<SUBMISSION>
<ACCESSION-NUMBER>0001019056-08-000508
<TYPE>DEFR14A
<PUBLIC-DOCUMENT-COUNT>3
<FILING-DATE>20080408
<DATE-OF-FILING-DATE-CHANGE>20080408
<EFFECTIVENESS-DATE>20080408
<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>DEFR14A
<ACT>34
<FILE-NUMBER>001-05863
<FILM-NUMBER>08745720
</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>DEFR14A
<SEQUENCE>1
<FILENAME>jaclyn_defr14a08.htm
<DESCRIPTION>DEFR14A
<TEXT>
<HTML>

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

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

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

<P ALIGN=CENTER><FONT SIZE=4><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 (Amendment No. 2)</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>&nbsp;</P>
</TD>
<TD WIDTH="95%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD COLSPAN="2" VALIGN=TOP>
<P><FONT SIZE=2>Filed by the
 Registrant <FONT FACE=WINGDINGS>x</FONT></FONT></P>
</TD>
</TR>
<TR>
<TD COLSPAN="2" VALIGN=TOP>
<P><FONT SIZE=2>Filed by a
 Party other than the Registrant <FONT FACE=WINGDINGS>o</FONT></FONT></P>
</TD>
</TR>
<TR>
<TD COLSPAN="2" VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD COLSPAN="2" VALIGN=TOP>
<P><FONT SIZE=2>Check the
 appropriate box: </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2 FACE=WINGDINGS>o</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Preliminary
 Proxy Statement </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2 FACE=WINGDINGS>o</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><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><FONT SIZE=2 FACE=WINGDINGS>x</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Definitive
 Proxy Statement </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2 FACE=WINGDINGS>o</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Definitive
 Additional Materials </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2 FACE=WINGDINGS>o</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Soliciting
 Material Pursuant to &#167; 240.14a-12 </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><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>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=5><B>JACLYN, INC.</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=2>(Name of Registrant as Specified In Its Charter)</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</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=2>(Name of Person(s) Filing Proxy Statement, if other than the
 Registrant)</FONT></P>
</TD>
</TR>
</TABLE>

<P><FONT SIZE=2>Payment of
Filing Fee (Check the appropriate box): </FONT></P>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style=font-size:1px>
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="90%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2 FACE=WINGDINGS>x</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<P><FONT SIZE=2>No fee
 required </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2 FACE=WINGDINGS>o</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>(1)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Title of
 each class of securities to which transaction applies: </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>(2)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Aggregate
 number of securities to which transaction applies: </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>(4)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Proposed
 maximum aggregate value of transaction: </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>(5)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Total fee
 paid: </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><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><FONT SIZE=2 FACE=WINGDINGS>o</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<P><FONT SIZE=2>Fee paid
 previously with preliminary materials. </FONT></P>
</TD>
</TR>

<TR>
<TD VALIGN=TOP colspan=2>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><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>
</TR>
<TR>
<TD VALIGN=TOP>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>(1)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Amount
 Previously Paid: </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>(2)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Form,
 Schedule or Registration Statement No.: </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>(3)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Filing
 Party: </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>(4)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Date Filed: </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><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 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 Avenue <BR>
Maywood, New Jersey 07607</B></FONT></P>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="70%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="30%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P align=right><FONT SIZE=2>April 7,
 2008 </FONT></P>
</TD>
</TR>
</TABLE>

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

<P><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
Avenue, Maywood, New Jersey 07607 at 9:00 a.m. (local time) on May 7, 2008. </FONT></P>

<P><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 proposals 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 proposals are approved, upon their
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><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
primary effect of the reverse stock split/forward stock split proposals 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 Securities Exchange Act of 1934, as amended, 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 onetime 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><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 proposals, including their 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><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 listed 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><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><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><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><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><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="50%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="50%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Sincerely, </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Robert
 Chestnov </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><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>
197 West Spring Valley Avenue <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 MAY 7, 2008</B></FONT></P>

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

<P><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 Avenue, Maywood,
New Jersey 07607 at 9:00 a.m. (local time) on May 7, 2008. The Special Meeting
is being held for the following purposes: </FONT></P>

