Pledge And Security Agreement, Dated As of April 4, 2006

Exhibit 10.2


PLEDGE AND SECURITY AGREEMENT

by and between

AMERICAN GREETINGS CORPORATION AND

ITS SUBSIDIARIES PARTY HERETO,

as Grantors,

and

NATIONAL CITY BANK,

as Collateral Agent

Dated as of April 4, 2006


THIS PLEDGE AND SECURITY AGREEMENT, dated as of April 4, 2006 (as the same may from time to time be amended, restated, supplemented or otherwise modified, this " Agreement" ), is entered into among:

(i) AMERICAN GREETINGS CORPORATION, an Ohio corporation (herein, together with its successors and assigns, the " Company" );

(ii) each of the Domestic Subsidiaries of the Company identified on Schedule 1 hereto (each such Domestic Subsidiary, together with the Company and any other Person that becomes a party hereto as a Grantor hereunder pursuant to Section 10.15, and each of their respective successors and assigns, collectively, the " Grantors" and, individually, " Grantor" ); and

(iii) NATIONAL CITY BANK, as collateral agent (together with any successor collateral agent that may be appointed pursuant to Section 9.22, the " Collateral Agent" ), for the benefit of the Secured Creditors (as hereinafter defined):

RECITALS :

(1) This Agreement is made pursuant to the Credit Agreement, dated as of the date hereof (as the same may from time to time be amended, restated, supplemented or otherwise modified, the " Credit Agreement" ), among the Company, the Foreign Subsidiary Borrowers (as defined therein) from time to time party thereto, the lenders from time to time party thereto (herein, together with their respective successors and assigns, collectively, the " Lenders" ), National City Bank, as the Global Agent, joint lead arranger, joint bookrunner, Swing Line Lender and LC Issuer, UBS Securities LLC, as joint lead arranger, joint bookrunner and Syndication Agent, and KeyBank National Association, JPMorgan Chase Bank, N.A., and LaSalle Bank National Association, as Co-Documentation Agents.

(2) The Company is a party to that certain Indenture, dated as of July 27, 1998 (as the same may from time to time be amended, restated, supplemented or otherwise modified, the " Senior Indenture" ), between the Company and JPMorgan Trust Company, N.A. (successor in interest to NBD Bank), as trustee, pursuant to which the Company has issued to the Senior Securities Holders (as hereinafter defined) the Senior Indenture Securities (as hereinafter defined). (3) Pursuant to the Senior Indenture, the Senior Indenture Securities are required to be secured equally and ratably with the Obligations (as defined in the Credit Agreement) and the Designated Hedge Document Obligations (as hereinafter defined); provided, however , that the Senior Indenture Securities will no longer be secured hereunder on and after the date on which the Senior Indenture Collateral Condition ceases to exist.

(4) It is a condition precedent to the making of Loans (as defined in the Credit Agreement) and the issuance of, and participation in, Letters of Credit (as defined in the Credit Agreement) under the Credit Agreement that each Grantor shall have executed and delivered to the Collateral Agent this Agreement. (5) Each Grantor will obtain benefits from the Credit Agreement and, accordingly, desires to execute this Agreement to satisfy the conditions described in the preceding paragraph and to induce the Lenders to extend credit pursuant to the Credit Agreement and the other Loan Documents (as defined in the Credit Agreement).

AGREEMENT :

NOW, THEREFORE, in consideration of the foregoing and the other benefits accruing to each Grantor, the receipt and sufficiency of which are hereby acknowledged, each Grantor hereby (i) makes the following representations and warranties to the Collateral Agent and (ii) covenants and agrees with the Collateral Agent and the other Secured Creditors (as defined below) as follows:

ARTICLE I.

DEFINITIONS AND TERMS Section 1.1. Defined Terms . Capitalized terms used in this Agreement and not otherwise defined in Section 1.2 shall have the meanings given to such terms in the Credit Agreement. Unless otherwise defined herein, all terms used herein and defined in the UCC shall have the same definitions herein as specified therein; provided, however , that if a term is defined in Article 9 of the UCC differently than in another Article of the UCC, the term shall have the meaning specified in Article 9 of the UCC.

