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<SEC-DOCUMENT>0000950123-10-003294.txt : 20100119
<SEC-HEADER>0000950123-10-003294.hdr.sgml : 20100118
<ACCEPTANCE-DATETIME>20100119133115
ACCESSION NUMBER:		0000950123-10-003294
CONFORMED SUBMISSION TYPE:	10-K
PUBLIC DOCUMENT COUNT:		9
CONFORMED PERIOD OF REPORT:	20090930
FILED AS OF DATE:		20100119
DATE AS OF CHANGE:		20100119

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			TEAMSTAFF INC
		CENTRAL INDEX KEY:			0000785557
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-HELP SUPPLY SERVICES [7363]
		IRS NUMBER:				221899798
		STATE OF INCORPORATION:			NJ
		FISCAL YEAR END:			0930

	FILING VALUES:
		FORM TYPE:		10-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-18492
		FILM NUMBER:		10532753

	BUSINESS ADDRESS:	
		STREET 1:		300 ATRIUM DRIVE
		CITY:			SOUTH PLAINFIELD
		STATE:			NJ
		ZIP:			08873
		BUSINESS PHONE:		7327481700

	MAIL ADDRESS:	
		STREET 1:		300 ATRIUM DRIVE
		CITY:			SOUTH PLAINFIELD
		STATE:			NJ
		ZIP:			08873

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	DIGITAL SOLUTIONS INC
		DATE OF NAME CHANGE:	19920703
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K
<SEQUENCE>1
<FILENAME>c94758e10vk.htm
<DESCRIPTION>FORM 10-K
<TEXT>
<HTML>
<HEAD>
<TITLE>Form 10-K</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">


<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 1pt solid black; font-size: 1pt">&nbsp;</DIV>




<DIV align="center" style="font-size: 14pt; margin-top: 10pt"><B>UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION</B>
</DIV>

<DIV align="center" style="font-size: 12pt"><B>Washington, D.C. 20549</B>
</DIV>

<DIV align="center" style="font-size: 18pt; margin-top: 10pt"><B>FORM 10-K</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>(Mark One)</B>
</DIV>


<DIV align="center">
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%" style="font-size: 12pt">
<TR style="font-size: 10pt">
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="88%">&nbsp;</TD>
</TR>
<TR valign="top">
    <TD align="center"><FONT face="Wingdings">&#254;</FONT> </TD>
    <TD>&nbsp;</TD>
    <TD><B>ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</B></TD>
</TR>
</TABLE>
</DIV>


<!-- xbrl,dc -->
<DIV align="left" style="font-size: 10pt; margin-top: 10pt; margin-left: 12%"><B>For the fiscal year ended September&nbsp;30, 2009</B></DIV>
<!-- /xbrl,dc -->

<DIV align="center">
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%" style="font-size: 12pt">
<TR style="font-size: 10pt">
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="88%">&nbsp;</TD>
</TR>
<TR valign="top">
    <TD align="center"><FONT face="Wingdings">&#111;</FONT> </TD>
    <TD>&nbsp;</TD>
    <TD><B>TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</B></TD>
</TR>
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt; margin-left: 12%"><B>For the transition period from <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></B></DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 10pt"><B>Commission File No.&nbsp;0-18492</B>
</DIV>
<DIV align="center" style="font-size: 24pt; margin-top: 10pt"><B><FONT style="border-bottom: 1px solid #000000">TEAMSTAFF, INC.</FONT></B>
</DIV>

<DIV align="center" style="font-size: 10pt">
(Exact Name of Registrant as Specified in Its Charter)</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="48%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="48%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><B>New Jersey</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>22-1899798</B></TD>
</TR>
<TR style="font-size: 1px">
    <TD align="center" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">(State or other jurisdiction of incorporation or organization)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(I.R.S. Employer Identification No.)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><FONT style="border-bottom: 1px solid #000000"><B>1 Executive Drive, Somerset, NJ 08873, Suite&nbsp;130 </B></FONT><BR>
(Address of principal executive offices) (Zip Code)</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 10pt"><FONT style="border-bottom: 1px solid #000000">Issuer&#146;s telephone number, including area code <B>(877)&nbsp;523-9897 </B></FONT>
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 10pt">Securities registered pursuant to Section 12(b) of the Exchange Act
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="47%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>Name of Each Exchange on</B></TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><B>Title of Each Class</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>Which Registered</B></TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><B>COMMON STOCK, PAR VALUE $.001 PER SHARE</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>THE NASDAQ STOCK MARKET, LLC</B></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 10pt">Securities registered pursuant to Section 12(g) of the Securities Exchange Act: NONE
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule&nbsp;405 of
the Securities Act. <FONT style="white-space: nowrap">Yes <FONT face="Wingdings">&#111;</FONT> No <FONT face="Wingdings">&#254;</FONT></FONT>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Indicate by check mark if the registrant is not required to file reports pursuant to Section&nbsp;13 or
15 (d)&nbsp;of the Securities Exchange Act. <FONT style="white-space: nowrap">Yes <FONT face="Wingdings">&#111;</FONT> No <FONT face="Wingdings">&#254;</FONT></FONT>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">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 during the preceding 12&nbsp;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&nbsp;days. <FONT style="white-space: nowrap">Yes <FONT face="Wingdings">&#254;</FONT> No <FONT face="Wingdings">&#111;</FONT></FONT>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Indicate by check mark whether the registrant has submitted electronically and posted on its
corporate Web site, if any, every Interactive Data File required to be submitted and posted
pursuant to Rule&nbsp;405 of Regulation&nbsp;S-T during the preceding 12&nbsp;months (or for such shorter period
that the registrant was required to submit and post such files). <FONT style="white-space: nowrap">Yes <FONT face="Wingdings">&#111;</FONT> No <FONT face="Wingdings">&#111;</FONT></FONT>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Indicate by check mark if disclosure of delinquent filers pursuant to Item&nbsp;405 of Regulation&nbsp;S-K
(ss.229.405 of this chapter) is not contained herein, and will not be contained, to the best of
registrant&#146;s knowledge, in definitive proxy or information statements incorporated by reference in
Part&nbsp;III of this Form 10-K or any amendment to this Form 10-K. <FONT face="Wingdings">&#254;</FONT>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated filer, or a smaller reporting company. See definitions of &#147;large accelerated
filer,&#148; &#147;accelerated filer&#148; and &#147;smaller
reporting company&#148; in
<FONT style="white-space: nowrap">Rule&nbsp;12b-2</font> of the Exchange Act.
(check one):
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="22%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="22%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="22%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="22%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top" nowrap>Large accelerated filer <FONT face="Wingdings">&#111;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top" nowrap>Accelerated filer <FONT face="Wingdings">&#111;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top" nowrap>Non-accelerated filer <FONT face="Wingdings">&#111;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top" nowrap>Smaller reporting company <FONT face="Wingdings">&#254;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top" nowrap>(do not check if a smaller reporting company)</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Indicate by check mark whether the registrant is a shell company (as defined in Rule&nbsp;12b-2 of the
Exchange Act). <FONT style="white-space: nowrap">Yes <FONT face="Wingdings">&#111;</FONT> No <FONT face="Wingdings">&#254;</FONT></FONT>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">State the aggregate market value of the voting and non-voting common equity held by non-affiliates
computed by reference to the price at which the common equity was last sold, or the average bid and
asked price of such common equity, as of the last business day of the registrant&#146;s most recently
completed second fiscal quarter (March&nbsp;31, 2009): $4,586,028.
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 10pt"><B>APPLICABLE ONLY TO CORPORATE REGISTRANTS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Indicate the number of shares outstanding of each of the registrant&#146;s classes of common stock, as
of the latest practicable date: On January&nbsp;5, 2010 there were 4,940,982 shares outstanding of
common stock of the Registrant.
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 10pt"><B>DOCUMENTS INCORPORATED BY REFERENCE</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">List hereunder the following documents if incorporated by reference and the Part of the Form 10-K
(e.g., Part&nbsp;I, Part&nbsp;II, etc.) into which the document is incorporated: (1)&nbsp;Any annual report to
security holders; (2)&nbsp;Any proxy or information statement; and (3)&nbsp;Any prospectus filed pursuant to
Rule 424(b) or (e)&nbsp;under the Securities Act of 1933.
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 10pt">None
</DIV>

<DIV style="width: 100%; border-bottom: 1pt solid black; margin-top: 10pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>




<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">
<DIV align="left">
<!-- TOC -->
</DIV>
<DIV align="left">
<A name="tocpage"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><U><B>TABLE OF CONTENTS</B></U>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="95%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>PAGE</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" colspan="5"><DIV style="margin-left:15px; text-indent:-15px"><A href="#101"><B>PART I</B></A></DIV></TD>

</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#102">Item&nbsp;1. Business</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#103">Item&nbsp;1A. Risk Factors</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#104">Item&nbsp;1B. Unresolved Staff Comments</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#105">Item&nbsp;2. Properties</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#106">Item&nbsp;3. Legal Proceedings</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#107">Item&nbsp;4. Submission of Matters to a Vote of Security Holders</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" colspan="5"><DIV style="margin-left:15px; text-indent:-15px"><A href="#108"><B>PART II</B></A></DIV></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#109">Item&nbsp;5. Market For the Registrant&#146;s Common Equity, and Related Stockholder Matters
and Issuer Purchases of Equity Securities</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#110">Item&nbsp;6. Selected Financial Data</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#111">Item&nbsp;7. Management&#146;s Discussion and Analysis of Financial Condition and Results of Operations</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#112">Item&nbsp;7A. Quantitative and Qualitative Disclosures About Market Risk</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">34</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#113">Item&nbsp;8. Financial Statements and Supplemental Data</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">34</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#114">Item&nbsp;9. Changes in and Disagreements With Accountants on Accounting
and Financial Disclosure</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">34</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#115">Item&nbsp;9A. Controls and Procedures</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">34</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#116">Item&nbsp;9B. Other Information</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">35</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" colspan="5"><DIV style="margin-left:15px; text-indent:-15px"><A href="#117"><B>PART III</B></A></DIV></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#118">Item&nbsp;10. Directors and Executive Officers of the Registrant</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">36</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#119">Item&nbsp;11. Executive Compensation</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">41</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#120">Item&nbsp;12. Security Ownership of Certain Beneficial Owners and Management</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">53</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#121">Item&nbsp;13. Certain Relationships and Related Transactions</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">55</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#122">Item&nbsp;14. Principal Accountant Fees and Services</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">56</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" colspan="5"><DIV style="margin-left:15px; text-indent:-15px"><A href="#123"><B>PART IV</B></A></DIV></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#124">Item&nbsp;15. Exhibits and Financial Statement Schedules</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">57</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="c94758exv10w35.htm">Exhibit 10.35</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="c94758exv10w36.htm">Exhibit 10.36</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="c94758exv10w37.htm">Exhibit 10.37</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="c94758exv21.htm">Exhibit 21</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="c94758exv23w1.htm">Exhibit 23.1</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="c94758exv31w1.htm">Exhibit 31.1</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="c94758exv31w2.htm">Exhibit 31.2</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="c94758exv32w1.htm">Exhibit 32.1</A></FONT></TD></TR>
</TABLE>
</DIV>
<DIV align="left">
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</DIV>


<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">



<DIV align="left">
<A name="101"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>PART I</B>
</DIV>

<DIV align="left">
<A name="102"></A>
</DIV>

<DIV align="left" style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="7%"></TD>
    <TD width="1%"></TD>
    <TD></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left"><B>ITEM 1.</B></TD>
    <TD>&nbsp;</TD>
    <TD><B>BUSINESS</B></TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>INTRODUCTION</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><I>General</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">TeamStaff, Inc. and its subsidiaries (&#147;TeamStaff&#148; or the &#147;Company&#148;, also referred to as &#147;we,&#148; &#147;us&#148;
and &#147;our&#148;), provide staffing services to the United States Department of Veterans Affairs (&#147;DVA&#148;)
and other US governmental entities. TeamStaff&#146;s primary operations are located in Loganville,
Georgia and its principal executive office is located at 1 Executive Drive, Suite&nbsp;130, Somerset,
New Jersey 08873 where its telephone number is (877)&nbsp;523-9897.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><I>Company History</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">TeamStaff, Inc., a New Jersey corporation, was founded in 1969 as a payroll service company and
evolved into a national provider of contract and permanent medical and administrative staffing
services. Its principal operations are conducted through its subsidiary, TeamStaff Government
Solutions, (&#147;TeamStaff GS&#148;), a wholly-owned subsidiary of TeamStaff, Inc. TeamStaff GS changed its
name from RS Staffing Services, Inc on February&nbsp;12, 2008 to reflect the subsidiary&#146;s expanding
service offerings.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">As described in greater detail below, on December&nbsp;28, 2009, TeamStaff and TeamStaff Rx, Inc.
(&#147;TeamStaff Rx&#148;), our wholly-owned subsidiary, entered into a definitive Asset Purchase Agreement
with Advantage RN, LLC, an Ohio limited liability company (&#147;Advantage RN&#148;), providing for the sale
of substantially all of the operating assets of TeamStaff Rx related to TeamStaff Rx&#146;s business of
providing travel nurse and allied healthcare professionals for temporary assignments to Advantage
RN. The closing of this transaction occurred on January&nbsp;4, 2010. The Asset Purchase Agreement
provides that the purchased assets were acquired by Advantage RN for a purchase price of up to
$425,000, of which (i) $350,000 in cash was paid at the closing, and (ii) $75,000 is subject to an
escrowed holdback as described in the Asset Purchase Agreement. Additionally, Advantage RN will
make rent subsidy payments to TeamStaff Rx totaling $125,000, consisting of (i) $25,000 payable at
closing, and (ii)&nbsp;an additional $100,000 payable in 10 equal monthly installments beginning on
March&nbsp;1, 2010. Under the terms of the Asset Purchase Agreement, Advantage RN did not assume any
debts, obligations or liabilities of TeamStaff Rx nor did it purchase any accounts receivable
outstanding as of the closing date.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">TeamStaff&#146;s other wholly-owned subsidiaries include DSI Staff ConnXions Northeast, Inc., DSI Staff
ConnXions Southwest, Inc., TeamStaff Solutions, Inc., TeamStaff I, Inc., TeamStaff II, Inc.,
TeamStaff III, Inc., TeamStaff IV, Inc., TeamStaff VIII, Inc., TeamStaff IX, Inc., Digital
Insurance Services, Inc., HR2, Inc. and BrightLane.com, Inc. As a result of the sale of our
Professional Employer Organization business in fiscal year 2004 and other Company business changes,
these &#147;other&#148; subsidiaries are not actively operating.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><I>Governmental Services</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Following the disposition of its TeamStaff Rx business, TeamStaff&#146;s operations are concentrated in
the governmental staffing segment. TeamStaff, through its TeamStaff GS subsidiary, is a staffing
provider specializing in providing healthcare, logistical, information technology and office
administration personnel to U.S. government entities. The staffing services offered by TeamStaff
GS are provided through independent Federal Supply Schedule (&#147;FSS&#148;) contracts through the United
States General Services Administration (&#147;GSA&#148;). The provision of logistical and administrative
personnel is accomplished through the Logistics Worldwide Schedule and medical personnel are
supplied through the Professional and Allied Healthcare Staffing Services Schedule. TeamStaff also
provides its staffing services to federal government agencies through competitively bid contracts
and has a GSA schedule contract to provide information technology professional services.
TeamStaff provides these services to the DVA, the US Department of Defense and other US
governmental agencies and placed contract employees at over 40 facilities during the 2009 fiscal
year.
</DIV>

<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->1<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">




<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Description of Services</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">TeamStaff, through its TeamStaff GS subsidiary, is a staffing provider specializing in healthcare,
logistical, information technology and office administration personnel that has been serving the
Federal Government for over a
decade. Providing quality staffing solutions and facility management services, TeamStaff GS is
committed to providing on-time delivery of multi-disciplined employees who possess the necessary
experience, expertise, and dedication required to meet contract specifications. TeamStaff GS&#146;
vision is to become the preferred partner of the federal government facilities by providing
reliable services and qualified personnel that deliver exceptional results. TeamStaff GS provides
nationwide service and has several remote offices and branches across the continental United
States.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">TeamStaff GS&#146;s primary client has been the United States Government and its various agencies.
TeamStaff GS provides contract staffing solutions for government agencies in the categories of
medical, professional, office administration, general services support, facility management and
logistics support. Through its FSS contracts with both the GSA and the DVA, TeamStaff GS offers the
ease of ordering directly through one of its multiple-award contracts and through multiple
procurement vehicles and schedules. These procurement vehicles include the Logistics World
schedule, the Professional and Allied Healthcare and Information Technology schedules, as well as
the ability to order through the GSA&#146;s e-Buy system. TeamStaff GS also provides technology for
online timesheets, reporting, ordering and invoicing as well as a provision of qualified personnel
which can be based on any term assignment or contract. During the fiscal year ended September&nbsp;30,
2009, this subsidiary generated $46.0&nbsp;million in revenues.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Teamstaff GS&#146; variety of services, nationwide presence and broad depth of experience enables the
company to provide staffing services to a wide range of Federal Government agencies. Some of these
clients include: United States Forestry Service, United States Fish and Wildlife Service, Army
Corps of Engineers, Army Medical Centers, Veterans Affairs Medical Centers, National Naval Medical
Centers, General Services Administration, United State Air Force, Bureau of Land Management, Center
for Disease Control, Naval Construction Battalion, Federal Bureau of Prisons and the Equal
Employment Opportunity Commission. TeamStaff GS also is seeking to develop and maintain a
nationwide network of teaming partners, including small businesses, Service Disabled Veteran Owned
Small Businesses and other small-businesses certified under Section 8(a) of the Small Business
Administration in order to expand and diversify its service offerings.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><U>Healthcare Staffing</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">For over a decade TeamStaff GS has been serving the United States Veteran&#146;s Affairs Department and
Department of Defense by providing qualified medical and non-medical professionals. TeamStaff GS
healthcare professionals are highly skilled clinicians who are licensed and credentialed,
experienced and knowledgeable. TeamStaff GS provides assignments ranging from short to long-term
positions.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">TeamStaff GS has an expansive pool of allied health and nursing professionals, which includes many
carefully screened and dedicated professionals experienced in a large number of modalities. Our
allied health professionals include persons trained as: MRI Technologists; CRNA; Diagnostic
Sonographers; Respiratory Therapists; Phlebotomists; Radiologic Technologists; Mammographers;
Administration; Physicists; Medical Laboratory Technicians; Dosimetrists; PA/Nurse Practitioners;
Radiation Therapists; Speech Therapists; Pharmacists; Pharmacy Technicians; Physical Therapists and
Occupational Therapists. Our nursing professionals are experienced in the following areas: ICU;
Emergency Room; CAN; Critical Care; Neonatal Intensive Care Unit; Medical Assistants;
Medical/Surgical; Post Partum; NP; Pediatrics; Labor and Delivery; CRNA; Dialysis; LPN Long Term
Care; Telemetry; Nursery; PACU; and PICU.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><U>Relationship with DVA</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The DVA&#146;s mission is one of service to the 27&nbsp;million veterans who have served their country. To
accomplish this mission, the VA provides products and services to veterans by working closely with
various industry sectors. TeamStaff GS is a pre-qualified vendor under Schedule&nbsp;621 I, and offers
professional and medical personnel in the healthcare field, including nursing, pharmacists and
pharmaceutical personnel. TeamStaff GS helps its clients bridge gaps in professional clinical
staffing in a variety of locations on a short or long-term basis.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Since 1999, TeamStaff GS has provided the DVA with contract staffing services at its consolidated
pharmacy distribution facilities. These services include pharmacists, pharmacy technicians and
shipping packers and are performed at six of the seven DVA-operated locations. In January&nbsp;2008
Teamstaff GS was issued purchase orders for all sites from the DVA&#146;s consolidated pharmacy national
contracting office, which allowed for standardization of labor categories as well as implementation
of correct Department of Labor Wage Determinations. Although, the
current task orders expired on December&nbsp;31, 2009, a six month continuation of services extension
for all six locations serviced by TeamStaff GS was awarded on December&nbsp;14, 2009.
</DIV>

<P align="center" style="font-size: 10pt">&nbsp;

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">




<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Previously, DVA had issued a new contract solicitation in June&nbsp;2008 for these services, which was
cancelled in October&nbsp;2008. We anticipate that the DVA may release new requests for proposals
related to staffing services at its pharmacy distribution facilities early in 2010. In such an
event, the Company intends to submit a proposal to address any such solicitation. Although the
Company believes it is well positioned to continue its relationship with the DVA, no assurances can
be given that in the event the DVA issues such a solicitation, that any purchase orders would be
awarded to the Company or if it is granted subsequent orders, that such orders would be of a scope
comparable to the services that the Company has provided to date.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><U>Logistics</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">TeamStaff GS is also a staffing provider of logistics and administrative professionals to the
federal government. TeamStaff GS specializes in proving personnel for logistics, office
administration, IT, and facilities/warehouse management through Federal Service Schedules.
TeamStaff GS&#146; project managers range from career government support employees to retired military
veterans with extensive experience. The experience of TeamStaff GS&#146; project managers is diverse
from operational unit level to systems command/headquarters program office experience. More
recently, TeamStaff GS has entered into several teaming agreements with Service Disabled Veteran
Owned Small Businesses. These agreements allow the Company to aid these companies, which typically
support Department of Defense requirements, and more specifically Defense Logistics Agency, in
having the ability to draw from our human resources and account administration expertise. In
particular, TeamStaff GS is experienced in providing personnel with supply chain distribution as
well as inventory and warehouse management expertise. TeamStaff GS is moving forward to expand its
service offering, especially within the Department of Defense.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">TeamStaff GS&#146; full spectrum of logistics and technical expertise is available to the government and
other authorized agencies through its LOGWORLD contract, which allows agencies to select service
providers that meet their needs for personnel, management, supplies, services, materials,
equipment, facilities and transportation. Staffing of logistics personnel includes the following:
Logistics Support, Office Administration, Information Technologies and Facilities Management.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Our Strategy</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">TeamStaff&#146;s entire complement of staffing services provides numerous benefits to customers in
managing their workforces. TeamStaff&#146;s contract staffing services allow a client to avoid
administrative responsibility for payroll, payroll taxes, workers&#146; compensation, unemployment and
medical benefits for interim employees.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The Company believes that its contract staffing services provide a client with an increased pool of
qualified personnel. Since TeamStaff&#146;s contract staffing employees have access to a wide array of
benefits, such as paid time off, health and life insurance and Section&nbsp;125 premium conversion plans,
TeamStaff believes it is able to attract a sufficient pool of qualified personnel to grow this
business. These benefits provide contract employees with the motivation of permanent workers
without additional benefit and administrative costs to the client.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">TeamStaff GS has achieved positive results in expanding its penetration of DVA facilities through
vertical expansion of previously awarded contracts. The Company is also expanding its reach within
the government sector beyond VA opportunities by bidding on Department of Defense (&#147;DOD&#148;) staffing
contracts afforded to large businesses and the GSA&#146;s <I>e-Buy </I>portal, an electronic Request for Quote
(RFQ) / Request for Proposal (RFP)&nbsp;system, which is designed to allow Federal buyers to request
information, find sources, and prepare RFQs/RFPs, online, for various services offered through
GSA&#146;s Multiple Award Schedule. Additionally, TeamStaff GS is evaluating opportunities to satisfy
the staffing needs of other government agencies in addition to the DVA and DOD as a means of
horizontal expansion of its client base.
</DIV>

<P align="center" style="font-size: 10pt">&nbsp;

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">




<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Customers</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">As of September&nbsp;30, 2009, TeamStaff&#146;s combined customer base consisted of approximately 40
government clients. Substantially all of the business of our TeamStaff GS subsidiary is
accomplished through contracts with various agencies of the United States Government. In fiscal
2009, through its FSS contracts primarily with the DVA,
TeamStaff GS had independent task&#150;orders with four DVA-related facilities which comprised 31%, 23%,
12% and 11%, or 77% in the aggregate, of the Company&#146;s overall consolidated revenue. In fiscal
2009, TeamStaff GS had five task-orders that each individually comprised greater than 5% of the
subsidiary&#146;s revenue. As described in greater detail above, we are currently providing these
services under extended task orders, which are scheduled to expire on or around June&nbsp;30, 2010 and
we anticipate that the DVA may release new requests for proposals related to staffing services at
its pharmacy distribution facilities in early 2010. In such an event, the Company intends to submit
a proposal to address any such solicitation.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><U>Government Contracts</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The U.S. Government is the primary customer to our TeamStaff GS subsidiary. Many of the U.S.
Government programs in which we participate as a contractor or subcontractor may extend for several
years. However, such programs are normally funded on an annual basis. All U.S. Government contracts
and subcontracts may be modified, curtailed or terminated at the convenience of the government for
any reason, including if program requirements or budgetary constraints change. If a contract is
terminated for convenience, we would generally be reimbursed for our allowable costs through the
date of termination and would be paid a proportionate amount of the stipulated profit or fee
attributable to the work actually performed. Although contract and program modifications,
curtailments or terminations have not had a material adverse effect on the business of TeamStaff GS
in the past, no assurance can be given that such modifications, curtailments or terminations will
not have a material adverse effect on our financial condition or results of operations in the
future. In addition, the U.S. Government may terminate a contract for default. Although the U.S.
Government has never terminated any of TeamStaff GS&#146;s contracts for default, such a termination
could have a significant impact on our business. If a contract is terminated for default, we may be
unable to recover amounts billed or billable under the contract and may be liable for other costs
and damages. The U.S. Government contract bid process is complex and sometimes lengthy. Once a bid
is won and a contract awarded, there still is the possibility of a bid protest or numerous delays
in implementation. There can be no assurance that such protest process or implementation delays
will not have a material adverse effect on our financial condition, results of operations or cash
flows in the future.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Sales and Marketing</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">TeamStaff maintains healthcare and government staffing sales, service and marketing personnel in
Tucson, Arizona; Loganville, Georgia; Hines, Illinois; Leavenworth, Kansas; Boston, Massachusetts;
Biloxi, Mississippi; Murfreesboro, Tennessee; and Charleston, South Carolina.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Through our operating subsidiary, TeamStaff continues to build sales through both the GSA&#146;s <I>e-Buy</I>
portal, an electronic system designed to allow Federal buyers to request information, find sources,
and prepare RFQs/RFPs, online and face-to-face client interactions. Efforts to build marketing
presence include the launching of new TeamStaff GS and corporate websites, implementing a print
advertisement campaign, and revising our strategic marketing communications plan in an effort to
attract allied medical and nurse travelers. During the year, we also added several marketing events
to our tradeshow calendar in order to increase our brand recognition. This added exposure is
allowing us to introduce our suite of offerings to an expanded market. We continue to focus on our
sales and marketing efforts in order to increase our contact with current and prospective clients.
During fiscal 2008 we completed a corporate branding campaign. TeamStaff GS gives us a strong
presence in the government sector and provides us with an opportunity to bid on awards for large
multi-year contracts with favorable operating margins.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Competition</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Our primary competitors in government staffing solutions include Top Echelon Management, Inc.,
Total Management, Inc., Medical Staffing Network Holdings, Inc., Kforce, Inc. and Maxim Healthcare
Services, Inc. TeamStaff competes with these companies by offering customized products,
personalized service, competitive prices and specialized personnel to satisfy a client&#146;s particular
requirements. Many of these companies have greater name-recognition and financial resources than we
do. The Company believes that its broad scope of services and its commitment to quality service
differentiate it from its competition. Further, the Company believes that TeamStaff GS&#146;s knowledge
and processes with respect to government contract bidding represents a competitive advantage. In
addition, we may face additional competition from other larger staffing companies that do not focus
on the government staffing sector.
</DIV>

<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->4<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">




<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Industry/Government Regulation</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><U>Introduction</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Federal and state laws materially affect TeamStaff&#146;s operations. These laws relate to labor, tax
and employment matters. As an employer, TeamStaff is subject to all federal statutes and
regulations governing its employer-employee relationships. The development of additional statutes
and regulations and interpretation of existing statutes and regulations with respect to the
alternative staffing industry can be expected to evolve over time. TeamStaff cannot predict with
certainty the nature or direction of the development of federal, state and local statutes and
regulations.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><U>Federal and State Employment Taxes</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">TeamStaff assumes the sole responsibility and liability for the payment of federal and state
employment taxes with respect to wages and salaries paid to its employees, including its contract
staffing employees. There are essentially three types of federal employment tax obligations: (i)
withholding of income tax requirements; (ii)&nbsp;obligations under the Federal Insurance Contribution
Act (&#147;FICA&#148;); and, (iii)&nbsp;obligations under the Federal Unemployment Tax Act. Under these statutes,
employers have the obligation to withhold and remit the employer portion and, where applicable, the
employee portion of these taxes.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><U>Employee Benefit Plans</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">TeamStaff offers various employee benefit plans to its full-time corporate (non-worksite)
employees. These plans include a 401(k) Plan (a profit-sharing plan with a cash or deferred
arrangement, or &#147;CODA&#148;), under Internal Revenue Code (&#147;IRC&#148;) Section&nbsp;401(k)), a Section&nbsp;125 plan,
group health plans, group dental insurance, vision insurance, a group life insurance plan and a
group disability insurance plan. Contract staffing employees are offered various employee benefit
plans that include a Section&nbsp;125 plan, group health plans, group dental insurance and group life
insurance. Generally, employee benefit plans are subject to provisions of both the Code and the
Employee Retirement Income Security Act of 1974 (&#147;ERISA&#148;). TeamStaff also makes a variety of
voluntary insurance products available to its employees, which its employees may purchase through
payroll deductions.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">In order to qualify for favorable tax treatment under the IRC, the plans must be established and
maintained by an employer for the exclusive benefit of its employees. In addition to the
employer/employee threshold, pension and profit-sharing plans, including plans that offer CODAs
under IRC Section 401(k) and matching contributions under IRC Section&nbsp;401(m), must satisfy certain
other requirements under the IRC. These other requirements are generally designed to prevent
discrimination in favor of highly compensated employees to the detriment of non-highly compensated
employees with respect to both the availability of, and the benefits, rights and features offered
in qualified employee benefit plans.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Employee pension and welfare benefit plans are also governed by ERISA. ERISA defines &#147;employer&#148; as
&#147;any person acting directly as an employer, or indirectly in the interest of an employer, in
relation to an employee benefit plan.&#148; ERISA defines the term &#147;employee&#148; as &#147;any individual
employed by an employer.&#148;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><U>State Regulation</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">As an employer, TeamStaff is subject to all federal, state and local statutes and regulations
governing the employer-employee relationship. Additionally, an increasing number of states have
adopted or are considering adopting licensing or registration requirements that affect TeamStaff&#146;s
contract medical staffing and permanent placement business. These license and registration
requirements generally provide for an evaluation of the operator&#146;s background and integrity and
periodic or ongoing monitoring of the medical staffing firm&#146;s policies and practices.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Information and Technology Systems</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Throughout the 2009 fiscal year, the Company has made technology related strategic improvements.
Previously, the infrastructure and IT support at TeamStaff GS&#146;s Loganville, GA headquarters was
outsourced. In an effort to reduce cost and increase network response time, the Company has moved
all aspects of IT in house; improving overall support, while reducing the Company&#146;s IT-related
expenditures by approximately $75,000 per year.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Looking forward, the Company will continue to focus on the government division. The Company has
analyzed and documented the requirements needed to replace the aged TeamStaff GS operating system,
which, while functional and compliant, will not efficiently meet the growth strategy of the
division. The new enterprise resource planning (&#147;ERP&#148;) system that will replace the current payroll
system has been identified and implementation will start in the first fiscal quarter of 2010 with
an expected activation with the first payroll cycle of the 2010 calendar year. This new ERP system
will open the doors to much larger government contracts that are unattainable with the current
solution due to the cost accounting system requirements of the Defense Contract Audit Agency. In
addition to the new ERP system, the Company will implement a new staffing database module that will
allow the division to more easily source open positions. Both the new ERP and staffing solutions
will integrate seamlessly with each other and Microsoft Outlook, streamlining business processes
and efficiency.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Disposition of Assets</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">On December&nbsp;28, 2009, TeamStaff, Inc. and TeamStaff Rx entered into a definitive Asset Purchase
Agreement, dated as of December&nbsp;28, 2009 with Advantage RN that provides for the sale of
substantially all of the operating assets of TeamStaff Rx related to TeamStaff Rx&#146;s business of
providing travel nurse and allied healthcare professionals for temporary assignments to Advantage
RN. The closing was held on January&nbsp;4, 2010. The Asset Purchase Agreement provided for the purchase
of the purchased assets by Advantage RN for a purchase price of up to $425,000, of which (i)
$350,000 in cash was paid at the closing, and (ii) $75,000 is subject to an escrowed holdback under
certain terms and conditions as described in the Asset Purchase Agreement. The holdback consists of
(i) $50,000 that will be held back subject to the number of travel nurses and allied healthcare
professionals associated with and working in the business on a full-time basis for the week ending
January&nbsp;24, 2010, and (ii) $25,000 that will be held back until appropriate releases have been
obtained from certain third parties by TeamStaff Rx and no encumbrances on the purchased assets
remain outstanding. As described in greater detail in Note 4 to the Company&#146;s consolidated financial statements, management anticipates that the Company will (i)&nbsp;report a net loss from discontinued operations through the effective date of the sale to Advantage RN, which will include an estimated charge of $0.2&nbsp;million for severance to certain TeamStaff Rx employees and (ii)&nbsp;incur a loss on the disposal of TeamStaff Rx approximating $0.3&nbsp;million principally from recognition of the remaining unfunded operating lease payments.

</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Under the terms of the Asset Purchase Agreement, Advantage RN did not assume any debts, obligations
or liabilities of TeamStaff Rx nor did it purchase any accounts receivable outstanding as of the
closing date. Following the closing, Advantage RN will have the right to use, through February&nbsp;28,
2011, the premises located in Clearwater, Florida that is currently used by TeamStaff Rx for its
principal executive offices of the Business. In connection with such use, Advantage RN will make
rent subsidy payments to TeamStaff Rx totaling $125,000, consisting of (i) $25,000 payable at the
closing, and (ii)&nbsp;an additional $100,000 payable in 10 equal monthly installments of $10,000
payable on the first day of each calendar month beginning on March&nbsp;1, 2010 until December&nbsp;1, 2010.
Effective with the closing of this transaction, the President of our TeamStaff Rx subsidiary, Dale
West, ceased her employment with TeamStaff. Ms.&nbsp;West will receive severance payments and benefits
as provided for in the employment agreement we entered into with her in December&nbsp;2008. See the
discussion of these payments and benefits under the section of this annual report captioned
&#147;Employment Agreements with Named Executive Officers&#148;.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Loan Facility</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">On March&nbsp;28, 2008, we entered into an Amended and Restated Loan and Security Agreement dated as of
March&nbsp;28, 2008 (the &#147;Loan Agreement&#148;) with Business Alliance Capital Company (&#147;BACC&#148;), a division
of Sovereign Bank (&#147;Sovereign&#148; or &#147;Lender&#148;). Effective April&nbsp;1, 2008, BACC changed its name to
Sovereign Business Capital. Under the Loan Agreement, the Lender agreed to provide a revolving
credit facility to the Company in an aggregate amount of up to $3,000,000, subject to the further
terms and conditions of the Loan Agreement. The loan is secured by a first priority lien on all of
the Company&#146;s assets. Previously in 2005, the Company and PNC Bank, National Association (&#147;PNC&#148;)
had entered into an $8,000,000 revolving credit facility (&#147;PNC Loan Facility&#148;). Pursuant to the
Loan Agreement, the Lender (i)&nbsp;acquired by assignment from PNC all right, title and interest of PNC
under the PNC Loan Facility, the PNC note and related loan documentation, and (ii)&nbsp;restructured the
PNC Loan Facility into a $3,000,000 revolving credit facility with a 3&nbsp;year term. The Company&#146;s
ability to request loan advances under the Loan Agreement is subject to computation of the
Company&#146;s advance limit and compliance with the covenants and conditions of the loan. The facility
is for a term of 36&nbsp;months and matures on March&nbsp;31, 2011. Interest on amounts due accrues on the
daily unpaid balance of the loan advances at a per annum rate of 0.25% percentage point above the
Prime Rate in effect from time to time, but not less than 5.5% per annum.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The facility is subject to certain restrictive covenants, including minimum debt service coverage
ratio and restrictions on the Company&#146;s ability to, among other things, dispose of certain assets,
engage in certain transactions, incur indebtedness and pay dividends. The Loan Agreement also
provides for customary events of default following which, the Lender may, at its option, accelerate
the amounts outstanding under the Loan Agreement.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 10pt">In connection with the disposition of the assets of our TeamStaff Rx subsidiary, we were required
to obtain the consent of Sovereign. On January&nbsp;12, 2010 we received such consent. As a condition to
such consent, however, Sovereign reduced the maximum amount available under such loan facility from
$3.0&nbsp;million to $2.0&nbsp;million. As of September&nbsp;30, 2009, there was no debt outstanding under the
Loan Agreement and unused availability (as defined) totaled $1.7&nbsp;million, net of required
collateral reserves per the Loan Agreement for certain payroll and tax liabilities. As of
September&nbsp;30, 2009, TeamStaff had working capital of $0.9&nbsp;million. Accordingly, management does
not believe that the reduction in the availability under the Loan Agreement will have a material
adverse impact on the Company&#146;s operations and financial condition.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">In addition, on January&nbsp;11, 2010, we determined that as of September&nbsp;30, 2009, we were not in
compliance with the debt service coverage ratio covenant of the Loan Agreement. The Loan Agreement
provides that following an event of default, Sovereign may, among other remedies provided for in
the Loan Agreement, accelerate the amounts outstanding under the Loan Agreement, take such actions
as it deems necessary to protect its security interest in the collateral, and terminate the Loan
Agreement. In connection with its consent to the sale of the TeamStaff Rx assets and loan
modification, Sovereign waived such non-compliance for the period ended September&nbsp;30, 2009.
Sovereign, however, reserved its rights under the Loan Agreement with respect to any future
non-compliance with the debt service coverage ratio for any future period or any other provision of
the Loan Agreement. If covenant violations were to occur in the future and the lender does not
agree to modify the covenants or waive such violations, it could result in the acceleration of the
maturity date of all of our debt under this loan facility. In both of these circumstances it could
have a material adverse impact on our business and financial condition. See &#147;<I>Risk Factors &#150; Risks
Relating to our Revolving Credit Line</I>&#148;.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Employees</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">As of September&nbsp;30, 2009, TeamStaff employed 45 corporate (non worksite) employees, both full-time
and part-time, including executive officers, a decrease from 64 during the previous fiscal year. As
of September&nbsp;30, 2009, TeamStaff also employed approximately 911 contract employees on client
assignments. TeamStaff believes its relationship with its current employees is satisfactory. None
of TeamStaff&#146;s employees are covered by a collective bargaining agreement.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Available Information</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">We file annual, quarterly and current reports and other information with the Securities and
Exchange Commission (&#147;SEC&#148;). Our annual reports on Form 10-K, quarterly reports on Form 10-Q,
current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the Exchange Act), are
available free of charge in the &#147;Investor Relations&#148; section of our website at www.teamstaff.com.
Our Internet website and the information contained on that website, or accessible from our website,
is not intended to be incorporated into this Annual Report on Form 10-K or any other filings we
make with the SEC. These reports, and any amendments to these reports, are made available on our
website as soon as reasonably practicable after such reports are filed with or furnished to the
SEC. Such reports are also available, free of charge, from the SEC&#146;s EDGAR database at www.sec.gov.
</DIV>

<DIV align="left">
<A name="103"></A>
</DIV>

<DIV align="left" style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="7%"></TD>
    <TD width="1%"></TD>
    <TD></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left"><B>Item&nbsp;1A.</B></TD>
    <TD>&nbsp;</TD>
    <TD><B>Risk Factors</B></TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><I>As provided for under the Private Securities Litigation Reform Act of 1995 (&#147;1995 Reform Act&#148;), we
wish to caution shareholders and investors that the following important factors, among others
discussed throughout this Annual Report on Form&nbsp;10-K for the fiscal year ended September&nbsp;30, 2009,
have affected, and in some cases could affect, our actual results of operation and cause our
results to differ materially from those anticipated in forward looking statements made herein. Our
business, results of operations and financial condition may be materially and adversely affected
due to any of the following risks. The risks described below are not the only ones we face.
Additional risks we are not presently aware of or that we currently believe are immaterial may also
impair our business operations. The trading price of our common stock could decline due to any of
these risks. In assessing these risks, you should also refer to the other information contained or
incorporated by reference in this Annual Report on Form&nbsp;10-K, including our consolidated financial
statements and related notes.</I>
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Safe Harbor Statement</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Certain statements contained herein constitute &#147;forward-looking statements&#148; within the meaning of
the 1995 Reform Act. TeamStaff desires to avail itself of certain &#147;safe harbor&#148; provisions of the
1995 Reform Act and is therefore including this special note to enable it to do so. Forward-looking
statements included in this Report on Form 10-K for fiscal year ended September&nbsp;30, 2009 involve
known and unknown risks, uncertainties, and other factors which could cause TeamStaff&#146;s actual
results, performance (financial or operating) or achievements to differ from the future results,
performance (financial or operating) or achievements expressed or implied by such forward-looking
statements. Such future results are based upon management&#146;s best estimates based upon current
conditions and the most recent results of operations. These risks include, but are not limited to,
the risks identified below.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">We believe it is important to communicate our expectations to our shareholders and potential
shareholders. There may be events in the future, however, that we are not accurately able to
predict or over which we have no control. The risk factors listed below, as well as any cautionary
language in this filing, provide examples of risks, uncertainties and events that may cause our
actual results to differ materially from the expectations we describe in our forward-looking
statements. You should be aware that the occurrence of any of the events described in the risk
factors below, elsewhere in this filing and other events that we have not predicted or assessed
could have a material adverse effect on our earnings, financial condition, cash flows or business.
In such case, the price of our securities could decline.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Risks Relating to Our Business and Our Industry</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>TeamStaff GS&#146;s revenue are derived from U.S. Government customers.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">We derive a substantial portion of our revenues in our TeamStaff GS subsidiary from the U.S.
Government as a prime contractor or a subcontractor. Revenues from the U.S. Government represented
approximately 98% of the total revenues of TeamStaff GS for each of the 2009 and 2008 fiscal years.
Further, in fiscal 2009, through its FSS contracts primarily with the DVA, TeamStaff GS had
independent task-orders with four DVA-related facilities that comprised 31%, 23%, 12% and 11% of
the Company&#146;s overall consolidated revenue, or 77% in the aggregate. Accordingly, our consolidated
revenues could be materially adversely impacted by a reduction in the overall level of U.S.
Government spending and by changes in its spending priorities from year to year.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">We are particularly dependent on the continuation of our relationship with DVA. As discussed above,
in January&nbsp;2008 Teamstaff GS was issued purchase orders for the DVA&#146;s consolidated pharmacy
distribution centers from the DVA national contracting office. Although the current task orders
expired on December&nbsp;31, 2009, a six month continuation of services extension for all six locations
serviced by TeamStaff GS was awarded on December&nbsp;14, 2009. We anticipate that the DVA may release
new requests for proposals related to staffing services at its pharmacy distribution facilities in
early 2010. In such an event, the Company intends to submit a proposal to address any such
solicitation. Although the Company believes it is well positioned to continue its relationship with
the DVA, no assurances can be given that the DVA would further extend our current service order or
that the Company will successfully bid for new contract solicitations which may by published by DVA
or that even if the Company is granted subsequent orders, that such orders would be of a scope
comparable to the services that the Company has provided to date. If the DVA does not further
extend the Company&#146;s current service contract or the Company is not successful in its efforts to
obtain contract awards pursuant to new solicitations, the Company&#146;s results of operations and
financial condition would be materially adversely affected.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Furthermore, even if the overall level of U.S. Government spending does increase or remains stable,
the budgets of the government agencies with whom we do business may be decreased or our projects
with them may not be sufficiently funded, particularly because Congress usually appropriates funds
for a given project on a fiscal-year basis even though contract performance may take more than one
year. In the event the budgets of the U.S. Government entities with which we do business,
particularly the DVA, are decreased or underfunded, our consolidated revenues and results of
operations could be adversely affected. In addition, obtaining U.S. Government contracts remains a
highly competitive process and this has led to a greater portion of our revenue base being
associated with contracts providing for a lower amount of reimbursable cost than we have
traditionally been able to recover. We are heavily dependent upon the U.S. Government as the
primary customer to our TeamStaff GS subsidiary. In light of the recent disposition of our
TeamStaff Rx business, our dependence on the results of operations of TeamStaff is significantly
increased as compared to prior periods. Our future success and revenue growth will depend in part
upon our ability to continue to expand our customer base.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>We face risks relating to U.S. Government contracts because these contracts may be terminated at
will.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Many of the U.S. Government programs in which we participate as a contractor or subcontractor may
extend for several years. However, these programs are normally funded on an annual basis. The U.S.
Government may modify, curtail or terminate its contracts and subcontracts at its convenience. Due
to our increasing dependence on these relationships, the modification, curtailment or termination
of our major programs or contracts would have a material adverse effect on our results of
operations and financial condition.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>Our contract costs are subject to audits and investigations by U.S. Government agencies and
unfavorable government audit results could force us to refund previously recognized revenues and
could subject us to a variety of penalties and sanctions.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">From time to time, U.S. Government representatives may audit our performance on and costs incurred
on our U.S. Government contracts, including allocated indirect costs. Further, federal agencies can
also audit and review our compliance with applicable laws, regulations and standards. These audits
may result in adjustments to our contract costs. In the event that it is determined that our
payments from Government agencies was in excess of contractual costs, we could be assessed for
these excess payments. We would expect that we would normally negotiate with U.S. Government
representatives before settling on final adjustments to our contract costs. However, we do not know
the outcome of any future audits and adjustments and we may be required to reduce our revenues or
profits upon completion and final negotiation of these audits. Further, an audit of our work,
including an audit of work performed by companies we have acquired or may acquire, or
subcontractors we have hired or may hire, could force us to refund previously recognized revenues.
Similarly, we are from time to time subject to inquiries and investigations of our business
practices by the U.S. Government due to our participation in government contracts. We cannot assure
you that any such inquiry or investigation will not have a material adverse effect on our results
of operations and financial condition.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">If a government audit uncovers improper or illegal activities, we may be subject to civil and
criminal penalties and administrative sanctions, including termination of contracts, forfeiture of
profits, suspension of payments, fines, and suspension or debarment from doing business with
federal government agencies. In addition, we could suffer serious harm to our reputation if
allegations of impropriety were made against us, whether or not true. If we were suspended or
debarred from contracting with the federal government generally or with any specific agency, if our
reputation or relationships with government agencies were impaired, or if the government otherwise
were to cease doing business with us or were to significantly decrease the amount of business it
does with us, our revenue, cash flows and operating results would be materially adversely affected.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>The U.S. Government contract bid process is complex and sometimes lengthy, subject to protest and
implementation delays.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The U.S. Government contract bid process is complex and sometimes lengthy. Once a bid is won and a
contract awarded, there still is the possibility of a bid protest or numerous delays in
implementation. There can be no assurance that such protest process or implementation delays will
not have a material adverse effect on our financial condition or results of operations in the
future.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>Our failure to comply with complex federal procurement laws and regulations could cause us to lose
business, incur additional costs, and subject us to a variety of penalties.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">We must comply with complex laws and regulations relating to the formation, administration, and
performance of federal government contracts. These laws and regulations create compliance risk and
affect how we do business with our federal agency clients, and may impose added costs on our
business. If a government review or investigation uncovers improper or illegal activities, we may
be subject to civil and criminal penalties and administrative sanctions, including termination of
contracts, forfeiture of profits, harm to our reputation, suspension of payments, fines, and
suspension or debarment from doing business with federal government agencies. The government may in
the future reform its procurement practices or adopt new contracting rules and regulations,
including cost accounting standards, that could be costly to satisfy or that could impair our
ability to obtain new contracts. A failure to comply with applicable laws and regulations could
result in contract termination, price or fee reductions, or suspension or debarment from
contracting with the federal government, each of which could lead to a material reduction in our
revenues, cash flows and operating results.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>Our government services business is dependent upon maintaining our reputation, our relationships
and our performance.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The reputation and relationships that we have established and currently maintain with government
personnel and agencies are important to maintaining existing business and identifying new business.
If our reputation or relationships were damaged, it could have a material adverse effect on our
ability to maintain or expand our business relationship with U.S. Government entities. In addition,
if our performance does not meet agency expectations, our revenue and operating results could be
materially harmed.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>Competition is intense in the government services business.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">There is often intense competition to win federal agency contracts. If we are unable to
successfully compete for new business or win competitions to maintain existing business, our
revenue growth and margins may decline. Many of our competitors are larger and have greater
resources than we do, larger client bases, and greater brand recognition. Our larger competitors
also may be able to provide clients with different or greater capabilities or benefits than we can
provide.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>Loss of our General Services Administration (&#147;GSA&#148;) schedule contracts or other contracting
vehicles could impair our ability to win new business.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">GSA schedule contracts constitute a significant percentage of revenue from our federal agency
clients. Due to our dependence on providing staffing services to U.S. government entities, if we
were to lose one or more of these contracts or other contracting vehicles, we could lose a
significant revenue source and our operating results and financial condition would be materially
and adversely affected. These contracts typically have an initial term with multiple options that
may be exercised by our government agency clients to extend the contract for successive periods of
one or more years. We can provide no assurance that our clients will exercise these options.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>Our failure to obtain and maintain necessary security clearances may limit our ability to perform
classified work for government clients, which could cause us to lose business.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Some government contracts require us to maintain facility security clearances and require some of
our employees to maintain individual security clearances. If our employees lose or are unable to
timely obtain security clearances, or we lose a facility clearance, a government agency client may
terminate the contract or decide not to renew it upon its expiration.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>Our employees may engage in misconduct or other improper activities, which could harm our business.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Like all government contractors, we are exposed to the risk that employee fraud or other misconduct
could occur. Misconduct by our employees could include intentional failures to comply with federal
government procurement regulations, engaging in unauthorized activities, seeking reimbursement for
improper expenses, or falsifying time records. Employee misconduct could also involve the improper
use of our clients&#146; sensitive or classified information, which could result in regulatory sanctions
against us and serious harm to our reputation. It is not always possible to deter employee
misconduct, and precautions to prevent and detect this activity may not be effective in controlling
such risks or losses, which could adversely affect our business.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>Security breaches in sensitive government information systems could result in loss of our clients
and cause negative publicity.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Many of the systems we develop, install, and maintain involve managing and protecting information
used in intelligence, national security, and other sensitive or classified government functions. A
security breach in one of these systems could cause serious harm to our business, damage our
reputation, and prevent us from being eligible for further work on sensitive or classified systems
for federal government clients. We could incur losses from such a security breach that could exceed
the policy limits under our insurance. Damage to our reputation or limitations on our eligibility
for additional work resulting from a security breach in one of our systems could materially reduce
our revenue.
</DIV>
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<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>The failure by Congress to approve budgets on a timely basis for the federal agencies we support or
changes in the budget priorities of such agencies could delay or reduce spending and cause us to
lose revenue.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">On an annual basis, Congress must approve budgets that govern spending by each of the federal
agencies we support. When Congress is unable to agree on budget priorities and is unable to pass
the annual budget on a timely basis,
Congress typically enacts a continuing resolution. A continuing resolution allows government
agencies to operate at spending levels approved in the previous budget cycle. When government
agencies must operate under a continuing resolution, it may delay funding we expect to receive from
clients on work we are already performing and will likely result in any new initiatives being
delayed, and potentially cancelled. Changes in federal government fiscal or spending policies could
adversely affect our government agency business. The occurrence of either scenario would adversely
impact our results of operations.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>We are dependent upon certain of our management personnel.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Our success to date has resulted in part from the significant contributions of our executive
officers. Our executive officers are expected to continue to make important contributions to our
success. The loss of our key personnel could materially affect our operations. Currently, our CEO,
CFO and the President of TeamStaff GS are under employment contracts. The Company does not
maintain &#147;key person&#148; life insurance policies on any of our key personnel.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>Our current President and Chief Executive Officer intends to resign from such positions at the end
of January&nbsp;2010. If we do not employ a new President and Chief Executive Officer by the time of his
departure, we will not have an executive officer to perform important managerial and oversight
functions.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">As previously disclosed, our President and Chief Executive Officer, Rick J. Filippelli, has
informed the Board of his intent to resign from such positions effective at the end of
January&nbsp;2010. Our Board has established a search committee to identify candidates for Chief
Executive Officer and has developed a short-list of candidates from which it anticipates being able
to select the new President and Chief Executive Officer. However, no assurances can be given that
we will be able select and employ our new President and Chief Executive Officer prior to the time
that Mr.&nbsp;Filippelli intends to depart our company. In such an event, we would need to appoint a
person to perform such responsibilities on an interim basis. If we are not able to employ a new
President and Chief Executive Officer by the time of Mr.&nbsp;Filippelli&#146;s departure, we will not have
an executive officer to perform the important managerial and oversight functions customarily
performed by a Company&#146;s chief executive. If this condition persists for an extended period, our
business, financial condition and results of operations could be materially adversely affected.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>Demand for staffing services could be significantly affected by the general level of economic
activity and unemployment or by factors beyond our control (i.e.; hurricanes, weather conditions,
acts of war, etc.) in the United States.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Our business, financial condition and results of operations may be affected by various economic
factors. Unfavorable economic conditions may make it more difficult for us to maintain and continue
our revenue growth. In an economic recession or under other adverse economic conditions, customers
and vendors may be more likely to be unable to meet contractual terms or their payment obligations.
When economic activity increases, contract employees are often added before full-time employees are
hired. However, as economic activity slows, many companies, including our hospital and healthcare
facility clients, reduce their use of contract employees before laying off full-time employees. In
addition, we experience more competitive pricing pressure during periods of economic downturn. A
decline in economic conditions may have a material adverse effect on our business.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The current recession and the continuation or intensification of any continued volatility in the
financial markets may have an adverse impact on the availability of credit to our customers and
businesses generally and could lead to a further weakening of the U.S. and global economies. To the
extent that disruption in the financial markets continues and/or intensifies, it has the potential
to materially affect our customers&#146; ability to tap into debt and/or equity markets to continue
their ongoing operations, have access to cash and/or pay their debts as they come due, all of which
could reasonably be expected to have an adverse impact on the number of open positions for
healthcare staff they request, as well as their ability to pay for our staffing services. Continued
economic weakness is likely to adversely impact our results of operations.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The disruptions that the financial markets are currently undergoing have led to unprecedented
governmental intervention on an emergency basis. The results of these actions have been unclear,
resulting in confusion and uncertainty which in itself has been materially detrimental to the
efficient functioning of the markets. It is impossible to predict what, if any, additional interim
or permanent governmental restrictions may be imposed on the markets and/or the effect of such
restrictions on us, our customers and the operations of corporate entities generally in the United
States.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 10pt">There are significant expectations that there may be legislative changes in the next few years that
fundamentally impact the healthcare industry. We cannot assess the impact that any such future
changes may have on our customers and, as a result, on our business. We also cannot assess how, and
whether, the recently enacted fiscal stimulus bill will impact our business and our industry.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>Our business may be adversely affected due to economic conditions in specific geographic markets.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">A significant portion of our revenues are derived from Illinois, Kansas, South Carolina and
Tennessee with respect to the government staffing services provided by TeamStaff GS. While we
believe that our market diversification will eventually lessen this risk in addition to generating
significant revenue growth, we may not be able to duplicate in other markets the revenue growth and
operating results experienced in the listed markets. Accordingly, we have a specific sensitivity
to adverse economic conditions in these geographic markets.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>Our financial condition may be affected by increases in health insurance premiums, unemployment
taxes and workers&#146; compensation rates.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Health insurance premiums, state unemployment taxes and workers&#146; compensation rates are in part
determined by our claims experience and comprise a significant portion of our direct costs. If we
experience a large increase in claim activity, our health insurance premiums, unemployment taxes or
workers&#146; compensation rates could increase. Although we employ internal and external risk
management procedures in an attempt to manage our claims incidence and estimate claims expenses and
structure our benefit contracts to provide as much cost stability as possible, we may not be able
to prevent increases in claim activity, accurately estimate our claims expenses or pass the cost of
such increases on to our clients. Since our ability to incorporate such increases into our fees to
our clients is constrained by contractual arrangements with our clients, a delay could occur before
such increases could be reflected in our fees, which may reduce our profit margin. As a result,
such increases could have a material adverse effect on our financial condition, results of
operations, cash flows and liquidity.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>Our financial condition may be affected by risks associated with our health and workers&#146;
compensation claims experience.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Although we utilize only fully insured plans of health care and incur no direct risk of loss under
those plans, the premiums that we pay for health care and workers&#146; compensation insurance are
directly affected by our claims experience, including the claims experience of our off-site
contract employees. If this experience is unfavorable, the premiums that are payable by us will
increase or coverage may become unavailable altogether. We may not be able to pass such increases
onto our clients, which may reduce our profit margins. Increasing health care and workers&#146;
compensation premiums could also place us at a disadvantage in competing for new clients. In
addition, periodic reassessments of workers&#146; compensation claims of prior periods (when TeamStaff
was covered under large deductible-type plans) may require an increase or decrease to our reserves,
and therefore may also affect our present and future financial condition.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>If unfavorable government regulations regarding contract and permanent staffing are implemented, or
if current regulations are changed, our business could be harmed.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Because many of the laws related to the employment relationship were enacted prior to the
development of alternative staffing businesses, many of these laws do not specifically address the
obligations and responsibilities of non-traditional employers. Numerous federal, state and local
laws and regulations relating to labor, tax, insurance and employment matters affect our
operations. Many states require licensure or registration of entities providing contract health
care or nursing services as well as those offering permanent placement services. There can be no
assurance that we will be able to comply with any such regulations, which may be imposed upon us
now or in the future, and our inability to comply with any such regulations could have a material
adverse effect on our results of operations and financial condition. In addition, there can be no
assurance that existing laws and regulations which are not currently applicable to us will not be
interpreted more broadly in the future to apply to our existing activities or that new laws and
regulations will not be enacted with respect to our activities. Either of these changes could have
a material adverse effect on our business, financial condition, results of operations and
liquidity.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>We may not be able to obtain all of the licenses and certifications that we need to operate.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">State authorities regulate the temporary medical staffing and permanent placement industry and some
states require us to satisfy operating, licensing or certification requirements. If we are unable
to obtain or maintain all of the required licenses or certifications that we need, we could
experience material adverse effects to our results of operations, financial condition and
liquidity.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>Health care reform could impose unexpected burdens on our ability to conduct our business.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Regulation in the health care field continues to evolve, and we cannot predict what additional
government regulations affecting our business may be adopted in the future. Changes in any of these
laws or regulations may adversely impact the demand for our services, require that we develop new
or modified services to meet the demands of the marketplace, or require that we modify the fees
that we charge for our services. Any such changes may adversely impact our competitiveness and
financial condition.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>We may be held liable for the actions of our contract employees and therefore incur unforeseen
liabilities.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">A number of legal issues with respect to the employment arrangements among contract staffing firms,
their clients and contract employees remain unresolved. These issues include who bears the ultimate
liability for violations of employment and discrimination laws. As a result of our employer status,
we may be liable for violations of these or other laws despite contractual protections. While our
client service agreements generally provide that the client is to indemnify us for any liability
caused by the client&#146;s failure to comply with its contractual obligations and the requirements
imposed by law, we may not be able to collect on such a contractual indemnification claim and may
then be responsible for satisfying such liabilities. In addition, contract employees may be deemed
to be our agents, which could make us liable for their actions.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>Our staffing of healthcare professionals exposes us to potential malpractice liability.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Through our subsidiaries, we engage in the business of providing contract healthcare professionals.
The placement of such employees increases our potential liability for negligence and professional
malpractice of those employees. Although we are covered by professional malpractice liability
insurance in the aggregate amount of $5.0&nbsp;million with a $2.0&nbsp;million per occurrence limit, which
we deem reasonable under the circumstances, not all of the potential liability we face may be fully
covered by insurance. Any significant adverse claim, which is not covered by insurance, may have a
material adverse effect on us.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>We may not be fully covered by the insurance we procure.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Although we carry liability insurance, the insurance we purchase may not be sufficient to cover any
judgments, settlements or costs relating to any present or future claims, suits or complaints. In
addition, sufficient insurance may not be available to us in the future on satisfactory terms or at
all. Additionally, the ever-increasing costs of insurance will impact our profitability to the
extent that we cannot offset these increases into our costs of
services. Our current workers&#146; compensation plan is a partially
self-funded workers&#146; compensation insurance program. The Company pays a base premium plus actual losses incurred, not to exceed certain stop-loss limits. The Company is insured for losses above these limits, both per occurrence and in the aggregate.
 If the insurance we carry
is not sufficient to cover any judgments, settlements or costs relating to any present or future
claims, suits or complaints, our business, financial condition, results of operations and liquidity
could be materially adversely affected.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>If we were not able to renew all of the insurance plans that cover contract healthcare employees,
our business would be adversely impacted.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The maintenance of health and workers&#146; compensation insurance plans that cover our contract
healthcare employees is a significant part of our business. If we were unable to secure renewal of
contracts for such plans or the renewal of such plans with favorable rates and with competitive
benefits, our business would be adversely affected. The current health and workers&#146; compensation
contracts are provided by vendors with whom we have an established relationship and on terms that
we believe to be favorable. While we believe that renewal contracts could be secured on competitive
terms without causing significant disruption to our business, there can be no assurance in this
regard.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>We operate in a highly competitive market and our success depends on our ability to remain
competitive in obtaining and retaining clients and demonstrating the value of our services.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">We operate in a highly competitive market. Our primary competitors in government staffing solutions
include Top Echelon Management, Inc., Total Management, Inc., Medical Staffing Network Holdings,
Inc., Kforce, Inc. and
Maxim Healthcare Services, Inc. In addition, other large staffing companies that do not currently
provide government staffing solutions may seek to enter into this space. These companies may have
greater name recognition and financial and marketing resources than us. Since we compete with
numerous entities that have greater resources than us, our business will suffer if we are not
competitive with respect to each of the services we provide. We also compete with smaller, more
specialized entities which are able to concentrate their resources on particular areas.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">We believe that the primary competitive factors in obtaining and retaining government healthcare
facility clients are identifying qualified healthcare professionals for specific job requirements,
providing qualified employees in a timely manner, pricing services competitively and effectively
monitoring the job performance of our contract professionals. Competition for government healthcare
facility clients and contract and permanent healthcare professionals may increase in the future
related to these factors or due to a shortage of qualified healthcare professionals in the
marketplace and, as a result, we may not be able to remain competitive. To the extent competitors
seek to gain or retain market share by reducing prices or increasing marketing expenditures, we
could lose revenue or clients and our margins could decline, which could seriously harm our
operating results and cause the price of our stock to decline. With respect to staffing for
Government entities, we also compete with the U.S. Government&#146;s own in-house capabilities and
ability to hire permanent staff. To remain competitive, we must provide superior service and
performance on a cost-effective basis to our customers. Any failure to do so could have a material
adverse effect on our business.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>If we are unable to attract qualified nurses and allied health professionals for our healthcare
staffing business, or other contract personnel for our staffing business, our business may be
negatively affected.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">We rely heavily on our ability to attract and retain nurses and allied health professionals who
possess the skills, experience and licenses necessary in order to provide staffing solutions for
hospital and healthcare facility assignments. We compete for healthcare professionals with other
healthcare staffing companies and with hospitals and healthcare facilities. We must continually
evaluate and expand our healthcare professional network to keep pace with our hospital and
healthcare facility clients&#146; needs. Currently, there is a shortage of qualified nurses in most
areas of the United States and competition for nursing personnel is increasing. We may be unable to
continue to increase the number of healthcare professionals that we recruit, thereby decreasing the
potential for growing our business. Our ability to attract and retain healthcare professionals
depends on several factors, including our ability to provide healthcare professionals with
assignments that they view as attractive and to provide them with competitive benefits and wages.
The cost of attracting healthcare professionals and providing them with attractive benefits
packages may be higher than we anticipate and, as a result, if we are unable to pass these costs on
to our hospital and healthcare facility clients, our profitability could decline. Moreover, if we
are unable to attract and retain healthcare professionals, the quality of our services to our
hospital and healthcare facility clients may decline and, as a result, we could lose clients.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Similarly, in order to provide contract logistic, administrative or other employees to our clients,
we are dependent on securing a pool of qualified persons willing to accept assignments for our
clients. Our business is materially dependent upon the continued availability of such qualified
personnel. Our inability to secure qualified personnel would have a material adverse effect on our
business.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>We are dependent on the proper functioning of our information systems.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">We are dependent on the proper functioning of our information systems in operating our business.
Critical information systems used in daily operations identify and match staffing resources and
client assignments. The system also tracks regulatory credentialing expirations and other relevant
client and healthcare information. They also perform payroll, billing and accounts receivable
functions. Our information systems are vulnerable to fire, storm, flood, power loss,
telecommunications failures, physical or software break-ins and similar events. If our information
systems fail or are otherwise unavailable, these functions would have to be accomplished manually,
which could impact our ability to identify business opportunities quickly, maintain billing and
staffing records reliably, pay our staff in a timely fashion and bill for services efficiently.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>Potential tax liabilities may adversely affect our financial condition.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">From time to time, we have received several notices from the Internal Revenue Service regarding
potential underpayment, overpayment or non-payment of payroll-related taxes. We have disputed these
notices, and strongly believe that such notices were the result of errors made in reporting taxes
paid and the resulting misapplication of taxes paid, in large part due to our operation of
approximately seventeen different subsidiaries predominantly from
our former Professional Employer Organization discontinued operations. The IRS has made claims
that, if we were required to pay in full, could materially adversely affect our financial condition
and cash flows. We are contesting these notices because we believe all material payroll-related
taxes have been paid. We further believe that once all tax payments are applied appropriately, all
material penalties and interest should be abated. We have retained the services of Ernst &#038; Young,
LLP to assist us in this regard. However, there can be no assurance that we will be successful in
our efforts. In settling various years for specific subsidiaries with the IRS, the Company has
received refunds for those specific periods; however, as the process of settling and concluding on
other periods and subsidiaries is not yet completed and the potential exists for related penalties
and interest, the remaining liability ($1.1&nbsp;million at September&nbsp;30, 2009) has been recorded in
accounts payable in the accompanying balance sheets. In fiscal 2009, the Company paid $1.1&nbsp;million,
related to this matter. Based on an assessment of periods settled and the status of open periods
under review by the IRS, management reduced its estimated liability by $0.7&nbsp;million in 2008. Such
amount, accounted for as a change in estimate, is included as a component of other income
(expense)&nbsp;in the accompanying 2008 statement of operations. Management believes that the ultimate
resolution of these remaining payroll tax matters will not have a significant adverse effect on its
financial position or future results of operations.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>We have a substantial amount of goodwill on our balance sheet. Future write-offs of goodwill may
have the effect of decreasing our earnings or increasing our losses.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">We have previously obtained growth through acquisitions of other companies and businesses. Under
existing accounting standards, we are required to periodically review goodwill and indefinite life
intangible assets for possible impairment. In the event that we are required to write down the
value of any assets under these pronouncements, it may materially and adversely affect our
earnings. See the more detailed discussion appearing as part of our Management&#146;s Discussion and
Analysis of Financial Condition and Results of Operations in Item&nbsp;7 herein.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">As of September&nbsp;30, 2009, we had $8.6&nbsp;million of goodwill on our consolidated balance sheet, which
represents the excess of the total purchase price of our acquisition over the fair value of the
net assets acquired. At such date, goodwill represented approximately 32% of our total assets. As
permitted, we do not amortize goodwill or intangible assets deemed to have an indefinite useful
life. Impairment, for goodwill and intangible assets deemed to have an indefinite
life, exists if the net book value of the goodwill or intangible asset equals or exceeds its fair
value. As required, we performed our annual review for impairment during the fourth quarter of
fiscal year 2009 by performing a fair value analysis of each reporting unit. The fair value
analysis was completed with the assistance of outside valuation professionals. The carrying values
of the intangibles associated with our continuing TeamStaff GS business were supported by the
results of this valuation, However, as a result of the decision to divest TeamStaff Rx, the Company
recognized an impairment charge of $2.3&nbsp;million to reduce the carrying value of long lived assets
(tradename &#151; $0.7&nbsp;million and goodwill &#151; $1.6&nbsp;million) to estimated fair value. The estimated fair
value was derived from the terms of the sale of these assets to Advantage RN. The impairment charge
is included in the 2009 loss from discontinued operations. Contributing to this 2009 impairment
charge was the reduction in our projected growth rates (compared to
prior projections),
management&#146;s current assessment of the healthcare staffing industry and the significant decrease in
the enterprise value of the unit. Additional impairment analyses may be performed to determine
if indicators of impairment are present, and if so, such amount will be determined and the
associated charge will be recorded to the consolidated statement of operations. Although it does
not affect our cash flow, an impairment charge to earnings has the effect of decreasing our
earnings or increasing our losses, as the case may be. If we are required to record additional
impairment charges, our stock price could also be adversely affected.
</DIV>

