printer-friendly

Sample Business Contracts

Cross License Agreement - American Greetings Corp. and AmericanGreetings.com Inc.

Sponsored Links

                         FORM OF CROSS LICENSE AGREEMENT


       THIS CROSS-LICENSE AGREEMENT (this "Agreement"), is made and entered into
as of ___________ ___, 1999, by and among American Greetings Corporation, an
Ohio corporation ("AG Corp"), its wholly-owned subsidiary AGC, Inc., a Delaware
corporation ("AGC" and, together with AG Corp, "AG"), AmericanGreetings.com,
Inc., a Delaware corporation ("amgreet.com") and its wholly owned subsidiary,
AG.COM, Inc., a Delaware corporation ("AGCI" and, together with amgreet.com,
"AG.COM") (together, the "Parties").


                                    RECITALS

A.     AG (with its Affiliates) and AG.COM each is the owner of all right, title
       and interest in and to certain trademarks, service marks, trade names,
       copyrights, trade dress and other intellectual property described herein,
       and is the authorized user or licensee of other trademarks, service
       marks, trade names, copyrights, trade dress and other intellectual
       property, all as described herein.

B.     AG.COM previously operated as a division of AG, and its assets and
       operations have been transferred to it pursuant to a Formation Agreement
       by and among the Parties and other affiliates dated ______ __, 1999 (the
       "Formation Agreement").

C.     Under the Formation Agreement, AG also transferred to AG.COM the
       ownership of certain intellectual property rights to use other
       intellectual property.

D.     AG, on the one hand, and AG.COM, on the other hand, each desires to
       license the other as provided herein.

       NOW, THEREFORE, based on the above premises and the promises made herein,
the Parties agree as follows:


                                   AGREEMENTS

1.     DEFINITIONS. Except as otherwise specified, the following terms shall
       have the respective meanings set forth below whenever used in this
       Agreement. Capitalized terms not defined in this Agreement will have the
       meaning set forth in the Formation Agreement (as defined below).

       1.1.      "AG" or "AG Group" means AG Corp, AGC and, with respect to the
                 scope of rights, grants and business activity restrictions in
                 this Agreement, all their present and future Affiliates, other
                 than AG.COM and its Subsidiaries.

       1.2.      "AG Business" means the distribution through, or sale to third
                 parties for sale at physical retail locations by, Physical
                 Retailers of (a) Physical Greeting Products and (b) other
                 social expression products manufactured in physical media,
                 including, without limitation, items such as gift wrap,
<PAGE>   2

                 stationery, party goods, balloons, candles and reading glasses.
                 Distribution or sale of computer software, for example on
                 CD-ROMs such as those sold by AG.COM, is not included in the
                 term "AG Business."

       1.3.      "AG Content" means Content and other Copyrights owned or
                 licensed and used by AG as of the Effective Time or
                 subsequently, including, without limitation, that which is
                 identified on Schedule 1.3.

       1.4.      "AG Intellectual Property" means Intellectual Property owned or
                 licensed for use by AG as of the Effective Time or
                 subsequently.

       1.5.      "AG Know-How" means Know-How owned or licensed for use by AG as
                 of the Effective Time or subsequently.

       1.6.      "AG Trademarks" means the Trademarks identified on Schedule
                 1.6. "Group 1 Trademarks", "Group 2 Trademarks", "Group 2A
                 Trademarks", "Group 2B Trademarks", and "Group 3 Trademarks"
                 mean the Trademarks so identified in each case on
                 Schedule 1.6.

       1.7.      "AG.COM" means AmericanGreetings.com, Inc. together with its
                 Subsidiaries and, with respect to the scope of rights, grants
                 and business activity restrictions, all its present and future
                 Affiliates, other than AG.

       1.8.      "AG.COM Business" means the distribution or sale of Electronic
                 Greeting Products and Physical Greeting Products to consumers
                 directly through Electronic Media; provided, however, that
                 AG.COM Business does not include distribution or sales within
                 the physical confines of retail stores owned or operated by AG.

       1.9.      "AG.COM Intellectual Property" means Intellectual Property
                 owned or licensed (other than from AG) for use by AG.COM as of
                 the Effective Time or subsequently.

       1.10.     "Affiliates" of any specified company means any other company
                 that, directly or indirectly, controls, is controlled by or is
                 under direct or indirect common control with such specified
                 company. For purposes of this Agreement, "control" means
                 ownership of a majority voting interest sufficient to direct
                 the affairs of a company.

       1.11.     "Ancillary Agreements" shall have the meaning set forth in
                 Section 7.01 of the Formation Agreement.

       1.12.     "Art" means art, including pictorial, graphic, visual, video,
                 photographic or sculptural works used, or usable, at any time,
                 past, present or future, in a greeting, social expression, or
                 other product, or on a Web site.

       1.13.     "Competitive Brand Trademark" means a Trademark identifying an
                 entity that derives a majority of its revenue from the AG
                 Business.

       1.14.     "Confidential Information" of a Party means (a) confidential
                 Know-How; and (b) any other confidential ideas, inventions,
                 software (including the object code and source code), program
                 structure, sequence and organization techniques, trade secrets
                 and other information of the Party



                                       2
<PAGE>   3

                 (including all copies thereof), whether or not registerable,
                 patentable or copyrightable, relating to, forming a part of or
                 concerning the Party's business and/or its Intellectual
                 Property which, as to each such item in clauses (a) and (b) of
                 this definition is (i) at any time during the term hereof
                 acquired or developed by a Party, is in the Party's possession,
                 and disclosed by the Party to the other pursuant to this
                 Agreement; (ii) neither available to the public at the time of
                 its receipt by a Party from the other hereunder nor obtained
                 from a public source by the Party; and (iii) the subject of
                 reasonable efforts by the Party to maintain confidentiality.
                 For the avoidance of doubt, any information of each Party
                 (including all copies hereof) that is obtained by that Party,
                 directly or indirectly, from a third Person who is subject to a
                 confidentiality obligation to that Party with respect to such
                 information shall constitute, and be deemed to be, Confidential
                 Information hereunder. Confidential Information does not
                 include any information which (i) has become generally known to
                 the public through no wrongful act or breach of any obligation
                 of confidentiality on the receiving party's or any third
                 party's part; (ii) was in the lawful knowledge and possession
                 of, or was independently developed by, the receiving party
                 prior to the time it was disclosed to, or learned by, the
                 receiving party as evidenced by written records kept in the
                 ordinary course of business by the receiving party; (iii) was
                 rightfully received from a third party not in violation of any
                 contractual, legal or fiduciary obligation of such third party;
                 or (iv) was approved for release by written authorization by
                 the party having rights in such information.

       1.15.     "Content" means Art and Verse, and any other work of authorship
                 in which copyright may exist, and all intellectual property
                 rights therein.

       1.16.     "Copyright" means, collectively, a copyright arising under the
                 laws of the United States or other nation in Content, Software
                 or other work of authorship, and the attendant exclusive
                 rights, together with the Content, Software or work of
                 authorship in which the copyright subsists.

       1.17.     "Effective Time" means the date of this Agreement in the
                 preamble, or another date agreed to by the Parties, which shall
                 occur after the closing of the transactions contemplated by the
                 Formation Agreement.

       1.18.     "End Date" means the time at which AG's voting (not equity)
                 interest in AG.COM falls below 20%, except that, (i) in the
                 event of a distribution by AG of substantially all its shares
                 of AG.COM to its shareholders, the End Date shall not occur
                 earlier than ten years after the date AG.COM's Initial Public
                 Offering and (ii) in the event of a sale of substantially all
                 of AG's interest in AG.COM, the End Date shall not occur
                 earlier than the later of (x) two years after written notice to
                 AG.COM by AG or (y) five years after the date of AG.COM's
                 Initial Public Offering.

