REVISION - 20 SEPTEMBER 2007

This notice was sent to clients on 20 September 2007. It supersedes all other policies below the dashed line that follows this notice.

Hello. This month I am substituting our bookkeeper's standard message with one from me. We've had some significant changes at interCOM that affect our billing cycle, and I want to share those with your personally.

For 12 years, interCOM has had a billing cycle that ran from the 20th of one month to the 19th of the next. We have processed our invoices on the 20th, and they were due by the first of the month. Rarely have we ever added finance charges to late or overdue payments, even when they went beyond 30 days. As a small business owner, I have known each of you personally and have never felt that penalizing someone with an anonymous finance charge was very friendly.

This practice gave our clients many days and weeks of free service into the next month with interCOM not knowing if we were going to be paid for the previous invoice period. It also made it impossible for us to pay our vendors on a consistent basis without incurring late fees and finance charges, which they were not so personally interested in working with us on.

The result is that on a regular basis, our billing has not adequately covered our expenses, as it should; this month alone resulting in nearly a 25% increase in our expenses due to late payments we received because of the Labor Day Holiday. You can probably guess from there who the last one was whom interCOM paid once the company handled those unexpected charges. ;)

Therefore, we have had to make some changes that may seem impersonal to you, as they do to me, but I have come to realize are simply a necessary part of doing business. It has taken us a decade to realize that, and I hope it does not reflect in our personal service you receive on a daily basis. For the majority of our clients, this policy change will not be significant, except in the positive incentives, as we do still enjoy considerable courtesy when it comes to our invoices being paid on time. Please know, also, that this policy stems mostly from the due date of our own bills, which is the first of every month in most cases and no later than the fifth in all of them.

Our policy is effective immediately with this invoice and we have changed it in this way:

To encourage and thank you for your help in maintaining our low expenses, we have devised some incentives for early payment:

I have personally selected a bookkeeper who will follow these rules strictly, and leave me out of the decision-making loop. Frankly, I am a bit softhearted, and that has been to the detriment of the business and (since that is how we make our living) to my family as well. The bookkeeper has the final word.

Notwithstanding what seems to be draconic measures (though I hope the early payment incentives help to ease that!), I am still your advocate. interCOM's clients are all what can be classified as "Small Business" and I know the challenges we all go through. You can certainly advise me of a challenge you may have paying an invoice before the due date and I will work something out with the bookkeeper to see if we can make some equitable arrangements. The bookkeeper will know our current vendor billing status and what might be moved around to keep us all running smooth. It will be extremely difficult for me to advocate after the due date has passed.

Please know that we have done some extensive calculations looking at many years' previous records to determine the equitable penalties and incentives, and we must pass on both the extra cost and the savings we incur. The buck has stopped at my desk for a long time, making individual decisions on a monthly basis for responsibilities that do not belong to me and, as much as I want to be personally involved, it has hurt our ability to do business to a noticeable degree. I certainly appreciate your understanding and welcome your comments, questions, and concerns. You can email me directly at kristofer.cowles@intercomcity.net or reply to this message and it will be forwarded to me. In addition, of course you can always call me directly on my cell phone at 979.492.9425.

Above all, please know that I personally appreciate your business and continued loyalty to interCOM and hope that you will continue to support our efforts to keep your costs lower and our service the best in the industry.

Cheers and God Bless!

Kristofer Cowles, I

President & CEO

http://www.intercomcity.net

interCOM is Enterprising Technology Solutions for Smaller Companies with BIG IDEAS.

A Duck Soup In A Dawg Bowl, LLC Company (www.ducksoupinadawgbowl.com)

Any policy below that contradicts the policy above is superseded by the above policy.

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Everything interCOM does is billable. Everything. interCOM's decision not to bill for a service at one time does not mean the service will not be billed in the future.

Basically, anything that requires our time is billable.

Some things that are billed that we have been questioned about:

Travel Time

Research

Installation Monitoring

Consulting

Phone Advice

Email Advice

interCOM bases its rates according to demand and talent, as well as competing market rates.

interCOM’s fiscal policy is derived and refined from our experiences with our clients. Most of these policies are necessary due to the relatively few clients who do not maintain the high level of integrity we are used to experiencing with the vast majority of our clientele.

Time that interCOM spends working on specific client issues for phone, email, on-site, or off-site consultation, service, etc. is billed at the following rates:

            Scheduled within 48 business hours of the service request.

            Scheduled within 24 business hours of the service request.

            Scheduled within 8 business hours of the service request.

            Scheduled within 4 business hours of the service request.

            A technician is immediately dispatched to address your concern. Dispatching may require travel from as far as 3 hours away.

Modifiers to the above rates are as follows:

Multiply the rate listed above times the modifier below to determine the hourly charge (Ex. A Highest Priority Weekdays After Hours Service would be $125 * 1.66 or  $207.50 per hour.

