<SUBMISSION>
<ACCESSION-NUMBER>0001019056-07-001327
<TYPE>PRE 14A
<PUBLIC-DOCUMENT-COUNT>1
<PERIOD>20071221
<FILING-DATE>20071221
<DATE-OF-FILING-DATE-CHANGE>20071221
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>JACLYN INC
<CIK>0000052969
<ASSIGNED-SIC>3100
<IRS-NUMBER>221432053
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>0630
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>PRE 14A
<ACT>34
<FILE-NUMBER>001-05863
<FILM-NUMBER>071323425
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>197 WEST SPRING VALLEY AVENUE
<CITY>MAYWOOD
<STATE>NJ
<ZIP>07607
<PHONE>201-909-6000
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>197 WEST SPRING VALLEY AVENUE
<CITY>MAYWOOD
<STATE>NJ
<ZIP>07607
</MAIL-ADDRESS>
</FILER>
<DOCUMENT>
<TYPE>PRE 14A
<SEQUENCE>1
<FILENAME>jaclyn_pre14a.htm
<DESCRIPTION>PRE 14A
<TEXT>

<HTML>

<HEAD><TITLE></TITLE></HEAD>
<BODY>

<HR NOSHADE COLOR=BLACK ALIGN=CENTER WIDTH="100%" SIZE=4>

<P ALIGN=CENTER><B><FONT SIZE=5>UNITED
STATES<BR>
SECURITIES AND EXCHANGE COMMISSION<BR>
</FONT><FONT SIZE=3>Washington, D.C. 20549</FONT></B></P>

<P ALIGN=CENTER><FONT SIZE=5><B>SCHEDULE
14A</B></FONT></P>

<P ALIGN=CENTER><FONT SIZE=3><B>Proxy Statement Pursuant to Section 14(a) of the
Securities<BR>
Exchange Act of 1934</B></FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="5%" VALIGN=TOP>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="5%" VALIGN=TOP>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="90%" VALIGN=TOP>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
</TR>
<TR>
<TD COLSPAN="3" VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>Filed by the Registrant <FONT   FACE=WINGDINGS>&#253;</FONT></FONT></P>
</TD>
</TR>
<TR>
<TD COLSPAN="3" VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>Filed by a Party other than the Registrant <FONT   FACE=WINGDINGS>o</FONT></FONT></P>
</TD>
</TR>
<TR>
<TD COLSPAN="3" VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD COLSPAN="3" VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>Check the appropriate box:</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2 FACE=WINGDINGS>&#253;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>Preliminary Proxy Statement</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2 FACE=WINGDINGS>o</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2><B>Confidential,
  for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>Definitive Proxy Statement</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2 FACE=WINGDINGS>o</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>Definitive Additional Materials</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2 FACE=WINGDINGS>o</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>Soliciting Material Pursuant to &#167; 240.14a-12</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD COLSPAN="3" VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=5><B>JACLYN, INC.</B></FONT></P>
</TD>
</TR>
<TR>
<TD COLSPAN="3" VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD COLSPAN="3" VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>(Name of Registrant as
  Specified In Its Charter)</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD COLSPAN="3" VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD COLSPAN="3" VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>(Name of Person(s)
  Filing Proxy Statement, if other than the Registrant)</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD COLSPAN="3" VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>Payment of Filing Fee (Check the appropriate box):</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2 FACE=WINGDINGS>&#253;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>No fee required</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2 FACE=WINGDINGS>o</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>Fee computed on table below per Exchange Act Rules
  14a-6(i)(4) and 0-11.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>(1)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>Title of each class of securities to which
  transaction applies:</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>(2)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>Aggregate number of securities to which transaction
  applies:</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>(3)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>Per unit price or other underlying value of
  transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount
  on which the filing fee is calculated and state how it was determined):</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>(4)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>Proposed maximum aggregate value of transaction:</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>(5)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>Total fee paid:</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2 FACE=WINGDINGS>o</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>Fee paid previously with preliminary materials.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2 FACE=WINGDINGS>o</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>Check box if any part of the fee is offset as
  provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which
  the offsetting fee was paid previously. Identify the previous filing by
  registration statement number, or the Form or Schedule and the date of its
  filing.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>(1)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>Amount Previously Paid:</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>(2)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>Form, Schedule or Registration Statement No.:</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>(3)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>Filing Party:</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>(4)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>Date Filed:</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
</TR>
</TABLE>
<BR>
<HR NOSHADE COLOR=BLACK ALIGN=CENTER WIDTH="100%" SIZE=4><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P ALIGN=CENTER><FONT SIZE=2><B>JACLYN, INC.<BR>
</B><B>197 West Spring Valley Road<BR>
Maywood, New Jersey 07607</B></FONT></P>

<P ALIGN=RIGHT><FONT SIZE=2>_______________, 2008</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>Dear Fellow Stockholders:</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You
are cordially invited to attend a special meeting of stockholders (the &#147;Special
Meeting&#148;) of Jaclyn, Inc., a Delaware corporation (the &#147;Company&#148;), which will be
held at the Company&#146;s principal executive offices, 197 West Spring Valley Road,
Maywood, New Jersey 07607 at 9:00 a.m. (local time) on _____________ __, 2008.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At
the Special Meeting, you will be asked to consider and vote upon a proposal to
amend the Company&#146;s certificate of incorporation to effect a 1-for-250 reverse
stock split of the Company&#146;s common stock, $1.00 per share par value, followed
immediately by a 250-for-1 forward stock split of the Company&#146;s common stock. If
the reverse stock split/forward stock split proposal is approved, upon its
completion each share of common stock held by a stockholder of record owning
fewer than 250 shares at the effective time of the reverse stock split will be
converted into the right to receive $10.21 in cash, without interest. Each share of common stock held by a stockholder
of record owning 250 shares or more will continue to represent one share of
common stock after completion of the Transaction.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
primary effect of the reverse stock split/forward stock split proposal will be
to reduce the Company&#146;s total number of record holders of common stock to below
300. As a result, the Company will be able to cease registration of its common
stock under the Exchange Act and withdraw its shares from listing on the
American Stock Exchange. The Company anticipates savings of approximately
$500,000 on an annual basis as a result of the Transaction, as well as
additional one-time savings during its current fiscal year for the initial
costs of compliance with the internal control provisions of the Sarbanes-Oxley
Act of 2002.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
May 23, 2007, the Board of Directors formed a Special Committee consisting only
of independent directors to consider and evaluate the reverse stock
split/forward stock split proposal, including its fairness to those
unaffiliated stockholders who will a receive cash payment for their fractional
shares, and those unaffiliated stockholders who will continue as stockholders.
Each member of the Special Committee is independent under applicable federal
securities laws and the rules of the American Stock Exchange. The Special
Committee has received a fairness opinion from Houlihan Smith &amp; Company
Inc., its independent financial advisor, indicating that the $10.21 per share
price to be received by unaffiliated stockholders of the Company for their
shares of common stock to be cashed out as a result of the reverse stock split
is fair from a financial point of view to those stockholders and to those
unaffiliated stockholders who will continue as stockholders.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
the protection of all continuing stockholders, the Company will maintain
certain important corporate governance measures and other protections following
the proposed Transaction, which are described in more detail in the attached
proxy statement. Those measures include, among others, that the Company will
make publicly available to its continuing stockholders annual audited and
quarterly unaudited financial statements, will have the Company&#146;s financial
statements certified by the Company&#146;s chief executive officer and chief
financial officer, will hold annual stockholder meetings, and will publicly
disclose other material events to stockholders. In addition, in order to
maintain a trading market in the Company&#146;s shares of common stock, it is also a
condition to the Transaction that the Company&#146;s common stock be quoted on the
OTCQX<SUP>SM</SUP> tier of Pink Sheets, LLC.</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;After
careful consideration, each of the Special Committee and the Board of Directors
has concluded that the Transaction is advisable and is in the best interests of
the Company and its stockholders, including its unaffiliated stockholders who
would be cashed out in the Transaction and its unaffiliated stockholders who
would continue as stockholders, and recommends that you vote &#147;FOR&#148; approval of
the Amendments.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
accompanying proxy statement explains the proposed Transaction and provides
specific information about the Special Meeting. Please read it carefully. You
may obtain additional information about the Company from documents the Company
has filed with the Securities and Exchange Commission.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;THE
TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE FAIRNESS
OR MERITS OF THE TRANSACTION OR UPON THE ACCURACY OR ADEQUACY OF THE
INFORMATION CONTAINED IN THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE. </B></FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Your
vote is important. </B>Whether
or not you plan to attend the Special Meeting, the Company urges you to please
complete, sign and date the enclosed proxy card and return it in the enclosed
envelope. The envelope requires no postage if mailed in the United States. If
you attend the Special Meeting, you may vote in person, even if you have
previously returned your proxy card, as described in the attached proxy
statement.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Your
prompt attention would be greatly appreciated.</FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="45%" VALIGN=TOP>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="50%" VALIGN=TOP>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>Sincerely,</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>Robert Chestnov</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>President and Chief
  Executive Officer</FONT></P>
</TD>
</TR>
</TABLE>
<BR>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P ALIGN=CENTER><FONT SIZE=2><B>JACLYN, INC.<BR>
</B><B>197 West Spring Valley Road<BR>
Maywood, New Jersey 07607</B></FONT></P>

<P ALIGN=CENTER><FONT SIZE=2><B>NOTICE OF SPECIAL MEETING OF
STOCKHOLDERS<BR>
TO BE HELD __________________, 2008</B></FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>To
Our Stockholders:</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notice
is hereby given that a special meeting of stockholders (the &#147;Special Meeting&#148;)
of Jaclyn, Inc., a Delaware corporation (the &#147;Company&#148;), will be held at the
Company&#146;s principal executive offices, 197 West Spring Valley Road, Maywood,
New Jersey 07607 at 9:00 a.m. (local time) on _____________, 2008. The Special
Meeting is being held for the following purposes:</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.
To consider and vote upon a proposal to amend the Company&#146;s certificate of
incorporation, as amended to date, to effect a 1-for-250 reverse stock split
(the &#147;Reverse Stock Split&#148;) of the Company&#146;s common stock, $1.00 par value per
share, followed immediately by a 250-for-1 forward stock split of the Company&#146;s
common stock (the &#147;Forward Stock Split,&#148; together with the Reverse Stock Split,
is referred to as the &#147;Transaction&#148;). As a result of the Transaction:</FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="3%" VALIGN=TOP>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="97%" VALIGN=TOP>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>each share of common stock held by a stockholder of
  record owning fewer than 250 shares at the effective time of the Reverse
  Stock Split will be converted into the right to receive $10.21 in cash,
  without interest; and</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>each share of common stock held by a stockholder of
  record owning 250 shares or more at the effective time of the Transaction
  will continue to represent one share of common stock after completion of the
  Transaction.</FONT></P>
</TD>
</TR>
</TABLE>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Copies of the proposed amendments to the Company&#146;s
certificate of incorporation, as amended to date, are attached hereto as <U>Annex
A</U> to the accompanying proxy statement.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.
To transact such other business as may properly come before the Special Meeting
or any adjournments or postponements of the Special Meeting.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Only
stockholders of record at the close of business on ___________ __, 2008 are
entitled to notice of, and to vote at, the Special Meeting or any adjournments
or postponements thereof.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All
stockholders are cordially invited to attend the Special Meeting in person.
However, whether or not you plan to attend the Special Meeting, please date,
sign and return the enclosed proxy in the postage prepaid envelope enclosed for
that purpose.</FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="44%" VALIGN=TOP>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="28%" VALIGN=TOP>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="28%" VALIGN=TOP>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>By Order of the Board of Directors</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>Jaclyn Hartstein</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=center><FONT SIZE=2><I>Secretary</I></FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
</TABLE>

<P ALIGN=JUSTIFY><FONT SIZE=2>_____________,
2008</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P ALIGN=CENTER><FONT SIZE=2>TABLE OF CONTENTS</FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="5%" VALIGN=TOP>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="90%" VALIGN=TOP>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="5%" VALIGN=TOP>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
</TR>
<TR>
<TD COLSPAN="2" VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_001">SUMMARY
  TERM SHEET</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>2</FONT></P>
</TD>
</TR>
<TR>
<TD COLSPAN="2" VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_002"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_002">The
  Transaction</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>2</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_003"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_003">Purpose
  of and Reasons for the Transaction</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>2</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_004"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_004">Effects
  of the Transaction</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>3</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_005"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_005">Special
  Committee and Board of Directors&#146; Protections for Continuing Stockholders</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>5</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_006"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_006">Special
  Committee and Board of Directors Recommendations of the Transaction</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>6</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_007"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_007">Reservation
  of Rights</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>7</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_008"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_008">Fairness
  of the Transaction</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>7</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_009"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_009">Advantages
  of the Transaction</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>8</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_010"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_010">Disadvantages
  of the Transaction</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>8</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_011"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_011">Potential
  Conflicts of Interests of Officers, Directors, and Certain Affiliated Persons</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>10</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_012"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_012">Vote
  Required for Approval of the Transaction At the Special Meeting</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>10</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_013"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_013">Treatment
  of Beneficial Holders (stockholders holding shares in street name)</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>10</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_014"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_014">Effectiveness
  of the Transaction</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>11</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_015"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_015">Financing
  for the Transaction</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>11</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_016"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_016">Recent
  Market Price of the Company&#146;s Common Stock</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>11</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_017"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_017">No
  Appraisal or Dissenters&#146; Rights</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>11</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_018"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_018">Material
  Federal Income Tax Consequences</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>12</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD COLSPAN="2" VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_019">QUESTIONS
  AND ANSWERS ABOUT THE TRANSACTION AND THE SPECIAL MEETING</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>13</FONT></P>
</TD>
</TR>
<TR>
<TD COLSPAN="2" VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_020"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_020">Where
  and when is the Special Meeting?</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>13</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_021"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_021">What
  am I being asked to vote on at the Special Meeting?</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>13</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_022"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_022">What
  is the purpose of the Transaction?</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>13</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_023"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_023">What
  does the deregistration of our common stock mean?</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>13</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_024"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_024">What
  are the Pink Sheets?</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>14</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_025"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_025">What
  will I receive in the Transaction?</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>15</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_026"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_026">Can
  the Board of Directors or the Special Committee determine that a different
  reverse stock split/forward stock split ratio should be used to effect the
  Transaction?</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>15</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_027"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_027">What
  if I hold fewer than 250 shares of common stock and hold all of my shares in
  &#147;street name&#148;?</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>15</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_028"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_028">What
  happens if I own a total of 250 or more shares of common stock beneficially,
  but I hold fewer than 250 shares of record in my name and fewer than 250
  shares of with my broker in street name?</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>15</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_029"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_029">If
  I own fewer than 250 shares of common stock, is there any way I can continue
  to be a stockholder of the Company after the Transaction?</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>16</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_030"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_030">Is
  there anything I can do if I own 250 or more shares of common stock, but
  would like to take advantage of the opportunity to receive cash for my shares
  as a result of the Transaction?</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>16</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_031"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_031">Who
  is entitled to vote at the Special Meeting?</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>16</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_032"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_032">How
  many shares were outstanding on the Record Date?</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>16</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_033"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_033">What
  is a &#147;quorum&#148; for purposes of the Special Meeting?</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>16</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_034"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_034">What
  vote is required to approve the proposal?</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>16</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_035"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_035">What
  will happen if the Transaction is approved by the Company&#146;s stockholders?</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>17</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_036"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_036">What
  will happen if the Transaction is not approved?</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>17</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_037"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_037">If
  the Transaction is approved by the stockholders can the Board of Directors or
  the Special Committee determine not to proceed with the Transaction?</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>17</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_038"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_038">What
  are the federal income tax consequences of the Transaction to me?</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>17</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_039"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_039">Should
  I send in my certificates now?</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>17</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_040"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_040">What
  is the total cost of the Transaction to the Company?</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>17</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_041"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_041">Am
  I entitled to appraisal rights in connection with the Transaction?</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>18</FONT></P>
</TD>
</TR>
</TABLE>

<P ALIGN=CENTER><FONT SIZE=2>i</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="5%" VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'>&nbsp;</P>
</TD>
<TD WIDTH="90%" VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'>&nbsp;</P>
</TD>
<TD WIDTH="5%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_042"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_042">How
  do I vote?</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>18</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_043"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_043">Can
  I change my vote?</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>18</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_044"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_044">What
  does it mean if I get more than one proxy card?</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>18</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_045"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_045">How
  does the board of directors recommend that I vote on the proposal?</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>18</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD COLSPAN="2" VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_046">CAUTIONARY
  STATEMENT REGARDING FORWARD-LOOKING STATEMENTS</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>19</FONT></P>
</TD>
</TR>
<TR>
<TD COLSPAN="2" VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD COLSPAN="2" VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_047">SPECIAL
  FACTORS</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>20</FONT></P>
</TD>
</TR>
<TR>
<TD COLSPAN="2" VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_048"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_048">Purpose
  of and Reasons for the Transaction</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>20</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_049"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_049">Special
  Committee and Board of Directors&#146; Protections for Continuing Stockholders</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>22</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_050"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_050">Background
  of the Transaction</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>24</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_051"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_051">Alternatives
  to the Transaction</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>33</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_052"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_052">Effects
  of the Transaction</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>35</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_053"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_053">American
  Stock Exchange Listing; Pink Sheets Listing</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>41</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_054"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_054">Fairness
  of the Transaction</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>42</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_055"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_055">Fairness
  Opinion of Financial Advisor</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>47</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_056"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_056">Conduct
  of the Company&#146;s Business After the Transaction</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>53</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_057"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_057">Material
  Federal Income Tax Consequences</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>53</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_058"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_058">Potential
  Conflicts of Interests of Officers, Directors, and Certain Affiliated Persons</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>56</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_059"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_059">Source
  of Funds and Expenses</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>57</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_060"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_060">Stockholder
  Approval</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>58</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_061"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_061">Effective
  Date</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>58</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_062"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_062">Termination
  of Transaction</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>58</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_063"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_063">Exchange
  of Certificates and Payment for Fractional Shares</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>59</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_064"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_064">No
  Appraisal or Dissenters&#146; Rights</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>60</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_065"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_065">Escheat
  Laws</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>60</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD COLSPAN="2" VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_066">INFORMATION
  ABOUT THE COMPANY</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>62</FONT></P>
</TD>
</TR>
<TR>
<TD COLSPAN="2" VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_067"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_067">Market
  Price of Common Stock</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>62</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_068"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_068">Dividends</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>62</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_069"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_069">Stockholders</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>62</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_070"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_070">Stock
  Purchases</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>62</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_071"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_071">Directors
  and Executive Officers</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>64</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_072"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_072">Security
  Ownership of Certain Beneficial Owners</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>65</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_073"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_073">Stockholders
  Agreement</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>67</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD COLSPAN="2" VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_074">MEETING
  AND VOTING INFORMATION</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>68</FONT></P>
</TD>
</TR>
<TR>
<TD COLSPAN="2" VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_075"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_075">Outstanding
  Voting Securities and Voting Rights</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>68</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_076"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_076">Information
  Concerning Proxies; Revocation of Proxies</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>68</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_077"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_077">Solicitation</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>68</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_078"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_078">Quorum
  and Certain Voting Matters</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>68</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_079"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_079">Adjournment
  or Postponement</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>68</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD COLSPAN="2" VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_080">FINANCIAL
  INFORMATION</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>69</FONT></P>
</TD>
</TR>
<TR>
<TD COLSPAN="2" VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_081"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_081">Summary
  Historical Financial Information</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>69</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_082"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_082">Pro
  Forma Consolidated Financial Statements (Unaudited)</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>70</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_083"></A></FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_083">Ratio
  of Earnings to Fixed Charges</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>75</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD COLSPAN="2" VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_084">STOCKHOLDER
  PROPOSALS</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>76</FONT></P>
</TD>
</TR>
<TR>
<TD COLSPAN="2" VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD COLSPAN="2" VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_085">WHERE
  YOU CAN FIND MORE INFORMATION</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>76</FONT></P>
</TD>
</TR>
<TR>
<TD COLSPAN="2" VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD COLSPAN="2" VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#JN_086">DOCUMENTS
  INCORPORATED BY REFERENCE</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>77</FONT></P>
</TD>
</TR>
</TABLE>

<P ALIGN=CENTER><FONT SIZE=2>ii</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P ALIGN=CENTER><FONT SIZE=2><B>JACLYN,
INC. <BR>
197 West Spring Valley Road<BR>
Maywood, New Jersey 07607</B></FONT></P>

<P align=justify><HR NOSHADE WIDTH=200 COLOR=black size=1>

<P ALIGN=CENTER><FONT SIZE=2><B>PROXY
STATEMENT FOR<BR>
SPECIAL MEETING OF STOCKHOLDERS</B></FONT></P>

<P align=justify><HR NOSHADE WIDTH=200 COLOR=black size=1>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
proxy statement is furnished in connection with the solicitation of proxies by
the Board of Directors of Jaclyn, Inc., a Delaware corporation (the &#147;Company,&#148; &#147;we,&#148;
&#147;our,&#148; &#147;ours,&#148; and &#147;us&#148;), for use at a special meeting of stockholders (the &#147;Special
Meeting&#148;) to be held at the Company&#146;s principal executive offices, 197 West
Spring Valley Road, Maywood, New Jersey 07607 at 9:00&nbsp;a.m. (local time) on
_____________ __, 2008, and at any adjournments or postponements of the Special
Meeting, for the purposes set forth on the attached notice of special meeting
of stockholders and in this proxy statement. Accompanying this proxy statement
is the Board of Directors&#146; proxy for the Special Meeting, which you may use to
indicate your vote on the proposal described in the proxy statement. We are
mailing this proxy statement on or about __________________, 2008.</FONT></P>

<P ALIGN=CENTER><FONT SIZE=2><B>PROPOSAL 1-AMENDMENTS TO THE COMPANY&#146;S CERTIFICATE<BR>
OF INCORPORATION TO EFFECT A 1-FOR-250 REVERSE STOCK SPLIT AND <BR>
A 250-FOR-1 FORWARD STOCK SPLIT</B></FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At
the Special Meeting, stockholders are being asked to consider and vote upon a proposal to amend the Company&#146;s
certificate of incorporation, as amended to date, to effect a 1-for-250 reverse
stock split (the &#147;Reverse Stock Split&#148;) of the Company&#146;s common stock, $1.00
par value per share, followed immediately by a 250-for-1 forward stock split
(the &#147;Forward Stock Split&#148;) of the Company&#146;s common stock Transaction:</FONT></P>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="3%" VALIGN=TOP>
<P align=justify>&nbsp;</P>
</TD>
<TD WIDTH="97%" VALIGN=TOP>
<P align=justify>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>each share of common stock held by a stockholder of
 record owning fewer than 250 shares at the effective time of the Reverse
 Stock Split will be converted into the right to receive $10.21 in cash,
 without interest;&nbsp;and</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>each share of common stock held by a stockholder of
 record owning 250 shares or more shares at the effective time of the
 Transaction will continue to represent one share of common stock after
 completion of the Transaction.</FONT></P>
</TD>
</TR>
</TABLE>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;After
the Transaction, we anticipate that we will have fewer than 300 stockholders of
record. In that event, we intend to cease registration of our common stock
under the Securities Exchange Act of 1934, as amended (the &#147;Exchange Act&#148;). As
a result, effective on and following the termination of the registration of our
common stock under the Exchange Act, the Company would no longer be subject to
the reporting requirements under the Exchange Act, or to the internal control audit and other
requirements under the Sarbanes-Oxley Act of 2002 (the &#147;Sarbanes-Oxley Act&#148;).
Our common stock also would cease to be listed on the American Stock Exchange
and will not be eligible for listing on the New York Stock Exchange, the
Nasdaq Global Select Market, the Nasdaq Global Market or the Nasdaq Capital
Market. Any trading in our common stock
after the Transaction and deregistration under the Exchange Act will only occur
in privately negotiated sales or on the OTCQX<SUP>SM </SUP>tier of Pink Sheets, LLC, or the &#147;pink
sheets.&#148;</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P ALIGN=CENTER><A NAME="JN_001"></A><FONT SIZE=2><B>SUMMARY
TERM SHEET</B></FONT></P>

<P align=justify><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following summary term sheet, together with the Questions and Answers section
that follows, highlights certain information about the proposed Transaction,
but may not contain all of the information that is important to you. For a more
complete description of the Transaction, we urge you to carefully read this
proxy statement and all of its annexes before you vote. For your convenience,
we have directed your attention to the location in this proxy statement where
you can find a more complete discussion of the items listed below.</I></FONT></P>

<P align=justify><A NAME="JN_002"></A><FONT SIZE=2><B>The Transaction</B></FONT></P>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="3%" VALIGN=TOP>
<P align=justify>&nbsp;</P>
</TD>
<TD WIDTH="97%" VALIGN=TOP>
<P align=justify>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>A special committee of the Board of Directors
 comprised solely of independent directors, which we refer to in this proxy
 statement as the &#147;Special Committee,&#148; and the Board of Directors has each
 reviewed, recommended and authorized a 1-for-250 reverse stock split of our
 common stock, followed by a 250-for-1 forward stock split of our common
 stock. Stockholders owning fewer than 250&nbsp;shares at the effective time
 of the reverse stock split, whom we refer to as &#147;Cashed Out Stockholders,&#148;
 will receive $10.21 in cash, without interest, for each share held at the
 effective time of the Reverse Stock Split, and they will no longer be
 stockholders of the Company.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>Stockholders who own 250 or more shares at the
 effective time of the Transaction, whom we refer to as &#147;Continuing
 Stockholders,&#148; will not be entitled to receive any cash for their fractional
 share interests resulting from the Reverse Stock Split, if any. </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>The Forward Stock Split that will immediately follow
 the Reverse Stock Split will reconvert whole shares and fractional share
 interests held by the Continuing Stockholders back into the same number of
 shares of our common stock they held immediately before the effective time of
 the Transaction. As a result, the total number of shares of our common stock
 held by a Continuing Stockholder will not change.</FONT></P>
</TD>
</TR>
</TABLE>

<BR>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="5%" VALIGN=TOP>
<P align=justify>&nbsp;</P>
</TD>
<TD WIDTH="5%" VALIGN=TOP>
<P align=justify>&nbsp;</P>
</TD>
<TD WIDTH="90%" VALIGN=TOP>
<P align=justify>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>See &#147;Special Factors &#150; Effects of the Transaction&#148;
 beginning on page 35.</FONT></P>
</TD>
</TR>
</TABLE>

<P align=justify><A NAME="JN_003"></A><FONT SIZE=2><B>Purpose
of and Reasons for the Transaction</B></FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Special Committee and the Board of Directors has decided that the costs of being an SEC
reporting company currently outweigh the benefits and, thus, it is no longer in
our best interests or the best interests of our stockholders, including our
unaffiliated stockholders (consisting of stockholders other than our executive
officers and directors and other than those stockholders who are parties to the
amended and restated stockholders agreement (the &#147;Stockholders Agreement&#148;)
described below) for us to remain a SEC
reporting company. The Transaction is intended to make us a non SEC reporting
company. Our reasons for proposing the Transaction include:</FONT></P>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="3%" VALIGN=TOP>
<P align=justify>&nbsp;</P>
</TD>
<TD WIDTH="97%" VALIGN=TOP>
<P align=justify>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>Annual cost savings we expect to realize as a result
 of the termination of the registration of our shares of common stock under
 the Exchange Act and the delisting of our common stock from the American
 Stock Exchange, including ongoing expenses for compliance with the
 Sarbanes-Oxley Act of 2002 (the &#147;Sarbanes-Oxley Act&#148;), and other accounting,
 legal, printing and other miscellaneous costs associated with being a
 publicly traded company, which we estimate will exceed approximately $500,000
 per year.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>An additional one-time cost savings during our
 current fiscal year, which ends on June 30, 2008, estimated to total
 approximately $140,000, due to the Company not becoming subject to the
 internal </FONT></P>
</TD>
</TR>
</TABLE>

<P ALIGN=CENTER><FONT SIZE=2>2</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="3%" VALIGN=TOP>
<P align=justify>&nbsp;</P>
</TD>
<TD WIDTH="97%" VALIGN=TOP>
<P align=justify>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>control audit requirements imposed by
 Section&nbsp;404 of the Sarbanes-Oxley Act, which would be effective, in
 part, as to us for the first time beginning with our current fiscal year.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>The additional savings in terms of our management&#146;s
 and employees&#146; time that will no longer be spent preparing the periodic and
 other reports required of SEC reporting companies under the Exchange Act,
 complying with the Sarbanes-Oxley Act, and managing stockholder relations and
 communications, although the Company will continue to be subject to the
 general anti-fraud provisions of applicable federal and state securities
 laws. </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>The ability of our management to focus on long-term
 growth without an undue emphasis on short-term financial results.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>The ability of our small stockholders (those holding
 fewer than 250 shares), who represent a large number of our record holders,
 to liquidate their holdings in us and receive a premium over market prices
 prevailing at the time of our public announcement of the Transaction, without
 incurring brokerage commissions.</FONT></P>
</TD>
</TR>
</TABLE>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;See
&#147;Special Factors &#150; Purpose of and Reasons for the Transaction&#148; beginning on
page 20 and &#147;Special Factors&#151;Special Committee and Board of Directors&#146;
Protections for Continuing Stockholders&#148; beginning on page 22.</FONT></P>

<P align=justify><A NAME="JN_004"></A><FONT SIZE=2><B>Effects
of the Transaction</B></FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
a result of the Transaction:</FONT></P>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="3%" VALIGN=TOP>
<P align=justify>&nbsp;</P>
</TD>
<TD WIDTH="97%" VALIGN=TOP>
<P align=justify>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>The number of our stockholders of record will be
 reduced below 300, which will allow us to cease the registration of our
 shares of common stock under the Exchange Act. Effective on and following the
 termination of the registration of our common stock under the Exchange Act,
 we will no longer be subject to any reporting requirements under the Exchange
 Act or the rules of the SEC applicable to SEC reporting companies. We will,
 therefore, cease to file annual, quarterly, current, and other reports and
 documents with the SEC, and stockholders will cease to receive annual reports
 and proxy statements. However, the Special Committee&#146;s recommendation of the
 Transaction to the full Board of Directors, and the Board of Directors
 approval of the Transaction, is contingent upon our common stock being quoted
 by at least two market makers on the OTCQX<SUP>SM</SUP> tier of the pink
 sheets. As a result we will be required to meet certain reporting
 requirements of the OTCQX<SUP>SM </SUP>tier, including, without limitation,
 preparing quarterly
 and annual financial reports and interim material event disclosure in
 accordance with the reporting requirements of the OTCQX<SUP>SM</SUP> tier.
 The reporting requirements of the OTCQX<SUP>SM</SUP> tier, however, are less
 onerous than the reporting requirements under the Exchange Act applicable to
 SEC reporting companies.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>We will no longer be subject to the provisions of
 the Sarbanes-Oxley Act, including the internal control provisions of that act
 and our chief executive officer and chief financial officer will no longer be
 required to certify our financial statements under that act. However, in
 accordance with the rules of the OTCQX<SUP>SM</SUP> tier of the pink sheets,
 and as required by our Board of Directors and the Special Committee, each of
 our chief executive officer and chief financial officer will be required to
 certify that (i) to his knowledge, the information about us furnished in
 accordance with the rules of the pink sheets 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
 that information; (ii) to his knowledge, the financial statements, and other
 financial information furnished in accordance with the rules of the pink
 sheets fairly present in all material respects our financial condition,
 results of </FONT></P>
</TD>
</TR>
</TABLE>

<P ALIGN=CENTER><FONT SIZE=2>3</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="3%" VALIGN=TOP>
<P align=justify>&nbsp;</P>
</TD>
<TD WIDTH="97%" VALIGN=TOP>
<P align=justify>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>operations and cash flows as of, and for, the
 periods presented; and (iii) based upon his reasonable belief, for at least
 one year from the date of the certification, we have sufficient working
 capital to continue operations and have the ability to continue to meet our
 obligations as they become due.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>Our officers, directors and 10% stockholders will no
 longer be subject to the reporting requirements of Section&nbsp;16 of the
 Exchange Act or be subject to the prohibitions against retaining short-swing
 profits in our shares of common stock. </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>Our shares of common stock will no longer be traded
 on the American Stock Exchange and will not be eligible for listing on the
 New York Stock Exchange, the Nasdaq Global Select Market, the Nasdaq Global
 Market or the Nasdaq Capital Market. Any trading in our common stock will
 occur on the OTCQX<SUP>SM</SUP> tier of the pink sheets or in privately
 negotiated sales.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>Holders of fewer than 250&nbsp;shares of our common
 stock at the effective time of the Reverse Stock Split will receive a cash
 payment of $10.21, without interest, for each share of common stock they
 hold, will no longer have any ownership interest in us, and will cease to
 participate in any of our future earnings and growth.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>Holders of 250 or more&nbsp;shares of our common
 stock at the effective time of the Transaction will not receive any payment
 for their shares and will continue to hold the same number of shares as
 before the Transaction.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>Options evidencing rights to purchase shares of our
 common stock would be unaffected by the Transaction because the options will,
 after the Transaction, be exercisable into the same number of shares of our
 common stock as they were before the Transaction.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>Since our obligation to file periodic and other
 filings with the SEC will be suspended, Continuing Stockholders may have
 access to less information about us and our business, operations and financial performance. However,
 we will prepare quarterly and
 annual financial reports and interim material event disclosure in
 accordance with the reporting requirements of the OTCQX<SUP>SM</SUP>
 tier of the pink sheets, and we will continue to prepare audited annual
 financial statements and unaudited quarterly financial statements and, in each
 case, make them publicly available to our Continuing Stockholders. The
 reporting requirements of the OTCQX<SUP>SM</SUP> tier, however, are less
 onerous than the reporting requirements under the Exchange Act applicable to
 SEC reporting companies.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>Upon the effectiveness of the Transaction, the
 ownership percentage of our shares of common stock subject to the
 Stockholders Agreement (see &#147;Special Factors--Potential Conflicts of
 Interests of Officers, Directors, and Certain Affiliated Persons&#148; beginning
 on page 56, and &#147;Information About the Company-Stockholders Agreement&#148;
 beginning on page 67) will increase from approximately 50.9% to approximately
 53.7% as a result of the reduction of the number of shares of common stock
 outstanding by approximately 128,889 shares. The increase in the ownership percentage of our
 shares of common stock subject to the Stockholders Agreement and the
 reduction in the number of shares outstanding following the completion of the
 Transaction is based upon
 information we received from our transfer agent, Continental Stock Transfer
 &amp; Trust Company, as to our record holders, and from Broadridge Financial
 Solutions, Inc. as to the accounts of our stockholders who hold shares in &#147;street name&#148;
 according to predefined ranges based on share amount. However, the ownership percentage and the
 reduction in the number of shares outstanding following the Transaction may
 increase or decrease depending the purchases, sales and other transfers of
 our shares of common stock by our stockholders prior to the effective time of
 the Transaction. The ownership percentage of our shares of common
 stock subject to the Stockholders Agreement and the ownership </FONT></P>
</TD>
</TR>
</TABLE>

<P ALIGN=CENTER><FONT SIZE=2>4</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="3%" VALIGN=TOP>
<P align=justify>&nbsp;</P>
</TD>
<TD WIDTH="97%" VALIGN=TOP>
<P align=justify>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>percentage of the Continuing Stockholders will
 proportionally increase or decrease as a result of such purchases, sales and other transfers of our
 shares of common stock by our stockholders prior to the effective time of the
 Transaction.</FONT></P>
</TD>
</TR>
</TABLE>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;See
&#147;Special Factors&nbsp;&#151; Effects of the Transaction&#148; beginning on page 35,&#148; &#147;Special
Factors&nbsp;&#151; Special Committee and Board of Director Protections for
Continuing Stockholders&#148; beginning on page 22,&#148; &#147;Special Factors &#150; Fairness of
the Transaction&#148; beginning on page 42,&#148; and &#147;Special Factors&nbsp;&#151; Potential
Conflicts of Interests of Officers, Directors, and Certain Affiliated Persons&#148;
beginning on page 56.&#148;</FONT></P>