Section 1.2. Additional Defined Terms . The following terms shall have the meanings specified herein unless the context otherwise requires:

" Acceleration Event" means (a) after the occurrence of a Default Event with respect to the Credit Agreement Obligations, the maturity of the Credit Agreement Obligations shall have been accelerated, or (b) at any time prior to the date on which the Senior Indenture Collateral Condition ceases to exist, after the occurrence of a Default Event with respect to the Senior Indenture Obligations, the maturity of any of the Senior Indenture Obligations shall have been accelerated.

" Account" means any " account," as such term is now or hereafter defined in the UCC. " Account Debtor" means any " account debtor," as such term is now or hereafter defined in the UCC. " Accounts Receivable" means (a) all Accounts, now existing or hereafter arising; and (b) without limitation of the foregoing, in any event includes, without limitation, (i) all right to a payment, whether or not earned by performance, for Goods or other property (other than Money) that has been or is to be sold, consigned, leased, licensed, assigned or otherwise disposed of, for services rendered or to be rendered, for a policy of insurance issued or to be issued, for a suretyship obligation incurred or to be incurred, for energy provided or to be provided, or for the use or hire of a vessel under a charter or other contract whether due or to become due, whether or not it has been earned by performance, and whether now existing or hereafter acquired or arising in the future, including Accounts Receivable from employees and Affiliates of any Grantor, (ii) all rights evidenced by an Account, invoice, purchase order, requisition, bill of exchange, note, contract, security agreement, lease, chattel paper, or any evidence of indebtedness or security related to the foregoing, (iii) all security pledged, assigned, hypothecated or granted to or held by a Grantor to secure the foregoing, (iv) all guarantees, letters of credit, banker' s acceptances, drafts, endorsements, credit insurance and indemnifications on, for or of, any of the foregoing, including all rights to make drawings, claims or demands for payment thereunder, and (v) all powers of attorney for the execution of any evidence of indebtedness, guaranty, letter of credit or security or other writing in connection therewith.

" Administrative Expenses" means, collectively, (a) any and all reasonable costs, liabilities and expenses (including, without limitation, losses, damages, penalties, claims, actions, reasonable attorneys' fees, legal expenses, judgments, suits and disbursements) incurred by, imposed upon, or asserted against,

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the Collateral Agent in the performance of its duties under or otherwise in connection with this Agreement or the other Secured Creditor Documents, or in any attempt by the Collateral Agent to (i) obtain, preserve, perfect or enforce any security interest evidenced by this Agreement, any other Security Document or any other Secured Creditor Document; (ii) obtain payment, performance or observance of any and all of the Obligations; or (iii) maintain, insure, audit, collect, preserve, repossess or dispose of any of the Collateral or any other collateral securing the Obligations, including, without limitation, costs and expenses for appraisals, assessments, and audits of any Grantor, or any such Collateral; (b) to the extent not covered in subpart (a) hereof, all costs and expenses payable to the Collateral Agent pursuant to Section 9.19 of this Agreement; and (c) all costs, liabilities and expenses incidental or related to (a) or (b) above; provided that if any such costs, liabilities or expenses shall not be paid within five Business Days after the Collateral Agent requests payment therefor in writing, such costs, liabilities and expenses shall accrue interest at the Default Rate from the date of such written request until paid.

" Administrative Obligations" means, collectively, all Administrative Expenses and all other Indebtedness or other obligations now owing or hereafter incurred by the Company or any other Grantor to the Collateral Agent (solely in its capacity as Collateral Agent under the Security Documents) pursuant to this Agreement or any other Secured Creditor Document.

" Agreement" has the meaning provided in the first paragraph of this Agreement.

" As-Extracted Collateral" means any " as-extracted collateral," as such term is now or hereafter defined in the UCC.

" Chattel Paper" means any " chattel paper," as such term is now or hereafter defined in the UCC.

" Collateral" has the meaning provided in Section 2.1.

