnings and cash flow of Greetings
and its consolidated Subsidiaries for the period commencing at the end of the
previous fiscal year and ending with the end of such quarter, certified by the
chief financial officer or treasurer of such Person;

(ii) as soon as available and in any event within 120 days after the end of each
fiscal year of Greetings, a copy of the annual report for such year for
Greetings and its consolidated Subsidiaries containing financial statements for
such year audited by independent certified public accountants of nationally
recognized standing;

(iii) as to the Servicer only, as soon as available and in any event not later
than two Business Days prior to the Settlement Date, an Information Package as
of the last day of such month or, within 10 Business Days of a request by the
Administrator or any Purchaser Agent, an Information Package for such periods as
is specified by the Administrator or such Purchaser Agent (including on a
semi-monthly, weekly or daily basis);

(iv) as soon as possible and in any event within five days after becoming aware
of the occurrence of each Termination Event or Unmatured Termination Event, a
statement of the chief financial officer of Greetings setting forth details of
such Termination Event or Unmatured Termination Event and the action that such
Person has taken or proposes to take with respect thereto;

(v) promptly after the sending or filing thereof, copies of all reports that
Greetings sends to any of its security holders, and copies of all reports and
registration statements that Greetings or any Subsidiary files with the
Securities and Exchange Commission or any national securities exchange;

(vi) promptly after the filing or receiving thereof, copies of all reports and
notices that Greetings or any of its Affiliate other than a Permitted Holder
files under ERISA with the Internal Revenue Service, the Pension Benefit
Guaranty Corporation or the U.S. Department of Labor or that Greetings or any of
its Affiliates other than a Permitted Holder receives from any of the foregoing
or from any multiemployer plan (within the meaning of Section 4001(a)(3) of
ERISA) to which Greetings or any of its Affiliates other than a Permitted Holder
is or was, within the preceding five years, a contributing employer, in each
case in respect of the assessment of withdrawal liability or an event or
condition that could result in the imposition of a liability on Greetings and/or
any such Affiliate other than a Permitted Holder;

 

Exh. IV - 8

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(vii) at least thirty days before any change in Greetings’s or any Originator’s
name or any other change requiring the amendment of UCC financing statements, a
notice setting forth such changes and the effective date thereof;

(viii) promptly after Greetings obtains knowledge thereof, notice of any:
(A) litigation, investigation or proceeding that may exist at any time between
Greetings or any of its Subsidiaries and any other Person that, if not cured or
if adversely determined, as the case may be, would reasonably be expected to
result in a Material Adverse Effect or (B) litigation or proceeding relating to
any Transaction Document;

(ix) promptly after the occurrence thereof, notice of any Material Adverse
Effect;

(x) such other information respecting the Receivables or the condition or
operations, financial or otherwise, of Greetings, any Originator or any of their
respective Affiliates other than a Permitted Holder as the Administrator or any
Purchaser Agent may from time to time reasonably request; and

(xi) promptly after the occurrence thereof, notice of any material acquisition
or investment by Greetings of or in any Person, business or operation.

3. Separate Existence. Each of the Seller and Greetings hereby acknowledges that
the Purchasers, the Purchaser Agents, the Administrator and the Liquidity
Providers are entering into the transactions contemplated by this Agreement and
the other Transaction Documents in reliance upon the Seller’s and AGSC’s
identity as a legal entity separate from Greetings and its Affiliates.
Therefore, from and after the date hereof, each of the Seller and Greetings
shall take all steps specifically required by the Agreement or reasonably
required by the Administrator to continue the Seller’s and AGSC’s identity as
separate legal entities and to make it apparent to third Persons that each of
the Seller and AGSC is an entity with assets and liabilities distinct from those
of Greetings and any other Person, and is not a division of Greetings, its
Affiliates or any other Person. Without limiting the generality of the foregoing
and in addition to and consistent with the other covenants set forth herein,
each of the Seller and Greetings shall take such actions as shall be required in
order that:

