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f LO' i•;S CO::PO'R.TION, 4 UrJTy OF "EW YOF ~ Exhibit ~/ Ide;i . Ed .............n...._..... Date -._........_ ................ . a corporation, LORILLAR7, Division of Loews Theatres, Inc., a corporation, ROBERT BRIAN ASSOCIA^ES, I2IC. , a corporation, BLCZ RIBBON PRO::OTIO:vS, INC. , a corporation, and D02.ALD JAGODa, individually and as officer of Blue Ribbon Prcnotior.s, Inc. ........................................ Dolores J, r3yaa, C.S.R. Official Court RePorter File \o. 722 3232 AGR.:Z_'.ENi CO.:_..=.:I:~C CO:vSE2;T ORDER TO Ci ASE AND D ;SIS^_' The Federal Trade CcT-^;ssion having initiated an ir.- vest~gaticrn of certain acts and practices of Loei•.~s Ccr_oration, a corporation; Lorillard, a Division of Loews Theatres, Inc., a cormoration; Robert Brian Associates, Inc., a corporation; Blue Ribbon Promotions, Inc., a corporation; and Donald Jagoda, individually and as officer of Blue Ribbon Promotions, Inc., and it now appearing that Lorillard, d division of Loews Theatres, Inc., Robert Brian Associates, Inc., Blue Ribbon Promotions, Inc., and Donald Jasoda, hereinafter som.eti,^•~es referred to as proposed respondents are willing to enter into an acree*nent containinc an order to cease and desist from the use of the acts and practices being investigated, which order, when final, will establish compliance by proposed respondent with the stat- utes, rules and regulations ac.-r.4 .^.istered by the Federal Trade Co-:,iissicn respect to the subject matter of the draft of con,,plaint here attached, - IT IS Hi.°~.'BY AGRLCD bv and bet-ween prcposed respo7c?er.ts and their attcrnevs and counsel for the Federal Trade Co:-nis- sion that: 1. Prcpcsed respondent, Lorillard, a Division of Loews Theatres, Ir:c., is a divis:.o.n of a cernoratioz orga::ize:: existing and doing bnsinr_-"s und^r anc'. b.: rirtue of the la:..7 n o_` the state of ?:ew Yor'.-:, with its rincinzl officc anu placc of busin::ss located at 200 East 42nd Street, in t'ZC City of 1N7cw York, State of NCJ YOL:C. 6 (Def. Ex. 0) (Not in Evidence) 1063 liNITED STr =ES 0^ ALMiE?'.ICA BEF C:'.E FEDr=AL TP=F. M::nSHW.J_rpURT OF THE STATE OF CO rr~ YORK

(Def. Ex.O) (Not in Evidence) ~ - 2 - 1064 Proposed' respondent Rc:^ert Brian Associates, Inc. is a corporation orc,anized, existing and doing business under and by virtue of the la,:7s of the State of New York, with its principal office and place of busincss located at 107 East 38th Street, in the City of New Yorv, State of New York. Proposed resnondent Blue Ribbon Promotions, Inc. is a corwor.ation organized, existing and doing business under and by virtue of the laws of the State of New York, with its principal office and place of doing business located at 35C rifth Avenue in the City of New York, State of New York. Pro_cosed resrer.dent Donald Jagoda is an individual and officer of respo-:dent Blue Ribbon Prcmotions, Inc. F:e formulates, directs and controls the acts and practices of the corporate respondent of which he is an officer, including the acts and practices herein set forth. His address is the same as that of respondent Blue Ribbon Promotions, Inc. 2. Prcp_csed rescondents admit all the jurisdictional facts set forth in the draft of complaint here attached. 3. Proposed.respondents waive: (a) Any further procedural steps; (b) The requirement that the Ce^^ission's decision contain a statement of findings of fact and conclusions of law; and (c) T.11 riahts to seek judicial review or otherc:ise to challenge or contest the validity of the order entered pursuant to this agreement. 4. This agreenent shall not become part of the official record off tiie pcecLedinys unless and until it is accept2d by the Ccr ission. Sf thi:: wgreement is accepted by the Co=ission, it, together with tl!e• Craft of complaint conte-olated `herei;y will be placed on th~~ puh.lic record for a period of thirty~(3C) days a-;' infornation i n rr n,,:,ct thereto publicly released; and suc'.•: accep- tance may be r:itir,3rr,.:rn by the Cc=ission if, within thirty (30) days after the acccatance, co^nc:nts or views subr.:i tted to the Commission disclose facts or considerations which ir.dicate tiiat the order containc:: in the agreer..nt is ir.apprcpriate, i:.rDrop_-r or inac?equatc. s f