<P align=justify><A NAME="JN_005"></A><FONT SIZE=2><B>Special
Committee and Board of Directors&#146; Protections for Continuing Stockholders</B></FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Special Committee&#146;s decision to unanimously recommend the Transaction to the
full Board of Directors, and the Board of Directors&#146; unanimous approval of the
Transaction, is contingent upon the continuation of certain corporate
governance and other stockholder protections following the Transaction,
including:</FONT></P>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="5%" VALIGN=TOP>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="95%" VALIGN=TOP>
<P align=justify>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>the preparation and public
 dissemination of quarterly and annual financial reports and the issuance of
 quarterly and annual earnings press releases;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>the preparation and public
 dissemination of annual audited financial statements which are accompanied by
 a certification from each of our chief executive officer and our chief
 financial officer;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>the public dissemination
 of press releases for material events;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>having at least two
 directors on our Board who are independent within the meaning of the rules of
 the American Stock Exchange and the Exchange Act;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>having the entire Board of
 Directors, or a committee of the Board of Directors with at least one
 independent director as a member, review and approve any non-compensatory
 related person transactions that a SEC reporting company would be required to
 disclose in a proxy statement prepared in accordance with the rules of the
 SEC and publicly announce any such transactions at least on an annual basis;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>holding annual
 stockholders&#146; meetings; and</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>maintaining our current
 code of ethics for finance professionals and code of business conduct for all
 employees.</FONT></P>
</TD>
</TR>
</TABLE>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These
corporate governance and the stockholder protections must remain in effect for
at least three years following the Transaction and any change following this
period must be approved by a our Board of Directors or by a committee appointed
by the Board of Directors with at least one independent director to consider
any such change. This three-year requirement will be applicable as long as
there are unaffiliated Continuing Stockholders during that time; it is not
intended to restrict or otherwise prohibit any merger, consolidation, sale of
all or substantially all of our assets, or similar extraordinary transaction
during that three-year period. We have no present plans or proposals for any
such transaction, however, and our intent is to operate our business after the
Transaction substantially as it is currently conducted. See &#147;Special
Factors&#151;Conduct of the Company&#146;s Business after the Transaction.&#148;</FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>5</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
order to ensure that our Continuing Stockholders will have continuing access to
a trading market in our shares, the Special Committee&#146;s recommendation of the
Transaction to the full Board of Directors, and the Board of Directors&#146;
approval of the Transaction, is also contingent upon our common stock being
quoted by at least two market makers on the OTCQX<SUP>SM</SUP> tier of the pink sheets. In order to
maintain a quotation on the OTCQX<SUP>SM</SUP> tier of the pink sheets, we will be required to meet certain reporting
and other requirements, many of which are similar to the corporate governance
protections noted above, including:</FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;
preparing annual and quarterly financial reports;</FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;
performing annual audits;</FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;
requiring our chief executive officer and chief financial officer to each
certify that (i) to his knowledge, the information about us furnished in
accordance with the rules of the pink sheets 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 that
information; (ii) to his knowledge, the financial statements, and other
financial information furnished in accordance with the rules of the pink
sheets, fairly present in all material respects our financial condition,
results of operations and cash flows as of, and for, the periods presented; and
(iii) based upon his reasonable belief, for at least one year from the date of
the certification, we have sufficient working capital to continue operations
and have the ability to continue to meet our obligations as they become due;
and</FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;
preparing interim
material event disclosure in accordance with the reporting requirements of the OTCQX<SUP>SM</SUP> tier. </FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;See
&#147;Special Factors&nbsp;&#151; Special Committee and Board of Directors&#146; Protections
for Continuing Stockholders&#148; beginning on page 22.</FONT></P>

<P align=justify><A NAME="JN_006"></A><FONT SIZE=2><B>Special
Committee and Board of Directors Recommendations of the Transaction</B></FONT></P>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="3%" VALIGN=TOP>
<P align=justify>&nbsp;</P>
</TD>
<TD WIDTH="97%" VALIGN=TOP>
<P align=justify>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>The Board of Directors established the Special
 Committee to consider whether a transaction of this type was in our best
 interests and the best interests of our stockholders, including our
 unaffiliated stockholders and to make a recommendation to the full Board of Directors
 concerning the advisability of a transaction of this type. In that regard,
 the Special Committee considered the purposes of and certain alternatives to
 the Transaction, the related advantages and disadvantages to us and our
 unaffiliated stockholders of the Transaction, and the fairness of the
 cash-out price both to unaffiliated Cashed Out Stockholders for shares of our
 common stock, and to unaffiliated Continuing Stockholders. </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>The Special Committee consists of Norman Axelrod,
 Chairman, Martin Brody and Harold Schechter, each of whom is independent
 within the meaning of Section 121A of the American Stock Exchange Company
 Guide and Rule 10A-3(b) of the Exchange Act. The Special Committee retained
 an independent financial advisor, Houlihan Smith &amp; Company Inc. (&#147;Houlihan&#148;),
 who has provided the Special Committee and the full Board of Directors with a
 &#147;fairness opinion&#148; as to the Transaction, a copy of which is attached to this
 proxy statement as <U>Annex B</U>. The Special Committee also retained Day
 Pitney LLP as independent legal counsel to represent its interests and advise
 it on legal questions related to transactions of this type.</FONT></P>
</TD>
</TR>
</TABLE>

<P ALIGN=CENTER><FONT SIZE=2>6</FONT></P>

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<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="3%" VALIGN=TOP>
<P align=justify>&nbsp;</P>
</TD>
<TD WIDTH="97%" VALIGN=TOP>
<P align=justify>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>Following the Special Committee&#146;s review of the
 fairness opinion and careful consideration of other factors relating to the
 advisability and fairness of the Transaction, the Special Committee
 determined that the Transaction is in the best interests of, and the price to
 be paid per fractional share is fair to, the Company&#146;s stockholders,
 including unaffiliated Cashed Out Stockholders and unaffiliated Continuing
 Stockholders. The Special Committee unanimously recommended the Transaction
 to the full Board of Directors. The Board of Directors unanimously determined
 that the Transaction is fair to, and in the best interests of, the Company
 and its stockholders, including all unaffiliated stockholders of the Company.
 </FONT></P>
</TD>
</TR>
</TABLE>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;See
&#147;Special Factors&#151;Fairness of the Transaction&#148; beginning on page 42.</FONT></P>

<P align=justify><A NAME="JN_007"></A><FONT SIZE=2><B>Reservation
of Rights</B></FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Both
the Special Committee and the Board of Directors have reserved the right to
change the reverse stock split/forward stock split ratio prior to the Special
Meeting or to recommend an alternative form of the Transaction if it is
necessary or advisable to accomplish the goal of reducing the number of record
holders to below 300. However, the Special Meeting or the Board of Directors will not change the reverse
stock split/forward stock split ratio following the Special Meeting. They
also may abandon the proposed Transaction at any time if they believe that is
no longer in the best interests of our stockholders, whether prior to or
following the Special Meeting. </FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;See
&#147;Special Factors&#151;Background of the Transaction&#148; beginning on page 24 and &#147;Special
Factors&#151; Fairness of the Transaction&#148; beginning on page&nbsp;42.</FONT></P>

<P align=justify><A NAME="JN_008"></A><FONT SIZE=2><B>Fairness
of the Transaction</B></FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Special Committee and the Board of Directors fully considered and reviewed the
terms, purpose, alternatives, effects and disadvantages of the Transaction, and
each has unanimously determined that the Transaction, taken as a whole, is
procedurally and substantively fair to, and in the best interests of,
unaffiliated Cashed Out Stockholders as well as unaffiliated Continuing
Stockholders. </FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Special Committee and the Board of Directors considered a number of factors in
reaching its determinations, including:</FONT></P>

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<TR style="font-size:1px">
<TD WIDTH="3%" VALIGN=TOP>
<P align=justify>&nbsp;</P>
</TD>
<TD WIDTH="97%" VALIGN=TOP>
<P align=justify>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>the Fairness Opinion prepared by Houlihan that the
 $10.21 cash out price is fair from a financial point of view to unaffiliated
 Cashed Out Stockholders and to unaffiliated Continuing Stockholders.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>the limited trading volume and liquidity of our
 shares of common stock and enabling our smallest stockholders, who represent
 a disproportionately large number of our record holders, to liquidate their
 holdings in shares of common stock and receive a premium over market prices
 prevailing at the time of our public announcement of the Transaction, without
 incurring brokerage commissions.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>without incurring brokerage commissions.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>the small effect of the proposed transaction on the
 relative voting power of Continuing Stockholders, including the members of
 the Stockholders Agreement.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>our business and operations are expected to continue
 substantially as presently conducted.</FONT></P>
</TD>
</TR>
</TABLE>

<P ALIGN=CENTER><FONT SIZE=2>7</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="3%" VALIGN=TOP>
<P align=justify>&nbsp;</P>
</TD>
<TD WIDTH="97%" VALIGN=TOP>
<P align=justify>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>the requirement that certain corporate governance
 and other stockholder protections be implemented as a condition to the
 Transaction, including, without limitation, maintaining a trading platform
 for our common stock on the OTCQX<SUP>SM</SUP> tier of the pink sheets. </FONT></P>
</TD>
</TR>
</TABLE>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;See
&#147;Special Factors&#151; Special
Committee and Board of Directors&#146; Protections for Continuing Stockholders&#148;
beginning on page 22, &#147;Special Factors&#151; Fairness of the Transaction&#148; beginning
on page 42&#148; and &#147;Special Factors&#151; Fairness Opinion of Financial Advisor&#148;
beginning on page&nbsp;47.</FONT></P>

<P align=justify><A NAME="JN_009"></A><FONT SIZE=2><B>Advantages
of the Transaction</B></FONT></P>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="3%" VALIGN=TOP>
<P align=justify>&nbsp;</P>
</TD>
<TD WIDTH="97%" VALIGN=TOP>
<P align=justify>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>By completing the Transaction, deregistering our
 shares and eliminating our obligations under the Sarbanes-Oxley Act and our
 periodic reporting obligations under the Exchange Act, we expect to save in
 excess of $500,000 per year.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>We will also save the significant amount of time and
 effort expended by our management on the preparation of SEC filings and in
 compliance with the Sarbanes-Oxley Act.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>There is a relatively illiquid and limited trading
 market in our shares. Our smallest stockholders, who represent a large number
 of our record holders, will have the opportunity to obtain cash for their
 shares at a premium over closing prices for our shares of common stock at the
 time of our announcement of the Transaction, without incurring brokerage
 commissions.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>The Transaction will have a limited effect on the
 relative voting power of Continuing Stockholders, including members of the
 Stockholders Agreement. Based on current record and beneficial owner
 information, the Transaction will result in less than a 2% increase in the
 relative voting power of the members of the Stockholders Agreement. </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>The parties to the Stockholders Agreement will be
 treated no differently than unaffiliated stockholders, including unaffiliated
 Cashed Out Stockholders and unaffiliated Continuing Stockholders. The sole
 determining factor as to whether a stockholder will be a Continuing
 Stockholder is the number of shares of our common stock that they own.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>Our business and operations are expected to continue
 substantially as present conducted.</FONT></P>
</TD>
</TR>
</TABLE>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;See
&#147;Special Factors&#151; Purpose
of and Reasons For the Transaction&#148; beginning on page 20 and &#147;Special Factors&#151;
Fairness of the Transaction&#148; beginning on page 42.</FONT></P>

<P align=justify><A NAME="JN_010"></A><FONT SIZE=2><B>Disadvantages
of the Transaction</B></FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
the Transaction occurs, there will be certain disadvantages to stockholders,
including the following:</FONT></P>

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<TR style="font-size:1px">
<TD WIDTH="5%" VALIGN=TOP>
<P align=justify>&nbsp;</P>
</TD>
<TD WIDTH="95%" VALIGN=TOP>
<P align=justify>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>Cashed Out Stockholders will no longer have any
 ownership interest in the Company and will no longer participate in our
 future earnings and growth.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>we will cease to file annual, quarterly, current,
 and other reports and documents with the SEC, and stockholders will cease to
 receive annual reports and proxy statements, and Continuing Stockholders will
 have access to less information about the Company and our business,
 operations, and financial performance. In order to mitigate this disadvantage
 to our Continuing Stockholders, we will prepare quarterly and annual financial reports and make interim
 material event disclosures in accordance with the reporting requirements of
 the OTCQX<SUP>SM</SUP> tier of
 the pink </FONT></P>
</TD>
</TR>
</TABLE>

<P ALIGN=CENTER><FONT SIZE=2>8</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="5%" VALIGN=TOP>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="95%" VALIGN=TOP>
<P align=justify>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>sheets, and have instituted additional stockholder
 protections. See &#147;Special Factors--Special Committee and Board of Director
 Protections for Continuing Stockholders.&#148;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>we will no longer be listed on the American Stock
 Exchange and our common stock will, instead, be quoted on the OTCQX<SUP>SM</SUP> tier of the pink sheets.
 In addition, because of the possible limited liquidity for our common stock,
 the termination of our obligation to publicly disclose financial and other
 information following the Transaction, and the deregistration of our common
 stock under the Exchange Act, Continuing Stockholders may potentially
 experience a significant decrease in the value of their common stock.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>we will no longer be subject to the provisions of
 the Sarbanes-Oxley Act, the liability provisions of the Exchange Act or the
 oversight of the American Stock Exchange.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>our executive officers, directors and 5%
 stockholders will no longer be required to file reports relating to their
 transactions in our common stock with the SEC. In addition, our executive
 officers, directors and 10% stockholders will no longer be subject to the
 recovery of profits provision of the Exchange Act, and persons acquiring 5%
 of our common stock will no longer be required to report their beneficial
 ownership under the Exchange Act.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>we estimate that the cost of payment to Cashed Out
 Stockholders, professional fees and other expenses will total approximately
 $1,916,000. As a result, immediately after the Transaction, we will have more
 debt outstanding than we would have had if the Transaction did not occur.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>the Transaction will result in the suspension and
 not the termination of our filing obligations under the Exchange Act. If on
 the first day of any fiscal year after the suspension of our filing
 obligations that we have more than 300 shareholders, then we must resume
 reporting pursuant to Section 15(d) of the Exchange Act.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>after the completion of the Transaction we will have
 at least two independent directors within the meaning of Section 121A of the
 American Stock Exchange Company Guide and Rule 10A-3(b) of the Exchange Act.
 However, we cannot be certain how long these directors will continue to be in
 office after the Transaction has been effected.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>under Delaware law, our certificate of incorporation
 and our bylaws, no appraisal or dissenters&#146; rights are available to our
 stockholders who vote against from the Transaction.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE="2">as of the Record Date, over 50% of the issued and
outstanding shares of our common stock was held subject to the Stockholders
Agreement. The stockholders committee under the Stockholders Agreement has
indicated that it intends to direct the voting of the shares of our common stock
(1,257,643 shares, or approximately 50.9% of the issued and outstanding
shares of our common stock) <B>&#147;</B>FOR<B>&#148;</B> the Transaction. Accordingly, if all those
shares are voted in favor of the Transaction, the Transaction will be
approved. </FONT> </P>
</TD>
</TR>
</TABLE>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;See
&#147;Special Factors&#151;
Fairness of the Transaction&#151;Disadvantages of the Transaction&#148; beginning on page
44 and &#147;Special Factors&#151; Special Committee and Board of Directors&#146;
Protections for Continuing Stockholders&#148; beginning on page 22.</FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>9</FONT></P>

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<P align=justify><A NAME="JN_011"></A><FONT SIZE=2><B>Potential
Conflicts of Interests of Officers, Directors, and Certain Affiliated Persons</B></FONT></P>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="3%" VALIGN=TOP>
<P align=justify>&nbsp;</P>
</TD>
<TD WIDTH="97%" VALIGN=TOP>
<P align=justify>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE="2">On the Record Date, 1,257,643 shares, or
approximately 50.9%, of the issued and outstanding shares of our common
stock, were held by certain parties to the Stockholders Agreement. Abe
Ginsburg, our Chairman of our Executive Committee, Allan Ginsburg, our
Chairman, Robert Chestnov, our President, and Howard Ginsburg our Vice
Chairman, as the stockholders committee under the Stockholders Agreement may
direct the vote of these shares, and has indicated that it intends to direct
the vote of all of the shares that are subject to the Stockholders Agreement <B>&#147;</B>FOR<B>&#148;</B> the Transaction. If those shares are voted in favor of the Transaction, the
Transaction will be approved. </FONT> </P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>Upon the effectiveness of the Transaction, the
 aggregate number of shares of our common stock owned by parties to the
 Stockholders Agreement will decrease by 200 shares. However, the ownership
 percentage of our shares of our common stock subject to the Stockholders
 Agreement will increase from approximately 50.9% to approximately 53.7% as a
 result of the reduction of the number of shares of our common stock
 outstanding by approximately 128,889 shares. The ownership percentage of our
 shares of common stock subject to the Stockholders Agreement and the
 ownership percentage of the Continuing Stockholders will proportionally
 increase or decrease as a result of such purchases, sales and other transfers
 of our shares of common stock by our stockholders prior to the effective time
 of the Transaction.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>In addition, our other directors and executive
 officers may have interests in the Transaction that are different from your
 interests as a stockholder, and have relationships that may present conflicts
 of interest. After the Transaction, the beneficial ownership of the executive
 officers and directors who are not parties to the Stockholders Agreement will
 increase from approximately 1.7% to approximately 1.8% as a result of the
 reduction of the number of shares of common stock outstanding.</FONT></P>
</TD>
</TR>
</TABLE>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;See
&#147;Special Factors&#151; Potential Conflicts of Interests of Officers,
Directors, and Certain Affiliated Persons&#148; beginning on page 56 and &#147;Information About the Company&#151; Stockholders
Agreement&#148; beginning on page 67.</FONT></P>

<P align=justify><A NAME="JN_012"></A><FONT SIZE=2><B>Vote
Required for Approval of the Transaction At the Special Meeting</B></FONT></P>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="3%" VALIGN=TOP>
<P align=justify>&nbsp;</P>
</TD>
<TD WIDTH="97%" VALIGN=TOP>
<P align=justify>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>A majority of the outstanding shares of our common
 stock will constitute a quorum for the purposes of approving the amendments
 to our certificate of incorporation to effect the Transaction. The
 affirmative vote of a majority of the shares of our common stock entitled to
 vote at the Special Meeting is required for the adoption of the proposals to
 approve the Transaction.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE="2">As of the Record Date, over 50% of the issued and
outstanding shares of our common stock was held subject to the Stockholders
Agreement. As noted above, the stockholders committee under the Stockholders
Agreement has indicated that it intends to direct the voting of the shares of
our common stock (1,257,643 shares, or approximately 50.9% of the issued and
outstanding shares of our common stock) <B>&#147;</B>FOR<B>&#148;</B> the Transaction. Accordingly,
if all those shares are voted in favor of the Transaction, the Transaction
will be approved. </FONT> </P>
</TD>
</TR>
</TABLE>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;See
&#147;Special Factors&#151; Stockholder Approval&#148; beginning on page&nbsp;58.</FONT></P>

<P align=justify><A NAME="JN_013"></A><FONT SIZE=2><B>Treatment
of Beneficial Holders (stockholders holding shares in street name)</B></FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;
We intend to treat stockholders holding our common stock in street name in the
same manner as record holders. Prior to the effective date of the Transaction,
we will conduct an inquiry of all </FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>10</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P align=justify><FONT SIZE=2>brokers, banks and other nominees that hold shares of
our common stock in street name, ask them to provide us with information on how
many shares held by beneficial holders will be cashed out, and request that
they effect the Transaction for those beneficial holders. However, these banks,
brokers and other nominees may have different procedures then registered
stockholders for processing the Transaction. Accordingly, if you hold your
shares of common stock in &#147;street name,&#148; we encourage you to contact your bank,
broker or other nominee.</FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;See
&#147;Special Factors&#151; Effects
of the Transaction&#148; beginning on page&nbsp;35.</FONT></P>

<P align=justify><A NAME="JN_014"></A><FONT SIZE=2><B>Effectiveness
of the Transaction</B></FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;
We anticipate that the Transaction will be effected as soon as possible after
the date of the Special Meeting. Following the effective date of the
Transaction, transmittal materials will be sent to those stockholders entitled
to a cash payment that will describe how to turn in their share certificates
and receive the cash payments. Those stockholders entitled to a cash payment
should not turn in their share certificates at this time. </FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;See
&#147;Special Factors&#151; Effective Date&#148; on page 58.</FONT></P>

<P align=justify><A NAME="JN_015"></A><FONT SIZE=2><B>Financing
for the Transaction</B></FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;
Based on information we have received from our transfer agent, Continental
Stock Transfer &amp; Trust Company, and from Broadridge Financial Solutions,
Inc., we estimate that the total funds required to pay the consideration to
record holders who are entitled to receive cash for their shares, holders of
shares in street name, and other costs of the Transaction will be approximately
$1,916,000. This total amount could be larger or smaller depending on, among
other things, the number of shares that will be outstanding after the
Transaction as a result of purchases, sales and other transfers of our shares
of common stock by our stockholders, or an increase in the costs and expenses
of the Transaction.</FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;
We intend that payments to Cashed Out Stockholders and the costs of the
Transaction will be paid from cash on hand and from funds under our existing
revolving loan agreement with TD Banknorth, N.A.</FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;See
&#147;Special Factors &#150; Source of Funds and Expenses&#148; beginning on page 57.</FONT></P>

<P align=justify><A NAME="JN_016"></A><FONT SIZE=2><B>Recent
Market Price of the Company&#146;s Common Stock</B></FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;
The closing price of our common stock on December 4, 2007, the last trading day
before the public announcement of the approval of the proposed Transaction by
the Special Committee and the Board of Directors, was $6.00 per share.</FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;See
&#147;Information About the Company&#151; Market Price of Common Stock&#148;
beginning on page 62.</FONT></P>

<P align=justify><A NAME="JN_017"></A><FONT SIZE=2><B>No
Appraisal or Dissenters&#146; Rights</B></FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;
Under Delaware law, our certificate incorporation and our bylaws, no appraisal
or dissenters&#146; rights are available to our stockholders who dissent from the
Transaction.</FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;See
&#147;Special Factors&#151; No Appraisal or Dissenters&#146; Rights&#148; beginning on
page 60.</FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>11</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P align=justify><A NAME="JN_018"></A><FONT SIZE=2><B>Material
Federal Income Tax Consequences</B></FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;
Generally, a Cashed Out Stockholder who receives cash for a fractional share as
a result of the Transaction will recognize capital gain or loss for United
States federal income tax purposes. A Continuing Stockholder who does not
receive cash for a fractional share as a result of the Transaction generally
will not recognize any gain or loss for United States federal income tax
purposes.</FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;See
&#147;Special Factors &#151; Material Federal Income Tax Consequences&#148; beginning on page
53.</FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>12</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>


<P ALIGN=CENTER><A NAME="JN_019"></A><FONT SIZE=2><B>QUESTIONS AND ANSWERS ABOUT THE <BR>
TRANSACTION AND THE SPECIAL MEETING</B></FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Following
are some commonly asked questions that may be raised by our stockholders and
answers to each of those questions.</FONT></P>

<P align=justify><A NAME="JN_020"></A><FONT SIZE=2><B>Where
and when is the Special Meeting?</B></FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Special Meeting will be held at our principal executive offices, 197 West
Spring Valley Road, Maywood, New Jersey 07607 at 9:00&nbsp;a.m. (local time) on
________ __, 2008.</FONT></P>

<P align=justify><A NAME="JN_021"></A><FONT SIZE=2><B>What
am I being asked to vote on at the Special Meeting?</B></FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
stockholders will consider and vote upon a proposal to amend our certificate of
incorporation to effect a 1-for-250 reverse stock split of our shares of common
stock, followed immediately by a 250-for-1 forward stock split of our shares of
common stock. Stockholders whose shares are converted into less than one share
of our common stock as a result of the Reverse Stock Split (meaning they own
fewer than 250&nbsp;shares of our common stock at the effective time of the
Transaction--which is the time that the certificate of amendment to our
certificate of incorporation to effect the Reverse Stock Split is filed with
the Secretary of State of the State of Delaware) will receive $10.21 in cash,
without interest, for each share of our common stock held immediately before
the Reverse Stock Split. Stockholders who own 250 or more shares of our common
stock at the effective time of the Transaction will continue to own the same
number of shares of our common stock after the completion of the Transaction.</FONT></P>

<P align=justify><A NAME="JN_022"></A><FONT SIZE=2><B>What
is the purpose of the Transaction?</B></FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Transaction will enable us to cease the registration of our common stock under
the Exchange Act if, after the Transaction, there are fewer than 300 record
holders of our common stock and we terminate our obligations to file annual and
periodic reports and make other filings with the SEC. The purposes of the
proposal include:</FONT></P>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR style="font-size:1px">
 <TD WIDTH="3%" VALIGN=TOP>
 <P align=justify>&nbsp;</P>
 </TD>
 <TD WIDTH="97%" VALIGN=TOP>
 <P align=justify>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>eliminating significant ongoing costs and management
 time and effort of compliance with the Sarbanes-Oxley Act and related
 regulations;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>eliminating significant ongoing costs and management
 time and effort associated with filing documents under the Exchange Act with
 the SEC;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>allowing our management to focus on long-term growth
 and enhancing the long-term value of shares of common stock; and</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>enabling our small stockholders (those holding fewer
 than 250), who represent a large number of our record holders, to liquidate
 their holdings in us and receive a premium over market prices prevailing at
 the time of the Special Committee&#146;s recommendation, and the Board of
 Directors&#146; approval, of the Transaction, without incurring brokerage
 commissions.</FONT></P>
 </TD>
 </TR>
</TABLE>

<P align=justify><A NAME="JN_023"></A><FONT SIZE=2><B>What
does the deregistration of our common stock mean?</B></FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Following
the Transaction, we expect to have fewer than 300&nbsp;stockholders of record,
which will enable us to take action to cease registration of our common stock
under the Exchange Act. Effective on and following the termination of the
registration of our common stock under the Exchange Act, we will no longer have
to file annual, quarterly and other reports with the SEC, and our executive
officers, </FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>13</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P align=justify><FONT SIZE=2>directors and 10%
stockholders will no longer be required to file reports relating to their
transactions in our common stock. In addition, we will take action to delist
our common stock from the American Stock Exchange and we will no longer be
subject to its rules. Any trading in our common stock will continue only in
privately negotiated sales or in the pink sheets.</FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Special Committee&#146;s decision to unanimously recommend the Transaction to the
Board of Directors, and the approval by the Board of Directors of the
Transaction, is conditioned on certain corporate governance and other
protections for those of our stockholders who will continue to be stockholders
after the Transaction, who we refer to as our Continuing Stockholders. Those
protections include the following:</FONT></P>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR style="font-size:1px">
 <TD WIDTH="5%" VALIGN=TOP>
 <P align=justify>&nbsp;</P>
 </TD>
 <TD WIDTH="95%" VALIGN=TOP>
 <P align=justify>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>we will prepare and
 publicly make available quarterly and annual financial reports and issue
 quarterly and annual earnings press releases;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>we will prepare and
 publicly make available annual audited and quarterly unaudited financial
 statements, along with a certification from each of our chief executive
 officer and our chief financial officer;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>we will prepare and
 publicly make available press releases for material events;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>at least two independent
 directors will continue to be members of the Board of Directors;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>having the Board of
 Directors, or a committee of the Board of Directors having at least one
 independent director as a member, review and approve any non-compensatory
 related person transactions that a SEC reporting company would be required to
 disclose in a proxy statement prepared in accordance with the rules of the
 SEC and publicly announce any such transactions at least on an annual basis;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>we will continue to hold
 annual stockholders&#146; meetings; and</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>we will continue to
 maintain in effect our current code of ethics for finance professionals and
 code of business conduct for all employees.</FONT></P>
 </TD>
 </TR>
</TABLE>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Completion
of the Transaction is also conditioned on having our common stock quoted by at
least two market makers on the OTCQX<SUP>SM</SUP> tier of the pink sheets. In order to maintain our
listing on that tier, we will be required to meet certain reporting and other
requirements, including:</FONT></P>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR style="font-size:1px">
 <TD WIDTH="5%" VALIGN=TOP>
 <P align=justify>&nbsp;</P>
 </TD>
 <TD WIDTH="95%" VALIGN=TOP>
 <P align=justify>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>preparing quarterly and
 annual financial reports;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>performing annual audits;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>requiring our chief
 executive officer and chief financial officer to make a certification
 regarding financial and other information required by the OTCQX<SUP>SM
 </SUP>tier of the pink sheets;
 and</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>preparing
 interim material event
 disclosure in accordance with the reporting requirements of the OTCQX<SUP>SM
 </SUP>tier of the pink sheets.</FONT></P>
 </TD>
 </TR>
</TABLE>

<P align=justify><A NAME="JN_024"></A><FONT SIZE=2><B>What
are the Pink Sheets?</B></FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
pink sheets is a listing service that offers financial and other information about issuers of
securities, like our common stock, and collects and publishes quotes of market
makers for over-the-counter securities through its website at
www.pinksheets.com. The OTCQX<SUP>SM</SUP> tier of the pink sheets is the highest tier
maintained by the pink sheets. </FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>14</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P align=justify><A NAME="JN_025"></A><FONT SIZE=2><B>What
will I receive in the Transaction?</B></FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
you own fewer than 250 shares of our common stock at the effective time of the
Transaction, you will receive $10.21 in cash, without interest, from us for
each pre-Reverse Stock Split share that you own. If you own 250 shares or more
of our common stock at the effective time of the Transaction, you will not
receive any cash payment for your shares in connection with the Transaction and
will continue to hold the same number of shares of our common stock as you did
before the Transaction.</FONT></P>

<P align=justify><A NAME="JN_026"></A><FONT SIZE=2><B>Can
the Board of Directors or the Special Committee determine that a different
reverse stock split/forward stock split ratio should be used to effect the
Transaction?</B></FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prior
to the Special Meeting either the Board of Directors or the Special Committee may
change the reverse stock split/forward stock split ratio to effect the
Transaction if necessary to reduce the number of our record holders below 300,
which is necessary to deregister under the Exchange Act, or if it is in the
best interests of the stockholders. However, the Board of Directors or the
Special Committee will not change the reverse stock split/forward stock split
ratio following the Special Meeting. We will notify you of any change in the
reverse stock split/forward stock split ratio.</FONT></P>

<P align=justify><A NAME="JN_027"></A><FONT SIZE=2><B>What
if I hold fewer than 250 shares of common stock and hold all of my shares in
&#147;street name&#148;?</B></FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
you hold fewer than 250 shares of our common stock in street name your broker,
bank or other nominee is considered the stockholder of record with respect to
those shares and not you. It is possible that the bank, broker or other nominee
also holds shares for other beneficial owners of our common stock and that it
may hold 250 or more total shares. Therefore, depending upon their procedures,
they may not be obligated to treat the Transaction as affecting beneficial
holders&#146; shares. It is our desire to treat stockholders holding fewer than 250
shares of our common stock in street name through a nominee (such as a bank or
broker) in the same manner as stockholders whose shares are registered in their
name. However, we or our transfer agent, Continental Stock Transfer &amp; Trust
Company, may not have the necessary information to compare your record holdings
with any shares that you may hold in street name in a brokerage account and
these banks, brokers and other nominees may have different procedures for
processing the Transaction. Accordingly, if you hold your shares of our common
stock in &#147;street name,&#148; we encourage you to contact your bank, broker or other
nominee.</FONT></P>

<P align=justify><A NAME="JN_028"></A><FONT SIZE=2><B>What
happens if I own a total of 250 or more shares of common stock beneficially,
but I hold fewer than 250 shares of record in my name and fewer than 250 shares
of with my broker in street name?</B></FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
may not have the information to compare your holdings in two or more different
brokerage firms. As a result, if you hold more than the minimum number of
shares, you may nevertheless have your shares cashed out if you hold them in a
combination of accounts in several brokerage firms. If you are in this
situation and desire to remain a stockholder of the Company after the
Transaction, we recommend that you combine your holdings in one brokerage
account or become a record holder prior to the effective time of the
Transaction. You should be able to determine whether your shares will be cashed
out by examining your brokerage account statements to see if you hold more than
the minimum number of shares in any one account. To determine the Transaction&#146;s
effect on any shares you hold in street name (and possible payment of the cash
consideration), you should contact your broker, bank or other nominee.</FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>15</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P align=justify><A NAME="JN_029"></A><FONT SIZE=2><B>If
I own fewer than 250 shares of common stock, is there any way I can continue to
be a stockholder of the Company after the Transaction?</B></FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
you own fewer than 250 shares of our common stock before the Transaction, the
only way you can continue to be a stockholder of the Company after the
Transaction is to purchase, prior to the effective time of the Transaction,
sufficient additional shares to cause you to own a minimum of 250 shares at the
effective time of the Transaction. However, we cannot assure you that any
shares will be available for purchase.</FONT></P>

<P align=justify><A NAME="JN_030"></A><FONT SIZE=2><B>Is
there anything I can do if I own 250 or more shares of common stock, but would
like to take advantage of the opportunity to receive cash for my shares as a
result of the Transaction?</B></FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
you own 250 or more shares of our common stock before the Transaction, you can
only receive cash for all of your shares if, prior to the effective time of the
Transaction, you reduce your stock ownership to fewer than 250 shares by
selling or otherwise transferring shares. However, we cannot assure you that
any purchaser for your shares will be available.</FONT></P>

<P align=justify><A NAME="JN_031"></A><FONT SIZE=2><B>Who
is entitled to vote at the Special Meeting?</B></FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Only
holders of record of our common stock as of the close of business on _________
__, 2008, which is the Record Date for the Special Meeting, are entitled to
notice of, and to vote at, the Special Meeting.</FONT></P>

<P align=justify><A NAME="JN_032"></A><FONT SIZE=2><B>How
many shares were outstanding on the Record Date?</B></FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At
the close of business on _____________ __, 2008 there were 2,468,614
outstanding shares of our common stock. At the Special Meeting, each of those
shares of common stock will be entitled to one vote.</FONT></P>

<P align=justify><A NAME="JN_033"></A><FONT SIZE=2><B>What
is a &#147;quorum&#148; for purposes of the Special Meeting?</B></FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
order to conduct business at the Special Meeting, a quorum must be present. A
&#147;quorum&#148; is a majority of the issued and outstanding shares of our common
stock. The shares may be present in person or represented by proxy at the
Special Meeting. Both abstentions and broker non-votes are counted as present
for the purpose of determining the presence of a quorum.</FONT></P>

<P align=justify><A NAME="JN_034"></A><FONT SIZE=2><B>What
vote is required to approve the proposal?</B></FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Once
a quorum has been established, for the Transaction to be approved, holders of a
majority of our issued and outstanding shares of common stock entitled to vote
at the meeting must vote &#147;FOR&#148; the proposal.</FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At
the close of business on the Record Date, 1,257,643 of our outstanding shares
of common stock (approximately 50.9%) were held by signatories to the
Stockholders Agreement. As we noted above, the Stockholders Agreement entitles
a four-person stockholders committee (presently consisting of Abe Ginsburg,
Robert Chestnov, Allan Ginsburg, and Howard Ginsburg) to direct the voting of
the shares of our common stock now or in the future owned by certain parties to
that agreement, or as to which they have or may have voting power. The
stockholders committee has indicated that it intends to direct the voting of
these shares of our common stock &#147;FOR&#148; the Transaction. Accordingly, if all of
the shares subject to the Stockholders Agreement are voted in favor of the
Transaction, the Transaction will be approved.</FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>16</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P align=justify><A NAME="JN_035"></A><FONT SIZE=2><B>What
will happen if the Transaction is approved by the Company&#146;s stockholders?</B></FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Assuming
that we have fewer than 300 record holders of our common stock after the
Transaction, we will file applicable forms with the SEC to deregister our
shares of common stock under the federal securities laws and to delist our
shares from the American Stock Exchange. Upon the effectiveness of those
filings, the Company would no longer be subject to the reporting and related
requirements under the federal securities laws that are applicable to public
companies and American Stock Exchange rules applicable to listed companies. We
will also no longer be subject to the provisions of the Sarbanes-Oxley Act. In
addition, Cashed Out Stockholders will no longer have a continuing interest as
stockholders of the Company and will not share in any future increase in the
value of the Company. Also, any trading in our common stock will occur in
privately negotiated sales or on the OTCQX<SUP>SM</SUP> tier of the pink sheets.</FONT></P>

<P align=justify><A NAME="JN_036"></A><FONT SIZE=2><B>What
will happen if the Transaction is not approved?</B></FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
the Transaction is not approved by our stockholders, we will continue to
operate our business, and we will continue to incur the costs involved of being
a public company. We also may decide to evaluate and explore available
alternatives, although the Board of Directors has not yet made a determination
that any of those alternatives are feasible or advisable.</FONT></P>

<P align=justify><A NAME="JN_037"></A><FONT SIZE=2><B>If
the Transaction is approved by the stockholders can the Board of Directors or
the Special Committee determine not to proceed with the Transaction?</B></FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
the Transaction is approved by the stockholders, either the Board of Directors
or the Special Committee may determine not to proceed with the Transaction if
they believe that proceeding with the Transaction is not in the best interests
of the stockholders. If either the Board of Directors or the Special Committee
determines not to proceed with the Transaction we will continue to operate our
business as presently conducted.</FONT></P>

<P align=justify><A NAME="JN_038"></A><FONT SIZE=2><B>What
are the federal income tax consequences of the Transaction to me?</B></FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
you are not subject to any special rules that may be applicable to you under
federal tax laws, then generally, a Cashed Out Stockholder that receives cash
for a fractional share as a result of the Transaction will recognize capital
gain or loss for United States federal income tax purposes. A Continuing
Stockholder who does not receive cash for a fractional share as a result of the
Transaction will not recognize any gain or loss for United States federal
income tax purposes. We urge you to consult with your personal tax advisor with
regard to the tax consequences to you of the Transaction.</FONT></P>

<P align=justify><A NAME="JN_039"></A><FONT SIZE=2><B>Should
I send in my certificates now?</B></FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No.
After the Transaction is completed, we will send instructions on how to receive
any cash payments to which you may be entitled.</FONT></P>

<P align=justify><A NAME="JN_040"></A><FONT SIZE=2><B>What
is the total cost of the Transaction to the Company?</B></FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Since
we do not know how many record and beneficial holders of our common stock will
be Cashed Out Stockholders, we do not know the exact cost of the Transaction.
However, based on information we have received from our transfer agent,
Continental Stock Transfer &amp; Trust Company, and from Broadridge Financial
Solutions, Inc. with regard to the size of holdings of those of you who may
hold shares in &#147;street name,&#148; as well our estimates of other Transaction
expenses, we believe that the total cash requirement of the Transaction to the
Company will be approximately $1,916,000. This amount includes approximately
$1,316,000 needed to cash out fractional shares, and approximately $600,000 of </FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>17</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P align=justify><FONT SIZE=2>legal, accounting, and financial advisory fees and
other costs to effect the Transaction. This total amount could be larger or
smaller depending on, among other things, the number of fractional shares that
will be outstanding after the Transaction as a result of purchases, sales and
other transfers of our shares of common stock by our stockholders.</FONT></P>

