Holder of a Certificate of Compliance

Coastal is a professional Commercial Collection Agency. As a member of the Commercial Law League of America and the Commercial Collection Agency Section since 1976, we believe we can use the term professional. An Agency must pass a rigid screening process to become a member of the CCAS of the CLLA
Enclosed is a copy of our Certificate of Compliance. We have also enclosed a copy of the Code of Ethics of the League by which we abide. Coastal is licensed, bonded, and insured in all the required states and jurisdictions in the U.S. A copy of our bond is enclosed.

Industry-Specific Programs and Services Designed

Our specialty is serving the particular needs that prevail within the business communities your company serves. Clients of Coastal that serve mostly the same type of customers are: Minolta; Konica; Ricoh; Bayer Corporation, AGFA Division; R. H. Donnelley; and Reed Publishing USA; to name a few. Through our knowledge of the business owners and managers in the industries you serve, and through our experience in working with them for the past twenty-three years, we have formulated and implemented specific programs which are designed to achieve:

Maximum clearance of commercial accounts,

Consistent and reliable communications with our clients,

Preservation of client's image, reputation and brand equity,

Professional, ethical, lawful, tactful service and results!

Services Offered:

Commercial Collection Services

Outsourcing of the Credit and/or Collection Function

Private-label collections,

Soft-Collect,

Letter Dunning Service

Full Range of Consulting Services

Customer Training and Education

Credit Manager and Collector Training

Benchmarking Program

Accounts Receivable Risk Analysis

Strategy and Policy Formulation

Commitment to personal contact

The backbone of Coastal's collection service is our commitment to personal contact of all your delinquent accounts. If it is humanly possible to do so, we will personally contact each and every debtor either by telephone or by visit to their office or home. This personal contact is always tactful, always professional, always respectful.

Debtors Respond

We want to collect your delinquent accounts, NOT MAKE ENEMIES of your debtors. When you think about it, personal contact either by telephone or personal visit is the only reliable and effective means of collecting these accounts. Yet many agencies continue to issue a series of form letters or computer letters, spaced ten days to two weeks apart. Will a company in financial difficulty respond to this approach? Very rarely! Will a company which disputes your invoice, or one which believes your company still owes them money or service respond favorably to a form letter? Of course not!

And what happens when these form letters are ignored by the debtor? It is either turned over to an attorney for settlement or written off to bad debt! Regardless of which avenue is taken it is going to cost you even more money!

Think about the present agency or those used in the past. Do they use a personal approach? Do they resolve most disputed claims in-house, or are they quick to refer the matter to an attorney? Has your company been forced to drop a number of legitimate claims because of extra expense and a lot of lost time?

Has the agency taken the time and effort to the best of their ability to determine the justification of the debt and if it is truly free from offset. Perhaps more importantly, has your company been blind sided with a counterclaim? Perhaps the most dreaded word in the credit field. Counterclaim! What does it really mean? How often does it actually occur? Could a different strategy been employed which may have resolved the matter without a lawsuit or allow a logical, economical decision be reached which allows the matter to be written off to bad debt?

We will only sight one matter which magnifies the importance of our approach to this issue and our consultant philosophy.

We received a placement of $85,000.00(rounded) with instructions to make one demand and if nothing positive developed, refer the matter to an attorney. The initial contact with the debtor ended with them referring us to their attorney. The conversation with debtor's attorney, while polite, ended in less than a minute. The debtor's attorney told us hire an attorney and he would accept service. Thank you for calling. Obviously nothing positive developed. We will not go through each and everything we did. We did receive permission from our client to do further investigation, as it was our belief the debtor was going to ambush our client once a lawsuit was commenced. We completed our investigation six months later. We submitted to our client our recommendation in a four page letter and the opinion of two collection attorneys. We received a phone call from our client shortly thereafter advising us he just left a meeting with the President, Executive Vice President of Sales, Corporate Counsel and himself. They wanted to thank us for what we had accomplished and to our happy surprise requested we forward a bill for our services which they insisted be no less than $10,000.00.

