September 17th, 1996
An Open Letter To Our Customers and Friends:

Earlier today NeoStar filed a voluntary petition to reorganize under Chapter 11 of the United States Bankruptcy Code. We fully anticipate that the effects of this filing will be invisible to both our stores and to our loyal customers. While it is impossible to anticipate every question that you may have, we will be addressing them on our home page as they come up.

Should you have any questions concerning a specific situation, please feel free to contact us at (817) 424-2186.

NeoStar Retail group is the nation's leading chain of consumer software specialty stores. The company employs over 5,000 people and operates 707 stores in the 49 states, the District of Columbia, Puerto Rico, and Canada primarily under the names of Software Etc., and Babbages.

On behalf of all of us at NeoStar, I thank you in advance for your continued patronage and support throughout our recovery period. We will continue to update you as information becomes available.

James B. McCurry
President and Chief Executive Officer