<P align=justify><A NAME="JN_041"></A><FONT SIZE=2><B>Am
I entitled to appraisal rights in connection with the Transaction?</B></FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No.
Under Delaware law, our certificate of incorporation and our bylaws, no
appraisal or dissenters&#146; rights are available to our stockholders who vote
against the Transaction.</FONT></P>

<P align=justify><A NAME="JN_042"></A><FONT SIZE=2><B>How
do I vote?</B></FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sign
and date each proxy card you receive and return it in the enclosed envelope
prior to the Special Meeting or attend the meeting and vote in person.</FONT></P>

<P align=justify><A NAME="JN_043"></A><FONT SIZE=2><B>Can
I change my vote?</B></FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Yes.
You may change your proxy instructions at any time before your proxy is voted
at the Special Meeting. Proxies may be revoked by taking any of the following
actions:</FONT></P>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR style="font-size:1px">
 <TD WIDTH="3%" VALIGN=TOP>
 <P align=justify>&nbsp;</P>
 </TD>
 <TD WIDTH="97%" VALIGN=TOP>
 <P align=justify>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>filing a written notice with our corporate secretary
 of revocation of any prior delivered proxy, or a duly executed proxy bearing
 a later date, with our corporate secretary at our principal executive office
 (197 West Spring Valley Road, Maywood, New Jersey 07607); or</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>attending the Special Meeting, filing a written
 notice of revocation of your proxy with our corporate secretary, and voting
 in person (although attendance at the meeting will not, by itself, revoke a
 proxy).</FONT></P>
 </TD>
 </TR>
</TABLE>

<P align=justify><A NAME="JN_044"></A><FONT SIZE=2><B>What
does it mean if I get more than one proxy card?</B></FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
your shares are registered differently and are in more than one account, you
will receive more than one proxy card. Sign and return all proxy cards to
ensure that all your shares are voted.</FONT></P>

<P align=justify><A NAME="JN_045"></A><FONT SIZE=2><B>How
does the board of directors recommend that I vote on the proposal?</B></FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Following
a recommendation from the Special Committee, the Board of Directors unanimously
recommends that you vote &#147;FOR&#148; the proposal to approve the Transaction.</FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>18</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P ALIGN=CENTER><A NAME="JN_046"></A><FONT SIZE=2><B>CAUTIONARY STATEMENT REGARDING
FORWARD-LOOKING STATEMENTS</B></FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
proxy statement contains certain forward-looking statements concerning, among
other things, our anticipated results, and future plans and objectives that are
or may be considered to be &#147;forward-looking statements.&#148; Our ability to do this
has been fostered by the Private Securities Litigation Reform Act of 1995 which
provides a &#147;safe harbor&#148; for forward-looking statements to encourage companies
to provide prospective information so long as those statements are accompanied
by meaningful cautionary statements identifying important factors that could
cause actual results to differ materially from those discussed. These
forward-looking statements are subject to a number of known and unknown risks
and uncertainties that could cause our actual results, performance or
achievements to differ materially from those described or implied in the
forward-looking statements, including, but not limited to, general economic and
business conditions, including the impact on consumer spending as a result of a
slower consumer economy, competition in the apparel and accessories markets,
potential changes in customer spending, acceptance of our product offerings and
designs, a highly promotional retail environment, any significant variations
between actual amounts and the amounts estimated for those matters identified
as our critical accounting estimates, as well as other significant accounting
estimates made in the preparation of our financial statements, and the impact
of the hostilities in the Middle East and the possibility of hostilities in
other geographic areas as well as other geopolitical concerns. Additional
uncertainty exists for the potential negative impact that a recurrence of
Severe Acute Respiratory Syndrome (SARS) in the Far East and other foreign
countries in which we source our products may have on our business. In light of
the uncertainty inherent in our forward-looking statements, you should not
consider their inclusion to be a representation that the forward-looking matters
will be achieved. In evaluating forward-looking statements, you should consider
all these risks and uncertainties, together with any other risks described in
our other reports and documents furnished or filed with the SEC, and you should
not place undue reliance on those statements. We assume no obligation for
updating any forward-looking statements, whether as a result of new
information, future events, or otherwise. However, to the extent that there are
any material changes in the information contained in this proxy statement, the
Company will promptly disclose the changes as and to the extent required by
applicable law and the rules and regulations of the SEC.</FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>19</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P ALIGN=CENTER><A NAME="JN_047"></A><FONT SIZE=2><B>SPECIAL FACTORS</B></FONT></P>

<P align=justify><A NAME="JN_048"></A><FONT SIZE=2><B>Purpose
of and Reasons for the Transaction</B></FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>General.</B> The Special Committee and the
Board of Directors has determined that the costs of being a SEC reporting
company currently outweigh the benefits and, thus, it is no longer in our best
interests or the best interests of our stockholders, including our unaffiliated
stockholders (consisting of stockholders other than our executive officers and
directors and other than those stockholders who are parties to the Stockholders
Agreement), for us to remain a SEC reporting company. Accordingly, we are
proposing the Transaction for the purpose of reducing the number of record
stockholders of our common stock to fewer than 300, so we can then cease
registration of our common stock under the Exchange Act, terminate our
reporting and other obligations as a SEC reporting company under the Exchange Act,
and delist our common stock from the American Stock Exchange. The proposed
Transaction, among other things, will enable us to realize significant cost
savings by the elimination of many of the expenses related to our status as an
SEC reporting company, including expenses relating to the disclosure, reporting
and compliance requirements of the Exchange Act, the Sarbanes-Oxley Act and
other federal securities laws, and will relieve us of the administrative
burdens associated with being an SEC reporting company.</FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Forward Stock Split is not necessary for us to reduce the number of holders of
record of our shares of common stock and to deregister our shares of common stock under the Exchange
Act. However, we have decided that it
is in the best interests of our stockholders to effect the Forward Stock Split
to avoid an unusually high stock price after the Transaction, to facilitate
trading of the shares of Continuing Stockholders either in private transactions
or on the OTCQX<SUP>SM</SUP>
tier of the pink sheets, and to mitigate any loss of liquidity in our shares of
common stock that may result from the Reverse Stock Split portion of the
Transaction.</FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Reduced Costs and Expenses</B><B>.</B> We incur both
direct and indirect costs to
comply with the filing and reporting requirements imposed on us as a result of
being an SEC reporting company. Professional fees of lawyers and accountants,
printing, mailing, and other costs incurred by us in complying with SEC
reporting and compliance requirements are substantial. We also incur direct and
indirect costs in complying with the Sarbanes-Oxley Act. Section 404 of the
Sarbanes-Oxley Act, which will become effective, in part, at the end of our
current fiscal year ending on June 30, 2008, would require that we test and
assess our internal control structure and, for the fiscal year ending June 30,
2009, that our external auditors report on our management&#146;s assessment of our
internal control structure. Compliance with these requirements will require
significant additional expenditures, including fees to third parties for
compliance planning, assessment, documentation and testing, as well as a
significant investment of time and energy by our management and employees. If
our SEC reporting obligations cease, we would not incur these expenses.</FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
estimated costs of remaining a SEC reporting company are described in greater
detail below:</FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>20</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR style="font-size:1px">
 <TD WIDTH="40%" VALIGN=BOTTOM>
 <P align=justify>&nbsp;</P>
 </TD>
 <TD WIDTH="4%" VALIGN=BOTTOM>
 <P align=justify>&nbsp;</P>
 </TD>
 <TD WIDTH="1%" VALIGN=BOTTOM>
 <P align=justify>&nbsp;</P>
 </TD>
 <TD WIDTH="7%" VALIGN=BOTTOM>
 <P ALIGN=RIGHT>&nbsp;</P>
 </TD>
 <TD WIDTH="4%" VALIGN=BOTTOM>
 <P align=justify>&nbsp;</P>
 </TD>
 <TD WIDTH="1%" VALIGN=BOTTOM>
 <P align=justify>&nbsp;</P>
 </TD>
 <TD WIDTH="9%" VALIGN=BOTTOM>
 <P ALIGN=RIGHT>&nbsp;</P>
 </TD>
 <TD WIDTH="6%" VALIGN=BOTTOM>
 <P align=justify>&nbsp;</P>
 </TD>
 <TD WIDTH="1%" VALIGN=BOTTOM>
 <P align=justify>&nbsp;</P>
 </TD>
 <TD WIDTH="10%" VALIGN=BOTTOM>
 <P ALIGN=RIGHT>&nbsp;</P>
 </TD>
 <TD WIDTH="6%" VALIGN=BOTTOM>
 <P align=justify>&nbsp;</P>
 </TD>
 <TD WIDTH="1%" VALIGN=BOTTOM>
 <P align=justify>&nbsp;</P>
 </TD>
 <TD WIDTH="9%" VALIGN=BOTTOM>
 <P ALIGN=RIGHT>&nbsp;</P>
 </TD>
 <TD WIDTH="1%" VALIGN=BOTTOM>
 <P align=justify>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=BOTTOM>
 <P ALIGN=CENTER><FONT SIZE=2><B>Costs</B></FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD COLSPAN="2" VALIGN=BOTTOM NOWRAP>
 <P ALIGN=CENTER><FONT SIZE=2><B>Actual 2007<BR>Expenses</B></FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD COLSPAN="2" VALIGN=BOTTOM NOWRAP>
 <P ALIGN=CENTER><FONT SIZE=2><B>Projected 2008<BR>
 Expenses</B></FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD COLSPAN="2" VALIGN=BOTTOM NOWRAP>
 <P ALIGN=CENTER><FONT SIZE=2><B>Projected 2009<BR>
 Expenses with<BR>
 Auditor<BR>
 Attestation</B></FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD COLSPAN="2" VALIGN=BOTTOM NOWRAP>
 <P ALIGN=CENTER><FONT SIZE=2><B>Projected 2009<BR>
 Expenses with<BR>
 No Auditor <BR>
 Attestation</B></FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=BOTTOM>
 <HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>

 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD COLSPAN="2" VALIGN=BOTTOM>
 <HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>

 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD COLSPAN="2" VALIGN=BOTTOM>
 <HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>

 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD COLSPAN="2" VALIGN=BOTTOM>
 <HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>

 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD COLSPAN="2" VALIGN=BOTTOM>
 <HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>

 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2>Audit of 10-K
 and review of 10-Q</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P align=justify><FONT SIZE=2>$</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P ALIGN=RIGHT><FONT SIZE=2>232,000</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P align=justify><FONT SIZE=2>$</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P ALIGN=RIGHT><FONT SIZE=2>264,000</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P align=justify><FONT SIZE=2>$</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P ALIGN=RIGHT><FONT SIZE=2>264,000</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P align=justify><FONT SIZE=2>$</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P ALIGN=RIGHT><FONT SIZE=2>264,000</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=BOTTOM>
 <P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2>Sarbanes-Oxley
 Initial Write-Up on Internal Controls</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>&#151;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>140,000</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P align=justify><FONT SIZE=2>(1)</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>&#151;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>&#151;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2>Sarbanes-Oxley
 Act Documentation and Testing</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P ALIGN=RIGHT><FONT SIZE=2>&#151;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P ALIGN=RIGHT><FONT SIZE=2>&#151;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P ALIGN=RIGHT><FONT SIZE=2>120,000</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P ALIGN=RIGHT><FONT SIZE=2>120,000</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=BOTTOM>
 <P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2>Sarbanes-Oxley
 Act Audit</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>&#151;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>60,000</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>170,000</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P align=justify><FONT SIZE=2>(2)</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>60,000</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P align=justify><FONT SIZE=2>(2)</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2>Sarbanes-Oxley
 Act Compliance Officer</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P ALIGN=RIGHT><FONT SIZE=2>&#151;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P ALIGN=RIGHT><FONT SIZE=2>50,000</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P ALIGN=RIGHT><FONT SIZE=2>50,000</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P ALIGN=RIGHT><FONT SIZE=2>50,000</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=BOTTOM>
 <P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2>SEC Counsel</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>104,000</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>104,000</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>104,000</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>104,000</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2>Board of
 Director Compensation</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P ALIGN=RIGHT><FONT SIZE=2>110,000</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P ALIGN=RIGHT><FONT SIZE=2>110,000</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P ALIGN=RIGHT><FONT SIZE=2>110,000</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P ALIGN=RIGHT><FONT SIZE=2>110,000</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=BOTTOM>
 <P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2>Director and
 Officer Insurance</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>76,000</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>76,000</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>76,000</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>76,000</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2>American Stock
 Exchange Listing Fees</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P ALIGN=RIGHT><FONT SIZE=2>17,000</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P ALIGN=RIGHT><FONT SIZE=2>17,000</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P ALIGN=RIGHT><FONT SIZE=2>17,000</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P ALIGN=RIGHT><FONT SIZE=2>17,000</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=BOTTOM>
 <P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2>Proxy and Annual
 Report Printing and Mailing, Transfer Agent Fees, Public Relations and
 Stockholder Communications and other miscellaneous costs</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>72,000</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>72,000</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>72,000</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>72,000</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT SIZE="2"><B>Total</B> </FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P align=justify><FONT SIZE=2>$</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P ALIGN=RIGHT><FONT SIZE=2>611,000</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P align=justify><FONT SIZE=2>$</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P ALIGN=RIGHT><FONT SIZE=2>893,000</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P align=justify><FONT SIZE=2>$</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P ALIGN=RIGHT><FONT SIZE=2>983,000</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P align=justify><FONT SIZE=2>$</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P ALIGN=RIGHT><FONT SIZE=2>873,000</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#Eaf9E8">
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
</TABLE>

<BR>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR style="font-size:1px">
 <TD WIDTH="100%" VALIGN=TOP>
 <P align=justify>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <HR SIZE=1 WIDTH="20%" NOSHADE COLOR=black ALIGN=LEFT>

 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>(1) This is a one-time cost projected to be spent in
 fiscal 2008 related to Sarbanes-Oxley Act compliance.</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>(2) We understand that the SEC may consider, but has
 not yet formally adopted, a proposal to delay for one year auditors&#146;
 attestations on internal controls for non-accelerated filers (companies with
 a public float of less than $75,000,000), which would include the Company. In
 the event that the proposal is adopted, we expect that our projected 2009
 expenses will be reduced by $110,000 to $873,000. See &#147;Special
 Factors&#151;Background of the Transaction&#148; beginning on page 24. </FONT></P>
 </TD>
 </TR>
</TABLE>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
ultimately expect to realize recurring annual cost savings of
approximately $500,000. These estimated savings primarily reflects, among other things:</FONT></P>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR style="font-size:1px">
 <TD WIDTH="3%" VALIGN=TOP>
 <P align=justify>&nbsp;</P>
 </TD>
 <TD WIDTH="97%" VALIGN=TOP>
 <P align=justify>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>a reduction in fees to our registered independent
 public accounting firm of approximately $315,000 for internal control audits,
 the review of our SEC periodic reports and related expenses;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>the elimination of annual costs attributable to
 ongoing audits to comply the Sarbanes-Oxley Act and the employment of a
 Sarbanes-Oxley Act compliance officer of approximately $50,000;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>the reduction in directors&#146; fees by reducing the
 size of our Board of Directors from nine to seven members; </FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>a reduction in legal fees associated with securities
 law compliance of approximately $25,000; and</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>the net reduction in costs and expenses associated
 with filing our annual, periodic and current reports and other documents,
 such as proxy statements and Section 16 filings with the SEC, the annual
 listing fees to the American Stock Exchange, and printing, mailing and other
 costs of the annual report to stockholders, proxy statements and other
 miscellaneous costs of approximately $79,000. We expect to save this amount
 even after giving effect to the cost of our shares being quoted on the OTCQX<SUP>SM </SUP>tier of the pink
 sheets.</FONT></P>
 </TD>
 </TR>
</TABLE>

<P ALIGN=CENTER><FONT SIZE=2>21</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
believe the projected fiscal 2009 costs are indicative of our annual costs
going forward if we remained a SEC reporting company. Please note, however,
that the annual costs are only estimates and the actual costs we realize may be
higher or lower than the estimates set forth in the table above. Likewise, our
projected annual cost savings are only estimates, and those cost savings could
be higher or lower than the amounts set forth above. As noted, our estimates
were based upon actual costs we incurred in fiscal 2007, but our estimates of
expenses in fiscal 2008 and 2009 and, accordingly our estimated cost savings,
are based, only in part, on historical costs. For example, if the Transaction
is effected, there will be an elimination of Sarbanes-Oxley Act documentation
and testing fees and a reduction in accounting fees. In addition, there will be
a more limited need for legal counsel if we no longer file reports with the
SEC, although we will need the assistance of legal counsel in complying with
the disclosure and other requirements of the pink sheets. Our auditing fees will be reduced
primarily because fees for certain interim services will be eliminated. Other
estimates were more subjective, such as savings in transfer agent&#146;s fees
because of a reduction in the number of stockholder accounts to be handled by
it, and a reduction printing and other related costs of distributions to
stockholders.</FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Management Time and Expense; Operational
Flexibility.</B>
The costs described above do not include the overall time expended by our
management on the preparation of our SEC filings. The time necessary to devote
to that preparation and review will likely increase, particularly for our chief
executive officer and our chief financial officer, who beginning at the end of
our current fiscal year must include in our annual report a report assessing
the effectiveness of our internal control over financial reports as required by
the Sarbanes-Oxley Act. We believe that this time could more effectively be
devoted to other purposes, such as operating our business and undertaking new
initiatives that may result in greater long-term growth. Additionally, due to
the public market&#146;s focus on quarterly results, smaller public companies such
as ours are required to focus on short-term goals, such as quarterly financial
results, often at the expense of longer-term objectives. As a non-SEC reporting
company, we believe management will have the flexibility by being able to
devote more time to sustaining long-term growth. </FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Limited Trading Volume and Liquidity for Small
Stockholdings.</B> The Board also believes that holders of small amounts
of shares of our common stock may be deterred from selling their shares because
of the lack of an active trading market and disproportionately high brokerage
costs. Based on our review of a list of record holders of our common stock
furnished to us by our transfer agent, as well as information we have received
regarding the holdings of beneficial owners of our common stock held in &#147;street
name,&#148; we estimate that there are approximately 361 holders of record of fewer
than 250 shares and approximately 244 holders of fewer than 250 shares in
&#147;street name.&#148; These holders are a large percentage of our unaffiliated
stockholders. The Transaction will offer each of these holders the opportunity
to obtain cash for their shares without the cost of dealing with a broker.</FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, the trading volume in our common stock has been and continues to be
thinly traded. The average daily trading volume of the stock from January 2,
2006 to December 4, 2007 (the trading day prior to the announcement of the
approval of the Transaction by the Company) was approximately 4,680 shares per
day, and during that period there were 139 trading days on which our common
stock did not trade at all. The trading of even a small number of shares may
have a disproportionate effect on the price of our shares in the public market.
Accordingly, the Transaction will provide our smallest stockholders with the
ability to liquidate their holdings in us and receive a fair price in cash for
their shares.</FONT></P>

<P align=justify><A NAME="JN_049"></A><FONT SIZE=2><B>Special
Committee and Board of Directors&#146; Protections for Continuing Stockholders</B></FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
order to mitigate any adverse effects of the Transaction on the liquidity or
value of the shares of common stock, and to foster a continuing trading market
in shares of common stock, the Special Committee and the Board of Directors
have conditioned the Transaction on the implementation of continuance of certain
corporate governance and other stockholder protections following the
Transaction, including:</FONT></P>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR style="font-size:1px">
 <TD WIDTH="5%" VALIGN=TOP>
 <P align=justify>&nbsp;</P>
 </TD>
 <TD WIDTH="95%" VALIGN=TOP>
 <P align=justify>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>the preparation and public
 dissemination quarterly and annual financial reports and the issuance of
 quarterly and annual earnings press releases;</FONT></P>
 </TD>
 </TR>
</TABLE>

<P ALIGN=CENTER><FONT SIZE=2>22</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR style="font-size:1px">
 <TD WIDTH="5%" VALIGN=TOP>
 <P align=justify>&nbsp;</P>
 </TD>
 <TD WIDTH="95%" VALIGN=TOP>
 <P align=justify>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>the preparation and public
 dissemination of annual audited financial statements which are accompanied by
 a certification from each of our chief executive officer and our chief
 financial officer, certifying that, among other things, the financial statements,
 fairly present in all material respects the financial condition, results of
 operations and cash flows of the Company as of and for, the periods presented
 in the financial statements;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>the public dissemination
 of press releases for material events;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>having at least two
 directors on our Board who are independent under the rules of the American
 Stock Exchange and under the Exchange Act;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>having the entire Board of
 Directors, or a committee of the Board of Directors with at least one
 independent director as a member, review and approve any non-compensatory
 related person transactions that a SEC reporting company would be required to
 disclose in a proxy statement prepared in accordance with the rules of the
 SEC and publicly announce any such transactions at least on an annual basis;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>holding annual
 stockholders&#146; meetings; and</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>maintaining our current
 code of ethics for finance professionals and code of business conduct for all
 employees.</FONT></P>
 </TD>
 </TR>
</TABLE>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These
corporate governance and the stockholder protections must remain in effect for
at least three years following the Transaction. Any change to those corporate
governance and other stockholder protections following this three year period
must be approved by a majority of the Board of Directors or a committee appointed
by the Board of Directors to consider any such changes. This three year
requirement will be applicable as long as there are unaffiliated Continuing
Stockholders during that time; it is not intended to restrict or otherwise
prohibit any merger, consolidation, sale of all or substantially all of our
assets, or similar extraordinary transaction during that three-year period. We
have no present plans or proposals for any such transaction, however, and our
intent is to operate our business after the Transaction substantially as it is
currently conducted. See &#147;Special Factors&#151;Conduct of the Company&#146;s Business
after the Transaction.&#148;</FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Additionally,
in order to ensure that our Continuing Stockholders will have continuing access
to a trading market, the Special Committee and the Board of Directors have also
required that our common stock be quoted by at least two market makers on the
OTCQX<SUP>SM</SUP> tier
of the pink sheets. The pink sheets is a tiered listing service that offers
trading, quotation and disclosure venue for over-the-counter securities in the
US markets and the OTCQX<SUP>SM</SUP> tier is the highest tier offered by the pink sheets. In order to
maintain a quotation on the OTCQX<SUP>SM</SUP> tier of the pink sheets, we will be required to meet certain reporting
and other requirements, including:</FONT></P>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR style="font-size:1px">
 <TD WIDTH="5%" VALIGN=TOP>
 <P align=justify>&nbsp;</P>
 </TD>
 <TD WIDTH="95%" VALIGN=TOP>
 <P align=justify>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>preparing annual and
 quarterly financial reports;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>performing annual audits;</FONT></P>
 </TD>
 </TR>
</TABLE>

<P ALIGN=CENTER><FONT SIZE=2>23</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>
<BR>
<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR style="font-size:1px">
 <TD WIDTH="5%" VALIGN=TOP>
 <P ALIGN=CENTER>&nbsp;</P>
 </TD>
 <TD WIDTH="95%" VALIGN=TOP>
 <P align=justify>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>requiring our chief executive officer and chief
 financial officer to each certify that (i) to his knowledge, the information
 about us furnished in accordance with the rules of the pink sheets 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 that information; (ii) to his knowledge, the financial
 statements, and other financial information furnished in accordance with the
 rules of the pink sheets, fairly present in all material respects our
 financial condition, results of operations and cash flows as of, and for, the
 periods presented; and (iii) based upon his reasonable belief, for at least
 one year from the date of the certification, we have sufficient working
 capital to continue operations and have the ability to continue to meet our
 obligations as they become due; and </FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>preparing interim material event disclosure in
 accordance with the reporting requirements of the OTCQX<SUP>SM</SUP>
 tier. </FONT></P>
 </TD>
 </TR>
</TABLE>

<P align=justify><A NAME="JN_050"></A><FONT SIZE=2><B>Background
of the Transaction</B></FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
passage of the Sarbanes-Oxley Act began a number of corporate governance
reforms that have increased the expenses of being a SEC reporting company
without enhancing, from a business and operational point of view, the benefits
of being a SEC reporting company. During our fiscal year ended June 30, 2007,
we spent approximately $611,000 in legal, accounting and other costs and
expenses related to compliance with the Sarbanes-Oxley Act and the rules and
regulations of the SEC, and we expect those costs to substantially increase.
Under current SEC regulations implementing the Sarbanes-Oxley Act, we will
become subject to the internal control audit requirements of Section 404 for
the first time beginning this fiscal year, and we expect that our costs and
expenses of compliance with Section 404 will initially increase by an
additional $234,000. Our independent registered public accounting firm will be
required to audit and provide an attestation report on our internal controls
beginning with our following fiscal year, although we note that the SEC has
publicly announced, but has not yet formally adopted, a proposal to delay our
auditor&#146;s attestation for one year. We estimate that the current total costs
and expenses of compliance with the Sarbanes-Oxley Act and of continuing to be
a reporting company under SEC regulations will be approximately $893,000 for
this fiscal year. In addition, we understand that the SEC may consider, but has
not yet formally adopted, a proposal to delay for one year auditors&#146;
attestations on internal controls for non-accelerated filers (companies with a
public float of less than $75,000,000), which would include the Company. If the
proposal is adopted, we estimate our projected 2009 expenses will be
approximately $873,000. For the first year the auditor attestation requirement
becomes applicable to us, and for each subsequent year, we estimate our
projected total costs and expenses of continuing to be a reporting company
under SEC regulations to be approximately $983,000. None of these cash costs
include the overall time of our executive officers and our other employees that
is necessary to prepare and review our public filings. </FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
the ordinary course, management has from time to time updated the Board of
Directors on the then current and anticipated costs relating to SEC reporting
and Sarbanes-Oxley Act compliance, particularly in connection with the pending
effectiveness of the internal control certification requirements of Section 404
of the Sarbanes-Oxley Act. At the September 26, 2006 Board of Directors
meeting, management was asked to discuss with the Board of Directors, at its
regularly scheduled January 2007 meeting, costs of compliance with its
obligations under the federal securities laws in light of the advance
preparation we would need to do prior to the potential effectiveness of Section
404 of the Sarbanes-Oxley Act. During the period prior to the scheduled January
2007 meeting, in consultation with its outside legal counsel, Troutman Sanders
LLP, and its independent registered public accounting firm, Deloitte &amp;
Touche, LLP, management reviewed those costs, as well as ways of reducing those
costs, all in preparation for its scheduled discussion with the Board of
Directors.</FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>24</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At
the meeting of the Board held on January 26, 2007, the Board and our management
reviewed these costs and expenses in detail, including the pending increase in
Sarbanes-Oxley Act costs that the Board of Directors believed would
dramatically increase our public company expenses once the Sarbanes-Oxley Act
was fully implemented with respect to us. The Board of Directors also noted the
substantial time and effort that management would spend on preparation for
compliance with the internal control audit requirements contained in Section
404 of the Sarbanes-Oxley Act. At that meeting, the Board asked our management
to continue to review these costs and expenses and periodically report back to
the Board.</FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During
the months following the January meeting, our management continued to review
our direct and indirect costs associated with being an SEC reporting company.
Management considered the costs of Sarbanes-Oxley compliance, both presently
and in the future, including resources and costs required to test and assess
our internal control structure and our external auditors&#146; report on our
management&#146;s assessment of that internal control structure. Our management
explored alternatives that might be available to us to reduce our costs,
including ceasing the registration of our shares of common stock under the
Exchange Act. The alternatives discussed included a transaction, such as a
reverse stock split, tender offer, odd-lot tender offer and the continuation or
an expansion of our long-standing open market repurchase program, in order to
reach the goal of reducing the number of our record holders below 300 and allow
us to deregister under the Exchange Act.</FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At
a meeting of the Board held on May 23, 2007, management updated the entire
Board of Directors on its review. At that meeting, the Board generally
discussed the possibility of converting to a non-SEC reporting company, and
about the general process of conversion, including:</FONT></P>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR style="font-size:1px">
 <TD WIDTH="5%" VALIGN=TOP>
 <P align=justify>&nbsp;</P>
 </TD>
 <TD WIDTH="5%" VALIGN=TOP>
 <P ALIGN=CENTER>&nbsp;</P>
 </TD>
 <TD WIDTH="90%" VALIGN=TOP>
 <P align=justify>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>evaluating the advantages
 and disadvantages of being a non-reporting company under the Exchange Act;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>if we decided to
 deregister our shares of common stock, reviewing the most appropriate method,
 including, reviewing alternatives to reduce the number of our stockholders
 below 300 so that we might deregister our common stock under the Exchange Act
 and delist our common stock from trading on the American Stock Exchange;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>depending on the method
 chosen, the possibility of holding a special meeting of our stockholders to
 approve any proposed transactions;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>determining the
 appropriate price at which to repurchase shares of our common stock;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>the preparation and filing
 with the SEC of appropriate stockholder disclosure materials; and</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>the preparation and filing
 of appropriate forms and information with the SEC and the American Stock
 Exchange to effect deregistration under the Exchange Act and delisting of our
 common stock from trading on the American Stock Exchange.</FONT></P>
 </TD>
 </TR>
</TABLE>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management&#146;s
report to the Board at this meeting included how the SEC counts the record
number of stockholders for determining whether a corporation may deregister its
shares under the Exchange Act, including the treatment of holders of shares of
our common stock in &#147;street name,&#148; the methods that public companies use to
reduce its number of stockholders below 300, including a reverse stock split,
tender offer, odd-lot tender offer, and open-market purchases. Management
indicated that it believed, after reviewing the possible alternatives, that a
reverse stock split would be the most expeditious and cost-effective method of
deregistration. In the context of a reverse stock split, management noted that </FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>25</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P align=justify><FONT SIZE=2>the Company had a
significant number of small stockholders, with many of them having received
shares of common stock under the Company&#146;s terminated employee stock ownership
plan, and that a deregistration transaction may provide them with a way to
obtain a payment for their shares without brokerage fees or commissions.
Management also discussed certain disadvantages to any proposed deregistration,
including that the Company would no longer file information and other reports
with the SEC and that continuing stockholders would have access to much less
information than they would if the status quo was maintained, and the
possibility of decreased liquidity for continuing stockholders. Management
noted that transactions on the pink sheets would provide continuing
stockholders with alternative means to trade shares of common stock,
particularly given the somewhat thin trading market of our shares of common
stock over time on the American Stock Exchange. </FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Troutman
Sanders then discussed with the Board members the general process of a
deregistration transaction, including potential SEC filings, including proxy
materials depending on the method chosen. Troutman Sanders also reviewed with
the Board members their fiduciary duties and responsibilities as members of the
Board in the context of a deregistration transaction, including the importance
of the appointment of a special committee of independent directors to review
the transaction and to act on behalf of the Company&#146;s unaffiliated
stockholders. After considerable deliberation, the Board decided to further
investigate a possible transaction to reduce the number of our stockholders of
record below 300, and to deregister our common stock under the Exchange Act. At
this meeting the Board established a special committee of the Board for the
purpose of considering whether to engage in a transaction and, if so, the
appropriate alternative methods for converting to a non SEC-reporting company,
the related advantages and disadvantages to the Company and its stockholders of
each of those alternatives, the fairness of the any transaction to the
unaffiliated stockholders of the Company, and to make a recommendation to the
full Board of Directors. The Board placed no limitations on the authority of
the Special Committee. The Board resolutions describing the authority of the
Special Committee provided, among other things, that if the members of the
Special Committee determined that a deregistration or other transaction was not
in the best interests of stockholders, then the entire Board of Directors would
be bound by that decision. The Board also empowered the Special Committee to
retain independent legal counsel and independent investment bankers and other
advisors, all at the expense of the Company. </FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
June 19, 2007, the Special Committee held its first meeting. At that meeting, the
Special Committee officially retained Day Pitney LLP as its independent legal
advisor. The Special Committee confirmed that its members would consist of
Norman Axelrod, who was appointed as Chairman of the Special Committee by its
members, Martin Brody and Harold Schechter, each of whom is independent within
the meaning of Section 121A of the American Stock Exchange Company Guide and
Rule 10A-3(b) of the Exchange Act. Day Pitney reviewed with the Special
Committee the independence rules and fiduciary duties for members of special
committees of boards of directors under Delaware law. The Special Committee reviewed and discussed certain
of the benefits and potential detriments to the Company and its stockholders of
any delisting and deregistration of the Company&#146;s common stock and also
discussed the significant increased cost of compliance with SEC, Sarbanes-Oxley
Act, and American Stock Exchange rules and regulations. The Special Committee
also reviewed generally the potential for the Company to continue trading on
the pink sheets following any potential transaction. The Special Committee then
reviewed information received from a number of investment banking firms that
had been contacted by Day Pitney in connection with the Special Committee&#146;s
proposed engagement of an independent financial advisor. The Special Committee
then interviewed two such firms. At the end of the interview process, on the
basis that Houlihan is an experienced provider of independent valuation and
fairness opinions and does not have any potentially conflicting relationships
with the Company or its affiliates, the Special Committee approved the
engagement of Houlihan as its independent financial advisor and directed Day
Pitney to take all necessary steps to finalize the engagement.</FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>26</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
July 12, 2007, the Special Committee met again, with Day Pitney and Houlihan in
attendance. The Special Committee members first confirmed their continued
independence and their understanding of the scope of their duties and
responsibilities, including their fiduciary duties. The Special Committee
discussed a number of alternative transactions, including maintaining the
status quo, purchasing shares of the Company&#146;s common stock in the open market,
undertaking an odd-lot tender offer, effecting a tender offer and considering a
sale of the Company. The Special Committee also reviewed materials provided by
Day Pitney regarding the potential advantages and disadvantages of a potential
delisting of the Company&#146;s common stock, and discussed preliminary information
provided to it by the Company on the estimated costs savings that the Company
may realize from a deregistration transaction. Day Pitney discussed recent
developments in the pink sheets trading market, including a new OTCQX<SUP>SM </SUP>tier listing service
that may provide a trading market for the Company&#146;s shares of common stock
after any potential deregistration/delisting transaction. In connection with
its review of each of these topics, the Special Committee discussed in detail
the additional information it would require in order to make an informed
recommendation to the Board as to whether a transaction would be in the best
interests of all of the Company&#146;s stockholders, particularly the unaffiliated
stockholders that would be cashed out in any potential transaction. The Special
Committee directed Day Pitney to request that the Company provide additional
information related to the proposed transaction, including, among other things,
the costs related to the Company&#146;s compliance with the rules of the SEC, the
Sarbanes-Oxley Act, and the American Stock Exchange that were currently being
incurred by the Company as well as the anticipated expenses and anticipated
cost-savings associated with the proposed transaction; the impact that the
proposed transaction may have on the Company&#146;s material agreements, financing
arrangements or ongoing business operations; and the impact that a proposed
transaction may have on the Company&#146;s executive officers, directors, and
affiliated stockholders. The Special Committee also directed Day Pitney to
provide the Special Committee with additional information regarding the
different transaction structures that could be utilized to effect the proposed
transaction as well as additional information on the mechanics and various
trading tiers of the pink sheets.</FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
July 31, 2007, the Special Committee met, with Day Pitney and Houlihan in
attendance. The Special
Committee members first confirmed their continued independence. The Special
Committee reviewed and discussed certain Company information, including an
analysis regarding the potential impact of a 1-for-500 stock split on the
Company&#146;s stockholders, and financial and other data supplied by the Company
which included updated information on holdings under the Stockholders
Agreement, stock options lists, summary backlog figures as of June 30, 2007,
consolidated statement of earnings for the one month ended July 31, 2006 and
the eleven months ended May 31, 2007, a list of the Company&#146;s customers as of
June 30, 2007, and a list of owned and leased real property. Day Pitney also
reviewed and discussed with the Special Committee the reporting requirements of
the Sarbanes-Oxley Act and recently proposed amendments to certain SEC
disclosure requirements, which could potentially apply to the Company.</FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Special Committee then reviewed the trading history of the Company from January
1, 2006 through June 30, 2007, noting that on approximately 75% of the trading
days during this period, the daily trading volume of the Company&#146;s common stock
was less than 4,000 shares and that on approximately 32% of the trading days,
no trades occurred in the Company&#146;s common stock. The Special Committee noted
that although one advantage of being listed on a national securities exchange
is increased liquidity, it did not appear from the data that the Company
realized this benefit. Day Pitney then discussed with the Special Committee its
preliminary analyses regarding the impact to the Company and its stockholders
of reverse stock splits in general, information concerning different stock
split ratios, the potential number of record holders who would be cashed out,
the potential number of record holders who would remain as stockholders, and a
share range analyses of the number of owners of shares of our common stock held
in street name. At this meeting, Day Pitney also discussed with the Special
Committee various public materials that had been supplied to the Special
Committee, including information available from the pink </FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>27</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P align=justify><FONT SIZE=2>sheets regarding the various
tiers on which a company&#146;s securities may trade following a delisting and
deregistration transaction and an academic study that considered the impact of
a voluntary deregistration transactions on the price and liquidity of the
common stock of firms included in the study. Day Pitney and the Special
Committee discussed the potential impact that discontinuation of current
financial and other material event disclosure may have on the continuing
unaffiliated stockholders following a deregistration transaction. Day Pitney
advised the Special Committee that if it were to recommend a proposed
transaction, it could determine to place certain conditions on its
recommendation, including a requirement that the Company continue to provide
its stockholders with annual audited and quarterly unaudited financial
statements and other material event disclosure. Houlihan then provided
the Special Committee with a status update of its progress, noting that it had
begun its preliminary evaluations. Houlihan and Day Pitney then each discussed
with the Special Committee the advantages and disadvantages of alternative
structures the Special Committee might consider, including maintaining the
status quo and not effecting any transaction, an issuer tender offer, an
odd-lot tender offer, the continuance of the Company&#146;s share repurchase
program, a potential sale of the Company and a cash-out merger.</FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
August 21, 2007 the Special Committee met again with Day Pitney and Houlihan in
attendance. The Special Committee members first confirmed their continued
independence. The Special Committee reviewed the information discussed during
the Special Committee meeting on July 31, 2007 regarding potential alternatives
to a transaction if the Special Committee determined that undertaking a
delisting/deregistration transaction was in the best interests of the Company
and its stockholders. The Special Committee preliminarily agreed that if the
Special Committee ultimately determined to recommend to the Board of Directors
that the Company undertake a delisting/deregistration transaction, such a
transaction should be structured as a reverse stock split immediately followed
by a forward stock split because the Special Committee believed that such a
structure provided the most fair, expeditious and cost-efficient method for
reducing the Company&#146;s stockholder base below 300 stockholders of record. The
Special Committee directed Day Pitney to collect additional information
regarding the impact various ratio alternatives would have on the number of
fractional shares purchased by the Company, the number of remaining
stockholders, and the ownership interests of the parties to the Stockholders
Agreement. The Special Committee also reviewed cost savings information
provided by the Company which outlined certain estimated cost savings that the
Company anticipated it would realize if a delisting/deregistration transaction
were undertaken noting the significant monetary expense and loss of management
time that the Company currently incurred, and currently anticipated that it
would incur in the future, in connection with the reporting requirements of the
Exchange Act and the Sarbanes-Oxley Act. Day Pitney also discussed with the
Special Committee the future potential legal, accounting, and financial
advisory fees and other miscellaneous costs (in addition to the cost associated
with the potential cash-out of stockholders) related to the proposed
transaction that may be incurred by the Company if the Board approved such a
transaction. The Special Committee reviewed the other information prepared by the
Company in response to the Special Committee&#146;s request for information, taking
particular note that the Company&#146;s bank lender, TD Banknorth, N.A., had
indicated that it would allow the Company to use funds under its existing
revolving credit facility to complete a deregistration transaction. The Special
Committee also discussed that Company management did not presently believe that
its status as a public company has had a measurable impact on the Company&#146;s
ability to attract customers, bank financing or favorable financing terms or
suppliers or favorable credit terms and that the Company did not presently
anticipate using its securities for any future acquisitions or as a vehicle for
financings in the future. The Special Committee then discussed the possible
disadvantages of a deregistration/delisting transaction, including the
potential impact it may have on the price and liquidity of the Company&#146;s common
stock. The Company&#146;s management and Troutman Sanders joined the meeting and
answered the Special Committee&#146;s questions regarding the information that had
been presented.</FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Special Committee held another meeting on September 18, 2007. The members
reviewed certain presentation materials that had been distributed, including
budget information prepared by the </FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>28</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P align=justify><FONT SIZE=2>Company,
information on disclosure categories of the pink sheets, and additional cost
savings and time savings information prepared by the Company. The Special
Committee discussed potential advantages and disadvantages associated with a
proposed transaction, including the different interests of unaffiliated Company
stockholders that would be cashed-out in a proposed transaction and those who
would continue to be stockholders. Among other factors considered, the Special
Committee noted that stockholders who would be cashed-out in a proposed
transaction would not be able to sell their stock at a time and price of their
own choosing and that the Special Committee would not be able to ensure that
the trading price of the Company&#146;s common stock would be within the cash-out
price either at the time of any transaction or at a later point in time. The
Special Committee continued to consider the potential impact that a proposed
transaction may have on the price and liquidity of the Company&#146;s common stock
and continued to review and consider possible measures to mitigate a potential
negative market reaction.</FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Special Committee held another meeting on September 26, 2007. Day Pitney and
Houlihan were again in attendance. After confirming their continued
independence, the members considered the threshold number of shares that a
stockholder of the Company would be required to hold in order to receive common
stock in the reverse stock split rather than a cash payment for fractional
shares. The Special Committee reviewed a recent share range analysis by Broadridge Financial Solutions, Inc. that showed the
distribution of beneficial owners&#146; stockholder accounts according to predefined
ranges based on share amount. The Special Committee also reviewed additional
information showing the potential number of record holders and beneficial
owners that may be cashed-out in various transaction ratios, the potential
number of fractional shares that the Company may be required to purchase from
both record holders and beneficial holders in connection with such transaction
ratios. The Special Committee also considered the approximate increase in
percentage ownership by the parties to the Stockholder&#146;s Agreement that may
result from such transaction ratios. The Special Committee agreed that a
transaction ratio selected should bring the number of stockholders of record
sufficiently below 300 so as reasonably to avoid re-triggering reporting
requirements following any potential delisting/deregistration transaction. The
Special Committee noted that although it sought to select a transaction ratio
that sufficiently reduced the number of stockholders of record below 300 so
that the Company could realize its projected cost savings, the Special
Committee also sought to limit the potential expense that would be incurred by
the Company in connection with the repurchase of fractional shares to that
necessary to achieve the cost-savings goal, and the members discussed various
ratio alternatives. During this meeting, the Day Pitney also reviewed with the
Special Committee, as a potential alternative transaction structure for
accomplishing the purpose of a proposed transaction, the mechanics of
reclassification transactions. Following the Special Committee&#146;s discussion and
consideration, the members determined that, in the event that they determined
to recommend a proposed transaction to the Board, the Special Committee
continued to believe that a reverse stock split, immediately followed by a
forward stock split, provided the most cost-efficient and fair manner in which
to effect a proposed transaction. Houlihan provided the Special Committee with
a status update of its progress, noting that as part of its diligence process
it was continuing to engage in discussions with management regarding the
financial condition and outlook of the Company. Houlihan then reviewed and
discussed with the Special Committee members the purpose and methodology of
each of the financial analyses Houlihan was performing in connection with its
analysis of a range of fair consideration that could be paid to the Company&#146;s
shareholders that would be cashed-out in a proposed transaction.</FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Special Committee&#146;s next meeting was held on November 20, 2007. The Special
Committee reviewed the procedures and process that had been followed by the
Special Committee, the advice and information that it had reviewed, and
potential benefits, potential disadvantages, Company developments and other
factors that it had considered throughout its evaluation of the proposed
transaction, including the timing of the transaction and the Company&#146;s
financial position. The Special Committee then reviewed with its advisors the
terms of a proposed reverse stock split/forward stock split transaction, </FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>29</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>