" Collateral Account" means any Controlled Deposit Account or Controlled Securities Account.

" Collateral Agent" has the meaning provided in the first paragraph of this Agreement.

" Collateral Assignment Agreement" means a Collateral Assignment of Patents, a Collateral Assignment of Trademarks or a Collateral Assignment of Copyrights.

" Collateral Assignment of Copyrights" means a Collateral Assignment of Copyrights, in form of and substance acceptable to the Collateral Agent, between the Grantors and the Collateral Agent. " Collateral Assignment of Patents" means a Collateral Assignment of Patents, in form and substance acceptable to the Collateral Agent, between the Grantors and the Collateral Agent.

" Collateral Assignment of Trademarks" means a Collateral Assignment of Trademarks, in form and substance acceptable to the Collateral Agent, between the Grantors and the Collateral Agent.

" Collateral Concentration Account" means a cash collateral Deposit Account established in the name of the Collateral Agent, and under the sole dominion and control of the Collateral Agent, for the benefit of the Secured Creditors, at an office of the Collateral Agent.

" Collateral Documents" shall mean the Security Documents, together with all other documents, instrument or agreements executed in connection with the Security Documents, or in connection with any security interest or Lien granted, or otherwise obtained, on or in connection with the Creditor Collateral, or any part thereof.

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" Collateral Trust Account" has the meaning provided in Section 9.7. " Commercial Tort Claim" means any " commercial tort claim," as such term is now or hereafter defined in the UCC. " Company" has the meaning provided in the first paragraph of this Agreement. " Contract Rights" means all rights of a Grantor under or in respect of a Contract, including, without limitation, all rights to payment, damages, liquidated damages, and enforcement.

" Contracts" means all contracts, agreements or other writings between a Grantor and one or more additional parties.

" Control" or " control" means (a) when used with respect to any Security or Security Entitlement, the meaning specified in Section 8-106 of the UCC, and (b) when used with respect to any Deposit Account, the meaning specified in Section 9-104 of the UCC. " Control Agreement" means a Deposit Account Control Agreement or a Securities Account Control Agreement. " Controlled Deposit Account" means a Deposit Account (a) that is subject to a Deposit Account Control Agreement or (b) as to which the Collateral Agent is the Depositary Bank' s " customer" (as defined in Section 4-104 of the UCC).

" Controlled Securities Account" means a Securities Account that (a) is maintained in the name of a Grantor at an office of a Securities Intermediary located in the United States of America and (b) together with all Financial Assets credited thereto and all related Security Entitlements, is subject to a Securities Account Control Agreement.

" Copyrights" means any U.S. copyright to which a Grantor now or hereafter has title, as well as any application for a U.S. copyright hereafter made by such Grantor.

" Credit Agreement" has the meaning provided in the Recitals of this Agreement.

" Credit Agreement Obligations" means the Obligations, as defined in the Credit Agreement.

" Creditor Collateral" shall mean, collectively, (a) all of the Collateral, as defined in each of the respective Security Documents executed by any Grantor, and (b) any other property, whether tangible or intangible, at any time securing the Obligations, or any part thereof, whether such Lien securing any of the Obligations shall have been granted to, or otherwise obtained by, the Collateral Agent or any Secured Creditor.

" Default Event" means the occurrence of (a) an Event of Default, as defined in the Credit Agreement, or (b) at any time prior to the date on which the Senior Indenture Collateral Condition ceases to exist, an Event of Default, as defined in the Senior Indenture.

" Deposit Account" means any " deposit account," as such term is now or hereafter defined in the UCC.


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" Deposit Account Control Agreement" means, with respect to a Deposit Account of a Grantor, a Deposit Account Control Agreement substantially in the form of Exhibit A-1 (or in such other form as may have been agreed to by the Collateral Agent) among such Grantor, the Collateral Agent and the relevant Depositary Bank.

" Depositary Bank" means a bank at which a Deposit Account is maintained. " Designated Hedge Document" means (a) each Designated Hedge Agreement (as defined in the Credit Agreement), and (b) each confirmation, transaction statement or other document executed and delivered in connection therewith.