<P align="center" style="font-size: 10pt">&nbsp;

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">




<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Risks Relating To Our Revolving Credit Line</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>Our credit facility is secured by a lien on substantially all of our assets and if we are unable to
make the scheduled principal and interest payments on the facility or maintain compliance with
other debt covenants, we may default on the facility.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">TeamStaff completed a $3.0&nbsp;million revolving credit facility by Sovereign Business Capital
(formerly known as Business Alliance Capital Company), a division of Sovereign Bank, effective on
March&nbsp;28, 2008. Revolving credit advances bear interest at the per annum rate of Prime Rate plus 25
basis points, but not less than 5.5% per annum. The facility has a three-year life and contains
term and line of credit borrowing options. In connection with the disposition of the assets of our
TeamStaff Rx subsidiary, we were required to obtain the consent of the lender under our Loan
Agreement, Sovereign. On January&nbsp;12, 2010 we were granted such consent. As a condition to such
consent, however, Sovereign reduced the maximum amount available under such loan facility from $3.0&nbsp;million
to $2.0&nbsp;million. As of September&nbsp;30, 2009, there was no debt outstanding under the Loan Agreement
and unused availability (as defined) totaled $1.7&nbsp;million, net of required collateral reserves per
the Loan Agreement for certain payroll and tax liabilities. As of September&nbsp;30, 2009, we had
working capital of $0.9&nbsp;million. Accordingly, management does not believe that the reduction in
the availability under the Loan Agreement will have a material adverse impact on our operations and
financial condition.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The facility is subject to certain restrictive covenants, including minimum debt service coverage
ratio and restrictions on the Company&#146;s ability to, among other things, dispose of certain assets,
engage in certain transactions, incur indebtedness and pay dividends. In addition, the line of
credit is secured by a lien on substantially all of our assets. Due to these covenants and
restrictions, our operations may be affected in several ways. For instance, a portion of our cash
flow from operations will be dedicated to the payment of the principal and interest on our
indebtedness and as referenced above, our ability to enter into certain transactions, incur
additional indebtedness and dispose of certain assets may be limited. The facility is subject to
acceleration upon non-payment or various other standard default clauses. Material increases in the
Prime rate could have a material adverse effect on our results of operations, the status of the
revolving credit facility, as well as interest costs. Failure to pay revolving credit advances or
any failure to comply with applicable restrictive covenants would have a material adverse effect on
our business in that we could be required to repay the outstanding balance in advance or sell
assets in order to repay the outstanding amount. In addition, the Lender could seize the collateral
securing the loan facility.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Further, availability under the line is directly related to the successful assignment of certain
accounts receivable. Certain government accounts of TeamStaff GS are required to execute
&#147;Acknowledgements of Assignment.&#148; There can be no assurance that every TeamStaff GS government
account will execute the documentation to effectuate the assignment and secure availability. The
failure of government third parties to sign the required documentation could result in a decrease
in availability under the line of credit, which would materially affect the Company&#146;s business.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">On January&nbsp;11, 2010, we determined that as of September&nbsp;30, 2009, we were not in compliance with
the debt service coverage ratio covenant of the Loan Agreement. The Loan Agreement provides that
following an event of default, Sovereign may, among other remedies provided for in the Loan
Agreement, accelerate the amounts outstanding under the Loan Agreement, take such actions as it
deems necessary to protect its security interest in the collateral, and terminate the Loan
Agreement. In connection with its consent to the sale of the TeamStaff Rx assets and loan
modification, on January&nbsp;12, 2010, Sovereign waived such non-compliance for the period ending
September&nbsp;30, 2009. The Lender, however, reserved its rights under the Loan Agreement with respect
to any future non-compliance with the debt service coverage ratio for any future period or any
other provision of the Loan Agreement. If covenant violations were to occur in the future and the
lender does not agree to modify the covenants or waive such violations, it could result in the
acceleration of the maturity date of all of our debt under this loan facility. In both of these
circumstances it could have a material adverse impact on our business and financial condition.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Risks Relating To Our Stock</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>There is limited trading volume in our common stock and you may find it difficult to dispose of
your shares of common stock; it is possible that our stock may be delisted from The Nasdaq Global
Market.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Our common stock is currently traded on The Nasdaq Capital Market under the symbol &#147;TSTF&#148;. On
December&nbsp;31, 2009, the closing bid price of our common stock was $0.80. If we fail to meet any of
the continued listing standards of The Nasdaq Capital Market, our common stock will be delisted
from The Nasdaq Capital Market. These continued listing standards include specifically enumerated
criteria, such as a $1.00 minimum closing bid price.
</DIV>


<P align="center" style="font-size: 10pt">&nbsp;

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">




<DIV align="left" style="font-size: 10pt; margin-top: 10pt">On December&nbsp;17, 2009, we received a staff deficiency letter from The Nasdaq Stock Market
notifying the Company that for the past 30 consecutive business days, the closing bid price per
share of its common stock was below the $1.00 minimum bid price requirement for continued listing
on the Nasdaq Capital Market set forth in Nasdaq Listing Rule&nbsp;5550(a)(2). As a result, the
Company was notified by Nasdaq that it is not in compliance with the Listing Rule. Nasdaq has
provided the Company with 180 calendar days, or until June&nbsp;15, 2010, to regain compliance. To
regain compliance with the minimum bid price requirement, the closing bid price of our common
stock must remain above $1.00 for a minimum of ten consecutive trading days during the 180-day
compliance period. If this occurs, Nasdaq will provide us with written notification of
compliance. However, if we do not regain compliance during this grace period, our common stock will be subject to delisting from
The Nasdaq Capital Market. The 180-day compliance period relates exclusively to our bid price
deficiency. We may be delisted during the 180-day period for failure to maintain compliance with
any other listing requirement which occurs during this period.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">If our common stock were to be delisted from The Nasdaq Capital Market, trading of our common stock
most likely will be conducted in the over-the-counter market on an electronic bulletin board
established for unlisted securities such as the OTC Bulletin Board. Such trading will reduce the
market liquidity of our common stock. As a result, an investor would find it more difficult to
dispose of, or obtain accurate quotations for the price of, our common stock. If our common stock
is delisted from The Nasdaq Capital Market and the trading price remains below $5.00 per share,
trading in our common stock might also become subject to the requirements of certain rules
promulgated under the Exchange Act, which require additional disclosure by broker-dealers in
connection with any trade involving a stock defined as a &#147;penny stock&#148; (generally, any equity
security not listed on a national securities exchange or quoted on Nasdaq that has a market price
of less than $5.00 per share, subject to certain exceptions). Many brokerage firms are reluctant to
recommend low-priced stocks to their clients. Moreover, various regulations and policies restrict
the ability of shareholders to borrow against or &#147;margin&#148; low-priced stocks, and declines in the
stock price below certain levels may trigger unexpected margin calls. Additionally, because
brokers&#146; commissions on low-priced stocks generally represent a higher percentage of the stock
price than commissions on higher priced stocks, the current price of the common stock can result in
an individual shareholder paying transaction costs that represent a higher percentage of total
share value than would be the case if our share price were higher. This factor may also limit the
willingness of institutions to purchase our common stock. Finally, the additional burdens imposed
upon broker-dealers by these requirements could discourage broker-dealers from facilitating trades
in our common stock, which could severely limit the market liquidity of the stock and the ability
of investors to trade our common stock.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>Changes in our business, the volatility of the market value of our comparable companies and the
impact of litigation and disputes may increase the volatility of the stock price.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The price of our common stock could be subject to fluctuations in the future. This volatility may
result from the impact on our stock price of:
</DIV>


<DIV style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the impact of acquisitions, investments, joint ventures and divestitures that we may undertake;</TD>
</TR>

<TR>
    <TD style="font-size: 8pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the impact of the volatility of the market value of comparable public companies that are
considered in our valuation process and any publicly traded securities we may own;</TD>
</TR>

<TR>
    <TD style="font-size: 8pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the impact of litigation, government investigations or other customer disputes on our
operating performance and future prospects; and</TD>
</TR>

<TR>
    <TD style="font-size: 8pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the mix of our commercial and international business as a proportion of our overall business
and the volatility associated with companies in those business areas</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>Since we have not paid dividends on our common stock, you cannot expect dividend income from an
investment in our common stock.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">We have not paid any dividends on our common stock since our inception and do not contemplate or
anticipate paying any dividends on our common stock in the foreseeable future. Future potential
lenders may prohibit us from paying dividends without its prior consent. Therefore, holders of our
common stock may not receive any dividends on their investment in us. Earnings, if any, will be
retained and used to finance the development and expansion of our business.
</DIV>


<P align="center" style="font-size: 10pt">&nbsp;

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">




<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>We may issue preferred stock with rights senior to our common stock, which may adversely impact the
voting and other rights of the holders of our common stock.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Our certificate of incorporation authorizes the issuance of &#147;blank check&#148; preferred stock with such
designations, rights and preferences as may be determined from time to time by our board of
directors up to an aggregate of 5,000,000 shares of preferred stock. Accordingly, our board of
directors is empowered, without stockholder approval, to issue preferred stock with dividend,
liquidation, conversion, voting or other rights, which would adversely affect the voting power or
other rights of the holders of our common stock. In the event of issuance, the preferred stock
could be utilized, under certain circumstances, as a method of discouraging, delaying or preventing
a change in control of our Company, which could have the effect of discouraging bids for our Company
and thereby prevent stockholders from receiving the maximum value for their shares. Although we
have no present intention to issue any shares of our preferred stock, in order to discourage or
delay a change of control of our Company, we may do so in the future. In addition, we may determine
to issue preferred stock in connection with capital raising efforts and the terms of the stock so
issued could have special voting rights or rights related to the composition of our Board.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>Anti-takeover provisions in our Articles of Incorporation make a change in control of our Company
more difficult.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The provisions of our Articles of Incorporation and the New Jersey Business Corporation Act,
together or separately, could discourage potential acquisition proposals, delay or prevent a change
in control and limit the price that certain investors might be willing to pay in the future for our
common stock. Among other things, these provisions:
</DIV>


<DIV style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>require certain supermajority votes;</TD>
</TR>

<TR>
    <TD style="font-size: 8pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>establish certain advance notice procedures for nomination of candidates for election as
directors and for shareholders&#146; proposals to be considered at shareholders&#146; meetings; and</TD>
</TR>

<TR>
    <TD style="font-size: 8pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>divide the board of directors into three classes of directors serving staggered three-year terms.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Pursuant to our articles of incorporation, the board of directors has authority to issue up to
5,000,000 preferred shares without further shareholder approval. Such preferred shares could have
dividend, liquidation, conversion, voting and other rights and privileges that are superior or
senior to our common stock. Issuance of preferred shares could result in the dilution of the voting
power of our common stock, adversely affecting holders of our common stock in the event of its
liquidation or delay, and defer or prevent a change in control. In certain circumstances, such
issuance could have the effect of decreasing the market price of our common stock. In addition, the
New Jersey Business Corporation Act contains provisions that, under certain conditions, prohibit
business combinations with 10% shareholders and any New Jersey corporation for a period of five
years from the time of acquisition of shares by the 10% shareholder. The New Jersey Business
Corporation Act also contains provisions that restrict certain business combinations and other
transactions between a New Jersey corporation and 10% shareholders.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>You may not be able to rely on forward-looking statements.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The information contained in this report or in documents that we incorporate by reference or in
statements made by our management includes some forward-looking statements that involve a number of
risks and uncertainties. A number of factors, including but not limited to those outlined in the
Risk Factors, could cause our actual results, performance, achievements, or industry results to be
very different from the results, performance or achievements expressed or implied by these
forward-looking statements.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">In addition, forward-looking statements depend upon assumptions, estimates and dates that may not
be correct or precise and involve known or unknown risks, uncertainties and other factors.
Accordingly, a forward-looking statement in this report is not a prediction of future events or
circumstances and those future events or circumstances may not occur. Given these uncertainties and
risks, you are warned not to rely on the forward-looking statements. A forward-looking statement is
usually identified by our use of certain terminology including &#147;believes,&#148; &#147;expects,&#148; &#147;may,&#148;
&#147;will,&#148; &#147;should,&#148; &#147;seeks,&#148; &#147;pro forma,&#148; &#147;anticipates&#148; or &#147;intends,&#148; or by discussions of strategies
or intentions. We are not undertaking any obligation to update these factors or to publicly
announce the results of any changes to our forward-looking statements due to future events or
developments.
</DIV>

<DIV align="left">
<A name="104"></A>
</DIV>

<DIV align="left" style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="7%"></TD>
    <TD width="1%"></TD>
    <TD></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left"><B>ITEM 1B.</B></TD>
    <TD>&nbsp;</TD>
    <TD><B>UNRESOLVED STAFF COMMENTS</B></TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">There are no unresolved staff comments.
</DIV>



<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->18<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">



<DIV align="left">
<A name="105"></A>
</DIV>

<DIV align="left" style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="7%"></TD>
    <TD width="1%"></TD>
    <TD></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left"><B>ITEM 2.</B></TD>
    <TD>&nbsp;</TD>
    <TD><B>PROPERTIES</B></TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Operations and Facilities</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Effective October&nbsp;23, 2007, TeamStaff&#146;s corporate headquarters is located in Somerset, New Jersey.
Previously, the
Company&#146;s corporate headquarters was located in Atlanta, Georgia. TeamStaff leases its 2,670
square foot corporate headquarters in Somerset, New Jersey, as well as offices in Atlanta, Georgia;
Clearwater, Florida; Memphis, Tennessee; and Loganville, Georgia. The facilities provide
sufficient capacity to meet demands for the foreseeable future. In the fiscal year ended September
30, 2009, TeamStaff&#146;s total lease expense for continuing operations was approximately $422,000.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The following is summary information on TeamStaff&#146;s facilities as of September&nbsp;30, 2009:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">APPROXIMATE</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">EXPIRATION</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">MONTHLY</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">LOCATION</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">SQUARE FEET</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">DATE</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">TERMS</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:0px; text-indent:-0px">Corporate Headquarters<br></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,670</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8/31/2012</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD nowrap align="right">4,248 10/2009 &#150; 8/2010</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:0px; text-indent:-0px">1 Executive Drive<br></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD nowrap align="right">4,376 9/2010 &#150; 8/2011</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:0px; text-indent:-0px">Suite&nbsp;130<br></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD nowrap align="right">4,507 9/2011 &#150; 8/2012</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:0px; text-indent:-0px">Somerset, NJ</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em"><!-- Blank Space -->
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:0px; text-indent:-0px">1545 Peachtree Street, NE*<br></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,998</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6/30/2011</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD nowrap align="right">6,825 10/2009 &#150; 1/2010</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:0px; text-indent:-0px">Suite&nbsp;340<br></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD nowrap align="right">7,030 2/2010 &#150; 1/2011</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:0px; text-indent:-0px">Atlanta, GA<br></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD nowrap align="right">7,241 2/2011 &#150; 6/2011</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em; background: #cceeff">
    <TD><DIV style="margin-left:0px; text-indent:-0px">18167 US 19 North**<br></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,177</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2/28/2011</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD nowrap align="right">25,624  10/2009 &#150; 8/2010</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:0px; text-indent:-0px">Suite&nbsp;400<br></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD nowrap align="right">26,395  9/2010 &#150; 2/2011</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:0px; text-indent:-0px">Clearwater, FL</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em"><!-- Blank Space -->
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:0px; text-indent:-0px">6555 Quince Road***<br></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,894</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1/31/2010</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD nowrap align="right">2,956  10/2009 &#150; 1/2010</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:0px; text-indent:-0px">Suite&nbsp;303<br>
Memphis, TN</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em; background: #cceeff">
    <TD><DIV style="margin-left:0px; text-indent:-0px">3525 Highway 81 South<br></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,200</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5/31/2015</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD nowrap align="right">6.250  10/2009 &#150; 5/2010</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:0px; text-indent:-0px">Loganville, GA</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD nowrap align="right">6,500 6/2010 &#150; 5/2011</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD nowrap align="right">6,750 6/2011 &#150; 5/2012</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD nowrap align="right">7,000 6/2012 &#150; 5/2013</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD nowrap align="right">7,250 6/2013 &#150; 5/2014</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD nowrap align="right">7,500 6/2014 &#150; 5/2015</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>





<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR style="font-size: 6pt">
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="96">&nbsp;</TD>
</TR>
<TR valign="top">
    <TD nowrap align="left">*</TD>
    <TD>&nbsp;</TD>
    <TD>As a result of the relocation of the Company&#146;s corporate headquarters, the Atlanta, GA office
space was vacated and has been subleased effective January&nbsp;15, 2008 through the end of the lease
term.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">**</TD>
    <TD>&nbsp;</TD>
    <TD>In connection with sale of the operating assets of TeamStaff Rx, Advantage RN will have the
right to use these premises and is obligated to make rent subsidy payments to us totaling $125,000,
beginning on March&nbsp;1, 2010.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">***</TD>
    <TD>&nbsp;</TD>
    <TD>As a result of the sale of the Nursing Innovations per diem business, the Memphis, TN office
space was vacated and is currently unoccupied.</TD>
</TR>

</TABLE>

<DIV align="left">
<A name="106"></A>
</DIV>

<DIV align="left" style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="7%"></TD>
    <TD width="1%"></TD>
    <TD></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left"><B>ITEM 3.</B></TD>
    <TD>&nbsp;</TD>
    <TD><B>LEGAL PROCEEDINGS</B></TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><U>RS Staffing Services, Inc.</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">On April&nbsp;17, 2007, a Federal Grand Jury subpoena was issued by the Northern District of Illinois to
the Company&#146;s wholly-owned subsidiary, TeamStaff GS, formerly known as RS Staffing Services,
requesting production of certain documents dating back to 1997, prior to the time the Company
acquired RS Staffing Services. The subpoena stated that it was issued in connection with an
investigation of possible violations of Federal criminal laws and related crimes concerning
procurement at the DVA. According to the cover letter accompanying the subpoena, the U.S.
Department of Justice, Antitrust Division (&#147;DOJ&#148;), along with the DVA, Office of the Inspector
General, are responsible for the current criminal investigation. RS Staffing Services provides
contract staffing at certain DVA hospitals that may be part of the investigation. The return date
for documents called for by the subpoena was May&nbsp;17, 2007. In connection with the same investigation, agents with the DVA, Office of Inspector
General, executed a search warrant at the Monroe, Georgia offices of RS Staffing Services.
</DIV>


<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->19<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">




<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The government has advised TeamStaff that the DOJ has no intent to charge TeamStaff or any of its
subsidiaries or employees in connection with the Federal investigation of contract practices at
various government owned/contractor operated facilities. TeamStaff remains committed to cooperate
with the DOJ&#146;s continued investigation of other parties.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The Company originally acquired RS Staffing Services in June&nbsp;2005. As part of the purchase price
of the acquisition, the Company issued to the former owners of RS Staffing Services a $3.0&nbsp;million
promissory note, of which $1.5&nbsp;million and interest of $150,000 was paid in June&nbsp;2006. On May&nbsp;31,
2007, the Company sent a notice of indemnification claim to the former owners for costs that have
been incurred in connection with the investigation. Effective June&nbsp;1, 2007, the Company and former
owners of RS Staffing Services reached an agreement to extend the due date from June&nbsp;8, 2007 to
December&nbsp;31, 2008 with respect to the remaining $1.5&nbsp;million note payable and accrued interest
payable. Such agreement has been extended to February&nbsp;28, 2010. As of September&nbsp;30 2009, the
amount has not been settled. The Company recognized expenses related to legal representation and
costs incurred in connection with the investigation in the amount of $21,000 and $219,000 during
fiscal 2009 and 2008, respectively, as a component of other income (expense). Cumulative costs
related to this matter approximate $1.7&nbsp;million. Pursuant to the acquisition agreement with RS
Staffing Services, the Company has notified the former owners of RS Staffing Services that it is
the Company&#146;s intention to exercise its right to setoff the payment of such expenses against the
remaining principal and accrued interest due to the former owners of RS Staffing Services.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The Company will pursue the recovery as a right of offset in future periods. Management has a good
faith belief that the Company will recover such amounts; however, generally accepted accounting
principles preclude the Company from recording an offset to the note payable to the former owners
of RS Staffing Services until the final amount of the claim is settled and determinable. At
present, no assurances can be given that the former owners of RS Staffing Services would not pursue
action against us or that the Company will be successful in the offset of such amounts against the
outstanding debt and accrued interest from notice date forward, if any. Accordingly, the Company
has expensed costs incurred related to the investigation through September&nbsp;30, 2009.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><U>Other Matters</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">On October&nbsp;2, 2008, the United States Equal Employment Opportunity Commission (&#147;EEOC&#148;) issued a
subpoena to TeamStaff GS regarding the alleged wrongful termination of certain employees who were
employed at a federal facility staffed by TeamStaff GS contract employees. The wrongful termination
is alleged to have occurred when the former employees were terminated because they could not
satisfy English proficiency requirements imposed by the Federal government. TeamStaff GS has
produced all documents that it believes were required by the subpoena and has submitted its
position statement to the EEOC. It is unclear, at present, if or when the EEOC will respond.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">As a commercial enterprise and employer, we are subject to various claims and legal actions in the
ordinary course of business. These matters can include professional liability,
employment-relations issues, workers&#146; compensation, tax, payroll and employee-related matters and
inquiries and investigations by governmental agencies regarding our employment practices. We are
not aware of any pending or threatened litigation that we believe is reasonably likely to have a
material adverse effect on our results of operations, financial position or cash flows.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">In connection with its medical staffing business, TeamStaff is exposed to potential liability for
the acts, errors or omissions of its contract medical employees. The professional liability
insurance policy provides up to $5,000,000 aggregate coverage with a $2,000,000 per occurrence
limit. Although TeamStaff believes the liability insurance is reasonable under the circumstances
to protect it from liability for such claims, there can be no assurance that such insurance will be
adequate to cover all potential claims.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">TeamStaff is engaged in no other litigation, the effect of which would be anticipated to have a
material adverse impact on TeamStaff&#146;s results of operations, financial position or cash flows.
</DIV>

<DIV align="left">
<A name="107"></A>
</DIV>

<DIV align="left" style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="7%"></TD>
    <TD width="1%"></TD>
    <TD></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left"><B>ITEM 4.</B></TD>
    <TD>&nbsp;</TD>
    <TD><B>SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS</B></TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">There were no matters submitted to a vote of security holders during the fourth quarter of fiscal
2009.
</DIV>



<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->20<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">



<DIV align="left">
<A name="108"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>PART II</B>
</DIV>

<DIV align="left">
<A name="109"></A>
</DIV>

<DIV align="left" style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="7%"></TD>
    <TD width="1%"></TD>
    <TD></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left"><B>ITEM 5.</B></TD>
    <TD>&nbsp;</TD>
    <TD><B>MARKET FOR REGISTRANT&#146;S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES
OF EQUITY SECURITIES</B></TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Principal Market</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">TeamStaff&#146;s common stock is traded in the over-the-counter market and included on the Nasdaq
Capital Market under the symbol &#147;TSTF&#148;. TeamStaff started trading on The Capital Market in
November&nbsp;25, 2009. Previously, TeamStaff&#146;s common stock was listed for trading on The Nasdaq
Global Market. As previously announced, on September&nbsp;15, 2009, we received a letter from the Nasdaq
Stock Market advising that we had not maintained a minimum market value of publicly held shares of
common stock of $5,000,000, as required by the continued listing requirements of the Nasdaq Global
Market set forth in Nasdaq Listing Rule&nbsp;5450(b)(1)(C). Subsequently, the Company elected to apply
to transfer the listing of its common stock to the Nasdaq Capital Market. On November&nbsp;23, 2009,
Nasdaq approved the transfer application.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">On December&nbsp;17, 2009, we received a staff deficiency letter from The Nasdaq Stock Market
notifying the Company that for the past 30 consecutive business days, the closing bid price per
share of its common stock was below the $1.00 minimum bid price requirement for continued listing
on the Nasdaq Capital Market set forth in Nasdaq Listing Rule&nbsp;5550(a)(2). As a result, the
Company was notified by Nasdaq that it is not in compliance with the Listing Rule. Nasdaq has
provided the Company with 180 calendar days, or until June&nbsp;15, 2010, to regain compliance. See
Item&nbsp;1A-Risk Factors-Risks Relating to Our Stock.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Market Information</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">On April&nbsp;17, 2008, the Company filed an amendment to its Amended and Restated Certificate of
Incorporation in order to effect a one-for-four reverse split of the Company&#146;s common stock. The
reverse split was approved on April&nbsp;17, 2008 at the Company&#146;s annual meeting of shareholders and
became effective on April&nbsp;21, 2008, at which time the Company&#146;s common stock began trading on the
Nasdaq Global Market on a split-adjusted basis. As a result of the reverse stock split, each four
shares of common stock was combined and reclassified into one share of common stock. All
references to common stock, options, share based arrangements, exercise price, fair values and
related data within this Form 10-K have been retroactively restated so as to incorporate the effect
of this reverse stock split.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The range of high and low sales prices for TeamStaff&#146;s common stock for the periods indicated below
are:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Common Stock</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="72%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>FISCAL YEAR 2009</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>HIGH</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>LOW</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">1st Quarter</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2.57</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.64</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2<SUP style="font-size: 85%; vertical-align: text-top">nd</SUP> Quarter</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2.25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.03</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">3rd Quarter</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2.65</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.23</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">4th Quarter</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.98</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.32</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="72%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>FISCAL YEAR 2008</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>HIGH</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>LOW</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">1st Quarter</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">4.16</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2.36</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2nd Quarter</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">3.24</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2.40</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">3rd Quarter</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2.80</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.83</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">4th Quarter</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">3.30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.85</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The above quotations, reported by Nasdaq, represent prices
between dealers and do not include retail mark-ups, markdowns or commissions. Such quotations do
not necessarily represent actual transactions. On December&nbsp;31, 2009, TeamStaff&#146;s common stock had a
closing price of $0.80 per share.
</DIV>

<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->21<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">




<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Dividends</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">TeamStaff has not declared any cash dividends on its common stock since inception, and has no
present intention of paying any cash dividends on its common stock in the foreseeable future.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Approximate Number of Equity Security Holders</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Effective August&nbsp;31, 2001, TeamStaff acquired all of the capital stock of BrightLane. As
contemplated under the agreements governing the transaction, TeamStaff agreed to issue 2,054,130
shares of its common stock in exchange for all of the outstanding capital stock of BrightLane. As
of December&nbsp;31, 2009, not all of the BrightLane shareholders had submitted their capital stock for
exchange into shares of common stock; however such shares are classified as outstanding.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">As of December&nbsp;31, 2009, there were 4,940,982 shares of common stock outstanding held of record by
267 persons. TeamStaff believes it has approximately 1,315 beneficial owners of its common stock.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Sales of Unregistered Securities</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">During the period covered by this report, the Company did not issue any securities that were not
registered under the Securities Act of 1933, as amended, except as has been reported in previous
filings with the SEC or as set forth herein. Following the end our 2009 fiscal year, on October&nbsp;13,
2009, we granted an aggregate of 42,500 shares of restricted stock to our non-executive directors,
consistent with our compensation policy for non-executive directors. These shares were issued
pursuant to the exemption from registration provided by Section&nbsp;4(2) of the Securities Act of 1933,
as amended.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Securities Authorized for Issuance Under Equity Compensation Plans</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">TeamStaff has three equity compensation plans, all of which were approved by its Board of Directors
and its shareholders. The table set forth below discloses outstanding
and available awards under our equity compensation plans as of
September 30, 2009. The Company has no equity compensation plans that have not been approved by
security holders. All option grants made to executive officers and directors, including those to
the Chief Executive Officer, under employment agreements, are made under the plans referenced
below. All grants of restricted stock made to executive officers are made under the plan
referenced below.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The stock option plans under which options are outstanding are:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The 2000 Employee Stock Option Plan (&#147;2000 Employee Plan&#148;)
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The 2000 Non-Executive Director Option Plan (&#147;2000 Non-Executive Director Plan&#148;)
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The long-term incentive plan under which restricted stock grants were made is:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The 2006 Long Term Incentive Plan (&#147;2006 Long Term Incentive Plan&#148;)
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="58%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="center" colspan="12" style="border-bottom: 1px solid #000000"><B>Equity Compensation Plan Information (*)</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>(b)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Weighted</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Average</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>(c)</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>(a)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>exercise price of</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Number of securities</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Number of Securities</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>outstanding</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>remaining available for</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>to be issued upon</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>options, warrants</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>future issuances under</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>exercise of</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>and rights (or fair</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>equity compensation plans</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>outstanding options,</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>value at date of</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>(excluding securities reflected in</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Plan Category</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>warrants and rights</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>grant)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>column (a))</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR><TD align="left" valign="top">&nbsp;</TD></TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Equity Compensation
Plans Approved by
Security Holders:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">2000 Employee
Stock Option
Plan</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">7.84</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,706,187</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">2000
Non-Executive
Director Stock
Option Plan (1)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,625</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">5.35</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">2006 Long
Term Incentive
Plan</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">391,250</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.96</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,454,222</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR style="font-size: 6pt">
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="96">&nbsp;</TD>
</TR>
<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>5,000 shares per year per non-executive director are granted under the 2000 Non-Executive
Director Plan for a full year&#146;s service and prorated for less than a full year&#146;s service.
Effective January&nbsp;19, 2007, this Plan was suspended due to a change in the compensation terms for
non-employee Board members. For additional information regarding our director compensation policy,
see below under the caption &#147;Director Compensation&#148; in Item&nbsp;11 &#150; Executive Compensation.</TD>
</TR>

</TABLE>



<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->22<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">





<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Registrant Repurchases of Securities</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">TeamStaff did not repurchase any of its securities during the two prior fiscal years ended
September&nbsp;30, 2009.
</DIV>

<DIV align="left">
<A name="110"></A>
</DIV>

<DIV align="left" style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="7%"></TD>
    <TD width="1%"></TD>
    <TD></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left"><B>ITEM 6.</B></TD>
    <TD>&nbsp;</TD>
    <TD><B>SELECTED FINANCIAL DATA</B></TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">We are a &#147;smaller reporting company&#148; as defined by Regulation&nbsp;S-K and as such, are not required to
provide the information contained in this item pursuant to Regulation&nbsp;S-K.
</DIV>

<DIV align="left">
<A name="111"></A>
</DIV>

<DIV align="left" style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="7%"></TD>
    <TD width="1%"></TD>
    <TD></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left"><B>ITEM 7.</B></TD>
    <TD>&nbsp;</TD>
    <TD><B>MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS</B></TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><U><B>Forward Looking and Cautionary Statements</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">This Annual Report on Form 10-K contains &#147;forward-looking statements&#148; within the meaning of the
1995 Reform Act, Section&nbsp;27A of the Securities Act and Section&nbsp;21E of the Exchange Act. TeamStaff
desires to avail itself of certain &#147;safe harbor&#148; provisions of the 1995 Reform Act and is therefore
including this special note to enable TeamStaff to do so. Forward-looking statements are identified
by words such as &#147;believe,&#148; &#147;anticipate,&#148; &#147;expect,&#148; &#147;intend,&#148; &#147;plan,&#148; &#147;will,&#148; &#147;may&#148; and other
similar expressions. In addition, any statements that refer to expectations, projections or other
characterizations of future events or circumstances are forward-looking statements. Forward-looking
statements included in this report involve known and unknown risks, uncertainties and other factors
which could cause TeamStaff&#146;s actual results, performance (financial or operating) or achievements
to differ from the future results, performance (financial or operating) or achievements expressed
or implied by such forward-looking statements. We based these forward-looking statements on our
current expectations and best estimates and projections about future events. Our actual results
could differ materially from those discussed in, or implied by, these forward-looking statements.
The following factors (among others) could cause our actual results to differ materially from those
implied by the forward-looking statements in this Annual Report on Form 10-K: our ability to
continue to recruit qualified contract and permanent healthcare professionals and administrative
staff at reasonable costs; our ability to retain qualified contract healthcare professionals and
administrative staff for multiple assignments at reasonable costs; our ability to attract and
retain sales and operational personnel; our ability to enter into contracts with United States
Government facilities on terms attractive to us and to secure orders related to those contracts;
changes in the timing of orders for and our placement of contract and permanent healthcare
professionals and administrative staff; the overall level of demand for services offered by
contract and permanent healthcare staffing providers; the variation in pricing of the healthcare
facility contracts under which we place contract and permanent healthcare professionals; our
ability to manage growth effectively; the performance of our management information and
communication systems; the effect of existing or future government legislation and regulation; the
impact of medical malpractice and other claims asserted against us; the disruption or adverse
impact to our business as a result of a terrorist attack; our ability to carry out our business
strategy; the loss of key officers, and management personnel that could adversely affect our
ability to remain competitive; the effect of recognition by us of an impairment to goodwill and
intangible assets; other tax and regulatory issues and developments; and the effect of adjustments
by us to accruals for self-insured retentions.
</DIV>

<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->23<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">




<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><U><B>Critical Accounting Policies and Estimates</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">TeamStaff believes the accounting policies below represent its critical accounting policies due to
the significance or estimation process involved in each. See Note 2 of TeamStaff&#146;s 2009 Annual
Report on Form 10-K as well as &#147;Critical Accounting Policies&#148; contained therein for a detailed
discussion on the application of these and other accounting policies.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Our discussion and analysis of our financial condition and results of operations is based upon our
Consolidated Financial Statements, which have been prepared in accordance with accounting
principles generally accepted in the United States and the rules of the SEC. The preparation of our
Consolidated Financial Statements and related notes in accordance with generally accepted
accounting principles requires us to make estimates, which include judgments and assumptions that
affect the reported amounts of assets, liabilities, revenue, and expenses, and related disclosure
of contingent assets and liabilities. We have based our estimates on historical experience and on
various assumptions that we believe to be reasonable under the circumstances. We evaluate our
estimates on a regular basis and make changes accordingly. Actual results may differ from these
estimates under different assumptions or conditions. To the extent that there are material
differences between these estimates and actual results, our financial condition, results of
operations and cash flow will be affected.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">A critical accounting estimate is based on judgments and assumptions about matters that are
uncertain at the time the estimate is made. Different estimates that reasonably could have been
used or changes in accounting estimates could materially impact our financial statements. We
believe that the policies described below represent our critical accounting policies, as they have
the greatest potential impact on our Consolidated Financial Statements. However, you should also
review our <I>Summary of Significant Accounting Policies </I>beginning on page F-8 of the notes to our
Consolidated Financial Statements contained elsewhere in this Annual Report on Form 10-K.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><U><B>Revenue Recognition </B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">TeamStaff accounts for its revenues in accordance with ACS 605-45, <I>Reporting Revenues Gross as a
Principal Versus Net as an Agent, </I>and SAB 104<I>, Revenue Recognition</I>. TeamStaff recognizes all
amounts billed to its contract staffing customers as gross revenue because, among other things,
TeamStaff is the primary obligor in the contract staffing arrangement; TeamStaff has pricing
latitude; TeamStaff selects contract employees for a given assignment from a broad pool of
individuals; TeamStaff is at risk for the payment of its direct costs; and TeamStaff assumes a
significant amount of other risks and liabilities as an employer of its contract employees, and
therefore, is deemed to be a principal in regard to these services. TeamStaff also recognizes as
gross revenue and as unbilled receivables, on an accrual basis, any such amounts that relate to
services performed by contract employees which have not yet been billed to the customer as of the
end of the accounting period.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Revenues related to retroactive billings in 2008 (see Note 10 to the Consolidated Financial
Statements) from an agency of the Federal government were recognized when: (1)&nbsp;the Company
developed and calculated an amount for such prior period services and has a contractual right to
bill for such amounts under its arrangements, (2)&nbsp;there were no remaining unfulfilled conditions
for approval of such billings and (3)&nbsp;collectability is
reasonably assured based on historical practices with the DVA. The related direct
costs, principally comprised of salaries and benefits, are recognized to match the recognized
reimbursements from the Federal agency; upon approval, wages will be processed for payment to the
employees.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">During the year ended September&nbsp;30, 2008, TeamStaff recognized revenues of $10.8&nbsp;million and direct
costs of $10.1&nbsp;million related to these non-recurring arrangements. At September&nbsp;30, 2009, the
amount of the remaining accounts receivable with the DVA approximates $9.3&nbsp;million and accrued
liabilities for salaries to employees and related benefits totaled $8.7&nbsp;million. The $9.3&nbsp;million
in accounts receivable was unbilled to the DVA at September&nbsp;30, 2009. At present, the Company
expects to collect such amounts by the end of the second quarter of
fiscal 2010 based on current discussions and collection efforts.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Staffing (whether medical or administrative) revenue is recognized as service is rendered.
TeamStaff bills its clients based on an hourly rate. The hourly rate is intended to cover
TeamStaff&#146;s direct labor costs of the contract employees, plus an estimate for overhead expenses
and a profit margin. Additionally, commissions from permanent placements are included in revenue as
placements are made. Commissions from permanent placements result from the successful placement of
a medical staffing employee to a customer&#146;s workforce as a permanent employee. The Company also
reviews the status of such placements to assess the Company&#146;s future performance obligations under
such contracts.
</DIV>

<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->24<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">




<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Direct costs of services are reflected in TeamStaff&#146;s Consolidated Statements of Operations as
&#147;direct expenses&#148; and are reflective of the type of revenue being generated. Direct costs of the
contract staffing business include wages, employment related taxes and reimbursable expenses.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><U><B>Goodwill and Intangible Assets </B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Beginning October&nbsp;1, 2001, TeamStaff no longer amortizes goodwill or indefinite life intangible
assets. TeamStaff continues to review its goodwill and other intangible assets for possible
impairment or loss of value at least annually or more frequently upon the occurrence of an event or
when circumstances indicate that a reporting unit&#146;s carrying amount is greater than its fair value.
If an impairment write off of all the goodwill became necessary, a charge of up to $8.6&nbsp;million
would be expensed in the Consolidated Statement of Operations. All remaining goodwill is
attributable to the TeamStaff GS reporting unit. If an impairment write off of all the trade names became
necessary, a charge of up to $3.9&nbsp;million would be expensed in the Consolidated Statement of
Operations. During 2009, in connection with the Company&#146;s decision to exit the TeamStaff Rx
business, an impairment loss of $1.6&nbsp;million was recognized to
reduce the carrying value of this business&#146;
goodwill to net realizable value and an impairment loss of $0.7&nbsp;million was recognized to reduce
the carrying value of the trade name to net realizable value. TeamStaff has concluded, at present,
that there is not any other required write off of goodwill or its tradename.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><U><B>Prepaid Workers&#146; Compensation </B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">From November&nbsp;17, 2003 through April&nbsp;14, 2009, inclusive, TeamStaff&#146;s workers&#146; compensation
insurance program was provided by Zurich American Insurance Company (&#147;Zurich&#148;). This program
covered TeamStaff&#146;s temporary, contract and corporate employees. This program was a fully insured,
guaranteed cost program that contained no deductible or retention feature. The premium for the
program was paid monthly based upon actual payroll and is subject to a policy year-end audit.
Effective April&nbsp;15, 2009, TeamStaff entered into a partially self-funded workers&#146; compensation
insurance program with a national insurance carrier for the premium year April&nbsp;15, 2009 through
April&nbsp;14, 2010. The Company will pay a base premium plus actual losses incurred, not to exceed
certain stop-loss limits. The Company is insured for losses above these limits, both per occurrence
and in the aggregate.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">As part of the Company&#146;s discontinued PEO operations, TeamStaff had a workers&#146; compensation program
with Zurich, which covered the period from March&nbsp;22, 2002 through November&nbsp;16, 2003, inclusive.
Payments for the policy were made to the trust monthly based on projected claims for the policy
period. Interest on all assets held in the trust is credited to TeamStaff. Payments for claims and
claims expenses are made from the trust. From time-to-time, trust assets have been refunded to the
Company based on Zurich&#146;s and managers&#146; overall assessment of claims experience and historical and
projected settlements. In June&nbsp;2009 and March&nbsp;2008, Zurich reduced the collateral requirements on
outstanding workers&#146; compensation claims and released $114,000 and $350,000, respectively, in trust
account funds back to the Company. The final amount of trust funds that could be refunded to the
Company is subject to a number of uncertainties (e.g. claim settlements and experience, health care
costs, the extended statutory filing periods for such claims); however, based on a third party&#146;s
study of claims experience, TeamStaff estimates that at September&nbsp;30, 2009, the remaining prepaid
asset of $0.3&nbsp;million will be received within the next twelve to thirty-six months. A portion of
this is reflected on TeamStaff&#146;s balance sheet as of September&nbsp;30, 2009 as a current asset, in
addition to approximately $0.2&nbsp;million related to current policy deposits.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">As of September&nbsp;30, 2009 the adequacy of the workers&#146; compensation reserves (which are offset
against the trust fund balances in prepaid assets) was determined, in management&#146;s opinion, to be
reasonable. In determining our reserves we rely in part upon information regarding loss data
received from our workers&#146; compensation insurance carriers that may include loss data for claims
incurred during prior policy periods. In addition, these reserves are for claims that have not been
sufficiently developed and such variables as timing of payments and investment returns thereon are
uncertain or unknown, therefore actual results may vary from current estimates. TeamStaff will
continue to monitor the development of these reserves, the actual payments made against the claims
incurred, the timing of these payments, the interest accumulated in TeamStaff&#146;s prepayments and
adjust the related reserves as deemed appropriate.
</DIV>