(a) The Seller will be a limited purpose corporation whose primary activities
are restricted in its certificate of incorporation to: (i) purchasing or
otherwise acquiring from the Originators, owning, holding, granting security
interests or selling interests in Pool Assets, (ii) entering into agreements for
the selling and servicing of the Receivables Pool, and (iii) conducting such
other activities as it deems necessary or appropriate to carry out its primary
activities;

(b) Seller shall not engage in any business or activity, or incur any
indebtedness or liability, other than as set forth in clause (a) above or as
otherwise expressly permitted by the Transaction Documents;

 

Exh. IV - 9

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(c) Not less than one member of the Seller’s Board of Directors (the
“Independent Director”) shall be an individual who is not a direct, indirect or
beneficial stockholder, officer, director, employee, affiliate, associate or
supplier of Greetings or any of its Affiliates. The certificate of incorporation
of the Seller shall provide that: (i) the Seller’s Board of Directors shall not
approve, or take any other action to cause the filing of, a voluntary bankruptcy
petition with respect to the Seller unless the Independent Director shall
approve the taking of such action in writing before the taking of such action,
and (ii) such provision cannot be amended without the prior written consent of
the Independent Director;

(d) The Independent Director shall not at any time serve as a trustee in
bankruptcy for the Seller, Greetings or any Affiliate thereof;

(e) Any employee, consultant or agent of the Seller or AGSC will be compensated
from the Seller’s or AGSC’s funds (as appropriate) for services provided to the
Seller or AGSC. Seller will not engage any agents other than its attorneys,
auditors and other professionals and a servicer and any other agent contemplated
by the Transaction Documents for the Receivables Pool, which servicer will be
fully compensated for its services by payment of the Servicing Fee;

(f) The Seller will contract with the Servicer to perform for the Seller all
operations required on a daily basis to service the Receivables Pool. The Seller
will pay the Servicer the Servicing Fee pursuant to the Agreement. The Seller
will not incur any material indirect or overhead expenses for items shared with
Greetings (or any other Affiliate thereof) that are not reflected in the
Servicing Fee. To the extent, if any, that the Seller or AGSC (or any Affiliate
thereof) shares items of expenses not reflected in the Servicing Fee, such as
legal, auditing and other professional services, such expenses will be allocated
to the extent practical on the basis of actual use or the value of services
rendered, and otherwise on a basis reasonably related to the actual use or the
value of services rendered; it being understood that Greetings shall pay all
expenses relating to the preparation, negotiation, execution and delivery of the
Transaction Documents, including legal, agency and other fees;

(g) Neither the Seller’s nor AGSC’s operating expenses will be paid by Greetings
or any other Affiliate thereof;

(h) All of the Seller’s and AGSC’s business correspondence and other
communications shall be conducted in their respective names and on their own
separate stationery;

(i) The Seller’s and AGSC’s books and records will be maintained separately from
those of Greetings and any other Affiliate thereof;

(j) All financial statements of Greetings or any Affiliate thereof that are
consolidated to include Seller or AGSC will contain detailed notes clearly
stating that: (i) each is a special purpose corporation and a Subsidiary of
Greetings, and (ii) the

 

Exh. IV - 10

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Originators have sold Receivables and other related assets to Seller and Seller
has sold undivided interests therein to certain financial institutions and other
entities;

(k) The Seller’s and AGSC’s assets will be maintained in a manner that
facilitates their identification and segregation from those of Greetings or any
Affiliate thereof;

(l) Each of the Seller and AGSC will strictly observe corporate formalities in
its dealings with Greetings or any Affiliate thereof, and funds or other assets
of the Seller will not be commingled with those of Greetings or any Affiliate
thereof except as permitted by the Agreement in connection with servicing the
Pool Receivables. The Seller shall not maintain joint bank accounts or other
depository accounts to which Greetings and/or any Affiliate thereof (other than
Greetings in its capacity as the Servicer and any permitted Sub-Servicer) has
independent access. Neither the Seller nor AGSC has been named, nor has entered
into any agreement to be named, directly or indirectly, as a direct or
contingent beneficiary or loss payee on any insurance policy with respect to any
loss relating to the property of Greetings or any Subsidiary or other Affiliate
of Greetings. The Seller will pay to the appropriate Affiliate their respective
share of the marginal increase or, in the absence of such increase, the market
amount of their respective share of the portion of the premium payable with
respect to any insurance policy that covers the Seller and such Affiliate;

