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Donnelley Marketing T2 a7h<coDUn&mpanyof YiSradst,eet[orporanon Mr. Paul Lawless December 16, 1981 Page Two on price increases in the past. Tao major factors are responsible for this years increase; the reduced redenption volume and a 13% increase in operating expenses. On the positive side, 1981 has seen two major changes which should help to hold future rrices doum and also inrorove sexvice: 1. The restructuring of our Elm City organization has already resulted in an increase in the a munt of mail fraud being caught by our teams. We also now have supervisors whose only responsibility is to insure that reports are accurate and on schedule. 2. The start-up of our Nexico operation will have two effects; a speed up in processing tiie and a reduced direct labor cost. We are confident that the service vra provide Iorillard is the best available. You are a valued client of ours and wE look forward to working together in 1982. sincerely, MN,d,.. iI1RI=IC- Jds6ph J. Gilbert Accomt Executive JJG/lal

IZ Donneiley Marketing M s. acompanvoF TheOun&I1ra&-trectCorporation 1515 Summer Street, Stamford, Conn. 06905 203-357-8600 Decemher 16, 1981 Mr. Paul A. Lawless Director, Sales Promotion lorillard Corporation 666 Fifth Avenue New York, NY 10019 Re: Lorillard Coupon Redemption Agreemizit Dear Paul: Enclosed please find the original and a copy of the new 1greHnent that becanes effective Febrna7y 1, 1982. This new Ag.Ceement calls for the following changes: 1. The service fee will be charged for coupons processed and placed on the Exception Report. Previously we did not charge for these coupons. 2. Billing for retailer payments shall be weekly instead of twice nonthly. Service fees will be billed on a nonthly ~ basis. 3. A change in the service fee fran $14.65 per thousand to $16.95 per thousand. This represents an increase of 14.3%.t', Considering the substantial increase in the Consumer Price Index and the substantial decrease in redemotion volume, the increase is not as dramatic as it first may seem. A six year history is outlined below: Year Vohane Service Fee Donnelley Price Change CPI Increase 1976 4m 18.50 - - 1977 lOnan 16.00 - 8.1% 5.2% 1978 25a 13.77 -13.9% 6.8% 1979 18.5nm 13.62 - 1.0% 9.3% 1980 33am 14.20 ' + 4.2% 13.9% 1981 17-1&1¢n 14.65 + 3.1% 11.7% As you can see frcan these nlmlers Paul, we have tried to hold the line