" Designated Hedge Document Obligations" means all amounts, indemnities and reimbursement obligations, direct or indirect, contingent or absolute, of every type or description, and at any time existing owing by any Grantor to any Designated Hedge Creditor (as defined in the Credit Agreement) pursuant to any of the Designated Hedge Documents (including, but not limited to, interest and fees that accrue after the commencement by or against any Grantor of any insolvency proceeding regardless of whether allowed or allowable in such proceeding or subject to an automatic stay under Section 362(a) of the Bankruptcy Code).

" Disclaiming Creditor" has the meaning provided in Section 9.20.

" Document" means any " document," as such term is now or hereafter defined in the UCC.

" Equipment" means any " equipment," as such term is now or hereafter defined in the UCC.

" Equity Interests" means (a) all of the issued and outstanding shares of all classes of capital stock of any corporation at any time directly owned by any Grantor and the certificates representing such capital stock, (b) all of the membership interests in a limited liability company at any time owned or held by any Grantor, and (c) all of the equity interests in any other form of organization at any time owned or held by any Grantor.

" Financial Assets" means any " financial asset," as such term is now or hereafter defined in the UCC.

" Fixtures" means any " fixtures," as such term is now or hereafter defined in the UCC.

" General Intangibles" means any " general intangibles," as such term is now or hereafter defined in the UCC.

" Goods" means any " goods," as such term is now or hereafter defined in the UCC.

" Governing Documents" means all agreements and instruments evidencing or relating to investments in, ownership, voting or disposition of, any of the Pledged Collateral.

" Grantor" or " Grantors" has the meaning provided in the first paragraph of this Agreement.

" Grantor Customer" means any retail or other customer of a Grantor, together with any subsidiary of such customer.

" Instrument" means any " instrument," as such term is now or hereafter defined in the UCC.


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" Intercompany and Third Party Notes" means all Promissory Notes, Instruments, debentures, bonds, evidences of indebtedness and similar securities from time to time issued to, or held by, any Grantor, including, without limitation, the Master Intercompany Note. " Intellectual Property" means (a) all Trademarks, together with the registrations and right to all renewals thereof, and the goodwill of the business of any Grantor symbolized by the Trademarks; (b) all Patents; (c) all Copyrights; and (d) all computer programs and software applications and source code of such Grantor and all intellectual property rights therein and all other Proprietary Information of such Grantor, including, but not limited to, Trade Secrets.

" Inventory" means (a) any " inventory," as such term is now or hereafter defined in the UCC; and (b) without limitation of the foregoing, and in all cases shall include, but shall not be limited to, all merchandise and other Goods held for sale or lease, or furnished or to be furnished under contracts for service, including, without limitation, (i) raw materials, (ii) works in process, (iii) finished goods, (iv) products made or processed, (v) intermediates, (vi) packing materials, (vii) shipping materials, (viii) labels, (ix) semi-finished inventory, (x) scrap inventory, (xi) spare parts inventory, (xii) manufacturing supplies, (xiii) consumable supplies, (xiv) other substances commingled therewith or added thereto, and (xv) all such Goods that have been returned, reclaimed, repossessed or exchanged.

" Investment Property" means any " investment property," as such term is now or hereafter defined in the UCC.

" Issuer" means the issuer of any Pledged Collateral.

" Lender" has the meaning provided in the Recitals of this Agreement. " Letter of Credit Rights" means any " letter of credit rights," as such term is now or hereafter defined in the UCC.

" Master Intercompany Note" means the Master Intercompany Note, dated as of the date hereof, by and among each of the Grantors, as the same may from time to time be amended, restated, supplemented or otherwise modified.

" Minerals" means any " minerals," as such term is now or hereafter defined in the UCC.

" Money" means any " money," as such term is now or hereafter defined in the UCC.

" Obligations" means the Credit Agreement Obligations, the Designated Hedge Document Obligations, the Administrative Obligations, and at any time prior to the date on which the Senior Indenture Collateral Condition ceases to exist, the Senior Indenture Obligations. " Patents" means any U.S. patent to which a Grantor now or hereafter has title, as well as any application for a U.S. patent now or hereafter made by a Grantor.