       1.19.     "Electronic Greeting Products" means (i) online and electronic
                 equivalents of Physical Greeting Products and (ii) electronic
                 and online versions of



                                       3
<PAGE>   4

                 other social communication items such as templates for
                 stationery, banners, gift tags and award certificates.

       1.20.     "Electronic Media" means the now existing and future developed
                 electronic media including (without limitation) the Internet
                 and online services (whether delivered through telephonic
                 connection, television, satellite or broadband connection) and
                 CD-ROM. Online retailers, including (without limitation)
                 America Online and Yahoo! are "Electronic Media," but online
                 retail locations of Physical Retailers are not Electronic
                 Media.

       1.21.     "Finished AG.COM Properties" means (i) finished Electronic
                 Greeting Products or social expression products, in form
                 suitable for use by consumers (as distinguished from digitized
                 electronic Art, Verse, Content and other component elements of
                 a finished Electronic Greeting Product) and (ii) finished,
                 production implementations of Software technology for the
                 implementation of the AG.COM Business (e.g. working web site
                 HTML code and related scripts but not Software tools used in
                 the creation, presentation, distribution or delivery of the
                 Finished AG.COM Properties described in clause (i)).

       1.22.     "Improvements" means any change, modification, alteration or
                 variation or any discovery, improvement, invention, innovation,
                 extension, derivative work or other enhancement, made or
                 acquired during the term hereof relating to an item of
                 Intellectual Property, as each exists on the Effective Time, or
                 as it may hereafter be modified, improved or enhanced through
                 the application of Improvements.

       1.23.     "Intellectual Property" means (a) inventions, whether or not
                 patentable, whether or not reduced to practice or whether or
                 not yet made the subject of a pending patent application or
                 applications; (b) ideas and conceptions of potentially
                 patentable subject matter, including, without limitation, any
                 patent disclosures, whether or not reduced to practice and
                 whether or not yet made the subject of a pending patent
                 application or applications; (c) national (meaning the United
                 States) and multinational statutory invention registrations,
                 patents, patent registrations, and patent applications
                 (including all reissues, divisions, continuations,
                 continuations-in-part, extensions and reexaminations) and all
                 rights therein provided by multinational treaties or
                 conventions and all improvements to the inventions disclosed in
                 each such registration, patent or application; (d) trademarks,
                 service marks, trade dress, logos, trade names and corporate
                 names, whether or not registered, including all common law
                 rights, and registrations and applications for registration
                 thereof, including, but not limited to, all marks registered in
                 the United States Patent and Trademark Office, the counterpart
                 agencies of the States and Territories of the United States of
                 America, and the Trademark offices of other nations throughout
                 the world, and all rights therein provided by multinational
                 treaties or conventions; (e) works of authorship of all types,
                 published and unpublished, and copyrights (registered or
                 otherwise) and registrations and



                                       4
<PAGE>   5

                 applications for registration thereof, and all rights therein
                 provided by multinational treaties or conventions; (f) moral
                 rights (including, without limitation, rights of paternity and
                 integrity), and waivers of such rights by others; (g) computer
                 software, including, without limitation, source code, operating
                 systems and specifications, data, data bases, files,
                 documentation and other materials related thereto, data and
                 documentation; (h) trade secrets and confidential, technical or
                 business information (including ideas, formulas, compositions,
                 inventions, and conceptions of inventions whether patentable or
                 unpatentable and whether or not reduced to practice); (i)
                 whether or not confidential, technology (including Know-How),
                 manufacturing and production processes and techniques, research
                 and development information, drawings, specifications, designs,
                 plans, proposals, technical data, copyrightable works,
                 financial, marketing and business data, pricing and cost
                 information, business and marketing plans and customer and
                 supplier lists and information; (j) copies and tangible
                 embodiments of all the foregoing, in whatever form or medium;
                 (k) all rights to obtain and rights to apply for patents, and
                 to register trademarks and copyrights; and (l) all rights to
                 sue and recover and retain damages and costs and attorneys'
                 fees for present and past infringement of any of the
                 Intellectual Property rights hereinabove set out.

       1.24.     "Know-How" means the technology, technical information,
                 methods, analyses, procedures, processes, teachings,
                 instructions, techniques, practices, methods, data, statistics,
                 drawings, designs, formulae, concepts, programs, raw material,
                 equipment and plant specifications, raw material blending and
                 purchasing, quality standards, inspection standards,
                 information as to test methods and procedures, and any other
                 knowledge, experience and information of a Party, whether or
                 not patentable (in each case regardless of the form in which
                 such technology, information or data may be embodied or
                 represented), and which a Party, on the date hereof or
                 hereafter during the term of this Agreement, owns or with
                 respect to which it has the right to grant a license hereunder
                 and all intellectual property rights therein.

       1.25.     "Patents" means patent applications and letters patent
                 including any renewal patents issued with respect to any of
                 such patent applications and letters patent, and any
                 certificates of invention and utility models, rights by license
                 or otherwise to or under letters patent, and all reissues,
                 divisions, continuations, continuations in part, renewals, and
                 extensions thereof.

       1.26.     "Permitted Premiums" means greetings or social expression
                 products (physical or electronic) distributed for a limited
                 period of time as a promotional premium for no consideration or
                 minimal consideration.

       1.27.     "Person" means an individual, a general or limited partnership,
                 a corporation, a trust, a joint venture, an unincorporated
                 organization, a limited liability entity, any other entity and
                 any Governmental Authority.



                                       5
<PAGE>   6

       1.28.     "Physical Greeting Products" means (a) non-customized greeting
                 cards manufactured or created in physical media such as paper,
                 plastic, mylar and other similar materials and (b) similar
                 card-type goods in physical media (e.g. invitations and thank
                 you notes).

       1.29.     "Physical Retailer" means a company and its Affiliates, as a
                 group, that is or becomes a retail store customer of AG and
                 derives a majority of its revenue from the sale of physical
                 goods to consumers at retail store locations where the consumer
                 is physically present to make purchases.

       1.30.     "Reversion Event" means the occurrence of circumstances in
                 which (after notice and an opportunity to cure for thirty (30)
                 days in the case of clauses (ii) and (iii) below), (i) AG.COM
                 has less than 10% of its revenues derive from the AG.COM
                 Business; (ii) AG.COM materially defaults in its royalty
                 obligations to AG under the Ancillary Agreements; (iii) AG.COM
                 materially defaults on any covenant related to indebtedness for
                 borrowed money in excess of One Million Dollars ($1,000,000),
                 or (iv) AG.COM's financial condition and its reasonably
                 available sources of debt or equity capital become such that
                 auditors, applying generally accepted auditing standards
                 consistently applied, would be required to qualify an audit
                 report with a "going concern" qualification.

       1.31.     "Formation Agreement" has the meaning ascribed to it in the
                 Recitals.

       1.32.     "Software" means computer programs and documentation.

       1.33.     "Subsidiary" of any specified company means an Affiliate of
                 that company that is, directly or indirectly, controlled by
                 that company.

       1.34.     "Trademark" means any word, design, logo or other item entitled
                 to protection as a trademark or services mark under the laws of
                 the United States or any other nation.

