January 17th, 2011

Dear Valued Partner,

Worldwide, manufacturers are seeing a significant increase in commodity prices which has led to a substantial increase in manufacturing costs.  Compatico has successfully avoided any price increases over the past two years by offsetting labor and commodity price increases with value engineered product, efficient manufacturing processes, and expanded domestic and global sourcing efforts.   These efforts have allowed Compatico to increase market share by offering high-quality, low-cost office systems.   In fact, our Compatico CVX system is available in the market today at prices approximately 25% below similar product pricing just two years ago.

However, due to our improvements over the past two years, our manufacturing process is far more sensitive to commodity price increases and the fluctuation of the value of the dollar.   Our suppliers are paying more for raw product and have increased our prices accordingly.  In an effort to assure that Compatico dealers can continue to aggressively compete in the new office furniture systems market, we will increase prices only a modest 3.5% effective March 1, 2011.   Please see the enclosed price increase sticker which should be placed on the front cover of you Compatico “2009 Price Book” catalog.

Thank you for your efforts to help Compatico not only survive the most severe recession in recent history but to actually increase market share, improve product lines, and strengthen the overall operations of the company.  We could not have done this without a strong representative and dealer network.

Best regards and may 2011 be a fantastic year for all.

Patrick Mullen

Chairman, CEO