How many lawsuits have been started and then dropped because NEW information materialized after the fact? We detest, but will not hesitate writing to a client and recommending a matter be written off to bad debt. It is our belief we are hired to produce a result. A result that will produce collection as well as advising our client when not to invest any further time, energy and money. Collection consultants do that, not volume approach collection agencies. Remember, Excellence in Performance Equals Results. We did not say collection.

Salesmanship

At Coastal, you will find Collection Specialists who have mastered the subtle art of SALESMANSHIP.

We convince your delinquent accounts that it is in their best interest to communicate with us, to be fair and honest with us, and to resolve their differences with you in a friendly manner. We do not threaten legal action as a matter of course because we do not think it is in your best interest to seek legal remedies at the drop of a hat.

Salesmanship means more collected without attorney involvement

Our experience shows this kind of SALESMANSHIP pays off. Of all the dollars Coastal has collected over the last five years, over 75% has been collected in-house by Coastal personnel and the remainder was resolved by attorneys! That means, for every $1,000,000.00 recovered for our clients over the last ten years, $750,000.00 was recovered by our in-house Collection Specialists and less than $250,000.00 was recovered by attorneys. This means our clients are not constantly being asked to advance funds for legal expenses because we use the courts only as a last resort.

If you are using another collection firm right now, ask them about their collection ratios. The lower their in-house ratios, the more it is costing you for their service. Odds are, they do not even know their in-house ratios because they are more interested in business volume than in serving your needs. Coastal makes just one guarantee: We will pursue every account personally to its just conclusion! Our staff Collection Specialists will do everything possible to resolve each of your claims Professionally, Quickly, Personally and Amicably.

Corporate Centralization

Consistent Communication From One Location

Coastal has one central office through which all collections are pursued and from which all communications are issued. Our standard communication policy follows. It can be tailored to meet your specific needs, however. Once we establish a master file for your company we will be able to communicate via letters, electronically, verbally, (telephone or Personal visit) or facsimile. We will acknowledge each placement singularly on the day it is placed. The placement can be submitted via mail, electronically, or via telecopier. A written report will be sent within the first ten (10) days of placement and all other written reports will be sent in 30 day intervals or as necessary. Computer reports will be sent quarterly or as you request. Generally, for matters less than $500.00, we will acknowledge as stated above, but will only communicate at the end of ninety days, sooner if necessary, or at your request. Our advice toward a payment received will be sent on the date received or no later than the next working day. Our remittance will be structured to meet your needs. All money received from a debtor is deposited with Marine Midland Bank, into a trust account. Your company's funds are never co-mingled with Coastal's.

Centralization Enables Immediate Contact

Our centralization allows us to contact the debtor, if requested, immediately after authorization to open a file is received; regardless of the claim size. A report of that contact can be transmitted, at that time, if requested, or as stated above.

Centralized Monitoring Means Client-Focused Employees

We know from experience that our special brand of personalized collection service is best fulfilled by our one central location. An agency can only be as good as the personnel in the office where claims are handled. At present, we have twelve employees. Our collection staff consists of four individuals who have combined experience of 66 years. The two outside sales representatives have 14 years experience. Two of our employees have MBA degrees in finance. We have a computer-programmer/LAN administrator on staff to meet our clients' needs. The remaining team handles the office and administrative functions. At Coastal, constant management supervision and coaching produce a maximum collection effort every day.

Your Company's Image, Reputation and Brand Equity Kept Intact

More importantly, the personal attention of Coastal's management to your account assures the preservation of your company's image and reputation. We are your representatives and partner and we will not tolerate methods or tactics which might damage your company's standing in your community. We can proudly state, to the best of our knowledge, we have never caused any of our client's to lose a customer because of how we pursued them. We also proudly state we have NEVER been sued by anyone for any reason. NEVER been reported to any Attorney General's office or Better Business Bureau for any reason.

Organization Ethics are Strengthened by Centralization

Management at Coastal constantly monitors our actions and intentions against a strict code of good business practices and ethics. These practices and beliefs protect our clients, protect us, and protect the just rights of the debtor company and representative. We want you to place the same confidence and trust in Coastal as you do in your lawyer(s) consultant(s) and accountant(s). Centralized operations assure we keep that trust.