<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->25<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">




<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><U><B>Income Taxes</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">TeamStaff accounts for income taxes in accordance with the &#147;liability&#148; method. Under this method,
deferred tax assets and liabilities are determined based on the difference between the financial
statement and tax bases of assets and liabilities, using enacted tax rates in effect for the year
in which the differences are expected to reverse. Deferred tax assets are reflected on the balance
sheet when it is determined that it is more likely than not that the asset will be realized. This
guidance also requires that deferred tax assets be reduced by a valuation allowance if it is more
likely than not that some or all of the deferred tax asset will not be realized.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">In the fiscal year ended September&nbsp;30, 2006, after an assessment of all available evidence
(including historical and forecasted operating results), management concluded that realization of
the Company&#146;s net operating loss carryforwards (which includes those amounts acquired in previous years&#146; business combinations,
collectively &#147;NOLs&#148;), tax credits and other deferred tax assets, could not be considered more
likely than not. Accordingly, for the fiscal years ended September&nbsp;30, 2009, 2008 and 2007, the
Company did not record a tax benefit for NOLs.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Based on an assessment performed as of September&nbsp;30, 2009 and 2008, the Company has maintained a
full valuation allowance against remaining NOLs and other deferred tax assets; as the realization
of such amounts, at that date, could not be considered more likely than not. In prospective
periods, there may be reductions to the valuation allowance to the extent that the Company
concludes that it is more likely that not that all or a portion of the deferred tax assets can be
utilized (subject to annual limitations and prior to the expiration of such NOLs), to offset future
periods&#146; taxable income.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">In the fiscal year ended September&nbsp;30, 2009, the Company recognized a tax benefit of $28,000
related to a refund from a state. In the fiscal year ended September&nbsp;30, 2008 the Company recorded
tax expense of $60,000 related to certain estimated state taxes due which could not be offset by an
NOL from those specific states.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">At September&nbsp;30, 2009 the Company had net operating losses of approximately $30.4&nbsp;million, $15.1
million and $.7&nbsp;million for U.S, New Jersey and other states&#146; tax return purposes, respectively,
and unutilized tax credits approximate $1.1&nbsp;million. As a result of previous business combinations
and changes in its ownership, there is a substantial amount of U.S. NOLs that are subject to annual
limitations on utilization. The U.S. NOLs begin to expire in 2021 and continue to expire through
2029.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><U><B>Allowance for Doubtful Accounts</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">TeamStaff maintains an allowance for doubtful accounts for estimated losses resulting from the
inability of its customers to pay. However, if the financial condition of TeamStaff&#146;s customers
were to deteriorate rapidly, resulting in nonpayment, TeamStaff&#146;s accounts receivable balances
could grow and TeamStaff could be required to provide for additional allowances, which would
decrease net income in the period that such determination was made. For example, TeamStaff
currently maintains an allowance of less than 1% of billed accounts receivable due to the fact that
a significant portion of accounts receivable are from the Federal Government which historically
have had little, if any, write-offs for non-payment.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><U><B>Overview</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><U>Business Description</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">TeamStaff, through its TeamStaff GS subsidiary, is a healthcare, logistical, information technology
and office administration staffing provider which has been serving the Federal Government for over
a decade. TeamStaff GS&#146;s primary client has been the United States Government and its various
agencies. TeamStaff GS is committed to providing on-time delivery of multi-disciplined employees
who possess the necessary experience, expertise, and dedication required to meet contract
specifications. The staffing services offered by TeamStaff GS are provided through independent FSS
contracts through the GSA. The provision of logistical and administrative personnel is accomplished
through the Logistics Worldwide Schedule and medical personnel are supplied through the
Professional and Allied Healthcare Staffing Services Schedule. TeamStaff also provides its
staffing services to federal government agencies through competitively bid contracts and has a GSA
schedule contract to provide information technology professional services. TeamStaff provides
these services to the DVA, the US Department of Defense and other US governmental agencies and
placed contract employees at over 40 facilities during the 2009 fiscal year.
</DIV>
<P align="center" style="font-size: 10pt">&nbsp;

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">



<DIV align="left" style="font-size: 10pt; margin-top: 10pt">As described in greater detail below, on December&nbsp;28, 2009, TeamStaff and TeamStaff Rx entered into
a definitive Asset Purchase Agreement with Advantage RN, LLC, an Ohio limited liability company,
providing for the sale of substantially all of the operating assets of TeamStaff Rx related to
TeamStaff Rx&#146;s business of providing travel nurse and allied healthcare professionals for temporary
assignments to Advantage RN. The closing of this transaction occurred on January&nbsp;4, 2010. The Asset
Purchase Agreement provides that the purchased assets were acquired by Advantage RN for a purchase
price of up to $425,000, of which (i) $350,000 in cash was paid at the closing, and (ii) $75,000 is
subject to an escrowed holdback as described in the Asset Purchase Agreement. Additionally,
Advantage RN will make rent subsidy payments to TeamStaff Rx totaling $125,000, consisting of (i)
$25,000 payable at closing, and (ii)&nbsp;an additional $100,000 payable in 10 equal monthly
installments beginning on March&nbsp;1, 2010.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Management anticipates that the Company will report a net loss from discontinued operations
through the effective date of the sale to Advantage RN, which will include an estimated charge of
$0.2&nbsp;million for severance to certain TeamStaff Rx employees. Although there are certain conditions
on the collection of amounts that are held in escrow, the Company expects to settle such matters in
the second quarter of the fiscal year ending September&nbsp;30, 2010. In addition, management estimates
that the Company will incur a loss on the disposal of TeamStaff Rx approximating $0.3&nbsp;million
principally from recognition of the remaining unfunded operating lease payments. The measurement
date for recording this liability is December&nbsp;31, 2009. These amounts are preliminary and subject
to change based on future events; the ultimate amount could significantly differ from these current
estimates.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Following the disposition of our TeamStaff Rx business, TeamStaff provides staffing services
through TeamStaff GS.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">As described in greater detail in Note 4 to our consolidated financial statements, the results of
operations, cash flows and related assets and liabilities of our TeamStaff Rx business was
reclassified in the accompanying consolidated financial statements from those of our continuing
businesses to discontinued operations.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><U>Recent Business Trends</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">TeamStaff GS is expanding its reach within the government sector beyond DVA opportunities by
bidding on Department of Defense staffing contracts afforded to large businesses and GSA&#146;s <I>e-Buy</I>
portal, an electronic Request for Quote (RFQ) / Request for Proposal (RFP)&nbsp;system designed to allow
Federal buyers to request information, find sources, and prepare RFQs/RFPs, online, for various
services offered through GSA&#146;s Multiple Award Schedule. Effective April&nbsp;6, 2009, TeamStaff GS was
awarded an Information Technology (&#147;IT&#148;) Schedule&nbsp;Contract for professional services by the GSA As
an IT schedule holder, TeamStaff GS is also now eligible, along with a select number of companies,
to participate in bid opportunities and requests for quotes for the Federal government&#146;s IT
staffing needs. Additionally, TeamStaff GS is evaluating opportunities to satisfy the staffing
needs of other government agencies in addition to the DVA and DOD as a means of horizontal
expansion of its client base. TeamStaff GS is also seeking to develop and maintain a nationwide
network of teaming partners, including small businesses, Service Disabled Veteran Owned Small
Businesses and other small-businesses certified under Section 8(a) of the Small Business
Administration in order to expand and diversify its service offerings.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">We believe demand will be strong in fiscal 2010 and beyond as the government maintains or improves
social services provided to our returning veterans, as well as funding to other federal agencies
that TeamStaff GS provides services to. In addition, we believe the government staffing business is
stable in an economic downturn due to the longer term duration of its contracts. Management
believes that, under the current administration, there will not be a reduction in government
spending supporting social programs that benefit military personnel and veterans.
</DIV>


<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->27<!-- /Folio -->
</DIV>



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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><U><B>Results of Operations</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><U><B>Fiscal Year 2009 as Compared to Fiscal Year 2008 </B></U>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The following table summarizes, for the periods indicated, selected consolidated statements of
operations data expressed as a percentage of revenue:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="72%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Fiscal Year</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Fiscal Year</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Ended</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Ended</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>September 30,</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>September 30,</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2009</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2008</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Condensed Consolidated Statement of Operations:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR><TD>&nbsp;</TD></TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Revenues</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">100.0</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">100.0</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Direct Expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">84.8</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">84.7</TD>
    <TD nowrap>%</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Gross Profit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">15.2</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">15.3</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Selling, general and administrative</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">14.1</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">10.1</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Depreciation and amortization expense</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">0.3</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">0.3</TD>
    <TD nowrap>%</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Income from operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">0.8</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">4.9</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Other income (expense)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD nowrap align="right">-0.1</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">0.7</TD>
    <TD nowrap>%</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Income from continuing operations before taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">0.7</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">5.6</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Income tax (expense)&nbsp;benefit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">0.1</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD nowrap align="right">-0.1</TD>
    <TD nowrap>%</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Income from continuing operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">0.8</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">5.5</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Loss from discontinued operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD nowrap align="right">-10.3</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD nowrap align="right">-3.5</TD>
    <TD nowrap>%</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Net income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD nowrap align="right">-9.5</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">2.0</TD>
    <TD nowrap>%</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Operating revenues from TeamStaff&#146;s continuing operations for the fiscal years ended September&nbsp;30,
2009 and 2008 were $46.0&nbsp;million and $47.7&nbsp;million, respectively, which represents a decrease of
$1.7&nbsp;million or 3.6% over the prior fiscal year. The decrease in operating revenues from
continuing operations is due primarily to the impact of reduced overtime and net reductions in
headcount at certain Government facilities. TeamStaff&#146;s total revenues
for the fiscal years ended September&nbsp;30, 2009 and 2008 were $46.0&nbsp;million and $58.5&nbsp;million,
respectively, which represents a decrease of $12.5&nbsp;million or 21.4% over the prior fiscal year.
Included in revenues for the fiscal year ended September&nbsp;30, 2008 is $10.8&nbsp;million in non-recurring
retroactive billings to the DVA.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">TeamStaff GS is seeking approval from the Federal government for gross
profit on retroactive billing rate increases associated with certain government contracts at which
it has employees staffed on contract assignments. These adjustments are due to changes in the
contracted wage determination rates for these contract employees. A wage determination is the
listing of wage rates and fringe benefit rates for each classification of laborers whom the
Administrator of the Wage and Hour Division of the U.S. Department of Labor (&#147;DOL&#148;) has determined
to be prevailing in a given locality. Contractors performing services for the Federal government
under certain contracts are required to pay service employees in various classes no less than the
wage rates and fringe benefits found prevailing in these localities. An audit by the DOL at one of
the facilities revealed that notification, as required by contract, was not provided to TeamStaff
GS in order to effectuate the wage increases in a timely manner. Wages for contract employees
currently on assignment have been adjusted prospectively to the prevailing rate and hourly billing
rates to the DVA have been increased accordingly. During the fiscal year ended September&nbsp;30, 2008,
TeamStaff recognized nonrecurring revenues of $10.8&nbsp;million and direct costs of $10.1&nbsp;million,
based on amounts that are contractually due under its arrangements with the Federal agencies. At
September&nbsp;30, 2009, the amount of the remaining accounts receivable with the DVA approximates $9.3
million. The Company has been and continues to be in discussions with representatives of the DVA
regarding the matter and anticipates resolution during fiscal 2010. In addition, TeamStaff is in
the process of negotiating a final amount related to gross profit on these adjustments. As such,
there may be additional revenues recognized in
future periods once the approval for such additional amounts is obtained. The ranges of additional
revenue and gross profit are estimated to be between
$0.4&nbsp;million and $0.6&nbsp;million. At present,
the Company expects to collect such amounts during fiscal 2010 based
on current discussions and collection efforts. Because these amounts are subject
to government review, no assurances can be given that we will receive any additional billings from
our government contracts or that if additional amounts are received, that the amount will be within
the range specified above.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Operating direct expenses from continuing operations for the fiscal years ended September&nbsp;30, 2009
and 2008 were $39.0&nbsp;million and $39.5&nbsp;million, respectively which represents a decrease of $0.5
million or 1.2% over the prior fiscal year. This decrease is primarily a result of lower revenues.
Total direct expenses for the fiscal years ended September&nbsp;30, 2009 and 2008 were $39.0&nbsp;million
and $49.6&nbsp;million, respectively. Included in direct expenses for the year ended September&nbsp;30, 2008
is $10.1&nbsp;million related to non-recurring retroactive billings to the DVA. As a percentage of
operating revenue from continuing operations, operating direct expenses were 84.8% and 82.7%,
respectively, for the years ended September&nbsp;30, 2009 and 2008. As a percentage of total revenue,
direct expenses were 84.8% and 84.7%, respectively, for the years ended September&nbsp;30, 2009 and
2008.
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">




<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Operating gross profit from continuing operations for the fiscal years ended September&nbsp;30, 2009 and
2008 were $7.0&nbsp;million and $8.3&nbsp;million, respectively which represents a decrease of $1.3&nbsp;million
or 15.1% over the prior fiscal year. Operating gross profit from continuing operations, as a
percentage of operating revenue, was 15.2% and 17.3%, for the fiscal years ended September&nbsp;30, 2009
and 2008, respectively. Operating gross profit is lower as compared to the prior year due to
increased health benefit expenses, lower overtime at certain government facilities and lower
turnover among our government contract employees resulting in higher vacation expense. Total gross
profit for the fiscal years ended September&nbsp;30, 2009 and 2008 were $7.0&nbsp;million and $8.9&nbsp;million,
respectively, which represents a decrease of $1.9&nbsp;million, or 21.7%. Gross profit, as a percentage
of total revenue, was 15.2% and 15.3%, for the fiscal years ended September&nbsp;30, 2009 and 2008,
respectively. Included in gross profit for the fiscal year ended September&nbsp;30, 2008 is $0.7
million related to non-recurring retroactive billings to the DVA.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Selling, general and administrative (&#147;SG&#038;A&#148;) expenses for the fiscal years ended September&nbsp;30, 2009
and 2008 were $6.5&nbsp;million and $5.9&nbsp;million, respectively, which represents an increase of $0.6
million, or 9.7%. Included in this increase is $0.1&nbsp;million in management consulting fees related
to the strategic business review of our government business, $0.5&nbsp;million in increased new business
expense for additional sales related headcount and marketing expense at TeamStaff GS and $0.2
million in legal settlement expense. The Company continues with its cost saving initiatives, which
have resulted in reduced headcount in non-revenue generating departments and G&#038;A costs. The
Company seeks continued elimination of overhead costs deemed to be non-essential to growth or
infrastructure.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Depreciation and amortization expense was approximately $111,000 and $150,000 for the fiscal years
ended September&nbsp;30, 2009 and 2008, respectively.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Income from operations for the fiscal year ended September&nbsp;30, 2009 was $0.4&nbsp;million as compared to
income from operations for the fiscal year ended September&nbsp;30, 2008 of $2.9&nbsp;million. This
represents a decline of $2.5&nbsp;million in results from operations from fiscal 2008 to 2009. The
decrease is primarily due to lower operating gross profit earned in fiscal 2009 as a result of
increased health benefit expenses, lower overtime at certain government facilities and lower
turnover among our government contract employees resulting in higher vacation expense, higher SG&#038;A
expenses, as well as $0.7&nbsp;million profit reported in fiscal 2008 related to the non-recurring
retroactive billings to the DVA.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Other income was $0.2&nbsp;million and $0.8&nbsp;million, for the fiscal years ended September&nbsp;30, 2009 and
2008, respectively. In fiscal 2009, the Company received a notification from the state of Florida
regarding a refund of $151,000 for various taxes. Such amount has been recognized in the related
periods&#146; statement of operations as a change in estimate. In fiscal 2008, based on an assessment
of periods settled and the status of open periods under review by the IRS regarding notices the
Company received related predominantly to its former PEO operations, the Company reduced its
estimated liability for payroll tax contingencies by $0.7&nbsp;million and recorded such adjustment as a
component of other income.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Interest expense for the fiscal years ended September&nbsp;30, 2009 and 2008 was approximately $0.2
million and $0.1&nbsp;million, respectively. The increase is primarily due to additional interest
accruals related to the estimated liability for payroll tax contingencies.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The Company recorded other expense of $21,000 and $218,000, for the fiscal years ended September
30, 2009 and 2008, respectively representing a decrease of $197,000. This expense is related to
legal representation and investigation costs incurred in connection with the Federal Grand Jury
subpoena issued to our subsidiary formerly known as RS Staffing Services on April&nbsp;17, 2007. The
subpoena requested production of certain documents dating back to 1997. The Company acquired RS
Staffing effective as of June&nbsp;2005. These expenses are classified as non-operating expenses
because the subpoena relates to activity prior to the acquisition.
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">




<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Beginning in fiscal 2006, the Company provided a 100% deferred tax valuation allowance because it
believes that it cannot be considered more likely than not that it will be able to realize the full
benefit of the deferred tax asset. The Company determined that negative evidence, including
historic and current taxable losses, as well as uncertainties related to the ability to utilize
certain Federal and state net loss carry forwards, outweighed any objectively verifiable positive
factors, and as such, concluded that a valuation allowance was necessary. In assessing the need
for a valuation allowance, the Company historically has considered all positive and negative
evidence, including scheduled reversals of deferred tax liabilities, prudent and feasible tax
planning strategies and recent financial performance. In the fiscal year ended September&nbsp;30, 2009,
the Company recognized a tax benefit of $28,000 related to a refund from a state. For fiscal 2008,
the Company did not record a Federal tax provision or benefit but recorded tax expense of $60,000
related to certain estimated states&#146; taxes due.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Income from continuing operations for the fiscal year ended September&nbsp;30, 2009 was $0.4&nbsp;million, or
$0.08 per basic share and $0.07 per diluted share, as compared to income from continuing operations
of $3.2&nbsp;million, or $0.66 per basic and diluted share, for the fiscal year ended September&nbsp;30,
2008.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Loss from discontinued operations, net of tax, for the fiscal years ended September&nbsp;30, 2009 was
$4.7&nbsp;million, or ($0.97) per basic share and ($0.93) per diluted share. This includes a loss of
$2.4&nbsp;million from the operating results of the discontinued TeamStaff Rx business and the
write-down to fair value of TeamStaff Rx intangible assets of $2.3&nbsp;million. Loss from discontinued
operations for the fiscal year ended September&nbsp;30, 2008 was $2.0&nbsp;million, or ($0.42)
per basic and diluted share.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Net loss for the fiscal year ended September&nbsp;30, 2009 was $4.4&nbsp;million, or ($0.89) per basic share
and ($0.86) per diluted share, as compared to net income of $1.1&nbsp;million, or $0.24 per basic and
diluted share, for the fiscal year ended September&nbsp;30, 2008. This represents a decline of $5.5
million in net income from fiscal 2008 to fiscal 2009.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><U><B>Liquidity and Capital Resources; Commitments</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Our principal sources of cash to fund our working capital needs are cash generated from operating
activities and borrowings under our revolving credit facility.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><I>Cash from operating activities</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Net cash used in operating activities for the fiscal year ended September&nbsp;30, 2009 was $2.1&nbsp;million
as compared to net cash provided by operating activities of $4.6&nbsp;million for the fiscal year ended
September&nbsp;30, 2008. This decrease in net cash was primarily driven by the loss from operations of
the discontinued TeamStaff Rx business of $2.3&nbsp;million, a net decrease in accounts payable of $1.0
million, of which $1.1&nbsp;million was for payments made to the IRS for previously recorded payroll tax
liabilities, offset by a decrease in days sales outstanding (&#147;DSO&#148;) from approximately 17&nbsp;days to
13&nbsp;days during fiscal 2009 as a result of improved payment processing by the government. Net cash
provided by operating activities for the fiscal year ended September&nbsp;30, 2008 was primarily driven by a decrease in DSO from approximately 40&nbsp;days to
17&nbsp;days during fiscal 2008 due to an enhanced and more efficient payment processing system
implemented by the government. This decrease in DSOs increased our cash position by approximately
$3&nbsp;million. Also contributing to net cash provided by operating
activities is net income  of $1.1&nbsp;million and $0.35&nbsp;million in cash received from Zurich related to the
reduction in collateral requirements on outstanding workers&#146; compensation claims.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><I>Cash from investing activities</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Net cash used in investing activities for the fiscal year ended September&nbsp;30, 2009 was $0.1
million. We continue to have relatively low capital investment requirements. The Company spent
$0.1&nbsp;million during fiscal 2009 for the purchase of equipment. Net cash provided by investing
activities for the fiscal year ended September&nbsp;30, 2008 was $0.2&nbsp;million as a result of proceeds
from the sale of our Per Diem division, offset in part by cash used for the purchases of furniture,
technology equipment and software related to the relocation of TeamStaff GS administrative offices
to Loganville, Georgia.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><I>Cash from financing activities</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Net cash used in financing activities for the fiscal year ended September&nbsp;30, 2009 was $0.1&nbsp;million
primarily as a result of repayment of capital lease obligations for continuing and discontinued
operations. Net cash used in financing activities for the fiscal year ended September&nbsp;30, 2008
was $0.2&nbsp;million, primarily as a result of repayments on capital lease obligations and fees related
to the new credit facility with Sovereign Business Capital and capital lease obligations.
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">




<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><U>Loan Facility</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">On March&nbsp;28, 2008, TeamStaff and its wholly-owned subsidiaries, TeamStaff Rx and TeamStaff GS
entered into an Amended and Restated Loan and Security Agreement dated as of March&nbsp;28, 2008 (the
&#147;Loan Agreement&#148;) with Business Alliance Capital Company, a division of Sovereign Bank. Pursuant to
the Loan Agreement, the Lender (i)&nbsp;acquired by assignment from the Company&#146;s prior lender, PNC
Bank, National Association, all right, title and interest of PNC under the $8.0&nbsp;million PNC Credit
Facility, the PNC note and related loan documentation, and (ii)&nbsp;restructured the PNC Credit
Facility into a $3.0&nbsp;million revolving credit facility with a three year term. Effective April&nbsp;1,
2008, BACC changed its name to Sovereign Business Capital. The outstanding principal and interest
balance under the PNC Credit Facility, related fees and certain expenses related to the execution
and closing of the Loan Agreement were paid in full with $0.6&nbsp;million in proceeds drawn from the
Loan Agreement on April&nbsp;2, 2008. Fees associated with this facility approximate $150,000, which are
amortized over the life of the Loan Agreement.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Under the Loan Agreement, the Lender agreed to provide a revolving credit facility to the Company
in an aggregate amount of up to $3.0&nbsp;million subject to the further terms and conditions of the
Loan Agreement. The loan is secured by a first priority lien on all of the Company&#146;s assets. There
is currently no debt outstanding under the Loan Agreement. In connection with the disposition of
the operating assets of our TeamStaff Rx subsidiary, we were required to obtain the consent of
Sovereign. On January&nbsp;12, 2010 we were granted such consent. As a condition to such consent,
however, Sovereign reduced the maximum amount available under such loan facility from $3.0&nbsp;million
to $2.0&nbsp;million. As of September&nbsp;30, 2009, there was no debt outstanding under the Loan Agreement
and unused availability (as defined) totaled $1.7&nbsp;million, net of required collateral reserves per
the Loan Agreement for certain payroll and tax liabilities. The average daily outstanding balance
on the facility for fiscal 2009 was $0.3&nbsp;million. As of September&nbsp;30, 2009, we had working capital
of $0.9&nbsp;million. Accordingly, management does not believe that the reduction in the availability
under the Loan Agreement will have a material adverse impact on our operations and financial
condition.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The Company&#146;s ability to request loan advances under the Loan Agreement is subject to computation
of the Company&#146;s advance limit and compliance with the covenants and conditions of the loan. The
loan is for a term of 36&nbsp;months and matures on March&nbsp;31, 2011. Interest on advances accrues on the
daily unpaid balance of the loan advances at a per annum rate of one-quarter (.25%) percentage
points above the Prime Rate in effect from time to time, but not less than five and one-half
percent (5.5%) per annum. The interest rate on the facility at September&nbsp;30, 2009 was 5.5%.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The Loan Agreement requires compliance with certain customary covenants including a debt service
coverage ratio and imposes restrictions on the Company&#146;s ability to, among other things, dispose of
certain assets, engage in certain transactions, incur indebtedness and pay dividends. The Loan
Agreement also provides for customary events of default following which, Sovereign may, at its
option, accelerate the amounts outstanding under the Loan Agreement.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">On January&nbsp;11, 2010, we determined that as of September&nbsp;30, 2009, we were not in compliance with
the debt service coverage ratio covenant of the Loan Agreement. The Loan Agreement provides that
following an event of default, Sovereign may, among other remedies provided for in the Loan
Agreement, accelerate the amounts outstanding under the Loan Agreement, take such actions as it
deems necessary to protect its security interest in the collateral, and terminate the Loan
Agreement. In connection with its consent to the sale of the TeamStaff Rx assets and loan
modification, Sovereign waived such non-compliance for the period ending September&nbsp;30, 2009. The
Lender, however, reserved its rights under the Loan Agreement with respect to any future
non-compliance with the debt service coverage ratio for any future period or any other provision of
the Loan Agreement. If covenant violations were to occur in the future and the lender does not
agree to modify the covenants or waive such violations, it could result in the acceleration of the
maturity date of all of our debt under this loan facility. In both of these circumstances it could
have a material adverse impact on our business and financial condition. See &#147;<I>Risk Factors &#150; Risks
Relating to our Revolving Credit Line</I>&#148;.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Availability under the Loan Agreement is directly related to the successful assignment of certain
accounts receivable. Certain government accounts of TeamStaff GS are required to execute
&#147;Acknowledgements of Assignment.&#148; There can be no assurance that every TeamStaff GS government
account will execute the documentation to effectuate the assignment and secure availability. The
failure of government third parties to sign the required documentation could result in a decrease
in availability under the Loan Agreement.
</DIV>

<P align="center" style="font-size: 10pt">&nbsp;

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">




<DIV align="left" style="font-size: 10pt; margin-top: 10pt">As of September&nbsp;30, 2009, TeamStaff had cash and cash equivalents of $3.0&nbsp;million and net accounts
receivable of $11.4&nbsp;million. At September&nbsp;30, 2009, the amount of the accounts receivable
associated with the DVA retroactive billings approximates $9.3&nbsp;million and was unbilled at
September&nbsp;30, 2009. As of September&nbsp;30, 2009, there was no debt outstanding under the Loan
Agreement and defined unused availability totaled $1.7&nbsp;million, net of required collateral reserves
per the Loan Agreement for certain payroll and tax liabilities. As of September&nbsp;30, 2009, TeamStaff
had working capital of $0.9&nbsp;million. The Company believes that it has adequate liquidity resources
to fund operations over the next twelve months.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><U><B>Payroll Taxes </B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">As described in greater detail in the notes to the consolidated financial statements, TeamStaff had
received notices from IRS claiming taxes, interest and penalties due related to payroll taxes
predominantly from its former PEO operations which were sold in fiscal 2003. TeamStaff has also
received notices from the IRS reporting overpayments of taxes. Management believes that these
notices are predominantly the result of misapplication of payroll tax payments between its legal
entities. If not resolved favorably, the Company may incur interest and penalties. To date,
TeamStaff has been working with the IRS to resolve these discrepancies and has had certain interest
and penalty claims abated. TeamStaff has also received notices from the Social Security
Administration claiming variances in wage reporting compared to IRS transcripts. TeamStaff
believes the notices from the Social Security Administration are directly related to the IRS
notices received. TeamStaff believes that after the IRS applies all the funds correctly, any
significant interest and penalties will be abated; however, there can be no assurance that each of
these matters will be resolved favorably. In settling various years for specific subsidiaries with
the IRS, the Company has received refunds for those specific periods; however, as the process of
settling and concluding on other periods and subsidiaries is not yet completed and the potential
exists for related penalties and interest, the remaining liability ($1.1&nbsp;million at September&nbsp;30,
2009) has been recorded in accounts payable. In fiscal 2009, the Company paid $1.1&nbsp;million, related
to this matter. Based on an assessment of periods settled and the status of open periods under
review by the IRS, management reduced its estimated liability by $0.7&nbsp;million in 2008. Such amount,
accounted for as a change in estimate, is included as a component of other income (expense)&nbsp;in the
accompanying 2008 statement of operations. Management believes that the ultimate resolution of
these remaining payroll tax matters will not have a significant adverse effect on its financial
position or future results of operations.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Contractual Obligations</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="44%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="10" style="border-bottom: 1px solid #000000"><B>Payments Due By Period</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="left">Obligations</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Less than</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>1-3</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>4-5</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">(Amounts in thousands)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Total</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>1 Year</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Years</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Years</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Long Term Debt (1)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,630</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,564</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">66</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Operating Leases (2)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,124</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">474</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">502</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">148</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Severence Liabilities (3)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">108</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">108</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Total Obligations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2,862</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2,146</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">568</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">148</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>




<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR style="font-size: 6pt">
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="96">&nbsp;</TD>
</TR>
<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Represents bank line of credit, the maximum amount of notes payable related to the acquisition of
TeamStaff GS, and capital lease obligations.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>Represents lease payments net of sublease income, including
those of discontinued operations. </TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(3)</TD>
    <TD>&nbsp;</TD>
    <TD>Represents severance payments related to former President of TeamStaff Rx.</TD>
</TR>

</TABLE>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Employment Agreements</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">As described in greater detail under the caption &#147;Executive Compensation and Related Information &#150;
Employment Agreements with Named Executive Officers&#148;, during fiscal 2008, we entered into
employment agreements with our Chief Executive Officer and Chief Financial Officer and during
fiscal 2009, we entered into employment agreements with our President of TeamStaff GS and with our
President of TeamStaff Rx. Subsequent to September&nbsp;30, 2009, we have entered into new employment
agreements with our Chief Executive Officer and Chief Financial Officer. The material terms and
conditions of each of these employment agreements are summarized in greater detail under the
caption &#147;Executive Compensation and Related Information &#150; Employment Agreements with Other
Executive Officers&#148;. The summaries of each of the foregoing agreements are incorporated herein by
reference.
</DIV>

<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->32<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">




<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Off-Balance Sheet Arrangements</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">We have not created, and are not party to, any special-purpose or off-balance sheet entities for
the purpose of raising capital, incurring debt or operating parts of our business that are not
consolidated into our financial statements. We do not have any arrangements or relationships with
entities that are not consolidated into our financial statements that are reasonably likely to
materially affect our liquidity or the availability of our capital resources. We have entered into
various agreements by which we may be obligated to indemnify the other party with respect to
certain matters. Generally, these indemnification provisions are included in contracts arising in
the normal course of business under which we customarily agree to hold the indemnified party
harmless against losses arising from a breach of representations related to such matters as
intellectual property rights. Payments by us under such indemnification clauses are generally
conditioned on the other party making a claim. Such claims are generally subject to challenge by us
and to dispute resolution procedures specified in the particular contract. Further, our obligations
under these arrangements may be limited in terms of time and/or amount and, in some instances, we
may have recourse against third parties for certain payments made by us. It is not possible to
predict the maximum potential amount of future payments under these indemnification agreements due
to the conditional nature of our obligations and the unique facts of each particular agreement.
Historically, we have not made any payments under these agreements that have been material
individually or in the aggregate. As of our most recent fiscal year end we were not aware of any
obligations under such indemnification agreements that would require material payments.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Effects of Inflation</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Inflation and changing prices have not had a material effect on TeamStaff&#146;s net revenues and
results of operations, as TeamStaff has been able to modify its prices and cost structure to
respond to inflation and changing prices.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><U><B>Recently Issued Accounting Pronouncements Affecting the Company</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">In June&nbsp;2006, the Financial Accounting Standards Board (&#147;FASB&#148;) issued authoritative guidance that
clarifies the accounting for uncertainty in income taxes recognized in an entity&#146;s financial
statements and prescribes a recognition threshold of more-likely-than-not to be sustained upon
examination. Measurement of the tax uncertainty occurs if the recognition threshold has been met.
This Interpretation also provides guidance on de-recognition, classification, interest and
penalties, accounting in interim periods, disclosure, and transition.
TeamStaff conducts business solely in the U.S. and, as a result, files income tax returns for U.S.,
New Jersey and various other states and jurisdictions. In the normal course of business the Company
is subject to examination by taxing authorities. The Company&#146;s tax returns for years subsequent to
fiscal 2005 are open, by statute, for review by authorities. However, at present, there are no
ongoing income tax audits or unresolved disputes with the various tax authorities that the Company
currently files or has filed with. Given the Company&#146;s substantial net operating loss
carryforwards, which are subject to a full valuation allowance, as well as the historical operating
losses in prior periods, the adoption of this guidance on October&nbsp;1, 2007 did not have any effect
on our financial position, results of operations or cash flows as of the adoption date or for
subsequent periods.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">In September&nbsp;2006, the FASB issued a standard which defines fair value, established a framework for
measuring fair value in accordance with accounting principles generally accepted in the United
States, and expanded disclosures about fair value measurements. This standard was effective for
financial statements issued for fiscal years beginning after November&nbsp;15, 2007, with earlier
application encouraged. Any amounts recognized upon adoption as a cumulative effect adjustment will
be recorded to the opening balance of retained earnings in the year of adoption. In February&nbsp;2008,
the FASB issued supplemental guidance in the form of a staff position, which delayed the effective
date of the initial standard for all nonfinancial assets and nonfinancial liabilities, except those
that are recognized or disclosed at fair value in the financial statements on a recurring basis (at
least annually), until fiscal years beginning after November&nbsp;15, 2008, and interim periods within
those fiscal years. The Company adopted this standard on October&nbsp;1, 2008 with no effect on its
financial position, results of operations and cash flows.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">In February&nbsp;2007, the FASB issued a standard that 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. This standard was effective for fiscal years
beginning after November&nbsp;15, 2007, the provisions of which are required to be applied
prospectively. The Company adopted this standard on October&nbsp;1, 2008 with no effect on its financial
position, results of operations and cash flows.
</DIV>

<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->33<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">




<DIV align="left" style="font-size: 10pt; margin-top: 10pt">In March&nbsp;2008, the FASB issued a standard which is intended to improve financial reporting about
derivative instruments and hedging activities by requiring enhanced disclosures to enable users of
the financial statements to better understand the effects on an entity&#146;s financial position,
financial performance, and cash flows. It is effective for financial statements issued for interim
periods beginning after November&nbsp;15, 2008, with early application encouraged. The adoption of this
standard did not have a material effect on our consolidated financial statements.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">In June&nbsp;2009, the FASB issued a standard which stipulated the <I>FASB Accounting Standards
Codification</I>&#153; is the source of authoritative U.S. GAAP recognized by the FASB to be applied by
nongovernmental entities. This standard is effective for financial statements issued for interim
and annual periods ended after September&nbsp;15, 2009. The implementation of this standard did not
have a material impact on the Company&#146;s financial position, results of operations and cash flows.
</DIV>

<DIV align="left">
<A name="112"></A>
</DIV>

<DIV align="left" style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="7%"></TD>
    <TD width="1%"></TD>
    <TD></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left"><B>Item&nbsp;7A.</B></TD>
    <TD>&nbsp;</TD>
    <TD><B>Quantitative and Qualitative Disclosures About Market Risk</B></TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">TeamStaff does not undertake trading practices in securities or other financial instruments and
therefore does not have any material exposure to interest rate risk, foreign currency exchange rate
risk, commodity price risk or other similar risks, which might otherwise result from such
practices. TeamStaff is not materially subject to fluctuations in foreign exchange rates, commodity
prices or other market rates or prices from market sensitive instruments. TeamStaff has a material
interest rate risk with respect to our prior workers&#146; compensation programs. In connection with
TeamStaff&#146;s prior workers&#146; compensation programs, prepayments of future claims were deposited into
trust funds for possible future payments of these claims in accordance with the policies. The
interest income resulting from these prepayments is for the benefit of TeamStaff, and is used to
offset workers&#146; compensation expense. If interest rates in these periods decrease, TeamStaff&#146;s
workers&#146; compensation expense would increase because TeamStaff would be entitled to less interest
income on the deposited funds. Further, and as discussed elsewhere in this filing, TeamStaff, Inc.
has, effective in January&nbsp;2010, a $2.0&nbsp;million revolving credit facility by Sovereign Business
Capital. Revolving credit advances bear interest at the Prime Rate plus 25 basis points. The
facility has a three-year life and contains term and line of credit borrowing options. The facility
is subject to certain restrictive covenants, including a fixed charge coverage ratio. The facility
is subject to acceleration upon non-payment or various other standard default clauses. Material increases in the Prime rate could have
a material adverse effect on our results of operations, the status of the revolving credit facility
as well as interest costs.
</DIV>

<DIV align="left">
<A name="113"></A>
</DIV>

<DIV align="left" style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="7%"></TD>
    <TD width="1%"></TD>
    <TD></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left"><B>Item&nbsp;8.</B></TD>
    <TD>&nbsp;</TD>
    <TD><B>Financial Statements and Supplemental Data</B></TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">See attached Financial Statements beginning on page F-1 attached to this Report on Form 10-K.
</DIV>

<DIV align="left">
<A name="114"></A>
</DIV>

<DIV align="left" style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="7%"></TD>
    <TD width="1%"></TD>
    <TD></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left"><B>Item&nbsp;9.</B></TD>
    <TD>&nbsp;</TD>
    <TD><B>Changes in and Disagreements with Accountants on Accounting and Financial Disclosure</B></TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Not applicable.
</DIV>

<DIV align="left">
<A name="115"></A>
</DIV>

<DIV align="left" style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="7%"></TD>
    <TD width="1%"></TD>
    <TD></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left"><B>Item&nbsp;9A(T).</B></TD>
    <TD>&nbsp;</TD>
    <TD><B>Controls and Procedures</B></TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Evaluation of Disclosure Controls and Procedures</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Our Chief Executive Officer and Chief Financial Officer, after evaluating the effectiveness of our
disclosure controls and procedures (as defined in Rule&nbsp;13a-15(e) or 15d-15(e) under the Exchange
Act) as of the end of the period covered by this report, have concluded that, based on the
evaluation of these controls and procedures, our disclosure controls and procedures were effective
at the reasonable assurance level to ensure that information required to be disclosed by us in the
reports that we file or submit under the Exchange Act is recorded, processed, summarized and
reported, within the time periods specified in the SEC&#146;s rules and forms and that such information
is accumulated and communicated to our management, including our Chief Executive Officer and Chief
Financial Officer, to allow timely decisions regarding required disclosure. Management does not
view the Company&#146;s inability to timely file its annual report on Form 10-K as evidence that the
Company&#146;s disclosure controls and procedures were not effective as the delay experienced by the
Company in completing its annual report was caused by the timing of the closing of the Company&#146;s
disposition of the assets of its TeamStaff Rx business. Due to the timing of this transaction, the
Company&#146;s management was not able to complete its preparation of this annual report prior to the
required filing date.
</DIV>

<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->34<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">




<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect
that our disclosure controls and procedures or our internal controls will prevent all errors and
all fraud. 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 our company have been detected. Our
management, however, believes our disclosure controls and procedures are in fact effective to
provide reasonable assurance that the objectives of the control system are met.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Management&#146;s Report on Internal Control over Financial Reporting</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Our management, under the supervision of our Chief Executive Officer and Chief Financial Officer,
is responsible for establishing and maintaining adequate internal control over financial reporting
(as defined in Rules&nbsp;13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as
amended). Our internal control over financial reporting is designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles. The company&#146;s
internal control over financial reporting includes those policies and procedures that:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(i)&nbsp;pertain to the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the company;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(ii)&nbsp;provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles,
and that receipts and expenditures of the company are being made only in accordance with
authorizations of management and directors of the company; and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(iii)&nbsp;provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of the company&#146;s assets that could have a material effect on the
financial statements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Management, including our Chief Executive Officer and Chief Financial Officer, conducted an
evaluation of the effectiveness of our internal control over financial reporting as of September
30, 2009. In making this evaluation, management used the framework in Internal Control&#151;Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Based on our evaluation under the framework in Internal Control&#151;Integrated Framework, our
management has concluded that our internal control over financial reporting was effective as of
September&nbsp;30, 2009.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">This annual report does not include an attestation report of our independent registered public
accounting firm regarding our internal control over financial reporting. Management&#146;s report was
not subject to attestation by our registered public accounting firm pursuant to temporary rules of
the Securities and Exchange Commission that permit us to provide only management&#146;s report in this
annual report.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Because of its inherent limitations, internal control over financial reporting may not prevent or
detect misstatements. Also, projections of any evaluation of effectiveness to future periods are
subject to the risk that controls may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Changes in Internal Control over Financial Reporting</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">There was no change in our system of internal control over financial reporting (as defined in Rule
13a-15(f) under the Exchange Act) during the fourth fiscal quarter of our fiscal year ended
September&nbsp;30, 2009 that has materially affected, or is reasonably likely to materially affect, our
internal control over financial reporting.
</DIV>

<DIV align="left">
<A name="116"></A>
</DIV>

<DIV align="left" style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="7%"></TD>
    <TD width="1%"></TD>
    <TD></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left"><B>Item&nbsp;9B.</B></TD>
    <TD>&nbsp;</TD>
    <TD><B>Other Information</B></TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">None.
</DIV>

<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->35<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">



<DIV align="left">
<A name="117"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>PART III</B>
</DIV>

<DIV align="left">
<A name="118"></A>
</DIV>

<DIV align="left" style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="7%"></TD>
    <TD width="1%"></TD>
    <TD></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left"><B>Item&nbsp;10.</B></TD>
    <TD>&nbsp;</TD>
    <TD><B>Directors, Executive Officers and Corporate Governance</B></TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Directors and Executive Officers</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Our Board is presently comprised of seven members and is classified into three classes, which are
each elected in staggered three-year terms. Class&nbsp;1 consists of T. Stephen Johnson and Peter
Black, and the term expires in 2012; Class&nbsp;2 consists of Karl Dieckmann, Frederick G. Wasserman and
William H. Alderman, and the term expires in 2010 and Class&nbsp;3 consists of Martin Delaney and Rick
J. Filippelli, and the term expires in 2011. In July&nbsp;2009, Mr.&nbsp;Johnson notified us that he decided
to resign as our Chairman, effective immediately. Following his resignation, Mr.&nbsp;Wasserman was
appointed to serve as our Chairman. Mr.&nbsp;Johnson continues to serve as a director. No family
relationship exists among any of our directors or executive officers.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The charts below list our directors and executive officers as of January&nbsp;5, 2010 and are followed
by biographic information about them.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>Directors</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="38%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="41%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Name</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Age</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Positions</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Class</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Frederick G. Wasserman
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">55</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chairman of the Board of Directors
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">2</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Karl W. Dieckmann
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">81</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Vice Chairman
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">2</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">William H. Alderman
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">47</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">2</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Peter Black
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">37</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">1</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Martin Delaney
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">66</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">3</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Rick J. Filippelli
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">53</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">President, Chief Executive
Officer and Director
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">3</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">T. Stephen Johnson
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">59</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">1</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>Executive Officers</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="38%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="61%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Name</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Age</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Positions</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Rick J. Filippelli
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">53</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">President, Chief Executive Officer and Director</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Cheryl Presuto
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">45</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chief Financial Officer, Controller</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Kevin Wilson
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">44</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">President, TeamStaff Government Solutions, Inc.</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">We reported on November&nbsp;3, 2009, that Mr.&nbsp;Rick J. Filippelli, who has served as our President and
Chief Executive Officer since January&nbsp;2007, has informed the Board of his intent to resign from
such positions in connection with the our strategic shift in our current business plan.
Mr.&nbsp;Filippelli&#146;s resignation as President and Chief Executive Officer will become effective at the
end of January&nbsp;2010. Mr.&nbsp;Filippelli has agreed to assist us with our transition to a new Chief
Executive Officer. Our Board has established a search committee to identify candidates for Chief
Executive Officer; however, we have not yet appointed a new President and Chief Executive Officer.
</DIV>

<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->36<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">




<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Biographical Information &#150; Board of Directors</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><I>William H. Alderman </I>joined the Board of Directors in January&nbsp;2007. Mr.&nbsp;Alderman has over 15&nbsp;years
experience providing investment banking services across multiple industries, with a particular
expertise in financings, and mergers and acquisitions in the aerospace and defense industry. Since
March&nbsp;2001, Mr.&nbsp;Alderman has been the President of Alderman &#038; Company, a securities broker
specializing in the aerospace and defense industries. Mr.&nbsp;Alderman started his career at Bankers
Trust Company and has held senior positions in investment management and corporate development at
GE Capital, Aviation Sales Company, and most recently as Managing Director of the aviation
investment banking practice of Fieldstone Investments. Mr.&nbsp;Alderman received a MBA from J.L.
Kellogg Graduate School of Management in 1989 and is also a graduate of Kenyon College and the Taft
School. Mr.&nbsp;Alderman is currently a director of Breeze-Eastern Corp. a publicly traded company and
ZAN Alpha Fund, a private company.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><I>Peter Black </I>joined the Board of Directors in March&nbsp;2005. For the past nine years, Mr.&nbsp;Black has
been an Investment Analyst and Portfolio Manager at Wynnefield Capital, Inc., where he is
responsible for researching and identifying small-cap value investments. Mr.&nbsp;Black has initiated
investments on Wynnefield&#146;s behalf that span multiple industries. Prior to joining Wynnefield, Mr.
Black was an investment banker in the mergers and acquisition departments of UBS Securities and SG
Cowen &#038; Co. Mr.&nbsp;Black is a graduate of Boston College and received his MBA from Fordham
University. Wynnefield Capital, Inc., through certain of its investment funds, is the owner of
approximately 14% of our outstanding shares of common stock. Mr.&nbsp;Black is currently a director of
Underground Solutions, Inc.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><I>Martin J. Delaney </I>joined the Board of Directors in July&nbsp;1998. Mr.&nbsp;Delaney is an attorney and a
prominent healthcare executive who began his hospital management career in 1971 as an Assistant
Administrator at Nassau County Medical Center. He has been a director of a large regional Health
Maintenance Organization on Long Island, the Hospital Association of New York State, the Greater
New York Hospital Association, and chairman of the Nassau-Suffolk Hospital Council. He has been
President, CEO and a director of Winthrop University Hospital, Winthrop South Nassau University
Health Care Systems, and the Long Island Health Network. He has a graduate degree in health care
management from The George Washington University and a law degree from St. John&#146;s University. He
has been admitted to practice in New York State and federal courts.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><I>Karl W. Dieckmann</I>, a Director of TeamStaff since April&nbsp;1990, had been Chairman of the Board from
November&nbsp;1991 until September&nbsp;2001 and has been Vice Chairman since September&nbsp;2001. From 1980 to
1988, Mr.&nbsp;Dieckmann was the Executive Vice President of Science Management Corporation and managed
the Engineering, Technology and Management Services Groups. From 1948 to 1980, Mr.&nbsp;Dieckmann was
employed by the Allied Signal Corporation (now Honeywell Corporation) in various capacities
including President, Semet Solvay Division; Executive Vice President, Industrial Chemicals
Division; Vice President Technical &#150; Fibers Division; Group General Manager &#150; Fabricated Products
Division; and General Manager &#150; Plastics Division, as well as various positions with the Chemicals
Division.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><I>Rick J. Filippelli </I>was appointed as our Chief Executive Officer, President and a member of our
Board of Directors in January&nbsp;2007. Mr.&nbsp;Filippelli also served as Vice President from September
2003 to January&nbsp;2007 and as Chief Financial Officer of TeamStaff from September&nbsp;2003 to October
2007. Prior to joining TeamStaff, Mr.&nbsp;Filippelli spent approximately two years as Chief Financial
Officer of Rediff.com, a publicly traded global information technology company. From 1985 through
2001, Mr.&nbsp;Filippelli held various financial positions including that of Chief Financial Officer
with Financial Guaranty Insurance Company (&#147;FGIC&#148;), a subsidiary of GE Capital. Prior to joining
FGIC, Mr.&nbsp;Filippelli spent six years in public accounting including three years with the Big 4 firm
of Ernst and Young. Mr.&nbsp;Filippelli holds a Bachelor of Science degree in Accounting from Brooklyn
College and is a Certified Public Accountant as well as a member of the American Institute of
Certified Public Accountants.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><I>T.
Stephen Johnson </I>has been a director of TeamStaff since
September&nbsp;2001. He served as our Chairman from September 2001
until July 2009. He has served
as Chairman of T. Stephen Johnson &#038; Associates, Inc., financial services consulting firm, and its
related entities since inception in 1986. Mr.&nbsp;Johnson is a long-time banking consultant and
Atlanta entrepreneur who has advised and organized dozens of community banks throughout the
Southeast. He is Chairman Emeritus of Netbank, the largest and most successful Internet-only bank,
as well as Chairman and principal owner of Bank Assets, Inc., a provider of benefit programs for
directors and officers of financial institutions. Mr.&nbsp;Johnson is
Chairman of the Board of Directo,
Inc. a company specializing in providing financial services for un-banked individuals and Chairman
of Atlanta Financial Corporation.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><I>Frederick
Wasserman </I>joined the Board of Directors in January&nbsp;2007 and
was appointed as our Chairman in July 2009. Mr.&nbsp;Wasserman is currently a
financial management consultant. Until December&nbsp;31, 2006, Mr.&nbsp;Wasserman was the Chief
Operating/Financial Officer for Mitchell &#038; Ness Nostalgia Co., a privately-held manufacturer and
distributor of licensed sportswear and authentic team apparel. Prior to Mitchell &#038; Ness, Mr.
Wasserman served as the President of Goebel of North America, a U.S. subsidiary of the German
specialty gift maker, from 2001 to 2005. Mr.&nbsp;Wasserman also served as the Chief Financial Officer
of Goebel North America in 2001. Prior to Goebel, Mr.&nbsp;Wasserman served as both the Interim
President and full-time Chief Financial Officer of Papel Giftware from 1995 to 2001. Mr.&nbsp;Wasserman
spent the first 13&nbsp;years of his career in the public accounting profession. Mr.&nbsp;Wasserman also
serves as a director of Acme Communications, Inc., Allied Defense Group, Inc., Breeze Eastern
Corporation, Gilman &#043; Ciocia, Inc., Crown Crafts, Inc. and AfterSoft Group, Inc.
</DIV>

<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->37<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">




<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Biographical Information &#150; Other Executive Officers</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><I>Cheryl
Presuto</I> was appointed to the position of Chief Financial Officer in October&nbsp;2007. She also
serves as the Company&#146;s Controller, a position she has held since August&nbsp;2004. Ms.&nbsp;Presuto
previously served as TeamStaff&#146;s Accounting Manager since January&nbsp;2002. Prior to joining TeamStaff,
Ms.&nbsp;Presuto spent four years with the newspaper division of Gannett, Inc., where she served as
Accounting Manager and Assistant Controller. Prior to joining Gannett, Ms.&nbsp;Presuto held various
accounting and consulting positions. Ms.&nbsp;Presuto holds a Bachelor of Science degree in Accounting
from Fairleigh Dickinson University where she graduated summa cum laude.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><I>Kevin
Wilson</I> was appointed as the President of TeamStaff GS in October&nbsp;2008. Previously, Mr.&nbsp;Wilson
served as the Director of TeamStaff GS from June&nbsp;2007 through September&nbsp;2008. From January&nbsp;2004 to
June&nbsp;2007, Mr.&nbsp;Wilson served as the Director of Strategic Alliances of Varec, Inc., where he was
responsible for business development in the domestic and foreign defense markets. Prior to his
tenure at Varec, Inc., from March&nbsp;1997 to January&nbsp;2004, Mr.&nbsp;Wilson was the Program Manager for a
multiyear defense services contract with Endress Hauser Systems &#038; Gauging. Mr.&nbsp;Wilson also worked
at Tracer Research Corporation from January&nbsp;1990 to March&nbsp;1997, where he was Project Manager for
the United States Air Force, Air Combat Command professional services contract. Mr.&nbsp;Wilson holds a
BS in Business Marketing from Northwest Missouri State University.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Corporate Governance</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Meetings of the Board of Directors; Independence and Committees</B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">During the fiscal year ended September&nbsp;30, 2009, the Board of Directors met on 8 occasions. Our
Board of Directors determined that as of September&nbsp;30, 2009, Messrs.&nbsp;Alderman, Black, Delaney,
Dieckmann, Johnson and Wasserman satisfied the independence requirements within the meaning of the
NASDAQ Marketplace Rules.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The Board of Directors has five standing committees: Audit Committee, Management Resources and
Compensation Committee, Executive Committee, Nominating and Corporate Governance Committee and
Strategic Planning Committee. Each of these committees has a written charter approved by the Board
of Directors. Other than the charter of the Strategic Planning Committee, all of the charters of
our Board committees, as well as the Company&#146;s corporate governance guidelines, are available at
the Company&#146;s website, <I><u>www.teamstaff.com</u></I> (click on Investors, then on Corporate Governance).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">For the fiscal year ended September&nbsp;30, 2009, a general description of the duties of the
Committees, their members and number of times each Committee met were as follows:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><I>Audit Committee. </I>A copy of the Audit Committee&#146;s Amended and Restated Charter may be viewed on our
website at <I><u>www.teamstaff.com</u></I>. TeamStaff&#146;s Audit Committee acts to: (i)&nbsp;review with management the
finances, financial condition and interim financial statements of TeamStaff; (ii)&nbsp;review with
TeamStaff&#146;s independent auditors the year-end financial statements; and (iii)&nbsp;review implementation
with the independent auditors and management any action recommended by the independent auditors and
the retention and termination of TeamStaff&#146;s independent auditors.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">From October&nbsp;1, 2008 to the present, members of our Audit Committee were and are Mr.&nbsp;Wasserman
(Chair), Mr.&nbsp;Black and Mr.&nbsp;Dieckmann. Mr.&nbsp;Wasserman is also designated as our Audit Committee
Financial Expert. During the 2009 fiscal year, all of the members of our Audit Committee were
&#147;independent&#148; within the definition of that
term as provided by the Nasdaq Marketplace Rules. During the fiscal year ended September&nbsp;30, 2009,
the Audit Committee met on 5 occasions.
</DIV>

