Loan Agreement – American Greetings Corp. and Schurman Fine Papers

THIS INSTRUMENT AND THE RIGHTS AND OBLIGATIONS EVIDENCED HEREBY ARE
SUBORDINATE IN THE MANNER AND TO THE EXTENT SET FORTH IN THAT CERTAIN
INTERCREDITOR AND SUBORDINATION AGREEMENT, DATED AS OF THE DATE HEREOF (THE
“SUBORDINATION AGREEMENT”), AMONG BORROWER (AS HEREINAFTER DEFINED), LENDER (AS
HEREINAFTER DEFINED) AND SENIOR AGENT (AS HEREINAFTER DEFINED), TO THE
INDEBTEDNESS (INCLUDING INTEREST) OWED BY BORROWER PURSUANT TO THAT CERTAIN
FIRST AMENDED LOAN AND SECURITY AGREEMENT, DATED AS OF THE DATE HEREOF (THE
“SENIOR LOAN AGREEMENT”), AMONG BORROWER, THE SUBSIDIARIES OF BORROWER PARTY
THERETO, THE LENDERS FROM TIME TO TIME PARTY THERETO AND SENIOR AGENT AND
PURSUANT TO THE OTHER LOAN DOCUMENTS (AS DEFINED IN THE SENIOR LOAN AGREEMENT)
AS SUCH SENIOR LOAN AGREEMENT AND OTHER LOAN DOCUMENTS MAY BE AMENDED, RESTATED,
SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME AND TO INDEBTEDNESS
REFINANCING THE INDEBTEDNESS THEREUNDER AS CONTEMPLATED BY THE SUBORDINATION
AGREEMENT; AND EACH HOLDER OF THIS INSTRUMENT, BY ITS ACCEPTANCE HEREOF,
IRREVOCABLY AGREES TO BE BOUND BY THE PROVISIONS OF THE SUBORDINATION
AGREEMENT.

LOAN AGREEMENT

by and between

SCHURMAN FINE PAPERS, d/b/a PAPYRUS

as Borrower,

and

AMERICAN GREETINGS CORPORATION

as Lender

Dated as of April 17, 2009

TABLE OF CONTENTS

						Page
1.		DEFINITIONS AND CONSTRUCTION					1
		1.1		Definitions			1
		1.2		Accounting Terms			16
		1.3		Code			16
		1.4		Construction			16
		1.5		Schedules and Exhibits			16
2.		LOAN AND TERMS OF PAYMENT					16
		2.1		Revolving Credit			16
		2.2		Procedure for Borrowing			17
		2.3		Payments			17
		2.4		Interest Rates: Rates, Payments, and Calculations			17
		2.5		Crediting Payments			18
		2.6		Designated Account			19
		2.7		Maintenance of Loan Account; Statements of Obligations			19
		2.8		Fees			19
3.		CONDITIONS; TERM OF AGREEMENT					19
		3.1		Conditions Precedent to Initial Extension of Credit			19
		3.2		Conditions Precedent to all Extensions of Credit			21
		3.3		Term			22
		3.4		Effect of Termination			22
		3.5		Early Termination by Borrower; Reduction of Commitment			22
4.		REPRESENTATIONS AND WARRANTIES					23
		4.1		No Encumbrances			23
		4.2		Records			23
		4.3		Legal Status			23
		4.4		Due Organization and Qualification; Subsidiaries			23
		4.5		Due Authorization; No Conflict			24
		4.6		Litigation			25
		4.7		No Material Adverse Change			25
		4.8		Fraudulent Transfer			25

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TABLE OF CONTENTS
(continued)

						Page
		4.9		Employee Benefits			26
		4.10		Environmental Condition			26
		4.11		Brokerage Fees			26
		4.12		Intellectual Property			26
		4.13		Leases			26
		4.14		Indebtedness			26
		4.15		Filing of Tax Returns and Payment of Taxes			27
		4.16		Royalty Payments			27
		4.17		Complete Disclosure			27
		4.18		Reserved			27
		4.19		Insurance			27
		4.20		Requirements of Law			28
		4.21		No Margin Stock			28
		4.22		Investment Company Status			28
		4.23		No Events of Default			28
		4.24		Use of Proceeds			28
		4.25		Shareholder Agreements			28
		4.26		Investments			28
5.		AFFIRMATIVE COVENANTS					28
		5.1		Accounting System			28
		5.2		Financial Statements, Reports, Certificates			28
		5.3		Returns			30
		5.4		Maintenance of Properties			30
		5.5		Tax Matters			31
		5.6		Insurance			31
		5.7		Location of Inventory and Equipment			32
		5.8		Compliance with Laws			32
		5.9		Leases			32
		5.10		Existence			32
		5.11		Environmental			32

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TABLE OF CONTENTS
(continued)

						Page
		5.12		Immediate Notice to Lender			32
		5.13		Disclosure Updates			33
		5.14		Solvency			33
		5.15		Line of Business: Borrower and Subsidiaries			33
		5.16		Royalty Payments			33
6.		NEGATIVE COVENANTS					34
		6.1		Indebtedness			34
		6.2		Liens			35
		6.3		Restrictions on Fundamental Changes			35
		6.4		Disposal of Assets			35
		6.5		Change of Name or Address			35
		6.6		Nature of Business			35
		6.7		Prepayments and Amendments			35
		6.8		Change of Control			36
		6.9		Distributions			36
		6.10		Accounting Methods			36
		6.11		Investments			36
		6.12		Transactions with Affiliates			36
		6.13		Store Openings and Closings			36
		6.14		Suspension			37
		6.15		Use of Proceeds			37
		6.16		Benefit Plans			37
		6.17		Warrants			37
		6.18		Shareholder Agreements			37
		6.19		Fiscal Year			37
7.		EVENTS OF DEFAULT					37
		7.1		Payment			37
		7.2		Covenants, etc.			37
		7.3		Attachment			37
		7.4		Insolvency			38

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TABLE OF CONTENTS
(continued)

						Page
		7.5		Involuntary Insolvency			38
		7.6		Injunction			38
		7.7		Levy			38
		7.8		Judgment			38
		7.9		Material Agreements			38
		7.10		Insurance			39
		7.11		Subordinated Debt			39
		7.12		Misrepresentation			39
		7.13		Loan Documents			39
		7.14		Material Adverse Change			39
		7.15		Change of Control			39
		7.16		Material Restraint			39
8.		LENDER’S RIGHTS AND REMEDIES					39
		8.1		Rights and Remedies			39
		8.2		Remedies Cumulative			40
9.		TAXES AND EXPENSES					40
10.		WAIVERS; INDEMNIFICATION					40
		10.1		Demand; Protest; etc.			40
		10.2		Indemnification			40
		10.3		Costs and Expenses of Lender			41
11.		NOTICES					42
12.		CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER					43
13.		MISCELLANEOUS PROVISIONS					44
		13.1		Successors			44
		13.2		Amendments and Waivers			44
		13.3		No Waivers; Cumulative Remedies			44
		13.4		Reliance by Lender			44
14.		GENERAL PROVISIONS					44
		14.1		Effectiveness			44
		14.2		Section Headings			44

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TABLE OF CONTENTS
(continued)

						Page
		14.3		Reserved			44
		14.4		Severability of Provisions			44
		14.5		Amendments in Writing			44
		14.6		Counterparts; Telefacsimile Execution			45
		14.7		Revival and Reinstatement of Obligations			45
		14.8		Integration			45
		14.9		Reserved			45
		14.10		Press Releases			45
		14.11		No Strict Construction			45

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TABLE OF CONTENTS

EXHIBITS AND SCHEDULES

Exhibit A-1		Form of Compliance Certificate
Exhibit B-1		Business Plan
Exhibit 2.1(f)		Form of Revolving Credit Note
Schedule P-1		Permitted Liens
Schedule 4.3		Legal Status
Schedule 4.4(b)		Capitalization of Borrower
Schedule 4.4(c)		Borrower’s Subsidiaries
Schedule 4.4(d)		Options and Warrants
Schedule 4.5		Consents, Approvals, and Registrations
Schedule 4.6(a)		Litigation
Schedule 4.10		Environmental Matters
Schedule 4.12		Intellectual Property
Schedule 4.14		Permitted Indebtedness
Schedule 4.16		Royalty Contracts and Payments
Schedule 4.19		Insurance
Schedule 4.25		Shareholder Agreements
Schedule 4.26		Existing Permitted Investments
Schedule 5.7		Location of Inventory and Equipment
Schedule 6.15		Subleases

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LOAN AGREEMENT

THIS LOAN AGREEMENT (this “Agreement“) is entered
into as of April 17, 2009 by and between AMERICAN GREETINGS
CORPORATION, an Ohio corporation (“Lender“), with offices at One
American Road, Cleveland, Ohio 44144, and SCHURMAN FINE PAPERS
d/b/a PAPYRUS (“Papyrus” or
“Borrower“), in consideration of mutual covenants contained herein and
benefits derived herefrom.

RECITALS

WHEREAS, Borrower has requested that Lender provide, and Lender is willing to
provide, a revolving credit facility on the terms and conditions set forth in
this Agreement and the other Loan Documents.

NOW THEREFORE, in consideration of the mutual covenants contained herein and
the benefits to be derived herefrom, the parties hereto hereby agree as follows.

WITNESSETH:

1. DEFINITIONS AND CONSTRUCTION.

1.1 Definitions.

As used in this Agreement, the following terms shall have the following
definitions:

“Accounts” means all of Borrower’s now owned or hereafter acquired
rights, title, and interests with respect to “accounts” (as such term is defined
from time to time in the Code and including, without limitation, credit card
receivables), and any and all supporting obligations in respect thereof.

“Acquired Assets” means the “Retailed Purchased Assets” as such term
is defined in the Purchase and Sale Agreement.

“Act” has the meaning set forth in Section 14.9.

“Administrative Fee” has the meaning set forth in Section
2.8(d).

“Advances” has the meaning set forth in Section 2.1(a).

“Affiliate” means, as applied to any Person, any other Person who,
directly or indirectly, controls, is controlled by, or is under common control
with, such Person. For purposes of this definition, “control” means the
possession, directly or indirectly, of the power to direct the management and
policies of a Person, whether through the ownership of Stock, by contract, or
otherwise; provided, however, that, for purposes of Section
6.12 hereof: (a) any Person which owns directly or indirectly 10% or more of
the securities having ordinary voting power for the election of directors or
other members of the governing body of a Person or 10% or more of the
partnership or other ownership interests of a Person (other than as a limited
partner of such Person) shall be deemed to control such Person; (b) each
director (or comparable manager) of a

Person shall be deemed to be an Affiliate of such Person; and (c) each
partnership or joint venture in which a Person is a partner or joint venturer
shall be deemed to be an Affiliate of such Person. In no event shall Lender be
deemed an Affiliate of Borrower.

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

“AG Credit Agreement” means that certain Credit Agreement, dated as of
April 4, 2006, by and among Lender, the foreign subsidiaries of Lender from time
to time party thereto, the lenders from time to time party thereto, National
City Bank, as global administrative agent, and the other agents party thereto,
as the same may be from time to time modified, amended, restated or
supplemented, and any renewal, extension or refinancing thereof.

“Applicable Law” means as to any Person: (i) all statutes, rules,
regulations, orders, treaties or other requirements having the force of law, and
(ii) all court orders, judgments, opinions, decrees and injunctions,
arbitrator’s decisions, and/or similar rulings, in each instance (i) and (ii) of
or by any federal, state, municipal, and other Governmental Authority, or court,
tribunal, panel, or other body which has or claims jurisdiction over such
Person, or any property of such Person, or of any other Person for whose conduct
such Person would be responsible.

“Authorized Person” means the Chief Executive Officer or the Chief
Financial Officer of Borrower, or any other officer or employee designated by
the Board of Directors of Borrower in writing to Lender and reasonably
acceptable to Lender.

“Availability” means, as of any date of determination, the result of

(a) the Maximum Revolver Amount

Minus

(b) the aggregate unpaid balance of the Loan Account

Minus

(c) the undrawn face amount of the Letter of Credit (Bridge).

“Bankruptcy Code” means the United States Bankruptcy Code, as in
effect from time to time.

“Base Rate” means the greater of (i) the “Base Rate” as defined in the
AG Credit Agreement and (ii) the sum of the “Adjusted Eurodollar Rate” as
defined in the AG Credit Agreement plus 1.0%.

“Base Rate Margin” means 6.5% per annum.

“Benefit Plan” means a “defined benefit plan” (as defined in Section
3(35) of ERISA) for which Borrower or any Subsidiary or ERISA Affiliate of
Borrower has been an “employer” (as defined in Section 3(5) of ERISA) within the
past six years.

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“Board of Directors” means the board of directors (or comparable
managers) of Borrower or any committee thereof duly authorized to act on behalf
thereof.

“Books” means all of Borrower’s and its Subsidiaries’ now owned or
hereafter acquired books and records (including all of its Records indicating,
summarizing, or evidencing its assets or liabilities, all of Borrower’s or its
Subsidiaries’ Records relating to its or their business operations or financial
condition, and all of its or their goods (as defined in the Code) or General
Intangibles related to such information).

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

“Borrowing” means a borrowing hereunder consisting of Advances made on
the same day by Lender.

“Business Day” means any day that is not a Saturday, Sunday, or other
day on which national banks are authorized or required to close in Cleveland,
Ohio.

“Business Plan” means the set of Projections of Borrower for the
period following the Closing Date to January 2011 (on a year by year basis)
attached hereto as Exhibit B-1, and similar sets of monthly and annual
Projections required to be delivered pursuant to Section 5.2 of this
Agreement, together, in each case, with any amendment, modification or revision
thereto approved by Lender in its Permitted Discretion.

“Capital Expenditures” means expenditures for the purchase or
construction of fixed assets, plant and equipment which are capitalized in
accordance with GAAP.

“Capital Lease” means a lease that is required to be capitalized for
financial reporting purposes in accordance with GAAP.

“Capitalized Lease Obligation” means any Indebtedness represented by
obligations under a Capital Lease.

“Cash Equivalents” means (a) marketable direct obligations issued or
unconditionally guaranteed by the United States or issued by any agency thereof
and backed by the full faith and credit of the United States, in each case
maturing within one year from the date of acquisition thereof, (b) marketable
direct obligations issued by any state of the United States or any political
subdivision of any such state or any public instrumentality thereof maturing
within one year from the date of acquisition thereof and, at the time of
acquisition, having the highest rating obtainable from either S&P or
Moody’s, (c) commercial paper maturing no more than 270 days from the date of
acquisition thereof and, at the time of acquisition, having a rating of A-1 or
P-1, or better, from S&P or Moody’s, and (d) certificates of deposit or
bankers’ acceptances maturing within one year from the date of acquisition
thereof either (i) issued by any bank organized under the laws of the United
States or any state thereof which bank has a rating of A or A2, or better, from
S&P or Moody’s, or (ii) certificates of deposit less than or equal to
$100,000 in the aggregate issued by any other bank insured by the Federal
Deposit Insurance Corporation.