<P align=justify><FONT SIZE=2>including
conditions that would limit adverse effects on unaffiliated stockholders who
would remain stockholders after completion of the stock splits. Those
conditions included: </FONT></P>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR style="font-size:1px">
 <TD WIDTH="5%" VALIGN=TOP>
 <P ALIGN=CENTER>&nbsp;</P>
 </TD>
 <TD WIDTH="95%" VALIGN=TOP>
 <P align=justify>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>The common
 stock of the Company must be quoted on the OTCQX<SUP>SM</SUP> tier of pink
 sheets by at least two market makers.</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>The Company
 must prepare audited annual financial statements and unaudited quarterly
 financial statements and make them available to stockholders.</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>The Company
 must prepare and make available to stockholders annual and quarterly
 financial reports as required by the pink sheets and issue quarterly and
 annual press releases.</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>The
 Company&#146;s financial statements must be certified by its chief executive
 officer and chief financial officer as required by the pink sheets.</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>After the
 Transaction, at least two directors who are independent within the
 meaning of the rules of the American Stock Exchange would continue to be
 members of the Board of Directors.</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>Any
 non-compensation transaction with any director or officer of the Company, and
 their immediate families, must be reviewed and approved by the Board of
 Directors or a committee of the Board having at least one independent
 director as a member and any such transactions must be publicly announced at
 least on an annual basis.</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>The Company
 must disclose material events to stockholders through the issuance of press
 releases or in another acceptable manner.</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>The
 Company&#146;s Code of Business Conduct for Finance Professionals and General Code
 of Ethics for Employees must remain in place after the Transaction.</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>Annual
 meetings of stockholders must be held.</FONT></P>
 </TD>
 </TR>
</TABLE>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Special Committee determined that these corporate governance and stockholder
protections must remain in effect for at least three years following the
proposed transaction and any change following this period must be approved by a
majority of the Board or a majority of the members of a committee appointed by
the Board to consider any such change. The Special Committee also determined
that its recommendation would be conditioned on confirmation by the Company
that it had received from each lender from whom the Company intended to borrow
funds in connection with the Transaction written confirmation of the terms and
conditions of any borrowings to be made in connection with the Transaction and
confirmation from the Company that any debt incurred in connection with the
cash-out of fractional shares would not impair the liquidity or financial
condition of the Company.</FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Houlihan
then presented to the Special Committee its financial report dated November 20,
2007. Houlihan reviewed the information included in the financial report,
including the background to the Transaction and the proposed structure of the
Transaction, possible alternatives to the Transaction, potential benefits from
such a Transaction, Houlihan&#146;s business and financial due diligence in
accessing, reviewing and evaluating the business and financial status and
prospects of the Company, the historic trading price trading volume of the
Company&#146;s common stock, the potential cost savings from the Transaction, and
the potential disposition of certain real estate by the Company. Houlihan then
reviewed with the Special Committee its approach to its financial analysis of the
Company, discussing the historical trading price and trading volume of the
Company&#146;s common stock and the financial methodology it used </FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>30</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P align=justify><FONT SIZE=2>in determining
the fair value of the cash consideration to be paid to the Cashed Out
Stockholders. Following Houlihan&#146;s presentation, the Special Committee
discussed the financial report, Houlihan&#146;s presentation and due diligence and
other matters in connection with determining a potential fair value of the cash
consideration to be paid to the Cashed Out Stockholders.</FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Special Committee determined that it was the Special Committee&#146;s view and
belief, based on all of the factors which had been considered by the Special
Committee, although not relying upon any one factor but considering all factors
as a whole, that the Transaction would be in the best interests of all of the
Company&#146;s stockholders, including the unaffiliated stockholders who would be
cashed-out in the Transaction and unaffiliated stockholders who would continue
as owners of the Company, and that the Transaction should be recommended to the
Board of Directors. The Special Committee preliminarily determined that the
ratio of the Reverse Stock Split would be 1-for-250 and, accordingly, that the
ratio of the Forward Stock Split would be 250-for-1, but reserved the right to
change that ratio to the extent necessary to accomplish the goal of reducing
the number of record holders of the Company to below 300 or if it otherwise
determined that such a change was in the best interests of the Company and its
stockholders. The Special Committee also reserved the right to withdraw its
recommendation at any time prior to the effectiveness of the Transaction if it
believed that would be in the best interest of our stockholders. Following
further discussion, including consideration of various possible cash out stock
prices presented by Houlihan, the Special Committee determined that a cash out
price of $10.21 was appropriate and fair to all unaffiliated stockholders,
including minority stockholders who would be cashed out in the Transaction as
well as unaffiliated holders who would continue as stockholders of the Company.
Houlihan then orally confirmed to the Special Committee that, in the opinion of
Houlihan, the $10.21 per share was fair from a financial point of view to the
unaffiliated stockholders who would be cashed-out in such the Transaction and
also to the unaffiliated stockholders would continue as stockholders following
the Transaction. Pursuant to the Special Committee&#146;s request, Houlihan
confirmed its oral fairness opinion with a written fairness opinion on November
28, 2007.</FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Board of Directors held a meeting on November 28, 2007 at which the Special
Committee made its recommendation to the full Board of Directors to proceed
with a reverse stock split, followed by a forward stock split, to effect a
deregistration of the Company&#146;s shares of common stock, and recommended a
$10.21 per fraction share price for those stockholders who would be cashed out
as a result of the reverse stock split. Day Pitney made a presentation to the
full Board of Directors concerning the Special Committee&#146;s procedures and
deliberations during the course of the six months since the establishment of
the Special Committee, including an outline of the information that it had
reviewed and considered, alternative transactions that had been considered and
certain factors that it had considered in reaching its conclusions and
recommendation. Among the factors noted were the following: </FONT></P>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR style="font-size:1px">
 <TD WIDTH="3%" VALIGN=TOP>
 <P align=justify>&nbsp;</P>
 </TD>
 <TD WIDTH="97%" VALIGN=TOP>
 <P align=justify>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>the
 significant ongoing costs and management time and effort of compliance with
 the Sarbanes-Oxley Act, including with the internal control provisions of
 Section 404 of that act; </FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>the
 significant ongoing costs and management time and effort involved in the
 preparation and filing of periodic and other reports with the SEC; </FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>the limited
 trading volume and liquidity of the Company&#146;s shares of common stock; </FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>the
 relatively small effect of the proposed transaction on the relative voting
 power of Continuing Stockholders, including the members of the Stockholders
 Agreement; </FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>the business
 and operations of the Company are expected to continue substantially as
 presently conducted; </FONT></P>
 </TD>
 </TR>
</TABLE>

<P ALIGN=CENTER><FONT SIZE=2>31</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR style="font-size:1px">
 <TD WIDTH="3%" VALIGN=TOP>
 <P align=justify>&nbsp;</P>
 </TD>
 <TD WIDTH="97%" VALIGN=TOP>
 <P align=justify>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>enabling the
 Company&#146;s smallest stockholders, who represent a disproportionately large
 number of the Company&#146;s record holders, to liquidate their holdings in shares
 of common stock and receive a premium over market prices prevailing at the
 time of our public announcement of the Transaction; </FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>the
 determination by Houlihan, the independent financial advisor to the Special
 Committee, that the cash-out price of $10.21 for fractional shares was fair
 from a financial point of view; and </FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>as a result
 of the deregistration and delisting, the ability of the Company&#146;s management
 and employees to focus their time, effort and resources on long-term growth
 and increasing long-term stockholder value. </FONT></P>
 </TD>
 </TR>
</TABLE>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
recommendation of the Special Committee, however, was conditioned on the
continuation by the Company of certain protections for its unaffiliated
Continuing Stockholders. Day Pitney reviewed each of these protections for the
directors. These protections are described above in &#147;Special Factors--Special
Committee and Board of Directors&#146; Protections for Continuing Stockholders.&#148;</FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Special Committee noted that its recommendation of the ratio for the reverse
stock split and forward stock split proposal could change based on changes in
facts and circumstances. Since the goal of the Transaction would be to reduce
the number of record holders below 300, changes in the number of record holders
or shareholdings prior to the stock splits may warrant a re-examination and
change of the ratio. Further, there may be circumstances, such as an adverse
change in the financial condition of the Company, that may make the
deregistration inadvisable. Accordingly, the Special Committee reserved the
right to withdraw it recommendation at any time prior to the effectiveness of
the Transaction, even if stockholders had already approved it at the Special
Meeting.</FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Houlihan
then joined the meeting and reviewed with the directors in detail its financial
report that it presented to the Special Committee on November 20, 2007.
Houlihan summarized for the directors its findings, reviewed its due diligence
procedures and its methodologies, including its historical price and volume
analysis, guideline public company method analysis, comparable transactions
method analysis, and discounted cash flow method analysis. Houlihan also
confirmed to the Board of Directors that, in the opinion of Houlihan, the
$10.21 per share was fair from a financial point of view to the unaffiliated
stockholders who would be cashed out in the Transaction and to the unaffiliated
stockholders who would continue as stockholders of the Company. The Board then
asked and Houlihan then answered a number of questions of Houlihan as to its
methodologies, information considered by it, and the results of its analyses. </FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Board of Directors held another meeting on December 5, 2007 to further discuss
and consider the recommendation of the Special Committee to engage in a
deregistration transaction. At that meeting, the Board particularly noted the
measures the Board adopted so that the consideration of a proposed transaction
was fair to unaffiliated stockholders of the Company, including the
establishment of the Special Committee, who had engaged its own legal and
financial advisors to review and determine whether a proposed transaction was
advisable and, if so, the structure and other terms of that transaction. The
Board then reviewed in detail the recommendation of the Special Committee that
had been made at the November 28, 2007 meeting of the full Board. The Board
noted the advantages and other considerations of the proposal to the Company
and its stockholders and other relevant factors, including: the significant
ongoing costs and management time and effort of compliance with the
Sarbanes-Oxley Act, including with the internal control provisions of Section
404 of that act, and the preparation and filing of periodic and other reports
with the SEC; the limited trading volume and liquidity of our shares of common
stock, and that a deregistration transaction would provide our smallest
stockholders, who represent a disproportionately large number of total record
holders, the opportunity to obtain cash for their shares in a relatively
limited trading market and at a premium over market prices prevailing at the
time of </FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>32</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P align=justify><FONT SIZE=2>our public
announcement of the Transaction; the small effect of the proposed transaction
on the relative voting power of Continuing Stockholders, including that
Transaction would result in less than a 2% increase in the voting power of the
parties to the Stockholders Agreement; management&#146;s statements that the business
and operations of the Company were expected to continue substantially as
presently conducted; the Company historically had not taken advantage of the
benefits of being a public company, in that it used bank borrowings in lieu of
equity financings to funds its operations, and it did not use equity as an
incentive or retention device for its senior management, nor has the Company
used equity as consideration for acquisitions; the determination by Houlihan
that the cash-out price of $10.21 for fractional shares was fair from a
financial point of view; no change of control would occur as a result of the
deregistration transaction; and as a result of the deregistration and
delisting, the ability of our management and employees to focus their time,
effort and resources on long-term growth and increasing long-term stockholder
value. The Board also noted that the cost of the transaction would be able to
be funded under the Company&#146;s existing revolving credit facility and
management&#146;s belief that the use of those funds would not have any material
impact on the Company&#146;s normal business operations. The Board then reviewed
each of the special stockholder protection measures on which the Special
Committee had conditioned its recommendation, and that the Special Committee
has reserved the right to change the ratio if necessary to reduce the number of
the Company&#146;s record holders below 300, which is necessary to deregister under
the federal securities laws, or as otherwise determined to be in the best
interests of the Company and its stockholders. The Board also noted that the
Special Committee has also reserved the right to abandon the transaction if it
believes that the transaction is no longer in the best interests of
stockholders.</FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based
on all of the factors which had been considered by the Board of Directors at
this and at its other meetings, and based on the information and recommendation
of the Special Committee, although not relying upon any one factor but
considering all factors as a whole, the Board, including all of non-employee
directors of the Company, specifically adopted the recommendations of the
Special Committee and all factors that the Special Committee took into account
in making its recommendations to the full Board of Directors. The Board of Directors
determined that the Transaction would be in the best interests of all Company&#146;s
stockholders, including the unaffiliated stockholders who would be cashed-out
in Transaction and unaffiliated stockholders who would continue as owners of
the Company, approved the Transaction, including the cash-out price of $10.21,
and recommended the Transaction to the stockholders of the Company. The Board
of Directors also retained the right to change the initial ratio of the stock
splits if necessary or advisable in order to accomplish the reduction of the
number of record holders below 300, and retained the right to withdraw its
approval of the Transaction, either before or after the vote of stockholders,
if the Board of Directors determined that the deregistration transaction was no
longer in our best interests or in the best interests of our stockholders. </FONT></P>

<P align=justify><A NAME="JN_051"></A><FONT SIZE=2><B>Alternatives to the Transaction</B></FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
making their determinations to proceed with the Transaction, the Special
Committee and the Board of Directors considered other methods of effecting a
deregistration transaction, including an issuer tender offer, an odd-lot tender
offer, a reclassification, a purchase of shares in the open market and a
cash-out merger, as well as maintaining the status quo. When considering the
various alternatives to the Transaction, the primary focus was the level of
assurance that the selected alternative would result in the Company having
fewer than 300 record owners of its common stock, thus allowing us to achieve
its objective, the time frame within which such alternative could reasonably be
expected to be achieved, again relative to the other alternatives under
consideration, as well as the potential costs of the alternative transactions.</FONT></P>

<P align=justify><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Issuer
Tender Offer</B>. In this alternative, we would offer to
purchase a set number of shares within a specific timetable. The results of an
issuer tender offer would be unpredictable, however, due to </FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>33</FONT></P>

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<P align=justify><FONT SIZE=2>its voluntary
nature, and we would have no assurance that enough stockholders would tender
all of their shares of our common stock to reduce the number of record owners
of our common stock to fewer than 300. In addition, the rules governing tender
offers require equal treatment of all stockholders, including pro rata
acceptance of offers from stockholders. The Special Committee and the Board of
Directors considered that since they could not guarantee or predict with
certainty how many shares would be tendered, the possibility existed that such
a transaction would not reduce the number of holders of record to below 300,
and the estimated costs of this type of transaction potentially could be higher
than the costs of the Transaction. As a result of these disadvantages, the
Special Committee and the Board of Directors determined not to pursue this
alternative.</FONT></P>

<P align=justify><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Odd&#150;Lot
Tender Offer</B>. Unlike a traditional tender offer, an
odd-lot tender offer would offer to purchase the shares of our common stock
only from those stockholders owning 99 or fewer. As of October 19, 2007, there
were approximately 275 holders of record owning 99 or fewer shares of our
common stock. However, like an issuer tender offer, this method would be
voluntary on the part of stockholders and there could be no assurance that a
requisite number of stockholders would participate. While the time frame for
completing an odd-lot tender offer is shorter than for the Transaction and
would be less expensive, the Special Committee and the Board of Directors
decided this alternative would not be preferable to the Transaction because of
the lack of assurance that an odd-lot tender offer would produce the intended
result.</FONT></P>

<P align=justify><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reclassification.
</B>The Special Committee also considered a
reclassification, in which stockholders would receive a new class of preferred
stock in exchange for their shares of common stock, rather than receive a cash
payment for their shares. While stockholders would continue to participate as
stockholders of the Company, there could be no assurance that any trading
market would arise for this new class of stock. Further, this alternative would
not provided our smallest stockholders with the ability to receive a cash
payment for their shares without the payment of brokerage commissions and other
transaction costs. Accordingly, this alternative was not considered the
preferable structure. </FONT></P>

<P align=justify><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchase
Of Shares in the Open Market</B>. The Special Committee
and the Board of Directors also considered expanding our existing traditional
stock repurchase program, under which the Company would make periodic repurchases
of its common stock in the open market or in privately negotiated transactions.
However, the Special Committee and the Board of Directors noted that this
method would be lengthy, and because it was voluntary, there was no assurance
of acquiring sufficient shares to reduce the number of record holders below
300.</FONT></P>

<P align=justify><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash-Out
Merger</B>. The alternative considered by the Special
Committee and the Board of Directors as the most similar to the Transaction is
a merger with a shell company and the reissuance of stock to Continuing
Stockholders of the newly-formed entity. Stockholders owning fewer then 250
shares would be cashed-out and stockholders owning 250 or more shares would
become stockholders in the newly-formed entity. In considering this alternative,
the Special Committee and the Board of Directors noted that a cash-out merger
could potentially be more complex and less cost effective than a reverse stock
split and required the formation of a new entity and required more
documentation than the Transaction. Accordingly, the Special Committee and the
Board of Directors concluded that the Transaction would be more simple and
cost-effective than a cash-out merger.</FONT></P>

<P align=justify><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Maintaining
the Status Quo.</B>&nbsp;The Special Committee and the Board of Directors also considered
maintaining the status quo. In that case, the Company would continue to incur
the significant expenses of being a SEC reporting company without enjoying the
benefits traditionally associated with SEC reporting company status, including,
but not limited to, raising capital in the public markets, stock liquidity,
business credibility and the ability to use its common stock as currency for
acquisitions. </FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>34</FONT></P>

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<P align=justify><FONT SIZE=2>However,
Special Committee and the Board of Directors believed that becoming a private
company would be in the best interests of the Company and its stockholders and
rejected this alternative.</FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;After
carefully reviewing all of these alternatives, for the reasons discussed above,
the Special Committee recommended, and the Board of Directors approved, the
Transaction as the most expeditious and economical way of changing our status
from that of a reporting company to that of a non-reporting company.</FONT></P>

<P align=justify><A NAME="JN_052"></A><FONT SIZE=2><B>Effects of the Transaction</B></FONT></P>

<P align=justify><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effect
of the Transaction on the Company.</B> The Transaction is
designed to reduce the number of our stockholders of record below 300, which
will allow us to terminate our reporting obligations with the SEC. Based on
information available to us as of the Record Date, we expect that as a result
of the Transaction the number of our stockholders of record would be reduced
from approximately 454 to approximately 155. In addition, we estimate that
there are approximately 244 holders in street name who own fewer than 250
shares of our common stock whose shares would be cashed out in the Transaction.
We also believe the Transaction will have the following additional effects:</FONT></P>

<P align=justify><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;
Termination of Exchange Act Registration and Elimination of SEC Reporting
Obligations.</I></B> Our common stock is currently
registered under the Exchange Act. The registration may be terminated upon
application by us to the SEC if there are fewer than 300 holders of record of
our common stock. We intend to file a Form 25 with the SEC to delist our common
stock from the American Stock Exchange and to deregister our common stock under
Section 12(b) of the Exchange Act. We expect that the delisting of our common
stock will be effective 10 days after we file the Form 25 with the SEC and
deregistration of our common stock under Section 12(b) of the Exchange Act will
take effect 90 days after the filing of the Form 25. Our duty to file periodic
and current reports under Section 13(a) of the Exchange Act and the rules and
regulations thereunder as a result of our common stock&#146;s registration under
Section 12(b) of the Exchange Act will be suspended 10 days after we file the
Form 25 with the SEC. We will also be required to terminate our registration
under other applicable provisions of the Exchange Act. Accordingly, we will
also file with the SEC a Form 15 certifying that we have less than 300
stockholders. Our obligation to file periodic and current reports as a result
of our common stock&#146;s registration under those other provisions of the Exchange
Act will be suspended immediately upon the filing the Form 15 with the SEC
(which we anticipate we will file 10 days following the filing of the Form 25).
After the 90-day waiting period following the filing of the Form 15: (1) our
obligation to comply with the requirements of the proxy rules and to file proxy
statements under Section&nbsp;14 of the Exchange Act will also be terminated;
(2) our executive officers, directors and 5% stockholders will no longer be
required to file reports relating to their transactions in our common stock
with the SEC and our executive officers, directors and 10% stockholders will no
longer be subject to the recovery of profits provision of the Exchange Act; and
(3) persons acquiring 5% of our common stock will no longer be required to
report their beneficial ownership under the Exchange Act. However, following
the filing of the Form 15 with the SEC, if on the first day of any fiscal year
we have more than 300 stockholders of record we will once again become subject
to the reporting requirements of the Exchange Act. The Company will continue to
be subject to the general anti-fraud provisions of applicable federal and state
securities laws. </FONT></P>

<P align=justify><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;
Stockholder Protections. </I></B>As part of the corporate
governance and other stockholder protections adopted by the Special Committee
and the Board of Directors, we are required to be quoted by at least two market
makers on the OTCQX<SUP>SM</SUP> tier of the pink sheets. We will continue to
prepare and publicly disseminate quarterly and annual financial reports, issue
quarterly and annual earnings press releases, prepare and publicly disseminate
annual audited financial statements which are accompanied by a certification
from each of our chief executive officer and chief financial officer and comply
with the </FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>35</FONT></P>

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<P align=justify><FONT SIZE=2>disclosure and
other requirements of the OTCQX<SUP>SM</SUP> tier of the pink sheets. See
&#147;Special Factors--Special Committee and Board of Director Protections for
Continuing Stockholders.&#148;</FONT></P>

<P align=justify><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;
Reduced</I></B> <B><I>Costs and Expenses</I></B>. Our direct, out-of-pocket costs
resulting from our reporting and other obligations under the Exchange Act, the
Sarbanes-Oxley Act, and the American Stock Exchange rules was approximately
$611,000 in fiscal 2007 and we expect these costs to be approximately $893,000
in fiscal 2008 and between approximately $873,000 and $983,000 in fiscal 2009. We
expect to save approximately $500,000 on an annual basis by becoming a
non-reporting company. We also believe our management team, which currently
spends a significant amount of time on activities related to compliance with
the Exchange Act and Sarbanes-Oxley Act will have more time to devote to
business development and revenue enhancing activities. We realize that, as a
condition to completion of the Transaction, we are required to be quoted by at
least two market makers on the OTCQX<SUP>SM</SUP> tier of the pink sheets, to
prepare and publicly disseminate quarterly and annual financial reports,
prepare and publicly disseminate annual audited financial statements which are
accompanied by a certification from each of our chief executive officer and
chief financial officer and comply with the disclosure and other requirements
of the OTCQX<SUP>SM</SUP> tier of the pink sheets. However, we anticipate that
these reporting requirements will require less of our management&#146;s and
employee&#146;s time than it currently does as a SEC reporting company, particularly
since we will no longer be subject to the Sarbanes-Oxley Act.</FONT></P>

<P align=justify><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;
Financial Effect of the Transaction.</I></B> Based on
information we have received from our transfer agent, Continental Stock
Transfer &amp; Trust Company, and from Broadridge Financial Solutions, Inc., we
estimate that the cost of payment to Cashed Out Stockholders, professional fees
and other expenses will total approximately $1,916,000. This total amount could
be larger or smaller depending on, among other things, the number of fractional
shares that will be outstanding after the Transaction as a result of purchases,
sales and other transfers of our shares of common stock by our stockholders.
The consideration to be paid to the Cashed Out Stockholders and the costs of the
Transaction will be paid from cash on hand and from funds under our existing
revolving loan agreement with TD Banknorth, N.A. See &#147;Special Factors--Source
of Funds and Expenses.&#148; These costs will be offset over time by the costs
savings of approximately $500,000 per year we estimate we expect to save as a
result of a Transaction. See &#147;Special Factors--Purpose of and Reasons for the
Transaction.&#148;</FONT></P>

<P align=justify><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;
Conduct of our Business after the Transaction.</I> </B>We
expect our business and operations to continue substantially as they are
currently conducted, and except as described in this proxy statement, the
Transaction is not expected to have any material effect upon the conduct of our
business. See &#147;Conduct of the Company&#146;s Business After the Transaction.&#148;</FONT></P>

<P align=justify><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;
Aggregate Stockholders&#146; Equity.</I></B> Our aggregate
stockholders&#146; equity will decrease from approximately $19,445,000 as of
September 30, 2007 to approximately $17,865,000 on a pro forma basis (after
giving effect to payment of Transaction Costs in the amount of $1,756,000,
consisting of approximately $1,316,000 for the cash out of the shares of Cashed
Out Stockholders, and approximately $440,000 representing the amount of other
Transaction Costs that have not been included in our historical financial statements).</FONT></P>

<P align=justify><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;
Book Value Per Share.</I></B> Our book value per share of
our common stock will decrease from $7.76 as of September 30, 2007 to
approximately $7.52 per share of common stock on a pro forma basis (after
giving effect to payment of Transaction Costs in the amount of $1,756,000).</FONT></P>

<P align=justify><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;
Net Earnings Per Share</I></B>. As of June 30, 2007 net
earnings per fully diluted share for our fiscal year then ended were $0.28 and
at September 30, 2007 net earnings per fully diluted share for our fiscal
quarter then ended were $0.12. On a pro forma basis (after giving effect to the
payment of the </FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>36</FONT></P>

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<P align=justify><FONT SIZE=2>estimated
$145,000 and $34,000 for additional interests costs for the three month period
ended June 30, 2007 and September 30, 2007, respectively, in the Transaction),
net earnings per fully diluted share for those periods would have been $0.26
and $0.12, respectively.</FONT></P>

<P align=justify><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effect
on Holders of Fewer than 250 Shares of Common Stock.</B>
Following the Transaction, holders of fewer than 250 shares of our common stock
would receive a cash payment of $10.21 per pre-split share, without interest,
and would cease to be stockholders of the Company. Cashed Out Stockholders will
have no further financial interest in us with respect to their cashed out
shares and thus will not have the opportunity to participate in the potential
appreciation in the value of such shares or our future growth.</FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
intend to treat stockholders holding our common stock in street name in the
same manner as record holders. Prior to the effective date of the Transaction,
we will conduct an inquiry of all brokers, banks and other nominees that hold
shares of our common stock in &#147;street name,&#148; ask them to provide us with
information on how many fractional shares will be cashed out, and request that
they effect the Transaction for their beneficial holders. However, these banks,
brokers and other nominees may have different procedures then registered
stockholders for processing the Transaction. As a result, a stockholder holding
a total of 250 or more shares of common stock may nevertheless have those
shares cashed out if the stockholder holds a combination of street name shares
and shares of record, or holds shares in several brokerage firms. If you are in
this situation and desire to remain a stockholder of the Company after the
Transaction, you may consolidate your holdings into one brokerage account or
record holder position prior to the effective date. Conversely, if you hold
less than 250 shares in street name and want to ensure that your shares are
cashed out, you may want to change the manner in which your shares are held
from street name into your own name so that you will be a record owner of the
shares.</FONT></P>

<P align=justify><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effect
on Unaffiliated Stockholders Who Own 250 or More Shares. </B>For
those unaffiliated stockholders who own 250 or more shares of our common stock,
the Transaction may have the following effects:</FONT></P>

<P align=justify><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;
Elimination of SEC Reporting Obligations and Compliance with the Sarbanes-Oxley
Act.</I></B> Our common stock is currently registered under the Exchange Act. The
registration may be terminated upon application by us to the SEC if there are
fewer than 300 holders of record of our common stock. We intend to file a Form
25 with the SEC to delist our common stock from the American Stock Exchange and
to deregister our common stock under Section 12(b) of the Exchange Act. We
expect that the delisting of our common stock will be effective 10 days after
we file the Form 25 with the SEC and deregistration of our common stock under
Section 12(b) of the Exchange Act will take effect 90 days after the filing of
the Form 25. Our duty to file periodic and current reports under Section 13(a)
of the Exchange Act and the rules and regulations thereunder as a result of our
common stock&#146;s registration under Section 12(b) of the Exchange Act will be
suspended 10 days after we file the Form 25 with the SEC. We will also be
required to terminate our registration under other applicable provisions of the
Exchange Act. Accordingly, we will also file with the SEC a Form 15 certifying
that we have less than 300 stockholders. Our obligation to file periodic and
current reports as a result of our common stock&#146;s registration under those
other provisions of the Exchange Act will be suspended immediately upon the
filing the Form 15 with the SEC (which we anticipate we will file 10 days
following the filing of the Form 25). After the 90-day waiting period following
the filing of the Form 15: (1) our obligation to comply with the requirements
of the proxy rules and to file proxy statements under Section&nbsp;14 of the
Exchange Act will also be terminated; (2) our executive officers, directors and
5% stockholders will no longer be required to file reports relating to their
transactions in our common stock with the SEC and our executive officers,
directors and 10% stockholders will no longer be subject to the recovery of
profits provision of the Exchange Act; and (3) persons acquiring 5% of our
common stock will no longer be required to report their beneficial ownership
under the Exchange Act. However, following the filing of </FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>37</FONT></P>

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<P align=justify><FONT SIZE=2>the Form 15
with the SEC, if on the first day of any fiscal year we have more than 300
stockholders of record we will once again become subject to the reporting
requirements of the Exchange Act. The Company will continue to be subject to
the general anti-fraud provisions of applicable federal and state securities
laws. </FONT></P>

<P align=justify><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;
Stockholder Protections</I>. </B>As part of the corporate
governance and other stockholder protections adopted by the Special Committee and
the Board of Directors, we are required to be quoted by at least two market
makers on the OTCQX<SUP>SM</SUP> tier of the pink sheets. We will continue to
prepare and publicly disseminate quarterly and annual financial reports, issue
quarterly and annual earnings press releases, prepare and publicly disseminate
annual audited financial statements (which are accompanied by a certification
from each of our chief executive officer and chief financial officer) and
quarterly unaudited financial statements and comply with the disclosure and
other requirements of the OTCQX<SUP>SM</SUP> tier of the pink sheets. See
&#147;Special Factors--Special Committee and Board of Director Protections for
Continuing Stockholders.&#148;</FONT></P>

<P align=justify><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;
Effect on Market for Shares and Liquidity. </I></B>Our
common stock is currently listed on the American Stock Exchange. After the
termination of our reporting obligations under the Exchange Act, our common
stock would no longer be listed on the American Stock Exchange, which may have
an adverse effect on the liquidity of our common stock. Accordingly, any
trading in our common stock will occur on the OTCQX<SUP>SM </SUP>tier of the
pink sheets or in privately negotiated sales which may adversely affect the
liquidity of our common stock. The average daily trading volume of our common
stock from January 2, 2006 to December 4, 2007 (the trading day prior to the
announcement of the Transaction by the Company) was approximately 4,680 shares
per day. During that period, there were 139 trading days on which our common
stock did not trade at all.</FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;
As part of the corporate governance and other stockholder protections adopted
by the Special Committee and the Board, we are required to be quoted by at
least two market makers on the OTCQX<SUP>SM</SUP> tier of the pink sheets, and
we will continue to prepare and publicly disseminate quarterly and annual
financial reports, issue quarterly and annual earnings press releases, prepare
and publicly disseminate annual audited financial statements (which are
accompanied by a certification from each of our chief executive officer and
chief financial officer) and quarterly unaudited financial statements and
comply with certain other disclosure and other requirements. These measures are
intended to mitigate any adverse effects of the Transaction on the liquidity or
value of the shares of common stock and to foster a continuing trading market
in shares of common stock. See &#147;Special Factors--Special Committee and Board of
Director Protections for Continuing Stockholders.&#148; </FONT></P>