<P><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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. </FONT></P>

<P><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
consider and vote upon a proposal to amend the Company&#146;s certificate of incorporation,
as amended to date, to effect, immediately after the Reverse Stock Split, 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>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
 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>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
 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>

<P><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><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Only
stockholders of record at the close of business on March 31, 2008 are entitled
to notice of, and to vote at, the Special Meeting or any adjournments or postponements
thereof. </FONT></P>

<P><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="50%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="6%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="41%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="3" VALIGN=TOP>
<P><FONT SIZE=2>By Order of
 the Board of Directors</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="3" VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<P><FONT SIZE=2>Jaclyn
 Hartstein</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2><I>Secretary </I></FONT></P>
</TD>
</TR>
</TABLE>

<P><FONT SIZE=2>April 7, 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><B>TABLE OF CONTENTS</B></FONT></P>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 width=100%>
 <TR style="font-size:1px">
 <TD WIDTH="88%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="6%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="4%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><B><A  HREF="#JI001_v1">SUMMARY TERM SHEET</A></B></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><A HREF="#JI001_v1"></A></FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>2</FONT></P>
 </TD>
 </TR>

<TR>
<TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>


 <TR>
 <TD VALIGN=TOP>
 <P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI002_v1">The Transaction</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><A HREF="#JI002_v1"></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-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI003_v1">Purpose of and Reasons for the
Transaction</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><A HREF="#JI003_v1"></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-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI004_v1">Effects of the
Transaction</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><A HREF="#JI004_v1"></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-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI005_v1">Special Committee and Board of
Directors&#146;
 Protections for Continuing Stockholders</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><A HREF="#JI005_v1"></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-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI006_v1">Special Committee and Board of
Directors
 Recommendations of the Transaction</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><A HREF="#JI006_v1"></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-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI007_v1">Reservation of
Rights</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><A HREF="#JI007_v1"></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-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI008_v1">Fairness of the
Transaction</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><A HREF="#JI008_v1"></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-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI009_v1">Advantages of the
Transaction</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><A HREF="#JI009_v1"></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-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI010_v1">Disadvantages of the
Transaction</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><A HREF="#JI010_v1"></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-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI011_v1">Potential Conflicts of Interests
of
 Officers, Directors, and Certain Affiliated Persons</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><A HREF="#JI011"></A></FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>9</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI012_v1">Vote Required for Approval of the
 Transaction At the Special Meeting</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><A HREF="#JI012_v1"></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-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI013_v1">Treatment of Beneficial Holders
 (stockholders holding shares in street name)</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><A HREF="#JI013"></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-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI014_v1">Determination of Stockholders of
Record</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><A HREF="#JI014_v1"></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-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI015_v1">Effectiveness of the
Transaction</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><A HREF="#JI015_v1"></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-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI016_v1">Financing for the
Transaction</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><A HREF="#JI016_v1"></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-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI017_v1">Recent Market Prices of the
Company&#146;s
 Common Stock</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><A HREF="#JI017_v1"></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-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI018_v1">No Appraisal or Dissenters&#146;
Rights</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><A HREF="#JI018_v1"></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-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI019_v1">Material Federal Income Tax
Consequences</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><A HREF="#JI019_v1"></A></FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>12</FONT></P>
 </TD>
 </TR>
<TR>
<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><B><A  HREF="#JI020_v1">QUESTIONS AND ANSWERS
 ABOUT THE TRANSACTION AND THE SPECIAL MEETING</A></B></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><A HREF="#JI020_v1"></A></FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>13</FONT></P>
 </TD>
 </TR>