“Change of Control” means (a) any “person” or “group” (within the
meaning of Sections 13(d) and 14(d) of the Exchange Act), other than Permitted
Holders, becomes the beneficial

-3-

owner (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of more than 20% of the Stock of Borrower having the right to vote
for the election of members of the Board of Directors of Borrower; (b) a
majority of the members of the Board of Directors of Borrower do not constitute
Continuing Directors; (c) Parent or a Subsidiary of Parent ceases to
collectively own and control, directly or indirectly, 55% of the outstanding
capital Stock or limited liability company membership interests of Borrower; or
(d) Borrower ceases to own and control, directly or indirectly, 100% of the
outstanding capital Stock or limited liability company membership interests of
any of its direct or indirect Subsidiaries.

“Closing Date” means the date on which all of the conditions precedent
set forth at Section 3.1 are satisfied as determined by Lender in its
Permitted Discretion.

“Code” means the Uniform Commercial Code, as in effect from time to
time in the State of Ohio.

“Commitment” means Ten Million Dollars ($10,000,000.00).

“Compliance Certificate” means a certificate substantially in the form
of Exhibit A-1 delivered by the chief financial officer of Borrower to
Lender.

“Consolidated” means when used to modify a financial term, test,
statement, or report, refers to the application or preparation of such term,
test, statement or report (as applicable) based upon the consolidation, in
accordance with GAAP, of the financial condition or operating results of
Borrower and its Subsidiaries.

“Continuing Director” means (a) any member of the Board of Directors
of Borrower who was a director (or comparable manager) of Borrower on the
Closing Date, and (b) any individual who becomes a member of the Board of
Directors after the Closing Date if such individual was appointed or nominated
for election to the Board of Directors by a majority of the Continuing
Directors, but excluding any such individual originally proposed for election in
opposition to the Board of Directors in office at the Closing Date in an actual
or threatened election contest relating to the election of the directors (or
comparable managers) of Borrower (as such terms are used in Rule 14a-11 under
the Exchange Act) and whose initial assumption of office resulted from such
contest or the settlement thereof.

“Customer Credit Liabilities” means gift certificates, customer
deposits, merchandise credits, layaway obligations, frequent shopper programs,
and similar liabilities of Borrower to their retail customers and prospective
customers.

“Daily Balance” means, with respect to each day during the term of
this Agreement, the amount of an Obligation owed at the end of such day.

“Default” means an event, condition, or default that, with the giving
of notice, the passage of time, or both, would be an Event of Default.

“Default Rate” means the applicable interest as set forth in
Section 2.4(c).

-4-

“Designated Account” means an account of Borrower located at Wells
Fargo Bank, N.A. with account number 4121720502 and ABA number 121000248.

“Distribution” means, with respect to any Person, (a) the declaration
or payment of any dividend on or in respect of any shares of any class of
capital Stock of such Person, other than dividends payable solely in shares of
common Stock of such Person, (b) the purchase, redemption, or other retirement
of any shares of any class of capital Stock of such Person, directly or
indirectly, (c) the return of capital by such Person to its shareholders or
members, or (d) any other distribution on or in respect of any shares of any
class of capital Stock of such Person.

“Disposed Assets” means the “Wholesale Purchased Assets” as such term
is defined in the Purchase and Sale Agreement.

“Dollars” or “$” means United States dollars.

“Environmental Actions” means any complaint, summons, citation,
notice, directive, order, claim, litigation, investigation, judicial or
administrative proceeding, judgment, letter, or other communication from any
Governmental Authority, or any third party involving violations of Environmental
Laws or releases of Hazardous Materials from (a) any assets, properties, or
businesses of Borrower or any predecessor in interest, (b) from adjoining
properties or businesses, or (c) from or onto any facilities which received
Hazardous Materials generated by Borrower or any predecessor in interest.

“Environmental Law” means any applicable federal, state, provincial,
foreign or local statute, law, rule, regulation, ordinance, code, binding and
enforceable guideline, binding and enforceable written policy or rule of common
law now or hereafter in effect and in each case as amended, or any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent decree or judgment, to the extent binding on Borrower, relating
to the environment, employee health and safety, or Hazardous Materials,
including the Comprehensive Environmental Response, Compensation, and Liability
Act of 1980, 42 U.S.C. § 9601 et seq.; the Resource Conservation
and Recovery Act, 42 U.S.C. § 6901 et seq.; the Federal Water
Pollution Control Act, 33 U.S.C. § 1251 et seq.; the Toxic
Substances Control Act, 15 U.S.C. § 2601 et seq.; the Clean Air
Act, 42 U.S.C. § 7401 et seq.; the Safe Drinking Water Act, 42
U.S.C. § 3803 et seq.; the Oil Pollution Act of 1990, 33 U.S.C. §
2701 et seq.; the Emergency Planning and the Community
Right-to-Know Act of 1986, 42 U.S.C. § 11001 et seq.; the Hazardous
Material Transportation Act, 49 U.S.C. § 1801 et seq.; and the
Occupational Safety and Health Act, 29 U.S.C. §651 et seq. (to the
extent it regulates occupational exposure to Hazardous Materials); any state and
local or foreign counterparts or equivalents, in each case as amended from time
to time.

“Environmental Liabilities and Costs” means all liabilities, monetary
obligations, Remedial Actions, losses, damages, punitive damages, consequential
damages, treble damages, costs and expenses (including all reasonable fees,
disbursements and expenses of counsel, experts, or consultants, and costs of
investigation and feasibility studies), fines, penalties, sanctions, and
interest incurred as a result of any claim or demand by any Governmental
Authority or any third party, and which relate to any Environmental Action.

-5-

“Environmental Lien” means any Lien in favor of any Governmental
Authority for Environmental Liabilities and Costs.

“EPI” means EPI Printers, Inc.

“EPI Intercreditor & Subordination Agreement” means that certain
Intercreditor & Subordination Agreement, among EPI and Lender, dated as of
the date hereof, pursuant to which EPI subordinates its repayment rights and
other rights and interest in the EPI Notes in favor of Lender.

“EPI Notes” means those certain Promissory Notes, dated as of the date
hereof, issued by Papyrus in favor of EPI.

“Equipment” means all of Borrower’s now owned or hereafter acquired
right, title, and interest with respect to “equipment” (as such term is defined
from time to time in the Code), fixtures and vehicles (including motor
vehicles), including all attachments, accessories, accessions, replacements,
substitutions, additions, and improvements to any of the foregoing.

“ERISA” means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute thereto.

“ERISA Affiliate” means (a) any Person subject to ERISA whose
employees are treated as employed by the same employer as the employees of
Borrower under IRC Section 414(b), (b) any trade or business subject to ERISA
whose employees are treated as employed by the same employer as the employees of
Borrower under IRC Section 414(c), (c) solely for purposes of Section 302 of
ERISA and Section 412 of the IRC, any organization subject to ERISA that is a
member of an affiliated service group of which Borrower is a member under IRC
Section 414(m), or (d) solely for purposes of Section 302 of ERISA and Section
412 of the IRC, any Person subject to ERISA that is a party to an arrangement
with Borrower and whose employees are aggregated with the employees of Borrower
under IRC Section 414(o).

“Event of Default” has the meaning set forth in Section 7.

“Exchange Act” means the Securities Exchange Act of 1934, as in effect
from time to time.

“Existing Warrants” means the warrants listed on Schedule
4.4(b).

“Existing Warrant-holder” means each of the Persons identified as
holders of Existing Warrants on Schedule 4.4(b).

“Federal Funds Rate” shall mean, for any day, a floating rate equal to
the weighted average of the rates on overnight federal funds transactions among
members of the Federal Reserve System, as determined by Lender.

“Federal Reserve Board” means the Board of Governors of the Federal
Reserve System, or any successor thereto.

-6-

“Fiscal” means, when followed by “month” or “quarter”, the relevant
fiscal period based on Borrower’s fiscal year and accounting conventions (e.g. a
reference to “April Fiscal 2009” is to the fiscal month of April of Borrower’s
2009 fiscal year). When followed by reference to a specific year, the fiscal
year which encompasses the majority of months in such fiscal year (e.g. if
Borrower’s 2009 fiscal year ends in January 2009 reference to that year would be
to Borrower’s “Fiscal 2009”).

“Funding Date” means any date on which a Borrowing occurs.

“GAAP” means generally accepted accounting principles as in effect
from time to time in the United States, consistently applied.

“General Intangibles” means all of Borrower’s now owned or hereafter
acquired right, title, and interest with respect to “general intangibles” or
“intangibles” (as such terms are defined from time to time in the Code), and any
and all supporting obligations in respect thereof.

“Governing Documents” means, with respect to any Person, the
certificate or articles of incorporation, by-laws, or other organizational
documents of such Person.

“Governmental Authority” means any federal, state, local or other
political subdivision thereof or other governmental or administrative body,
instrumentality, department, or agency or any court, tribunal, administrative
hearing body, arbitration panel, commission, or other similar dispute-resolving
panel or body.

“Hazardous Materials” means (a) substances that are defined or listed
in, or otherwise classified pursuant to, any applicable laws or regulations as
“hazardous substances,” “hazardous materials,” “hazardous wastes,” “toxic
substances,” or any other formulation intended to define, list, or classify
substances by reason of deleterious properties such as ignitability,
corrosivity, reactivity, carcinogenicity, reproductive toxicity, or “EP
toxicity”, (b) oil, petroleum, or petroleum derived substances, natural gas,
natural gas liquids, synthetic gas, drilling fluids, produced waters, and other
wastes associated with the exploration, development, or production of crude oil,
natural gas, or geothermal resources, (c) any flammable substances or explosives
or any radioactive materials, and (d) asbestos in any form or electrical
equipment that contains any oil or dielectric fluid containing levels of
polychlorinated biphenyls in excess of 50 parts per million.

“Indebtedness” means (a) all obligations for borrowed money, (b) all
obligations evidenced by bonds, debentures, notes, or other similar instruments
and all reimbursement or other obligations in respect of letters of credit,
bankers acceptances, interest rate swaps, or other financial products, (c) all
obligations under Capital Leases, (d) all obligations or liabilities of others
secured by a Lien on any asset of Borrower or its Subsidiaries, irrespective of
whether such obligation or liability is assumed, (e) all obligations for the
deferred purchase price of assets (other than trade debt incurred in the
ordinary course of business and repayable in accordance with customary trade
practices), and (f) any obligation guaranteeing or intended to guarantee
(whether directly or indirectly guaranteed, endorsed, co-made, discounted, or
sold with recourse) any obligation of any other Person.

“Indemnified Liabilities” has the meaning set forth in Section
10.2.

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“Indemnified Person” has the meaning set forth in Section
10.2.

“Insolvency Proceeding” means any proceeding commenced by or against
any Person under any provision of the Bankruptcy Code or under any other state
or federal bankruptcy or insolvency law, assignments for the benefit of
creditors, formal or informal moratoria, compositions, extensions generally with
creditors, or proceedings seeking reorganization, arrangement, or other similar
relief.

“Inventory” means all Borrower’s now owned or hereafter acquired
rights, title, and interests with respect to inventory, including goods held for
sale or lease or to be furnished under a contract of service, goods that are
leased by Borrower as lessor, goods that are furnished by Borrower under a
contract of service, and raw materials, work in process, or materials used or
consumed in Borrower’s business.

“Investment” means, with respect to any Person, any investment by such
Person in any other Person (including Affiliates) in the form of loans,
guarantees, advances, or capital contributions (excluding (a) commission,
travel, and similar advances to officers and employees of such Person made in
the ordinary course of business, and (b) bona fide Accounts arising in the
ordinary course of business consistent with past practices), purchases or other
acquisitions for consideration of Indebtedness or Stock, and any other items
that are or would be classified as investments on a balance sheet prepared in
accordance with GAAP.

“IRC” means the Internal Revenue Code of 1986, as amended.

“Leasehold Interest” means “Leasehold Interest” as defined in the
Senior Credit Agreement.

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

“Lender’s Account” means an account of Lender located at National City
Bank, with account number 4007736, ABA number 041000124 and account name
American Greetings Corporation.

“Lender Expenses” means all (a) costs or expenses (including taxes,
and insurance premiums) required to be paid by Borrower under any of the Loan
Documents that are paid or incurred by Lender, (b) reasonable out-of-pocket fees
or charges paid or incurred by Lender in connection with Lender’s transactions
with Borrower, including, reasonable fees or charges for photocopying,
notarization, couriers and messengers, telecommunication, public record searches
(including tax lien, litigation and UCC searches and including searches with the
patent and trademark office, the copyright office, or the department of motor
vehicles), filing, recording, publication, appraisal, real estate surveys, real
estate title policies and endorsements, and environmental audits, (c) reasonable
costs and expenses incurred by Lender in the disbursement of funds to or for the
account of Borrower (by wire transfer or otherwise), (d) reasonable
out-of-pocket costs and expenses paid or incurred by Lender to correct any
default or enforce any provision of the Loan Documents, (e) reasonable audit
fees and expenses of Lender related to audit examinations of the Books to the
extent of the fees and charges (and in all cases subject to the limitations and
restrictions contained in this Agreement), (f) reasonable out-of-pocket costs
and expenses of third party claims or any other suit paid or incurred by Lender
in enforcing or

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defending the Loan Documents or in connection with the transactions
contemplated by the Loan Documents, (g) Lender’s reasonable out-of-pocket fees
and expenses (including attorneys’ fees) incurred in advising, structuring,
drafting, reviewing, administering, or amending the Loan Documents, and (h)
Lender’s reasonable out-of-pocket fees and expenses (including attorneys’ fees)
incurred in terminating, enforcing (including attorneys fees and expenses
incurred in connection with a “workout,” a “restructuring,” or an Insolvency
Proceeding concerning Borrower or in exercising rights or remedies under the
Loan Documents), or defending the Loan Documents, irrespective of whether suit
is brought.

“Lender-Related Person” means Lender, together with Lender’s
Affiliates, and the officers, directors and employees of Lender.

“Letter of Credit (Bridge)” means that certain Irrevocable Standby
Letter of Credit No. SCL015563 issued by National City Bank on behalf of Lender
to WFRF, as beneficiary, with an initial issue date of April 16, 2009, and any
renewal or replacement thereof.

“Lien” means any interest in an asset securing an obligation owed to,
or a claim by, any Person other than the owner of the asset, whether such
interest shall be based on the common law, statute, or contract, whether such
interest shall be recorded or perfected, and whether such interest shall be
contingent upon the occurrence of some future event or events or the existence
of some future circumstance or circumstances, including the lien or security
interest arising from a mortgage, deed of trust, encumbrance, pledge,
hypothecation, assignment, deposit arrangement, security agreement, conditional
sale or trust receipt, or from a lease, consignment, or bailment for security
purposes or from a sale of accounts receivable or chattel paper, or the interest
of a lessor under a Capital Lease or other arrangement pursuant to which any
Person is entitled to any preference or priority with respect to the property or
assets of another Person or the income or profits of such other Person and also
including reservations, exceptions, encroachments, easements, rights-of-way,
covenants, conditions, restrictions, leases, and other title exceptions and
encumbrances affecting Real Property each of the foregoing whether consensual or
non-consensual and whether arising by way of agreement, operation of law, legal
process or otherwise.

“Loan Account” has the meaning set forth in Section 2.7.

