Collectronics, Inc. offers its clients a viable alternative in the management of account receivable portfolios. This is known as The Accounts Receivable Management Solutions Programs ("A.R.M.S."). The A.R.M.S. Program provides Collectronics's clients with the opportunity to utilize a sensitive approach when contacting their clients or customers without the usual alienation of a third-party debt collection agency.

Collectronics's automated system generates past due collection letters and/or past-due notices, including monthly statements, indicating they are generated from the Audit Department at your business. The correspondence will be sent to your customers at a pre-determined date and time. These letters, which are generated from the data base at your discretion, to utilize the intervention of a Third-Party Debt Collection Agency on your account placements. Therefore, the past-due dun letters may be directed to your account placements utilizing the significance and notability of Collectronics. In addition, the telephone call may then be placed to your account placements by personnel from Collectronics indication that they are calling from your offices. Whichever program you choose could stimulate or motivate an immediate response. There are four internally generated letters in this program. They can, at your discretion, be customized for your use. You may request that we enclose a self-addressed envelope in each contact. Payments will be mailed directly to your business or to any address which you may deem appropriate. The A.R.M.S. Program preserves good will and rapport with your clients and, at the same time, reduces the burdensome responsibility of your internal collection department from mailing these collection letters or past due notices without any hesitation or delay. Therefore, cash flow would be immediately stimulated through the use of these internal collection letters and telephonic contacts.

In addition to the computer generated collection letters and statements, an account representative at Collectronics will establish telephone contact with each account to request payment or discuss the account billing in detail. It is important to note that, while contacting your accounts, the personnel at Collectronics identify themselves as representatives of the Audit Department at your business and NOT as representatives of Collectronics. Also, we establish an 800 number to which your accounts may call to discuss their account balance. This number will appear in each letter contact. When returning a call to our office, the phone will be answered "Audit Department." Your business will be protected from numerous or unwanted telephone calls.

Once accounts arrive at Collectronics's facility, they are entered into our computer data base within twenty-four hours. A collection letter is then generated and mailed to your customer indication that the past due amount is now due and payable. The letters continue for a thirty day period with the last letter indicating that the customer has ten days in order to rectify the situation or that the account may be assigned to a debt collection agency. The collection letters can, if you wish, be furnished to the appropriate sales representative for complete follow-up throughout the process. Ten days after the final demand has been submitted or mailed to the customer, Collectronics will forward to the appropriate individual in your Credit Department an inventory listing of all accounts placed with the A.R.M.S. Program. At this juncture, you will have the option to cancel any number of accounts that have either paid in full, promised to pay, etc. You may cancel any accounts at any time, for any reason, throughout the process. The remaining accounts, at your option, may be assigned at the time to Collectronics at the previously agreed upon contingent fee arrangement.

All rates are based on volume. A minimum of thirty accounts must be placed or ordered with A.R.M.S. to activate or open an account. Accounts referred to A.R.M.S. will be processed for a fee per account, based on usage. No set-up or up-front fees will be charged. Invoices will be issued at the conclusion of each calendar month on Net 30 terms, based on the number of accounts assigned during the calendar month.