<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->38<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">




<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><I>Management Resources and Compensation Committee. </I>The charter governing the activities of the
Management Resources and Compensation Committee (sometimes referred to as the &#147;Compensation
Committee&#148;) may be viewed online on our website at
<I><u>www.teamstaff.com.</u> </I>The Management Resources and
Compensation Committee functions include negotiation and review of all employment agreements of
executive officers of TeamStaff and administration of TeamStaff&#146;s 2006 Long Term Incentive Plan,
its 2000 Employee Stock Option Plan and Non-Executive Director Stock Option Plan. From October&nbsp;1,
2008 to the present, the members of the Management Resources and Compensation Committee were and
are Mr.&nbsp;Black (Chair), Mr.&nbsp;Dieckmann and Mr.&nbsp;Johnson. At all times members of the Management
Resources and Compensation Committee satisfied the independence requirements of the Nasdaq
Marketplace Rules. During the fiscal year ended September&nbsp;30, 2009, this committee met on 3
occasions.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><I>Nominating and Corporate Governance Committee</I>. The charter governing the activities of the
Nominating and Corporate Governance Committee may be viewed online on our website at
<I>www.teamstaff.com</I>. Pursuant to its charter, the Nominating and Corporate Governance Committee&#146;s
tasks include reviewing and recommending to the Board issues relating to the Board&#146;s composition
and structure; establishing criteria for membership and evaluating corporate policies relating to
the recruitment of Board members; implementing and monitoring policies regarding principles of
corporate governance in order to ensure the Board&#146;s compliance with its fiduciary duties to the
company and its shareholders; and making recommendations regarding proposals submitted by
shareholders. The Nominating and Corporate Governance Committee functions also include the review
of all candidates for a position on the board of directors including existing directors for
re-nomination and reports its findings with recommendations to the Board. The Nominating and
Corporate Governance Committee solicits candidates on behalf of TeamStaff to fill any vacancy on
the Board. The members of the Nominating and Corporate Governance Committee members are Mr.
Alderman (Chair), Mr.&nbsp;Delaney, Mr.&nbsp;Dieckmann and Mr.&nbsp;Johnson, each of whom satisfy the independence
requirements of the Nasdaq Marketplace Rules. Mr.&nbsp;Delaney was appointed to this Committee in April
2009. During the fiscal year ended September&nbsp;30, 2009, this committee met once.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><I>Strategic Planning Committee</I>. The Board of Directors established a Strategic Planning Committee in
July&nbsp;30, 2009. Members of this Committee are Messrs.&nbsp;Alderman, Black, Delaney and Wasserman. Mr.
Alderman serves as the Chairman of this committee. The Strategic Planning Committee was created in
order to confirm the strategic decisions of the Company and, as necessary, engage the services of
outside professionals to assess the market for the Company&#146;s products and services, and confirm or
suggest modifications to, the Company&#146;s business plans. During the 2009 fiscal year, the Strategic
Planning Committee met on 2 occasions.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><I>Executive Committee</I>. The Board of Directors created an Executive Committee effective September&nbsp;4,
2001. Executive Committee members are currently Mr.&nbsp;Karl W. Dieckmann and Mr.&nbsp;Rick Wasserman. Mr.
Wasserman replaced Mr.&nbsp;Johnston on this committee at the time of his appointment as our Chairman.
Mr.&nbsp;Wasserman serves as its chairman. This committee did not meet during the fiscal year ended
September&nbsp;30, 2009.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">No member of the Board of Directors or any committee failed to attend at least, or participated in
fewer than, 75% of the meetings of the Board or of a committee on which such member serves.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Management Resources and Compensation Committee Interlocks and Insider Participation in
Compensation Decisions</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Mr.&nbsp;Peter Black (Chair), Mr.&nbsp;Karl W. Dieckmann and Mr.&nbsp;T. Stephen Johnson served on the Management
Resources and Compensation Committee for the fiscal year ended September&nbsp;30, 2009. There are no
interlocks between TeamStaff&#146;s Directors and directors of other companies.
</DIV>


<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->39<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">



<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Nominating and Corporate Governance Matters</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Our Nominating and Corporate Governance Committee considers candidates for election to our Board of
Directors, whether recommended by security holders or otherwise, in accordance with the following
criteria. The Nominating and Corporate Governance Committee applies the following general criteria
to all candidates:
</DIV>


<DIV style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Nominees shall have a reputation for integrity, honesty and adherence to high ethical standards.</TD>
</TR>

<TR>
    <TD style="font-size: 8pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Nominees should have demonstrated business acumen, experience and the ability to exercise sound
judgment in matters that relate to current and long term objectives of the Company and should
be willing and able to contribute positively to TeamStaff&#146;s decision-making process.</TD>
</TR>

<TR>
    <TD style="font-size: 8pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Nominees should have a commitment to understand the Company and its industries and to regularly
attend and participate in meetings of the Board and its committees.</TD>
</TR>

<TR>
    <TD style="font-size: 8pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Nominees should have the interest and ability to understand the sometimes conflicting interests
of the various constituencies of the Company, which include shareholders, employees, customers,
governmental units, creditors and the general public, and to act in the interests of all
shareholders.</TD>
</TR>

<TR>
    <TD style="font-size: 8pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Nominees should not have, nor appear to have, a conflict of interest that would impair the
nominees&#146; ability to represent the interests of all the Company&#146;s shareholders and to fulfill
the responsibilities of a director.</TD>
</TR>

<TR>
    <TD style="font-size: 8pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Nominees shall not be discriminated against on the basis of race, religion, national origin,
sex, disability or any other basis proscribed by applicable law.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The re-nomination of existing directors is not to be viewed as automatic, but is based on
continuing qualification under the various criteria set forth above. In addition, the Nominating
and Corporate Governance Committee considers the existing director&#146;s performance on the Board and
any committee thereof. The Nominating and Corporate Governance Committee also considers the
backgrounds and qualifications of the directors considered as a group. The Nominating and Corporate
Governance Committee strives to ensure that the Board, when taken as a whole, provides a
significant breadth of experience, knowledge and abilities that shall assist the Board in
fulfilling its responsibilities.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Procedure to be Followed by Shareholders in Submitting Director Candidate Recommendations</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Any shareholder who desires the Nominating and Corporate Governance Committee to consider one or
more candidates for nomination as a director should, either by personal delivery or by United
States mail, postage prepaid, deliver a written recommendation addressed to the Chairman,
TeamStaff, Inc. Nominating and Corporate Governance Committee at 1 Executive Drive, Suite&nbsp;130,
Somerset, New Jersey 08873, not later than (i)&nbsp;with respect to an election to be held at an annual
meeting of shareholders, 90&nbsp;days prior to the anniversary date of the immediately preceding annual
meeting or if an annual meeting has not been held in the preceding year, 90&nbsp;days prior the first
Tuesday in April; and (ii)&nbsp;with respect to an election to be held at a special meeting of
shareholders for the election of directors, the close of business on the tenth day following the
date on which notice of such meeting is first given to shareholders. Each written recommendation
should set forth: (a)&nbsp;the name and address of the shareholder making the recommendation and of the
person or persons recommended; (b)&nbsp;the consent of such person(s) to serve as a director(s) of the
Company if nominated and elected; and (c)&nbsp;a description of how the person(s) satisfy the General
Criteria for consideration as a candidate referred to below in the section entitled &#147;<I>Nominating and
Corporate Governance Matters</I>.&#148;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Additional Criteria for Notice of Shareholder Nominees</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">In accordance with our By-Laws, any shareholder entitled to vote in the election of directors
generally may nominate one or more persons for election as directors at a meeting only if written
notice of such shareholder&#146;s intent to make such nomination or nominations has been given, either
by personal delivery or by United States
mail, postage prepaid, to the Secretary of the Company in accordance with the terms described in
the preceding paragraph. Each such notice shall set forth: (a)&nbsp;the name and address of the
shareholder who intends to make the nomination and of the person or persons to be nominated; (b)&nbsp;a
representation that the shareholder is a holder of record of stock of the Company entitled to vote
at such meeting and intends to appear in person or by proxy at the meeting to nominate the person
or persons specified in the notice; (c)&nbsp;a description of all arrangements or understandings between
the shareholder and each nominee and any other person or persons (naming such person or persons)
pursuant to which the nomination or nominations are to be made by the shareholder; (d)&nbsp;such other
information regarding each nominee proposed by such shareholder as would be required to be included
in a proxy statement filed pursuant to the proxy rules of the Securities and Exchange Commission
(&#147;SEC&#148;); and (e)&nbsp;the consent of each nominee to serve as a director of the Company if so elected.
</DIV>


<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->40<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">




<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Shareholder Communications with the Board</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Any shareholder may communicate with the Board of Directors in writing through the Company&#146;s
Corporate Secretary (at TeamStaff, Inc., 1 Executive Drive, Suite&nbsp;130, Somerset, New Jersey 08873)
provided that the communication identifies the shareholder and the number and type of securities
held by that shareholder. The Secretary reviews such communications, and forwards them to the Board
of Directors unless the Secretary, in consultation with the Chief Executive Officer, determines
that the communication is inappropriate for the Board&#146;s consideration (for example, if it relates
to a personal grievance or is unrelated to Company business). The Secretary maintains a permanent
written record of all such shareholder communications received by the Secretary. This process was
unanimously approved by the Nominating and Corporate Governance Committee of the Board of Directors
(which is comprised of independent directors).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Code of Ethics</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">On June&nbsp;20, 2003, TeamStaff distributed a company-wide Code of Ethics and Business Conduct and Code
of Ethics for our Chief Executive Officer, Chief Financial Officer and Controller. Additionally,
both the Codes were posted on TeamStaff&#146;s internal intranet website and are available on
TeamStaff&#146;s Internet web address, <u>www.teamstaff.com</u>. These Codes were adopted by TeamStaff&#146;s Board
of Directors, and provide employees with a confidential method of reporting suspected Code
violations.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Section&nbsp;16(a) Beneficial Ownership Reporting Compliance</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Section&nbsp;16(a) of the Exchange Act requires our directors and executive officers, and persons who
own, directly or indirectly, more than 10% of a registered class of our equity securities, to file
with the SEC initial reports of ownership and reports of changes in ownership of common stock and
other equity securities we issue. Officers, directors and greater than 10% shareholders are
required by SEC regulations to furnish us with copies of all Section 16(a) forms that they file.
Based solely on a review of the copies of such reports received by us, we believe that all Section
16(a) filing requirements applicable to our officers, directors and 10% shareholders were complied
with during the 2009 fiscal year.
</DIV>

<DIV align="left">
<A name="119"></A>
</DIV>

<DIV align="left" style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="7%"></TD>
    <TD width="1%"></TD>
    <TD></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left"><B>Item&nbsp;11.</B></TD>
    <TD>&nbsp;</TD>
    <TD><B>Executive Compensation and Related Information</B></TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">This section provides information, in tabular and narrative formats specified in applicable
SEC rules, regarding the amounts of compensation paid to our Named Executive Officers and related
information. As a smaller reporting company, the Company has presented such information in
accordance with the scaled disclosure requirements permitted under applicable SEC regulations.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>Summary Compensation Table</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The following table sets forth certain information concerning all cash and non-cash compensation
awarded to, earned by or paid to our each of our named executive officers during the two year
period ended September&nbsp;30, 2009:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="23%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Change in Pension</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Value and</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 0px solid #000000"><B>Nonqualified Deferred</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Stock</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Compensation</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>All Other</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 0px solid #000000"><B>Name and Principal</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Salary</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Bonus</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Awards</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Earnings</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Compensation</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Position</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Year</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>($)(1)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>($)(2)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>($)(3)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>($)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>($)(4)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Total ($)</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="padding-top: 0em"><!-- Blank Space -->
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:0px; text-indent:-0px">Rick J. Filippelli,<br>
President and Chief <br>
Executive Officer</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">290,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">44,625</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">4,169</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">338,794</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2008</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">280,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">196,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">100,796</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">4,495</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">581,291</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em"><!-- Blank Space -->
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:0px; text-indent:-0px">Cheryl Presuto,<br>
Chief Financial
Officer</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">181,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2,501</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">209,001</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2008</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">175,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">87,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">57,433</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">3,394</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">323,327</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em; background: #cceeff">
    <TD><DIV style="margin-left:0px; text-indent:-0px">Dale West,
President,
TeamStaff Rx (5)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">200,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">50,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">990</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">251,490</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em"><!-- Blank Space -->
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:0px; text-indent:-0px">Kevin Wilson,
President,
TeamStaff GS</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">200,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">225,500</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left"><DIV style="font-size: 3pt; margin-top: 13pt; width: 18%; border-bottom: 1px solid #000000">&nbsp;</DIV></DIV>




<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR style="font-size: 6pt">
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="96">&nbsp;</TD>
</TR>
<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>&#147;Salary&#148; is comprised of the cash salary paid to the Named Executive Officers during
fiscal 2009 and 2008.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>&#147;Bonus&#148; is comprised of cash awards made to the Named Executive Officers in the
discretion of the Company&#146;s Board of Directors as recommended by the Management Resources
and Compensation Committee, subject to certain performance and EBITDA requirements.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(3)</TD>
    <TD>&nbsp;</TD>
    <TD>&#147;Stock Awards&#148; reflect the portion of restricted stock grants awarded to Named
Executives Officers under the Company&#146;s 2006 Long Term Incentive Plan that was recognized
by the Company as a compensation expense in fiscal year 2009 and 2008 in accordance with
the provisions of revised Statement of Financial Accounting Standards (&#147;SFAS&#148;) No.&nbsp;123,
(&#147;FAS 123R&#148;) Share-Based Payment.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(4)</TD>
    <TD>&nbsp;</TD>
    <TD>&#147;All Other Compensation&#148; consists of compensation received from employer matching
contributions to the Company&#146;s 401(k) Plan, long term disability insurance premiums and
life insurance premiums paid by the Company for each Named Executive Officer.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(5)</TD>
    <TD>&nbsp;</TD>
    <TD>As previously reported, Ms.&nbsp;West&#146;s employment was terminated on January&nbsp;4, 2010 in
connection with the closing of the Company&#146;s disposition of assets of TeamStaff Rx.</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->41<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><I>Additional Information. </I>The Summary Compensation Table above quantifies the amount or value
of the different forms of compensation earned by or awarded to our Named Executive Officers in
fiscal 2009 and provides a dollar amount for total compensation. Descriptions of the material terms
of each Named Executive Officer&#146;s employment agreement and related information is provided under
&#147;Employment Agreements with Named Executive Officers&#148; below. The agreements provide the general
framework and some of the specific terms for the compensation of the Named Executive Officers.
Approval of the Management Resources and Compensation Committee and/or the Board of Directors is
required prior to our entering into employment agreements with its executive officers or amendments
to those agreements. However, many of the decisions relating to compensation for a specific year
are made by the Management Resources and Compensation Committee and are implemented without changes
to the general terms of employment set forth in those agreements.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">During the 2009 fiscal year, the Company granted restricted stock awards to its Named Executive
Officers as follows. An aggregate of 70,000 shares of restricted stock were granted to Mr.
Filippelli, with 35,000 shares vesting on January&nbsp;2, 2010 and the balance vesting on January&nbsp;2,
2011. Per Mr.&nbsp;Filippelli&#146;s employment agreement, any unvested shares will immediately vest upon
termination. An aggregate of 40,000 shares were granted to each of Ms.&nbsp;Presuto, Mr.&nbsp;Wilson and Ms.
West. Of these grants, 20,000 shares vested January&nbsp;2, 2010 and the balance vests on January&nbsp;2,
2011. Following Ms.&nbsp;West&#146;s departure, however, the vesting conditions applicable to the remaining
20,000 shares will not occur and such shares were cancelled following the closing of the
disposition of the operating assets of TeamStaff Rx. Ms.&nbsp;West was also granted an aggregate of
16,612 shares of restricted stock during 2009 pursuant to her employment agreements. These shares
were vested as of the grant date. For information regarding the effect on the vesting and treatment
of these stock awards on the death, disability or termination of employment of a Named Executive
Officer or a change in control of our company, see &#147;Employment Agreements with Named Executive
Officers&#148; below. Each award of Restricted Stock to our Named Executive Officers in fiscal 2009
represents an award of Common Stock that is subject to certain restrictions,
including restrictions on transferability. These Restricted Stock Awards were granted under our
2006 Plan. The restrictions lapse in accordance with the terms of the award agreement. Holders of
shares of Restricted Stock have voting power and the right to receive dividends, if any, that are
declared on those shares which are vested. The grants of Restricted Stock made to our Named
Executive Officers vest as described in the footnotes to the above table. The 2006 Plan is
administered by the Management Resources and Compensation Committee. The committee has authority to
interpret the plan provisions and make all required determinations under those plans. This
authority includes making required proportionate adjustments to outstanding awards upon the
occurrence of certain corporate events such as reorganizations, mergers and stock splits. Awards
granted under the 2006 Plan are generally only transferable to a beneficiary of a Plan participant
upon his or her death. However, the committee may establish procedures for the transfer of awards
to other persons or entities, provided that such transfers comply with applicable laws.
</DIV>




<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>Outstanding Equity Awards at End of 2009</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The following table sets forth certain information with respect to outstanding equity awards at
September&nbsp;30, 2009 with respect to the Named Executive Officers.
</DIV>

<DIV align="center">
<TABLE style="font-size: 8pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="20%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="14" style="border-bottom: 1px solid #000000"><B>Option Awards</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="14" style="border-bottom: 1px solid #000000"><B>Stock Awards</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 0px solid #000000"><B>(a)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 0px solid #000000"><B>(b)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 0px solid #000000"><B>(c)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 0px solid #000000"><B>(d)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 0px solid #000000"><B>(e)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 0px solid #000000"><B>(f)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 0px solid #000000"><B>(g)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 0px solid #000000"><B>(h)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>(i)</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Equity Incentive</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Equity Incentive</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Plan Awards:</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>&nbsp;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Number</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Market</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Plan Awards:</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Market or</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Number of</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Number of</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>of Shares</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Value of</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Number of</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Payout Value of</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Securities</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Securities</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>or Units</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Shares or</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Unearned</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Unearned</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Underlying</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Underlying</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>of Stock</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Units of</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Shares, Units or</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Shares, Units or</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Unexercised</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Unexercised</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Option</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>That</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Stock That</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Other Rights</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Other Rights</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Options</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Options</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Exercise</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Option</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Have Not</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Have Not</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>That Have Not</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>That Have Not</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>(#)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>(#)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Price</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Expiration</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Vested</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Vested</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Vested</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Vested</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Name</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Exercisable</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Unexercisable</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>($)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Date</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>(#)(1)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>($)(2)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>(#)(3)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>($)(2)</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="padding-top: 0em"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #cceeff">
    <TD nowrap><DIV style="margin-left:15px; text-indent:-15px">Rick Filippelli</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">70,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">105,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,750</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">20,625</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cheryl Presuto</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">7.84</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11/04/09</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">40,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">60,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">15,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em; background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Dale West</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">40,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">60,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">45,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Kevin Wilson</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">40,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">60,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">30,000</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left"><DIV style="font-size: 3pt; margin-top: 13pt; width: 18%; border-bottom: 1px solid #000000">&nbsp;</DIV></DIV>




<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR style="font-size: 6pt">
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="96">&nbsp;</TD>
</TR>
<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Represents unvested portion of stock award granted on January&nbsp;2, 2009 with a two year vesting
schedule.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>The market or payout value of stock awards reported in Columns (g)&nbsp;and (i)&nbsp;is computed by
multiplying the number of shares of stock reported in Column (f)&nbsp;and (h)&nbsp;by the closing market
price of our Common Stock on the last trading day of fiscal 2009.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(3)</TD>
    <TD>&nbsp;</TD>
    <TD>Represents unvested portion of stock award granted to Mr.&nbsp;Filippelli on April&nbsp;27, 2008, Ms.
Presuto on July&nbsp;30, 2008, Ms.&nbsp;West on December&nbsp;3, 2008 and Mr.&nbsp;Wilson on October&nbsp;3, 2008 as part of
their employment agreements. These unvested shares are subject to certain performance criteria for
the fiscal year ended September&nbsp;30, 2009 for Mr.&nbsp;Filippelli and Ms.&nbsp;Presuto and for the fiscal
years ended September&nbsp;30, 2009 and 2010 for Ms.&nbsp;West and Mr.&nbsp;Wilson. It was subsequently
determined that the performance criteria for fiscal year 2009 was not met and 13,750 shares for Mr.
Filippelli, 10,000 shares for Ms.&nbsp;Presuto, 15,000 shares for Ms.&nbsp;West and 10,000 shares for Mr.
Wilson were cancelled. As a result of the sale of the operating assets of TeamStaff Rx, the
remaining 15,000 shares for Ms.&nbsp;West will not vest and were cancelled on the closing date of such
transaction.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->42<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><I>Additional Information. </I>Each stock option grant reported in the table above was granted under,
and is subject to, our 2000 Employee Plan. The option expiration date shown above is the normal
expiration date, and the last date that the options may be exercised. For each Named Executive
Officer, the unexercisable options shown above are also unvested. Unvested shares are generally
forfeited if the Named Executive Officer&#146;s employment terminates, except to the extent otherwise
provided in an employment agreement. For information regarding the effect on vesting of options on
the death, disability or termination of employment of a Named Executive Officer or a change
in control of our company, see &#147;Employment Agreements with Named Executive Officers&#148; below. If a
Named Executive Officer&#146;s employment is terminated by us for cause, options (including the vested
portion) are generally forfeited. The exercisable options shown above, and any unexercisable
options shown above that subsequently become exercisable, will generally expire earlier than the
normal expiration date if the Named Executive Officer&#146;s employment terminates, except as otherwise
specifically provided in the Named Executive Officer&#146;s employment agreement. For a description of
the material terms of the Named Executive Officer&#146;s employment agreements, see &#147;Employment
Agreements with Named Executive Officers&#148; below. Restricted Stock Awards granted our Named
Executive Officers were granted under the 2006 Plan. This table does not reflect prior grants of
restricted stock awards that are fully vested.
</DIV>




<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Employment Agreements with Named Executive Officers</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The following are summaries of the employment agreements with our Named Executive Officers.
The agreements provide the general framework and the specific terms for the compensation of the
Named Executive Officers.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><I>Rick J. Filippelli</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">On June&nbsp;30, 2005 TeamStaff entered into a twenty seven month employment agreement with Mr.&nbsp;Rick J.
Filippelli, its Vice President and Chief Financial Officer. The term of the agreement commenced on
June&nbsp;30, 2005 and was scheduled to terminate on September&nbsp;30, 2007. TeamStaff entered into a
formal letter agreement dated and effective as of February&nbsp;14, 2007 with Mr.&nbsp;Filippelli following
his appointment on January&nbsp;10, 2007 as President and Chief Executive Officer, which modified
certain terms of his 2005 employment agreement. On April&nbsp;17, 2008, we entered into a new
employment agreement with Mr.&nbsp;Filippelli which expired as of September&nbsp;30, 2009.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">On November&nbsp;3, 2009, we announced that Mr.&nbsp;Rick J. Filippelli has informed the Board of his intent
to resign from such positions in connection with our strategic shift in our current business plan.
Mr.&nbsp;Filippelli&#146;s resignation as President and Chief Executive Officer will become effective at the
end of January&nbsp;2010. Mr.&nbsp;Filippelli has agreed to assist us with our transition to a new Chief
Executive Officer. In connection with the foregoing, on November&nbsp;2, 2009, we entered into a new
employment agreement with Mr.&nbsp;Filippelli, the material terms of which are summarized below. The
following description of this employment is qualified in its entirety by reference to the full text
of such agreement. The new employment agreement supersedes and replaces the employment agreement
that the Company entered into with Mr.&nbsp;Filippelli on April&nbsp;17, 2008.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%"><B>&#149;</B>&nbsp;The new employment agreement is dated November&nbsp;2, 2009, is effective as of
October&nbsp;1, 2009 and expires January&nbsp;31, 2010, unless both parties agree to extend the term. Under
the employment agreement, Mr.&nbsp;Filippelli will receive a base salary of $290,000 and may receive a
bonus in the sole discretion of the Management Resources and Compensation Committee of the Board of
Directors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%"><B>&#149;</B>&nbsp;Under the new employment agreement, Mr.&nbsp;Filippelli was granted options to
purchase 30,000 shares of common stock. The options are exercisable for five years from the date of
grant and vest upon the termination date, as defined in the new employment agreement, provided he
complies with the obligations described therein. The exercise price of the options was equal to
closing price of our common stock on the execution date of the new employment agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%"><B>&#149;</B>&nbsp;In the event of a termination of his employment by him for good reason (as
defined in the employment agreement), (a)&nbsp;Mr.&nbsp;Filippelli&#146;s right to purchase shares of common stock
pursuant to any stock option or stock option plan shall immediately fully vest and become
exercisable, (b)&nbsp;the exercise period in which he may exercise his options to purchase common stock
shall be extended to the duration of their original term, as if he remained an employee of the
Company, and (c)&nbsp;the terms of such options shall be deemed amended to reflect the foregoing
provisions. Further, in the event of a termination of the Mr.&nbsp;Filippelli&#146;s employment for cause,
options granted and not exercised as of the termination date shall terminate immediately and be
null and void. In the event of a termination of his employment due to his death or disability, Mr.
Filippelli&#146;s (or his estate&#146;s or legal representative&#146;s) right to exercise any stock option, to the
extent vested as of the termination date, shall remain
exercisable for a period of twelve (12)&nbsp;months following the termination date, but in no event
after the expiration of the exercise period. In the event of a termination of his employment other
than for good reason, his right to exercise the stock options, to the extent vested as of the
termination date, shall remain exercisable for a period of three months following the termination
date, but in no event after the expiration of the exercise period.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%"><B>&#149;</B>&nbsp;The employment agreement further provides that in the event of a change in
control (as defined in the employment agreement), or termination without cause by us or for good
reason (as defined in the employment agreement) by Mr.&nbsp;Filippelli, the conditions to the vesting of
any outstanding restricted stock awards granted to Mr.&nbsp;Filippelli shall be deemed void and all such
shares shall be immediately and fully vested and delivered to him. Mr.&nbsp;Filippelli agreed not sell
35,000 restricted shares of the Company&#146;s Common Stock originally scheduled to vest in January
2011, and the shares of Common Stock underlying the option granted pursuant to the new employment
agreement until the earlier of a Change of Control or January&nbsp;31, 2011.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%"><B>&#149;</B>&nbsp;In the event of the termination of employment by us without &#147;cause&#148; or by him for
&#147;good reason,&#148; as those terms are defined in the employment agreement, or in the event his
employment is terminated due to his disability, Mr.&nbsp;Filippelli would be entitled to: (a)&nbsp;a
severance payment of 12&nbsp;months of base salary; (b)&nbsp;continued participation in our health and
welfare plans for a period not to exceed 18&nbsp;months from the termination date; and (c)&nbsp;all
compensation accrued but not paid as of the termination date. In the event of the termination of
his employment due to his death, Mr.&nbsp;Filippelli&#146;s estate would be entitled to receive all
compensation accrued but not paid as of the termination date and continued participation in our
health and welfare plans for a period not to exceed 18&nbsp;months from the termination date. If his
employment is terminated by us for &#147;cause&#148; or by him without &#147;good reason,&#148; he is not entitled to
any additional compensation or benefits other than his accrued and unpaid compensation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%"><B>&#149;</B>&nbsp;In the event that within 180&nbsp;days of a &#147;Change in Control&#148;, as defined in the
employment agreement, (a)&nbsp;Mr.&nbsp;Filippelli&#146;s employment is terminated, or (b)&nbsp;his status, title,
position or responsibilities are materially reduced and he terminates his employment, the Company
shall pay and/or provide to him, the following compensation and benefits:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt; margin-left: 12%; text-indent: 4%">(A)&nbsp;we shall pay him, in lieu of any other payments due hereunder, (i)&nbsp;the
accrued compensation; (ii)&nbsp;the continuation benefits; and (iii)&nbsp;as severance, base
salary for a period of 12&nbsp;months, payable in one lump sum following the termination
date; and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt; margin-left: 12%; text-indent: 4%">(B)&nbsp;The conditions to the vesting of any outstanding incentive awards (including
restricted stock, stock options and granted performance shares or units) granted to
Mr.&nbsp;Filippelli under any of our plans, or under any other incentive plan or
arrangement, shall be deemed void and all such incentive awards shall be immediately
and fully vested and exercisable. Further, any such options shall be deemed amended to
provide that in the event of termination after a change of control, the options shall
remain exercisable for the duration of their term.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%"><B>&#149;</B>&nbsp;Notwithstanding the foregoing, if the payments due in the event of a change in
control would constitute an &#147;excess parachute payment&#148; as defined in Section&nbsp;280G of the Internal
Revenue Code of 1986, as amended (the &#147;Code&#148;), the aggregate of such credits or payments under the
employment agreement and other agreements shall be reduced to the largest amount as will result in
no portion of such aggregate payments being subject to the excise tax imposed by Section&nbsp;4999 of
the Code. The priority of the reduction of excess parachute payments shall be in the discretion of
Mr.&nbsp;Filippelli.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%"><B>&#149;</B>&nbsp;Pursuant to the employment agreement, Mr.&nbsp;Filippelli is subject to customary
confidentiality, non-solicitation of employees and non-competition obligations that survive the
termination of such agreement.
</DIV>
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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><I>Cheryl Presuto</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">On July&nbsp;30, 2008, we entered into an employment agreement with our Chief Financial Officer, Cheryl
Presuto, which expired as of September&nbsp;30, 2009. On January&nbsp;14, 2010, we entered into a new
employment agreement with Ms.&nbsp;Presuto, the terms of which are summarized below. The following
description of our new employment agreement with Ms.&nbsp;Presuto is qualified in its entirety by
reference to the full text of such agreement.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%"><B>&#149;</B>&nbsp;The employment agreement is for an initial term expiring September&nbsp;30, 2010. Under the
employment agreement, Ms.&nbsp;Presuto will receive a base salary of $181,000. The term of the agreement
is effective as of October&nbsp;1, 2009. Upon any termination of the Employee&#146;s employment on or after
the expiration date, other than cause (as defined in the employment agreement), Ms.&nbsp;Presuto will be
entitled to the severance payment described below.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%"><B>&#149;</B>&nbsp;Ms.&nbsp;Presuto may receive a bonus in the sole discretion of the Management Resources and
Compensation Committee of the Board of Directors of up to 50% of her base salary for each fiscal
year of employment. The bonus will be based on performance targets and other key objectives
established by the Management Resources and Compensation Committee.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%"><B>&#149;</B>&nbsp;Grant of options to purchase 75,000 shares of common stock under the Company&#146;s 2006
Long Term Incentive Plan. The vesting schedule applicable to the options is as follows: 50% of the
options shall vest on the date of the agreement and the balance shall vest on September&nbsp;30, 2010,
provided Ms.&nbsp;Presuto is an employee as of such date. The options
are exercisable for a period of five years at a per share exercise price equal to the closing price of
the Company&#146;s common stock on the date of execution of the employment agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">In the event of the termination of her employment, the Options will be governed by the terms
of the 2006 Plan, except that the following provisions shall apply:
</DIV>

<DIV style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>in the event Ms.&nbsp;Presuto&#146;s employment is terminated
for cause, options granted
and not exercised as of the termination date shall terminate immediately and be null
and void;</TD>
</TR>

<TR>
    <TD style="font-size: 8pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(ii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>in the event her employment with the Company is terminated due to her death, or
disability, her (or her estate&#146;s or legal representative&#146;s) right to purchase shares of
common stock pursuant to any stock option or stock option plan to the extent vested as
of the date of termination shall remain exercisable for a period of 12&nbsp;months, but in
no event after the expiration of the option;</TD>
</TR>

<TR>
    <TD style="font-size: 8pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(iii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>in the event Ms.&nbsp;Presuto elects to terminate her employment other than for
good reason (as defined in the agreement), her right to purchase shares of common stock
of the Company pursuant to any stock option or stock option plan to the extent vested
as of the date of termination shall remain exercisable for a period of three months
following such termination date, but in no event after the expiration of option; and</TD>
</TR>

<TR>
    <TD style="font-size: 8pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(iv)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In the event of (A)&nbsp;a Change of Control, as defined in the agreement, (B)
employee&#146;s termination by the Company without cause or; (C)&nbsp;termination by employee for
good reason, the conditions to the vesting of any outstanding restricted stock awards
or options granted under the agreement shall be deemed void and all such shares and
options shall be immediately and fully vested and delivered to the employee and all
outstanding options shall remain exercisable for a period of 24&nbsp;months following the
date of termination, but in no event after the expiration date of any
such option.</TD>
</TR>

</TABLE>
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%"><B>&#149;</B>&nbsp;In the event of the termination of employment by us without &#147;cause&#148; or by Ms.&nbsp;Presuto
for &#147;good reason,&#148; as those terms are defined in the employment agreement, or in the event her
employment is terminated due to her disability, she would be entitled to: (a)&nbsp;a severance payment
of 12&nbsp;months of base salary; (b)&nbsp;continued participation in our health and welfare plans for a
period not to exceed 12&nbsp;months from the termination date; and (c)&nbsp;all compensation accrued but not
paid as of the termination date. In addition, in the event of termination for disability, she would
also receive a pro-rata bonus, as described below.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%"><B>&#149;</B>&nbsp;In the event of the termination of her employment due to her death, Ms.&nbsp;Presuto&#146;s
estate would be entitled to receive: (a)&nbsp;all compensation accrued but not paid as of the
termination date; (b)&nbsp;continued participation
in our health and welfare plans for a period not to exceed 12&nbsp;months from the termination date; and
(c)&nbsp;payment of a &#147;Pro Rata Bonus&#148;, which is defined as an amount equal to the maximum bonus
Ms.&nbsp;Presuto had an opportunity to earn multiplied by a fraction, the numerator of which shall be
the number of days from the commencement of the fiscal year to the termination date, and the
denominator of which shall be the number of days in the fiscal year in which she was terminated.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%"><B>&#149;</B>&nbsp;If Ms.&nbsp;Presuto&#146;s employment is terminated by us for &#147;cause&#148; or by her without &#147;good
reason,&#148; she is not entitled to any additional compensation or benefits other than her accrued and
unpaid compensation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%"><B>&#149;</B>&nbsp;In the event that within 180&nbsp;days of a &#147;Change in Control&#148; as defined in the employment
agreement, (a)&nbsp;Ms.&nbsp;Presuto is terminated, or (b)&nbsp;her status, title, position or responsibilities
are materially reduced and she terminates her employment, the Company shall pay and/or provide to
her, the following compensation and benefits:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt; margin-left: 12%; text-indent: 4%">(A)&nbsp;The Company shall pay Ms.&nbsp;Presuto, in lieu of any other payments due
hereunder, (i)&nbsp;the accrued compensation; (ii)&nbsp;the continuation benefits; and
(iii)&nbsp;as severance, base salary for a period of 12&nbsp;months, payable in equal
installments on each of the Company&#146;s regular pay dates for executives during the
twelve months commencing on the first regular executive pay date following the
termination date; and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt; margin-left: 12%; text-indent: 4%">(B)&nbsp;The conditions to the vesting of any outstanding incentive awards
(including restricted stock, stock options and granted performance shares or units)
granted to Ms.&nbsp;Presuto under any of the Company&#146;s plans, or under any other
incentive plan or arrangement, shall be deemed void and all such incentive awards
shall be immediately and fully vested and exercisable. Further, any such options
shall be deemed amended to provide that in the event of termination after a change
of control, the options shall remain exercisable for the duration of their term.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%"><B>&#149;</B>&nbsp;Upon the effective date of an event constituting a change of control, the Company shall pay
Ms.&nbsp;Presuto, in one lump sum upon the first day of the month immediately following such event, an
amount equal to her then current base salary. Ms.&nbsp;Presuto shall be entitled to such payment whether
or not her employment with the Company continues after the change of control.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%"><B>&#149;</B>&nbsp;If the payments due in the event of a change in control would constitute an &#147;excess
parachute payment&#148; as defined in Section&nbsp;280G of the Internal Revenue Code of 1986, as amended (the
&#147;Code&#148;), the aggregate of such credits or payments under the employment agreement and other
agreements shall be reduced to the largest amount as will result in no portion of such aggregate
payments being subject to the excise tax imposed by Section&nbsp;4999 of the Code. The priority of the
reduction of excess parachute payments shall be in the discretion of Ms.&nbsp;Presuto.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%"><B>&#149;</B>&nbsp;Pursuant to the employment agreement, Ms.&nbsp;Presuto is subject to customary confidentiality,
non-solicitation of employees and non-competition obligations that survive the termination of such
agreements.
</DIV>


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<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><I>Kevin Wilson</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">On October&nbsp;3, 2008, we entered into an employment agreement with Mr.&nbsp;Kevin Wilson, the President of
our TeamStaff GS subsidiary. The employment agreement is for an initial term expiring September
30, 2010. Under the employment agreement, Mr.&nbsp;Wilson will receive a base salary of $200,000. The
term of the agreement is effective as of October&nbsp;1, 2008. Mr.&nbsp;Wilson may receive a bonus in the
sole discretion of the Management Resources and Compensation Committee of the Board of Directors
and will have an opportunity to earn a cash bonus of up to 70% of his base salary for each fiscal
year of employment. The bonus will be based on performance targets and other key objectives
established by the Chief Executive Officer. Thirty percent of the bonus shall be based on achieving
revenue targets, sixty percent shall be based on achieving EBITDA targets, and ten percent shall be
based on achieving corporate goals established by the Chief Executive Officer. Additional terms of
his agreement are as follows:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%"><B>&#149;</B>&nbsp;Grant of 30,000 shares of restricted common stock. The vesting schedule applicable to the
restricted stock is as follows: one-third of the restricted shares vest on the date of the
agreement; one-third vest on September&nbsp;30, 2009, upon satisfaction of performance targets and other
key objectives established by the Chief Executive Officer for fiscal 2009; and one-third vest on
September&nbsp;30, 2010, upon the satisfaction of the performance targets determined for fiscal 2010.
However, in the event of a change in control (as defined in the employment agreement), the
conditions to the vesting of the restricted stock awards shall be deemed void and all such shares
shall be immediately and fully vested.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%"><B>&#149;</B>&nbsp;In the event of the termination of employment by us without &#147;cause&#148; or by Mr.&nbsp;Wilson for
&#147;good reason,&#148; as those terms are defined in the employment agreement, or in the event his
employment is terminated due to his disability, he would be entitled to: (a)&nbsp;a severance payment of
6&nbsp;months of base salary; (b)&nbsp;continued participation in our health and welfare plans for a period
not to exceed 6&nbsp;months from the termination date; and (c)&nbsp;all compensation accrued but not paid as
of the termination date. In addition, in the event of termination for disability, he would also
receive a pro-rata bonus, as described below.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%"><B>&#149;</B>&nbsp;In the event of the termination of his employment due to his death, Mr.&nbsp;Wilson&#146;s estate
would be entitled to receive: (a)&nbsp;all compensation accrued but not paid as of the termination date;
(b)&nbsp;continued participation in our health and welfare plans for a period not to exceed 6&nbsp;months
from the termination date; and (c)&nbsp;payment of a &#147;Pro Rata Bonus&#148;, which is defined as an amount
equal to the lesser of (i) $75,000, and (ii)&nbsp;the Targeted Bonus multiplied by a fraction, the
numerator of which shall be the number of days from the commencement of the fiscal year to the
termination date, and the denominator of which shall be the number of days in the fiscal year in
which his employment was terminated. If his employment is terminated by us for &#147;cause&#148; or by him
without &#147;good reason,&#148; he is not entitled to any additional compensation or benefits other than his
accrued and unpaid compensation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%"><B>&#149;</B>&nbsp;In the event that within 90&nbsp;days of a &#147;Change in Control&#148; as defined in the employment
agreement, (a)&nbsp;Mr.&nbsp;Wilson is terminated, or (b)&nbsp;his status, title, position or responsibilities are
materially reduced and he terminates his employment, we shall pay and/or provide to him the
following compensation and benefits: (A) (i)&nbsp;the accrued compensation; (ii)&nbsp;the continuation
benefits; and (iii)&nbsp;as severance, base salary for a period of 6&nbsp;months, payable in equal
installments on each of the Company&#146;s regular pay dates for executives during the six months
commencing on the first regular executive pay date following the termination date; and (B)&nbsp;The
conditions to the vesting of any outstanding incentive awards (including restricted stock, stock
options and granted performance shares or units) granted to Mr.&nbsp;Wilson shall be deemed void and all
such awards shall be immediately and fully vested.
</DIV>
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<DIV align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%"><B>&#149;</B>&nbsp;In addition, in the event the Company serves a &#147;Notice of Retention&#148; and Mr.&nbsp;Wilson
diligently performs his duties during the &#147;Retention Period&#148; (as those terms are defined in the
employment agreement), the Company shall pay him, in one lump sum on the first day of the month
immediately following the month in which the Retention Period ends, an amount equal to 50% of his
then current base salary. In the event the Company fails to serve a Notice of Retention, the
Company shall pay him in one lump sum on the first day of the month immediately following the
change of control, an amount equal to 50% of his then current base salary.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%"><B>&#149;</B>&nbsp;Notwithstanding the foregoing, if the payments due in the event of a change in control would
constitute an &#147;excess parachute payment&#148; as defined in Section&nbsp;280G of the Internal Revenue Code of
1986, as amended (the &#147;Code&#148;), the aggregate of such credits or payments under the employment
agreement and other agreements shall be reduced to the largest amount as will result in no portion
of such aggregate payments being subject to the excise tax imposed by Section&nbsp;4999 of the Code.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%"><B>&#149;</B>&nbsp;Pursuant to the employment agreement, Mr.&nbsp;Wilson is subject to customary confidentiality,
non-solicitation of employees and non-competition obligations that survive the termination of such
agreements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><I>Dale West</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">On December&nbsp;3, 2008, we entered into an employment agreement with Ms.&nbsp;Dale West, the President of
our TeamStaff Rx subsidiary. The employment agreement is for an initial term expiring September
30, 2010.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">However, as reported above, Ms.&nbsp;West&#146;s employment with TeamStaff terminated in connection with the
closing of the sale of the operating assets of TeamStaff Rx to Advantage RN, which occurred January
4, 2010. Ms.&nbsp;West will receive severance payments and benefits as provided for in this agreement.
Under the employment agreement, Ms.&nbsp;West received a base salary of $200,000. The term of the
agreement is effective as of October&nbsp;1, 2008. Ms.&nbsp;West may receive a bonus in the sole discretion
of the Management Resources and Compensation Committee of the Board of Directors and will have an
opportunity to earn a cash bonus (&#147;Targeted Bonus&#148;) of up to 70% of her base salary for each fiscal
year of employment. The bonus will be based on performance targets and other key objectives
established by the Chief Executive Officer. Thirty percent (30%) of the bonus shall be based on
achieving revenue targets, sixty percent (60%) shall be based on achieving EBITDA targets, and ten
percent (10%) shall be based on achieving corporate goals established by the Chief Executive
Officer. Additional terms of her agreement are as follows:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%"><B>&#149;</B>&nbsp;Grant of 30,000 shares of restricted common stock. The vesting schedule applicable to the
restricted stock is as follows: one-half vest on September&nbsp;30, 2009, upon satisfaction of
performance targets and other key objectives established by the Chief Executive Officer for 2009;
and one-half vest on September&nbsp;30, 2010, upon the satisfaction of the performance targets
determined for 2010. However, in the event of a change in control (as defined in the employment
agreement), the conditions to the vesting of the restricted stock awards shall be deemed void and
all such shares shall be immediately and fully vested.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%"><B>&#149;</B>&nbsp;Ms.&nbsp;West was eligible to receive a quarterly stock bonus equal to $12,500 of the Company&#146;s
common stock at the end of each calendar quarter of employment for satisfaction of performance
criteria and other key objectives established by the Chief Executive Officer, provided that the
first two quarterly bonuses were deemed earned if she is continuously employed by the Company
during such quarters and shall not be conditioned on the achievement of any other performance
criteria. Such shares of common stock were valued on the last trading day of each quarter and were
deemed vested and earned on the first business day following the close of the quarter.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%"><B>&#149;</B>&nbsp;In the event of the termination of employment by us without &#147;cause&#148; or by Ms.&nbsp;West for &#147;good
reason,&#148; as those terms are defined in the employment agreement, or in the event her employment is
terminated due to her disability, she would be entitled to: (a)&nbsp;a severance payment of 6&nbsp;months of
base salary; (b)&nbsp;continued participation in our health and welfare plans for a period not to exceed
6&nbsp;months from the termination date; and (c)&nbsp;all compensation accrued but not paid as of the
termination date. In addition, in the event of termination for disability, she would also receive a
pro-rata bonus, as described below.
</DIV>
<P align="center" style="font-size: 10pt; text-indent: 8%">&nbsp;

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%"><B>&#149;</B>&nbsp;In the event of the termination of her employment due to her death, Ms.&nbsp;West&#146;s estate would
be entitled to receive: (a)&nbsp;all compensation accrued but not paid as of the termination date; (b)
continued participation in our health and welfare plans for a period not to exceed 6&nbsp;months from
the termination date; and (c)&nbsp;payment of a &#147;Pro Rata Bonus&#148;, which is defined as an amount equal to
the lesser of (i) $75,000, and (ii)&nbsp;the Targeted Bonus multiplied by a fraction, the numerator of
which shall be the number of days from the commencement of the fiscal year to the termination date,
and the denominator of which shall be the number of days in the fiscal year in which she was
terminated. If her employment is terminated by us for &#147;cause&#148; or by her without &#147;good reason,&#148; she
is not entitled to any additional compensation or benefits other than her accrued and unpaid
compensation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%"><B>&#149;</B>&nbsp;In the event that within 90&nbsp;days of a &#147;Change in Control&#148; as defined in the employment
agreement, (a)&nbsp;Ms.&nbsp;West&#146;s employment is terminated, or (b)&nbsp;her status, title, position or
responsibilities are materially reduced and she terminates her employment, the Company shall pay
and/or provide to her, the following compensation and benefits: (A) (i)&nbsp;the accrued compensation;
(ii)&nbsp;the continuation benefits; and (iii)&nbsp;as severance, base salary for a period of 6&nbsp;months,
payable in equal installments on each of the Company&#146;s regular pay dates for executives during the
six months commencing on the first regular executive pay date following the termination date; and
(B)&nbsp;the conditions to the vesting of any outstanding incentive awards (including restricted stock,
stock options and granted performance shares or units) granted to Ms.&nbsp;West shall be deemed void and
all such awards shall be immediately and fully vested.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%"><B>&#149;</B>&nbsp;In addition, in the event the Company serves a &#147;Notice of Retention&#148; and Ms.&nbsp;West diligently
performs her duties during the &#147;Retention Period&#148; (as those terms are defined in the employment
agreement), the Company shall pay her, in one lump sum on the first day of the month immediately
following the month in which the Retention Period ends, an amount equal to 50% of her then current
base salary. In the event the Company fails
to serve a Notice of Retention, the Company shall pay her in one lump sum on the first day of the
month immediately following the Change in Control, an amount equal to 50% of her then current base
salary.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%"><B>&#149;</B>&nbsp;Notwithstanding the foregoing, if the payments due in the event of a Change in Control would
constitute an &#147;excess parachute payment&#148; as defined in Section&nbsp;280G of the Code, the aggregate of
such credits or payments under the employment agreement and other agreements shall be reduced to
the largest amount as will result in no portion of such aggregate payments being subject to the
excise tax imposed by Section&nbsp;4999 of the Code.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%"><B>&#149;</B>&nbsp;Pursuant to the employment agreement, Ms.&nbsp;West is subject to customary confidentiality,
non-solicitation of employees and non-competition obligations that survive the termination of such
agreements. In addition, Ms.&nbsp;West was provided an advance to reimburse her for living expenses not
to exceed $3,200 in any month or $36,000 in the aggregate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Stock Option Plans</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>2000 Employee Stock Option Plan</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">In the fiscal year 2000, the Board of Directors and shareholders approved the adoption of the 2000
Employee Plan to provide for the grant of options to purchase up to 1,714,286 shares of TeamStaff&#146;s
common stock to all employees, including senior management. The 2000 Employee Plan replaced the
1990 Employee Plan and Senior Management Plans, both of which expired. Under the terms of the
approved 2000 Employee Plan, options granted there under may be designated as options which qualify
for incentive stock option treatment (&#147;ISOs&#148;) under Section&nbsp;422A of the Code, or options which do
not so qualify (&#147;Non-ISOs&#148;). As of September&nbsp;30, 2009, there were 4,500 options outstanding under
the 2000 Employee Plan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The 2000 Employee Plan is administered by the Management Resources and Compensation Committee
designated by the Board of Directors. The Management Resources and Compensation Committee has the
discretion to determine the eligible employees to whom, and the times and the price at which,
options will be granted; whether such options shall be ISOs or Non-ISOs; the periods during which
each option will be exercisable; and the number of shares subject to each option. The Committee
has full authority to interpret the 2000 Employee Plan and to establish and amend rules and
regulations relating thereto.
</DIV>
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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Under the 2000 Employee Plan, the exercise price of an option designated, as an ISO shall not be
less than the fair market value of the common stock on the date the option is granted. However, in
the event an option designated as an ISO is granted to a ten percent (10%) shareholder (as defined
in the 2000 Employee Plan), such exercise price shall be at least 110% of such fair market value.
Exercise prices of Non-ISO options may be less than such fair market value.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The aggregate fair market value of shares subject to options granted to a participant, which are
designated as ISOs and which become exercisable in any calendar year shall not exceed $100,000.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The Management Resources and Compensation Committee may, in its sole discretion, grant bonuses or
authorize loans to or guarantee loans obtained by an optionee to enable such optionee to pay the
exercise price or any taxes that may arise in connection with the exercise or cancellation of an
option. The Management Resources and Compensation Committee can also permit the payment of the
exercise price in the common stock of the Company held by the optionee for at least six months
prior to exercise.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>2000 Non-Executive Director Option Plan</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">In fiscal year 2000, the Board of Directors and stockholders approved the adoption of the 2000
Non-Executive Director Plan (the &#147;2000 Non-Executive Director Plan&#148;) to provide for the grant of
options to non-employee directors of TeamStaff. Under the terms of the 2000 Non-Executive Director
Plan, each non-executive director is automatically granted an option to purchase 5,000 shares upon
joining the Board and each September lst, pro rata, based on the time the director has served in
such capacity during the previous year. The 2000 Non-Executive Director Plan also provides that
directors, upon joining the Board, and for one (1)&nbsp;year thereafter, will be entitled
to purchase restricted stock from TeamStaff at a price equal to 80% of the closing bid price on the
date of purchase up to an aggregate purchase price of $50,000. The 2000 Non-Executive Director
Plan replaced the previous director plan that expired in April&nbsp;2000.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Under the 2000 Non-Executive Director Plan, the exercise price for options granted under the 2000
Non-Executive Director Plan shall be 100% of the fair market value of the common stock on the date
of grant. Until otherwise provided in such Plan, the exercise price of options granted under the
2000 Non-Executive Director Plan must be paid at the time of exercise, either in cash, by delivery
of shares of common stock of TeamStaff or by a combination of each. The term of each option
commences on the date it is granted and unless terminated sooner as provided in the 2000
Non-Executive Director Plan, expires five (5)&nbsp;years from the date of grant. The Compensation
Committee has no discretion to determine which non-executive director or advisory board member will
receive options or the number of shares subject to the option, the term of the option or the
exercisability of the option. However, the Compensation Committee will make all determinations of
the interpretation of the 2000 Non-Executive Director Plan. Options granted under the 2000
Non-Executive Director Plan are not qualified for incentive stock option treatment. As of
September&nbsp;30, 2009, there were 10,625 options held by directors outstanding under the 2000
Non-Executive Director Plan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Effective January&nbsp;19, 2007, the 2000 Non-Executive Director Plan was suspended due to a change in
the compensation terms for non-employee Board members. For additional information regarding our
director compensation policy, see below under the caption &#147;Director Compensation&#148;.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>2006 Long Term Incentive Plan</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The Board of Directors adopted the 2006 Long-Term Incentive Plan on January&nbsp;17, 2006. The
shareholders approved the 2006 Long Term Incentive Plan at the annual meeting on April&nbsp;27, 2006.
The Company reserved an aggregate of 5,000,000 shares of common stock for issuance under the 2006
Long Term Incentive Plan. The maximum number of shares of common stock that may be delivered to
participants under the 2006 Long-Term Incentive Plan equals the sum of: (a)&nbsp;5,000,000 shares of
common stock; (b)&nbsp;any shares subject to awards granted under the 2000 Employee Plan and the 2000
Non-Executive Director Plan (collectively, the &#147;2000 Plans&#148;), which are forfeited, expired,
canceled or settled in cash without delivery of such shares to the participant or otherwise is
terminated without a share issuance; (c)&nbsp;any shares tendered by participants or withheld in payment
of the exercise price of options or to satisfy withholding taxes under the 2000 Plans; and (d)&nbsp;any
shares repurchased with the proceeds of options exercised under the 2000 Plans. As of September
30, 2009, there were 545,778 shares of common stock granted pursuant to awards under the 2006 Long
Term Incentive Plan.
</DIV>
<P align="center" style="font-size: 10pt">&nbsp;