“Loan Documents” means this Agreement and all documents executed or
delivered in connection with this Agreement, including, without limitation any
Revolving Credit Note, the EPI Intercreditor & Subordination Agreement, the
Schurman Family Intercreditor & Subordination Agreement, any certificates
(including without limitation, each Solvency Certificate, and each Compliance
Certificate) from time to time delivered by Borrower pursuant to this Agreement
or any other Loan Document, any note or notes executed by Borrower in connection
with this Agreement and payable to Lender, and any other agreement entered into,
now or in the future, by Borrower and Lender in connection with this Agreement.

“Material Adverse Change” means (a) a material adverse change in the
business, prospects, operations, results of operations, assets, liabilities or
condition (financial or otherwise) of Borrower and its Subsidiaries taken as a
whole, or (b) any impairment of Borrower’s ability to

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perform its material obligations under the Loan Documents or of Lender’s
ability to enforce the Obligations.

“Maximum Revolver Amount” means $10,000,000.

“Moody’s” means Moody’s Investors Service, Inc. and any successor
company thereto which is a nationally recognized statistical rating organization
and otherwise reasonably acceptable to Lender in its Permitted Discretion.

“Multiple Closing Minimum” has the meaning set forth in Section
6.13.

“Obligations” means all Advances, debts, principal, interest
(including any interest that, but for the provisions of the Bankruptcy Code,
would have accrued), contingent reimbursement obligations with respect to
outstanding premiums, liabilities, obligations, fees (including, without
limitation, the Unused Line Fee), charges, costs, Lender Expenses (including any
fees or expenses that, but for the provisions of the Bankruptcy Code, would have
accrued), lease payments, guaranties, covenants, indemnification obligations
arising pursuant to the Loan Documents (including, without limitation,
underSection 10.2), and duties of any kind and description owing by
Borrower to Lender pursuant to or evidenced by the Loan Documents and
irrespective of whether for the payment of money, whether direct or indirect,
absolute or contingent, due or to become due, now existing or hereafter arising,
and including all interest not paid when due and all Lender Expenses that
Borrower is required to pay or reimburse by the Loan Documents, by law, or
otherwise. Any reference in this Agreement or in the Loan Documents to the
Obligations shall include all amendments, changes, extensions, modifications,
renewals replacements, substitutions, and supplements, thereto and thereof, as
applicable, both prior and subsequent to any Insolvency Proceeding.

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

“Parent” means Weston Presidio Capital IV, L.P., WPC Entrepreneur Fund
II, L.P., and Dorset Capital L.P.

“Permitted Discretion” means a determination made in good faith and in
the exercise of reasonable business judgment.

“Permitted Dispositions” means (a) sales or other dispositions by
Borrower or its Subsidiaries of Equipment that is substantially worn, damaged,
or obsolete in the ordinary course of business, (b) sales by Borrower or its
Subsidiaries of Inventory to buyers in the ordinary course of business, (c) the
use or transfer of money or Cash Equivalents by Borrower or its Subsidiaries in
a manner that is not prohibited by the terms of this Agreement or the other Loan
Documents, (d) the licensing and sub-licensing by Borrower or its Subsidiaries,
on a non-exclusive basis, of patents, trademarks, copyrights, and other
intellectual property rights in the ordinary course of business, (e) sales,
including “going-out-of business” sales and other dispositions in respect of
locations being closed in compliance with Section 6.13 hereof, (f)
Permitted Liens and (g) the sale or transfer of the Disposed Assets in
accordance with the Purchase and Sale Documents.

“Permitted Holder” means (a) Parent or its Affiliates and (b) the
Schurman Family.

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“Permitted Investments” means (a) investments in Cash Equivalents, (b)
advances made in connection with purchases of goods or services in the ordinary
course of business; (c) investments received in connection with the bankruptcy
or reorganization of customers or suppliers and in settlement of delinquent
obligations of, and other disputes with, such customers or suppliers arising in
the ordinary course of business, (d) Investments existing as of the Closing Date
set forth on Schedule 4.26, and (e) other Investments not to exceed
$22,000 in the aggregate at any time outstanding.

“Permitted Liens” means (a) Liens in favor of the Senior Agent, (b)
Liens for unpaid Taxes that either (i) are not yet delinquent, or (ii) do not
constitute an Event of Default hereunder and are the subject of Permitted
Protests, (c) Liens set forth on Schedule P-1, (d) the interests of
lessors under operating leases, (e) Liens or the interests of lessors under
Capital Leases to the extent that such Liens or interests secure Permitted
Purchase Money Indebtedness and so long as such Lien attaches only to the asset
purchased or acquired and the proceeds thereof, (f) Liens arising by operation
of law or pursuant to contract in favor of warehousemen, landlords, carriers,
mechanics, materialmen, laborers, or suppliers, incurred in the ordinary course
of business and not in connection with the borrowing of money, and which Liens
either (i) are for sums not yet delinquent, (ii) are the subject of Permitted
Protests, or (iii) result from the Purchase and Sale, (g) Liens arising from
deposits made in connection with obtaining worker’s compensation or other
unemployment insurance, (h) Liens or deposits to secure performance of bids,
tenders, or leases incurred in the ordinary course of business and not in
connection with the borrowing of money, (i) Liens granted as security for surety
or appeal bonds in connection with obtaining such bonds in the ordinary course
of business, (j) Liens resulting from any judgment or award that is not an Event
of Default hereunder, (k) with respect to any Real Property, easements, rights
of way, and zoning restrictions that do not materially interfere with or impair
the use or operation thereof, (l) non-exclusive licenses or sublicenses entered
in the ordinary course of Borrower’s business, (m) Liens on insurance proceeds
in favor of insurance companies granted solely as security for financed
premiums, (n) Liens which constitute rights of set-off of a customary nature or
bankers’ or securities intermediaries’ Liens with respect to amounts on deposit
or investment property, as applicable, whether arising by operation of law or by
contract, in connection with arrangements entered into with banks or securities
intermediaries, to the extent permitted by the Loan Documents, and (o) subleases
entered in the ordinary course of Borrower’s business.

“Permitted Protest” means the right of Borrower or any of its
Subsidiaries, as applicable, to protest any Lien, Taxes (other than payroll
Taxes or Taxes that are the subject of a United States federal tax lien), or
rental payment, provided that (a) a reserve with respect to such
obligation is established on the Books in such amount as is required under GAAP
and (b) any such protest is instituted promptly and prosecuted diligently by
Borrower or any of its Subsidiaries, as applicable, in good faith.

“Permitted Purchase Money Indebtedness” means, as of any date of
determination, (i) Purchase Money Indebtedness, and (ii) Capitalized Lease
Obligations in an aggregate amount outstanding at any one time not in excess of
$550,000. In no event shall Permitted Purchase Money Indebtedness include
Indebtedness incurred for the purpose of financing all or any part of the
acquisition cost of any Inventory.

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“Person” means natural persons, corporations, limited liability
companies, limited partnerships, general partnerships, limited liability
partnerships, joint ventures, trusts, land trusts, business trusts, or other
organizations, irrespective of whether they are legal entities, and governments
and agencies and political subdivisions thereof.

“Preferred Stock” means the Series A Preferred Stock and Series B
Preferred Stock of Papyrus.

“Projections” means Borrower’s forecasted (a) balance sheets, (b)
profit and loss statements, and (c) cash flow statements, all prepared on a
consistent basis with Borrower’s historical financial statements, together with
appropriate supporting details and a statement of underlying assumptions.

“Purchase and Sale” means the series of transactions between Lender
and its Affiliates, on the one hand, and Papyrus and its Affiliates, on the
other hand, pursuant to which Papyrus purchases from Lender and its Affiliates
the Acquired Assets and sells, transfers and conveys to Lender and its
Affiliates the Disposed Assets.

“Purchase and Sale Agreement” means the Purchase and Sale Agreement
among AG and its Subsidiaries party thereto and Papyrus and its Subsidiaries
party thereto dated as of the Restatement Date.

“Purchase and Sale Documents” means, collectively, the Purchase and
Sale Agreement and each “Ancillary Agreement” as defined in the Purchase and
Sale Agreement.

“Purchase Money Indebtedness” means Indebtedness (other than the
Obligations, but including Capitalized Lease Obligations) incurred at the time
of, or within 20 days after, the acquisition of any fixed assets for the purpose
of financing all or any part of the acquisition cost thereof.

“Real Property” means any fee, leasehold or other estate or interest
in real property now or hereafter owned or leased hereafter acquired by Borrower
and the improvements thereto.

“Record” means information that is inscribed on a tangible medium or
which is stored in an electronic or other medium and is retrievable in
perceivable form.

“Remedial Action” means all actions taken to (a) clean up, remove,
remediate, contain, treat, monitor, assess, evaluate, or in any way address
Hazardous Materials in the indoor or outdoor environment, (b) prevent or
minimize a release or threatened release of Hazardous Materials so they do not
migrate or endanger or threaten to endanger public health or welfare or the
indoor or outdoor environment, (c) perform any pre-remedial studies,
investigations, or post-remedial operation and maintenance activities, or (d)
conduct any other actions authorized by Applicable Law, including 42 U.S.C.
§9601.

“Restricted Payment” means (i) any cash dividend or other cash
distribution or payment, direct or indirect, on or on account of any shares of
any class of stock of Borrower now or hereafter outstanding (including any
payments to any holders of Preferred Stock or warrants in their capacity as
holders of such Stock but excluding any regular salary or bonus payments or

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other payments which Borrower may make to any Person who holds Stock or
warrants in Borrower in such Person’s capacity as an employee of Borrower or any
capacity other than as a shareholder or warrant holder in the ordinary course of
Borrower’s business); (ii) any dividend or other distribution in respect of, or
redemption, purchase or other acquisition, direct or indirect, of any shares of
any class of stock of Borrower (including Preferred Stock) now or hereafter
outstanding or of any warrants (including Existing Warrants), options or rights
to purchase any such stock (including, without limitation, the repurchase of any
such stock, warrant, option or right or any refund of the purchase price thereof
in connection with the exercise by the holder thereof of any right of rescission
or similar remedies with respect thereto); and (iii) any direct salary,
non-salary managerial fees, fee (consulting, management or other), fringe
benefit, allowance or other expense directly or indirectly paid or payable by
Borrower (as compensation or otherwise) to any shareholder or Affiliate of
Borrower (other than to an employee or consultant, to the extent of such
employee’s or consultant’s compensation; provided that the terms of such
compensation are approved by the applicable board of directors or the
compensation committee thereof) and (iv) meeting fees, travel and expense
reimbursement and clothing allowance payable to the directors of Borrower or any
partner, shareholder or Affiliate (in his capacity as a director, partner,
shareholder or Affiliate, but not as an employee) thereof, solely for purposes
of this subsection (iv), not to exceed $100,000 per annum in the aggregate (and
not for each director, partner, shareholder or Affiliate) or such greater amount
as may be agreed to in writing by Lender, in its Permitted Discretion, upon
request from Borrower provided that such cap on the meeting fees, travel and
expense reimbursement and clothing allowance referenced in this clause (iv)
shall not apply to the meeting fees, travel and expense reimbursement and
clothing allowance payable to any director of Borrower or any partner,
shareholder or Affiliate, in each case, solely in his or her capacity as an
employee of Borrower.

“Revolver Usage” means, as of any date of determination, the then
extant amount of outstanding principal amount of Advances.

“Revolving Credit” has the meaning set forth in Section
2.1(a).

“Revolving Credit Maturity Date” means the date that is nineteen
months after the Closing Date; provided, however, after the
initial period, this Agreement shall automatically renew for up to three
consecutive one-year periods unless either Borrower or Lender provides
irrevocable written notice to the other party not less than 90 days prior to the
end of such period of its intention to terminate the this Agreement.
Notwithstanding the foregoing, the final Revolving Credit Maturity Date shall be
June 25, 2013.

“Revolving Credit Note” has the meaning set forth in Section
2.1(f).

“Revolving Credit Obligations” means the aggregate of Borrower’s
liabilities, obligations, and indebtedness of any character on account of or in
respect to the Revolving Credit.

“Revolving Credit Termination Date” shall mean the earliest to occur
of: (a) the Revolving Credit Maturity Date; (b) termination of this Agreement by
Borrower pursuant to Section 3.5; (c) termination of this Agreement by
Lender pursuant to Section 8.1 for reasons

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other than an occurrence of an Event of Default pursuant to Sections
7.4 or 7.5; or (d) automatically upon the occurrence of an Event of
Default pursuant to Sections 7.4 or 7.5.

“S&P” means Standard & Poor’s Rating Services, a division of
The McGraw Hill Companies, Inc., and any successor company thereto which is a
nationally recognized statistical rating organization and is otherwise
reasonably acceptable to Lender in its Permitted Discretion.

“Schurman Family” means Dominique Schurman and Marcel Schurman (and
each of their lineal heirs and descendants) and the Schurman 1988 Family Trust.

“Schurman Family Intercreditor & Subordination Agreement” means
that certain Intercreditor & Subordination Agreement, dated as of the date
hereof, among the Schurman Family and Lender, pursuant to which the Schurman
Family subordinates its repayment rights under the Schurman Family Notes in
favor of Lender.

“Schurman Family Notes” means, collectively, that certain Promissory
Note, dated as of April 17, 2009, issued by Papyrus to Marcel Schurman, and that
certain Promissory Note, dated as of April 17, 2009, issued by Papyrus to
Margrit Schurman.

“SEC” means the United States Securities and Exchange Commission and
any successor thereto.

“Senior Agent” means WFRF, as administrative agent, under the Senior
Credit Agreement.

“Senior Credit Agreement” means that certain First Amended and
Restated Loan and Security Agreement, dated as of the date hereof, by and among
Papyrus, each of its Subsidiaries party thereto, WFRF, as administrative agent,
collateral agent and a revolving credit lender, and each other revolving credit
lender party thereto, as amended from time to time.

“Senior Indebtedness” means the “Obligations” as defined in the Senior
Credit Agreement.

“Shareholder Consent” means an agreement from any shareholder of
Borrower, including holders of Preferred Stock, consenting to Borrower entering
into the Loan Documents and the transactions contemplated hereby.

“Solvency Certificate” means a certificate signed by an Authorized
Person of Borrower, dated as of the Closing Date, demonstrating that Borrower is
Solvent and reasonably acceptable to Lender.

“Solvent” means, with respect to any Person on a particular date, that
such Person is not insolvent (as such term is defined in the Uniform Fraudulent
Transfer Act).

“Stock” means all shares, options, warrants, interests,
participations, or other equity equivalents (regardless of how designated) of or
in a Person, whether voting or nonvoting, including common stock, preferred
stock, or any other “equity security” (as such term is defined

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in Rule 3a11-1 of the General Rules and Regulations promulgated by the SEC
under the Exchange Act).

“Sublease Requirement” means “Sublease Requirement” as defined in the
Senior Credit Agreement.

“Subordination Agreement” means the Schurman Family Intercreditor
& Subordination Agreement and the EPI Intercreditor & Subordination
Agreement.

“Subordinated Indebtedness” means aggregate Indebtedness of Borrower
that is subordinate in right of payment and priority to the Obligations in a
manner which is satisfactory to Lender in its Permitted Discretion.

“Subsidiary” of a Person means a corporation, partnership, limited
liability company, or other entity in which that Person directly or indirectly
owns or controls the shares of Stock having ordinary voting power to elect a
majority of the board of directors (or appoint other comparable managers) of
such corporation, partnership, limited liability company, or other entity.