(m) The Seller and AGSC will maintain arm’s-length relationships with Greetings
(and any Affiliate thereof). Any Person that renders or otherwise furnishes
services to the Seller and/or AGSC will be compensated by the Seller or AGSC (as
appropriate) at market rates for such services it renders or otherwise furnishes
to the Seller or AGSC (as appropriate). Neither the Seller or AGSC, on the one
hand, nor Greetings, on the other hand, will be or will hold itself out to be
responsible for the debts of the other or the decisions or actions respecting
the daily business and affairs of the other. The Seller, AGSC and Greetings will
immediately correct any known misrepresentation with respect to the foregoing,
and they will not operate or purport to operate as an integrated single economic
unit with respect to each other or in their dealing with any other entity; and

(n) Greetings shall not pay the salaries of Seller’s or AGSC’s employees, if
any, for services rendered by such employees exclusively for the Seller.

 

Exh. IV - 11

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EXHIBIT V

TERMINATION EVENTS

Each of the following shall be a “Termination Event”:

(a) (i) the Seller, Greetings, any Originator or the Servicer shall fail to
perform or observe any term, covenant or agreement under the Agreement or any
other Transaction Document to be observed or performed by it, (ii) the Seller or
the Servicer shall fail to make when due any payment or deposit to be made by it
under the Agreement and such failure shall continue unremedied for one Business
Day or (iii) Greetings shall resign as Servicer, and no successor Servicer
reasonably satisfactory to the Administrator and the Majority Purchaser Agents
shall have been appointed; provided that at all times when the Administrator is
not permitted to demand that the Servicer segregate Collections pursuant to
Section 1.4(b), no Termination Event or Unmatured Termination Event shall arise
solely from the Seller’s or Servicer’s (whether as Greetings or as Servicer)
failure to comply with the first sentence of Sections 1(j) or 2(h) of Exhibit IV
to this Agreement (respectively) with respect to Collections received as wire
transfers, unless and until the Servicer shall fail to transfer Collections
received by it at any time the aggregate amount of such Collections during any
calendar month and not previously transferred shall exceed $100,000 for such
calendar month; provided, further, that with respect to the failure described in
clause (a)(i) hereinabove, if such failure may be cured without any potential or
actual detriment to any Purchaser, then the Seller, Greetings, any Originator or
the Servicer, as applicable, shall have ten days from the earlier of (A) such
Person’s knowledge of such failure and (B) notice to such Person of such failure
to so cure any such failure before a Termination Event shall occur, so long as
such Person is diligently attempting to effect such cure.

(b) Greetings (or any Affiliate thereof) shall fail to transfer to any successor
Servicer when required any rights pursuant to the Agreement that Greetings (or
such Affiliate) then has as Servicer;

(c) any representation or warranty made or deemed made by the Seller, Greetings
or any Originator (or any of their respective officers) under or in connection
with the Agreement or any other Transaction Document, or any information or
report delivered by the Seller, Greetings or any Originator or the Servicer
pursuant to the Agreement or any other Transaction Document, shall prove to have
been incorrect or untrue in any material respect when made or deemed made or
delivered; provided, however, that if the representation and warranty contained
in Sections 1(g), 1(n) or 1(t) of Exhibit III to this Agreement shall prove to
have been incorrect or untrue in any material respect when made or deemed made
or delivered, such breach shall not constitute a Termination Event if the Seller
shall have complied with its obligations with respect to such Receivable set
forth in Section 1.4(e); provided, further, that if such breach may be cured
without any potential or actual detriment to any Purchaser, then the Seller,
Greetings or any Originator, as applicable, shall have ten days from the earlier
of (A) such Person’s knowledge of such breach and (B) notice to such Person of
such

 

Exh. V - 1

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breach to so cure any such breach before a Termination Event shall occur, so
long as such Person is diligently attempting to effect such cure.

