<SUBMISSION>
<ACCESSION-NUMBER>0001193125-07-245446
<TYPE>10-Q
<PUBLIC-DOCUMENT-COUNT>8
<PERIOD>20070930
<FILING-DATE>20071113
<DATE-OF-FILING-DATE-CHANGE>20071113
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>Clearpoint Business Resources, Inc
<CIK>0001298663
<ASSIGNED-SIC>6770
<IRS-NUMBER>000000000
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>10-Q
<ACT>34
<FILE-NUMBER>000-51200
<FILM-NUMBER>071239256
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>1600 MANOR DRIVE
<STREET2>SUITE 110
<CITY>CHALFONT
<STATE>PA
<ZIP>18914
<PHONE>215-569-5693
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>1600 MANOR DRIVE
<STREET2>SUITE 110
<CITY>CHALFONT
<STATE>PA
<ZIP>18914
</MAIL-ADDRESS>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>Terra Nova Acquisition CORP
<DATE-CHANGED>20040727
</FORMER-COMPANY>
</FILER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>d10q.htm
<DESCRIPTION>CLEARPOINT BUSINESS RESOURCES INC--FORM 10-Q
<TEXT>
<HTML><HEAD>
<TITLE>ClearPoint Business Resources Inc--Form 10-Q</TITLE>
</HEAD>
 <BODY BGCOLOR="WHITE">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>

<HR SIZE="3" NOSHADE COLOR="#000000" ALIGN="left"> <P STYLE="margin-top:3px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="5"><B>UNITED STATES </B></FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="5"><B>SECURITIES AND EXCHANGE COMMISSION </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman"
SIZE="3"><B>Washington, D.C. 20549 </B></FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><HR WIDTH="17%" SIZE="1" NOSHADE COLOR="#000000"> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="5"><B>FORM 10-Q </B></FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><HR WIDTH="17%" SIZE="1" NOSHADE COLOR="#000000"> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2"><B>(Mark One) </B></FONT></P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="3"><B><FONT FACE="WINGDINGS">&#120;</FONT><B></B></B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="3"><B>QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 </B></FONT></TD></TR></TABLE> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:5%"><FONT FACE="Times New Roman" SIZE="2"><B>For the quarterly period ended September&nbsp;30, 2007 </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="2"><B>OR </B></FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="3"><B></B></FONT><FONT FACE="WINGDINGS" SIZE="3" COLOR="#000000"><B>&#168;</B></FONT><FONT FACE="Times New Roman" SIZE="3"><B><B></B></B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="3"><B>TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 </B></FONT></TD></TR></TABLE> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:5%"><FONT FACE="Times New Roman" SIZE="2"><B>For the transition period from <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> to
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>Commission file number: 000-51200 </B></FONT></P> <P
STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><HR WIDTH="17%" SIZE="1" NOSHADE COLOR="#000000"> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="6"><B>ClearPoint Business Resources,
Inc. </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>(Exact name of registrant as specified in its charter) </B></FONT></P> <P
STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><HR WIDTH="17%" SIZE="1" NOSHADE COLOR="#000000"> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="50%"></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD WIDTH="48%"></TD></TR>
<TR>
<TD VALIGN="top" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>Delaware</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>98-0434371</B></FONT></TD></TR>
<TR>
<TD VALIGN="top" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>(State or other jurisdiction of</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="1"><B>incorporation or organization)</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>(I.R.S. Employer</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="1"><B>Identification No.)</B></FONT></P></TD></TR>
</TABLE> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>1600 Manor Drive, Suite 110, Chalfont, PA 18914 </B></FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>(Address of principal executive offices) (Zip Code) </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="2"><B>(215) 997-7710 </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>(Registrant&#146;s telephone number, including area code) </B></FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>N/A </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>(Former name, former address
and former fiscal year, if changed since last report) </B></FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><HR WIDTH="17%" SIZE="1" NOSHADE COLOR="#000000"> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Indicate by check mark whether the registrant (1)&nbsp;has filed all reports required to be filed by Section&nbsp;13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)&nbsp;has been subject to such filing requirements for the past 90
days.&nbsp;&nbsp;&nbsp;&nbsp;Yes&nbsp;&nbsp;<FONT FACE="WINGDINGS">&#120;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;No&nbsp;&nbsp;</FONT><FONT FACE="WINGDINGS" SIZE="2" COLOR="#000000">&#168;</FONT><FONT FACE="Times New Roman" SIZE="2"> </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of
&#147;accelerated filer and large accelerated filer&#148; in Rule 12b-2 of the Exchange Act. (Check one): </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">Large accelerated
filer&nbsp;&nbsp;</FONT><FONT FACE="WINGDINGS" SIZE="2" COLOR="#000000">&#168;</FONT><FONT FACE="Times New Roman" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;Accelerated filer&nbsp;&nbsp;</FONT><FONT FACE="WINGDINGS" SIZE="2" COLOR="#000000">&#168;</FONT><FONT
FACE="Times New Roman" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;Non-accelerated filer&nbsp;&nbsp;<FONT FACE="WINGDINGS">&#120;</FONT> </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Indicate by
check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).&nbsp;&nbsp;&nbsp;&nbsp;Yes&nbsp;&nbsp;</FONT><FONT FACE="WINGDINGS" SIZE="2" COLOR="#000000">&#168;</FONT><FONT FACE="Times New Roman"
SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;No&nbsp;&nbsp;<FONT FACE="WINGDINGS">&#120;</FONT> </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Indicate the number of shares outstanding of each of
the issuer&#146;s classes of common stock, as of the latest practicable date: </FONT></P> <P STYLE="font-size:18px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="49%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="50%"></TD></TR>
<TR>
<TD VALIGN="bottom" ALIGN="center"> <P STYLE="margin-left:0px;margin-right:0px;margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>Class</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>Outstanding at November&nbsp;13, 2007</B></FONT></P></TD></TR>
<TR>
<TD VALIGN="top" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>Common Stock</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>13,208,916</B></FONT></TD></TR>
</TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P><HR SIZE="3" NOSHADE COLOR="#000000" ALIGN="left">

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>
<A NAME="toc"></A>CLEARPOINT BUSINESS RESOURCES, INC. </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>TABLE OF CONTENTS </B></FONT></P> <P
STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD WIDTH="84%"></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>Page</B></FONT></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"><FONT FACE="Times New Roman" SIZE="2">
<A HREF="#toc17341_1">PART I&#151;FINANCIAL INFORMATION </A></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">1</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ITEM&nbsp;1.</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">
<A HREF="#toc17341_2">CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</A></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">1</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ITEM&nbsp;2.</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">
<A HREF="#toc17341_3">MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS</A></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">19</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ITEM&nbsp;3.</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">
<A HREF="#toc17341_4">QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK</A></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">30</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ITEM&nbsp;4.</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">
<A HREF="#toc17341_5">CONTROLS AND PROCEDURES</A></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">30</FONT></TD></TR>
<TR>
<TD HEIGHT="8" COLSPAN="3"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"><FONT FACE="Times New Roman" SIZE="2">
<A HREF="#toc17341_6">PART II&#151;OTHER INFORMATION </A></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">31</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ITEM&nbsp;1.</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">
<A HREF="#toc17341_7">LEGAL PROCEEDINGS</A></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">31</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ITEM&nbsp;1A.</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">
<A HREF="#toc17341_8">RISK FACTORS</A></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">32</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ITEM&nbsp;2.</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">
<A HREF="#toc17341_9">UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS</A></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">34</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ITEM&nbsp;3.</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">
<A HREF="#toc17341_10">DEFAULTS UPON SENIOR SECURITIES</A></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">34</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ITEM&nbsp;4.</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">
<A HREF="#toc17341_11">SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS</A></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">34</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ITEM&nbsp;5.</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">
<A HREF="#toc17341_12">OTHER INFORMATION</A></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">34</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ITEM&nbsp;6.</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">
<A HREF="#toc17341_13">EXHIBITS</A></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">34</FONT></TD></TR>
<TR>
<TD HEIGHT="8" COLSPAN="3"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"><FONT FACE="Times New Roman" SIZE="2">
<A HREF="#toc17341_14">SIGNATURES</A></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">35</FONT></TD></TR>
<TR>
<TD HEIGHT="8" COLSPAN="3"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"><FONT FACE="Times New Roman" SIZE="2">
<A HREF="#toc17341_15">EXHIBIT INDEX</A></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">36</FONT></TD></TR>
</TABLE>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>
<A NAME="toc17341_1"></A>PART I&#151;FINANCIAL INFORMATION </B></FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="9%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"><B>
<A NAME="toc17341_2"></A>ITEM&nbsp;1.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2"><B>FINANCIAL STATEMENTS </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>CLEARPOINT BUSINESS
RESOURCES, INC. AND SUBSIDIARIES </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>CONDENSED CONSOLIDATED BALANCE SHEETS </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"
ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>ASSETS </B></FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="80%"></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD>
<TD></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>September&nbsp;30,<BR>2007</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>December&nbsp;31,<BR>2006</B></FONT></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>(Unaudited)</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>(Audited)</B></FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2"><B>CURRENT ASSETS</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Cash and cash equivalents</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">1,858,627</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">499,654</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Accounts receivable, net of allowance for doubtful accounts of $686,000 and $405,000 at September&nbsp;30, 2007 and December&nbsp;31, 2006,
respectively</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">20,878,354</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">11,198,359</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Unbilled revenue</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">2,838,265</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">2,055,511</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Prepaid expenses and other current assets</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">3,713,038</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">1,584,670</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Deferred income taxes</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">2,702,062</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">157,950</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:5.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2"><B>TOTAL CURRENT ASSETS</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">31,990,346</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">15,496,144</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2"><B>EQUIPMENT, FURNITURE AND FIXTURES, net</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">1,511,813</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">650,568</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2"><B>INTANGIBLE ASSETS, net</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">6,469,203</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">2,455,452</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2"><B>GOODWILL</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">16,821,586</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">255,586</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2"><B>DEFERRED INCOME TAXES, net of current portion</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">1,451,447</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">570,795</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2"><B>DEFERRED FINANCING COSTS, net</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">113,989</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">399,463</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2"><B>OTHER ASSETS</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">4,072,502</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">2,424,950</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2"><B>TOTAL ASSETS</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">62,430,886</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">22,252,958</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD></TR>
</TABLE> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">The accompanying notes are an integral part of these condensed consolidated financial statements.
</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">1 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>CLEARPOINT BUSINESS RESOURCES, INC. AND SUBSIDIARIES </B></FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>CONDENSED CONSOLIDATED BALANCE SHEETS </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman"
SIZE="2"><B>LIABILITIES AND STOCKHOLDERS&#146; EQUITY (DEFICIT) </B></FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="80%"></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD>
<TD></TD>
<TD></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>September&nbsp;30,<BR>2007</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>December&nbsp;31,<BR>2006</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>(Unaudited)</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>(Audited)</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2"><B>CURRENT LIABILITIES</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Current portion of long-term debt</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">1,000,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Current portion of notes payable other</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">1,949,458</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">450,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Accounts payable</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">3,407,583</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">1,719,696</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Accrued expenses and other current liabilities</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">6,411,564</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">2,064,379</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Accrued payroll and related taxes</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">5,535,323</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">2,124,008</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Retirement benefit payable</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">77,257</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">68,065</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Current portion of accrued restructuring costs</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">203,766</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:5.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2"><B>TOTAL CURRENT LIABILITIES</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">18,584,951</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">6,426,148</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2"><B>REVOLVING CREDIT FACILITY</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">14,821,143</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2"><B>ACCRUED RESTRUCTURING COSTS, net of current</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">1,249,020</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2"><B>LONG-TERM DEBT, net of current</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">4,823,333</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">13,755,255</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2"><B>NOTES PAYABLE OTHER, net of current</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">523,533</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2"><B>NOTES PAYABLE-STOCKHOLDERS</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">550,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">1,210,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2"><B>LIABILITY FOR WARRANTS ISSUED</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">3,291,775</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2"><B>RETIREMENT BENEFIT PAYABLE, net of current</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">268,281</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">283,911</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2"><B>TOTAL LIABILITIES</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">40,820,261</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">24,967,089</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2"><B>Commitments and contingencies</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2"><B>STOCKHOLDERS&#146; EQUITY (DEFICIT)</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Preferred stock, $.0001 par value, Authorized 1,000,000 shares; none issued</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Common stock, $.0001 par value (September 30, 2007: 60,000,000 shares authorized, 13,208,916 shares issued and outstanding. December&nbsp;31,
2006: 30,000,000 shares authorized, 6,051,549 shares issued and outstanding)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">1,321</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">605</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Paid-in capital</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">31,313,354</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">599,461</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Accumulated deficit</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(9,704,050</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(3,314,197</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:5.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2"><B>TOTAL STOCKHOLDERS&#146; EQUITY (DEFICIT)</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">21,610,625</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(2,714,131</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2"><B>TOTAL LIABILITIES AND STOCKHOLDERS&#146; EQUITY (DEFICIT)</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">62,430,886</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">22,252,958</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
</TABLE> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">The accompanying notes are an integral part of these condensed consolidated financial statements.
</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">2 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>CLEARPOINT BUSINESS RESOURCES, INC. AND SUBSIDIARIES </B></FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman"
SIZE="2"><B>(UNAUDITED) </B></FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="59%"></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD>
<TD></TD>
<TD></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="6" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>For the three months ended<BR>September&nbsp;30,</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="6" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>For the nine months ended<BR>September&nbsp;30,</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>2007</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>2006</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>2007</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>2006</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2"><B>REVENUES</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">52,426,731</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">29,260,836</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">139,669,803</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">84,800,237</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2"><B>COST OF SERVICES</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">46,547,818</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">24,199,382</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">120,014,617</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">69,993,006</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2"><B>GROSS PROFIT</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">5,878,913</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">5,061,454</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">19,655,186</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">14,807,231</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2"><B>SELLING, GENERAL AND ADMINISTRATIVE EXPENSES</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">4,718,843</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">3,059,860</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">19,909,699</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">10,088,857</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2"><B>RESTRUCTURING (INCOME) EXPENSE</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(650,884</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">2,201,116</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2"><B>DEPRECIATION AND AMORTIZATION EXPENSE</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">1,400,523</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">479,458</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">3,926,446</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">2,010,231</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2"><B>INCOME (LOSS) FROM OPERATIONS</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">410,431</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">1,522,136</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(6,382,075</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">2,708,143</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2"><B>OTHER INCOME (EXPENSE)</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Other income</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">6,124</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">654,385</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">23,369</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Interest (expense)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(529,015</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(754,064</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(1,626,828</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(2,547,651</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Interest income (expense) on warrant liability</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">64,069</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(50,655</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Other (expense)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(438,526</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(20,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Prepayment penalty on early retirement of debt</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(1,949,928</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:5.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2"><B>TOTAL OTHER INCOME (EXPENSE)</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(529,015</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(683,871</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(3,360,897</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(2,594,937</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2"><B>INCOME (LOSS ) BEFORE INCOME TAX EXPENSE (BENEFIT)</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(118,584</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">838,265</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(9,742,972</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">113,206</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2"><B>INCOME TAX EXPENSE (BENEFIT)</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">39,620</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">491,235</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(3,353,119</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">525,203</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2"><B>NET INCOME (LOSS)</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(158,204</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">347,030</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(6,389,853</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(411,997</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2"><B>INCOME (LOSS) PER COMMON SHARE</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2"><B>Basic and Diluted</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(.01</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">.06</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(.53</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(.07</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2"><B>WEIGHTED AVERAGE COMMON SHARES OUTSTANDING</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2"><B>Basic and Diluted</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">13,208,916</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">6,051,549</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">12,090,189</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">6,051,549</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
</TABLE> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">The accompanying notes are an integral part of these condensed consolidated financial statements.
</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">3 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>CLEARPOINT BUSINESS RESOURCES, INC. AND SUBSIDIARIES </B></FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS&#146; EQUITY (DEFICIT) </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"
ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>(UNAUDITED) </B></FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="54%"></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD>
<TD></TD>
<TD></TD></TR>
<TR>
<TD ROWSPAN="2" VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="5" STYLE="border-bottom:1px solid #000000"> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P
STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>Common Stock</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ROWSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>Paid in<BR>Capital</B></FONT></P></TD>
<TD VALIGN="bottom" ROWSPAN="2"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ROWSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>Accumulated<BR>Deficit</B></FONT></P></TD>
<TD VALIGN="bottom" ROWSPAN="2"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ROWSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT FACE="Times New Roman"
SIZE="1"><B>Total<BR>Stockholders&#146;<BR>Equity&nbsp;(Deficit)</B></FONT></P></TD>
<TD VALIGN="bottom" ROWSPAN="2"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>Shares</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>Amount</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Balance as of December&nbsp;31, 2006</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">6,051,549</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">605</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">599,461</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(3,314,197</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(2,714,131</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Issuance of common stock in connection with reverse acquisition of Terra Nova Acquisition Corp, net of acquisition costs</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">6,720,000</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">672</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">27,256,857</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">27,257,529</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Shares converted on vote against merger</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">(2,000</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(11,076</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(11,076</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Issuance of common stock in connection with the acquisition of certain assets and liabilities of ALS, LLC</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">439,367</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">44</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">2,499,956</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">2,500,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Issuance of stock options</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">968,156</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">968,156</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Net loss</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(6,389,853</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(6,389,853</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Balance as of September&nbsp;30, 2007</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">13,208,916</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">1,321</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">31,313,354</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(9,704,050</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">21,610,625</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
</TABLE> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">The accompanying notes are an integral part of these condensed consolidated financial statements.
</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">4 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>CLEARPOINT BUSINESS RESOURCES, INC. AND SUBSIDIARIES </B></FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman"
SIZE="2"><B>(UNAUDITED) </B></FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="80%"></TD>
<TD VALIGN="bottom" WIDTH="3%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="3%"></TD>
<TD></TD>
<TD></TD>
<TD></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="6" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>For the nine months ended<BR>September&nbsp;30,</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>2007</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>2006</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2"><B>CASH FLOWS FROM OPERATING ACTIVITIES</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Net (loss)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(6,389,853</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(411,997</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Adjustments to reconcile net (loss) to net cash (used in) provided by operating activities:</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Deferred income tax (benefit)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(3,424,764</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(327,298</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Depreciation and amortization</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">3,926,446</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">2,010,231</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Provision for (reduction in) allowance for doubtful accounts</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">280,891</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(57,685</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Stock based compensation</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">968,156</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Interest on warrant liability</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">50,665</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Amortization of discount on note payable</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">97,942</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Changes in operating assets and liabilities:</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">(Increase) decrease in accounts receivable</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(9,960,886</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">645,944</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">(Increase) decrease in unbilled revenue</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(782,754</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(551,422</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">(Increase) in prepaid expenses and other current assets</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(2,128,367</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(958,961</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">(Increase) in other assets</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(1,647,550</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(582,353</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Increase (decrease) in accounts payable</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">1,301,887</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(330,476</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Increase in accrued expense and other accrued liabilities</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">4,347,180</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">1,323,860</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Increase in accrued payroll and related taxes</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">3,411,315</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">42,689</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Increase in accrued restructuring costs</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">1,452,787</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">(Decrease) in retirement benefits due</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(6,438</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(56,353</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:5.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Total adjustments to net (loss)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(2,262,097</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">1,306,783</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:7.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Net cash (used in) provided by operating activities</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(8,651,950</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">894,786</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2"><B>CASH FLOWS FROM INVESTING ACTIVITIES</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Purchase of equipment, furniture and fixtures</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(554,462</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(145,621</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Acquisition of business</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(19,000,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(232,936</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:5.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Net cash (used in) investing activities</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(19,554,462</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(378,557</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2"><B>CASH FLOWS FROM FINANCING ACTIVITIES</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Proceeds from issuance of common stock in merger, net of acquisition costs</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">27,257,529</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">(Repayments) of long term debt &#150; Bridge</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(12,465,255</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Net borrowings (repayments) on revolving credit facility</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">14,821,143</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(631,290</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Borrowings from long term debt &#150; M&amp;T</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">5,000,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">(Repayments) of long term debt &#150; M&amp;T</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(466,667</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Principal (repayments) on notes payable stockholder</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(660,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Principal (repayments) on notes payable other</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(477,009</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Retirement of warranty liability</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(3,291,775</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Shares converted on vote against merger</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(11,076</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Fees incurred in refinancing</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(141,505</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(100,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Contributions of capital by principal stockholders</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">593,900</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:5.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Net cash (used in ) provided by financing activities</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">29,565,385</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(137,390</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:7.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Net increase in cash and cash equivalents</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">1,358,973</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">378,829</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2"><B>CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">499,654</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">58,891</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2"><B>CASH AND CASH EQUIVALENTS AT END OF PERIOD</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">1,858,627</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">437,720</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
</TABLE> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">The accompanying notes are an integral part of these condensed consolidated financial statements.
</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">5 </FONT></P>


<p Style='page-break-before:always'>
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<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>CLEARPOINT BUSINESS RESOURCES, INC. AND SUBSIDIARIES </B></FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman"
SIZE="2"><B>(UNAUDITED) </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>(CONTINUED) </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="82%"></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD>
<TD></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="5" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>For the nine months ended<BR>September&nbsp;30,</B></FONT></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>2007</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>2006</B></FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Cash paid during the period for:</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Interest</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">1,472,225</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">2,513,178</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Income taxes</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">1,109,514</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">343,557</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD></TR>
</TABLE> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>SUPPLEMENTAL SCHEDULE OF NON-CASH, INVESTING AND FINANCING ACTIVITIES: </B></FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">On February&nbsp;23, 2007, the Company acquired certain assets and liabilities of ALS, LLC for $19,000,000 in cash, a note payable of $2,500,000, shares of common stock
with a value of $2,500,000 and the assumption of $0.4 million of current liabilities. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">On August&nbsp;14, 2006, the Company acquired 100% of the common
stock of Staffbridge, Inc. (&#147;Staffbridge&#148;) for $233,500 in cash and a note payable of $450,000 which is due December&nbsp;31, 2007. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman"
SIZE="2">The accompanying notes are an integral part of these condensed consolidated financial statements. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">6 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>CLEARPOINT BUSINESS RESOURCES, INC. AND SUBSIDIARIES </B></FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="2"><B>NOTE 1 &#150; ORGANIZATION AND BASIS OF PRESENTATION: </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The accompanying unaudited interim condensed consolidated financial
statements of ClearPoint Business Resources, Inc. (&#147;ClearPoint&#148; or the &#147;Company&#148;) and its wholly owned subsidiaries as of September 30, 2007 and 2006 were prepared in accordance with accounting principles generally accepted in
the United States of America and the interim financial statement rules and regulations of the Securities and Exchange Commission (&#147;SEC&#148;). In the opinion of management, these statements include all adjustments (consisting only of normal
recurring adjustments) necessary for a fair presentation of the condensed consolidated financial statements. The interim operating results are not necessarily indicative of the results for a full year or any interim period. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally
accepted in the United States have been condensed or omitted pursuant to such rules and regulations relating to interim financial statements. The condensed consolidated financial statements included in this Report on Form 10-Q should be read in
conjunction with management&#146;s discussion and analysis of financial condition and results of operations (&#147;MD&amp;A&#148;) included elsewhere in this Report on Form 10-Q and the Company&#146;s annual audited consolidated financial statements
and notes thereto and the MD&amp;A included in the Form 8-K filed on April&nbsp;5, 2007 with the SEC. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">ClearPoint provides comprehensive
workforce management solutions throughout the United States, including outsourcing placement and recruiting services, vendor management services (&#147;VMS&#148;) and staff augmentation programs. Since its inception, the Company has enhanced its
platform through organic growth and the integration of acquisitions. The Company derives its revenues from fees for professional services as well as from franchise fees generated from its recently implemented franchise network. Strategically, all
core operations, including recruiting, credentialing, compliance, payroll, benefits administration and risk management, are centralized at its offices in Chalfont, Pennsylvania and Maitland, Florida. </FONT></P> <P
STYLE="margin-top:18px;margin-bottom:0px; margin-left:4%"><FONT FACE="Times New Roman" SIZE="2"><B><I>Terra Nova Acquisition Corporation (&#147;Terra Nova&#148;) Merger and Accounting Treatment: </I></B></FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Terra Nova Acquisition Corporation (&#147;Terra Nova&#148;), incorporated in Delaware, was a blank check company formed on July&nbsp;21, 2004 to effect a
merger, capital stock exchange, asset acquisition or other similar business combination with an operating business. On April&nbsp;22, 2005, Terra Nova consummated an Initial Public Offering (&#147;Offering&#148;) of 4,800,000 units
(&#147;Units&#148;) with each Unit consisting of one share of Terra Nova&#146;s common stock, $.0001 par value, and two redeemable common stock purchase warrants (&#147;Warrants&#148;) as described in Note 14. On April&nbsp;26, 2005, Terra Nova
consummated the closing of an additional 720,000 Units which were subject to the over-allotment option. The units were sold at an offering price of $6.00 per Unit, generating total gross proceeds of $33,120,000. After deducting the underwriting
discounts and commissions and the offering expenses, the total net proceeds to Terra Nova from the Offering were approximately $29,556,400, of which $28,648,800 was deposited into a trust fund (&#147;Trust Fund&#148;). </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">On February&nbsp;12, 2007, ClearPoint consummated a merger (the &#147;Merger&#148;) with Terra Nova. As a result, CPBR Acquisition, Inc.
(&#147;CPBR&#148;), a Delaware corporation and wholly-owned subsidiary of Terra Nova, merged with ClearPoint. The parties to the Merger included Terra Nova, ClearPoint, CPBR and all of ClearPoint&#146;s stockholders. At the closing of the Merger,
the ClearPoint stockholders were issued an aggregate of 6,051,549 shares of Terra Nova common stock. Ten percent (10%)&nbsp;of the Terra Nova common stock being issued to the ClearPoint stockholders at the time of the Merger was placed into escrow
to secure the indemnity rights of Terra Nova under the Merger agreement and are governed by the </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">7 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px">
<FONT FACE="Times New Roman" SIZE="2">terms of an escrow agreement. A further ten percent (10%)&nbsp;of the Terra Nova common stock being issued to the ClearPoint stockholders at the time of the
Merger was placed into escrow to be released upon finalization of certain closing conditions pursuant to the Merger agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The Merger
agreement also provides for ClearPoint&#146;s original stockholders to receive additional performance payments, in the form of cash and/or shares, contingent upon the future performance of the combined company&#146;s share price. Upon the Closing,
Terra Nova changed its name to ClearPoint Business Resources, Inc. and is hereinafter referred to as the &#147;Company&#148;. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Upon
consummation of the Merger, $30.6 million was released from the Trust Fund to be used by the combined company. After payments totaling approximately $3.3 million for professional fees and other direct and indirect costs related to the Merger, the
net proceeds amounted to $27.3 million, all of which were used by ClearPoint as follows: (i) to retire the outstanding debt to Bridge, as defined below, of $12,453, (ii) to pay an early debt retirement penalty in the amount of $1,950 to Bridge,
(iii) to pay the redemption of warrants related to its credit facility with Bridge in the amount of $3,292, and (iv) to fund the acquisition of ASG, as defined below, and certain other related transaction costs. The Merger was accounted for under
the purchase method of accounting as a reverse acquisition in accordance with accounting principles generally accepted in the United States of America for accounting and financial reporting purposes. Under this method of accounting, Terra Nova was
treated as the &#147;acquired&#148; company for financial reporting purposes. In accordance with guidance applicable to these circumstances, this Merger was considered to be a capital transaction in substance. Accordingly, for accounting purposes,
the Merger was treated as the equivalent of ClearPoint issuing stock for the net monetary assets of Terra Nova, accompanied by a recapitalization. All historical share and per share amounts have been retroactively adjusted to give effect to the
reverse acquisition of ClearPoint and related recapitalization. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>NOTE 2 &#150; SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: </B></FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant
inter-company transactions and balances have been eliminated. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The Company&#146;s accounting policies are in accordance with accounting
principles generally accepted in the United States of America. The accounting policies followed by the Company are set forth in Note 2 to the Company&#146;s 2006 audited consolidated financial statements included in the Form 8-K filed on
April&nbsp;5, 2007 with the SEC. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">During the three months ended September&nbsp;30, 2007, the Company entered into two franchise agreements
whereby approximately 40 branch locations owned by the Company were converted into franchise operations. Under the terms of the franchise agreements, the Company provides billing and certain administrative services and provides temporary personnel
to the franchisee. In exchange, the Company is reimbursed for the use of its temporary personnel and receives a franchise fee based upon the gross billings of the franchisee and other performance metrics. Franchise fees, which are included in
revenues, were approximately $0.96 million for the three months ended September&nbsp;30, 2007. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px; margin-left:4%"><FONT FACE="Times New Roman" SIZE="2"><B><I>Earnings (Loss) Per Share: </I></B>
</FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Basic earnings per share is calculated by dividing income (loss) available to common shareholders by the weighted average number of shares
of common stock outstanding during the period. Diluted earnings per share is calculated by dividing income (loss) available to common shareholders by the weighted average number of common shares outstanding for the period adjusted to reflect
potentially dilutive securities. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">In accordance with SFAS 128, stock options and warrants outstanding at September&nbsp;30, 2007 to
purchase 11,856,000 shares of common stock were not included in the computation of diluted earnings per share as they were antidilutive. The stock options and warrants did not exist at September&nbsp;30, 2006. </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">8 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4%"><FONT FACE="Times New Roman" SIZE="2"><B><I>Recent Accounting Pronouncements: </I></B></FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">In July 2006, FASB issued FASB Interpretation No.&nbsp;48 (&#147;FIN 48&#148;), &#147;Accounting for Uncertainty in Income Taxes&#148;. FIN 48 clarifies
the accounting for uncertainty in income taxes recognized in an enterprise&#146;s financial statements in accordance with SFAS No.&nbsp;109, &#147;Accounting for Income Taxes&#148;. FIN 48 prescribes a recognition threshold and measurement
attributable for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim
periods, disclosures and transitions. FIN 48 is effective for fiscal years beginning after December&nbsp;15, 2006. The Company has adopted FIN 48 and believes that there is no material impact on the Company&#146;s consolidated financial statements.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">In September 2006, FASB issued SFAS No.&nbsp;157, &#147;Fair Value Measurements&#148;. SFAS No.&nbsp;157 provides enhanced guidance for
using fair value to measure assets and liabilities. SFAS No.&nbsp;157 applies whenever other standards require (or permit) assets or liabilities to be measured at fair value. SFAS No.&nbsp;157 does not expand the use of fair value in any new
circumstances. SFAS No.&nbsp;157 is effective for financial statements issued for fiscal years beginning after November&nbsp;15, 2007, and interim periods within those fiscal years. Earlier application is encouraged, provided that the reporting
entity has not yet issued financial statements for that fiscal year, including financial statements for an interim period within that fiscal year. The Company will adopt SFAS No.&nbsp;157 effective for periods beginning January&nbsp;1, 2008. The
Company is currently evaluating the impact, if any, that the adoption of SFAS No.&nbsp;157 will have on its consolidated financial statements. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman"
SIZE="2">In February 2007, the FASB issued SFAS No. 159, &#147;The Fair Value Option for Financial Assets and Financial Liabilities&#148; (&#147;SFAS No. 159&#148;). SFAS No. 159 permits entities to choose to measure, on an item-by-item basis,
specified financial instruments and certain other items at fair value. Unrealized gains and losses on items for which the fair value option has been elected are required to be reported in earnings at each reporting date. SFAS No. 159 is effective
for fiscal years beginning after November 15, 2007, the provisions of which are required to be applied prospectively. The Company expects to adopt SFAS No. 159 in the first quarter of Fiscal 2008 and is still evaluating the effect, if any, on its
financial position or results of operations. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>NOTE 3 &#150; BUSINESS AND ASSET ACQUISITIONS: </B></FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">On February&nbsp;23, 2007, the Company acquired certain assets and liabilities of ALS, LLC and its subsidiaries, doing business as Advantage Services
Group (&#147;ASG&#148;) based in Florida that expanded the Company&#146;s operations to clients in California and Florida. The purchase price of $24.4 million consisted of cash of $19 million, a note of $2.5 million, shares of the Company&#146;s
common stock with a value of $2.5 million (439,367 shares) and the assumption of $0.4 million of current liabilities. ASG&#146;s stockholders may also receive up to two additional $1 million payments in shares of the Company&#146;s common stock
based on financial and integration performance metrics of the Company in calendar years 2007 and 2008. The Company has allocated the purchase price to the assets acquired and the liabilities assumed at their estimated values as of the acquisition
date as stated below. There have been no changes in circumstances that would indicate a change in the carrying amount recoverable. </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="92%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="88%"></TD>
<TD VALIGN="bottom" WIDTH="4%"></TD>
<TD></TD>
<TD></TD>
<TD></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Equipment, furniture and fixtures</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2"> 630,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Contract rights</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">7,190,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Goodwill</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">16,566,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">24,386,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Liabilities assumed</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(386,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Net assets acquired</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">24,000,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
</TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">On August&nbsp;14, 2006, the Company acquired 100% of the common stock of StaffBridge, Inc. for
$233,000 in cash and a note payable of $450,000. The acquisition provides the Company the ability to further develop its VMS service line due to the acquisition of the underlying software that the Company was already utilizing to service its
clients. The results of operations have been included in the condensed consolidated statement of operations beginning from August&nbsp;14, 2006, the date of acquisition. The Company has allocated the purchase price to the assets acquired and the
liabilities assumed at their estimated values as of the acquisition date as stated below. There have been no changes in circumstances that would indicate a change in the carrying amount recoverable. </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">9 </FONT></P>


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<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="92%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="90%"></TD>
<TD VALIGN="bottom" WIDTH="4%"></TD>
<TD></TD>
<TD></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Cash</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2"> 64</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Equipment, furniture and fixtures</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">77,350</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Computer software</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">100,000</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Goodwill</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">255,586</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Covenant not to compete</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">250,000</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">683,000</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD></TR>
</TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The following unaudited pro forma information presents a summary of condensed consolidated
financial results of the operations of the Company and ASG as if the acquisition had occurred on January&nbsp;1, 2006, the beginning of the earliest period presented. StaffBridge has not been included in the pro forma financial information for
periods prior to its acquisition due to its immaterial impact on revenue and net income (loss). The unaudited pro forma amounts below reflect interest on the debt incurred as a result of the acquisition of ASG, with interest calculated at the
Company&#146;s borrowing rate under its credit facilities. The unaudited pro forma financial information in the schedule below does not purport to be indicative of the results of operations that would have occurred had the acquisition taken place at
the beginning of the periods presented or of future results of operations. </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="92%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="74%"></TD>
<TD VALIGN="bottom" WIDTH="4%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="4%"></TD>
<TD></TD>
<TD></TD>
<TD></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="6" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>For the nine months ended<BR>September&nbsp;30,</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>2007</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>2006</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>(unaudited)</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>(unaudited)</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Revenue</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">152,126,255</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">161,815,758</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Net (loss)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(6,636,446</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(345,904</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Loss per common share</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">( .55 </FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">( .06 </FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
</TABLE> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>NOTE 4 &#150; PREPAID EXPENSES AND OTHER CURRENT ASSETS: </B></FONT></P> <P
STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="92%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="76%"></TD>
<TD VALIGN="bottom" WIDTH="4%"></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="4%"></TD>
<TD></TD>
<TD></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>September&nbsp;30,<BR>2007</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>December&nbsp;31,<BR>2006</B></FONT></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>(unaudited)</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>(audited)</B></FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Prepaid insurance</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">3,053,820</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">1,063,280</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Other current assets</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">659,218</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">521,390</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">3,713,038</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">1,584,670</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD></TR>
</TABLE> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>NOTE 5 &#150; EQUIPMENT, FURNITURE AND FIXTURES: </B></FONT></P> <P
STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="92%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="77%"></TD>
<TD VALIGN="bottom" WIDTH="5%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="5%"></TD>
<TD></TD>
<TD></TD>
<TD></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>September&nbsp;30,<BR>2007</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>December&nbsp;31,<BR>2006</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>(unaudited)</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>(audited)</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Furniture and fixtures</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">860,086</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">730,656</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Computer software and equipment</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">1,301,860</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">272,188</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Leasehold improvements</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">43,362</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">18,002</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">2,205,308</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">1,020,846</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Less, accumulated depreciation</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(693,495</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(370,278</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Equipment, furniture and fixtures, net</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">1,511,813</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">650,568</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
</TABLE> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Depreciation expense for the nine months ended September&nbsp;30, 2007 and 2006 was $323,217, and $142,182,
respectively. Depreciation expense for the three months ended September&nbsp;30, 2007 and 2006 was $129,429 and $42,013, respectively. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">10 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>NOTE 6 &#150; INTANGIBLE ASSETS: </B></FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="92%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="77%"></TD>
<TD VALIGN="bottom" WIDTH="4%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="4%"></TD>
<TD></TD>
<TD></TD>
<TD></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>September&nbsp;30,<BR>2007</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>December&nbsp;31,<BR>2006</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>(unaudited)</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>(audited)</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Contract rights</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">11,351,300</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">6,679,726</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Covenant not to compete</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">250,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">250,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">11,601,300</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">6,929,726</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Less, accumulated amortization</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(5,132,097</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(4,474,274</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">6,469,203</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">2,455,452</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
</TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">All contract rights are amortized over their estimated asset lives of two (2)&nbsp;to three
(3)&nbsp;years. The covenant not to compete is amortized over its five (5)&nbsp;year life. Amortization expense of intangible assets for the nine months ended September&nbsp;30, 2007 and 2006 was $3,176,250 and $1,578,711, respectively. Amortization
expense for the three months ended September&nbsp;30, 2007 and 2006 was $1,259,300 and $346,376, respectively. Amortization expense expected to be incurred for the remainder of fiscal year ending December&nbsp;31, 2007 is $1,256,850. Amortization
expense for the fiscal years ending December&nbsp;31, 2008, 2009, 2010 and 2011 is $4,480,220, $648,800, $50,000 and $33,332, respectively. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>NOTE 7
&#150; OTHER ASSETS: </B></FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="92%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="76%"></TD>
<TD VALIGN="bottom" WIDTH="4%"></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="4%"></TD>
<TD></TD>
<TD></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>September&nbsp;30,<BR>2007</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>December&nbsp;31,<BR>2006</B></FONT></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>(unaudited)</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>(audited)</B></FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Refundable insurance premium</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">3,173,991</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">1,620,557</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Security deposits and other assets</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">898,511</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">804,393</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">4,072,502</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">2,424,950</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD></TR>
</TABLE> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>NOTE 8 &#150; ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES: </B></FONT></P> <P
STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="92%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="76%"></TD>
<TD VALIGN="bottom" WIDTH="4%"></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="4%"></TD>
<TD></TD>
<TD></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>September&nbsp;30,<BR>2007</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>December&nbsp;31,<BR>2006</B></FONT></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>(unaudited)</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>(audited)</B></FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Insurance premiums payable</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">2,418,641</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">185,990</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Customer deposits</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">2,626,309</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">304,575</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Income taxes payable</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">1,032,866</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Accrued expenses and other current liabilities</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">1,366,614</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">540,948</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">6,411,564</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">2,064,379</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD></TR>
</TABLE> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>NOTE 9 &#150; ACCRUED RESTRUCTURING COSTS: </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2">Effective June&nbsp;29, 2007, the Company initiated a restructuring program of its field and administrative operations. As part of the restructuring program, the Company closed 24 branch and administrative offices and
eliminated approximately 75 positions. The Company recorded $1,902,000 of restructuring charges for costs of severance, related benefits and outplacement services related to the termination of these employees and $950,000 of charges relating to the
early termination of office spaces leases for a total of $2,852,000. These expenses were present valued and accrued on a one time basis and will be paid out over a three year period. During the three months ended September&nbsp;30, 2007, the Company
paid out $748,330 and recognized a reduction in accrued restructuring costs of $650,884 due to severance and related benefits which the Company is no longer liable for since one of the Company&#146;s franchisees hired the former employees to whom
severance was expected to be paid out, and these former employees waived their right to receive severance. The Company has calculated the restructuring costs as follows: </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;
</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">11 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>


<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="92%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="88%"></TD>
<TD VALIGN="bottom" WIDTH="5%"></TD>
<TD></TD>
<TD></TD>
<TD></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>September&nbsp;30,<BR>2007</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>(unaudited)</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Accrued restructuring costs at inception</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">2,852,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Payments</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(748,330</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Reductions in costs previously accrued</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(650,884</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Total accrued restructuring costs</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">1,452,786</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Less: current portion</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(203,766</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Total accrued restructuring costs &#150; long-term</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">1,249,020</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
</TABLE> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>NOTE 10 &#150; REVOLVING CREDIT FACILITY </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2">Effective February&nbsp;23, 2007, the Company entered into a $20 million revolving credit facility (the &#147;Revolver&#148;) with Manufacturers and Traders Trust Company (&#147;M&amp;T&#148;) which is not payable
until February&nbsp;23, 2010. The Company may borrow up to the sum of 85% of eligible accounts receivable as defined in the credit agreement and 65% of unbilled revenue. Interest is payable monthly at variable rates for each drawdown based on either
LIBOR + 1.5% or at the lender&#146;s Prime rate. As of September&nbsp;30, 2007, the balance on the Revolver was $14,821,143. As of September&nbsp;30, 2007, the weighted average interest rate for amounts drawn on the Revolver was 7.68%. The Company
paid closing fees of $141,505 related to the M&amp;T Revolver and M&amp;T term loan (the &#147;Term Loan&#148;) (see Note 12 for a description of the M&amp;T Term Loan). The M&amp;T Revolver is collateralized by a first priority lien on all assets
and is cross-collateralized and cross-guaranteed with the M&amp;T Term Loan. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>NOTE 11 &#150; NOTES PAYABLE: </B></FONT></P> <P
STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="92%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="76%"></TD>
<TD VALIGN="bottom" WIDTH="5%"></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="5%"></TD>
<TD></TD>
<TD></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>September&nbsp;30,<BR>2007</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>December&nbsp;31,<BR>2006</B></FONT></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>(unaudited)</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>(audited)</B></FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2"><B><U>NOTES PAYABLE STOCKHOLDERS</U></B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Subordinated note payable to Optos Capital, LLC, a stockholder with interest payable at 9% and was due July&nbsp;1, 2005. The note payable is
subordinated to the M&amp;T Revolver and Term Loan, and was due February&nbsp;28, 2008</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">250,000</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Subordinated note payable to Optos Capital, LLC, a stockholder, with interest payable at 12%. The note payable is subordinated to the M&amp;T
Revolver and Term Loan, and was due March&nbsp;1, 2008</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">300,000</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="3"></TD>
<TD HEIGHT="8" COLSPAN="3"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Subordinated notes payable to various stockholders due March, 2008. The notes have an interest rate of 12% and are subordinated to the M&amp;T
Revolver and Term Loan</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">550,000</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">660,000</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Total notes payable-stockholders</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">550,000</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">1,210,000</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD></TR>
</TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The above notes payable are classified as long-term based on their subordination to the M&amp;T
Revolver and Term Loan. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">12 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>


<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="92%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="76%"></TD>
<TD VALIGN="bottom" WIDTH="7%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="7%"></TD>
<TD></TD>
<TD></TD>
<TD></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>September&nbsp;30,<BR>2007</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>December&nbsp;31,<BR>2006</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>(unaudited)</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>(audited)</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2"><B><U>NOTES PAYABLE &#150; OTHER</U></B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Notes payable to former owners of ASG for the purchase of certain assets and liabilities of ALS, LLC, dated February&nbsp;23, 2007, which
mature on October&nbsp;23, 2008. Principal and interest payments of $398,392 are payable on a quarterly basis at an interest rate of 7%.</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">2,022,991</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Note payable to unrelated individuals for purchase of the common stock of StaffBridge, Inc. dated August&nbsp;14, 2006 and is due and payable
December&nbsp;31, 2007. Interest is calculated at 6%&nbsp;per annum.</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">450,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">450,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">2,472,991</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">450,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Less: current portion</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(1,949,458</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(450,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Total notes payable &#150; long-term</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">523,533</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
</TABLE> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>NOTE 12 &#150; LONG-TERM DEBT: </B></FONT></P> <P
STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="92%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="76%"></TD>
<TD VALIGN="bottom" WIDTH="4%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="4%"></TD>
<TD></TD>
<TD></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>September&nbsp;30,<BR>2007</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>December&nbsp;31,<BR>2006</B></FONT></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>(unaudited)</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>(audited)</B></FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">M&amp;T Term Loan&#151;$5,000,000 with a maturity date of February&nbsp;23, 2012. Principal payments of $83,333, plus interest are payable
monthly at LIBOR + 1.5% (8.125% at September&nbsp;30, 2007). The M&amp;T Term Loan is collateralized by a first priority lien on all assets and is cross-collateralized and cross-guaranteed with the M&amp;T Revolver. (See Note 10).</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">4,533,333</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Subordinated note payable to Blue Lake Rancheria due March&nbsp;31, 2008. Interest of 6%&nbsp;per annum is payable quarterly. This note has
been guaranteed by one of the principal stockholders of the Company and is classified as long-term based on its subordination to the M&amp;T Revolver and Term Loan.</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">1,290,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">1,290,000</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Bridge Healthcare Finance (&#147;Bridge&#148;) &#150; Under a revolving loan, the Company could borrow up to 90% of eligible accounts, as
defined in the Agreement, up to $12,500,000. Any amounts borrowed were due on February&nbsp;28, 2008. Interest was payable monthly at prime plus 4.5% (12.75% at December&nbsp;31, 2006, but could not be less than 9.50%). The Company paid a $200,000
closing fee, which was included in deferred financing costs, and paid a monthly mandatory fee of $30,000 and a fee of 3% on the unused revolving loan. The loan was collateralized by all of the assets of the Company and was guaranteed by the
principal stockholders of the Company.</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">7,575,488</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Note payable to Bridge &#150; Term loan with borrowings up to $10,000,000 due on February&nbsp;28, 2008. Interest was payable monthly at a
fixed rate of 16% on an annual basis. The loan was collateralized by all of the assets of the Company and was guaranteed by the principal stockholders of the Company. The amount at December&nbsp;31, 2006 is shown net of unamortized discount of
$132,057 relating to the issuance of detachable warrants described below.</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">4,889,767</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Total long-term debt</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">5,823,333</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">13,755,255</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Less: current portion</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(1,000,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Total long-term debt</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">4,823,333</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">13,755,255</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD></TR>
</TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The revolving loan and term loan from Bridge were completely paid off on February&nbsp;12, 2007
from the proceeds received as a result of the Merger. This resulted in a pre-payment penalty of $1,949,928 which was expensed in the first quarter of fiscal 2007. In addition, the unamortized deferred finance costs related to the Bridge debt
amounted to $370,712 at the time of pre-payment. This amount was expensed as part of the amortization of deferred financing costs in the first quarter of fiscal 2007. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">13 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Amortization of deferred financing costs for the nine months ended September&nbsp;30, 2007 and 2006 was
$426,979 and $289,337 respectively. Amortization of deferred financing costs for the three months ended September&nbsp;30, 2007 and 2006 was $11,792 and $91,068 respectively. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Maturities of long-term debt are as follows based upon subordination to the M&amp;T Revolver and Term Loan: </FONT></P> <P
STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="84%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="87%"></TD>
<TD VALIGN="bottom" WIDTH="5%"></TD>
<TD></TD>
<TD></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>Amount</B></FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Remainder of fiscal 2007</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">500,000</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Fiscal 2008</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">1,000,000</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Fiscal 2009</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">1,000,000</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Fiscal 2010</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">1,000,000</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Fiscal 2011</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">1,000,000</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Fiscal 2012</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">1,323,333</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Total</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">5,823,333</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD></TR>
</TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The M&amp;T Revolver (see Note 10) and Term Loan contain certain financial covenants including
leverage ratios and a fixed charge coverage ratio. The Company was in compliance with the covenants at September&nbsp;30, 2007. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px; margin-left:4%"><FONT FACE="Times New Roman"
SIZE="2"><B><I>Warrants &#150; Bridge </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">In connection with the Bridge $10,000,000 term loan at February&nbsp;28, 2005, the Company
simultaneously issued three detachable warrants to purchase an aggregate of 9% of the Company&#146;s outstanding stock, on a fully diluted basis, at the exercise date at the exercise price of $0.001 per share. The warrants vested immediately upon
issuance and could be exercised until February&nbsp;28, 2015. The Company accounted for the warrants issued to the investors as a liability under the provisions of FAS 150, &#147;Accounting for Certain Financial Instruments with Characteristics of
both Liabilities and Equity&#148; (&#147;FAS 150&#148;). The warrants were initially valued at $396,000 by an independent valuation company. This initial value had been recorded as debt discount and was being amortized over the three year life of
the loan by the interest method. Amortization of $132,000 and $98,000 was recorded by the Company as interest expense for the nine months ended September&nbsp;30, 2007 and 2006, respectively. The warrants were fair valued each reporting period and
the increase/decrease reflected as interest expense/income in the condensed consolidated statement of operations. As of December&nbsp;31, 2006, the warrants were valued at $3,291,775. The warrant holders were paid $3,291,775 to redeem the warrants
on February&nbsp;12, 2007 from proceeds received as a result of the Merger. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>NOTE 13 &#150; STOCK BASED COMPENSATION: </B></FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The Company has adopted the provisions of FASB Statement No.&nbsp;123 (revised 2004), &#147;Share-Based Payment&#148;, (&#147;SFAS 123(R)&#148;) and the
guidance provided by the SEC Staff Accounting Bulletin No.&nbsp;107 (&#147;SAB 107&#148;), which established the accounting for share-based compensation awards exchanged for employee services and requires companies to expense the estimated fair
value of these awards over the requisite employee service period. SFAS 123(R) requires companies to record compensation expense for stock options measured at fair value, on the date of grant, using an option-pricing model. The fair value of stock
options is determined using the Black-Scholes valuation model. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Stock options granted under the Company&#146;s 2006 Long-Term Incentive
Plan (&#147;the LTI Plan&#148;), which was approved by the stockholders on February&nbsp;12, 2007, may expire up to ten years after the date of grant or earlier at the determination of the Board of Directors. Under the LTI Plan, the Company reserved
2,750,000 shares of stock in accordance with the plan&#146;s terms. The number of shares covered by stock options that may be exercised by any participant during any calendar year cannot have an aggregate fair market value in excess of $100,000,
measured at the date of the grant. The exercise price for options cannot be less than the fair market value of the Company&#146;s common stock on the date of the grant. To date, 816,000 options have been granted to key employees and directors of the
Company. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">14 </FONT></P>