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><I>Administration</I>. The 2006 Long Term Incentive Plan is administered by the Compensation Committee.
The 2006 Long Term Incentive Plan authorizes the Compensation Committee to select those
participants to whom awards may be granted, to determine whether and to what extent awards are
granted, to determine the number of shares of common stock or other considerations to be covered by
each award, to determine the terms and conditions of awards, to amend the terms of outstanding
awards, and to take any other action consistent with the terms of the 2006 Long Term Incentive Plan
as the Committee deems appropriate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><I>Terms and Conditions of Awards</I>. The Compensation Committee is authorized to make any type of award
to a participant that is consistent with the provisions of the Plan. Awards may consist of options,
stock appreciation rights, restricted stock, restricted stock units, performance shares, cash
awards or any combination of these types of awards.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Subject to the terms of the 2006 Long Term Incentive Plan, the Compensation Committee determines
the provisions, terms and conditions of each award. The Committee may grant awards subject to
vesting schedules or restrictions and contingencies in the company&#146;s favor. However, the awards may
be subject to acceleration such that they become fully vested, exercisable and released from any
restrictions or contingencies upon the occurrence of a change of control (as defined in the Plan).
The Committee may provide that stock-based awards earn dividends or dividend equivalents, which may
be paid in cash or shares or may be credited to an account designated in the name of the
participants. Participants may also be required or permitted to defer the issuance of shares or
cash settlements under awards including under other deferred compensation arrangements of the
company. Each option granted under the Plan will be designated as either an incentive stock option
or a non-statutory stock option. No option or stock appreciation right may be granted with a term
of more than 10&nbsp;years from the date of grant.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Performance shares or cash awards will depend on achievement of performance goals based on one or
more performance measures determined by the Committee over a performance period as prescribed by
the Committee of not less than one year and not more than five years. Performance goals may be
established on a corporate-wide basis or as to one or more business units, divisions or
subsidiaries, and may be in either absolute terms or relative to the performance of one or more
comparable companies on an index covering multiple companies. &#147;Performance measures&#148; means criteria
established by the Committee from time to time prior to granting the performance shares or cash
awards.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><I>Exercise Price</I>. The Plan authorizes the Compensation Committee to grant options and stock
appreciation rights at an exercise price of not less than 100% of the fair market value of the
shares on the date of grant. The Committee has the right to provide post-grant reduction in
exercise price to reflect any floating index as specified in an award agreement. The exercise price
is generally payable in cash, check, surrender of pre-owned shares of common stock, broker-dealer
exercise and sale, or by such other means determined by the Committee.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><I>Option Repricing Prohibited</I>. The exercise price for any outstanding option or stock appreciation
right may not be decreased after the date of grant, nor may any outstanding option or stock
appreciation right be surrendered as consideration for the grant of a new option or stock
appreciation right with a lower exercise price.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Director Compensation</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Effective as of October&nbsp;1, 2007, our Board determined to reinstitute a cash compensation policy for
non-executive directors. Accordingly, our non-executive directors are compensated as follows.
</DIV>

<DIV style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The annual director fee for our non-executive directors is $15,000;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Chairman of Board and the Audit Committee Chairman shall receive an additional
$3,500 per year;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Vice Chairman of the Board, Chairman of the Management Resources and Compensation
Committee and Chairman of the Nominating and Corporate Governance Committee shall each
receive an additional $2,500 per year;</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt">&nbsp;

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV style="margin-top: 10pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


</TABLE>
</DIV>

<DIV style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>each non-executive director shall be awarded an annual grant of 3,750 shares of
restricted common stock pursuant to the Company&#146; 2006 Long Term Incentive Policy
following the Company&#146;s annual meeting of shareholders held in 2008, provided that such
award shall vest as follows: (A)&nbsp;50% of the Award shall vest when the volume-weighted
average share price over any 20 consecutive trading days exceeds the price per share of
common stock on the date of grant by 20%; and (B)&nbsp;50% of the Award shall vest one year
from the vesting specified in (A)&nbsp;above;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>each non-executive director shall be eligible for an additional annual grant of 1,250
shares of restricted stock for each committee membership held by a non-executive director
following the Company&#146;s annual meeting to be held in 2008, with such under the Company&#146;s
2006 Long Term Incentive Plan, with such additional award to be fully vested on the date
of grant;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Reasonable and customary expenses incurred in attending the board and committee
meetings are reimbursable.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">In addition, on February&nbsp;12, 2009, our Board approved an increase in the cash fees payable to
our non-executive directors from $15,000 to $20,000 per annum, effective as of such date. A summary
of non-executive director compensation for the year ended September&nbsp;30, 2009 is as follows:
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>Summary of Non-Executive Director Compensation</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
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    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Change in</TD>
    <TD>&nbsp;</TD>
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    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Pension Value</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">and Nonqualified</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Fees Earned</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Non-Equity</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Deferred</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">or Paid in</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Stock</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Option</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Incentive Plan</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Compensation</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">All Other</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Cash</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Awards</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Awards</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Compensation</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Earnings</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Compensation</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Total</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Name (1) (3) (4)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">($)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">($) (2)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">($)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">($)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">($)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">($)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">($)</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>T. Stephen Johnson</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">21,250</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">8,375</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">29,625</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Karl W. Dieckmann</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">20,833</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">11,725</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,557</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">34,115</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>William H. Alderman</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">20,833</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">8,375</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,762</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">30,970</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Peter Black</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">20,833</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">10,050</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">30,883</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Martin J. Delaney</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">18,333</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">8,375</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">698</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">27,406</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Frederick G.
Wasserman</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">22,417</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">10,050</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">32,467</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>

<DIV align="left"><DIV style="font-size: 10pt; margin-top: 10pt; width: 18%; border-bottom: 1px solid #000000">&nbsp;</DIV></DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR style="font-size: 6pt">
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="96">&nbsp;</TD>
</TR>
<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>As of September&nbsp;30, 2009, each director had the following number of
Director Plan options outstanding: Mr.&nbsp;Johnson &#151; 3,750; Mr.
Dieckmann &#151; 3,750; Mr.&nbsp;Alderman &#151; 0; Mr.&nbsp;Black &#151; 3,125; Mr.&nbsp;Delaney
&#151; 2,500; Mr.&nbsp;Wasserman &#151; 0</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>No restricted stock awards were granted to our non-executive directors
during the 2009 fiscal year. Following the end our 2009 fiscal year,
on October&nbsp;13, 2009, we granted an aggregate of 42,500 shares of
restricted stock to our non-executive directors as follows: Mr.
Johnson &#151; 6,250 shares; Mr.&nbsp;Dieckmann &#151; 8,750 shares; Mr.&nbsp;Alderman
&#151; 6,250 shares; Mr.&nbsp;Black &#151; 7,500 shares; Mr.&nbsp;Delaney &#151; 6,250
shares; and Mr.&nbsp;Wasserman &#151; 7,500 shares. The closing price of our
common stock on such date was $1.34.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->52<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">




<DIV align="left">
<A name="120"></A>
</DIV>

<DIV align="left" style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="7%"></TD>
    <TD width="1%"></TD>
    <TD></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left"><B>Item&nbsp;12.</B></TD>
    <TD>&nbsp;</TD>
    <TD><B>Security Ownership of Certain Beneficial Owners and Management and Related Shareholder
Matters</B></TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The following table sets forth certain information as of January&nbsp;5, 2010 with respect to each
director, each of the named executive officers as defined in Item 402(a) (3), and directors and
executive officers of TeamStaff as a group, and to the persons known by TeamStaff to be the
beneficial owner of more than five percent of any class of TeamStaff&#146;s voting securities. At
January&nbsp;5, 2010, TeamStaff had 4,940,982 shares of common stock outstanding. The figures stated
below are based upon Schedule&nbsp;13Ds, Schedule&nbsp;13D/As, Form&nbsp;3s, and Form&nbsp;4s filed with the Securities
and Exchange Commission by the named persons.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="56%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="14%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="14%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Number of Shares</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Percent of Company&#146;s</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Name</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Currently Owned (1)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Outstanding Stock</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR><TD>&nbsp;</TD></TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:0px; text-indent:-0px">William H. Alderman (2)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,938</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:0px; text-indent:-0px">c/o TeamStaff, Inc.<br>
1 Executive Drive <br>
Somerset, NJ 08873</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em"><!-- Blank Space -->
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:0px; text-indent:-0px">Peter Black
(3)(12)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:0px; text-indent:-0px">c/o TeamStaff, Inc.<br>
1 Executive Drive <br>
Somerset, NJ 08873</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em; background: #cceeff">
    <TD><DIV style="margin-left:0px; text-indent:-0px">Martin J. Delaney (4)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,432</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:0px; text-indent:-0px">c/o TeamStaff, Inc. <br>
1 Executive Drive <br>
Somerset, NJ 08873</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em"><!-- Blank Space -->
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:0px; text-indent:-0px">Karl W. Dieckmann (5)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">42,731</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:0px; text-indent:-0px">c/o TeamStaff, Inc.<br>
1 Executive Drive <br>
Somerset, NJ 08873</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em; background: #cceeff">
    <TD><DIV style="margin-left:0px; text-indent:-0px">Rick J. Filippelli (6)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">147,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">2.89</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:0px; text-indent:-0px">c/o TeamStaff, Inc.<br>
1 Executive Drive <br>
Somerset, NJ 08873</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em"><!-- Blank Space -->
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:0px; text-indent:-0px">T. Stephen Johnson (7)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">82,877</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">1.64</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:0px; text-indent:-0px">c/o TeamStaff, Inc. <br>
1 Executive Drive <br>
Somerset, NJ 08873</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em; background: #cceeff">
    <TD><DIV style="margin-left:0px; text-indent:-0px">Frederick G. Wasserman (8)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16,563</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:0px; text-indent:-0px">c/o TeamStaff, Inc.<br>
1 Executive Drive <br>
Somerset, NJ 08873</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em"><!-- Blank Space -->
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:0px; text-indent:-0px">Cheryl Presuto (9)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">45,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:0px; text-indent:-0px">c/o TeamStaff, Inc.<br>
1 Executive Drive <br>
Somerset, NJ 08873</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em; background: #cceeff">
    <TD><DIV style="margin-left:0px; text-indent:-0px">Kevin Wilson (10)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:0px; text-indent:-0px">c/o TeamStaff, Inc.<br>
1 Executive Drive <br>
Somerset, NJ 08873</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em"><!-- Blank Space -->
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:0px; text-indent:-0px">Bernard J. Korman (11)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">729,146</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">14.48</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:0px; text-indent:-0px">2129 Chestnut Street <br>
Philadelphia, PA 19103</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em; background: #cceeff">
    <TD><DIV style="margin-left:0px; text-indent:-0px">Wynnefield Partners Small Cap Value LP (12)(13)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">332,097</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">6.59</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:0px; text-indent:-0px">450 Seventh Ave<br>
New York, NY 10123</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em"><!-- Blank Space -->
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:0px; text-indent:-0px">Wynnefield
Partners Small Cap Value LP I (12)(14)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">428,850</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">8.52</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:0px; text-indent:-0px">450 Seventh Ave <br>
New York, NY 10123</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em; background: #cceeff">
    <TD><DIV style="margin-left:0px; text-indent:-0px">Wynnefield
Partners Small Cap Value Offshore Fund, Ltd. (12)(15)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">428,072</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">8.5</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:0px; text-indent:-0px">
450 Seventh Ave <br>
New York, NY 10123</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>



<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->53<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="56%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="14%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="14%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Number of Shares</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Percent of Company&#146;s</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Name</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Currently Owned (1)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Outstanding Stock</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body --><TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em">
    <TD><DIV style="margin-left:0px; text-indent:-0px">Wynnefield
Capital Profit Sharing Plan (12)(16)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">92,563</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.84</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:0px; text-indent:-0px">450 Seventh Ave <br>
New York NY 10123</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em; background: #cceeff">
    <TD><DIV style="margin-left:0px; text-indent:-0px">Channel Partnership II, LP (12)(17)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:0px; text-indent:-0px">450 Seventh Ave <br>
New York NY 10123</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em"><!-- Blank Space -->
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:0px; text-indent:-0px">Hummingbird Value Fund (11)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">145,060</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">2.88</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:0px; text-indent:-0px">460 Park Avenue, 12<SUP style="font-size: 85%; vertical-align: text-top">th</SUP> Flr.<br>
New York NY 10022</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em; background: #cceeff">
    <TD><DIV style="margin-left:0px; text-indent:-0px">Hummingbird Microcap Value Fund (11)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">129,340</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">2.57</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:0px; text-indent:-0px">460 Park Avenue, 12<SUP style="font-size: 85%; vertical-align: text-top">th</SUP> Flr.<br>
New York NY 10022</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em"><!-- Blank Space -->
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:0px; text-indent:-0px">All officers
and directors as a group (9)&nbsp;persons (2, 3, 4, 5, 6, 7, 8, 9, 10, 12)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,715,123</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">33.45</TD>
    <TD nowrap>%</TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>


<DIV align="left"><DIV style="font-size: 10pt; margin-top: 10pt; width: 18%; border-bottom: 1px solid #000000">&nbsp;</DIV></DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR style="font-size: 6pt">
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="96">&nbsp;</TD>
</TR>
<TR valign="top">
    <TD nowrap align="left">*</TD>
    <TD>&nbsp;</TD>
    <TD>Less than 1&nbsp;percent.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">1.</TD>
    <TD>&nbsp;</TD>
    <TD>Ownership consists of sole voting and investment power except as otherwise noted.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">2.</TD>
    <TD>&nbsp;</TD>
    <TD>Includes 4,063 unvested shares of restricted stock which may vest within 60
days. Excludes 4,063 shares of restricted stock which are unvested and subject
to vesting requirements. Includes 7,500 shares of restricted stock that are
vested.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">3.</TD>
    <TD>&nbsp;</TD>
    <TD>Includes options to purchase 3,125 shares of TeamStaff&#146;s common stock. Includes
4,375 unvested shares of restricted stock which may vest within 60&nbsp;days.
Excludes 4,375 shares of restricted stock which are unvested and subject to
vesting requirements. Includes 10,000 shares of restricted stock that are
vested. Mr.&nbsp;Black is a member of the Company&#146;s Board of Directors and is an
Investment Analyst and Portfolio Manager at Wynnefield Capital, Inc. Mr.&nbsp;Black
expressly disclaims beneficial ownership of the securities owned by Wynnefield
Capital and its affiliates.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">4.</TD>
    <TD>&nbsp;</TD>
    <TD>Includes options to purchase 1,250 shares of TeamStaff&#146;s common stock. Includes
4,375 unvested shares of restricted stock which may vest within 60&nbsp;days.
Excludes 4,375 shares of restricted stock which are unvested and subject to
vesting requirements. Includes 6,250 shares of restricted stock that are vested.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">5.</TD>
    <TD>&nbsp;</TD>
    <TD>Includes options to purchase 2,500 shares of TeamStaff&#146;s common stock. Includes
5,000 unvested shares of restricted stock which may vest within 60&nbsp;days.
Excludes 5,000 shares of restricted stock which are unvested and subject to
vesting requirements. Includes 13,750 shares of restricted stock that are
vested.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">6.</TD>
    <TD>&nbsp;</TD>
    <TD>Includes options to purchase 30,000 shares of TeamStaff&#146;s common stock which may
vest within 60&nbsp;days. Includes 82,500 shares of restricted stock which are
vested and 35,000 shares of restricted stock which may vest within 60&nbsp;days.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">7.</TD>
    <TD>&nbsp;</TD>
    <TD>Includes an aggregate of 36,947 shares owned by or on behalf of certain of the
holder&#146;s family members and as to which shares the listed holder expressly
disclaims beneficial ownership. Includes options to purchase 2,500 shares of
TeamStaff&#146;s common stock. Includes 4,375 unvested shares of restricted stock
which may vest within 60&nbsp;days. Excludes 4,375 shares of restricted stock which
are unvested and subject to vesting requirements. Includes 10,000 shares of
restricted stock that are vested.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">8.</TD>
    <TD>&nbsp;</TD>
    <TD>Includes 4,063 unvested shares of restricted stock which may vest within 60
days. Excludes 4,063 shares of restricted stock which are unvested and subject
to vesting requirements. Includes 8,750 shares of restricted stock that are
vested.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">9.</TD>
    <TD>&nbsp;</TD>
    <TD>Includes 45,000 shares of restricted stock which are vested. Excludes 20,000
shares of restricted stock which are unvested and subject to vesting
requirements.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">10.</TD>
    <TD>&nbsp;</TD>
    <TD>Includes 30,000 shares of restricted stock which are vested. Excludes 30,000
shares of restricted stock which are unvested and subject to vesting
requirements.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">11.</TD>
    <TD>&nbsp;</TD>
    <TD>Beneficial ownership is based on Schedule&nbsp;13D filed with the SEC.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">12.</TD>
    <TD>&nbsp;</TD>
    <TD>Beneficial ownership is based upon Schedule&nbsp;13D, Schedule&nbsp;13D/As, Form&nbsp;3, and
Form&nbsp;4s filed with the SEC. Mr.&nbsp;Peter Black, one of our directors, is an
affiliate of Wynnefield Capital and its affiliated entities. Mr.&nbsp;Black
expressly disclaims beneficial ownership of the securities owned by Wynnefield
Capital and its affiliates.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">13.</TD>
    <TD>&nbsp;</TD>
    <TD>Listed shares are directly beneficially owned by Wynnefield Partners Small Cap
Value, L.P., as members of a group under Section 13(d) of the Securities
Exchange Act of 1934, as amended (the &#147;Exchange Act&#148;). Wynnefield Capital
Management, LLC, as the sole general partner of Wynnefield Partners Small Cap
Value, L.P., has an indirect beneficial ownership interest in the shares of
Common Stock that Wynnefield Partners Small Cap Value L.P. directly beneficially
owns. Nelson Obus and Joshua Landes, as co-managing members of Wynnefield
Capital Management, LLC, have an indirect beneficial ownership interest in such
shares of Common Stock.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">14.</TD>
    <TD>&nbsp;</TD>
    <TD>Listed shares are directly beneficially owned by Wynnefield Partners Small Cap
Value, L.P. I, as members of a group under Section 13(d) of the Securities
Exchange Act of 1934, as amended (the &#147;Exchange Act&#148;). Wynnefield Capital
Management, LLC, as the sole general partner of Wynnefield Partners Small Cap
Value, L.P. I, has an indirect beneficial ownership interest in the shares of
Common Stock that Wynnefield Partners Small Cap Value L.P. I directly
beneficially owns. Nelson Obus and Joshua Landes, as co-managing members of
Wynnefield Capital Management, LLC, have an indirect beneficial ownership
interest in such shares of Common Stock.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->54<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">




<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR style="font-size: 6pt">
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="96">&nbsp;</TD>
</TR>
<TR valign="top">
    <TD nowrap align="left">15.</TD>
    <TD>&nbsp;</TD>
    <TD>Listed shares are directly beneficially owned by Wynnefield Small Cap Value
Offshore Fund, Ltd., as members of a group under Section 13(d) of the Exchange
Act. Wynnefield Capital, Inc. as the sole investment manager of Wynnefield Small
Cap Value Offshore Fund, Ltd., has an indirect beneficial ownership interest in
the shares of Common Stock that Wynnefield Small Cap Value Offshore Fund, Ltd.
directly beneficially owns. Mr.&nbsp;Obus and Mr.&nbsp;Landes, as principal executive
officers of Wynnefield Capital, Inc., have an indirect beneficial ownership
interest in the shares of Common Stock that Wynnefield Small Cap Value Offshore
Fund, Ltd. directly beneficially owns.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">16.</TD>
    <TD>&nbsp;</TD>
    <TD>Wynnefield Capital Inc. Profit Sharing Plan directly beneficially owns 92,563
shares of common stock of TeamStaff. Mr.&nbsp;Obus has the power to vote and dispose
of Wynnefield Capital, Inc. Profit Sharing Plan&#146;s investments in securities and
has an indirect beneficial ownership interest in the shares of Common Stock that
Wynnefield Capital, Inc. Profit Sharing Plan directly beneficially owns.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">17.</TD>
    <TD>&nbsp;</TD>
    <TD>Listed shares of Common Stock are directly beneficially owned by Channel
Partnership II, L.P., as members of a group under Section 13(d) of the Exchange
Act. Nelson Obus, as the sole general partner of Channel Partnership II, L.P.,
has an indirect beneficial ownership interest in the shares of Common Stock that
Channel Partnership II, L.P. directly beneficially owns.</TD>
</TR>

</TABLE>

<DIV align="left">
<A name="121"></A>
</DIV>

<DIV align="left" style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="7%"></TD>
    <TD width="1%"></TD>
    <TD></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left"><B>Item&nbsp;13.</B></TD>
    <TD>&nbsp;</TD>
    <TD><B>Certain Relationships and Related Transactions</B></TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">For information concerning employment and severance agreements with, and compensation of, the
Company&#146;s present executive officers and directors, see &#147;Executive Compensation.&#148; The Directors&#146;
Plan provides that directors, upon joining the Board, and for one year thereafter, will be entitled
to purchase restricted stock from TeamStaff at a price equal to 80% of the closing bid price on the
date of purchase up to an aggregate purchase price of $50,000.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><U>Approval for Related Party Transactions </U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Although we have not adopted a formal policy relating to the approval of proposed transactions that
we may enter into with any of our executive officers, directors and principal stockholders,
including their immediate family members and affiliates, our Audit Committee, all of the members of which are independent, reviews
the terms of any and all such proposed material related party transactions. The results of this
review are then communicated to the entire Board of Directors, which has the ultimate authority as
to whether or not we enter into such transactions. We will not enter into any material related
party transaction without the prior consent of our Audit Committee and our Board of Directors. In
approving or rejecting the proposed related party transaction, our Audit Committee and our Board of
Directors shall consider the relevant facts and circumstances available and deemed relevant to
them, including, but not limited to the risks, costs and benefits to us, the terms of the
transaction, the availability of other sources for comparable services or products, and, if
applicable, the impact on a director&#146;s independence. We shall approve only those agreements that,
in light of known circumstances, are in, or are not inconsistent with, our best interests, as our
Audit Committee and our Board of Directors determine in the good faith exercise of their
discretion.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><U>Independence of our Board of Directors and its Committees </U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The listing rules established by the Nasdaq Stock Market, LLC require that a majority of the
members of a listed company&#146;s board of directors qualify as &#147;independent&#148; as affirmatively
determined by the board, meaning that each independent director has no direct or indirect material
relationship with a company other than as a director and/or a stockholder. Our Board of Directors
consults with legal counsel to ensure that our Board&#146;s determination with respect to the definition
of &#147;independent&#148; is consistent with current Nasdaq listing rules.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Our Board of Directors reviewed all relevant transactions or relationships between each director,
or any of his family members, and our company and has affirmatively determined that each of our
directors, other than Rick Filippelli (our Chief Executive Officer) are independent directors under
the applicable guidelines noted above. Our Board of Directors has five committees: the Audit
Committee, the Management Resources and Compensation Committee, the Nominating and Corporate
Governance Committee, the Strategic Planning and the Executive Committee. All of the members of our
Audit, Nominating and Corporate Governance and Management Resources and Compensation Committees
meet the standards for independence required under current Nasdaq Stock Market listing rules, SEC
rules, and applicable securities laws and regulations.
</DIV>
<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->55<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">
<DIV align="left">
<A name="122"></A>
</DIV>

<DIV align="left" style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="7%"></TD>
    <TD width="1%"></TD>
    <TD></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left"><B>Item&nbsp;14.</B></TD>
    <TD>&nbsp;</TD>
    <TD><B>Principal Accountant Fees and Services</B></TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The following table presents the total fees billed for professional audit and non-audit services
rendered by our independent auditors for the audit of our annual financial statements as of and for
the years ended September&nbsp;30, 2009 and September&nbsp;30, 2008, and fees billed for other services
rendered by our independent auditors during those periods.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="66%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000">Fiscal Years Ended September 30,</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2008</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Audit Fees (1)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">175,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">170,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Audit-Related Fees (2)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Tax Fees (3)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">103,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">106,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">All Other Fees (4)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">293,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">289,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>




<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR style="font-size: 6pt">
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="96">&nbsp;</TD>
</TR>
<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Audit services consist of work performed in the examination of financial statements, as well as
work that generally only the independent auditor can reasonably be expected to provide, including
attest services and consultation regarding financial accounting and/or reporting standards.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>Audit-related services consist of assurance and related services that are traditionally
performed by the independent auditor, including due diligence related to mergers and acquisitions
and special procedures required to meet certain regulatory requirements.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(3)</TD>
    <TD>&nbsp;</TD>
    <TD>Tax services consist of all services performed by the independent auditor&#146;s tax personnel,
except those services specifically related to the audit of the financial statements, and includes
fees in the areas of tax compliance, tax planning, and tax advice.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(4)</TD>
    <TD>&nbsp;</TD>
    <TD>Other services consist of those service not captured in the other categories,
principally audit services for the Company&#146;s 401(k) plan.</TD>
</TR>

</TABLE>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Our Audit Committee has determined that the services provided by our independent auditors and the
fees paid to them for such services has not compromised the independence of our independent
auditors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Consistent with SEC policies regarding auditor independence, the Audit Committee has responsibility
for appointing, setting compensation and overseeing the work of the independent auditor. In
recognition of this responsibility, the Audit Committee has established a policy to pre-approve all
audit and permissible non-audit services provided by the independent auditor. Prior to engagement
of the independent auditor for the next year&#146;s audit, management will submit a detailed description
of the audit and permissible non-audit services expected to be rendered during that year for each
of four categories of services provided by the independent auditor to the Audit Committee for
approval. The four categories of services provided by the independent auditor are as defined in the
footnotes to the fee table set forth above. In addition, management will also provide to the Audit
Committee for its approval a fee proposal for the services proposed to be rendered by the
independent auditor. Prior to the engagement of the independent auditor, the Audit Committee will
approve both the description of audit and permissible non-audit services proposed to be rendered by
the independent auditor and the budget for all such services. The fees are budgeted and the Audit
Committee requires the independent auditor and management to report actual fees versus the budget
periodically throughout the year by category of service.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">During the year, circumstances may arise when it may become necessary to engage the independent
auditor for additional services not contemplated in the original pre-approval. In those instances,
the Audit Committee requires separate pre-approval before engaging the independent auditor. To
ensure prompt handling of unexpected matters, the Audit Committee may delegate pre-approval
authority to one or more of its members. The member to whom such authority is delegated must report
any pre-approval decisions to the Audit Committee at its next scheduled meeting.
</DIV>
<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->56<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">
<DIV align="left">
<A name="123"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>PART IV</B>
</DIV>

<DIV align="left">
<A name="124"></A>
</DIV>

<DIV align="left" style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="7%"></TD>
    <TD width="1%"></TD>
    <TD></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left"><B>ITEM 15.</B></TD>
    <TD>&nbsp;</TD>
    <TD><B>EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K</B></TD>
</TR>
</TABLE>
</DIV>

<DIV style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(a)(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Financial Statements</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The financial statements and schedules of TeamStaff are included in Part&nbsp;II, Item&nbsp;8 of this
report beginning on page F-1 and including page S-1.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(a)(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Financial Statement Schedule</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Valuation of qualifying accounts. See Schedule&nbsp;I annexed to the financial statements. All
other schedules have been omitted since the required information is not applicable or
because the information required is included in the Consolidated Financial Statements or the
notes thereto.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(a)(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Exhibits</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The exhibits designated with an asterisk (*) are filed herewith. All other exhibits have
been previously filed with the Commission and, pursuant to 17 C.F.R. Secs. 20l.24 and
240.12b-32, are incorporated by reference to the document referenced in brackets following
the descriptions of such exhibits. The exhibits designated with a number sign (#) indicate
a management contract or compensation plan or arrangement.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="77%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Exhibit No.</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Description</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2.1</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Agreement and Plan of Merger by and among TeamStaff, Inc., TeamSub, Inc and BrightLane.com,
Inc., dated as of March&nbsp;6, 2001, as amended by Amendment No.&nbsp;1 dated as of March&nbsp;21, 2001 and
Amendment No.&nbsp;2 dated as of April&nbsp;6, 2001 (filed as Appendix&nbsp;A to the Proxy
Statement/prospectus filed on August&nbsp;7, 2001, SEC File no. 333-61730, as part of Registrant&#146;s
Registration Statement on Form&nbsp;S-4).</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2.2.1</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Form of Asset Purchase Agreement between TeamStaff, Inc and Gevity HR, Inc. dated as of
November&nbsp;14, 2003 (filed as Exhibit&nbsp;2 to Form&nbsp;8-K dated November&nbsp;14, 2003).</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2.3</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Asset Purchase Agreement, dated as of January&nbsp;29, 2008, by and among Temps, Inc., TeamStaff,
Inc. and TeamStaff Rx, Inc. (previously filed as Exhibit&nbsp;2.1 to the Current Report on Form&nbsp;8-K
filed by the Company on February&nbsp;5, 2008).</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2.4</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Asset Purchase Agreement, dated as of December&nbsp;28, 2009, by and among Advantage RN, LLC,
TeamStaff, Inc. and TeamStaff Rx, Inc. (previously filed as Exhibit&nbsp;2.1 to the Current Report
on Form&nbsp;8-K filed by the Company on December&nbsp;30, 2009).</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">3.1</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Amended and Restated Certificate of Incorporation (filed as Exhibit&nbsp;A to Definitive Proxy
Statement dated May&nbsp;1, 2000 as filed with the Securities and Exchange Commission).</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">3.2</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Form of Certificate of Designation of Series&nbsp;A Preferred Stock (filed as Exhibit&nbsp;3.1 to Form
8-K dated April&nbsp;6, 2001).</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">3.3</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Amended By-Laws of Registrant adopted as of May&nbsp;15, 2001 (filed as Exhibit&nbsp;3.4 to the
Registration Statement on Form&nbsp;S-4 File No.&nbsp;333-61730).</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">3.4</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Amended and restated By-Laws of Registrant adopted as of August&nbsp;29, 2001 (filed as Exhibit&nbsp;3.5
to the Registrant&#146;s Form&nbsp;S-3 filed on December&nbsp;27, 2001).</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">3.5</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Amendment to By-Laws of Registrant adopted November&nbsp;8, 2007 (filed as Exhibit&nbsp;3.1 to the
Registrant&#146;s Current Report on Form&nbsp;8-K filed on November&nbsp;13, 2007).</DIV></TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>


<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->57<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="77%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Exhibit No.</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Description</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">3.6</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Amendment to Amended and Restated Certificate of Incorporation of the Company (filed as Exhibit
B to Definitive Proxy Statement dated March&nbsp;13, 2008 as filed with the Securities and Exchange
Commission).</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">4.1</TD>
    <TD nowrap valign="top">#&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">2000 Employee Stock Option Plan (filed as Exhibit&nbsp;B to the Proxy Statement dated as of March&nbsp;8,
2000 with respect to the Annual meeting of Shareholders held on April&nbsp;13, 2000).</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">4.2</TD>
    <TD nowrap valign="top">#&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">2000 Non-Executive Director Stock Option Plan (filed as Exhibit&nbsp;B to the Proxy Statement dated
as of March&nbsp;8, 2000 with respect to the Annual meeting of Shareholders held on April&nbsp;13,
2000).</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">4.3</TD>
    <TD nowrap valign="top">#&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">2006 Long Term Incentive Plan (filed as Exhibit&nbsp;10.1 to the Form&nbsp;10-Q filed on May&nbsp;15, 2006).</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.1</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Lease dated May&nbsp;30, 1997 for office space at 300 Atrium Drive, Somerset, New Jersey (Exhibit
10.6.1 to Form&nbsp;10-K for the fiscal year ended September&nbsp;30, 1997).</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.2</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Form of Stock Purchase Agreement dated as of April&nbsp;6, 2001 between TeamStaff, Inc. and
BrightLane.com, Inc. with respect to purchase of Series&nbsp;A Preferred Stock (filed as Exhibit
10.1 to Form&nbsp;8-K dated April&nbsp;6, 2001).</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.3</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Form of Escrow Agreement between TeamStaff, Inc. and BrightLane Shareholders with respect to
the placement of 150,000 shares into escrow by the BrightLane shareholders (filed as Appendix&nbsp;B
to the proxy statement/prospectus filed on August&nbsp;7, 2001 SEC File No.&nbsp;333.61730).</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.4</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Form of Securities Purchase Agreement dated as of November&nbsp;5, 2004 including Form of Warrant
(filed as Exhibit&nbsp;10.1 to the Form&nbsp;8-K filed on November&nbsp;12, 2004).</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.5</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Form of Asset Purchase Agreement by and among Nursing Innovations, Inc., Vitriarc, Inc., and
William L. Booth and TeamStaff Rx, Inc. dated as of November&nbsp;5, 2004 (filed as Exhibit&nbsp;10.1 to
the Form&nbsp;8-K filed on November&nbsp;18, 2004).</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.6</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Form of Agreement for Sale of Goodwill dated as of November&nbsp;5, 2004 by and between William Lee
Booth and TeamStaff Rx, Inc. (filed as Exhibit&nbsp;10.2 to the Form&nbsp;8-K filed on November&nbsp;18,
2004).</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.7</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Form of Client Transfer Agreement as of November&nbsp;14, 2004, by and among Nursing Innovations,
Inc., Vitriarc, Inc., and William L. Booth and TeamStaff Rx Inc. (filed as Exhibit&nbsp;10.3 to the
Form&nbsp;8-K filed on November&nbsp;18, 2004).</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.8</TD>
    <TD nowrap valign="top">#&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Form of Employee Incentive Stock Option Certificate and Agreement (filed as Exhibit&nbsp;10.13 to
the Form&nbsp;10-K filed on December&nbsp;23, 2004).</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.9</TD>
    <TD nowrap valign="top">#&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Form of Employee Non-Qualified Stock Option Certificate and Agreement (filed as Exhibit&nbsp;10.14
to the Form&nbsp;10-K filed on December&nbsp;23, 2004).</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.10</TD>
    <TD nowrap valign="top">#&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Form of 2000 Director Plan Non-Qualified Stock Option Agreement (filed as Exhibit&nbsp;10.15 to the
<font style="white-space: nowrap">Form&nbsp;10-K</font> filed on December&nbsp;23, 2004).</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.11</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Form of Lease for our business premises located at 18167 U.S. Highway 19N, Suite&nbsp;400,
Clearwater, Fl 33764 (filed as Exhibit&nbsp;10.1 to Form&nbsp;8-K dated February&nbsp;29, 2005).</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.12</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Form of Stock Purchase Agreement among TeamStaff, Inc. and the Shareholders of RS Staffing
Services, Inc. dated as of May&nbsp;26, 2005 (filed as Exhibit&nbsp;10.1 to Form&nbsp;8-K dated June&nbsp;8, 2005).</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.12.1</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Form of Note dated June&nbsp;8, 2005 issued by TeamStaff, Inc. to Roger Staggs (filed as Exhibit
10.2 to the Form&nbsp;10-Q filed on August&nbsp;12, 2005).</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.12.2</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Form of Note dated June&nbsp;8, 2005 issued by Team Staff, Inc. to Barry Durham (filed as Exhibit
10.2 to the Form&nbsp;10-Q filed on August&nbsp;12, 2005).</DIV></TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>


<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->58<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="77%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Exhibit No.</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Description</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.13</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Form of Revolving Credit Agreement, Promissory Notes and related documents between TeamStaff,
Inc. and PNC Bank, NA, dated as of June&nbsp;8, 2005 (filed as Exhibits 10.4 and 10.5 to the Form
10-Q filed on August&nbsp;12, 2005).</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.14</TD>
    <TD nowrap valign="top">#&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Form of Employment Agreement between TeamStaff, Inc. and Rick J. Filippelli, dated as of June
30, 2005 (filed as Exhibit&nbsp;10.2 to the Form&nbsp;8-K filed on July&nbsp;14, 2005).</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.15</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Form of Settlement Agreement between TeamStaff, Inc. and the CNA Entities dated as of October
10, 2005 (filed as Exhibit&nbsp;10.1 to the Form&nbsp;8-K filed on October&nbsp;20, 2005).</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.16</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Form of Lease dated as of November&nbsp;18, 2005 between TeamStaff, Inc. and One Peachtree Pointe
Associates, LLC (file as Exhibit&nbsp;10.1 to the Form&nbsp;10-Q filed on February&nbsp;14, 2006).</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.17</TD>
    <TD nowrap valign="top">#&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Form&nbsp;Notice of Restricted Stock Bonus Award and Restricted Stock Agreement (filed as Exhibit
10.2 to the Form&nbsp;10-Q filed on May&nbsp;15, 2006).</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.18</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Form of Asset Purchase Agreement, Exhibits and Schedules re: sale of DSI Payroll Services to
CompuPay, Inc. (filed as Exhibit&nbsp;10.1 to the Form&nbsp;8-K filed on June&nbsp;1, 2006).</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.19</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Form of Settlement Agreement and Exhibits (Stock Purchase Agreement and Lock-Up Agreement re:</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">TeamStaff, Inc. and Atomic Fusion filed as Exhibit&nbsp;10-1 to the Form&nbsp;8-K filed on June&nbsp;6, 2006).</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.20</TD>
    <TD nowrap valign="top">#&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Form of Director Stock Option Agreement for options granted September&nbsp;1, 2006. (filed as
Exhibit&nbsp;10.26 to the Company&#146;s Form&nbsp;10-K filed on December&nbsp;21, 2006).</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.21</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Form of Amendment to Revolving Credit and Security Agreement dated December&nbsp;13, 2006 between
TeamStaff, Inc. and PNC Bank, N.A. (filed as Exhibit&nbsp;10.1 to the Form&nbsp;10-Q filed on February
14, 2007).</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.22</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Lease, dated as of December&nbsp;4, 2006, for our business premises located at 6555 Quince Road,
Suite&nbsp;303, Memphis, Tennessee (filed as Exhibit&nbsp;10.2 to the Form&nbsp;10-Q filed on February&nbsp;14,
2007).</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.23</TD>
    <TD nowrap valign="top">#&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Separation Agreement with T. Kent Smith dated as of January&nbsp;19, 2007 (filed as Exhibit&nbsp;99.1 to
the <font style="white-space: nowrap">Form&nbsp;8-K</font> filed on February&nbsp;1, 2007).</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.24</TD>
    <TD nowrap valign="top">#&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Form of Letter of Agreement with Rick Filippelli dated as of January&nbsp;10, 2007 (filed as Exhibit
99.1 to the Form&nbsp;8-K filed on February&nbsp;20, 2007).</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.25</TD>
    <TD nowrap valign="top">#&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Form of Letter of Agreement with James Houston dated as of January&nbsp;10, 2007 (filed as Exhibit
99.2 to the Form&nbsp;8-K filed on February&nbsp;20, 2007).</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.26</TD>
    <TD nowrap valign="top">#&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Form of Agreement and Release with James Houston dated as of May&nbsp;11, 2007 (filed as Exhibit
10.29 to the Form&nbsp;10-Q filed on May&nbsp;15, 2007).</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.27</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Lease, dated as of April&nbsp;13, 2007, for our business premises located at 1 Executive Drive,
Suite&nbsp;130, Somerset, New Jersey (filed as Exhibit&nbsp;10.1 to the Form&nbsp;10-Q filed August&nbsp;14,
2007).</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.28</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Lease dated as of March&nbsp;27, 2008 between TeamStaff Government Solutions, Inc. and West Walton
Properties, Inc. (filed as Exhibit&nbsp;10.1 to the Form&nbsp;10-Q filed May&nbsp;15, 2008).</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.29</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Amended and Restated Loan and Security Agreement dated March&nbsp;28, 2008 between TeamStaff, Inc.
and Business Alliance Capital Company, a division of Sovereign Bank. (filed as Exhibit&nbsp;10.2 to
the Form&nbsp;10-Q filed May&nbsp;15, 2008).</DIV></TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>


<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->59<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="77%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Exhibit No.</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Description</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.30</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Amended and Restated Revolving Credit Master Promissory Note dated March&nbsp;28, 2008 between
TeamStaff, Inc. and Business Alliance Capital Company, a division of Sovereign Bank. (filed as
Exhibit&nbsp;10.3 to the Form&nbsp;10-Q filed May&nbsp;15, 2008).</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.31</TD>
    <TD nowrap valign="top">#&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Employment Agreement between the Company and Rick Filippelli dated as of April&nbsp;17, 2008 (filed
as Exhibit&nbsp;10.1 to Current Report on Form&nbsp;8-K filed on April&nbsp;22, 2008).</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.32</TD>
    <TD nowrap valign="top">#&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Employment Agreement between the Company and Cheryl Presuto dated as of July&nbsp;30, 2008 (filed as
Exhibit&nbsp;10.1 to Current Report on Form&nbsp;8-K filed on August&nbsp;4, 2008).</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.33</TD>
    <TD nowrap valign="top">#&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Employment Agreement between the Company and Kevin Wilson dated October&nbsp;3, 2008 (filed as
Exhibit&nbsp;10.1 to Current Report on Form&nbsp;8-K filed on October&nbsp;8, 2008).</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.34</TD>
    <TD nowrap valign="top">#&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Employment Agreement between the Company and Dale West dated December&nbsp;3, 2008 (filed as Exhibit
10.1 to Current Report on Form&nbsp;8-K filed on December&nbsp;9, 2008).</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.35</TD>
    <TD nowrap valign="top">#*&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Employment Agreement between the Company and Rick Filippelli dated as of November&nbsp;2, 2009.</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.36</TD>
    <TD nowrap valign="top">*&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Modification Agreement dated as of January&nbsp;8, 2010 between TeamStaff, Inc. and Sovereign
Business Capital, Division of Sovereign Bank.</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.37</TD>
    <TD nowrap valign="top">*&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Amended and Restated Revolving Credit Master Promissory Note dated January&nbsp;8, 2010 between
TeamStaff, Inc. and Sovereign Business Capital, Division of Sovereign Bank.</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">14</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Code of Ethics (Exhibit&nbsp;14.1 to Annual Report on Form&nbsp;10-K for the fiscal year ended September
30, 2003).</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">21</TD>
    <TD nowrap valign="top">*&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Subsidiaries of Registrants.</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">23.1</TD>
    <TD nowrap valign="top">*&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Consent of WithumSmith&#043;Brown, PC</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">31.1</TD>
    <TD nowrap valign="top">*&nbsp;</TD>
    <TD>&nbsp;</TD>

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Certification of Chief Executive Officer pursuant to Section 17 CFR 240.13a-14(a) or 17 CFR
240.15d-14(a).</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">31.2</TD>
    <TD nowrap valign="top">*&nbsp;</TD>
    <TD>&nbsp;</TD>

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Certification of Chief Financial Officer pursuant to Section 17 CFR 240.13a-14(a) or 17 CFR
240.15d-14(a).</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">32.1</TD>
    <TD nowrap valign="top">*&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Certification of Chief Executive Officer and Chief Financial Officer pursuant to 17 CFR
240.13a-14(b) or 17 CFR 240.15d-14(b) and Section&nbsp;1350 of Chapter&nbsp;63 of Title 18 of the United
States Code.</DIV></TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>


<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->60<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">
<DIV align="left">
<A name="125"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>Signatures</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Pursuant to the requirements of Section&nbsp;13 or 15(d) 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.
</DIV>


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left"><B>TEAMSTAFF, INC.</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR><TD>&nbsp;</TD></TR>
<TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ Rick J. Filippelli
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Rick J. Filippelli&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Chief Executive Officer<br>
(Principal Executive Officer)&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Dated: January&nbsp;19, 2010
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed
below by the following persons on behalf of the Registrant and in the capacities and on the dates
indicated:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="35%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Signature</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Capacity</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Date</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Frederick G. Wasserman
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Frederick G. Wasserman
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chairman of the Board&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">January&nbsp;19, 2010</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Karl W. Dieckmann
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Karl W. Dieckmann
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Vice-Chairman of the Board&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">January&nbsp;19, 2010</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ T. Stephen Johnson
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
T. Stephen Johnson
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">January&nbsp;19, 2010</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Peter Black
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Peter Black
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">January&nbsp;19, 2010</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Martin J. Delaney
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Martin J. Delaney
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">January&nbsp;19, 2010</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ William H. Alderman
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
William H. Alderman
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">January&nbsp;19, 2010</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Rick J. Filippelli
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Rick J. Filippelli
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chief Executive Officer,
<br>President
and Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">January&nbsp;19, 2010</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Cheryl Presuto
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Cheryl Presuto
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chief Financial Officer and
<br>Principal Accounting Officer
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">January&nbsp;19, 2010</TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>


<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->61<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><U><B>TeamStaff, Inc. and Subsidiaries</B></U>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><U><B>Index to Consolidated Financial Statements</B></U>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="95%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Page</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#300">Report of Independent Registered Public Accounting Firm</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">F-2</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#301">Consolidated Balance Sheets As Of September&nbsp;30, 2009 and 2008</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">F-3</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#302">Consolidated Statements Of Operations and Comprehensive Income (Loss)
For the Years Ended September&nbsp;30, 2009 and 2008</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">F-5</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#303">Consolidated Statements Of Shareholders&#146; Equity For The Years Ended
September&nbsp;30, 2009 and 2008</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">F-6</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#304">Consolidated Statements Of Cash Flows For The Years Ended
September&nbsp;30, 2009 and 2008</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">F-7</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#305">Notes To Consolidated Financial Statements</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">F-8</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#306">Schedule&nbsp;I &#151; Valuation And Qualifying Accounts For The Years Ended
September&nbsp;30, 2009 and 2008</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">S-1</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Schedules other than those listed above have been omitted
as they are either not required or because the related
information has been included in the notes to
consolidated financial statements</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->F-1<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">
<DIV align="left">
<A name="300"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><U><B>REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">To the Board of Directors and Shareholders of TeamStaff, Inc.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">We have audited the accompanying consolidated balance sheets of TeamStaff, Inc. and Subsidiaries as
of September&nbsp;30, 2009 and 2008, and the related consolidated statements of operations and
comprehensive income (loss), shareholders&#146; equity and cash flows for each of the years then ended.
Our audits also included the consolidated financial statement schedule as listed in the index.
These financial statements and schedule are the responsibility of the Company&#146;s management. Our
responsibility is to express an opinion on these consolidated financial statements and schedule
based on our audits.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">We conducted our audits in accordance with the standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the consolidated financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the consolidated financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well as evaluating the
overall consolidated financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">In our opinion, the consolidated financial statements referred to above present fairly, in all
material respects, the consolidated financial position of TeamStaff, Inc. and Subsidiaries as of
September&nbsp;30, 2009 and 2008, and the consolidated results of its operations and its cash flows for
each of the years then ended, in conformity with accounting principles generally accepted in the
United States of America. Also, in our opinion, the consolidated financial statement schedule
referred to above, when considered in relation to the basic consolidated financial statements taken
as a whole, presents fairly, in all material respects, the information set forth therein.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">/s/ WithumSmith&#043;Brown, PC
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">WithumSmith&#043;Brown, PC<BR>
Morristown, New Jersey<BR>
January&nbsp;19, 2010

</DIV>
<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->F-2<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><U>TEAMSTAFF, INC. AND SUBSIDIARIES</U>
</DIV>

<DIV align="left">
<A name="301"></A>
</DIV>
<!-- xbrl,bs -->
<DIV align="center" style="font-size: 10pt"><U>CONSOLIDATED BALANCE SHEETS</U></DIV>
<!-- xbrl,body -->

<DIV align="center" style="font-size: 10pt"><U>(AMOUNTS IN THOUSANDS)</U></DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="72%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>September 30,</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>September 30,</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2009</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2008</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>ASSETS</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>CURRENT ASSETS:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Cash and cash equivalents</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2,992</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">5,213</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Accounts receivable, net of allowance for doubtful
accounts of $0 as of September&nbsp;30, 2009 and 2008</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,427</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,881</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Prepaid workers&#146; compensation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">517</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">562</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Other current assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">257</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">505</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Assets from discontinued operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,418</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,878</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px"><B>Total current assets</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>16,611</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>22,039</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>EQUIPMENT AND IMPROVEMENTS:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Furniture and equipment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,262</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,262</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Computer equipment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">255</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">249</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Computer software</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">788</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">725</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Leasehold improvements</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,314</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,245</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Less accumulated depreciation and amortization</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3,054</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(2,945</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px"><B>Equipment and improvements, net</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>260</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>300</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>TRADENAME</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>3,924</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>3,924</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>GOODWILL</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>8,595</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>8,595</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>OTHER ASSETS</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>267</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>136</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>TOTAL ASSETS</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>29,657</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>34,994</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="center" style="font-size: 10pt; margin-top: 10pt">The accompanying notes are an integral part of these consolidated financial statements
</DIV>


<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->F-3<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<!-- xbrl -->
<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">




<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><U>TEAMSTAFF, INC. AND SUBSIDIARIES</U><BR>
<U>CONSOLIDATED BALANCE SHEETS</U><BR>
<U>(AMOUNTS IN THOUSANDS, EXCEPT PAR VALUE)</U>
</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="72%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>September 30,</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>September 30,</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2009</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2008</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>LIABILITIES AND SHAREHOLDERS&#146; EQUITY</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>CURRENT LIABILITIES:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Notes payable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,500</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Current portion of capital lease obligations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">29</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Accrued payroll</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,694</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,408</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Accrued pension liability</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">70</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Accounts payable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,890</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,578</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Accrued expenses and other current liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,241</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,910</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Liabilities from discontinued operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">392</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">381</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px"><B>Total current liabilities</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>15,737</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>16,876</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>CAPITAL LEASE OBLIGATIONS, net of current portion</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">45</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>OTHER LONG TERM LIABILITY, net of current portion</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>LONG TERM LIABILITIES FROM DISCONTINUED OPERATIONS</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">64</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">173</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px"><B>Total Liabilities</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>15,841</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>17,108</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>COMMITMENTS AND CONTINGENCIES</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>SHAREHOLDERS&#146; EQUITY:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Preferred stock, $.10 par value; authorized 5,000 shares;
none issued and outstanding</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Common Stock, $.001 par value; authorized 40,000 shares;
issued 4,900 at September&nbsp;30, 2009 and 4,874 at
September&nbsp;30, 2008, respectively; outstanding 4,898 at
September&nbsp;30, 2009 and 4,843 at September&nbsp;30, 2008, respectively</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Additional paid-in capital</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">69,124</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">68,844</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Accumulated deficit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(55,289</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(50,934</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Accumulated comprehensive loss</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(5</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Treasury stock, 2 shares at cost at September&nbsp;30, 2009 and
September&nbsp;30, 2008</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(24</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(24</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Total shareholders&#146; equity</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,816</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,886</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>TOTAL LIABILITIES AND SHAREHOLDERS&#146; EQUITY</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>29,657</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>34,994</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="center" style="font-size: 10pt; margin-top: 10pt">The accompanying notes are an integral part of these consolidated financial statements
</DIV>
<!-- /xbrl,bs -->

<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->F-4<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">




<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><U>TEAMSTAFF, INC. AND SUBSIDIARIES</U>
</DIV>

<DIV align="left">
<A name="302"></A>
</DIV>
<!-- xbrl,op -->
<DIV align="center" style="font-size: 10pt"><U>CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)</U></DIV>
<!-- xbrl,body -->

<DIV align="center" style="font-size: 10pt"><U>(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)</U></DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="72%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>For the Year Ended</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>September 30,</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>September 30,</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2009</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2008</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>REVENUES</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Operating revenues</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">46,021</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">47,747</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Non-recurring retroactive billings</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,772</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Total revenue</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">46,021</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">58,519</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>DIRECT EXPENSES</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Operating direct expense</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">39,019</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">39,495</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Non-recurring retroactive billings</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,080</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Total direct expense</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">39,019</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">49,575</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>GROSS PROFIT</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Operating gross profit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,002</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,252</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Non-recurring retroactive billings</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">692</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Total gross profit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>7,002</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>8,944</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>SELLING, GENERAL AND ADMINISTRATIVE EXPENSES</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,505</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,930</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>DEPRECIATION AND AMORTIZATION</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">111</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">150</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B>Income from operations</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>386</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2,864</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>OTHER INCOME (EXPENSE)</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Interest income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">45</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">40</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Interest expense</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(222</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(147</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Settlement of prior periods&#146; payroll tax contingencies</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">716</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Other income, net</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">160</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Legal expense related to pre-acquisition activity of
acquired company</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(21</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(218</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(38</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">391</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B>Income from continuing operations before taxes</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>348</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>3,255</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>INCOME TAX BENEFIT (EXPENSE)</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(60</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B>Income from continuing operations</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>376</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>3,195</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>LOSS FROM DISCONTINUED OPERATIONS</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Loss from operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(4,731</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(2,049</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B>Loss from discontinued operations</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(4,731</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(2,049</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>NET (LOSS)&nbsp;INCOME</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(4,355</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,146</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>OTHER COMPREHENSIVE INCOME</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Pension liability adjustment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>COMPREHENSIVE (LOSS)&nbsp;INCOME</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left"><B>$</B></TD>
    <TD align="right"><B>(4,350</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>1,174</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>(LOSS)&nbsp;EARNINGS PER SHARE &#151; BASIC</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Income from continuing operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.08</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.66</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Loss from discontinued operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(0.97</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(0.42</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net (loss)&nbsp;earnings per share</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(0.89</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.24</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>(LOSS)&nbsp;EARNINGS PER SHARE &#151; DILUTED</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Income from continuing operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.07</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.66</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Loss from discontinued operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(0.93</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(0.42</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net (loss)&nbsp;earnings per share</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(0.86</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.24</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>WEIGHTED AVERAGE BASIC SHARES OUTSTANDING</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,900</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,866</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>WEIGHTED AVERAGE DILUTED SHARES OUTSTANDING</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,085</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,875</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="center" style="font-size: 10pt; margin-top: 10pt">The accompanying notes are an integral part of these consolidated financial statements
</DIV>
<!-- /xbrl,op -->

<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->F-5<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">




<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><u>TEAMSTAFF, INC. AND SUBSIDIARIES</u>
</DIV>

<DIV align="left">
<A name="303"></A>
</DIV>

<!-- xbrl,se -->
<DIV align="center" style="font-size: 10pt; margin-top: 0pt"><u>CONSOLIDATED STATEMENTS OF SHAREHOLDERS&#146; EQUITY</u>
<!-- xbrl,body -->
</DIV>

<DIV align="center" style="font-size: 10pt"><u>FOR THE YEARS ENDED SEPTEMBER 30, 2009 AND 2008</u></DIV>

<DIV align="center" style="font-size: 10pt"><u>(AMOUNTS IN THOUSANDS)</u></DIV>


<DIV align="center">
<TABLE style="font-size: 8pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="28%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Additional</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Other</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Total</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>Common Stock</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Paid-In</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Accumulated</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>Treasury Stock</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Comprehensive</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Shareholders&#146;</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Shares</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Amount</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Capital</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Deficit</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Shares</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Amount</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Loss</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Equity</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>BALANCE, September&nbsp;30, 2007</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>4,823</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>5</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>68,726</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>(52,080</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>(24</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>(33</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>16,594</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Pension liability adjustment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Return of shares related to settlement</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(41</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(41</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Expense related to director restricted stock grants</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Expense related to employee restricted stock grants</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">129</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">129</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Fractional shares related to reverse stock split</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,146</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,146</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>BALANCE, September&nbsp;30, 2008</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>4,843</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>5</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>68,844</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(50,934</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(24</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(5</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>17,886</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Pension liability adjustment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Return of shares related to settlement</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(38</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Director restricted stock grants</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Expense related to employee restricted
stock grants</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">79</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">280</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">280</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(4,355</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(4,355</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>BALANCE, September&nbsp;30, 2009</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>4,898</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>5</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>69,124</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>(55,289</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>(24</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>0</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>13,816</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="center" style="font-size: 10pt; margin-top: 10pt">The accompanying notes are an integral part of these consolidated financial statements
</DIV>
<!-- /xbrl,se -->