       1.35.     "Verse" means verse, including text and literary works, such as
                 poems, sayings, jingles, words, narratives, or phrases which
                 are used or usable at any time in a greeting or social
                 expression product or a communication.


2.     LICENSE GRANTS BY AG

       2.1.      AG TRADEMARKS.

                 2.1.1.   Subject to the terms and conditions of this Agreement,
                          AG hereby grants to AG.COM (until termination of this
                          Agreement and thereafter to the extent provided under
                          the terms and conditions of this Agreement) a
                          non-transferable, worldwide license to use the AG
                          Trademarks as follows:

                 2.1.1.1. GROUP 1. The license to use the Group 1 Trademarks is
                          exclusive to AG.COM in the AG.COM Business and non
                          exclusive for all other uses except that (i) no
                          license is granted for use in the AG Business and
                          (ii) AG retains a



                                       6
<PAGE>   7

                          non-exclusive right within the AG.COM Business (A) to
                          associate a Group 3 Trademark with a Group 1 Trademark
                          (for example, to identify a product sold through
                          Electronic Media as "Designware, an American Greetings
                          company") and (B) for business to business commerce
                          with prospective or existing non-consumer customers.

                 2.1.1.2. GROUP 2. The license to use the Group 2 Trademarks is
                          exclusive to AG.COM except that no license is granted
                          for use in the AG Business.

                 2.1.1.3. GROUP 3. The license to use the Group 3 Trademarks is
                          non-exclusive, except that no license is granted for
                          use in the AG Business.

       2.1.2.    DUTY TO PROMOTE AG TRADEMARKS. AG.COM will use best reasonable
                 efforts to use and promote the Trademarks "American Greetings"
                 and the AG "Rose" logo in its business and markets in North
                 America.

2.2.   NON-TRADEMARK LICENSED AG INTELLECTUAL PROPERTY. Subject to the terms and
       conditions of this Agreement, AG hereby grants to AG.COM, (until
       termination of this Agreement and thereafter to the extent provided under
       the terms and conditions of this Agreement), a non-transferable,
       irrevocable (except as provided herein) worldwide license to use the
       non-Trademark AG Intellectual Property as follows:

       2.2.1.    GENERAL. Unless otherwise expressly provided, the rights and
                 licenses granted in this Section are exclusive for the AG.COM
                 Business, and non exclusive otherwise, except that no license
                 is granted in the AG Business.

       2.2.2.    CONTENT. The license to AG's current and future Content shall
                 include the right to use, copy, modify, distribute and display.
                 The license to AG's current and future Patents shall include
                 the rights to use, make, have made, sell and import products
                 and services incorporating the covered inventions.

       2.2.3.    THIRD-PARTY LICENSED INTELLECTUAL PROPERTY. To the extent
                 permitted in each case, the license granted in this Section
                 includes sublicenses of Intellectual Property that is licensed
                 to AG by its Affiliates and by non-Affiliate third parties,
                 subject in the case of non-Affiliates, to any restrictions or
                 limitations in such licenses. Such third-party licensed
                 Intellectual Property includes that which is so identified on
                 Schedules [________].


       2.2.4.    INCLUDED PROPERTY. AG agrees that any and all Patents and
                 Software (other than Patents and Software transferred to AG.COM
                 pursuant to the Formation Agreement) that it may own now or in
                 the future are included in the non-Trademark AG Intellectual
                 Property licensed in this Section 2.2.



                                       7
<PAGE>   8

       2.3.      SUBLICENSING.

                 2.3.1.   TRADEMARKS. AG.COM may not sublicense any of the
                          Trademark rights granted hereunder, other than under
                          written sublicense agreements consistent with the
                          terms, conditions and requirements of this Agreement,
                          including, without limitation (in the case of licensed
                          trademarks), the standards in Section 2.5. For the
                          avoidance of doubt, the standards of Section 2.5 may
                          limit the identity of sublicensees of Trademarks.

                 2.3.2.   OTHER. AG.COM may not sublicense any of the
                          non-Trademark rights granted hereunder, other than
                          under written sublicense agreements consistent with
                          the terms, conditions and requirements of this
                          Agreement, including, without limitation (in the case
                          of licensed trademarks), the standards in Section 2.5.

       2.4.      LICENSES SUBJECT TO RESTRICTION AND OTHER USE. With respect to
                 any Intellectual Property licensed by AG and not assigned to
                 AG.COM pursuant to the Formation Agreement that either (i) is
                 used by AG primarily for use not in the AG.COM Business or (ii)
                 is subject to restrictions on sublicensing to AG.COM or both,
                 AG will use reasonable efforts to provide the benefit thereof
                 to AG.COM to the extent permitted, for AG.COM's exclusive use
                 in the AG.COM Business and non-exclusive use otherwise (other
                 than in the AG Business), or if not able to do so will
                 negotiate in good faith to determine appropriate treatment
                 (including one Party being reasonably required to obtain a
                 second license) on a case by case basis.

       2.5.      QUALITY. AG.COM shall comply with the usage, product and
                 licensee quality requirements of Schedule 2.5 (the "Quality
                 Standards"), as they may be reasonably changed by AG with
                 reasonable advance notice to AG.COM from time to time with
                 respect to AG.COM's use of the licensed AG Trademarks. AG.COM
                 shall not use the licensed AG Trademarks in a manner that
                 violates the Quality Standards, nor shall it affix or sell or
                 offer for sale under the AG Trademarks any product or service
                 that violates the Quality Standards. AG.COM shall not permit
                 any Affiliate or third party with whom it has a sublicense or
                 other agreement or arrangement to take any such action
                 involving an AG Trademark that would violate the Quality
                 Standards. Notwithstanding anything to the contrary herein or
                 in the Quality Standards under no circumstances will AG.COM be
                 required to obtain prior approval for usage of an AG Trademark,
                 but AG reserves the right to object, under the terms hereof, to
                 any usage that it determines violates the terms hereof or the
                 Quality Standards.


3.     LICENSE GRANTS BY AG.COM

       3.1.      NON-TRADEMARK LICENSED AG.COM INTELLECTUAL PROPERTY. Subject to
                 the terms and conditions of this Agreement, AG.COM hereby
                 grants to AG (until termination of this Agreement and
                 thereafter to the extent provided under the terms and
                 conditions of this Agreement), a non-transferable,



                                       8
<PAGE>   9

                 irrevocable (except as provided herein) worldwide license to
                 use the non-Trademark AG.COM Intellectual Property as follows:

                 3.1.1.   GENERAL. Unless otherwise expressly provided, the
                          rights and licenses granted in this Section are
                          exclusive for the AG Business, and non-exclusive
                          otherwise except that no license is granted in the
                          AG.COM Business.

                 3.1.2.   CONTENT. The license to AG.COM's current and future
                          Content shall include the right to use, copy, modify,
                          distribute and display. The license to AG.COM's
                          current and future Patents shall include the right to
                          use, make, have made, sell and import products and
                          services incorporating the covered inventions.

                 3.1.3.   LIMITATION WITH RESPECT TO FINISHED AG.COM PROPERTIES.
                          AG.COM may terminate the licenses granted hereunder to
                          AG for Finished AG.COM Properties if AG is furnishing
                          such products to one or more Physical Retailers for
                          sale or distribution directly to consumers by the
                          Physical Retailers through the Physical Retailer's
                          online retail locations in a manner that AG.COM
                          determines to be in competition with it. AG.COM may
                          terminate such licenses as to Finished AG.COM
                          Properties that AG.COM does not offer at no charge on
                          its web site on 30 days prior written notice. As to
                          Finished AG.COM Properties that AG.COM offers at no
                          charge on its web site, AG.COM may terminate such
                          license only on one year's prior written notice.