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<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The Company&#146;s results of operations for the three months and nine months ended September&nbsp;30,
2007 include share-based employee compensation totaling $77,411 and $968,156, respectively. Such amounts have been included in the Statements of Operations in selling, general and administrative expenses. As of September&nbsp;30, 2007 there was $0
of total unrecognized compensation cost related to all unvested stock options which are estimated to be $157,886. The fair value of these options was estimated using the Black-Scholes valuation model with the following weighted-average assumptions
and fair values: </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="92%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="84%"></TD>
<TD VALIGN="bottom" WIDTH="10%"></TD>
<TD></TD>
<TD></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>Nine&nbsp;months&nbsp;ended<BR>September&nbsp;30,&nbsp;2007</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Volatility</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">23.6</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Expected term in years</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">3.8&nbsp;years</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Risk-free interest rate</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">4.6</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Expected dividend yield</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">0</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
</TABLE> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">The following information relates to the stock option activity for the nine months ended September&nbsp;30, 2007:
</FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="78%"></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>Shares</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>Weighted<BR>Average<BR>Exercise<BR>Price</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>Weighted<BR>Average<BR>Remaining<BR>Contractual<BR>Life</B></FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Outstanding at January 1, 2007</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Granted</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">816,000</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">5.68</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">3.78&nbsp;years</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Exercised</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Cancelled</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Exercisable at September 30, 2007</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">816,000</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">5.68</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">3.39 years</FONT></TD></TR>
</TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The aggregate intrinsic value for the options in the table above was zero as at September&nbsp;30,
2007 based on the closing common share price of $3.99 as at September&nbsp;30, 2007. The aggregate intrinsic value represents the total pre-intrinsic value (the difference between the Company&#146;s closing stock price on the last trading day of the
third quarter of 2007 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on September&nbsp;30, 2007. This amount changes based
on the fair market value of the Company&#146;s common stock. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>NOTE 14 &#150; WARRANTS: </B></FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">In connection with Terra Nova&#146;s Offering on April&nbsp;22, 2005, there were 11,040,000 Warrants issued and outstanding at September&nbsp;30, 2007,
which include Warrants that are part of the outstanding Units. Each Warrant entitles the holder to purchase from the Company one share of common stock at an exercise price of $5.00 commencing on February&nbsp;12, 2007 (the completion of the Merger)
and expiring on April&nbsp;17, 2009 (four years from the effective date of Terra Nova&#146;s Offering). The Warrants are redeemable at a price of $.01 per Warrant upon 30 days notice after the Warrants become exercisable, only in the event that the
last sale price of the common stock is at least $8.50 per share for any 20 trading days within a 30 trading day period ending on the third day prior to the date on which notice of redemption is given. In connection with Terra Nova&#146;s Offering,
Terra Nova issued an option for $100 to the representative of the underwriters to purchase 240,000 Units at an exercise price of $9.90 per Unit. In addition, the Warrants underlying such Units are exercisable at $6.65 per share. </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">15 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>NOTE 15 &#150; COMMITMENTS AND CONTINGENCIES: </B></FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%"><FONT FACE="Times New Roman" SIZE="2"><I>Leases: </I></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The Company leases offices
and equipment under operating leases that expire over the next one to four years. Future minimum rental payments required under operating leases that have remaining lease terms in excess of one year as of September&nbsp;30, 2007 are as follows:
</FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="84%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="87%"></TD>
<TD VALIGN="bottom" WIDTH="5%"></TD>
<TD></TD>
<TD></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>Amount</B></FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Remainder of fiscal 2007</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">462,918</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Fiscal 2008</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">865,512</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Fiscal 2009</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">691,410</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Fiscal 2010</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">408,033</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Total</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">2,427,873</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD></TR>
</TABLE> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Above lease commitments do not include future minimum rental payments that have been accrued for in restructuring
costs (see Note 9), which are $108,218, $337,149, $148,099 and $45,052 for the remainder of 2007, 2008, 2009 and 2010. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>NOTE 16 &#150; LITIGATION: </B>
</FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">In February of 2007, the Company entered into a three party settlement agreement between the Company, Westaff, Inc (&#147;Westaff&#148;)
and 26 employees hired by the Company who formerly worked for Westaff. The settlement arose out of lawsuits filed by Weststaff against certain of those employees. The terms of the settlement required the Company to make a one time cash payment of
$266,000 to Westaff, plus legal fees of $56,000, and in return for such consideration Westaff agreed to release all 26 former employees of Westaff and now employed by the Company from their non-compete and non-solicitation agreements that the
employees had signed while employed by Westaff. As an additional term of the settlement agreement, the Company agreed to cease the solicitation of Westaff employees. The total cost to the Company including legal expenses was $0 and $322,000 for the
three and nine months ended September&nbsp;30, 2007. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The Company also hired a high level transportation sales executive. The former
partner of the high level executive, threatened litigation against the Company based on covenants not to compete related to customers that the Company was soliciting. To settle the potential claim, the Company made a one-time cash payment of $80,000
in the first quarter of fiscal 2007 to the former partner of the transportation executive in exchange for full settlement and release of all potential claims against the Company and the executive. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">On September&nbsp;21, 2007, Temporary Services Insurance Ltd. (&#147;TSIL&#148;), which claims to be a captive reinsurance company offering workers&#146;
compensation insurance to its shareholders through an insurance program, filed a complaint (the &#147;TSIL Litigation&#148;) in the U.S. District Court in Florida against ALS, LLC (&#147;ALS&#148;), Advantage Services Group, LLC (&#147;Advantage
Services&#148;), certain officers and shareholders of ALS and Advantage Services as well as certain other third party companies (collectively, the &#147;ALS Defendants&#148;), alleging that it was owed at least $2,161,172 in unpaid insurance
assessments, as well as other requested damages, from the ALS Defendants. Kevin O&#146;Donnell, a former officer of the ALS companies and a named defendant in the TSIL Litigation, controls KOR Capital, LLC &#150; a franchisee of the Company.
</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">16 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The Company is also named as a defendant because it acquired certain assets from ALS and its wholly owned
subsidiaries including Advantage Services Group II, LLC (&#147;ASG II&#148;), in February 2007, for which it paid a portion of the purchase price at closing to the ALS Defendants, through ALS. It is alleged that this transfer rendered ASG II, one of
the named insureds on the TSIL policy, insolvent and unable to pay the insurance assessments and damages owed to TSIL. TSIL requests in its complaint that its damages be satisfied from the assets transferred to the Company. Agreements related to the
acquisition of certain assets and liabilities of ALS in February 2007 contain provisions under which the Company may seek indemnification from ALS in connection with the foregoing. The Company intends to pursue all appropriate claims for such
indemnification. (See also Part II &#150; Item&nbsp;1A (Risk Factors)). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">On or about October&nbsp;29, 2007, the Company received a copy of
a letter sent by a law firm to the California Labor&nbsp;&amp; Workforce Development Agency, pursuant to which such law firm sought permission under the California Labor Code Private Attorney General Act of 2004 to file a complaint (the
&#147;Potential California Complaint&#148;) against the Company, a wholly owned subsidiary of the Company and ALS and one of its subsidiaries, on behalf of a class of employees currently and formerly employed by the defendants in California (the
employees have not been named). Plaintiff has alleged that the defendants (i)&nbsp;failed to pay overtime compensation, (ii)&nbsp;failed to pay wages at time of discharge, (iii)&nbsp;failed to pay all wages at the time required, (iv)&nbsp;failed to
provide proper itemized wage statements, and (v)&nbsp;issued checks drawn on out-of-state banks with no in-state address for presentation. Agreements related to the acquisition of certain assets and liabilities of ALS in February 2007 contain
provisions under which the Company may seek indemnification from ALS in connection with the foregoing. The Company intends to pursue all appropriate claims for such indemnification. (See also Part II &#150; Item&nbsp;1A (Risk Factors)). </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Generally, the Company is engaged in various litigation from time to time in the normal course of business. Management does not believe that the
ultimate outcome of such matters, including the matters above, either individually or in the aggregate, will have a material adverse impact on the financial condition or results of operations of the Company. </FONT></P> <P
STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>NOTE 17 &#150; FRANCHISE AGREEMENTS </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">On
August&nbsp;30, 2007, the Company entered into an Agreement with KOR Capital, LLC (&#147;KOR&#148;), a Florida limited liability company controlled by Kevin O&#146;Donnell, a former officer of the Company, pursuant to which the Company granted to
KOR an exclusive right and license (i)&nbsp;to set up and operate, in parts of Northern California and Florida, a franchise of the Company&#146;s system and procedures for the operation of light industrial and clerical temporary staffing services
and (ii)&nbsp;to use in connection with the operation certain of the Company&#146;s proprietary intellectual property. The Agreement with KOR replaced the agreement between the Company and KOR entered on July 9, 2007. In consideration for the grant
and license, KOR is required to pay to the Company, on a weekly basis, a royalty equal to four and one half percent of all gross revenues earned by KOR from the operation. KOR also agreed to pay the Company a royalty equal to fifty percent of the
net income from the operation. Through this relationship KOR will operate and manage up to twelve of the Company&#146;s former branches. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman"
SIZE="2">The Agreement provides that the Company will, directly or indirectly, process the weekly payroll for all temporary and contract staff placed on assignment by KOR and KOR&#146;s weekly invoices. The Agreement has a term of 99 years, but is
subject to earlier termination upon certain material breaches or defaults and it may only be assigned by KOR if the assignee satisfies certain financial, business experience and character criteria acceptable to the Company. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">On August&nbsp;13, 2007, the Company entered into an Agreement with TZG Enterprises, LLC (&#147;TZG&#148;), a Delaware limited liability company
controlled by J. Todd Warner, a former officer of the Company, pursuant to which the Company granted to TZG an exclusive right and license (i)&nbsp;to set up and operate a franchise of the Company&#146;s system and procedures for the operation of
transportation and light industrial temporary staffing services and (ii)&nbsp;to use in connection with the operation certain of the Company&#146;s proprietary intellectual property. In consideration for the grant and license, TZG is required to pay
to the Company, on a weekly basis, a royalty equal to six percent of all gross revenues earned by TZG from the operation. Through this relationship TZG will operate and manage up to twenty-five of the Company&#146;s former branches. </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">17 </FONT></P>


<p Style='page-break-before:always'>
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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">The Agreement provides that the Company will, directly or indirectly, process the weekly payroll for all temporary and
contract staff placed on assignment by TZG and TZG&#146;s weekly invoices. The Agreement has a term of 99 years, but is subject to earlier termination upon certain material breaches or defaults and it may only be assigned by TZG if the assignee
satisfies certain financial, business experience and character criteria acceptable to the Company </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">18 </FONT></P>


<p Style='page-break-before:always'>
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<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="9%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"><B>
<A NAME="toc17341_3"></A>ITEM&nbsp;2.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2"><B>MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS </B></FONT></TD></TR></TABLE> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The information contained herein has been derived from the Company&#146;s condensed consolidated financial statements and should be read together with the
Company&#146;s consolidated financial statements and related notes included in the quarterly report on Form 10-Q. Some of the forward-looking statements can be identified by the use of forward-looking terms such as &#147;believes,&#148;
&#147;expects,&#148; &#147;may,&#148; &#147;will,&#148; &#147;should,&#148; &#147;could,&#148; &#147;seek,&#148; &#147;intends,&#148; &#147;plans,&#148; &#147;estimates,&#148; &#147;anticipates&#148; or other comparable terms. Forward-looking
statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those in the forward-looking statements. The risks and uncertainties discussed in &#147;Risk Factors&#148;
included in the reports filed by the Company with the SEC should be considered in evaluating the Company&#146;s forward-looking statements. The Company has no plans to update its forward-looking statements to reflect events or circumstances after
the date hereof. We caution readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman"
SIZE="2">The following discussion is intended to assist in the understanding and assessment of significant changes and trends related to the results of operations and financial condition of ClearPoint Business Resources, Inc., together with its
consolidated subsidiaries (&#147;ClearPoint&#148; or the &#147;Company&#148;). This discussion and analysis should be read in conjunction with the ClearPoint&#146;s consolidated financial statements and notes thereto, including those found in the
Company&#146;s Form 8-K filed on April&nbsp;5, 2007, as well as the Company&#146;s Form 8-K/A filed on May&nbsp;11, 2007, that include information regarding the acquisition of certain assets and liabilities of ALS, LLC and its subsidiaries, doing
business as Advantage Services Group (&#147;ASG&#148;) and the Company&#146;s Form 8-K/A filed on May&nbsp;14, 2007 that includes information regarding the merger (&#147;Merger&#148;) with Terra Nova Acquisition Corp. (&#147;Terra Nova&#148;).
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">All figures in ClearPoint&#146;s Management&#146;s Discussion and Analysis of Financial Condition and Results of Operations are shown in
thousands (000s) of dollars unless otherwise noted. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B><I>Overview </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">ClearPoint&#146;s corporate headquarters are located in Chalfont, Pennsylvania. ClearPoint currently operates its main processing office in Maitland, Florida. ClearPoint also has 7 regional recruiting offices. In the
third quarter of 2007, the Company converted approximately 40 branch locations into franchise operations. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">ClearPoint provides
comprehensive workforce management solutions throughout the United States, including outsourcing placement and recruiting services, vendor management services (&#147;VMS&#148;) and staff augmentation programs to a diversified group of clients
throughout the United States in the transportation, logistics, engineering, scientific, aerospace, allied health, information technology, manufacturing, distribution, call center, financial, hospitality, food service, data processing, legal and
administration industries. Since its inception, the Company has enhanced its platform through organic growth and the integration of acquisitions. The Company derives its revenues from fees for professional services. In the third quarter of 2007,
ClearPoint launched its i-Labor Network which is a virtual marketplace for on-demand staffing. Its i-Labor Network of franchisees and affiliates provide customized workforce solutions with performance-based deliverables which increase productivity.
</FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B><I>Application of Critical Accounting Policies and Estimates </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">ClearPoint&#146;s discussion and analysis of its financial condition and results of operations are based on ClearPoint&#146;s consolidated financial statements, which have been prepared in accordance with accounting
principles generally accepted in the United States of America. The preparation of financial statements in conformity with these principles in the United States of America requires ClearPoint to </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">19 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px">
<FONT FACE="Times New Roman" SIZE="2">make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the
date of the financial statements and also affect the amounts of revenues and expenses reported for each period. Actual results could differ from those which result from using the estimates. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The SEC defines &#147;critical accounting policies&#148; as those that require application of management&#146;s most difficult, subjective or complex
judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">ClearPoint&#146;s significant accounting policies are described in Note 2 to the Notes to ClearPoint&#146;s Consolidated Financial Statements for the year ended December&nbsp;31, 2006, as filed on Form 8-K on
April&nbsp;5, 2007 and additional policies are described in Note 2 to the Notes to the Consolidated Financial Statements included in this Quarterly Report on Form 10-Q. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2"><B><I>Seasonality </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">ClearPoint experiences fluctuation in revenue and operating results based on a
number of factors including but not limited to competition in its markets, availability of qualified personnel and the personnel demands of its clients. Historically, ClearPoint has experienced a rise in demand from its transportation clients in the
third and fourth quarter due to the increase in the shipment of products for the holiday season. Inclement weather can cause a slowdown in ClearPoint&#146;s business due to business shutdowns by its clients. The first quarter has been traditionally
the slowest quarter from a revenue perspective due to national holidays and customer planning cycles. This revenue seasonality will also typically impact the Company&#146;s profitability as most operating expenses are spread evenly throughout the
year. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B><I>Results of Operations (Unaudited) </I></B></FONT></P> <P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman"
SIZE="2"><B>Three Months Ended September&nbsp;30, 2007 Compared to </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>Three Months Ended September&nbsp;30, 2006 (000&#146;s)
</B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">The following summarizes select items of the income statement during the three months ended September&nbsp;30, 2007 and September&nbsp;30, 2006:
</FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="69%"></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD>
<TD></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="1"><B>$ (000&#146;s)</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>2007</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>% of<BR>Revenue</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>2006</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>% of<BR>Revenue</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>%<BR>Change</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Net Revenue</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">52,427</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">100.00</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">29,261</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">100.00</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">79.2</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Cost of services</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">46,548</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">88.79</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">24,199</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">82.70</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">92.4</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Gross profit</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">5,879</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">11.21</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">5,061</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">17.30</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">16.2</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">SG&amp;A and restructuring expenses</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">4,068</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">7.75</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">3,060</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">10.46</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">33.0</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Depreciation and amortization expense</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">1,401</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">2.67</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">479</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">1.64</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">192.5</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Income from operations</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">410</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">0.78</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">1,522</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">5.20</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">-73.1</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Other income (expense)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">6</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">0.02</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Interest (expense)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(529</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">-1.01</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(690</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">-2.36</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">-23.3</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Net income (loss) before income taxes</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(119</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">-0.23</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">838</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">2.86</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">-114.2</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Income tax expense</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">39</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">0.07</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">491</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">1.68</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">-92.1</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Net income (loss)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(158</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">-0.30</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">347</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">1.19</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">-145.5</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
</TABLE> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><I>Net Revenue </I></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">ClearPoint&#146;s revenues for the three months ended September&nbsp;30, 2007 and 2006 were $52,427 and $29,261, respectively, which represents an increase of $23,166 or 79%. As a result of the Company&#146;s recent
franchising of many of its branches, the Company recorded $958 in franchise royalties in net revenue during the three months ended September&nbsp;30, 2007. Revenues for the three </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">20 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px">
<FONT FACE="Times New Roman" SIZE="2">months ended September&nbsp;30, 2007 included approximately $7,165 from ClearPoint Advantage, LLC, a wholly owned subsidiary of the Company, relating to the
contract rights obtained in the acquisition of certain assets and liabilities from ALS and its subsidiaries on February&nbsp;23, 2007 (see Note 3 to the Notes to the Consolidated Financial Statements included in this Quarterly Report on Form 10-Q).
Of the $7,165 from ClearPoint Advantage, $591 in net revenue was related to franchise royalties. The remaining increase of $16,001 was primarily due to expansion of existing and addition of new clients in the Company&#146;s outsourcing division, as
well as, the launch of the i-Labor Network, a virtual marketplace for on-demand staffing. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><I>Cost of Services and Gross Profit </I></FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Cost of services consist of direct labor expenses for time charged directly to a client and related payroll taxes, unemployment and workers&#146;
compensation insurance expenses, employee benefits, and other out-of-pocket expenses directly associated with the performance of the service to the client. ClearPoint&#146;s cost of services for the three months ended September&nbsp;30, 2007 and
2006 were $46,548 and $24,199, respectively, which represents an increase of $22,349, or 92.4%, which includes cost of services of $5,208 from the acquisition of ASG. ClearPoint&#146;s gross profit for the three months ended September&nbsp;30, 2007
and 2006 were $5,879 and $5,061, respectively, which represents an increase of $818 or 16.2%. As a percentage of revenue for the three months ended September&nbsp;30, 2007 and 2006 ClearPoint&#146;s gross profit was 11.2% and 17.3% respectively. The
decrease in the overall gross profit percentage was primarily due to lower margin business of ASG, the organic growth in ClearPoint&#146;s human resource outsourcing business which is priced to have lower margin but longer term contracts, offset by
the higher gross margin percentage of ClearPoint&#146;s franchise royalties as there are minimal cost of services associated with franchise royalties recognized in this quarter. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2"><I>Selling, General, Administrative and Restructuring Expenses </I></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">ClearPoint&#146;s selling, general and
administrative (&#147;SG&amp;A&#148;) expenses for the three months ended September&nbsp;30, 2007 and 2006 were $4,068 and $3,060, respectively, which represents an increase of $1,008 or 33.0%. SG&amp;A expenses for the three months ended
September&nbsp;30, 2007 include $1,715 from the acquisition of ASG. Effective June&nbsp;29, 2007, the Company initiated a restructuring program of its field and administrative operations. As part of the restructuring program, the Company closed 24
branch and administrative offices and eliminated approximately 75 positions. During the three months ended September&nbsp;30, 2007 and 2006 the Company did not record any additional expenses associated with restructuring and the Company recognized a
reduction in accrued restructuring costs of $651 due to severance and related benefits which the Company is no longer liable for. As a result of the Company&#146;s restructuring and recent franchising of many of its branches, the Company had
substantially less selling expenses associated with the Company&#146;s branch based operations during the three months ended September&nbsp;30, 2007 which offset the increase in costs related to the ASG acquisition. As a percentage of revenue,
SG&amp;A decreased from 10.5% to 7.8% over the comparative periods largely as a result of the factors discussed. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><I>Depreciation and Amortization Expense
</I></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">ClearPoint&#146;s depreciation and amortization expenses for the three months ended September&nbsp;30, 2007 and 2006 were $1,401 and
$479, respectively, which represents an increase of $922 or 192.5%. This increase was primarily due to the amortization of contract rights and depreciation of fixed assets acquired from ASG of $948, offset by the reduction in contract rights
amortized from the Company&#146;s previous acquisitions that were fully amortized in 2006. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">21 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><I>Interest Expense </I></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">ClearPoint&#146;s interest expense for the three months ended September&nbsp;30, 2007 and 2006 was $529 and $690, respectively, which represents a decrease of $161, or 23.3%, primarily due to the reduced interest cost
from the M&amp;T Term Loan and Revolver compared to the Company&#146;s previous financing as well as the change in interest associated with the warrant liability. </FONT></P> <P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="2"><B>Nine Months Ended September&nbsp;30, 2007 Compared to </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>Nine Months Ended September&nbsp;30, 2006
(000&#146;s) </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">The following summarizes select items of the income statement during the nine months ended September&nbsp;30, 2007 and September&nbsp;30,
2006: </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="67%"></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD>
<TD></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="1"><B>$ (000&#146;s)</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>2007</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>% of<BR>Revenue</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>2006</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>% of<BR>Revenue</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>%<BR>Change</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Net Revenue</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">139,670</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">100.00</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">84,800</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">100.00</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">64.7</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Cost of services</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">120,015</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">85.93</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">69,993</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">82.54</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">71.5</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Gross profit</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">19,655</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">14.07</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">14,807</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">17.46</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">32.7</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">SG&amp;A and restructuring expenses</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">22,111</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">15.83</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">10,089</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">11.90</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">119.2</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Depreciation and amortization expense</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">3,926</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">2.81</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">2,010</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">2.37</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">95.2</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Income (loss) from operations</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(6,382</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">-4.57</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">2,708</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">3.19</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">-335.7</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Other income (expense)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">216</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">0.16</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">3</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">0.00</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">7,133.3</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Interest (expense)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(1,627</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">-1.16</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(2,598</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">-3.06</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">-37.4</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Prepayment penalty on early retirement of debt</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(1,950</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">-1.40</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Net income (loss) before income taxes</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(9,743</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">-6.98</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">113</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">0.13</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Income tax expense (benefit)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(3,353</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">-2.40</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">525</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">0.62</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">-738.6</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Net income (loss)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(6,390</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">-4.59</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">(412</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">-0.49</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">1,450.9</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
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</TABLE> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><I>Net Revenue </I></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">ClearPoint&#146;s net revenues for the nine months ended September&nbsp;30, 2007 and 2006 were $139,670 and $84,800, respectively, which represents an increase of $54,870 or 64.7%. As a result of the Company&#146;s
recent franchising of many of its branches, the Company recorded $958 in franchise royalties in net revenue during the nine months ended September&nbsp;30, 2007. Revenues for the nine months ended September&nbsp;30, 2007 included approximately
$35,849 from ClearPoint Advantage, LLC, a wholly owned subsidiary of the Company, relating to the contract rights obtained in the acquisition of certain assets and liabilities from ALS and its subsidiaries on February&nbsp;23, 2007 (see Note 3 to
the Notes to the Consolidated Financial Statements included in this Quarterly Report on Form 10-Q). The remaining increase of $19,021 was primarily due to new clients in the Company&#146;s outsourcing division, as well as the launch of the i-Labor
Network, a virtual marketplace for on-demand staffing. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><I>Cost of Services and Gross Profit </I></FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Cost of services consist of direct labor expenses for time charged directly to a client and related payroll taxes, unemployment and workers&#146;
compensation insurance expenses, employee benefits, and other out-of-pocket expenses directly associated with the performance of the service to the client. ClearPoint&#146;s cost of services for the nine months ended September&nbsp;30, 2007 and 2006
were $120,015 and $69,993, respectively, which represents an increase of $50,022, or 71.5%, which include cost of services from ASG of $28,637. ClearPoint&#146;s gross profit for the nine months ended September&nbsp;30, 2007 and 2006 was $19,655 and
$14,807, respectively, which represents an increase of $4,848 or 32.7%. As a percentage of revenue for the nine months ended September&nbsp;30, 2007 and 2006 ClearPoint&#146;s gross profit was 14.1% and 17.5%, respectively. The decrease in the
overall gross profit percentage was primarily due to lower margin business of ASG and the organic growth in ClearPoint&#146;s human resource outsourcing business which is priced to have lower margin but longer term contracts. </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><I>Selling, General, Administrative and Restructuring Expenses </I></FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">ClearPoint&#146;s selling, general and administrative expenses (&#147;SG&amp;A&#148;) for the nine months ended September&nbsp;30, 2007 and 2006 were
$22,111 and $10,089, respectively, which represents an increase of $12,022 or 119.2%. SG&amp;A expenses include approximately $8,671 from the acquisition of ASG effective February&nbsp;23, 2007 and $10,591 from the ClearPoint&#146;s previously
existing administrative operations. In the first quarter of 2007, ClearPoint incurred $180 in incremental costs associated with the completion and due diligence of the acquisition of ASG, $1,021 in one-time bonus payments due to the successful
closing of the Merger with TerraNova, and one-time payments of $322 and $80 relating to non-compete agreements of new ClearPoint employees. In the second quarter of 2007, ClearPoint recorded $1,902 of restructuring charges for costs of severance,
related benefits and outplacement services related to the termination of certain employees and $950 of charges relating to the early termination of office spaces leases for a total of $2,852.<I> </I>During the nine months ended September&nbsp;30,
2007 and 2006 the Company did not record any additional expenses associated with restructuring and the Company recognized a reduction in accrued restructuring costs of $651 due to severance and related benefits which the Company is no longer liable
for. As a percentage of revenue, SG&amp;A increased from 11.9% to 15.8% over the comparative periods largely as a result of the factors discussed. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="2"><I>Depreciation and Amortization Expense </I></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">ClearPoint&#146;s depreciation and amortization expenses for the nine months ended
September&nbsp;30, 2007 and 2006 were $3,926 and $2,010, respectively, which represents an increase of $1,916 or 95.3%. This increase was primarily due to the immediate amortization of deferred finance costs in the first quarter of $370 related to
the payoff of Bridge Healthcare Finance (&#147;Bridge&#148;) revolver and term loan and the amortization of contract rights and depreciation of fixed assets acquired from ASG of $2,205, offset by the reduction in contract rights amortized from the
Company&#146;s previous acquisitions that were fully amortized in 2006. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><I>Interest Expense </I></FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">ClearPoint&#146;s interest expense for the nine months ended September&nbsp;30, 2007 and 2006 was $1,627 and $2,598, respectively, which represents a
decrease of $971, or 37.4%, primarily due to the redemption of warrants on February&nbsp;12, 2007 and reduced interest cost from the M&amp;T Term Loan and Revolver compared to the Company&#146;s previous financing. Included in interest expense is
expense relating to the amortization of the warrant discount further described below of $132 and $98 for the nine months ended September&nbsp;30, 2007 and 2006, respectively, which included the immediate amortization of the discount due to the
payoff of the Bridge $10,000 term loan (for further description of the Bridge loan, see Note 10 to the Notes to ClearPoint&#146;s Consolidated Financial Statements for the year ended December&nbsp;31, 2006, as filed on Form 8-K on April&nbsp;5, 2007
and Note 12 to the Notes to ClearPoint&#146;s Consolidated Financial Statements included in this Quarterly Report on Form 10-Q). During the same period, interest expense related to the change in warrant liability was $0 and $51 at September&nbsp;30,
2007 and 2006, respectively. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">In connection with the $10,000 term loan at February&nbsp;28, 2005, the Company simultaneously issued three
detachable warrants to purchase an aggregate of 9% of the Company&#146;s outstanding stock, on a fully diluted basis, at the exercise date at the exercise price of $0.001 per share. The warrants vested immediately upon issuance and may be exercised
until February&nbsp;28, 2015. The Company accounted for the warrants issued to the investors as a liability under the provisions of FAS 150, &#147;Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity&#148;
(&#147;FAS 150&#148;). The warrants were initially valued at $396 by an independent valuation company. This initial value has been recorded as debt discount and is being amortized over the three year life of the loan by the interest method.
Amortization of $132 (the balance of the debt discount) and $98 has been recorded by the Company as interest expense for the nine months ended September&nbsp;30, 2007 and 2006, respectively. The </FONT>
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<FONT FACE="Times New Roman" SIZE="2">warrants are fair valued each reporting period and the increase/decrease reflected as interest expense/income in the condensed consolidated statement of
operations. As of December&nbsp;31, 2006, the warrants were valued at $3,292. As a result of the Merger with Terra Nova, ClearPoint retired all outstanding debt with Bridge in the amount of $12,453 and paid an early debt retirement penalty in the
amount of $1,950 referred to in other expense below. Additionally, ClearPoint redeemed all outstanding warrants related to its credit facility with Bridge for a cash payment of $3,292 on February&nbsp;12, 2007 from proceeds received as a result of
the Merger. These warrants were no longer outstanding on September&nbsp;30, 2007. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><I>Other Income or Expense </I></FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">For the nine months ended September&nbsp;30, 2007, the Company incurred a prepayment penalty of $1,950 as a result of the early retirement of its Bridge
debt on February&nbsp;12, 2007. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B><I>Liquidity and Capital Resources </I></B></FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">ClearPoint&#146;s short and long-term liquidity needs have been financed primarily through cash generated by operating activities and through various
forms of debt and equity financing. ClearPoint&#146;s traditional use of cash flow is for funding payroll in advance of collecting revenue, particularly during periods of economic upswings and growth and during periods in which sales are seasonally
high throughout the year. Temporary personnel are generally paid on a weekly basis while payments from customers are generally received 30 to 60 days after billing. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">On February&nbsp;12, 2007, ClearPoint consummated the Merger with Terra Nova. As a result, CPBR Acquisition, Inc. (&#147;CPBR&#148;), a Delaware corporation and wholly-owned subsidiary of Terra Nova, merged with and
into ClearPoint. The parties to the Merger included Terra Nova, ClearPoint, CPBR and all of ClearPoint&#146;s stockholders. At the closing of the Merger, the ClearPoint stockholders were issued an aggregate of 6,051,549 shares of Terra Nova common
stock. Ten percent (10%)&nbsp;of the Terra Nova common stock being issued to the ClearPoint stockholders at the time of the Merger was placed into escrow to secure the indemnity rights of Terra Nova under the merger agreement and are governed by the
terms of an escrow agreement. A further ten percent (10%)&nbsp;of the Terra Nova common stock being issued to the ClearPoint stockholders at the time of the Merger was placed into escrow to be released upon finalization of certain closing conditions
pursuant to the merger agreement. The Merger agreement also provides for ClearPoint&#146;s original stockholders to receive additional performance payments, in the form of cash and/or shares, contingent upon the future performance of the combined
company&#146;s share price. Upon the closing of the Merger, Terra Nova changed its name to ClearPoint Business Resources, Inc. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Upon
consummation of the Merger, $30,600 was released from the Trust Fund to be used by the combined company. After payments totaling approximately $3,300 for professional fees and other direct and indirect costs related to the Merger, the net proceeds
amounted to $27,300. The Merger was accounted for under the purchase method of accounting as a reverse acquisition in accordance with accounting principles generally accepted in the United States of America for accounting and financial reporting
purposes. Under this method of accounting, Terra Nova was treated as the &#147;acquired&#148; company for financial reporting purposes. In accordance with guidance applicable to these circumstances, this Merger was considered to be a capital
transaction in substance. Accordingly, for accounting purposes, the Merger was treated as the equivalent of ClearPoint issuing stock for the net monetary assets of Terra Nova, accompanied by a recapitalization. All historical share and per share
amounts have been retroactively adjusted to give effect to the reverse acquisition of ClearPoint and related recapitalization. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">As a result
of the Merger with Terra Nova, ClearPoint retired all outstanding debt with Bridge in the amount of $12,453 and paid an early debt retirement penalty in the amount of $1,950. In addition, ClearPoint redeemed all outstanding warrants related to its
credit facility with Bridge for a cash payment of $3,292. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">On February&nbsp;23, 2007, the Company entered into new credit facilities with Manufacturers and Traders
Trust Company consisting of a $20 million revolving credit facility (&#147;Revolver&#148;) expiring in February 2010 and a $3 million term loan (&#147;Term Loan&#148;) expiring in February 2012. In July 2007, the Company expanded its Term Loan to $5
million. These credit facilities bear an interest rate of LIBOR plus between 1.50% and 2.25%, depending on the Company&#146;s ratio of debt to earnings before interest, tax, depreciation and amortization. The available amount to be borrowed from the
M&amp;T Revolver is limited based upon ratios of accounts receivable and unbilled revenue. The balance at September&nbsp;30, 2007 was $14,821 for the Revolver and $4,533 for the Term Loan. The M&amp;T Revolver and Term Loan contain certain financial
covenants including leverage ratios and a fixed charge coverage ratio. The Company was in compliance with the covenants at September&nbsp;30, 2007. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman"
SIZE="2">On February&nbsp;23, 2007, the Company acquired certain assets and liabilities of ALS and its subsidiaries. (See Note 3 to the Notes of the Consolidated Financial Statements included in this Quarterly Report on Form 10-Q). The purchase
price of $24,400 consisted of cash of $19,000, a note of $2,500, shares of the Company&#146;s common stock with a value of $2,500 (439,367 shares) and the assumption of $400 of current liabilities. ASG&#146;s stockholders may also receive up to two
additional $1,000 payments in shares of the Company&#146;s common stock based on financial and integration performance metrics of the Company in calendar years 2007 and 2008. The balance of this note payable at September&nbsp;30, 2007 was $2,023.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">On August&nbsp;14, 2006, ClearPoint acquired 100% of the common stock of StaffBridge, Inc. for $233 in cash and a note payable of $450 due
December&nbsp;31, 2007. The note payable bears interest at 6%&nbsp;per annum and is payable quarterly. The balance at September&nbsp;30, 2007 was $450. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">Effective March&nbsp;31, 2005, ClearPoint entered into a subordinated note payable of $1,290 to Blue Lake Rancheria which is due March&nbsp;31, 2008. Interest of 6%&nbsp;per annum is payable quarterly. This note has
been guaranteed by Michael Traina, a director and Chief Executive Officer of ClearPoint, and was primarily used to assist ClearPoint in funding its workers compensation insurance policy. The balance of this note payable at September&nbsp;30, 2007
was $1,290. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">ClearPoint issued a 9% Amended and Restated Subordinated Note for $250 due 2008 and a 12% Amended and Restated Subordinated
Note in the original principal amount of $300 due 2008 to Optos Capital, LLC, a Pennsylvania limited liability company which is wholly-owned by Christopher B. Ferguson, a director and the President of ClearPoint, which notes were repaid during the
three months ended September&nbsp;30, 2007. On March&nbsp;1, 2005, ClearPoint issued a 12% Amended and Restated Subordinated Note in the original principal amount of $300 due 2008 to Fergco Bros Partnership, a New Jersey partnership of which
Christopher Ferguson owns a twenty five percent (25%)&nbsp;ownership interest. The balance of these notes payable at September&nbsp;30, 2007 was $0, $0 and $300, respectively. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">On March&nbsp;1, 2005, ClearPoint issued a 12% Subordinated Note in the original principal amount of $100 due 2008 to Richard Traina and Margaret Traina,
the parents of Michael Traina, a director and the Chief Executive Officer of ClearPoint, which note was repaid during the three months ended September&nbsp;30, 2007. The balance of this note payable at September&nbsp;30, 2007 was $0. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">In addition, on March&nbsp;1, 2005, ClearPoint issued 12% Amended and Restated Subordinated Notes in the aggregate original principal amount of $310 due
2008 to several ClearPoint shareholders who do not individually own 5% or more of the outstanding securities of ClearPoint and who are not members of the immediate family of any ClearPoint director or executive officer. The balance of these notes
payable at September&nbsp;30, 2007 is $250. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Net cash (used in) provided by operating activities were $(8,652) and $895 for the nine months
ended September&nbsp;30, 2007 and 2006, respectively. The primary change in the nine months ended September&nbsp;30, 2007 that resulted in $8,652 of net cash used was due to: a book net loss of $6,390; non cash items of: a deferred tax benefit of
$3,425, depreciation and amortization expense of $3,926 largely </FONT>
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<FONT FACE="Times New Roman" SIZE="2">due to the acquisition of contract rights, an increase in the provision for doubtful accounts of $281, and non-cash stock based compensation of $968; and
cash items of: an increase in accounts receivable of $9,961 due the acquisition of ASG and the related increase in revenue, an increase in unbilled revenue of $783, an increase in prepaid expenses and other current assets of $2,128, an increase in
other assets of $1,648, an increase in accounts payable of $1,302, an increase in accrued expenses and other accrued liabilities of $4,347, an increase in the accrued restructuring costs of $1,453, an increase in accrued payroll and related taxes of
$3,411 and a decrease in retirement benefits due of $6. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The primary changes in the nine months ended September&nbsp;30, 2006 that resulted
in $895 of net cash provided by operating activities was due to a book net loss of ClearPoint of $412; non cash items of: a deferred income tax benefit of $327, depreciation and amortization expense of $2,010 largely due to the acquisition of
contract rights, a reduction in the provision for doubtful accounts of $58, amortization of discount on note payable of $98 and non-cash interest on the warrant liability relating to the Bridge debt of $51; and cash items of: a decrease in accounts
receivable of $646, an increase in unbilled revenue of $551, an increase in prepaid expenses and other current assets of $959, an increase in other assets of $582, an decrease in accounts payable of $330, an increase in accrued expenses and other
accrued liabilities of $1,324, and an increase in accrued payroll and related taxes of $43, and a decrease in retirement benefits due of $56. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman"
SIZE="2">Net cash used in investing activities was $19,554 and $379 for the nine months ended September&nbsp;30, 2007 and 2006, respectively. The primary uses of cash for investing activities for the nine months ended September&nbsp;30, 2007 were
the purchase of equipment, furniture and fixtures of $554 and the cash portion paid for the acquisition of certain assets of ASG for $19,000. The primary uses of cash for investing activities for the nine months ended September&nbsp;30, 2006 was for
the purchase of equipment, furniture and fixtures for $146 and the cash portion paid for the acquisition of the common stock of StaffBridge, Inc for $233. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">Net cash (used in) provided by financing activities was $29,565 and $(137) for the nine months ended September&nbsp;30, 2007 and 2006, respectively. The primary activities in the nine months ended September&nbsp;30,
2007 were the net proceeds from issuance of common stock in connection with the Merger with Terra Nova of $27,258, repayment of borrowings and fees from Bridge for $12,465, redemption and retirement of warrants for $3,292, net borrowings from
M&amp;T on the revolving credit facility of $14,821 and the borrowing from the M&amp;T term loan of $5,000 with repayments of $(467) and repayments of other notes payable of $660. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The primary activities in the nine months ended September&nbsp;30, 2006 that resulted in net cash used of $137 were contributions of capital by principal
stockholders of $594, offset by repayments from Bridge of $631, and fees incurred in refinancing of $100. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The Company believes that it
will generate sufficient cash from operations and, if necessary, through available bank borrowings to finance its operations for the next twelve months. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="2"><B><I>Warrants </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">In connection with the $10,000 term loan at February&nbsp;28, 2005, the Company simultaneously issued three
detachable warrants to purchase an aggregate of 9% of the Company&#146;s outstanding stock, on a fully diluted basis, at the exercise date at the exercise price of $0.001 per share. The warrants vested immediately upon issuance and may be exercised
until February&nbsp;28, 2015. The Company has accounted for the warrants issued to the investors as a liability under the provisions of FAS 150, &#147;Accounting for Certain Financial Instruments with Characteristics of both Liabilities and
Equity&#148; (&#147;FAS 150&#148;). The warrants were initially valued at $396 by an independent valuation company. This initial value has been recorded as debt discount and is being amortized over the three year life of the loan by the interest
method. Amortization of $132 (the balance of the debt discount) and $98 has been recorded by the </FONT>
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<FONT FACE="Times New Roman" SIZE="2">Company as interest expense for the nine months ended September&nbsp;30, 2007 and 2006, respectively. The warrants are fair valued each reporting period and
the increase/decrease reflected as interest expense/income in the condensed consolidated statement of operations. As of December&nbsp;31, 2006, the warrants were valued at $3,292. The warrant holders were paid $3,292 to redeem the warrants on
February&nbsp;12, 2007 from proceeds received as a result of the Merger. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">As a result of the Merger with Terra Nova, ClearPoint retired all
outstanding debt with Bridge in the amount of $12,453 and paid an early debt retirement penalty in the amount of $1,950. In addition, ClearPoint redeemed all outstanding warrants related to its credit facility with Bridge for a cash payment of
$3,292 on February&nbsp;12, 2007. These warrants were no longer outstanding on September&nbsp;30, 2007. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">As a result of Terra Nova&#146;s
Offering, there were 11,040,000 Redeemable Common Stock Purchase Warrants (the &#147;Warrants&#148;) issued and outstanding at September&nbsp;30, 2007, which include Warrants that are part of the outstanding Units. Each Warrant entitles the holder
to purchase from the Company one share of common stock at an exercise price of $5.00 commencing on February&nbsp;12, 2007 (the completion of the Merger) and expiring on April&nbsp;17, 2009 (four years from the effective date of Terra Nova&#146;s
Offering). The Warrants are redeemable at a price of $.01 per Warrant upon 30 days notice after the Warrants become exercisable, only in the event that the last sale price of the common stock is at least $8.50 per share for any 20 trading days
within a 30 trading day period ending on the third day prior to the date on which notice of redemption is given. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">In connection with its
Offering, Terra Nova issued an option for $100 to the representative of the underwriters to purchase 240,000 Units at an exercise price of $9.90 per Unit with each Unit consisting of one share of Terra Nova&#146;s common stock, $.0001 par value, and
two redeemable common stock purchase warrants. In addition, the warrants underlying such Units are exercisable at $6.65 per share. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B><I>Income Taxes
</I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">As of September 30, 2007, the Company had a current and long term deferred tax asset of $4,154. Management believes that after
consideration of positive and negative factors that, as of September 30, 2007, it is more likely than not that the deferred tax asset will be realized as it has the ability to carry back some of the loss to the prior year and will be able to
generate sufficient future taxable income. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B><I>Contractual obligations </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2">A summary of ClearPoint&#146;s contractual obligations as of September&nbsp;30, 2007 is as follows: </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD>
<TD></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="1"><B>$ (000&#146;s</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>Total</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>Remainder<BR>2007</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>2008</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>2009</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>2010</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>2011</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>thereafter</B></FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Revolving credit facility</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">14,821</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">14,821</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Long-term debt</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">5,823</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">500</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">1,000</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">1,000</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">1,000</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">1,000</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">1,323</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Notes payable</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">2,473</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">1,187</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">1,286</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Operating leases</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">2,428</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">463</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">865</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">691</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">409</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Insurance premium</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">2,419</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">2,419</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Retirement benefits</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">345</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">19</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">77</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">77</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">77</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">76</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">19</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Restructuring costs</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">1,453</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">204</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">945</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">250</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">54</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">29,762</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">4,792</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">4,173</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">2,018</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">16,361</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">1,076</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">1,342</FONT></TD></TR>
</TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B><I>Debt:</I></B> As discussed under Liquidity and Capital Resources, ClearPoint has entered
into various debt agreements with M&amp;T, Blue Lake Rancheria and various stockholders with varying expiration dates in the years ending December&nbsp;31, 2007 through December&nbsp;31, 2012. ClearPoint has entered into a debt agreement with
unrelated individuals in connection with the acquisition of StaffBridge, Inc. expiring December&nbsp;31, 2007. ClearPoint has entered into a debt agreement with the former owners of ASG in connection with the acquisition of ASG, expiring
October&nbsp;23, 2008. Debt and notes payable that are subordinated to the M&amp;T Revolver and Term Loan are classified in the balance sheet as long-term. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2"><B><I>Operating Leases:</I></B> ClearPoint leases offices and equipment under operating leases that expire over the next one to five years. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;
</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">27 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B><I>Retirement Benefits:</I></B> Upon its acquisition of Quantum, ClearPoint assumed a stock purchase
agreement dated December&nbsp;30, 1986 with a former owner. The agreement called for the payment of retirement benefits in equal monthly payments, adjusted for the cost of living increases equal to the Consumer Price Index. The former owner is
entitled to these benefits until his death. On the date of acquisition of Quantum on July&nbsp;29, 2005, ClearPoint recorded a liability based upon the expected remaining life of the former owner, and made payments of $58 for the nine months ended
September&nbsp;30, 2007 and $55 for the nine months ended September&nbsp;30, 2006. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B><I>Franchise Agreements </I></B></FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">On August&nbsp;30, 2007, the Company entered into an Agreement with KOR Capital, LLC (&#147;KOR&#148;), a Florida limited liability company controlled by
Kevin O&#146;Donnell, a former officer of the Company, pursuant to which the Company granted to KOR an exclusive right and license (i)&nbsp;to set up and operate, in parts of Northern California and Florida, a franchise of the Company&#146;s system
and procedures for the operation of light industrial and clerical temporary staffing services and (ii)&nbsp;to use in connection with the operation certain of the Company&#146;s proprietary intellectual property. The Agreement with KOR replaced the
agreement between the Company and KOR entered on July&nbsp;9, 2007. In consideration for the grant and license, KOR is required to pay to the Company, on a weekly basis, a royalty equal to four and one half percent of all gross revenues earned by
KOR from the operation. KOR also agreed to pay the Company a royalty equal to fifty percent of the net income from the operation. Through this relationship KOR will operate and manage up to twelve of the Company&#146;s former branches. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The Agreement provides that the Company will, directly or indirectly, process the weekly payroll for all temporary and contract staff placed on
assignment by KOR and KOR&#146;s weekly invoices. The Agreement has a term of 99 years, but is subject to earlier termination upon certain material breaches or defaults and it may only be assigned by KOR if the assignee satisfies certain financial,
business experience and character criteria acceptable to the Company. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">On August&nbsp;13, 2007, the Company entered into an Agreement with
TZG Enterprises, LLC (&#147;TZG&#148;), a Delaware limited liability company controlled by J. Todd Warner, a former officer of the Company, pursuant to which the Company granted to TZG an exclusive right and license (i)&nbsp;to set up and operate a
franchise of the Company&#146;s system and procedures for the operation of transportation and light industrial temporary staffing services and (ii)&nbsp;to use in connection with the operation certain of the Company&#146;s proprietary intellectual
property. In consideration for the grant and license, TZG is required to pay to the Company, on a weekly basis, a royalty equal to six percent of all gross revenues earned by TZG from the operation. Through this relationship TZG will operate and
manage up to twenty-five of the Company&#146;s branches. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The Agreement provides that the Company will, directly or indirectly, process the
weekly payroll for all temporary and contract staff placed on assignment by TZG and TZG&#146;s weekly invoices. The Agreement has a term of 99 years, but is subject to earlier termination upon certain material breaches or defaults and it may only be
assigned by TZG if the assignee satisfies certain financial, business experience and character criteria acceptable to the Company. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B><I>Contingencies and
Litigation </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">In February of 2007, the Company entered into a three party settlement agreement between ClearPoint, Westaff, Inc
(&#147;Westaff&#148;) and 26 employees hired by ClearPoint who formerly worked for Westaff. The settlement arose out of lawsuits filed by Westaff against certain of those employees. The terms of the settlement required ClearPoint to make a one time
cash payment of $266 to Westaff, plus legal fees of $56, and in return for such consideration Westaff agreed to release all 26 former employees of Westaff and now employed by ClearPoint from their non-compete and non-solicitation agreements that the
employees had signed while employed by Westaff. As an additional term of the settlement agreement, ClearPoint agreed to cease the solicitation of Westaff employees. The total cost to the Company including legal expenses was $322 in the nine months
ended September&nbsp;30, 2007. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The Company also hired a high level transportation sales executive. The former partner of the high level
executive, threatened litigation against the Company based on covenants not to compete related to customers that the Company was soliciting. To settle the potential claim, the Company made a one-time cash payment of $80 in the first quarter of
fiscal 2007 to the former partner of the transportation executive in exchange for full settlement and release of all potential claims against the Company and the executive. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">On September&nbsp;21, 2007, Temporary Services Insurance Ltd. (&#147;TSIL&#148;), which claims to be a captive reinsurance company offering workers&#146;
compensation insurance to its shareholders through an insurance program, filed a complaint (the &#147;TSIL Litigation&#148;) in the U.S. District Court in Florida against ALS, LLC (&#147;ALS&#148;), Advantage Services Group, LLC (&#147;Advantage
Services&#148;), certain officers and shareholders of ALS and Advantage Services as well as certain other third party companies (collectively, the &#147;ALS Defendants&#148;), alleging that it was owed at least $2,161,172 in unpaid insurance
assessments, as well as other requested damages, from the ALS Defendants. Kevin O&#146;Donnell, a former officer of the ALS companies and a named defendant in the TSIL Litigation, controls KOR Capital, LLC &#150; a franchisee of the Company.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The Company is also named as a defendant because it acquired certain assets from ALS and its wholly owned subsidiaries including Advantage
Services Group II, LLC (&#147;ASG II&#148;), in February 2007, for which it paid a portion of the purchase price at closing to the ALS Defendants, through ALS. It is alleged that this transfer rendered ASG II, one of the named insureds on the TSIL
policy, insolvent and unable to pay the insurance assessments and damages owed to TSIL. TSIL requests in its complaint that its damages be satisfied from the assets transferred to the Company. Agreements related to the acquisition of certain assets
and liabilities of ALS in February 2007 contain provisions under which the Company may seek indemnification from ALS in connection with the foregoing. The Company intends to pursue all appropriate claims for such indemnification. (See also Part II
&#150; Item&nbsp;1A (Risk Factors)). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">On or about October&nbsp;29, 2007, the Company received a copy of a letter sent by a law firm to the
California Labor&nbsp;&amp; Workforce Development Agency, pursuant to which such law firm sought permission under the California Labor Code Private Attorney General Act of 2004 to file a complaint (the &#147;Potential California Complaint&#148;)
against the Company, a wholly owned subsidiary of the Company and ALS and one of its subsidiaries, on behalf of a class of employees currently and formerly employed by the defendants in California (the employees have not been named). Plaintiff has
alleged that the defendants (i)&nbsp;failed to pay overtime compensation, (ii)&nbsp;failed to pay wages at time of discharge, (iii)&nbsp;failed to pay all wages at the time required, (iv)&nbsp;failed to provide proper itemized wage statements, and
(v)&nbsp;issued checks drawn on out-of-state banks with no in-state address for presentation. Agreements related to the acquisition of certain assets and liabilities of ALS in February 2007 contain provisions under which the Company may seek
indemnification from ALS in connection with the foregoing. The Company intends to pursue all appropriate claims for such indemnification. (See also Part II &#150; Item&nbsp;1A (Risk Factors)). </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Generally, the Company is engaged in various litigation, from time to time, in the normal course of business. Management does not believe that the
ultimate outcome of such matters, either individually or in the aggregate, will have a material adverse impact on the financial condition or results of the operations of Company. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">In the ordinary course of its business, ClearPoint is periodically threatened with or named as a defendant in various lawsuits, claims and pending
actions, and is typically engaged in various litigation from time to time. The principal risks that ClearPoint insures against are workers&#146; compensation, general liability, automobile liability, property damage, alternative staffing errors and
omissions, fiduciary liability and fidelity losses. If a potential loss arising from these lawsuits, claims and actions is probable, reasonably estimable, and is not an insured risk, ClearPoint records the estimated liability based on circumstances
and assumptions existing at the time. Whereas management believes the recorded liabilities are adequate, there are inherent limitations in the estimation process whereby future actual losses may exceed projected losses, which could materially
adversely affect the financial condition of ClearPoint. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B><I>Recent Accounting Pronouncements </I></B></FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">In July 2006, FASB issued FASB Interpretation No.&nbsp;48 (&#147;FIN 48&#148;), &#147;Accounting for Uncertainty in Income Taxes&#148;. FIN 48 clarifies
the accounting for uncertainty in income taxes recognized in an enterprise&#146;s financial statements in accordance with SFAS No.&nbsp;109, &#147;Accounting for Income Taxes&#148;. FIN 48 prescribes a recognition threshold and measurement
attributable for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim
periods, disclosures and transitions. FIN 48 is effective for fiscal years beginning after December&nbsp;15, 2006. The Company has adopted FIN 48 and has determined that there is no material impact on the Company&#146;s consolidated financial
statements. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">In September 2006, FASB issued SFAS No.&nbsp;157, &#147;Fair Value Measurements&#148;. SFAS No.&nbsp;157 provides enhanced
guidance for using fair value to measure assets and liabilities. SFAS No.&nbsp;157 applies whenever other standards require (or permit) assets or liabilities to be measured at fair value. SFAS No.&nbsp;157 does not expand the use of fair value in
any new circumstances. SFAS No.&nbsp;157 is effective for financial statements issued for fiscal years beginning after November&nbsp;15, 2007, and interim periods within those fiscal years. Earlier application is encouraged, provided that the
reporting entity has not yet issued financial statements for that fiscal year, including financial statements for an interim period within that fiscal year. The Company will adopt SFAS No.&nbsp;157 effective for periods beginning January&nbsp;1,
2008. The Company is currently evaluating the impact, if any, that the adoption of SFAS No.&nbsp;157 will have on its condensed consolidated financial statements. </FONT></P> <P STYLE="font-size:18px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="9%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"><B>
<A NAME="toc17341_4"></A>ITEM&nbsp;3.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2"><B>QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman"
SIZE="2">ClearPoint&#146;s major financial market exposure is to changing interest rates. While certain portions of ClearPoint&#146;s debt are at a fixed percentage interest rates, ClearPoint&#146;s borrowings under its facilities with M&amp;T vary
based on changes in interest rates. At September&nbsp;30, 2007, ClearPoint has total debt outstanding on these facilities of approximately $19,354. Changes in the LIBOR rate would have an impact on ClearPoint&#146;s cash flows, and earnings for the
nine months ended September&nbsp;30, 2007. For example, a 0.25% increase in the base rates would increase ClearPoint&#146;s monthly interest expenses and negatively impact earnings and cash flows by approximately $4. </FONT></P> <P
STYLE="font-size:18px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="9%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"><B>
<A NAME="toc17341_5"></A>ITEM&nbsp;4.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2"><B>CONTROLS AND PROCEDURES </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">ClearPoint, under the
supervision and with the participation of its management, including its principal executive officer and principal financial officer, evaluated the effectiveness of ClearPoint&#146;s disclosure controls and procedures as of the end of the period
covered by this report. Based on this evaluation, the principal executive officer and principal financial officer concluded that, as of the end of the period covered by this report, ClearPoint&#146;s disclosure controls and procedures were effective
to provide reasonable assurance that information required to be disclosed in reports that are filed or submitted under the Securities Exchange Act of 1934, as amended (the &#147;Exchange Act&#148;), is (i)&nbsp;recorded, processed, summarized and
reported within the time periods specified in the SEC&#146;s rules and forms and (ii)&nbsp;accumulated and communicated to ClearPoint&#146;s management, including the principal executive officer and principal financial officer, or persons performing
similar functions, as appropriate to allow timely decisions regarding the required disclosure. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">ClearPoint&#146;s principal executive
officer and principal financial officer note that, due to human performance error, not a process deficiency, during the three months ended September 30, 2007, ClearPoint did not timely file a Current Report on Form 8-K announcing the increased
principal amount of ClearPoint&#146;s Term Loan and amendments to its credit agreement with M&amp;T. Such information is included in &#147;Part II, Item&nbsp;5 &#150; Other Information&#148; of this Quarterly Report on Form 10-Q. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The principal executive officer and principal financial officer also conducted an evaluation of changes in the internal control over financial reporting
(&#147;Internal Control&#148;) to determine whether any changes in Internal Control occurred during the quarter (ClearPoint&#146;s fourth fiscal quarter in the case of an annual report) that have materially affected or which are reasonably likely to
materially affect Internal Control. Based on that evaluation, there has been no such change during the quarter covered by this report. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">A control system, no matter how well conceived and operated, can provide only reasonable, not absolute,
assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the
inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within ClearPoint have been detected. Because of the inherent limitations in a
cost-effective control system, misstatements due to error or fraud may occur and not be detected. </FONT></P> <P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>
<A NAME="toc17341_6"></A>PART II&#151;OTHER INFORMATION </B></FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="9%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"><B>
<A NAME="toc17341_7"></A>ITEM&nbsp;1.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2"><B>LEGAL PROCEEDINGS </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">In February of 2007, the Company
entered into a three party settlement agreement between ClearPoint, Westaff, Inc (&#147;Westaff&#148;) and 26 employees hired by ClearPoint who formerly worked for Westaff. The settlement arose out of lawsuits filed by Westaff against certain of
those employees. The terms of the settlement required ClearPoint to make a one time cash payment of $266 to Westaff, plus legal fees of $56, and in return for such consideration Westaff agreed to release all 26 former employees of Westaff and now
employed by ClearPoint from their non-compete and non-solicitation agreements that the employees had signed while employed by Westaff. As an additional term of the settlement agreement, ClearPoint agreed to cease the solicitation of Westaff
employees. The total cost to the Company including legal expenses was $322 in the nine months ended September&nbsp;30, 2007. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The Company
also hired a high level transportation sales executive. The former partner of the high level executive, threatened litigation against the Company based on covenants not to compete related to customers that the Company was soliciting. To settle the
potential claim, the Company made a one-time cash payment of $80 in the first quarter of fiscal 2007 to the former partner of the transportation executive in exchange for fully settlement and release of all potential claims against the Company and
the executive. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">On September&nbsp;21, 2007, TSIL, which claims to be a captive reinsurance company offering workers&#146; compensation
insurance to its shareholders through an insurance program, filed a complaint in the U.S. District Court in Florida against the ALS Defendants, alleging that it was owed at least $2,161,172 in unpaid insurance assessments, as well as other requested
damages, from the ALS Defendants. Kevin O&#146;Donnell, a former officer of ALS and a named defendant in the TSIL Litigation, controls KOR Capital, LLC &#150; a franchisee of the Company. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The Company is also named as a defendant because it acquired certain assets from ALS and its wholly owned subsidiaries including ASG II, in February 2007
for which it paid a portion of the purchase price at closing to the ALS Defendants, through ALS. It is alleged that this transfer rendered ASG II, one of the named insureds on the TSIL policy, insolvent and unable to pay the insurance assessments
and damages owed to TSIL. TSIL requests in its complaint that its damages be satisfied from the assets transferred to the Company. Agreements related to the acquisition of certain assets and liabilities of ALS in February 2007 contain provisions
under which the Company may seek indemnification from ALS in connection with the foregoing. The Company intends to pursue all appropriate claims for such indemnification. (See also Part II &#150; Item&nbsp;1A (Risk Factors)). </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">On or about October&nbsp;29, 2007, the Company received a copy of a letter sent by a law firm to the California Labor&nbsp;&amp; Workforce Development
Agency, pursuant to which such law firm sought permission under the California Labor Code Private Attorney General Act of 2004 to file a complaint against the Company, a wholly owned subsidiary of the Company and ALS and one of its subsidiaries, on
behalf of a class of employees currently and formerly employed by the defendants in California (the employees have not been named). Plaintiff has alleged that the defendants (i)&nbsp;failed to pay overtime compensation, (ii)&nbsp;failed to pay wages
at time of discharge, (iii)&nbsp;failed to pay all wages at the time required, (iv)&nbsp;failed to provide proper itemized wage statements, and (v)&nbsp;issued checks drawn on out-of-state banks with no in-state address for presentation. Agreements
related to the acquisition of certain assets and liabilities of ALS in February 2007 contain provisions under which the Company may seek indemnification from ALS in connection with the foregoing. The Company intends to pursue all appropriate claims
for such indemnification. (See also Part II &#150; Item&nbsp;1A (Risk Factors)). </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Generally, the Company is engaged in various litigation, from time to time, in the normal course of
business. Management does not believe that the ultimate outcome of such matters, either individually or in the aggregate, will have a material adverse impact on the financial condition or results of operations of the Company. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">In the ordinary course of its business, ClearPoint is periodically threatened with or named as a defendant in various lawsuits, claims and pending
actions, and is typically engaged in various litigation from time to time. The principal risks that ClearPoint insures against are workers&#146; compensation, general liability, automobile liability, property damage, alternative staffing errors and
omissions, fiduciary liability and fidelity losses. If a potential loss arising from these lawsuits, claims and actions is probable, reasonably estimable, and is not an insured risk, ClearPoint records the estimated liability based on circumstances
and assumptions existing at the time. Whereas management believes the recorded liabilities are adequate, there are inherent limitations in the estimation process whereby future actual losses may exceed projected losses, which could materially
adversely affect the financial condition of ClearPoint. </FONT></P> <P STYLE="font-size:18px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="9%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"><B>
<A NAME="toc17341_8"></A>ITEM&nbsp;1A.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2"><B>RISK FACTORS </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Unless the context indicates
otherwise, all references to &#147;we,&#148; &#147;us,&#148; &#147;our&#148; in this subsection &#147;Risk Factors&#148; refer to the Company.&nbsp;In addition to the other information set forth in this report, you should carefully consider the
factors discussed under &#147;Risk Factors&#148; in our Form 8-K/A filed with the SEC on May&nbsp;14, 2007, which could materially affect our business, financial condition or future results.&nbsp;Other than the risk factors set forth below, there
have been no material changes in our risk factors from those disclosed in our Form 8-K/A filed with the SEC on May&nbsp;14, 2007.&nbsp;The following&nbsp;risk factors&nbsp;should be read in conjunction with the risk factors included in our Form
8-K/A filed with the SEC on May&nbsp;14, 2007. The risks described in&nbsp;such Form 8-K/A, as amended below, are not the only risks&nbsp;facing ClearPoint. Additional risks and uncertainties not currently known to us or that we currently deem to be
immaterial also may materially adversely affect our business, financial condition and/or results of operations. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Pursuant to a settlement agreement, we
may no longer solicit employees from a significant competitor, which limits our ability to attract qualified personnel. </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">In February of
2007, we entered into a three party settlement agreement between ClearPoint, Westaff, Inc., referred to as &#147;Westaff,&#148; and 26 employees hired by us who formerly worked for Westaff. The settlement arose out of lawsuits filed by Westaff
against certain of those employees. The terms of the settlement require us to cease the solicitation of Westaff employees. Our inability to solicit employees from this significant competitor will limit our ability to attract qualified personnel.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>We are subject to the TSIL Litigation and we have been threatened with the Potential California Complaint, the impact of which on our financial
position and results of operations is uncertain. The inherent uncertainty related to litigation of this type and the preliminary stage of these matters makes it difficult to predict the ultimate outcome or potential liability that we may incur as a
result. </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">We are involved in the TSIL Litigation which alleges that the ALS Defendants failed to pay at least $2,161,172 in insurance
assessments, as well as other requested damages. The Company is also named as a defendant because it acquired certain assets from ALS and its wholly owned subsidiaries including ASG II, in February 2007, for which it paid a portion of the purchase
price at closing to the ALS Defendants, through ALS. It is alleged that this transfer rendered ASG II, one of the named Insureds on the TSIL policy, insolvent and unable to pay the insurance assessments and damages owed to TSIL. </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">We have received the Potential California Complaint, which alleges an intent to file a lawsuit against
the Company, a wholly owned subsidiary of the Company and ALS and one of its subsidiaries on behalf of a class of employees currently and formerly employed by the defendants in California. Plaintiff has alleged that the defendants (i)&nbsp;failed to
pay overtime compensation, (ii)&nbsp;failed to pay wages at time of discharge, (iii)&nbsp;failed to pay all wages at the time required, (iv)&nbsp;failed to provide proper itemized wage statements, and (v)&nbsp;issued checks drawn on out-of-state
banks with no in-state address for presentation. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Procedurally, both of these matters are in very preliminary stages. We believe that we
have several defenses to the claims raised in these matters and intend to vigorously defend them. Due to the inherent uncertainties in litigation and because the ultimate resolution of these proceedings is influenced by factors outside of our
control, we are currently unable to predict the ultimate outcome of these matters or their impact on our financial position or results of operations. However, to the extent that our management will be required to participate in or otherwise devote
substantial amounts of time to the defense of these matters, such activities would result in the diversion of our management resources from our business operations and the implementation of our business strategy, which may negatively impact our
financial position and results of operations. Furthermore, Kevin O&#146;Donnell, a former officer of the ALS companies and a named defendant in the TSIL Litigation, controls KOR &#150; a franchisee of the Company. To the extent that Kevin
O&#146;Donnell will be required to participate in or otherwise devote substantial amounts of time to the defense of the TSIL Litigation, such activities would result in the diversion of Kevin O&#146;Donnell&#146;s attention from the business
operations of KOR and the implementation of KOR&#146;s business strategy, which may negatively impact our financial position and results of operations. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="2"><B>We have converted a significant number of our former branches to a franchise model and we derive a portion of our revenue from these franchise operations. We intend for the franchise model to be a significant contributor to our revenues
in the future, which presents a number of disadvantages and risks. </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">We have converted 40 of our former branches to a franchise model.
At this time, we have two franchisees: TZG and KOR. We derive a portion of our revenue from these franchise operations. Although we believe that the franchise model is beneficial in that it allows us to substantially reduce our selling expenses
associated with branch based operations, the franchise operations present a number of disadvantages and risks, such as: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">Our ability to identify prospective franchisees with the experience and financial resources to be effective operators. Franchisees may not have access to the
financial resources they need due to the unavailability of credit or other factors beyond their control; </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">The potential risks to our brand if a franchisee fails to perform or projects a brand image inconsistent with our values, even where we retain substantial rights to
remedy such a default, which will likely be more significant if an arrangement places multiple markets or a large number of branches under the control of a single franchisee; </FONT></P></TD></TR></TABLE> <P
STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">Although we can exercise control over our franchisees to the extent provided under the franchise agreements, the quality of the franchise operations may be
diminished by any number of factors beyond our control. Consequently, franchisees may not successfully operate branches in a manner consistent with our standards and requirements, or may not hire and train qualified managers or temporary personnel;
and </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">While we ultimately can take action to terminate franchisees that do not comply with the standards contained in our franchise agreements, we may not be able to
identify problems and take action quickly enough and, as a result, our image and reputation may suffer, and our franchise revenues could decline. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">33 </FONT></P>


