Cookie Jar, American Greetings Settle Litigation

CLEVELAND/TORONTO, July
23: Cookie Jar Entertainment has acquired the Strawberry Shortcake and Care Bears properties for $195 million in a deal that settles
litigation initiated by American Greetings Properties and enables the
completion of the acquisition of DIC Entertainment.

Last month, American
Greetings obtained a temporary restraining order blocking the sale of DIC to
Cookie Jar over concerns for its Strawberry Shortcake brand. The legal action came just a day after
Cookie Jar announced its acquisition of DIC in a transaction valued at $87.6
million.

The combined Cookie
Jar/DIC library will now include content from Strawberry Shortcake and Care Bears, which, since being re-introduced in 2002, have
generated more than $5 billion combined in retail sales of licensed product.
Cookie Jar is also securing from American Greetings the rights to Sushi Pack, a new property created by Studio Espinosa and
co-produced by American Greetings and DIC Entertainment. Additionally, Cookie
Jar has granted American Greetings a ten-year exclusive inbound licensing
agreement for social-expression products on all three properties.

"When Cookie Jar was
founded we wanted to become an international power in children's entertainment
programming," said Cookie Jar's CEO, Michael Hirsh. "We have been
filling Cookie Jar with great properties such as Caillou, Arthur, Johnny Test and The
Doodlebops. The acquisition of DIC
and now Strawberry Shortcake
and Care Bears makes us the
fastest-growing independent player in the industry."

Josef Mandelbaum, the CEO of the Intellectual Property Group at American Greetings,
added: "Strawberry Shortcake
and Care Bears have been
synonymous with American Greetings for more than 25 years and are beloved by
all. We are very confident that Cookie Jar will be able to take these two
properties to new heights. This is a great outcome for our company and
shareholders that has allowed us to realize significant value from all of our
past efforts in these properties."

American Greetings
Properties will now focus its efforts on licensing, marketing and promotional
programs for its other franchises. These include Twisted Whiskers, Mad Balls, Holly Hobbie, TinPo and its new preschool property, Maryoku Yummy.

DIC, meanwhile, will now
function as a wholly-owned subsidiary of Cookie Jar. The combined library is
home to almost 6,000 half hours of content. The merged firm also owns a third
of KidsCo.

“This transaction is an
important milestone in our growth strategy and we continue to be receptive to
deals that meet our criteria for excellence,” said Hirsh.

Toper Taylor, the
president and COO of Cookie Jar, added: “DIC expands our merchandising and
licensing capabilities, adds valuable relationships with consumer brands such
as McDonald’s, General Mills and Wal-Mart, and deepens our network in the
global children’s entertainment industry. Michael and I look forward to working
with Andy Heyward, who will focus on new strategic opportunities for Cookie Jar and
build on his relationships in the industry. We are going to move quickly to
integrate DIC’s existing operations into Cookie Jar’s ongoing businesses and
platforms.”

DIC’s longtime chief, Andy
Heyward, has inked a long-term employment agreement with Cookie Jar. “I am very
pleased to be joining Cookie Jar, a profitable and well-capitalized company led
by two of our industry’s most successful executives,” he said. “This merger is
an exciting development for the future of children’s entertainment worldwide.”

—By Mansha Daswani