<P align=justify><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;
Outstanding Stock Options.</I></B> The Transaction will
have no effect on outstanding options to purchase shares of our common stock.</FONT></P>

<P align=justify><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;
Reduction in Publicly Available Information.</I> </B>If we
complete the Transaction as described in this proxy statement, our common stock
will no longer be registered under the Exchange Act and we will no longer be a
reporting company under the Exchange Act. We will, therefore, cease to file
annual, quarterly, current, and other reports and documents with the SEC, and
stockholders will cease to receive annual reports and proxy statements. Persons
that remain stockholders after the Transaction is effected will, therefore,
have access to less information about the Company and our business, operations,
and financial performance. We will, however, continue to prepare and publicly
disseminate certain business and financial information under the rules of the
pink sheets and as required by the Special Committee and the Board of
Directors. While these disclosure requirements may be less comprehensive than
the disclosure requirements under the Exchange Act applicable to SEC reporting
companies they are </FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>38</FONT></P>

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<P align=justify><FONT SIZE=2>intended to
ameliorate the impact of the Transaction on our Continuing Stockholders. See
&#147;Special Factors--Special Committee and Board of Director Protections for Continuing
Stockholders.&#148;</FONT></P>

<P align=justify><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;
Possible Decline in the Value of Our Common Stock.</I> </B>Because
of the possible limited liquidity for our common stock, the termination of our
obligation to publicly disclose financial and other information following the
Transaction, and the deregistration of our common stock under the Exchange Act,
Continuing Stockholders may experience a significant decrease in the value of
their common stock. The adoption by the Board and the Special Committee of the
corporate governance and other special stockholder protections, including
continuing disclosure requirements and that we be listed on the OTCQX<SUP> SM</SUP>
tier of the pink sheets, is intended to mitigate any reduction in the trading
price of our common stock. See &#147;Special Factors--Special Committee and Board of
Director Protections for Continuing Stockholders.&#148; </FONT></P>

<P align=justify><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;
Aggregate Stockholders&#146; Equity.</I></B> Our aggregate
stockholders&#146; equity will decrease from approximately $19,445,000 as of
September 30, 2007 to approximately $17,865,000 on a pro forma basis (after
giving effect to payment of Transaction Costs in the amount of $1,756,000).</FONT></P>

<P align=justify><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;
Book Value Per Share.</I></B> Our book value per share of
our common stock will decrease from $7.76 as of September 30, 2007 to
approximately $7.52 per share of common stock on a pro forma basis (after
giving effect to payment of Transaction Costs in the amount of $1,756,000).</FONT></P>

<P align=justify><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;
Net Earnings Per Share</I></B>. As of June 30, 2007 net
earnings per fully diluted share for our fiscal year then ended were $0.28 and
at September 30, 2007 net earnings per fully diluted share for our fiscal
quarter then ended were $0.12. On a pro forma basis (after giving effect to the
payment of the estimated $145,000 and $34,000 for additional interests costs
for the three month period ended June 30, 2007 and September 30, 2007,
respectively, in the Transaction), net earnings per fully diluted share for
those periods would have been $0.26 and $0.12, respectively.</FONT></P>

<P align=justify><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effect
on Affiliated Stockholders.</B> On the Record Date,
1,257,643 shares, or approximately 50.9%, of the issued and outstanding shares
of our common stock, were held by certain parties to the Stockholders
Agreement. Abe Ginsburg, our Chairman of our Executive Committee, Allan
Ginsburg, our Chairman, Robert Chestnov, our President and Howard Ginsburg our
Vice Chairman, certain other family members, trusts and custodianships for the
benefit of such individuals and family members, unrelated individuals, and the
Company are parties to the Stockholders Agreement. The Stockholders Agreement,
among other things, entitles Abe Ginsburg, Allan Ginsburg, Robert Chestnov and
Howard Ginsburg, in their capacity as a stockholders&#146; committee, acting by the
vote of at least two-thirds, or by the unanimous written consent, of the
members of the stockholders committee, for a period of fifteen years from the
date of the Stockholders Agreement, to direct the vot&#173;ing of the shares of
common stock with respect to which the signatory stockholders have or share, or
may hereafter have or share, voting power with respect to all matters submitted
to our stockholders at any annual or special meeting of stockholders or
pursuant to a written consent in lieu thereof. Each of the members of the
stockholders committee is considered to be the beneficial owner of the shares
of our common stock subject to the Stockholders Agreement. The stockholders
committee has indicated that it intends to direct the vote of all of the shares
that are subject to the Stockholders Agreement <B>&#147;</B>FOR<B>&#148; </B>the Transaction. Accordingly,
if all those shares are voted in favor of the Transaction, the Transaction will
be approved.</FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon
the effectiveness of the Transaction, the aggregate number of shares of our
common stock owned by parties to the Stockholders Agreement will decrease by
200 shares. However, the ownership percentage of our shares of our common stock
subject to the Stockholders Agreement will increase from approximately 50.9% to
approximately 53.7% as a result of the reduction of the number of shares of our
</FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>39</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P align=justify><FONT SIZE=2>common stock
outstanding by approximately 128,889 shares. The increase in the ownership
percentage of our shares of common stock subject to the Stockholders Agreement
and the reduction in the number of shares outstanding following the completion
of the Transaction is based on record holder information we received from our
transfer agent, Continental Stock Transfer &amp; Trust Company, and a share
range analysis we received from Broadridge Financial Solutions, Inc.,
reflecting the distribution of the accounts of our stockholders who hold shares
in &#147;street name&#148; according to predefined ranges based on share amount. However,
the ownership percentage and the reduction in the number of shares outstanding
following the Transaction may increase or decrease depending the purchases,
sales and other transfers of our shares of common stock by our stockholders
prior to the effective time of the Transaction. The ownership percentage of our
shares of common stock subject to the Stockholders Agreement and the ownership percentage
of the Continuing Stockholders will proportionally increase or decrease as a
result of such purchases, sales and other transfers of our shares of common
stock by our stockholders prior to the effective time of the Transaction.</FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, our other directors and executive officers may have interests in the
Transaction that are different from your interests as a stockholder, and have
relationships that may present conflicts of interest, including the following:</FONT></P>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR style="font-size:1px">
 <TD WIDTH="3%" VALIGN=TOP>
 <P align=justify>&nbsp;</P>
 </TD>
 <TD WIDTH="97%" VALIGN=TOP>
 <P align=justify>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>Richard
 Chestnov, a director of the Company who is also a party to the Stockholders
 Agreement, holds 33,150 shares of our common stock directly, and 31,123
 shares of our common stock indirectly in his capacity as a trustee of trusts
 for family members or as an officer and director of charitable entities. At
 the effective time of the Transaction, 200 shares held indirectly by Mr.
 Chestnov will be cashed out and he will retain an aggregate of 64,073 shares
 after the Transaction.</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>Martin
 Brody, a director of the Company, owns 387 shares of our common stock and
 will retain all of these shares after the Transaction. Mr. Brody has advised
 us he intends to vote in favor of the Transaction. </FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>Anthony
 Christon, our Vice President and Chief Financial Officer, owns 7,500 shares of
 our common stock and will retain all of those shares after the Transaction.
 Mr. Christon has advised us he intends to vote in favor of the Transaction.</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>Each member
 of the Board of Directors other than Albert Safer, Richard Chestnov and
 Robert Chestnov holds options to purchase shares of our common stock. The
 Transaction will not affect these stock options and they will remain
 outstanding after the Transaction.</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>After the
 Transaction, the beneficial ownership of the executive officers and directors
 who are not parties to the Stockholders Agreement will increase from
 approximately 1.7% to approximately 1.8% as a result of the reduction of the
 number of shares of common stock outstanding. </FONT></P>
 </TD>
 </TR>
</TABLE>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;See
&#147;Special Factors--Potential Conflicts of Interests of Officers,
Directors, and Certain Affiliated Persons&#148; and &#147;Information About the Company&#151;Stockholders Agreement.&#148;</FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>40</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P align=justify><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Examples.
</B>The effect of the Transaction on both Cashed Out
Stockholders and Continuing Stockholders may be illustrated, in part, by the
following examples:</FONT></P>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR style="font-size:1px">
 <TD WIDTH="18%" VALIGN=BOTTOM>
 <P ALIGN=CENTER>&nbsp;</P>
 </TD>
 <TD WIDTH="31%" VALIGN=BOTTOM>
 <P ALIGN=CENTER>&nbsp;</P>
 </TD>
 <TD WIDTH="4%" VALIGN=BOTTOM>
 <P ALIGN=CENTER>&nbsp;</P>
 </TD>
 <TD WIDTH="20%" VALIGN=BOTTOM>
 <P ALIGN=CENTER>&nbsp;</P>
 </TD>
 <TD WIDTH="6%" VALIGN=BOTTOM>
 <P ALIGN=CENTER>&nbsp;</P>
 </TD>
 <TD WIDTH="20%" VALIGN=BOTTOM>
 <P ALIGN=CENTER>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD COLSPAN="2" VALIGN=BOTTOM>
 <P align=justify><FONT SIZE=2><B><I>Hypothetical Scenario</I></B></FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD COLSPAN="3" VALIGN=BOTTOM>
 <P ALIGN=CENTER><FONT  SIZE=2><B><I>Result</I></B></FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=BOTTOM>
 <HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>

 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>

 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD COLSPAN="2" VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD COLSPAN="3" VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD COLSPAN="2" VALIGN=TOP>
 <P align=justify><FONT SIZE=2>Mr. Smith is
 a registered stockholder who holds 50 shares of our common stock of record in
 his name at the effective time of the Transaction. Mr.&nbsp;Smith holds no
 other shares.</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD COLSPAN="3" VALIGN=TOP>
 <P align=justify><FONT SIZE=2>Mr. Smith
 will receive cash in the amount of $510.50, without interest, for the 50
 shares of common stock held prior to the reverse stock split.</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD COLSPAN="2" VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD COLSPAN="3" VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD COLSPAN="2" VALIGN=TOP>
 <P align=justify><FONT SIZE=2>Ms. Jones
 holds 100 shares of our common stock in a brokerage account at the effective
 time of the Transaction. Ms.&nbsp;Jones holds no other shares.</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD COLSPAN="3" VALIGN=TOP>
 <P align=justify><FONT SIZE=2>We intend to
 treat stockholders holding common stock in street name in the same manner as
 stockholders whose shares are registered in their own names, and will ask
 banks, brokers and nominees holding these shares to effect the Transaction
 for their beneficial holders. Assuming that they do so, Ms.&nbsp;Jones will
 receive cash in the amount of $1,021, without interest, for the 100 shares of
 common stock held prior to the reverse stock split. If the bank, broker or
 nominee holding Ms. Jones&#146; shares have different procedures, or do not
 provide us with sufficient information on Ms. Jones&#146; holdings, then Ms. Jones
 may or may not receive cash for her shares depending on the number of shares
 held by the bank, broker or other nominee, which is the actual record holder
 of her shares.</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD COLSPAN="2" VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD COLSPAN="3" VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD COLSPAN="2" VALIGN=TOP>
 <P align=justify><FONT SIZE=2>Mr. Williams
 holds 225 shares of our common stock of record in his name and 75 shares in a
 brokerage account at the effective time of the Transaction. Mr. Williams
 holds no other shares.</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD COLSPAN="3" VALIGN=TOP>
 <P align=justify><FONT SIZE=2>Each of Mr.
 Williams&#146; holdings will be treated separately. Accordingly, assuming the
 brokerage firm with whom Mr. Williams holds his shares in street name effects
 the Transaction for its beneficial holders, Mr. Williams will receive cash in
 the amount of $3,063, without interest, for the 300 shares of common stock
 held prior to the reverse stock split.</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD COLSPAN="2" VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD COLSPAN="3" VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD COLSPAN="2" VALIGN=TOP>
 <P align=justify><FONT SIZE=2>Ms.
 Washington holds 400 shares of our common stock in her name and 400 shares in
 a brokerage account at the effective time of the Transaction</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD COLSPAN="3" VALIGN=TOP>
 <P align=justify><FONT SIZE=2>Ms. Washington
 will continue to hold 400 shares of common stock in her own name and 400
 shares in a brokerage account after the Transaction.</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD COLSPAN="2" VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD COLSPAN="3" VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD COLSPAN="2" VALIGN=TOP>
 <P align=justify><FONT SIZE=2>Mr. Adams
 holds 200 shares of common stock in one brokerage account and 200 shares in
 another brokerage account at the effective time of the Transaction</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD COLSPAN="3" VALIGN=TOP>
 <P align=justify><FONT SIZE=2>Each of Mr.
 Adams&#146; holdings will be treated separately. Assuming each of the brokerage
 firms with whom Mr. Adams holds his shares in street name effect the
 Transaction for their beneficial holders, Mr. Adams will receive cash in the
 amount of $4,084, without interest, for the 400 shares of common stock held
 prior to the reverse stock split.</FONT></P>
 </TD>
 </TR>
</TABLE>

<P align=justify><A NAME="JN_053"></A><FONT SIZE=2><B>American Stock Exchange Listing; Pink Sheets
Listing</B></FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
common stock is currently listed on the American Stock Exchange. To obtain the
cost savings we anticipate by no longer preparing and filing annual, periodic
and current reports with the SEC, our common stock will need to be delisted
from the American Stock Exchange.</FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>41</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;However,
in order to ensure that our Continuing Stockholders will the ability to trade
their shares after the Transaction, the Special Committee&#146;s recommendation of
the Transaction to the full Board of Directors, and the Board of Directors
approval of the Transaction, is also contingent upon our common stock being
quoted by at least two market makers on the OTCQX<SUP>SM</SUP> tier of the pink
sheets. The pink sheets is a tiered listing service that offers trading,
quotation and disclosure venue for over-the-counter securities in the US
markets and the OTCQX<SUP>SM</SUP> tier is the highest tier offered by the pink
sheets. In order to maintain a quotation on the OTCQX<SUP>SM</SUP> tier, we
will be required to meet certain reporting and other requirements of the OTCQX<SUP>SM,</SUP>
tier including, without limitation, the following: </FONT></P>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR style="font-size:1px">
 <TD WIDTH="5%" VALIGN=TOP>
 <P ALIGN=CENTER>&nbsp;</P>
 </TD>
 <TD WIDTH="95%" VALIGN=TOP>
 <P align=justify>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>preparing quarterly and annual financial reports;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>performing
 annual audits;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>requiring
 our chief executive officer and chief financial officer to each certify that
 (i) to his knowledge, the information about us furnished in accordance with
 the rules of the pink sheets 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 that
 information; (ii) to his knowledge, the financial statements, and other
 financial information furnished in accordance with the rules of the pink
 sheets, fairly present in all material respects our financial condition,
 results of operations and cash flows as of, and for, the periods presented;
 and (iii) based upon his reasonable belief, for at least one year from the
 date of the certification, we have sufficient working capital to continue
 operations and have the ability to continue to meet our obligations as they
 become due; and </FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2>preparing interim material event disclosure
 in accordance with the reporting requirements of the OTCQX<SUP>SM</SUP> tier.
 </FONT></P>
 </TD>
 </TR>
</TABLE>

<P align=justify><FONT SIZE=2><B>Fairness of the Transaction<A NAME="JN_054"></A></B></FONT></P>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Special Committee and the Board of Directors fully considered and reviewed the
terms, purpose, alternatives and effects of the proposed Transaction, and each
has unanimously determined that the Transaction is procedurally and
substantively fair to all stockholders of the Company, including the unaffiliated
stockholders who will receive cash consideration in the Transaction and
unaffiliated stockholders who will continue as owners of the Company. The Board
of Directors has unanimously approved the Transaction and recommends that
stockholders vote &#147;FOR&#148; approval of the Transaction.</FONT></P>

<P align=justify><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Substantive
Fairness</B><I>. </I>The Special Committee and the Board of
Directors considered, among other things, the factors listed below, as well as
the alternatives to the Transaction as noted above in &#147;Special
Factors&#151;Alternatives to the Transaction&#148; in reaching their conclusions as to
the substantive fairness of the Transaction to our stockholders, including both
unaffiliated Cashed Out Stockholders and unaffiliated Continuing Stockholders.
The Special Committee and the Board of Directors did not assign specific weight
to any factors they considered, nor did they apply them in a formulaic fashion,
although they particularly noted the opportunity in the Transaction for
stockholders to sell their holdings at a premium, as well as the significant
cost and time savings for the Company resulting from the Transaction which will
benefit Continuing Stockholders. The discussion below is not meant to be
exhaustive, but we believe includes all material factors considered by the
Special Committee and the Board of Directors in their determinations.</FONT></P>

<P align=justify><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Future
Cost and Time Savings</I>. The direct, out-of-pocket costs
resulting from our reporting and other obligations under the Exchange Act, the
Sarbanes-Oxley Act, and the American Stock Exchange </FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>42</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P align=justify><FONT SIZE=2>rules was
approximately $611,000 in fiscal 2007 and we expect these costs to be
approximately $893,000 in fiscal 2008 and between approximately $873,000 and
$983,000 in fiscal 2009. By eliminating these direct and indirect costs, the
Company ultimately expects to realize recurring annual cost savings of
approximately $500,000. In addition, the Special Committee and the Board of
Directors noted that the Company would eliminate the time and effort currently
spent by the Company&#146;s management to prepare and review the reports it files
with the SEC under the Exchange Act and the Sarbanes-Oxley Act, and after the
Transaction, management and our other employees will be able to reallocate this
time and effort to other areas of our businesses and operations. </FONT></P>

<P align=justify><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Opportunity
to Liquidate Shares of Common Stock</I>. The Special Committee and Board of
Directors considered the opportunity the Transaction presents for stockholders
owning fewer than 250 shares to liquidate their holdings at a premium over the
closing price per share of our common stock at the time of the approval of the
Transaction, without incurring brokerage costs. </FONT></P>

<P align=justify><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Limited
Liquidity for the Company&#146;s Common Stock</I>. The Special
Committee and the Board of Directors noted that the trading volume in our
common stock has been, and continues to be, relatively limited. The average
daily trading volume of the stock from January 2, 2006 to December 4, 2007 (the
trading day just prior to the announcement of the approval of the Transaction
by the Special Committee and the Board of Directors) was approximately 4,680
shares per day. During that period, however, there were 139 trading days on
which our common stock did not trade at all. Accordingly, the Transaction
provides a large number of our record holders and beneficial holders with the
opportunity to obtain cash for their shares in a relatively limited trading
market and at a premium over the closing price of our common stock at the time
of our announcement of the Transaction. With respect to the Continuing
Stockholders, the Special Committee and Board noted that any effect of this
Transaction on their liquidity may be mitigated by the fact that the shares
will be quoted on the OTCQX<SUP>SM</SUP> tier of the pink sheets.</FONT></P>

<P align=justify><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Historical
Prices. </I>The Special Committee and the Board of
Directors considered both the historical market prices and recent trading
activity and current market prices of our common stock. Between January 2, 2006
and December 4, 2007, the day before the public announcement of the proposed
transaction, our share price has ranged from $2.10 to $14.25. The $10.21 cash
out price, therefore, represents an approximately 25% premium over the midpoint
of the range of the share price for that period and an approximately 70%
premium over the $6.00 closing sales price of common stock on December 4, 2007.
</FONT></P>

<P align=justify><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Opinion
of the Financial Advisor</I>. The Special Committee and
the Board of Directors considered a valuation report dated November 20, 2007
issued by Houlihan, and the opinion of Houlihan rendered to the Special
Committee on November 20, 2007 and confirmed in writing by Houlihan on November
28, 2007, to the effect that, as of the date of such opinion and based upon and
subject to certain matters stated therein, the $10.21 per share in cash to be
paid is fair, from a financial point of view to unaffiliated Cashed Out
Stockholders and unaffiliated Continuing Stockholders. For more information
about the opinion, you should read the discussion below under &#147;Special
Factors&#151;Fairness Opinion of Financial Advisor&#148; and a copy of the opinion of
Houlihan attached as Annex B to this proxy statement. Each of the valuation
report and the opinion of Houlihan is available for inspection and copying at
our principal executive offices, 197 West Spring Valley Avenue, Maywood, New
Jersey 07607.</FONT></P>

<P align=justify><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net
Book Value and Liquidation Value.</I> While the Houlihan
reviewed the net book value of our shares of common stock, none of Houlihan,
the Special Committee or the Board viewed it as being relevant for the fair
value to be paid to Cashed Out Stockholders. Net book value is based on the
historical cost of our assets. The value of items, such as our positive
business reputation and goodwill, particularly since we will continue as a
going concern, are not included in a determination of net book value.
Nevertheless, our stockholders&#146; equity (net book value) per share on September
30, 2007 was </FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>43</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P align=justify><FONT SIZE=2>$7.76, and the
cash out price of $10.21 represents a $2.45, or 32%, premium to net book value.
In addition, while Houlihan considered a liquidation analysis, it determined
that it also had no relevance in light of the fact that we will remain as a
continuing business and the Transaction will not result in a change of control
of the Company. </FONT></P>

<P align=justify><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No
Firm Offers.</I> The Special Committee and the Board of
Directors is not aware of any firm offers during the past two years by any
unaffiliated person for the merger or consolidation of the Company, the sale or
other transfer or all or any substantial part of the assets of the Company, or
a purchase of our shares of common stock or other securities that would enable
the holder to exercise control of the Company.</FONT></P>

<P align=justify><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Disadvantages
of the Transaction. </I></B>The Special Committee and the
Board of Directors also considered the disadvantages of the Transaction,
including that:</FONT></P>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR style="font-size:1px">
 <TD WIDTH="5%" VALIGN=TOP>
 <P ALIGN=CENTER>&nbsp;</P>
 </TD>
 <TD WIDTH="94%" VALIGN=TOP>
 <P align=justify>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2><I>No Participation in Future Growth by Cashed
 Out Stockholders. </I>Cashed Out Stockholders will no
 longer have any ownership interest in the Company and will no longer
 participate in our future earnings and growth.</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2><I>Possible Reduction in Information about the
 Company. </I>After completion of the Transaction, we
 will cease to file annual, quarterly, current, and other reports and
 documents with the SEC, and stockholders will cease to receive annual reports
 and proxy statements, Continuing Stockholders will have access to less
 information about the Company and our business, operations, and financial
 performance. In order to mitigate this disadvantage to our Continuing
 Stockholders, we will prepare quarterly
 and annual financial reports, issue quarterly and annual earnings press
 releases and make interim material event disclosures in accordance
 with the reporting requirements of the OTCQX<SUP>SM</SUP> tier of the pink
 sheets, and have instituted additional stockholder protections. See &#147;Special
 Factors--Special Committee and Board of Director Protections for Continuing
 Stockholders.&#148;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2><I>Limited Liquidity. </I>After
 the Transaction, we will no longer be listed on the American Stock Exchange
 and our common stock will, instead, be quoted on the OTCQX<SUP>SM</SUP> tier
 of the pink sheets. In addition, because of the possible limited liquidity
 for our common stock, the termination of our obligation to publicly disclose
 financial and other information following the Transaction, and the
 deregistration of our common stock under the Exchange Act, Continuing
 Stockholders may potentially experience a significant decrease in the value
 of their common stock. In order to mitigate this disadvantage, a condition to
 the Transaction is that we be quoted by at least two market makers on the
 pink sheets, that we continue to prepare and publicly disseminate quarterly
 and annual financial reports, issue quarterly and annual earnings press
 releases, prepare and publicly disseminate annual audited financial statements
 as well as interim material
 event disclosure in accordance with the reporting requirements of the OTCQX<SUP>SM</SUP>
 tier of the pink sheets is intended to ameliorate the impact of the
 deregistration and delisting. </FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2><I>Limited Oversight</I>.
 After completion of the Transaction, we will no longer be subject to the
 provisions of the Sarbanes-Oxley Act, the liability provisions of the
 Exchange Act or the oversight of the American Stock Exchange.</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2><I>Reporting Obligations of Certain Insiders. </I>Our
 executive officers, directors and 5% stockholders will no longer be required
 to file reports relating to their transactions in our common stock with the
 SEC. In addition, our executive officers, directors and 10% stockholders will
 no longer be subject to the recovery of profits provision of the Exchange
 Act, and persons acquiring 5% of our common stock will no longer be required
 to report their beneficial ownership under the Exchange Act.</FONT></P>
 </TD>
 </TR>
</TABLE>

<P ALIGN=CENTER><FONT SIZE=2>44</FONT></P>

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<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR style="font-size:1px">
 <TD WIDTH="5%" VALIGN=TOP>
 <P ALIGN=CENTER>&nbsp;</P>
 </TD>
 <TD WIDTH="95%" VALIGN=TOP>
 <P align=justify>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2><I>Increased Debt</I>. We
 estimate that the cost of payment to Cashed Out Stockholders, professional
 fees and other expenses will total approximately $1,916,000. The
 consideration to be paid to the Cashed Out Stockholders and the costs of the
 Transaction will be paid from funds on hand and funds under our existing
 revolving loan agreement with TD Banknorth, N.A. As a result, immediately
 after the Transaction, we will have more debt outstanding than we would have
 had if the Transaction did not occur.</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2><I>Filing Requirements Reinstituted</I>.
 The filing of the Form 15 will result in the suspension and not the
 termination of our filing obligations under the Exchange Act. This suspension
 remains in effect so long as we have fewer than 300 stockholders of record.
 Thus, subsequent to the time the Form 15 becomes effective, if on the first
 day of any fiscal year, the we have more than 300 shareholders, then we must
 resume reporting pursuant to Section 15(d) of the Exchange Act.</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2><I>Board Composition</I>.
 After the completion of the Transaction we will have at least two independent
 directors within the meaning of Section 121A of the American Stock Exchange
 Company Guide and Rule 10A-3(b) of the Exchange Act. However, we cannot be
 certain how long these directors will continue to be in office after the
 Transaction has been effected.</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2><I>No Appraisal Rights</I>.
 Under Delaware law, our certificate of incorporation and our bylaws, no
 appraisal or dissenters&#146; rights are available to our stockholders who dissent
 from the Transaction.</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=2><I>Approval of the Transaction</I>.
 As of the Record Date, over 50% of the issued and outstanding shares of our
 common stock was held subject to the Stockholders Agreement. The stockholders
 committee under the Stockholders Agreement has indicated that it intends to
 direct the voting of the shares of our common stock (1,257,643 shares, or
 approximately 50.9% of the issued and outstanding shares of our common stock)
 <B>&#147;</B>FOR<B>&#148;</B>
 the Transaction. Accordingly, if all those shares are voted in favor of the
 Transaction, the Transaction will be approved.</FONT></P>
 </TD>
 </TR>
</TABLE>

<P align=justify><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;See
&#147;Special Factors--Effects of the Transaction&#148;.</FONT></P>

<P align=justify><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Procedural
Fairness<I>. </I></B>No
unaffiliated representative acting solely on behalf of our unaffiliated
stockholders for the purpose of negotiating the terms of the Transaction or
preparing a report covering the fairness of the Transaction was retained by the
Company, nor were special provisions made to grant unaffiliated stockholders
access to our corporate files or to obtain counsel or appraisal services. The
Board of Directors established the Special Committee to consider possible alternatives
to the Transaction, the related advantages and disadvantages to the Company and
its stockholders of each of those alternatives, the fairness of the price to be
paid to Cashed Out Stockholders, and to make a recommendation to the full Board
of Directors concerning the advisability of the alternatives considered. The
Board of Directors believes that the Special Committee, whose members are each
independent within the meaning of Rule 121A of the American Stock Exchange
Company Guide and Section 10A-3(b) of the Exchange Act, was sufficient to
protect the interests of unaffiliated stockholders. In addition, the Special
Committee and the Board of Directors took note of the fact that the interests
of unaffiliated stockholders inherently varied depending upon whether any
particular unaffiliated stockholder held 250 shares or more or held fewer than
250&nbsp;shares. The Special Committee and the Board of Directors each believe
that the separate representatives and advisors for each of these classes would
have provided no measurable additional protection to unaffiliated stockholders.</FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>45</FONT></P>

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<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Special Committee and the Board of Directors also noted that this proxy
statement, along with our other filings with the SEC, provide a great deal of
information for unaffiliated stockholders to make an informed decision as to
the Transaction, and that no special provision for the review of our files was
necessary. The Special Committee and the Board of Directors noted, though, that
subject to certain conditions, Delaware law already provides stockholders with
the right to review our books and records.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Special Committee and the Board of Directors determined not to condition the
approval of the Transaction on approval by a majority of unaffiliated
shareholders. The Special Committee and the Board of Directors noted that
affiliated and unaffiliated stockholders will be treated equally in the
Transaction. If separate approval of unaffiliated stockholders were required,
our affiliated stockholders would receive lesser voting rights than
unaffiliated stockholders solely on the basis of their affiliate status even
though they will receive no additional benefits or different treatment in the
Transaction, and that any such requirement would prevent a majority of the
outstanding shares of our common stock from participating in the consideration
of the proposed Transaction. Holders of shares of common stock under the
stockholders agreement presently own 50.9% of the issued and outstanding shares
of our common stock (please see &#147;Special Factors &#150; Potential Conflicts of
Interests of Officers, Directors, and Certain Affiliated Persons&#148;).
Furthermore, a vote of the majority of unaffiliated stockholders is not
required under Delaware law. Finally, stockholders can increase, divide, or
otherwise adjust their existing holdings at any time prior to the effective
date of the Transaction, so as to retain some or all of their shares of common
stock, or to receive cash for some or all of their shares, as they see fit.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Special Committee and the Board of Directors also noted that there will be no
material change in the percentage ownership of the parties to the Stockholders
Agreement. Based on information provided by our transfer agent as to our record
holders and Broadridge Financial Solutions, Inc., reflecting the distribution
of the accounts of our stockholders who hold shares in &#147;street name&#148; according
to predefined ranges based on share amount, up to approximately 128,889 shares
out of 2,468,614 issued and outstanding shares of our common stock (consisting
of an estimated 21,029 shares owned by record holders and up to an estimated
107,860 owned by holders of shares in street name) will be eliminated as a
result of the Transaction. The Special Committee also noted that as of
________________, 2008, the parties to the Stockholders Agreement held
1,257,643 shares, or approximately 50.9%, of the issued and outstanding shares
of our common stock, and after the Transaction, those parties would hold
1,257,443 shares, or approximately 53.7% of the issued and outstanding shares,
subject to change based on the actual number of shares that would be purchased
in the Transaction.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Finally,
the Special Committee and the Board of Directors also have required that we
implement or maintain for a period of three years following the Transaction
certain corporate governance and other stockholder protections intended to
provide Continuing Stockholders with financial and other information about us,
and to mitigate any impact that the Transaction may have on the liquidity of
our shares of common stock. See &#147;Special Factors&#151; Special Committee and Board
of Directors&#146; Protections for Continuing Stockholders.&#148; This three-year
requirement will be applicable as long as there are unaffiliated Continuing
Stockholders during that time; it is not intended to restrict or otherwise
prohibit any merger, consolidation, sale of all or substantially all of our
assets, or similar extraordinary transaction during that three-year period. We
have no present plans or proposals for any such transaction, however, and our
intent is to operate our business after the Transaction substantially as it is
currently conducted. See &#147;Special Factors&#151;Conduct of the Company&#146;s Business
after the Transaction.&#148;</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Recommendation
of the Special Committee. </B>Based on the foregoing analyses, including
a consideration of the disadvantages of the Transaction, the Special Committee
believed that the Transaction is procedurally and substantively fair to all
stockholders, including the unaffiliated stockholders, regardless of whether a
stockholder receives cash or continues to be a stockholder following the
Transaction, and believes the $10.21 cash amount to be fair consideration for
those stockholders holding less than 250 shares. As a result, the Special Committee
unanimously recommended the Transaction to the full Board of Directors.</FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>46</FONT></P>

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<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Recommendation
of the Board of Directors</B>. At a meeting held on December 5, 2007,
the Board of Directors unanimously determined that the Transaction is fair to,
and in the best interests of, the Company and its stockholders, including all
unaffiliated stockholders, unanimously approved the Transaction and recommends
that you vote <B>&#147;</B>FOR<B>&#148;</B> approval. In reaching its determination
and recommendation, the Board of Directors considered and specifically adopted
the recommendations of the Special Committee and the factors that the Special
Committee took into account in making its recommendations to the full Board of
Directors.</FONT></P>

<P ALIGN=JUSTIFY><A NAME="JN_055"></A><FONT SIZE=2><B>Fairness Opinion of Financial Advisor</B></FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
June 26, 2007, the Special Committee and the Board of Directors formally
retained Houlihan to consider the fairness, from a financial point of view, of
the cash consideration be paid to Cashed Out Stockholders. At a meeting of the
Special Committee held on November 20, 2007, Houlihan delivered its oral
opinion to the Special Committee that, as of November 20, 2007, the cash
consideration to be paid to those stockholders receiving the cash consideration
was fair, from a financial point of view, to unaffiliated Cashed Out
Stockholders and to unaffiliated Continuing Stockholders. At a meeting of the
Board of Directors on November 28, 2007, Houlihan delivered its oral opinion to
the Board of Directors that, as of November 28, 2007, the cash consideration to
be paid to those stockholders receiving the cash consideration was fair, from a
financial point of view, to unaffiliated Cashed Out Stockholders and to
unaffiliated Continuing Stockholders. Pursuant to the Special Committee&#146;s
request, Houlihan confirmed its oral fairness opinion with a written fairness opinion
dated November 28, 2007 in which it stated that the cash consideration to be
paid to those stockholders receiving the cash consideration in the Transaction
is fair, from a financial point of view, to unaffiliated Cashed Out
Stockholders and to unaffiliated Continuing Stockholders. This fairness opinion
is attached to this proxy statement as Annex&nbsp;B.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Special Committee retained Houlihan based upon Houlihan&#146;s experience in the
valuation of businesses of the Company&#146;s size and their experience in providing
independent financial opinions to special committees. Houlihan is a nationally
recognized investment banking firm of recognized standing. As part of its
investment banking services, it is regularly engaged in the valuation of
corporate entities on a stand-alone basis and in connection with capital
raising and merger and acquisition transactions and has provided investment
banking services related to going private transactions. The Special Committee
imposed no limitations upon Houlihan with respect to the investigations made or
procedures followed in rendering its valuation or its fairness opinion. </FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
have agreed to pay Houlihan a fee of $125,000, plus reimbursement of its
out-of-pocket expenses, for providing its fairness opinion and related
financial advisory services. No portion of Houlihan&#146;s fee is contingent upon
the conclusions reached in the Houlihan opinion or upon consummation of any
transaction. We have agreed to indemnify and hold harmless Houlihan, and its
employees, agents, officers, directors, principals and affiliates (and their
successors and assigns) against and from all losses arising out of or in
connection with its engagement by the Special Committee.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
complete text of Houlihan&#146;s opinion is attached to this proxy statement as
Annex B, and the following summary of that opinion is qualified in its entirety
by reference to that opinion. We urge you to read the opinion carefully for a
description of the procedures followed, the factors it considered and the
assumption it made. </FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
connection with its opinion, Houlihan made such reviews, analyses and inquiries
as it deemed necessary and appropriate under the circumstances. Among other
items:</FONT></P>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH=100%>
<TR style="font-size:1px">
<TD WIDTH="5%" VALIGN=TOP>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="95%" VALIGN=TOP>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>reviewed the
 financial terms and conditions of the Transaction;</FONT></P>
</TD>
</TR>
</TABLE>

<P ALIGN=CENTER><FONT SIZE=2>47</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>
<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH=100%>
<TR style="font-size:1px">
<TD WIDTH="5%" VALIGN=TOP>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="95%" VALIGN=TOP>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>reviewed the
 Company&#146;s publicly available financial information and other data with
 respect to the Company, including the Company&#146;s Form&nbsp;10-Ks for the
 fiscal years ended June 30, 2002 to June 30, 2007 and quarterly reports on
 Form&nbsp;10-Q for the three month periods ended from September 30, 2005 to
 September 30, 2007, as well as certain other public filings;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>reviewed
 certain internal financial information and other data relating to the
 business and financial prospects of the Company provided by our senior
 management, including fiscal year 2008 budgets;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>conducted an
 on-site visit and held discussion with the Company&#146;s senior management
 regarding the historic, current and future outlook and financial prospects of
 the Company;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>discussed
 with the Company&#146;s senior management details of a potential sale of
 non-operating assets consisting of a warehouse facility and adjacent parcels
 of land located in West New York and reviewed certain public filings relating
 to the potential sale and performed a site visit (the &#147;Assets Held for
 Sale&#148;);</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>reviewed the
 financial terms of certain recent business combinations in the apparel and
 accessories industries specifically;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>analyzed
 historic trading prices and volume in the Company&#146;s common stock;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>analyzed
 other recent reverse and forward split transactions and premiums paid in such
 transactions as fractional share consideration;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>reviewed the
 annual cost savings projected by the Company&#146;s senior management to be
 achieved through delisting from the American Stock Exchange and
 deregistration under the federal securities laws as well as the cost savings
 projected to be achieved through the disposition of non-operating assets
 consisting of a warehouse facility and adjacent parcels of land located in
 West New York; and</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>reviewed
 other financial studies, analyses and investigations, and considered such
 other information as Houlihan deemed necessary or appropriate.</FONT></P>
</TD>
</TR>
</TABLE>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Houlihan
used several methodologies to assess the fairness of the cash consideration to
be paid to those stockholders receiving the cash consideration in connection
with the Transaction. The following is a summary of the material financial
analyses used by Houlihan in connection with its appraisal. Houlihan utilized
each of the following analyses based upon its view that each is appropriate and
reflective of generally accepted valuation methodologies. Each analysis
provides an indication of the Company&#146;s per share value in order to assess the
fairness of the cash consideration to be paid to those stockholders receiving
the cash consideration in connection with the Transaction.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Historical
Stock Trading Analysis</B>. Houlihan reviewed the Company&#146;s common stock
based on an historical analysis of closing prices and trading volumes for the
five-year period prior to November 16, 2007. The shares of our common stock
presently are and during that period of time have been traded on the American
Stock Exchange. Houlihan noted that the Company&#146;s common stock has been
volatile over that period of time based on relatively thin trading volume. </FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following chart summarizes the average closing prices and average daily volume
of trading of the Company&#146;s common stock over the last year:</FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>48</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>
<BR>
<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH=100%>
<TR style="font-size:1px">
<TD WIDTH="38%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="6%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="6%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="6%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="6%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="6%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="6%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
</TR>
<TR>
<TD COLSPAN="20" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2><B>Historical
 Price and Volume Analysis (1)</B></FONT></P>
</TD>
</TR>
<TR>
<TD COLSPAN="20" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2><B>Current</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2><B>1 Week<BR>
 Average</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM NOWRAP>
<P ALIGN=CENTER><FONT SIZE=2><B>1 Month<BR>
 Average</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM NOWRAP>
<P ALIGN=CENTER><FONT SIZE=2><B>3 Month<BR>
 Average</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM NOWRAP>
<P ALIGN=CENTER><FONT SIZE=2><B>6 Month<BR>
 Average</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM NOWRAP>
<P ALIGN=CENTER><FONT SIZE=2><B>1 Year<BR>
 Average</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>Average
 Price</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>6.25</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>5.39</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>5.89</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>7.54</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>8.95</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>10.08</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>Average
 Daily Volume</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>2,200</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>12,200</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>8,771</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>10,006</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>6,517</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>8,783</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
</TR>
</TABLE>