            After 5:00PM or before 9:00AM Monday Evening to Friday Morning

            From 5:00PM Friday to 5:00PM Saturday

            From 5:00PM Saturday to 9:00AM Monday*

            All Federal and Christian Holidays, beginning at 5:00PM the previous business day and concluding at 9:00AM the next business day. Service on Company Holidays is provided at a regular rate when a technician is available.

For a list of our holidays and operating hours, please see our Operating Hours.

Billed according to the time involved. The client picks a specific amount of hours that interCOM will work as their IT Department. Scheduling of hours is dependent on the hours involved.

Project rates are negotiated between interCOM and the clients based on the project and are outlined in a written contract.

Estimates are provided as a courtesy after the initial consultation.

Estimates are not a final project amount. They are provided to give the client a general idea of the hourly cost of labor, and the cost for doing what was discovered in the initial consultation process. If work on a project is going to exceed an estimate, interCOM will inform the client as soon as it becomes aware of the excess cost, in writing, and receive approval from the client to go on with the project after the client has acknowledged in writing an understanding that costs greater than the estimate will be incurred.

Work beyond the estimate total will not be performed until the estimate total has been paid.

Payment for Services

Definition: Service provided to the client at the client's location or other designated non-interCOM location.

Bills for onsite work are presented at the completion of the project.

Payment by check is expected at the time of completion, unless other arrangements have been made prior to the technician's arrival.

Definition: Service provided to the client at at an interCOM facility.

Phone and Email IT Support are billed to existing customers by invoice.

Phone and Email IT Support are purchased by new clients and clients with outstanding balances via PayPal before interCOM performs any service. This is billed in hourly increments ahead of time, and incurs a 3% service fee above the hourly rate.

Definition: Service provided to the client that involves a web presence.

interCOM bills forward, not in arrears. Invoices are emailed on or before the 20th of each month, for the charges a client will incur in the coming month as well as charges incurred since the last invoice, except as outlined herein.

Billing Status

New client invoices are due on receipt, regardless of date they are created.

New Clients who pay on time for three consecutive months will automatically have their invoicing period upgraded to Net 10.

Regular clients in good standing with interCOM are billed on a Net 10 basis.

Billing Definitions

"NET 10“ means the total due on the invoice is due on or before the tenth day following the date of the invoice.

”Due On Receipt“ means the total due on the invoice must be postmarked within 2 calendar days of receipt of the invoice.

Forms of Payment

interCOM accepts check, money order, cashier’s check and major credit cards. Accounts that are considered risky by interCOM may be required to be paid by credit card.

Credit Card payments may be made through our online payment site and according to the procedures and conditions listed there. The site address is: http://payments.intercomcity.net.

Cash payments are accepted for onsite transactions with the appropriate receipt. interCOM is not responsible for any cash payment made for which the client does not receive and retain a signed receipt from the onsite technician, and the client will need to pay for any services for which they have not retained a receipt. interCOM will produce an electronic invoice marked "PAID" within five days of service paid for with cash, for the client to retain as a permanent record.

Pre-Payment

Some accounts may be required to pre-pay for services, based on estimates interCOM provides before service commences. Payments will be required, by credi card or check, at interCOM's discretion, before each new hour of service commences.

Late Payments

Payments are considered late if they are not received electronically or postmarked physically on or before the due date printed on the invoice.

Any service provided by interCOM not paid for on or before the due date may be removed any time after the close of business on that due date.

Late payments by check will be credited seven days after the date the payment clears interCOM’s account. This permits time for the payment to be dishonored by the crediting bank.

Late payments will incur finance and service charges until the payment clears.

A late payment charge of $50.00 is applied to every unpaid invoice.

Finance Charges are applied at the rate of 18% APR, and are charged on the full balance due at the start of each billing cycle on all unpaid balances. Finance charges are not charged on existing finance charges.

Service Charges are applied for the time and resources expended to process the late payment. This includes, but is not limited to: Unscheduled banking processes, unscheduled accounting processes, time and labor. The minimum service charge is $80.00 and our regular hourly rates as listed above will apply.

interCOM does not waste a lot of time on collections. Time is money in this industry, and our paying clients already foot the bill for those who do not pay.

interCOM may notify clients with one or more late notices as a courtesy, but is not obligated to do so.

Any late invoice remaining unpaid thirty days from the due date will be immediately referred to the County Attorney under a "Theft of Services" criminal complaint. interCOM may or may not notify the client of this action.

Any accounts unpaid after the due date are subject to having discounts removed and the total balance immediately due and the theft of these services filed with the County Attorney. Discounts are a courtesy offered based on payment by the due date that we extend in good faith and reserve the right to remove them if that faith is not returned for the services provided. This may subject invoices to being increased by several thousand dollars, all of which will be due before our criminal complaint is dropped.