“Taxes” or “Tax” means includes any taxes, duties, fees,
premiums, assessments, levies, tariffs and any other charges whatsoever imposed,
assessed, reassessed or collected by any Governmental Authority, including all
fines, penalties, interest, additions to tax, installments on account of taxes,
or other additional amounts imposed, assessed or collected by any Governmental
Authority in respect thereof, and including those related to any tax-sharing
agreement or any other contract relating to the sharing or payment of any such
Taxes, or levied on, or measured by, or referred to as, gross income, net
income, gross receipts, profits, royalty, capital, capital gains, transfer, land
transfer, sales, goods and services, harmonized sales, use, alternative, net
worth, value-added, severance, premium, real property, capital stock, personal
property, ad valorem, windfall profits, environmental, excise, stamp,
withholding, business, franchise, property development, occupancy, employer
health, payroll, employment, health, social services, education and social
security taxes, all surtaxes, all customs duties and import and export taxes,
countervail and anti-dumping, all license, franchise and registration fees and
all employment insurance, health insurance and other government pension plan
premiums or contributions, all withholdings on amounts paid to or by the
relevant Person, and any liability for any of the foregoing as a transferee,
successor, guarantor or by contract or by operation of Applicable Law, whether
disputed or not.

“Tax Returns” includes all returns, elections, filings, forms, and any
other documents (whether in electronic, tangible or any other form whatsoever)
made, prepared or filed, or to be made, prepared or filed in respect of Taxes
under Applicable Law.

“Unused Line Fee” has the meaning set forth in Section 2.8(a).

“Voidable Transfer” has the meaning set forth in Section 14.7.

“WFRF” means Wells Fargo Retail Finance, LLC.

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1.2 Accounting Terms. All accounting terms not specifically defined
herein shall be construed in accordance with GAAP. When used herein, the term
“financial statements” shall include the notes and schedules thereto. Whenever
the term “Borrower” is used in respect of a financial covenant or a related
definition, it shall be understood to mean Borrower and its Subsidiaries on a
Consolidated basis unless the context clearly requires otherwise.

1.3 Code. Any terms used in this Agreement that are defined in the
Code shall be construed and defined as set forth from time to time in the Code
unless otherwise defined herein.

1.4 Construction. Unless the context of this Agreement or any other
Loan Document clearly requires otherwise, references to the plural include the
singular, references to the singular include the plural, the term “including” is
not limiting, and the term “or” has, except where otherwise indicated, the
inclusive meaning represented by the phrase “and/or.” The words “hereof,”
“herein,” “hereby,” “hereunder,” and similar terms in this Agreement or any
other Loan Document refer to this Agreement or such other Loan Document, as the
case may be, as a whole and not to any particular provision of this Agreement or
such other Loan Document, as the case may be. Section, subsection, clause,
schedule, and exhibit references herein are to this Agreement unless otherwise
specified. Any reference in this Agreement or in the other Loan Documents to any
agreement, instrument, or document shall include all alterations, amendments,
changes, extensions, modifications, renewals, replacements, substitutions,
joinders, and supplements, thereto and thereof, as applicable (subject to any
restrictions on such alterations, amendments, changes, extensions,
modifications, renewals, replacements, substitutions, joinders, and supplements
set forth herein). Any reference herein to any Person shall be construed to
include such Person’s successors and assigns. Any requirement of a writing
contained herein or in the other Loan Documents shall be satisfied by the
transmission of a Record and any Record transmitted shall constitute a
representation and warranty as to the accuracy and completeness of the
information contained therein.

1.5 Schedules and Exhibits. All of the schedules and exhibits attached
to this Agreement shall be deemed incorporated herein by reference.

2. LOAN AND TERMS OF PAYMENT.

2.1 Revolving Credit.

(a) During the term of this Agreement, Lender agrees to make cash advances
(“Advances“) to Borrower in an aggregate amount at any one time
outstanding not to exceed an amount equal to the difference of (i) the Maximum
Revolver Amount minus (ii) the undrawn face amount of the Letter of
Credit (Bridge), each as then in effect. The Advances to be made under this
Section 2 shall be referred to as the “Revolving Credit“.

(b) Reserved.

(c) Lender shall have no obligation to make additional Advances hereunder to
the extent an Event of Default has occurred and is continuing, or after giving
effect to the issuance of such Advance (i) the Revolver Usage would exceed the
lesser of Availability or the Maximum Revolver Amount, (ii) a Default or Event
of Default would occur or (iii) the

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conditions set forth in Sections 3.1 and 3.2, as applicable, have not been
satisfied or waived by Lender.

(d) Amounts borrowed pursuant to this Section shall be repaid and, subject to
the terms and conditions of this Agreement, may be reborrowed at any time during
the term of this Agreement.

(e) All amounts borrowed pursuant to this Section, together with all other
Obligations, shall be due and payable on the Revolving Credit Termination Date.

(f) Borrower’s obligation to repay Advances and other financial
accommodations under the Revolving Credit, with interest as provided herein, may
be evidenced by a note or notes substantially in the form of Exhibit
2.1(f) (the “Revolving Credit Note“), executed by Borrower, payable
to Lender. Neither the original nor a copy of any Revolving Credit Note shall be
required, however, to establish or prove any Obligation. Upon Borrower being
provided with an affidavit (which shall include an indemnity reasonably
satisfactory to Borrower) from Lender to the effect that the Revolving Credit
Note has been lost, mutilated, or destroyed, Borrower shall execute and deliver
a replacement thereof to Lender.

2.2 Procedure for Borrowing. Each Borrowing shall be made by an
irrevocable written request by an Authorized Person delivered to Lender, which
notice must be received by Lender no later than 1:00 p.m. (Cleveland, Ohio time)
at least four Business Days prior to the date that is the requested Funding
Date, or such shorter period as agreed to by Lender in its sole discretion, and
specify (i) the amount of such Borrowing, (ii) the requested Funding Date, which
shall be a Business Day and (iii) the use for which the proceeds are to be used.

2.3 Payments.

(a) Payments by Borrower. Except as otherwise expressly provided
herein, all payments by Borrower shall be made to Lender’s Account and shall be
made in immediately available funds, no later than 1:00 p.m. (Cleveland, Ohio
time) on the date specified herein. Any payment received by Lender later than
1:00 p.m. (Cleveland, Ohio time), shall be deemed to have been received on the
following Business Day and any applicable interest or fee shall continue to
accrue until such following Business Day.

(b) Application of Payments. Except as otherwise provided in the Loan
Documents, all payments shall be remitted to Lender and all such payments shall
be applied first to Lender Expenses and any fees and charges then due and
payable hereunder, second to any accrued but unpaid interest then due and
payable hereunder and, third, to reduce the outstanding principal balance of the
Obligations.

2.4 Interest Rates: Rates, Payments, and Calculations.

(a) Interest Rates. Except as provided in clause (c) below, all
Obligations that have been charged to the Loan Account pursuant to the terms
hereof shall bear interest on the Daily Balance thereof at a per annum rate
equal to the Base Rate plus the Base Rate Margin.

(b) Reserved.

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(c) Default Rate. Upon the occurrence and during the continuation of
an Event of Default, and without notice to Borrower, all Obligations that have
been charged to the Loan Account pursuant to the terms hereof shall bear
interest on the Daily Balance thereof at a per annum rate equal to two
percentage points above the per annum rate otherwise applicable hereunder (the
“Default Rate“).

(d) Payment. Interest and all other fees payable hereunder shall be
due and payable, in arrears, on the first day of each month at any time that
Obligations or Commitments are outstanding. Borrower hereby authorizes Lender,
from time to time, without prior notice to Borrower, to charge such interest and
fees, all Lender Expenses (as and when incurred), the charges, commissions,
fees, and costs provided for in Section 2.8 (as and when accrued or
incurred) and all other payments as and when due and payable under any Loan
Document to Borrower’s Loan Account, which amounts thereafter shall constitute
Advances hereunder and shall accrue interest at the rate then applicable to
Advances hereunder and shall accrue interest at the rate then applicable to
Advances hereunder. Any interest not paid when due shall be compounded by being
charged to Borrower’s Loan Account and shall thereafter constitute Advances
hereunder and shall accrue interest at the rate then applicable to Advances.
Lender shall provide Borrower with copies of invoices it receives in respect to
Lender Expenses upon request.

(e) Computation. All interest and fees chargeable under the Loan
Documents shall be computed on the basis of a 360 day year for the actual number
of days elapsed. In the event the Base Rate is changed from time to time
hereafter, the rates of interest hereunder based upon the Base Rate
automatically and immediately shall be increased or decreased by an amount equal
to such change in the Base Rate.

(f) Intent to Limit Charges to Maximum Lawful Rate. In no event shall
the interest rate or rates payable under this Agreement, plus any other
amounts paid in connection herewith, exceed the highest rate permissible under
any law that a court of competent jurisdiction shall, in a final determination,
deem applicable. Borrower and Lender, in executing and delivering this
Agreement, intend legally to agree upon the rate or rates of interest and manner
of payment stated within it; provided, however, that, anything
contained herein to the contrary notwithstanding, if said rate or rates of
interest or manner of payment exceeds the maximum allowable under applicable
law, then, ipso facto, as of the date of this Agreement, Borrower is
and shall be liable only for the payment of such maximum as allowed by law, and
payment received from Borrower in excess of such legal maximum, whenever
received, shall be applied to reduce the principal balance of the Obligations to
the extent of such excess.

2.5 Crediting Payments. The receipt of any payment item by Lender
shall not be considered a payment on account unless such payment item is a wire
transfer of immediately available federal funds made to Lender’s Account or
unless and until such payment item is honored when presented for payment. Should
any payment item not be honored when presented for payment, then Borrower shall
be deemed not to have made such payment and interest shall be calculated
accordingly. Anything to the contrary contained herein notwithstanding, any
payment item shall be deemed received by Lender only if it is received into
Lender’s Account on a Business Day on or before 1:00 p.m. (Cleveland, Ohio
time). If any payment item is received into Lender’s Account on a non-Business
Day or after 1:00 p.m. (Cleveland, Ohio time) on a

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Business Day, it shall be deemed to have been received by Lender as of the
opening of business on the immediately following Business Day.

2.6 Designated Account. Lender is authorized to make the Advances
under this Agreement based upon instructions received from anyone purporting to
be an Authorized Person, or without instructions if pursuant to Section
2.4(c). Borrower agrees to establish and maintain the Designated Account for
the purpose of receiving the proceeds of the Advances requested by Borrower and
made by Lender hereunder. Notwithstanding the foregoing, Lender, in its sole
discretion, may make Advances directly to creditors of Borrower provided such
Advance satisfies the requirements of Section 6.15.

2.7 Maintenance of Loan Account; Statements of Obligations.

(a) Lender shall maintain an account on its books in the name of Borrower
(the “Loan Account“) on which Borrower will be charged with all Advances
made by Lender to Borrower and with all other payment Obligations hereunder or
under the other Loan Documents, including accrued interest, fees and expenses,
and Lender Expenses incurred by Lender. Lender shall render statements regarding
the Loan Account to Borrower, including principal, interest, fees, and including
an itemization of all charges and expenses constituting Lender Expenses incurred
by Lender, and such statements shall be conclusively presumed to be correct and
accurate and constitute an account stated between Borrower and Lender unless,
within 30 days after receipt thereof by Borrower, Borrower shall deliver to
Lender written objection thereto describing the error or errors contained in any
such statements.

2.8 Fees. Borrower shall pay to Lender the following fees and charges,
which fees and charges shall be non-refundable when paid (irrespective of
whether this Agreement is terminated thereafter):

(a) Unused Line Fee. On the first day of each month during the term of
this Agreement, an unused line fee for in an amount equal to 0.5% per annum
times the result of (a) the Maximum Revolver Amount then in effect,
less (b) the average Daily Balance of Advances that were outstanding
during the immediately preceding month (the “Unused Line Fee“).

(b) Reserved.

(c) Reserved.

(d) Administrative Fee. Borrower shall pay Lender an administrative
fee of $10,000 per annum during the term of this facility (the
“Administrative Fee“). The Administrative Fee shall in no way limit
Borrower’s obligations to pay any other fee, or reimburse Lender for any cost or
expense, under the Loan Documents. The Administrative Fee shall be payable on
the Closing Date and each anniversary thereof.

3. CONDITIONS; TERM OF AGREEMENT

3.1 Conditions Precedent to Initial Extension of Credit. The
obligation of Lender to make the initial Advance (or otherwise to extend any
credit provided for hereunder on the

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Closing Date) is subject to the prior fulfillment, to the satisfaction of
Lender in its sole discretion, of each of the conditions precedent set forth
below:

(a) the transactions contemplated under the Purchase and Sale Documents shall
have been consummated in accordance with the terms thereof, without waiver of
any material condition by Lender;

(b) Lender shall have received a certified true, accurate and complete copy
of the Senior Credit Agreement, all of which shall be satisfactory to Lender,
which is in full force and effect;

(c) Lender shall have received the following duly executed and delivered Loan
Documents, in form and substance satisfactory to Lender, and each such document
shall be in full force and effect:

(i) this Agreement (with all exhibits and schedules attached);

(ii) the Revolving Credit Note;

(iii) the EPI Intercreditor & Subordination Agreement;

(iv) the Schurman Family Intercreditor & Subordination Agreement; and

(v) any other documents or agreements required by Lender.

(d) no “default” or “event of default” (as such terms or similar terms are
defined in any of (i) the Senior Credit Agreement, (ii) the Schurman Family
Notes or (iii) the EPI Notes) shall have occurred and be continuing on the date
of such Advance, or shall result from the making of such Advance;

(e) Lender shall have received a pro forma Compliance Certificate dated as of
the Closing Date;

(f) Lender shall have received the Solvency Certificate and Lender shall
otherwise be satisfied, in its Permitted Discretion, with the capital structure
of Borrower and its Affiliates;

(g) Lender shall have received a certificate from the Secretary of Borrower
attesting to and attaching the resolutions of Borrower’s Board of Directors
authorizing its execution, delivery, and performance of this Agreement and the
other Loan Documents to which such Person is a party and authorizing specific
officers of Borrower to execute the same;

(h) Lender shall have received Shareholder Consents from at least 85% of all
shareholders of Borrower and copies of all consents, approvals, and
registrations described on Schedule 4.5;

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(i) Lender shall have received copies of Borrower’s Governing Documents, as
amended, modified, or supplemented to the Closing Date, certified by the
Secretary of Borrower, in form and substance satisfactory to Lender;

(j) Lender shall have received a certificate of status with respect to
Borrower, dated within 10 days of the Closing Date, such certificate to be
issued by the appropriate officer of the jurisdiction of organization of
Borrower, which certificate shall indicate that Borrower is in good standing in
such jurisdiction;

(k) Reserved;

(l) Lender shall have received the Business Plan, in form and substance
satisfactory to Lender in their Permitted Discretion;

(m) Borrower shall have paid all Lender Expenses incurred in connection with
the transactions evidenced by this Agreement;

(n) Lender shall have received evidence satisfactory to it in its Permitted
Discretion that Borrower has received all consents, licenses, approvals or
evidence of other actions required by any Person, including any Governmental
Authority, in connection with the execution and delivery by Borrower of this
Agreement or any other Loan Document or with the consummation of the
transactions contemplated hereby or thereby;

(o) Lender shall have received an Officer’s Closing Certificate dated as of
the Closing Date, the form and substance of which shall be satisfactory to
Lender;

(p) Lender shall have received a certified copy of the following:

(i) Schurman Family Notes and the EPI Notes;

(ii) evidence of the termination and cancellation of (A) the warrants issued
by Borrower and (B) the Preferred Stock; and

(iii) any Shareholder Agreements.