                 3.1.4.   THIRD PARTY LICENSED INTELLECTUAL PROPERTY. To the
                          extent permitted in each case, the licenses granted in
                          this Section include sublicenses of Intellectual
                          Property that is licensed to AG.COM by its Affiliates
                          (other than AG) and by non-Affiliate third parties,
                          subject in the case of non-Affiliates, to any
                          restrictions or limitations in such licenses. Such
                          third-party licensed Intellectual Property includes
                          that which is identified on Schedules [_________].

       3.2.      SUBLICENSING. AG may not sublicense any of the rights granted
                 hereunder, other than under written sublicense agreements
                 consistent with the terms, conditions and requirements of this
                 Agreement.

       3.3.      LICENSE RESERVED UNDER FORMATION AGREEMENT. The rights reserved
                 by AG pursuant to Section __ of the Formation Agreement shall
                 be deemed to be subject to all the rights and benefits of the
                 license granted to AG herein.

       3.4.      SCOPE OF CERTAIN LICENSES. For the avoidance of doubt, AG.COM
                 acknowledges that the exclusion of Finished AG.COM Properties
                 from the license grant set forth above pursuant to a
                 termination under Section 3.1.3 shall not be interpreted to
                 preclude AG from creating, reproducing, distributing,
                 displaying or otherwise using (or render the same as an



                                       9
<PAGE>   10

       infringement of AG.COM's rights) derivative works of the licensed
       Intellectual Property or its own Intellectual Property that are similar
       or identical to the non-licensed Finished AG.COM Properties.

4.     CERTAIN AGREEMENTS REGARDING LICENSED PROPERTY

       4.1.      VALIDITY. AG and AG.COM each recognize the validity of the
                 Intellectual Property licensed by the other hereunder and of
                 any registrations therefor, and each acknowledges the other as
                 the owner of all rights, title and interest in and to the
                 licensed Intellectual Property of the other listed on any
                 Schedule or Exhibit to this Agreement or Formation Agreement.
                 Neither AG nor AG.COM will contest, nor assist any third party
                 in contesting, the other's ownership of such licensed
                 Intellectual Property or any registrations of the other for
                 such licensed Intellectual Property, and will not contest the
                 validity thereof. Except for the licensed AG Intellectual
                 Property, AG.COM agrees not to use at any time any other
                 trademarks, names, designs, trade dress or other intellectual
                 property confusingly similar to the licensed AG Trademarks.
                 These obligations shall survive the expiration or earlier
                 termination of this Agreement for any reason. AG agrees that
                 AG.COM may, with prior written approval of AG, (such approval
                 not to unreasonably withheld or delayed) file applications to
                 register a trademark that is confusingly similar to one or more
                 of the licensed AG Trademarks. If any application for
                 registration is filed in any country by AG.COM in contravention
                 of this paragraph, AG shall have the right to take appropriate
                 action against AG.COM, including seeking injunctive relief.

       4.2.      GENERAL RESERVATION OF RIGHTS. No other rights or licenses,
                 express or implied other than those granted by AG in Article 2
                 and by AG.COM in Article 3, respectively, are granted to the
                 other in and to any Intellectual Property of the granting
                 Party. Each Party reserves to itself the right to use and to
                 license to others the right to use any of its Intellectual
                 Property not licensed hereunder, or to exercise any rights in
                 its licensed Intellectual Property not granted exclusively to
                 the other Party.

       4.3.      ADDITIONAL ITEMS AND CATEGORIES OF ITEMS OF INTELLECTUAL
                 PROPERTY. As to any item of Intellectual Property in a category
                 treated under the assignment or licensing provisions of the
                 Formation Agreement or this Agreement and not included on a
                 Schedule or Exhibit to one of those Agreements, and any
                 category of Intellectual Property not so treated, the Parties
                 agree that such item or category of Intellectual Property will
                 be treated in a manner that is consistent with the treatment of
                 like items under the Formation Agreement and this Agreement, as
                 the case may be.

       4.4.      IMPROVEMENTS: Ownership of Improvements and Grant Backs.

                 4.4.1.   OWNERSHIP OF IMPROVEMENTS. Each Party will own (and to
                          the extent of any interest therein, the other party
                          hereby assigns to such party) Improvements to
                          Intellectual Property that are created, invented or
                          developed by it, whether the original Intellectual



                                       10
<PAGE>   11

                          Property is owned by it or licensed to it by the other
                          Party hereunder. If an Improvement is created,
                          invented or developed jointly, or from contributions
                          by both Parties, then the Parties shall seek to agree
                          as to the ownership. If the Parties cannot agree, the
                          Intellectual Property in the Improvement shall be
                          owned jointly by the Parties (and to the extent of any
                          interest therein, each party hereby assigns a joint
                          ownership interest to the other party) in accordance
                          with the laws of inventorship (or authorship, as the
                          case may be) or other applicable law in proportion to
                          the Parties' relative contributions.

                 4.4.2.   GRANT BACKS. Improvements owned by AG are included in
                          the Intellectual Property licensed to AG.COM under
                          Section 2.2, and Improvements owned by AG.COM (other
                          than Finished AG.COM Properties, after a termination
                          under Section 3.1.3) are included in the Intellectual
                          Property licensed to AG under Section 3.1.

5.     ROYALTIES

       5.1.      GENERAL ROYALTY PROVISIONS.

                 5.1.1.   FIXED ROYALTY PROVISION. In consideration of all the
                          rights and licenses granted to AG.COM hereunder,
                          AG.COM will pay AG fixed royalty charges of Six
                          Hundred Sixty Six Thousand Six Hundred Sixty Seven
                          Dollars ($666,667) per month for thirty six months
                          commencing as of July 1, 1999. Effective July 1, 2002,
                          all licenses, other than the AG Trademark licenses,
                          shall be deemed fully paid.

                 5.1.2.   ANNUAL ROYALTY PROVISION. In consideration of the
                          continuing trademark licenses granted in Article 2
                          above, AG.COM will pay AG a fixed royalty of 3% of
                          AG.COM's total consolidated net revenue for all
                          periods after the AG.COM fiscal half year ending June
                          30, 2002, with minimum royalty payments at an annual
                          rate of $5 million, so long as AG.COM uses any of the
                          licensed AG Trademarks (other than "ag.com").

       5.2.      ROYALTY PROVISIONS RELATED TO LICENSES.

                 5.2.1.   FULLY-PAID LICENSES. Except as provided in Section
                          5.1, all licenses granted in this Agreement that are
                          not expressly made royalty-bearing will be fully-paid.

                 5.2.2.   THIRD-PARTY LICENSES. In each case in which a Party is
                          required to license, sublicense or transfer rights
                          acquired by it from third parties, or provide access
                          to Intellectual Property acquired from third parties,
                          and the Party is obligated to pay a royalty, fee or
                          other charge to the third party in respect of such
                          right or Intellectual Property, then the licensee or
                          recipient Party will pay an equitable portion of such
                          charges as determined by mutual agreement between the
                          Parties. These payments will be structured



                                       11
<PAGE>   12



                          in an appropriate manner as determined by mutual
                          agreement between the Parties, such as a direct
                          payment to the third party or a pass-through charge.

       5.3.      ROYALTY REPORTS AND PAYMENTS.

                 5.3.1.   TIME OF REPORTING AND PAYMENT. Royalties will be
                          reported and paid quarterly, each report and payment
                          to be made 75 days after the end of each fiscal
                          quarter.