<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->F-6<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">




<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><U>TEAMSTAFF, INC. AND SUBSIDIARIES</U>
</DIV>

<DIV align="left">
<A name="304"></A>
</DIV>
<!-- xbrl,cf -->
<DIV align="center" style="font-size: 10pt"><U>CONSOLIDATED STATEMENTS OF CASH FLOWS</U></DIV>
<!-- xbrl,body -->

<DIV align="center" style="font-size: 10pt"><U>(AMOUNTS IN THOUSANDS)</U></DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="72%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>For the Twelve Months Ended</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>September 30,</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>September 30,</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2009</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2008</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>CASH FLOWS FROM OPERATING ACTIVITIES</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net (loss)&nbsp;income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(4,355</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,146</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Adjustments to reconcile net income to net cash (used in)
provided by operating activities, net of divested businesses:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:60px; text-indent:-15px">Depreciation and amortization</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">111</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">150</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:60px; text-indent:-15px">Settlement of prior periods&#146; payroll tax contingencies</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(716</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:60px; text-indent:-15px">Compensation expense related to director restricted stock grants</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:60px; text-indent:-15px">Compensation expense related to employee restricted stock grants</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">221</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">188</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:60px; text-indent:-15px">Recovery of doubtful accounts</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(6</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:60px; text-indent:-15px">Loss on retirement of equipment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Changes in operating assets and liabilities, net of divested businesses:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:60px; text-indent:-15px">Accounts receivable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">454</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(5,949</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:60px; text-indent:-15px">Other current assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">293</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(137</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:60px; text-indent:-15px">Other assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(131</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">69</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:60px; text-indent:-15px">Accounts payable, accrued payroll,
accrued expenses and other current liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,012</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,876</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:60px; text-indent:-15px">Other long term liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(18</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:60px; text-indent:-15px">Pension liability</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">(70</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(276</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:60px; text-indent:-15px">Cash flow from discontinued operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,400</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,237</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:75px; text-indent:-15px">Net cash (used in) provided by operating activities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(2,090</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,602</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>CASH FLOWS FROM INVESTING ACTIVITIES</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Purchase of equipment, leasehold improvements and software</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(69</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(140</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Cash flow from discontinued operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">357</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:75px; text-indent:-15px">Net cash (used in) provided by investing activities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(69</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">217</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>CASH FLOWS FROM FINANCING ACTIVITIES</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Repayments on capital lease obligations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(27</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(27</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Loan fees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(146</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Net comprehensive income on pension</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Cash flows from discontinued operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(40</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(22</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:75px; text-indent:-15px">Net cash used in financing activities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(62</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(167</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Net (decrease)&nbsp;increase in cash and cash equivalents</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(2,221</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,652</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,213</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">561</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">CASH AND CASH EQUIVALENTS AT END OF PERIOD</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2,992</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">5,213</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Cash paid during the period for interest</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">159</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Cash paid during the period for income taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">124</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">86</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 10pt">SUPPLEMENTAL DISCLOSURE OF NON CASH INVESTING AND FINANCING ACTIVITIES:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">In the year ended September&nbsp;30, 2009, an accrued liability was reduced (and additional
paid-in-capital was increased) by $59 to reflect the issuance of stock to settle the liability.
</DIV>
<!-- /xbrl,cf -->


<DIV align="center" style="font-size: 10pt; margin-top: 10pt">The accompanying notes are an integral part of these consolidated financial statements
</DIV>


<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->F-7<!-- /Folio -->
</DIV>



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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

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<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><U><B>TEAMSTAFF, INC. AND SUBSIDIARIES</B></U>
</DIV>

<DIV align="left">
<A name="305"></A>
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 10pt"><U><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B></U>
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 10pt"><U><B>SEPTEMBER 30, 2009 AND 2008</B></U>
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>(1)&nbsp;</B><U><B>ORGANIZATION AND BUSINESS</B></U><B>:</B>
</DIV>

<!-- xbrl,body -->
<DIV align="left" style="font-size: 10pt; margin-top: 10pt">TeamStaff, Inc. and its subsidiaries (&#147;TeamStaff&#148; or the &#147;Company&#148;, also referred to as &#147;we,&#148; &#147;us&#148;
and &#147;our&#148;), provide staffing services to the United States Department of Veterans Affairs (&#147;DVA&#148;)
and other US governmental entities. TeamStaff&#146;s primary operations are located in Loganville,
Georgia and its principal executive office is located at 1 Executive Drive, Suite&nbsp;130, Somerset,
New Jersey 08873 where its telephone number is (877)&nbsp;523-9897. TeamStaff, Inc., a New Jersey
corporation, was founded in 1969 as a payroll service company and evolved into a national provider
of contract and permanent medical and administrative staffing services. Its principal operations
are conducted through its subsidiary, TeamStaff Government Solutions, (&#147;TeamStaff GS&#148;), a
wholly-owned subsidiary of TeamStaff, Inc. TeamStaff GS changed its name from RS Staffing Services,
Inc on February&nbsp;12, 2008 to reflect the subsidiary&#146;s expanding service offerings.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">On December&nbsp;28, 2009, TeamStaff and TeamStaff Rx, Inc. (&#147;TeamStaff Rx&#148;), its wholly-owned
subsidiary, entered into a definitive Asset Purchase Agreement with Advantage RN, LLC, an Ohio
limited liability company (&#147;Advantage RN&#148;), providing for the sale of substantially all of the
operating assets of TeamStaff Rx related to TeamStaff Rx&#146;s business of providing travel nurse and
allied healthcare professionals for temporary assignments to Advantage RN. The closing of this
transaction occurred on January&nbsp;4, 2010. The Asset Purchase Agreement provides that the purchased
assets were acquired by Advantage RN for a purchase price of up to $425,000, of which: (i) $350,000
in cash was paid at the closing, and (ii) $75,000 is subject to an escrowed holdback as described
in the Asset Purchase Agreement. Additionally, Advantage RN will make rent subsidy payments to
TeamStaff Rx totaling $125,000, consisting of (i) $25,000 paid at closing, and (ii)&nbsp;an additional
$100,000 payable in 10 equal monthly installments beginning on March&nbsp;1, 2010. Under the terms of
the Asset Purchase Agreement, Advantage RN did not assume any debts, obligations or liabilities of
TeamStaff Rx nor did it purchase any accounts receivable outstanding as of the closing date. As
described in note 4 to these consolidated financial statements, the results of operations, cash
flows and related assets and liabilities of TeamStaff Rx have been reclassified in the accompanying
consolidated financial statements from those of continuing businesses for all periods presented.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Following the disposition of its TeamStaff Rx business, TeamStaff provides specialized medical,
nursing, logistics and administrative staffing services by supplying allied healthcare and nursing
professionals, logistics and administrative personnel to U.S. government entities through TeamStaff
GS. The staffing services offered by TeamStaff are provided through independent Federal Supply
Schedule (&#147;FSS&#148;) contracts through the United States General Services Administration (&#147;GSA&#148;). The
provision of logistical and administrative personnel is accomplished through the Logistics
Worldwide Schedule and medical personnel are supplied through the Professional and Allied
Healthcare Staffing Services Schedule. TeamStaff also provides its staffing services to federal
government agencies through competitively bid contracts and has a GSA schedule contract to provide
information technology professional services. TeamStaff provides these services to the DVA, the US
Department of Defense and other US governmental agencies and placed contract employees at over 40
facilities during the 2009 fiscal year.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">TeamStaff&#146;s other wholly-owned subsidiaries include DSI Staff ConnXions Northeast, Inc., DSI Staff
ConnXions Southwest, Inc., TeamStaff Solutions, Inc., TeamStaff I, Inc., TeamStaff II, Inc.,
TeamStaff III, Inc., TeamStaff IV, Inc., TeamStaff VIII, Inc., TeamStaff IX, Inc., Digital
Insurance Services, Inc., HR2, Inc. and BrightLane.com, Inc. As a result of the sale of our
Professional Employer Organization business in fiscal year 2004 and other Company business changes,
these &#147;other&#148; subsidiaries are not actively operating.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>(2)&nbsp;</B><U><B>SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</B></U><B>:</B>
</DIV>
<!-- xbrl,body -->
<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><U><B>Basis of Presentation and Principles of Consolidation</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The accompanying consolidated financial statements include the accounts of TeamStaff, Inc. and its
subsidiaries, all of which are wholly owned. All intercompany balances and transactions have been
eliminated in the consolidated financial statements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">All references to common stock, options, share based arrangements, exercise price, fair values and
related data within this Form 10-K have been retroactively amended so as to incorporate the effect
of the one-to-four reverse stock split effective April&nbsp;21, 2008.
</DIV>
<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->F-8<!-- /Folio -->
</DIV>

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<!-- xbrl -->

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><U><B>Use of Estimates</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The preparation of financial statements in conformity with accounting principles generally accepted
in the United States requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and expenses during the reporting
period. Significant estimates include valuation of goodwill and other intangible assets, expected
settlement amounts of accounts receivable, measurement of prepaid workers&#146; compensation, valuation
allowances established against accounts receivable and deferred tax assets and measurement of
payroll tax contingencies, accounts payable, workers&#146; compensation claims and accrued expenses.
Actual results could differ from those estimates. As disclosed in Note 10, the Company reduced
liabilities established for certain prior period payroll tax contingencies by $0.7&nbsp;million in
fiscal 2008 based on resolution of such matters with the Internal Revenue Service.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><U><B>Revenue Recognition</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">TeamStaff accounts for its revenues in accordance with ACS 605-45, <I>Reporting Revenues Gross as a
Principal Versus Net as an Agent, </I>and SAB 104<I>, Revenue Recognition</I>. TeamStaff recognizes all
amounts billed to its contract staffing customers as gross revenue because, among other things,
TeamStaff is the primary obligor in the contract staffing arrangement; TeamStaff has pricing
latitude; TeamStaff selects contract employees for a given assignment from a broad pool of
individuals; TeamStaff is at risk for the payment of its direct costs; and TeamStaff assumes a
significant amount of other risks and liabilities as an employer of its contract employees, and
therefore, is deemed to be a principal in regard to these services. TeamStaff also recognizes as
gross revenue and as unbilled receivables, on an accrual basis, any such amounts that relate to
services performed by contract employees which have not yet been billed to the customer as of the
end of the accounting period.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Revenues related to retroactive billings in 2008 (see Note 10 to the Consolidated Financial
Statements) from an agency of the Federal government were recognized when: (1)&nbsp;the Company
developed and calculated an amount for such prior period services and had a contractual right to
bill for such amounts under its arrangements, (2)&nbsp;there were no remaining unfulfilled conditions
for approval of such billings and (3)&nbsp;collectability is
reasonably assured based on historical practices with the DVA. The related direct
costs, principally comprised of salaries and benefits, are recognized to match the recognized
reimbursements from the Federal agency; upon approval, wages will be processed for payment to the
employees.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">During the year ended September&nbsp;30, 2008, TeamStaff recognized revenues of $10.8&nbsp;million and direct
costs of $10.1&nbsp;million related to these non-recurring arrangements. At September&nbsp;30, 2009 and 2008,
the amount of the remaining accounts receivable with the DVA approximated $9.3&nbsp;million and accrued
liabilities for salaries to employees and related benefits totaled $8.7&nbsp;million. The $9.3&nbsp;million
in accounts receivable was unbilled to the DVA at September&nbsp;30, 2009 and 2008. At present, the
Company expects to collect such amounts by the end of the second
quarter of fiscal 2010 based on current discussions and collection
efforts.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Staffing (whether medical or administrative) revenue is recognized as service is rendered.
TeamStaff bills its clients based on an hourly rate. The hourly rate is intended to cover
TeamStaff&#146;s direct labor costs of the contract employees, plus an estimate for overhead expenses
and a profit margin. Additionally, commissions from permanent placements (principally TeamStaff Rx)
are included in revenue as placements are made. Commissions from permanent placements result from
the successful placement of a medical staffing employee to a customer&#146;s workforce as a permanent
employee. The Company also reviews the status of such placements to assess the Company&#146;s future
performance obligations under such contracts.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Direct costs of services are reflected in TeamStaff&#146;s Consolidated Statements of Operations as
&#147;direct expenses&#148; and are reflective of the type of revenue being generated. Direct costs of the
contract staffing business include wages, employment related taxes and reimbursable expenses.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><U><B>Concentrations of Credit Risks</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Financial instruments that potentially subject TeamStaff to concentrations of credit risk consist
principally of cash and accounts receivable. TeamStaff maintains substantially all its cash
balances in a limited number of financial institutions. The balances are insured by the Federal
Deposit Insurance Corporation up to $250,000 (effective through December&nbsp;31, 2013). At times the
deposits in banks may exceed the amount of insurance provided on such deposits. TeamStaff
monitors the financial health of these banking institutions. At
September 30, 2009, the Company&#146;s uninsured cash balances
approximated $1.2 million. Historically, the Company has not
experienced any losses on deposits.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">TeamStaff provides staffing services to the DVA, the US Department of Defense and other US
governmental agencies and placed contract employees at over 40 facilities during the 2009 fiscal
year. Substantially all of the business of TeamStaff GS is accomplished through FSS contracts with
the GSA and DVA. Credit, when given, is generally granted on an unsecured basis.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">TeamStaff maintains an allowance for doubtful accounts, if any, for estimated losses resulting from
the inability of its customers to pay. However, if the financial condition of TeamStaff&#146;s
customers were to deteriorate rapidly, resulting in nonpayment, TeamStaff could be required to
provide for additional allowances, which would decrease operating results in the period that such
determination was made.
</DIV>
<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->F-9<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<!-- xbrl -->

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><U><B>Cash Equivalents</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">For purposes of the Consolidated Statements of Cash Flows, TeamStaff considers all liquid
investments purchased with a maturity of three months or less to be cash equivalents.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><U><B>Allowance for Doubtful Accounts</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Accounts receivable are unsecured and carried at fair value, which is net of an allowance for
doubtful accounts. The allowance for doubtful accounts is determined based on a specific
identification methodology. Generally an account receivable is deemed uncollectible based upon the
aging of the receivable and/or specific identification. Interest is not typically charged on past
due accounts and specific identification takes into account the Company&#146;s assessment of the default
risk based upon recent events in the customer&#146;s business, economic status and changes in credit
status. With respect to receivables owed by agencies of the U.S. Government, the Company believes
that the risk of loss on these accounts is minimal (See Note 14).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Before accounts are deemed uncollectible, demand letters are sent and, if that does not result in
payment, the receivable is placed for collection with a collection agency. The Company&#146;s last
attempt at collection would be legal action, depending upon the customer&#146;s financial situation. If
the Company is unsuccessful at collection after these steps, the receivable is written-off.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><U><B>Fair Value</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">TeamStaff has financial instruments, principally accounts receivable, accounts payable, notes
payable and accrued expenses. TeamStaff estimates that the fair value of all financial instruments
at September&nbsp;30, 2009 and 2008 does not differ materially from the aggregate carrying values of
these financial instruments recorded in the accompanying consolidated balance sheets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><U><B>Equipment and Improvements</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Equipment and improvements are stated at cost. Depreciation and amortization are provided using
the straight-line method over the estimated useful asset lives (3 to 5&nbsp;years) and the shorter of
the initial lease term or estimated useful life for leasehold improvements. During 2008, the
Company retired fixed assets with a carrying value of $20,000 and accumulated depreciation of
$12,000 that resulted in a loss of $8,000 (included in other income, net).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><U><B>Advertising Costs</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The Company&#146;s advertising expenses consist primarily of online advertising, health care
professional trade magazines and other various print media, promotional material and direct mail
marketing. The Company expenses advertising costs as they are incurred. Total advertising costs
for continuing operations were $0.2&nbsp;million and $0.1&nbsp;million for fiscal years ended September&nbsp;30,
2009 and 2008, respectively.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><U><B>Occupancy Lease Commitments</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The Company has occupancy leases with various payment terms to include a fixed payment schedule
over the lease term, variable payment schedule over the lease term, or a lease that may have rent
escalations, an abatement or &#147;rent holiday&#148; periods. The Company records occupancy expense using
the straight-line method over the lease term, regardless of actual payment terms.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><U><B>Long-Lived Assets</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">TeamStaff reviews its long-lived assets for impairment whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable. If such events or changes in
circumstances are present, a loss is recognized to the extent that the carrying value of the asset
is in excess of the sum of the undiscounted cash flows expected to result from the use of the asset
and its eventual disposition.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">As a result of the decision to divest TeamStaff Rx, the Company recognized an impairment charge of
$2.3&nbsp;million to reduce the carrying value of long lived assets (equipment, tradename and goodwill)
to estimated fair value. The estimated fair value was derived from the terms of the sale of these
assets to Advantage RN, as described in Note 1. The impairment charge is included in the 2009 loss
from discontinued operations.
</DIV>
<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->F-10<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<!-- xbrl -->

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><U><B>Acquired Intangible Assets</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Acquired intangible assets consist of trade name of $3.9&nbsp;million at September&nbsp;30, 2009 and 2008.
Tradename of $0.7&nbsp;million related to TeamStaff RX has been reclassified to &#147;Assets from
Discontinued Operations&#148; for all periods presented.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">TeamStaff will continue to annually test and review its remaining indefinite life intangible assets
for possible impairment or loss of value.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><U><B>Goodwill</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Goodwill is assigned to specific reporting units and is reviewed for possible impairment at least
annually or more frequently upon the occurrence of an event or when circumstances indicate that a
reporting unit&#146;s carrying amount may be greater than its fair value. All goodwill is attributable
to continuing staffing services reporting units. Goodwill of $1.6&nbsp;million related to TeamStaff RX
has been reclassified to &#147;Assets from Discontinued Operations&#148; for all periods presented.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><U><B>Workers&#146; Compensation</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">For the remaining open years through November&nbsp;17, 2003, the date of sale of its discontinued PEO
business, TeamStaff applies loss-development factors to workers&#146; compensation incurred losses in
order to estimate fully developed losses as well as other formula driven methodologies supplied by
its current third party administrator (See Note 10).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><U><B>Income Taxes</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">TeamStaff accounts for income taxes in accordance with the &#147;liability&#148; method, whereby deferred tax
assets and liabilities are determined based on the difference between the financial statement and
tax bases of assets and liabilities, using enacted tax rates in effect for the year in which the
differences are expected to reverse. Deferred tax assets are reflected on the consolidated balance
sheet when it is determined that it is more likely than not that the asset will be realized. This
guidance also requires that deferred tax assets be reduced by a valuation allowance if it is more
likely than not that some or all of the deferred tax asset will not be realized. At September&nbsp;30,
2009 and 2008, the Company recorded a 100% valuation allowance against its net deferred tax assets
(See Note 5).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><U><B>Reclassifications</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Certain reclassifications have been made to prior years&#146; amounts to conform to the current year
presentation and the effects of the reverse stock split. As discussed in Note 4, the TeamStaff Rx
operations were reclassified in 2009 and 2008 as discontinued operations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><U><B>Stock-Based Compensation </B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Compensation costs for the portion of awards (for which the requisite service has not been
rendered) that are outstanding are recognized as the requisite service is rendered. The
compensation cost for that portion of awards shall be based on the grant-date fair value of those
awards as calculated for recognition purposes under applicable guidance. There was no share-based
compensation expense for options for the years ended September&nbsp;30, 2009 and 2008. As of September
30, 2009, there was no remaining unrecognized compensation expense related to non-vested stock
option awards to be recognized in future periods.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">From time to time, the Company grants restricted stock awards to non-employee directors and
employees under existing plans. The Company recognizes non cash compensation expense over the
various vesting periods. Stock compensation expense totaled $0.2&nbsp;million in each of fiscal 2009
and 2008. Certain awards vest upon satisfaction of certain performance criteria. As permitted,
the Company will not recognize expense on the performance based shares until it is probable that
these conditions will be achieved. Such charges could be material in future periods.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><U><B>Earnings (Loss) Per Share</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Basic earnings (loss)&nbsp;per share is calculated by dividing income (loss)&nbsp;available to common
shareholders by the weighted average number of common shares outstanding and restricted stock
grants that vested or are likely to vest during the period. Diluted earnings (loss)&nbsp;per share is
calculated by dividing income (loss)&nbsp;available to common shareholders by the weighted average
number of basic common shares outstanding, adjusted to reflect potentially dilutive securities.
</DIV>
<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->F-11<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<!-- xbrl -->

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The respective determination of weighted average shares used in the computation of earnings (loss)
per share is as follows (amounts in thousands);
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="72%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2009</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2008</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Basic:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Income from continuing operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,900</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,866</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Loss from Discontinued operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,900</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,866</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Diluted:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Income from continuing operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,085</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,875</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Loss from Discontinued operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,085</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,875</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Under guidance for determining earnings (loss)&nbsp;per share, the effects of common stock equivalents
of approximately 185,000 and 9,000, are included (even though the shares are anti dilutive) for
2009 and 2008, in the calculation of loss per share for discontinued operations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><U><B>Accumulated Comprehensive Income (Loss) and Pension Liability Adjustment </B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">A pension liability adjustment is required when the actuarial present value of accumulated
benefit obligation exceeds the plan assets and accrued pension liabilities. The pension
liability adjustment, net of income taxes, is recorded as a component of &#147;Accumulated comprehensive
loss&#148; on the balance sheet and is reflected in the Statement of Comprehensive Income (Loss) as
&#147;Pension liability adjustment&#148;. The Company used a discount rate of 3.0% to
calculate the projected benefit obligation and the periodic benefit cost calculation for the
respective years presented. The Company recorded a reduction in the net liability from such
adjustment, net of tax of $5,000 and $28,000 for the years ended September&nbsp;30, 2009 and 2008,
respectively. The accumulated comprehensive loss on the consolidated balance sheets reflects the
cumulative balance due to the pension liability adjustment. As of September&nbsp;30, 2009, the
liability was paid off and thus, there was no remaining accumulated comprehensive loss to be
recognized in future periods.
</DIV>

<!-- xbrl,n -->



<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>(3)&nbsp;</B><U><B>RECENT ACCOUNTING STANDARDS</B></U><b>:</b>
</DIV>
<!-- xbrl,body -->
<DIV align="left" style="font-size: 10pt; margin-top: 10pt">In June&nbsp;2006, the Financial Accounting Standards Board (&#147;FASB&#148;) issued authoritative guidance that
clarifies the accounting for uncertainty in income taxes recognized in an entity&#146;s financial
statements and prescribes a recognition threshold of more-likely-than-not to be sustained upon
examination. Measurement of the tax uncertainty occurs if the recognition threshold has been met.
This Interpretation also provides guidance on de-recognition, classification, interest and
penalties, accounting in interim periods, disclosure, and transition. TeamStaff conducts business
solely in the U.S. and, as a result, files income tax returns for U.S., New Jersey and various
other states and jurisdictions. In the normal course of business the Company is subject to
examination by taxing authorities. The Company&#146;s tax returns for years subsequent to fiscal 2005
are open, by statute, for review by authorities. However, at present, there are no ongoing income
tax audits or unresolved disputes with the various tax authorities that the Company currently files
or has filed with. Given the Company&#146;s substantial net operating loss carryforwards, which are
subject to a full valuation allowance, as well as the historical operating losses in prior periods,
the adoption of this guidance on October&nbsp;1, 2007 did not have any effect on our financial position,
results of operations or cash flows as of the adoption date or for subsequent periods.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">In September&nbsp;2006, the FASB issued a standard which defines fair value, established a framework for
measuring fair value in accordance with accounting principles generally accepted in the United
States, and expanded disclosures about fair value measurements. This standard was effective for
financial statements issued for fiscal years beginning after November&nbsp;15, 2007, with earlier
application encouraged. Any amounts recognized upon adoption as a cumulative effect adjustment will
be recorded to the opening balance of retained earnings in the year of adoption. In February&nbsp;2008,
the FASB issued supplemental guidance in the form of a staff position, which delayed the effective
date of the initial standard for all nonfinancial assets and nonfinancial liabilities, except those
that are recognized or disclosed at fair value in the financial statements on a recurring basis (at
least annually), until fiscal years beginning after November&nbsp;15, 2008, and interim periods within
those fiscal years. The Company adopted this standard on October&nbsp;1, 2008 with no effect on its
financial position, results of operations and cash flows.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">In February&nbsp;2007, the FASB issued a standard that 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. This standard was effective for fiscal years
beginning after November&nbsp;15, 2007, the provisions of which are required to be applied
prospectively. The Company adopted this standard on October&nbsp;1, 2008 with no effect on its financial
position, results of operations and cash flows.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">In March&nbsp;2008, the FASB issued a standard which is intended to improve financial reporting about
derivative instruments and hedging activities by requiring enhanced disclosures to enable users of
the financial statements to better understand the effects on an entity&#146;s financial position,
financial performance, and cash flows. It is effective for financial statements issued for interim
periods beginning after November&nbsp;15, 2008, with early application encouraged. The adoption of this
standard did not have a material effect on our consolidated financial statements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">In June&nbsp;2009, the FASB issued a standard which stipulated the <I>FASB Accounting Standards
Codification</I>&#153; is the source of authoritative U.S. GAAP recognized by the FASB to be applied by
nongovernmental entities. This standard is effective for financial statements issued for interim
and annual periods ending after September&nbsp;15, 2009. The implementation of this standard did not
have a material impact on the Company&#146;s financial position, results of operations and cash flows.
</DIV>
<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->F-12<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<!-- xbrl -->

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<!-- xbrl,n -->



<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>(4)&nbsp;</B><U><B>DISCONTINUED OPERATIONS: </B></U>
</DIV>

<!-- xbrl,body -->
<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><U><B>Sale of Nursing Innovations Division</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Effective January&nbsp;27, 2008, TeamStaff, Inc. completed the sale of its per diem nurse staffing
business located in Memphis, Tennessee and operating under the name of Nursing Innovations, to
Temps, Inc. Under the terms of the definitive Asset Purchase Agreement, dated as of January&nbsp;29,
2008 (&#147;Asset Purchase Agreement&#148;), the Company received a cash purchase price of $447,000 for the
acquired business and related assets. Of the purchase price, a defined amount was escrowed for a
period of six months from the closing date. Temps, Inc. released approximately $89,000 escrow to
Teamstaff in the fourth quarter of 2008.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Net revenues and net loss for the Nursing Innovations per diem operations for 2008 were $0.7
million and $42,000 respectively.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><U><B>Sale of TeamStaff Rx</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Based on an analysis of historical and forecasted results and the Company&#146;s strategic initiative to
focus on core business, in the fourth quarter of fiscal 2009, the Company approved and committed to
a formal plan to divest the operations of TeamStaff Rx, our wholly-owned subsidiary, based at its
Clearwater, Florida location. In evaluating the facets of TeamStaff Rx&#146;s operations, management
concluded that this business component meets the definition of a discontinued operation.
Accordingly, the results of operations, cash flows and related assets and liabilities of TeamStaff
Rx for all periods presented have been reclassified in the accompanying consolidated financial
statements from those of continuing businesses.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Effective December&nbsp;28, 2009, TeamStaff and TeamStaff Rx entered into a definitive Asset Purchase
Agreement with Advantage RN, providing for the sale of substantially all of the operating assets of
TeamStaff Rx related to TeamStaff Rx&#146;s business of providing travel nurse and allied healthcare
professionals for temporary assignments to Advantage RN. The closing of this transaction occurred
on January&nbsp;4, 2010. The Asset Purchase Agreement provides that the purchased assets were acquired
by Advantage RN for a purchase price of up to $425,000, of which (i) $350,000 in cash was paid at
the closing, and (ii) $75,000 is subject to an escrowed holdback as described in the Asset Purchase
Agreement. Additionally, Advantage RN will make rent subsidy payments to TeamStaff Rx totaling
$125,000, consisting of: (i) $25,000 paid at closing, and (ii)&nbsp;an additional $100,000 payable in
10 equal monthly installments beginning on March&nbsp;1, 2010. Under the terms of the Asset Purchase
Agreement, Advantage RN will not assume any debts, obligations or liabilities of TeamStaff Rx nor
will it purchase any accounts receivable outstanding as of the closing date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Condensed financial statement information and results of discontinued operations are as follows:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="72%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000">For the Fiscal Years Ended</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">September 30,</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">September 30,</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">(amounts in thousands)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2008</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Revenues</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">8,342</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">14,766</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Direct expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,537</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,649</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Selling, general and
administrative expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,152</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,142</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Impairment charge-intangible assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,305</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other expense, net</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">79</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net loss</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(4,731</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(2,049</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">There were no tax benefits associated with the losses from these discontinued operations.
</DIV>
<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->F-13<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<!-- xbrl -->

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The following chart details assets and liabilities from all discontinued operations (amounts in
thousands):
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="72%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">September 30,</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">September 30,</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2008</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">ASSETS</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Cash</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">245</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Accounts receivable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">674</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,011</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Other current assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">124</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">102</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Total current assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,043</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,113</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Fixed assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,878</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,859</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Accumulated depreciation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,602</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,464</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Net fixed assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">276</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">395</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Goodwill and intangibles</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">99</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,355</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Other assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Total assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,418</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">3,878</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Current portion capital leases</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">44</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">40</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Accrued payroll</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">237</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">177</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Accrued expenses and other
current liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">111</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">164</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Total current liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">392</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">381</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Long term capital leases</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">39</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">83</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Other long term liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">90</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Total liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">456</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">554</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Activity in the liabilities of discontinued operations is as follows:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="44%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">September 30,</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Expensed</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Paid This</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">September 30,</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2007 Balance</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">This Period</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Period</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2008 Balance</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Current portion capital leases</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">45</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(9</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">40</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Accrued payroll</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">279</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(102</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">177</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Accrued expenses and other
current liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">228</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">135</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(199</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">164</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Capital leases</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">140</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(57</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">83</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other long term liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">123</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(33</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">90</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">815</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">139</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(400</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">554</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="44%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">September 30,</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Expensed</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Paid This</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">September 30,</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2008 Balance</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">This Period</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Period</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2009 Balance</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Current portion capital leases</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">40</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">44</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Accrued payroll</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">177</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">60</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">237</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Accrued expenses and other
current liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">164</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(55</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">111</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Capital leases</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">83</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(44</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">39</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other long term liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">90</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(65</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">554</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">66</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(164</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">456</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Management anticipates that the Company will report a net loss from discontinued operations
through the effective date of the sale to Advantage RN, which will include an estimated charge of
$0.2&nbsp;million for severance to certain TeamStaff Rx employees. Although there are certain conditions
on the collection of amounts that are held in escrow, the Company expects
to settle such matters in the second quarter of the fiscal year ending September&nbsp;30, 2010. In
addition, management estimates that the Company will incur a loss on the disposal of TeamStaff Rx
approximating $0.3&nbsp;million principally from recognition of the remaining unfunded operating lease
payments. The measurement date for recording this liability is December&nbsp;31, 2009. These amounts are
preliminary and subject to change based on future events; the ultimate amount could significantly
differ from these current estimates.
</DIV>
<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->F-14<!-- /Folio -->
</DIV>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<!-- xbrl -->

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<!-- xbrl,n -->



<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>(5)&nbsp;</B><U><B>INCOME TAXES</B></U><B>:</B>
</DIV>

<!-- xbrl,body -->
<DIV align="left" style="font-size: 10pt; margin-top: 10pt">TeamStaff accounts for income taxes in accordance with the &#147;liability&#148; method. Under this method,
deferred tax assets and liabilities are determined based on the difference between the financial
statement and tax bases of assets and liabilities, using enacted tax rates in effect for the year
in which the differences are expected to reverse. Deferred tax assets are reflected on the balance
sheet when it is determined that it is more likely than not that the asset will be realized. This
guidance also requires that deferred tax assets be reduced by a valuation allowance if it is more
likely than not that some or all of the deferred tax asset will not be realized.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">In the fiscal year ended September&nbsp;30, 2006, after an assessment of all available evidence
(including historical and forecasted operating results), management concluded that realization of
the Company&#146;s net operating loss carryforwards (which includes those amounts acquired in previous
years&#146; business combinations, collectively &#147;NOLs&#148;), tax credits and other deferred tax assets,
could not be considered more likely than not. Accordingly, for the fiscal years ended September&nbsp;30,
2009, 2008 and 2007, the Company did not record a tax benefit for NOLs.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Based on similar assessments, the Company increased (decreased)&nbsp;the valuation allowance established
on deferred tax assets by approximately $1.8&nbsp;million and $(0.5) million in 2009 and 2008,
respectively. The increase in the valuation allowance for the fiscal year ended September&nbsp;30,
2009 was principally due to the Federal NOL and the asset impairment charge while the net decrease
of $0.5 in 2008 related to the Federal NOL, offset by a decrease of approximately $1.1 representing adjustments to state NOLs and
other fully reserved deferred tax assets. The primary reason for the NOL generated in 2008 relates
to the realized tax loss (unrealized in 2007) on the sale of the Nursing Innovations discontinued
operation&#146;s assets (see Note 4).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Based on an assessment performed as of September&nbsp;30, 2009 and 2008, the Company has maintained a
full valuation allowance against remaining NOLs and other deferred tax assets; as the realization
of such amounts, at those dates, could not be considered more likely than not. In prospective
periods, there may be reductions to the valuation allowance to the extent that the Company
concludes that it is more likely that not that all or a portion of the deferred tax assets can be
utilized (subject to annual limitations and prior to the expiration of such NOLs), to offset future
periods&#146; taxable income.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">In the fiscal year ended September&nbsp;30, 2009, the Company recognized a tax benefit of $28,000
related to a refund from a state. In the fiscal year ended September&nbsp;30, 2008 the Company recorded
tax expense of $60,000 related to certain estimated state taxes due which could not be offset by an
NOL from those specific states.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">At September&nbsp;30, 2009 the Company had net operating losses of approximately $30.4&nbsp;million, $15.1
million and $.7&nbsp;million for U.S., New Jersey and other states&#146; tax return purposes, respectively,
and unutilized tax credits approximate $1.1&nbsp;million. As a result of previous business combinations
and changes in its ownership, there is a substantial amount of U.S. NOLs that are subject to annual
limitations on utilization. The U.S. NOLs begin to expire in 2021 and continue to expire through
2029.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">An analysis of TeamStaff&#146;s deferred tax asset and liability (including those related to TeamStaff
Rx) is as follows (Amounts in thousands):
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="72%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000">Years Ended September 30,</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2008</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Deferred income tax asset:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net operating loss carry forwards and tax credits</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">12,977</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">12,102</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Workers&#146; compensation reserves</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(115</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(160</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Occupancy leases</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">55</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Pension</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Deferred rent</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">35</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">37</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Accrued liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">335</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">235</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Stock based compensation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">133</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">68</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Fixed and intangible assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(252</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(997</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other items, net</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Valuation allowance</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(13,120</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(11,369</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->F-15<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<!-- xbrl -->

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The significant components of the expense (benefit)&nbsp;for income taxes from continuing
operations are summarized as follows-
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="72%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000">Years Ended September 30,</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">(Amounts in thousands)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2008</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Current expense (benefit)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(28</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">60</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Deferred expense (benefit)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Total expense (benefit)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(28</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">60</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The following table indicates the significant differences between the Federal statutory rates
and TeamStaff&#146;s effective tax rate for continuing operations-
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="72%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000">Years Ended September 30,</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">(Amounts in thousands)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2008</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Federal statutory rate</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">157</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,139</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">State taxes, net</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(28</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">60</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Valuation allowance</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(157</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,139</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(28</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">60</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


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<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>(6)&nbsp;</B><U><B>DEBT</B></U><B>:</B>
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 10pt">On March&nbsp;28, 2008, we entered into an Amended and Restated Loan and Security Agreement dated as of
March&nbsp;28, 2008 (the &#147;Loan Agreement&#148;) with Business Alliance Capital Company (&#147;BACC&#148;), a division
of Sovereign Bank (&#147;Sovereign&#148; or &#147;Lender&#148;). Effective April&nbsp;1, 2008, BACC changed its name to
Sovereign Business Capital. Under the Loan Agreement, the Lender agreed to provide a revolving
credit facility to the Company in an aggregate amount of up to $3,000,000, subject to the further
terms and conditions of the Loan Agreement. The loan is secured by a first priority lien on all of
the Company&#146;s assets. Previously in 2005, the Company and PNC Bank, National Association (&#147;PNC&#148;)
had entered into an $8,000,000 revolving credit facility (&#147;PNC Loan Facility&#148;). Pursuant to the
Loan Agreement, the Lender (i)&nbsp;acquired by assignment from PNC all right, title and interest of PNC
under the PNC Loan Facility, the PNC note and related loan documentation, and (ii)&nbsp;restructured the
PNC Loan Facility into a $3,000,000 revolving credit facility with a 3&nbsp;year term. The Company&#146;s
ability to request loan advances under the Loan Agreement is subject to computation of the
Company&#146;s advance limit and compliance with the covenants and conditions of the loan. The facility
is for a term of 36&nbsp;months and matures on March&nbsp;31, 2011. Interest on amounts due accrue on the
daily unpaid balance of the loan advances at a per annum rate of 0.25% percentage point above the
Prime Rate in effect from time to time, but not less than 5.5% per annum.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The facility is subject to certain restrictive covenants, including minimum debt service coverage
ratio and restrictions on the Company&#146;s ability to, among other things, dispose of certain assets,
engage in certain transactions, incur indebtedness and pay dividends. The Loan Agreement also
provides for customary events of default following which, the Lender may, at its option, accelerate
the amounts outstanding under the Loan Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">In connection with the disposition of the assets of our TeamStaff Rx subsidiary, we were required
to obtain the consent of Sovereign. On January&nbsp;12, 2010 we were granted such consent. As a
condition to such consent, however, Sovereign reduced the maximum amount available under such loan
facility from $3.0&nbsp;million to $2.0&nbsp;million. As of September&nbsp;30, 2009 and 2008, there was no debt
outstanding under the Loan Agreement and unused availability (as defined) totaled $1.7&nbsp;million and
$1.8&nbsp;million, respectively, net of required collateral reserves per the Loan Agreement for certain
payroll and tax liabilities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">In addition, on January&nbsp;11, 2010, we determined that as of September&nbsp;30, 2009, we were not in
compliance with the debt service coverage ratio covenant of the Loan Agreement. The Loan Agreement
provides that following an event of default, Sovereign may, among other remedies provided for in
the Loan Agreement, accelerate the amounts outstanding under the Loan Agreement, take such actions
as it deems necessary to protect its security interest in the collateral, and terminate the Loan
Agreement. In connection with its consent to the sale of the TeamStaff Rx assets and loan
modification, Sovereign waived such non-compliance for the period ended September&nbsp;30, 2009.
Sovereign, however, reserved its rights under the Loan Agreement with respect to any future
non-compliance with the debt service coverage ratio for any future period or any other provision of
the Loan Agreement.
</DIV>
<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->F-16<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<!-- xbrl -->

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<!-- xbrl,n -->



<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>(7)&nbsp;</B><U><B>CAPITAL LEASES</B></U><B>:</B>
</DIV>

<!-- xbrl,body -->
<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The Company leases certain office equipment under non-cancelable capital lease agreements that
expire at various dates through fiscal year 2012. Terms range from 36 to 63&nbsp;months. Interest
rates range from 7.5% to 10.1%. As of September&nbsp;30, 2009 and 2008, the Company has recorded $1.0
million in gross capital leases and accumulated depreciation of $0.9&nbsp;million and $0.8&nbsp;million,
respectively.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Future lease payments at September&nbsp;30, 2009 are as follows (amounts in thousands):
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="86%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Years Ending September&nbsp;30,</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">2010</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">24</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">2011</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">2012</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total minimum lease payments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">53</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Amounts representing interest</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(6</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">47</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Less current portion</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(20</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Long term portion</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">27</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<!-- xbrl,n -->



<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>(8)&nbsp;</B><U><B>OTHER CURRENT ASSETS</B></U><B>:</B>
</DIV>

<!-- xbrl,body -->
<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Other current assets at September&nbsp;30, 2009 and 2008 consist of the following (amounts in
thousands):
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="72%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2008</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Miscellaneous receivables</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">87</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">381</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Prepaid insurance</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">57</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">66</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Miscellaneous prepaid expense</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">34</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Security deposits</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Prepaid income taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">43</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">32</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">33</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">257</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">505</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<!-- xbrl,n -->



<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>(9)&nbsp;</B><U><B>ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES</B></U><B>:</B>
</DIV>

<!-- xbrl,body -->
<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Accrued expenses and other current liabilities at September&nbsp;30, 2009 and 2008 consist of the
following (amounts in thousands):
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="66%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2008</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Accrued benefits and incentives</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">406</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">482</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Accrued bonus</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">588</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Accrued interest</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">75</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">75</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Accrued occupancy</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">72</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Accrued payroll taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">70</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">66</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Accrued professional fees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">487</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">297</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">103</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">330</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,241</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,910</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>

<!-- xbrl,n -->



<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>(10)&nbsp;</B><U><B>COMMITMENTS AND CONTINGENCIES</B></U><B>:</B>
</DIV>

<!-- xbrl,body -->
<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><U><B>Potential Contractual Billing Adjustments</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">At September&nbsp;30, 2009, TeamStaff GS is seeking approval from the Federal government for gross
profit on retroactive billing rate increases associated with certain government contracts at which
it has employees staffed on contract assignments. These adjustments are due to changes in the
contracted wage determination rates for these contract employees. A wage determination is the
listing of wage rates and fringe benefit rates for each classification of laborers whom the
Administrator of the Wage and Hour Division of the U.S. Department of Labor (&#147;DOL&#148;) has determined
to be prevailing in a given locality. Contractors performing services for the Federal government
under certain contracts are required to pay service employees in various classes no less than the
wage rates and fringe benefits found prevailing in these localities. An audit by the DOL at one of
the facilities revealed that notification, as required by contract, was not provided to TeamStaff
GS in order to effectuate the wage increases in a timely manner. Wages for contract employees
currently on assignment have been adjusted prospectively to the prevailing rate and hourly billing
rates to the DVA have been increased accordingly. During the fiscal year ended September&nbsp;30, 2008,
TeamStaff recognized nonrecurring revenues of $10.8&nbsp;million and direct costs of $10.1&nbsp;million,
based on amounts that are contractually due under its arrangements with the Federal agencies. At
September&nbsp;30, 2009, the amount of the remaining accounts receivable with the DVA approximates $9.3
million. The Company has been and continues to be in discussions with representatives of the DVA
regarding the matter and anticipates resolution during the second quarter of fiscal 2010.
TeamStaff is currently in the process of negotiating a final amount related to gross profit on
these adjustments. As such, there may be additional revenues recognized in future periods once the
approval for such additional amounts is obtained. The ranges of additional revenue and gross profit
are estimated to be between $0.4&nbsp;million and $0.6&nbsp;million. At present, the Company expects to
collect such amounts during fiscal 2010. Because these amounts are subject to government review,
no assurances can be given that we will receive any additional
billings from our government contracts or that if additional amounts are received, that the amount
will be within the range specified above.
</DIV>
<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->F-17<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<!-- xbrl -->

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><U><B>Leases</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Minimum payments including those of discontinued businesses, net of expected sublease payments,
under non-cancelable operating lease obligations at September&nbsp;30, 2009 are as follows (amounts in
thousands):
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="86%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD style="border-bottom: 1px solid #000000">Years Ending September&nbsp;30,</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 10pt">
<TD>&nbsp;</TD>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2010</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">474</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2011</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">285</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2012</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">132</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2013</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">85</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2014</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">88</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2015</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">60</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>1,124</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Rent expense, net of sublease income, under all operating leases in fiscal year ended
September&nbsp;30, 2009, was $483,000, of which $148,000 is attributed to continuing operations and
$335,000 is attributed to discontinued operations. Rent expense, net of sublease income, under all
operating leases in fiscal year ended September&nbsp;30, 2008, was $542,000, of which $167,000 is
attributed to continuing operations and $375,000 is attributed to discontinued operations. At
September&nbsp;30, 2009 there is one remaining occupancy sublease.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">As discussed in Note 4, as part of the sale of TeamStaff Rx, Advantage RN will have the right to
use, through February&nbsp;28, 2011, the premises located in Clearwater, Florida that was used by
TeamStaff Rx for its principal executive offices. In connection with such use, Advantage RN will
make rent subsidy payments to TeamStaff Rx totaling $125,000, consisting of (i) $25,000 payable at
the closing and (ii)&nbsp;an additional $100,000 payable in 10 equal monthly installments of $10,000
payable on the first day of each calendar month beginning on March&nbsp;1, 2010 until December&nbsp;1, 2010.
In addition, the Company anticipates incurring a loss on the disposal of TeamStaff Rx principally
from recognition of the remaining unfunded operating lease payments at this facility. The
measurement date for recording this liability is December&nbsp;31, 2009.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><U><B>Prepaid Workers&#146; Compensation</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">From November&nbsp;17, 2003 through April&nbsp;14, 2009, inclusive, TeamStaff&#146;s workers&#146; compensation
insurance program was provided by Zurich American Insurance Company (&#147;Zurich&#148;). This program
covered TeamStaff&#146;s temporary, contract and corporate employees. This program was a fully insured,
guaranteed cost program that contained no deductible or retention feature. The premium for the
program was paid monthly based upon actual payroll and is subject to a policy year-end audit.
Effective April&nbsp;15, 2009, TeamStaff entered into a partially self-funded workers&#146; compensation
insurance program with a national insurance carrier for the premium year April&nbsp;15, 2009 through
April&nbsp;14, 2010. The Company will pay a base premium plus actual losses incurred, not to exceed
certain stop-loss limits. The Company is insured for losses above these limits, both per occurrence
and in the aggregate. The Company accrues for estimated claims incurred based on data provided by
its insurance carrier.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">As part of the Company&#146;s discontinued PEO operations, TeamStaff had a workers&#146; compensation program
with Zurich, which covered the period from March&nbsp;22, 2002 through November&nbsp;16, 2003, inclusive.
Payments for the policy were made to the trust monthly based on projected claims for the policy
period. Interest on all assets held in the trust is credited to TeamStaff. Payments for claims and
claims expenses are made from the trust. From time-to-time, trust assets have been refunded to the
Company based on Zurich&#146;s and management&#146;s overall assessment of claims experience and historical
and projected settlements. In June&nbsp;2009 and March&nbsp;2008, Zurich reduced the collateral requirements
on outstanding workers&#146; compensation claims and released $114,000 and $350,000, respectively, in
trust account funds back to the Company. The final amount of trust funds that could be refunded to
the Company is subject to a number of uncertainties (e.g. claim settlements and experience, health
care costs, the extended statutory filing periods for such claims); however, based on a third
party&#146;s study of claims experience, TeamStaff estimates that at September&nbsp;30, 2009, the remaining
prepaid asset of $0.3&nbsp;million will be received within the next twelve to thirty-six months. A
portion of this is reflected on TeamStaff&#146;s balance sheet as of September&nbsp;30, 2009 as a current
asset, in addition to approximately $0.2&nbsp;million related to current policy deposits.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">As of September&nbsp;30, 2009 the adequacy of the workers&#146; compensation reserves (which are offset
against the trust fund balances in prepaid assets) was determined, in management&#146;s opinion, to be
reasonable. In determining our reserves we rely in part upon information regarding loss data
received from our workers&#146; compensation insurance carriers that may include
loss data for claims incurred during prior policy periods. In addition, these reserves are for
claims that have not been sufficiently developed and such variables as timing of payments and
investment returns thereon are uncertain or unknown, therefore actual results may vary from current
estimates. TeamStaff will continue to monitor the development of these reserves, the actual
payments made against the claims incurred, the timing of these payments, the interest accumulated
in TeamStaff&#146;s prepayments and adjust the related reserves as deemed appropriate.
</DIV>
<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->F-18<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><U><B>Payroll Taxes </B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">TeamStaff has received notices from the Internal Revenue Service (&#147;IRS&#148;) claiming taxes, interest
and penalties due related to payroll taxes predominantly from its former PEO operations which were
sold in fiscal 2003. TeamStaff has also received notices from the IRS reporting overpayments of
taxes. Management believes that these notices are predominantly the result of misapplication of
payroll tax payments between its legal entities. If not resolved favorably, the Company may incur
interest and penalties. Until the sale of certain assets related to the former PEO operations,
TeamStaff operated through 17 subsidiaries, and management believes that the IRS has not correctly
identified payments made through certain of the different entities, therefore leading to the
notices. To date, TeamStaff has been working with the IRS to resolve these discrepancies and has
had certain interest and penalty claims abated. TeamStaff has also received notices from the Social
Security Administration claiming variances in wage reporting compared to IRS transcripts.
TeamStaff believes the notices from the Social Security Administration are directly related to the
IRS notices received. TeamStaff had retained the services of Ernst &#038; Young LLP as a consultant to
assist in resolving certain of these matters with the IRS and Social Security Administration.
TeamStaff believes that after the IRS applies all the funds correctly, any significant interest and
penalties will be abated; however, there can be no assurance that each of these matters will be
resolved favorably. In settling various years for specific subsidiaries with the IRS, the Company
has received refunds for those specific periods; however, as the process of settling and concluding
on other periods and subsidiaries is not yet completed, the potential exists for related penalties
and interest. Based upon the most recent correspondence from the IRS and an assessment of open
periods, we believe that our liability of $1.1&nbsp;million at September&nbsp;30, 2009 (recorded in accounts
payable) is fairly stated. Interest expense would accrue on such amounts through the ultimate
payment date, unless waived by the IRS. In fiscal 2009, the Company paid $1.1&nbsp;million, related to
this matter.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Based on an assessment of periods settled and the status of open periods under review by the IRS,
management reduced its estimated liability by $0.7&nbsp;million in 2008. Such amount, accounted for as
a change in estimate, is included as a component of other income (expense)&nbsp;in the accompanying 2008
statement of operations. Management believes that the ultimate resolution of these remaining
payroll tax matters will not have a significant adverse effect on its financial position or future
results of operations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><U><B>Legal Proceedings</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>RS Staffing Services, Inc.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">On April&nbsp;17, 2007, a Federal Grand Jury subpoena was issued by the Northern District of Illinois to
the Company&#146;s wholly-owned subsidiary, TeamStaff GS, formerly known as RS Staffing Services,
requesting production of certain documents dating back to 1997, prior to the time the Company
acquired RS Staffing Services. The subpoena stated that it was issued in connection with an
investigation of possible violations of Federal criminal laws and related crimes concerning
procurement at the DVA. According to the cover letter accompanying the subpoena, the U.S.
Department of Justice, Antitrust Division (&#147;DOJ&#148;), along with the DVA, Office of the Inspector
General, are responsible for the current criminal investigation. RS Staffing Services provides
contract staffing at certain DVA hospitals that may be part of the investigation. The return date
for documents called for by the subpoena was May&nbsp;17, 2007. In connection with the same
investigation, agents with the DVA, Office of Inspector General, executed a search warrant at the
Monroe, Georgia offices of RS Staffing Services.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The government has advised TeamStaff that the DOJ has no intent to charge TeamStaff or any of its
subsidiaries or employees in connection with the Federal investigation of contract practices at
various government owned/contractor operated facilities. TeamStaff remains committed to cooperate
with the DOJ&#146;s continued investigation of other parties.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The Company originally acquired RS Staffing Services in June&nbsp;2005. As part of the purchase price
of the acquisition, the Company issued to the former owners of RS Staffing Services a $3.0&nbsp;million
promissory note, of which $1.5&nbsp;million and interest of $150,000 was paid in June&nbsp;2006. On May&nbsp;31,
2007, the Company sent a notice of indemnification claim to the former owners for costs that have
been incurred in connection with the investigation. Effective June&nbsp;1, 2007, the Company and former
owners of RS Staffing Services reached an agreement to extend the due date from June&nbsp;8, 2007 to
December&nbsp;31, 2008 with respect to the remaining $1.5&nbsp;million note payable and accrued interest
payable. Such agreement has been extended to February&nbsp;28, 2010. As of September&nbsp;30 2009, the
amount has not been settled. The Company recognized expenses related to legal representation and
costs incurred in connection with the investigation in the amount of $21,000
and $219,000 during fiscal 2009 and 2008, respectively, as a component of other income (expense).
Cumulative costs related to this matter approximate $1.7&nbsp;million. Pursuant to the acquisition
agreement with RS Staffing Services, the Company has notified the former owners of RS Staffing
Services that it is the Company&#146;s intention to exercise its right to setoff the payment of such
expenses against the remaining principal and accrued interest due to the former owners of RS
Staffing Services.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The Company will pursue the recovery as a right of offset in future periods. Management has a good
faith belief that the Company will recover such amounts; however, generally accepted accounting
principles preclude the Company from recording an offset to the note payable to the former owners
of RS Staffing Services until the final amount of the claim is settled and determinable. At
present, no assurances can be given that the former owners of RS Staffing Services would not pursue
action against us or that the Company will be successful in the offset of such amounts against the
outstanding debt and accrued interest from notice date forward, if any. Accordingly, the Company
has expensed costs incurred related to the investigation through September&nbsp;30, 2009.
</DIV>
<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->F-19<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><b><U>Other Matters</U></b>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">On October&nbsp;2, 2008, the United States Equal Employment Opportunity Commission (&#147;EEOC&#148;) issued a
subpoena to TeamStaff GS regarding the alleged wrongful termination of certain employees who were
employed at a federal facility staffed by TeamStaff GS contract employees. The wrongful termination
is alleged to have occurred when the former employees were terminated because they could not
satisfy English proficiency requirements imposed by the Federal government. TeamStaff GS has
produced all documents that it believes were required by the subpoena and has submitted its
position statement to the EEOC. It is unclear, at present, if or when the EEOC will respond.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">As a commercial enterprise and employer, we are subject to various claims and legal actions in the
ordinary course of business. These matters can include professional liability,
employment-relations issues, workers&#146; compensation, tax, payroll and employee-related matters and
inquiries and investigations by governmental agencies regarding our employment practices. We are
not aware of any pending or threatened litigation that we believe is reasonably likely to have a
material adverse effect on our results of operations, financial position or cash flows.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">In connection with its medical staffing business, TeamStaff is exposed to potential liability for
the acts, errors or omissions of its contract medical employees. The professional liability
insurance policy provides up to $5,000,000 aggregate coverage with a $2,000,000 per occurrence
limit. Although TeamStaff believes the liability insurance is reasonable under the circumstances
to protect it from liability for such claims, there can be no assurance that such insurance will be
adequate to cover all potential claims.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">TeamStaff is engaged in no other litigation, the effect of which would be anticipated to have a
material adverse impact on TeamStaff&#146;s results of operations, financial position or cash flows.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><U><B>Employment Agreements </B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">From time-to-time, we enter into employment agreements with certain key executives which provide
for fixed compensation, criterion for earning bonuses and other incentives and, in certain
instances, issuance of share based equity grants. These agreements generally continue until
terminated by the employee or the Board of Directors or, upon the occurrence of defined certain
events or circumstances (including a defined change in control), and provide for salary continuance
for specified periods of generally no more than a year.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">During the fiscal year ended September&nbsp;30, 2009, the Company terminated certain management and
staff personnel, and as a result, incurred severance related expenses of approximately $169,000, of which $165,000 is included in
results of discontinued operations; at September&nbsp;30, 2009 the remaining liability from these arrangements was
approximately $108,000, which is included in accrued expenses.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">During the fiscal year ended September&nbsp;30, 2008, the Company terminated certain executives,
management and staff personnel, and as a result, incurred severance related expenses of
approximately $0.2&nbsp;million (included in selling, general and administrative expense); at September
30, 2008 the remaining liability from these arrangements was approximately $74,000, which was
included in accrued expenses.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><U><B>Government Assignment of Contracts</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Availability of funds under the Sovereign line of credit is directly related to the successful
assignment of certain accounts receivable. Certain government accounts of TeamStaff GS are required
to execute &#147;Acknowledgements of Assignment.&#148; There can be no assurance that every TeamStaff GS
government account will execute the documentation to effectuate the
assignment and secure availability. The failure of government third parties to sign the required
documentation could result in a decrease in availability under the existing line of credit.
</DIV>