In short, when you make Coastal a part of your team, you can be assured of the highest standards of ethics and conduct, and you can be assured of more PROFITS from your business operation!

Comprehensive Investigation Department

Each claim you submit for collection is completely investigated, whenever possible. We want to know as much as possible about each debtor. Where do they bank? Are they having problems with any other creditors? How many times have we collected against the debtor before? Have there been any recent judgments against them? Do they owe local, State or Federal taxes? Are there any liens or pledges against them? Has the ownership of the company changed recently, or is there a change pending? Is this process time-consuming? Of course! Is it important? Critically! This knowledge enables our Collection Specialists to develop a successful collection strategy. It is important to you in making critical decisions on pursuing your claim, or deciding if placing an account for collection is appropriate. You can consult our collection experts any time. Many of our clients call before they place a claim. They consult us for a two-fold reason: A) So we can collectively determine if there is anything further they can do, so they do not have to employ us; b) To ascertain what we may know about their customer. They know we have often worked with their problem customer before and can give insight into who the customer is and what has helped them pay in the past. This is a free Coastal service that has saved clients thousands and/or helped them feel comfortable with their decision. And it is important to the debtor because it allows us to reach a fair and amicable solution to the debt he owes you.

Skip trace philosophy and resources used:

Philosophy:

Skip tracing at Coastal is part of Collection Strategy Support (CSS). CSS helps us improve collection results and make recommendations to you about whether to file suit, hire an attorney or write off an account. The more information you can provide or we can economically find about your debtor, the better the chances of collecting. We at Coastal believe anyone can be found, if money is unlimited. The major questions that determine the amount of money and time spent to attempt to find a commercial debtor, proprietor, partner or personal guarantor are:

Will finding the debtor put us in a better position to collect the account or give the client needed service?

Once decided that finding the debtor is warranted, we ask: How can we account for the time and resources necessary to locate the debtor that would allow us to invest Coastal's or our client's resources?

As a rule of thumb, we would be doing our client a disservice if we overall, not on an individual account basis, expend more money on skipped accounts than is recovered. In essence, we do much more than just verify your account is skipped; some agencies will make one phone call and send a letter, and wait for the mail to be returned. That's a start. We use all the resources economically available to verify, find and collect your accounts.

Resources available:

The resources listed below are available to use for skip tracing. The items with bullets are the sources we most often use. Although the other sources are available, occasionally we will ask you to provide a D B Report on a customer or recommend you spend additional fees to hire an investigator.

Abandoned Property Records.

Bankruptcy Records.

Births, Deaths, Marriages Divorces Information.

Board of Elections for Voter Registrations.

Coastal Records of past history collecting against debtor.

Cole Publications, National Look-up Library. Reverse directory.

Your Competitors.

Corporations and UCC Filings.

County or City Chamber of Commerce.

County Records.

Directory assistance and the Telephone business office.

Driving Records, Registrations Titles.

Dun Bradstreet Information Services.

Your Employees.

Federal Records.

Local Attorneys.

Local Businesses or Nearby Businesses.

On-line Information Services including Dow Jones News Retrieval.

Social Security Administration.

State Records.

The Banking System.

Trans Union Credit Services.

TRW Credit Services.

Workers' Compensation Records.

There will be occasions Coastal will suggest that we outsource the task of locating assets or location of a debtor. The cost of this service, in general terms, follows:

Asset Search: $250.00 up to $1000.00;

Locating Bank Accounts only: Up to $100.00;

Locating Debtor: $50.00 up to $250.00.

Under no circumstances will your company ever receive such a bill, until and unless the cost is approved in advance.

Structured Claim Review

All accounts placed with Coastal for collection are continually reviewed by our Collection Specialists and by management. Through this analysis, we make regular decisions regarding the best and the quickest strategies for liquidating your accounts. What form of personal contact will have the greatest chance of success? Which SALESMANSHIP techniques should be applied? If the amount owed is disputed, is the dispute real, imagined, or just a dodge? Should we recommend a payment schedule or go for a lump sum payment?