<BR>
<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH=100%>
<TR style="font-size:1px">
<TD WIDTH="5%" VALIGN=TOP>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="95%" VALIGN=TOP>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
</TR>
<TR>
<TD COLSPAN="2" VALIGN=TOP>
<HR SIZE=1 WIDTH="20%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>(1)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>The source of all share data is CapitalIQ based on historical trading
 in Jaclyn&#146;s common stock as of November 16, 2007.</FONT></P>
</TD>
</TR>
</TABLE>

<P ALIGN=JUSTIFY><FONT SIZE=2>The cash out
price of $10.21 to be paid to Cashed Out Stockholders is above the average
closing prices of the Company&#146;s common stock for the current, one-week,
one-month, three-month, six-month and one-year periods reviewed as part of the
historical stock trading analysis. </FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Guideline
Public Company Method</B><I>. </I>The guideline public company method
applies the trading multiples of publicly traded companies to the Company to
derive an indication of value. Houlihan sought guideline companies in
industries similar to our operating structures and target customers, and found
ten companies that were comparable to the Company based on size, growth,
leverage, profitability, turnover ratio and liquidity. Those companies are:
Tarrant Apparel Group, Ted Baker plc, Tandy Brands Accessories Inc., Maidenform
Brands Inc., Oxford Industries Inc., St. John Knits International Inc.,
Kellwood Co., G-III Apparel Group, Ltd., Delta Apparel Inc., and Cygne Designs
Inc.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Houlihan
determined that the valuations derived from EBITDA (earnings before interest,
taxes, depreciation and amortization), EBIT (earnings before interest and
taxes) and book value multiples of the guideline companies would provide the
most meaningful indications of value. Houlihan first multiplied the Company&#146;s
last twelve&#150;month EBITDA, EBIT and book value reported as of September 30, 2007
by the selected median multiples to calculate the indications of common equity
values. Then the cash that would be received upon exercise of outstanding
options was added to the equity value and the resulting value was divided by
the number of shares of the Company&#146;s common stock outstanding on a fully
diluted basis. Finally, Houlihan added the calculated range of values for the
sale of the assets of the Company that are classified as &#147;Assets Held for
Sale,&#148; consisting of the Company&#146;s former executive offices, warehouse facility
and adjacent parcels of land located in West New York, New Jersey, to determine
an indicated common equity value per share of $8.54 to $11.24. Houlihan
considered the price/earnings multiple approach, but did not use it in its
analysis given the fact that the Company&#146;s price/earnings multiple was much
lower than the guideline companies due to the Company&#146;s mature stage, low
growth, and historically low leverage.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Comparable
Transactions Method</B><I>. </I>The comparable transactions method is a
market approach which analyzes transactions involving target companies
operating in industries that are similar to the Company&#146;s industry. Although no
two companies are exactly alike, and no two transactions are structured exactly
the same, consideration is given to the similarity in capital structure,
operations and profitability, as well as other operating characteristics of the
target companies.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Houlihan
found twelve transactions within the apparel and accessories industries that
had comparability. Houlihan determined that the valuations from EBITDA and EBIT
multiples of the guideline companies would provide the most meaningful
indications of value and applied these multiples to the Company&#146;s financial
metrics over the last twelve month period ended September 30, 2007 to calculate
the enterprise value based upon the comparable transactions method.</FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>49</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
comparable transactions considered by Houlihan are set forth below:</FONT></P>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH=100%>
<TR style="font-size:1px">
<TD WIDTH="10%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="20%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="2%" COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="5%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="19%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="7%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="7%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2><B>Announced<BR>
 Date</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2><B>Target/Issuer</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="5" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2><B>Total
 Transac-<BR>
 tion<BR>
 Amount</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2><B>Industry
 Classification/<BR>
 [Target/Issuer]</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2><B>Implied<BR>
 Enterprise<BR>
 Value/EBITDA</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2><B>Implied<BR>
 Enterprise<BR>
 Value/EBIDTA</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="5" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
</TR>
<TR BGCOLOR="#Eaf9E8">
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>10/03/2003</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>Royal
 Robbins Inc.</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>$</FONT></P>
</TD>
<TD COLSPAN="4" VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>16.5</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>Women&#146;s,
 Misses&#146;, and Juniors&#146; Apparel</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>10.3x</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>11.9x</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>10/02/2003</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>GFSI
 Holdings Inc.</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>$</FONT></P>
</TD>
<TD COLSPAN="4" VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>268.6</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>Women&#146;s,
 Misses&#146;, and Juniors&#146; Apparel</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>9.5x</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>11.2x</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
</TR>
<TR BGCOLOR="#Eaf9E8">
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>07/07/2003</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>Nautica
 Enterprises, Inc.</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>$</FONT></P>
</TD>
<TD COLSPAN="4" VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>650.0</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>Boys&#146;
 Apparel, Girls&#146; Apparel, Women&#146;s, Misses&#146;, and Juniors&#146; Apparel</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>6.8x</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>10.5x</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>07/10/2001</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>Full Line
 Distributors, Inc.</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>$</FONT></P>
</TD>
<TD COLSPAN="4" VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>26.0</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>Girls&#146;
 Apparel, Women&#146;s, Misses&#146;, and Juniors&#146; Apparel</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>8.2x</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>10.0x</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
</TR>
<TR BGCOLOR="#Eaf9E8">
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>06/04/2004</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>The First
 Years Inc.</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>$</FONT></P>
</TD>
<TD COLSPAN="4" VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>170.1</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>Girls&#146;
 Apparel</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>8.0x</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>9.5x</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>06/13/2005</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>CFS
 International Inc.</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>$</FONT></P>
</TD>
<TD COLSPAN="4" VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>14.1</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>Women&#146;s,
 Misses&#146;, and Juniors&#146; Apparel</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>5.7x</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>6.8x</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
</TR>
<TR BGCOLOR="#Eaf9E8">
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>07/02/2002</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>Garan
 Incorporated</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>$</FONT></P>
</TD>
<TD COLSPAN="4" VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>275.6</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>Boys&#146;
 Apparel, Girls&#146; Apparel, Women&#146;s, Misses&#146;, and Juniors&#146; Apparel</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>4.6x</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>5.3x</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>05/15/2002</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>Gerber
 Childrenswear Inc.</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>$</FONT></P>
</TD>
<TD COLSPAN="4" VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>137.2</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>Girls&#146;
 Apparel, Women&#146;s, Misses&#146;, and Junior&#146;s Apparel</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>3.8x</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>5.2x</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
</TR>
<TR BGCOLOR="#Eaf9E8">
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>09/27/2006</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>Hanesbrands
 Inc.</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>$</FONT></P>
</TD>
<TD COLSPAN="4" VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>43.0</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>Apparel,
 Accessories and Luxury Goods</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>4.1x</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>5.2x</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>07/07/2003</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>M. J. Soffe
 Co.</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>$</FONT></P>
</TD>
<TD COLSPAN="4" VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>71.8</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>Boys&#146;
 Apparel, Women&#146;s, Misses&#146;, and Juniors Apparel</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>4.1x</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>5.0x</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
</TR>
<TR BGCOLOR="#Eaf9E8">
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>02/04/2003</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>Salant
 Corporation</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>$</FONT></P>
</TD>
<TD COLSPAN="4" VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>86.8</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>Boys&#146;
 Apparel, Women&#146;s, Misses&#146;, and Juniors&#146; Apparel</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>3.4x</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>4.6x</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>05/01/2006</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>Oxford
 Industries Inc., Womenswear Group</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>$</FONT></P>
</TD>
<TD COLSPAN="4" VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>37.0</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>Women&#146;s,
 Misses&#146;, and Juniors&#146; Apparel</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>NA</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>3.7x</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="4" VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2><B>Median</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2><B>5.7x</B></FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2><B>6.0x</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
</TR>
</TABLE>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)
The source of all data was CapitalIQ.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Houlihan
applied a comparable transactions method in its analyses of the Company&#146;s fair
value to calculate unadjusted indications of enterprise values. Houlihan
adjusted these values from the calculated range of values for the Assets Held for
Sale to determine a range of indicated enterprise values. Interest bearing debt
(adjusted for the retirement of the Company&#146;s mortgage on its Assets Held for
Sale) was then subtracted and cash received from exercise of options was added
to the indicated enterprise values. This equity value was divided by the number
of common shares outstanding on a fully diluted basis to calculate a range of
indicated values for the Company&#146;s common equity of $9.14 to $10.21 per share.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Discounted
Cash Flow</B><I>. </I>For this valuation approach, Houlihan
prepared a discounted cash flow analysis of the Company, which estimates the
present value of projected future earnings. In preparing its discounted cash
flow analysis Houlihan was provided with a fiscal year 2008 budget prepared by
senior management of the Company, further budgets and other financial
information prepared by senior management relating to material business and operational events, and also held extensive
discussions with the Company&#146;s senior management. Houlihan applied a discount
rate of 13% in determining discounted cash flows, based on Houlihan&#146;s estimate,
utilizing the build-up method, of our weighted average cost of capital, which
represents a blended after-tax cost to us of debt and equity capital. Houlihan
utilized a long term growth rate of 3% which reflects the mature stage of the
Company, as well as discussions with</FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>50</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P ALIGN=JUSTIFY><FONT SIZE=2>management as to, among other things,
management&#146;s view of general economic conditions, conditions in the apparel and
accessories industry, financial prospects and recent changes in the Company&#146;s
operations in particular. Houlihan used the financial projections to determine
the enterprise net cash flows of the Company over the projected five year
period. Houlihan used the enterprise net cash flows to calculate a fair
enterprise value, applying the discounted cash flow method. Houlihan added the
range of values calculated for the Company&#146;s Assets Held for Sale, added cash
received from exercise of options and subtracted interest bearing date
(adjusted for the retirement of the Company&#146;s mortgage on the Assets Held for
Sale) from the unadjusted indicated enterprise value. This value was divided by
the number of shares of common stock outstanding on a fully diluted basis. From
the discounted cash flow analysis, Houlihan concluded a range of values for the
Company&#146;s common equity of $9.00 to 11.18 per share. </FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Assets Held
for Sale</B>. In performing its analyses, Houlihan took in to account
Assets Held for Sale, which had been subject to a purchase and sale agreement
with a third-party purchaser at a purchase price of $8,000,000. Houlihan
reviewed the purchase and sale agreement and also held discussions with the
Company&#146;s senior management regarding the Assets Held for Sale. Management
indicated the proposed purchaser would use the real estate for residential
purposes. The closing of the purchase was contingent on the proposed
purchaser&#146;s receipt of governmental approvals required for the construction of
residential, multi-family housing consisting of 150 residential units.
Management noted that it was likely the Company would be able to realize a net
benefit from the sale of the real estate after paying taxes and retiring the
outstanding mortgage debt on the assets being sole. Houlihan treated the Assets
Held for Sale as a non-operating asset and added the value of those assets to
the unadjusted equity value indicated in Houlihan&#146;s analyses.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Houlihan
used the $8,000,000 stated purchase price only as an indication of value. However,
because of the high level of uncertainty related to the zoning approval,
Houlihan applied sensitivity analysis. After accounting for taxes and the
retirement of the outstanding mortgage debt, on the high end of its analysis,
Houlihan estimated that the Company may realize a net benefit of approximately
$2,448,940. On the low end, Houlihan determined the value of the property would
be considerably less, and estimated a net benefit of $0. Houlihan tested the
reasonableness of its range by reviewing comparable transactions, and also
analyzed local real estate market conditions. </FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
December 12, 2007, the Company issued a press release indicating that the
proposed purchaser of the Assets Held for Sale had terminated the purchase and
sale agreement because it was not able to obtain governmental approvals
required to proceed with the residential housing project. </FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Fair Value
Summary</B>. Houlihan weighted each of its three approached equally to
calculate the fair value range per share for common equity of $8.89 to 10.88,
with a midpoint of $9.89.</FONT></P>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH=100%>
<TR style="font-size:1px">
<TD WIDTH="74%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="8%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="8%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
</TR>
<TR>
<TD COLSPAN="8" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2><B>Fair Value
 Summary</B></FONT></P>
</TD>
</TR>
<TR>
<TD COLSPAN="8" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE="2">Low </FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE="2">High </FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>Guideline Public Company
 Method</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>8.54</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>11.24</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>Comparable Transaction
 Method</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>9.14</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>10.21</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>DCF Method</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>9.00</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>11.18</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2><B>Implied Common Equity Value per Share Range</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2><B>$</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2><B>8.89</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2><B>$</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2><B>10.88</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
</TR>
</TABLE>

<P ALIGN=JUSTIFY><FONT SIZE=2>Houlihan noted
the volatility and relatively thin trading volume throughout the periods
Houlihan reviewed historical closing prices and trading volumes of our common
stock. Accordingly, Houlihan did not use historical price and volume data in
determining the fair value of our common stock.</FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>51</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Premium
Analysis. </I>Houlihan analyzed 37 reverse split transactions over the
last five years and found the medium premium over the average price over a one
day, 20 day, 60 day, 90 day, 120 day, and one year period ranged from 17% to
22%. Applying these premiums to the Company&#146;s average common stock price over
each respective period, Houlihan presented for illustrative purposes an applied
premium range of $7.16 to $12.09 as set forth below:</FONT></P>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH=100%>
<TR style="font-size:1px">
<TD WIDTH="37%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="5%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="5%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="5%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="5%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="5%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="5%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="18" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2><B>Premium
 Paid On Average Price Over The Following Periods</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="18" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2><B>Median
 Premium From Sample</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>21.4</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>22.0</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>17.8</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>18.5</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>17.0</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>20.0</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>%</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2><B>Jaclyn&#146;s
 Common Equity Average Price</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>6.25</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>5.87</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>6.71</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>7.54</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>8.30</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>10.08</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2><B>Premium
 Applied to Jaclyn&#146;s Average Price</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>7.59</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>7.16</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>7.91</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>8.94</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>9.71</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>12.09</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
</TR>
</TABLE>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Houlihan
noted an implied common equity value per share range of $8.89 to $10.88, with a
midpoint of $9.89. Applying premiums paid in comparable transactions to the
Company&#146;s average common stock price over multiple time periods, Houlihan
noted, for illustrative purposes an applied premium range of $7.16 to $12.09.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Houlihan
suggested a range of fractional share consideration of $8.89 to $10.88, with a
midpoint of $9.89. This represents a premium range of 42.2% to 74.1% over the
closing price on November 16, 2007 of $6.25, a premium range of 17.9% to 44.3%
over the 90-day average of $7.54 and a premium range of -11.8% to 7.9% over the
1-year average of $10.08.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain
Qualifying Statements Regarding the Fairness Opinion. </B>In
preparing its valuation of our shares of common stock and its fairness opinion,
Houlihan received and reviewed business and financial information provided to
Houlihan by the Company. Houlihan did not independently verify this
information, and has relied on its accuracy in all material respects, nor did
it obtain any independent appraisal of any of our assets. </FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;HOULIHAN&#146;S
OPINION DOES NOT ADDRESS THE BUSINESS DECISION BY THE COMPANY TO ENGAGE IN THE
TRANSACTION OR ADDRESS THE RELATIVE MERITS OF ANY ALTERNATIVES DISCUSSED BY THE
SPECIAL COMMITTEE AND THE BOARD OF DIRECTORS. HOULIHAN&#146;S OPINION DOES NOT
CONSTITUTE A RECOMMENDATION AS TO HOW ANY STOCKHOLDER SHOULD VOTE WITH RESPECT
TO THE TRANSACTION. HOULIHAN DID NOT MAKE, AND WAS NOT REQUESTED BY THE COMPANY
OR ANY OTHER PERSON TO MAKE, ANY RECOMMENDATIONS AS TO THE RELATIVE MERITS OF
ANY ALTERNATIVE DISCUSSED BY THE SPECIAL COMMITTEE.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
summary set forth above describes what we believe are the material points of
the detailed analyses performed by Houlihan in arriving at its fairness
opinion. In arriving at its opinion, Houlihan employed several analytical
methodologies, while not regarding any one as critical to its overall
conclusion. Each of its methodologies had inherent strengths and weaknesses,
and the nature of available information may affect the value of particular
techniques. Accordingly, the conclusions Houlihan reached was based on all the
analyses and factors presented taken as a whole and on the application of its
own experience and judgment. Houlihan has given no opinion as to the value or
merit, standing alone, of any one of the analyses. Its opinion, and the analyses
it prepared, were based on market, economic and other conditions that existed
at the time and could be evaluated as of the date of its opinion. You or your
representative (who is designated in writing) may inspect and copy of
Houlihan&#146;s valuation report at our principal executive offices, 197 West Spring
Valley Avenue, Maywood, New Jersey 07607, during our normal business hours.</FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>52</FONT></P>

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<P ALIGN=JUSTIFY><A NAME="JN_056"></A><FONT SIZE=2><B>Conduct of the Company&#146;s Business After the
Transaction.</B></FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except
as described in this proxy statement, neither the Company nor its management
has any current plans or proposals to effect any extraordinary corporate
transaction, such as a merger, reorganization or liquidation, a sale or
transfer of any material amount of its assets, a change in management, a material
change in its indebtedness or capitalization, or any other material change in
its corporate structure or business. In that regard, we expect to conduct our
business and operations after the effective date of the Transaction in
substantially the same manner as currently conducted and, except as described
in this proxy statement with respect to: (1)&nbsp;the use of funds to finance
the Transaction and related costs and (2)&nbsp;our plans to deregister our
common stock under the Exchange Act and delist it from the American Stock
Exchange, the Transaction is not anticipated to have a material effect upon the
conduct of our business. We intend, however, to continue to evaluate and review
our businesses, properties, management and other personnel, corporate
structure, capitalization and other aspects of our operations in the same
manner as we historically have from time to time, and to make such changes as
we consider appropriate. We also intend to continue to explore acquisitions and
other business opportunities to expand or strengthen our businesses, as we have
done in the past. In that regard, we may review proposals or may propose the
acquisition or disposition of assets or other changes in our business,
corporate structure, capitalization, management or other changes which we then
consider to be in our best interests and in the best interests of Continuing
Stockholders.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, we may reduce the size of the Board of Directors from the current
number of nine directors, which contributes to the cost savings we expect to
receive as a result of the Transaction. See &#147;Special Factors&#151;Purpose of and
Reasons for the Transaction.&#148; We therefore expect that certain members of the
Board of Directors, including the independent directors, may not continue in
office after the Transaction has been effected. However, for at least three
years after the Transaction has been effected, we will have at least two
independent directors within the meaning of Section 121A of the American Stock
Exchange Company Guide and Rule 10A-3(b) of the Exchange Act. We have not
identified those members of the Board of Directors who will continue after the
Transaction and those who may not continue. We expect, however, that Robert
Chestnov, Allan Ginsburg and Howard Ginsburg will continue to serve as
directors of the Company after the effective time of the Transaction.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
corporate governance and other stockholder protections described above under
the caption &#147;Special Factors-- Special Committee and Board of Directors&#146;
Protections for Continuing Stockholders&#148; will remain in place for at least
three years following the Transaction. This three-year requirement will be
applicable as long as there are unaffiliated Continuing Stockholders during
that time; it is not intended to restrict or otherwise prohibit any merger,
consolidation, sale of all or substantially all of our assets, or similar
extraordinary transaction during that three-year period. We have no present
plans or proposals for any such transaction, however, and our intent is to operate
our business after the Transaction substantially as it is currently conducted. </FONT></P>

<P ALIGN=JUSTIFY><A NAME="JN_057"></A><FONT SIZE=2><B>Material Federal Income Tax Consequences</B></FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following
is a summary of certain United States federal income tax consequences to the
Company and its stockholders resulting from the Transaction. This summary
addresses only those stockholders who have held their shares as capital assets.
This discussion does not address all United States federal income tax
considerations that may be relevant to particular stockholders in light of
their individual circumstances. Many types of stockholders (such as financial
institutions, tax-exempt organizations (including private foundations),
insurance companies, dealers in securities, foreign investors, and partnerships
and their partners), holders that received their shares pursuant to the
exercise of employee stock options or otherwise as compensation, and investors
that hold the shares as part of a straddle, hedge, conversion, constructive
sale, or other integrated transaction for United States federal income tax
purposes, may be subject to special tax rules. The following summary is based
upon United States federal</FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>53</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P ALIGN=JUSTIFY><FONT SIZE=2>income tax
law, as currently in effect, which is subject to differing interpretations or
change, possibly on a retroactive basis, and does not address any state, local,
foreign, or other tax considerations. No assurance can be given that possible
changes in such United States federal income tax laws or interpretations will
not adversely affect this summary. This summary is not binding on the Internal
Revenue Service.</FONT></P>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH=100%>
<TR style="font-size:1px">
<TD WIDTH="5%" VALIGN=TOP>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="95%" VALIGN=TOP>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>This summary
 assumes that you are one of the following:</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>a citizen or
 resident of the United States;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>a
 corporation or an entity taxable as a corporation created or organized under
 U.S. law (federal or state);</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>an estate
 the income of which is subject to federal income taxation regardless of its
 sources;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>a trust if a
 U.S. court is able to exercise primary supervision over the administration of
 the trust and one or more U.S. persons have authority to control all
 substantial decisions of the trust; or</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>any other
 person whose worldwide income and gain is otherwise subject to United States
 federal income taxation on a net basis.</FONT></P>
</TD>
</TR>
</TABLE>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>NO RULING
FROM THE INTERNAL REVENUE SERVICE OR OPINION OF COUNSEL HAS BEEN OR WILL BE
OBTAINED REGARDING THE UNITED STATES FEDERAL INCOME TAX CONSEQUENCES TO
STOCKHOLDERS IN CONNECTION WITH THE TRANSACTION. ACCORDINGLY, EACH STOCKHOLDER
IS ENCOURAGED TO CONSULT THEIR OWN TAX ADVISOR AS TO THE PARTICULAR FEDERAL,
STATE, LOCAL, FOREIGN, AND OTHER TAX CONSEQUENCES OF THE TRANSACTION, IN LIGHT
OF THEIR INDIVIDUAL CIRCUMSTANCES.</B></FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Tax Consequences to the Company.</B> We believe
that the Transaction will be treated as a tax-free &#147;recapitalization&#148; for federal
income tax purposes. This will result in no material federal income tax
consequences to the Company.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Federal Income Tax Consequences to Stockholders Who Do
Not Receive Cash in the Transaction.</B> If
you receive no cash as a result of the Transaction, but continue to hold our
shares of Common Stock immediately after the Transaction, you will not
recognize any gain or loss for United States federal income tax purposes. The
aggregate adjusted tax basis of the shares you hold immediately after the Transaction
will equal the aggregate adjusted tax basis of the shares you held immediately
prior to the Transaction, and the holding period in those shares will be the
same as immediately prior to the Transaction.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Federal
Income Tax Consequences to Stockholders Who Receive Cash in the Transaction and
Who Will Own, or Will Be Considered under the Internal Revenue Code to Own,
Shares of Common Stock After the Transaction.</B> In some
instances you may be entitled to receive cash in the Transaction for shares of
our common stock you hold in one capacity, but continue to hold shares in
another capacity. For example, you may own fewer than 250 shares in your own
name (for which you will receive cash) and own 250 or more shares that are held
in your brokerage account in street name. Alternatively, for federal income tax
purposes you may be deemed to own shares held by others. For instance, if you
own fewer than 250 shares in your own name (for which you will receive cash)
and your spouse owns 250 or more shares (which will continue to be held
following the completion of the</FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>54</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P ALIGN=JUSTIFY><FONT SIZE=2>Transaction),
the shares owned by your spouse will be attributable to you. Furthermore, in
determining whether you are considered to continue to hold shares of our common
stock, for federal income tax purposes, immediately after the Transaction, you
will be treated as owning shares actually or constructively owned by certain
family members and entities in which you have an interest (such as trusts and
estates of which you are beneficiary and corporations and partnerships of which
you are an owner, and shares you have an option to acquire). Accordingly, in
some instances the shares of common stock you own in another capacity, or which
are attributed to you, may remain outstanding.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
you receive cash for a fractional share as a result of the Transaction, but are
treated as continuing to own shares of common stock through attribution as
described above, you will recognize capital gain or loss for federal income tax
purposes equal to the difference between the cash you receive for the shares of
common stock and your aggregate adjusted tax basis in those shares, provided
that the receipt of cash either is &#147;not essentially equivalent to a dividend,&#148;
or&nbsp;constitutes a &#147;substantially disproportionate redemption of stock,&#148; as
described below.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Not
Essentially Equivalent to a Dividend.</I> The receipt of cash is &#147;not
essentially equivalent to a dividend&#148; if the reduction in your proportionate
interest in us resulting from the Transaction (taking into account for this
purpose shares of common stock which you are considered to own under the
attribution rules described above) is considered a &#147;meaningful reduction&#148; given
your particular facts and circumstances. The Internal Revenue Service has ruled
that a small reduction by a minority stockholder whose relative stock interest
is minimal and who exercises no control over the affairs of a corporation can
satisfy this test.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Substantially
Disproportionate Redemption of Stock.</I> The receipt of cash in the
Transaction will be a &#147;substantially disproportionate redemption of stock&#148; if
(a)&nbsp;you own less than 50% of the total combined voting power of all
classes of stock entitled to vote, and (b)&nbsp;the percentage of our voting
stock owned by you (and by those other stockholders whose shares of common
stock you are considered to own under the attribution rules described above)
immediately after the Transaction is less than 80% of the percentage of shares
of voting stock owned by you immediately before the Transaction.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
the receipt of cash in exchange for shares of common stock is not treated as
capital gain or loss under either of the tests, it will be treated first as
ordinary dividend income to the extent of the your ratable share of our current
and accumulated earnings and profits, then as a tax-free return of capital to
the extent of the your aggregate adjusted tax basis in the shares, and any
remaining amount will be treated as capital gain.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Capital
gain or loss recognized will be long-term if your holding period with respect
to the common stock surrendered is more than one year at the time of the
Transaction. The deductibility of capital loss is subject to limitations. If
you are an individual, long-term capital gain and dividend income should
generally be subject to United Stated federal income tax at a maximum rate of
15%. In general, dividends are taxed at ordinary income rates. However, you may
qualify for a 15% rate of tax on any cash received in the Transaction that is treated
as a dividend as described above, if (i) you are an individual or other
non-corporate stockholder; (ii) you have held the common stock with respect to
which the dividend was received for more that 60 days during the 120-day period
beginning 60 days before the ex-dividend date, as determined under the Internal
Revenue Code; and (iii) you were not obligated during such period (pursuant to
a short sale or otherwise) to make related payments with respect to positions
in substantially similar or related property. You should consult with your tax
advisor regarding your eligibility for such lower tax rates on dividend income.
</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
you, or a person or entity whose ownership shares would be attributed to you,
will continue to hold common stock immediately after the Transaction, you are
urged to consult with your tax advisor as to the
particular federal, state, local, foreign, and other tax consequences of the
Transaction, in light of your specific circumstances.</FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>55</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Federal
Income Tax Consequences to Stockholders Who Receive Cash in the Transaction and
Who Will Not Own, or Will Not Be Considered under the Internal Revenue Code to
Own, Shares of Common Stock After the Transaction.</B> If you receive
cash as a result of the Transaction and you do not own, and are not considered
to own, shares of our common stock immediately after the Transaction, you will
recognize capital gain or loss for federal income tax purposes equal to the
difference between the cash you receive for the shares of common stock and your
aggregate adjusted tax basis in those shares.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Backup Withholding. </B>If you are to receive cash as
a result
of the Transaction, you will be required to provide your social security or
other taxpayer identification number (or, in some instances, additional
information) in connection with the Transaction to avoid backup withholding
requirements that might otherwise apply. The letter of transmittal and other
documentation we will send to you after the Transaction will require you to
deliver such information when the common stock certificates are surrendered
following the effective time of the Transaction. Failure to provide such
information may result in backup withholding. Backup withholding is not an
additional tax. Rather, the amount of the backup withholding can be credited
against your United States federal income tax liability provided that the
required information is given to the IRS. If backup withholding results in an
overpayment of tax, a refund can be obtained by you upon filing an appropriate
income tax return on a timely basis.</FONT></P>

<P ALIGN=JUSTIFY><A NAME="JN_058"></A><FONT SIZE=2><B>Potential Conflicts of Interests of Officers,
Directors, and Certain Affiliated Persons</B></FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
the Record Date, 1,257,643 shares, or approximately 50.9%, of the issued and
outstanding shares of our common stock was held by parties to a Stockholders
Agreement. As noted above, the Stockholders Agreement entitles Abe Ginsburg,
Allan Ginsburg, Robert Chestnov and Howard Ginsburg, in their capacity as a
stockholders&#146; committee, to direct the vot&#173;ing of the shares of common stock
owned by signatories to the Stockholders Agreement. Each member of the
stockholders committee is considered to be the beneficial owner of the shares
of our common stock subject to the Stockholders Agreement. See &#147;Information
About the Company&#151;Stockholders Agreement.&#148; The stockholders committee has
indicated that it intends to direct the vote of all of the shares that are
subject to the Stockholders Agreement <B>&#147;</B>FOR<B>&#148; </B>the Transaction. Accordingly, if all
those shares are voted in favor of the Transaction, the Transaction will be
approved.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon
the effectiveness of the Transaction, the aggregate number of shares of our
common stock owned by parties to the Stockholders Agreement will decrease by
200 shares. However, the ownership percentage of our shares of our common stock
subject to the Stockholders Agreement will increase from approximately 50.9% to
approximately 53.7% as a result of the reduction of the number of shares of our
common stock outstanding by up to approximately 128,889 shares. See &#147;Special
Factors &#150; Effects of the Transaction &#150; Effect on Affiliated Stockholders.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, our other directors and executive officers may have interests in the
Transaction that are different from your interests as a stockholder, and have
relationships that may present conflicts of interest, including the following:</FONT></P>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH=100%>
<TR style="font-size:1px">
<TD WIDTH="5%" VALIGN=TOP>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="95%" VALIGN=TOP>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>Richard
 Chestnov, a director of the Company who is also a party to the Stockholders
 Agreement, holds 33,150 shares of our common stock directly, and 31,123
 shares of our common stock indirectly in his capacity as a trustee of trusts
 for family members or as an officer and director of charitable entities. At
 the effective time of the Transaction, 200 shares held indirectly by Mr.
 Chestnov in his capacity as
 a trustee of a trust for a family member will be cashed out and he will
 retain an aggregate of 64,073 shares after the Transaction.</FONT></P>
</TD>
</TR>
</TABLE>

<P ALIGN=CENTER><FONT SIZE=2>56</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>
<BR>
<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH=100%>
<TR style="font-size:1px">
<TD WIDTH="5%" VALIGN=TOP>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="95%" VALIGN=TOP>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>Martin
 Brody, a director of the Company, owns 387 shares of our common stock and
 will retain all of those shares after the Transaction. Mr. Brody has advised
 us he intends to vote in favor of the Transaction.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>Anthony
 Christon, our Vice President and Chief Financial Officer, owns 7,500 shares
 of our common stock and will retain all of those shares after the Transaction.
 Mr. Christon has advised us he intends to vote in favor of the Transaction.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>Each member
 of the Board of Directors other than Albert Safer, Richard Chestnov and
 Robert Chestnov holds options to purchase shares of our common stock. The
 Transaction will not affect these stock options and they will remain
 outstanding after the Transaction.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>After the
 Transaction, the beneficial ownership of the executive officers and directors
 who are not parties to the Stockholders Agreement will increase from approximately
 1.7% to approximately 1.8% as a result of the reduction of the number of
 shares of common stock outstanding.</FONT></P>
</TD>
</TR>
</TABLE>

<P ALIGN=JUSTIFY><A NAME="JN_059"></A><FONT SIZE=2><B>Source of Funds and Expenses</B></FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based
on information we have received from our transfer agent, Continental Stock
Transfer &amp; Trust Company, as to holdings of our record holders, and from
Broadridge Financial Solutions, Inc. reflecting the distribution of the
accounts of our stockholders who hold shares in street name, as well our
estimates of other Transaction expenses, we believe that the total cash
requirement of the Transaction to the Company will be approximately $1,916,000.
This amount includes approximately $1,316,000 needed to cash out fractional
shares (although this amount could be larger or smaller depending on, among other
things, the number of fractional shares that will be outstanding at the time of
the Transaction as a result of purchases, sales and other transfers of our
shares of common stock by our stockholders), and approximately $600,000 of
legal, accounting, and financial advisory fees and other costs to effect the
Transaction as follows:</FONT></P>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH=80%>
<TR style="font-size:1px">
<TD WIDTH="80%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="12%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>Legal Fees</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>350,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>Investment
 Banker/Fairness Opinion</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>130,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>Accounting
 Fees</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>50,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>Transfer
 Agent Fees</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>20,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>Printing
 Costs</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>16,000 </FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>Pink Sheets
 Listing Fees and Related Costs</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>14,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>Miscellaneous
 Other</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>20,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>

</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2><B>Total Expenses</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2><B>$</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2><B>600,000</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
</TR>
</TABLE>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
expect that the consideration to be paid to the Cashed Out Stockholders and the
costs of the Transaction will be paid from cash on hand and from funds under
our existing revolving loan agreement with TD Banknorth, N.A. The revolving
loan agreement provides for short-term loans and the issuance of letters of
credit in an aggregate amount not to exceed $50,000,000. Based on a borrowing
formula, we may borrow up to $30,000,000 in short-term loans and up to
$50,000,000 including letters of credit. Substantially all of our personal
property assets are pledged to the bank as collateral. The revolving loan
agreement requires that we maintain a minimum tangible net worth, as defined,
and imposes certain debt to equity ratio requirements. We were in compliance
with all applicable financial covenants as of September 30, 2007. As long as no
default or event of default under the revolving loan agreement exists,</FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>57</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P ALIGN=JUSTIFY><FONT SIZE=2>we may use the
proceeds of loans we borrow under that agreement for the repurchase by use of
our shares of common stock in the Transaction in an aggregate amount not to
exceed $3,000,000. We anticipate that our borrowings under the revolving loan
agreement will be repaid in the ordinary course of business and we have not
made any special plans or arrangements to repay loans made to us to complete
the Transaction.</FONT></P>

<P ALIGN=JUSTIFY><A NAME="JN_060"></A><FONT SIZE=2><B>Stockholder Approval</B></FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
majority of the outstanding shares of our common stock will constitute a quorum
for the purposes of approving the amendments to our certificate of
incorporation to effect the Transaction. Assuming the presence of a quorum, the
affirmative vote of a majority of the shares of our common stock entitled to
vote at the Special Meeting is required for the adoption of the proposals to
approve the Transaction.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
of the Record Date, over 50% of the issued and outstanding shares of our common
stock was held subject to the Stockholders Agreement. As noted above, the
stockholders committee under the Stockholders Agreement has indicated that it
intends to direct the voting of the shares of our common stock (1,257,643
shares, or approximately 50.9% of the issued and outstanding shares of our common
stock) <B>&#147;</B>FOR<B>&#148; </B>the
Transaction. Accordingly, if all those shares are voted in favor of the
Transaction, the Transaction will be approved.</FONT></P>