(d) the Seller or the Servicer shall fail to deliver the Information Package
pursuant to the Agreement, and such failure shall remain unremedied for two
Business Days;

(e) the Agreement or any Purchase or reinvestment pursuant to the Agreement
shall for any reason: (i) cease to create, or the Purchased Interest shall for
any reason cease to be, a valid and enforceable perfected undivided percentage
ownership or security interest to the extent of the Purchased Interest in each
Pool Receivable, the Related Security and Collections with respect thereto, free
and clear of any Adverse Claim, or (ii) cease to create with respect to the Pool
Assets, or the interest of the Administrator (for the benefit of the Purchasers)
with respect to such Pool Assets shall cease to be, a valid and enforceable
first priority perfected security interest, free and clear of any Adverse Claim;

(f) the Seller, Greetings, AGSC or any Originator shall generally not pay its
debts as such debts become due, or shall admit in writing its inability to pay
its debts generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against the Seller,
Greetings, AGSC or any Originator seeking to adjudicate it bankrupt or
insolvent, or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a receiver,
trustee, custodian or other similar official for it or for any substantial part
of its property and, in the case of any such proceeding instituted against
Greetings, the Seller, AGSC or any Originator (but not instituted by it), either
such proceeding shall remain undismissed or unstayed for a period of 60 days
(provided, however, that if any such proceeding against the Seller remains
undismissed or unstayed on any following day after such proceeding is filed,
then any Purchaser Agent may declare the occurrence of a Termination Event by
giving notice to all parties), or any of the actions sought in such proceeding
(including the entry of an order for relief against, or the appointment of a
receiver, trustee, custodian or other similar official for, it or for any
substantial part of its property) shall occur; or the Seller, Greetings, AGSC or
any Originator shall take any organizational action to authorize any of the
actions set forth above in this paragraph;

(g) (i) (A) the Everyday Default Ratio shall exceed 5.0%, (B) the Disputed
Default Ratio shall exceed 3.0%, (C) the Seasonal Default Ratio shall exceed
3.0%, (D) the Delinquency Ratio shall exceed 38% or (ii) the average for three
consecutive calendar months of (A) the Everyday Default Ratio shall exceed 4.0%,
(B) the Disputed Default Ratio shall exceed 2.5%, (C) the Seasonal Default Ratio
shall exceed 2.5%, (D) the Delinquency Ratio shall exceed 34%, or (E) the
Dilution Ratio shall exceed 7%; or (iii) Days Sales Outstanding shall exceed
100.

(h) a Change in Control shall occur with respect to Seller, any Originator or
Greetings;

 

Exh. V - 2

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(i) at any time (i) the sum of (A) the Aggregate Investment plus (B) the LC
Amount plus (C) the Total Reserves, exceeds (ii) the sum of (A) the Net
Receivables Pool Balance at such time plus (B) the Purchasers’ Share of the
amount of Collections then on deposit in the Lock-Box Accounts (other than
amounts set aside therein representing Discount and Fees), plus (C) the sum of
all amounts then on deposit in the LC Collateral Account, and such circumstance
shall not have been cured within two Business Days;

(j) (i) Greetings or any of its Subsidiaries shall fail to pay any principal of
or premium or interest on any of its Debt that is outstanding in a principal
amount of at least $20,000,000 in the aggregate when the same becomes due and
payable (whether by scheduled maturity, required prepayment, acceleration,
demand or otherwise), and such failure shall continue after the applicable grace
period, if any, specified in the agreement, mortgage, indenture or instrument
relating to such Debt (and shall have not been waived); or (ii) any other event
shall occur or condition shall exist under any agreement, mortgage, indenture or
instrument relating to any such Debt and shall continue after the applicable
grace period, if any, specified in such agreement, mortgage, indenture or
instrument (and shall have not been waived), if, in either case: (a) the effect
of such non-payment, event or condition is to give the applicable debtholders
the right (whether acted upon or not) to accelerate the maturity of such Debt,
or (b) any such Debt shall be declared to be due and payable, or required to be
prepaid (other than by a regularly scheduled required prepayment), redeemed,
purchased or defeased, or an offer to repay, redeem, purchase or defease such
Debt shall be required to be made, in each case before the stated maturity
thereof;