Should the account be placed with an attorney? Do we want to give the attorney authority to sue? Does the debtor have sufficient assets to satisfy a judgment? The questions and the possibilities are endless, and they are different for each account. However, they are vital in formulating a final approach to your debtor and in making professional recommendations to you. Recommendations which can be communicated during a personal visit, correspondence or telephone.

Review helps detect hidden counterclaim liability

We help detect possible counterclaim liability before a claim is litigated.

We have recommended clients close $100,000+ claims due to our review. In another instance, after taking the time to speak with our client's salesman (who no longer worked for the company!), we recommended the client not pursue the claim. We had invested tens of hours in the claim, but uncovered a hidden liability of a counterclaim. The client agreed and thanked us. There is more to a collection agency than collections. Our clients thank us when we recommend they write a claim off to bad debt, if that is in the best interest of the client. There is no extra charge, just value.

We have also recently returned a $400.00 claim, after review unopened. We thought the risk of counterclaim was too high. We told the client to hide the bill- bury it! They agreed. (They eventually got sued; but, it could have been worse.) After the client was sued, top management wanted to know why we had returned the claim without opening it. The obvious reason was the hidden liability; but, the question, which proved to top management they use a professional agency, was How did the agency return a file before it was opened? Coastal's Structured Review! What agency would not open a claim to protect you?- Coastal! You use us because of our structured review of each file, and our ability to listen. We are your collection consultant, not a collection agency.

Often an account should go to an attorney to protect your rights.

Placement of Accounts with Attorneys

Coastal's Philosophy on Selecting Attorneys.

Firstly, we look for the attorneys whose major area of expertise is creditors rights, that proceed in accordance to our client's philosophy. They report timely. We do not look for ambulance chasers. We look for Professionals. Secondly, we are not looking for volume approach attorneys. We demand and will not settle for less than complete effort, integrity, ethics, enthusiasm and nothing they do will cause embarrassment to their client. Yes, we said your attorney. We choose the attorneys, but they are legally your company's attorneys.

Attorney Referral Process

Upon your prior approval, Coastal may forward accounts to attorneys who shall act as your company's attorney(s). If client does not designate the attorney to whom a particular account or accounts are to be forwarded, Coastal will be authorized and instructed as your agent to select an attorney for collection. The name and address of the attorney will be promptly furnished to your company. Coastal will direct, as a convenience and in accordance with instructions, all correspondence with those to whom accounts are forwarded. Such attorney shall, at all times, be subject to your control and direction. Coastal will not and cannot act as an attorney for any client . If suit is recommended by the attorney, you will be advised as to the requirements pertaining thereto. No suit shall be commenced; no compromise shall be effected; no extension of time for payment shall be granted; and no expense chargeable shall be incurred, without specific authorization. Recommendation for the filing of suit, proposed compromise, extension or any other matter requiring a decision by your company may be made directly to your company by the attorney if they desire. When your company authorizes suit or expense, your company will advance the necessary funds. In the event Coastal is authorized to advance costs, an invoice for the amount advanced shall be forwarded to your company for immediate payment. The fees and costs charged by attorneys vary from locale to locale. Any fees, charges or commissions of any attorney, whether chosen by your company or Coastal, are the sole responsibility of your company . The costs advanced to an attorney will be refunded if not used by the attorney or if received from a debtor. Fees charged by attorneys cannot be quoted.

Generally Accepted Commercial Attorney Rates

The contingent fees charged for a collection by an attorney are the generally accepted Commercial Law League rates. Those rates are:

20% for the first $300.00;

18% for the next $1,700.00 and

13% thereafter.

In the event suit is authorized, the attorney generally requests, in addition to the above commission, a contingent (upon collection) suit fee of up to 10%. From time to time, the attorney may request a portion of their suit fee in advance (a non-contingent suit fee).

Most attorneys we select are Commercial Law League of America members. All abide by the Operative Guide for Forwarding and Receiving; as adopted by The Commercial Law League of America.