                 5.3.2.   ROYALTY REPORTS. Each royalty payment is to be
                          accompanied by a written financial report stating
                          AG.COM's net revenue during the relevant period and
                          all other relevant information, each in sufficient
                          detail to permit the calculation of the royalty
                          payments due. Each royalty report is to be certified
                          by the Chief Financial Officer of AG.COM.

                 5.3.3.   MAINTENANCE OF RECORDS. During the term of the
                          Agreement, and for a period of two (2) years
                          thereafter, AG.COM will keep complete, clear and
                          accurate records with respect to all matters
                          pertaining to royalties.

       5.4.      AUDIT RIGHTS. AG, on reasonable notice, may request that it or
                 its authorized representative review AG.COM's corporate books
                 and records relevant to this Agreement in order to verify the
                 royalty reports. If inconsistencies or mistakes are discovered,
                 they must be rectified and (i) in the case of underpayment, the
                 appropriate payments made by AG.COM on demand by AG or (ii) in
                 the case of overpayment, AG will deduct such amount from the
                 next royalty payment. AG will bear all expenses of any audits
                 unless AG.COM has understated the royalties for any quarter by
                 ten percent (10%) or more, in which case AG.COM will reimburse
                 AG for its out-of-pocket expenses incurred in connection with
                 the audit as well as pay AG the unpaid royalties plus the
                 accrued interest.

       5.5.      LATE ROYALTY PAYMENTS. Any royalty payments, including accrued
                 royalties and interest, not paid when due must be paid
                 immediately upon demand. Simple interest, at a rate of one and
                 one-half percent (1-1/2%) per month will accrue on any late
                 payment during the period from the date it was due until paid.
                 AG's right to interest payments under this provision is in
                 addition to any other remedy, including, without limitation,
                 termination of this Agreement, that AG may have for failure of
                 AG.COM to make timely royalty payments.

6.     REPRESENTATIONS AND WARRANTIES

       6.1.      REPRESENTATIONS AND WARRANTIES. AG and AG.COM each represents
                 and warrants to the other as follows:

                 6.1.1.   CORPORATE POWER AND AUTHORITY. It has the power and
                          authority to enter into and perform this Agreement;



                                       12
<PAGE>   13

                 6.1.2.   OWNERSHIP OR VALID LICENSES. It either owns or has a
                          valid license to use and, except as disclosed from
                          time to time as to subsequently acquired Intellectual
                          Property, will own or will have a valid license to
                          use, the Intellectual Property it licensed hereunder
                          and has or will have sufficient right and authority to
                          grant to the other all licenses and rights it granted
                          hereunder;

                 6.1.3.   NO CONFLICTS. To the best of its knowledge, except as
                          disclosed herein, the execution, delivery and
                          performance by it of this Agreement will not conflict
                          with, result in a breach or termination of, constitute
                          a default under, or require a consent that has not
                          been obtained under any lease, agreement, commitment
                          or other instrument to which it is a party; and

                 6.1.4.   VALID AND BINDING. This Agreement constitutes its
                          valid and binding obligations of enforceable against
                          it in accordance with its terms, except to the extent
                          enforcement is limited by bankruptcy or other
                          insolvency laws.

                 6.1.5.   NON-INFRINGEMENT. To its actual knowledge: (i) it has
                          not misappropriated or improperly copied from a third
                          party any now- existing Intellectual Property licensed
                          hereunder; (ii) it has not infringed or otherwise
                          violated any statutory or other rights of any third
                          party in or to any intellectual property therein
                          including, without limitation, copyrights, patents,
                          trade secrets or trademarks; and (iii) no third party
                          has asserted, or is asserting a claim of any of the
                          foregoing.

       6.2.      DISCLAIMERS OF WARRANTIES.

                 6.2.1.   CLAIMS OF INFRINGEMENT. Except as disclosed herein or
                          otherwise in connection with the Closing under the
                          Formation Agreement, neither AG nor AG.COM has
                          received notice of any claim that any item of
                          Intellectual Property licensed by it infringes or
                          violates the patent, copyright, trade secret or other
                          intellectual property rights of any third party.

                 6.2.2.   VALIDITY OF THE PATENTS. Neither AG nor AG.COM makes
                          any representation or warranty, and each Party hereby
                          disclaims all representations and warranties, to the
                          effect that the Patents licensed or in any way
                          transferred by it, is valid or enforceable.

                 6.2.3.   WARRANTY DISCLAIMERS. EXCEPT AS OTHERWISE EXPRESSLY
                          PROVIDED IN SECTION 6.1, EACH OF AG AND AG.COM
                          EXPRESSLY DISCLAIMS ANY AND ALL REPRESENTATIONS AND
                          WARRANTIES, EXPRESS OR IMPLIED, IN CONNECTION WITH THE
                          LICENSED INTELLECTUAL PROPERTY, INCLUDING WITHOUT
                          LIMITATION, ALL IMPLIED WARRANTIES OF



                                       13
<PAGE>   14

                          MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

7.     FUTURE CONDUCT COVENANTS

       7.1.      AG NOT TO ENGAGE IN AG.COM BUSINESS. Subject to the exceptions
                 below and to Article 9, AG will not, without the prior written
                 consent of AG.COM, directly or indirectly (i) engage in the
                 AG.COM Business or (ii) enter into agreements with, license or
                 sublicense Intellectual Property to, or own a material interest
                 in, an entity that engages in the AG.COM Business.
                 Notwithstanding the foregoing,

                 7.1.1.   The foregoing will not prevent AG from selling
                          Physical Greeting Products or Electronic Greeting
                          Products (including therein Content licensed from
                          third parties) to Physical Retailers under terms that
                          permit the Physical Retailers to sell or distribute
                          such products or services directly to consumers via
                          physical means or the Physical Retailers' online
                          retail locations.

                 7.1.2.   After a termination notice with respect to Finished
                          AG.COM Properties under Section 3.1.3, the foregoing
                          and Section 7.1.4 will not prevent AG from entering
                          into agreements with, licensing or sublicensing
                          Intellectual Property from, or owning a material
                          interest in, an entity that engages in the AG.COM
                          Business to the extent AG reasonably determines it is
                          necessary or useful to enable AG to acquire the
                          capability to create and furnish to Physical Retailers
                          products and services comparable to Finished AG.COM
                          Properties or otherwise required by the Physical
                          Retailer.

                 7.1.3.   The foregoing will not require AG to terminate an
                          agreement with or dispose of an interest in an entity
                          that, without AG's participation or prior knowledge,
                          enters into the AG.COM Business subsequent to the time
                          AG entered into such agreement or acquired such
                          interest.

                 7.1.4.   AG may own a material interest in an entity that
                          engages in the AG.COM Business if (i) to the extent
                          commercially feasible, prior to acquiring such
                          interest AG first notifies AG.COM (which shall agree
                          to hold such notice confidential) of its intent to
                          acquire such interest and uses good faith efforts
                          under all the circumstances to negotiate a mutually
                          acceptable agreement with AG.COM regarding the
                          ownership of such interest; and (ii) if no such
                          agreement is reached, or if AG decides it must acquire
                          such interest without notice or before negotiations
                          under clause (i) can be completed, AG obtains an
                          independent third party appraisal (by an appraiser
                          approved by AG.COM, such approval not to be
                          unreasonably withheld) of the fair market value of
                          such interest and offers the same to AG.COM for
                          purchase in cash; and (iii) if such offer is not
                          accepted, does not utilize or license to such entity



                                       14
<PAGE>   15

                          any of the Intellectual Property already then existing
                          and licensed hereunder to AG.COM.