(k) either: (i) a contribution failure shall occur with respect to any Benefit
Plan sufficient to give rise to a lien under Section 302(f) of ERISA, (ii) the
Internal Revenue Service shall file a notice of lien asserting a claim or claims
pursuant to the Internal Revenue Code with regard to any of the assets of
Seller, any Originator, Greetings or any ERISA Affiliate and such lien shall
have been filed and not released within 10 days, or (iii) the Pension Benefit
Guaranty Corporation shall, or shall indicate its intention in writing to the
Seller, any Originator, Greetings or any ERISA Affiliate to, either file a
notice of lien asserting a claim pursuant to ERISA with regard to any assets of
the Seller, any Originator, Greetings or any ERISA Affiliate or terminate any
Benefit Plan that has unfunded benefit liabilities, or any steps shall have been
taken to terminate any Benefit Plan subject to Title IV of ERISA so as to result
in any liability in excess of $1,000,000 and such lien shall have been filed and
not released within 10 days;

(l) one or more final judgments for the payment of money shall be entered
against the Seller or (ii) one or more final judgments for the payment of money
in an amount in excess of $20,000,000, individually or in the aggregate, shall
be entered against the Servicer on claims not covered by insurance or as to
which the insurance carrier has denied its responsibility, and such judgment
shall continue unsatisfied and in effect for sixty (60) consecutive days without
a stay of execution;

 

Exh. V - 3

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(m) Any Letter of Credit is drawn upon and, unless as a result of the LC Bank’s
failure to provide the notice required by Section 1.14(b), not fully reimbursed
pursuant to Section 1.14 (including, if applicable, with the proceeds of any
funding by the applicable Conduit Purchaser) within two Business Days from the
date of such draw.

(n) the “Receivables Sale Termination Date” under and as defined in the
Receivables Sale Agreement shall occur under the Receivables Sale Agreement or
any Originator thereunder shall for any reason (other than as a result of or in
connection with its merger into, or its transfer of all or substantially all of
its assets or business to, another Originator) cease to transfer, or cease to
have the legal capacity to transfer, or otherwise be incapable of transferring
Receivables under the Receivables Sale Agreement;

(o) the “Sale and Contribution Termination Date” under and as defined in the
Sale and Contribution Agreement shall occur under the Sale and Contribution
Agreement or Greetings shall for any reason (other than as a result of or in
connection with its merger into, or its transfer of all or substantially all of
its assets or business to, another Originator) cease to transfer, or cease to
have the legal capacity to transfer, or otherwise be incapable of transferring
Receivables under the Sale and Contribution Agreement;

(p) Moody’s or Standard & Poor’s shall request any amendment, supplement or
other modification of the Agreement or any other Transaction Document which is
not consented to by the Seller and Greetings within 10 Business Days after the
applicable Purchaser Agent has provided notice thereof to the parties hereto;

(q) the amount of dilutions recorded on any Information Package (i) with respect
to Receivables originated by any Originator other than Plus Mark, Inc., for any
of (a) seasonal returns, (b) advertising allowances or (c) volume rebates or
(ii) with respect to Receivables originated by Plus Mark, Inc., for any of the
Plus Mark, Inc. specific factors, exceeds the reserves or liabilities reported
on the immediately prior Information Package related to such dilution category;
or

(r) Greetings shall breach, default on or fail to comply with the “Leverage
Ratio” as required under the Credit Agreement; provided, however, that it shall
not be a Termination Event under the Agreement if such breach, default or
failure is waived by the requisite lenders under the Credit Agreement.

 

Exh. V - 4