One Million Dollar Bond Program on Attorneys Selected by Coastal

Attorneys that Coastal selects carry protection for your company of up to $1,000,000. The insurance program includes coverage against acts of larceny, embezzlement, fraudulent failure to make accounting or overcharge. This is not a malpractice program. This program covers claims in all 50 states and Canada, but, does not provide coverage on foreign attorneys or foreign claims, including Puerto Rico, Guam, and the Virgin Islands. The Bond Program is underwritten by Chubb Insurance.

Automation and Technology

Information Exchange Capability

Coastal will accept placements, and communicate with your personnel by any of the following means:

Via Facsimile.

Via telephone, person to person.

Standard mail, using our forms or the your company letterhead. When placing accounts with letterhead, request we open claim subject to our Terms and Conditions.

Magnetic media, including computer floppy disk, or audio tape.

In person if feasible.

Internet e-mail.

Intranet, (Web server-based network).

Electronic Capability

On-line placements and status reporting EFT/EDI

Coastal is capable of handling all transactions electronically.

This includes placement of accounts, status reporting via EDI or other electronic means, and EFT payment of net proceeds collected on your behalf.

Coastal generated information can be merged with your company's information

Coastal's Windows based custom computer software enables us complete flexibility. Through EDI, file synchronization software, or in batch process by disk, any information we gather (transactional or event based) can be merged with your company's files to enhance the recovery process.

Minimum hardware and software requirements

Requirements for Coastal direct on-line placements or inquiry services are as follows:

IBM Compatible PC (Running DOS 5.0 or higher and/or Windows 3.1 or Windows95), a Hayes compatible modem (9600 Baud), any standard communication software.

Disaster Recovery Program

Coastal's main server saves data to two hard drives. A 3-day rotating tape back-up of the system is done daily. Auxiliary battery power is installed to minimize power outage loss.

Reporting Capabilities

Monthly Standard Status Reports if Requested

Monthly, a report will be sent electronically or by mail, listing all accounts placed, dollars collected, accounts forwarded to attorneys, and accounts closed. All closed accounts will be purged from this report quarterly, March 31, June 30, September 30, and December 31. Reports will be tailored to meet your exact requirements.

Custom Reporting

Coastal Management System was/is custom designed by our in-house programmer. Reports in any format and structure will be designed to meet your exact needs. Complete in-depth risk analysis of your claims is also available. Our risk analysis lets you see the full range of possible outcomes for any spreadsheet model designed. Training will be provided in advanced statistical distributions and probability theory if necessary.

Updates Provided on the Collection Industry to Client's Collection Staff

Coastal is in a unique position to provide timely and relevant information on trends in the collection industry and in the credit function as a whole. One of our vice-presidents is very active in the Commercial Law League of America (CLLA) leadership. He will be serving a two year term on the Commercial Collection Agency Section Executive Council starting in 1996. He was recently nominated to the Executive Council of the Eastern District of the CLLA. He was chosen recently to participate in a future planning conference for the CLLA where just over 100 individuals were asked out of 5,000 members. Many of Coastal's clients are active in the Credit Research Foundation (CRF). Coastal has been a proponent of the use of benchmarking, and would introduce this to your company and collection staff if it has not already been implemented. Coastal Recovery has a consulting arm Coastal Commercial Group, Ltd. which provides additional insights for credit and collection staff. Also, as we have a committee member of the CLLA Pamphlet Review and Revision Committee, we provide clients with the most updated relevant articles on such topics as Preferential Payments, How to Testify at a Trial, and The Flow of a Claim through the Legal Process. Information on bankruptcy filings is provided to our clients quarterly, if requested. Recently our clients received a summary of Bad Check Laws. This is the type of information Coastal provides its customers. Ask Robert Meyer, Director of Credit, Honeywell what we do to keep him on top of his job. We recently provided him information on new algorithms for automated cash application tools he was reviewing- he knew to ask us. All of this, except major consulting work, is provided by placing claims with us. We do not add costs we add value.