American Greetings to Acquire PhotoWorks, Inc.

CLEVELAND and SEATTLE, Nov. 28 /PRNewswire/ -- American GreetingsCorporation (NYSE: AM) and PhotoWorks, Inc. (OTC Bulletin Board: PHTW) todayannounced they have entered into an agreement whereby American Greetings,through a wholly owned subsidiary, will acquire PhotoWorks for approximately$26.5 million. Under the terms of the agreement, American Greetings will makea cash tender offer to acquire all outstanding common shares of PhotoWorks ata price of 59.5 cents per share. The tender offer will be followed by amerger in which the holders of the outstanding common shares of PhotoWorks notpurchased in the tender offer will receive the same per share price paid inthe tender offer, in cash, without interest. American Greetings is expectedto launch the tender offer shortly, and the merger is expected to close inlate January 2008.

The Board of Directors of PhotoWorks has unanimously recommended thatshareholders of PhotoWorks accept the offer. Certain shareholders ofPhotoWorks have already signed agreements by which they agreed to tender allof their shares in the tender offer. The shares held by such shareholdersrepresent 44.5% of the total shares of PhotoWorks currently outstanding.

PhotoWorks is a leading online photo sharing and personal publishingcompany that allows consumers to use their digital images to create qualityphoto-personalized products like greeting cards, calendars, online photoalbums and photo books. PhotoWorks offers consumers new, creative, andrefreshing ways to connect and express themselves privately with friends andfamily, and publicly within communities of similar interest.

Zev Weiss, Chief Executive Officer of American Greetings said, "Theacquisition of PhotoWorks positions us for a comprehensive photo strategy,bringing together both digital and physical products. We are taking advantageof the opportunity to establish a leadership position in this growing channelof the social expression industry."Josef Mandelbaum, Chief Executive Officer of AG Interactive, one ofAmerican Greetings' segments, stated, "Our previous acquisition of Webshotsprovided a strong entree into the online photo sharing space, a significantnumber of unique visitors, and a scalable platform. Now, PhotoWorks providesa strong integrated supply chain platform to provide customers the ability tocreate unique, high quality physical products with their own photos. Thisfurther positions us to provide a full social expression photo solution to ourconsumers."Andy Wood, President and Chief Executive Officer of PhotoWorks said,"PhotoWorks is thrilled to be a part of this important step forward forAmerican Greetings. We are excited to build and provide a compelling onlineexperience for consumers in cooperation with one of the world's leadinggreeting card and social expression companies. I am confident that combiningthese companies' content and relationships will result in a more appealingsite with truly unique products for all of our consumers."

Weiss added, "At this time, the transaction is expected to have a minimalimpact to fiscal 2008 earnings."

About American Greetings Corporation

American Greetings Corporation (NYSE: AM) is one of the world's largestmanufacturers of social expression products. Along with greeting cards, itsproduct lines include gift wrap, party goods, stationery, calendars, ornamentsand electronic greetings. Located in Cleveland, Ohio, American Greetingsgenerates annual revenue of approximately $1.7 billion. For more informationon the Company, visit http://corporate.americangreetings.com.

About PhotoWorks

PhotoWorks(R), Inc. is an Internet-based personal publishing company andphotography community. The company's web-based services allow PC and Macusers to share and store their digital photos, host personalized My Share Webpages, sell one-of-a-kind products through My Storefront, join photocommunities, and create hardbound photo books, customized greeting cards,calendars, prints and other photography-sourced products. Formerly known asSeattle Film Works, PhotoWorks has a 30-year national heritage of helpingphotographers share and preserve their memories with innovative and inspiringproducts and services. More information on the Company is available athttp://www.photoworks.com.