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<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="9%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"><B>
<A NAME="toc17341_9"></A>ITEM&nbsp;2.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2"><B>UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman"
SIZE="2">On April 22, 2005, Terra Nova consummated the Offering of 4,800,000 Units, with each Unit consisting of one share of Terra Nova&#146;s common stock and two Warrants, under a registration statement on Form S-1 (File No. 333-122439) which was
declared effective by the SEC on April 18, 2005. On April 26, 2005, Terra Nova consummated the Offering of an additional 720,000 Units which were subject to the over-allotment option. The Units were sold at an offering price of $6.00 per Unit,
generating total gross proceeds of $33.1 million. After deducting the underwriting discounts and commissions and the Offering expenses, the total net proceeds to Terra Nova from the Offering were approximately $29.6 million, of which $28.6 million
was deposited into the Trust Fund. In connection with the Offering, Terra Nova sold to EarlyBirdCapital, Inc., a representative of the underwriters in such Offering, an option to purchase 240,000 Units at a purchase price of $9.90 per Unit.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">On February 12, 2007, ClearPoint consummated the Merger with Terra Nova. Upon consummation of the Merger, $30.6 million was released from
the Trust Fund to be used by the combined company. After payments totaling approximately $3.3 million for professional fees and other direct and indirect costs related to the Merger, the net proceeds amounted to $27.3 million, all of which were used
by ClearPoint as follows: (i) to retire the outstanding debt to Bridge of $12.5 million, (ii) to pay an early debt retirement penalty in the amount of $1.95 million to Bridge, (iii) to pay the redemption of warrants related to its credit facility
with Bridge in the amount of $3.3 million, and (iv) to fund the acquisition of ASG and certain other related transaction costs. </FONT></P> <P STYLE="font-size:18px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="9%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"><B>
<A NAME="toc17341_10"></A>ITEM&nbsp;3.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2"><B>DEFAULTS UPON SENIOR SECURITIES </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">None. </FONT></P>
<P STYLE="font-size:18px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="9%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"><B>
<A NAME="toc17341_11"></A>ITEM&nbsp;4.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2"><B>SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman"
SIZE="2">None. </FONT></P> <P STYLE="font-size:18px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="9%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"><B>
<A NAME="toc17341_12"></A>ITEM&nbsp;5.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2"><B>OTHER INFORMATION </B></FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="9%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"><B>Item&nbsp;1.01</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2"><B>Entry into a Material Definitive Agreement. </B></FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="9%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"><B>Item&nbsp;2.03</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2"><B>Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. </B></FONT></TD></TR></TABLE> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">On February 23, 2007, the Company entered into a credit agreement with Manufacturers and Traders Trust Company (&#147;M&amp;T&#148;) for a $20 million
revolving credit facility and a $3 million term loan (the &#147;Term Loan&#148;), as disclosed by the Company in a Form 8-K that was filed with the Securities and Exchange Commission on February 28, 2007. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">On July 13, 2007, the Company increased the principal amount of its Term Loan with M&amp;T from $3,000,000 to $5,000,000. The Company paid a fee of
$10,000, at the rate of fifty (50) basis points on the $2,000,000 increase. The increase was reflected in an Amended and Restated Term Note as well as a First Amendment to Credit Agreement (the &#147;Amended Credit Agreement&#148;). In addition to
increasing the principal amount of the Term Loan, the Amended Credit Agreement (i) modified the interest payment dates, (ii) modified the &#147;Applicable Commitment Fee Percentage&#148; definition utilized in calculating any revolving credit
commitment fee due to M&amp;T, and (iii) modified the &#147;Applicable Margin&#148; definition utilized in calculating any letter of credit fees due to M&amp;T and the interest rates. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The foregoing is a summary of the material provisions of the Amended and Restated Term Note and Amended Credit Agreement. This summary is qualified in
its entirety by reference to the Amended and Restated Term Note and Amended Credit Agreement, which are incorporated by reference in their entirety herein and copies of which are attached to this Quarterly Report on Form 10-Q as <U>Exhibits 4.1</U>
and <U>10.3</U>, respectively. Capitalized terms which are not defined in this Quarterly Report on Form 10-Q shall have the meanings assigned to such terms in the Amended and Restated Term Note and Amended Credit Agreement. </FONT></P> <P
STYLE="font-size:18px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="9%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"><B>
<A NAME="toc17341_13"></A>ITEM&nbsp;6.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2"><B>EXHIBITS </B></FONT></TD></TR></TABLE> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="7%"></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD WIDTH="91%"></TD></TR>
<TR>
<TD VALIGN="bottom"> <P STYLE="margin-right:0px;margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>Exhibit&nbsp;No.</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT FACE="Times New Roman" SIZE="1"><B>Description</B></FONT></P></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">&nbsp;&nbsp;4.1</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Amended and Restated Term Note, dated July 13, 2007, payable to Manufacturers and Traders Trust Company in the original principal amount of $5,000,000</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">10.1</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Franchise Agreement, dated August 13, 2007, by and between ClearPoint Business Resources, Inc. and TZG Enterprises, LLC</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">10.2</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Franchise Agreement, dated August 30, 2007, by and between ClearPoint Business Resources, Inc. and KOR Capital, LLC</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">10.3</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">First Amendment to Credit Agreement, date July 13, 2007, by and between ClearPoint Business Resources, Inc. and Manufacturers and Traders Trust Company</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">31.1</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Certification of Chief Executive Officer pursuant to Rule 13a-14(a) promulgated under the Exchange Act.</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">31.2</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Certification of Chief Financial Officer pursuant to Rule 13a-14(a) promulgated under the Exchange Act.</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">32</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Certification of the Company&#146;s Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
</FONT></TD></TR>
</TABLE><HR WIDTH="8%" SIZE="1" NOSHADE COLOR="#000000" ALIGN="left">
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">*</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Management contract or compensatory plan or arrangement. </FONT></TD></TR></TABLE> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">34 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>
<A NAME="toc17341_14"></A>SIGNATURES </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned thereunto duly authorized. </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0">

<TR>
<TD WIDTH="48%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="2%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="48%"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="3"><FONT FACE="Times New Roman" SIZE="2">CLEARPOINT BUSINESS RESOURCES, INC.</FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Date: November&nbsp;13, 2007</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-bottom:1px;border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="2">/s/ Michael D. Traina</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Michael D. Traina</FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Chief Executive Officer</FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Date: November 13, 2007</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-bottom:1px;border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="2">/s/ Kurt A. Braun</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Kurt A. Braun</FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Chief Financial Officer</FONT></TD></TR>
</TABLE> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">35 </FONT></P>


<p Style='page-break-before:always'>
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<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>
<A NAME="toc17341_15"></A>EXHIBIT INDEX </B></FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="7%"></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD WIDTH="91%"></TD></TR>
<TR>
<TD VALIGN="bottom"> <P STYLE="margin-right:0px;margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>Exhibit&nbsp;No.</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT FACE="Times New Roman" SIZE="1"><B>Description</B></FONT></P></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">&nbsp;&nbsp;4.1</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Amended and Restated Term Note, dated July 13, 2007, payable to Manufacturers and Traders Trust Company in the original principal amount of $5,000,000</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">10.1</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Franchise Agreement, dated August 13, 2007, by and between ClearPoint Business Resources, Inc. and TZG Enterprises, LLC</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">10.2</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Franchise Agreement, dated August 30, 2007, by and between ClearPoint Business Resources, Inc. and KOR Capital, LLC</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">10.3</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">First Amendment to Credit Agreement, date July 13, 2007, by and between ClearPoint Business Resources, Inc. and Manufacturers and Traders Trust Company</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">31.1</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Certification of Chief Executive Officer pursuant to Rule 13a-14(a) promulgated under the Exchange Act.</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">31.2</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Certification of Chief Financial Officer pursuant to Rule 13a-14(a) promulgated under the Exchange Act.</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">32</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Certification of the Company&#146;s Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
</FONT></TD></TR>
</TABLE><HR WIDTH="8%" SIZE="1" NOSHADE COLOR="#000000" ALIGN="left">
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">*</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Management contract or compensatory plan or arrangement. </FONT></TD></TR></TABLE> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">36 </FONT></P>

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<TYPE>EX-4.1
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<FILENAME>dex41.htm
<DESCRIPTION>AMENDED AND RESTATED TERM NOTE
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<TITLE>Amended and Restated Term Note</TITLE>
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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2"><B>Exhibit 4.1 </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="2">AMENDED AND RESTATED TERM NOTE </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="48%"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">$5,000,000</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">July&nbsp;13, 2007</FONT></TD></TR>
</TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">FOR VALUE RECEIVED, CLEARPOINT BUSINESS RESOURCES, INC. (the &#147;<U>Borrower</U>&#148;) hereby
unconditionally promises to pay to the order of MANUFACTURERS AND TRADERS TRUST COMPANY (the &#147;<U>Lender</U>&#148;) at the office of MANUFACTURERS AND TRADERS TRUST COMPANY (the &#147;<U>Administrative Agent</U>&#148;) located at 601 Dresher
Road, Horsham, PA 19044, the sum of FIVE MILLION DOLLARS ($5,000,000). In addition, the Borrower agrees to make principal payments on this Note on the dates specified in the Credit Agreement (as defined below) and in the amounts determined in
accordance with the provisions thereof, including any outstanding principal and accrued interest being due and payable on the Term Loan Maturity Date. The Borrower further agrees to pay interest accrued on the unpaid principal amount outstanding
hereunder from time to time from the date hereof at such office in the amounts, at the rates and on the dates specified in the Credit Agreement, together with all other costs, fees and expenses as provided in the Credit Agreement. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The holder of this Note is authorized to endorse on Schedule 1 annexed hereto and made a part hereof, or on a continuation thereof which shall be
attached hereto and made a part hereof, the respective date, Type and the amount of the Term Loan made by the Lender to the Borrower, each continuation thereof, each conversion of all or portion thereof to another Type, the date and amount of all
payments and prepayments of the principal hereof and interest hereon and the respective dates thereof, and, in the case of Eurodollar Loans, the length of each Interest Period with respect thereto, or to otherwise record such information on its
internal records, and any such endorsement or recordation shall constitute <I>prima facie</I> evidence of the accuracy of the information so endorsed or recorded; <I>provided, however,</I> that the failure to make any such endorsement or recordation
(or any error in such endorsement or recordation) shall not affect the obligations of the Borrower to make payments of principal, interest and other amounts outstanding in accordance with the terms of this Note and the Credit Agreement. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Capitalized terms used herein without definition shall have the meanings given in the Credit Agreement, dated as of February&nbsp;23, 2007, among the
Borrower, the Administrative Agent, and the Lenders party thereto (as it may be amended, restated, supplemented or otherwise modified from time to time, the &#147;<U>Credit Agreement</U>&#148;). This Note is one of the Term Notes referred to in,
evidences indebtedness incurred under, and is entitled to the benefits of, the Credit Agreement. The Credit Agreement, among other things, contains provisions for acceleration of the maturity hereof upon the happening of certain events, for optional
or mandatory prepayments of the principal hereof prior to the maturity thereof, for a higher rate of interest hereunder upon the occurrence of an Event of Default and the continuance thereof and for the amendment or waiver of certain provisions of
the Credit Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">This Note shall be deemed to be in complete substitution for and replacement of, and not a repayment of, the Term
Note dated February&nbsp;23, 2007 made by the Borrower payable to order of the Lender (the &#147;<U>Prior Note</U>&#148;), and all interest accrued and unpaid under such Prior Note shall be deemed evidenced by this Note and payable hereunder. The
execution and delivery of this Note shall not be construed (a)&nbsp;to have constituted repayment of any amount of principal or interest on the Prior Note, or (b)&nbsp;to release, cancel, terminate or otherwise impair all or any part of any Lien
granted to the Lenders or the Administrative Agent as collateral security for the Prior Note. </FONT></P>

<p Style='page-break-before:always'>
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Upon the occurrence and continuance of any one or more of the Events of Default specified in the Credit
Agreement, all amounts then remaining unpaid on this Note shall become, or may be declared to be, immediately due and payable, all as provided therein. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">All parties now and hereafter liable with respect to this Note, whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive presentment, demand, protest and notice of any kind. No failure to
exercise, and no delay in exercising, any rights hereunder on the part of the holder hereof shall operate as a waiver of such rights. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The
Borrower acknowledges that it has read and understood all the provisions of this Note, and has been advised by counsel as necessary or appropriate. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman"
SIZE="2">[SIGNATURE PAGE TO FOLLOW] </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">2 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">WITNESS the due execution hereof as a document under seal, as of the date first written above with the
intent to be legally bound hereby. </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><DIV ALIGN="right">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="40%" BORDER="0">

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<TD WIDTH="7%"></TD>
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<TD VALIGN="top" COLSPAN="3"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2"><B>CLEARPOINT BUSINESS RESOURCES, INC.</B></FONT></P></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">By:</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-bottom:1px;border-bottom:1px solid #000000; margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">/s/ Chris Ferguson</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Name:</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Chris Ferguson</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Title:</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">President</FONT></P></TD></TR>
</TABLE></DIV> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">S-1 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>Schedule 1 </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="2"><B>Loans, Conversions and Payments </B></FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TR>
<TD WIDTH="11%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="11%"></TD>
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<TD WIDTH="12%"></TD>
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<TD WIDTH="12%"></TD>
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<TD WIDTH="12%"></TD>
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<TD WIDTH="12%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="11%"></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="3" ALIGN="center" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>Payments</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="bottom"> <P STYLE="margin-right:0px;margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>Date</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>Amount of Loan</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>Interest Rate</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>Interest Period</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>Principal</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>Interest</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>Unpaid</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"
ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>Balance&nbsp;of&nbsp;Note</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>Notation</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"
ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>Made&nbsp;By</B></FONT></P></TD></TR>
</TABLE>
</BODY></HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>3
<FILENAME>dex101.htm
<DESCRIPTION>FRANCHISE AGREEMENT-TZG ENTERPRISES, LLC
<TEXT>
<HTML><HEAD>
<TITLE>Franchise Agreement-TZG Enterprises, LLC</TITLE>
</HEAD>
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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2"><B>Exhibit 10.1 </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="2"><B>Franchise Agreement &#150; Management Agreement </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B>1. </B>THIS AGREEMENT is made this 13th day of
August 2007, by and between Clearpoint Business Resources, Inc. located at 1600 Manor Drive, Suite 110, Chalfont, PA 18914 (hereinafter referred to as &#147;Franchisor&#148; or &#147;ClearPoint&#148;) and TZG Enterprises, LLC, located at 101 Colonel
Clayton Drive, Middletown, DE 19709 (hereinafter referred to as &#147;Franchisee&#148; or &#147;You&#148;). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">The Parties shall seek to
enforce this Agreement as a Franchise Agreement and shall cooperate with each other and exercise their best efforts to secure any such required approvals, file any such registrations, or satisfy any such conditions expeditiously. In the event that
the parties mutually determine that the formal relationship of Franchisor/Franchisee is not practical, the parties shall follow the specific terms and intent of the Agreement with ClearPoint as the Company and TGZ Enterprises, LLC as the Service
Manager for the Company. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>2. CLEARPOINT BUSINESS RESOURCES OVERVIEW </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2">ClearPoint Business Resources, Inc. is a leading Workforce Management Solutions provider to clients ranging from small businesses to Fortune 500 companies. Franchisor&#146;s of franchisees and affiliates provide
customized temporary staffing solutions with performance based deliverables, creating increased productivity. The Company&#146;s services can streamline and optimize the complex processes involved in the procurement and management of a contingent
workforce. ClearPoint&#146;s proprietary suite of technology provides a cutting human capital portal that allows companies to manage their workforce in one click. This unique approach involving their specialized consultant teams puts the Franchisor
at the forefront of the rapidly evolving Human Capital industry. For more information about ClearPoint, visit <U>http://www.clear-point.com</U>. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>3. THE
CLEARPOINT PROGRAM AND NETWORK </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">3(a) Clearpoint Business Resources has developed a unique and distinctive <B>&#147;Program&#148; </B>which includes the
Client Files, Prospect Lists, Materials, Proprietary Marks, Domain Names, Copyrighted Works, Confidential Information, as well as certain tools, methods, operational procedures and techniques, proprietary and other third-party software applications,
advertising materials, promotional programs, recordkeeping and reporting procedures, training, and knowledge. All components of the Program, existing today or developed by Franchisee or Franchisor during the term of this Agreement, constitute
valuable trade secrets that are proprietary to Franchisor. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">3(b) All components of the Program are provided to Franchisee for the establishment,
development, operation and management of each franchise licensed under this Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">3(c) The Program is the undisputed property of Franchisor, any
component of the Program may be changed, improved, developed or discontinued by Franchisor from time to time, Franchisee must adhere to any changes to the Program. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="2">3(d) Ownership of the Confidential Information by Franchisor is derived from the fact that all business generated during the operation of Franchisee is done under the Proprietary Marks, the Program, and the training designed and provided by
Franchisor. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">3(e) The value of the Program is enhanced by the <B>&#147;Network&#148; </B>which consists of all of the ClearPoint licensed franchisees and
affiliates or offices owned directly by Franchisor. Franchisee may compete directly with any other franchisee, and any other Clearpoint Resources franchisee, affiliate or Franchisor owned office may compete directly with Franchisee, including the
solicitation of Clients, Job-seekers, and Field Employees. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">3(f) For the purposes of this Agreement, the Clearpoint Franchisee (the
<B>&#147;Business&#148;</B>)<B> </B>is licensed for the purpose of providing full staffing employment services. Without limitation, those services include, </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">1 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px">
<FONT FACE="Times New Roman" SIZE="2">career placements, contract staffing, temp-to-hire placements, and temporary assignments, as well as all other similar or related staffing products,
services, or activities. The Franchisor is specifically precluded from providing employee leasing services and technology solutions. The parties hereby agree that such services are exclusively provided to Clients by Franchisor. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">3(g) Any use of the Program, including the Confidential Information and the Proprietary Marks, other than for the operation of the Business, is a material breach of this
Agreement. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>4. AUTHORIZATION FOR PAY/BILL SERVICES BY CLEARPOINT </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2">4(a) <U>Authorization:</U> The Franchisee relationship is primarily with Franchisor; however, certain duties and obligations contained in this Agreement will be performed by Franchisee. Franchisee must receive written
approval of your plan to perform Payroll and Billings Operations under this Agreement. Franchisor authorizes ClearPoint&#146;s Payroll and Billings Operations to perform these duties and obligations in accordance with the terms of this Agreement.
Any changes to this plan must be pre approved by Franchisor. Generally, the role of Franchisor will be to fund, process, administer and maintain the accounting of the monies on behalf of the Franchisee (as detailed in <U><B>Section&nbsp;9),</B></U>
and employ Field Employees to be utilized by Franchisee. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">4(b) <U>Employment of Field Employees:</U> Franchisee, Franchisor, and each &#147;Client&#148;
(commonly identified as any individual or entity that uses, or desires to use, the services of Clearpoint) may under certain federal and state laws, contemporaneously incur certain employer responsibilities through their respective day-to-day
activities and interaction with the Field Employee. These activities may result in the Co-employment of a Field Employee. <B>&#147;</B><B>Co-employment&#148; </B>means the act of having direct contact with, or control of, a Field Employee.
Therefore, as the facts and circumstances of each action performed by Franchisee, Franchisor, and/or the Client may warrant, each party may be required to undertake an employer&#146;s legal duty to the Field Employee. Unless otherwise required by
law, as a result of the affiliation with Franchisor, the Field Employee services provided through the Business shall be provided by individuals who are generally employees of Franchisee. In all circumstances, Franchisee shall be solely responsible
for all taxes, wages, and benefits due Field Employees. Franchisee shall also be solely responsible to ensure compliance with all laws regarding employment and hiring of Field Employees. Franchisee agrees to indemnify and hold harmless Franchisor
for any and all claims related to the employment of Field Employees. All Clients who receive services through the Business shall be Clients of Franchisor. Franchisor shall retain all right, title and interest in and to all Clients. </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">2 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">4(c) <U>Reasons to Refuse Services:</U> Franchisor reserves the right, in our sole discretion, to refuse to: </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(1) Allow Franchisee to employ any individual referred by Franchisee as a Field Employee who does meet the qualifications and standards specified by
Franchisor in the Materials or who does not meet Federal, state, or local minimum hiring requirements, </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(2) allow Franchisee to dispatch a
Field Employee to any job assignment due to any adverse economic or safety reasons, or any reason that would violate a Field Employee&#146;s rights under federal law, </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT
FACE="Times New Roman" SIZE="2">(3) provide Field Employees to a Client who has not made timely payments to Franchisor; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(4) enter into an
agreement with a Client if the anticipated Gross Margin with respect to that agreement would not fairly compensate Franchisor for providing Franchisor related services; or </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(5) at the sole discretion of the Franchisor, allow Franchisee to provide Field Employees to a Client if Franchisee fail to perform credit checks or if
we deem a Client to be a high credit risk. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>5. THE CLEARPOINT LICENSE RELATIONSHIP </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2">5(a) <U>Grant:</U> In reliance on the representations, warrants, acknowledgements, promises and covenants Franchisee makes in this Agreement, Franchisor grants Franchisee a nonexclusive license to use the Clearpoint
Property solely for the purpose of operating each Business identified in Attachment 2. In turn, Franchisee accept the rights and obligations contained in this Agreement and Franchisee agrees to comply with all terms and provisions contained in this
Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>5(b) </B><U>Term:</U> The initial term of this Agreement begins on the Effective Date and will not exceed 99 years. In addition, every ten
years the Parties shall engage in the 10 Year Renewal Process set forth in Section&nbsp;13. <B> </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">5(c) <U>Granted Territory and Minimum Performance
Requirements:</U> </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(1) If the parties agreed to designate a <B>&#147;Granted Territory&#148; </B>(as detailed on Attachment 2), then
Franchisee must establish Franchisee first Location within that Granted Territory. If the parties agree not to identify a Granted Territory, then Franchisee must establish Franchisee first Location at a site approved by Franchisor in accordance with
subsection 6(b) below. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(2) The terms of this Agreement provide for operating multiple Business locations. During the term of this
Agreement, if Franchisee desires to expand Franchisee existing operations, and Franchisee meets Franchisors then-current criteria to expand, Franchisor will determine whether or not the new location must be established within the Granted Territory
or elsewhere. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(3) It is agreed by the <B>parties </B>that the grant of the <B>Granted </B>Territory rights is specifically conditional on
Franchisee successful market penetration of the Granted Territory. It is understood that if during any given annual period during the term of this Agreement Franchisee fails to achieve the <B>&#147;Minimum Performance Requirements&#148; </B>set
forth on Attachment 2, Franchisor will provide Franchisee with Franchisors written notice that Franchisor elect to either: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(i) give
Franchisee the opportunity to pay Franchisor the amount equal to the shortfall between the Royalty payments actually paid by Franchisee and the then-required Minimum Performance Requirement figure thus enabling Franchisee to retain Franchisee rights
to the Granted Territory, or </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(ii) rescind your Granted Territory rights, at which time Franchisor is no longer restricted from
establishing other ClearPoint businesses (whether franchised or company-owned) within </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<FONT FACE="Times New Roman" SIZE="2">the Granted Territory, regardless of proximity to any Business already established within the Granted Territory. </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(i) <U>Limited On-Site Services:</U> Franchisor, or another of Franchisor&#146;s franchisees, may, from
time to time, provide limited on-site services to a single on-site client within the Granted Territory. All on-site services are strictly limited to the needs of the specific on-site client and may not service other Clients in the granted Territory.
Once the on-site services are no longer required, <B>all </B>on-site personnel must be removed from the on-site client&#146;s facility within the time period specified by the on-site client following the stop in services. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(ii) <U>Clearpoint Acquisition:</U> In the event Franchisor (whether directly or through Franchisor&#146;s subsidiaries or affiliates) acquire a
multi-location staffing business from an unrelated third-party that happens to have one or more locations within the Granted Territory, Franchisor may at Franchisors sole option either (a)&nbsp;operate the acquired businesses using the Proprietary
Marks, (b)&nbsp;operate the acquired businesses under any other trade name or mark selected by Franchisor, <B>or </B>(c)&nbsp;provide Franchisee the opportunity to purchase and operate one or more <B>of </B>the acquired businesses located within the
Granted Territory. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(iii) <U>Major Account Client:</U> If during the term of this Agreement Franchisor initiates a major account program
that requires servicing Clients located in the Granted Territory Franchisor may either (a)&nbsp;perform the services Ourselves, or (b)&nbsp;offer Franchisee the opportunity to perform the services as required by the related Major Account agreement,
or (c)&nbsp;authorize another Clearpoint franchisee or third-party to perform the services. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(4) Franchisor is not restricted from
developing business within the Granted Territory if Franchisee does not retain Franchisee rights (or in those instances that apply to the exceptions above). Further, Franchisor is not restricted from establishing ClearPoint businesses (or other
similar staffing businesses) outside the Granted Territory. Franchisor may establish such businesses under the Proprietary Marks or any other marks Franchisor designates. The established businesses may be operated or franchised by Franchisor from
sites anywhere in the world, and regardless of proximity to a specific ClearPoint office. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px;padding-bottom:3px;line-Height:95%; vertical-align:top"><FONT FACE="Times New Roman" SIZE="2">5(d)
<U>Use of Franchisor Property:</U> Franchisee is hereby licensed to use the Clearpoint Property solely in accordance with this Agreement and in the manner prescribed by Franchisor either in the Materials or by Franchisors written instructions to
Franchisee. Franchisor may change, modify, develop, or discontinue components of the Clearpoint Property from time to time. The <B>&#147;</B><FONT FACE="Times New Roman" SIZE="1"><SUP><B></B></SUP></FONT><FONT FACE="Times New Roman"
SIZE="2"><B>Clearpoint Property&#148; </B>includes the following: </FONT></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(1) The Program. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(2) The &#147;<B>Proprietary </B>Marks&#148; including the service marks CLEARPOINT , CLEARPOINTSEARCH<B>, </B>the descriptive phrases CLEARPOINT
RESOURCES, CLEARPOINT Technical Services and CLEARPOINT Information Services, and such other trade names, trademarks, and service marks as Franchisor may designate (or substitute) for Franchisee use in connection with the operation of the Business.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(3) The &#147;Domain <B>Names</B>&#148;<B> </B>including the Internet domain name www.clear-point.com (and all other Domain Names
registered by Franchisor or Franchisor&#146;s affiliates) and any other domain names that may be utilized by Franchisor. Franchisee must use the Domain Names in conjunction with the identifier Franchisor assign to Franchisee. </FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%;padding-bottom:3px;line-Height:95%; vertical-align:top"><FONT FACE="Times New Roman" SIZE="2">(4) The <B>&#147;</B><FONT FACE="Times New Roman" SIZE="1"><SUP><B></B></SUP></FONT><FONT
FACE="Times New Roman" SIZE="2"><B>Materials&#148;, </B>(whether written or electronic) include without limitation manuals, written directives and policy statements, Copyrighted Works, forms, reports, audio or video tapes, all virtual classroom
programs, forms of electronic storage media, software applications and Internet web pages (whether owned or licensed by Franchisor). Franchisor may, at Franchisors sole option, modify the Materials from time to time, and Franchisee must adhere to
such changes. </FONT></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(5) The <B>&#147;Copyrighted Works&#148;, </B>includes all Materials containing the copyright identification
<U>CLEARPOINT,</U> as well as all other Materials entitled to the protection of the copyright laws. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(6) All Confidential Information
owned, licensed or sublicensed by Franchisor or delivered </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<FONT FACE="Times New Roman" SIZE="2">to Franchisee in confidence, including information developed by the parties during the term of this Agreement. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(7) All <B>&#147;Service Files&#148; </B>which consist of any and all the information concerning any Client or potential Client, any job opening from a
Client or potential Client, and resumes, applications, and any other related information concerning the following individuals: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(i) any
<B>&#147;Job-seeker&#148; </B>who is generally identified as an applicant who seeks out Clearpoint Resources, with respect to self-employment, or temporary employment by others; and </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(ii) any <B>&#147;Field Employee&#148; </B>who is generally identified as a Job-seeker who becomes a Field Employee at the time Franchisee sells his/her
services to one or more Clients; and </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(8) The goodwill associated with and symbolized by each component described in this subsection 5(d),
and all improvements, enhancements, additions and modifications to any of them. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(9) All &#147;accounts&#148; resulting from the processing
of Billings in accordance with Section&nbsp;9 of this Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">5(e) <U>Ownership of the Clearpoint Property:</U> </FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(1) Franchisor&#146;s ownership of the Clearpoint Property is undisputed. Franchisee shall not contest the validity of Franchisors rights in the
Clearpoint Property or take any action that would prejudice or interfere with the validity of Franchisors rights with respect to the Clearpoint Property. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT
FACE="Times New Roman" SIZE="2">(2) Except with regard to Franchisee right to use the Clearpoint Property in accordance with the terms and conditions of this Agreement nothing in this Agreement shall give Franchisee (or any related party to
Franchisee) any rights, title, or interest in or to the Clearpoint Property. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(3) Any unauthorized use of the Clearpoint Property by
Franchisee shall constitute an infringement of Franchisors rights in the Clearpoint Property and is a material default of this Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman"
SIZE="2">(4) Franchisee shall execute and provide to Franchisor all documents and information Franchisor reasonably request to fully vest and protect Franchisor&#146;s right, title and interest in the Clearpoint Property. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">5(f) <U>Identifying the Program:</U> </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(1) Clearpoint
reserves the right to issue specifications and guidelines as are reasonably necessary to preserve Franchisors rights in and to the Proprietary Marks and Domain Names. Franchisee must adhere to these specifications and guidelines. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(2) If the current Proprietary Marks or Domain Names can no longer be used Franchisor may discontinue, modify, substitute or add to the Proprietary Marks
or Domain Names for the benefit of the Program. Upon Franchisee&#146;s receipt of Franchisor&#146;s written notice, Franchisee must, at Franchisee&#146;s expense, comply with such change. Franchisee agrees to consistently adhere to Franchisor&#146;s
instructions concerning the use of the Proprietary Marks and Domain Names. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(3) Franchisor may inspect Franchisee operations from time to
time and will advise Franchisee of any deficiencies concerning Franchisee non-compliance with the Program identification at the Business. Upon notification of such deficiencies, Franchisee must conform Franchisee operations accordingly.
Franchisee&#146;s failure to comply with Franchisors instructions is a material breach of this Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">5(g) <U>Identification for Advertising and
Marketing Purposes:</U> Franchisee must identify itself as a Clearpoint franchisee as Franchisor prescribed or approved by Franchisor. Franchisee may not use the Proprietary Marks with any prefix, suffix, or additional words, symbols, marks, or
punctuation that have not been approved by Franchisor. If the law requires different or additional identification, Franchisee may </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<FONT FACE="Times New Roman" SIZE="2">use the Proprietary Marks only with modifications that Franchisor designates in writing to Franchisee. Franchisee may not use any corporate, partnership,
fictitious, trade, domain or other name without Franchisors prior written approval. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">5(h) <U>Identification as an Independent Contractor.</U> </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(1) This Agreement does not create a fiduciary relationship between Franchisee and Franchisor. Nothing in this Agreement is intended to make either
party an agent, legal representative, subsidiary, joint venturer, partner, employee, or servant of the other for any purpose whatsoever. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman"
SIZE="2">(2) Franchisee must hold itself out to the public as an independent contractor operating according to a franchise license from Franchisor. Franchisee must exhibit a notice in a conspicuous place at each Business to inform the public that
Franchisee is operating independently as a franchisee of ClearPoint. Franchisor reserves the right to specify in the Materials the content and form of Franchisee notice. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT
FACE="Times New Roman" SIZE="2">(3) nothing in this Agreement authorizes Franchisee to enter into any contract, agreement, lease, warranty or representation by using Franchisors name, except as a doing business as (d/b/a) identifier (for example,
John Doe Corporation, dba Clearpoint Resources). Franchisee can not legally bind Franchisor to incur any debt or obligations, and Franchisor shall not assume any liability, or be deemed liable under this Agreement as a result of any action by
Franchisee to attempt to do so. Franchisee may not execute any written agreement with a Client that imposes an indemnification of any nature by Franchisor. Should Franchisee enter into any such agreement, the agreement shall be void against
Franchisor and will constitute an event of default under this Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(4) Franchisor shall not be liable for any act or omission by
Franchisee in operating the Business or for any claim or judgment arising from such acts or omissions. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">5(i) <U>Associated Goodwill:</U> Any and all
goodwill associated with, and identified by, the Proprietary Marks and Domain Names (including goodwill arising from Franchisee use of them) inures directly and exclusively to Franchisors benefit and is Franchisors property. Upon expiration (without
renewal) or termination of this Agreement, no monetary amount shall be attributable to the goodwill associated with Franchisee use of the Clearpoint Property, or Franchisee activities under the Program. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">5(j) <U>Future Development of the Clearpoint Property:</U> Any improvements, enhancements, advertising or public relations programs, marks, domain names, inventions, or
modifications of the Clearpoint Property developed or adopted by Franchisee during the term of this Agreement (even if not authorized by Franchisor) which relates in any way to the operation of the Business, shall be Franchisors exclusive property.
Franchisee hereby disclaims any right, title or interest therein. Franchisee must immediately disclose to Franchisor any such future development designed by Franchisee. If Franchisor, at Franchisors expense, elects to file for patent, copyright,
domain name registration or similar protection concerning the future development, Franchisee must execute the documents and provide Franchisor with any information Franchisor may reasonably request in order to perfect the filing. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">5(k) <U>Services Rendered:</U> Any services Franchisee renders using the ClearPoint Property must conform to the standards of quality specified or approved by
Franchisor. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">5(l) <U>Internet Services:</U> As long as Franchisor provides an Internet presence for Franchisee, Franchisee may not independently establish
an Internet presence in any manner. However, should Franchisor cease to provide Franchisee with Internet service, upon obtaining Franchisor&#146;s prior written consent, Franchisee may do so. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">5(m) <U>notice of Legal Action and Indemnification:</U> </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(1)
YOU AGREE, AT ALL TIMES AND AT YOUR EXPENSE, TO DEFEND, INDEMNIFY AND </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">7 </FONT></P>