(q) all other documents and legal matters in connection with the transactions
contemplated by this Agreement shall have been delivered, executed, or recorded
and shall be in form and substance satisfactory to Lender.

3.2 Conditions Precedent to all Extensions of Credit. The obligation
of Lender to make any Advance (or to extend any other credit hereunder) shall be
subject to the following conditions precedent:

(a) the representations and warranties contained in this Agreement and the
other Loan Documents shall be true and correct in all material respects on and
as of the date of such extension of credit, as though made on and as of such
date (except to the extent that such representations and warranties relate
solely to an earlier date);

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(b) Lender shall be satisfied that the proceeds of such Advance will be
issued solely for the purposes permitted pursuant to Section 6.15;

(c) Lender shall have received an officer’s certificate signed by an
Authorized Person attesting to and attaching a resolution of the approval of all
eligible directors, which shall not include any Institutional Director (as such
term is defined in the Stockholders Agreement of the Borrower as in effect on
the date hereof) who abstains or recuses herself or himself from the action (i)
authorizing such Advance and (ii) acknowledging that based on Borrower’s current
financial condition and in the Board of Directors’ good faith determination,
such Advance is the only funding option of those currently available to Borrower
to make any such payment as described in Section 6.15;

(d) no “default” or “event of default” (as such terms or similar terms are
defined in any of (i) the Senior Credit Agreement, (ii) the Schurman Family
Notes or (iii) the EPI Notes) shall have occurred and be continuing on the date
of such extension of credit, or shall result from the making of such Advance;

(e) no Default or Event of Default shall have occurred and be continuing on
the date of such extension of credit, nor shall either result from the making
thereof;

(f) no injunction, writ, restraining order, or other order of any nature
prohibiting, directly or indirectly, the extending of such credit shall have
been issued and remain in force by any Governmental Authority against Borrower,
Lender, or any of their Affiliates; and

(g) no Material Adverse Change shall have occurred since April 1, 2009.

3.3 Term. This Agreement shall become effective upon the Closing Date.
Lender shall have the right to terminate its obligations under this Agreement
immediately and without notice upon the occurrence and during the continuation
of an Event of Default other than an Event of Default pursuant to Sections
7.4 or 7.5. This Agreement shall automatically terminate without
notice upon the occurrence of an Event of Default pursuant to Sections
7.4 or 7.5. Borrower shall have the right to terminate this Agreement
pursuant to Section 3.5. If not earlier terminated, this Agreement shall
terminate on the Revolving Credit Maturity Date.

3.4 Effect of Termination. On the Revolving Credit Termination Date,
all Revolving Credit Obligations immediately shall become due and payable
without notice or demand.

3.5 Early Termination by Borrower; Reduction of Commitment.

(a) Borrower has the option, at any time upon 90 days prior written notice to
Lender, to terminate the Revolving Credit by paying to Lender, in cash, the
Obligations (other than any inchoate Obligations which have not been asserted
and are not otherwise known to Borrower or Lender) in full. If Borrower has sent
a notice of termination pursuant to the provisions of this Section, then the
Commitments shall terminate and Borrower shall be obligated to repay the
Obligations in full, on the date set forth as the date of termination of this
Agreement in such notice.

(b) Reserved.

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(c) Borrower may from time to time, by written notice to Lender, reduce the
unused Commitment, provided that Borrower shall not reduce the Commitment if,
after giving effect to any concurrent prepayment of any outstanding Obligations
in accordance with this Section, the sum of the outstanding Obligations would
exceed an amount equal to the difference of (i) the Maximum Revolver Amount
minus (ii) the undrawn face amount of the Letter of Credit (Bridge).

4. REPRESENTATIONS AND WARRANTIES.

In order to induce Lender to enter into this Agreement, Borrower makes the
following representations and warranties to Lender which shall be true, correct,
and complete, in all material respects, as of the Closing Date, and at and as of
the date of each certificate delivered pursuant to Section 5.2 hereof
(except to the extent that such representations and warranties relate solely to
an earlier date) and such representations and warranties shall survive the
execution and delivery of this Agreement.

4.1 No Encumbrances. Borrower has good and legally marketable title to
all of its property, free and clear of Liens except for Permitted Liens.

4.2 Records. Borrower keeps correct and accurate Books itemizing and
describing the type, and quantity of its Inventory and Equipment and the book
value thereof.

4.3 Legal Status. Borrower represents and warrants that (a) Borrower’s
exact legal name is that indicated on Schedule 4.3 and on the signature
page hereof; (b) Borrower is an organization of the type, and is organized in
the jurisdiction, set forth on Schedule 4.3; (c) Schedule 4.3
accurately sets forth Borrower’s organizational identification number or
accurately states that Borrower has none; and (d) Schedule 4.3
accurately sets forth Borrower’s place of business or, if more than one, its
chief executive office, as well as Borrower’s mailing address, if different.

4.4 Due Organization and Qualification; Subsidiaries.

(a) Borrower is duly organized and existing and in good standing under the
laws of the jurisdiction of its organization and qualified to do business in any
state where the failure to be so qualified reasonably could be expected to
result in a Material Adverse Change.

(b) Set forth on Schedule 4.4(b), is a complete and accurate
description of the authorized capital Stock of Borrower, by class, and, as of
the Closing Date, a description of the number of shares of each such class that
are issued and outstanding. Other than as described on Schedule 4.4(b),
there are no subscriptions, options, warrants, or calls relating to any shares
of Borrower’s capital Stock, including any right of conversion or exchange under
any outstanding security or other instrument. The Borrower is not subject to any
obligation (contingent or otherwise) to repurchase or otherwise acquire or
retire any shares of its capital Stock or any security convertible into or
exchangeable for any of its capital Stock. As of the Closing Date, there is no
preferred Stock of Borrower. The preferred Stock of Borrower was converted to
common Stock in connection with the Purchase and Sale. No previous holder of any
preferred Stock of Borrower received any Restricted Payment, or is entitled to
receive any Restricted Payment, in connection with such conversion or otherwise.

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(c) Set forth on Schedule 4.4(c), is a complete and accurate list of
Borrower’s direct and indirect Subsidiaries, showing: (i) the jurisdiction of
their organization; (ii) the number of shares of each class of common and
preferred Stock authorized for each of such Subsidiaries; and (iii) the number
and the percentage of the outstanding shares of each such class owned directly
or indirectly by Borrower. All of the outstanding capital Stock of each such
Subsidiary has been validly issued and is fully paid and nonassessable.

(d) Except as set forth on Schedule 4.4(d) hereto, there are no
subscriptions, options, warrants, or calls relating to any shares of Borrower’s
or its Subsidiaries’ capital Stock, including any right of conversion or
exchange under any outstanding security or other instrument. The Existing
Warrants have been cancelled and terminated in connection with the Purchase and
Sale. No previous Existing Warrant-holder received any Restricted Payment, or is
entitled to receive any Restricted Payment, in connection with such cancellation
or otherwise.

(e) Neither Borrower nor any of its Subsidiaries is subject to any obligation
(contingent or otherwise) to repurchase or otherwise acquire or retire any
shares of Borrower’s or Subsidiary’s capital Stock or any security convertible
into or exchangeable for any such capital Stock.

4.5 Due Authorization; No Conflict.

(a) The execution, delivery, and performance by Borrower of this Agreement,
the other Loan Documents and the Purchase and Sale Documents have been duly
authorized by all necessary action on the part of Borrower.

(b) The execution, delivery, and performance by Borrower of this Agreement,
the other Loan Documents and the Purchase and Sale Documents do not and will not
(i) violate any provision of Applicable Law, or the Governing Documents of
Borrower, (ii) conflict with, result in a breach of, or constitute (with due
notice or lapse of time or both) a default under any contractual obligation of
Borrower which could reasonably be expected to result in a Material Adverse
Effect, (iii) result in or require the creation or imposition of any Lien of any
nature whatsoever upon any properties or assets of Borrower, other than
Permitted Liens, or (iv) require any approval of Borrower’s interestholders or
any approval or consent of any Person under any material contractual obligation
of Borrower other than consents and approvals which have been already obtained
prior to the Closing Date, or as set forth on Schedule 4.5.

(c) The execution, delivery, and performance by Borrower of this Agreement,
the other Loan Documents and the Purchase and Sale Documents do not and will not
require any registration with, consent, or approval of, or notice to, or other
action with or by, any Governmental Authority or other Person other than
registrations, consents and approvals which have been already made or obtained
prior to the Closing Date, or as set forth on Schedule 4.5.

(d) This Agreement, the other Loan Documents and the Purchase and Sale
Documents, and all other documents contemplated hereby and thereby, when
executed and delivered by Borrower will be the legally valid and binding
obligations of Borrower, enforceable against Borrower in accordance with their
respective terms, except as enforcement may be

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limited by equitable principles or by bankruptcy, insolvency, reorganization,
moratorium, or similar laws relating to or limiting creditors’ rights generally.

4.6 Litigation.

(a) Other than those matters disclosed on Schedule 4.6(a) and
immaterial matters where the amount in controversy is less than $250,000, there
are no actions, suits, or proceedings pending or, to the knowledge of Borrower,
threatened against Borrower or any of its Subsidiaries, as applicable.
Schedule 4.6(a) includes, as applicable, for each matter set forth
thereon (i) the name, docket number and jurisdiction for such matter, (ii) the
status of such proceeding, and (iii) whether such matter is covered by an
insurance policy and, if so, the insurance carrier, the policy number and the
deductible amount associated with such insurance policy.

(b) There are no actions, suits or proceedings pending or, to the knowledge
of Borrower, threatened against Borrower or any of its Subsidiaries, as
applicable, that question the validity or enforceability of this Agreement, any
other Loan Document or the Purchase and Sale Documents or any action taken by
Borrower in connection therewith.

4.7 No Material Adverse Change. All financial statements relating to
Borrower (including any Projections with respect to Acquired Assets and the
Purchase and Sale) that have been delivered by Borrower to Lender have been
prepared in accordance with GAAP (except, in the case of unaudited financial
statements, for the lack of footnotes and being subject to year-end audit
adjustments) and present fairly in all material respects Borrower’s financial
condition as of the date thereof and results of operations for the period then
ended. There has not been a Material Adverse Change with respect to Borrower
since the date of the latest financial statements submitted to Lender. The
consummation of the transactions contemplated by the Purchase and Sale Documents
shall not cause a Material Adverse Change.

4.8 Fraudulent Transfer. After giving effect to the Purchase and Sale
(and the transactions contemplated thereby and hereby):

(a) Borrower is Solvent;

(b) no transfer of property is being made by Borrower and no obligation is
being incurred by Borrower in connection with the transactions contemplated by
this Agreement or the other Loan Documents with the intent to hinder, delay, or
defraud either present or future creditors of Borrower; and

(c) no transfer of property is being made by Borrower without receiving a
reasonably equivalent value in exchange for such transfer and Borrower’s
remaining assets are not unreasonably small in relation to their businesses.

Lender acknowledges that the representation of Borrower in Section
4.8(a) is made in reliance upon the Business Plan. Lender further
acknowledges that it has contributed certain financial data and other
information, including certain assumptions, concerning the Acquired Assets to
the Business Plan. For purpose of the representation in Section 4.8(a),
Borrower has assumed, with

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the permission of Lender, the truth and accuracy of all data and information
contributed by Lender that has been incorporated into the Business Plan.

4.9 Employee Benefits. None of Borrower, any of its Subsidiaries, or
any of their ERISA Affiliates maintains or contributes to any Benefit Plan.

4.10 Environmental Condition. Except as set forth on Schedule
4.10, (a) to Borrower’s knowledge, none of Borrower’s properties or assets
has ever been used by Borrower or by previous owners or operators in the
disposal of, or to produce, store, handle, treat, release, or transport, any
Hazardous Materials, where such production, storage, handling, treatment,
release or transport was in violation, in any material respect, of applicable
Environmental Law, (b) to Borrower’s knowledge, none of Borrower’s properties or
assets has ever been designated or identified in any manner pursuant to any
environmental protection statute as a Hazardous Materials disposal site, (c)
Borrower has not received notice that a Lien arising under any Environmental Law
has attached to any revenues or to any Real Property owned or operated by
Borrower, and (d) Borrower has not received a summons, citation, notice, or
directive from the Environmental Protection Agency or any other federal or state
governmental agency concerning any action or omission by Borrower resulting in
the releasing or disposing of Hazardous Materials into the environment.

4.11 Brokerage Fees. Borrower has not utilized the services of any
broker or finder in connection with Borrower’s obtaining financing from Lender
under this Agreement and no brokerage commission or finders fee is payable by
Borrower in connection herewith.

4.12 Intellectual Property. Borrower owns, or holds licenses in, all
trademarks, trade names, copyrights, patents, patent rights, and licenses that
are necessary to the conduct of its business as currently conducted. Attached
hereto as Schedule 4.12 is a true, correct, and complete listing of all
patents, patent applications, registered trademarks, trademark applications,
registered copyrights, and copyright registration applications as to which
Borrower is the owner or is an exclusive licensee. All licenses set out in
Schedule 4.12 are in good standing and there have been no defaults
thereunder by Borrower or, to the knowledge of Borrower, by any other party
thereto. All royalty fees have been paid on the patents and patent applications
owned by Borrower and set out in Schedule 4.12 and all renewal fees have
been paid on the registered trademarks owned by Borrower.

4.13 Leases. Borrower enjoys peaceful and undisturbed possession under
all leases (including subleases) material to the business of Borrower and to
which Borrower is a party or under which Borrower is operating other than any
sublease to which the Sublease Requirement applies but has not been satisfied.
Except for any failure to comply with the Sublease Requirement, all of such
leases are valid and subsisting and no material default by Borrower exists under
any of them.

4.14 Indebtedness. Set forth on Schedule 4.14 is a true and
complete list of all Indebtedness of Borrower outstanding immediately prior to
the Closing Date that is to remain outstanding immediately after the Closing
Date. Such Schedule accurately reflects the aggregate principal amount of such
Indebtedness and the principle terms thereof and whether (and to what extent)
such Indebtedness is secured.

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4.15 Filing of Tax Returns and Payment of Taxes. Except where the
failure to do so could not reasonably result in a Material Adverse Change:

(a) Borrower has duly and timely filed, or caused to be duly and timely
filed, all Tax Returns required to be filed by it in respect of Taxes, and has
duly and timely paid, or caused to be duly and timely paid, all Taxes due and
payable by it as required by Applicable Law, including all Taxes assessed,
reassessed or for which a demand for payment was made by any Governmental
Authority, except when and so long as the validity of any such Taxes is being
contested in good faith by it or any other Person on its behalf through
appropriate proceedings, such contest is a Permitted Protest, and adequate
provisions for such Taxes have been made in its financial statements in
accordance with GAAP.