" Payment Intangible" means any " payment intangible," as such term is now or hereafter defined in the UCC.

" Permits" means, to the extent permitted to be assigned, pledged or otherwise disposed of by the terms thereof or by applicable law, all licenses, permits, rights, orders, variances, franchises or authorizations of or from any Governmental Authority.


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" Pledged Collateral" means the Pledged Equity Interests and the Pledged Debt.

" Pledged Debt" means all of the Intercompany and Third Party Notes presently owned or hereafter acquired from time to time by any Grantor, and all interest, cash, instruments and other property hereafter from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the foregoing. " Pledged Entity" means the Issuer of any Pledged Equity Interests. " Pledged Equity Interests" means, subject to Section 2.1(b), all of the Equity Interests now owned or hereafter acquired by each Grantor, and all of such Grantor' s other rights, title and interests in, or in any way related to, each Pledged Entity to which any of such Equity Interests relate, including, without limitation: (a) all additional Equity Interests hereafter from time to time acquired by such Grantor in any manner, together with all dividends, cash, instruments and other property hereafter from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such Equity Interests and in all profits, losses and other distributions to which such Grantor shall at any time be entitled in respect of any such Equity Interests; (b) all other payments due or to become due to such Grantor in respect of any such Equity Interest, whether under any partnership agreement, limited liability company agreement, other agreement or otherwise, whether as contractual obligations, damages, insurance proceeds or otherwise; (c) all of its claims, rights, powers, privileges, authority, puts, calls, options, security interests, liens and remedies, if any, under any partnership agreement, limited liability company agreement, other agreement or at law or otherwise in respect of any such Equity Interests; (d) all present and future claims, if any, of such Grantor against any such Pledged Entity for moneys loaned or advanced, for services rendered or otherwise; (e) all of such Grantor' s rights under any partnership agreement, limited liability company agreement, other agreement or at law to exercise and enforce every right, power, remedy, authority, option and privilege of such Grantor relating to any such Equity Interests; (f) all other property hereafter delivered in substitution for or in addition to any of the foregoing; (g) all certificates and instruments representing or evidencing any of the foregoing; (h) all cash, securities, interest, distributions, dividends, rights and other property at any time and from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all thereof.

" Proceeds" means (a) any " proceeds," as such term is now or hereafter defined in the UCC; and (b) without limitation of the foregoing and in all cases, and includes, but is not limited to, (i) whatever is acquired upon the sale, lease, license, exchange, or other disposition of any Collateral, (ii) whatever is collected on, or distributed on account of, any Collateral, (iii) rights arising out of any Collateral, (iv) claims arising out of the loss or nonconformity of, defects in, or damage to any Collateral, (v) claims and rights to any proceeds of any insurance, indemnity, warranty or guaranty payable to a Grantor (or the Collateral Agent, as assignee, loss payee or an additional insured) with respect to any of the Collateral, (vi) claims and rights to payments (in any form whatsoever) made or due and payable to a Grantor from time to time in connection with any requisition, confiscation, condemnation, seizure or forfeiture of all or any part of the Collateral by any governmental authority (or any Person acting under color of governmental authority), (vii) all cash, Money, checks and negotiable instruments received or held on behalf of the Collateral Agent pursuant to any lockbox or similar arrangement relating to the payment of Accounts Receivable or other Collateral, and (viii) any and all other amounts from time to time paid or payable under or in connection with any of the Collateral. " Products" means any " products," as such term is now or hereafter defined in the UCC. " Promissory Notes" means any " promissory note," as such term is now or hereafter defined in the UCC.

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" Proprietary Information" means all information and know-how worldwide, including, without limitation, technical data; manufacturing data; research and development data; data relating to compositions, processes and formulations, manufacturing and production know-how and experience; management know-how; training programs; manufacturing, engineering and other drawings; specifications; performance criteria; operating instructions; maintenance manuals; technology; technical information; software; computer programs; engineering and computer data and databases; design and engineering specifications; catalogs; promotional literature; financial, business and marketing plans; inventions and invention disclosures.