<TR>
<TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>

 <TR>
 <TD VALIGN=TOP>
 <P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI021_v1">Where and when is the Special
Meeting?</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>13</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI022_v1">What am I being asked to vote on
at the
 Special Meeting?</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>13</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI023_v1">What is the purpose of the
Transaction?</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>13</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI024_v1">What does the deregistration of
our common
 stock mean?</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>13</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI025_v1">What are the Pink
Sheets?</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>15</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI026_v1">What will I receive in the
Transaction?</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>15</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI027_v1">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=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>15</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI028_v1">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=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>15</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI029_v1">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=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>15</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI030_v1">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=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>16</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI031_v1">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=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>16</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI032_v1">Who is entitled to vote at the
Special
 Meeting?</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>16</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI033_v1">How many shares were outstanding
on the
 Record Date?</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>16</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI034_v1">What is a &#147;quorum&#148; for
purposes of the
 Special Meeting?</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>16</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI035_v1">What vote is required to approve
the
 proposals?</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>16</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI036_v1">What will happen if the
Transaction is
 approved by the Company&#146;s stockholders?</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>17</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI037_v1">What will happen if the
Transaction is not
 approved?</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>17</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI038_v1">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=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>17</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI039_v1">What are the federal income tax
 consequences of the Transaction to me?</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>17</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI040_v1">Should I send in my certificates
now?</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>17</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="88%" VALIGN=TOP>
 <P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'>&nbsp;</P>
 </TD>
 <TD WIDTH="6%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="4%" VALIGN=BOTTOM>
 <P ALIGN=RIGHT>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI041_v1">What is the total cost of the
Transaction
 to the Company?</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>17</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI042_v1">Am I entitled to appraisal rights
in
 connection with the Transaction?</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>18</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI043_v1">How do I vote?</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>18</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI044_v1">Can I change my
vote?</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>18</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI045_v1">What does it mean if I get more
than one
 proxy card?</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>18</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI046_v1">How does the board of directors
recommend
 that I vote on the proposals?</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>18</FONT></P>
 </TD>
 </TR>
<TR>
<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><B><A  HREF="#JI047_v1">CAUTIONARY STATEMENT
 REGARDING FORWARD-LOOKING STATEMENTS</A></B></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><A HREF="#JI047_v1">&nbsp;</A></FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>19</FONT></P>
 </TD>
 </TR>

<TR>
<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><B><A  HREF="#JI048_v1">SPECIAL FACTORS</A></B></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><A HREF="#JI048"></A></FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>20</FONT></P>
 </TD>
 </TR>
<TR>
<TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>

 <TR>
 <TD VALIGN=TOP>
 <P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI049_v1">Purpose of and Reasons for the
Transaction</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><A HREF="#JI049"></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-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI050_v1">Special Committee and Board of
Directors&#146;
 Protections for Continuing Stockholders</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><A HREF="#JI050"></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-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI051_v1">Background of the
Transaction</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><A HREF="#JI051"></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-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI052_v1">Alternatives to the
Transaction</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><A HREF="#JI052"></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-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI053_v1">Effects of the
Transaction</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><A HREF="#JI053"></A></FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>34</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI054_v1">American Stock Exchange Listing;
Pink
 Sheets Listing</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><A HREF="#JI054"></A></FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>43</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI055_v1">Fairness of the
Transaction</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><A HREF="#JI055"></A></FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>43</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI056_v1">Fairness Opinion of Financial
Advisor</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><A HREF="#JI056"></A></FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>48</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI057_v1">Conduct of the Company&#146;s
Business After the
 Transaction</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><A HREF="#JI057"></A></FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>54</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI058_v1">Material Federal Income Tax
Consequences</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><A HREF="#JI058"></A></FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>55</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI059_v1">Potential Conflicts of Interests
of
 Officers, Directors, and Certain Affiliated Persons</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><A HREF="#JI059"></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-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI060_v1">Source of Funds and
Expenses</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><A HREF="#JI060"></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-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI061_v1">Stockholder
Approval</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><A HREF="#JI061"></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-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI062_v1">Effective Date</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><A HREF="#JI062"></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-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI063_v1">Termination of
Transaction</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><A HREF="#JI063"></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-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI064_v1">Exchange of Certificates and
Payment for
 Fractional Shares</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><A HREF="#JI064"></A></FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>61</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI065_v1">No Appraisal or Dissenters&#146;
Rights</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><A HREF="#JI065"></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-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI066_v1">Escheat Laws</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><A HREF="#JI066"></A></FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>62</FONT></P>
 </TD>
 </TR>
<TR>
<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><B><A  HREF="#JI067_v1">INFORMATION ABOUT THE
 COMPANY</A></B></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><A HREF="#JI067"></A></FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>64</FONT></P>
 </TD>
 </TR>
<TR>
<TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>