<!-- xbrl,n -->



<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>(11)&nbsp;</B><U><B>SHAREHOLDERS&#146; EQUITY</B></U><B>:</B>
</DIV>

<!-- xbrl,body -->
<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><U><B>Stock Warrants</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">During the fiscal year ended September&nbsp;30, 2009, TeamStaff granted no warrants, no warrants expired
unexercised and no warrants were exercised. During the fiscal year ended September&nbsp;30, 2008,
TeamStaff granted no warrants, 149,500 warrants expired unexercised and no warrants were exercised.
At September&nbsp;30, 2009, there are no warrants outstanding.
</DIV>

<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->F-20<!-- /Folio -->
</DIV>



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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<!-- xbrl -->

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><U><B>Stock Option Plans</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>2000 Employee Stock Option Plan</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">During 2000, the Board of Directors and shareholders approved the adoption of the 2000 Employees
Stock Option Plan (the &#147;2000 Plan&#148;) to provide for the grant of options to purchase up to 1,714,286
shares of TeamStaff&#146;s common stock to all employees, including senior management. The 2000 Plan
replaces the 1990 Employee Plan and Senior Management Plans, both of which expired. Under the
terms of the 2000 Plan, options granted thereunder may be designated as options which qualify for
incentive stock option treatment (&#147;ISOs&#148;) under Section&nbsp;422A of the Code, or options which do not
so qualify (&#147;Non-ISO&#146;s&#148;). As of September&nbsp;30, 2009 and 2008, there were 4,500 and 17,000 options,
respectively, outstanding under the 2000 Plan.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The 2000 Plan is administered by the Management Resources and Compensation Committee of the Board
of Directors (&#147;The Compensation Committee&#148;). The Compensation Committee has the discretion to
determine the eligible employees to whom, and the times and the price at which, options will be
granted; whether such options shall be ISOs or Non-ISOs, subject to applicable law; the periods
during which each option will be exercisable; and the number of shares subject to each option. The
Compensation Committee has full authority to interpret the 2000 Plan and to establish and amend
rules and regulations relating thereto.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Under the 2000 Plan, the exercise price of an option designated as an ISO shall not be less than
the fair market value of the common stock on the date the option is granted. However, in the event
an option designated as an ISO is granted to a ten percent (10%) shareholder, as defined, such
exercise price shall be at least 110% of such fair market value. Exercise prices of Non-ISO options
may be less than such fair market value.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The aggregate fair market value of shares subject to options granted to a participant, which are
designated as ISOs and which become exercisable in any calendar year shall not exceed $100,000.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The Compensation Committee may, in its sole discretion, grant bonuses or authorize loans to or
guarantee loans obtained by an optionee to enable such optionee to pay the exercise price or any
taxes that may arise in connection with the exercise or cancellation of an option. The
Compensation Committee can also permit the payment of the exercise price in the common stock of the
Company held by the optionee for at least six months prior to exercise.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Non-Executive Director Plan</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">In fiscal year 2000, the Board of Directors and stockholders approved the adoption of the 2000
Non-Executive Director Stock Option Plan (the &#147;2000 Director Plan&#148;) to provide for the grant of
options to non-employee directors of TeamStaff. Under the terms of the 2000 Director Plan, each
non-executive director is automatically granted an option to purchase 5,000 shares upon joining the
Board and each September lst, pro rata, based on the time the director has served in such capacity
during the previous year. However, the granting of options to non-employee directors was
suspended for fiscal 2007, 2008 and 2009. The 2000 Director Plan also provides that directors,
upon joining the Board, and for one (1)&nbsp;year thereafter, will be entitled to purchase restricted
stock from TeamStaff at a price equal to 80% of the closing bid price on the date of purchase up to
an aggregate purchase price of $50,000. For fiscal years 2005 through 2009 there were no purchases
of discounted restricted stock. The 2000 Director Plan replaced the previous Director Plan that
expired in April&nbsp;2000. As of September&nbsp;30, 2009 and 2008, there were 10,625 and 15,625 options,
respectively, held by directors outstanding.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Under the 2000 Director Plan, the exercise price for options granted shall be 100% of the fair
market value of the common stock on the date of grant. Until otherwise provided, the exercise
price of options granted under the 2000 Director Plan must be paid at the time of exercise, either
in cash, by delivery of shares of common stock of TeamStaff or by a combination of each. The term
of each option commences on the date it is granted and unless terminated sooner as provided in the
2000 Director Plan, expires five (5)&nbsp;years from the date of grant. The Compensation Committee has
no discretion to determine which non-executive director will receive options or the number of
shares subject to the option, the term of the option or the exercisability of the option. However,
the Compensation Committee will make all determinations of the interpretation of the 2000 Director
Plan. Options granted under the 2000 Director Plan are not qualified for incentive stock option
treatment.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The fair value of previously issued options at the date of grant historically was estimated using
the Black-Scholes option pricing model. The Company took into consideration pertinent accounting
guidance and SEC Staff Accounting Bulletin No.&nbsp;107 when reviewing and updating assumptions. The
expected volatility was based upon historical volatility of our stock and other contributing
factors. The expected term was based upon observation of actual time elapsed between date of grant
and exercise of options for all employees. Previously such assumptions were determined based on
historical data.
</DIV>



<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->F-21<!-- /Folio -->
</DIV>

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<!-- xbrl -->

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The following tables summarize the activity in TeamStaff&#146;s various stock option plans for the years
ended September&nbsp;30, 2009 and 2008:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="44%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Weighted</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Average</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Aggregate</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Weighted</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Remaining</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Pretax</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Number of</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Average</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Contractual</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Intrinsic</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Shares</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Exercise Price</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Term</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Value</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Options
outstanding,
September&nbsp;30, 2007</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">59,125</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">8.80</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Granted</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Exercised</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cancelled</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(26,500</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">9.47</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Options
outstanding,
September&nbsp;30, 2008</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">32,625</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">8.09</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Granted</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Exercised</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cancelled</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(17,500</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">9.12</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Options
outstanding,
September&nbsp;30, 2009</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,125</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">6.30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">As of September&nbsp;30, 2009 and 2008, all options had vested and were exercisable.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The aggregate intrinsic value in the table above represents the total pretax intrinsic value (i.e.,
the difference between the Company&#146;s closing stock price on the last trading day of the fiscal year
and the exercise price, times the number of shares) that would have been received by the option
holders had all option holders exercised their in the money options on those dates.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">This amount changes based on the fair market value of the Company&#146;s stock.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>2006 Long Term Incentive Plan (&#147;2006 Plan&#148;)</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The Board of Directors adopted the 2006 Plan on January&nbsp;17, 2006. The shareholders approved the
2006 Plan at the annual meeting on April&nbsp;27, 2006. The Company reserved an aggregate of 5,000,000
shares of common stock for issuance under the 2006 Plan. The maximum number of shares of common
stock that may be delivered to participants under the 2006 Plan equals the sum of: (a)&nbsp;5,000,000
shares of common stock; (b)&nbsp;any shares subject to awards granted under the 2000 Plan and the 2000
Director Plan (collectively, the &#147;2000 Plans&#148;), which are forfeited, expired, canceled or settled
in cash without delivery of such shares to the participant or otherwise is terminated without a
share issuance; (c)&nbsp;any shares tendered by participants or withheld in payment of the exercise
price of options or to satisfy withholding taxes under the 2000 Plans; and (d)&nbsp;any shares
repurchased with the proceeds of options exercised under the 2000 Plans.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><I>Administration</I>. The 2006 Plan is administered by the Compensation Committee. The 2006 Plan
authorizes the Compensation Committee to select those participants to whom awards may be granted,
to determine whether and to what extent awards are granted, to determine the number of shares of
common stock or other considerations to be covered by each award, to determine the terms and
conditions of awards, to amend the terms of outstanding awards, and to take any other action
consistent with the terms of the 2006 Plan as the Compensation Committee deems appropriate.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><I>Terms and Conditions of Awards</I>. The Compensation Committee is authorized to make any type of award
to a participant that is consistent with the provisions of the Plan. Awards may consist of options,
stock appreciation rights, restricted stock, restricted stock units, performance shares, cash
awards or any combination of these types of awards.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Subject to the terms of the 2006 Plan, the Compensation Committee determines the provisions, terms
and conditions of each award. The Compensation Committee may grant awards subject to vesting
schedules or restrictions and contingencies in the company&#146;s favor. However, the awards may be
subject to acceleration such that they become fully vested, exercisable and released from
any restrictions or contingencies upon the occurrence of a change of control (as defined in the
2006 Plan). The Compensation Committee may provide that stock-based awards earn dividends or
dividend equivalents, which may be paid in cash or shares or may be credited to
an account designated in the name of the participants. Participants may also be required or
permitted to defer the issuance of shares or cash settlements under awards including under other
deferred compensation arrangements of the company. Each option granted under the 2006 Plan will be
designated as either an incentive stock option or a non-statutory stock option. No option or stock
appreciation right may be granted with a term of more than 10&nbsp;years from the date of grant.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Performance shares or cash awards will depend on achievement of performance goals based on one
or more performance measures determined by the Compensation Committee over a performance period as
prescribed by the Compensation
Committee of not less than one year and not more than five years. Performance goals may be
established on a corporate-wide basis or as to one or more business units, divisions or
subsidiaries, and may be in either absolute terms or relative to the performance of one or more
comparable companies on an index covering multiple companies. &#147;Performance measures&#148; means criteria
established by the Compensation Committee from time to time prior to granting the performance
shares or cash awards.
</DIV>

<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->F-22<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<!-- xbrl -->

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><I>Exercise Price</I>. The 2006 Plan authorizes the Compensation Committee to grant options and stock
appreciation rights at an exercise price of not less than 100% of the fair market value of the
shares on the date of grant. The Compensation Committee has the right to provide post-grant
reduction in exercise price to reflect any floating index as specified in an award agreement. The
exercise price is generally payable in cash, check, surrender of pre-owned shares of common stock,
broker-dealer exercise and sale, or by such other means determined by the Compensation Committee.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><I>Option Repricing Prohibited</I>. The exercise price for any outstanding option or stock appreciation
right may not be decreased after the date of grant, nor may any outstanding option or stock
appreciation right be surrendered as consideration for the grant of a new option or stock
appreciation right with a lower exercise price.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">A summary of activity in restricted stock is as follows:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="72%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Weighted</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Number Of</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Average Grant-</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Shares</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Date Fair Value</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Restricted stock outstanding,
September&nbsp;30, 2007</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">55,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">5.32</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Granted</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">147,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2.58</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Issued</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(21,250</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">3.32</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cancelled</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(28,334</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">4.58</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Restricted stock outstanding,
September&nbsp;30, 2008</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">152,916</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">3.09</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Granted</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">341,612</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.76</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Issued</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(93,278</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">3.11</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cancelled</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(10,000</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.70</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Restricted stock outstanding,
September&nbsp;30, 2009</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">391,250</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.96</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">During the year ended September&nbsp;30, 2009, TeamStaff granted awards of restricted stock under its
2006 Plan. An aggregate of 341,612 restricted shares were awarded to employees and non-employee
directors at the closing price on the award dates. Of this award, 16,612 shares vested
immediately, resulting in a charge of $25,000; 10,000 shares were cancelled; and 315,000 shares
will vest upon satisfaction of certain performance criteria. In
addition, $196,000 related to current and prior
periods&#146; grants was recognized as an expense. The Company will not recognize expense on 315,000
shares of these awards until it is probable that these performance conditions will be achieved.
Such charges could be material in future periods. During the fiscal year ended September&nbsp;30, 2009,
10,000 unvested shares were cancelled. As of September&nbsp;30, 2009, approximately $282,000 of
unrecognized compensation costs related to non-vested non-performance based restricted stock awards
is expected to be recognized in future periods.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">During the year ended September&nbsp;30, 2008, TeamStaff granted awards of restricted stock under its
2006 Plan. An aggregate of 147,500 restricted shares were awarded to employees and non-employee
directors at the closing price on the award dates. Of this award, 47,500 shares vested
immediately, resulting in a charge of $115,000; 23,750 shares vested at September&nbsp;30, 2008 based
upon satisfaction of certain performance criteria, resulting in a charge of $59,000 (included in
accrued expenses at that date); and 76,250 shares will vest upon satisfaction of certain
performance criteria. In addition, $44,000 related to prior periods&#146; grants was recognized as an
expense. Of the restricted shares awarded in fiscal 2008, 30,000 shares were awarded to the
Company&#146;s non-employee directors and are subject to vesting as follows: fifty percent of all such
shares of restricted stock shall vest when the volume-weighted average share price of the Company&#146;s
common stock over any twenty consecutive trading days exceeds the price on the date of grant by
20%, with the remaining fifty percent vesting one year thereafter. As permitted, the Company will
not recognize expense on 76,250 shares of these awards until it is probable that these performance
conditions will be achieved. Such charges could be material in future periods. During the fiscal
year ended September&nbsp;30, 2008, 28,334 unvested shares were cancelled. As of September&nbsp;30, 2008,
approximately $23,000 of unrecognized compensation costs related to non-vested non-performance
based restricted stock awards is expected to be recognized during fiscal 2009.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">At
September 30, 2009 and 2008 the number of unvested shares under this
program totaled 391,250 and 82,084, respectively. At September&nbsp;30, 2009 the Company had reserved 6,160,409 shares of common stock for issuance under
various option, shares and warrant plans and arrangements.
</DIV>

<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->F-23<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<!-- xbrl -->

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">During the fiscal year ended September&nbsp;30, 2009, the Company did not issue any equity grants of
securities to its board members. However, on October&nbsp;13, 2009, the Board of Directors approved the
issuance of 42,500 shares of restricted stock to the Company&#146;s non-employee directors. Such shares
were vested on the grant date. The estimated expense that will be recognized in the first quarter
of fiscal 2010 approximates $57,000.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Subsequent to September&nbsp;30, 2009, the Company approved a grant of options to purchase 30,000 shares
of Common Stock to the Company&#146;s Chief Executive Officer in connection with his execution of a new
employment agreement. The options awarded to Mr.&nbsp;Filippelli are exercisable for a period of five
years at an exercise price of $1.00 per share. There will be a charge
associated with this grant of approximately $14,000 in fiscal 2010. Such options will vest and become exercisable upon
the termination date of this new employment agreement. In addition, on January&nbsp;14, 2010, the
Company granted options to purchase 75,000 shares of its Common Stock to the Company&#146;s Chief
Financial Officer in connection with the entering into of a new employment agreement on such date.
Fifty percent of the options awarded to Ms.&nbsp;Presuto vest on the date of issuance and the balance
vests on September&nbsp;30, 2010, provided Ms.&nbsp;Presuto is in the Company&#146;s employ as of such date. The
options have a per share exercise price of $1.06 and are exercisable
for a period of five years. There will be a charge associated with
this grant of approximately $37,000 in fiscal 2010.
</DIV>


<!-- xbrl,n -->
<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>(12) </B><U><B>QUARTERLY FINANCIAL DATA (UNAUDITED):</B></U>
</DIV>

<!-- xbrl,body -->
<DIV align="left" style="font-size: 10pt; margin-top: 10pt">(Amounts in thousands, except per share data)
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="44%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">First Quarter</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Second Quarter</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Third Quarter</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Fourth Quarter</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Fiscal Year 2009</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net revenues</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">12,013</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">11,472</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">11,344</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">11,192</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Gross profit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,122</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,715</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,719</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,446</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Income (loss)&nbsp;from operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">587</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">72</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(42</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(231</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Income (loss)&nbsp;from continuing
operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">569</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">53</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">126</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(372</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Loss from discontinued
operations (1)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(521</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(612</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(659</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(2,939</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net income (loss)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">48</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(559</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(533</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3,311</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Earnings (loss)&nbsp;per share from
continuing operations &#151; Basic</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.12</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.01</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.03</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(0.08</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net earnings (loss)&nbsp;per share &#151; Basic</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.01</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(0.11</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(0.11</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(0.68</TD>
    <TD nowrap>)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="44%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">First Quarter</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Second Quarter</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Third Quarter</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Fourth Quarter</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Fiscal Year 2008</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net revenues (2)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">10,465</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">13,666</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">14,634</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">19,754</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Gross profit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,700</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,195</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,648</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,401</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Income from operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">469</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">735</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">929</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">731</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Income from continuing
operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">347</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">641</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,184</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,023</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Loss from discontinued
operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(312</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(577</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(643</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(517</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">35</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">64</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">541</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">506</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Earnings per share from continuing
operations &#151; Basic and Diluted</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.07</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.13</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.21</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net earnings per share &#151; Basic
and Diluted</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.01</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.01</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.11</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.11</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>




<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR style="font-size: 6pt">
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="96">&nbsp;</TD>
</TR>
<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Reflects impairment charge in the fourth quarter on TeamSTaff Rx intangible assets of $2.3
million.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>Revenues for the 2nd, 3rd and 4th quarter of fiscal 2008 include retroactive billings for
Teamstaff GS in the amount of $1.5&nbsp;million, $2.1&nbsp;million and $7.2&nbsp;million, respectively, described in Note 10.</TD>
</TR>

</TABLE>


<!-- xbrl,n -->
<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>(13) </B><U><B>EMPLOYEE BENEFIT PLANS: </B></U>
</DIV>

<!-- xbrl,body -->
<DIV align="left" style="font-size: 10pt; margin-top: 10pt">As of September&nbsp;30, 2009, TeamStaff and its subsidiaries currently maintain a defined contribution
and a supplemental pension plan.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">As of January&nbsp;1, 2004, TeamStaff adopted the TeamStaff 401(k) Plan (the &#147;401(k) Plan&#148;) for the
benefit of its eligible employees. Any TeamStaff corporate (non worksite) employee is immediately
eligible upon hire for participation in the 401(k) Plan. TeamStaff may provide a discretionary
matching contribution of 25% of each of the first 4% of a participant&#146;s elective contributions
under the 401 (k)&nbsp;Plan. TeamStaff recorded related expense of $13,000 and $18,000 respectively, in
fiscal 2009 and 2008. A participant is always fully vested in his or her elective contributions
and vest in Company matching contributions over a four year period.
</DIV>

<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->F-24<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<!-- xbrl -->

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Effective October&nbsp;1, 2000, TeamStaff adopted a non-qualified, supplemental retirement plan covering
certain corporate officers of TeamStaff (the &#147;SERP&#148;). Under the terms of the SERP, a participant
received a benefit sufficient to provide lump sum annual payments equal to approximately one-third
of the participant&#146;s base salary on the date the participant became a participant. Payment of
benefits was to commence when the participant reached 65&nbsp;years of age. The benefit under the SERP
was subject to a seven-year vesting schedule (0%,0%,20%,40%, 60%, 80%, 100%), based on the
participant&#146;s original date of employment with TeamStaff and was contingent on the participant&#146;s
reaching age 55; provided, however, a participant&#146;s benefit became fully vested upon a change of
control, as defined in the SERP, if within two years of the change of control there was a material
change in the participant&#146;s job title or responsibilities or if the participant&#146;s employment was
terminated by TeamStaff for any reason other than conviction for theft or embezzlement from
TeamStaff. Additionally, if a participant retired by means of total disability (as defined in the
SERP), the participant&#146;s benefit became fully vested and benefit payments would have commenced as
of the disability retirement date. The SERP did not provide a death benefit. At inception,
TeamStaff&#146;s former Chief Executive Officer and its former Chief Financial Officer were the only
SERP participants.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">SERP participants were also provided with a split dollar life insurance policy (&#147;Policy&#148;), insuring
the life of the participant until the participant reached age 65. Although the participant was the
owner of the Policy, TeamStaff paid all Policy premiums. Each participant collaterally assigned the
Policy to TeamStaff to secure repayment of the premiums through either its cash surrender value or
the Policy proceeds. The participant&#146;s right to the Policy vested in accordance with the same
schedule as the SERP and with similar change of control provisions. Upon the participant&#146;s
65<SUP style="font-size: 85%; vertical-align: text-top">th</SUP> birthday (and in certain other circumstances provided by the Policy agreement),
TeamStaff was to release the collateral assignment of the Policy provided the participant released
TeamStaff from all obligations the Company may have had with respect to the participant (including
those under the SERP).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The following table illustrates TeamStaff&#146;s changes in benefit costs and pension benefit
obligations for the fiscal years ended September&nbsp;30, 2009 and 2008 under the SERP:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="72%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000">Fiscal Year</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">(Amounts in thousands)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2008</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Change in benefit obligation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Benefit obligation at beginning of year</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">70</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">346</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Service cost</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Interest Cost</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Benefits paid</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(70</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(280</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Actuarial loss</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Benefit obligation at end of year</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">70</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Change in plan assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Company contribution</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">70</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">280</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Benefits paid</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(70</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(280</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Fair value of plan assets at end of year</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Reconciliation of funded status</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Funded status</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(70</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Unrecognized net actuarial (gain)/loss</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net amount recognized</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(42</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Amounts recognized in the consolidated balance sheets consist of:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Accrued benefit liability</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(70</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Accumulated other comprehensive income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net amount recognized</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(42</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Discount rate used to determine benefit cost and obligations:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">3.00</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">3.00</TD>
    <TD nowrap>%</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->F-25<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<!-- xbrl -->

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="72%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2008</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Components of net periodic benefit cost are as follows:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Interest cost</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Recognized actuarial loss</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net periodic benefit cost</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Settlement charges</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">38</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total benefit cost</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">51</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other disclosure items at end of year:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Projected benefit obligation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">70</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Fair value of plan assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Increase in
pension liability included in other comprehensive income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(8</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(46</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">For unfunded plans, contributions to the SERP are the benefit payments made to
participants. For years ended September&nbsp;30, 2009 and 2008, TeamStaff made benefit payments
of $70,000 and $280,000, respectively. There are no benefit payments remaining related to
the SERP.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">During fiscal year 2004, TeamStaff and plan participants agreed on optional payment forms
effectively accelerating benefit payments. Beginning in fiscal year 2004 and ending in fiscal
year 2009, the SERP settles liabilities by paying benefit obligations to participants. Each
quarter, a settlement charge was recognized to account for settling of liabilities. A
settlement charge of $8,000 and $38,000 was recognized during fiscal 2009 and 2008,
respectively.
</DIV>


<!-- xbrl,n -->



<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>(14)&nbsp;</B><U><B>ECONOMIC DEPENDENCY: </B></U>
</DIV>

<!-- xbrl,body -->
<DIV align="left" style="font-size: 10pt; margin-top: 10pt">A major customer is defined as a customer from which the Company derives at least 10% of its
revenues. For the fiscal year ended September&nbsp;30, 2009, Teamstaff GS generated approximately 98.2%
of the Company&#146;s overall consolidated revenues from agencies of the United States Government.
Through its FSS contracts primarily with the DVA, the Company had four specific customers who
totaled 31%, 23%, 12% and 11% of the Company&#146;s overall consolidated revenues. We anticipate that
the DVA may release new requests for proposals related to staffing services with these four
customer facilities in 2010. In such an event, the Company intends to submit a proposal to address
any such solicitation. Although the Company believes it is well positioned to continue its
relationship with the DVA, no assurances can be given that in the event the DVA issues such a
solicitation, that any purchase orders would be awarded to the Company or if it is granted
subsequent orders, that such orders would be of a scope comparable to the services that the Company
has provided to date.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">For the fiscal year ended September&nbsp;30, 2008, Teamstaff GS generated approximately 96.7% of the
Company&#146;s overall consolidated revenues from agencies of the United States Government. Through its
FSS contracts primarily with the DVA, the Company had three specific customers who totaled 39%, 17%
and 10% of the Company&#146;s overall consolidated revenues.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Accounts receivable from agencies of the United States Government totaled $11.4&nbsp;million and $11.9
million at September&nbsp;30, 2009 and 2008, respectively. As discussed in Note 10, included in revenue
derived from the Federal government in 2008 are retroactive adjustments that totaled $10.8&nbsp;million.
$9.3&nbsp;million of this amount is included in accounts receivable (unbilled)at September&nbsp;30, 2009.
Such revenue is not expected to recur in future periods.
</DIV>


<!-- xbrl,n -->
<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>(15) </B><U><B>SUBSEQUENT EVENTS: </B></U>
</DIV>

<!-- xbrl,body -->
<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Management
evaluated subsequent events through January&nbsp;19, 2010, the date the Company&#146;s
financial statements were issued. Based on this evaluation, the Company has determined that
no subsequent events have occurred which require disclosure through
January&nbsp;19, 2010, which
is the date that these financial statements are issued.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><U>Disposition of TeamStaff Rx Assets</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">On December&nbsp;28, 2009, TeamStaff and TeamStaff Rx, our wholly-owned subsidiary, entered into a
definitive Asset Purchase Agreement with Advantage RN, providing for the sale of
substantially all of the operating assets of TeamStaff Rx related to TeamStaff Rx&#146;s business
of providing travel nurse and allied healthcare professionals for temporary assignments to
Advantage RN. The closing of this transaction occurred on January&nbsp;4, 2010. The Asset Purchase
Agreement provides that the purchased assets were acquired by Advantage RN for a purchase
price of up to $425,000, of which (i) $350,000 in cash was paid at the closing, and (ii)
$75,000 is subject to an escrowed holdback as described in the Asset Purchase Agreement.
Additionally, Advantage RN will make rent subsidy payments to TeamStaff Rx totaling $125,000,
consisting of (i) $25,000 payable at closing, and (ii)&nbsp;an additional $100,000 payable in 10
equal monthly installments beginning on March&nbsp;1, 2010. Under the terms of the Asset Purchase
Agreement, Advantage RN did not assume any debts, obligations or liabilities of TeamStaff Rx
nor did it purchase any accounts receivable outstanding as of the closing date. Upon the
completion of the sale, the employment agreement of Dale West, TeamStaff Rx&#146;s President, was
terminated, with an effective date as of December&nbsp;28, 2009 in accordance with its terms. Ms.
West will be entitled to receive certain termination compensation and benefits pursuant to
such employment agreement.
</DIV>

<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->F-26<!-- /Folio -->
</DIV>

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<!-- xbrl -->

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><U>Employment Agreement with Chief Executive Officer</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">On November&nbsp;3, 2009, the Company announced in a press release that Mr.&nbsp;Rick J. Filippelli, who has
served as the Registrant&#146;s President and Chief Executive Officer since January&nbsp;2007, has informed
the Board of his intent to resign from such positions in connection with the Company&#146;s strategic
shift in its current business plan. Mr.&nbsp;Filippelli&#146;s resignation as President and Chief Executive
Officer will become effective at the end of January&nbsp;2010. Mr.&nbsp;Filippelli has agreed to assist the
Company with its transition to a new Chief Executive Officer. The Company&#146;s Board has established a
search committee to identify candidates for Chief Executive Officer. In connection with the
foregoing, on November&nbsp;2, 2009, the Company entered into a new employment agreement with Mr.
Filippelli, the material terms of which are summarized below. As used in
the following summary, the term &#147;Executive&#148; shall refer to Mr.&nbsp;Filippelli. The following
description of this employment is qualified in its entirety by reference to the full text of such
agreement. The new employment agreement supersedes and replaces the employment agreement that the
Company entered into with Mr.&nbsp;Filippelli on April&nbsp;17, 2008.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The new employment agreement is dated November&nbsp;2, 2009, is effective as of October&nbsp;1, 2009 and
expires January&nbsp;31, 2010, unless both parties agree to extend the term. Under the employment
agreement, the Executive will receive a base salary of $290,000 per
annum and may receive a bonus in the sole
discretion of the Management Resources and Compensation Committee of the Board of Directors. Under
the new employment agreement, Mr.&nbsp;Filippelli was granted options to purchase 30,000 shares of
common stock. The options are exercisable for five years from the date of grant and vest upon the
termination date, as defined in the new employment agreement, provided the Executive complies with
the obligations described therein. The exercise price of the options shall be equal to closing
price of the Company&#146;s common stock on the execution date of the new employment agreement.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">In the event of a termination of Executive&#146;s employment by the Executive for good reason (as
defined in the employment agreement), (a)&nbsp;the Executive&#146;s right to purchase shares of common stock
of the Company pursuant to any stock option or stock option plan shall immediately fully vest and
become exercisable, (b)&nbsp;the exercise period in which he may exercise his options to purchase common
stock shall be extended to the duration of their original term, as if he remained an employee of
the Company, and (c)&nbsp;the terms of such options shall be deemed amended to reflect the foregoing
provisions. Further, in the event of a termination of the Executive&#146;s employment for cause, options
granted and not exercised as of the termination date shall terminate immediately and be null and
void. In the event of a termination of Executive&#146;s employment due to his death or disability, the
Executive&#146;s (or his estate&#146;s or legal representative&#146;s) right to exercise any stock option, to the
extent vested as of the termination date, shall remain exercisable for a period of twelve (12)
months following the termination date, but in no event after the expiration of the exercise period.
In the event of a termination of Executive&#146;s employment other than for good reason, his right to
exercise the stock options, to the extent vested as of the termination date, shall remain
exercisable for a period of three months following the termination date, but in no event after the
expiration of the exercise period.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The employment agreement further provides that in the event of a change in control (as defined in
the employment agreement), or termination without cause by the Company or for good reason (as
defined in the employment agreement) by the Executive, the conditions to the vesting of any
outstanding restricted stock awards granted to the Executive shall be deemed void and all such
shares shall be immediately and fully vested and delivered to the Executive.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">In the event of the termination of employment by us without &#147;cause&#148; or by the Executive for &#147;good
reason,&#148; as those terms are defined in the employment agreement, or in the event his employment is
terminated due to his disability, the Executive would be entitled to: (a)&nbsp;a severance payment of 12
months of base salary; (b)&nbsp;continued participation in our health and welfare plans for a period not
to exceed 18&nbsp;months from the termination date; and (c)&nbsp;all compensation accrued but not paid as of
the termination date. In the event of the termination of his employment due to his death, the
Executive&#146;s estate would be entitled to receive all compensation accrued but not paid as of the
termination date and continued participation in our health and welfare plans for a period not to
exceed 18&nbsp;months from the termination date. If the Executive&#146;s employment is terminated by us for
&#147;cause&#148; or by him without &#147;good reason,&#148; he is not entitled to any additional compensation or
benefits other than his accrued and unpaid compensation.
</DIV>



<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->F-27<!-- /Folio -->
</DIV>

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<!-- xbrl -->

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">In the event that within 180&nbsp;days of a &#147;Change in Control&#148;, as defined in the employment agreement,
(a)&nbsp;the Executive is terminated, or (b)&nbsp;his status, title, position or responsibilities are
materially reduced and the Executive terminates his employment, the Company shall pay and/or
provide to the Executive, the following compensation and benefits: (A)&nbsp;The Company shall pay the
Executive, in lieu of any other payments due hereunder, (i)&nbsp;the accrued compensation; (ii)&nbsp;the
continuation benefits; and (iii)&nbsp;as severance, base salary for a period of 12&nbsp;months, payable in
one lump sum following the termination date; and (B)&nbsp;The conditions to the vesting of any
outstanding incentive awards (including restricted stock, stock options and granted performance
shares or units) granted to the Executive under any of the Company&#146;s plans, or under any other
incentive plan or arrangement, shall be deemed void and all such incentive awards shall be
immediately and fully vested and exercisable. Further, any such options shall be deemed amended to
provide that in the event of termination after a change of control, the options shall remain
exercisable for the duration of their term. Notwithstanding the foregoing, if the payments due in
the event of a change in control would constitute an &#147;excess parachute payment&#148; as defined in
Section&nbsp;280G of the Internal Revenue Code of 1986, as amended (the &#147;Code&#148;), the aggregate of such
credits or payments under the employment agreement and other agreements shall be reduced to the
largest amount as will result in no portion of such aggregate payments being subject to the excise
tax imposed by Section&nbsp;4999 of the Code. The priority of the reduction of excess parachute payments
shall be in the discretion of the Executive.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Pursuant to the employment agreement, the Executive is subject to customary confidentiality,
non-solicitation of employees and non-competition obligations that survive the termination of such
agreement.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><U>Employment Agreement with Chief Financial Officer</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">On January&nbsp;14, 2010, the Company entered into a new employment agreement with Ms.&nbsp;Presuto, the
terms of which are summarized below. The following description of our new employment agreement with
Ms.&nbsp;Presuto is qualified in its entirety by reference to the full text of such agreement.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The employment agreement is for an initial term expiring September&nbsp;30, 2010. Under the employment
agreement, Ms.&nbsp;Presuto will receive a base salary of $181,000. The term of the agreement is
effective as of October&nbsp;1, 2009. Upon any termination of the Employee&#146;s employment on or after the
expiration date, other than cause (as defined in the employment agreement), Ms.&nbsp;Presuto will be
entitled to the severance payment described below. Ms.&nbsp;Presuto may receive a bonus in the sole
discretion of the Management Resources and Compensation Committee of the Board of Directors of up
to 50% of her base salary for each fiscal year of employment. The bonus will be based on
performance targets and other key objectives established by the Management Resources and
Compensation Committee.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Ms.&nbsp;Presuto received a grant of options to purchase 75,000 shares of common stock under the
Company&#146;s 2006 Long Term Incentive Plan. The vesting schedule applicable to the options is as
follows: 50% of the options shall vest on the date of the agreement and the balance shall vest on
September&nbsp;30, 2010, provided Ms.&nbsp;Presuto is an employee as of such date. The options are
exercisable for a period of five years at a per share exercise price equal to the closing price of
the Company&#146;s common stock on the date of execution of the employment agreement.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">In the event of the termination of her employment, the Options will be governed by the terms of the
2006 Plan, except that the following provisions shall apply: (a)&nbsp;in the event Ms.&nbsp;Presuto&#146;s
employment is terminated for cause, options granted and not exercised as of the termination date
shall terminate immediately and be null and void; (b)&nbsp;in the event her employment with the Company
is terminated due to her death, or disability, her (or her estate&#146;s or legal representative&#146;s)
right to purchase shares of common stock pursuant to any stock option or stock option plan to the
extent vested as of the date of termination shall remain exercisable for a period of 12&nbsp;months, but
in no event after the expiration of the option; (c)&nbsp;in the event Ms.&nbsp;Presuto elects to terminate
her employment other than for good reason (as defined in the agreement), her right to purchase
shares of common stock of the Company pursuant to any stock option or stock option plan to the
extent vested as of the date of termination shall remain exercisable for a period of three months
following such termination date, but in no event after the expiration of option; and (d)&nbsp;in the
event of (A)&nbsp;a Change of Control, as defined in the agreement, (B)&nbsp;employee&#146;s termination by the
Company without cause or; (C)&nbsp;termination by employee for good reason, the conditions to the
vesting of any outstanding restricted stock awards or options granted under the agreement shall be
deemed void and all such shares and options shall be immediately and fully vested and delivered to
the employee and all outstanding options shall remain exercisable for a period of 24&nbsp;months
following the date of termination, but in no event after the expiration date of any such option.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">In the event of the termination of employment by us without &#147;cause&#148; or by Ms.&nbsp;Presuto for &#147;good
reason,&#148; as those terms are defined in the employment agreement, or in the event her employment is
terminated due to her disability, she would be entitled to: (a)&nbsp;a severance payment of 12&nbsp;months of
base salary; (b)&nbsp;continued participation in our health and welfare plans for a period not to exceed
12&nbsp;months from the termination date; and (c)&nbsp;all compensation accrued but not paid as of the
termination date. In addition, in the event of termination for disability, she would also receive a
pro-rata bonus, as described below.
</DIV>




<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->F-28<!-- /Folio -->
</DIV>

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<!-- xbrl -->

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">In the event of the termination of her employment due to her death, Ms.&nbsp;Presuto&#146;s estate would be
entitled to receive: (a)&nbsp;all compensation accrued but not paid as of the termination date; (b)
continued participation in our health and welfare plans for a period not to exceed 12&nbsp;months from
the termination date; and (c)&nbsp;payment of a &#147;Pro Rata Bonus&#148;, which is defined as an amount equal to
the maximum bonus Ms.&nbsp;Presuto had an opportunity to earn multiplied by a fraction, the numerator of
which shall be the number of days from the commencement of the fiscal year to the termination date,
and the denominator of which shall be the number of days in the fiscal year in which she was
terminated. If Ms.&nbsp;Presuto&#146;s employment is terminated by us for &#147;cause&#148; or by her without &#147;good
reason,&#148; she is not entitled to any additional compensation or benefits other than her accrued and
unpaid compensation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">In the event that within 180&nbsp;days of a &#147;Change in Control&#148; as defined in the employment agreement,
(a)&nbsp;Ms.&nbsp;Presuto is terminated, or (b)&nbsp;her status, title, position or responsibilities are
materially reduced and she terminates her employment, the Company shall pay and/or provide to her,
the following compensation and benefits: (A)&nbsp;The Company shall pay Ms.&nbsp;Presuto, in lieu of any
other payments due hereunder, (i)&nbsp;the accrued compensation; (ii)&nbsp;the continuation benefits; and
(iii)&nbsp;as severance, base salary for a period of 12&nbsp;months, payable in equal installments on each of
the Company&#146;s regular pay dates for executives during the twelve months commencing on the first
regular executive pay date following the termination date; and (B)&nbsp;The conditions to the vesting of
any outstanding incentive awards (including restricted stock, stock options and granted performance
shares or units) granted to Ms.&nbsp;Presuto under any of the Company&#146;s plans, or under any other
incentive plan or arrangement, shall be deemed void and all such incentive awards shall be
immediately and fully vested and exercisable. Further, any such options shall be deemed amended to
provide that in the event of termination after a change of control, the options shall remain
exercisable for the duration of their term. Upon the effective date of an event constituting a
change of control, the Company shall pay Ms.&nbsp;Presuto, in one lump sum upon the first day of the
month immediately
following such event, an amount equal to her then current base salary. Ms.&nbsp;Presuto shall be
entitled to such payment whether or not her employment with the Company continues after the change
of control.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">If the payments due in the event of a change in control would constitute an &#147;excess parachute
payment&#148; as defined in Section&nbsp;280G of the Internal Revenue Code of 1986, as amended (the &#147;Code&#148;),
the aggregate of such credits or payments under the employment agreement and other agreements shall
be reduced to the largest amount as will result in no portion of such aggregate payments being
subject to the excise tax imposed by Section&nbsp;4999 of the Code. The priority of the reduction of
excess parachute payments shall be in the discretion of Ms.&nbsp;Presuto. Pursuant to the employment
agreement, Ms.&nbsp;Presuto is subject to customary confidentiality, non-solicitation of employees and
non-competition obligations that survive the termination of such agreements.
</DIV>

<!-- /xbrl,ns -->

<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->F-29<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">
<DIV align="left">
<A name="306"></A>
</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 10pt">SCHEDULE I
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><U>TEAMSTAFF, INC. AND SUBSIDIARIES</U>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 10pt"><U>VALUATION AND QUALIFYING ACCOUNTS</U>
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 10pt"><U>FOR THE YEARS ENDED SEPTEMBER 30, 2009 AND 2008</U><BR>
<U>(Amounts in thousands)</U>
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="49%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 0px solid #000000"></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 0px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>(c)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 0px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 0px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Additions</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>(b)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Charged to</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>(e)</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Balance at</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>(reversed from) </B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>(d)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Balance at</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD><B>(a)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Beginning of</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Costs and</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Deductions &#150;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>End of</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Description</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Year</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Expenses</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Net Adjustments</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Year</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Year Ended September&nbsp;30, 2009</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Allowance for doubtful accounts
on trade receivables</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Deferred tax valuation allowance</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">11,369</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,751</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">13,120</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Year Ended September&nbsp;30, 2008</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Allowance for doubtful accounts
on trade receivables (1)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(10</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Deferred tax valuation allowance</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">11,843</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(474</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">11,369</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>




<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR style="font-size: 6pt">
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="96">&nbsp;</TD>
</TR>
<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Reflects reclassification of discontinued operations in 2009.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->S-1<!-- /Folio -->
</DIV>

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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.35
<SEQUENCE>2
<FILENAME>c94758exv10w35.htm
<DESCRIPTION>EXHIBIT 10.35
<TEXT>
<HTML>
<HEAD>
<TITLE>Exhibit 10.35</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="right" style="font-size: 10pt; margin-top: 10pt"><B>Exhibit&nbsp;10.35</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>EMPLOYMENT AGREEMENT</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">THIS AGREEMENT is made on the 2<SUP style="font-size: 85%; vertical-align: text-top">nd</SUP> day of November, 2009 by and between Rick J.
Filippelli (the &#147;Employee&#148;) and TEAMSTAFF, INC., a New Jersey corporation (the &#147;Company&#148;) and is
effective as of the 1<SUP style="font-size: 85%; vertical-align: text-top">st</SUP> day of October, 2009. (Unless the context indicates otherwise,
the &#147;Company&#148; shall include the Company&#146;s subsidiaries.)
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>W I T N E S S E T H:</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">WHEREAS, the Company and its subsidiaries are engaged in the business of providing Business
Outsourcing Services; and
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">WHEREAS, the Employee is currently employed by the Company and the Company desires to continue
the employment of the Employee and secure for the Company the experience, ability and services of
the Employee; and
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">WHEREAS, the Employee desires to continue his employment with the Company, pursuant to the
terms and conditions herein set forth, superseding all prior oral and written employment
agreements, and term sheets and letters between the Company, its subsidiaries and/or predecessors
and Employee;
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%">NOW, THEREFORE, it is mutually agreed by and between the parties hereto as follows:
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>ARTICLE 1</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>DEFINITIONS</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">1.1 <I>Accrued Compensation. </I>Accrued Compensation shall mean an amount which
shall include all amounts earned or accrued through the &#147;Termination Date&#148; (as defined below) but
not paid as of the Termination Date, including (i)&nbsp;Base Salary, (ii)&nbsp;reimbursement for business
expenses incurred by the Employee on behalf of the Company, pursuant to the Company&#146;s expense
reimbursement policy in effect at such time, (iii)&nbsp;vacation pay, and (iv)&nbsp;unpaid bonuses and
incentive compensation earned and awarded prior to the Termination Date.
</DIV>
<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">1.2 <I>Cause</I>. Cause shall mean: (i)&nbsp;willful disobedience by the Employee of a material and lawful
instruction of the Board of Directors of the Company; (ii)&nbsp;formal charge, indictment or conviction
of the Employee of any misdemeanor involving fraud or embezzlement or similar crime, or any felony;
(iii)&nbsp;conduct amounting to fraud, dishonesty, gross negligence, willful misconduct or recurring
insubordination; or (iv)&nbsp;excessive absences from work, other than for illness or Disability;
provided that the Company shall not have the right to terminate the employment of Employee pursuant
to the foregoing clauses (i), (iii), and (iv)&nbsp;above unless written notice specifying such breach
shall have been given to the Employee and, in the case of breach which is capable of being cured,
the Employee shall have failed to cure such breach within thirty (30)&nbsp;days after his receipt of
such notice.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">1.3 <I>Change in Control. </I>&#147;Change in Control&#148; shall mean any of the following events:
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">a.&nbsp;(i)&nbsp;An acquisition (other than directly from the Company) of any voting securities of the
Company (the &#147;Voting Securities&#148;) by any &#147;Person&#148; (as the term person is used for purposes of
Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the &#147;1934 Act&#148;))
immediately after which such Person has &#147;Beneficial Ownership&#148; (within the meaning of Rule&nbsp;13d-3
promulgated under the 1934 Act) of twenty percent (20%) or more of the combined voting power of the
Company&#146;s then outstanding Voting Securities (27% if such Person is Wynnnefield Capital Inc. and
its affiliates); provided, however, that in determining whether a Change in Control has occurred,
Voting Securities which are acquired in a &#147;Non-Control Acquisition&#148; (as defined below) shall not
constitute an acquisition which would cause a Change in Control. A &#147;Non-Control Acquisition&#148; shall mean an acquisition by (1)&nbsp;an employee
benefit plan (or a trust forming a part thereof) maintained by (x)&nbsp;the Company or (y)&nbsp;any
corporation or other Person of which a majority of its voting power or its equity securities or
equity interest is owned directly or indirectly by the Company (a &#147;Subsidiary&#148;), or (2)&nbsp;the Company
or any Subsidiary.
</DIV>
<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->2<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(ii)&nbsp;Notwithstanding the foregoing, a Change in Control shall not be deemed to occur solely
because a Person (the &#147;Subject Person&#148;) gained Beneficial Ownership of more than the permitted
amount of the outstanding Voting Securities as a result of the acquisition of Voting Securities by
the Company which, by reducing the number of Voting Securities outstanding, increases the
proportional number of shares Beneficially Owned by the Subject Person, provided that if a Change
in Control would occur (but for the operation of this sentence) as a result of the acquisition of
Voting Securities by the Company, and after such share acquisition by the Company, the Subject
Person becomes the Beneficial Owner of any additional Voting Securities which increases the
percentage of the then outstanding Voting Securities Beneficially Owned by the Subject Person, then
a Change in Control shall occur.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">b.&nbsp;The individuals who, as of the date this Agreement is approved by the Board, are members of
the Board (the &#147;Incumbent Board&#148;), cease for any reason to constitute at least two-thirds of the
Board; provided, however, that if the election, or nomination for election by the Company&#146;s
stockholders, of any new director was approved by a vote of at least two-thirds of the Incumbent
Board, such new director shall, for purposes of this Agreement, be considered and defined as a
member of the Incumbent Board; and provided, further, that no individual shall be considered a
member of the Incumbent Board if such individual initially assumed office as a
result of either an actual &#147;Election Contest&#148; (as described in Rule&nbsp;14a-11 promulgated under
the 1934 Act) or other solicitation of proxies or consents by or on behalf of a Person other than
the Board (a &#147;Proxy Contest&#148;); or
</DIV>
<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->3<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">c.&nbsp;Approval by stockholders of the Company of:
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(i)&nbsp;A merger, consolidation or reorganization involving the Company, unless: (1)&nbsp;the
stockholders of the Company, immediately before such merger, consolidation or reorganization, own,
directly or indirectly immediately following such merger, consolidation or reorganization, at least
sixty percent (60%) of the combined voting power of the outstanding voting securities of the
corporation resulting from such merger or consolidation or reorganization (the &#147;Surviving
Corporation&#148;) in substantially the same proportion as their ownership of the Voting Securities
immediately before such merger, consolidation or reorganization, (2)&nbsp;the individuals who were
members of the Incumbent Board immediately prior to the execution of the agreement providing for
such merger, consolidation or reorganization constitute at least two-thirds of the members of the
board of directors of the Surviving Corporation, and (3)&nbsp;no Person (other than the Company, any
Subsidiary, any employee benefit plan (or any trust forming a part thereof) maintained by the
Company, the Surviving Corporation or any Subsidiary) becomes Beneficial Owner of twenty percent
(20%) or more of the combined voting power of the Surviving Corporation&#146;s then outstanding voting
securities as a result of such merger (27% if such Person is Wynnnefield Capital Inc. and its
affiliates) , consolidation or reorganization, a transaction described in clauses (1)&nbsp;through (3)
shall herein be referred to as a &#147;Non-Control Transaction&#148;; or
</DIV>
<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->4<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(ii)&nbsp;An agreement for the sale or other disposition of all or substantially all of the assets
of the Company, to any Person, other than a transfer to a Subsidiary, in one transaction or a
series of related transactions;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(iii)&nbsp;The stockholders of the Company approve any plan or proposal for the liquidation or
dissolution of the Company.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">d.&nbsp;Notwithstanding anything contained in this Agreement to the contrary, if the Employee&#146;s
employment is terminated prior to a Change in Control and the Employee reasonably demonstrates that
such termination (i)&nbsp;was at the request of a third party who has indicated an intention or taken
steps reasonably calculated to effect a Change in Control (a &#147;Third Party&#148;) or (ii)&nbsp;otherwise
occurred in connection with, or in anticipation of, a Change in Control, then for all purposes of
this Agreement, the date of a Change in Control with respect to the Employee shall mean the date
immediately prior to the date of such termination of the Employee&#146;s employment.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">1.4 <I>Continuation Benefits. </I>Continuation Benefits shall be the continuation of the Benefits,
as defined in Section&nbsp;5.1, for the period commencing on the Termination Date and terminating 12
months thereafter, or such other period as specifically stated by this agreement (the &#147;Continuation
Period&#148;) at the Company&#146;s expense on behalf of the Employee and his dependents; provided, however,
that (i)&nbsp;in no event shall the Continuation Period exceed 18&nbsp;months from the Termination Date; and
(ii)&nbsp;the level and availability of benefits provided during the Continuation Period shall at all
times be subject to the post-employment conversion or portability provisions of the benefit plans.
The Company&#146;s obligation hereunder with respect to the foregoing benefits shall also be limited to
the extent that if the Employee obtains any such benefits pursuant to a subsequent
</DIV>
<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->5<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">employer&#146;s benefit plans, the Company may reduce the coverage of any benefits it is required
to provide the Employee hereunder as long as the aggregate coverage and benefits of the combined
benefit plans is no less favorable to the Employee than the coverage and benefits required to be
provided hereunder. This definition of Continuation Benefits shall not be interpreted so as to
limit any benefits to which the Employee, his dependents or beneficiaries may be entitled under
any of the Company&#146;s employee benefit plans, programs or practices following the Employee&#146;s
termination of employment, including, without limitation, retiree medical and life insurance
benefits. Notwithstanding the foregoing, Employee shall be entitled to take advantage of the COBRA
benefits to the maximum amount permitted by law.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">1.5 <I>Disability</I>. Disability shall mean a physical or mental infirmity which impairs the
Employee&#146;s ability to substantially perform his duties with the Company for a period of one hundred
eighty (180)&nbsp;consecutive days and the Employee has not returned to his full time employment prior
to the Termination Date as stated in the &#147;Notice of Termination&#148; (as defined below).
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">1.6 <I>Good Reason</I>. &#147;Good Reason&#148; shall mean without the written consent of the Employee: (A)&nbsp;a
material breach of any provision of this Agreement by the Company; (B)&nbsp;failure by the Company to
pay when due any compensation to the Employee; (C)&nbsp;a reduction in the Employee&#146;s Base Salary; (D)
failure by the Company to maintain the Employee in the positions referred to in Section&nbsp;2.1 of this
Agreement for a period in excess of 30&nbsp;days after the Board of Directors has reassigned Employee or
designated an individual other than Employee to assume the office of Chief Executive Officer; (E)
assignment to the Employee of any duties materially and adversely inconsistent with the Employee&#146;s
positions, authority, duties, responsibilities, powers, functions, reporting relationship or title
as contemplated by Section&nbsp;2.1 of this Agreement or any
</DIV>
<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->6<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">other action by the Company that results in a material diminution of such positions,
authority, duties, responsibilities, powers, functions, reporting relationship or title except for
a period of up to 30&nbsp;days after the Board of Directors has designated an individual other than
Employee to assume the office of Chief Executive Officer; (F)&nbsp;relocation of Employee&#146;s principal
place of employment to a location outside a 25 mile radius of the present location in Somerset, New
Jersey, without the Employee&#146;s written consent; or (G)&nbsp;a Change in Control, provided the event on
which the Change of Control is predicated occurs within 90&nbsp;days of the service of the Notice of
Termination by the Employee, it being understood that Employee shall have the right to terminate
his employment under this Section&nbsp;1.6 (G)&nbsp;for any reason or no reason within such 90&nbsp;day period;
and provided further, however, that the Employee agrees not to terminate his employment for Good
Reason pursuant to clauses (A)&nbsp;through (F)&nbsp;unless (a)&nbsp;the Employee has given the Company at least
10&nbsp;days&#146; prior written notice of his intent to terminate his employment for Good Reason, which
notice shall specify the facts and circumstances constituting Good Reason; and (b)&nbsp;the Company has
not remedied such facts and circumstances constituting Good Reason to the reasonable and good faith
satisfaction of the Employee within a 10-day period after receipt of such notice.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">1.7 <I>Notice of Termination</I>. Notice of Termination shall mean a written notice from the
Company, or the Employee, of termination of the Employee&#146;s employment which indicates the provision
in this Agreement relied upon, if any and which sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Employee&#146;s employment under the
provision so indicated. A Notice of Termination served by the Company shall specify the effective
date of termination.
</DIV>
<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->7<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">1.8 <I>Severance Payment</I>. &#147;Severance Payment&#148; shall mean an amount equal to the sum of 12&nbsp;months
of Employee&#146;s Base Salary in effect on the Termination Date. Unless otherwise specifically
provided herein, the Severance Payment shall be payable in equal installments on each of the
Company&#146;s regular pay dates for executives during the twelve months commencing on the first
regular executive pay date following the Termination Date. The Severance Payment is conditioned on
the Employee executing a termination agreement and release in a form reasonably acceptable to the
Employee and the Company.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">1.9 <I>Termination Date</I>. Termination Date shall mean (i)&nbsp;in the case of the Employee&#146;s death, his
date of death; (ii)&nbsp;in the case of Good Reason, 30&nbsp;days from the date the Notice of Termination is
given to the Company, provided the Company has not remedied such facts and circumstances
constituting Good Reason to the reasonable and good faith satisfaction of the Employee; and (iii)
in all other cases, the date specified in the Notice of Termination; provided, however, if the
Employee&#146;s employment is terminated by the Company for any reason except Cause, the date specified
in the Notice of Termination shall be at least 30&nbsp;days from the date the Notice of Termination is
given to the Employee, and provided further that in the case of Disability, the Employee shall not
have returned to the full-time performance of his duties during such period of at least 30&nbsp;days.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>ARTICLE II</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>EMPLOYMENT</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">2.1 Subject to and upon the terms and conditions of this Agreement, the Company hereby agrees
to continue the employment of the Employee, and the Employee hereby accepts such employment, as
President and Chief Executive Officer of the Company. The Employee&#146;s
position includes acting as an officer and/or director of any of the Company&#146;s subsidiaries as
determined by the Board of Directors. The Employee agrees to resign from the Board upon the
termination of employment for any reason.
</DIV>
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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>ARTICLE III</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>DUTIES</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">3.1 The Employee shall, during the term of his employment with the Company, and subject to the
direction and control of the Company&#146;s Board of Directors, perform such duties and functions as he
may be called upon to perform by the Company&#146;s Board of Directors during the term of this
Agreement, consistent with his position as President and Chief Executive Officer.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">3.2 The Employee shall perform, in conjunction with the Company&#146;s Executive Management, to the
best of his ability the following services and duties for the Company and its subsidiary
corporations (by way of example, and not by way of limitation):
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(i)&nbsp;Those duties attendant to the position of Chief Executive Officer;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(ii)&nbsp;Establish and implement current and long range objectives, plans, and policies, subject
to the approval of the Board of Directors;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(iii)&nbsp;Financial planning including the development of, liaison with, financing sources and
investment bankers;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(iv)&nbsp;Managerial oversight of the Company&#146;s business;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(v)&nbsp;Shareholder relations;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(vi)&nbsp;Compliance with local, state and federal regulations and laws governing business
operations;
</DIV>
<P align="center" style="font-size: 10pt">&nbsp;