(b) Borrower has duly and timely withheld, or caused to be duly and timely
withheld, all Taxes and other amounts required to be withheld by it in
accordance with Applicable Law from any amount paid, or credited, or deemed to
be paid or credited by it to or for the account of any Person (including any
employees, officers or any non-resident Person), and has duly and timely
remitted, or caused to be duly and timely remitted, to the appropriate
Governmental Authority such Taxes required by Applicable Law to be remitted by
it.

(c) Borrower has not failed to pay any Taxes which has or would result in a
Lien (other than a Permitted Lien) on its property. Borrower has only contested
a Permitted Lien that is subject to a Permitted Protest.

4.16 Royalty Payments. Schedule 4.16 lists all contracts or
other agreements between Borrower and any other Person pursuant to which
Borrower has made any royalty or similar payments in either of the two Fiscal
years prior to the Closing Date.

4.17 Complete Disclosure. All factual information (taken as a whole)
furnished by or on behalf of Borrower in writing to Lender (including all
information contained in the Schedules hereto or in the other Loan Documents)
for purposes of or in connection with this Agreement, the other Loan Documents
or any transaction contemplated herein or therein is, and all other such factual
information (taken as a whole) hereafter furnished by or on behalf of Borrower
in writing to Lender will be, as of the date provided, true and accurate in all
material respects on the date as of which such information is dated or certified
or otherwise speaks and not incomplete by omitting to state any fact necessary
to make such information (taken as a whole) not misleading in any material
respect at such time in light of the circumstances under which such information
was provided. On the Closing Date, the Business Plan (giving effect to the
Purchase and Sale) represents, and as of the date on which any other Business
Plan is delivered to Lender, such additional Business Plans represent,
Borrower’s good faith best estimate of its future performance for the periods
covered thereby.

4.18 Reserved.

4.19 Insurance. Schedule 4.19 annexed hereto, is a schedule of
all insurance policies owned by Borrower or under which Borrower is the named
insured. Each such policy is in full force and effect. Neither the issuer of any
such policy nor Borrower is in default or violation of

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any such policy. The coverage reflected on Schedule 4.19 satisfies the
requirements of Section 5.6.

4.20 Requirements of Law. To Borrower’s knowledge, Borrower is in
compliance with, and shall hereafter comply with and use its assets in
compliance with, all requirements of Applicable Law except where the failure of
such compliance will not be reasonably likely to result in a Material Adverse
Change. Borrower has not received any notice of any violation of any requirement
of law (other than of a violation which could not be reasonably likely to result
in a Material Adverse Change) which violation has not been cured or otherwise
remedied.

4.21 No Margin Stock. Borrower is not engaged in the business of
extending credit for the purpose of purchasing or carrying any margin stock
(within the meaning of Regulations U, T, and X of the Board of Governors of the
Federal Reserve System of the United States). No part of the proceeds of any
Borrowing hereunder will be used at any time to purchase or carry any such
margin stock or to extend credit to others for the purpose of purchasing or
carrying any such margin stock.

4.22 Investment Company Status. Borrower is not an “investment
company” as defined in, or subject to regulation under, the Investment Company
Act of 1940.

4.23 No Events of Default. As of any date of determination, both
before and after giving effect to the making of any Advances, there are no
Events of Default.

4.24 Use of Proceeds. The proceeds of any Advance is neither intended
or anticipated to be used nor been used in any way which would cause a breach of
Section 6.15 or otherwise result in an Event of Default.

4.25 Shareholder Agreements. Schedule 4.25 lists all
Shareholder Agreements in place as of the Closing Date, including any voting
agreements among shareholders, concerning any class or all classes of Borrower’s
capital stock, including Preferred Stock.

4.26 Investments. Schedule 4.26 lists all Investments of
Borrower, or any agreements or other legally binding commitments made by
Borrower to invest in any Person, existing as of the Closing Date.

5. AFFIRMATIVE COVENANTS.

Borrower covenants and agrees that, so long as this Agreement and any other
Loan Document remains in effect and until full and final payment of the
Obligations (other than any inchoate Obligations which have not been asserted
and are not otherwise known to Borrower or Lender), Borrower shall and shall
cause each of its Subsidiaries to do all of the following:

5.1 Accounting System. Maintain a system of accounting that enables
Borrower to produce financial statements in accordance with GAAP.

5.2 Financial Statements, Reports, Certificates. Deliver to Lender:

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(a) as soon as available, but in any event within 15 days after the end of
each month during each of Borrower’s Fiscal years,

(i) a Borrower prepared Consolidated and individual balance sheet, income
statement, and statement of cash flow covering Borrower’s and its Subsidiaries’
operations during such period and comparing the then current Business Plan and
the same period during the prior year on a Consolidated, consolidating and
individual basis,

(ii) a certificate signed by the chief financial officer of Borrower to the
effect that:

(A) the financial statements delivered hereunder have been prepared in
accordance with GAAP (except for the lack of footnotes and being subject to
fiscal year-end audit adjustments) and fairly present in all material respects
the financial condition of Borrower and its Subsidiaries,

(B) the representations and warranties of Borrower contained in this
Agreement and the other Loan Documents are true and correct in all material
respects on and as of the date of such certificate, as though made on and as of
such date (except to the extent that such representations and warranties relate
solely to an earlier date), and

(C) there does not exist any condition or event that constitutes a Default or
Event of Default (or, to the extent of any non-compliance, describing such
non-compliance as to which he or she may have knowledge and what action Borrower
has taken, is taking, or proposes to take with respect thereto).

(b) Reserved;

(c) as soon as available, but in any event within 90 days after the end of
Borrower’s Fiscal year, Consolidated and consolidating financial statements of
Borrower and its Subsidiaries for each such Fiscal year, audited by independent
certified public accountants selected by Borrower and reasonably acceptable to
Lender and certified, without any qualifications, by such accountants to have
been prepared in accordance with GAAP (such audited financial statements to
include a balance sheet, income statement, and statement of cash flow and, if
prepared, such accountants’ letter to management) together with a certificate of
such accountants addressed to Lender stating that such accountants do not have
knowledge of the existence of any Default or Event of Default;

(d) as soon as available but in any event:

(i) within 15 days after the end of each month during the first twelve
calendar months after the Closing Date copies of Borrower’s monthly Business
Plan, for the next four week period, on a week-by-week basis; and

(ii) prior to the last Business Day of each January, in each Fiscal year of
Borrower, copies of Borrower’s annual Business Plan, for the forthcoming year,
on a month-by-month basis, year by year;

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each such Business Plan to be in form and substance (including as to scope
and underlying assumptions) satisfactory to Lender in its Permitted Discretion
certified by the chief financial officer of Borrower (in such officer’s capacity
as such and not individually) as being such officer’s good faith best estimate
of the financial performance of Borrower and its Subsidiaries during the period
covered thereby,

(e) if and when filed by Borrower,

(i) any filings made by Borrower with the SEC or any other securities
commission in any other jurisdiction,

(ii) copies of Borrower’s federal income tax returns, and any amendments
thereto, filed with the Internal Revenue Service or any other relevant
Governmental Authority, and

(iii) any other information that is provided by Borrower to its shareholders
generally solely in their capacities as shareholders,

(f) if and when filed by Borrower and as reasonably requested by Lender,
satisfactory evidence of payment of any applicable Taxes in each jurisdiction in
which (i) Borrower is required to pay any Taxes, (ii) where Borrower’s failure
to pay any such applicable Taxes would result in a Lien (other than a Permitted
Lien) on the properties or assets of Borrower, or (iii) where Borrower’s failure
to pay any such applicable Taxes reasonably could be expected to result in a
Material Adverse Change,

(g) as soon as Borrower has knowledge of any event or condition that
constitutes a Default or an Event of Default, notice thereof and a statement of
the curative action that Borrower propose to take with respect thereto, and

(h) upon the request of Lender, any other report reasonably requested
relating to the financial condition of Borrower.

Borrower agrees that it and its Subsidiaries will have the same Fiscal year.
Borrower agrees that its independent certified public accountants are authorized
to communicate with Lender and to release to Lender whatever financial
information concerning Borrower that Lender reasonably may request. Borrower
waives the right to assert a confidential relationship, if any, it may have with
any accounting firm or service bureau in connection with any information
requested by Lender pursuant to or in accordance with this Agreement, and agree
that Lender may contact directly any such accounting firm or service bureau in
order to obtain such information.

5.3 Returns. Account for returns of Inventory and Customer Credit
Liabilities and record the effects thereof on the general ledger on the same
basis and in accordance with the usual customary practices of Borrower, as they
exist at the time of the execution and delivery of this Agreement.

5.4 Maintenance of Properties. Maintain and preserve all of their
properties which are necessary or useful in the proper conduct to Borrower’s
business in good working order and condition, ordinary wear and tear excepted,
and comply at all times with the provisions of all

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material leases to which it is a party as lessee, so as to prevent any loss
or forfeiture thereof or thereunder.

5.5 Tax Matters.

(a) Duly and timely file, or cause to be duly and timely filed, all Tax
Returns required to be filed by it in respect of Taxes, and duly and timely pay,
or cause to be duly and timely paid, all Taxes due and payable by it as required
by Applicable Law, including all Taxes assessed, reassessed or for which a
demand for payment is made by any Governmental Authority, except when and so
long as the validity of any such Taxes is being contested in good faith by it or
any other Person on its behalf through appropriate proceedings, and such contest
is a Permitted Protest and adequate provisions for such Taxes have been made in
its financial statements in accordance with GAAP or where the failure to pay
such Tax will not be reasonably likely to result in, or result in, a Material
Adverse Change.

(b) Borrower will duly and timely withhold, or cause to be duly and timely
withheld, all material Taxes required to be withheld by it in accordance with
Applicable Law from any amount paid, or credited, or deemed to be paid or
credited by it to or for the account of any Person (including any employees,
officers or any non-resident Person), and will duly and timely remit, or cause
to be duly and timely remitted, to the appropriate Governmental Authority such
Taxes required by Applicable Law to be remitted by it.

(c) Borrower will not fail to pay any Taxes or other amounts which would
result in a Lien (other than a Permitted Lien) on its property. Borrower shall
only contest a Permitted Lien that is subject to a Permitted Protest.

(d) Borrower will, upon written request, furnish to Lender satisfactory
evidence that Borrower has paid such Taxes in each jurisdiction in which
Borrower is required to pay such Taxes.

5.6 Insurance.

(a) At Borrower’s expense, maintain insurance respecting its property and
assets wherever located, covering loss or damage by fire, theft, explosion, and
all other hazards and risks as ordinarily are insured against by other Persons
engaged in the same or similar businesses. Borrower also shall maintain business
interruption, public liability, and product liability insurance, as well as
insurance against larceny, embezzlement, and criminal misappropriation. All such
policies of insurance shall be in such amounts and with such insurance companies
as are reasonably satisfactory to Lender. Borrower shall deliver copies of all
such policies to Lender.

(b) Borrower shall give Lender prompt notice of any material loss covered by
such insurance. Any monies received as payment for any loss under any insurance
policy mentioned above (other than liability insurance policies) or as payment
of any award or compensation for condemnation or taking by eminent domain, shall
be applied either to the prepayment of the obligations under the Senior Credit
Agreement or shall be used to fund the cost of repairs, replacements, or
restorations. Any such repairs, replacements, or restorations

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shall be affected with reasonable promptness and shall be of a value at least
equal to the value of the items or property destroyed prior to such damage or
destruction.

5.7 Location of Inventory and Equipment. Keep the Inventory and
Equipment at the locations identified on Schedule 5.7 (except for
Inventory or Equipment in transit and except for samples) or such other
locations identified by written notice to Lender not less than 10 Business Days
prior to the date on which the Inventory or Equipment is moved to such new
location, so long as such new location is within the continental United States.

5.8 Compliance with Laws. Comply with the requirements of all
Applicable Law, including the Fair Labor Standards Act and the Americans With
Disabilities Act, other than laws, rules, regulations, and orders the
non-compliance with which, individually or in the aggregate, would not result in
and reasonably could not be expected to result in a Material Adverse Change.

5.9 Leases. Pay when due all rents and other amounts payable and
perform all material obligations under any material leases and subleases to
which Borrower is a party or by which Borrower’s properties and assets are
bound, unless such payments are the subject of a Permitted Protest.

5.10 Existence. At all times preserve and keep in full force and
effect Borrower’s valid existence and good standing and any rights and
franchises material to Borrower’s businesses, including those with respect to
trademark licenses and the Purchase and Sale Documents.

5.11 Environmental. Keep any property either owned or operated by
Borrower free of any Environmental Liens or post bonds or other financial
assurances sufficient to satisfy the obligations or liability evidenced by such
Environmental Liens, (b) comply, in all material respects, with Environmental
Laws and provide to Lender documentation of such compliance which Lender
reasonably requests, (c) promptly notify Lender of any release of a Hazardous
Material of any reportable quantity from or onto property owned or operated by
Borrower and take any Remedial Actions required to abate said release or
otherwise to come into compliance with applicable Environmental Law, and (d)
promptly provide Lender with written notice within 10 days of the receipt of any
of the following: (i) notice that an Environmental Lien has been filed against
any of the real or personal property of Borrower, (ii) commencement of any
Environmental Action or notice that an Environmental Action will be filed
against Borrower, and (iii) notice of a violation, citation, or other
administrative order which reasonably could be expected to result in a Material
Adverse Change.

5.12 Immediate Notice to Lender. Borrower shall provide Lender with
written notice promptly upon the occurrence of any of the following events,
which written notice shall state with reasonable particularity the facts and
circumstances of the event for which such notice is being given:

(a) the occurrence of any “default” or “event of default” under any of the
EPI Notes, the Schurman Family Notes or the Senior Credit Agreement;

(b) any notices provided to the Senior Lender pursuant to the Senior Credit
Agreement and not otherwise delivered to Lender, other than borrowing notices;

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(c) any change in the Authorized Persons;

(d) any cessation by Borrower of its making payment to its creditors
generally as Borrower’s debts become due;

(e) any failure by Borrower to pay rent at any of Borrower’s locations, which
failure continues for more than two Business Days following the last day on
which such rent was payable without more than a minimal adverse effect on
Borrower;

(f) any Material Adverse Change;

(g) the occurrence of any Default or Event of Default;

(h) any intention on the part of Borrower to discharge Borrower’s present
independent accountants or any withdrawal or resignation by such independent
accountants from their acting in such capacity;

(i) any litigation which, if determined adversely to Borrower, could
reasonably be expected to result in a Material Adverse Change;

(j) at Lender’s request, Borrower shall provide Lender, when so distributed,
with copies of all national or otherwise material advertising copy (including
print advertising and video and radio advertising);

(k) provide Lender, when received by Borrower, with a copy of any management
letter or similar communications from any accountant of Borrower; and

(l) provide Lender with prompt written notice upon the acquisition or
formation of any Subsidiary.

5.13 Disclosure Updates. Promptly and in no event later than five
Business Days after an Authorized Person or other senior officer of Borrower
obtains actual knowledge thereof, (a) notify Lender if any written information,
exhibit, schedule, or report furnished to Lender contained any untrue statement
of a material fact or omitted to state any material fact necessary to make the
statements contained therein not misleading in light of the circumstances in
which made at the time made, or (b) correct any defect or error that may be
discovered therein or in any Loan Document or in the execution, acknowledgement,
filing, or recordation thereof.