 <TR>
 <TD VALIGN=TOP>
 <P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI068_v1">Market Price of Common
Stock</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><A HREF="#JI068"></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-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI069_v1">Dividends</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><A HREF="#JI069"></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-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI070_v1">Stockholders</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><A HREF="#JI070"></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-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI071_v1">Stock Purchases</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><A HREF="#JI071"></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-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI072_v1">Directors and Executive
Officers</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><A HREF="#JI072"></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-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI073_v1">Security Ownership of Certain
Beneficial
 Owners</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><A HREF="#JI073"></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-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI074_v1">Stockholders
Agreement</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><A HREF="#JI074"></A></FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>69</FONT></P>
 </TD>
 </TR>
<TR>
<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><B><A  HREF="#JI075_v1">MEETING AND VOTING
 INFORMATION</A></B></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><A HREF="#JI075"></A></FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>70</FONT></P>
 </TD>
 </TR>
<TR>
<TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>

 <TR>
 <TD VALIGN=TOP>
 <P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI076_v1">Outstanding Voting Securities and
Voting
 Rights</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><A HREF="#JI076"></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-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI077_v1">Information Concerning Proxies;
Revocation
 of Proxies</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><A HREF="#JI077"></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-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI078_v1">Solicitation</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><A HREF="#JI078"></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-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI079_v1">Quorum and Certain Voting
Matters</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><A HREF="#JI079"></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-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI080_v1">Adjournment or
Postponement</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><A HREF="#JI080"></A></FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>70</FONT></P>
 </TD>
 </TR>
<TR>
<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><B><A  HREF="#JI081_v1">FINANCIAL INFORMATION</A></B></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><A HREF="#JI081"></A></FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>71</FONT></P>
 </TD>
 </TR>
<TR>
<TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>

 <TR>
 <TD VALIGN=TOP>
 <P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI082_v1">Summary Historical Financial
Information</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><A HREF="#JI082"></A></FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>71</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI083_v1">Pro Forma Consolidated Financial
Statements
 (Unaudited)</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><A HREF="#JI083"></A></FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>72</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><A HREF="#JI084_v1">Ratio of Earnings to Fixed
Charges</A></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><A HREF="#JI084"></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>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 width=100%>
 <TR style="font-size:1px">
 <TD WIDTH="88%" VALIGN=TOP>
 <P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'>&nbsp;</P>
 </TD>
 <TD WIDTH="6%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="4%" 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><B><A  HREF="#JI085_v1">STOCKHOLDER PROPOSALS</A></B></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><A HREF="#JI085"></A></FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>78</FONT></P>
 </TD>
 </TR>
<TR>
<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><B><A  HREF="#JI086_v1">WHERE YOU CAN FIND
 MORE INFORMATION</A></B></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><A HREF="#JI086"></A></FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>78</FONT></P>
 </TD>
 </TR>
<TR>
<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><B><A  HREF="#JI087_v1">DOCUMENTS INCORPORATED
 BY REFERENCE</A></B></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><A HREF="#JI087"></A></FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>79</FONT></P>
 </TD>
 </TR>
</TABLE>

<P ALIGN=CENTER><FONT SIZE=2>iii</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 Avenue <BR>
Maywood, New Jersey 07607</B></FONT></P>

<HR SIZE=1 WIDTH="40%" NOSHADE COLOR=BLACK ALIGN=CENTER>

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

<HR SIZE=1 WIDTH="40%" NOSHADE COLOR=BLACK ALIGN=CENTER>

<P><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 Avenue, Maywood, New Jersey 07607 at 9:00 a.m.
(local time) on May 7, 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 proposals described in the proxy statement. We are
mailing this proxy statement on or about April 7, 2008. </FONT></P>