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<FONT FACE="Times New Roman" SIZE="2">HOLD HARMLESS US, OUR AFFILIATES, SUBSIDIARIES, SUCCESSORS, ASSIGNS, AND DESIGNEES, AND THEIR RESPECTIVE MANAGERS, MEMBERS, OFFICERS, AGENTS, AND
REPRESENTATIVES (COLLECTIVELY REFERRED TO AS THE <B>&#147;INDEMNITEES&#148;</B>) FROM ALL LOSSES AND EXPENSES INCURRED IN CONNECTION WITH ANY ACTION, SUIT, ALTERNATIVE DISPUTE RESOLUTION, ARBITRATION, PROCEEDING, CLAIM, DEMAND, INVESTIGATION, FORMAL
OR INFORMAL INQUIRY, OR ANY SETTLEMENT THEREOF (COLLECTIVELY REFERRED TO AS &#147;ACTION&#148;) WHICH <B>ARISES </B>OUT OF OR IS BASED UPON YOUR OWNERSHIP OR OPERATION OF THE BUSINESS, INCLUDING CLAIMS RELATED TO THE EMPLOYMENT OF YOUR STAFF
EMPLOYEES. THIS OBLIGATION TO INDEMNIFY AND DEFEND US SHALL APPLY EVEN IN THE EVENT OF THE NEGLIGENCE OF OR CLAIM OF NEGLIGENCE AGAINST INDEMNITEES. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT
FACE="Times New Roman" SIZE="2">(2) SPECIFICALLY EXCLUDED FROM THE INDEMNITY GIVEN ABOVE IS ANY LIABILITY ARISING SOLELY FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF INDEMNITEES (EXCEPT TO THE EXTENT THAT SUCH GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT IS ATTRIBUTED OR IMPUTED BY REASON OF ANY ACT OR OMISSION BY YOU). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(3) For the purpose of this Agreement the term
<B>&#147;losses and expenses&#148; </B>shall, without limitation include, all losses, compensatory, exemplary or punitive damages, fines, charges, costs, expenses, lost profits, attorneys&#146; fees, experts&#146; fees, court costs, settlement
amounts, judgments, arbitration awards, compensation for damages to Franchisors reputation and goodwill, costs of or resulting from delays, financing, costs of advertising material and media time or space, including costs of changing, substituting
or replacing same, and all expenses for recall, refunds, compensation, public notices and other such amounts incurred in connection with the matters described. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT
FACE="Times New Roman" SIZE="2">(4) As soon as Franchisee are aware of any Action Franchisee must immediately give Franchisor notice of such Action. At Franchisee expense and risk, Indemnitees may elect to assume the defense of any Action; however,
under no circumstance are Indemnitees obligated to undertake the defense of any Action. Such an undertaking by Indemnitees shall in no manner diminish Franchisee obligation to indemnify Indemnitees and to hold them harmless. Franchisee acknowledge
that Franchisee have no authority to accept any service of process on behalf of any of the lndemnitees. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(5) Franchisor may, at any time
and with such notice as Franchisor deems appropriate, offer, order, consent or agree to settlements or take such other remedial or corrective actions Franchisor deems expedient with respect to any Action if, in Franchisors <B>sole </B>judgment,
there are reasonable grounds to believe that any of the acts or circumstances enumerated in this subsection 5(m) have occurred, or that any act, error, or omission of Yours may result directly or indirectly in damage, injury or harm to any person or
any property. All losses and expenses incurred under this subsection 5(m) shall be chargeable to and paid by Franchisee regardless of any action, activity or defense undertaken by any Indemnitees or the subsequent success or failure of such actions,
activity or defense. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(6) Indemnitees do not assume any liability whatsoever for acts, errors, or omissions of those with whom Franchisee
may contract, regardless of the purpose. Franchisee shall hold harmless and indemnify Indemnitees for all losses and expenses that may arise out of any acts, errors or omissions regarding such third parties. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(7) Under no circumstances shall Indemnitees be required or obligated to seek recovery from third parties or otherwise mitigate their losses in order to
maintain a claim against Franchisee. The failure to pursue such recovery or mitigate loss will in no way reduce the amounts recoverable by Indemnitees from Franchisee. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT
FACE="Times New Roman" SIZE="2">(8) Provisions of this subsection 5(m) shall continue in effect after the expiration or termination of this Agreement for any and all Actions that accrued during the term of this Agreement. </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">5(n) <U>Infringement and Franchisor&#146;s Related indemnification:</U> </FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(1) Should Franchisee become aware that a suspected unauthorized third party is using the Proprietary Marks (or any variant thereof), Franchisee must
immediately notify Franchisor of the facts relating to the alleged infringement. Upon receipt of Franchisee notice, Franchisor shall, in Franchisor&#146;s sole discretion, determine whether or not Franchisor will take any action concerning the
alleged infringement. Franchisee shall have no right to make any demand or prosecute any claim related to such infringement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(2)
Franchisee must notify Franchisor immediately of any claim against Franchisee alleging that Franchisee use of the Proprietary Marks constitutes an infringement of someone else&#146;s rights. So long as Franchisee have complied with the Program,
Franchisor agrees to indemnify and hold Franchisee harmless against any liability assessed against Franchisee in favor of the claimant, including Franchisee reasonable costs of defending the claim. Franchisor will not be liable for any other
damages, costs, expenses or for any loss of profits or business opportunities or incidental or consequential damages of any kind relating to any such claim. Franchisor reserve the right to defend, compromise and settle any such action and if
Franchisor do undertake Franchisee defense, Franchisor will not be responsible for the cost of any independent counsel Franchisee retain. Franchisor shall have no obligation to defend or indemnify Franchisee pursuant to this subsection 5(n) if the
claim, suit or demand against Franchisee arises out of or relates to Franchisee use of the Proprietary Marks in violation of the terms of this Agreement. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="2"><B>7. TRADE SECRET/CONFIDENTIAL INFORMATION </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">7(a) <U>Trade Secret:</U> The Confidential Information is not a matter of common knowledge in the
trade, is generally not available except through time consuming and costly processes, and gives Franchisee and Franchisor an advantage over other staffing businesses. Therefore, Franchisee acknowledges and agrees that the Confidential Information,
whether currently in existence or hereafter acquired, constitutes a trade secret of ClearPoint. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">7(b) <U>Confidential Information:</U> The following
information, without limitation, constitutes the <B>&#147;Confidential Information&#148;:</B> </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(1) the Clearpoint Property, the Materials;
the Program, Service Files content, Field Employee and/or Staff Employee information obtained through the operation of the Business (whether past, present or prospective); </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(2) any information regarding any individual who has a reasonable expectation of privacy and/or which was disclosed to Franchisee, the Client, the
Business and/or Franchisor in confidence; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(3) any additional information regarding any Client, including, but not limited to, personal
information on the various contact persons, contact telephone numbers, personnel needs, fringe benefits, hiring practices, time lines and budgets, policies, goals and plans, usage of Field Employees, Client pricing for various services and types of
Field Employees, fees, profit margins, credit history, existing or prospective Job-orders and Client agreements and all other dealings with Franchisee, the Business and/or Franchisor, </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">9 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(4) any information regarding Franchisee business operations and practices under the Program, including
pricing and cost codes, marketing techniques, strategic business plans and market research studies, promotional ideas, operating reports, placement registers, and accounts receivable; </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(5) any information, including a formula, pattern, compilation, program, device, method, technique, or process that derives independent economic value,
actual or potential, for which reasonable efforts are used to maintain its secrecy, and which is not generally known to the public or readily ascertainable by proper means by other persons who can obtain economic value from its disclosure or use;
and </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(6) any other information known by Franchisee or used in the Business that could give Franchisee an advantage over competitors that is
not disclosed to the public by Franchisor or that is not generally known to the public. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">7(c) <U>Non-Disclosure of Confidential Information:</U> Franchisee
and Franchisee Principal Owners acknowledge that any use of the Confidential Information other than for the operation of the Business is a material breach of this Agreement and constitutes an unfair business practice. Franchisee agrees that during
the term of this Agreement, Franchisee will institute thorough and effective measures to protect and preserve the confidentiality of the Confidential information. Franchisee agrees that Franchisee will not (1)&nbsp;disclose the contents of the
Confidential Information to unauthorized persons; (2)&nbsp;allow any written Confidential Information to leave the Location; (3)&nbsp;copy or use the Confidential Information for any purpose other than as permitted by this Agreement; or
(4)&nbsp;disclose, use or misappropriate the Confidential Information. Franchisee further agrees to adhere to these terms after the expiration (without renewal) or termination of this Agreement. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">7(d) <U>Protection of Confidential Information:</U> </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(1)
Franchisee will require Franchisee Manager, Staff Employees and/or agents or other third parties who will have access to the Confidential Information to execute a <B>&#147;Confidentiality Agreement&#148; </B>in the same form as Attachment 4 to this
Agreement. Franchisee must advise such persons that the Confidentiality Agreement contains covenants against unfair trade practices and that execution of the Confidentiality Agreement is a prior condition of employment and/or association with
Franchisee. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(2) All officers, directors, spouses, and other third parties Franchisor designates who are not required by Franchisor to
execute this Agreement but whom Franchisor have a reasonable expectation will have access to Confidential Information must execute a Confidentiality Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT
FACE="Times New Roman" SIZE="2">(3) Franchisee must forward a copy of each executed Confidentiality Agreement to Franchisor for Franchisors records. Franchisee and Franchisee Principal Owners may not reveal any Confidential Information to any
individual in the absence of a written obligation from such person not to misuse or disclose the Confidential Information, Franchisee agrees to consistently and uniformly enforce the Confidentiality Agreement. </FONT></P> <P
STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>8. OPERATION OF THE BUSINESS </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">8(a) <U>Compliance With Law and
Program:</U> Franchisee must strictly follow the Program and comply with all applicable federal, state and local laws, regulations, ordinances, codes, and guidelines. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2">8(b) <U>Initial Marketing Campaign:</U> Within <U>the first 90</U> days following the opening of the Business, Franchisee must, at Franchisee cost, conduct an aggressive <U>initial</U> marketing campaign to promote
the entrance of the Business into the local market. Franchisor will provide Franchisee with the basic components of advertising and promotional materials to assist Franchisee in this endeavor. If Franchisee desires to use Franchisee own materials
Franchisee may do so after obtaining Franchisors written consent. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">10 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">8(c) <U>Treatment of Personnel:</U> With respect to the operation of each Business, Franchisee agrees to take all steps
necessary to ensure that all Job-seekers, Field Employees, and Staff Employees are treated fairly, equally, and with dignity and respect, as required under the Materials and under applicable laws prohibiting discrimination and harassment, or any
other illegal basis concerning the hiring, compensation, supervision, safety, training, discharge, dispatching, or referral for placement of such persons. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="2">8(d) <U>Required insurance:</U> </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(1) Except for the insurance Franchisor charges to Franchisee through our processing billing group
concerning the Field Employees and the services provided through the Business; Franchisee must procure and maintain the following coverage as required by the Materials: (i)&nbsp;crime/fidelity bond, (Ii) commercial general liability,
(ill)&nbsp;worker&#146;s compensation, (iv)&nbsp;errors and omission, (v)&nbsp;employment practices liability, (vi)&nbsp;medical malpractice liability (if Franchisee Intend to provide certain medical services), (vii)&nbsp;professional liability (if
Franchisee intend to provide certain professional services) and (viii)&nbsp;any other insurance Franchisor deem necessary (collectively the <B>&#147;Insurance&#148;</B>) to protect Franchisee and the Indemnitees against any demand or claim with
respect to personal injury, death or property damage, as well as any loss, liability or expense arising or occurring in connection with the Business. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT
FACE="Times New Roman" SIZE="2">(2) The deductible on any Insurance policy may not exceed $2,500 without Franchisors prior written approval, The Insurance shall be underwritten by insurance companies holding a Best&#146;s Rating of not less than
B+<B>; </B>Class VI, and shall be in forms acceptable to Franchisor, The insurance provider must name Franchisor as an additional insured, and the coverage must conform to the minimum amounts and special provisions described in the Materials.
Franchisor may modify these insurance requirements from time to time to meet current industry needs and/or governmental regulations, and Franchisee must comply with such change. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%;padding-bottom:3px;line-Height:95%; vertical-align:top"><FONT FACE="Times New Roman" SIZE="2">(3) At least 30 days prior to opening the<FONT FACE="Times New Roman"
SIZE="1"><SUP>.</SUP></FONT><FONT FACE="Times New Roman" SIZE="2"> Business, Franchisee shall provide to Franchisor a certificate of insurance or other documents required by the Materials evidencing the required coverage. Franchisee must provide
Franchisor with a new certificate of insurance every year at least 30 days prior to the expiration of any required coverage. All Insurance shall expressly provide for no less than 30 days&#146; advance written notice to Franchisor to inform
Franchisor of any event of a material alteration to the Insurance, or cancellation of the insurance. </FONT></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(4) Should Franchisee, for any
reason, fail to procure or maintain the Insurance, Franchisor has the right and authority (however not the obligation) to immediately procure the Insurance. Franchisor will charge Franchisors related costs to Franchisee, together with Franchisors
reasonable incurred expenses and may deduct them from Franchisee Distribution Account. If Franchisee Distribution Account has a negative balance, upon receipt of Franchisors notice to Franchisee, Franchisee shall immediately reimburse Franchisor for
Franchisors costs, These remedies shall be in addition to any other remedies Franchisor may have at law or in equity. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(5) If you elect to
enter into an arrangement to lease Franchisee Staff Employees, Franchisee are responsible for obtaining a certificate of insurance from the leasing company evidencing the same level of coverage as would be held by Franchisee if Franchisee did not
lease Franchisee Staff Employees. The leasing company must also provide an indemnification of the Indemnitees. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(7) The insurance shall
include a waiver of subrogation in favor of Franchisor, and Franchisors affiliates and subsidiaries. All public liability and property damage policies shall contain a provision that Franchisor, Franchisors agents, or Field Employees, are entitled to
recover any loss by reason of Franchisee negligence or the negligence of Franchisee agents, Franchisee Staff Employees, or other Field Employees. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">11 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">8(e) <U>Insurance Programs:</U> Although not required to do so, Franchisor may establish programs for the Network for any
type of insurance coverage required at any time for the Business. If Franchisor does establish such programs, Franchisor may, in Franchisors sole discretion, require Franchisee to enroll and participate in the programs. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">8(f) <U>Full Time Management:</U> Franchisee shall at all times have the Business managed by a Manager (whether a Principal Owner or otherwise) who will maintain a
presence at the Location and who will devote full time, energy, and best efforts to the management, promotion, and growth of the Business. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">8(g)
<U>Submission of Reports:</U> Franchisee shall, at Franchisee expense, provide to Franchisor all documents and information Franchisor deem necessary to implement and maintain this Agreement. With respect to each Location developed under this
Agreement, Franchisee must submit to Franchisor the marketing, financial and/or other designated reports Franchisor requires. Such information must be submitted in the manner, form, time frame and content prescribed by Franchisor in the Materials.
Franchisor has the right to electronically collect this information and/or in turn, require Franchisee to submit this information electronically to Franchisor. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="2">8(h) <U>No Other Business Conducted at Location:</U> Franchisee must ensure that no business other than the Business is conducted at the Location. Franchisee may not allow the impression of a physical or operational connection with any
other business. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">8(i) <U>Compliance with Materials:</U> Franchisee shall, at Franchisee&#146;s expense, comply with the standards and requirements stated
in the Materials (as modified from time to time), including without limitation: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(1) utilization of new technology in the operation of the
Business, </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(2) office decor, furniture, fixtures, electronic, mechanical and communications equipment, business forms, and advertising
materials from the sources Franchisor designate, </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(3) use of motivation and recognition programs, annual planning sessions, and format
marketing plans, including a grand opening campaign for each Business licensed under this Agreement, </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(4) levels and type of Staff
Employees necessary to properly penetrate the market and grow market share, and the use of Staff Employee Confidential Agreements, training and improvement programs, </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT
FACE="Times New Roman" SIZE="2">(5) treatment of Job-seekers and the hiring and dispatching of Field Employees, and </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(6) compliance with
national programs, such as Client satisfaction guarantees, special hours incentive pay, holiday pay, vacation pay, referral payments, and Co-op Splits. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="2">8(j) <U>Modernization:</U> Except for the 12 month period immediately prior to the Scheduled Expiration Date, Franchisor may, during the term of this Agreement, require Franchisee to modernize, at Franchisee expense, all or part of
Franchisee Business operations (including the assets at each Location) for the purpose of complying with Franchisors then-current electronic hardware, software, and/or Internet standards and specifications, If any component of the up-dated
modernization requires additional training, Franchisor will identify the individual(s) required to attend such training, and Franchisee will, at Franchisee cost, insure that they attend the required training. </FONT></P> <P
STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>9. DISTRIBUTION ACCOUNT AND PROCESSING. </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">9(a) <U>Distribution
Account:</U> Franchisor&#146;s processing billing group will maintain Franchisee <B>&#147;Distribution Account&#148;, </B>which includes without limitation the administration of Credits and Charges related to the Business in accordance with the
Materials and the summary provided below. Franchisee is not entitled to any distribution payments on Billings processed after termination or expiration (without renewal) of this Agreement. Franchisee understands and agrees that Franchisee is
financially responsible for all </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">12 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px">
<FONT FACE="Times New Roman" SIZE="2">Charges, each of which will be deducted from the Distribution Account. The following summary of typical Credits (denoted with a &#147;+&#148;) and Charges
(denoted with a&#148;-&#148;) is provided far demonstrative purposes: </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="84%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="36%"></TD>
<TD VALIGN="bottom" WIDTH="8%"></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="8%"></TD>
<TD></TD></TR>
<TR>
<TD VALIGN="bottom" COLSPAN="3"> <P STYLE="margin-right:0px;margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>Typical Items Credited to the Distribution Account include:</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top" NOWRAP><FONT FACE="Times New Roman" SIZE="2">+&nbsp;Career&nbsp;Billings</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" NOWRAP><FONT FACE="Times New Roman" SIZE="2">+&nbsp;Expense&nbsp;Reimbursements</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" NOWRAP><FONT FACE="Times New Roman" SIZE="2">+&nbsp;Temporary&nbsp;Help&nbsp;Billings</FONT></TD></TR>
<TR>
<TD VALIGN="top" NOWRAP><FONT FACE="Times New Roman" SIZE="2">+&nbsp;Conversion&nbsp;Fees</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" NOWRAP><FONT FACE="Times New Roman" SIZE="2">+&nbsp;Miscellaneous&nbsp;Adjustments</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" NOWRAP><FONT FACE="Times New Roman" SIZE="2">+&nbsp;temp-to-hire&nbsp;Billings</FONT></TD></TR>
<TR>
<TD VALIGN="top" NOWRAP><FONT FACE="Times New Roman" SIZE="2">+&nbsp;Credits</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" NOWRAP><FONT FACE="Times New Roman" SIZE="2">+&nbsp;Miscellaneous&nbsp;Billings</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD HEIGHT="16" COLSPAN="3"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="bottom" COLSPAN="3"> <P STYLE="margin-right:0px;margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>Typical items charged to the Distribution Account include:</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top" NOWRAP><FONT FACE="Times New Roman" SIZE="2">-Ad Fund contributions</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" NOWRAP><FONT FACE="Times New Roman" SIZE="2">-Co-op Splits</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" NOWRAP><FONT FACE="Times New Roman" SIZE="2">-Payroll</FONT></TD></TR>
<TR>
<TD VALIGN="top" NOWRAP><FONT FACE="Times New Roman" SIZE="2">-Bad Debt Reserve</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" NOWRAP><FONT FACE="Times New Roman" SIZE="2">-Garnishments</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" NOWRAP><FONT FACE="Times New Roman" SIZE="2">-Payroll Costs</FONT></TD></TR>
<TR>
<TD VALIGN="top" NOWRAP><FONT FACE="Times New Roman" SIZE="2">-Benefits</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" NOWRAP><FONT FACE="Times New Roman" SIZE="2">-Insurance Costs</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" NOWRAP><FONT FACE="Times New Roman" SIZE="2">-Royalties</FONT></TD></TR>
<TR>
<TD VALIGN="top" NOWRAP><FONT FACE="Times New Roman" SIZE="2">-Chargebacks</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" NOWRAP><FONT FACE="Times New Roman" SIZE="2">-interest</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" NOWRAP><FONT FACE="Times New Roman" SIZE="2">-Unemployment Costs</FONT></TD></TR>
<TR>
<TD VALIGN="top" NOWRAP><FONT FACE="Times New Roman" SIZE="2">-Client Refunds</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" NOWRAP><FONT FACE="Times New Roman" SIZE="2">-Miscellaneous Adjustments</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
</TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(1) &#147;Credits&#148; include without limitation, Billings charged to Clients for Temporary Help
Billings, Conversion Fees, Expense Reimbursements, temp-to-hire Billings, and Career Placement Billings as defined below: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(i)
<B>&#147;Billings&#148; </B>individually and collectively refers to all charges to Clients which without limitation include: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:17%"><FONT FACE="Times New Roman" SIZE="2">(a)
<B>&#147;Temporary Help Billings&#148; </B>means fees charged for (1)&nbsp;Field Employees and/or temporary contract workers services (whether on or off site from the Client&#146;s premises), (2)&nbsp;payroll services, and (3)&nbsp;temporary
outsourcing, </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:17%"><FONT FACE="Times New Roman" SIZE="2">(b) <B>&#147;Conversion Fees&#148; </B>means the fees charged to the Client for the conversion of the Field Employee to the
Client&#146;s payroll or another staffing business; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:17%"><FONT FACE="Times New Roman" SIZE="2">(c) <B>&#147;Expense Reimbursement&#148; </B>means a Field Employee&#146;s job
related costs (I.e., meals, parking, travel allowances, supplies, equipment, mileage, and other similar or related items); </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:17%"><FONT FACE="Times New Roman" SIZE="2">(d)
<B>&#147;temp-to-hire Billings&#148; </B>means the fees charged for the placement of a Field Employee with the intent to become an employee of the Client at a later date; </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:17%"><FONT FACE="Times New Roman" SIZE="2">(e) <B>&#147;Career Placement Billings&#148; </B>means the fees charged for (1)&nbsp;helping Job-seekers obtain long term employment or self-employment,
(2)&nbsp;Field Employee and Job-seeker testing, training,. counseling and/or consulting services, (3)&nbsp;Client counseling and/or consulting services, (4)&nbsp;resume consultation, preparation, processing and distribution, (5)&nbsp;outsourcing,
outplacement, or business opportunity services, (6)&nbsp;employment related software sales, (7)&nbsp;Client, Field Employee and/or Job-seeker promotional programs, (8)&nbsp;check cashing services for Clients, Field Employees and/or Job-seekers,
(9)&nbsp;co-op activities, (10)&nbsp;employment related publications and/or book sales, and (11)&nbsp;all other similar or related products or services. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT
FACE="Times New Roman" SIZE="2">(2) <B>&#147;Charges&#148; </B>shall include amounts charged for: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(i) <B>&#147;Payroll&#148; </B>resulting
from the Field Employees&#146; gross wages, including bonuses, commissions and any other form of compensation; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(ii) <B>&#147;Payroll
Costs&#148; </B>for (a)&nbsp;federal withholding, FICA, and state withholding, (b)&nbsp;state unemployment and unemployment consulting fees, (c)&nbsp;local taxes of any type or kind, and (d)&nbsp;amounts allocated or charged by Franchisor for the
unemployment claims experience of the Field Employees submitted by Franchisee for processing as well as the Program in general; </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">13 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(iii) <B>&#147;Insurance Costs&#148; </B>resulting from expenses incurred by Franchisor for
(a)&nbsp;obtaining commercial general liability, umbrella, errors and omissions, crime/bond, and employment practices liability insurance coverage or any other coverage Franchisor deem appropriate related to the Field Employees, (b)&nbsp;any
retention assumed by Franchisor for worker&#146;s compensation, (c)&nbsp;deductibles or defense costs, in connection with such policies or their administration, (d)&nbsp;obtaining insurance on Field Employees, including residual market loads and any
fees or costs related to the number of claims and loss experience of the Field Employees submitted by Franchisee for processing, (e)&nbsp;the cost of administering and implementing the insurance program, including brokerage and consulting expenses,
overhead, and travel expenses, (f)&nbsp;claims handling fees and legal fees related to such claims, (g)&nbsp;charges for misclassification of Field Employees for worker&#146;s compensation reporting and charge purposes, and (h)&nbsp;taxes and any
other related fees or costs; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(iv) Royalty payments due Franchisor with regard to Temporary Help Billings, temp-to-hire Billings, Career
Placement Billings, Conversion Fees, and/or any related Receipts. For the purpose of this Agreement, <B>&#147;Receipts&#148; </B>means all money and other valuable consideration, including barter, received during or after the term of this Agreement
by Franchisor, Franchisee, Franchisee Staff Employees, collection agents, or other assignees, as revenue generated by the operation of the Business. The parties further agree that any Receipt represented by consideration other than money shall be
given their fair market value as Franchisor may reasonably determine; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(v) Ad Fund contributions due to the promotional fund established
by Franchisor to promote the Network; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(vi) <B>&#147;Chargebacks&#148; </B>which include without limitation Billings that (a)&nbsp;are
repudiated in whole or in part by a Client; (b)&nbsp;produce a negative Gross Margin; (c)&nbsp;remain unpaid for 67 days after the respective invoice date, (d)&nbsp;are uncollected at the time of termination or expiration (without renewal) of this
Agreement, and (e)&nbsp;are the result of the additional amounts due if the Client is classified as a high credit risk or the Clients unpaid Billings exceed Franchisors credit limits; </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(vii) <B>&#147;Interest&#148; </B>at the rate of 1%&nbsp;per month. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT
FACE="Times New Roman" SIZE="2">(viii) <B>&#147;Adjustments&#148; </B>include without limitation amounts charged to the Distribution Account for items such as (a)&nbsp;bank wire transfer fees, (b)&nbsp;overnight courier packages, (c)&nbsp;stop
payment check charges, (d)&nbsp;manual check charges, (e)&nbsp;non-sufficient fund charges, (f)&nbsp;Payroll error adjustments, (g)&nbsp;UCC recording fees or other similar filing fees, (h)&nbsp;credit reports and other credit or collection services
Franchisor deem appropriate, (i)&nbsp;other collection costs, (j)&nbsp;any adjustments to Payroll Costs, (k)&nbsp;Electronic Data Interchange <B>&#147;EDI&#148;, </B>(l)&nbsp;any special program offered by Franchisor in which Franchisee voluntarily
participate, (m)&nbsp;garnishments, and (n)&nbsp;any other charges to the Distribution Account; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(ix) <B>&#147;Client Refunds&#148;
</B>amounts related to service guarantees, billing errors, Client dissatisfaction, or items Franchisor may otherwise authorize by the Materials; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman"
SIZE="2">(x) <B>&#147;Co-op Splits&#148; </B>amounts related to Franchisee agreement to co-operate with other franchised or company-owned Clearpoint offices or other third-party personnel companies where the parties agree to a split of the Receipts
for services provided cooperatively to Clients; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(xi) <B>&#147;Benefits&#148; </B>include without limitation amounts represented by
salaries and charges to the Distribution Account for (a)&nbsp;disability insurance, (b)&nbsp;health insurance, (c)&nbsp;special hours incentive pay, (d)&nbsp;holiday pay, (e)&nbsp;vacation pay, (f)&nbsp;401 k contributions, if applicable, and
(g)&nbsp;any other benefits now or hereafter deemed mandatory or necessary by Franchisor; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(xii) <B>&#147;Unemployment Costs&#148;
</B>resulting from prior unemployment claims during the applicable state law base period assumed by Franchisor including without limitation (a)&nbsp;Franchisors costs related to the number of claims and the loss experience for the Field Employees
submitted by Franchisee for processing; (b)&nbsp;Franchisors cost of administering and implementing the merit Program, including consulting expenses and overhead, (c)&nbsp;claims handling fees and legal fees related to such </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<FONT FACE="Times New Roman" SIZE="2">claims; and (d)&nbsp;any other related fees or costs; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman"
SIZE="2">(xiii) <B>&#147;Bad Debt Reserve&#148; </B>is a reserve our Payroll and Billing Operations maintains in Franchisee Distribution Account that is intended to assist Franchisee in covering un-collectable accounts that have a very high
potential of never being collected, such as in the event a Client files for bankruptcy protection. They will deduct .2% of the Temporary Help Billings collected weekly and hold in Franchisee Bad Debt Reserve. The Bad Debt Reserve will accrue over
time to a maximum of 1.2% of Franchisee trailing 52 weeks of Billings. In addition, within 90 days following the expiration (without renewal) or termination of this Agreement Franchisor will remit to Franchisee the balance of Franchisee Bad Debt
Reserve (minus the negative balance, if any, of Franchisee Distribution Account at that time); </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(xiv) all safes taxes and any other taxes
(other than Franchisors income taxes); </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(xv) amounts related to Franchisee indemnification of the Indemnitees; and </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(xvi) any other amounts due under this Agreement or any other agreement between Franchisor and/or Franchisors affiliates and Franchisee. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">9(b) <U>Distribution Account Balance:</U> Each week, Franchisors Payroll and Billings Operations shall pay Franchisee the net positive amount reflected in the
Distribution Account. However, should the Distribution Account reflect a net negative balance, they will notify Franchisee of the shortfall. Within 5 days following Franchisee receipt of Franchisors written notice, Franchisee agrees to pay the
amount necessary to bring the Distribution Account to at least a zero balance. If Franchisee fails to do so, Franchisor may, at Franchisors option, report Franchisee failure to pay monies owed to all appropriate credit reporting agencies. In
addition, if Franchisee continue to fail to pay, Franchisor may elect to terminate this Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">9(c) <U>Set-Off by Clearpoint</U><U>.</U> Franchisor
may, at any time, set-off and make payment from the Distribution Account of any amounts (including penalties, interest, reasonable attorney&#146;s fees and costs of collection) owed by Franchisee or Franchisee Principal Owners to Franchisor or
Franchisors affiliates. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">9(d) <U>Transmission of Information;</U> For each Location, Franchisee shall transmit all payroll/billing information, as well as
any other operational or financial information required by Franchisor, in the form, manner and time frame as prescribed in the Materials. In turn, Franchisors Payroll and Billing Operations shall transmit information and funds to Franchisee as
prescribed in the Materials. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">9(e) <U>Calculate the Distribution Funds</U> due Franchisee, (1)&nbsp;process and pay garnishments as required by court
order, and (2)&nbsp;perform other similar functions related to the processing of the Distribution Account. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">9(f) <U>Credit and Collections;</U> Franchisee
agrees to comply with Franchisors credit and collections policy provided below and as it may be modified from time to time: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(1) Franchisee
shall ensure that Clients submit payments directly and promptly to Franchisor or Franchisors Payroll and Billing Operations. Franchisee agrees Franchisee will not interfere with such payments. Franchisor, in Franchisors sole discretion, may also
contact Clients regarding the collection of their Billings. All collection costs directly related to Franchisee operation of the Business incurred by Franchisor, Internally or externally, shall be changed to Franchisee as an Adjustment to the
Distribution Account. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(2) Franchisee agrees Franchisee will not deposit or cash any Receipts inadvertently received by Franchisee, but
will immediately forward such Receipts to Franchisor. However, should Franchisee, Franchisee Manager or Staff Employees inadvertently accept such payment Franchisee shall promptly turn over such payments to Franchisor in the form received. Failure
to immediately remit to Franchisor any Client payments that may come into Franchisee possession (including any amounts previously treated as Chargebacks), shall result in (i)&nbsp;the suspension of all further Distribution Account </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<FONT FACE="Times New Roman" SIZE="2">payments to Franchisee until Franchisor receives such payments, and (ii)&nbsp;Interest accrual from the date Franchisee received such payments until they are
received by Franchisor. Such action shall be viewed as a conversion of Franchisors funds for which this Agreement and any other agreement with Franchisor and Franchisors affiliates may be immediately terminated. In addition, Franchisee and
Franchisee Principal Owners may be subject to appropriate legal remedies which may include criminal prosecution. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(3) Franchisee hereby
authorizes and grant to Franchisor the power to accept, endorse, and negotiate any Client payments made inadvertently or improperly to Franchisee, Franchisee agents, affiliates, or other persons associated with the Business. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(4) Franchisor may, at Franchisee expense, conduct credit checks on all proposed Clients. Franchisor shall reserve the right to conduct credit checks on
proposed Clients and charge the Distribution Account accordingly. Each Client must be approved by Franchisor before Franchisee provides services to the Client. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="2">9(g) <U>Related Parties:</U> Franchisee acknowledges that Franchisor has no obligation to pay Franchisee Staff Employee payroll, and therefore, Franchisee may not, utilize or attempt to utilize Franchisors payroll/billing services with
respect to (1)&nbsp;processing payroll for Franchisee Staff Employees or (2)&nbsp;any Client in which Franchisee or any Principal Owner has a financial or equity interest of 5% or more. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2">9(h) <U>Accurate Classification of Field Employees for Workers Compensation Insurance:</U> Franchisee must classify each Field Employee in accordance with the Worker&#146;s Compensation Insurance Code Listings
prescribed by Franchisor. Misclassifications or excessive claims and loss experience can result in additional Adjustments to Franchisee Distribution Account. If the misclassification is the result of any willful or negligent act by Franchisee,
Franchisee Principal Owners, or Staff Members, Franchisor may assess up to the first $50,000 in related worker&#146;s compensation losses attributable to the injury of any misclassified Field Employee and charge Franchisee Distribution Account
accordingly. In addition, Franchisor may, in Franchisors sole discretion, terminate this Agreement without an opportunity to cure. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">9(i) <U>Limitation of
Liability:</U> Except as expressly provided herein, and except for the indemnity and payment obligations-outlined in this Agreement, neither Franchisor nor Franchisors Payroll and Billing Operations shall be liable to Franchisee for any loss,
damage, liability, claim or expense arising out of, or in relation to, the processing services described in this Agreement. Neither Franchisor nor Franchisors Payroll and Billing Operations shall be liable for any indirect, incidental, exemplary,
punitive or other consequential damages, including, but not limited to damages for the loss of data, goodwill or profits. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>10. FEES AND FINANCIAL
OBLIGATIONS </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">10(a) <U>Franchise Fee:</U> Franchisee shall pay Franchisor the applicable franchise fee identified in Attachment 2 at the time Franchisee
execute this Agreement. The initial franchise fee is nonrefundable. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">10(b) <U>Royalty:</U> </FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(1) In partial consideration of the rights granted to Franchisee by Franchisor under this Agreement, Franchisee shall pay Franchisor a
&#147;<B>Royalty</B>&#148; equal to 6.0% of all Temporary Help Billings and Conversion Fees. Franchisors Payroll and Billings Operations will deduct the Royalty weekly from the Distribution Account. However, with respect to Career Placement Billings
and Conversion Fees you may elect one of the following options: </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"></FONT><FONT FACE="WINGDINGS" SIZE="2" COLOR="#000000">&#168;</FONT><FONT FACE="Times New Roman" SIZE="2"></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Option 1: Franchisors Payroll and Billing Operations will deduct the applicable Royalty for Career Placement Billings and Conversion Fees is thirty percent (30%)&nbsp;as Receipts
are collected, or </FONT></TD></TR></TABLE> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"> <P STYLE="line-Height:95%; vertical-align:top"><FONT FACE="Times New Roman" SIZE="2"></FONT><FONT FACE="WINGDINGS" SIZE="2" COLOR="#000000">&#168;</FONT><FONT FACE="Times New Roman" SIZE="2"></FONT></P></TD>