(Def. Ez.0) (Not in - Evidence) 1065 - 3 - 5. This agree-ent is for settlement purposes o n'_1 and does not constitute an ad:nission by proposed respondents that the law has been violated as alleged in the draft of complaint here attached. • 6. This agreement contemplates that, if it is accepted by the Cc:=assien, and if such acceptance is not subsecuentiy withdra;cn bv the Ccm..:-nission pursuant to the nrovisions of Section 2.34(b) of the Commission's P,ules, the Co^Tission may, without further notice to proposed respondents, (1) issue its complaint, correspo.^.ding in form and substance with the draft of complaint here attached and its decision containing the following order to cease and desist in disposition of the proceeding and (2) ma::e information public in respect thereto. Pihen so entered, the or;.er to cease and desist shall have the same force and effect and shall become final and may be altered, modified or set aside in the sa-:e manner and within the sa.:.e time provided by statute for other orders. The complaint may be used in construing the terms of the order, and no agreement, understanding, representation, or inter- pretation net contained in the order or the aforementioned agree- ment may be used to vary or to contradict the terms of the onder. 7. Proposed respondents have read the proposed cc-,iplaint and order cer.te_mplated hereby, and they understan:d that once the order has been issued, they will be required to file cne or more co-.cliance recorts shc,vina that it has fullv comclied with the order, and that they may be liable for a civil per.alty of up to $5,000 for each violation of the order after it becomes final. ORDER IT IS ORDERED that respondent Lorillard, a Division of Loews Theatres, Inc.,.a division of a corporation, Robert Brian Associates, Inc., a corporation, Blue Ribbon Prom.otions, Inc., a corporation, and Donald Jagoda, individually and as officer of Blue Ribbon Promotions, Inc., and their respective officers, agents, representatives and employees, directly or through any coraerate or other device, in connection with the preparation, advertising, sale distribution or use of the "Aent Castle Contest" or any other promotional game, contest or device which involves or offers an opnortuaity to receive a prize or anything of value, by any means, in co:r,merce, as "cc~r.erce" is defined in the Fcderzl Trade Commission Act, do forthwith cease and desist from: 1. a. Misrepresenting the manner in which any pre:nction game, contest or device, will be judg2d; b. Failing to deternir.e or judge entries in accordance with the published rules. 4F s k

- 4 - (Def. Ex. 0) ._ (Not in Evidence) 2. Engaging in or promoting, directly or ind =cc__,>, the use of any such ro^otional game, contest or devics by means of ar.y annou ncement notice, or advertisement unless: a. The rules4 and entry blanks where used, relating to promotional games, contests, or devices of skill shall clearly and conspicuously present a fair surmary of the manner in which any such promotional games, contests, or devices of skill will be judged, as well as all of the require- ments, terms and conditions for part'_.ci- pating therein and for entitlement to prizes or other awards; 10 6 6' b. All offered orizes or other asards are distributed to those participants so er.titled under the rules; c. Following the awarding of prizes in any pro- notional games, contests, or devices, respon- dcnts shall furnish to participants, upon reauest, the names and city and state of all winners, or with regard to s: eepsta::es co: tests, of all %•.inners of prizes having a retail value of fifty dollars ($50) or more, their rc,o;ctive ~,,inning scores, and a detailed statement enunciating the basis or method used to deter.nine entitlement to prizes; further- more, respondents shall clearly and cons,icuously present in the statement of the rules, and entry blanks where used, pertaining to any such promotional aames, contests, or devices thc? fact that such in_`ormation will be fur- nished'to participants therein upon such ruqucst. d. For the purpose of 2(a) and 2(c) hereof, clLiarly and conspicuously shall be satisfied only it the reauired presentation appears in b(,ld face ty pe so as to di s*_insuish it from that typ: used to state the tevt of the rules. 3. Lorillzrd shtll pay the costs and expenscs of rc;• ^- ing thc "Kcnt Castlc Contcst" which rejudging shall be conduc*ed in t he followin.j manner. a. Each er.try in the Kent Castle Contest which dis- closes, pursuant to the Rules of the Contect, a ~:•ord total within such entry of 9,700 or more words, shall be segregated from all entriec in such Contest with a lo:aer word total. G