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

<P><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
proposals 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. As a result of the Transaction: </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although
both the Reverse Stock Split and the Forward Stock Split will be voted on
separately, the Company will not effect either the Reverse Stock Split or the
Forward Stock Split unless both proposals are approved by stockholders. </FONT></P>

<P><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="JI001_v1"></A><FONT SIZE=2><B>SUMMARY
TERM SHEET</B></FONT></P>

<P><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><A NAME="JI002_v1"></A><FONT SIZE=2><B>The Transaction</B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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
immediately by a 250-for-1 forward stock split of our common stock.
Stockholders owning fewer than 250 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>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

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>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;See
&#147;Special Factors &#150; Effects of the Transaction&#148; beginning on page 34. </FONT></P>

<P><A NAME="JI003_v1"></A><FONT SIZE=2><B>Purpose of and Reasons for the Transaction </B></FONT></P>

<P><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 a Securities and Exchange Commission (the &#147;SEC&#148;) 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>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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, 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>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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 control audit requirements imposed by
Section 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>

<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>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The ability of our management to focus on long-term growth without an undue
emphasis on short-term financial results. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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>

<P><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><A NAME="JI004_v1"></A><FONT SIZE=2><B>Effects of the Transaction </B></FONT></P>

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

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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 listed on the OTCQX<SUP>SM </SUP>tier of
the pink sheets and at least two market makers having indicated their intent to
quote our common stock on the OTCQX<SUP>SM</SUP> tier when our common stock has
been listed. 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>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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 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>

<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>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our officers, directors and 10% stockholders will no longer be subject to the
reporting requirements of Section 16 of the Exchange Act or be subject to the
prohibitions against retaining short-swing profits in our shares of common
stock. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Holders of fewer than 250 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>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Holders of 250 or more 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>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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 57, and &#147;Information About the
Company-Stockholders Agreement&#148; beginning on page 69) will increase from
approximately 50.9% to approximately 58.2% as a result of the reduction of the
number of shares of common stock outstanding by approximately 306,319 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 as of January 31, 2008 from our transfer agent,
Continental Stock Transfer &amp; Trust Company, as to our record holders, and
from Broadridge Corporate Issuer Services, a division of 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. The share
range analysis from Broadridge Corporate Issuer Services reflects the share
ranges of 896,080 shares, or approximately 82%, of the 1,094,221 outstanding
shares of our common stock held in street name as of January 31, 2008. We have
assumed for purposes of determining ownership percentages and the reduction in
the number of shares outstanding following the Transaction that the remaining
198,141 street name shares also will be cashed out in the Transaction. However,
the ownership percentage and the reduction in the number of shares outstanding
following the Transaction may increase or decrease depending on purchases,
sales and other transfers of our shares of common stock by our stockholders
prior to the effective time of the Transaction, and the number of street name
shares that are actually cashed out in the Transaction. The ownership
percentage of our shares of common stock subject to the Stockholders Agreement
and the ownership percentage of the Continuing </FONT></P>

<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>

<P><FONT SIZE=2>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, and depending on the number of street name
shares that are actually cashed out in the Transaction. </FONT></P>

<P><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 34,&#148; &#147;Special
Factors &#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 43,&#148; and &#147;Special Factors &#151; Potential Conflicts
of Interests of Officers, Directors, and Certain Affiliated Persons&#148; beginning
on page 57.&#148; </FONT></P>

<P><A NAME="JI005_v1"></A><FONT SIZE=2><B>Special Committee and Board of Directors&#146; Protections
for Continuing Stockholders </B></FONT></P>

<P><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>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><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><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><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><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><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><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><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><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><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><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><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><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><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><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><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 </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><FONT SIZE=2>Directors, and the Board of
Directors&#146; approval of the Transaction, is also contingent upon our common
stock being listed on the OTCQX<SUP>SM</SUP> tier of the pink sheets and at
least two market makers having indicated their intent to quote our common stock
on the OTCQX<SUP>SM</SUP> tier once our common stock has been listed. 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><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;preparing
annual and quarterly financial reports; </FONT></P>