<TD ALIGN="left" VALIGN="top"> <P STYLE="line-height:95%; vertical-align:top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">Option 2: Franchisee is solely responsible for submitting each Career Placement Billings and Conversion Fees Royalty
payment via wire transfer in order for Franchisor to receive each payment on or before the 10<FONT FACE="Times New Roman" SIZE="1"><SUP>th</SUP></FONT><FONT FACE="Times New Roman" SIZE="2"> day of the month following the month in which Receipts were
collected. </FONT></FONT></P></TD></TR></TABLE> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">10(d) <U>Other Financial Obligations: No Right of Set-Off:</U> Franchisee shall promptly pay any money due Franchisor or
Franchisors subsidiaries, affiliates, or designees (including money owed under a separate promissory note, contract, or other obligation). Franchisee shall have no right to withhold or set-off any amounts owed under this Agreement (or any other
agreement) for any reason. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">10(e) <U>Interest</U>: Past due amounts shall accrue Interest. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2">10(f) <U>Security Interest:</U> As security for the advancement of monies to Franchisee and for the payment of fees and other amounts owed to Franchisor under this Agreement, Franchisee and Franchisee Principal Owners
hereby convey to Franchisor a security interest in all present and later acquired interests in the Business, including contract rights, accounts receivable, fixed assets, general intangibles, and all cash or non-cash proceeds from the Business, as
security for all Franchisee present and future obligations to Franchisor. Further, Franchisee and Franchisee Principal Owners shall execute one or more financing statements, continuation statements, amendments or other documents as Franchisor deem
necessary. Franchisor have the right to assign Franchisors interest at any time upon notice to Franchisee. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>11. RECORDKEEPING; REPORTING; AUDITS </B>
</FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">11(a) <U>Recordkeeping and Reporting:</U> Franchisee shall provide Franchisor immediate access to any information (including information concerning any
Principal Owner), regardless of who possesses it that relates in any way to the Business. Such access shall include access that allows Franchisor to electronically receive and/or collect such information. Franchisee agrees to timely prepare,
preserve, and report full, complete, and accurate books, records, and accounts of the Business to Franchisor in accordance with generally accepted accounting principles <B>(&#147;GAAP&#148;) </B>and as instructed in the Materials. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">11(b) <U>Financial Audits:</U> Franchisor, or Franchisors designated agent, have the right to enter the Business during any Business Day with or without prior notice to
Franchisee in order to audit the books, records, and/or automation Programs used by Franchisee for the operation of the Business. Franchisee shall fully cooperate with the individuals conducting such audits. Ordinarily, Franchisor will pay
Franchisors costs associated with the audit. However, Franchisee shall be obligated to immediately pay all costs and fees associated with the audit if: (i)&nbsp;Franchisee delays the time for the audit by more than 5 Business Days;
(ii)&nbsp;Franchisee fails to cooperate with Franchisor or-Franchisors designated agent; (iii)&nbsp;Franchisee financial records require a substantial effort to be placed in a condition readily conducive to an audit; and/or (iv)&nbsp;the examination
or audit reveals unreported Billings, Receipts or other delinquent financial liabilities to Franchisor that total more than $2,500. For purposes of this Agreement, <B>&#147;Business Day&#148; means </B>each day other than Sundays, Saturdays, and
nationally recognized holidays. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px;padding-bottom:3px;line-Height:95%; vertical-align:top"><FONT FACE="Times New Roman" SIZE="2">11(c) <U>Compliance Audits:</U> Franchisor, or Franchisors
designated agent, may from time to time perform an operational compliance audit of the Business. If such operational audit reveals that Franchisee have failed to comply with this Agreement, including the Materials, Franchisee shall be obligated to
immediately pay all costs associated with the audit. The performance of such an audit as well as its findings or lack of findings in no way waives any of Franchisors rights under this Agreement. Should Franchisee fail <B>2 </B>consecutive compliance
audits, Franchisor<FONT FACE="Times New Roman" SIZE="1"><SUP>-</SUP></FONT><FONT FACE="Times New Roman" SIZE="2">may, at Franchisors option, terminate this Agreement if Franchisee fails to cure the noted deficiencies. </FONT></FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">11(d) <U>Use of Information</U><U>:</U> </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(1) Franchisor.
may, as Franchisor deems appropriate or as required by law, use all financial and operational information that Franchisor obtains concerning the Business. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT
FACE="Times New Roman" SIZE="2">(2) Franchisee acknowledges that the Confidential information is owned by Franchisor. Though the information is owned by Franchisor, Franchisor agrees to provide certain assurances to Franchisee that Franchisor will
not intentionally use, divulge or otherwise permit access to any confidential payroll/billing information (the &#147;P/B Confidential Information&#148;) pertaining to the Business operations with the intention of allowing the P/B Confidential
Information to be used for any competitive purpose against Franchisee. However, from time to time, Franchisor may review the P/B Confidential </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<FONT FACE="Times New Roman" SIZE="2">Information in order to avoid conflicts of interest between Franchisee and Franchisor during the bidding process and/or to prevent pricing errors. At the
time the Franchise Agreement is terminated or expires without renewal, Franchisor is not restricted in how Franchisor chooses to use the P/B Confidential Information. Further, Franchisor is not restricted if Franchisee is adjudicated as bankrupt,
insolvent or are found to be in breach for any other action described in subsection 15(b)(8). In addition, in the event of an emergency where Franchisee is unable to perform Franchisee duties to Clients and/or Field Employees, Franchisor may use the
P/B Confidential Information. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>12. OWNERSHIP STRUCTURE AND TRANSFER </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2">12(a) <U>Ownership Interest:</U> <B></B><B>&#147;Ownership Interest&#148;</B> means any stock, limited liability company membership, partnership interest, or other direct or indirect beneficial interest or ownership
in Franchisee, or Franchisee parent, subsidiary or other affiliated business entities. For example: If a shareholder owns 25% interest in a corporation that owns 50% interest in Franchisee, then that shareholder owns 12.5% Ownership Interest in
Franchisee; making that shareholder a Principal Owner of Franchisee. Franchisee must at all times keep Franchisor informed of all Ownership Interest in Franchisee. Franchisee shall provide Franchisor copies of all organizational documents and other
materials or statements that Franchisor may require in order to document Franchisee ownership structure throughout the term of this Agreement. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">12(b) <U>Ownership Structure:</U> <B></B><B>&#147;Principal Ownee&#148;</B> means each individual or entity that has a 5%
or more Ownership interest in Franchisee. Each Principal Owner must execute this Agreement and the applicable Guaranty attached hereto in the forms of Attachment 3.1 and/or Attachment 3.2. The identity of each Principal Owner is set forth in
Attachment 5 to this Agreement as it may be amended from time to time. Franchisee and Franchisee Principal Owners agree that no one related to Franchisee shall have any Ownership Interest in any staffing business other than each the Business
licensed under this Agreement. Notwithstanding anything to the contrary herein, this restriction shall not apply to a publicly-traded ownership interest of less than 1% in any one company traded on any securities exchange. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">12(c) <U>Ownership Transfer and/or Change in Control:</U> </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman"
SIZE="2">(1) <B>&#147;Ownership Transfer&#148; </B>means the transfer, sale, assignment, pledge or other encumbrance of all or a part of the assets of the Business or Ownership Interest in Franchisee. During the term of this Agreement, no Ownership
interest may be transferred, sold, assigned or otherwise divested to any person or entity outside the Clearpoint Program. Franchisee must obtain Franchisors prior written consent to any Ownership Transfer. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(2) <B>&#147;Control&#148; </B>shall mean an Ownership Interest of 50% or more in Franchisee (or in some cases, less than 50% if Franchisor determines a
Principal Owner with less than 50% Ownership Interest has substantial authority and/or power over Franchisee and/or Franchisee operation of the Business). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="2">12(d) <U>Transfer by Franchisee:</U> </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(1) The rights and duties set forth in this Agreement are personal to Franchisee and
Franchisee Principal Owners. Franchisor granted Franchisee rights under this Agreement in reliance on Franchisee Principal Owners&#146; business skill, financial status and personal character. Franchisor has legitimate reasons to evaluate the
qualifications of any potential new owner. Franchisor has the right to analyze the terms of the proposed purchase contract with Franchisee. Franchisor will investigate any potential owner&#146;s qualifications, including whether sufficient financial
resources are available to operate the Business and hear the burden of the purchase terms. Therefore, Franchisee and Franchisee Principal Owners acknowledge and agree that Franchisors contact with any potential owner is for the purpose of protecting
Franchisors business interests and the integrity of the Program, and does not constitute improper or unlawful conduct and/or tortuous interference with Franchisee contractual or business relationships. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(2) No one may sell, assign, transfer, convey, pledge, mortgage, encumber, or give away, any direct or indirect Ownership Interest except as provided for
in this Agreement. If any such action occurs by operation of law or otherwise that is not in accordance with the provisions of this Agreement, the transaction shall be null and void and shall constitute a material breach of this Agreement.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(3) In computing changes of Ownership Interest, limited partners will not be distinguished from general or managing partners. Franchisors
judgment will be final if there is any question as to the definition of Ownership interest or as to the computation of Ownership Interest. The principal considerations in computing Ownership interest include: (i)&nbsp;total shares and control of
voting stock, (ii)&nbsp;direct and indirect power to exercise control over Franchisee affairs; (iii)&nbsp;direct and indirect rights to share in Franchisee profits; and (iv)&nbsp;amounts directly or indirectly exposed to risk in Franchisee franchise
business. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(4) Franchisee Principal Owners must collectively at all times retain 100% of the ownership shares of Franchisee Voting Stock.
<B>&#147;Voting Stock&#148; </B>means restricted, non-registered, non-public shares held by Franchisee Principal Owners. Franchisee financial business representative shall certify annually to Franchisor that Franchisee is in compliance with the
provisions of this subsection 12(d). Such certification shall be delivered to Franchisor along with Franchisee annual financial statements required in accordance with the Materials. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P>
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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">12(e) <U>Conditions for Ownership Transfer:</U> </FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(1) Franchisor may, in Franchisor&#146;s sole discretion, require any or all of the following as conditions of Franchisor&#146;s approval to any proposed
transfer of Ownership Interest. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(i) Franchisee may not be in breach of this Agreement. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(ii) Franchisee must obtain Franchisors prior written consent to the transfer and Franchisors approval of the new owner(s). </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(iii) Franchisee must provide Franchisor with a copy of any buy/sell agreement or other instrument of transfer, as well as any other information
Franchisor requires to analyze the proposed purchase terms, at least 30 days prior to Franchisee proposed closing date. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(iv) Franchisee
and the proposed new owner shall supply Franchisor, at Franchisee cost, with all information Franchisor requires to investigate the proposed new owner, including a personal interview at Franchisors corporate headquarters. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(v) If Franchisor determines, in Franchisors sole discretion, that training is required, Franchisor will designate the Principal Owner(s) and/or Manager
who must attend and complete to Franchisors satisfaction Franchisors then-current initial training program. The training must be completed within the time frame Franchisor stipulates following the transfer. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(3) If the transfer results in a transfer of more than 51% Ownership interest or Change in Control, the new franchisee and its principals must enter into
Franchisors then-current form of franchise agreement. Further the new franchisee must renovate, modernize and/or upgrade those items that we identify including but not limited to signage furniture, fixtures, equipment, computer hardware and/or
software, to our then-current standards for new franchise locations. Such renovations, modernization and/or upgrades must be completed within 90 days following the date of transfer. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(4) Regardless of the total percentage of Ownership interest transferred, Franchisor requires the applicable parties to sign a mutual release, in a form
satisfactory to Franchisor, at the time of transfer. in general, (except for post-termination covenants under this Agreement) the mutual release will provide for a release of any and all existing claims against either party and their respective
affiliates, and the officers, directors, shareholders, partners, agents, managers, members, and representatives of each of them, in their corporate and individual capacities, including claims arising under this Agreement and under any law.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">12(f) <U>Right of First Refusal:</U> Franchisor has the right to purchase Ownership Interest and/or the Business on substantially the same terms of any
bona fide offer submitted to Franchisee. Franchisor will have 30 days following Franchisors receipt of Franchisee notice of the offer to make Franchisors decision. Franchisor has the right, in Franchisors sole discretion, to substitute cash for any
other consideration offered and to pay the entire discounted present value of the purchase price at the time of closing. Any material change in the terms of the proposed offer prior to closing shall constitute a new offer subject to Franchisors same
right of first refusal. Franchisor will have 15 days following Franchisors receipt of the modified offer to make Franchisors decision. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">12(g) <U>Change of
Control:</U> A <B>&#147;Change in Control&#148; </B>occurs at the time of the death, incapacity, withdrawal, stock redemption, <B>or </B>other elimination of a Principal Owner. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2">12(h) <U>Termination Due to Death or Incapacity:</U> When a Change in Control occurs because of the death or incapacity of a Principal Owner (and there is no remaining Principal Owner) this Agreement shall terminate
ninety (90)&nbsp;days after the occurrence. No later than 30 days prior to the termination, the successors or heirs, if any, of the deceased or incapacitated Principal Owner may apply to Franchisor for </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<FONT FACE="Times New Roman" SIZE="2">a franchise license to continue operating the Business and at least one Principal Owner must attend Franchisors then-current training programs. Franchisors
approval will not be unreasonably withheld. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>13. RENEWAL OF AGREEMENT </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2">13(a) <U>Renewal:</U> Unless Franchisor has reason to terminate this Agreement for cause, or Franchisor agrees to purchase Franchisee assets, Franchisor will renew the franchise for an additional 10 year term (the
<B>&#147;Renewal Term&#148;</B>)<B> </B>contingent upon each of the following factors: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(1) At least 180 days prior to the Scheduled
Expiration Date Franchisor will provide Franchisee with a written renewal notice (the <B>&#147;Renewal notice&#148;</B>)<B></B>,<B> </B>confirming Franchisors offer to renew the franchise. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(2) No less than 30 days following Franchisee receipt of the Renewal notice, Franchisee must provide Franchisor with Franchisee written confirmation
regarding Franchisee intent to renew, or not to renew, the franchise (&#147;Renewal Intent&#148;). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(3) If Franchisee elect to renew, at
least 30 days prior to the Scheduled Expiration Date, Franchisee and Franchisee Principal Owners must execute Franchisors then-current form of franchise agreement and all other related documents required by Franchisor at that time (cumulatively the
<B>&#147;Renewal Documents&#148;</B>).<B> </B>Franchisee and Franchisee Principal Owners acknowledge that the Renewal Documents may contain terms and conditions that are significantly different from this Agreement. In addition, the parties agree to
execute a mutual release which is intended to release any and all claims the parties may have against each other arising out of or related to this Agreement. The release however will not purport to release the parties from any future claims arising
out of or related to the Renewal Documents. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(4) Franchisee may not be in material default of this Agreement as of the scheduled renewal
date. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(5) All monetary obligations Franchisee owes to Franchisor under this Agreement, or any other Agreement between Franchisee and
Franchisor, must be paid current as of the scheduled renewal date. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(6) Those individuals that Franchisor identifies in the Renewal notice
(whether a Principal Owner, Manager, and/or Staff Employee), must successfully complete Franchisors then-required&#146; training concerning the operation of the Business within the first 180 days following the scheduled renewal date. </FONT></P> <P
STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>14. NON-RENEWAL OF AGREEMENT </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">14(a) <U>Non-Renewal notice
Requirement:</U> If Franchisee does not desire to renew the franchise at the end of the then-current Renewal term, Franchisee must inform Franchisor, in writing (the <B>&#147;Non-Renewal notice</B>&#148;)<B> </B>no later than 30 days after
Franchisee receipt of the Renewal notice, In all cases, if Franchisee opts for non-renewal, Franchisee must enter into Franchisors then-current exit agreement at least 30 days prior to the Scheduled Expiration Date. The exit agreement may, at
Franchisors sole option, provide that Franchisor may step in on or before the Scheduled Expiration Date and continue to operate one or more Locations licensed under this Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2">14(b) <U>Continued Service Required to End of Term:</U> The parties agree that it is imperative that the goodwill of Clearpoint and the Network be protected. Therefore, Franchisee agrees to continue to service
Clients, Job-seekers, and Field Employees, up to and including the day of the Scheduled Expiration Date. Franchisor is entitled to all Royalty, Ad Fund, and any other payments and other monies owed and accruing up to and including the Scheduled
Expiration Date. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>15. TERMINATION </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="2">15(a) <U>Termination for Failure to Cure Breach:</U> Except as otherwise provided in subsection 15(b), when Franchisee receives a written notice from Franchisor Informing Franchisee that Franchisee has failed to comply with the terms of
this Agreement (as supplemented by the Materials), Franchisee will have 10 consecutive days (or such other time frame as required by law) to cure the breach to Franchisors satisfaction. If Franchisee do not cure the breach within the applicable time
period, this Agreement may terminate without further notice to Franchisee. In addition, if the breach is due to Franchisee failure to timely pay monies due Franchisor, Franchisor reserve the right to file a delinquency report with all appropriate
credit reporting agencies. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">15(b) <U>Termination Without Opportunity to Cure Breach:</U> After any one or more of the following events described below,
Franchisor may, in Franchisors sole discretion, terminate this Agreement without providing Franchisee any opportunity to cure the breach, and the termination is effective when Franchisee receive Franchisors written notice. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(1) Franchisee fails to open the Business as required under subsection 6(a) or the Business is closed for 5 consecutive Business Days. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(2) Franchisee or any Principal Owner is convicted of, or pleads no contest to, a felony, a crime involving moral turpitude, or any other crime or
offense that is likely, in Franchisors sole opinion, to adversely affect the Network, the Clearpoint Property, or Franchisors interest in them. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman"
SIZE="2">(3) Franchisee or any Principal Owner attempts to transfer or transfers, with or without remuneration, any of the material assets of the Business, the Clearpoint Property, any rights or obligations under this Agreement, or any Ownership
Interest in Franchisee without first obtaining Franchisors written approval </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(4) Franchisee or any Principal Owner fail to comply with any
Confidentiality Agreement and/or non-disclosure agreement or fails to comply with any of the provisions of this Agreement related to: (i)&nbsp;Non-Disclosure of Confidential Information, (ii)&nbsp;Protection of Confidential Information,
(iii)&nbsp;Treatment of Personnel, (iv)&nbsp;operation of the Business from a Clearpoint Approved location, (v)&nbsp;maintaining uninterrupted required insurance coverage, (vi)&nbsp;Credit and Collections, or (vii)&nbsp;Rules Governing Unfair Trade
Practices. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(5) Franchisee or any Principal Owner uses in any unauthorized manner or discloses to any unauthorized party, the Clearpoint
Property and/or any third party software sublicensed through Clearpoint to Franchisee. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(6) Franchisee or any Principal Owner (i)&nbsp;acts
in any way inconsistent with being a business separate from Clearpoint; (ii)&nbsp;commits any unauthorized acts involving Clearpoint; (iii)&nbsp;commits any act or pursues any course of conduct that brings the Program, the Network, or the
Proprietary Marks into disrepute; (iv)&nbsp;participates in any fraudulent activity, including any fraudulent reporting, of financial or operational information to Franchisor; (v)&nbsp;willfully or negligently misclassifies Field Employees for
worker&#146;s compensation reporting and charge purposes, (vi)&nbsp;permits Field Employees to perform prohibited services or (viii)&nbsp;permits Field Employees to be employed in job classifications that are prohibited as instructed by Franchisor.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(7) Franchisee loses legal control of the assets, business affairs, or freedom of action with respect to the Business. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(8) Franchisee is (i)&nbsp;adjudicated as bankrupt or insolvent, (ii)&nbsp;all or a substantial part of the </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<FONT FACE="Times New Roman" SIZE="2">assets are assigned to, or for, the benefit of any creditor, (iii)&nbsp;a petition in bankruptcy is filed by or against Franchisee and is not immediately
contested and dismissed within 60 days from filing, (iv)&nbsp;a bill in equity or other proceeding for the appointment of a receiver or other custodian of Franchisee, the Business or assets of either is filed and consented to by Franchisee,
(v)&nbsp;a receiver or other custodian (permanent or temporary) of Franchisee assets or property, or any part thereof, is appointed by any court of competent jurisdiction, (vi)&nbsp;proceedings for a composition with creditors under any state or
federal law are instituted by or against Franchisee, (vii)&nbsp;Franchisee is dissolved, and/or (viii)&nbsp;execution is levied against Franchisee or the real or personal property of the Business is scheduled to be sold after levy thereon by any
governmental body or agency, sheriff, marshal or constable. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(9) Franchisee has converted Franchisors funds as described in subsection
9(f)(2) of this Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(10) Franchisee or any Principal Owner commits 2 material breaches under this Agreement within a 12 month
period, whether or not such breaches have been cured after Franchisee receipt of Franchisors written notice. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">15(c) <U>Cease Operations:</U> If Franchisee
fail to cure the breach, Franchisee must immediately cease operating the Business and comply with the post termination obligations contained in Sections 16 and 17. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="2">15(d) <U>Cross Default:</U> If any of Franchisee subsidiaries or affiliates authorized to operate one or more Businesses under this Agreement comments any breach described herein, the breach shall effect all members of this Agreement. In
addition, if any Principal Owner is a Principal Owner in another Clearpoint franchise, a breach of the other franchisee&#146;s franchise agreement or attendant agreements shall be a breach of this Agreement and vice versa. </FONT></P> <P
STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">15(e) <U>Inability to Perform at a Specific location:</U> </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman"
SIZE="2">(1) This Agreement provides for the potential operation of multiple Business locations during the term. If Franchisee operates more than one Business, and Franchisor finds Franchisee cannot perform under this Agreement for one particular
Location, Franchisee must obtain Franchisors prior written consent to either merge the Business into one of Franchisee&#146;s other Locations, or close the Business in accordance with the terms provided herein. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(2) At least 90 days prior to taking any action concerning the subject Location, Franchisee must provide Franchisor with Franchisee written notice
regarding Franchisee intentions to either merge the Business or close the Business. Franchisee agrees that all terms contained in subsections 15(f) and 15(g) below will apply in like manner to the subject Location, except however (i)&nbsp;if
Franchisor agrees to allow Franchisee to rescind Franchisee notice Franchisee agrees to execute the required re-instatement documents, including a mutual release by the parties, and Franchisee shall pay a $5,000 re-instatement fee to Franchisor, or
(ii)&nbsp;if Franchisee fails to operate the Business for the required 90 day period, Franchisor will be entitled to liquidated damages in an amount equal to the Royalties due and payable for the 9 month period immediately preceding the time
Franchisee ceased operation of the subject Location. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">15(f) <U>Inability to Perform Under the Agreement</U> </FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(1) In the event Franchisee cannot perform under this Agreement, despite Franchisee best efforts, and provided Franchisee is in compliance with all of the
terms and conditions of this Agreement, Franchisee may voluntarily terminate this Agreement by providing Franchisor with a 180 days prior written notice detailing Franchisee intentions. The notice to voluntarily terminate this Agreement is
irrevocable upon Franchisors receipt, and the option to allow Franchisee to rescind any such voluntary notice of termination shall be at Franchisors sole discretion. If Franchisor approves Franchisee request to rescind Franchisee notice to
terminate, Franchisee agrees to execute the </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<FONT FACE="Times New Roman" SIZE="2">required re-instatement documents, including a mutual release by the parties, and Franchisee shall pay a $10,000 re-instatement fee to Franchisor. Similarly,
the provisions of this subsection 15(f) shall apply should Franchisee elect to rescind Franchisee notice of renewal described in subsection 13(a)(2), except however Franchisee agrees to execute Franchisors required termination documents, including a
mutual release by all parties, and pay Franchisor all monies due under this Agreement at that time. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(2) Franchisee written notice must
contain all of the information required to be provided to Franchisor in subsections 16(a)(12) and 16(a)(13) below. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(3) The parties agree
that the date Franchisor receives Franchisee written notice is referred to as the <B>&#147;Voluntary notice Date&#148;, </B>and the scheduled date to cease operations under this Agreement is 180 days following Franchisors receipt of Franchisee
voluntary notice (the <B>&#147;Termination Date&#148;</B>).<B> </B>Franchisee automatically releases certain rights in effect as of the Voluntary notice Date such as participation in any special programs or qualification for any economic incentives
Franchisor may provide at the time. Franchisee agrees in order to protect Franchisors goodwill and to reasonably arrange to continue to service Clients, Job-seekers and Field Employees, Franchisee will use Franchisee&#146;s best efforts to continue
to perform under this Agreement for the entire 180 day notice period. Further, Franchisee acknowledge that Franchisor is entitled to all Royalties, Ad Fund contributions, and any other monies owed and accruing up to an including the Termination
Date. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(4) Franchisor shall have 90 days following the Voluntary notice Date to inform Franchisee as to whether or not Franchisor, or our
designee, elect to purchase any or all of Franchisee assets pursuant to subsection 16(a)(11). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">15(g) <U>Liquidated Damages:</U> </FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(1) If this Agreement is terminated under subsections 15(a) or 15(b), or if Franchisee fails to provide Franchisor the required notice described in
subsections 15(e) or 15(f), or if Franchisee fails to operate the Business for any period prior to the Termination Date, Franchisee agrees to compensate Franchisor for the reasonable costs, expenses, and losses, Franchisor incurred in connection
with such termination or cessation. Franchisors expenses may include without limitation the (i)&nbsp;costs of soliciting, locating, qualifying and training a replacement franchisee, (ii)&nbsp;loss of any Field Employees and/or Clients, and
(iii)&nbsp;loss of revenue Franchisor would otherwise receive as a result of Franchisee continued operation of the Business. The parties agree that such expenditures and losses may be uncertain and difficult to ascertain and therefore agree that the
compensation specified below reasonably represents such expenditures and losses and is not a penalty. Therefore, Franchisee agrees to pay Franchisor an amount equal to the Royalty due and payable by Franchisee for the 18 month period immediately
preceding the date Franchisee ceased operating the Business or if the Business has not been operated for an 18 month period, an amount equal to the average monthly amounts due during the time the Business was operated multiplied by 18. This
subsection 15(g) shall not be construed as Franchisors sole election of remedies and shall not prejudice Franchisors rights to pursue other remedies under this Agreement, including seeking damages and/or injunctive relief for any violation of
Sections 7 and 17, or damages for the conversion of Field Employees or the continued solicitation of Clients in violation of subsection 17(c)(3). </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>16.
TERMINATION DUTIES: </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">16(a) <U>Termination Duties:</U> If this Agreement terminates for any reason, voluntarily or involuntarily, Franchisee and
Franchisee Principal Owners, jointly and severally, to the extent permitted by law, shall immediately and expeditiously comply with each of the following requirements: </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;
</FONT></P>
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(1) Stop using all Clearpoint Property or any variation or colorable imitation of any component, and
refrain from identifying, promoting or advertising Yourselves as a member of the Clearpoint Network or former Clearpoint franchisee, or as formerly associated with Clearpoint in any manner (including the display of any Clearpoint related diplomas,
awards, plaques, or other similar paraphernalia). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(2) Stop using all software licensed or sublicensed by Franchisor to Franchisee.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(3) Cancel all filings or authorizations to operate under the Proprietary Marks, Domain Names or any colorable imitation of them pursuant
to a fictitious name statute or any similar statute. Within 30 days following the termination Franchisee must submit written evidence of such cancellation to Franchisor. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT
FACE="Times New Roman" SIZE="2">(4) Assign all Domain Names or other identifications related to the Program to Franchisor without delay. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman"
SIZE="2">(5) No later than 3 days following the termination, deliver to Franchisor, at Franchisee expense, all originals and copies of the Clearpoint Property and any software licensed or sublicensed by Franchisor to Franchisee. Further, Franchisee
shall not make, retain or use any copy of the Clearpoint Property or any software licensed or sublicensed by Franchisor to Franchisee. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(6)
Pay in full all liabilities of the Business, including, rent, telephone, leases, salaries, vendors, and other claims. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(7) Franchisee will
not contest that for a period of 90 days following the termination of this Agreement, Franchisor will use Franchisee Bad Debt Reserve to cover the negative balance, if any, of Franchisee Distribution Account, and/or any other amounts due Franchisor
under this Agreement, including liquidated damages, if applicable. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(8) Cease using all Listings for any purpose whatsoever. Franchisee may
not enter any &#147;call forwarding&#148; or similar instruction with Franchisee service provider to circumvent this provision. In addition, at Franchisors election, Franchisee must execute all forms and documents required by Franchisor and
Franchisee service provider to either cancel the Listings or transfer the service and the Listings to Franchisor. For purposes of this Agreement, &#147;Listings&#148; means, all office telephone numbers, cellular and facsimile numbers, related
Yellow Pages listings/advertisements or other business listings or directories, e-mail addresses, Internet web sites, Internet directories, Internet chat rooms, and all Internet meta keywords, and any other similar components identifying the
Business which is accessible by the general public. The obligations of this Section&nbsp;16 shall survive the termination of this Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman"
SIZE="2">(9)&nbsp;If the Location is leased, Franchisor may, at Franchisors option, provide written notice to Franchisee requiring Franchisee to assign Franchisee interest in any lease or sublease for the Location to Franchisor. Franchisor may
exercise this option up to 30 days <U>following</U> the termination of this Agreement. Franchisee agrees to remain liable for all obligations arising prior to the date of the assignment. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(10) If Franchisor do not assume the lease, Franchisee must, at Franchisee expense, remove all signs bearing the Proprietary Marks and make such
modifications to the premises as Franchisor deems necessary to clearly distinguish it from any personnel business operating under the Program. Franchisor has the right to enter the Location, without being guilty of any crime or tort, to make, or
cause to be made, at Franchisee expense, the changes and modifications required by this Agreement. Franchisee agrees to pay Franchisors incurred costs upon demand. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT
FACE="Times New Roman" SIZE="2">(11) Franchisor may, at Franchisors sole option, require Franchisee to sell to Franchisor any or all of Franchisee assets. The parties agree that the purchase price shall equal the lesser of (i)&nbsp;fair market
value, or (ii)&nbsp;3 times Franchisee annual pre-tax earnings for the subject Business for Franchisee most recently completed fiscal year as computed in accordance with GAAP. If Franchisor cannot agree on a fair market value prior to the
Termination Date, the parties agree the fair market value shall be determined by a qualified independent appraiser; selected by Franchisor. Once the </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<FONT FACE="Times New Roman" SIZE="2">value is established, Franchisee shall execute Franchisors required Asset Purchase Agreement. Franchisor has the right to deduct from the purchase price any
sums owing from Franchisee under this Agreement or any other agreements between Franchisee and Franchisor, and Franchisors reasonable related expenses incurred (including attorneys&#146; fees). The sale shall occur on or before the Termination Date,
or such other date as the parties may agree. In addition, Franchisor may require one or more of Franchisee Principal Owners to enter into Franchisors standard consulting agreement in order to provide certain services for Franchisor for a limited
period of time. The purchase, if completed, is for the assets only and Franchisor will not assume any of Franchisee liabilities, except for those, if any, identified within the Asset Purchase Agreement. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(12) Franchisee acknowledges that all Client Accounts and Field Employees are Franchisors property. Franchisor may service or dispose of the Client
Accounts in any manner Franchisor deem appropriate. Franchisee and Franchisee Principal Owners understand and agree that any solicitation by either of Franchisee of any Clients and/or Field Employees following the termination of this Agreement is a
material breach of this Agreement for which Franchisor may seek all legal remedies. In addition, Franchisee must deliver to Franchisor such documents and/or instruments Franchisor deem necessary to evidence Franchisors ownership of the Client
Accounts and to meet the requirements of all taxing and other government authorities. For the purpose of this Agreement, <B>&#147;Client Accounts&#148; </B>means all accounts or other established business relationships with every Client to whom
Franchisee, through the operation of the Business, has provided staffing services or related products or services during the 2 year period prior to the termination or expiration (without renewal), or that placed a Job-order for the services offered
by Franchisee during the 90 day period prior to the termination or expiration. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(13) Franchisee agrees to fully cooperate with Franchisor
by providing Franchisor, or Franchisors designee, immediate access to Franchisee computer Program and computer hardware for the purpose of returning to Franchisor the Clearpoint Property and the Clearpoint licensed or sublicensed computer software
contained within it. Franchisor will provide to Franchisee a voucher insuring the safe and timely return of Franchisee computer hardware. Franchisor will retrieve the names, addresses, and telephone numbers of all Client Accounts, as well as all
Job-seekers, and Field Employees used or contacted by Franchisee through the operation of the Business during the 2 year period prior to the termination or expiration (without renewal) of this Agreement. Franchisor will transfer the information
directly from Franchisee computer to ClearPoint, and then return the computer hardware to Franchisee. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(14) All Confidential Information
shall remain Franchisors exclusive property. Therefore, Franchisee and Franchisee Principal Owners must preserve forever in confidence all written, electronic or otherwise tangible Confidential Information for Franchisors benefit, and never use,
disclose, or misappropriate, directly or indirectly, any Confidential Information to Franchisors and/or any successor franchisee&#146;s competitive disadvantage or economic injury. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(15) If Franchisee or Franchisee Principal Owners fail to comply with all post-termination obligations, Franchisee obligation to provide Franchisor with
monies due, reports, records, Client Accounts, Confidential Information, licensed and/or sublicensed software and any other materials required in accordance with this Agreement shall be based on the later of the Termination Date or the date all such
post-termination covenants have been fully complied with by the offending party. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">16(b) <U>Transfer of Staff Employees:</U> Franchisor is not be obligated
to hire any of Franchisee Staff Employees. However, if Franchisor request a transfer of any Staff Employee, and the Staff Employee is willing to transfer, Franchisee will assign the person&#146;s employment contract to Franchisor. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">16(c) <U>Money Owed:</U> The termination of this Agreement shall not release Franchisee from Franchisee obligations to pay all money due or owed under this Agreement
unless Franchisee executes the Renewal Documents, all Billings that have not been collected will immediately be treated as Chargebacks and no Distribution Account amounts will be available to Franchisee until the Distribution Account balance
subsequently becomes net positive, and Franchisee owes no other amounts to Franchisor. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">16(d) <U>Continued Effect of Agreement:</U> Provisions of this Agreement that govern the parties&#146; conduct after
termination shall continue in effect according to their terms after termination or expiration. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>17. RULES GOVERNING UNFAIR TRADE-PRACTICES
</B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B></B>17(a) <U>Covenants Regarding Unfair Trade Practices:</U> Franchisee and Franchisee Principal Owners each agree that, among other things, the
training, trade secrets and Confidential Information Franchisee receive or procure provide a competitive advantage and each component is valuable to Franchisee In operating the Business. Gaining access to such training, trade secrets and
Confidential Information is a primary reason why Franchisee is entering into this Agreement. Therefore, in consideration for such training, trade secrets, Confidential Information and rights, Franchisee and Franchisee Principal Owners specifically
make the covenants set forth in this <B><U>Section 17.</U> </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B></B>17(b) <U>No Competition During Term of This Agreement:</U> During the term of this
Agreement, neither Franchisee nor any Principal Owner shall directly or indirectly own, conduct, operate, organize, work for or consult for, or associate with any non-Clearpoint staffing business located within the United States, its territories or
commonwealths, or any other country, province or geographical area. This subsection 17(b) shall not apply to the ownership of less than 1% of the equity securities of a publicly held corporation. In addition, the applicable restrictions as described
in Attachment 4 apply to all who have executed Attachment 4<B></B>.<B> </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">17(c) <U>Post-Termination Unfair Competition and Unfair Trade Practices:</U>
Upon the termination or non-renewal of this Agreement, Franchisee and/or Franchisee Principal Owners may operate a staffing business so long as Franchisee each comply accordingly with the terms set forth below. In addition, if an individual ceases
to be a Principal Owner at any time during the term of. this Agreement, that individual may operate a staffing business so long as the individual also complies with the terms set forth below. Franchisee and Franchisee Principal Owners acknowledge
and agree that noncompliance with these terms constitute unfair trade practices. In addition, the applicable restrictions as described in Attachment 4 apply to all who have executed Attachment 4. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(1) Franchisee and/or Franchisee Principal Owners shall not, directly .or indirectly, without Franchisors express written consent, either as an
individual, counselor, recruiter, consultant, employee, manager, officer, director, shareholder or in any other capacity, use in any manner any part of the Clearpoint Property, including the use of any Confidential Information to do any of the acts
set forth in. subsection 17(c)(3). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(2) Franchisee shall deliver to Clearpoint the information and materials described in subsections
16(a)(12), and 16(a)(13). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(3) Neither Franchisee nor Franchisee Principal Owners may, for a period of 2 years after the termination or
non-renewal of this Agreement, (referred to as the <B>&#147;Termination Period&#148;</B>)<B> </B>directly or indirectly, for Yourselves or through, on behalf of or in conjunction with any person or business entity do any of the following, except as
they relate to another business licensed or approved by Franchisor. In addition, no Principal Owner may for the 2 years following the date he/she ceased to be a Principal Owner do so. </FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(i) operate any staffing business at a location that is within a 10 mile radius from any Clearpoint location, </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(ii) hire or seek to hire, or in any other manner attempt to influence, induce or encourage any Field Employee or Staff Employee of the Business, of any
successor franchisee, and/or of ClearPoint to leave their employment; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(iii) contact, seek to contact, or do business with any individual
or entity that was a </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<FONT FACE="Times New Roman" SIZE="2">Client during the 2 year period prior to the Termination Period, or in any other manner attempt to solicit, influence, induce or encourage any Client to
cease doing business with Franchisor and/or a successor franchisee; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(iv) procure or attempt to procure employment or placement of a
Job-seeker that Franchisee procured, interviewed or attempted to procure, employ, or place during the 2 year period prior to the Termination Period; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT
FACE="Times New Roman" SIZE="2">(v) refer or attempt to refer any Job-seeker for employment on an existing or prospective Job-order that Franchisee procured or attempted to procure during the 2 year period prior to the Termination Period, or,
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(vi) divert or attempt to divert, for Franchisee benefit or Franchisee Principal Owners&#146; benefit, or for the benefit of another
staffing business, management search consultant, or other recruitment firm, any Job-seeker, Field Employee, or Job-order in existence on the beginning date of the Termination Period. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%;padding-bottom:3px;line-Height:95%; vertical-align:top"><FONT FACE="Times New Roman" SIZE="2">(4) Franchisee and Franchisee Principal Owners acknowledge and agree that the covenants described
above are not intended to and would not prevent or materially impair any party from obtaining a livelihood in the staffing business during the Termination Period. Therefore, if Franchisee or one of Franchisee Principal Owners commit a breach of
subsection 17(c)(3), the<FONT FACE="Times New Roman" SIZE="1"><SUB>,</SUB></FONT><FONT FACE="Times New Roman" SIZE="2">2 year period specified in subsection 17(c)(3) shall be tolled during the period of such breach. </FONT></FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">17(d) <U>Information Request:</U> Franchisee and Franchisee Principal Owners shall supply such information as Franchisor may request in order to ascertain whether or not
Franchisee each have complied with, or have violated, the confidentiality covenants contained in this Agreement. Franchisee each shall furnish the requested information to Franchisor within a reasonable time, but in no event later than 10 days
following Franchisee receipt of Franchisors request. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">17(e) <U>Injunctions:</U> Franchisee and Franchisee Principal Owners acknowledge that a violation of
any of the provisions of this Agreement related to the: (i)&nbsp;License Relationship, (ii)&nbsp;Materials, (iii)&nbsp;Confidential Information, (iv)&nbsp;Ownership Structure and Transfer, (v)&nbsp;Termination Duties, or (vi)&nbsp;Rules Governing
Unfair Trade Practices, will use irreparable harm to Franchisor and the Network. Franchisee agrees that Franchisor have the right to seek injunctive or declaratory relief to remedy any actual or threatened violation of this Agreement specifically
including the equitable remedy of specific performance. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">17(f) <U>Indirect Conduct:</U> For the purpose of Section&nbsp;16 and Section&nbsp;17 herein, the
parties agree that <U>indirectly</U> includes any acts committed by Franchisee, any Principal Owner, or their respective spouse, child, life partner, other dependent household members, officers, agents, employees, attorneys, estate, or heirs, and
those persons in active concert or participation with them, it being the intent of the parties that such persons may not perform any act indirectly which would be prohibited if carried out directly by Franchisee. In addition, the parties agree that
<U>staffing business </U>includes any business similar to that as set forth under the definition of Business in subsection 3(f). </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>18. GENERAL LEGAL
MATTERS </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">18(a) <U>GOVERNING LAW:</U> THIS AGREEMENT TAKES EFFECT UPON ITS ACCEPTANCE BY US IN THE STATE OF PENNSYLVANIA. IN AN EFFORT TO
PROMOTE CONSISTENCY WITHIN THE NETWORK, WITH RESPECT TO ALL CLAIMS, CONTROVERSIES, DISPUTES OR ACTIONS RELATED TO THIS AGREEMENT OR THE RELATIONSHIP CREATED THEREBY, THIS AGREEMENT SHALL BE INTERPRETED, ENFORCED AND GOVERNED BY THE LAW OF THE STATE
OF PENNSYLVANIA. PENNSYLVANIA LAW SHALL PREVAIL IN THE EVENT OF ANY CONFLICT OF LAW, EXCEPT TO THE EXTENT GOVERNED BY THE UNITED STATES TRADEMARK ACT OF 194E (LANHAM ACT, 15 U,S.C., SECTION 1501, ET SEQ.). </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">18(b) <U>MEDIATION:</U> </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT
FACE="Times New Roman" SIZE="2">(1) THE PARTIES AGREE TO SUBMIT ANY CLAIM, CONTROVERSY OR DISPUTE ARISING OUT OF OR RELATING TO THE FRANCHISE, YOUR OPERATION OF THE BUSINESS, THIS AGREEMENT, OR ANY OTHER AGREEMENT BETWEEN US, OR OUR AFFILIATES, AND
YOU TO NON-BINDING MEDIATION PRIOR TO FILING SUCH CLAIM, CONTROVERSY OR DISPUTE IN ARBITRATION OR A COURT. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(2) THE MEDIATION SHALL BE
CONDUCTED THROUGH EITHER AN INDEPENDENT MEDIATOR OR A MEDIATOR APPOINTED BY A MEDIATION SERVICES ORGANIZATION OR BODY EXPERIENCED IN THE MEDIATION OF DISPUTES BETWEEN FRANCHISORS AND FRANCHISEES AGREED UPON BY THE PARTIES. FAILING SUCH AGREEMENT
WITHIN 15 DAYS OF TIME AFTER EITHER PARTY HAS RESOURCESIFIED THE OTHER IN WRITING OF ITS DESIRE TO SEEK MEDIATION, THE MEDIATION SHALL BE CONDUCTED THROUGH A MUTUALLY AGREED MEDIATOR. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(3) THE COSTS AND EXPENSES OF MEDIATION, INCLUDING COMPENSATION AND EXPENSES OF THE MEDIATOR, SHALL BE BORNE BY THE PARTIES EQUALLY. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(4) THE PARTIES ARE UNABLE TO RESOLVE THE CLAIM, CONTROVERSY OR DISPUTE WITHIN 90 DAYS AFTER THE MEDIATOR HAS BEEN APPOINTED, THEN THE DISPUTE SHALL
AUTOMATICALLY BE REFERRED TO ARBITRATION UNDER SUBSECTION 18(c). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(5) RESOURCES WITHSTANDING THE FOREGOING, WE MAY, IN OUR SOLE DISCRETION,
BRING AN ACTION FOR (i)&nbsp;MONIES OWED, (ii)&nbsp;INJUNCTIVE OR OTHER EXTRAORDINARY OR EQUITABLE RELIEF, (iii)&nbsp;SPECIFIC PERFORMANCE, OR (iii)&nbsp;THE POSSESSION OR DISPOSITION OF, OR OTHER RELIEF RELATING TO, REAL PROPERTY IN A COURT HAVING
JURISDICTION AND IN ACCORDANCE WITH SUBSECTIONS 18(c)(3) AND 18(d), WITHOUT FIRST SUBMITTING SUCH ACTION TO MEDIATION. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">18(c) <U>ARBITRATION:</U>
</FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(1) THE PARTIES AGREE THAT ANY CLAIM, CONTROVERSY OR DISPUTE ARISING OUT OF OR RELATING TO THE FRANCHISE, YOUR OPERATION OF THE BUSINESS,
THIS AGREEMENT, OR ANY OTHER AGREEMENT BETWEEN US, OR OUR AFFILIATES, AND YOU, THAT CAN RESOURCES BE AMICABLY SETTLED AMONG THE PARTIES OR THROUGH MEDIATION SHALL, EXCEPT AS SPECIFICALLY SET FORTH HEREIN AND IN SUBSECTION 18(d), BE REFERRED TO
ARBITRATION. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(2) THE ARBITRATION SHALL BE CONDUCTED THROUGH AN ORGANIZATION OR BODY EXPERIENCED IN THE ARBITRATION OF DISPUTES BETWEEN
FRANCHISORS AND FRANCHISEES AGREED UPON BY THE PARTIES. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(3) FAILING SUCH AGREEMENT WITHIN 15 DAYS AFTER ONE PARTY. HAS RESOURCESIFIED THE
OTHER PARTY IN WRITING OF ITS INTENTION TO ARBITRATE, ARBITRATION SHALL BE CONDUCTED BY THE AMERICAN ARBITRATION ASSOCIATION (&#147;AAA&#148;), OR ITS SUCCESSOR, IN ACCORDANCE WITH THE COMMERCIAL RULES OF AAA OR ITS SUCCESSOR, AS AMENDED, EXCEPT
THAT THE ARBITRATOR(S) SHALL APPLY THE FEDERAL RULES OF EVIDENCE. HOWEVER, IF SUCH RULES ARE IN ANY WAY CONTRARY TO OR IN CONFLICT WITH THIS AGREEMENT, THE TERMS OF THIS AGREEMENT SHALL CONTROL. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(4) ALL CLAIMS, CONTROVERSIES OR DISPUTES INVOLVING YOU MAY ONLY BE ARBITRATED ON AN INDIVIDUAL BASIS AND MAY RESOURCES BE CONSOLIDATED WITH ANY CLAIM,
CONTROVERSY OR DISPUTE FOR OR ON BEHALF OF ANY OTHER </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<FONT FACE="Times New Roman" SIZE="2">CLEARPOINT FRANCHISEE OR SUPPLIER. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(5) IF THE
AMOUNT IN CONTROVERSY INVOLVES LESS THAN $100,000, THE PARTIES SHALL SELECT A SINGLE ARBITRATOR IN ACCORDANCE WITH THE LIST AND STRIKE PROVISIONS OF THE AAA RULES. IF THE AMOUNT IN CONTROVERSY INVOLVES $100,000 OR MORE, A THREE-PERSON PANEL OF
ARBITRATORS SHALL BE SELECTED. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(6) TO SELECT A THREE PERSON PANEL, THE PARTIES SHALL EACH SELECT ONE ARBITRATOR. IF THE PARTY UPON WHOM
THE DEMAND FOR ARBITRATION IS SERVED FAILS TO SELECT AN ARBITRATOR WITHIN 15 DAYS AFTER THE RECEIPT OF THE DEMAND FOR ARBITRATION, THEN THE ARBITRATOR SO DESIGNATED BY THE PARTY REQUESTING ARBITRATION SHALL ACT AS THE SOLE ARBITRATOR TO RESOLVE THE
CONTROVERSY AT HAND. OTHERWISE, THE TWO ARBITRATORS DESIGNATED BY THE PARTIES SHALL SELECT A THIRD ARBITRATOR. IF THE TWO ARBITRATORS DESIGNATED BY THE PARTIES FAIL TO SELECT A THIRD ARBITRATOR WITHIN 15 DAYS, THE THIRD ARBITRATOR SHALL BE SELECTED
BY THE ORGANIZATION AGREED UPON OR AAA OR ANY SUCCESSOR THERETO, UPON APPLICATION BY EITHER PARTY. ALL OF THE ARBITRATORS SHALL BE EXPERIENCED IN THE ARBITRATION OF DISPUTES BETWEEN FRANCHISORS AND FRANCHISEES, BUT THE PERSON SELECTED MAY RESOURCES
HAVE SERVED AS THE MEDIATOR OF THE DISPUTE SUBMITTED TO ARBITRATION AS PROVIDED BY SUBSECTION 17(b) ABOVE. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(7) THE ARBITRATION SHALL TAKE
PLACE IN PHILADELPHIA, PA OR THE CURRENT CITY AND STATE WHERE OUR CORPORATE HEADQUARTERS IS LOCATED AT THE TIME THE DISPUTE IS SUBMITTED TO ARBITRATION. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT
FACE="Times New Roman" SIZE="2">(8) THE AWARD OF THE ARBITRATORS SHALL BE FINAL AND JUDGMENT UPON THE AWARD RENDERED IN ARBITRATION MAY BE ENTERED IN ANY COURT HAVING JURISDICTION THEREOF. THE ARBITRATORS SHALL BE REQUIRED TO SUBMIT WRITTEN FINDINGS
OF FACT AND CONCLUSIONS OF LAW AND A WRITTEN EXPLANATION AND CALCULATION OF THE AMOUNT AWARDED (IF APPLICABLE) WITHIN 30 BUSINESS DAYS FOLLOWING THE FINAL HEARING SESSION OF THE ARBITRATORS. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(9) THE COSTS AND EXPENSES OF ARBITRATION MAY BE ENTERED IN ANY COURT HAVING JURISDICTION THEREOF, THE COSTS AND EXPENSES OF ARBITRATION, INCLUDING
COMPENSATION AND EXPENSES OF THE ARBITRATORS, SHALL BE BORNE BY THE PARTIES AS THE ARBITRATORS DETERMINE. EACH PARTY FURTHER AGREES THAT, UNLESS APPLICABLE LAW PROHIBITS SUCH LIMITATION, NEITHER PARTY SHALL BE LIABLE FOR PUNITIVE OR EXEMPLARY
DAMAGES, AND THE ARBITRATORS SHALL HAVE NO AUTHORITY TO AWARD THE SAME. ANY AWARD OF PUNITIVE OR EXEMPLARY DAMAGES BY THE ARBITRATOR(S) IS OUTSIDE OF AND IN VIOLATION OF THIS AGREEMENT TO ARBITRATE DISPUTES. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(10) IF WE DESIRE TO SEEK SPECIFIC PERFORMANCE OR OTHER EXTRAORDINARY OR EQUITABLE RELIEF INCLUDING, BUT RESOURCES LIMITED TO, INJUNCTIVE RELIEF UNDER
THIS AGREEMENT AND ANY AMENDMENTS THERETO, THEN ANY SUCH ACTION SHALL RESOURCES BE SUBJECT TO MANDATORY ARBITRATION AND WE SHALL HAVE THE RIGHT TO BRING SUCH ACTION AS DESCRIBED IN SUBSECTION 17(d). IN ADDITION, ANY ARBITRATOR APPOINTED PURSUANT TO
THE TERMS OF THIS AGREEMENT, SHALL HAVE THE AUTHORITY TO ENTER AN AWARD FOR SPECIFIC PERFORMANCE OR OTHER EXTRAORDINARY OR EQUITABLE RELIEF IF SPECIFICALLY SOUGHT BY A PARTY. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(11) IN PROCEEDING WITH ARBITRATION AND IN MAKING DETERMINATIONS HEREUNDER, THE ARBITRATORS SHALL RESOURCES EXTEND, MODIFY OR SUSPEND ANY TERMS OF THIS
AGREEMENT OR THE REASONABLE STANDARDS OF BUSINESS PERFORMANCE AND </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<FONT FACE="Times New Roman" SIZE="2">OPERATION ESTABLISHED BY US IN GOOD FAITH. RESOURCESICE OF OR DEMAND FOR ARBITRATION SHALL RESOURCES STAY, POSTPONE OR RESCIND THE EFFECTIVENESS OF ANY
TERMINATION OF THIS AGREEMENT OR SUSPEND THE OPERATION OF OR EFFECT OF ANY TERM OF THE AGREEMENT. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">18(d) <U>VENUE:</U> </FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(1) EXCEPT AS STATED ABOVE, AND IN THIS SUBSECTION OR PRECLUDED BY STATE LAW IN THE STATE IN WHICH THE BUSINESS IS LOCATED, WITH RESPECT TO ALL CLAIMS SET
FORTH ABOVE IN SUBSECTION 18(c) (ARBITRATION), OR WHICH AS A MATTER OF LAW OR PUBLIC POLICY CAN RESOURCES BE SUBMITTED TO ARBITRATION, YOU AND YOUR PRINCIPAL OWNERS HEREBY IRREVOCABLY SUBMIT YOURSELVES TO THE EXCLUSIVE JURISDICTION OF THE STATE
COURTS AND THE FEDERAL DISTRICT COURT WHERE WE HAVE OUR PRINCIPAL CORPORATE HEADQUARTERS. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(2) YOU AND YOUR PRINCIPAL OWNERS HEREBY WAIVE
ALL QUESTIONS OF PERSONAL JURISDICTION FOR THE PURPOSE OF CARRYING OUT THIS PROVISION. YOU AND YOUR PRINCIPAL OWNERS HEREBY AGREE THAT SERVICE OF PROCESS MAY BE MADE UPON ANY OF YOU IN ANY PROCEEDING RELATING TO OR ARISING OUT OF THIS AGREEMENT OR
THE RELATIONSHIP CREATED BY THIS AGREEMENT BY ANY MEANS ALLOWED BY SUCH STATE OR FEDERAL LAW. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%;padding-bottom:3px;line-Height:95%; vertical-align:top"><FONT
FACE="Times New Roman" SIZE="2">(3) YOU AND YOUR PRINCIPAL OWNERS FURTHER AGREE, EXCEPT AS OTHERWISE<FONT FACE="Times New Roman" SIZE="1"><SUP>.</SUP></FONT><FONT FACE="Times New Roman" SIZE="2"> SET FORTH HEREIN THAT EXCLUSIVE VENUE FOR ANY
PROCEEDING RELATING TO OR ARISING OUT OF THIS AGREEMENT OR THE RELATIONSHIP CREATED THEREBY SHALL BE THE COUNTY WHERE WE HAVE OUR CORPORATE HEADQUARTERS; PROVIDED, HOWEVER, WITH RESPECT TO ANY ACTION (i)&nbsp;FOR MONIES OWED, (ii)&nbsp;FOR
INJUNCTIVE OR OTHER EXTRAORDINARY OR EQUITABLE RELIEF (INCLUDING SPECIFIC PERFORMANCE), OR (iii)&nbsp;INVOLVING POSSESSION OR DISPOSITION OF, OR OTHER RELIEF RELATING .TO REAL PROPERTY, WE MAY BRING SUCH ACTION IN ANY STATE OR FEDERAL DISTRICT COURT
WHICH HAS JURISDICTION. </FONT></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">18(e) <U>MUTUAL BENEFIT:</U> THE PARTIES ACKNOWLEDGE THAT (1)&nbsp;EACH PARTY&#146;S AGREEMENT REGARDING APPLICABLE STATE
LAW AND FORUM SET FORTH IN SUBSECTION 18(a) AND SUBSECTION 18(d) PROVIDE THE MUTUAL BENEFIT OF UNIFORM INTERPRETATION OF THIS AGREEMENT AND ANY DISPUTE ARISING OUT OF THIS AGREEMENT OR THE PARTIES&#146; RELATIONSHIP CREATED BY THIS AGREEMENT,
(ii)&nbsp;THE RECEIPT AND SUFFICIENCY OF MUTUAL CONSIDERATION FOR SUCH BENEFIT, AND (iii)&nbsp;THE PROVISIONS REGARDING APPLICABLE STATE LAW AND FORUM HAVE BEEN NEGOTIATED FOR IN GOOD FAITH AND ARE PART OF THE BENEFIT OF THE BARGAIN REFLECTED BY
THIS AGREEMENT. THE PARTIES ACKNOWLEDGE THAT THE EXECUTION OF THIS AGREEMENT AND ACCEPTANCE OF THE TERMS BY THE PARTIES OCCURRED AT OUR CORPORATE HEADQUARTERS. THE PARTIES FURTHER ACKNOWLEDGE THAT YOUR PERFORMANCE OF CERTAIN OBLIGATIONS ARISING
UNDER THIS AGREEMENT, INCLUDING, BUT RESOURCES LIMITED TO, THE PAYMENT OF MONIES DUE HEREUNDER, SHALL OCCUR WHERE OUR CORPORATE HEADQUARTERS IS LOCATED AT THE TIME SUCH OBLIGATION IS DUE. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">18(f) <U>AMENDMENTS TO FRANCHISE AGREEMENT:</U> EXCEPT FOR THOSE AMENDMENTS PERMITTED TO BE MADE UNILATERALLY BY US HEREUNDER, ANY CHANGES OR MODIFICATIONS TO THIS
AGREEMENT, OR SPECIFIC WAIVERS OF RIGHTS, SHALL BE MADE ONLY IN WRITING EXECUTED BY AUTHORIZED OFFICERS OR AGENTS OF EACH PARTY. YOU AND YOUR PRINCIPAL OWNERS ACKNOWLEDGE THAT NO OFFICER, AGENT OR FIELD EMPLOYEE OF OURS IS AUTHORIZED TO CHANGE OR
MODIFY THIS AGREEMENT VERBALLY AND THAT YOU WILL RESOURCES RELY ON CONVERSATIONS OR OTHER COMMUNICATIONS WITH OFFICERS, AGENTS OR FIELD EMPLOYEES OF OURS RELATED TO </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<FONT FACE="Times New Roman" SIZE="2">ANY CHANGE OR MODIFICATION OF THIS AGREEMENT. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">18(g)
<U>Waivers: Attorney&#146;s Fees:</U> All waivers relating to this Agreement shall be strictly construed. In any litigation related to this Agreement or the operation of the Business, all costs and all reasonable attorney&#146;s fees (including
those for appeal) incurred as a result of the legal action shall be paid to the prevailing party by the other party. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">18(h) <U>Notices:</U> Any notices
required or permitted by this Agreement shall be in writing and shall be directed to either party at the respective last known business address, delivered prepaid in one of the following ways: (i)&nbsp;personally or by expedited delivery service,
(ii)&nbsp;U.S. first-class postage prepaid mail, or (iii)&nbsp;facsimile or electronic mail (provided that the sender confirms the facsimile or electronic mail by sending an original confirmation copy by certified or registered mail or expedited
delivery service within 3 Business Days after transmission). Any notice shall be deemed to have been given (i)&nbsp;in the case of personal delivery, at the time of personal delivery, (ii)&nbsp;in the case of facsimile or electronic mail, upon
transmission (provided confirmation is sent as described above) or (iii)&nbsp;in the case of U.S. mail, 3 Business Days after the date of mailing. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">18(i)
<U>Parties Bound: Assignment:</U> This Agreement binds Franchisee, Franchisee Principal Owners, and their heirs, executors, administrators, successors, and assigns. Franchisor may assign this Agreement in whole or in part to any person or entity on
written notice to Franchisee. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">18(j) <U>Severability:</U> The provisions of this Agreement are severable, it being the intention of the parties that should
any provision be found invalid, such invalidity shall not affect the remaining provisions, which shall remain in full force and effect as though such invalid provisions had not been contained in this Agreement. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">18(k) <U>Entire Agreement:</U> This Agreement, any Rider, Attachment or Amendment hereto, shall be construed together and constitute the entire, full and complete
agreement between the parties concerning the subject matter hereof, and shall supersede all prior agreements, if any. Franchisee hereby warrant and represent that no other representation has induced Franchisee or Franchisee Principal Owners to
execute this Agreement, and there are no representations, inducements, promises or agreements, oral or otherwise, between the Franchisee and Franchisor not embodied herein, which are of any force or effect with reference to this Agreement. No
amendment, change or variance from this Agreement shall be binding on either party unless executed in writing by all parties. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">18(l) <U>Force Majeure:</U>
Except for monies owed, if circumstances such as acts of nature, strikes, lockouts or other industrial disturbances, war, terrorist attacks, riot, epidemic, fire or other catastrophes or other forces beyond the control of the parties make it
impossible for either or both of them to perform their obligations under this Agreement, the obligations will be suspended during the pendency of the circumstances. If through no fault of Yours the Business is damaged or destroyed by an event as
described above<B>, </B>failure to operate the Business will not result in a breach of this Agreement, provided that Franchisee apply within 30 days after such event for Franchisors approval to relocate or reconstruct the premises and Franchisee
diligently pursue such reconstruction or relocation. Such approval may be conditioned upon the payment of an agreed minimum fee to Franchisor during the period in which the Business is not In operation. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px;padding-bottom:3px;line-Height:95%; vertical-align:top"><FONT FACE="Times New Roman" SIZE="2">18(m) <U>Rules of Construction:</U> This Agreement shall be interpreted as follows: (i)&nbsp;nouns, pronouns, and
variations of them refer to the masculine, feminine, neuter, singular, or plural as the context may require, (ii)&nbsp;headings and their numbers are solely for convenience and ease of reference, (iii)&nbsp;the words <U>include, includes,</U> or
<U>including</U> mean including without limitation, and (iv)&nbsp;unless otherwise<FONT FACE="Times New Roman" SIZE="1"><SUB>.</SUB></FONT><FONT FACE="Times New Roman" SIZE="2"> noted, when the words of a term defined in this Agreement appear
without initial capital letters, they shall be given a generic, rather than the defined interpretation. </FONT></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">18(n) <U>Mutual Release:</U> Franchisee and
Franchisee Principal Owners expressly acknowledge that as a condition of obtaining Franchisors consent to take any action not allowed or provided for in this Agreement, to participate in any special programs not provided for in this Agreement or to
take any </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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 <P STYLE="margin-top:0px;margin-bottom:0px">
<FONT FACE="Times New Roman" SIZE="2">action for which consent is required under this Agreement, including changing Franchisee business entity structure or the status of Franchisee Principal
Owners or their Ownership Interest in Franchisee, Franchisor will require Franchisee and Franchisee Principal Owners to execute a mutual release In a form satisfactory to Franchisor of any and all existing claims against Franchisor, Franchisors
affiliates, successors, assigns and designees and their respective managers, officers, agents, members, designees, and representatives, including claims arising under this Agreement and under any law. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">18(o) <U>Authorship:</U> This Agreement will not be construed against either party due to authorship. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2">18(p) <U>Multiple Counterparts:</U> This Agreement may be executed in any number of counterparts, and each such counterpart shall be deemed to be an original instrument, but all such counterparts together shall
constitute but one agreement. Further, facsimile signatures on counterparts of this Agreement are hereby accepted and acknowledged as though they were originals. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="2">18(q) <U>Further Execution:</U> The parties shall, from time to time, on or after the Effective Date of this Agreement take such additional actions and execute such additional documents as may be necessary or appropriate, in Franchisors
sole opinion, to give effect to the provisions of this Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">18(r) <U>Acceptance of Agreement:</U> This offer is made upon Franchisee receipt and is
extended for a period of time not to exceed 30 days following such receipt. The parties acknowledge and agree that this Agreement shall not be effective and binding until executed by Franchisor. </FONT></P> <P
STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>19. ACKNOWLEDGEMENTS </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">19(a) Franchisee and Franchisee Principal
Owners each acknowledge and agree that: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(1) Prior to execution of this Agreement, Franchisee investigated the Program to Franchisee
satisfaction and Franchisee had the opportunity to consult with appropriate legal and business advisors with respect to this Agreement and the potential benefits and risks of entering into this Agreement. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(2) Franchisee have not received and are not relying on any representations of any kind from Franchisor that are not contained in this Agreement or any
other currently effective written agreement executed by Franchisee and Franchisor. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(3) Franchisor have not made any representations of any
kind concerning Franchisee potential success, earnings, potential sales, gross revenues, distributions, income or operating costs relating to the Business. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT
FACE="Times New Roman" SIZE="2">(4) Franchisee received a complete copy of this Agreement and all related Riders, Attachments, Exhibits, and ancillary agreements at least 5 Business Days prior to the date on which Franchisee executed this Agreement.
</FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>20. GRANTED TERRITORY </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">The Franchise consists of the
following locations and markets: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Atlanta </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">1328 Mt Zion
Road </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Morrow, GA 30260 </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Bridgeport </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">510 Heron
Drive </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Logan Township, NJ 08085 </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Leominster </B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">12 Main Street </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Leominster, MA 01453 </FONT></P> <P
STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Parkersburg </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">3901 Briscoe Road </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Parkersburg, W.VA 26104 </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Dallas </B></FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">2208 W. Park Row Suite 104 </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Pantego, TX 76013 </FONT></P> <P
STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Houston </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">17378 Northwest Highway </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Houston, TX 77040 </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Ontario </B></FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">4045 Guasti Road </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Unit 216 </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Ontario, CA 91764 </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Oklahoma City </B></FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">5208 West Reno </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Oklahoma City, OK 73127 </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Denver </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">3350 Peoria
Street </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Aurora, CO 80010 </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Hayward </B></FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">3777 Depot Road </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Hayward, CA 94545 </FONT></P> <P
STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Norwalk </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">14616 Carmenita Road </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Norwalk, CA 90650 </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Mt Vernon </B></FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">4202 Williamson Place </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Mt Vernon, IL 62864 </FONT></P> <P
STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Paris </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">401 East Jasper Street </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Paris IL 61944 </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Greenup </B></FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">101 West Cumberland Street </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Greenup, IL 62428 </FONT></P> <P
STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Phoenix </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">3001 W. Indian School Rd. Suite 314 </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Phoenix, AZ 85017 </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Rochester </B></FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">527 Ridge Road </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Rochester, NY 14621 </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="2"><B>West Sacramento </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">3960 Industrial Blvd. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">West
Sacramento, CA 95691 </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">IN WITNESS WHEREOF the parties have executed this Franchise/Affiliate Agreement as of the Effective Date. </FONT></P> <P
STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD VALIGN="top" COLSPAN="7"><FONT FACE="Times New Roman" SIZE="2">Franchisor:</FONT></TD>
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<TD VALIGN="bottom" COLSPAN="7"><FONT FACE="Times New Roman" SIZE="2">Franchisee</FONT></TD></TR>
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<TD VALIGN="top" COLSPAN="7"><FONT FACE="Times New Roman" SIZE="2">ClearPoint Business Resources, Inc.</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="7"><FONT FACE="Times New Roman" SIZE="2">TGZ Enterprises, LLC</FONT></TD></TR>
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<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">By:</FONT></TD>
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<TD VALIGN="top" COLSPAN="5"> <P STYLE="margin-bottom:1px;border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="2">/s/&nbsp;&nbsp;&nbsp;&nbsp;Michael Traina</FONT></P></TD>
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<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">By:</FONT></TD>
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<TD VALIGN="bottom" COLSPAN="5"> <P STYLE="margin-bottom:1px;border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="2">/s/&nbsp;&nbsp;&nbsp;&nbsp;Todd Warner</FONT></P></TD></TR>
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<TD VALIGN="top" COLSPAN="7"> <P STYLE="text-indent:1.20em"><FONT FACE="Times New Roman" SIZE="2">Michael Traina, CEO</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="7"> <P STYLE="text-indent:1.20em"><FONT FACE="Times New Roman" SIZE="2">Todd Warner, Owner</FONT></P></TD></TR>
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<DESCRIPTION>FRANCHISE AGREEMENT-KOR CAPITAL, LLC
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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2"><B>Exhibit 10.2 </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="2"><B>Franchise Agreement &#150; Management Agreement </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B>1. </B>THIS AGREEMENT is made this 30th day of
August 2007, by and between Clearpoint Business Resources, Inc and or its assigns located at 1600 Manor Drive, Suite 110, Chalfont, PA 18914 (hereinafter referred to as &#147;Franchisor&#148; or &#147;ClearPoint&#148;) and KOR Capital, LLC, located
at 442 Genius Drive, Winter Park, FL 32789 (hereinafter referred to as &#147;Franchisee&#148; or &#147;You&#148;). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">The Parties shall seek
to enforce this Agreement as a Franchise Agreement and shall cooperate with each other and exercise their best efforts to secure any such required approvals, file any such registrations, or satisfy any such conditions expeditiously. In the event
that the parties mutually determine that the formal relationship of Franchisor/Franchisee is not practical, the parties shall follow the specific terms and intent of the Agreement with ClearPoint as the Company and KOR Capital, LLC as the Service
Manager for the Company. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>2. CLEARPOINT BUSINESS RESOURCES OVERVIEW </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2">ClearPoint Business Resources, Inc. is a leading Workforce Management Solutions provider to clients ranging from small businesses to Fortune 500 companies. Franchisor&#146;s of franchisees and affiliates provide
customized temporary staffing solutions with performance based deliverables, creating increased productivity. The Company&#146;s services can streamline and optimize the complex processes involved in the procurement and management of a contingent
workforce. ClearPoint&#146;s proprietary suite of technology provides a cutting human capital portal that allows companies to manage their workforce in one click. This unique approach involving their specialized consultant teams puts the Franchisor
at the forefront of the rapidly evolving Human Capital industry. For more information about ClearPoint, visit <U>http://www.clear-point.com</U>. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>3. THE
CLEARPOINT PROGRAM AND NETWORK </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">3(a) Clearpoint Business Resources has developed a unique and distinctive <B>&#147;Program&#148; </B>which includes the
Client Files, Prospect Lists, Materials, Proprietary Marks, Domain Names, Copyrighted Works, Confidential Information, as well as certain tools, methods, operational procedures and techniques, proprietary and other third-party software applications,
advertising materials, promotional programs, recordkeeping and reporting procedures, training, and knowledge. All components of the Program, existing today or developed by Franchisee or Franchisor during the term of this Agreement, constitute
valuable trade secrets that are proprietary to Franchisor. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">3(b) All components of the Program are provided to Franchisee for the establishment,
development, operation and management of each franchise licensed under this Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">3(c) The Program is the undisputed property of Franchisor, any
component of the Program may be changed, improved, developed or discontinued by Franchisor from time to time, Franchisee must adhere to any changes to the Program. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="2">3(d) Ownership of the Confidential Information by Franchisor is derived from the fact that all business generated during the operation of Franchisee is done under the Proprietary Marks, the Program, and the training designed and provided by
Franchisor. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">3(e) The value of the Program is enhanced by the <B>&#147;Network&#148; </B>which consists of all of the ClearPoint licensed franchisees and
affiliates or offices owned directly by Franchisor. Franchisee may compete directly with any other franchisee, and any other Clearpoint Resources franchisee, affiliate or Franchisor owned office may compete directly with Franchisee, including the
solicitation of Clients, Job-seekers, and Field Employees. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">3(f) For the purposes of this Agreement, the Clearpoint Franchisee (the
<B>&#147;Business&#148;) </B>is licensed for the purpose of providing full staffing employment services. Without limitation, those services include, </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<FONT FACE="Times New Roman" SIZE="2">career placements, contract staffing, temp-to-hire placements, and temporary assignments, as well as all other similar or related staffing products,
services, or activities. The Franchisor is specifically precluded from providing employee leasing services and technology solutions. The parties hereby agree that such services are exclusively provided to Clients by Franchisor. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">3(g) Any use of the Program, including the Confidential Information and the Proprietary Marks, other than for the operation of the Business, is a material breach of this
Agreement. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>4. AUTHORIZATION FOR PAY/BILL SERVICES BY CLEARPOINT </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2">4(a) <U>Authorization:</U> The Franchisee relationship is primarily with Franchisor; however, certain duties and obligations contained in this Agreement will be performed by Franchisee. Franchisee must receive written
approval of your plan to perform Payroll and Billings Operations under this Agreement. Franchisor authorizes ClearPoint&#146;s Payroll and Billings Operations to perform these duties and obligations in accordance with the terms of this Agreement.
Any changes to this plan must be pre approved by Franchisor. Generally, the role of Franchisor will be to fund, process, administer and maintain the accounting of the monies on behalf of the Franchisee (as detailed in <B><U>Section&nbsp;9),</U></B>
and employ Field Employees to be utilized by Franchisee. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">4(b) <U>Employment of Field Employees:</U> Franchisee, Franchisor, and each &#147;Client&#148;
(commonly identified as any individual or entity that uses, or desires to use, the services of Clearpoint) may under certain federal and state laws, contemporaneously incur certain employer responsibilities through their respective day-to-day
activities and interaction with the Field Employee. These activities may result in the Co-employment of a Field Employee. <B>&#147;Co-employment&#148;</B> means the act of having direct contact with, or control of, a Field Employee. Therefore, as
the facts and circumstances of each action performed by Franchisee, Franchisor, and/or the Client may warrant, each party may be required to undertake an employer&#146;s legal duty to the Field Employee. Unless otherwise required by law, as a result
of the affiliation with Franchisor, the Field Employee services provided through the Business shall be provided by individuals who are generally employees of Franchisee. In all circumstances, Franchisee shall be solely responsible for all taxes,
wages, and benefits due Field Employees. Franchisee shall also be solely responsible to ensure compliance with all laws regarding employment and hiring of Field Employees. Franchisee agrees to indemnify and hold harmless Franchisor for any and all
claims related to the employment of Field Employees. All Clients who receive services through the Business shall be Clients of Franchisor. Franchisor shall retain all right, title and interest in and to all Clients. </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">4(c) <U>Reasons to Refuse Services:</U> Franchisor reserves the right, in our sole discretion, to refuse to: </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(1) Allow Franchisee to employ any individual referred by Franchisee as a Field Employee who does meet the qualifications and standards specified by
Franchisor in the Materials or who does not meet Federal, state, or local minimum hiring requirements, </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(2) allow Franchisee to dispatch a
Field Employee to any job assignment due to any adverse economic or safety reasons, or any reason that would violate a Field Employee&#146;s rights under federal law, </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT
FACE="Times New Roman" SIZE="2">(3) provide Field Employees to a Client who has not made timely payments to Franchisor; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(4) enter into an
agreement with a Client if the anticipated Gross Margin with respect to that agreement would not fairly compensate Franchisor for providing Franchisor related services; or </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(5) at the sole discretion of the Franchisor, allow Franchisee to provide Field Employees to a Client if Franchisee fail to perform credit checks or if
we deem a Client to be a high credit risk. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>5. THE CLEARPOINT LICENSE RELATIONSHIP </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2">5(a) <U>Grant:</U> In reliance on the representations, warrants, acknowledgements, promises and covenants Franchisee makes in this Agreement, Franchisor grants Franchisee a nonexclusive license to use the Clearpoint
Property solely for the purpose of operating each Business identified in Attachment 2: Granted Territory. Franchisee has an exclusive license to all ClearPoint Property under the trademark &#147;Advantage Services Group&#148; or &#147;ASG&#148; in
the granted territory. In turn, Franchisee accepts the rights and obligations contained in this Agreement and Franchisee agrees to comply with all terms and provisions contained in this Agreement. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>5(b) </B><U>Term:</U> The initial term of this Agreement begins on the Effective Date and will not exceed 99 years. In addition, every ten years the Parties shall
engage in the 10 Year Renewal Process set forth in Section&nbsp;13. <B> </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">5(c) <U>Granted Territory and Minimum Performance Requirements:</U>
</FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(1) If the parties agreed to designate a <B>&#147;Granted Territory&#148; </B>(as detailed on Attachment 2), then Franchisee must establish
Franchisee first Location within that Granted Territory. If the parties agree not to identify a Granted Territory, then Franchisee must establish Franchisee first Location at a site approved by Franchisor in accordance with subsection 6(b) below.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(2) The terms of this Agreement provide for operating multiple Business locations. During the term of this Agreement, if Franchisee
desires to expand Franchisee existing operations, and Franchisee meets Franchisors then-current criteria to expand, Franchisor will determine whether or not the new location must be established within the Granted Territory or elsewhere. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(3) It is agreed by the <B>parties </B>that the grant of the <B>Granted </B>Territory rights is specifically conditional on Franchisee successful
market penetration of the Granted Territory. It is understood that if during any given annual period during the term of this Agreement Franchisee fails to achieve the <B>&#147;Minimum Performance Requirements&#148; </B>set forth on Attachment 2,
Franchisor will provide Franchisee with Franchisors written notice that Franchisor elect to either: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(i) give Franchisee the opportunity to
pay Franchisor the amount equal to the shortfall between the Royalty payments actually paid by Franchisee and the then-required Minimum Performance Requirement figure thus enabling Franchisee to retain Franchisee rights to the Granted Territory, or
</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(ii) rescind your Granted Territory rights, at which time Franchisor is no longer restricted from
establishing other ClearPoint businesses (whether franchised or company-owned) within the Granted Territory, regardless of proximity to any Business already established within the Granted Territory. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(3a) Further, except under the other specific circumstances described below, as long as You retain those rights, ClearPoint will not establish, or
authorize any other party to establish a ASG or Advantage Services Group office within the Granted Territory. The parties acknowledge that physical ClearPoint offices exist in the Granted Territory and such offices primarily focus on transportation
staffing and technical staffing. Franchisor will continue to develop business in the Granted Territory on behalf of Franchisee including: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman"
SIZE="2">(i) <U>Clearpoint Acquisition:</U> In the event Franchisor (whether directly or through Franchisor&#146;s subsidiaries or affiliates) acquire a multi-location staffing business from an unrelated third-party that happens to have one or more
locations within the Granted Territory, Franchisor shall seek to provide Franchisee the opportunity to purchase and operate one or more of the acquired businesses located within the Granted Territory. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(iii) <U>Major Account Client:</U> If during the term of this Agreement Franchisor initiates a major account program that requires servicing Clients
located in the Granted Territory Franchisor shall offer Franchisee the opportunity to perform the services as required by the related Major Account agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT
FACE="Times New Roman" SIZE="2">(4) Franchisor is not restricted from developing business within the Granted Territory if Franchisee does not retain Franchisee rights (or in those instances that apply to the exceptions above). Further, Franchisor is
not restricted from establishing ClearPoint businesses (or other similar staffing businesses) outside the Granted Territory. Franchisor may establish such businesses under the Proprietary Marks or any other marks Franchisor designates. The
established businesses may be operated or franchised by Franchisor from sites anywhere in the world, and regardless of proximity to a specific ClearPoint office. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="2">5(d) <U>Use of Franchisor Property:</U> Franchisee is hereby licensed to use the Clearpoint Property solely in accordance with this Agreement and in the manner prescribed by Franchisor either in the Materials or by Franchisors written
instructions to Franchisee. Franchisor may change, modify, develop, or discontinue components of the Clearpoint Property from time to time. The <B>&#147;Clearpoint Property&#148;</B> includes the following: </FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(1) The Program. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(2) The
&#147;<B>Proprietary</B> Marks&#148; including the service marks CLEARPOINT , CLEARPOINTSEARCH, the descriptive phrases CLEARPOINT RESOURCES, CLEARPOINT Technical Services and CLEARPOINT Information Services, and such other trade names, trademarks,
and service marks as Franchisor may designate (or substitute) for Franchisee use in connection with the operation of the Business. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(3) The
&#147;Domain <B>Names</B>&#148; including the Internet domain name www.clear-point.com (and all other Domain Names registered by Franchisor or Franchisor&#146;s affiliates) and any other domain names that may be utilized by Franchisor. Franchisee
must use the Domain Names in conjunction with the identifier Franchisor assign to Franchisee. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(4) The <B>&#147;Materials&#148;</B>,
(whether written or electronic) include without limitation manuals, written directives and policy statements, Copyrighted Works, forms, reports, audio or video tapes, all virtual classroom programs, forms of electronic storage media, software
applications and Internet web pages (whether owned or licensed by Franchisor). Franchisor may, at Franchisors sole option, modify the Materials from time to time, and Franchisee must adhere to such changes. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(5) The <B>&#147;Copyrighted Works&#148;</B>, includes all Materials containing the copyright identification <U>CLEARPOINT</U>, as well as all other
Materials entitled to the protection of the copyright laws. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">4 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(6) All Confidential Information owned, licensed or sublicensed by Franchisor or delivered to Franchisee
in confidence, including information developed by the parties during the term of this Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(7) All <B>&#147;Service Files&#148;
</B>which consist of any and all the information concerning any Client or potential Client, any job opening from a Client or potential Client, and resumes, applications, and any other related information concerning the following individuals:
</FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(i) any <B>&#147;Job-seeker&#148; </B>who is generally identified as an applicant who seeks out Clearpoint Resources, with respect to
self-employment, or temporary employment by others; and </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(ii) any <B>&#147;Field Employee&#148; </B>who is generally identified as a
Job-seeker who becomes a Field Employee at the time Franchisee sells his/her services to one or more Clients; and </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(8) The goodwill
associated with and symbolized by each component described in this subsection 5(d), and all improvements, enhancements, additions and modifications to any of them. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT
FACE="Times New Roman" SIZE="2">(9) All &#147;accounts&#148; resulting from the processing of Billings in accordance with Section&nbsp;9 of this Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="2">5(e) <U>Ownership of the Clearpoint Property:</U> </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(1) Franchisor&#146;s ownership of the Clearpoint Property is undisputed.
Franchisee shall not contest the validity of Franchisors rights in the Clearpoint Property or take any action that would prejudice or interfere with the validity of Franchisors rights with respect to the Clearpoint Property. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(2) Except with regard to Franchisee right to use the Clearpoint Property in accordance with the terms and conditions of this Agreement nothing in this
Agreement shall give Franchisee (or any related party to Franchisee) any rights, title, or interest in or to the Clearpoint Property. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(3)
Any unauthorized use of the Clearpoint Property by Franchisee shall constitute an infringement of Franchisors rights in the Clearpoint Property and is a material default of this Agreement. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(4) Franchisee shall execute and provide to Franchisor all documents and information Franchisor reasonably request to fully vest and protect
Franchisor&#146;s right, title and interest in the Clearpoint Property. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">5(f) <U>Identifying the Program:</U> </FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(1) Clearpoint reserves the right to issue specifications and guidelines as are reasonably necessary to preserve Franchisors rights in and to the
Proprietary Marks and Domain Names. Franchisee must adhere to these specifications and guidelines. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(2) If the current Proprietary Marks or
Domain Names can no longer be used Franchisor may discontinue, modify, substitute or add to the Proprietary Marks or Domain Names for the benefit of the Program. Upon Franchisee&#146;s receipt of Franchisor&#146;s written notice, Franchisee must, at
Franchisee&#146;s expense, comply with such change. Franchisee agrees to consistently adhere to Franchisor&#146;s instructions concerning the use of the Proprietary Marks and Domain Names. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(3) Franchisor may inspect Franchisee operations from time to time and will advise Franchisee of any deficiencies concerning Franchisee non-compliance
with the Program identification at the Business. Upon notification of such deficiencies, Franchisee must conform Franchisee operations accordingly. Franchisee&#146;s failure to comply with Franchisors instructions is a material breach of this
Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">5(g) <U>Identification for Advertising and Marketing Purposes:</U> Franchisee must identify itself as a Clearpoint franchisee as Franchisor
prescribed or approved by Franchisor. Franchisee may not use the Proprietary Marks with any prefix, suffix, or additional words, symbols, marks, or punctuation that have </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<FONT FACE="Times New Roman" SIZE="2">not been approved by Franchisor. If the law requires different or additional identification, Franchisee may use the Proprietary Marks only with modifications
that Franchisor designates in writing to Franchisee. Franchisee may not use any corporate, partnership, fictitious, trade, domain or other name without Franchisors prior written approval. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">5(h) <U>Identification as an Independent Contractor.</U> </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman"
SIZE="2">(1) This Agreement does not create a fiduciary relationship between Franchisee and Franchisor. Nothing in this Agreement is intended to make either party an agent, legal representative, subsidiary, joint venturer, partner, employee, or
servant of the other for any purpose whatsoever. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(2) Franchisee must hold itself out to the public as an independent contractor operating
according to a franchise license from Franchisor. Franchisee must exhibit a notice in a conspicuous place at each Business to inform the public that Franchisee is operating independently as a franchisee of ClearPoint. Franchisor reserves the right
to specify in the Materials the content and form of Franchisee notice. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(3) nothing in this Agreement authorizes Franchisee to enter into
any contract, agreement, lease, warranty or representation by using Franchisors name, except as a doing business as (d/b/a) identifier (for example, John Doe Corporation, dba Clearpoint Resources). Franchisee can not legally bind Franchisor to incur
any debt or obligations, and Franchisor shall not assume any liability, or be deemed liable under this Agreement as a result of any action by Franchisee to attempt to do so. Franchisee may not execute any written agreement with a Client that imposes
an indemnification of any nature by Franchisor. Should Franchisee enter into any such agreement, the agreement shall be void against Franchisor and will constitute an event of default under this Agreement, </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(4) Franchisor shall not be liable for any act or omission by Franchisee in operating the Business or for any claim or judgment arising from such acts or
omissions. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">5(i) <U>Associated Goodwill:</U> Any and all goodwill associated with, and identified by, the Proprietary Marks and Domain Names (including
goodwill arising from Franchisee use of them) inures directly and exclusively to Franchisors benefit and is Franchisors property. Upon expiration (without renewal) or termination of this Agreement, no monetary amount shall be attributable to the
goodwill associated with Franchisee use of the Clearpoint Property, or Franchisee activities under the Program. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">5(j) <U>Future Development of the
Clearpoint Property:</U> Any improvements, enhancements, advertising or public relations programs, marks, domain names, inventions, or modifications of the Clearpoint Property developed or adopted by Franchisee during the term of this Agreement
(even if not authorized by Franchisor) which relates in any way to the operation of the Business, shall be Franchisors exclusive property. Franchisee hereby disclaims any right, title or interest therein. Franchisee must immediately disclose to
Franchisor any such future development designed by Franchisee. If Franchisor, at Franchisors expense, elects to file for patent, copyright, domain name registration or similar protection concerning the future development, Franchisee must execute the
documents and provide Franchisor with any information Franchisor may reasonably request in order to perfect the filing. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">5(k) <U>Services Rendered:</U> Any
services Franchisee renders using the ClearPoint Property must conform to the standards of quality specified or approved by Franchisor. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">5(l) <U>Internet
Services:</U> As long as Franchisor provides an Internet presence for Franchisee, Franchisee may not independently establish an Internet presence in any manner. However, should Franchisor cease to provide Franchisee with Internet service, upon
obtaining Franchisor&#146;s prior written consent, Franchisee may do so. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">5(m) <U>notice of Legal Action and Indemnification:</U> </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(1) YOU AGREE, AT ALL TIMES AND AT YOUR EXPENSE, TO DEFEND, INDEMNIFY AND HOLD HARMLESS US, OUR
AFFILIATES, SUBSIDIARIES, SUCCESSORS, ASSIGNS, AND DESIGNEES, AND THEIR RESPECTIVE MANAGERS, MEMBERS, OFFICERS, AGENTS, AND REPRESENTATIVES (COLLECTIVELY REFERRED TO AS THE <B>&#147;INDEMNITEES&#148;</B>) FROM ALL LOSSES AND EXPENSES INCURRED IN
CONNECTION WITH ANY ACTION, SUIT, ALTERNATIVE DISPUTE RESOLUTION, ARBITRATION, PROCEEDING, CLAIM, DEMAND, INVESTIGATION, FORMAL OR INFORMAL INQUIRY, OR ANY SETTLEMENT THEREOF (COLLECTIVELY REFERRED TO AS &#147;ACTION&#148;) WHICH <B>ARISES </B>OUT
OF OR IS BASED UPON YOUR OWNERSHIP OR OPERATION OF THE BUSINESS, INCLUDING CLAIMS RELATED TO THE EMPLOYMENT OF YOUR STAFF EMPLOYEES. THIS OBLIGATION TO INDEMNIFY AND DEFEND US SHALL APPLY EVEN IN THE EVENT OF THE NEGLIGENCE OF OR CLAIM OF NEGLIGENCE
AGAINST INDEMNITEES. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(2) SPECIFICALLY EXCLUDED FROM THE INDEMNITY GIVEN ABOVE IS ANY LIABILITY ARISING SOLELY FROM THE GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT OF INDEMNITEES (EXCEPT TO THE EXTENT THAT SUCH GROSS NEGLIGENCE OR WILLFUL MISCONDUCT IS ATTRIBUTED OR IMPUTED BY REASON OF ANY ACT OR OMISSION BY YOU). </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(3) For the purpose of this Agreement the term <B>&#147;losses and expenses&#148; </B>shall, without limitation include, all losses, compensatory,
exemplary or punitive damages, fines, charges, costs, expenses, lost profits, attorneys&#146; fees, experts&#146; fees, court costs, settlement amounts, judgments, arbitration awards, compensation for damages to Franchisors reputation and goodwill,
costs of or resulting from delays, financing, costs of advertising material and media time or space, including costs of changing, substituting or replacing same, and all expenses for recall, refunds, compensation, public notices and other such
amounts incurred in connection with the matters described. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(4) As soon as Franchisee are aware of any Action Franchisee must immediately
give Franchisor notice of such Action. At Franchisee expense and risk, Indemnitees may elect to assume the defense of any Action; however, under no circumstance are Indemnitees obligated to undertake the defense of any Action. Such an undertaking by
Indemnitees shall in no manner diminish Franchisee obligation to indemnify Indemnitees and to hold them harmless. Franchisee acknowledge that Franchisee have no authority to accept any service of process on behalf of any of the lndemnitees.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(5) Franchisor may, at any time and with such notice as Franchisor deems appropriate, offer, order, consent or agree to settlements or
take such other remedial or corrective actions Franchisor deems expedient with respect to any Action if, in Franchisors <B>sole </B>judgment, there are reasonable grounds to believe that any of the acts or circumstances enumerated in this subsection
5(m) have occurred, or that any act, error, or omission of Yours may result directly or indirectly in damage, injury or harm to any person or any property. All losses and expenses incurred under this subsection 5(m) shall be chargeable to and paid
by Franchisee regardless of any action, activity or defense undertaken by any Indemnitees or the subsequent success or failure of such actions, activity or defense. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT
FACE="Times New Roman" SIZE="2">(6) Indemnitees do not assume any liability whatsoever for acts, errors, or omissions of those with whom Franchisee may contract, regardless of the purpose. Franchisee shall hold harmless and indemnify Indemnitees for
all losses and expenses that may arise out of any acts, errors or omissions regarding such third parties. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(7) Under no circumstances shall
Indemnitees be required or obligated to seek recovery from third parties or otherwise mitigate their losses in order to maintain a claim against Franchisee. The failure to pursue such recovery or mitigate loss will in no way reduce the amounts
recoverable by Indemnitees from Franchisee. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(8) Provisions of this subsection 5(m) shall continue in effect after the expiration or
</FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<FONT FACE="Times New Roman" SIZE="2">termination of this Agreement for any and all Actions that accrued during the term of this Agreement. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">5(n) <U>Infringement and Franchisor&#146;s Related indemnification:</U> </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT
FACE="Times New Roman" SIZE="2">(1) Should Franchisee become aware that a suspected unauthorized third party is using the Proprietary Marks (or any variant thereof), Franchisee must immediately notify Franchisor of the facts relating to the alleged
infringement. Upon receipt of Franchisee notice, Franchisor shall, in Franchisor&#146;s sole discretion, determine whether or not Franchisor will take any action concerning the alleged infringement. Franchisee shall have no right to make any demand
or prosecute any claim related to such infringement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(2) Franchisee must notify Franchisor immediately of any claim against Franchisee
alleging that Franchisee use of the Proprietary Marks constitutes an infringement of someone else&#146;s rights. So long as Franchisee have complied with the Program, Franchisor agrees to indemnify and hold Franchisee harmless against any liability
assessed against Franchisee in favor of the claimant, including Franchisee reasonable costs of defending the claim. Franchisor will not be liable for any other damages, costs, expenses or for any loss of profits or business opportunities or
incidental or consequential damages of any kind relating to any such claim. Franchisor reserve the right to defend, compromise and settle any such action and if Franchisor do undertake Franchisee defense, Franchisor will not be responsible for the
cost of any independent counsel Franchisee retain. Franchisor shall have no obligation to defend or indemnify Franchisee pursuant to this subsection 5(n) if the claim, suit or demand against Franchisee arises out of or relates to Franchisee use of
the Proprietary Marks in violation of the terms of this Agreement. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>7. TRADE SECRET/CONFIDENTIAL INFORMATION </B></FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">7(a) <U>Trade Secret:</U> The Confidential Information is not a matter of common knowledge in the trade, is generally not available except through time consuming and
costly processes, and gives Franchisee and Franchisor an advantage over other staffing businesses. Therefore, Franchisee acknowledges and agrees that the Confidential Information, whether currently in existence or hereafter acquired, constitutes a
trade secret of ClearPoint. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">7(b) <U>Confidential Information:</U> The following information, without limitation, constitutes the <B>&#147;Confidential
Information&#148;</B><B>:</B> </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(1) the Clearpoint Property, the Materials; the Program, Service Files content, Field Employee and/or Staff
Employee information obtained through the operation of the Business (whether past, present or prospective); </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(2) any information regarding
any individual who has a reasonable expectation of privacy and/or which was disclosed to Franchisee, the Client, the Business and/or Franchisor in confidence; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT
FACE="Times New Roman" SIZE="2">(3) any additional information regarding any Client, including, but not limited to, personal information on the various contact persons, contact telephone numbers, personnel needs, fringe benefits, hiring practices,
time lines and budgets, policies, goals and plans, usage of Field Employees, Client pricing for various services and types of Field Employees, fees, profit margins, credit history, existing or prospective Job-orders and Client agreements and all
other dealings with Franchisee, the Business and/or Franchisor, </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">8 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(4) any information regarding Franchisee business operations and practices under the Program, including
pricing and cost codes, marketing techniques, strategic business plans and market research studies, promotional ideas, operating reports, placement registers, and accounts receivable; </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(5) any information, including a formula, pattern, compilation, program, device, method, technique, or process that derives independent economic value,
actual or potential, for which reasonable efforts are used to maintain its secrecy, and which is not generally known to the public or readily ascertainable by proper means by other persons who can obtain economic value from its disclosure or use;
and </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(6) any other information known by Franchisee or used in the Business that could give Franchisee an advantage over competitors that is
not disclosed to the public by Franchisor or that is not generally known to the public. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">7(c) <U>Non-Disclosure of Confidential Information:</U> Franchisee
and Franchisee Principal Owners acknowledge that any use of the Confidential Information other than for the operation of the Business is a material breach of this Agreement and constitutes an unfair business practice. Franchisee agrees that during
the term of this Agreement, Franchisee will institute thorough and effective measures to protect and preserve the confidentiality of the Confidential information. Franchisee agrees that Franchisee will not (1)&nbsp;disclose the contents of the
Confidential Information to unauthorized persons; (2)&nbsp;allow any written Confidential Information to leave the Location; (3)&nbsp;copy or use the Confidential Information for any purpose other than as permitted by this Agreement; or
(4)&nbsp;disclose, use or misappropriate the Confidential Information. Franchisee further agrees to adhere to these terms after the expiration (without renewal) or termination of this Agreement. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">7(d) <U>Protection of Confidential Information:</U> </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(1)
Franchisee will require Franchisee Manager, Staff Employees and/or agents or other third parties who will have access to the Confidential Information to execute a <B>&#147;Confidentiality Agreement&#148; </B>in the same form as Attachment 4 to this
Agreement. Franchisee must advise such persons that the Confidentiality Agreement contains covenants against unfair trade practices and that execution of the Confidentiality Agreement is a prior condition of employment and/or association with
Franchisee. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(2) All officers, directors, spouses, and other third parties Franchisor designates who are not required by Franchisor to
execute this Agreement but whom Franchisor have a reasonable expectation will have access to Confidential Information must execute a Confidentiality Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT
FACE="Times New Roman" SIZE="2">(3) Franchisee must forward a copy of each executed Confidentiality Agreement to Franchisor for Franchisors records. Franchisee and Franchisee Principal Owners may not reveal any Confidential Information to any
individual in the absence of a written obligation from such person not to misuse or disclose the Confidential Information, Franchisee agrees to consistently and uniformly enforce the Confidentiality Agreement. </FONT></P> <P
STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>8. OPERATION OF THE BUSINESS </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">8(a) <U>Compliance With Law and
Program:</U> Franchisee must strictly follow the Program and comply with all applicable federal, state and local laws, regulations, ordinances, codes, and guidelines. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2">8(b) <U>Initial Marketing Campaign:</U> Within <U>the first 90</U> days following the opening of the Business, Franchisee must, at Franchisee cost, conduct an aggressive <U>initial</U> marketing campaign to promote
the entrance of the Business into the local market. Franchisor will provide Franchisee with the basic components of advertising and promotional materials to assist Franchisee in this endeavor. If Franchisee desires to use Franchisee own materials
Franchisee may do so after obtaining Franchisors written consent. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">9 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">8(c) <U>Treatment of Personnel:</U> With respect to the operation of each Business, Franchisee agrees to take all steps
necessary to ensure that all Job-seekers, Field Employees, and Staff Employees are treated fairly, equally, and with dignity and respect, as required under the Materials and under applicable laws prohibiting discrimination and harassment, or any
other illegal basis concerning the hiring, compensation, supervision, safety, training, discharge, dispatching, or referral for placement of such persons. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="2">8(d) <U>Required insurance:</U> </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(1) Except for the insurance Franchisor charges to Franchisee through our processing billing group
concerning the Field Employees and the services provided through the Business; Franchisee must procure and maintain the following coverage as required by the Materials: (i)&nbsp;crime/fidelity bond, (Ii) commercial general liability,
(ill)&nbsp;worker&#146;s compensation, (iv)&nbsp;errors and omission, (v)&nbsp;employment practices liability, (vi)&nbsp;medical malpractice liability (if Franchisee Intend to provide certain medical services), (vii)&nbsp;professional liability (if
Franchisee intend to provide certain professional services) and (viii)&nbsp;any other insurance Franchisor deem necessary (collectively the <B>&#147;Insurance&#148;</B>) to protect Franchisee and the Indemnitees against any demand or claim with
respect to personal injury, death or property damage, as well as any loss, liability or expense arising or occurring in connection with the Business. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT
FACE="Times New Roman" SIZE="2">(2) The deductible on any Insurance policy may not exceed $2,500 without Franchisors prior written approval, The Insurance shall be underwritten by insurance companies holding a Best&#146;s Rating of not less than
B+<B>; </B>Class VI, and shall be in forms acceptable to Franchisor, The insurance provider must name Franchisor as an additional insured, and the coverage must conform to the minimum amounts and special provisions described in the Materials.
Franchisor may modify these insurance requirements from time to time to meet current industry needs and/or governmental regulations, and Franchisee must comply with such change. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%;padding-bottom:3px;line-Height:95%; vertical-align:top"><FONT FACE="Times New Roman" SIZE="2">(3) At least 30 days prior to opening the<FONT FACE="Times New Roman"
SIZE="1"><SUP>.</SUP></FONT><FONT FACE="Times New Roman" SIZE="2"> Business, Franchisee shall provide to Franchisor a certificate of insurance or other documents required by the Materials evidencing the required coverage. Franchisee must provide
Franchisor with a new certificate of insurance every year at least 30 days prior to the expiration of any required coverage. All Insurance shall expressly provide for no less than 30 days&#146; advance written notice to Franchisor to inform
Franchisor of any event of a material alteration to the Insurance, or cancellation of the insurance. </FONT></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(4) Should Franchisee, for any
reason, fail to procure or maintain the Insurance, Franchisor has the right and authority (however not the obligation) to immediately procure the Insurance. Franchisor will charge Franchisors related costs to Franchisee, together with Franchisors
reasonable incurred expenses and may deduct them from Franchisee Distribution Account. If Franchisee Distribution Account has a negative balance, upon receipt of Franchisors notice to Franchisee, Franchisee shall immediately reimburse Franchisor for
Franchisors costs, These remedies shall be in addition to any other remedies Franchisor may have at law or in equity. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(5) If you elect to
enter into an arrangement to lease Franchisee Staff Employees, Franchisee are responsible for obtaining a certificate of insurance from the leasing company evidencing the same level of coverage as would be held by Franchisee if Franchisee did not
lease Franchisee Staff Employees. The leasing company must also provide an indemnification of the Indemnitees. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(7) The insurance shall
include a waiver of subrogation in favor of Franchisor, and Franchisors affiliates and subsidiaries. All public liability and property damage policies shall contain a provision that Franchisor, Franchisors agents, or Field Employees, are entitled to
recover any loss by reason of Franchisee negligence or the negligence of Franchisee agents, Franchisee Staff Employees, or other Field Employees. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">10 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">8(e) <U>Insurance Programs:</U> Although not required to do so, Franchisor may establish programs for the Network for any
type of insurance coverage required at any time for the Business. If Franchisor does establish such programs, Franchisor may, in Franchisors sole discretion, require Franchisee to enroll and participate in the programs. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">8(f) <U>Full Time Management:</U> Franchisee shall at all times have the Business managed by a Manager (whether a Principal Owner or otherwise) who will maintain a
presence at the Location and who will devote full time, energy, and best efforts to the management, promotion, and growth of the Business. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">8(g)
<U>Submission of Reports:</U> Franchisee shall, at Franchisee expense, provide to Franchisor all documents and information Franchisor deem necessary to implement and maintain this Agreement. With respect to each Location developed under this
Agreement, Franchisee must submit to Franchisor the marketing, financial and/or other designated reports Franchisor requires. Such information must be submitted in the manner, form, time frame and content prescribed by Franchisor in the Materials.
Franchisor has the right to electronically collect this information and/or in turn, require Franchisee to submit this information electronically to Franchisor. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="2">8(h) <U>No Other Business Conducted at Location:</U> Franchisee must ensure that no business other than the Business is conducted at the Location. Franchisee may not allow the impression of a physical or operational connection with any
other business. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">8(i) <U>Compliance with Materials:</U> Franchisee shall, at Franchisee&#146;s expense, comply with the standards and requirements stated
in the Materials (as modified from time to time), including without limitation: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(1) utilization of new technology in the operation of the
Business, </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(2) office decor, furniture, fixtures, electronic, mechanical and communications equipment, business forms, and advertising
materials from the sources Franchisor designate, </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(3) use of motivation and recognition programs, annual planning sessions, and format
marketing plans, including a grand opening campaign for each Business licensed under this Agreement, </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(4) levels and type of Staff
Employees necessary to properly penetrate the market and grow market share, and the use of Staff Employee Confidential Agreements, training and improvement programs, </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT
FACE="Times New Roman" SIZE="2">(5) treatment of Job-seekers and the hiring and dispatching of Field Employees, and </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(6) compliance with
national programs, such as Client satisfaction guarantees, special hours incentive pay, holiday pay, vacation pay, referral payments, and Co-op Splits. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="2">8(j) <U>Modernization:</U> Except for the 12 month period immediately prior to the Scheduled Expiration Date, Franchisor may, during the term of this Agreement, require Franchisee to modernize, at Franchisee expense, all or part of
Franchisee Business operations (including the assets at each Location) for the purpose of complying with Franchisors then-current electronic hardware, software, and/or Internet standards and specifications, If any component of the up-dated
modernization requires additional training, Franchisor will identify the individual(s) required to attend such training, and Franchisee will, at Franchisee cost, insure that they attend the required training. </FONT></P> <P
STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>9. DISTRIBUTION ACCOUNT AND PROCESSING. </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">9(a) <U>Distribution
Account:</U> Franchisor&#146;s processing billing group will maintain Franchisee <B>&#147;Distribution Account&#148;</B>, which includes without limitation the administration of Credits and Charges related to the Business in accordance with the
Materials and the summary provided below. The Franchisee shall have capital availability equal to 85% of the eligible Temporary Help Billings generated by the Franchisee. Eligible Temporary Staffing Billings shall be defined as all Temporary Help
Billings less than 60 days old, </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">11 </FONT></P>