       7.2.      AG.COM NOT TO ENGAGE IN AG BUSINESS. Subject to the exceptions
                 below and to Article 9, AG.COM will not, without the prior
                 written consent of AG, directly or indirectly (i) engage in the
                 AG Business or (ii) enter into agreements, license or
                 sublicenses Intellectual Property to, or own a material
                 interest in, an entity that engages in the AG Business.
                 Notwithstanding the foregoing,

                 7.2.1.   The foregoing will not apply to agreements by which
                          such entity licenses Intellectual Property (other than
                          Competitive Brand Trademarks) to AG.COM for
                          consideration other than sublicenses of Intellectual
                          Property of AG.COM that AG.COM has licensed from AG.

                 7.2.2.   The foregoing will not require AG.COM to terminate an
                          agreement or dispose of an interest in an entity that,
                          without AG.COM's participation or prior knowledge,
                          enters into the AG Business subsequent to the time
                          AG.COM entered into such agreement or acquired such
                          interest.

                 7.2.3.   AG.COM may own a material interest in an entity that
                          engages in the AG Business if (i) to the extent
                          commercially feasible, prior to acquiring such
                          interest AG.COM first notifies AG (which shall agree
                          to hold such notice confidential) of its intent to
                          acquire such interest and uses good faith efforts
                          under all the circumstances to negotiate a mutually
                          acceptable agreement with AG regarding the ownership
                          of such interest; and (ii) if no such agreement is
                          reached, or if AG.COM decides it must acquire such
                          interest without notice or before negotiations under
                          clause (i) can be completed, AG.COM obtains an
                          independent third party appraisal (by an appraiser
                          approved by AG, such approval not to be unreasonably
                          withheld) of the fair market value of such interest
                          and offers the same to AG for purchase in cash; and
                          (iii) if such offer is not accepted, does not utilize
                          or license to such entity any of the Intellectual
                          Property already then existing and licensed hereunder
                          to AG.

       7.3.      COOPERATION BETWEEN AG AND AG.COM. AG and AG.COM agree to
                 establish working level committees (both in the United States
                 and internationally) to hold regular meetings and foster
                 cooperation in the development of Art and Verse and other
                 Content that will be subject to the licenses hereunder, to
                 communicate and coordinate opportunities for licensing such
                 Content from third parties, and to encourage other forms of
                 business cooperation. This cooperation will include disclosure
                 and transfer of knowledge and information as reasonably
                 requested by the recipient Party to enable that Party to
                 utilize and exploit the assets and Intellectual Property
                 transferred or licensed pursuant to the Formation



                                       15
<PAGE>   16

                 Agreement or this Agreement and may include sharing of
                 documents, training, demonstrations and technical meetings,
                 with the objective of enabling the licensee to utilize and
                 benefit from the licensed Intellectual Property. Except for
                 extraordinary circumstances, including unreasonable requests
                 under this provision, neither Party will charge for the time of
                 its employees expended pursuant to this Section. Except as
                 specifically provided otherwise herein, expenses will be shared
                 in an equitable manner, with the licensee generally bearing the
                 expense of information and knowledge transfer that benefits it.

       7.4.      PERMITTED PREMIUMS. Notwithstanding anything to the contrary in
                 this Agreement, neither Party shall be restricted from
                 providing Permitted Premiums.

       7.5.      ACCESS AND KNOWLEDGE TRANSFER. AG and AG.COM each agrees to
                 grant to the other liberal access to its own library of Art and
                 Verse and to deliver, subject to availability, physical and/or
                 electronic manifestations of particular items thereof (whether
                 licensed or transferred) promptly upon request, such delivery
                 to be in mutually agreed upon, then existing formats and at no
                 charge other than actual and reasonable out-of-pocket expenses,
                 if any, for reproduction. To the extent feasible, physical
                 and/or electronic manifestations of all other (i.e. other than
                 Art or Verse) licensed or transferred Intellectual Property in
                 existence at the Closing under the Formation Agreement will be
                 delivered as promptly as practicable. The Parties agree to
                 adopt reasonable practices and procedures for the physical
                 delivery of the manifestations of the Intellectual Property
                 licensed hereunder and coming into existence after the Closing.

       7.6.      CUSTOMER NAMES AND CONSUMER INFORMATION.

                 7.6.1.   CURRENT DATA BASE. With respect to all consumers whose
                          data is in the current data base of the predecessor of
                          AG.COM (i.e. the division of AG previously operating
                          the AG.COM business), AG will transfer to AG.COM all
                          of AG's rights in all consumer information AG
                          possesses or controls, including, but not limited to
                          the following: name; address; e-mail address; order,
                          payment and fulfillment information; customer profile
                          information; and customer account information.

                 7.6.2.   SHARING INFORMATION. AG.COM and AG agree to share
                          information from their respective current and future
                          consumer information databases (including, in the case
                          of AG.COM, the information transferred as described
                          above and in the case of AG, the Carlton Cards
                          "Celebrations" database) subject to each accepting and
                          adhering to the other's privacy policies and subject
                          to any present or future governmental or industry
                          standard regulations or restrictions. The privacy
                          policies will be established at the time of the
                          Closing and AG and AG.COM will, subject to



                                       16
<PAGE>   17

                          applicable law, maintain those policies with
                          reasonable modifications.

                 7.6.3.   RESTRICTIONS ON SHARING INFORMATION. The information
                          to be shared will be the maximum amount permitted by
                          the privacy policies and other restrictions referred
                          to above. Such restrictions may, in some cases, limit
                          further disclosure to aggregated, non-identifiable
                          form. If required to satisfy the requirements of such
                          privacy or other legal restrictions, and if requested
                          by one party, the other party will include in its
                          privacy policy disclosure to consumers a description
                          of the information sharing arrangement between AG and
                          AG.COM and, if required, a "checkoff" or similar
                          facility for the consumer to permit such sharing. The
                          parties will take reasonable steps under the pertinent
                          circumstances to encourage consumers to permit the
                          above sharing. The privacy policies may require that a
                          party will use the customer information of the other
                          only for use in its own business, and that it will not
                          sell such information for use by third parties.
                          Similarly, the privacy policies may only permit a
                          party to disclose such information in aggregated,
                          non-identifiable form for its business purposes
                          without the consent of the other party. The privacy
                          policies are not expected to permit sharing of credit
                          card numbers.

                 7.6.4.   PROMOTIONS. Either AG or AG.COM may conduct promotions
                          sponsored by one or both parties, which may have the
                          feature of seeking consumer consent to information
                          sharing between AG and AG.COM. Where a party sponsors
                          such a promotion, the sponsor would bear the costs of
                          the promotion and the other party's costs in carrying
                          out the promotion.

8.     PROTECTION OF INTELLECTUAL PROPERTY

       8.1. CONFIDENTIALITY.

                 8.1.1.   OBLIGATION. Each of AG and AG.COM will keep
                          confidential and will not cause or permit the
                          disclosure to any third party (other than those whose
                          duties require possession of such information, or who
                          are otherwise entitled hereunder to receive such
                          information, and who agree to be bound by the
                          confidentiality obligations set forth in this Section
                          8.1 or are otherwise subject to substantially similar
                          duties of nondisclosure), or the unauthorized use, of
                          any Confidential Information disclosed to it by the
                          other Party, it being understood, however that
                          Confidential Information assigned to AG.COM pursuant
                          to the Formation Agreement shall be deemed
                          Confidential Information of AG.COM and not of AG.