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

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

<P><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. </FONT></P>

<P><A NAME="JI006_v1"></A><FONT SIZE=2><B>Special Committee and Board of Directors
Recommendations of the Transaction </B></FONT></P>

<P><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</B>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>

<P><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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 </FONT></P>

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

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

<P><FONT SIZE=2>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>

<P><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 43. </FONT></P>

<P><A NAME="JI007_v1"></A><FONT SIZE=2><B>Reservation of Rights </B></FONT></P>

<P><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><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 43. </FONT></P>

<P><A NAME="JI008_v1"></A><FONT SIZE=2><B>Fairness of the Transaction </B></FONT></P>

<P><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><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>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
 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>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the small effect of
the proposed transaction
on the relative voting power of Continuing Stockholders, including the members
of the Stockholders Agreement. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
our business and operations are expected to continue substantially as presently
conducted. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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>

<P><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 43&#148; and &#147;Special Factors&#151; Fairness Opinion
of Financial Advisor&#148; beginning on page 48. </FONT></P>

<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>

<P><A NAME="JI009_v1"></A><FONT SIZE=2><B>Advantages of the Transaction </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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 and the Record Date, without incurring brokerage commissions. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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 approximately a 7.2% increase in the relative voting power of the members of
the Stockholders Agreement. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our business and operations are expected to continue substantially as present
conducted. </FONT></P>

<P><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 43. </FONT></P>

<P><A NAME="JI010_v1"></A><FONT SIZE=2><B>Disadvantages of the Transaction </B></FONT></P>

<P><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>

<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>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><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><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><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 sheets, and have instituted additional stockholder
  protections. See &#147;Special Factors--Special Committee and Board of Director
  Protections for Continuing Stockholders&#148; beginning on page 22. </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><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><FONT SIZE=2>we will no longer be
  listed on the American Stock Exchange and our common stock will, instead, be
  listed 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 </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>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1></FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>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=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><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><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><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><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><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><FONT SIZE=2>we estimate that the cost
  of payment to Cashed Out Stockholders, professional fees and other expenses
  will total approximately $3,728,000. 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><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><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><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><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 serve as directors 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><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><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><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><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) &#147;FOR&#148; 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><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 45 and &#147;Special Factors&#151; Special Committee and Board of
Directors&#146; Protections for Continuing Stockholders&#148; beginning on page 22. </FONT></P>

<P><A NAME="JI011_v1"></A><FONT SIZE=2><B>Potential Conflicts of Interests of Officers,
Directors, and Certain Affiliated Persons </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&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, 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 &#147;FOR&#148; the Transaction. If those shares are voted in
favor of the Transaction, the Transaction will be approved. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&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 not
change. The ownership </FONT></P>

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

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

<P><FONT SIZE=2>percentage of the shares of
our common stock subject to the Stockholders Agreement will increase from
approximately 50.9% to approximately 58.2% as a result of the reduction of the
number of shares of our common stock outstanding by approximately 306,319
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 purchases,
sales and other transfers of our shares of common stock by our stockholders
prior to the effective time of the Transaction, and depending on the number of
street name shares that are actually cashed out in the Transaction. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&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. After the Transaction,
the beneficial ownership of the executive officers and directors who are not
parties to the Stockholders Agreement will increase from approximately 1.6% to
approximately 1.8% as a result of the reduction of the number of shares of
common stock outstanding. </FONT></P>

<P><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 57 and &#147;Information About the
Company&#151; Stockholders Agreement&#148; beginning on page 69. </FONT></P>

<P><A NAME="JI012_v1"></A><FONT SIZE=2><B>Vote Required for Approval of the Transaction At the
Special Meeting </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&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. 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 each of the Reverse Stock Split proposal and the
Forward Stock Split proposal and, accordingly, to approve the Transaction. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&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 subject to
the Stockholders Agreement (1,257,643 shares, or approximately 50.9% of the
issued and outstanding shares of our common stock) &#147;FOR&#148; the Transaction.
Accordingly, if all those shares are voted in favor of the Transaction, the
Transaction will be approved. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;See
&#147;Special Factors&#151; Stockholder Approval&#148; beginning on page 60. </FONT></P>