Def. Ex. 0 (Not in Evidence) 1067 - 5 - b. All entries of 9,7c0 ccords or more, so secrec~ta , sha'_1 be nu.:.zered for identification and judginc in accordance with the procedures set forth below. (Such entries are hereinafter referrzd to as "Entries to be Judged"). c. Research wriangle Institute or such other person or organization :..utual'_y satisfactory to Lorillard and the Federal Trade Ccr.z,,.ission (hereinafter re- ferred to as "Institute") shall pre~are 100 seParate word lists (hereinafter referred to as "First Stage Zists"), each consisting of 200 ~rerds selected at random from the Master Word List. rlastcr Word List means the list previously pre- pared by Blue Ribbon Promotions, Inc. (hereinafter referred to as "Blue Ribbon") for the original judging of the Kent Castle Contest. d. Institute shall ^ ..u:aber the First Stage Lists and shall assign, at random, one First Stage List to I each Entry to be Judged. Institute shall then select at random 1,C00 Entries to be Judged and shall d~termine the number of words in each such ~ Entry to be Judged that appear on the F-st Stage List assigned to such entry. Upon cor..n_~•ticn of this determination, Institute shall analyze and ~ ~ evaluate the statistical infor7,,aticn thus deve'_cped an& shall repor t an d set forth the met:.od or methods which reasonably could be used in judging the remaining Entries to be Judged, and further- more shall set forth, in declining order of conti- I dence levels, each suc.`h method and the Alternate ~ Statistical Approach set forth in e. below. Blue f Ribbon shall thereunon "cost" the method or methods s_h forth ir the Institute report. If any method con- ; tained -in the Institute report offers a higher level i of confidence than the Alternate Statistic::l Approach,1 as determined by Institute in its report, and iz the cost of judging all entries by applying such method to judging the remaining Entries to be Judgec shall not thereby e::ceed $100,000, then such method shall be followed b_v Blue Ribbon in judcinc, the Kent Castle Contest. If more than one such ret:cd is found, the method offering the hichest confi- dence level shall be follc::ed. Otherwis^, the ?:ent Castle Contest N:ill be judged by Blue Ribbon in accordance with the Alternate Statistical F,p;=oach set forth in e. belo,::. 107

- 6 - Def. Ex. 0 (Not in Evidence) e. In the event there is no nethcd su,gosted i^n the Institute report which provides a hig'.= confidence level within the m.avim.un cost li:.:ita- tiorn than the Alternate Statistical nooroach set fcrth below, then Blue Ribbon shall underta'.;e the judging pursuant to the following procedure (h_re- inafter r.,:erred to as the "Alternate Statistical Aparoach") : (i) It is understood and agreed bet-,•,een the par- ties to this order that the maximum cost to Lorillard for Blue Ribbon's judging of the Kent Castle Contest under the Alternate Sta- tistical Approach, as more specifically set forth in 3e(ii) of this order, shall not es- ceed $100,000.00. However, whatever the e.ct,__ cost of judcing may be, Blue Ribt:;n shall com- plete the judging in accordance with the pro- cedures outlined in 3e(ii). Institute shall furnish to Blue Ribbon such word lists, random selection of numbers, analyses, and other data as may be necessary to permit Blue Ribbon to judge the contest strictly and solely in accordance with this order. (ii) Blue Ribbon shall judge each Entry to he Judged against the First Stage List as:i_g^ed to it by Institute and shall determine the number of words in each Entry to be Judged that appear on the First Stage List against which it is judged. Blue Ribbon shall de- termine the 500 Entries to be Judged which contain the highest num:,er of words appearing on its First Stage List. Blue Ribbon shall then judge those 500 Entries to be Judged ag.ainst word lists containing 400 words each, (hereinafter referred to as "Second Stage Lists") in the manner described with respect to the First Stage judging. The Second Stage Lists to be used in judging the 500 Entries to be Judged shall be supplied to Blue Ribl:on by Institute. Blue Ribbon shall then certify to Loril.lard, with a copy to the Federal Trac'.e Ccr.^ission, the 50 Entries to be Judged ,:hic: contain the greatest number of t•:ords on th~- First and Sccond Stage Lists against which they c.;ere judged, and ce rtify and declare thJse 50 Entries to be Ju dged grand prize winners of the Kent Castle Contest. of the winning of t:e F:enk Castle Contest. 4. Lorillard shall award prizes in the amount of $2,000 each to e-!ch of the winners so certified by Blue Ribbon which winnc~c have not been /areviously awarded a grand prize as a result r .