Our collection policy is stringent, and it works. It is this way because our services are nearly almost always impossible to repossess, and the client benefits from our services immediately while we wait to be compensated, which we take rather personally.

Returned Check Fees

The returned check fee is $50.00. This is in addition to any other charges that may apply as outlined in this policy.

Any service provided by interCOM that is paid for with a dishonored check will be immediately considered in late payment status as outlined above.

Services represented by the return of a dishonored check will be disabled immediately upon receipt of notification from interCOM’s bank that the check has been dishonored.

Checks returned to interCOM will not be deposited again by interCOM. A photocopy of the check will be returned to you along with an invoice from interCOM reflecting the return check fee as well as other service charges as outlined above, including charges for reinstating any disconnected services. The total on that invoice will be due to interCOM via credit card, certified check or money order before the service provided by interCOM is reinstated. A 3% service charge will be added to the balance due if the restitution is made via credit card.

Any account that has presented a dishonored check to interCOM will be placed on a ”Due on Receipt“ status for future invoices, and those balances will be due in certified funds or money order until further notice from interCOM.

In addition to any charges outlined above, interCOM will pursue legal restitution for charges incurred to our financial status with vendors and in other transactions that were dishonored due to a returned client check. This includes but is not limited to downstream charges incurred by employees, contractors, principals and vendors that are directly related to the dishonored check.

interCOM will file any unpaid checks with the County Attorney 5 days after notifying the client of a dishonored check if the client has not made satisfactory arrangements with interCOM for restitution with interCOM. A written agreement concerning these arrangements must be signed by interCOM and the client before it is considered satisfactory. Verbal agreements and email exchanges are not acceptable.

Disputed Invoices

Any invoice questions must be brought to interCOM’s attention via email or phone within five days of receipt of the invoice, or they will be considered valid, and questions about the invoice after that date will not be acceptable reasons for a delay in payment of the invoice.

Discounts

Because there are substantial penalties for not honoring the commitment made when asking for interCOM’s services, there are also substantial discounts for those who honor the commitments they make!

Many discounts are available on an arbitrary basis at interCOM's discretion. We base them on the client’s payment history, the relationship we have with the client, their appreciation for our customer service, their referral record, and their loyalty to us as their provider. interCOM has very strong relationships with all of its clients, and we are proud to reward and acknowledge those relationships through our discounts. Some clients have received up to $1600.00 in services from interCOM, monthly, for as little as $500.00 per month!

Any discounts previously applied will be removed at interCOM's discretion based on the account history.

Discounts are not a client's right.

Taxes

The Internet and IT Services are very dynamic industries, and taxing authorities are still establishing policy and law as to it’s culpability in taxation. interCOM strives to stay on top of the constantly changing local, state, and federal code and we attempt to reflect that in the taxable charges in our invoicing. If a client sees a change in their taxable charges occasionally, it is only because of our research and information leading to that change based on the actions or judgements of the appropriate taxing authority.

While interCOM maintains a strict vigilance on taxing authorities and laws, we cannot guarantee, because of the dynamic nature of our industry, that our charges will accurately reflect current laws.

interCOM reserves the right to charge clients for previously uncharged taxes, and the client agrees to pay these charges within ninety days of notice, should interCOM be required to pay uncollected taxes on charges specific to that client.

interCOM will refund to the client any over collected taxes within ninety days of receiving notification from the appropriate authority that an overcharge occurred.

Taxes are a client's responsibility whether or not stated in a contract, project bid, or estimate. The client must pay any taxes that are due to the appropriate taxing authority, whether or not that tax has been included in any project bids, estimates or contracts with the client.

A Note About Our Fiscal Policy

We fully acknowledge the punitive nature of our fiscal policy when it comes to unpaid invoices and collections. It is not a pleasant policy to read, and it was not a pleasant one to write. We believe, however, that a client should know everything up front regarding their obligations to pay for what they are asking us to perform.

This policy has permitted us to focus on what we are good at doing, which is why we are hired. When interCOM is distracted by the fiscal mismanagement of a few, the entire client base and organization suffers. We are a reasonable small business, and we know things happen. We have been pleased to work with many fine companies, many of which have had an occasional financial hiccup that we have worked through with them, allowing them to avoid any of the punitive remedies outlined in this policy.

This policy allows us to faithfully consider every new client as a good egg, and focus on doing what that client needs without concerning ourselves with whether or not the client is a good risk.

More than one client has told us that they wished that they had the nerve to publish and enforce such a policy and, while we know it probably scares some potential clients away, those are usually the clients we would have had to enact the policy on.

Thank you for regarding this policy as it is meant to be seen: A protection of our clients who, because of this policy, pay less for the quality of service we provide than they would otherwise have to pay.