<P><A NAME="JI013_v1"></A><FONT SIZE=2><B>Treatment of Beneficial Holders (stockholders holding
shares in street name) </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&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 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><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 34. </FONT></P>

<P><A NAME="JI014_v1"></A><FONT SIZE=2><B>Determination of Stockholders of Record </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In determining whether the number of our stockholders of record falls below 300
as a result of the Transaction, we will count stockholders of record in
accordance with Rule 12g5-1 under the </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><FONT SIZE=2>Exchange Act. Rule 12g5-1
provides, with certain exceptions, that in determining whether issuers,
including the Company, are subject to the registration provisions of the
Exchange Act, securities are considered to be &#147;held of record&#148; by each person
who is identified as the owner of such securities on the respective records of
security holders maintained by or on behalf of the issuers. However,
institutional custodians such as Cede &amp; Co. and other commercial depositories
are not considered a single holder of record for purposes of these provisions.
Rather, Cede &amp; Co.&#146;s and these depositories&#146; accounts are treated as the
record holder of shares. Based on information available to us, as of January
31, 2008 there were approximately 515 holders of record of our shares of common
stock. </FONT></P>

<P><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 34. </FONT></P>

<P><A NAME="JI015_v1"></A><FONT SIZE=2><B>Effectiveness of the Transaction </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;See
&#147;Special Factors&#151; Effective Date&#148; on page 60. </FONT></P>

<P><A NAME="JI016_v1"></A><FONT SIZE=2><B>Financing for the Transaction </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Based on information we have received as of January 31, 2008 from our transfer
agent, Continental Stock Transfer &amp; Trust Company, and from Broadridge
Corporate Issuer Services, a division of 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
$3,728,000. 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><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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><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 59. </FONT></P>

<P><A NAME="JI017_v1"></A><FONT SIZE=2><B>Recent Market Prices of the Company&#146;s Common Stock </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The closing prices 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, and on the Record Date,
were $6.00 per share and $8.58 per share, respectively. </FONT></P>

<P><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
64. </FONT></P>

<P><A NAME="JI018_v1"></A><FONT SIZE=2><B>No Appraisal or Dissenters&#146; Rights </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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><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 62. </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><A NAME="JI019_v1"></A><FONT SIZE=2><B>Material Federal Income Tax Consequences </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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><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
55. </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="JI020_v1"></A><FONT SIZE=2><B>QUESTIONS AND ANSWERS ABOUT THE <BR>
TRANSACTION AND THE SPECIAL MEETING</B></FONT></P>

<P><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><A NAME="JI021_v1"></A><FONT SIZE=2><B>Where
and when is the Special Meeting?</B></FONT></P>

<P><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 Avenue, Maywood, New Jersey 07607 at 9:00&nbsp;a.m. (local time) on
May 7, 2008.</FONT></P>

<P><A NAME="JI022_v1"></A><FONT SIZE=2><B>What
am I being asked to vote on at the Special Meeting?</B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
stockholders will consider and vote upon proposals 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&#151;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. Although
the Reverse Stock Split and the Forward Stock Split will be voted on
separately, the Company will not effect either the Reverse Stock Split or the
Forward Stock Split unless both proposals are approved by the stockholders of
the Company.</FONT></P>

<P><A NAME="JI023_v1"></A><FONT SIZE=2><B>What
is the purpose of the Transaction?</B></FONT></P>

<P><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
proposals include:</FONT></P>

<P><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;eliminating
significant ongoing costs and management time and effort of compliance with the
Sarbanes-Oxley Act and related regulations;</FONT></P>

<P><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;eliminating
significant ongoing costs and management time and effort associated with filing
documents under the Exchange Act with the SEC;</FONT></P>

<P><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;allowing
our management to focus on long-term growth and enhancing the long-term value
of shares of common stock; and</FONT></P>

<P><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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>

<P><A NAME="JI024_v1"></A><FONT SIZE=2><B>What
does the deregistration of our common stock mean?</B></FONT></P>