" Reporting Date" has the meaning provided in Section 4.8(a).

" Scan Based Inventory" means all Inventory of a Grantor delivered to, or otherwise physically located on the premises owned, leased, controlled, occupied and/or otherwise used by, a Grantor Customer on a consignment basis for the purpose of the ultimate sale of such Inventory to the Grantor Customer or by such Grantor Customer to its customers on behalf of such Grantor. Scan-Based Inventory shall include all Inventory sold by a Grantor to a Grantor Customer that was repurchased by a Grantor in order to convert the relationship with such Grantor Customer to a scan-based trading relationship where such repurchased Inventory was thereafter intended to be held by such Grantor Customer on a consignment basis. " Secured Creditor Documents" means, collectively, the Loan Documents and, at any time prior to the date on which the Senior Indenture Collateral Condition ceases to exist, the Senior Indenture Documents, together with all other documents, instruments or agreements executed and delivered in connection with the foregoing, in each case as the same may from time to time be amended, restated, supplemented or otherwise modified.

" Secured Creditor Pro Rata Share" means, at the time of determination, with respect to any Secured Creditor, the percentage that shall be determined by dividing:

(a) (i) for each Lender, the Global Agent, the Swing Line Lender or any LC Issuer, the Dollar Equivalent amount of the Aggregate Credit Facility Exposure owing to the Global Agent, the Swing Line Lender, such LC Issuer, or such Lender, as applicable, (ii) for each Designated Hedge Creditor, the aggregate outstanding principal amount of Designated Hedge Document Obligations owing to such Designated Hedge Creditor, and (iii) at any time prior to the date on which the Senior Indenture Collateral Condition ceases to exist, for each Senior Securities Holder, the aggregate outstanding principal amount of Senior Indenture Obligations owing to such Senior Securities Holder pursuant to the Senior Indenture; by (b) the sum of the aggregate outstanding principal Dollar Equivalent amount of all of the Obligations (other than the Administrative Obligations).

For all purposes under this Agreement or any of the other Secured Creditor Documents, the Secured Creditor Pro Rata Share shall be determined on the date of the occurrence of the first Sharing Event.

" Secured Creditors" means, collectively, the Collateral Agent, the Global Agent, the Lenders, the Swing Line Lender, each LC Issuer, each Designated Hedge Creditor and, at any time prior to the date on which the Senior Indenture Collateral Condition ceases to exist, each Senior Securities Holder, and the respective successors and assigns of each of the foregoing.

" Securities Account" means any " securities account," as such term is now or hereafter defined in the UCC.


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" Securities Account Control Agreement" means, with respect to a Securities Account of a Grantor, a Securities Account Control Agreement substantially in the form of Exhibit A-2 (or in such other form as may have been agreed to by the Collateral Agent) among the relevant Securities Intermediary, such Grantor and the Collateral Agent.

" Securities Act" has the meaning provided in Section 6.10. " Securities Intermediary" means a clearing corporation or a Person, including, without limitation, a bank or broker, that in the ordinary course of its business maintains Securities Accounts for others and is acting in that capacity.

" Security" means any " security," as such term is now or hereafter defined in the UCC.

" Security Agreement Joinder" means a joinder supplement to this Agreement substantially in the form of Exhibit B .

" Security Entitlement" means any " security entitlement," as such term is now or hereafter defined in the UCC.

" Security Interest" means the security interest granted by a Grantor and/or by all Grantors, as applicable, pursuant to Section 2.1.

" Senior Indenture" has the meaning provided in the Recitals of this Agreement.

" Senior Indenture Collateral Condition" has the meaning provided in the Credit Agreement.

" Senior Indenture Documents" means the Senior Indenture and the Senior Indenture Securities, together with all other documents, instruments or agreements executed and delivered in connection with the foregoing, in each case as the same may from time to time be amended, restated, supplemented or otherwise modified. " Senior Indenture Obligations" means all Indebtedness and o ...