Penguin Putnam Inc. is pleased to announce its conversion to a new enterprise-wide SAP system, effective November 1, 2002.

October 1, 2002-- Penguin Putnam Inc. is pleased to announce its conversion to a new enterprise-wide SAP system, effective November 1, 2002. With the new system you'll enjoy expanded options and ore responsive service. Using experience gained over the years working with booksellers, we've been preparing for this launch for many months, to ensure that your needs will be served now and in the future.

Of the many enhancements included in this new system, the most important feature affecting your business with us is the change to a post billing system. We will have to shut down our old system for a brief period as we prepare the new one. The final section of this letter explains the transition schedule. This is especially important for electronic order customers.

Here are some important dates for the transition:

Thursday, October 24
EDI orders - Final day to transmit orders to the VAN for EDI processing. Orders transmitted after that date will be held until October 31. During the transition, we will send Functional Acknowledgements (997s) confirming that your orders have been received. We will send Purchase Order Acknowledgements (855s) and invoices (810s) after the orders are processed on October 31.

IBID, Wordstock, and other direct EDI orders - These direct EDI orders must be received by 3:00 p.m. EDT. Orders placed after that time will be processed on November 1.

PUBNET orders - The last PUBNET pickup will be at 3:00 p.m. EDT. PUBNET orders transmitted after that time will be picked up on November 1 for processing, and Purchase Order Acknowledgements (855s) will not be issued until after orders are processed. We will send Functional Acknowledgements (997s) for these orders.

Friday, October 25
Phone, fax, mail - This is the last day we can manually process orders in the old system.

Saturday, October 26 through Thursday, October 31
We will continue to receive direct EDI orders and will send electronic POAs. As noted above, these orders will not be processed until November 1; hence the availability information stated on the POA may be inaccurate. These orders will be secure in our systems, but cannot be viewed in OASIS or our internal systems until after go-live. Please take particular care not to duplicate orders.

Friday, November 1
Go-live.

The PPI Customer Service Group is available during business hours at 800/631-8571 to answer questions about this form, sample documents, and the implementation schedule of the new system.

Thank you in advance for helping us make this transition a success.

Sincerely,

James C. Clark
Vice President, Order Fulfillment