_7_ Det.EX.o 1060 (Not in Evidence) 5. T he sole respon- ib'_lity of Lorillard wi t.. res_ _. t to the judging of the rie:a Castle Contest shall be to pay the e:co-r•ses and fees of the institute in an amount to be agreec: con by and the Institute, and the expenses and fees of Blue ..ibbon _.n an amount not to exceed the $100,000.00 as set forth in para7rap'.: 3c:(i) above, and, if Blue Ribbon for anv reaso^n shall fail to ~::e contest as prCv~ded above, any Ct.^er expenses and fees wi:ic.^. .^..ay be necessary in order that the contest be judged by an individual or oraanzzat-or• acceotable tolw-he Cc::T,=ssion in the manner set '_ort.n in para,^rap:: 3 above. This provisio^n shall not affect the obliga- tion of Blue P•ibborn to judae the contest in the nanne: set fcrth in paragraph 3 above regardless of the actual cost of judging the con- test. 6. Except for the initial activities of the Ins*_itute set forth herein, Blue Ribbon shall be solely resco-:si-ble, a,-.:: Lorillard shall not be responsible, for the executiorn of the of the F:ent Castle Contest pursuant to this Consent Order. 7. A person or organization satisfactory to the Federal Trade Commission shall exar:ine the judgir•g by Blue R•_bbon and shall certify to the Cc-~..-;:ission the accuracy of the judging hereunder by Blue Ribbon. Such e:;a_•nination nay be by periodic observation and by sampling of judged entries against the results certified by Blue Ribbon. 8. Where reference is made to "Blue Ribbon" in connection with rejudging, the ebligation for such rejudging is also ap_licable ~ to respondent, Donald Jagoda. i 9. As progress pay...ents are made by Lorillard to Blue Ribbo.^n for its rejudging, 25 percent of each payroe:.t whic : Lerillard is obligated to rake, pursuant to _ts agreement with Blue Ri:Dbcn, shall be withheld by Lorillard until completion of the judging. ~ Judging shall be deemed cor.•.oleted for the purposes of this caragraph upon the certification by Blue Ribbon pursuant to Paragraph 3e(ii) above. ~ . + IT IS FURTHER ORDERED that the rescond_r.t ccr_oorations shall forthwith distribute a copy of this order to each of their respective operating divisions or departments. IT IS FURTHER ORDERED that the corporate respondents notif.;- the Commission at least thirty (30) days prior to any proposed change 1Pn the corporate respor.dents such as dissolution, assignment or sale resul*_ing in the e^.erge.^.ce of a sL'ccessor cOr'~'~ora`_ion, the creation or dissolutic° of subsidiaries or any other chan^e in the coroorations which may affect cc:npliance obligations arising out of the order. IT IS FURTHER ORDERED that respor.dents shall, withi.n. .,_ . (60) days after service upon it of this crder, file with the Co=iss'_-' a rervt, in writ q, setting forth in deta'.l the nanr.er and fcr-•, _n which it has ce^.olied t^e erder to cec.se and desist. 607

Der. Ex. 0 - g - (Not in Evidence) 107 0 Signed this day cf go , 1973. LO?2ILLARD, a Division of Loe,,-s Theatres, Inc., a corporation By Arthur J . 6.te Vice President PAUL, j•1EISS, RIPIKI".ID, Fr=.R:C_: & GARRISOt: By tdartin t:oeir.bard Attorr.e ys for Lorillar : NICaOLSON & CARTJR By James 1,11. Vic:ioiso^. Attorneys for Lorillard ROBERT BRIAN ASSOCIATES, INC., a corporation By Robert Sanael^ar. President a:a;ASCr & CiiA=:: C By Burton I. Ilonasci: ~ Attorne~•s for Robert urian Associates, Inc. N .D~ 107

APPROVED: 6 *p DEF. EX., 0 (Not in Evidence) - 9 - 10?i BLUE RI BBO_*I Pt.Or?OTIO:.J, It.:.. , a corporation By 1 Donald Jagoca President DONALD JAGODA, individually and as officer of Blue Ribbon Prc:r.oti o::s, Inc. / ~ By Donald Ja:,oda WEIS~IAN, CELLER, SPE_T, b13DLIi: & WERTriEIMER i ' By Steven P Rayr:o,^.a Attorneys for Blue Ribbon Prc::.o- tions, Inc. and Donald Jagoda