<P ALIGN=JUSTIFY><A NAME="JN_061"></A><FONT SIZE=2><B>Effective Date</B></FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Transaction will become effective as of the date that the Board of Directors
amends the certificate of incorporation of the Company through the filing of a
certificate of amendment to the certificate of incorporation with the State of
Delaware to effectuate the Reverse Stock Split and the Forward Stock Split. We
intend to effect the Transaction as soon as possible after the Transaction is
approved by our stockholders. Our common stock acquired by us in connection
with the Transaction either will be held as treasury shares, or restored to the
status of authorized but unissued shares. The suspension of our obligation to
file periodic reports and other documents under the Exchange Act will become
effective after the filing with the SEC of both a notice of removal from
listing of our common stock from listing on the American Stock Exchange and termination
of registration under Section 12(b) of the Exchange Act on Form 25, and a
certification and notice of termination of registration on Form 15. The
deregistration of our common stock under Section 12(b) of the Exchange Act will
take effect 90 days after the filing of the Form 25 and the deregistration of
our common stock under other provisions of the Exchange Act will become
effective 90 days after the filing of the Form 15. See &#147;Special Factors&#151;Effects
of the Transaction&#151;<I>Termination of Exchange Act Registration and
Elimination of SEC Reporting Obligations</I>&#148;.</FONT></P>

<P ALIGN=JUSTIFY><A NAME="JN_062"></A><FONT SIZE=2><B>Termination of Transaction</B></FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although
we are requesting your approval of the Transaction, the Special Committee and
the Board of Directors has retained authority, in their discretion, to withdraw
the Transaction from the agenda of the Special Meeting prior to any vote. In
addition, even if the Transaction is approved by stockholders at the Special
Meeting, the Special Committee or the Board may determine not to implement the
Transaction if subsequently it determines that the Transaction is not in the
best interests of the Company and stockholders. If for any reason the
Transaction is not approved, or if approved, is not implemented, our common
stock will not be deregistered until such time as we otherwise are eligible to
do so. Reasons to withdraw the Transaction from the agenda, or to abandon the
Transaction may include, among other things:</FONT></P>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH=100%>
<TR style="font-size:1px">
<TD WIDTH="5%" VALIGN=TOP>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="95%" VALIGN=TOP>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>any change
 in the nature of the holdings of stockholders which would result in us not
 being able to reduce the number of our record holders below 300 as a result
 of the Transaction;</FONT></P>
</TD>
</TR>
</TABLE>

<P ALIGN=CENTER><FONT SIZE=2>58</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH=100%>
<TR style="font-size:1px">
<TD WIDTH="5%" VALIGN=TOP>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="95%" VALIGN=TOP>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>any change
 in the number of record holders that would enable us to deregister our shares
 of common stock without effecting the Transaction;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>any change
 in the number of shares that will be exchanged for cash in connection with
 the Transaction, including the shares owned by holders in street name, that
 would increase in any material respect the cost and expense of the
 Transaction compared to what we presently estimate; and</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>any adverse
 change in our financial condition that would cause us to believe that the
 Transaction would no longer be in the best interests of the Company or our
 stockholders.</FONT></P>
</TD>
</TR>
</TABLE>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
the Special Committee or the Board decides to withdraw the Transaction from the
agenda of the Special Meeting, or to abandon the Transaction, the Board will
promptly notify stockholders of the decision.</FONT></P>

<P ALIGN=JUSTIFY><A NAME="JN_063"></A><FONT SIZE=2><B>Exchange of Certificates and Payment for
Fractional Shares</B></FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
transfer agent, Continental Stock Transfer &amp; Trust Company, will act as our
agent for purposes of exchanging certificates and paying for fractional shares
in connection with the Transaction.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No
service charge, brokerage commission, or transfer tax will be payable by any holder
of any old certificate evidencing shares of our common stock in connection with
the issuance of a new certificate in respect thereof, except that if any new
certificate is to be issued in a name other than that in which the old
certificate (that is surrendered for exchange) is registered, it will be a
condition to such issuance that: (i)&nbsp;the person requesting such issuance
pay to us any transfer taxes payable by reason of such transfer (or any prior
transfer of such surrendered certificate, if any) or establish to our
satisfaction that such taxes have been paid or are not payable; and
(ii)&nbsp;the surrendered certificate has been properly endorsed and otherwise
in proper form for transfer.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
any certificate evidencing shares of our common stock has been lost or
destroyed, we may in our sole discretion accept in lieu thereof a duly executed
affidavit and indemnity agreement in a form satisfactory to us. The holder of
any shares of our common stock evidenced by any certificate that has been lost or
destroyed must submit, in addition to the (i)&nbsp;letter of transmittal sent
by us, (ii)&nbsp;the above-referenced affidavit, (iii)&nbsp;the
above-referenced indemnity agreement, and (iv)&nbsp;any other document required
by us, a bond or other security satisfactory to the us indemnifying us and our
other persons against any losses incurred as a consequence of issuing a
certificate evidencing new shares of our common stock or paying cash in lieu of
issuing fractional shares of our common stock in exchange for the existing shares
of our common stock evidenced or purported to be evidenced by such lost or
destroyed certificate. Additional instructions with respect to lost or
destroyed certificates will be included with the letter of transmittal that we
will send to stockholders after the Effective Date.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stockholders
owning less than 250 shares on the effective date of the Transaction will
receive $10.21 for each pre-split share of common stock, without interest.
Stockholders who own 250 or more shares at the effective date of the
Transaction will not be entitled to receive any cash for their fractional share
interests resulting from the Reverse Stock Split. The Forward Stock Split that
will immediately follow the Reverse Stock Split will reconvert their whole
shares and fractional share interests back into the same number of shares of
our common stock they held immediately before the effective time of the
Transaction. As a result, the total number of shares held by such a stockholder
will not change after completion of
the Transaction, and the stockholder will not receive new certificates for his
or her shares of our common stock.</FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>59</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
purposes of determining ownership of shares of our common stock on the
effective date of the Transaction, such shares will be considered held by the
person in whose name such shares are registered on our transfer agent&#146;s
records. Upon effecting the Transaction, we intend to treat stockholders
holding shares of our common stock in street name in the same manner as registered
stockholders whose shares are registered in their names. Prior to the effective
date of the Transaction, we will conduct an inquiry of all brokers, banks and
other nominees that hold shares of our common stock in street name. We will ask
them to effect the Transaction for their beneficial holders holding shares of
our common stock in street name. We will rely on these brokers, banks and other
nominees to provide us with information on how many fractional shares will be
cashed out. However, these brokers, banks and other nominees may have different
procedures than registered stockholders for processing the Transaction. If you
hold your shares in street name with a bank, broker or other third party, and
if you have any questions in this regard, we encourage you to contact your
bank, broker or nominee.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Promptly
after the effective date of the Transaction, we will send to each holder of
record of our common stock, and to brokers, banks and other nominees, based on
information we receive from them in response to our inquiries, for each owner
of our common stock held in street name, instructions for surrendering any
certificates held thereby representing shares of our common stock which will be
converted to a right to receive cash as a result of the Transaction. Only
holders of 249 or fewer shares of our common stock immediately prior the
Transaction should surrender their shares. Holders of 250 or more shares should
not surrender their shares. Such instructions will include a letter of
transmittal to be completed and returned to the Transfer Agent by the holder of
such certificates, together with such certificates.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Promptly
after the Transfer Agent receives any surrendered certificate from a holder of
249 or fewer shares of our common stock immediately prior to the Transaction,
together with a duly completed and executed letter of transmittal with respect
thereto and such other documents as we may require, the Transfer Agent will
deliver to the person payment in an amount equal to $10.21, without
interest,&nbsp;for each pre-split share of common stock that is represented by
the fractional share.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There
will be no differences between the respective rights, preferences or
limitations of our common stock prior to the Transaction and our common stock
after the Transaction. There will be no differences with respect to dividend,
voting, liquidation or other rights associated with our common stock.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;DO
NOT SEND SHARE CERTIFICATES TO THE COMPANY OR THE TRANSFER AGENT UNTIL AFTER
YOU HAVE RECEIVED THE A LETTER OF TRANSMITTAL AND ANY ACCOMPANYING
INSTRUCTIONS.</B></FONT></P>

<P ALIGN=JUSTIFY><A NAME="JN_064"></A><FONT SIZE=2><B>No Appraisal or Dissenters&#146; Rights</B></FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under
Delaware law, our certificate of incorporation and our bylaws, no appraisal or
dissenters&#146; rights are available to stockholders of the Company who dissent
from the Transaction.</FONT></P>

<P ALIGN=JUSTIFY><A NAME="JN_065"></A><FONT SIZE=2><B>Escheat Laws</B></FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
unclaimed property and escheat laws of each state provide that under
circumstances defined in that state&#146;s statutes, holders of unclaimed or
abandoned property must surrender that property to the state. Persons whose
shares are cashed out and whose addresses are unknown to us, or who do not
return their stock certificates and request payment for their cashed-out
shares, generally will have a period of </FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>60</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P ALIGN=JUSTIFY><FONT SIZE=2>years from the
effective date of the Transaction in which to claim the cash payment payable to
them. For example, with respect to stockholders whose last known addresses are
in New York, as shown by our records, the period is three years. Following the
expiration of that three-year period, the Unified Disposition of Unclaimed
Property Act of New York would likely cause the cash payments to escheat to the
State of New York. For stockholders who reside in other states or whose last
known addresses, as shown by our records, are in states other than New York,
such states may have abandoned property laws which call for such state to
obtain either (i)&nbsp;custodial possession of property that has been unclaimed
until the owner reclaims it; or (ii)&nbsp;escheat of such property to the
state. Under the laws of such other jurisdictions, the &#147;holding period&#148; or the
time period which must elapse before the property is deemed to be abandoned may
be shorter or longer than three years. If we do not have an address for the
holder of record of the shares, then unclaimed cash-out payments would be
turned over to our state of incorporation, the State of Delaware, in accordance
with its escheat laws.</FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>61</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P ALIGN=CENTER><A NAME="JN_066"></A><FONT SIZE=2><B>INFORMATION
ABOUT THE COMPANY</B></FONT></P>

<P ALIGN=JUSTIFY><A NAME="JN_067"></A><FONT SIZE=2><B>Market Price of Common Stock</B></FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
common stock is traded on the American Stock Exchange under the symbol &#147;JLN.&#148;
The following table sets forth the high and low closing sales prices reported
by the American Stock Exchange for our common stock for our two most recent
fiscal years:</FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="95%" STYLE="MARGIN-LEFT:5%">
<TR style="font-size:1px" >
<TD WIDTH="80%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="6%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="6%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2><B>Fiscal
  Year Ended June 30, 2008</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2><B>High</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2><B>Low</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="50%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:17.3PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2>First quarter</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>11.50</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>6.55</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:17.3PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2>Second quarter</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>7.75</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>4.55</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:17.3PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2>(though December 19, 2007)</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2><B>Fiscal Year Ended June 30, 2007</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="50%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:17.3PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2>First quarter</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>7.70</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>7.30</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:17.3PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2>Second quarter</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>11.80</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>7.70</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:17.3PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2>Third quarter</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>14.25</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>10.36</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:17.3PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2>Fourth quarter</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>12.03</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>8.50</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2><B>Fiscal Year Ended June 30, 2006</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="50%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:17.3PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2>First quarter</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>7.97</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>6.34</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:17.3PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2>Second quarter</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>8.09</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>7.25</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:17.3PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2>Third quarter</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>8.90</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>7.40</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:17.3PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2>Fourth quarter</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>8.25</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>7.28</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
</TABLE>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
December 4, 2007 the day before we announced the Transaction, the closing price
of our common stock on the American Stock Exchange was $6.00.</FONT></P>

<P ALIGN=JUSTIFY><A NAME="JN_068"></A><FONT SIZE=2><B>Dividends</B></FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
did not pay cash dividends during fiscal 2007 or 2006 and do not anticipate
paying cash dividends in the foreseeable future.</FONT></P>

<P ALIGN=JUSTIFY><A NAME="JN_069"></A><FONT SIZE=2><B>Stockholders</B></FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
of _________ __, 2008 there were approximately ________ holders of record of
our common stock.</FONT></P>

<P ALIGN=JUSTIFY><A NAME="JN_070"></A><FONT SIZE=2><B>Stock Purchases</B></FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except
as described below, the Company has not purchased any shares of its common
stock within the past two years.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During
our last two fiscal years, the Company purchased an aggregate of 199,562 shares
of its common stock. The following table sets forth information by quarter
regarding such share repurchases:</FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>62</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px" >
<TD WIDTH="45%" VALIGN=TOP>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=TOP>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=TOP>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="11%" VALIGN=TOP>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=TOP>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=TOP>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="16%" VALIGN=TOP>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=TOP>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=TOP>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="11%" VALIGN=TOP>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2><B>Fiscal Year Ended June 30, 2008</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2><B>(a) Total <BR>
  Number of <BR>
  Shares (or <BR>
  Units) <BR>
  Purchased</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2><B>(b) Range of <BR>
  Prices Paid per <BR>
  Share</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM nowrap>
<P ALIGN=CENTER><FONT SIZE=2><B>(c) Average <BR>
  Price Paid per <BR>
  Share</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="90%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP colspan=2>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP colspan=2>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP colspan=2>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:17.3PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2>First quarter</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>&#151;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:17.3PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2>Second quarter (though December 19, 2007)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>&#151;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:17.3PT;TEXT-INDENT:-8.65PT'><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE="2"><B>Fiscal Year Ended June 30, 2007</B> </FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="90%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:17.3PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2>First quarter</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>&#151;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:17.3PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2>Second quarter</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>6,548</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>$8.35 - $9.45</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>8.46</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:17.3PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2>Third quarter</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>6,000</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=2>$12.88</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>12.88</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:17.3PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2>Fourth quarter</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>28,557</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>$12.55 - $14.15</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>13.03</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE="2"><B>Fiscal Year Ended June 30, 2006</B> </FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="90%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:17.3PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2>First quarter</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>100,619</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=2>$6.79 - $7.15</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>7.15</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:17.3PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2>Second quarter</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>30,000</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>$7.50 - $8.09</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>7.71</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:17.3PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2>Third quarter</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>27,838</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=2>$7.73 - $8.28</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>7.87</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:17.3PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2>Fourth quarter</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>&#151;</FONT></P>
</TD>
</TR>
</TABLE>

<P ALIGN=JUSTIFY><HR NOSHADE WIDTH=120 COLOR=BLACK ALIGN=LEFT SIZE=1>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, during the last two years, none of our directors or executive
officers have purchased shares of our common stock except as follows: </FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;
On March 14, 2006 and June 20, 2006, respectively, Anthony Christon, our Vice
President and Chief Financial Officer, acquired 3,700 and 3,800 shares,
respectively, of our common stock upon the exercise of stock options previously
granted under a stockholder approved stock option plan of the Company, in each
case at an exercise price per share of $4.0625;</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;
On November 8, 2006, Richard Chestnov, a director of the Company, acquired
2,000 shares of our common stock upon the exercise of a stock option previously
granted under a stockholder approved stock option plan of the Company at an
exercise price of $5.125 per share, and on February 15, 2007, Richard Chestnov
acquired 16,000 shares of our common stock upon the exercise of stock options
previously granted under a stockholder approved stock option plan of the
Company at exercise prices per share ranging from $2.42 to $6.70; and</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;
On June 7, 2007, Robert Chestnov, our President and Chief Executive Officer,
acquired 15,000 shares of our common stock upon the exercise of a stock option
previously granted under a stockholder approved stock option plan of the
Company at an exercise price per share of $7.70.</FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>63</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P ALIGN=JUSTIFY><A NAME="JN_071"></A><FONT SIZE=2><B>Directors and Executive Officers</B></FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following sets forth certain information concerning our current directors and
executive officers:</FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px" >
<TD WIDTH="36%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=TOP>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="6%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=TOP>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="50%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2><B>Name</B></FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2><B>Age</B></FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2><B>Position</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="30%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="30%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>Abe Ginsburg</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>90</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>Chairman of the Executive Committee</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>Allan Ginsburg</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>65</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>Chairman of the Board</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>Robert Chestnov</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>59</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>President, Chief Executive Officer and Director</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>Howard Ginsburg</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>65</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>Vice Chairman of the Board</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>Martin Brody</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>86</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>Director</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>Richard Chestnov</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>62</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>Director</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>Albert Safer</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>59</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>Director</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>Norman Axelrod</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>55</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>Director</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>Harold Schechter</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>63</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>Director</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>Anthony Christon</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>62</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>Chief Financial Officer</FONT></P>
</TD>
</TR>
</TABLE>

<P ALIGN=JUSTIFY><FONT SIZE=2><B>Information Concerning the Board of Directors and Executive Officers</B></FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
business experience during the last five years of the directors of the Company
is as follows:</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Abe
Ginsburg has been Chairman of the Executive Committee of the Company since
November 29, 1988.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Allan
Ginsburg has been Chairman of the Board of the Company since November 29, 1988.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Robert
Chestnov has been the President and Chief Executive Officer of the Company
since November 29, 1988.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Howard
Ginsburg has been Vice Chairman of the Board of the Company since November 29,
1988.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Martin
Brody has been a private investor since his retirement on January 1, 1994. From
April 1990 through December 1993, Mr. Brody was Vice Chairman of the Board of
Restaurant Associates Corporation, the owner and operator of specialty
restaurants, and was Chairman of its Board for more than five years prior
thereto. Mr. Brody also serves as a director of a number of Salomon Smith
Barney mutual funds and preferred income funds.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Richard
Chestnov has been a private investor since 1992. Before then, he was a partner
of Chego International, an apparel importer.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Albert
Safer has been President of Safer Textile Processing and Kuttner Prints,
textile mills, for more than the past five years. Mr. Safer has also served as
President of Safer Development and Management, which is engaged in real estate
development and management, for more than the past five years.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Norman
Axelrod has been Chairman of the Board of Directors of General Nutrition
Centers, Inc., a specialty retailer of health and wellness products, and
certain affiliated companies, since March 2007. From March 2006 to March 2007,
Mr. Axelrod was a private investor. From 1988 until March 2006, Mr. Axelrod
served as Chief Executive Officer of Linens &#145;n Things, Inc., a leading,
national large format retailer of home textiles, housewares and home accessories,
was Chairman of the Board of that company from 1997 until March 2006, and
through 2000, he also held the additional post of President. Mr. Axelrod also
serves as a director of Maidenform Brands, Inc.</FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>64</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Harold
Schechter has been Chief Financial Officer of Global Design Concepts, Inc., a
manufacturer and distributor of handbags and related products, since January
2005. From October 2004 until January 2005, Mr. Schechter was the Chief
Financial Officer of Diamond Chemical Company Inc., a manufacturer of cleaning
chemicals. Mr. Schechter served as Vice President, Chief Operating Officer and
Chief Financial Officer of Creative Salon Products, an importer and distributor
of beauty products, from January 2003 to October 2004, and as Vice President, Chief
Operating Officer and Chief Financial Officer of William H. Ranney Associates
Inc., which was also an importer and distributor of beauty products, from May
2001 to December 2002. From January 1999 to April 2001, Mr. Schechter served as
Vice President-Operations and Purchasing of Monarch Luggage Inc., an importer
and distributor of luggage and related items.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Anthony
Christon has been Chief Financial Officer of the Company for more than the past
five years.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Family
Relationships. </I>Abe
Ginsburg, Chairman of the Executive Committee and a director of the Company, is
the father of Howard Ginsburg, Vice Chairman of the Board and a director of the
Com&#173;pany. Allan Ginsburg, Chairman of the Board and a director of the Company,
is a nephew of Abe Ginsburg and is a first cousin of Howard Ginsburg. Robert
Chestnov, President, Chief Executive Officer and a director of the Com&#173;pany,
and Richard Chestnov, a director of the Company, are brothers.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None
of our officers or directors has been involved in any transaction in the shares
of our common stock during the past 60 days.</FONT></P>

<P ALIGN=JUSTIFY><A NAME="JN_072"></A><FONT SIZE=2><B>Security Ownership of Certain Beneficial
Owners</B></FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table sets forth certain information as of _____________, 2008 with
respect to the beneficial ownership of our common stock before the Transaction
and after the Transaction, by: (a)&nbsp;each director of the Company;
(b)&nbsp;each of the Company&#146;s executive officers; (c)&nbsp;the directors and
executive officers of the Company, as a group; and (d)&nbsp;all persons known
to the Company to be the beneficial owners of more than five percent (5%) of
its outstanding common stock. As of ________ _, 2008, there were 2,468,614
shares of common stock issued and outstanding.</FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px" >
<TD WIDTH="39%" VALIGN=TOP>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=TOP>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=TOP>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="17%" VALIGN=TOP>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="6%" VALIGN=TOP>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=TOP>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="7%" VALIGN=TOP>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=TOP>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=TOP>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="13%" VALIGN=TOP>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=TOP>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2><B>Name of Beneficial Owner</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2><B>Amount and Nature of<BR>
  Beneficial Ownership(1)</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2><B>Pre-Split</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2><B>Post Split</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>

</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>Abe Ginsburg</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>69,223</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>(2)</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>2.8</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>%</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>3.0</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>%</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>Allan
  Ginsburg</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>196,861</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>(3)(4)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>7.9</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>%</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>8.4</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>%</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>Robert
  Chestnov</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>176,654</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>(3)(5)</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>7.2</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>%</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>7.6</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>%</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>Howard
  Ginsburg</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>175,047</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>(3)(6)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>7.0</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>%</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>7.4</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>%</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>Martin Brody</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>14,387</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>(7)</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>*</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>*</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>Richard
  Chestnov</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>64,273</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>(8)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>2.6</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>%</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>2.7</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>%</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>Albert Safer</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>Norman
  Axelrod</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>12,000</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>(9)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>*</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>*</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>Harold
  Schechter</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>6,000</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>(10)</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>*</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>*</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>Anthony
  Christon</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>7,500</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>*</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>*</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT SIZE=2>All
  directors and executive officers <BR>
  as a group (10 persons)</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>691,022</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>(11)</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>27.3</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>28.9</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>%</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2><I>Other 5% Stockholders</I></FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>Bonnie Sue
  Levy</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>213,968</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>(3)(12)</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>8.7</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>%</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>9.1</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>%</FONT></P>
</TD>
</TR>
</TABLE>

<P ALIGN=JUSTIFY><HR NOSHADE WIDTH=120 COLOR=BLACK ALIGN=LEFT SIZE=1>

<DIV ALIGN=JUSTIFY><FONT SIZE="2">* Less than one (1%) percent. </FONT></DIV>

<P ALIGN=CENTER><FONT SIZE=2>65</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px" >
<TD WIDTH="5%" VALIGN=TOP>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="95%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>(1)</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>Except as otherwise indicated below, each person named above and each
  person in the group referred to above has sole voting and dispositive power
  with respect to shares indi&#173;cated as beneficially owned by such person or
  group.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>(2)</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>Includes 65,769 shares of our common stock owned by a charitable foundation in which Abe
  Ginsburg serves as an officer and director and with respect to which Mr.
  Ginsburg shares voting and dispositive power, and 2,581 shares owned by a
  charitable foundation of which Mr. Ginsburg serves as an officer and
  director, and with respect to which shares Mr. Ginsburg has sole voting and
  dispositive power. Mr. Ginsburg disclaims beneficial ownership of all such
  shares.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>(3)</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>Such
  stockholder, along with certain of his or her family members, trusts and
  custodianships for the benefit of such stockholder and his or her family
  members, unrelated individuals, and the Company are parties to the
  Stockholders Agreement, which provides, among other things, that a committee
  of four of the signatory stockholders, consisting of Abe Ginsburg, Allan
  Ginsburg, Robert Chestnov and Howard Ginsburg, may direct the vote of the
  shares as to which such stockholder may have or share voting power and,
  accordingly, Abe Ginsburg, Allan Ginsburg, Robert Chestnov and Howard
  Ginsburg may be considered to beneficially own the shares of common stock
  subject to the Stockholders Agreement. On the record date, 1,257,643 shares of our common stock
  (50.9%) were subject to the Stockholders Agreement. </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>(4)</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>Includes 8,470 shares of our common stock held by Mr. Ginsburg in an individual
  retirement account and 17,500 shares Mr. Ginsburg has the right to acquire
  pursuant to presently exercisable stock options. Also includes 29,884 shares
  held of record by Mr. Ginsburg as custodian for his children, 10,769 shares
  owned by Mr. Ginsburg&#146;s wife, and 1,984 shares owned by a charitable
  foundation of which Mr. Ginsburg serves as an officer and trustee, with
  respect to which Mr. Ginsburg shares voting and dispositive power. Mr.
  Ginsburg disclaims beneficial ownership of all of such shares.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>(5)</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>Includes 10,953 shares held by Mr. Chestnov in an individual
  retirement account. Also includes 27,423 shares held of record by Mr.
  Chestnov as co-trustee of a trust with respect to which he shares voting and
  dispositive power, 3,500 shares owned by a charitable foundation of which Mr.
  Chestnov serves as an officer and director, 372 shares of our
  common stock owned by Mr. Chestnov&#146;s
  wife and 6,906 shares held of record by her as custodian for their children,
  with respect to all of which shares Mr. Chestnov disclaims beneficial
  ownership.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>(6)</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>Includes 8,470 shares held by Mr. Ginsburg in an individual
  retirement account and 17,500 shares Mr. Ginsburg has the right to acquire
  pursuant to presently exercisable stock options. Also includes 55,114 shares
  of our common stock held
  of record by Mr. Ginsburg as custodian for his children and 1,800 shares
  owned by his wife, with respect to all of which shares Mr. Ginsburg disclaims
  beneficial ownership.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>(7)</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>Includes 14,000 shares of our common stock which Mr. Brody has the right to acquire
  pursuant to presently exercisable stock options.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>(8)</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>Richard Chestnov holds 27,423 of the shares set opposite his name as
  co-trustee of a trust, 3,500 of the shares set opposite his name as an
  officer and director of a charitable foundation, with respect to which, in
  each case, he shares voting and dispositive power, and 200 shares as
  custodian for his child. Mr. Chestnov disclaims beneficial ownership of such
  shares.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>(9)</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>Includes 12,000 shares of our common stock which Mr. Axelrod has the right to acquire
  pursuant to presently exercisable stock options.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>(10)</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>Includes 6,000 shares of our common stock which Mr. Schechter has the right to acquire
  pursuant to presently exercisable stock options.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>(11)</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>Reference is
  made to footnotes (1) through (10) above. Includes an aggregate of 67,000 shares
  of our common stock which our directors and executive officers have the right
  to acquire pursuant to presently exercisable stock options.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>(12)</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>Includes 6,164 shares held by Mrs. Levy in an individual retirement
  account.</FONT></P>
</TD>
</TR>
</TABLE>

<P ALIGN=CENTER><FONT SIZE=2>66</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P ALIGN=JUSTIFY><A NAME="JN_073"></A><FONT SIZE=2><B>Stockholders Agreement</B></FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Abe
Ginsburg, Allan Ginsburg, Robert Chestnov and Howard Ginsburg, certain other
family members, trusts and custodianships for the benefit of such individuals
and family members, unrelated individuals, and the Company are parties to the
Stockholders Agreement. The Stockholders Agreement, among other things,
entitles Abe Ginsburg, Allan Ginsburg, Robert Chestnov and Howard Ginsburg, in
their capacity as a stockholders&#146; committee, acting by the vote of at least
two-thirds, or by the unanimous written consent, of the members of the
stockholders committee, for a period of fifteen years from the date of the
Stockholders Agreement, to direct the vot&#173;ing of the shares of common stock
with respect to which the signatory stockholders have or share, or may
hereafter have or share, voting power with respect to all matters submitted to
our stockholders at any annual or special meeting of stockholders or pursuant
to a written consent in lieu thereof. On the Record Date, the stockholders
committee was entitled under the Stockholders Agreement to direct the vote as
to 1,257,643 shares of our
common stock (50.9%).</FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>67</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P ALIGN=CENTER><A NAME="JN_074"></A><FONT SIZE=2><B>MEETING AND VOTING INFORMATION</B></FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<A NAME="JN_075"></A><B>Outstanding Voting
Securities and Voting Rights.</B> Only
stockholders of record at the close of business on ____________ __, 2008 (the
&#147;Record Date&#148;), will be entitled to notice of, and to vote at, the Special
Meeting or any adjournments or postponements of the Special Meeting. On the
Record Date, 2,468,614 shares of our common stock were issued and outstanding.
Each share of our common stock is entitled to one vote.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<A NAME="JN_076"></A><B>Information Concerning
Proxies; Revocation of Proxies.</B> Sending in a signed proxy will not
affect your right to attend the Special Meeting and vote in person since the
proxy is revocable. All proxies which are properly completed, signed and
returned to us prior to the Special Meeting, and which have not been revoked,
unless otherwise directed by you, will be voted in accordance with the
recommendations of the Board of Directors set forth in this proxy statement.
You may revoke your proxy at any time before it is voted either by (i) filing
with the Secretary of the Company, at its principal executive offices, 197 West
Spring Valley Road, Maywood, New Jersey 07607, a written notice of revocation
or a duly executed proxy bearing a later date, or (ii) by attending the Special
Meeting, delivering written notice of revocation of your proxy and voting your
shares in person.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<A NAME="JN_077"></A><B>Solicitation.</B>
The Company will bear the entire cost of solicitation, including the
preparation, assembly, printing and mailing of this proxy statement, the proxy
and any additional solicitation materials furnished to stockholders. Copies of
the solicitation materials will be furnished to brokerage houses, fiduciaries
and custodians holding shares in their names that are beneficially owned by
others so that they may forward this solicitation material to those beneficial
owners. Our officers, directors and employees may also solicit proxies by
telephone, telegram or other means. Upon request, we will pay the reasonable
expenses incurred by record holders of its common stock who are brokers,
dealers, banks or voting trustees, or their nominees, for sending proxy
materials to the beneficial owners of the shares they hold of record.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<A NAME="JN_078"></A><B>Quorum and Certain Voting
Matters.</B> The presence, in person or represented by proxy, of the
holders of a majority of the issued and outstanding shares of our common stock
will constitute a quorum for the transaction of business at the Special Meeting.
The affirmative vote of the majority of outstanding shares of our common stock
entitled to vote at the Special Meeting is required to approve the Transaction.
Abstentions and broker non-votes (i.e., when a nominee holding shares of common
stock cannot vote on a particular proposal because the nominee does not have
discretionary voting power with respect to that proposal and has not received
voting instructions from the beneficial owner) will be included in the number
of shares present at the Special Meeting for the purpose of determining the
presence of a quorum. Shares of our common stock that are voted to abstain are
considered shares entitled to vote, and cast, with regard to the Transaction.
Shares of our common stock subject to broker non-votes will not be considered
as shares entitled to vote with respect to the Transaction. The enclosed proxy
will be voted in accordance with the instructions thereon.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<A NAME="JN_079"></A><B>Adjournment or
Postponement.</B> The Special Meeting may be adjourned or postponed. Any
adjournment may be made without notice, other than by an announcement made at
the Special Meeting. The favorable vote of a majority of the shares of our
common stock present in person or represented by proxy and entitled to vote on
the adjournment proposal may adjourn the meeting. Any adjournment or
postponement of the Special Meeting will allow our stockholders who have
already sent in their proxies to revoke them at any time prior to their use at
the Special Meeting as adjourned or postponed.</FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>68</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P ALIGN=CENTER><A NAME="JN_080"></A><FONT SIZE=2><B>FINANCIAL
INFORMATION</B></FONT></P>

<P ALIGN=JUSTIFY><A NAME="JN_081"></A><FONT SIZE=2><B>Summary Historical Financial Information</B></FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following summary consolidated financial information was derived from our
audited consolidated financial statements as of and for each of the years ended
June 30, 2007, 2006 and 2005 and from unaudited consolidated interim financial
statements as of and for the three months ended September 30, 2007 and 2006. In
the opinion of management, all adjustments (consisting only of normal recurring
accruals) which are necessary for a fair presentation of the financial position
and results of operation have been included. The consolidated statement of
earnings data for the three months ended September 30, 2007 is not necessarily
indicative of results for the full fiscal year. This financial information is
only a summary and should be read in conjunction with our historical financial
statements and the accompanying footnotes. Please see below entitled &#147;Available
Information&#148;</FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px" >
<TD WIDTH="34%" VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="9%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="9%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="9%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="10%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="9%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER STYLE='MARGIN-LEFT:8.65PT;   TEXT-INDENT:-8.65PT'><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="5" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2><B>Three Months Ended<BR>
  September 30,</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="8" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2><B>Years Ended June 30,</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER STYLE='MARGIN-LEFT:8.65PT;   TEXT-INDENT:-8.65PT'><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="5" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="8" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER STYLE='MARGIN-LEFT:8.65PT;   TEXT-INDENT:-8.65PT'><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2><B>2007</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2><B>2006</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2><B>2007</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2><B>2006</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2><B>2005</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2>Net Sales</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>37,453,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>40,624,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>154,507,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>126,601,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>126,477,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2>Cost of Goods Sold</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>29,200,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>32,121,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>118,247,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>95,735,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>97,952,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2>Gross Profit</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>8,253,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>8,503,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>36,260,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>30,866,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>28,525,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2>Shipping, selling and administrative
  expenses</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>7,612,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>7,390,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>30,573,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>27,574,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>26,172,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2>Pension plan settlement</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>3,089,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2>Interest expense</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>146,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>347,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>1,001,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>586,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>639,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2>Interest income</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>(5,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>)</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>(5,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>)</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>(1,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>)</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2>Provision for income taxes</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>195,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>303,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>893,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>1,181,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>666,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2>NET EARNINGS</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>300,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>463,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>709,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>1,530,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>1,049,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2>Weighted average shares &#150; Basic</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>2,468,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>2,483,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>2,478,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>2,480,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>2,596,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2>Net earnings per common share &#150; Basic</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>.12</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>.19</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>.29</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>.62</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>.40</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2>Weighted average shares &#150; Diluted</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>2,506,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>2,529,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>2,528,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>2,557,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>2,702,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2>Net earnings per common share &#150; Diluted</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>.12</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>.18</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>.28</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>.60</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>.39</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2>TOTAL ASSETS</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>48,128,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>48,708,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>38,077,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>41,702,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>32,492,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2>Mortgage Payable - Long-Term portion</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>2,341,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>2,520,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>2,387,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>2,563,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>2,727,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2>Stockholders&#146; equity</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>19,445,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>19,510,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>19,274,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>19,047,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>16,674,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
</TABLE>

<P ALIGN=CENTER><FONT SIZE=2>69</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P ALIGN=JUSTIFY><A NAME="JN_082"></A><FONT SIZE=2><B>Pro Forma Consolidated Financial Statements (Unaudited)</B></FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following unaudited pro forma consolidated balance sheet as of September 30,
2007, and the unaudited pro forma consolidated statements of earnings for the
three months ended September 30, 2007 and for the fiscal year ended
June&nbsp;30, 2007, show the pro forma effect of the Transaction and related
events as required by Rule&nbsp;11-02 of Regulation&nbsp;S-X. The historical
figures as of and for the period ended September 30, 2007 were derived from the
Company&#146;s unaudited consolidated financial statements that were included in the
Company&#146;s Quarterly Report on Form 10-Q for the three months ended
September&nbsp;30, 2007. The historical figures for the fiscal year ended
June&nbsp;30, 2007, were derived from the Company&#146;s audited consolidated
financial statements that were included in the Company&#146;s Annual Report on Form
10-K for the fiscal year ended June&nbsp;30, 2007. </FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
pro forma information below gives effect to the Transaction based on holders of
record owning less than 250 shares of shares of common stock, the resulting
reduced number of shares outstanding, the impact of additional borrowing to
effect the Transaction as well as tax implications as of September 30, 2007 and
June 30, 2007. The Transaction assumes that 128,889 shares are purchased for treasury stock at a price of $10.21
per share. Pro forma adjustments to the pro forma consolidated balance sheet
are computed as if the Transaction had occurred at September 30, 2007, while
the pro forma consolidated statements of earnings are computed as if the
Transaction had occurred at the beginning of the periods. The pro forma Consolidated Statements of
Earnings do not give effect to the remaining non-recurring costs and expenses
of the Transaction (estimated to be $440,000 before income taxes).</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
pro forma information is not necessarily indicative of what the Company&#146;s financial
position or results of operations actually would have been if the Transaction
had occurred on July&nbsp;1, 2006 or July&nbsp;1, 2007, or of the Company&#146;s
financial position or results of operations in the future.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
unaudited pro forma financial statements should be read in conjunction with the
historical financial statements and accompanying footnotes included in the
Company&#146;s Annual Report on Form 10-K for the year ended June&nbsp;30, 2007, and
in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2007,
which are being delivered to our stockholders with this proxy statement and are
incorporated by reference in this proxy statement.</FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>70</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P ALIGN=JUSTIFY><FONT SIZE=2><B>JACLYN, INC. AND SUBSIDIARIES <BR>
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET <BR>
SEPTEMBER 30, 2007 </B></FONT></P>

<TABLE ALIGN=CENTER BORder=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="47%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="12%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="12%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="4%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN="BOTTOM" ALIGN="LEFT">
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="12%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2><B>September 30,<BR>
 2007</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2><B>Pro Forma<BR>
 Adjustments</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN="BOTTOM" ALIGN="LEFT">
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2><B>Pro Forma<BR>
 September 30,<BR>
 2007</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN="BOTTOM" ALIGN="LEFT">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>ASSETS</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN="BOTTOM" BGCOLOR="#EAF9E8" ALIGN="LEFT">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>CURRENT
 ASSETS:</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN="BOTTOM" ALIGN="LEFT">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>CASH AND
 CASH EQUIVALENTS</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>769,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>(769,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>)(1)</FONT></P>
</TD>
<TD VALIGN="BOTTOM" BGCOLOR="#EAF9E8" ALIGN="LEFT">
<P ALIGN=left><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>ACCOUNTS
 RECEIVABLE, LESS SALES</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN="BOTTOM" ALIGN="LEFT">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>RETURNS,
 SALES DISCOUNTS, SALES</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN="BOTTOM" BGCOLOR="#EAF9E8" ALIGN="LEFT">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>ALLOWANCE,
 &amp; ALLOWANCE FOR</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN="BOTTOM" ALIGN="LEFT">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>DOUBTFUL
 ACCOUNTS: 2007: $3,269,000;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>25,286,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN="BOTTOM" BGCOLOR="#EAF9E8" ALIGN="LEFT">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>25,286,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>INVENTORIES</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>11,517,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN="BOTTOM" ALIGN="LEFT">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>11,517,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>PREPAID
 EXPENSES AND OTHER CURRENT</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN="BOTTOM" BGCOLOR="#EAF9E8" ALIGN="LEFT">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>ASSETS</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>2,674,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN="BOTTOM" ALIGN="LEFT">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>2,674,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>