                 8.1.2.   COMPELLED DISCLOSURE. If either Party is required by
                          law, legal process or court order to disclose any
                          Confidential Information of the other, the Party
                          shall: (i) notify the other Party in writing as soon
                          as possible, but in no event less than ten (10)
                          calendar days



                                       17
<PAGE>   18

                          prior to any such disclosure; (ii) cooperate with the
                          other Party to preserve the confidentiality of such
                          confidential information consistent with applicable
                          law; and (iii) use its best efforts to limit any such
                          disclosure to the minimum disclosure necessary to
                          comply with such law or court order.

       8.2.      PROTECTION AND REGISTRATION OF TRADEMARKS, COPYRIGHTS.

                 8.2.1.   FORM AND MANNER OF USAGE OF TRADEMARKS. AG.COM will
                          use the AG Trademarks in such form and manner as
                          specified by AG in Section 2.5 (including Schedule 2.5
                          as incorporated or therein or modified in accordance
                          with the terms thereof). AG will own any approved
                          composite mark used by AG.COM which includes the AG
                          Trademarks (excluding any element thereof owned by a
                          third party).

                 8.2.2.   NOTICES. AG.COM shall apply trademark notices in
                          connection with the AG Trademarks as reasonably
                          specified by AG, and as may be reasonably necessary to
                          ensure a uniform presentation throughout the AG
                          Business and the AG.COM Business where appropriate and
                          consistent with the establishment of an AG.COM brand
                          identity where appropriate. AG.COM will comply with
                          reasonable requests by AG to modify its display of an
                          AG Trademark, consistent with the requirements hereof.
                          Each licensee Party shall apply Copyright notices as
                          the licensor Party may subsequently reasonably specify
                          as required by law to protect, preserve or enhance the
                          rights of the Copyright Owner.

                 8.2.3.   PROMINENCE. AG and, subject to Section 5.06(a)(i) of
                          the Formation Agreement and Section 2.1.2 hereof,
                          AG.COM, each has the right, but not the obligation, in
                          its respective sole discretion but subject to all the
                          terms and conditions hereof, to use the AG Trademarks
                          so as to give the AG Trademarks full and favorable
                          prominence and publicity. AG has no obligation
                          whatsoever to continue using any trademark in
                          connection with its business.

                 8.2.4.   APPROVAL PRIOR TO FIRST USAGE. AG.COM is not required
                          to obtain prior approval of any usage of Trademarks or
                          Copyrights. If AG.COM requests approval, AG will
                          respond promptly with its approval or its objections.
                          AG may request, however, written notice of the first
                          date for the appearance of an AG trademark on a Web
                          site, product or service.

                 8.2.5.   RIGHT TO INSPECT. In order to determine whether AG.COM
                          is in compliance with this Article 8, at AG's request,
                          AG.COM, at its own expense, will provide to AG copies,
                          photographs, electronic files, Web pages, or
                          representative samples of its Web site as well as
                          packaging, advertising copy, promotional materials or
                          other materials bearing any of the AG Intellectual
                          Property. Also at its



                                       18
<PAGE>   19


                          own expense, AG.COM will prepare a report of its use
                          of the AG Trademarks.

                 8.2.6.   NO TRADEMARK DISPARAGEMENT. AG.COM agrees not to use
                          the AG Trademarks in any manner which, directly or
                          indirectly, would dilute, demean, ridicule or
                          otherwise tarnish the image of, the AG Trademarks or
                          AG. In addition, AG.COM agrees not to use the AG
                          Trademarks in any manner in connection with the
                          design, planning, implementation, promotion,
                          marketing, or advertising of any business, service or
                          product inconsistent with the image of AG and its
                          products and services.

       8.3.      PROSECUTION AND MAINTENANCE.

                 8.3.1.   PROSECUTION. AG and AG.COM each agrees, at its own
                          expense to prosecute and maintain the intellectual
                          property rights licensed to the other and, in any
                          event will not abandon rights therein, except with
                          prior notice to the licensee and an opportunity for
                          the licensee to take over prosecution and maintenance.
                          Neither party shall transfer to a non-affiliate
                          ownership of the intellectual property rights licensed
                          to the other without notice to the licensee and only
                          pursuant to an agreement expressly made subject to the
                          rights of the licensee.

                 8.3.2.   REGISTRATION. AG has the exclusive right (but not the
                          obligation) to obtain registrations and any other form
                          of protection for the AG Trademarks and Copyrights.
                          Each party shall furnish the other with all reasonably
                          requested information (including specimens and samples
                          illustrative of the manner of use of the Trademarks)
                          and documentation (including the execution and
                          delivery of any and all true and correct affidavits,
                          declarations, oaths and other documentation) to assist
                          such party in obtaining and maintaining such trademark
                          protection and registrations.

                 8.3.3.   ENFORCEMENT AG and AG.COM will each cooperate in
                          pursuing infringers of intellectual property licensed
                          from the other. In the case of an infringement
                          recovery, an allocation will be made between AG and
                          AG.COM based on the field of use of the infringer (as
                          between the AG Business, the AG.COM Business and
                          otherwise), the contribution of each party to the
                          enforcement action, and other relevant considerations
                          including royalties paid by AG.COM hereunder, and the
                          damage each party suffered as a result of the
                          infringement and the expense of the enforcement;
                          provided, however, that any such recoveries shall be
                          applied first to fully reimburse all expenses of the
                          enforcement. Each licensee Party will notify the other
                          of any actual or threatened infringement of any of the
                          Intellectual Property by third parties of which either
                          becomes aware. AG.COM has no right to take any action
                          with respect to any third party in an attempt to
                          enforce any rights



                                       19
<PAGE>   20

                          regarding the AG Trademarks without the prior written
                          approval of AG, which approval shall not be
                          unreasonably withheld in the case of infringement
                          involving the AG.COM business.

       8.4.      DEFENSE OF INFRINGEMENT CLAIMS. Except for indemnified losses
                 under Article 10, each Party is responsible for the defense and
                 settlement of, and shall pay all expenses (including attorneys'
                 fees) related to, any and all claims by third parties that the
                 Intellectual Property licensed hereunder infringes or
                 misappropriates any intellectual property rights of such third
                 parties. Each Party agrees to cooperate fully with the other,
                 at the defending Party's reasonable request and expense, in
                 connection with the defense of any such claim.

9.     TERM AND TERMINATION

       9.1.      TERM; END DATE AND REVERSION EVENTS; TERMINATION.

                 9.1.1.   TERM. The term of this Agreement shall be from its
                          Effective Time until the End Date, unless earlier
                          terminated at AG's election upon the occurrence of a
                          Reversion Event or by mutual agreement of the Parties.

                 9.1.2.   REVERSION EVENT. If there is a Reversion Event, then,
                          in addition to the termination effects set forth
                          below, if (i) the circumstances that caused the
                          Reversion Event are not cured by AG.COM within 90 days
                          of notice from AG and (ii) AG so elects by written
                          notice to AG.COM, then all licenses granted to AG.COM
                          hereunder (other than the license to the Group 2B
                          Trademarks) will terminate at the end of twelve (12)
                          months after the notice of election from AG.