5.14 Solvency. Borrower shall be in compliance with Section 4.8
hereof.

5.15 Line of Business: Borrower and Subsidiaries. Neither Borrower nor
any of its Subsidiaries shall engage in any business other than the business in
which it is currently engaged or a business reasonably related thereto (the
conduct of which reasonably related business is reflected in the then current
Business Plan).

5.16 Royalty Payments. In the event that, as of the end of any Fiscal
quarter, Schedule 4.16 fails to list the Persons to which Borrower paid
royalty payments or any other similar payment in the previous Fiscal quarter,
Borrower shall, within 15 days after the end of such

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Fiscal quarter, provide Lender with an appendix to such Schedule providing
details of the Persons to which Borrower paid royalty payments or any other
similar payment in the previous Fiscal quarter.

6. NEGATIVE COVENANTS.

Borrower covenants and agrees that, so long as this Agreement and any other
Loan Document remains in effect and until full and final payment of the
Obligations (other than any inchoate Obligations which have not been asserted
and are not otherwise known to Borrower or Lender), Borrower will not, and will
not permit any of its Subsidiaries to do, any of the following:

6.1 Indebtedness. Create, incur, assume, permit, guarantee, or
otherwise become or remain, directly or indirectly, liable with respect to any
Indebtedness, except:

(a) Indebtedness evidenced by this Agreement and the other Loan Documents;

(b) Indebtedness set forth on Schedule 4.14;

(c) Permitted Purchase Money Indebtedness;

(d) refinancings, renewals, or extensions of Indebtedness permitted under
clauses (b) and (c) of this Section 6.1 (and continuance or renewal of
any Permitted Liens associated therewith) so long as: (i) the terms and
conditions of such refinancings, renewals, or extensions do not, in Lender’s
reasonable judgment, materially impair the prospects of repayment of the
Obligations by Borrower or materially impair Borrower’s creditworthiness, (ii)
such refinancings, renewals, or extensions do not result in an increase in the
principal amount of the Indebtedness so refinanced, renewed, or extended, (iii)
such refinancings, renewals, or extensions do not result in a shortening of the
average weighted maturity of the Indebtedness so refinanced, renewed, or
extended, nor are they on terms or conditions, that, taken as a whole, are
materially more burdensome or restrictive to Borrower, and (iv) if the
Indebtedness that is refinanced, renewed, or extended was subordinated in right
of payment to the Obligations, then the terms and conditions of the refinancing,
renewal, or extension Indebtedness must include subordination terms and
conditions that are at least as favorable to Lender as those that were
applicable to the refinanced, renewed, or extended Indebtedness;

(e) Indebtedness comprising Permitted Investments; and

(f) Indebtedness secured by Permitted Liens;

(g) Subordinated Indebtedness;

(h) Senior Indebtedness; and

(i) other Indebtedness not to exceed $22,000 in the aggregate at any time
outstanding.

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6.2 Liens. Create, incur, assume, or permit to exist, directly or
indirectly, any Lien on or with respect to any of its assets, of any kind,
whether now owned or hereafter acquired, or any income or profits therefrom,
except for Permitted Liens (including Liens that are replacements of Permitted
Liens to the extent that the original Indebtedness is refinanced, renewed, or
extended under Section 6.1(d) and so long as the replacement Liens only
encumber those assets that secured the refinanced, renewed, or extended
Indebtedness).

6.3 Restrictions on Fundamental Changes.

(a) Enter into any merger, consolidation, reorganization, or
recapitalization, or reclassify its Stock or otherwise change Borrower’s type of
organization, jurisdiction of organization or other legal or corporate
structure.

(b) Liquidate, wind up, or dissolve itself (or suffer any liquidation or
dissolution).

(c) Convey, sell, lease, license, assign, transfer, or otherwise dispose of,
in one transaction or a series of transactions, all or any substantial part of
its assets (other than as a Permitted Disposition).

(d) Purchase or otherwise acquire substantially all of the capital stock or
all or substantially all of the assets of any other Person with a value of more
than $250,000 in the aggregate.

6.4 Disposal of Assets. Other than Permitted Dispositions, convey,
sell, lease, license, assign, transfer, or otherwise dispose of any of the
assets of Borrower.

6.5 Change of Name or Address. Change Borrower’s name or
organizational identification number or relocate Borrower’s chief executive
office to a new location; provided, however, that Borrower may change its name
or chief executive office location upon at least 30 days prior written notice by
Borrower to Lender of such change.

6.6 Nature of Business. Make any change in the principal nature of
Borrower’s business except as otherwise permitted by Section 5.15.

6.7 Prepayments and Amendments.

(a) Except in connection with a refinancing permitted by Section
6.1(d) and regularly scheduled payments not prohibited under the terms of
any subordination agreement, prepay, redeem, defease, purchase, or otherwise
acquire any Indebtedness of Borrower, other than the Obligations in accordance
with this Agreement.

(b) Except in connection with a refinancing permitted by Section
6.1(d), directly or indirectly, amend, modify, alter, increase, or change
any of the terms or conditions of any agreement, instrument, document,
indenture, or other writing evidencing or concerning Indebtedness permitted
under Sections 6.1(b), (c), (g) or (h).

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(c) Directly or indirectly, amend, modify, alter, increase or change any of
the terms or conditions of any Purchase and Sale Document without Lender’s prior
consent.

6.8 Change of Control. Cause, permit, or suffer, directly or
indirectly, any Change of Control.

6.9 Distributions. Make or permit any Subsidiary to, directly or
indirectly (i) declare, order, pay or make any Restricted Payment or (ii) set
aside any sum or property therefore or exercise any set-off or similar rights of
Borrower, if any, with respect to any Subordinated Indebtedness.

6.10 Accounting Methods. Modify or change its method of accounting
(other than as may be required to conform to GAAP) or enter into, modify, or
terminate any agreement currently existing, or at any time hereafter entered
into with any third party accounting firm or service bureau for the preparation
or storage of Borrower’s accounting records without said accounting firm or
service bureau agreeing to provide Lender information regarding Borrower’s
financial condition.

6.11 Investments. Except for Permitted Investments, directly or
indirectly, make or acquire any Investment, or incur any liabilities (including
contingent obligations) for or in connection with any Investment.

6.12 Transactions with Affiliates. Directly or indirectly enter into
or permit to exist any transaction with any Affiliate of Borrower (including,
without limitation, purchases of Inventory and other transactions between
Borrower or any of its Affiliates) except for transactions that are in the
ordinary course of Borrower’s business, upon fair and reasonable terms, fully
disclosed to Lender in reasonable detail, no less favorable to Borrower than
would be obtained in an arm’s length transaction with a non-Affiliate.

6.13 Store Openings and Closings. Commit to open, open or close any
location at which Borrower maintains, offers for sale or stores any Inventory
unless Borrower has provided Lender at least 30 days’ prior written notice of
such commitment, opening or closing and (i) in the case of any such opening,
such opening is consistent with the then current Business Plan or Lender has
consented thereto in writing or (ii) in the case of any such closing, such
closing is consistent with the then current Business Plan or Lender has
consented thereto in writing and is conducted in a manner consistent with
Borrower’s historical store closing practices, including, without limitation, as
to any third party agent that Borrower propose to employ in connection
therewith, provided further that if Borrower intends that 5% or more of
Borrower’s (individually as to Borrower or in the aggregate among Borrower and
its Subsidiaries) stores are to be closed within any Fiscal year or within any
period of 12 consecutive months (“Multiple Closing Minimum“), Borrower
must retain a nationally-recognized liquidator (or such other Person approved by
Lender) as either a consultant or liquidator in connection with the closing of
each of such stores. Borrower may purchase Real Property as part of any store
opening permitted hereunder provided that (i) such purchase is consistent with
the current Business Plan approved by Lender, (ii) the financing of such
purchase of Real Property is permitted hereunder and is consistent with the
current Business Plan approved by Lender, and (iii) such purchase and, if
applicable, the financing thereof, are consented to by Lender in its sole
discretion.

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6.14 Suspension. Suspend or go out of a substantial portion of
Borrower’s business.

6.15 Use of Proceeds. Use the proceeds of the Advances for any purpose
other than making (a) any scheduled or required payment of interest or principal
of the Senior Indebtedness, or subject to the terms of the applicable
Subordination Agreement, the Subordinated Indebtedness, (b) a payment of rent
under any sublease listed on Schedule 6.15 or (c) a payment of payroll
obligations of Borrower or its Subsidiaries that are due and payable.

6.16 Benefit Plans. No Borrower, any of its Subsidiaries, or any of
their ERISA Affiliates shall maintain or contribute to any Benefit Plan.

6.17 Warrants. Borrower shall not, and shall not permit any Subsidiary
to, grant or issue any warrants with respect to its Stock.

6.18 Shareholder Agreements. None of the Shareholder Agreements
described on Schedule 4.25 shall be amended, modified, superseded,
waived, or replaced without Lender’s prior written consent (not to be
unreasonably withheld or delayed).

6.19 Fiscal Year. Borrower shall not change its Fiscal year from the
current twelve month period that comprises its Fiscal year as of the Closing
Date.

7. EVENTS OF DEFAULT.

Any one or more of the following events shall constitute an event of default
(each, an “Event of Default“) under this Agreement:

7.1 Payment. If Borrower fails to pay when due and payable or when
declared due and payable, all or any portion of the Obligations (whether of
principal, interest (including any interest which, but for the provisions of the
Bankruptcy Code, would have accrued on such amounts), fees and charges due
Lender, reimbursement of Lender Expenses, or other amounts constituting
Obligations);

7.2 Covenants, etc.

(a) If Borrower fails to perform, keep, or observe any term, provision,
condition, covenant, or agreement contained in Articles 5 or 6 of
this Agreement or in any of the other Loan Documents;

(b) If Borrower fails to perform, keep, or observe any other term, provision,
condition, covenant, or agreement contained in this Agreement or any other Loan
Document, and such failure shall continue unremedied for a period of 15 days
after the first to occur of Borrower’s actual knowledge thereof or notice
thereof from Lender to Borrower;

7.3 Attachment. If any material portion of Borrower’s or any of its
Subsidiaries’ assets is attached, seized, subjected to a writ or distress
warrant, levied upon, or comes into the possession of any third Person;

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7.4 Insolvency. If an Insolvency Proceeding is commenced by Borrower
or any of its Subsidiaries;

7.5 Involuntary Insolvency. If an Insolvency Proceeding is commenced
against Borrower or any of its Subsidiaries and any of the following events
occur: (a) Borrower or the applicable Subsidiary consents to the institution of
the Insolvency Proceeding against it, (b) the petition commencing the Insolvency
Proceeding is not timely controverted, (c) the petition commencing the
Insolvency Proceeding is not dismissed within 60 calendar days of the date of
the filing thereof, (d) an interim trustee or interim receiver or a trustee or
receiver is appointed to take possession of all or any substantial portion of
the properties or assets of, or to operate all or any substantial portion of the
business of, Borrower or any of its Subsidiaries, or (e) an order for relief
shall have been entered therein;

7.6 Injunction. If Borrower or any of its Subsidiaries is enjoined,
restrained, or in any way prevented by court order or otherwise from continuing
to conduct all or any material part of its business affairs;

7.7 Levy. If a notice of Lien, levy, or assessment is filed of record
with respect to any material portion of Borrower’s or any of its Subsidiaries’
assets by the United States, or any department, agency, or instrumentality
thereof, or by any state, county, municipal, governmental agency or other
Governmental Authority, or if any taxes or debts owing at any time hereafter to
any one or more of such entities becomes a Lien, whether choate or otherwise,
upon Borrower’s or any of its Subsidiaries’ assets and the same is not paid on
the payment date thereof;

7.8 Judgment. If one or more judgments or orders for the payment of
money is rendered against Borrower in excess of $250,000 in the aggregate
(provided, that, any judgment covered by insurance where the
insurer has assumed responsibility in writing for such judgment and acknowledged
that Borrower will receive the proceeds of such insurance within 30 days of the
issuance of a final, non-appealable judgment and execution thereon is
effectively stayed shall not be included in calculating such amount) and shall
remain undischarged or unvacated for a period in excess of 30 days or execution
shall at any time not be effectively stayed, or any judgment other than for the
payment of money, or injunction, attachment, garnishment or execution is
rendered against Borrower or any of its assets having a value in excess of
$250,000 and shall remain undischarged or unvacated for a period in excess of 30
days or execution shall at any time not be effectively stayed;

7.9 Material Agreements. If there is a default by Borrower in any
Purchase and Sale Document or by any party (other than Lender) in any other
agreement material to the operations of the business of Borrower to which
Borrower or any of its Subsidiaries is a party and such default (a) occurs at
the final maturity of the obligations thereunder (with respect to monetary
obligations) or on the date required for performance (with respect to
performance obligations), or (b) results in a right by the other party thereto,
irrespective of whether exercised, to accelerate the maturity of Borrower’s or
its Subsidiaries’ obligations thereunder, to terminate such agreement, or to
refuse to renew such agreement pursuant to an automatic renewal right therein,
unless such default is a monetary default and the amount necessary for Borrower
to pay to cure such default is less than $250,000 and Borrower has established
adequate reserves therefor and is contesting such default in good faith;

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7.10 Insurance. Any event occurs, as a result of which
revenue-producing activities (except to the extent such lost revenue is promptly
replaced with business interruption insurance) cease or are substantially
curtailed at (a) any of Borrower’s principal distribution centers and such
cessation or curtailment continues for more than five Business Days or (b) any
other facility or facilities of Borrower generating more than 10% of Borrower’s
Consolidated revenues for Borrower’s Fiscal year preceding such event, and such
cessation or curtailment continues for more than 20 days;

7.11 Subordinated Debt. If Borrower or any of its Subsidiaries makes
any payment on account of Subordinated Indebtedness, except to the extent such
payment is permitted by the terms of the subordination provisions applicable to
such Indebtedness;

7.12 Misrepresentation. If any material misstatement or
misrepresentation exists in any warranty, representation, statement, or Record
made to Lender by Borrower, its Subsidiaries, or any officer, employee, agent,
or director of Borrower or any of its Subsidiaries;

7.13 Loan Documents. Any provision of any Loan Document or any
Purchase and Sale Document shall at any time for any reason be declared to be
null and void, or the validity or enforceability thereof shall be contested by
or on behalf of Borrower, or a proceeding shall be commenced seeking to
establish the invalidity or unenforceability thereof (as the case may be), or
Borrower shall deny that Borrower has any liability or obligation purported to
be created under any Loan Document or any Purchase and Sale Document, in each
case other than in connection with any Leasehold Interest subject to the
Sublease Requirement;

7.14 Material Adverse Change. If there is a Material Adverse Change;

7.15 Change of Control. If a Change of Control shall occur without the
consent of Lender; or

7.16 Material Restraint. The indictment of, or institution of any
legal process or proceeding against Borrower or its Subsidiary where the relief,
penalties or remedies sought or available include the forfeiture of any property
of Borrower or Subsidiary and/or the imposition of any stay or other order, the
effect of which could be to restrain in any material way the conduct by Borrower
of its business in the ordinary course or would otherwise result in a Material
Adverse Change.