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<FONT FACE="Times New Roman" SIZE="2">provided that such Billings have the required back up and are not disputed by Client. KOR shall receive weekly funding equal to 50% of all receivables that
are between 60 and 90 days old. FRANCHISOR may charge interest for the funding of such past due accounts at the rate of one percent per month. KOR shall not receive any advances for receivables that are greater than 90 days old. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">In the event that any of the Accounts Receivable become uncollectible at any time or remains uncollected for more than ninety (90)&nbsp;days after the invoice date,
Franchisor has the option at such time to sell such accounts receivable to KOR. The purchase shall be self effectuating without any formal purchase agreement, and FRANCHISOR shall advise the KOR of the Accounts Receivable being assigned and sold and
shall be entitled to immediate payment by the KOR of the amount of that assigned receivable. FRANCHISOR shall have the right to offset any funds due and unpaid from the KOR against collections of the Accounts Receivable. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Franchisee is not entitled to any distribution payments on Billings processed after termination or expiration (without renewal) of this Agreement. Franchisee understands
and agrees that Franchisee is financially responsible for all Charges, each of which will be deducted from the Distribution Account. The following summary of typical Credits (denoted with a &#147;+&#148;) and Charges (denoted with a&#148;-&#148;) is
provided far demonstrative purposes: </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="84%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="36%"></TD>
<TD VALIGN="bottom" WIDTH="8%"></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="8%"></TD>
<TD></TD></TR>
<TR>
<TD VALIGN="bottom" COLSPAN="3" NOWRAP> <P STYLE="margin-right:0px;margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>Typical Items Credited to the Distribution Account
include:</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top" NOWRAP> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">+&nbsp;Career Billings</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" NOWRAP><FONT FACE="Times New Roman" SIZE="2">+&nbsp;Expense&nbsp;Reimbursements</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" NOWRAP><FONT FACE="Times New Roman" SIZE="2">+&nbsp;Temporary&nbsp;Help&nbsp;Billings</FONT></TD></TR>
<TR>
<TD VALIGN="top" NOWRAP> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">+&nbsp;Conversion Fees</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" NOWRAP><FONT FACE="Times New Roman" SIZE="2">+&nbsp;Miscellaneous&nbsp;Adjustments</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" NOWRAP><FONT FACE="Times New Roman" SIZE="2">+&nbsp;temp-to-hire Billings</FONT></TD></TR>
<TR>
<TD VALIGN="top" NOWRAP> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">+&nbsp;Credits</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" NOWRAP><FONT FACE="Times New Roman" SIZE="2">+&nbsp;Miscellaneous Billings</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD HEIGHT="16" COLSPAN="3"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="bottom" COLSPAN="3" NOWRAP> <P STYLE="margin-right:0px;margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>Typical items charged to the Distribution Account
include:</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top" NOWRAP> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">-Ad Fund contributions</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" NOWRAP><FONT FACE="Times New Roman" SIZE="2">-Co-op Splits</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" NOWRAP><FONT FACE="Times New Roman" SIZE="2">-Payroll</FONT></TD></TR>
<TR>
<TD VALIGN="top" NOWRAP> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">-Bad Debt Reserve</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" NOWRAP><FONT FACE="Times New Roman" SIZE="2">-Garnishments</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" NOWRAP><FONT FACE="Times New Roman" SIZE="2">-Payroll Costs</FONT></TD></TR>
<TR>
<TD VALIGN="top" NOWRAP> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">-Benefits</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" NOWRAP><FONT FACE="Times New Roman" SIZE="2">-Insurance Costs</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" NOWRAP><FONT FACE="Times New Roman" SIZE="2">-Royalties</FONT></TD></TR>
<TR>
<TD VALIGN="top" NOWRAP> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">-Chargebacks</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" NOWRAP><FONT FACE="Times New Roman" SIZE="2">-interest</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" NOWRAP><FONT FACE="Times New Roman" SIZE="2">-Unemployment&nbsp;Costs</FONT></TD></TR>
<TR>
<TD VALIGN="top" NOWRAP> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">-Client Refunds</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" NOWRAP><FONT FACE="Times New Roman" SIZE="2">-Miscellaneous Adjustments</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
</TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(1) &#147;Credits&#148; include without limitation, Billings charged to Clients for Temporary Help
Billings, Conversion Fees, Expense Reimbursements, temp-to-hire Billings, and Career Placement Billings as defined below: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(i)
<B>&#147;Billings&#148; </B>individually and collectively refers to all charges to Clients which without limitation include: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:17%"><FONT FACE="Times New Roman" SIZE="2">(a)
<B>&#147;Temporary Help Billings&#148; </B>means fees charged for (1)&nbsp;Field Employees and/or temporary contract workers services (whether on or off site from the Client&#146;s premises), (2)&nbsp;payroll services, and (3)&nbsp;temporary
outsourcing, </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:17%"><FONT FACE="Times New Roman" SIZE="2">(b) <B>&#147;Conversion Fees&#148; </B>means the fees charged to the Client for the conversion of the Field Employee to the
Client&#146;s payroll or another staffing business; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:17%"><FONT FACE="Times New Roman" SIZE="2">(c) <B>&#147;Expense Reimbursement&#148; </B>means a Field Employee&#146;s job
related costs (I.e., meals, parking, travel allowances, supplies, equipment, mileage, and other similar or related items); </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:17%"><FONT FACE="Times New Roman" SIZE="2">(d)
<B>&#147;temp-to-hire Billings&#148; </B>means the fees charged for the placement of a Field Employee with the intent to become an employee of the Client at a later date; </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:17%"><FONT FACE="Times New Roman" SIZE="2">(e) <B>&#147;Career Placement Billings&#148; </B>means the fees charged for (1)&nbsp;helping Job-seekers obtain long term employment or self-employment,
(2)&nbsp;Field Employee and Job-seeker </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<FONT FACE="Times New Roman" SIZE="2">testing, training,. counseling and/or consulting services, (3)&nbsp;Client counseling and/or consulting services, (4)&nbsp;resume consultation, preparation,
processing and distribution, (5)&nbsp;outsourcing, outplacement, or business opportunity services, (6)&nbsp;employment related software sales, (7)&nbsp;Client, Field Employee and/or Job-seeker promotional programs, (8)&nbsp;check cashing services
for Clients, Field Employees and/or Job-seekers, (9)&nbsp;co-op activities, (10)&nbsp;employment related publications and/or book sales, and (11)&nbsp;all other similar or related products or services. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(2) <B>&#147;Charges&#148; </B>shall include amounts charged for: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:13%"><FONT
FACE="Times New Roman" SIZE="2">(i) <B>&#147;Payroll&#148; </B>resulting from the Field Employees&#146; gross wages, including bonuses, commissions and any other form of compensation; </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(ii) <B>&#147;Payroll Costs&#148; </B>for (a)&nbsp;federal withholding, FICA, and state withholding, (b)&nbsp;state unemployment and unemployment
consulting fees, (c)&nbsp;local taxes of any type or kind, and (d)&nbsp;amounts allocated or charged by Franchisor for the unemployment claims experience of the Field Employees submitted by Franchisee for processing as well as the Program in
general; </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">13 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(iii) <B>&#147;Insurance Costs&#148; </B>resulting from expenses incurred by Franchisor for
(a)&nbsp;obtaining commercial general liability, umbrella, errors and omissions, crime/bond, and employment practices liability insurance coverage or any other coverage Franchisor deem appropriate related to the Field Employees, (b)&nbsp;any
retention assumed by Franchisor for worker&#146;s compensation, (c)&nbsp;deductibles or defense costs, in connection with such policies or their administration, (d)&nbsp;obtaining insurance on Field Employees, including residual market loads and any
fees or costs related to the number of claims and loss experience of the Field Employees submitted by Franchisee for processing, (e)&nbsp;the cost of administering and implementing the insurance program, including brokerage and consulting expenses,
overhead, and travel expenses, (f)&nbsp;claims handling fees and legal fees related to such claims, (g)&nbsp;charges for misclassification of Field Employees for worker&#146;s compensation reporting and charge purposes, and (h)&nbsp;taxes and any
other related fees or costs; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(iv) Royalty payments due Franchisor with regard to Temporary Help Billings, temp-to-hire Billings, Career
Placement Billings, Conversion Fees, and/or any related Receipts. For the purpose of this Agreement, <B>&#147;Receipts&#148; </B>means all money and other valuable consideration, including barter, received during or after the term of this Agreement
by Franchisor, Franchisee, Franchisee Staff Employees, collection agents, or other assignees, as revenue generated by the operation of the Business. The parties further agree that any Receipt represented by consideration other than money shall be
given their fair market value as Franchisor may reasonably determine; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(v) Ad Fund contributions due to the promotional fund established
by Franchisor to promote the Network; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(vi) <B>&#147;Chargebacks&#148; </B>which include without limitation Billings that (a)&nbsp;are
repudiated in whole or in part by a Client; (b)&nbsp;produce a negative Gross Margin; (c)&nbsp;remain unpaid for 67 days after the respective invoice date, (d)&nbsp;are uncollected at the time of termination or expiration (without renewal) of this
Agreement, and (e)&nbsp;are the result of the additional amounts due if the Client is classified as a high credit risk or the Clients unpaid Billings exceed Franchisors credit limits; </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(vii) <B>&#147;Interest&#148; </B>at the rate of 1%&nbsp;per month. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT
FACE="Times New Roman" SIZE="2">(viii) <B>&#147;Adjustments&#148; </B>include without limitation amounts charged to the Distribution Account for items such as (a)&nbsp;bank wire transfer fees, (b)&nbsp;overnight courier packages, (c)&nbsp;stop
payment check charges, (d)&nbsp;manual check charges, (e)&nbsp;non-sufficient fund charges, (f)&nbsp;Payroll error adjustments, (g)&nbsp;UCC recording fees or other similar filing fees, (h)&nbsp;credit reports and other credit or collection services
Franchisor deem appropriate, (i)&nbsp;other collection costs, (j)&nbsp;any adjustments to Payroll Costs, (k)&nbsp;Electronic Data Interchange <B>&#147;EDI&#148;, </B>(l)&nbsp;any special program offered by Franchisor in which Franchisee voluntarily
participate, (m)&nbsp;garnishments, and (n)&nbsp;any other charges to the Distribution Account; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(ix) <B>&#147;Client Refunds&#148;
</B>amounts related to service guarantees, billing errors, Client dissatisfaction, or items Franchisor may otherwise authorize by the Materials; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman"
SIZE="2">(x) <B>&#147;Co-op Splits&#148; </B>amounts related to Franchisee agreement to co-operate with other franchised or company-owned Clearpoint offices or other third-party personnel companies where the parties agree to a split of the Receipts
for services provided cooperatively to Clients; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(xi) <B>&#147;Benefits&#148; </B>include without limitation amounts represented by
salaries and charges to the Distribution Account for (a)&nbsp;disability insurance, (b)&nbsp;health insurance, (c)&nbsp;special hours incentive pay, (d)&nbsp;holiday pay, (e)&nbsp;vacation pay, (f)&nbsp;401 k contributions, if applicable, and
(g)&nbsp;any other benefits now or hereafter deemed mandatory or necessary by Franchisor; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(xii) <B>&#147;Unemployment Costs&#148;
</B>resulting from prior unemployment claims during the applicable state law base period assumed by Franchisor including without limitation (a)&nbsp;Franchisors costs related to the number of claims and the loss experience for the Field Employees
submitted by Franchisee for processing; (b)&nbsp;Franchisors cost of administering and implementing the merit Program, including consulting expenses and overhead, (c)&nbsp;claims handling fees and legal fees related to such </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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 <P STYLE="margin-top:0px;margin-bottom:0px">
<FONT FACE="Times New Roman" SIZE="2">claims; and (d)&nbsp;any other related fees or costs; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman"
SIZE="2">(xiii) <B>&#147;Bad Debt Reserve&#148; </B>is a reserve our Payroll and Billing Operations maintains in Franchisee Distribution Account that is intended to assist Franchisee in covering un-collectable accounts that have a very high
potential of never being collected, such as in the event a Client files for bankruptcy protection. They will deduct .2% of the Temporary Help Billings collected weekly and hold in Franchisee Bad Debt Reserve. The Bad Debt Reserve will accrue over
time to a maximum of 1.2% of Franchisee trailing 52 weeks of Billings. In addition, within 90 days following the expiration (without renewal) or termination of this Agreement Franchisor will remit to Franchisee the balance of Franchisee Bad Debt
Reserve (minus the negative balance, if any, of Franchisee Distribution Account at that time); </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(xiv) all safes taxes and any other taxes
(other than Franchisors income taxes); </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(xv) amounts related to Franchisee indemnification of the Indemnitees; and </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(xvi) any other amounts due under this Agreement or any other agreement between Franchisor and/or Franchisors affiliates and Franchisee. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">9(b) <U>Distribution Account Balance:</U> Each week, Franchisors Payroll and Billings Operations shall pay Franchisee the net positive amount reflected in the
Distribution Account. However, should the Distribution Account reflect a net negative balance, they will notify Franchisee of the shortfall. Within 5 days following Franchisee receipt of Franchisors written notice, Franchisee agrees to pay the
amount necessary to bring the Distribution Account to at least a zero balance. If Franchisee fails to do so, Franchisor may, at Franchisors option, report Franchisee failure to pay monies owed to all appropriate credit reporting agencies. In
addition, if Franchisee continue to fail to pay, Franchisor may elect to terminate this Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">9(c) <U>Set-Off by Clearpoint.</U> Franchisor may, at
any time, set-off and make payment from the Distribution Account of any amounts (including penalties, interest, reasonable attorney&#146;s fees and costs of collection) owed by Franchisee or Franchisee Principal Owners to Franchisor or Franchisors
affiliates. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">9(d) <U>Transmission of Information;</U> For each Location, Franchisee shall transmit all payroll/billing information, as well as any other
operational or financial information required by Franchisor, in the form, manner and time frame as prescribed in the Materials. In turn, Franchisors Payroll and Billing Operations shall transmit information and funds to Franchisee as prescribed in
the Materials. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">9(e) <U>Calculate the Distribution Funds</U> due Franchisee, (1)&nbsp;process and pay garnishments as required by court order, and
(2)&nbsp;perform other similar functions related to the processing of the Distribution Account. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">9(f) <U>Credit and Collections;</U> Franchisee agrees to
comply with Franchisors credit and collections policy provided below and as it may be modified from time to time: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(1) Franchisee shall
ensure that Clients submit payments directly and promptly to Franchisor or Franchisors Payroll and Billing Operations. Franchisee agrees Franchisee will not interfere with such payments. Franchisor, in Franchisors sole discretion, may also contact
Clients regarding the collection of their Billings. All collection costs directly related to Franchisee operation of the Business incurred by Franchisor, Internally or externally, shall be changed to Franchisee as an Adjustment to the Distribution
Account. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(2) Franchisee agrees Franchisee will not deposit or cash any Receipts inadvertently received by Franchisee, but will immediately
forward such Receipts to Franchisor. However, should Franchisee, Franchisee Manager or Staff Employees inadvertently accept such payment Franchisee shall promptly turn over such payments to Franchisor in the form received. Failure to immediately
remit to Franchisor any Client payments that may come into Franchisee possession (including any amounts previously treated as Chargebacks), shall result in (i)&nbsp;the suspension of all further Distribution Account </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<FONT FACE="Times New Roman" SIZE="2">payments to Franchisee until Franchisor receives such payments, and (ii)&nbsp;Interest accrual from the date Franchisee received such payments until they are
received by Franchisor. Such action shall be viewed as a conversion of Franchisors funds for which this Agreement and any other agreement with Franchisor and Franchisors affiliates may be immediately terminated. In addition, Franchisee and
Franchisee Principal Owners may be subject to appropriate legal remedies which may include criminal prosecution. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(3) Franchisee hereby
authorizes and grant to Franchisor the power to accept, endorse, and negotiate any Client payments made inadvertently or improperly to Franchisee, Franchisee agents, affiliates, or other persons associated with the Business. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(4) Franchisor may, at Franchisee expense, conduct credit checks on all proposed Clients. Franchisor shall reserve the right to conduct credit checks on
proposed Clients and charge the Distribution Account accordingly. Each Client must be approved by Franchisor before Franchisee provides services to the Client. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="2">9(g) <U>Related Parties:</U> Franchisee acknowledges that Franchisor has no obligation to pay Franchisee Staff Employee payroll, and therefore, Franchisee may not, utilize or attempt to utilize Franchisors payroll/billing services with
respect to (1)&nbsp;processing payroll for Franchisee Staff Employees or (2)&nbsp;any Client in which Franchisee or any Principal Owner has a financial or equity interest of 5% or more. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2">9(h) <U>Accurate Classification of Field Employees for Workers Compensation Insurance:</U> Franchisee must classify each Field Employee in accordance with the Worker&#146;s Compensation Insurance Code Listings
prescribed by Franchisor. Misclassifications or excessive claims and loss experience can result in additional Adjustments to Franchisee Distribution Account. If the misclassification is the result of any willful or negligent act by Franchisee,
Franchisee Principal Owners, or Staff Members, Franchisor may assess up to the first $50,000 in related worker&#146;s compensation losses attributable to the injury of any misclassified Field Employee and charge Franchisee Distribution Account
accordingly. In addition, Franchisor may, in Franchisors sole discretion, terminate this Agreement without an opportunity to cure. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">9(i) <U>Limitation of
Liability:</U> Except as expressly provided herein, and except for the indemnity and payment obligations-outlined in this Agreement, neither Franchisor nor Franchisors Payroll and Billing Operations shall be liable to Franchisee for any loss,
damage, liability, claim or expense arising out of, or in relation to, the processing services described in this Agreement. Neither Franchisor nor Franchisors Payroll and Billing Operations shall be liable for any indirect, incidental, exemplary,
punitive or other consequential damages, including, but not limited to damages for the loss of data, goodwill or profits. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>10. FEES AND FINANCIAL
OBLIGATIONS </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">10(a) <U>Franchise Fee:</U> Franchisee shall pay Franchisor the applicable franchise fee identified in Attachment 2 at the time Franchisee
execute this Agreement. The initial franchise fee is nonrefundable. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">10(b) <U>Royalty</U><U>:</U> </FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(1) In partial consideration of the rights granted to Franchisee by Franchisor under this Agreement, Franchisee shall pay Franchisor a
&#147;<B>Royalty</B>&#148; equal to 4.5% of all Temporary Help Billings and Conversion Fees. Franchisors Payroll and Billings Operations will deduct the Royalty weekly from the Distribution Account. However, with respect to Career Placement Billings
and Conversion Fees you may elect one of the following options: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"></FONT><FONT FACE="WINGDINGS" SIZE="2" COLOR="#000000">&#168;</FONT><FONT FACE="Times New Roman" SIZE="2"></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Option 1: Franchisors Payroll and Billing Operations will deduct the applicable Royalty for Career Placement Billings and Conversion Fees is thirty percent (30%)&nbsp;as Receipts
are collected, or </FONT></TD></TR></TABLE> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"> <P STYLE="line-Height:95%; vertical-align:top"><FONT FACE="Times New Roman" SIZE="2"></FONT><FONT FACE="WINGDINGS" SIZE="2" COLOR="#000000">&#168;</FONT><FONT FACE="Times New Roman" SIZE="2"></FONT></P></TD>