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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(vii)&nbsp;Business expansion of the Company including acquisitions, joint ventures, and other
opportunities;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(viii)&nbsp;Promotion of the relationships of the Company and its subsidiaries with their
respective employees, customers, suppliers and others in the business community;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(ix)&nbsp;Use best efforts to assist in the divestiture or closure of any business unit as directed
by the Board of Directors; and
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(x)&nbsp;Assist, in Somerset NJ, in the transition to a new chief executive officer.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">3.3 The Employee agrees to devote full business time and his best efforts in the performance
of his duties for the Company and any subsidiary corporation of the Company.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">3.4 Employee shall undertake regular travel to the Company&#146;s executive and operational
offices, and such other occasional travel within or outside the United States as is or may be
reasonably necessary in the interests of the Company. All such travel shall be at the sole cost
and expense of the Company and shall include reasonable lodging and food costs incurred by Employee
while traveling.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>ARTICLE IV</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>COMPENSATION</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">4.1 During the term of this Agreement, Employee shall be compensated initially at the rate of
$290,000 per annum, subject to such increases, if any, as determined by the Board of Directors, or
if the Board so designates, the Management Resources and Compensation Committee, in its discretion,
at the commencement of each of the Company&#146;s fiscal years during the term of this Agreement (the
&#147;Base Salary&#148;). The base salary shall be paid to the Employee in accordance with the Company&#146;s
regular executive payroll periods.
</DIV>
<P align="center" style="font-size: 10pt">&nbsp;

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">4.2 Employee may receive a bonus (the &#147;Bonus&#148;) in the sole discretion of the Management
Resources and Compensation Committee of the Board of Directors.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">4.3 The Company shall deduct from Employee&#146;s compensation all federal, state, and local taxes
which it may now or hereafter be required to deduct.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">4.4 Employee may receive such other additional compensation as may be determined from time to
time by the Board of Directors including bonuses and other long term compensation plans. Nothing
herein shall be deemed or construed to require the Board to award any bonus or additional
compensation.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>ARTICLE V</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>BENEFITS</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">5.1 During the term hereof, the Company shall provide Employee with the following benefits
(the &#147;Benefits&#148;): (i)&nbsp;group health care and insurance benefits as generally made available to the
Company&#146;s senior management; and (ii)&nbsp;such other insurance benefits obtained by the Company and
made generally available to the Company&#146;s senior management. The Company shall reimburse Employee,
upon presentation of appropriate vouchers, for all reasonable business expenses incurred by
Employee on behalf of the Company upon presentation of suitable documentation.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">5.2 In the event the Company wishes to obtain Key Man life insurance on the life of Employee,
Employee agrees to cooperate with the Company in completing any applications necessary to obtain
such insurance and promptly submit to such physical examinations and furnish such information as
any proposed insurance carrier may request.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">5.3 For the term of this Agreement, Employee shall be entitled to paid vacation at the rate of
five (5)&nbsp;weeks per annum.
</DIV>
<P align="center" style="font-size: 10pt">&nbsp;

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</DIV>

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<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>ARTICLE VI</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>NON-DISCLOSURE</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">6.1 The Employee shall not, at any time during or after the termination of his employment
hereunder, except when acting on behalf of and with the authorization of the Company, make use of
or disclose to any person, corporation, or other entity, for any purpose whatsoever, any trade
secret or other confidential information concerning the Company&#146;s business, finances, marketing,
accounting , personnel and/or staffing business of the Company and its subsidiaries, including
information relating to any customer of the Company or pool of temporary or permanent employees,
governmental customer or any other nonpublic business information of the Company and/or its
subsidiaries learned as a consequence of Employee&#146;s employment with the Company (collectively
referred to as the &#147;Proprietary Information&#148;). For the purposes of this Agreement, trade secrets
and confidential information shall mean information disclosed to the Employee or known by him as a
consequence of his employment by the Company, whether or not pursuant to this Agreement, and not
generally known in the industry. The Employee acknowledges that trade secrets and other items of
confidential information, as they may exist from time to time, are valuable and unique assets of
the Company, and that disclosure of any such information would cause substantial injury to the
Company. Trade secrets and confidential information shall cease to be trade secrets or
confidential information, as applicable, at such time as such information becomes public other than
through disclosure, directly or indirectly, by Employee in violation of this Agreement.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">6.2 If Employee is requested or required (by oral questions, interrogatories, requests for
information or document subpoenas, civil investigative demands, or similar process) to disclose any
Proprietary Information, Employee shall, unless prohibited by law, promptly notify the Company of
such request(s) so that the Company may seek an appropriate protective order.
</DIV>
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</DIV>

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<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>ARTICLE VII</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>RESTRICTIVE COVENANT</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">7.1 In the event of the termination of employment for any reason, Employee agrees that he will
not, for a period of one (1)&nbsp;year following such termination, directly or indirectly, enter into or
become associated with or engage in any other business (whether as a partner, officer, director,
shareholder, employee, consultant, or otherwise), which is involved in the business of providing
(i)&nbsp;temporary and/or permanent staffing of governmental employees, travel health professionals
and/or travel nurses, (ii)&nbsp;medical and office administration/technical professionals through
Federal Supply Schedule (&#147;FSS&#148;) contracts with both the United States General Services
Administration (&#147;GSA&#148;), United States Department of Veterans Affairs (&#147;DVA&#148;), United States
Department of Defense (&#147;DOD&#148;) or other federal, state and local entities, or (iii)&nbsp;is otherwise
engaged in the same or similar business as the Company in direct competition with the Company, or
which the Company was in the process of developing, during the tenure of Employee&#146;s employment by
the Company. Notwithstanding the foregoing, the ownership by Employee of less than five percent of
the shares of any publicly held corporation shall not violate the provisions of this Article&nbsp;VII.
In furtherance of, and in addition to, the foregoing, Employee shall not during the aforesaid
period of non-competition, directly or indirectly, in connection with any temporary or permanent
employee placement, governmental staffing or any other business the Company and its subsidiaries,
including information relating to any customer of the Company or pool of temporary employees, or
any other nonpublic business information , or any business similar to the business in which the
Company was engaged, or in the process of developing during Employee&#146;s tenure with the Company,
solicit any customer or employee of the Company who was a customer or employee of the Company during the tenure of his
employment.
</DIV>
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</DIV>

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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">7.2 If any court shall hold that the duration of non-competition or any other restriction
contained in this Article&nbsp;VII is unenforceable, it is our intention that same shall not thereby be
terminated but shall be deemed amended to delete therefrom such provision or portion adjudicated to
be invalid or unenforceable or, in the alternative, such judicially substituted term may be
substituted therefor.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>ARTICLE VIII</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>TERM</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">8.1 This Agreement shall be for a term (the &#147;Initial Term&#148;) commencing on October&nbsp;1, 2009 (the
&#147;Commencement Date&#148;) and terminating on January&nbsp;31, 2010, unless such term is extended in writing
by mutual agreement of Employee and the Company at any time prior to ten days before the later of
the expiration of the Initial Term, or the extension period (the &#147;Expiration Date&#148;).
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>ARTICLE IX</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>TERMINATION</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">9.1 The Company may terminate this Agreement by giving a Notice of Termination to the Employee
in accordance with this Agreement:
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(i)&nbsp;for Cause;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(ii)&nbsp;without Cause;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(iii)&nbsp;for Disability.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">9.2 Employee may terminate this Agreement by giving a Notice of Termination to the Company in
accordance with this Agreement, at any time, with or without Good Reason.
</DIV>
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</DIV>

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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">9.3 If the Employee&#146;s employment with the Company shall be terminated, the Company shall pay
and/or provide to the Employee the following compensation and benefits in lieu of any other
compensation or benefits arising under this Agreement or otherwise:
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(i)&nbsp;if the Employee was terminated by the Company for Cause, or the Employee terminates
without Good Reason, the Accrued Compensation;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(ii)&nbsp;if the Employee was terminated by the Company for Disability,
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 12%">(a)&nbsp;the Continuation Benefits;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 12%">(b)&nbsp;the Accrued Compensation; and
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 12%">(c)&nbsp;the Severance Payment; or
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(iii)&nbsp;if termination was due to the Employee&#146;s death,
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 12%">(a)&nbsp;the Accrued Compensation; and
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 12%">(b)&nbsp;the Continuation Benefits; or
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(iv)&nbsp;if the Employee was terminated by the Company without cause, or the Employee terminates
this Agreement for Good Reason,
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 12%">(a)&nbsp;the Accrued Compensation;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 12%">(b)&nbsp;the Severance Payment; and
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 12%">(c)&nbsp;the Continuation Benefits.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">9.4 The amounts payable under this Section&nbsp;9, shall be paid as follows:
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(i)&nbsp;Accrued Compensation shall be paid within five (5)&nbsp;business days after the Employee&#146;s
Termination Date (or earlier, if required by applicable law).
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(ii)&nbsp;If the Continuation Benefits are paid in cash, the payments shall be made on the first
day of each month during the Continuation Period (or earlier, if required by applicable law).
</DIV>
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</DIV>

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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">9.5 Notwithstanding the foregoing, in the event Employee is a member of the Board of Directors
on the Termination Date, the payment of any and all compensation due hereunder, except Accrued
Compensation, and Employee&#146;s right to exercise any Employee Stock Option after the Termination
Date, is expressly conditioned on Employee&#146;s resignation from the Board of Directors within five
(5)&nbsp;business days of notice by the Company requesting such resignation.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">9.6 The Employee shall not be required to mitigate the amount of any payment provided for in
this Agreement by seeking other employment or otherwise and no such payment shall be offset or
reduced by the amount of any compensation or benefits provided to the Employee in any subsequent
employment except as provided in Sections&nbsp;1.4.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>ARTICLE X</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>TERMINATION OF PRIOR AGREEMENTS</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">10.1 This Agreement sets forth the entire agreement between the parties and supersedes all
prior agreements, letters and understandings between the parties, whether oral or written prior to
the effective date of this Agreement except for the terms of employee stock option plans,
restricted stock grants and option certificates.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>ARTICLE XI</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>RESTRICTED STOCK GRANTS</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">11.1 In the event of a Change of Control, as defined in Section&nbsp;1.3, or termination without
cause by the Company or for Good Reason by Employee, the conditions to the vesting of any
outstanding Restricted Stock Awards granted to the Employee shall be deemed void and all such
Shares shall be deemed immediately and fully vested and shall be promptly delivered to the
Employee. Employee agrees that Employee will not sell the 35,000 restricted shares of the
Company&#146;s Common Stock originally scheduled to vest in January&nbsp;2011, and the shares of Common
Stock underlying the option granted pursuant to Section&nbsp;11.2, until the earlier of a change of
control or January&nbsp;31, 2011.
</DIV>
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</DIV>

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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">11.2 As an inducement to Employee to enter into this Agreement, the Company hereby grants to
Employee options to purchase 30,000 shares of the Company&#146;s Common Stock, $.001 par value (the
&#147;Options&#148;), subject to the terms and conditions of the Company&#146;s 2006 Long Term Incentive Plan (the
&#147;Plan&#148;), and the terms and conditions set forth in the Stock Option Agreement which are
incorporated herein by reference. The Options shall be exercisable for a period of five years from
the date of this Agreement and vest on the Termination Date provided:
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(i)&nbsp;Employee shall have used his best efforts to assist in the divestiture or closure of any
business unit as directed by the Board of Directors ; and
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(ii)&nbsp;Employee shall assist, in Somerset NJ, in the transition to a new chief executive
officer.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">11.3 The exercise price of the Options shall be equal to the closing price of the Company&#146;s
Common Stock as reported by Nasdaq on the date of final execution of this Agreement and shall
contain such other terms and conditions as set forth in the stock option agreement. The Options
provided for herein are not transferable by Employee and shall be exercised only by Employee, or by
his legal representative or executor, as provided in the Plan. Such Options shall terminate as
provided in the Plan, except as otherwise modified by this Agreement or the stock option agreement.
</DIV>
<P align="center" style="font-size: 10pt">&nbsp;

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</DIV>

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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">11.4 In the event of a termination of Employee&#146;s employment with the Company by the Employee
for Good Reason, notwithstanding anything herein or in any stock option agreement to the contrary,
(a)&nbsp;the Employee&#146;s right to purchase shares of Common Stock of the Company pursuant to any stock
option or stock option plan shall immediately fully vest and become exercisable, (b)&nbsp;the exercise
period in which Employee may exercise his options to purchase Company common stock shall be
extended to the duration of their original term, as if Employee remained an employee of the
Company, and the terms of such options shall be deemed amended to reflect the foregoing provisions.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">11.5 In the event of a termination of Employee&#146;s employment with the Company pursuant to
Section&nbsp;9.1(i), options granted and not exercised as of the Termination Date shall terminate
immediately and be null and void. In the event of a termination of Employee&#146;s employment with the
Company due to the Employee&#146;s death, or Disability, the Employee&#146;s (or his estate&#146;s or legal
representative&#146;s) right to purchase shares of Common Stock of the Company pursuant to any stock
option or stock option plan to the extent vested as of the Termination Date shall remain
exercisable for a period of twelve (12)&nbsp;months following the Termination Date, but in no event
after the expiration of the exercise period. In the event of a termination of Employee&#146;s employment
with the Company by the Employee other than for Good Reason, the Employee&#146;s right to purchase
shares of Common Stock of the Company pursuant to any stock option or stock option plan to the
extent vested as of the Termination Date shall remain exercisable for a period of three months
following the Termination Date, but in no event after the expiration of the exercise period.
</DIV>
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<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>ARTICLE XII</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>EXTRAORDINARY TRANSACTIONS</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">12.1 The Company&#146;s Board of Directors has determined that it is appropriate to reinforce and
encourage the continued attention and dedication of members of the Company&#146;s management, including
the Employee, to their assigned duties without distraction in potentially disturbing circumstances
arising from the possibility of a change in control of the Company.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">In the event that within one hundred eighty days (180)&nbsp;days of a Change of Control as
described in Section&nbsp;12.2, (i)&nbsp;Employee is terminated, or (ii)&nbsp;Employee&#146;s status, title, position
or responsibilities are materially reduced and Employee terminates his Employment, the Company
shall pay and/or provide to the Employee, the following compensation and benefits:
</DIV>

<DIV style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">The Company shall pay the Employee, in lieu of any other
payments due hereunder, (i)&nbsp;the Accrued Compensation; (ii)&nbsp;the Continuation
Benefits; and (iii)&nbsp;the Severance Payment, payable ten days after the
Termination Date, in one lump sum; and</DIV></TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">The conditions to the vesting of any outstanding incentive
awards (including restricted stock, stock options and granted performance
 shares or units) granted to the Employee under any of the Company&#146;s plans, or
under any other incentive plan or arrangement, shall be deemed void and all
such incentive awards shall be immediately and fully vested and exercisable.
Further, the options shall be deemed amended to provide that in the event of
termination after an event enumerated in this Article&nbsp;XII, the options shall
remain exercisable for the duration of their term.</DIV></TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->19<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">12.4 Notwithstanding the foregoing, if the payment under this Article&nbsp;XII, either alone or
together with other payments which the Employee has the right to receive from the Company, would
constitute an &#147;excess parachute payment&#148; as defined in Section&nbsp;280G of the Internal Revenue Code of
1986, as amended (the &#147;Code&#148;), the aggregate of such credits or payments under this Agreement and
other agreements shall be reduced to the largest amount as will result in no portion of such
aggregate payments being subject to the excise tax imposed by Section&nbsp;4999 of the Code. The
priority of the reduction of excess parachute payments shall be in the discretion of the Employee.
The Company shall give notice to the Employee as soon as practicable after its determination that
Change of Control payments and benefits are subject to the excise tax, but no later than ten (10)
days in advance of the due date of such Change of Control payments and benefits, specifying the
proposed date of payment and the Change of Control benefits and payments subject to the excise tax.
Employee shall exercise his option under this paragraph 12.4 by written notice to the Company
within five (5)&nbsp;days in advance of the due date of the Change of Control payments and benefits
specifying the priority of reduction of the excess parachute payments.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>ARTICLE XIII</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>ARBITRATION AND INDEMNIFICATION</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">13.1 Any dispute arising out of the interpretation, application, and/or performance of this
Agreement with the sole exception of any claim, breach, or violation arising under Articles VI or
VII hereof shall be settled through final and binding arbitration before a single arbitrator in the
State of New Jersey in accordance with the Rules of the American Arbitration Association. The
arbitrator shall be selected by the Association and shall be an attorney-at-law experienced in the
field of corporate law. Any judgment upon any arbitration award may be entered in any court, federal
or state, having competent jurisdiction of the parties.
</DIV>
<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->20<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">13.2 The Company hereby agrees to indemnify, defend, and hold harmless the Employee for any
and all claims arising from or related to his employment by the Company at any time asserted, at
any place asserted, to the fullest extent permitted by law, except for claims based on Employee&#146;s
fraud, deceit or willfulness. The Company shall maintain such insurance as is necessary and
reasonable to protect the Employee from any and all claims arising from or in connection with his
employment by the Company during the term of Employee&#146;s employment with the Company and for a
period of six (6)&nbsp;years after the date of termination of employment for any reason. The provisions
of this Section&nbsp;13.2 are in addition to and not in lieu of any indemnification, defense or other
benefit to which Employee may be entitled by statute, regulation, common law or otherwise.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>ARTICLE XIV</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>SEVERABILITY</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">If any provision of this Agreement shall be held invalid and unenforceable, the remainder of
this Agreement shall remain in full force and effect. If any provision is held invalid or
unenforceable with respect to particular circumstances, it shall remain in full force and effect in
all other circumstances.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>ARTICLE XV</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>NOTICE</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">For the purposes of this Agreement, notices and all other communications provided for in the
Agreement shall be in writing and shall be deemed to have been duly given when (a)&nbsp;personally
delivered or (b)&nbsp;sent by (i)&nbsp;a nationally recognized overnight courier service or (ii)&nbsp;certified mail,
</DIV>
<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->21<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">return receipt requested, postage prepaid and in each case addressed to the respective
addresses as set forth below or to any such other address as the party to receive the notice shall
advise by due notice given in accordance with this paragraph. All notices and communications shall
be deemed to have been received on (A)&nbsp;if delivered by personal service, the date of delivery
thereof; (B)&nbsp;if delivered by a nationally recognized overnight courier service, on the first
business day following deposit with such courier service; or (C)&nbsp;on the third business day after
the mailing thereof via certified mail. Notwithstanding the foregoing, any notice of change of
address shall be effective only upon receipt.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The current addresses of the parties are as follows:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="25%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="66%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">IF TO THE COMPANY:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">TeamStaff, Inc.<BR>
1 Executive Drive<BR>
Somerset, NJ 08873</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">WITH A COPY TO:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Victor J. DiGioia<BR>
Becker &#038; Poliakoff, LLP<BR>
45 Broadway<BR>
New York, NY 10006</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">IF TO THE EMPLOYEE:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>ARTICLE XVI</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>BENEFIT</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">This Agreement shall inure to, and shall be binding upon, the parties hereto, the successors
and assigns of the Company, and the heirs and personal representatives of the Employee.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>ARTICLE XVII</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>WAIVER</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The waiver by either party of any breach or violation of any provision of this Agreement shall
not operate or be construed as a waiver of any subsequent breach of construction and validity.
</DIV>
<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->22<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>ARTICLE XVIII</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>GOVERNING LAW</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">This Agreement has been negotiated and executed in the State of New Jersey which shall govern
its construction and validity.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>ARTICLE XIX</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>JURISDICTION</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Any or all actions or proceedings which may be brought by the Company or Employee under this
Agreement shall be brought in courts having a situs within the State of New Jersey, and Employee
and the Company each hereby consent to the jurisdiction of any local, state, or federal court
located within the State of New Jersey.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>ARTICLE XX</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>ENTIRE AGREEMENT</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">This Agreement contains the entire agreement between the parties hereto. No change, addition,
or amendment shall be made hereto, except by written agreement signed by the parties hereto.
</DIV>
<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->23<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><B>IN WITNESS WHEREOF, </B>the parties hereto have executed this Agreement and affixed their hands
and seals the day and year first above written.
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="38%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left"><B>TEAMSTAFF, INC.</B><BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">     /s/ Peter Black
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Peter Black&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" nowrap>Chairman of the Management Resources and<BR>
Compensation Committee&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" style="border-bottom: 1px solid #000000" align="left">         /s/ Rick J. Filippelli
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Rick J. Filippelli&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Employee&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>


<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->24<!-- /Folio -->
</DIV>




</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.36
<SEQUENCE>3
<FILENAME>c94758exv10w36.htm
<DESCRIPTION>EXHIBIT 10.36
<TEXT>
<HTML>
<HEAD>
<TITLE>Exhibit 10.36</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="right" style="font-size: 10pt; margin-top: 10pt"><B>Exhibit&nbsp;10.36</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B>THIS MODIFICATION AGREEMENT, </B>dated as of January&nbsp;8, 2010, by and among
</DIV>


<DIV align="justify" style="margin-top: 10pt; margin-left:8%; margin-right:8%; font-size: 10pt"><B>SOVEREIGN BUSINESS CAPITAL, DIVISION OF SOVEREIGN BANK</B>, a federal
savings bank and successor by merger to Business Alliance Capital
Corp., with a place of business at 214 Carnegie Center, Suite&nbsp;302,
Princeton, New Jersey 08540 (&#147;<B>Bank</B>&#148;)
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt">and
</DIV>


<DIV align="justify" style="margin-top: 10pt; margin-left:8%; margin-right:8%; font-size: 10pt"><B>TeamStaff Inc. (&#147;TSI&#148;)</B>, a New Jersey corporation with its chief
executive office at 1&nbsp;Executive Drive, Suite&nbsp;130, Somerset, New
Jersey 08873, and<BR>
<B>TeamStaff RX, Inc. (&#147;RX&#148;)</B>, a Texas corporation with its chief
executive office at 1&nbsp;Executive Drive, Suite&nbsp;130, Somerset, New
Jersey 08873, and<BR>
<B>TeamStaff Government Solutions, Inc. (&#147;TGS&#148;), </B>a Georgia corporation
with its chief executive office at 1&nbsp;Executive Drive, Suite&nbsp;130,
Somerset, New Jersey 08873<BR>
(TSI, RX and TGS hereinafter collectively the &#147;<B>Borrowers</B>&#148;)
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><U><B>RECITALS</B></U>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><B>WHEREAS</B>, Bank (then known as Business Alliance Capital Corp. (&#147;<B>BACC</B>&#148;) and Borrowers entered
into a certain March&nbsp;28, 2008 Amended and Restated Loan and Security Agreement (said agreement as
amended, modified or extended from time to time, hereinafter the &#147;<B>Loan Agreement&#148;</B>);
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><B>WHEREAS</B>, the Loan Agreement sets forth the terms and conditions of a $3,000,000 revolving
credit facility extended by Bank to Borrowers;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><B>WHEREAS</B>, each Borrower has guaranteed the obligations of the other Borrowers under the Loan
Agreement pursuant to an instrument of written guaranty dated as of March&nbsp;28, 2008, and entitled
&#147;Multi-Entity Guaranty&#148; (said instrument of written guaranty as amended, modified or extended from
time to time. hereinafter the &#147;<B>Guaranty</B>&#148;);
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><B>WHEREAS</B>, the Term of the Loan Agreement expires on March&nbsp;31, 2011, unless sooner terminated or
extended as more fully set forth in the Loan Agreement;
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"><B>WHEREAS</B>, Bank is the successor by merger to BACC;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">Mod &#151; sale of RX and DSC waiver 9/30/09
</DIV>
<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->- 1 -<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><B>WHEREAS</B>, Advantage RN, LLC (an Ohio entity) and RX and TSI have entered into a certain Asset
Purchase Agreement dated on or about December&nbsp;28, 2009 (the &#147;<B>Asset Purchase Agreement</B>&#148;) pursuant to
which RX and TSI have agreed to sell to Advantage RN, LLC, the following assets of RX (the &#147;<B>Purchased
Assets</B>&#148;): substantially all assets used by RX in the operation of its business of providing travel
nurse and allied health care professionals for temporary assignments, including, but not limited to
(i)&nbsp;office furniture and equipment, (ii)&nbsp;client and customer contracts, (iii)&nbsp;employment agreements
with travel nurses and allied healthcare professionals, (iv)&nbsp;any related databases or lists of
travel nurses and allied healthcare professionals previously utilized by RX, and (v)&nbsp;those assets
described on Exhibit&nbsp;A of the Asset Purchase Agreement &#151; provided, however, the Purchased Assets
do not include any RX&#146; accounts receivables in existence on the date that the sale of the Purchased
Assets is completed;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><B>WHEREAS</B>, Borrowers acknowledge that the sale of the Purchased Assets pursuant to the Asset
Purchase Agreement (the &#147;<B>Sale of RX&#146; Assets</B>&#148;) would result in a violation of the following
provisions of the Loan Agreement:
</DIV>

<DIV style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">Section&nbsp;7.1 of the Loan Agreement which prohibits Borrowers
from entering into any transaction not in the ordinary and usual course of its
business as conducted on the date hereof, including but not limited to the
sale, lease, disposal, movement, relocation or transfer, whether by sale or
otherwise, of any its assets other than sales of Inventory in the ordinary and
usual course of its business as presently conducted;</DIV></TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">Section&nbsp;7.5 of the Loan Agreement which prohibits Borrowers
from making any change in its financial structure or business operations;</DIV></TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">Section&nbsp;7.14 of the Loan Agreement which prohibits Borrowers
from suspending or going out of business;</DIV></TD>
</TR>

</TABLE>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><B>WHEREAS, </B>Section&nbsp;7.15 of the Loan Agreement requires that Borrowers&#146; &#147;Debt Service Coverage
Ratio&#148; (as defined in the Loan Agreement) be not less than 1.05 to 1.0 as at the end of any fiscal
quarter, but Borrowers&#146; internally prepared financial statements as at September&nbsp;30, 2009, indicate
that such &#147;Debt Service Coverage Ratio&#148; was less than 1.05 to 1.0, for the rolling twelve-month
period ending on said September&nbsp;30, 2009, thereby resulting in a violation of the &#147;Debt Service
Coverage Ratio&#148; covenant of said Section&nbsp;7.15 of the Loan Agreement (hereinafter the &#147;<B>DSC Default
as at 09/30/09</B>&#148;);
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"><B>WHEREAS, </B>Borrowers have applied to Bank for each of the following:
</DIV>

<DIV style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">Borrowers have applied to Bank for Bank&#146;s consent to the
Sale of RX&#146; Assets; and</DIV></TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">Borrowers have applied to Bank for a waiver of the DSC
Default as at 09/30/09 for the test date of September&nbsp;30, 2009;</DIV></TD>
</TR>

</TABLE>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><B>WHEREAS</B>, Bank has approved the application of the Borrower, subject, however, to the terms and
conditions set forth herein, including without limitation a reduction of the Advance Limit from
$3,000,000 to $2,000,000.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">Mod &#151; sale of RX and DSC waiver 9/30/09
</DIV>
<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->- 2 -<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><B>NOW, THEREFORE, </B>in consideration of the premises and other good and valuable consideration,
the parties hereto adopt the above recitals and agree as follows:
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">1.&nbsp;Capitalized terms not defined herein but defined in the Loan Agreement shall have the same
meanings ascribed to such terms in the Loan Agreement.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">2.&nbsp;(a)&nbsp;Bank hereby gives its consent to the sale of the Purchased Assets. The aforesaid consent
granted by Bank hereunder is (i)&nbsp;limited to the sale of the Purchased Assets and only so long as
such sale is completed no later than January&nbsp;15, 2010, and (ii)&nbsp;not be deemed a waiver for any
other violation of Section&nbsp;7.1, Section&nbsp;7.5 and Section&nbsp;7.14 of the Loan Agreement for the present
or any future period.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(b)&nbsp;All of the Purchased Assets shall be sold free and clear of the liens held by Bank in the
Purchased Assets and Bank will file a release of its lien in the Purchased Assets.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(c)&nbsp;Bank will retain its lien on all RX&#146; accounts receivables in existence on the date that
the sale of the Purchased Assets is completed pursuant to the Asset Purchase Agreement.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(d)&nbsp;Bank&#146;s aforesaid consent is (i)&nbsp;limited to only the sale of the Purchased Assets pursuant
to the Asset Purchase Agreement and (ii)&nbsp;not a consent for any other transaction involving RX&#146;
assets.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">3.&nbsp;Effective upon the sale of the Purchased Assets, the existing Section&nbsp;2.1 of the Loan Agreement
is hereby amended so as to provide as follows (it being intended to reduce the Advance Limit from
$3,000,000 to $2,000,000):
</DIV>

<DIV align="justify" style="margin-top: 10pt; margin-left:8%; margin-right:4%; font-size: 10pt"><B>2.1 Revolving Advances; Advance Limit. </B>Upon the request of Borrower, made at
any time from and after the date hereof until the Termination Date, and so
long as no Event of Default has occurred, Bank may, in its sole and absolute
discretion, make Advances in an amount up to (a)&nbsp;eighty five percent (85%)
of the aggregate outstanding amount of Eligible Accounts, plus (b)&nbsp;the
lesser of (i)&nbsp;seventy percent (70%) of the aggregate outstanding amount of
Future Eligible Unnoticed Government Contract Accounts or (ii)&nbsp;Five Hundred
Thousand Dollars ($500,000.00), plus (c)&nbsp;the lesser of (i)&nbsp;seventy percent
(70%) of the aggregate outstanding amount of Eligible Unnoticed Government
Contract Accounts or (ii)&nbsp;One Hundred Thousand Dollars ($100,000.00), minus
(d)&nbsp;the Payroll Reserve Amount in effect from time to time, and further
minus (e)&nbsp;the Tax Reserve Amount in effect from time to time; provided,
however, that in no event shall the aggregate amount of the outstanding
Advances under the Revolving Credit Facility be greater than, at any time,
the amount of Two Million Dollars ($2,000,000.00) or such other amount as
Bank and Borrower may agree to in writing from time to time (said dollar
limit the &#147;<I>Advance Limit</I>&#148;). Borrower may from time to time apply to Bank for
an increase in the Advance Limit based upon Borrower&#146;s projection of a need
for an increase in the Advance Limit because of additional contracts awarded
or anticipated may be awarded to Borrower and/or proposed acquisitions by
Borrower and/or other
factors, and with Borrower acknowledging that any increase in the Advance
Limit shall be in the sole and absolute discretion of Bank and on such terms
and conditions as Bank shall require. Bank may create additional reserves
against, or reduce its advance percentage based on Eligible Accounts without
declaring an Event of Default if it determines, in its good faith
discretion, that such reserves or reduction is necessary, including, without
limitation, to protect its interest in the Collateral and/or against
diminution in the value of any Collateral, and/or to insure the prospect of
payment or performance by Borrower of its Obligations to Bank are not
impaired.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">Mod &#151; sale of RX and DSC waiver 9/30/09
</DIV>
<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->- 3 -<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">4.&nbsp;(a)&nbsp;Bank hereby waives the DSC Default as at 09/30/09 for the test date of September&nbsp;30, 2009.
The aforesaid waiver granted by Bank hereunder is (i)&nbsp;limited to the DSC Default as at 09/30/09 and
only for the period and/or date expressly stated above and (ii)&nbsp;not be deemed a waiver for any
future period.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(b)&nbsp;Bank&#146;s aforesaid waiver is (i)&nbsp;limited to only the violations specifically set forth above
and (ii)&nbsp;not a waiver for any other violation or for any period thereafter.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">5.&nbsp;Each Borrower hereby affirms that the Guaranty remains in full force and effect, subject to the
terms and conditions set forth therein, and that as of the date hereof, there is no defense,
set-off, counterclaim or cause of action as to the Guaranty. Each Borrower hereby affirms that the
Guaranty includes the obligations of the Borrower under the Loan Agreement as modified by this
Modification Agreement and that said Guaranty remains absolute and unconditional.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">6.&nbsp;Nothing herein shall be deemed a waiver of (a)&nbsp;any of Lender&#146;s rights and remedies under the
Loan Agreement, the Guaranty or any of the other Loan Documents, (b)&nbsp;any other condition, term or
covenant of the Loan Agreement, the Guaranty or any of the other Loan Documents, (c)&nbsp;Lender&#146;s right
to enforce the Loan Agreement, the Guaranty or any of the other Loan Documents for any future or
other period of time, or (d)&nbsp;Lender&#146;s right to call a default if any Borrower breaches any of the
covenants, conditions or terms of the Loan Agreement, the Guaranty and the other Loan Documents.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">7.&nbsp;Bank&#146;s aforesaid waiver and consent are conditioned upon Borrower&#146;s payment of a waiver fee of
$10,000.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">8.&nbsp;Borrower further represents that:
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(a)&nbsp;each and every representation heretofore made by Borrower in the Loan Agreement is true
and correct as of the date of this Modification Agreement,
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(b)&nbsp;no consent or approval of, or exemption by any Person is required to authorize, or is
otherwise required in connection with the execution and delivery of this Modification Agreement and
the other Loan Documents provided for herein, which has not been obtained and which remains in full
force and effect,
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">Mod &#151; sale of RX and DSC waiver 9/30/09
</DIV>
<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->- 4 -<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(c)&nbsp;Borrower has the power to execute, deliver and carry out this Modification Agreement and
all documents executed in connection herewith, and this Modification Agreement and such other
documents are valid, binding and enforceable against Borrower in accordance with their terms,
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(d)&nbsp;no material adverse change in the financial condition of Borrower has occurred since the
date of the most recent financial statements of Borrower submitted to Bank, and the information
contained in said statements and reports is true and correctly reflects the financial condition of
Borrower as of the dates of the statements and reports, and such statements and reports have been
prepared in accordance with GAAP and do not contain any material misstatement of fact or omit to
state any facts necessary to make the statements contained therein not misleading, and
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%">(e)&nbsp;no default or Event of Default exists under the Loan Agreement.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">9.&nbsp;Borrowers hereby confirm the security interests and liens granted by Borrowers to Bank in and to
the Collateral in accordance with the Loan Agreement and other Loan Documents as security for its
Obligations to Bank. Borrowers hereby authorize Bank to file such financing statements as Bank
deems necessary to perfect and maintain perfected its security interest in the Collateral, which
may, <I>subject to Paragraph&nbsp;2 above</I>, contain an &#147;all asset&#148; or &#147;all property&#148; description of the
Collateral.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">10.&nbsp;Each Borrower represents and warrants to Bank, and acknowledges that it does not have any claim
or offset against, or defense or counterclaim to, Bank, the Loan Agreement or any other Loan
Documents, the indebtedness evidenced by the Loan Documents, or the liens securing any Obligations,
including, without limitation, any defense or offset resulting from or arising out of breach of
contract or duty, the amount of interest charges, collected, or received on any Note, or breach of
any commitment or promise of any type.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">11.&nbsp;Borrowers waive, release and discharge any and all claims or causes of action of any kind
whatsoever, whether at law or in equity, arising on or prior to the date hereof, which Borrowers
may have against Lender, its predecessors and successors and assigns, agents, employees and
counsel, in connection with the Credit Facility, the Loan Agreement, the Guaranty and the other
Loan Documents. The waivers and releases made herein include the waiver of any damages which may
have been or may in the future be caused to any Borrower, any such Borrower&#146;s respective properties
or business prospects because of the actions waived and released and the agreements made herein,
including without limitation, any actual or implicit, direct or indirect, incidental or
consequential damages suffered by any Borrower therefrom, including but not limited to (i)&nbsp;lost
profits, (ii)&nbsp;loss of business opportunity, (iii)&nbsp;increased financing costs, (iv)&nbsp;increased legal
and other administrative fees and (v)&nbsp;damages to business reputation.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">12.&nbsp;Each Borrower hereby ratifies and reaffirms its obligations under the Loan Agreement, the
Guaranty and the other Loan Documents and agrees to be bound, without defense, setoff, recoupment
or counterclaim of any kind
whatsoever, by all of the terms and conditions contained therein, which terms and conditions remain
in full force and effect except as expressly modified hereby.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">Mod &#151; sale of RX and DSC waiver 9/30/09
</DIV>
<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->- 5 -<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">13.&nbsp;Each Borrower will continue to comply with all other terms and conditions now set forth in the
Loan Agreement, the Guaranty and the other Loan Documents (including, without limitation, principal
and interest payments due on the Credit Facility) and all other terms and conditions now set forth
in the Loan Documents.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">14.&nbsp;This Modification Agreement shall be construed and enforced in accordance with the terms of the
laws of the State of New Jersey. If any provision of this Modification Agreement is not
enforceable, the remaining provisions hereof shall be enforced in accordance with their terms.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">15.&nbsp;Borrower agrees to pay any and all expenses, including reasonable counsel fees, including
allocated fees of in-house counsel, and disbursements, incurred by Bank in connection with the
preparation and execution of this Modification Agreement and all other documents executed in
connection herewith.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">16.&nbsp;(a)&nbsp;This Modification Agreement is intended to supplement and modify the Loan Agreement, as
heretofore amended or modified, and the rights and obligations of the parties under the Loan
Agreement shall not in any way be vacated, modified or terminated except as herein provided.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(b)&nbsp;Borrowers&#146; promissory note dated March&nbsp;28, 2008, and entitled &#147;Amended and Restated
Revolving Credit Master Promissory Note&#148; (the &#147;2008 Revolving Note&#148;) shall be restated and amended
by Borrowers&#146; promissory note dated on or about even date herewith in the face amount of $2,000,000
and entitled &#147;Amended and Restated Revolving Credit Master Promissory Note&#148; (as amended, modified
or extended from time to time, the &#147;2010 Revolving Note&#148;). The 2010 Revolving Note shall replace
and substitute for the 2008 Revolving Note. It is intended that the 2010 Revolving Note restate,
amend, substitute for, and replace in its entirety the 2008 Revolving Note and shall evidence
Borrower&#146;s obligation to repay Advances made by Bank under the Loan Agreement and be a &#147;Note&#148; as
such term is defined in the Loan Agreement. The 2010 Revolving Note does not represent in any way
new indebtedness or satisfaction of the indebtedness evidenced by the 2008 Revolving Note. It is
the intention of Borrower that the 2010 Revolving Note shall not constitute a novation of any debt
outstanding on the 2008 Revolving Note
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(c)&nbsp;All terms and conditions contained in each and every other agreement or promissory note or
other evidence of indebtedness of Borrower to Bank are incorporated herein by reference.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(d)&nbsp;If there is a conflict between any of the provisions heretofore entered into and the
provisions of this Modification Agreement, then the provisions of this Modification Agreement shall
govern.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">(e)&nbsp;By entering into this Modification Agreement Bank is not waiving any Event of Default
(except as set forth in Paragraph 4(a) above), if any so exists, or any of its rights and remedies
as a consequence thereof.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">Mod &#151; sale of RX and DSC waiver 9/30/09
</DIV>
<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->- 6 -<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">17.&nbsp;This Modification Agreement shall be construed in accordance with the substantive laws of the
State of New Jersey without regard to conflict of laws.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">18.&nbsp;This Modification Agreement may be executed and delivered in counterparts and by facsimile or
other electronic delivery means, with each such counterpart and facsimile or other electronic
delivery means constituting a valid, effective and enforceable agreement.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt">THIS IS THE LAST PAGE OF THIS DOCUMENT.<BR>
THE NEXT PAGE IS THE SIGNATURE PAGE.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">Mod &#151; sale of RX and DSC waiver 9/30/09
</DIV>
<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->- 7 -<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><B>IN WITNESS WHEREOF, </B>the parties hereto have caused this Modification Agreement to be executed
and delivered as of the day and year first above written.
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left"><B>TeamStaff Inc.</B><BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">                /s/ Cheryl Presuto
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Cheryl Presuto, Chief Financial Officer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left"><B>TeamStaff RX, Inc.</B><BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">                /s/ Cheryl Presuto
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Cheryl Presuto, Chief Financial Officer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left"><B>TeamStaff Government Solutions, Inc.</B><BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">                /s/ Cheryl Presuto
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Cheryl Presuto, Chief Financial Officer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left"><B>SOVEREIGN BUSINESS CAPITAL DIVISION OF SOVEREIGN BANK</B><BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">               /s/ Beatriz H. Freire
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Beatriz H. Freire, Senior Vice President&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">Mod &#151; sale of RX and DSC waiver 9/30/09
</DIV>


<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->- 8 -<!-- /Folio -->
</DIV>




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</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.37
<SEQUENCE>4
<FILENAME>c94758exv10w37.htm
<DESCRIPTION>EXHIBIT 10.37
<TEXT>
<HTML>
<HEAD>
<TITLE>Exhibit 10.37</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="right" style="font-size: 10pt; margin-top: 10pt"><B>Exhibit&nbsp;10.37</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>AMENDED AND RESTATED<BR>
REVOLVING CREDIT MASTER<BR>
PROMISSORY NOTE</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="47%"></TD>
    <TD width="5%"></TD>
    <TD width="47%"></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="left" valign="top"><B>$2,000,000.00</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top"><B>Princeton, New Jersey</B></TD>
</TR>
<TR valign="bottom">
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="left" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">As of January&nbsp;8, 2010</TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%"><B>FOR VALUE RECEIVED, </B>the undersigned <B>TeamStaff Inc. </B>(a New Jersey corporation) and <B>TeamStaff
RX, Inc. </B>(a Texas corporation) and <B>TeamStaff Government Solutions, Inc. </B>(a Georgia corporation),
individually and collectively &#147;Borrower&#148;, each jointly and severally promises to pay to the order
of <B>SOVEREIGN BUSINESS CAPITAL, A DIVISION OF SOVEREIGN BANK, a federal saving bank </B>(herein called
&#147;Bank&#148;) at 214 Carnegie Center, Suite&nbsp;302, Princeton, New Jersey, 08540, or such other address as
Bank may notify Borrower, such sum up to Two Million and 00/100 ($2,000,000.00) Dollars, together
with interest as hereinafter provided, as may be outstanding on Advances by Bank to Borrower under
Paragraph&nbsp;2.1 of the Amended and Restated Loan and Security Agreement dated as of March&nbsp;28, 2008,
between Business Alliance Capital Corp. (&#147;<B>BACC</B>&#148;) and Borrower, as amended from time to time,
including without limitation an instrument of modification between Bank (as the successor by merger
to BACC) and Borrower dated as of even date herewith and entitled &#147;Modification Agreement&#148; (said
Agreement as so amended and as amended or modified from time to time hereafter the &#147;<B>Loan
Agreement</B>&#148;). Capitalized terms not otherwise defined herein have the meanings set forth in the
Loan Agreement. The Loan Agreement is incorporated herein as though fully set forth and Borrower
acknowledges its reading and execution. The principal amount owing hereunder shall be paid to Bank
on March&nbsp;31, 2011, or as may otherwise be provided for in the Loan Agreement.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">On the first day of each month hereafter, Borrower shall pay Bank accrued interest, computed
on the basis of a 360&nbsp;day year, for the actual number of days elapsed, on the daily unpaid balance
of the Advances, at the per annum rate of one-quarter (.25%) percentage points above the Prime Rate
in effect from time to time, but not less than five and one-half (5.5%) per annum. If there is a
change in the Prime Rate, the rate of interest on the Advances shall be changed accordingly as of
the date of the change in the Prime Rate, without notice to Borrower.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Borrower acknowledges Bank as the successor to the rights of BACC under the Loan Agreement.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">This Note replaces and substitutes for Borrower&#146;s March&nbsp;28, 2008, Amended and Restated
Revolving Credit Master Promissory Note in the face amount of $3,000,000. It is intended that this
Note restate, amend, substitute for, and replace in its entirety such March&nbsp;28, 2008, Amended and
Restated Revolving Credit Master Promissory Note. This Note shall evidence Borrower&#146;s obligation
to repay Advances made by Bank under the Loan Agreement and is a &#147;Note&#148; as such term is defined in
the Loan Agreement. This Note does not represent in any way new indebtedness or satisfaction of the
indebtedness evidenced by Borrower&#146;s March&nbsp;28, 2008, Amended and Restated Revolving Credit Master
Promissory Note. It is the intention of Borrower that this Note shall not constitute a novation of
any debt outstanding on Borrower&#146;s March&nbsp;28, 2008, Amended and Restated Revolving Credit Master
Promissory Note on the date hereof.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">To secure the payment of this Note and the Obligations, Borrower has granted to Bank a
continuing security interest in and lien on the Collateral.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">In addition to all remedies provided by law upon default on payment of this Note, or upon an
Event of Default, Bank may, at its option:
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(1)&nbsp;Declare this Note and the Obligations immediately due and payable;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(2)&nbsp;Collect interest on this Note at the default rate set forth in the Loan Agreement from the
date of such Event of Default, and if this Note is referred to an attorney for collection, collect
reasonable attorneys&#146; fees; and
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">Revolving Note
</DIV>
<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->- 1 -<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">(3)&nbsp;Exercise any and all remedies provided for in the Loan Agreement.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%"><B>BORROWER WAIVES PRESENTMENT FOR PAYMENT, PROTEST AND NOTICE OF PROTEST FOR NON-PAYMENT OF THIS
NOTE AND TRIAL BY JURY IN ANY ACTION UNDER OR RELATING TO THIS NOTE AND THE ADVANCES EVIDENCED
HEREBY.</B>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%"><B>THIS NOTE, TOGETHER WITH THE OTHER LOAN DOCUMENTS, REPRESENT THE FINAL AGREEMENT BETWEEN THE
PARTIES REGARDING THE SUBJECT MATTER HEREIN AND THEREIN AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES HERETO. THERE ARE NO UNWRITTEN
ORAL AGREEMENTS BETWEEN THE PARTIES.</B>
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left"><B>TeamStaff Inc.</B><BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">                /s/ Cheryl Presuto
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Cheryl Presuto, Chief Financial Officer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left"><B>TeamStaff RX, Inc.</B><BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">                /s/ Cheryl Presuto
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Cheryl Presuto, Chief Financial Officer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left"><B>TeamStaff Government Solutions, Inc.</B><BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">                /s/ Cheryl Presuto
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Cheryl Presuto, Chief Financial Officer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">Revolving Note
</DIV>


<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->- 2 -<!-- /Folio -->
</DIV>




</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-21
<SEQUENCE>5
<FILENAME>c94758exv21.htm
<DESCRIPTION>EXHIBIT 21
<TEXT>
<HTML>
<HEAD>
<TITLE>Exhibit 21</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="right" style="font-size: 10pt; margin-top: 10pt"><B>EXHIBIT 21</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>TEAMSTAFF, INC. SUBSIDIARIES OF REGISTRANT</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">TeamStaff Rx, Inc.<BR>
TeamStaff Government Solutions, Inc. (formerly known as RS Staffing Services, Inc.)<BR>
DSI Staff ConnXions Northeast, Inc.<BR>
DSI Staff ConnXions Southwest, Inc.<BR>
TeamStaff Solutions, Inc.<BR>
TeamStaff I, Inc.<BR>
TeamStaff II, Inc.<BR>
TeamStaff III, Inc.<BR>
TeamStaff IV, Inc.<BR>
TeamStaff V, Inc.<BR>
TeamStaff VI, Inc.<BR>
TeamStaff VIII, Inc.<BR>
TeamStaff IX, Inc.<BR>
TeamStaff Insurance Services, Inc.<BR>
Employer Support Services, Inc.<BR>
Digital Insurance Services, Inc.<BR>
HR2, Inc.<BR>
BrightLane.com, Inc.

</DIV>
<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.1
<SEQUENCE>6
<FILENAME>c94758exv23w1.htm
<DESCRIPTION>EXHIBIT 23.1
<TEXT>
<HTML>
<HEAD>
<TITLE>Exhibit 23.1</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="right" style="font-size: 10pt; margin-top: 10pt"><B>Exhibit&nbsp;23.1</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>CONSENT OF REGISTERED INDEPENDENT PUBLIC ACCOUNTING FIRM</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">We hereby
consent to the incorporation by reference of our report dated January&nbsp;19, 2010 relating
to the consolidated financial statements and schedule of TeamStaff, Inc. (the &#147;Company&#148;) as of and
for the years ended September&nbsp;30, 2009 and 2008 included in this Annual Report on Form 10-K into
the Company&#146;s previously filed Registration Statements on Form(s) S-3 (File Nos. 333-74478 and
333-120423) and Form(s) S-8 (File Nos. 333-73426 and 333-143951).
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="35%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="64%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ WithumSmith&#043;Brown, PC
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">WithumSmith&#043;Brown, PC</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Morristown, New Jersey</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">January&nbsp;19, 2010</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>



</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>7
<FILENAME>c94758exv31w1.htm
<DESCRIPTION>EXHIBIT 31.1
<TEXT>
<HTML>
<HEAD>
<TITLE>Exhibit 31.1</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="right" style="font-size: 10pt; margin-top: 10pt"><B>EXHIBIT 31.1</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Certification</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">I, Rick J. Filippelli, certify that:
</DIV>

<DIV style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>I have reviewed this Annual Report on Form 10-K of TeamStaff, Inc.;</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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;</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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;</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The registrant&#146;s other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules&nbsp;13a-15(e) and 15d-15(e)) and internal control over financial
reporting (as defined in Exchange Act Rules&nbsp;13a-15(f) and 15d-15(f)) for the
registrant and have:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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;</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>designed such internal
control over financial
reporting, or caused
such internal control
over financial
reporting to be
designed under our
supervision, to
provide reasonable
assurance regarding
the reliability of
financial reporting
and the preparation of
financial statements
for external purposes
in accordance with
generally accepted
accounting principles;</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">5.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The registrant&#146;s other certifying officer(s) 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):</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Date:
January&nbsp;19, 2010
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="35%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="64%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Rick J. Filippelli
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Rick J. Filippelli
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Chief Executive Officer</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(Principal Executive Officer)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>


<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>8
<FILENAME>c94758exv31w2.htm
<DESCRIPTION>EXHIBIT 31.2
<TEXT>
<HTML>
<HEAD>
<TITLE>Exhibit 31.2</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="right" style="font-size: 10pt; margin-top: 10pt"><B>EXHIBIT 31.2</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Certification</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">I, Cheryl Presuto, certify that:
</DIV>

<DIV style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>I have reviewed this Annual Report on Form 10-K of TeamStaff, Inc.;</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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;</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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;</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The registrant&#146;s other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules&nbsp;13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and have:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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;</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>designed such internal control
over financial reporting, or
caused such internal control over
financial reporting to be
designed under our supervision,
to provide reasonable assurance
regarding the reliability of
financial reporting and the
preparation of financial
statements for external purposes
in accordance with generally
accepted accounting principles;</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">5.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The registrant&#146;s other certifying officer(s) 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):</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Date:
January&nbsp;19, 2010
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="35%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="64%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Cheryl Presuto
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Cheryl Presuto
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Chief Financial Officer</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(Principal Accounting Officer)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>


<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.1
<SEQUENCE>9
<FILENAME>c94758exv32w1.htm
<DESCRIPTION>EXHIBIT 32.1
<TEXT>
<HTML>
<HEAD>
<TITLE>Exhibit 32.1</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="right" style="font-size: 10pt; margin-top: 10pt"><B>EXHIBIT 32.1</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>Certification of Chief Executive Officer and Chief Financial Officer<BR>
Pursuant to 18 U.S.C Section&nbsp;1350,<BR>
As Adopted Pursuant to Section&nbsp;906 of the Sarbanes-Oxley Act of 2002</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">In connection with the Fiscal Year End Report of TeamStaff, Inc. (the &#147;Company&#148;) on Form 10-K for
the period ending September&nbsp;30, 2009 as filed with the Securities and Exchange Commission on the
date hereof (the &#147;Report&#148;), the undersigned, being, Rick J. Filippelli, Chief Executive Officer,
and Cheryl Presuto, Chief Financial Officer and Principal Accounting Officer, certify, pursuant to
18 U.S.C. ss.1350, as adopted pursuant to Section&nbsp;906 of the Sarbanes-Oxley Act of 2002, that:
</DIV>

<DIV style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Report fully complies with the requirements of Section 13(a)
or 15(d) of the Securities Exchange Act of 1934; and</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The information contained in the Report fairly presents, in all
material respects, the financial condition and result of
operations of the Company.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Dated:
January&nbsp;19, 2010
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="18%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="40%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Rick J. Filippelli
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Cheryl Presuto</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Rick J. Filippelli
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Cheryl Presuto</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Chief Executive Officer
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chief Financial Officer</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(Principal Executive Officer)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">(Principal Accounting Officer)</TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">A signed original of this written statement required by Section&nbsp;906 has been provided to the
Company and will be retained by the Company and furnished to the Securities and Exchange Commission
or its staff upon request.
</DIV>


<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>



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