Important Information

This press release is neither an offer to purchase nor a solicitation ofan offer to sell securities. The tender offer for the outstanding commonshares of PhotoWorks, Inc. ("PhotoWorks") described in this press release hasnot commenced. At the time the expected tender offer is commenced, AmericanGreetings Corporation ("American Greetings"), or a wholly owned subsidiary ofAmerican Greetings will file a tender offer statement on Schedule TO with theUnited States Securities and Exchange Commission (the "SEC"), and PhotoWorkswill file a solicitation/recommendation statement with respect to the tenderoffer. Investors and PhotoWorks' shareholders are strongly advised to readthe tender offer statement (including the offer to purchase, letter oftransmittal and other offer documents) and the relatedsolicitation/recommendation statement because they will contain importantinformation. When available, the offer to purchase, the related letter oftransmittal and certain other offer documents, as well as thesolicitation/recommendation statement, will be made available to allshareholders of PhotoWorks at no expense to them. These documents will alsobe available at no charge at the SEC's website at http://www.sec.gov.

Certain statements in this release may constitute forward-lookingstatements within the meaning of the Federal securities laws. These statementscan be identified by the fact that they do not relate strictly to historic orcurrent facts. They use such words as "anticipate," "estimate," "expect,""project," "intend," "plan," "believe," and other words and terms of similarmeaning in connection with any discussion of the proposed acquisition andfuture operating or financial performance of American Greetings. By theirnature forward-looking statements involve risks and uncertainties that couldcause actual results to materially differ from those anticipated in thestatements. With respect to the proposed acquisition, these risks anduncertainties include, but are not limited to:

-- the ability to successfully complete the proposed acquisition on a

timely basis;

-- the ability to achieve the desired benefits associated with the

proposed acquisition.

With respect to future operating and financial performance of AmericanGreetings, these risks and uncertainties include, but are not limited to:

-- retail consolidations, acquisitions and bankruptcies, including the

possibility of resulting adverse changes to retail contract terms;

-- the ability of American Greetings to successfully implement its

strategy to invest in its core greeting card business;

-- the timing and impact of investments in new retail or product

strategies as well as new product introductions and achieving the

desired benefits from those investments;

-- the timing and impact of converting customers to a scan-based trading

model;

-- the ability to execute share repurchase programs or the ability to

achieve the desired accretive effect from such repurchases;

-- the ability of American Greetings to successfully complete, or achieve

the desired benefits associated with, dispositions;

-- a weak retail environment;

-- consumer acceptance of products as priced and marketed;

-- the impact of technology on core product sales;

-- competitive terms of sale offered to customers;

-- successful implementation of supply chain improvements and achievement

of projected cost savings from those improvements;

-- increases in the cost of material, energy, freight, and other

production costs;

-- the ability of American Greetings to comply with its debt covenants;

-- fluctuations in the value of currencies in major areas where the

American Greetings operates, including the U.S. Dollar, Euro, U.K.

Pound Sterling, and Canadian Dollar;

-- escalation in the cost of providing employee health care;

-- successful integration of acquisitions; and

-- the outcome of any legal claims known or unknown.

Risks pertaining specifically to AG Interactive include the viability ofonline advertising, subscriptions as revenue generators and the public'sacceptance of online greetings and other social expression products.

In addition, this release contains time-sensitive information thatreflects management's best analysis as of the date of this release. AmericanGreetings does not undertake any obligation to publicly update or revise anyforward-looking statements to reflect future events, information orcircumstances that arise after the date of this release. Further informationconcerning issues that could materially affect financial performance relatedto forward-looking statements can be found in American Greetings' andPhotoWorks' periodic filings with the SEC, including the "Risk Factors"section of American Greetings' Annual Report on Form 10-K for the fiscal yearended February 28, 2007 and the "Risk Factors" section of PhotoWorks' AnnualReport on Form 10-KSB for the fiscal year ended September 30, 2006.SOURCE American Greetings CorporationGregory M. Steinberg, Treasurer and Director of Investor Relations of AmericanGreetings Corporation, +1-216-252-4864, investor.relations@amgreetings.com; orGenesa Garbarino of PhotoWorks, Inc., +1-206-281-1397, genesa@photoworks.com