<TD ALIGN="left" VALIGN="top"> <P STYLE="line-height:95%; vertical-align:top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">Option 2: Franchisee is solely responsible for submitting each Career Placement Billings and Conversion Fees Royalty
payment via wire transfer in order for Franchisor to receive each payment on or before the 10<FONT FACE="Times New Roman" SIZE="1"><SUP>th</SUP></FONT><FONT FACE="Times New Roman" SIZE="2"> day of the month following the month in which Receipts were
collected. </FONT></FONT></P></TD></TR></TABLE> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">10(d) <U>Other Financial Obligations: No Right of Set-Off:</U> Franchisee shall promptly pay any money due Franchisor or
Franchisors subsidiaries, affiliates, or designees (including money owed under a separate promissory note, contract, or other obligation). Franchisee shall have no right to withhold or set-off any amounts owed under this Agreement (or any other
agreement) for any reason. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">10(e) <U>Interest</U><U>:</U> Past due amounts shall accrue Interest. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">10(f) <U>Security Interest:</U> As security for the advancement of monies to Franchisee and for the payment of fees and other amounts owed to Franchisor under this
Agreement, Franchisee and Franchisee Principal Owners hereby convey to Franchisor a security interest in all present and later acquired interests in the Business, including contract rights, accounts receivable, fixed assets, general intangibles, and
all cash or non-cash proceeds from the Business, as security for all Franchisee present and future obligations to Franchisor. Further, Franchisee and Franchisee Principal Owners shall execute one or more financing statements, continuation
statements, amendments or other documents as Franchisor deem necessary. Franchisor have the right to assign Franchisors interest at any time upon notice to Franchisee. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2"><B>11. RECORDKEEPING; REPORTING; AUDITS </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">11(a) <U>Recordkeeping and Reporting:</U> Franchisee shall provide Franchisor
immediate access to any information (including information concerning any Principal Owner), regardless of who possesses it that relates in any way to the Business. Such access shall include access that allows Franchisor to electronically receive
and/or collect such information. Franchisee agrees to timely prepare, preserve, and report full, complete, and accurate books, records, and accounts of the Business to Franchisor in accordance with generally accepted accounting principles
<B>(&#147;GAAP&#148;) </B>and as instructed in the Materials. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">11(b) <U>Financial Audits:</U> Franchisor, or Franchisors designated agent, have the right
to enter the Business during any Business Day with or without prior notice to Franchisee in order to audit the books, records, and/or automation Programs used by Franchisee for the operation of the Business. Franchisee shall fully cooperate with the
individuals conducting such audits. Ordinarily, Franchisor will pay Franchisors costs associated with the audit. However, Franchisee shall be obligated to immediately pay all costs and fees associated with the audit if: (i)&nbsp;Franchisee delays
the time for the audit by more than 5 Business Days; (ii)&nbsp;Franchisee fails to cooperate with Franchisor or-Franchisors designated agent; (iii)&nbsp;Franchisee financial records require a substantial effort to be placed in a condition readily
conducive to an audit; and/or (iv)&nbsp;the examination or audit reveals unreported Billings, Receipts or other delinquent financial liabilities to Franchisor that total more than $2,500. For purposes of this Agreement, <B>&#147;Business Day&#148;
means </B>each day other than Sundays, Saturdays, and nationally recognized holidays. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px;padding-bottom:3px;line-Height:95%; vertical-align:top"><FONT FACE="Times New Roman" SIZE="2">11(c)
<U>Compliance Audits:</U> Franchisor, or Franchisors designated agent, may from time to time perform an operational compliance audit of the Business. If such operational audit reveals that Franchisee have failed to comply with this Agreement,
including the Materials, Franchisee shall be obligated to immediately pay all costs associated with the audit. The performance of such an audit as well as its findings or lack of findings in no way waives any of Franchisors rights under this
Agreement. Should Franchisee fail <B>2 </B>consecutive compliance audits, Franchisor<FONT FACE="Times New Roman" SIZE="1"><SUP>-</SUP></FONT><FONT FACE="Times New Roman" SIZE="2">may, at Franchisors option, terminate this Agreement if Franchisee
fails to cure the noted deficiencies. </FONT></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">11(d) <U>Use of Information</U><U>:</U> </FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(1) Franchisor. may, as Franchisor deems appropriate or as required by law, use all financial and operational information that Franchisor obtains
concerning the Business. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(2) Franchisee acknowledges that the Confidential information is owned by Franchisor. Though the information is
owned by Franchisor, Franchisor agrees to provide certain assurances to Franchisee that Franchisor will not intentionally use, divulge or otherwise permit access to any confidential payroll/billing information (the &#147;P/B Confidential
Information&#148;) pertaining to the Business operations with the intention of allowing the P/B Confidential Information to be used for any competitive purpose against Franchisee. However, from time to time, Franchisor may review the P/B
Confidential </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<FONT FACE="Times New Roman" SIZE="2">Information in order to avoid conflicts of interest between Franchisee and Franchisor during the bidding process and/or to prevent pricing errors. At the
time the Franchise Agreement is terminated or expires without renewal, Franchisor is not restricted in how Franchisor chooses to use the P/B Confidential Information. Further, Franchisor is not restricted if Franchisee is adjudicated as bankrupt,
insolvent or are found to be in breach for any other action described in subsection 15(b)(8). In addition, in the event of an emergency where Franchisee is unable to perform Franchisee duties to Clients and/or Field Employees, Franchisor may use the
P/B Confidential Information. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>12. OWNERSHIP STRUCTURE AND TRANSFER </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2">12(a) <U>Ownership Interest:</U> <B>&#147;Ownership Interest&#148;</B> means any stock, limited liability company membership, partnership interest, or other direct or indirect beneficial interest or ownership in
Franchisee, or Franchisee parent, subsidiary or other affiliated business entities. For example: If a shareholder owns 25% interest in a corporation that owns 50% interest in Franchisee, then that shareholder owns 12.5% Ownership Interest in
Franchisee; making that shareholder a Principal Owner of Franchisee. Franchisee must at all times keep Franchisor informed of all Ownership Interest in Franchisee. Franchisee shall provide Franchisor copies of all organizational documents and other
materials or statements that Franchisor may require in order to document Franchisee ownership structure throughout the term of this Agreement. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">12(b) <U>Ownership Structure:</U> <B></B><B>&#147;Principal Ownee&#148;</B> means each individual or entity that has a 5%
or more Ownership interest in Franchisee. Each Principal Owner must execute this Agreement and the applicable Guaranty attached hereto in the forms of Attachment 3.1 and/or Attachment 3.2. The identity of each Principal Owner is set forth in
Attachment 5 to this Agreement as it may be amended from time to time. Franchisee and Franchisee Principal Owners agree that no one related to Franchisee shall have any Ownership Interest in any staffing business other than each the Business
licensed under this Agreement. Notwithstanding anything to the contrary herein, this restriction shall not apply to a publicly-traded ownership interest of less than 1% in any one company traded on any securities exchange. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">12(c) <U>Ownership Transfer and/or Change in Control:</U> </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman"
SIZE="2">(1) <B>&#147;Ownership Transfer&#148; </B>means the transfer, sale, assignment, pledge or other encumbrance of all or a part of the assets of the Business or Ownership Interest in Franchisee. During the term of this Agreement, no Ownership
interest may be transferred, sold, assigned or otherwise divested to any person or entity outside the Clearpoint Program. Franchisee must obtain Franchisors prior written consent to any Ownership Transfer. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(2) <B>&#147;Control&#148; </B>shall mean an Ownership Interest of 50% or more in Franchisee (or in some cases, less than 50% if Franchisor determines a
Principal Owner with less than 50% Ownership Interest has substantial authority and/or power over Franchisee and/or Franchisee operation of the Business). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="2">12(d) <U>Transfer by Franchisee:</U> </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(1) The rights and duties set forth in this Agreement are personal to Franchisee and
Franchisee Principal Owners. Franchisor granted Franchisee rights under this Agreement in reliance on Franchisee Principal Owners&#146; business skill, financial status and personal character. Franchisor has legitimate reasons to evaluate the
qualifications of any potential new owner. Franchisor has the right to analyze the terms of the proposed purchase contract with Franchisee. Franchisor will investigate any potential owner&#146;s qualifications, including whether sufficient financial
resources are available to operate the Business and hear the burden of the purchase terms. Therefore, Franchisee and Franchisee Principal Owners acknowledge and agree that Franchisors contact with any potential owner is for the purpose of protecting
Franchisors business interests and the integrity of the Program, and does not constitute improper or unlawful conduct and/or tortuous interference with Franchisee contractual or business relationships. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(2) No one may sell, assign, transfer, convey, pledge, mortgage, encumber, or give away, any direct or indirect Ownership Interest except as provided for
in this Agreement. If any such action occurs by operation of law or otherwise that is not in accordance with the provisions of this Agreement, the transaction shall be null and void and shall constitute a material breach of this Agreement.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(3) In computing changes of Ownership Interest, limited partners will not be distinguished from general or managing partners. Franchisors
judgment will be final if there is any question as to the definition of Ownership interest or as to the computation of Ownership Interest. The principal considerations in computing Ownership interest include: (i)&nbsp;total shares and control of
voting stock, (ii)&nbsp;direct and indirect power to exercise control over Franchisee affairs; (iii)&nbsp;direct and indirect rights to share in Franchisee profits; and (iv)&nbsp;amounts directly or indirectly exposed to risk in Franchisee franchise
business. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(4) Franchisee Principal Owners must collectively at all times retain 100% of the ownership shares of Franchisee Voting Stock.
<B>&#147;Voting Stock&#148; </B>means restricted, non-registered, non-public shares held by Franchisee Principal Owners. Franchisee financial business representative shall certify annually to Franchisor that Franchisee is in compliance with the
provisions of this subsection 12(d). Such certification shall be delivered to Franchisor along with Franchisee annual financial statements required in accordance with the Materials. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P>
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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">12(e) <U>Conditions for Ownership Transfer:</U> </FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(1) Franchisor may, in Franchisor&#146;s sole discretion, require any or all of the following as conditions of Franchisor&#146;s approval to any proposed
transfer of Ownership Interest. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:17%"><FONT FACE="Times New Roman" SIZE="2">(i) Franchisee may not be in breach of this Agreement. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:17%"><FONT FACE="Times New Roman" SIZE="2">(ii) Franchisee must obtain Franchisors prior written consent to the transfer and Franchisors approval of the new owner(s). </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:17%"><FONT FACE="Times New Roman" SIZE="2">(iii) Franchisee must provide Franchisor with a copy of any buy/sell agreement or other instrument of transfer, as well as any other information
Franchisor requires to analyze the proposed purchase terms, at least 30 days prior to Franchisee proposed closing date. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:17%"><FONT FACE="Times New Roman" SIZE="2">(iv) Franchisee
and the proposed new owner shall supply Franchisor, at Franchisee cost, with all information Franchisor requires to investigate the proposed new owner, including a personal interview at Franchisors corporate headquarters. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:17%"><FONT FACE="Times New Roman" SIZE="2">(v) If Franchisor determines, in Franchisors sole discretion, that training is required, Franchisor will designate the Principal Owner(s) and/or Manager
who must attend and complete to Franchisors satisfaction Franchisors then-current initial training program. The training must be completed within the time frame Franchisor stipulates following the transfer. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(3) If the transfer results in a transfer of more than 51% Ownership interest or Change in Control, the new franchisee and its principals must enter into
Franchisors then-current form of franchise agreement. Further the new franchisee must renovate, modernize and/or upgrade those items that we identify including but not limited to signage furniture, fixtures, equipment, computer hardware and/or
software, to our then-current standards for new franchise locations. Such renovations, modernization and/or upgrades must be completed within 90 days following the date of transfer. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(4) Regardless of the total percentage of Ownership interest transferred, Franchisor requires the applicable parties to sign a mutual release, in a form
satisfactory to Franchisor, at the time of transfer. in general, (except for post-termination covenants under this Agreement) the mutual release will provide for a release of any and all existing claims against either party and their respective
affiliates, and the officers, directors, shareholders, partners, agents, managers, members, and representatives of each of them, in their corporate and individual capacities, including claims arising under this Agreement and under any law.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">12(f) <U>Right of First Refusal:</U> Franchisor has the right to purchase Ownership Interest and/or the Business on substantially the same terms of any
bona fide offer submitted to Franchisee. Franchisor will have 30 days following Franchisors receipt of Franchisee notice of the offer to make Franchisors decision. Franchisor has the right, in Franchisors sole discretion, to substitute cash for any
other consideration offered and to pay the entire discounted present value of the purchase price at the time of closing. Any material change in the terms of the proposed offer prior to closing shall constitute a new offer subject to Franchisors same
right of first refusal. Franchisor will have 15 days following Franchisors receipt of the modified offer to make Franchisors decision. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">12(g) <U>Change of
Control:</U> A <B>&#147;Change in Control&#148; </B>occurs at the time of the death, incapacity, withdrawal, stock redemption, <B>or </B>other elimination of a Principal Owner. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2">12(h) <U>Termination Due to Death or Incapacity:</U> When a Change in Control occurs because of the death or incapacity of a Principal Owner (and there is no remaining Principal Owner) this Agreement shall terminate
ninety (90)&nbsp;days after the occurrence. No later than 30 days prior to the termination, the successors or heirs, if any, of the deceased or incapacitated Principal Owner may apply to Franchisor for </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<FONT FACE="Times New Roman" SIZE="2">a franchise license to continue operating the Business and at least one Principal Owner must attend Franchisors then-current training programs. Franchisors
approval will not be unreasonably withheld. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>13. RENEWAL OF AGREEMENT </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2">13(a) <U>Renewal:</U> Unless Franchisor has reason to terminate this Agreement for cause, or Franchisor agrees to purchase Franchisee assets, Franchisor will renew the franchise for an additional 10 year term (the
<B>&#147;Renewal Term&#148;</B>) contingent upon each of the following factors: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(1) At least 180 days prior to the Scheduled Expiration
Date Franchisor will provide Franchisee with a written renewal notice (the <B>&#147;Renewal notice&#148;</B>), confirming Franchisors offer to renew the franchise. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT
FACE="Times New Roman" SIZE="2">(2) No less than 30 days following Franchisee receipt of the Renewal notice, Franchisee must provide Franchisor with Franchisee written confirmation regarding Franchisee intent to renew, or not to renew, the franchise
<B>(&#147;Renewal Intent&#148;)</B>. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(3) If Franchisee elect to renew, at least 30 days prior to the Scheduled Expiration Date, Franchisee
and Franchisee Principal Owners must execute Franchisors then-current form of franchise agreement and all other related documents required by Franchisor at that time (cumulatively the <B>&#147;Renewal Documents&#148;</B>). Franchisee and Franchisee
Principal Owners acknowledge that the Renewal Documents may contain terms and conditions that are significantly different from this Agreement. In addition, the parties agree to execute a mutual release which is intended to release any and all claims
the parties may have against each other arising out of or related to this Agreement. The release however will not purport to release the parties from any future claims arising out of or related to the Renewal Documents. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(4) Franchisee may not be in material default of this Agreement as of the scheduled renewal date. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(5) All monetary obligations Franchisee owes to Franchisor under this Agreement, or any other Agreement between Franchisee and Franchisor, must be paid
current as of the scheduled renewal date. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(6) Those individuals that Franchisor identifies in the Renewal notice (whether a Principal
Owner, Manager, and/or Staff Employee), must successfully complete Franchisors then-required&#146; training concerning the operation of the Business within the first 180 days following the scheduled renewal date. </FONT></P> <P
STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>14. NON-RENEWAL OF AGREEMENT </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">14(a) <U>Non-Renewal notice
Requirement:</U> If Franchisee does not desire to renew the franchise at the end of the then-current Renewal term, Franchisee must inform Franchisor, in writing (the <B>&#147;Non-Renewal notice&#148;</B>) no later than 30 days after Franchisee
receipt of the Renewal notice, In all cases, if Franchisee opts for non-renewal, Franchisee must enter into Franchisors then-current exit agreement at least 30 days prior to the Scheduled Expiration Date. The exit agreement may, at Franchisors sole
option, provide that Franchisor may step in on or before the Scheduled Expiration Date and continue to operate one or more Locations licensed under this Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="2">14(b) <U>Continued Service Required to End of Term:</U> The parties agree that it is imperative that the goodwill of Clearpoint and the Network be protected. Therefore, Franchisee agrees to continue to service Clients, Job-seekers, and
Field Employees, up to and including the day of the Scheduled Expiration Date. Franchisor is entitled to all Royalty, Ad Fund, and any other payments and other monies owed and accruing up to and including the Scheduled Expiration Date. </FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>15. TERMINATION </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="2">15(a) <U>Termination for Failure to Cure Breach:</U> Except as otherwise provided in subsection 15(b), when Franchisee receives a written notice from Franchisor Informing Franchisee that Franchisee has failed to comply with the terms of
this Agreement (as supplemented by the Materials), Franchisee will have 10 consecutive days (or such other time frame as required by law) to cure the breach to Franchisors satisfaction. If Franchisee do not cure the breach within the applicable time
period, this Agreement may terminate without further notice to Franchisee. In addition, if the breach is due to Franchisee failure to timely pay monies due Franchisor, Franchisor reserve the right to file a delinquency report with all appropriate
credit reporting agencies. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">15(b) <U>Termination Without Opportunity to Cure Breach:</U> After any one or more of the following events described below,
Franchisor may, in Franchisors sole discretion, terminate this Agreement without providing Franchisee any opportunity to cure the breach, and the termination is effective when Franchisee receive Franchisors written notice. </FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(1) Franchisee fails to open the Business as required under subsection 6(a) or the Business is closed for 5 consecutive Business Days. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(2) Franchisee or any Principal Owner is convicted of, or pleads no contest to, a felony, a crime involving moral turpitude, or any other crime or
offense that is likely, in Franchisors sole opinion, to adversely affect the Network, the Clearpoint Property, or Franchisors interest in them. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman"
SIZE="2">(3) Franchisee or any Principal Owner attempts to transfer or transfers, with or without remuneration, any of the material assets of the Business, the Clearpoint Property, any rights or obligations under this Agreement, or any Ownership
Interest in Franchisee without first obtaining Franchisors written approval </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(4) Franchisee or any Principal Owner fail to comply with any
Confidentiality Agreement and/or non-disclosure agreement or fails to comply with any of the provisions of this Agreement related to: (i)&nbsp;Non-Disclosure of Confidential Information, (ii)&nbsp;Protection of Confidential Information,
(iii)&nbsp;Treatment of Personnel, (iv)&nbsp;operation of the Business from a Clearpoint Approved location, (v)&nbsp;maintaining uninterrupted required insurance coverage, (vi)&nbsp;Credit and Collections, or (vii)&nbsp;Rules Governing Unfair Trade
Practices. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(5) Franchisee or any Principal Owner uses in any unauthorized manner or discloses to any unauthorized party, the Clearpoint
Property and/or any third party software sublicensed through Clearpoint to Franchisee. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(6) Franchisee or any Principal Owner (i)&nbsp;acts
in any way inconsistent with being a business separate from Clearpoint; (ii)&nbsp;commits any unauthorized acts involving Clearpoint; (iii)&nbsp;commits any act or pursues any course of conduct that brings the Program, the Network, or the
Proprietary Marks into disrepute; (iv)&nbsp;participates in any fraudulent activity, including any fraudulent reporting, of financial or operational information to Franchisor; (v)&nbsp;willfully or negligently misclassifies Field Employees for
worker&#146;s compensation reporting and charge purposes, (vi)&nbsp;permits Field Employees to perform prohibited services or (viii)&nbsp;permits Field Employees to be employed in job classifications that are prohibited as instructed by Franchisor.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(7) Franchisee loses legal control of the assets, business affairs, or freedom of action with respect to the Business. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(8) Franchisee is (i)&nbsp;adjudicated as bankrupt or insolvent, (ii)&nbsp;all or a substantial part of the </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<FONT FACE="Times New Roman" SIZE="2">assets are assigned to, or for, the benefit of any creditor, (iii)&nbsp;a petition in bankruptcy is filed by or against Franchisee and is not immediately
contested and dismissed within 60 days from filing, (iv)&nbsp;a bill in equity or other proceeding for the appointment of a receiver or other custodian of Franchisee, the Business or assets of either is filed and consented to by Franchisee,
(v)&nbsp;a receiver or other custodian (permanent or temporary) of Franchisee assets or property, or any part thereof, is appointed by any court of competent jurisdiction, (vi)&nbsp;proceedings for a composition with creditors under any state or
federal law are instituted by or against Franchisee, (vii)&nbsp;Franchisee is dissolved, and/or (viii)&nbsp;execution is levied against Franchisee or the real or personal property of the Business is scheduled to be sold after levy thereon by any
governmental body or agency, sheriff, marshal or constable. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(9) Franchisee has converted Franchisors funds as described in subsection
9(f)(2) of this Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(10) Franchisee or any Principal Owner commits 2 material breaches under this Agreement within a 12 month
period, whether or not such breaches have been cured after Franchisee receipt of Franchisors written notice. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">15(c) <U>Cease Operations:</U> If Franchisee
fail to cure the breach, Franchisee must immediately cease operating the Business and comply with the post termination obligations contained in Sections 16 and 17. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="2">15(d) <U>Cross Default:</U> If any of Franchisee subsidiaries or affiliates authorized to operate one or more Businesses under this Agreement comments any breach described herein, the breach shall effect all members of this Agreement. In
addition, if any Principal Owner is a Principal Owner in another Clearpoint franchise, a breach of the other franchisee&#146;s franchise agreement or attendant agreements shall be a breach of this Agreement and vice versa. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">15(e) <U>Inability to Perform at a Specific location:</U> </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman"
SIZE="2">(1) This Agreement provides for the potential operation of multiple Business locations during the term. If Franchisee operates more than one Business, and Franchisor finds Franchisee cannot perform under this Agreement for one particular
Location, Franchisee must obtain Franchisors prior written consent to either merge the Business into one of Franchisee&#146;s other Locations, or close the Business in accordance with the terms provided herein. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(2) At least 90 days prior to taking any action concerning the subject Location, Franchisee must provide Franchisor with Franchisee written notice
regarding Franchisee intentions to either merge the Business or close the Business. Franchisee agrees that all terms contained in subsections 15(f) and 15(g) below will apply in like manner to the subject Location, except however (i)&nbsp;if
Franchisor agrees to allow Franchisee to rescind Franchisee notice Franchisee agrees to execute the required re-instatement documents, including a mutual release by the parties, and Franchisee shall pay a $5,000 re-instatement fee to Franchisor, or
(ii)&nbsp;if Franchisee fails to operate the Business for the required 90 day period, Franchisor will be entitled to liquidated damages in an amount equal to the Royalties due and payable for the 9 month period immediately preceding the time
Franchisee ceased operation of the subject Location. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">15(f) <U>Inability to Perform Under the Agreement</U> </FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(1) In the event Franchisee cannot perform under this Agreement, despite Franchisee best efforts, and provided Franchisee is in compliance with all of the
terms and conditions of this Agreement, Franchisee may voluntarily terminate this Agreement by providing Franchisor with a 180 days prior written notice detailing Franchisee intentions. The notice to voluntarily terminate this Agreement is
irrevocable upon Franchisors receipt, and the option to allow Franchisee to rescind any such voluntary notice of termination shall be at Franchisors sole discretion. If Franchisor approves Franchisee request to rescind Franchisee notice to
terminate, Franchisee agrees to execute the </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<FONT FACE="Times New Roman" SIZE="2">required re-instatement documents, including a mutual release by the parties, and Franchisee shall pay a $10,000 re-instatement fee to Franchisor. Similarly,
the provisions of this subsection 15(f) shall apply should Franchisee elect to rescind Franchisee notice of renewal described in subsection 13(a)(2), except however Franchisee agrees to execute Franchisors required termination documents, including a
mutual release by all parties, and pay Franchisor all monies due under this Agreement at that time. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(2) Franchisee written notice must
contain all of the information required to be provided to Franchisor in subsections 16(a)(12) and 16(a)(13) below. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(3) The parties agree
that the date Franchisor receives Franchisee written notice is referred to as the <B>&#147;Voluntary notice Date&#148;, </B>and the scheduled date to cease operations under this Agreement is 180 days following Franchisors receipt of Franchisee
voluntary notice (the <B>&#147;Termination Date&#148;</B>). Franchisee automatically releases certain rights in effect as of the Voluntary notice Date such as participation in any special programs or qualification for any economic incentives
Franchisor may provide at the time. Franchisee agrees in order to protect Franchisors goodwill and to reasonably arrange to continue to service Clients, Job-seekers and Field Employees, Franchisee will use Franchisee&#146;s best efforts to continue
to perform under this Agreement for the entire 180 day notice period. Further, Franchisee acknowledge that Franchisor is entitled to all Royalties, Ad Fund contributions, and any other monies owed and accruing up to an including the Termination
Date. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(4) Franchisor shall have 90 days following the Voluntary notice Date to inform Franchisee as to whether or not Franchisor, or our
designee, elect to purchase any or all of Franchisee assets pursuant to subsection 16(a)(11). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">15(g) <U>Liquidated Damages:</U> </FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(1) If this Agreement is terminated under subsections 15(a) or 15(b), or if Franchisee fails to provide Franchisor the required notice described in
subsections 15(e) or 15(f), or if Franchisee fails to operate the Business for any period prior to the Termination Date, Franchisee agrees to compensate Franchisor for the reasonable costs, expenses, and losses, Franchisor incurred in connection
with such termination or cessation. Franchisors expenses may include without limitation the (i)&nbsp;costs of soliciting, locating, qualifying and training a replacement franchisee, (ii)&nbsp;loss of any Field Employees and/or Clients, and
(iii)&nbsp;loss of revenue Franchisor would otherwise receive as a result of Franchisee continued operation of the Business. The parties agree that such expenditures and losses may be uncertain and difficult to ascertain and therefore agree that the
compensation specified below reasonably represents such expenditures and losses and is not a penalty. Therefore, Franchisee agrees to pay Franchisor an amount equal to the Royalty due and payable by Franchisee for the 18 month period immediately
preceding the date Franchisee ceased operating the Business or if the Business has not been operated for an 18 month period, an amount equal to the average monthly amounts due during the time the Business was operated multiplied by 18. This
subsection 15(g) shall not be construed as Franchisors sole election of remedies and shall not prejudice Franchisors rights to pursue other remedies under this Agreement, including seeking damages and/or injunctive relief for any violation of
Sections 7 and 17, or damages for the conversion of Field Employees or the continued solicitation of Clients in violation of subsection 17(c)(3). </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>16.
TERMINATION DUTIES: </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">16(a) <U>Termination Duties:</U> If this Agreement terminates for any reason, voluntarily or involuntarily, Franchisee and
Franchisee Principal Owners, jointly and severally, to the extent permitted by law, shall immediately and expeditiously comply with each of the following requirements: </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;
</FONT></P>
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(1) Stop using all Clearpoint Property or any variation or colorable imitation of any component, and
refrain from identifying, promoting or advertising Yourselves as a member of the Clearpoint Network or former Clearpoint franchisee, or as formerly associated with Clearpoint in any manner (including the display of any Clearpoint related diplomas,
awards, plaques, or other similar paraphernalia). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(2) Stop using all software licensed or sublicensed by Franchisor to Franchisee.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(3) Cancel all filings or authorizations to operate under the Proprietary Marks, Domain Names or any colorable imitation of them pursuant
to a fictitious name statute or any similar statute. Within 30 days following the termination Franchisee must submit written evidence of such cancellation to Franchisor. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT
FACE="Times New Roman" SIZE="2">(4) Assign all Domain Names or other identifications related to the Program to Franchisor without delay. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman"
SIZE="2">(5) No later than 3 days following the termination, deliver to Franchisor, at Franchisee expense, all originals and copies of the Clearpoint Property and any software licensed or sublicensed by Franchisor to Franchisee. Further, Franchisee
shall not make, retain or use any copy of the Clearpoint Property or any software licensed or sublicensed by Franchisor to Franchisee. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(6)
Pay in full all liabilities of the Business, including, rent, telephone, leases, salaries, vendors, and other claims. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(7) Franchisee will
not contest that for a period of 90 days following the termination of this Agreement, Franchisor will use Franchisee Bad Debt Reserve to cover the negative balance, if any, of Franchisee Distribution Account, and/or any other amounts due Franchisor
under this Agreement, including liquidated damages, if applicable. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(8) Cease using all Listings for any purpose whatsoever. Franchisee may
not enter any &#147;call forwarding&#148; or similar instruction with Franchisee service provider to circumvent this provision. In addition, at Franchisors election, Franchisee must execute all forms and documents required by Franchisor and
Franchisee service provider to either cancel the Listings or transfer the service and the Listings to Franchisor. For purposes of this Agreement, &#147;Listings&#148; means, all office telephone numbers, cellular and facsimile numbers, related
Yellow Pages listings/advertisements or other business listings or directories, e-mail addresses, Internet web sites, Internet directories, Internet chat rooms, and all Internet meta keywords, and any other similar components identifying the
Business which is accessible by the general public. The obligations of this Section&nbsp;16 shall survive the termination of this Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman"
SIZE="2">(9)&nbsp;If the Location is leased, Franchisor may, at Franchisors option, provide written notice to Franchisee requiring Franchisee to assign Franchisee interest in any lease or sublease for the Location to Franchisor. Franchisor may
exercise this option up to 30 days <U>following</U> the termination of this Agreement. Franchisee agrees to remain liable for all obligations arising prior to the date of the assignment. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(10) If Franchisor do not assume the lease, Franchisee must, at Franchisee expense, remove all signs bearing the Proprietary Marks and make such
modifications to the premises as Franchisor deems necessary to clearly distinguish it from any personnel business operating under the Program. Franchisor has the right to enter the Location, without being guilty of any crime or tort, to make, or
cause to be made, at Franchisee expense, the changes and modifications required by this Agreement. Franchisee agrees to pay Franchisors incurred costs upon demand. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT
FACE="Times New Roman" SIZE="2">(11) Franchisor may, at Franchisors sole option, require Franchisee to sell to Franchisor any or all of Franchisee assets. The parties agree that the purchase price shall equal the lesser of (i)&nbsp;fair market
value, or (ii)&nbsp;3 times Franchisee annual pre-tax earnings for the subject Business for Franchisee most recently completed fiscal year as computed in accordance with GAAP. If Franchisor cannot agree on a fair market value prior to the
Termination Date, the parties agree the fair market value shall be determined by a qualified independent appraiser; selected by Franchisor. Once the </FONT>
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<FONT FACE="Times New Roman" SIZE="2">value is established, Franchisee shall execute Franchisors required Asset Purchase Agreement. Franchisor has the right to deduct from the purchase price any
sums owing from Franchisee under this Agreement or any other agreements between Franchisee and Franchisor, and Franchisors reasonable related expenses incurred (including attorneys&#146; fees). The sale shall occur on or before the Termination Date,
or such other date as the parties may agree. In addition, Franchisor may require one or more of Franchisee Principal Owners to enter into Franchisors standard consulting agreement in order to provide certain services for Franchisor for a limited
period of time. The purchase, if completed, is for the assets only and Franchisor will not assume any of Franchisee liabilities, except for those, if any, identified within the Asset Purchase Agreement. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(12) Franchisee acknowledges that all Client Accounts and Field Employees are Franchisors property. Franchisor may service or dispose of the Client
Accounts in any manner Franchisor deem appropriate. Franchisee and Franchisee Principal Owners understand and agree that any solicitation by either of Franchisee of any Clients and/or Field Employees following the termination of this Agreement is a
material breach of this Agreement for which Franchisor may seek all legal remedies. In addition, Franchisee must deliver to Franchisor such documents and/or instruments Franchisor deem necessary to evidence Franchisors ownership of the Client
Accounts and to meet the requirements of all taxing and other government authorities. For the purpose of this Agreement, <B>&#147;Client Accounts&#148; </B>means all accounts or other established business relationships with every Client to whom
Franchisee, through the operation of the Business, has provided staffing services or related products or services during the 2 year period prior to the termination or expiration (without renewal), or that placed a Job-order for the services offered
by Franchisee during the 90 day period prior to the termination or expiration. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(13) Franchisee agrees to fully cooperate with Franchisor
by providing Franchisor, or Franchisors designee, immediate access to Franchisee computer Program and computer hardware for the purpose of returning to Franchisor the Clearpoint Property and the Clearpoint licensed or sublicensed computer software
contained within it. Franchisor will provide to Franchisee a voucher insuring the safe and timely return of Franchisee computer hardware. Franchisor will retrieve the names, addresses, and telephone numbers of all Client Accounts, as well as all
Job-seekers, and Field Employees used or contacted by Franchisee through the operation of the Business during the 2 year period prior to the termination or expiration (without renewal) of this Agreement. Franchisor will transfer the information
directly from Franchisee computer to ClearPoint, and then return the computer hardware to Franchisee. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(14) All Confidential Information
shall remain Franchisors exclusive property. Therefore, Franchisee and Franchisee Principal Owners must preserve forever in confidence all written, electronic or otherwise tangible Confidential Information for Franchisors benefit, and never use,
disclose, or misappropriate, directly or indirectly, any Confidential Information to Franchisors and/or any successor franchisee&#146;s competitive disadvantage or economic injury. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(15) If Franchisee or Franchisee Principal Owners fail to comply with all post-termination obligations, Franchisee obligation to provide Franchisor with
monies due, reports, records, Client Accounts, Confidential Information, licensed and/or sublicensed software and any other materials required in accordance with this Agreement shall be based on the later of the Termination Date or the date all such
post-termination covenants have been fully complied with by the offending party. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">16(b) <U>Transfer of Staff Employees:</U> Franchisor is not be obligated
to hire any of Franchisee Staff Employees. However, if Franchisor request a transfer of any Staff Employee, and the Staff Employee is willing to transfer, Franchisee will assign the person&#146;s employment contract to Franchisor. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">16(c) <U>Money Owed:</U> The termination of this Agreement shall not release Franchisee from Franchisee obligations to pay all money due or owed under this Agreement
unless Franchisee executes the Renewal Documents, all Billings that have not been collected will immediately be treated as Chargebacks and no Distribution Account amounts will be available to Franchisee until the Distribution Account balance
subsequently becomes net positive, and Franchisee owes no other amounts to Franchisor. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">16(d) <U>Continued Effect of Agreement:</U> Provisions of this Agreement that govern the parties&#146; conduct after
termination shall continue in effect according to their terms after termination or expiration. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>17. RULES GOVERNING UNFAIR TRADE-PRACTICES
</B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px;padding-bottom:3px;line-Height:95%; vertical-align:top"><FONT FACE="Times New Roman" SIZE="2">17(a) <U>Covenants Regarding Unfair Trade Practices<FONT FACE="Times New Roman"
SIZE="1"><SUB></SUB></FONT><FONT FACE="Times New Roman" SIZE="2">:</FONT></U><FONT FACE="Times New Roman" SIZE="2"> Franchisee and Franchisee Principal Owners each agree that, among other things, the training, trade secrets and Confidential
Information Franchisee receive or procure provide a competitive advantage and each component is valuable to Franchisee In operating the Business. Gaining access to such training, trade secrets and Confidential Information is a primary reason why
Franchisee is entering into this Agreement. Therefore, in consideration for such training, trade secrets, Confidential Information and rights, Franchisee and Franchisee Principal Owners specifically make the covenants set forth in this <B><U>Section
17</U></B>. </FONT></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">17(b) <U>No Competition During Term of This Agreement:</U> During the term of this Agreement, neither Franchisee nor any Principal
Owner shall directly or indirectly own, conduct, operate, organize, work for or consult for, or associate with any non-Clearpoint staffing business located within the United States, its territories or commonwealths, or any other country, province or
geographical area. This subsection 17(b) shall not apply to the ownership of less than 1% of the equity securities of a publicly held corporation. In addition, the applicable restrictions as described in Attachment 4 apply to all who have executed
Attachment 4. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">17(c) <U>Post-Termination Unfair Competition and Unfair Trade Practices:</U> Upon the termination or non-renewal of this Agreement,
Franchisee and/or Franchisee Principal Owners may operate a staffing business so long as Franchisee each comply accordingly with the terms set forth below. In addition, if an individual ceases to be a Principal Owner at any time during the term of.
this Agreement, that individual may operate a staffing business so long as the individual also complies with the terms set forth below. Franchisee and Franchisee Principal Owners acknowledge and agree that noncompliance with these terms constitute
unfair trade practices. In addition, the applicable restrictions as described in Attachment 4 apply to all who have executed Attachment 4. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman"
SIZE="2">(1) Franchisee and/or Franchisee Principal Owners shall not, directly .or indirectly, without Franchisors express written consent, either as an individual, counselor, recruiter, consultant, employee, manager, officer, director, shareholder
or in any other capacity, use in any manner any part of the Clearpoint Property, including the use of any Confidential Information to do any of the acts set forth in. subsection 17(c)(3). </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(2) Franchisee shall deliver to Clearpoint the information and materials described in subsections 16(a)(12), and 16(a)(13). </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(3) Neither Franchisee nor Franchisee Principal Owners may, for a period of 2 years after the termination or non-renewal of this Agreement, (referred to
as the <B>&#147;Termination Period&#148;</B>) directly or indirectly, for Yourselves or through, on behalf of or in conjunction with any person or business entity do any of the following, except as they relate to another business licensed or
approved by Franchisor. In addition, no Principal Owner may for the 2 years following the date he/she ceased to be a Principal Owner do so. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman"
SIZE="2">(i) operate any staffing business at a location that is within a 10 mile radius from any Clearpoint location, </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(ii) hire or seek
to hire, or in any other manner attempt to influence, induce or encourage any Field Employee or Staff Employee of the Business, of any successor franchisee, and/or of ClearPoint to leave their employment; </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(iii) contact, seek to contact, or do business with any individual or entity that was a </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<FONT FACE="Times New Roman" SIZE="2">Client during the 2 year period prior to the Termination Period, or in any other manner attempt to solicit, influence, induce or encourage any Client to
cease doing business with Franchisor and/or a successor franchisee; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(iv) procure or attempt to procure employment or placement of a
Job-seeker that Franchisee procured, interviewed or attempted to procure, employ, or place during the 2 year period prior to the Termination Period; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT
FACE="Times New Roman" SIZE="2">(v) refer or attempt to refer any Job-seeker for employment on an existing or prospective Job-order that Franchisee procured or attempted to procure during the 2 year period prior to the Termination Period, or,
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(vi) divert or attempt to divert, for Franchisee benefit or Franchisee Principal Owners&#146; benefit, or for the benefit of another
staffing business, management search consultant, or other recruitment firm, any Job-seeker, Field Employee, or Job-order in existence on the beginning date of the Termination Period. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(4) Franchisee and Franchisee Principal Owners acknowledge and agree that the covenants described above are not intended to and would not prevent or
materially impair any party from obtaining a livelihood in the staffing business during the Termination Period. Therefore, if Franchisee or one of Franchisee Principal Owners commit a breach of subsection 17(c)(3), the, 2 year period specified in
subsection 17(c)(3) shall be tolled during the period of such breach. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">17(d) <U>Information Request:</U> Franchisee and Franchisee Principal Owners shall
supply such information as Franchisor may request in order to ascertain whether or not Franchisee each have complied with, or have violated, the confidentiality covenants contained in this Agreement. Franchisee each shall furnish the requested
information to Franchisor within a reasonable time, but in no event later than 10 days following Franchisee receipt of Franchisors request </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">17(e)
<U>Injunctions:</U> Franchisee and Franchisee Principal Owners acknowledge that a violation of any of the provisions of this Agreement related to the: (i)&nbsp;License Relationship, (ii)&nbsp;Materials, (iii)&nbsp;Confidential Information,
(iv)&nbsp;Ownership Structure and Transfer, (v)&nbsp;Termination Duties, or (vi)&nbsp;Rules Governing Unfair Trade Practices, will use irreparable harm to Franchisor and the Network. Franchisee agrees that Franchisor have the right to seek
injunctive or declaratory relief to remedy any actual or threatened violation of this Agreement specifically including the equitable remedy of specific performance. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2">17(f) <U>Indirect Conduct:</U> For the purpose of Section&nbsp;16 and Section&nbsp;17 herein, the parties agree that <U>indirectly</U> includes any acts committed by Franchisee, any Principal Owner, or their
respective spouse, child, life partner, other dependent household members, officers, agents, employees, attorneys, estate, or heirs, and those persons in active concert or participation with them, it being the intent of the parties that such persons
may not perform any act indirectly which would be prohibited if carried out directly by Franchisee. In addition, the parties agree that <U>staffing business</U> includes any business similar to that as set forth under the definition of Business in
subsection 3(f). </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>18. GENERAL LEGAL MATTERS </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman"
SIZE="2">18(a) <U>GOVERNING LAW:</U> THIS AGREEMENT TAKES EFFECT UPON ITS ACCEPTANCE BY US IN THE STATE OF PENNSYLVANIA. IN AN EFFORT TO PROMOTE CONSISTENCY WITHIN THE NETWORK, WITH RESPECT TO ALL CLAIMS, CONTROVERSIES, DISPUTES OR ACTIONS RELATED
TO THIS AGREEMENT OR THE RELATIONSHIP CREATED THEREBY, THIS AGREEMENT SHALL BE INTERPRETED, ENFORCED AND GOVERNED BY THE LAW OF THE STATE OF PENNSYLVANIA. PENNSYLVANIA LAW SHALL PREVAIL IN THE EVENT OF ANY CONFLICT OF LAW, EXCEPT TO THE EXTENT
GOVERNED BY THE UNITED STATES TRADEMARK ACT OF 194E (LANHAM ACT, 15 U,S.C., SECTION 1501, ET SEQ.). </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">18(b) <U>MEDIATION:</U> </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT
FACE="Times New Roman" SIZE="2">(1) THE PARTIES AGREE TO SUBMIT ANY CLAIM, CONTROVERSY OR DISPUTE ARISING OUT OF OR RELATING TO THE FRANCHISE, YOUR OPERATION OF THE BUSINESS, THIS AGREEMENT, OR ANY OTHER AGREEMENT BETWEEN US, OR OUR AFFILIATES, AND
YOU TO NON-BINDING MEDIATION PRIOR TO FILING SUCH CLAIM, CONTROVERSY OR DISPUTE IN ARBITRATION OR A COURT. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(2) THE MEDIATION SHALL BE
CONDUCTED THROUGH EITHER AN INDEPENDENT MEDIATOR OR A MEDIATOR APPOINTED BY A MEDIATION SERVICES ORGANIZATION OR BODY EXPERIENCED IN THE MEDIATION OF DISPUTES BETWEEN FRANCHISORS AND FRANCHISEES AGREED UPON BY THE PARTIES. FAILING SUCH AGREEMENT
WITHIN 15 DAYS OF TIME AFTER EITHER PARTY HAS RESOURCESIFIED THE OTHER IN WRITING OF ITS DESIRE TO SEEK MEDIATION, THE MEDIATION SHALL BE CONDUCTED THROUGH A MUTUALLY AGREED MEDIATOR. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(3) THE COSTS AND EXPENSES OF MEDIATION, INCLUDING COMPENSATION AND EXPENSES OF THE MEDIATOR, SHALL BE BORNE BY THE PARTIES EQUALLY. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(4) THE PARTIES ARE UNABLE TO RESOLVE THE CLAIM, CONTROVERSY OR DISPUTE WITHIN 90 DAYS AFTER THE MEDIATOR HAS BEEN APPOINTED, THEN THE DISPUTE SHALL
AUTOMATICALLY BE REFERRED TO ARBITRATION UNDER SUBSECTION 18(c). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(5) RESOURCES WITHSTANDING THE FOREGOING, WE MAY, IN OUR SOLE DISCRETION,
BRING AN ACTION FOR (i)&nbsp;MONIES OWED, (ii)&nbsp;INJUNCTIVE OR OTHER EXTRAORDINARY OR EQUITABLE RELIEF, (iii)&nbsp;SPECIFIC PERFORMANCE, OR (iii)&nbsp;THE POSSESSION OR DISPOSITION OF, OR OTHER RELIEF RELATING TO, REAL PROPERTY IN A COURT HAVING
JURISDICTION AND IN ACCORDANCE WITH SUBSECTIONS 18(c)(3) AND 18(d), WITHOUT FIRST SUBMITTING SUCH ACTION TO MEDIATION. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">18(c) <U>ARBITRATION:</U>
</FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(1) THE PARTIES AGREE THAT ANY CLAIM, CONTROVERSY OR DISPUTE ARISING OUT OF OR RELATING TO THE FRANCHISE, YOUR OPERATION OF THE BUSINESS,
THIS AGREEMENT, OR ANY OTHER AGREEMENT BETWEEN US, OR OUR AFFILIATES, AND YOU, THAT CAN RESOURCES BE AMICABLY SETTLED AMONG THE PARTIES OR THROUGH MEDIATION SHALL, EXCEPT AS SPECIFICALLY SET FORTH HEREIN AND IN SUBSECTION 18(d), BE REFERRED TO
ARBITRATION. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(2) THE ARBITRATION SHALL BE CONDUCTED THROUGH AN ORGANIZATION OR BODY EXPERIENCED IN THE ARBITRATION OF DISPUTES BETWEEN
FRANCHISORS AND FRANCHISEES AGREED UPON BY THE PARTIES. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(3) FAILING SUCH AGREEMENT WITHIN 15 DAYS AFTER ONE PARTY. HAS RESOURCESIFIED THE
OTHER PARTY IN WRITING OF ITS INTENTION TO ARBITRATE, ARBITRATION SHALL BE CONDUCTED BY THE AMERICAN ARBITRATION ASSOCIATION (&#147;AAA&#148;), OR ITS SUCCESSOR, IN ACCORDANCE WITH THE COMMERCIAL RULES OF AAA OR ITS SUCCESSOR, AS AMENDED, EXCEPT
THAT THE ARBITRATOR(S) SHALL APPLY THE FEDERAL RULES OF EVIDENCE. HOWEVER, IF SUCH RULES ARE IN ANY WAY CONTRARY TO OR IN CONFLICT WITH THIS AGREEMENT, THE TERMS OF THIS AGREEMENT SHALL CONTROL. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(4) ALL CLAIMS, CONTROVERSIES OR DISPUTES INVOLVING YOU MAY ONLY BE ARBITRATED ON AN INDIVIDUAL BASIS AND MAY RESOURCES BE CONSOLIDATED WITH ANY CLAIM,
CONTROVERSY OR DISPUTE FOR OR ON BEHALF OF ANY OTHER </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<FONT FACE="Times New Roman" SIZE="2">CLEARPOINT FRANCHISEE OR SUPPLIER. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(5) IF THE
AMOUNT IN CONTROVERSY INVOLVES LESS THAN $100,000, THE PARTIES SHALL SELECT A SINGLE ARBITRATOR IN ACCORDANCE WITH THE LIST AND STRIKE PROVISIONS OF THE AAA RULES. IF THE AMOUNT IN CONTROVERSY INVOLVES $100,000 OR MORE, A THREE-PERSON PANEL OF
ARBITRATORS SHALL BE SELECTED. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(6) TO SELECT A THREE PERSON PANEL, THE PARTIES SHALL EACH SELECT ONE ARBITRATOR. IF THE PARTY UPON WHOM
THE DEMAND FOR ARBITRATION IS SERVED FAILS TO SELECT AN ARBITRATOR WITHIN 15 DAYS AFTER THE RECEIPT OF THE DEMAND FOR ARBITRATION, THEN THE ARBITRATOR SO DESIGNATED BY THE PARTY REQUESTING ARBITRATION SHALL ACT AS THE SOLE ARBITRATOR TO RESOLVE THE
CONTROVERSY AT HAND. OTHERWISE, THE TWO ARBITRATORS DESIGNATED BY THE PARTIES SHALL SELECT A THIRD ARBITRATOR. IF THE TWO ARBITRATORS DESIGNATED BY THE PARTIES FAIL TO SELECT A THIRD ARBITRATOR WITHIN 15 DAYS, THE THIRD ARBITRATOR SHALL BE SELECTED
BY THE ORGANIZATION AGREED UPON OR AAA OR ANY SUCCESSOR THERETO, UPON APPLICATION BY EITHER PARTY. ALL OF THE ARBITRATORS SHALL BE EXPERIENCED IN THE ARBITRATION OF DISPUTES BETWEEN FRANCHISORS AND FRANCHISEES, BUT THE PERSON SELECTED MAY RESOURCES
HAVE SERVED AS THE MEDIATOR OF THE DISPUTE SUBMITTED TO ARBITRATION AS PROVIDED BY SUBSECTION 17(b) ABOVE. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(7) THE ARBITRATION SHALL TAKE
PLACE IN PHILADELPHIA, PA OR THE CURRENT CITY AND STATE WHERE OUR CORPORATE HEADQUARTERS IS LOCATED AT THE TIME THE DISPUTE IS SUBMITTED TO ARBITRATION. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT
FACE="Times New Roman" SIZE="2">(8) THE AWARD OF THE ARBITRATORS SHALL BE FINAL AND JUDGMENT UPON THE AWARD RENDERED IN ARBITRATION MAY BE ENTERED IN ANY COURT HAVING JURISDICTION THEREOF. THE ARBITRATORS SHALL BE REQUIRED TO SUBMIT WRITTEN FINDINGS
OF FACT AND CONCLUSIONS OF LAW AND A WRITTEN EXPLANATION AND CALCULATION OF THE AMOUNT AWARDED (IF APPLICABLE) WITHIN 30 BUSINESS DAYS FOLLOWING THE FINAL HEARING SESSION OF THE ARBITRATORS. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(9) THE COSTS AND EXPENSES OF ARBITRATION MAY BE ENTERED IN ANY COURT HAVING JURISDICTION THEREOF, THE COSTS AND EXPENSES OF ARBITRATION, INCLUDING
COMPENSATION AND EXPENSES OF THE ARBITRATORS, SHALL BE BORNE BY THE PARTIES AS THE ARBITRATORS DETERMINE. EACH PARTY FURTHER AGREES THAT, UNLESS APPLICABLE LAW PROHIBITS SUCH LIMITATION, NEITHER PARTY SHALL BE LIABLE FOR PUNITIVE OR EXEMPLARY
DAMAGES, AND THE ARBITRATORS SHALL HAVE NO AUTHORITY TO AWARD THE SAME. ANY AWARD OF PUNITIVE OR EXEMPLARY DAMAGES BY THE ARBITRATOR(S) IS OUTSIDE OF AND IN VIOLATION OF THIS AGREEMENT TO ARBITRATE DISPUTES. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(10) IF WE DESIRE TO SEEK SPECIFIC PERFORMANCE OR OTHER EXTRAORDINARY OR EQUITABLE RELIEF INCLUDING, BUT RESOURCES LIMITED TO, INJUNCTIVE RELIEF UNDER
THIS AGREEMENT AND ANY AMENDMENTS THERETO, THEN ANY SUCH ACTION SHALL RESOURCES BE SUBJECT TO MANDATORY ARBITRATION AND WE SHALL HAVE THE RIGHT TO BRING SUCH ACTION AS DESCRIBED IN SUBSECTION 17(d). IN ADDITION, ANY ARBITRATOR APPOINTED PURSUANT TO
THE TERMS OF THIS AGREEMENT, SHALL HAVE THE AUTHORITY TO ENTER AN AWARD FOR SPECIFIC PERFORMANCE OR OTHER EXTRAORDINARY OR EQUITABLE RELIEF IF SPECIFICALLY SOUGHT BY A PARTY. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(11) IN PROCEEDING WITH ARBITRATION AND IN MAKING DETERMINATIONS HEREUNDER, THE ARBITRATORS SHALL RESOURCES EXTEND, MODIFY OR SUSPEND ANY TERMS OF THIS
AGREEMENT OR THE REASONABLE STANDARDS OF BUSINESS PERFORMANCE AND </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<FONT FACE="Times New Roman" SIZE="2">OPERATION ESTABLISHED BY US IN GOOD FAITH. RESOURCESICE OF OR DEMAND FOR ARBITRATION SHALL RESOURCES STAY, POSTPONE OR RESCIND THE EFFECTIVENESS OF ANY
TERMINATION OF THIS AGREEMENT OR SUSPEND THE OPERATION OF OR EFFECT OF ANY TERM OF THE AGREEMENT. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">18(d) <U>VENUE:</U> </FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(1) EXCEPT AS STATED ABOVE, AND IN THIS SUBSECTION OR PRECLUDED BY STATE LAW IN THE STATE IN WHICH THE BUSINESS IS LOCATED, WITH RESPECT TO ALL CLAIMS SET
FORTH ABOVE IN SUBSECTION 18(c) (ARBITRATION), OR WHICH AS A MATTER OF LAW OR PUBLIC POLICY CAN RESOURCES BE SUBMITTED TO ARBITRATION, YOU AND YOUR PRINCIPAL OWNERS HEREBY IRREVOCABLY SUBMIT YOURSELVES TO THE EXCLUSIVE JURISDICTION OF THE STATE
COURTS AND THE FEDERAL DISTRICT COURT WHERE WE HAVE OUR PRINCIPAL CORPORATE HEADQUARTERS. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(2) YOU AND YOUR PRINCIPAL OWNERS HEREBY WAIVE
ALL QUESTIONS OF PERSONAL JURISDICTION FOR THE PURPOSE OF CARRYING OUT THIS PROVISION. YOU AND YOUR PRINCIPAL OWNERS HEREBY AGREE THAT SERVICE OF PROCESS MAY BE MADE UPON ANY OF YOU IN ANY PROCEEDING RELATING TO OR ARISING OUT OF THIS AGREEMENT OR
THE RELATIONSHIP CREATED BY THIS AGREEMENT BY ANY MEANS ALLOWED BY SUCH STATE OR FEDERAL LAW. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%;padding-bottom:3px;line-Height:95%; vertical-align:top"><FONT
FACE="Times New Roman" SIZE="2">(3) YOU AND YOUR PRINCIPAL OWNERS FURTHER AGREE, EXCEPT AS OTHERWISE<FONT FACE="Times New Roman" SIZE="1"><SUP>.</SUP></FONT><FONT FACE="Times New Roman" SIZE="2"> SET FORTH HEREIN THAT EXCLUSIVE VENUE FOR ANY
PROCEEDING RELATING TO OR ARISING OUT OF THIS AGREEMENT OR THE RELATIONSHIP CREATED THEREBY SHALL BE THE COUNTY WHERE WE HAVE OUR CORPORATE HEADQUARTERS; PROVIDED, HOWEVER, WITH RESPECT TO ANY ACTION (i)&nbsp;FOR MONIES OWED, (ii)&nbsp;FOR
INJUNCTIVE OR OTHER EXTRAORDINARY OR EQUITABLE RELIEF (INCLUDING SPECIFIC PERFORMANCE), OR (iii)&nbsp;INVOLVING POSSESSION OR DISPOSITION OF, OR OTHER RELIEF RELATING .TO REAL PROPERTY, WE MAY BRING SUCH ACTION IN ANY STATE OR FEDERAL DISTRICT COURT
WHICH HAS JURISDICTION. </FONT></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">18(e) <U>MUTUAL BENEFIT:</U> THE PARTIES ACKNOWLEDGE THAT (1)&nbsp;EACH PARTY&#146;S AGREEMENT REGARDING APPLICABLE STATE
LAW AND FORUM SET FORTH IN SUBSECTION 18(a) AND SUBSECTION 18(d) PROVIDE THE MUTUAL BENEFIT OF UNIFORM INTERPRETATION OF THIS AGREEMENT AND ANY DISPUTE ARISING OUT OF THIS AGREEMENT OR THE PARTIES&#146; RELATIONSHIP CREATED BY THIS AGREEMENT,
(ii)&nbsp;THE RECEIPT AND SUFFICIENCY OF MUTUAL CONSIDERATION FOR SUCH BENEFIT, AND (iii)&nbsp;THE PROVISIONS REGARDING APPLICABLE STATE LAW AND FORUM HAVE BEEN NEGOTIATED FOR IN GOOD FAITH AND ARE PART OF THE BENEFIT OF THE BARGAIN REFLECTED BY
THIS AGREEMENT. THE PARTIES ACKNOWLEDGE THAT THE EXECUTION OF THIS AGREEMENT AND ACCEPTANCE OF THE TERMS BY THE PARTIES OCCURRED AT OUR CORPORATE HEADQUARTERS. THE PARTIES FURTHER ACKNOWLEDGE THAT YOUR PERFORMANCE OF CERTAIN OBLIGATIONS ARISING
UNDER THIS AGREEMENT, INCLUDING, BUT RESOURCES LIMITED TO, THE PAYMENT OF MONIES DUE HEREUNDER, SHALL OCCUR WHERE OUR CORPORATE HEADQUARTERS IS LOCATED AT THE TIME SUCH OBLIGATION IS DUE. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">18(f) <U>AMENDMENTS TO FRANCHISE AGREEMENT:</U> EXCEPT FOR THOSE AMENDMENTS PERMITTED TO BE MADE UNILATERALLY BY US HEREUNDER, ANY CHANGES OR MODIFICATIONS TO THIS
AGREEMENT, OR SPECIFIC WAIVERS OF RIGHTS, SHALL BE MADE ONLY IN WRITING EXECUTED BY AUTHORIZED OFFICERS OR AGENTS OF EACH PARTY. YOU AND YOUR PRINCIPAL OWNERS ACKNOWLEDGE THAT NO OFFICER, AGENT OR FIELD EMPLOYEE OF OURS IS AUTHORIZED TO CHANGE OR
MODIFY THIS AGREEMENT VERBALLY AND THAT YOU WILL RESOURCES RELY ON CONVERSATIONS OR OTHER COMMUNICATIONS WITH OFFICERS, AGENTS OR FIELD EMPLOYEES OF OURS RELATED TO </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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 <P STYLE="margin-top:0px;margin-bottom:0px">
<FONT FACE="Times New Roman" SIZE="2">ANY CHANGE OR MODIFICATION OF THIS AGREEMENT. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">18(g)
<U>Waivers: Attorney&#146;s Fees:</U> All waivers relating to this Agreement shall be strictly construed. In any litigation related to this Agreement or the operation of the Business, all costs and all reasonable attorney&#146;s fees (including
those for appeal) incurred as a result of the legal action shall be paid to the prevailing party by the other party. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">18(h) <U>Notices:</U> Any notices
required or permitted by this Agreement shall be in writing and shall be directed to either party at the respective last known business address, delivered prepaid in one of the following ways: (i)&nbsp;personally or by expedited delivery service,
(ii)&nbsp;U.S. first-class postage prepaid mail, or (iii)&nbsp;facsimile or electronic mail (provided that the sender confirms the facsimile or electronic mail by sending an original confirmation copy by certified or registered mail or expedited
delivery service within 3 Business Days after transmission). Any notice shall be deemed to have been given (i)&nbsp;in the case of personal delivery, at the time of personal delivery, (ii)&nbsp;in the case of facsimile or electronic mail, upon
transmission (provided confirmation is sent as described above) or (iii)&nbsp;in the case of U.S. mail, 3 Business Days after the date of mailing. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">18(i)
<U>Parties Bound: Assignment:</U> This Agreement binds Franchisee, Franchisee Principal Owners, and their heirs, executors, administrators, successors, and assigns. Franchisor may assign this Agreement in whole or in part to any person or entity on
written notice to Franchisee. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">18(j) <U>Severability:</U> The provisions of this Agreement are severable, it being the intention of the parties that should
any provision be found invalid, such invalidity shall not affect the remaining provisions, which shall remain in full force and effect as though such invalid provisions had not been contained in this Agreement. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">18(k) <U>Entire Agreement:</U> This Agreement, any Rider, Attachment or Amendment hereto, shall be construed together and constitute the entire, full and complete
agreement between the parties concerning the subject matter hereof, and shall supersede all prior agreements, if any. Franchisee hereby warrant and represent that no other representation has induced Franchisee or Franchisee Principal Owners to
execute this Agreement, and there are no representations, inducements, promises or agreements, oral or otherwise, between the Franchisee and Franchisor not embodied herein, which are of any force or effect with reference to this Agreement. No
amendment, change or variance from this Agreement shall be binding on either party unless executed in writing by all parties. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">18(l) <U>Force Majeure:</U>
Except for monies owed, if circumstances such as acts of nature, strikes, lockouts or other industrial disturbances, war, terrorist attacks, riot, epidemic, fire or other catastrophes or other forces beyond the control of the parties make it
impossible for either or both of them to perform their obligations under this Agreement, the obligations will be suspended during the pendency of the circumstances. If through no fault of Yours the Business is damaged or destroyed by an event as
described above<B>, </B>failure to operate the Business will not result in a breach of this Agreement, provided that Franchisee apply within 30 days after such event for Franchisors approval to relocate or reconstruct the premises and Franchisee
diligently pursue such reconstruction or relocation. Such approval may be conditioned upon the payment of an agreed minimum fee to Franchisor during the period in which the Business is not In operation. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px;padding-bottom:3px;line-Height:95%; vertical-align:top"><FONT FACE="Times New Roman" SIZE="2">18(m) <U>Rules of Construction:</U> This Agreement shall be interpreted as follows: (i)&nbsp;nouns, pronouns, and
variations of them refer to the masculine, feminine, neuter, singular, or plural as the context may require, (ii)&nbsp;headings and their numbers are solely for convenience and ease of reference, (iii)&nbsp;the words <U>include, includes, </U>or
<U>including</U> mean including without limitation, and (iv)&nbsp;unless otherwise<FONT FACE="Times New Roman" SIZE="1"><SUB>.</SUB></FONT><FONT FACE="Times New Roman" SIZE="2"> noted, when the words of a term defined in this Agreement appear
without initial capital letters, they shall be given a generic, rather than the defined interpretation. </FONT></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">18(n) <U>Mutual Release:</U> Franchisee and
Franchisee Principal Owners expressly acknowledge that as a condition of obtaining Franchisors consent to take any action not allowed or provided for in this Agreement, to participate in any special programs not provided for in this Agreement or to
take any </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">33 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px">
<FONT FACE="Times New Roman" SIZE="2">action for which consent is required under this Agreement, including changing Franchisee business entity structure or the status of Franchisee Principal
Owners or their Ownership Interest in Franchisee, Franchisor will require Franchisee and Franchisee Principal Owners to execute a mutual release In a form satisfactory to Franchisor of any and all existing claims against Franchisor, Franchisors
affiliates, successors, assigns and designees and their respective managers, officers, agents, members, designees, and representatives, including claims arising under this Agreement and under any law. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">18(o) <U>Authorship:</U> This Agreement will not be construed against either party due to authorship. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2">18(p) <U>Multiple Counterparts:</U> This Agreement may be executed in any number of counterparts, and each such counterpart shall be deemed to be an original instrument, but all such counterparts together shall
constitute but one agreement. Further, facsimile signatures on counterparts of this Agreement are hereby accepted and acknowledged as though they were originals. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="2">18(q) <U>Further Execution:</U> The parties shall, from time to time, on or after the Effective Date of this Agreement take such additional actions and execute such additional documents as may be necessary or appropriate, in Franchisors
sole opinion, to give effect to the provisions of this Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">18(r) <U>Acceptance of Agreement:</U> This offer is made upon Franchisee receipt and is
extended for a period of time not to exceed 30 days following such receipt. The parties acknowledge and agree that this Agreement shall not be effective and binding until executed by Franchisor. </FONT></P> <P
STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>19. ACKNOWLEDGEMENTS </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">19(a) Franchisee and Franchisee Principal
Owners each acknowledge and agree that: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(1) Prior to execution of this Agreement, Franchisee investigated the Program to Franchisee
satisfaction and Franchisee had the opportunity to consult with appropriate legal and business advisors with respect to this Agreement and the potential benefits and risks of entering into this Agreement. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(2) Franchisee have not received and are not relying on any representations of any kind from Franchisor that are not contained in this Agreement or any
other currently effective written agreement executed by Franchisee and Franchisor. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(3) Franchisor have not made any representations of any
kind concerning Franchisee potential success, earnings, potential sales, gross revenues, distributions, income or operating costs relating to the Business. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT
FACE="Times New Roman" SIZE="2">(4) Franchisee received a complete copy of this Agreement and all related Riders, Attachments, Exhibits, and ancillary agreements at least 5 Business Days prior to the date on which Franchisee executed this Agreement.
</FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>20. GRANTED TERRITORY </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B><U>GRANTED</U>
<U>TERRITORY</U> </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Fairfield </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">1500 Oliver Road
</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Suite H </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Fairfield, CA 94533 </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Hayward </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">24303
Southland </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Hayward, CA 94545 </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Roseville </B></FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">3300 Douglas Blvd </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Suite 160 </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Roseville, CA 95661 </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Santa Rosa </B></FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">520 Mendocino Ave </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Suite 210 </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Santa Rosa, CA 95404 </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Stockton </B></FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Central Ave </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Suite 225 </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Stockton, CA 95207 </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Napa </B></FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">1443 Main Street </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Suite B-130 </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Napa, CA 94558 </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Sacramento </B></FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">2277 Fair Oaks Blvd </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Suite 402 </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Sacramento, CA 95825 </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Miami </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px;padding-bottom:3px;line-Height:95%; vertical-align:top"><FONT FACE="Times New Roman" SIZE="2">3785 NW 82<FONT FACE="Times New Roman" SIZE="1"><SUP>nd</SUP></FONT><FONT FACE="Times New Roman" SIZE="2"> Ave
</FONT></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Suite 117 </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Miami, FL 95825 </FONT></P> <P
STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Plantation </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">8430 W. Broward Blvd </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Suite 250 </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Plantation, FL 33324 </FONT></P> <P
STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Ocala </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px;padding-bottom:3px;line-Height:95%; vertical-align:top"><FONT FACE="Times New Roman" SIZE="2">2703 NE
14<FONT FACE="Times New Roman" SIZE="1"><SUP>th</SUP></FONT><FONT FACE="Times New Roman" SIZE="2"> Street </FONT></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Suite 123 </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Ocala, FL 34470 </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">35 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">South Orlando </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">6220 S.
Orange Blossom Trail </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Suite 140 </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Orlando, FL 32809 </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Largo (Tampa) </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">3690 east bay Drive </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Suite V </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Largo, FL 33771 </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">IN WITNESS WHEREOF the parties have executed this Franchise-Management Agreement as of the Effective Date. </FONT></P> <P
STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0">