<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN="BOTTOM" ALIGN="LEFT">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>TOTAL
 CURRENT ASSETS</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>40,246,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>(769,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>)</FONT></P>
</TD>
<TD VALIGN="BOTTOM" BGCOLOR="#EAF9E8" ALIGN="LEFT">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>39,477,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN="BOTTOM" ALIGN="LEFT">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>PROPERTY,
 PLANT AND EQUIPMENT &#150; NET</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>3,880,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN="BOTTOM" ALIGN="LEFT">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>3,880,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>ASSETS HELD
 FOR SALE</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>357,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN="BOTTOM" BGCOLOR="#EAF9E8" ALIGN="LEFT">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>357,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>GOODWILL</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>3,338,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN="BOTTOM" ALIGN="LEFT">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>3,338,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>OTHER ASSETS</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>307,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN="BOTTOM" BGCOLOR="#EAF9E8" ALIGN="LEFT">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>307,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN="BOTTOM" ALIGN="LEFT">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>48,128,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>(769,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>)</FONT></P>
</TD>
<TD VALIGN="BOTTOM" ALIGN="LEFT">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>47,359,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN="BOTTOM" ALIGN="LEFT">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>LIABILITIES
 AND STOCKHOLDERS&#146; EQUITY</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN="BOTTOM" BGCOLOR="#EAF9E8" ALIGN="LEFT">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>CURRENT
 LIABILITIES:</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN="BOTTOM" ALIGN="LEFT">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>NOTES
 PAYABLE &#150; BANK</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>13,130,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>547,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>(1)</FONT></P>
</TD>
<TD VALIGN="BOTTOM" BGCOLOR="#EAF9E8" ALIGN="LEFT">
<P ALIGN=RIGHT><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>13,677,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>ACCOUNTS
 PAYABLE</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>8,186,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>440,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>(3)</FONT></P>
</TD>
<TD VALIGN="BOTTOM" ALIGN="LEFT">
<P ALIGN=RIGHT><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>8,626,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>OTHER
 CURRENT LIABILITIES</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>4,139,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN="BOTTOM" BGCOLOR="#EAF9E8" ALIGN="LEFT">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>4,139,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN="BOTTOM" ALIGN="LEFT">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>TOTAL
 CURRENT LIABILITIES</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>25,455,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>987,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN="BOTTOM" ALIGN="LEFT">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>26,442,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN="BOTTOM" ALIGN="LEFT">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>

<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>MORTGAGE
 PAYABLE</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>2,341,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN="BOTTOM" BGCOLOR="#EAF9E8" ALIGN="LEFT">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>2,341,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN="BOTTOM" ALIGN="LEFT">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>

<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>DEFERRED
 INCOME TAXES</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>325,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>(176,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>)(2)</FONT></P>
</TD>
<TD VALIGN="BOTTOM" ALIGN="LEFT">
<P ALIGN=RIGHT><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>149,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN="BOTTOM" ALIGN="LEFT">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>

<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>OTHER
 LIABILITIES</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>562,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN="BOTTOM" BGCOLOR="#EAF9E8" ALIGN="LEFT">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>562,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN="BOTTOM" ALIGN="LEFT">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>

<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>COMMITMENTS
 AND CONTINGENCIES</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN="BOTTOM" ALIGN="LEFT">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>STOCKHOLDERS&#146;
 EQUITY:</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN="BOTTOM" BGCOLOR="#EAF9E8" ALIGN="LEFT">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>PREFERRED
 STOCK, PAR VALUE $1:</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN="BOTTOM" ALIGN="LEFT">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>AUTHORIZED,
 1,000,000 SHARES; ISSUED AND</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN="BOTTOM" BGCOLOR="#EAF9E8" ALIGN="LEFT">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>OUTSTANDING,
 NONE</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN="BOTTOM" ALIGN="LEFT">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>COMMON
 STOCK, PAR VALUE $1:</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN="BOTTOM" BGCOLOR="#EAF9E8" ALIGN="LEFT">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>AUTHORIZED,
 5,000,000 SHARES</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>3,369,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN="BOTTOM" ALIGN="LEFT">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>3,369,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>ADDITIONAL
 PAID-IN CAPITAL</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>9,518,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN="BOTTOM" BGCOLOR="#EAF9E8" ALIGN="LEFT">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>9,518,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>RETAINED
 EARNINGS</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>13,175,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>(264,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>)(2)</FONT></P>
</TD>
<TD VALIGN="BOTTOM" ALIGN="LEFT">
<P ALIGN=RIGHT><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>12,911,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN="BOTTOM" ALIGN="LEFT">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>

<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>26,062,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>(264,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>)</FONT></P>
</TD>
<TD VALIGN="BOTTOM" BGCOLOR="#EAF9E8" ALIGN="LEFT">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>25,798,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>LESS:
 TREASURY STOCK AT COST</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>6,617,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>1,316,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=left><FONT SIZE=2> (1)</FONT></P>
</TD>
<TD VALIGN="BOTTOM" ALIGN="LEFT">
<P ALIGN=RIGHT><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>7,933,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN="BOTTOM" ALIGN="LEFT">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>

<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>TOTAL
 STOCKHOLDERS&#146; EQUITY</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>19,445,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>(1,580,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>)</FONT></P>
</TD>
<TD VALIGN="BOTTOM" BGCOLOR="#EAF9E8" ALIGN="LEFT">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>17,865,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN="BOTTOM" ALIGN="LEFT">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>

<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>48,128,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>(769,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>)</FONT></P>
</TD>
<TD VALIGN="BOTTOM" ALIGN="LEFT">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>47,359,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN="BOTTOM" ALIGN="LEFT">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>

</TABLE>

<P ALIGN=JUSTIFY><FONT SIZE=2>See Notes to
the Unaudited Pro Forma Consolidated Financial Statements </FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>71</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P ALIGN=JUSTIFY><FONT SIZE=2><B>JACLYN, INC. AND SUBSIDIARIES <BR>
PROFORMA CONSOLIDATED STATEMENT OF EARNINGS <BR>
QUARTER ENDED SEPTEMBER 30, 2007 </B></FONT></P>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="49%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="11%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="10%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="9%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2><B>September 30,<BR>
 2007</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2><B>Pro Forma<BR>
 Adjustments</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2><B>Pro Forma<BR>
 September<BR>
 30, 2007</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>Net sales</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>37,453,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>37,453,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>Cost of
 goods sold</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>29,200,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>29,200,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>Gross profit</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>8,253,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>8,253,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>Shipping,
 selling and administrative expenses</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>7,612,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>8,052,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>Interest
 expense</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>146,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>34,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=left><FONT SIZE=2>(4)</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>180,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>EARNINGS
 BEFORE PROVISION FOR INCOME TAXES</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>495,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>34,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>461,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>PROVISION
 FOR INCOME TAXES</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>195,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>(14,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>)(7)</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>181,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>NET EARNINGS</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>300,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>20,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>280,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>NET EARNINGS
 PER COMMON SHARE &#150; BASIC</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>.12</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>.12</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>Weighted
 average number of shares outstanding &#150; basic</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>2,468,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>129,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=left><FONT SIZE=2>(5)&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>  &nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>2,339,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>NET EARNINGS
 PER COMMON SHARE &#150; DILUTED</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>.12</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>.12</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>Weighted
 average number of shares outstanding &#150; diluted</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>2,506,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>129,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=left><FONT SIZE=2>(5) </FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2> &nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>2,377,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
</TR>
</TABLE>

<P ALIGN=JUSTIFY><FONT SIZE=2>See Notes to
the Unaudited Pro Forma Consolidated Financial Statements </FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>72</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P ALIGN=JUSTIFY><FONT SIZE=2><B>JACLYN, INC. AND SUBSIDIARIES <BR>
PROFORMA CONSOLIDATED STATEMENT OF EARNINGS <BR>
YEAR ENDED JUNE 30, 2007 </B></FONT></P>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="51%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="9%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="10%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="10%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2><B>June 30,<BR>
 2007</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2><B>Pro Forma<BR>
 Adjustments</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2><B>Pro Forma<BR>
 June 30,<BR>
 2007</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>Net sales</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>154,507,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>154,507,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>Cost of goods
 sold</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>118,247,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>118,247,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>Gross profit</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>36,260,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>36,260,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>Shipping,
 selling and administrative expenses</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>30,573,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>30,573,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>Pension plan
 settlement</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>3,089,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>3,089,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>Interest
 expense</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>1,001,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>145,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=left><FONT SIZE=2> (6)</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>1,146,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>Interest
 income</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>(5,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>)</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>(5,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>)</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>EARNINGS
 BEFORE PROVISION FOR INCOME TAXES</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>1,602,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>145,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>1,457,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>PROVISION
 FOR INCOME TAXES</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>893,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>58,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=left><FONT SIZE=2> (7)</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>835,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>NET EARNINGS</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>709,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>87,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>622,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>NET EARNINGS
 PER COMMON SHARE &#150; BASIC</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>.29</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>.27</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>Weighted
 average number of shares outstanding &#150; basic</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>2,468,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>129,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=left><FONT SIZE=2>(5)</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>2,339,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>NET EARNINGS
 PER COMMON SHARE &#150; DILUTED</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>.28</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>.26</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>Weighted
 average number of shares outstanding &#150; diluted</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>2,528,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>129,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=left><FONT SIZE=2>(5)</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>2,399,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
</TR>
</TABLE>

<P ALIGN=JUSTIFY><FONT SIZE=2>See Notes to
the Unaudited Pro Forma Consolidated Financial Statements </FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>73</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P ALIGN=CENTER><FONT SIZE=2><B>Notes to the Unaudited Pro Forma Consolidated
Financial Statements</B></FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>(1) Represents
the impact on the September 30, 2007 historical balance sheet of cash used and
borrowed under the Company&#146;s credit facility to effect the Transaction. The
estimated cash payout is approximately $1,316,000 for the shares subject to the
Transaction. </FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>(2) Retained
earnings are reduced for the remaining estimated non-recurring costs and
expenses, as of September 30, 2007, related to the Transaction of $440,000
($264,000 net of tax using an assumed tax rate of 40%). The remaining estimated
expenses of $440,000 reflect an estimated $600,000 of transaction costs, less
$160,000 expensed through September 30, 2007. </FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>(3) Represents
the remaining estimated expenses related to the Transaction, totaling $440,000,
primarily for the legal costs, accounting costs, financial advisor fees, filing
and printing costs. </FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>(4) Increased
interest costs of approximately $34,000 for the 3-month period ended September
30, 2007 at an assumed interest rate of 7.80% on the estimated $1,756,000 of
the Company&#146;s revolving line of credit used to effect the Transaction. A 1/8%
change in the assumed rate would result in a change in interest expense of
approximately $600. </FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>(5) Pro forma
basic and diluted weighted outstanding shares are adjusted based on the assumed
redemption of 128,889 shares. </FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>(6) Reflects
increased interest costs of approximately $145,000 for the fiscal year ended
June 30, 2007 at a weighted-average interest rate of 7.71% on the estimated
$1,881,000 of the Company&#146;s revolving line of credit used to effect the
Transaction. A 1/8% change in the assumed rate would result in a change in
interest expense of approximately $2,400 per annum. </FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>(7) Reflects
the estimated tax effect resulting from the pro forma adjustments at an assumed
rate of 40%. </FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>(8) Potential
Cost Savings </FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
table below shows the Company&#146;s historical approximate annualized costs related
to being a public company. As a deregistered company, we do not expect to incur
these costs. However, as required by SEC rules and regulations, these costs
continue to be included in the accompanying Unaudited Pro Forma Consolidated
Statements of Earnings. </FONT></P>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="63%">
<TR style="font-size:1px">
<TD WIDTH="76%"  VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="4%"  VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="15%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
</TR>
<TR>
<TD  VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>Description</FONT></P>
</TD>
<TD  VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>Annualized<BR>
 Costs as a<BR>
 Public<BR>
 Company</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD  VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="25%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD  VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD  VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT  SIZE=2>Audit</FONT></P>
</TD>
<TD  VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>315,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD  VALIGN=BOTTOM>
<P><FONT  SIZE=2>Legal</FONT></P>
</TD>
<TD  VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>25,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD  VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT  SIZE=2>Other Sarbanes-Oxley Costs</FONT></P>
</TD>
<TD  VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>50,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD  VALIGN=BOTTOM>
<P><FONT  SIZE=2>Corporate Governance Costs</FONT></P>
</TD>
<TD  VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>133,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD  VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT  SIZE=2>Additional Costs &#150; Pink Sheets</FONT></P>
</TD>
<TD  VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>(14,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>)</FONT></P>
</TD>
</TR>
<TR>
<TD  VALIGN=BOTTOM>
<P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:17.3PT;TEXT-INDENT:-8.65PT'><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD  VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD  VALIGN=BOTTOM>
<P><FONT  SIZE=2>Total estimated annualized costs, net</FONT></P>
</TD>
<TD  VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>509,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD  VALIGN=BOTTOM>
<P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:17.3PT;TEXT-INDENT:-8.65PT'><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD  VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
</TABLE>

<P ALIGN=CENTER><FONT SIZE=2>74</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P ALIGN=JUSTIFY><FONT SIZE=2><A NAME="JN_083"></A><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ratio
of Earnings to Fixed Charges </B></FONT></P>

<TABLE ALIGN=CENTER BORder=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="41%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="8%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="7%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="7%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="7%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="6%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="5" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2><B>September 30, 2007</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>

<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="5" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>

<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2><B>Pro forma<BR>
 June 30,<BR>
 2007</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2><B>Actual<BR>
 June 30,<BR>
 2007</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2><B>Actual<BR>
 June 30,<BR>
 2006</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2><B>Pro<BR>
 forma</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2><B>Actual</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>Earnings before provision for income taxes</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>1,457,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>1,602,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>2,711,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>461,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>495,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>Fixed Charges</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>1,606,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>1,461,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>1,027,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>302,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>268,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>Earnings available to cover fixed charges</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>3,063,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>3,063,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>3,738,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>763,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>763,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>Fixed Charges</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>Interest</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>1,146,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>1,001,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>586,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>180,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>146,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>Interest portion of rental expense</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>460,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>460,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>441,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>122,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>122,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>Total fixed charges</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>1,606,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>1461,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>1,027,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>302,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>268,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>Ratio of earnings to fixed charges (a)</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>1.9</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>x</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>2.1</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>x</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>3.6</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>x</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>2.5</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>x</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>2.8</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>x</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
</TABLE>

<BR>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="5%" VALIGN=TOP>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="20%" VALIGN=TOP>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="75%" VALIGN=TOP>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
</TR>
<TR>
<TD COLSPAN="3" VALIGN=TOP>
<HR SIZE=1 WIDTH="20%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
</TR>
<TR>
<TD COLSPAN="3" VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>(a) For
 purposes of computing the ratio of earnings to fixed charges, earnings
 consist of income before income taxes plus fixed charges. Fixed charges
 consist of interest expense on all indebtedness and the portion of rental
 expense that management believes is representative of the interest factor. </FONT></P>
</TD>
</TR>
</TABLE>

<P ALIGN=CENTER><FONT SIZE=2>75</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P ALIGN=center><A NAME="JN_084"></A><FONT SIZE=2><B>STOCKHOLDER PROPOSALS </B></FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
the Transaction is not consummated and the Company remains a public company,
stockholder proposals intended to be included in the proxy statement and form
of proxy for the 2008 Annual Meeting of Stockholders must be received at the
principal executive offices of the Company, 197 West Spring Valley Avenue,
Maywood, New Jersey 07607, no later than July 1, 2008. Any such proposals, as
well as any questions relating thereto, should be directed to the Secretary of
the Company. As to any proposals intended to be presented by a stockholder
without inclusion in the Company&#146;s proxy statement and form of proxy for the
2008 Annual Meeting, the proxies named in the Company&#146;s form of proxy for that
meeting will be entitled to exercise discretionary authority on that proposal
unless the Company receives notice of the matter on or before September 14,
2008. However, even if such notice is timely received, such proxies may
nevertheless be entitled to exercise discretionary authority on that matter to
the extent permitted by Securities and Exchange Commission regulations. </FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stockholder
recommendations of candidates for Board membership will be considered when
timely submitted with sufficient detail including candidate&#146;s name, principal
occupation during the past five years, listing of directorships, a statement
that such nominee has consented to the submission of the nomination, amount of
common stock of the Company held by the nominee and qualification (including
information regarding compliance with the Company&#146;s bylaws on qualifications)
addressed to the Corporate Secretary of the Company, 197 West Spring Valley
Road, Maywood, New Jersey 07607. Stockholder proposals should also be submitted
to our Corporate Secretary at the address noted. </FONT></P>

<P ALIGN=CENTER><A NAME="JN_085"></A><FONT SIZE=2><B>WHERE
YOU CAN FIND MORE INFORMATION</B></FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Transaction is a &#147;going private&#148; Transaction subject to Rule 13e-3 of the 1934
Act. The Company has filed a Rule 13e-3 Transaction Statement on Schedule 13E-3
under the 1934 Act with respect to the Transaction. The Schedule 13E-3 contains
additional information about the Company. Copies of the Schedule 13E-3 are
available for inspection and copying at the principal executive offices of the
Company during regular business hours by any interested stockholder of the
Company, or a representative who has been so designated in writing, and may be
inspected and copied, or obtained by mail, by written request directed to
Jaclyn Hartstein, the Company&#146;s Secretary, at the following address: Jaclyn,
Inc., 197 West Spring Valley Road, Maywood, New Jersey 07607. </FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company is currently subject to the information requirements of the Exchange
Act and files periodic reports, proxy statements and other information with the
SEC relating to its business, financial and other matters. </FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You
may read and copy any document we file at the SEC&#146;s public reference room at
100 F Street, N.E., Washington, D.C. 20549 Washington, D.C. Please call the
Commission at 1-800-SEC-0330 for further information on the public reference
room. Our SEC filings are also available to the public over the Internet at the
SEC&#146;s Website at <U>http://www.sec.gov.</U></FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>76</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P ALIGN=CENTER><A NAME="JN_086"></A><FONT SIZE=2><B>DOCUMENTS
INCORPORATED BY REFERENCE</B></FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
filings with the SEC, information is sometimes incorporated by reference. That
means that we are referring to you to information that we have filed separately
with the SEC. The information incorporated by reference should be considered
part of this proxy statement, except for any information superseded by
information contained directly in this proxy statement. </FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
proxy statement incorporates by reference our financial statements that we
contained in certain documents that we have previously filed with the SEC, as follows:
</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
audited Consolidated Balance Sheets as at June 30, 2007 and 2006, our audited
Consolidated Statements of Earnings for the years ended June 30, 2007 and 2006,
our audited Consolidated Statements of Cash Flow for the years ended June 30,
2007, 2006 and 2005 and the Notes to our audited Consolidated Financial
Statements, in each case that are contained in our Annual Report on Form 10-K
for the year ended June 30, 2007; and </FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
Condensed Consolidated unaudited Balance Sheets as at September 30, 2007 and
June 30, 2007, our Condensed Consolidated unaudited Statements of Earnings for
the three months ended September 30, 2007 and 2006, our Condensed Consolidated
unaudited Statements of Cash Flow for the three months ended September 30, 2007
and 2006, and the Notes to our Condensed Consolidated unaudited Financial
Statements, in each case that are contained in our Quarterly Report on Form
10-Q for the fiscal quarter ended September 30, 2007. </FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
are delivering to you with this Proxy Statement copies of our Annual Report on
Form 10-K for the fiscal year ended June 30, 2007 and our Quarterly Report on
Form 10-Q for the fiscal quarter ended September 30, 2007. </FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
have not authorized anyone to give any information or make any representation
about the Transaction or us that differs from, or adds to, the information in
this proxy statement or in our documents that are publicly filed with the SEC.
If anyone does give you different or additional information, you should not
rely on it. </FONT></P>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="46%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="7%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="46%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>By Order of
 the Board of Directors</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>Jaclyn
 Hartstein</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2><I>Secretary</I></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>______________,
 2007</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
</TABLE>

<P ALIGN=CENTER><FONT SIZE=2>77</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P ALIGN=RIGHT><FONT SIZE=2><B>Annex A </B></FONT></P>

<P ALIGN=CENTER><FONT SIZE=2><B>CERTIFICATE OF AMENDMENT <BR>
OF THE <BR>
CERTIFICATE OF INCORPORATION <BR>
OF <BR>
JACLYN, INC.</B></FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Corporation organized and existing under and by virtue of the General
Corporation Law of the State of Delaware does hereby certify: </FONT></P>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="5%" VALIGN=TOP>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="5%" VALIGN=TOP>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="90%" VALIGN=TOP>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
</TR>
<TR>
<TD COLSPAN="3" VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.
 The name of the Corporation is Jaclyn, Inc.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD COLSPAN="3" VALIGN=TOP>
<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.
 Article FOURTH of the Certificate of Incorporation of the Corporation
 (hereinafter called the &#147;Certificate of Incorporation&#148;) is hereby amended by
 inserting the following as new Section C.5.:</FONT></P>
</TD>
</TR>
</TABLE>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;5.
Without regard to any other provision of this Certificate of Incorporation,
each 250 shares of Common Stock of the Corporation, either issued and
outstanding or held by the Corporation as treasury stock, immediately prior to
the time this amendment becomes effective shall be and is automatically
reclassified and changed (without any further act) into one (1) fully paid and
nonassessable share of Common Stock of the Corporation without increasing or
decreasing the amount of stated capital or paid-in surplus of the Corporation,
provided that no fractional shares shall be issued to any holder of fewer than
250 shares of Common Stock of the Corporation immediately prior to the time
this amendment becomes effective, and that instead of issuing such fractional
shares, the Corporation shall pay an amount in cash equivalent to $10.21 per
share of Common Stock of the Corporation held by such holder immediately prior
to the time this amendment becomes effective.&#148; </FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.
This amendment of the Certificate of Incorporation herein certified has been
duly adopted in accordance with the provisions of Section 242 of the Delaware
General Corporation Law and shall become effective at 11:58 p.m., Eastern time,
on _________ __, 2008 </FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN
WITNESS WHEREOF, said Corporation has caused this certificate to be signed this
_____ day of ___________, 2008. </FONT></P>

<TABLE ALIGN=CENTER BORder=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="50%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="46%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>JACLYN, INC.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>By:</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="70%" NOSHADE COLOR=BLACK ALIGN=left>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>Name:</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>Title:</FONT></P>
</TD>
</TR>
</TABLE>

<P ALIGN=CENTER><FONT SIZE=2>A-1</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P ALIGN=CENTER><FONT SIZE=2><B>CERTIFICATE OF AMENDMENT <BR>
OF THE <BR>
CERTIFICATE OF INCORPORATION <BR>
OF <BR>
JACLYN, INC.</B></FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Corporation organized and existing under and by virtue of the General
Corporation Law of the State of Delaware does hereby certify: </FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The name
of the Corporation is Jaclyn, Inc.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Article
FOURTH of the Certificate of Incorporation of the Corporation (hereinafter
called the &#147;Certificate of Incorporation&#148;) is hereby amended by deleting
current section C.5. in its entirety and replacing it with the following:</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;5.
Without regard to any other provision of this Certificate of Incorporation,
each one (1) share of Common Stock of the Corporation, either issued and
outstanding or held by the Corporation as treasury stock (and including each
fractional share in excess of one (1) share held by any stockholder and each
fractional interest in excess of one (1) share held by the Corporation or its
agent pending disposition on behalf of those entitled thereto), immediately
prior to the time this amendment becomes effective shall be and is
automatically reclassified and changed (without any further act) into 250 fully
paid and nonassessable shares of Common Stock of the Corporation (or, with
respect to such fractional shares and interests, such lesser number of shares
and fractional shares or interests as may be applicable based upon such
250-for-1 ratio) without increasing or decreasing the amount of stated capital
or paid-in surplus of the corporation, provided that no fractional shares shall
be issued.&#148; </FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.
This amendment of the Certificate of Incorporation herein certified has been
duly adopted in accordance with the provisions of Sections 242 of the Delaware
General Corporation Law and shall become effective at 11:59 p.m., Eastern time,
on _________ __, 2008 </FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN
WITNESS WHEREOF, said Corporation has caused this certificate to be signed this
_____ day of ___________, 2008. </FONT></P>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="50%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
<TD WIDTH="46%" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>JACLYN, INC.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>By:</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="70%" NOSHADE COLOR=BLACK ALIGN=left>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>Name:</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=JUSTIFY><FONT SIZE=2>Title:</FONT></P>
</TD>
</TR>
</TABLE>

<P ALIGN=CENTER><FONT SIZE=2>A-2</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>


<P ALIGN=RIGHT><FONT SIZE=2><B>Annex B</B></FONT></P>

<P ALIGN=CENTER><FONT SIZE=2><B>[HOULIHAN SMITH &amp; COMPANY INC.
LETTERHEAD]</B></FONT></P>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR style="font-size:1px">
 <TD WIDTH="67%" VALIGN=TOP>
 <P ALIGN=JUSTIFY>&nbsp;</P>
 </TD>
 <TD WIDTH="32%" VALIGN=TOP>
 <P ALIGN=JUSTIFY>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=2>November 28, 2007</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=RIGHT><FONT SIZE=2><B><U>CONFIDENTIAL</U></B></FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=2>Special Committee to the
 Board of Directors</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=2>Jaclyn, Inc.</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=2>197 West Spring Valley Ave</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=2>Maywood, NJ 07607</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
</TABLE>

<P ALIGN=JUSTIFY><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Re:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fairness
Opinion &#150; Opinion of the Special Committee&#146;s Financial Advisor</B></FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>Dear Members of the Special Committee:</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>We understand that Jaclyn,
Inc. (&#147;Jaclyn&#148; or the &#147;Company&#148;), a Delaware corporation, intends to effect a
1-for-250 reverse stock split, which will then be immediately followed by a 250-for-1
forward stock split. Following the reverse/forward stock split, the Company
would expect to take action to delist its common stock with the American Stock
Exchange and deregister its common stock under the Securities Exchange Act of
1934, as amended (the &#147;Transaction&#148;). As a result of the Transaction, (a) each
shareholder owning less than 250 shares before the Transaction will receive
from the Company $10.21 in cash for each of such shareholder&#146;s pre-split shares
(the &#147;Transaction Consideration&#148;); and (b) each share of the common stock held
by a shareholder owning 250 or more shares will continue to represent one share
of the Company after completion of the Transaction.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>Houlihan Smith &amp;
Company, Inc. (&#147;Houlihan&#148;) has been engaged by the Special Committee to the
Board of Directors of Jaclyn (&#147;Special Committee&#148;) to render an opinion
(whether or not favorable) to the Special Committee as to whether, from a
financial point of view, the Transaction is fair to the unaffiliated
shareholders of the Company, which consists of those whose fractional shares
would be chased out as part of the Transaction and those who would remain as
shareholders (the &#147;Opinion&#148;).</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>In performing our analyses
and for purposes of our Opinion set forth herein, we have, among other things:</FONT></P>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR style="font-size:1px">
 <TD WIDTH="5%" VALIGN=TOP>
 <P ALIGN=JUSTIFY>&nbsp;</P>
 </TD>
 <TD WIDTH="5%" VALIGN=TOP>
 <P ALIGN=JUSTIFY>&nbsp;</P>
 </TD>
 <TD WIDTH="90%" VALIGN=TOP>
 <P ALIGN=JUSTIFY>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=2>a.</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=2>Reviewed the financial
 terms and conditions of the Transaction;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=2>b.</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=2>Reviewed publicly
 available financial information and other data with respect to Jaclyn,
 including the Form 10-K&#146;s for the fiscal years ended June 30, 2002 through
 2007 and the Form 10-Q&#146;s for each three months period ended from September
 30, 2005 to September 30, 2007, as well as certain other public filings made;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=2>c.</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=2>Review certain internal
 financial information and other data relating to the business and financial prospects
 of Jaclyn, including the fiscal year 2008 financial budget;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=2>d.</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=2>Conducted an on-site visit
 and held discussions with the senior management of Jaclyn (&#147;Management&#148;)
 regarding the historic, current, and future outlook of Jaclyn;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=2>e.</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=2>Discussed with Management
 details of a potential sale of non-operating assets consisting of a warehouse
 facility and adjacent parcels of land located in West New York (the &#147;Assets
 Held for Sale&#148;). Houlihan reviewed certain public filings to the potential
 sale and performed a site visit;</FONT></P>
 </TD>
 </TR>
</TABLE>

<P ALIGN=CENTER><FONT SIZE=2>B-1</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR style="font-size:1px">
 <TD WIDTH="5%" VALIGN=TOP>
 <P ALIGN=JUSTIFY>&nbsp;</P>
 </TD>
 <TD WIDTH="5%" VALIGN=TOP>
 <P ALIGN=JUSTIFY>&nbsp;</P>
 </TD>
 <TD WIDTH="90%" VALIGN=TOP>
 <P ALIGN=JUSTIFY>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=2>f.</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=2>Reviewed financial and
 operating information with respect to certain publicly-traded companies in
 the apparel and accessories industries, which we believe to be generally
 comparable to the business of the Company;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=2>g.</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=2>Reviewed the financial
 terms of certain recent business combinations in the apparel and accessories
 industries specifically;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=2>h.</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=2>Analyzed historic trading
 prices and volume in Jaclyn&#146;s shares;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=2>i.</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=2>Analyzed other recent
 reverse and forward split transactions and premiums paid in such transactions
 as fractional share consideration;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=2>j.</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=2>Reviewed the annual cost
 savings projected by Management achieved through delisting and deregistration
 as well as the cost savings achieved though the disposition of the Assets
 Held for Sale; and </FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=2>k.</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=2>Performed other financial
 studies, analyses and investigations, and considered such other information,
 as we deemed necessary or appropriate.</FONT></P>
 </TD>
 </TR>
</TABLE>

<P ALIGN=JUSTIFY><FONT SIZE=2>We have relied upon and
assumed, without independent verification, the accuracy, completeness and
reasonableness of the financial, legal, tax, and other information discussed
with or reviewed by us and have assumed such accuracy and completeness for
purposes of rendering an opinion. In addition, we have not made any independent
evaluation or appraisal of any of the assets or liabilities (contingent or
otherwise) of the Company, nor have we been furnished with any such evaluation
or appraisal. We have further relied upon the assurances and representation
from senior management of Jaclyn that they are unaware of any facts that would
make the information provided to us to be incomplete or misleading for the
purposes of our Opinion. We have no assumed responsibility for any independent
verification of this information nor have we assumed any obligation to verify
this information.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>Further, our Opinion is
necessarily based upon information made available to us, as well as the
economic, monetary, market, financial and other conditions as they exist as of
the date of this letter. We disclaim any obligation to advise the Special
Committee or any person of any change in any fact or matter affecting our
Opinion, which may come or be brought to our attention after the date of this
Opinion.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>Each of the analyses
conducted by Houlihan was carried out to provide a particular perspective of
the Transaction. Houlihan did not form a conclusion as to whether any
individual analysis, when considered in isolation, supported or failed to
support our Opinion as to the fairness of the Transaction o the unaffiliated
shareholders. Houlihan does not place any specific reliance or weight on any
individual analysis, but instead, concludes that it s analyses taken as a
whole, supports its conclusion and Opinion. Accordingly, Houlihan believes that
its analyses must be considered in its entirety and that selecting portions of
its analyses or the factors it considered, without considering all analyses and
factors collectively, could create an incomplete view of the processes
underlying the analyses performed by Houlihan in connection with the
preparation of the Opinion.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>Our Opinion does not
constitute a recommendation to proceed with the Transaction. This Opinion
relates solely to the question of the fairness to unaffiliated shareholders. We
are expressing no opinion as to the income tax consequences of the Transaction
to the unaffiliated shareholders.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>Houlihan, a Financial
Industry Regulatory Authority (FINRA) member, as part of its investment banking
services, is regularly engaged in the valuation of businesses and securities in
connection with mergers and acquisitions, private placements, bankruptcy,
capital restructuring, solvency analyses, stock buybacks, </FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>B-2</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P ALIGN=JUSTIFY><FONT SIZE=2>and valuations for corporate
and other purposes. Houlihan has no prior investment banking relationships with
the Company. Houlihan has received a non-contingent fee from Jaclyn relating to
its services in providing the Opinion. In an engagement letter dated June 26,
2007, Jaclyn has agreed to indemnify Houlihan with respect to Houlihan&#146;s services
relating to the Opinion.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>Based on and subject to the
foregoing, it is our opinion that, as of the date hereof, the Transaction
Consideration to be received by the unaffiliated shareholders of the Company,
which consists of those whose fractional shares would be cashed out as part of
the Transaction and those would remain as shareholders is fair, from a
financial point of view, to such shareholders.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>Very truly yours,</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>/s/ Houlihan Smith &amp;
Company, Inc.</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2>Houlihan Smith &amp;
Company, Inc.</FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>B-3</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=2><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P ALIGN=CENTER><FONT SIZE=2><B>[PROXY CARD]</B></FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=2><I><U>Front of Card</U></I></FONT></P>

<P ALIGN=CENTER><FONT SIZE=2><B>JACLYN,
INC.</B></FONT></P>



<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR style="font-size:1px">
 <TD WIDTH="100%" VALIGN=TOP>
 <P ALIGN=JUSTIFY>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2><B>PROXY FOR
 SPECIAL MEETING OF STOCKHOLDERS</B></FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>

 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2>THIS
 PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS</FONT></P>
 </TD>
 </TR>
</TABLE>



<P align=justify><FONT SIZE=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned
stockholder hereby appoints
JACLYN HARTSTEIN and LLOYD FRANK, and any one of them, the proxies of the
undersigned, with power of substitution, hereby revoking any proxy heretofore
given, to vote all shares which the undersigned is entitled to vote at the
Special Meeting of Stockholders of JACLYN, INC. (the &#147;Company&#148;) to be held at
the Company&#146;s offices, 197 West Spring Valley Road, Maywood, New Jersey 07607
at 9:00&nbsp;a.m. (local time) on ___________, __2008, and at any adjourn&#173;ments
and postponements thereof, with all powers the undersigned would possess if
personally present upon the matters set forth on the reverse side hereof.</FONT></P>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR style="font-size:1px">
 <TD WIDTH="50%" VALIGN=TOP>
 <P ALIGN=JUSTIFY>&nbsp;</P>
 </TD>
 <TD WIDTH="50%" VALIGN=TOP>
 <P ALIGN=JUSTIFY>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1><B>Date</B></FONT></P>
 </TD>
 </TR>

<TR>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <HR align=right SIZE=1 WIDTH="92%" NOSHADE COLOR=BLACK>
 </TD>
 </TR>

 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1><B>Signature</B>
</FONT></P>
 </TD>
 </TR>

<TR>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <HR align=right SIZE=1 WIDTH="85%" NOSHADE COLOR=BLACK>
 </TD>
 </TR>

 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1><B>Signature</B></FONT></P>
 </TD>
 </TR>

<TR>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <HR align=right SIZE=1 WIDTH="85%" NOSHADE COLOR=BLACK>
 </TD>
 </TR>

 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P align=justify><FONT SIZE=1><B>Note: Please date and sign exactly as your name appears
 hereon. If acting as an executor, administrator, trustee, guardian, etc., you
 should so indicate. If the signer is a corporation, please sign the full
 corporate name by a duly authorized officer. If shares are held jointly, each
 stockholder should sign.</B></FONT></P>
 </TD>
 </TR>
</TABLE>

<BR>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR style="font-size:1px">
 <TD WIDTH="100%" VALIGN=TOP>
 <P ALIGN=JUSTIFY>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>

 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=2><I><U>Back of Card</U></I></FONT></P>
 </TD>
 </TR>
</TABLE>

<P ALIGN=CENTER><FONT SIZE=1>The Board of Directors recommends a vote
&#147;For&#148; the following proposal:</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=1>1. Proposal to
amend the Company&#146;s Certificate of Incorporation to effect a 1-for-250 reverse
stock split, immediately followed by 250-for-1 forward stock split of the
Company&#146;s then outstanding shares, all as described in the Company&#146;s proxy
statement dated ____________, 2008 relating to the Special Meeting of
Stockholders to be held on _________________, 2008.</FONT></P>

<P ALIGN=CENTER><FONT SIZE=1>FOR _______________ AGAINST _______________
ABSTAIN _______________</FONT></P>

<P ALIGN=JUSTIFY><FONT SIZE=1><B>The
proxies are authorized to vote upon such other matters as may properly come
before the meeting. Each properly executed proxy will be voted as directed by
the stockholder(s). If no direction is given, such shares will be voted FOR
Proposal No. 1, and in the discretion of the proxies on any other matters that
may properly come before the meeting.</B></FONT></P>

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