8. LENDER’S RIGHTS AND REMEDIES.

8.1 Rights and Remedies. Upon the occurrence, and during the
continuation, of an Event of Default, Lender may exercise any of the rights and
remedies provided for in this Agreement or any other Loan Document or otherwise
available to it at law or in equity, such rights and remedies to include,
without limitation, the following, all of which are authorized by Borrower:

(a) declare all Obligations, whether evidenced by this Agreement, by any of
the other Loan Documents, or otherwise, immediately due and payable;

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(b) cease advancing money or extending credit to or for the benefit of
Borrower under this Agreement, under any of the Loan Documents, or under any
other agreement between Borrower and Lender;

(c) terminate this Agreement and any of the other Loan Documents as to any
future liability or obligation of Lender but without affecting the Obligations;

(d) without notice to Borrower (such notice being expressly waived), and
without constituting a retention of any collateral in satisfaction of an
obligation (within the meaning of the Code), set off and apply to the
Obligations any and all (i) balances and deposits of Borrower held by Lender, or
(ii) Indebtedness at any time owing to or for the credit or the account of
Borrower held by Lender; and

(e) Lender shall have all other rights and remedies available to it at law or
in equity pursuant to any other Loan Documents.

8.2 Remedies Cumulative. The rights and remedies of Lender under this
Agreement, the other Loan Documents, and all other agreements shall be
cumulative and may be exercised simultaneously. Lender shall have all other
rights and remedies not inconsistent herewith as provided under the Code, by
law, or in equity. No exercise by Lender of one right or remedy shall be deemed
an election, and no waiver by Lender of any Event of Default shall be deemed a
continuing waiver. No delay by Lender shall constitute a waiver, election, or
acquiescence by it.

9. TAXES AND EXPENSES.

If Borrower fails to pay any monies (whether Taxes or, in the case of leased
properties or assets, rents or other amounts payable under such leases) due to
third Persons, or fails to make any deposits or furnish any required proof of
payment or deposit, all as required under the terms of this Agreement, then,
Lender, in its sole discretion and without prior notice to Borrower, may do any
or all of the following: (a) make payment of the same or any part thereof, or
(b) set up such reserves in Borrower’s Loan Account as Lender deems necessary to
protect itself from the exposure created by such failure. Any such amounts paid
by Lender shall constitute Lender Expenses and any such payments shall not
constitute an agreement by Lender to make similar payments in the future or a
waiver by Lender of any Event of Default under this Agreement. Lender need not
inquire as to, or contest the validity of, any such expense, tax, or Lien and
the receipt of the usual official notice for the payment thereof shall be
conclusive evidence that the same was validly due and owing.

10. WAIVERS; INDEMNIFICATION.

10.1 Demand; Protest; etc. Borrower waives demand, protest, notice of
protest, notice of intention to accelerate, notice of acceleration, notice of
default or dishonor, notice of payment and nonpayment, nonpayment at maturity,
release, compromise, settlement, extension, or renewal of documents,
instruments, chattel paper, and guarantees at any time held by the Lender on
which Borrower may in any way be liable.

10.2 Indemnification. Borrower shall pay, indemnify, defend, and hold
Lender, Lender-Related Persons, and each of their respective officers,
directors, employees, agents,

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attorneys, and attorneys-in-fact (each, an “Indemnified Person“)
harmless (to the fullest extent permitted by law) from and against any and all
claims, demands, suits, actions, investigations, proceedings, and damages, and
all reasonable attorneys fees and disbursements and other costs and expenses
actually incurred in connection therewith (as and when they are incurred and
irrespective of whether suit is brought), at any time asserted against, imposed
upon, or incurred by any of them (a) in connection with or as a result of or
related to the execution, delivery, enforcement, performance, or administration
of this Agreement, any of the other Loan Documents, or the transactions
contemplated hereby or thereby, and (b) with respect to any investigation,
litigation, or proceeding related to this Agreement, any other Loan Document, or
the use of the proceeds of the credit provided hereunder (irrespective of
whether any Indemnified Person is a party thereto), or any act, omission, event,
or circumstance in any manner related thereto (all the foregoing, collectively,
the “Indemnified Liabilities“). The foregoing to the contrary
notwithstanding, Borrower shall have no obligation to any Indemnified Person
under this Section 10.2 with respect to any Indemnified Liability that a
court of competent jurisdiction finally determines to have resulted from the
gross negligence or willful misconduct of such Indemnified Person. This
provision shall survive the termination of this Agreement and the repayment of
the Obligations. If any Indemnified Person makes any payment to any other
Indemnified Person with respect to an Indemnified Liability as to which Borrower
was required to indemnify the Indemnified Person receiving such payment, the
Indemnified Person making such payment is entitled to be indemnified and
reimbursed by Borrower with respect thereto. Borrower shall be subrogated to an
Indemnified Person’s rights of recovery to the extent of any liabilities
satisfied by Borrower and such Indemnified Person shall execute and deliver such
instruments and papers as are necessary to assign such rights and assist in the
execution thereof; provided, however, that, and, notwithstanding the foregoing
to the contrary, such subrogation rights of Borrower may not be exercised until
payment in full of all Obligations due hereunder and the termination of Lender’s
obligation to make Advances under the Revolving Credit and shall be subordinate
to the Obligations due Lender in all respects. WITHOUT LIMITATION, THE
FOREGOING INDEMNITY SHALL APPLY TO EACH INDEMNIFIED PERSON WITH RESPECT TO
INDEMNIFIED LIABILITIES WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF
ANY NEGLIGENT ACT (NOT CONSTITUTING GROSS NEGLIGENCE) OR OMISSION OF SUCH
INDEMNIFIED PERSON OR OF ANY OTHER PERSON.

10.3 Costs and Expenses of Lender.

(a) Borrower shall pay from time to time on demand all costs of collection,
Lender Expenses and all reasonable costs, expenses, and disbursements (including
reasonable attorneys’ fees and expenses) which are incurred by Lender in
connection with the preparation, negotiation, execution, administration and
delivery of this Agreement and of any other Loan Documents, and all other
reasonable costs, expenses, and disbursements which may be incurred in
connection with or in respect to the credit facility contemplated hereby or
which otherwise are incurred with respect to the Obligations.

(b) Borrower shall pay from time to time on demand all Lender Expenses
(including reasonable attorneys’ fees and reasonable attorneys’ expenses)
incurred, following the occurrence of any Event of Default, by Lender.

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(c) Borrower authorizes Lender to pay all such fees and expenses, and in
Lender’s discretion, to add such fees and expenses to the Loan Account.

(d) The undertaking on the part of Borrower in this Section 10.3
shall survive payment of the Obligations and/or any termination, release, or
discharge executed by Lender in favor of Borrower, other than a termination,
release, or discharge which makes specific reference to this Section
10.3.

11. NOTICES.

Unless otherwise provided in this Agreement, all notices or demands by
Borrower or Lender to the others relating to this Agreement or any other Loan
Document shall be in writing and (except for financial statements and other
informational documents which may be sent by first-class mail, postage prepaid)
shall be personally delivered or sent by registered or certified mail (postage
prepaid, return receipt requested), overnight courier, electronic mail (at such
email addresses as Borrower or Lender, as applicable, may designate to each
other in accordance herewith), or telefacsimile (with a confirming receipt from
the sending machine) to Borrower or Lender, as the case may be, at its address
set forth below:

			If to Borrower: Schurman Fine Papers, d/b/a Papyrus 500 Chadbourne Road Caller Box 6030 Fairfield, CA 94533 Attn: Tom Shaw With a copy to: Dominique Schurman Fax No: (707) 428-0641
			With copies to: Morgan Lewis & Bockius LLP One Market Spear Street Tower San Francisco, CA 94024 Attn: Scott Karchmer, Esquire Fax No: (415) 442-1001
			If to Lender: American Greetings Corporation One American Road Cleveland, Ohio 44144 Attn: Chris Haffke Fax No: (216) 252-6741
			with copies to: Jones Day 901 Lakeside Avenue Cleveland, Ohio 44114 Attn: Rachel Rawson Fax No: (216) 579-0212

Lender and Borrower may change the address at which they are to receive
notices hereunder, by notice in writing in the foregoing manner given to the
other party. All notices or

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demands sent in accordance with this Section 11, shall be deemed
received on the earlier of the date of actual receipt or three (3) Business Days
after the deposit thereof in the mail.

12. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.

(a) THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
(UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT
OF SUCH OTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT
HEREOF AND THEREOF, AND THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH
RESPECT TO ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR
THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.

(b) BORROWER AND LENDER IRREVOCABLY CONSENT AND SUBMIT TO THE NON-EXCLUSIVE
JURISDICTION OF THE NEW YORK COUNTY SUPREME COURT OF THE STATE OF NEW YORK AND
ANY COURT TO WHICH AN APPEAL MAY BE TAKEN THEREFROM AND THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, WHICHEVER LENDER MAY
ELECT. THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION
WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND LITIGATED
ONLY IN THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF
NEW YORK, PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT
AGAINST ANY ASSETS OR OTHER PROPERTY MAY BE BROUGHT, AT LENDER’S OPTION, IN THE
COURTS OF ANY JURISDICTION WHERE LENDER ELECTS TO BRING SUCH ACTION OR WHERE
SUCH ASSETS OR OTHER PROPERTY MAY BE FOUND. BORROWER WAIVES, TO THE EXTENT
PERMITTED UNDER APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO ASSERT THE DOCTRINE OF
FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT
ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 12(b).

(c) BORROWER AND LENDER HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL
OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN
DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT
CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS. BORROWER AND LENDER REPRESENT THAT EACH HAS REVIEWED THIS
WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS
AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

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13. MISCELLANEOUS PROVISIONS.

13.1 Successors. This Agreement shall bind and inure to the benefit of
the respective successors and assigns of each of the parties; provided,
however, that Borrower may not assign this Agreement or any rights or
duties hereunder without Lender’s prior written consent and any prohibited
assignment shall be absolutely void ab initio. No consent to assignment
by Lender shall release Borrower from its Obligations.

13.2 Amendments and Waivers. No amendment or waiver of any provision
of this Agreement or any other Loan Document, and no consent with respect to any
departure by Borrower therefrom, shall be effective unless the same shall be in
writing and signed by Lender and Borrower and then any such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given.

13.3 No Waivers; Cumulative Remedies. No failure by Lender to exercise
any right, remedy, or option under this Agreement or any other Loan Document nor
any delay by Lender in exercising the same, will operate as a waiver thereof. No
waiver by Lender will be effective unless it is in writing, and then only to the
extent specifically stated. No waiver by Lender on any occasion shall affect or
diminish its rights thereafter to require strict performance by Borrower of any
provision of this Agreement. Lender’s rights under this Agreement and the other
Loan Documents will be cumulative and not exclusive of any other right or remedy
that Lender may have.

13.4 Reliance by Lender. Lender shall be entitled to rely upon any
certificate, notice or other document (including any cable, telegram, telex, or
facsimile) reasonably believed by Lender to be genuine and correct and to have
been signed or sent by or on behalf of the proper Person or Persons, and upon
advice and statements of attorneys, accountants and other experts selected by
Lender.

14. GENERAL PROVISIONS.

14.1 Effectiveness. This Agreement shall be binding and deemed
effective when executed by Borrower and Lender.

14.2 Section Headings. Headings and numbers have been set forth herein
for convenience only. Unless the contrary is compelled by the context,
everything contained in each Section applies equally to this entire Agreement.

14.3 Reserved.

14.4 Severability of Provisions. Each provision of this Agreement
shall be severable from every other provision of this Agreement for the purpose
of determining the legal enforceability of any specific provision.

14.5 Amendments in Writing. This Agreement only can be amended by
writing in accordance with Section 13.2.

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14.6 Counterparts; Telefacsimile Execution. This Agreement may be
executed in any number of counterparts and by different parties on separate
counterparts, each of which, when executed and delivered, shall be deemed to be
an original, and all of which, when taken together, shall constitute but one and
the same agreement. Delivery of an executed counterpart of this Agreement by
telefacsimile shall be equally as effective as delivery of an original executed
counterpart of this Agreement. Any party delivering an executed counterpart of
this Agreement by telefacsimile also shall deliver an original executed
counterpart of this Agreement but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Agreement. The foregoing shall apply to each other Loan Document
mutatis mutandis, except as otherwise specifically provided therein or
therefor.

14.7 Revival and Reinstatement of Obligations. If the incurrence or
payment of the Obligations by Borrower or the transfer to Lender of any property
should for any reason subsequently be declared to be void or voidable under any
state or federal law relating to creditors’ rights, including provisions of the
Bankruptcy Code relating to fraudulent conveyances, preferences, or other
voidable or recoverable payments of money or transfers of property
(collectively, a “Voidable Transfer“), and if Lender is required to repay
or restore, in whole or in part, any such Voidable Transfer, or elects to do so
upon the reasonable advice of its counsel, then, as to any such Voidable
Transfer, or the amount thereof that Lender is required or elects to repay or
restore, and as to all reasonable costs, expenses, and attorneys fees of Lender
related thereto, the liability of Borrower automatically shall be revived,
reinstated, and restored and shall exist as though such Voidable Transfer had
never been made.

14.8 Integration. This Agreement, together with the other Loan
Documents, reflects the entire understanding of the parties with respect to the
transactions contemplated hereby and shall not be contradicted or qualified by
any other agreement, oral or written, before the date hereof.

14.9 Reserved.

14.10 Press Releases. The Borrower agrees that neither it nor its
Affiliates will in the future issue any press releases or other public
disclosure using the name of Lender or its Affiliates or referring to this
Agreement or the other Loan Documents without at least two (2) Business Days’
prior notice to Lender and without the prior written consent of Lender unless
(and only to the extent that) Borrower or its Affiliate is required to do so
under Applicable Law and then, in any event, Borrower or its Affiliate will
consult with Lender before issuing such press release or other public
disclosure. Borrower, on their own behalf and on behalf of its Affiliates,
consents to the publication by Lender of advertising material relating to the
financing transactions contemplated by this Agreement using Borrower’s or
Affiliates name, product photographs, logo or trademark. Lender shall provide a
draft reasonably in advance of any advertising material to Borrower for review
and comment prior to the publication thereof.

14.11 No Strict Construction. The parties hereto have participated
jointly in the negotiation and drafting of this Agreement and the other Loan
Documents. In the event an ambiguity or question of intent or interpretation
arises, this Agreement and the other Loan Documents shall be construed as if
drafted jointly by the parties hereto and no presumption or

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burden of proof shall arise favoring or disfavoring any party by virtue of
the authorship of any provisions of this Agreement and the other Loan Documents.

[The remainder of this page is intentionally left blank.]

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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered as of the date first above written.

	SCHURMAN FINE PAPERS d/b/a PAPYRUS, as Borrower
	By:	/s/ Thomas A. Shaw
		Name:	Thomas A. Shaw
		Title:	Chief Financial Officer
	AMERICAN GREETINGS CORPORATION, as Lender
	By:	/s/ Catherine M. Kilbane
		Name:	Catherine Kilbane
		Title:	Senior Vice President, General Counsel & Secretary

Signature Page to Loan Agreement : Papyrus

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