       9.2.      TERM OF LICENSES. Unless earlier terminated in accordance with
                 this Article 9, the term of each license of Intellectual
                 Property hereunder shall be as long as may be permitted by
                 applicable law. Unless earlier terminated in accordance
                 herewith, each trademark license shall be for a term of 999
                 years, except that in the event of a distribution by AG of
                 substantially all its shares of AG.COM to its shareholders the
                 license to the Group 1 Trademarks may thereafter be terminated
                 by AG on two year's written notice to AG.COM. In no case shall
                 the duration of any license exceed the longest period for which
                 rights in an item of Intellectual Property are granted and may
                 be renewed or extended pursuant to applicable law.

       9.3.      CONSEQUENCES OF TERMINATION; SURVIVAL.

                 9.3.1.   SURVIVAL. Upon the end of the Term, the rights and
                          obligations of the Parties under Sections 5.01, 10.1,
                          10,2, and 10.3 will survive termination.

                 9.3.2.   TERMINATION OF EXCLUSIVITY. Without limitation, upon
                          the end of the Term, unless survival is expressly
                          provided, all covenants will terminate and agreements
                          respecting the exclusivity of the AG.COM and the AG
                          Business will terminate.



                                       20
<PAGE>   21

                 9.3.3.   SURVIVAL OF LICENSES. Except as otherwise expressly
                          provided, all Intellectual Property licenses granted
                          hereunder will survive the end of the Term and will
                          continue for their respective terms except that (i) if
                          AG elects, then with 12 months prior written notice to
                          AG.COM, the licenses from AG to AG.COM of the Group 1
                          and Group 2A trademarks may be terminated by AG, and
                          (ii) from and after the end of the Term all licenses
                          will be entirely non-exclusive for all fields.

                 9.3.4.   TERMINATION OF LICENSE GRANTS. Upon the end of the
                          Term, all license grants of Intellectual Property
                          acquired or developed after the date of termination
                          will terminate, and any surviving license grants
                          herein will only apply to items coming into existence
                          and acquired prior to the end of the Term.

10.    INDEMNIFICATION AND REMEDIES

       10.1.     INDEMNIFICATION. Each of the Parties agrees to indemnify the
                 other in accordance with the cross-indemnification provisions
                 of Sections 6.02 and 6.03 of the Formation Agreement.

       10.2.     REMEDIES AND LIMITATIONS. The remedies of the Parties and
                 limitations of liabilities will be governed by Section 6.01 of
                 the Formation Agreement.

       10.3.     DISPUTE RESOLUTION. Disputes arising hereunder between the
                 Parties shall be resolved pursuant to the provisions of Section
                 8.09 of the Formation Agreement.

11. MISCELLANEOUS PROVISIONS

       11.1.     ENTIRE AGREEMENT AND AMENDMENT. This Agreement, together with
                 the Schedules hereto and the portions of the Formation
                 Agreement referred to herein, embodies the entire understanding
                 of the Parties with respect to the subject matter hereof, and
                 there are no other agreements or understandings, written or
                 oral, in effect between the Parties, relating to the subject
                 matter hereof. This Agreement may be amended or modified only
                 in writing by an instrument signed by the Parties.

       11.2.     GOVERNING LAW. This Agreement shall be governed by and
                 construed in accordance with the substantive laws of the State
                 of Ohio without regard to the conflicts of law principles
                 thereof; provided, however, that any question respecting the
                 validity, existence and effect of any Intellectual Property
                 will be determined under the laws of the jurisdiction under
                 which rights in such Intellectual Property arose.

       11.3.     WAIVERS. Any waiver by any Party of any violation of, breach
                 of, or default under any provision of this Agreement by any
                 other Party hereto shall not be construed as, or constitute, a
                 continuing waiver of such provision, waiver of any other
                 violation of, breach of, or default under any other provision
                 of this Agreement. No single or partial exercise of a right
                 shall preclude any other or further exercise of that or any
                 other right.



                                       21
<PAGE>   22

       11.4.     COUNTERPARTS. This Agreement may be executed simultaneously in
                 two or more counterparts, each of which shall be deemed an
                 original but all of which together shall constitute one and the
                 same instrument.

       11.5.     ASSIGNMENT. Except for assignments to Affiliates, no Party may
                 assign this Agreement, or its rights and obligations hereunder,
                 in whole or in part, without the other Parties' prior written
                 consent.

       11.6.     SEVERABILITY. If any provision of this Agreement shall be
                 invalid or unenforceable, such invalidity or unenforceability
                 shall not render the entire Agreement invalid. Rather, the
                 Agreement shall be construed as if not containing the
                 particular invalid or unenforceable provision, and the rights
                 and obligations of each party shall be construed and enforced
                 accordingly.

       11.7.     CAPTIONS. The captions of the Articles and Sections of this
                 Agreement are inserted for convenience of reference only and
                 shall not be used in any way in interpreting this Agreement.

       11.8.     FORCE MAJEURE. No Party will be liable for any failure of, or
                 delay in the performance of, its obligations under this
                 Agreement for the period that such failure or delay is due to
                 acts of God, public enemy, act of any military, civil or
                 regulatory authority, civil war, strikes, labor disputes, or
                 any other cause, whether similar or dissimilar to any of the
                 foregoing, beyond such Party's reasonable control. Each Party
                 agrees to notify the other Parties promptly of the occurrence
                 of any such cause and to carry out this Agreement as promptly
                 as practicable after such cause is terminated.

       11.9.     NOTICES. All notices, requests, consents, demands and other
                 communications to be given or delivered shall be in writing and
                 (a) personally delivered, (b) sent by an overnight courier
                 service, or (c) transmitted by facsimile with a confirmation of
                 delivery, and shall be deemed to have been duly given when
                 received. Any Party may change this information by written
                 notice. Further, notice may be given to such other person or at
                 such other place as either of the parties may from time to time
                 notify to the other party as provided herein.

                     If to AMERICAN GREETINGS CORPORATION or AGC, Inc.:

                       Jon Groetzinger, Sr. V.P. -- General Counsel & Secretary
                       One American Road
                       Cleveland OH 44114-2398
                       216.252.7300 x1667
                       fax:  252.6777
                       jgroetzin@amgreetings.com



                                       22
<PAGE>   23

                     If to AmericanGreetings.com, Inc. or AGCI, Inc.:

                       John Klipfell, Chief Executive Officer
                       One American Road
                       Cleveland OH 44114-2398
                       216.252.7300 x1332
                       jklipfell@ag.com


                     with a copy to:

                       Stephen Gold, Esq.
                       Gordon & Glickson LLC
                       444 North Michigan Ave.
                       Suite 3600
                       Chicago, Illinois 60614
                       312-321-7664
                       sgold@ggtech.com

       11.10.    FURTHER ASSURANCES. Each Party agrees that it will take such
                 actions and will execute, deliver or file such documents as may
                 be reasonably requested by the other Party to carry out the
                 purposes hereof or to evidence or secure the transfers,
                 licenses and other provisions hereof, including without
                 limitation to carry out the intent of Section 4.3.

                [Remainder of this page intentionally left blank]



                                       23
<PAGE>   24


         IN WITNESS WHEREOF, each of AG, AGC, Inc., AG.COM and AGCI has duly
executed and delivered this Agreement as of the date first written above.


                         AMERICAN GREETINGS CORPORATION


                         By:_______________________________
                         Name:
                         Title:



                         AGC, Inc.


                         By:_______________________________
                         Name:
                         Title:



                         AmericanGreetings.com, Inc.


                         By:_______________________________
                         Name:
                         Title:



                         ag.com, inc.


                         By:_______________________________
                         Name:
                         Title:



                                       24
<PAGE>   25

                                    SCHEDULES

1.3   AG Content

1.6   AG Trademarks

2.5   Trademark Usage and Quality Guidelines and Standards