<TR>
<TD WIDTH="4%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="2%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="2%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="39%"></TD>
<TD VALIGN="bottom" WIDTH="6%"></TD>
<TD WIDTH="4%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="2%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="2%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="38%"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="7"><FONT FACE="Times New Roman" SIZE="2">Franchisor:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="7"><FONT FACE="Times New Roman" SIZE="2">Franchisee</FONT></TD></TR>
<TR>
<TD HEIGHT="8" COLSPAN="7"></TD>
<TD HEIGHT="8" COLSPAN="8"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="7"><FONT FACE="Times New Roman" SIZE="2">ClearPoint Business Resources, Inc.</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="7"><FONT FACE="Times New Roman" SIZE="2">KOR Capital, LLC</FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="6"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD>
<TD HEIGHT="16" COLSPAN="6"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" COLSPAN="5"> <P STYLE="margin-bottom:1px;border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="2">/s/ Chris Ferguson</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="5"> <P STYLE="margin-bottom:1px;border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="2">/s/ Kevin O&#146;Donnell</FONT></P></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="7"><FONT FACE="Times New Roman" SIZE="2">Chris Ferguson, President</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="7"><FONT FACE="Times New Roman" SIZE="2">Kevin O&#146;Donnell, Manager</FONT></TD></TR>
<TR>
<TD HEIGHT="16" COLSPAN="5"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD>
<TD HEIGHT="16" COLSPAN="6"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="5"><FONT FACE="Times New Roman" SIZE="2"><B>WITNESS:</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-bottom:1px;border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="5"><FONT FACE="Times New Roman" SIZE="2"><B>WITNESS:</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-bottom:1px;border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></P></TD></TR>
</TABLE> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Principal Owners of Franchisees: (Owners of more than 5%) </B></FONT></P> <P
STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="40%" BORDER="0">

<TR>
<TD WIDTH="50%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="49%"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-bottom:1px;border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-bottom:1px;border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-bottom:1px;border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
</TABLE> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">36 </FONT></P>

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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.3
<SEQUENCE>5
<FILENAME>dex103.htm
<DESCRIPTION>FIRST AMENDMENT TO CREDIT AGREEMENT
<TEXT>
<HTML><HEAD>
<TITLE>First Amendment to Credit Agreement</TITLE>
</HEAD>
 <BODY BGCOLOR="WHITE">

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2"><B>Exhibit 10.3 </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="2"><B>FIRST AMENDMENT TO CREDIT AGREEMENT </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B>FIRST AMENDMENT TO CREDIT AGREEMENT </B>(this
&#147;<U>Amendment</U>&#148;), dated as of July&nbsp;13, 2007, among <B>CLEARPOINT BUSINESS RESOURCES, INC.</B>, a Delaware corporation (the &#147;<U>Borrower</U>&#148;), the several banks and other financial institutions parties to the Credit
Agreement (as hereinafter defined) (collectively, the &#147;<U>Lenders</U>&#148;), and <B>MANUFACTURERS AND TRADERS TRUST COMPANY</B>, as Administrative Agent for the Lenders (in such capacity, the &#147;<U>Administrative Agent</U>&#148;).
</FONT></P> <P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><U>WITNESSETH</U>: </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman"
SIZE="2"><B>WHEREAS</B>, the Borrower, the Lenders and the Administrative Agent are parties to a Credit Agreement, dated as of February&nbsp;23, 2007 (as heretofore amended, supplemented or otherwise modified, the &#147;<U>Credit
Agreement</U>&#148;); and </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B>WHEREAS</B>, the parties hereto have agreed to amend the Credit Agreement to (i)&nbsp;increase the aggregate
Term Loan Commitments of the Lenders by $2,000,000, (ii)&nbsp;modify the repayment schedule for the Term Loans and (iii)&nbsp;modify the pricing grid, all on the terms and subject to the terms and conditions herein set forth. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B>NOW, THEREFORE</B>, in consideration of the foregoing and for other consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto, intending to be legally bound, hereby agree as follows: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">1. <B><U>Defined Terms</U>.</B> Unless otherwise defined herein,
terms defined in the Credit Agreement are used herein as therein defined. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">2. <B><U>Increase in the Term Loan Commitments</U></B>.
(a)&nbsp;The aggregate amount of the Term Loan Commitments is hereby increased from $3,000,000 to $5,000,000. In furtherance thereof, Schedule I to the Credit Agreement is hereby amended to read as set forth on the new Schedule I to Credit Agreement
attached hereto as Exhibit&nbsp;A. On the Effective Date (as defined in Paragraph 8 hereof), the Term Loan Lender shall extend an additional Term Loan to the Borrower in the amount of $2,000,000. The proceeds of the new Term Loan shall be applied to
the Revolving Credit Loans outstanding, with such payments being first applied to Base Rate Loans and then to Eurodollar Loans, with payment to Eurodollar Loans being applied in direct order of maturity. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(b) On and after the Effective Date, principal on the Term Loans shall be repaid in equal monthly installments of $83,333.33 on the first Business Day of
each month, with the first such payment being due on the first Business Day in August 2007. In furtherance thereof, the fourth sentence of Section&nbsp;2.1(b) of the Credit Agreement is hereby deleted and the following two sentences are inserted in
lieu thereof: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%"><FONT FACE="Times New Roman" SIZE="2">Subject to any prepayment obligation provided in this Agreement, on and after the effective date of the First Amendment to
Credit Agreement, dated as of July&nbsp;13, 2007, the outstanding principal amount of the Term Loans shall be due and payable in monthly </FONT>
</P>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4%">
<FONT FACE="Times New Roman" SIZE="2">installments of $83,333.33 payable on the first Business Day of each month commencing on the first Business Day in August 2007, with a final balloon payment
of all outstanding principal of the Term Loans due on the Term Loan Maturity Date. The Borrower shall also pay on the Term Loan Maturity Date all accrued and unpaid interest under the Term Loan Facility. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(c) On the Effective Date, the Borrower shall deliver to the Term Loan Lender a new Term Note in favor of such Lender in a principal amount equal to such
Lender&#146;s new Term Loan Commitment (the &#147;New Note&#148;). The New Note shall be in substitution for such Lender&#146;s existing Term Note. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman"
SIZE="2">3. <B><U>Applicable Margin</U>. </B>The definition of the term &#147;Applicable Margin&#148; contained in Section&nbsp;1.1 of the Credit Agreement is hereby amended and restated to read as follows: </FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<U>Applicable Margin</U>&#148;: (a)&nbsp;on any date, for any Revolving Credit Loan, the percentage per annum set forth below in the column entitled
&#147;Applicable Margin&#151;Base Rate Loans&#148; or &#147;Applicable Margin&#151;Eurodollar Loans,&#148; as appropriate, opposite the Total Leverage Ratio set forth below as shown on the last Compliance Certificate delivered by the Borrower to the
Administrative Agent pursuant to subsection 5.1(c) prior to such date: </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="92%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="3%"></TD>
<TD VALIGN="bottom" WIDTH="10%"></TD>
<TD WIDTH="63%"></TD>
<TD VALIGN="bottom" WIDTH="10%"></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="10%"></TD>
<TD></TD></TR>
<TR>
<TD VALIGN="bottom"> <P STYLE="margin-right:0px;margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>Level</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>Total Leverage Ratio</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" NOWRAP ALIGN="center" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>Applicable<BR>Margin&nbsp;-&nbsp;Base&nbsp;Rate</B></FONT></P> <P
STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>Loans</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" NOWRAP ALIGN="center" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>Applicable<BR>Margin&nbsp;-&nbsp;Eurodollar</B></FONT></P> <P
STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>Loans</B></FONT></P></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">I</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Less than or equal to 1.50 to 1.0</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">0%</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">1.50%</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">II</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Greater than 1.50 to 1.0, but less than or equal to 2.50 to 1.0</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">0%</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">1.875%</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">III</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Greater than 2.50 to 1.0</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">0%</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">2.25%</FONT></TD></TR>
</TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%"><FONT FACE="Times New Roman" SIZE="2">; provided, however, that (a)&nbsp;adjustments, if any, to the Applicable Margin for Revolving
Credit Loans resulting from a change in the Total Leverage Ratio shall be effective five (5)&nbsp;Business Days after the Administrative Agent has received a Compliance Certificate, (b)&nbsp;in the event that no Compliance Certificate has been
delivered for a fiscal quarter on or prior to the last date on which it can be delivered without violation of subsection 5.1(c), the Applicable Margin for Revolving Credit Loans from such date until such Compliance Certificate is actually delivered
shall be that applicable under Level&nbsp;III and (c)&nbsp;in the event that the actual Total Leverage Ratio for any fiscal quarter is subsequently determined to </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">2 </FONT></P>


<p Style='page-break-before:always'>
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 <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4%">
<FONT FACE="Times New Roman" SIZE="2">be greater than that set forth in the Compliance Certificate for such fiscal quarter, the Applicable Margin for Revolving Credit Loans shall be recalculated
for the actual period based upon such actual Total Leverage Ratio.<B> </B>Any additional interest on the Revolving Credit Loans resulting from the operation of clause (c)&nbsp;above shall be payable by the Borrower to the Administrative Agent, for
the benefit of the Revolving Credit Lenders, within five (5)&nbsp;days after receipt of a written demand therefor from the Administrative Agent. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%"><FONT FACE="Times New Roman"
SIZE="2">(b) on any date, for any Term Loan, the percentage per annum set forth below in the column entitled &#147;Applicable Margin&#151;Base Rate Loans&#148; or &#147;Applicable Margin&#151;Eurodollar Loans&#148;, as appropriate, opposite the
Total Leverage Ratio set forth below as shown on the last Compliance Certificate delivered by the Borrower to the Administrative Agent pursuant to subsection 5.1(c) prior to such date: </FONT></P> <P
STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="92%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="3%"></TD>
<TD VALIGN="bottom" WIDTH="10%"></TD>
<TD WIDTH="63%"></TD>
<TD VALIGN="bottom" WIDTH="10%"></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="10%"></TD>
<TD></TD></TR>
<TR>
<TD VALIGN="bottom"> <P STYLE="margin-right:0px;margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>Level</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>Total Leverage Ratio</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" NOWRAP ALIGN="center" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>Applicable<BR>Margin&nbsp;-&nbsp;Base&nbsp;Rate</B></FONT></P> <P
STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>Loans</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" NOWRAP ALIGN="center" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>Applicable<BR>Margin&nbsp;-&nbsp;Eurodollar</B></FONT></P> <P
STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>Loans</B></FONT></P></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">I</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Less than or equal to 1.50 to 1.0</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">0%</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">1.875%</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">II</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Greater than 1.50 to 1.0, but less than or equal to 2.50 to 1.0</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">0%</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">2.25%</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">III</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Greater than 2.50 to 1.0</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">0%</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">2.625%</FONT></TD></TR>
</TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%"><FONT FACE="Times New Roman" SIZE="2">; provided, however, that (a)&nbsp;adjustments, if any, to the Applicable Margin for Term Loans
resulting from a change in the Total Leverage Ratio shall be effective five (5)&nbsp;Business Days after the Administrative Agent has received a Compliance Certificate, (b)&nbsp;in the event that no Compliance Certificate has been delivered for a
fiscal quarter on or prior to the last date on which it can be delivered without violation of subsection 5.1(c), the Applicable Margin for Term Loans from such date until such Compliance Certificate is actually delivered shall be that applicable
under Level&nbsp;III and (c)&nbsp;in the event that the actual Total Leverage Ratio for any fiscal quarter is subsequently determined to be greater than that set forth in the Compliance Certificate for such fiscal quarter, the Applicable Margin for
Term Loans shall be recalculated for the actual period based upon such actual Total Leverage Ratio. Any additional interest on the Term Loans resulting from the operation </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">3 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4%">
<FONT FACE="Times New Roman" SIZE="2">of clause (c)&nbsp;above shall be payable by the Borrower to the Administrative Agent, for the benefit of the Term Loan Lenders, within five (5)&nbsp;days
after receipt of a written demand therefor from the Administrative Agent. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">4. <B><U>Commitment Fees</U>.</B> The definition of the term
&#147;Applicable Commitment Fee Percentage&#148; contained in Section&nbsp;1.1 of the Credit Agreement is hereby amended and restated to read as follows: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%"><FONT
FACE="Times New Roman" SIZE="2">&#147;<U>Applicable Commitment Fee Percentage</U>&#148;: on any date, the percentage per annum set forth below opposite the Total Leverage Ratio set forth below as shown on the last Compliance Certificate delivered by
the Borrower to the Administrative Agent pursuant to subsection 5.1(c) prior to such date: </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="92%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="3%"></TD>
<TD VALIGN="bottom" WIDTH="10%"></TD>
<TD WIDTH="75%"></TD>
<TD VALIGN="bottom" WIDTH="10%"></TD>
<TD></TD></TR>
<TR>
<TD VALIGN="bottom"> <P STYLE="margin-right:0px;margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>Level</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>Total Leverage Ratio</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>Applicable&nbsp;Commitment<BR>Fee Percentage</B></FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">I</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Less than or equal to 1.50 to 1.0</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">0.15%</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">II</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Greater than 1.5 to 1.0, but less than or equal to 2.50 to 1.0</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">0.20%</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">III</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Greater than 2.50 to 1.0</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">0.25%</FONT></TD></TR>
</TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%"><FONT FACE="Times New Roman" SIZE="2"><U>provided</U>, <U>however</U>, that (a)&nbsp;adjustments, if any, to the Applicable Commitment
Fee Percentage resulting from a change in the Total Leverage Ratio shall be effective five (5)&nbsp;Business Days after the Administrative Agent has received a Compliance Certificate, (b)&nbsp;in the event that no Compliance Certificate has been
delivered for a fiscal quarter on or prior to the last date on which it can be delivered without violation of subsection 5.1(c), the Applicable Commitment Fee Percentage from such date until such Compliance Certificate is actually delivered shall be
that applicable under Level&nbsp;III and (c)&nbsp;in the event that the actual Total Leverage Ratio for any fiscal quarter is subsequently determined to be greater than that set forth in the Compliance Certificate for such fiscal quarter, the
Applicable Commitment Fee Percentage shall be recalculated for the applicable period based upon such actual Total Leverage Ratio. Any additional Commitment Fees resulting from the operation of clause (c)&nbsp;above shall be payable by the Borrower
to the Administrative Agent, for benefit of the Revolving Credit Lenders, within five (5)&nbsp;days after receipt of a written demand therefor from the Administrative Agent. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">4 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">5. <B><U>Interest Payments</U>.</B> </FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(a) The definition of the term &#147;Interest Payment Date&#148; contained in Section&nbsp;1.1 of the Credit Agreement is hereby amended and restated to
read as follows: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<U>Interest Payment Date</U>&#148;: (a)&nbsp;as to any Revolving Credit Loan that bears interest at the Base Rate,
each January&nbsp;1, April&nbsp;1, July&nbsp;1 and October&nbsp;1, (b)&nbsp;as to any Term Loan that bears interest at the Base Rate, the first Business Day of each calendar month, (c)&nbsp;as to any Eurodollar Loan, the last day of such Interest
Period, (d)&nbsp;as to any Revolving Credit Loan, in addition to the foregoing, the Revolving Credit Termination Date and (e)&nbsp;as to any Term Loan, in addition to the foregoing, the Term Loan Maturity Date. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(b) Notwithstanding anything to the contrary, the Borrower may only select an Interest Period of one month for all or any portion of the Term Loans and
therefore the Borrower shall not have the option of an Interest Period of two or three months on any Term Loan bearing interest at the Eurodollar Rate. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">6. <B><U>Existing Notes</U></B>. The Lenders hereby agree to waive the requirement that the Borrower obtain a Subordination Agreement for each Existing Note and waive any Default or Event of Default caused by the
Borrower&#146;s failure to do so within sixty days of the Closing Date. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">7. <B><U>Representations and Warranties</U>.</B> The Borrower
hereby represents and warrants to the Lenders and the Administrative Agent that: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(a) After giving effect to this Amendment, there exists no
Default or Event of Default under the Credit Agreement; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(b) No Material Adverse Change has occurred since March&nbsp;31, 2007; </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(c) The representations and warranties made in the Loan Documents are true and correct in all material respects on and as of the date hereof as if
made on and as of the date hereof, except that any such representation and warranty that is given as of a particular date or period and relates solely to such date or period is true and correct in all material respects as of such date or period;
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(d) Each of the Borrower and the other Loan Parties has all requisite power and authority, corporate or otherwise, to enter into and
perform its obligations under this Amendment, the New Note, the Consent and Agreement of Guarantors attached hereto (the &#147;<U>Consent and Agreement of Guarantors</U>&#148;) and any other Loan Documents to which it is a party and to fulfill its
obligations set forth herein and therein. The execution, delivery and performance of this Amendment, the borrowings under the Credit Agreement as amended hereby and the execution and delivery of the New Note and the other Loan Documents to which the
Borrower or any other Loan Party is a party have been duly authorized by all requisite corporate or other action and will not violate or constitute a default under any Requirement of Law, or of any indenture, note, loan or credit agreement, license
or any other agreement, lease or instrument to which the Borrower or any of its Subsidiaries is a party or by which the Borrower or any of its </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">5 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px">
<FONT FACE="Times New Roman" SIZE="2">Subsidiaries or any of its or their Properties are bound. This Amendment, the New Note, the Consent and Agreement of Guarantors and the other Loan Documents
have each been duly executed and delivered by each Loan Party thereto. This Amendment, the New Note, the Consent and Agreement of Guarantors and the other Loan Documents issued or to be issued hereunder constitute, the authorized, valid and legally
binding obligations of the Borrower or other Loan Party(ies) party thereto enforceable in accordance with their respective terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws or equitable
principles from time to time in effect relating to or affecting the rights of creditors generally. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(e) The making and performance of this
Amendment, the New Note, the Consent and Agreement of Guarantors and the other documents or instruments executed in connection herewith will not (i)&nbsp;violate any provision of any law or regulation, federal, state or local, or the certificate or
articles of incorporation, bylaws, certificate or articles of organization or operating agreement (as applicable) of the Borrower or any Guarantor, (ii)&nbsp;result in any breach or violation of, or constitute a default or require the obtaining of
any consent under, any agreement or instrument by which the Borrower or any Guarantor or its or their property may be bound, or (iii)&nbsp;affect the validity, perfection or priority of the interests of the Administrative Agent, for the benefit of
the Lenders, in any collateral securing the Obligations. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">8. <B><U>Conditions Precedent</U>.</B> This Amendment shall become effective on
the date that the Administrative Agent shall have received the following, all of which shall be in form and substance satisfactory to the Administrative Agent and its counsel (such date, the &#147;<U>Effective Date</U>&#148;): </FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(a) This Amendment duly executed and delivered by the Borrower, the Administrative Agent and the Lenders; </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(b) The New Note duly executed and delivered by the Borrower; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT
FACE="Times New Roman" SIZE="2">(c) The Consent and Agreement of Guarantors, a form of which is attached as Exhibit B hereto, duly executed and delivered by the Guarantors; </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(d) A certificate of the Secretary of the Borrower and each Guarantor certifying as to (i)&nbsp;the resolutions of the Boards of Directors of the
Borrower and each Guarantor approving and adopting this Amendment, the New Note, the Consent and Agreement of Guarantors, the other documents and instruments executed in connection herewith, the transactions contemplated herein and authorizing
execution and delivery hereof and thereof, certified by a secretary or assistant secretary of the Borrower or such Guarantor to be true and correct and in full force and effect as of the Effective Date and (ii)&nbsp;that there has been no changes to
the organizational documents of such Person since the copies delivered on the Closing Date. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(e) A fee equal to $10,000 (50 basis points on
the $2,000,000 increase in the Term Loans). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">9. <B><U>Affirmations</U>.</B> The Borrower hereby: (a)&nbsp;affirms all the provisions of the
Credit Agreement and the other Loan Documents, as supplemented and amended hereby, (b)&nbsp;agrees that the terms and conditions of the Credit Agreement and the other Loan Documents </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">6 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px">
<FONT FACE="Times New Roman" SIZE="2">shall continue in full force and effect as supplemented and amended hereby, (c)&nbsp;acknowledges, confirms and reaffirms that the collateral pledged under
the Loan Document continues to secure the Obligations, including those arising under the Credit Agreement, as amended hereby, and (d)&nbsp;acknowledges and agrees that it has no defense, set-off, counterclaim or challenge against the payment of any
sums currently owing under the Loan Documents or the enforcement of any of the terms or conditions thereof. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">10. <B><U>Limited Effect; No
Waiver</U>.</B> Except as expressly modified hereby, the Credit Agreement and the other Loan Documents shall continue to be, and shall remain, unaltered and in full force and effect in accordance with their terms. Except as provided in Paragraph 6
above, the execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any existing or future Default or Event of Default, whether known or unknown or any right, power or remedy of the Administrative Agent or the Lenders
under the Credit Agreement, nor constitute a waiver of any provision of the Credit Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">11. <B><U>Release and Indemnity</U>.</B>
(a)&nbsp;Recognizing and in consideration of the Lenders&#146; agreements set forth herein, the Borrower and each Guarantor hereby waives and releases the Administrative Agent, the Lenders and their respective officers, attorneys, agents, and
employees from any liability, suit, damage, claim, loss or expense of any kind or nature whatsoever and howsoever arising that the Borrower or such Guarantor ever had or now has against any of them through and including the date hereof arising out
of or relating to any acts or omissions with respect to this Amendment, the Credit Agreement, the other Loan Documents or any other matters described or referred to herein or therein or related hereto or thereto. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(b) The Borrower and each Guarantor further hereby agrees to indemnify and hold the Administrative Agent, the Lenders and their respective officers,
attorneys, agents and employees (collectively, the &#147;<U>Indemnified Parties</U>&#148;) harmless from any loss, damage, judgment, liability or expense (including counsel fees) suffered by or rendered against the Lenders or the Administrative
Agent or any of them on account of anything arising out of this Amendment, the Credit Agreement, the other Loan Documents or any other document delivered pursuant hereto or thereto up to and including the date hereof; provided that, neither the
Borrower nor any Guarantor shall have any obligation hereunder to any Indemnified Party with respect to indemnified liabilities arising from the gross negligence or willful misconduct of such Indemnified Person as finally determined by a court of
competent jurisdiction. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">12. <B><U>Integration</U>.</B> This Amendment constitutes the sole agreement of the parties with respect to the
terms hereof and shall supersede all oral negotiations and the terms of prior writings with respect thereto. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">13.
<B><U>Severability</U>.</B> Any provision of this Amendment which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">7 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">14. <B><U>Miscellaneous</U>.</B> </FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(a) <U>Expenses</U>. The Borrower agrees to pay all of the Administrative Agent&#146;s reasonable out-of-pocket fees and expenses incurred in connection
with the preparation, negotiation and execution of this Amendment and the other documents executed in connection herewith, including without limitation, the reasonable fees and expenses of counsel to the Administrative Agent. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(b) <U>Governing Law</U>. This Amendment shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(c) <U>Successor and Assigns</U>. This Amendment shall inure to the benefit of, and be binding upon, the parties hereto and their respective
successors and assigns. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(d) <U>Counterparts</U>. This Amendment may be executed in one or more counterparts, each of which shall be deemed
to be an original, and all of which shall constitute one and the same instrument. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(e) <U>Headings</U>. The headings of any paragraph of
this Amendment are for convenience only and shall not be used to interpret any provision hereof. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(f) <U>Modifications</U>. No modification
hereof or any agreement referred to herein shall be binding or enforceable unless in writing and signed on behalf of the party against whom enforcement is sought. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="2">[SIGNATURES TO FOLLOW] </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">8 </FONT></P>


<p Style='page-break-before:always'>
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B>IN WITNESS WHEREOF</B>, the parties hereto have caused this Amendment to be duly executed and
delivered by their proper and duly authorized officers as of the day and year first above written. </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><DIV ALIGN="right">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="40%" BORDER="0">

<TR>
<TD WIDTH="7%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="92%"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"><FONT FACE="Times New Roman" SIZE="2"><B>CLEARPOINT BUSINESS RESOURCES, INC.</B></FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-bottom:1px;border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="2">/s/ Chris Ferguson</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Name:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-bottom:1px;border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="2">Chris Ferguson</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Title:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-bottom:1px;border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="2">President</FONT></P></TD></TR>
<TR>
<TD HEIGHT="16" COLSPAN="3"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>MANUFACTURERS&nbsp;AND&nbsp;TRADERS&nbsp;TRUST&nbsp;COMPANY</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT
FACE="Times New Roman" SIZE="2">as a Lender and as Administrative Agent</FONT></P></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-bottom:1px;border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="2">/s/ David Mills</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Name:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-bottom:1px;border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="2">David Mills</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Title:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-bottom:1px;border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="2">Vice President</FONT></P></TD></TR>
</TABLE></DIV>

<p Style='page-break-before:always'>
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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>EXHIBIT A </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="2"><B><U>Schedule I to Credit Agreement </U></B></FONT></P>

<p Style='page-break-before:always'>
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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B><U>SCHEDULE I </U></B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="2">Lenders and Commitments </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="65%"></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD>
<TD></TD></TR>
<TR>
<TD VALIGN="bottom"> <P STYLE="margin-right:0px;margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>Lenders and Notice Information</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>Revolving Credit<BR>Commitment</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>Term Loan<BR>Commitment</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>Total<BR>Commitment</B></FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Manufacturers and Traders Trust Company</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px; margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">601 Dresher Road</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:1.00em; text-indent:-1.00em"><FONT
FACE="Times New Roman" SIZE="2">Horsham, PA 19044</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Attention: David W. Mills</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:1px; margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Telecopy: (215)&nbsp;956-7074</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="top" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">20,000,000.00</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="top" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">5,000,000.00</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="top" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">25,000,000.00</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="3"></TD>
<TD HEIGHT="8" COLSPAN="3"></TD>
<TD HEIGHT="8" COLSPAN="3"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Total</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">20,000,000.00</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">5,000,000.00</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">25,000,000.00</FONT></TD></TR>
</TABLE> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">2 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>EXHIBIT B </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="2"><B>CONFIRMATION AND ACKNOWLEDGMENT OF GUARANTORS </B></FONT></P>

<p Style='page-break-before:always'>
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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>CONSENT OF GUARANTORS </B></FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Each of the undersigned guarantors (each a &#147;Guarantor&#148;) consents to the provisions of the foregoing First Amendment to Credit Agreement (the
&#147;Amendment&#148;) and confirms and agrees that: (a)&nbsp;such Guarantor&#146;s obligations under its Guaranty dated as of February&nbsp;23, 2007 (as amended, the &#147;Guaranty&#148;), relating to the Obligations (as defined in the Credit
Agreement referred to in the Amendment) shall be unimpaired by the Amendment; (b)&nbsp;such Guarantor has no defenses, setoffs, counterclaims, discounts or charges of any kind against the Administrative Agent or any Lender, its officers, directors,
employees, agents or attorneys with respect to the Guaranty and the other Loan Documents to which it is a party; (c)&nbsp;the provisions of Paragraph 11(a) and (b)&nbsp;of the Amendment are binding on such Guarantor as if such Guarantor signed the
Amendment; (d)&nbsp;the collateral pledged under the Loan Documents continues to secure the Obligations, including those arising under the Credit Agreement, as amended by the Amendment; and (e)&nbsp;all of the terms, conditions and covenants in the
Guaranty and the other Loan Documents to which it is a party remain unaltered and in full force and effect and are hereby ratified and confirmed and apply to the Obligations, as modified by the Amendment, including the increase in the Term Loans to
$5,000,000. Each of the undersigned Guarantors certifies that all representations and warranties made in the Guaranty are true and correct in all material respects as of the date of the amendment. Unless otherwise defined herein, terms defined in
the Credit Agreement referred to in the Amendment are used herein as therein defined. </FONT></P>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">WITNESS the due execution of this Consent as of the date of the Amendment, intending to be legally bound
hereby. </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><DIV ALIGN="right">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="40%" BORDER="0">

<TR>
<TD WIDTH="7%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="92%"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"><FONT FACE="Times New Roman" SIZE="2">ALLIED CONTRACT SERVICES, LLC</FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-bottom:1px;border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="2">/s/ Chris Ferguson</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Name:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Chris Ferguson</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Title:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">President</FONT></TD></TR>
<TR>
<TD HEIGHT="16" COLSPAN="3"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"><FONT FACE="Times New Roman" SIZE="2">CLEARPOINT RESOURCES, INC.</FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-bottom:1px;border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="2">/s/ Chris Ferguson</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Name:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Chris Ferguson</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Title:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">President</FONT></TD></TR>
<TR>
<TD HEIGHT="16" COLSPAN="3"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"><FONT FACE="Times New Roman" SIZE="2">MERCER VENTURES, INC.</FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-bottom:1px;border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="2">/s/ Chris Ferguson</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Name:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Chris Ferguson</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Title:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">President</FONT></TD></TR>
<TR>
<TD HEIGHT="16" COLSPAN="3"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"><FONT FACE="Times New Roman" SIZE="2">QUANTUM RESOURCE CORPORATION</FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-bottom:1px;border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="2">/s/ Chris Ferguson</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Name:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Chris Ferguson</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Title:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">President</FONT></TD></TR>
<TR>
<TD HEIGHT="16" COLSPAN="3"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"><FONT FACE="Times New Roman" SIZE="2">STAFFBRIDGE, INC.</FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-bottom:1px;border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="2">/s/ Chris Ferguson</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Name:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Chris Ferguson</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Title:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">President</FONT></TD></TR>
<TR>
<TD HEIGHT="16" COLSPAN="3"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"><FONT FACE="Times New Roman" SIZE="2">CLEARPOINT ADVANTAGE, LLC</FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-bottom:1px;border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="2">/s/ Chris Ferguson</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Name:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Chris Ferguson</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Title:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">President</FONT></TD></TR>
</TABLE></DIV>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

<DIV ALIGN="right">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="40%" BORDER="0">

<TR>
<TD WIDTH="7%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="92%"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"><FONT FACE="Times New Roman" SIZE="2">CLEARPOINT MANAGED SERVICES, LLC</FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-bottom:1px;border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="2">/s/ Chris Ferguson</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Name:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Chris Ferguson</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Title:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">President</FONT></TD></TR>
<TR>
<TD HEIGHT="16" COLSPAN="3"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"><FONT FACE="Times New Roman" SIZE="2">CLEARPOINT ADVANTAGE, LLC</FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-bottom:1px;border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="2">/s/ Chris Ferguson</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Name:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Chris Ferguson</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Title:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">President</FONT></TD></TR>
</TABLE></DIV>
</BODY></HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>6
<FILENAME>dex311.htm
<DESCRIPTION>CERTIFICATION OF CHIEF EXECTUTIVE OFFICER
<TEXT>
<HTML><HEAD>
<TITLE>Certification of Chief Exectutive Officer</TITLE>
</HEAD>
 <BODY BGCOLOR="WHITE">

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2"><B>Exhibit 31.1 </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="2"><B>CERTIFICATION OF CHIEF EXECUTIVE OFFICER </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">I, Michael D. Traina, certify that: </FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">1. I have reviewed this Form 10-Q of ClearPoint Business Resources, Inc; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this report; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">3. Based on my knowledge, the financial
statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">4. The registrant&#146;s other certifying officer and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(a) Designed such disclosure controls
and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this report is being prepared; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(b) [Intentionally omitted] </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(c) Evaluated the effectiveness of the registrant&#146;s disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman"
SIZE="2">(d) Disclosed in this report any change in the registrant&#146;s internal control over financial reporting that occurred during the registrant&#146;s most recent fiscal quarter (the registrant&#146;s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to materially affect, the registrant&#146;s internal control over financial reporting; and </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">5. The registrant&#146;s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant&#146;s auditors and the audit committee of
the registrant&#146;s board of directors (or persons performing the equivalent functions): </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(a) All significant deficiencies and material
weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant&#146;s ability to record, process, summarize and report financial information; and </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant&#146;s internal control
over financial reporting. </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0">

<TR>
<TD WIDTH="48%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="2%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="48%"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Date: November&nbsp;13, 2007</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-bottom:1px;border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="2">/s/ Michael D. Traina</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Michael D. Traina</FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Chief Executive Officer</FONT></TD></TR>
</TABLE>
</BODY></HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>7
<FILENAME>dex312.htm
<DESCRIPTION>CERTIFICATION OF CHIEF FINANCIAL OFFICER
<TEXT>
<HTML><HEAD>
<TITLE>Certification of Chief Financial Officer</TITLE>
</HEAD>
 <BODY BGCOLOR="WHITE">

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2"><B>Exhibit 31.2 </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="2"><B>CERTIFICATION OF CHIEF FINANCIAL OFFICER </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">I, Kurt A. Braun, certify that: </FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">1. I have reviewed this Form 10-Q of ClearPoint Business Resources, Inc; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this report; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">3. Based on my knowledge, the financial
statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">4. The registrant&#146;s other certifying officer and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(a) Designed such disclosure controls
and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this report is being prepared; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(b) [Intentionally omitted] </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(c) Evaluated the effectiveness of the registrant&#146;s disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman"
SIZE="2">(d) Disclosed in this report any change in the registrant&#146;s internal control over financial reporting that occurred during the registrant&#146;s most recent fiscal quarter (the registrant&#146;s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to materially affect, the registrant&#146;s internal control over financial reporting; and </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">5. The registrant&#146;s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant&#146;s auditors and the audit committee of
the registrant&#146;s board of directors (or persons performing the equivalent functions): </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(a) All significant deficiencies and material
weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant&#146;s ability to record, process, summarize and report financial information; and </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant&#146;s internal control
over financial reporting. </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0">

<TR>
<TD WIDTH="48%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="2%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="48%"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Date: November&nbsp;13, 2007</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-bottom:1px;border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="2">/s/ Kurt A. Braun</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Kurt A. Braun</FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Chief Financial Officer</FONT></TD></TR>
</TABLE>
</BODY></HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32
<SEQUENCE>8
<FILENAME>dex32.htm
<DESCRIPTION>CERTIFICATION OF THE COMPANY'S CHIEF EXECUTIVE OFFICER
<TEXT>
<HTML><HEAD>
<TITLE>Certification of the Company's Chief Executive Officer</TITLE>
</HEAD>
 <BODY BGCOLOR="WHITE">

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2"><B>Exhibit 32 </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="2"><B>CERTIFICATION PURSUANT TO </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>18 U.S.C. SECTION 1350, </B></FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>AS ADOPTED PURSUANT TO </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002 </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Pursuant to Section&nbsp;906 of the Sarbanes-Oxley Act of 2002 (Section 1350 of Chapter 63 of Title
18 of the United States Code), each of the undersigned officers of ClearPoint Business Resources, Inc. (the &#147;Company&#148;) does hereby certify with respect to the Quarterly Report of the Company on Form 10-Q for the period ended
September&nbsp;30, 2007 (the &#147;Report&#148;) that: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(1)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">The Report fully complies with the requirements of Section&nbsp;13(a) or 15(d) of the Securities Exchange Act of 1934; and </FONT></TD></TR></TABLE> <P
STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(2)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. </FONT></TD></TR></TABLE> <P
STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0">

<TR>
<TD WIDTH="48%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="2%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="48%"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Date: November&nbsp;13, 2007</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-bottom:1px;border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="2">/s/ Michael D. Traina</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Michael D. Traina</FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Chief Executive Officer</FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Date: November 13, 2007</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-bottom:1px;border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="2">/s/ Kurt A. Braun</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Kurt A. Braun</FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Chief Financial Officer</FONT></TD></TR>
</TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The foregoing certification is being furnished solely pursuant to Section&nbsp;906 of the
Sarbanes-Oxley Act of 2002 (Section 1350 of Chapter 63 of Title 18 of the United States Code) and is not being filed as part of the Report or as a separate disclosure document. </FONT></P>
</BODY></HTML>
</TEXT>
</DOCUMENT>
</SUBMISSION>