<P><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 </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><FONT SIZE=2>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, 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><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 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=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="95%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><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><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><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><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><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><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><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><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><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><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><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><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><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><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Completion
of the Transaction is also conditioned on our common stock being listed
on the OTCQX<SUP>SM </SUP>tier of the pink sheets and at least two market
makers having indicated their intent to quote our common stock on the OTCQX<SUP>SM</SUP>
tier when our common stock has been listed. 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=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="95%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><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><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><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><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><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><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><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=CENTER STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:0IN; '><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><A NAME="JI025_v1"></A><FONT SIZE=2><B>What
are the Pink Sheets?</B></FONT></P>

<P><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><A NAME="JI026_v1"></A><FONT SIZE=2><B>What
will I receive in the Transaction?</B></FONT></P>

<P><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><A NAME="JI027_v1"></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><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><A NAME="JI028_v1"></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><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><A NAME="JI029_v1"></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><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>

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<P><A NAME="JI030_v1"></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><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><A NAME="JI031_v1"></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><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><A NAME="JI032_v1"></A><FONT SIZE=2><B>Who
is entitled to vote at the Special Meeting?</B></FONT></P>

<P><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 March 31,
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><FONT SIZE=2><A NAME="JI033_v1"></A><B>How many
shares were outstanding on the Record Date?</B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At
the close of business on March 31, 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><A NAME="JI034_v1"></A><FONT SIZE=2><B>What
is a &#147;quorum&#148; for purposes of the Special Meeting?</B></FONT></P>

<P><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><A NAME="JI035_v1"></A><FONT SIZE=2><B>What
vote is required to approve the proposals?</B></FONT></P>

<P><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; each of the Reverse Stock Split proposal and the
Forward Stock Split proposal.</FONT></P>

<P><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>

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<P><A NAME="JI036_v1"></A><FONT SIZE=2><B>What
will happen if the Transaction is approved by the Company&#146;s stockholders?</B></FONT></P>

<P><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><A NAME="JI037_v1"></A><FONT SIZE=2><B>What
will happen if the Transaction is not approved?</B></FONT></P>

<P><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><A NAME="JI038_v1"></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><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><A NAME="JI039_v1"></A><FONT SIZE=2><B>What
are the federal income tax consequences of the Transaction to me?</B></FONT></P>

<P><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><A NAME="JI040_v1"></A><FONT SIZE=2><B>Should
I send in my certificates now?</B></FONT></P>

<P><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><A NAME="JI041_v1"></A><FONT SIZE=2><B>What
is the total cost of the Transaction to the Company?</B></FONT></P>

<P><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 that we have received as of January 31, 2008 from our
transfer agent, Continental Stock Transfer &amp; Trust Company, and from
Broadridge Corporate Issuer Services, a division of 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 $3,728,000. This amount includes approximately
$3,128,000 needed to cash out fractional shares, and approximately $600,000 of
legal, </FONT></P>

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

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<P><FONT SIZE=2>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><A NAME="JI042_v1"></A><FONT SIZE=2><B>Am
I entitled to appraisal rights in connection with the Transaction?</B></FONT></P>

<P><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><A NAME="JI043_v1"></A><FONT SIZE=2><B>How
do I vote?</B></FONT></P>

<P><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><A NAME="JI044_v1"></A><FONT SIZE=2><B>Can
I change my vote?</B></FONT></P>

<P><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>

<P><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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
Avenue, Maywood, New Jersey 07607); or</FONT></P>

<P><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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>

<P><A NAME="JI045_v1"></A><FONT SIZE=2><B>What
does it mean if I get more than one proxy card?</B></FONT></P>

<P><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><A NAME="JI046_v1"></A><FONT SIZE=2><B>How
does the board of directors recommend that I vote on the proposals?</B></FONT></P>

<P><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 proposals to approve the Transaction.</FONT></P>

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

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<P ALIGN=CENTER><A NAME="JI047_v1"></A><FONT SIZE=2><B>CAUTIONARY STATEMENT REGARDING
FORWARD-LOOKING STATEMENTS</B></FONT></P>

<P><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; 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>

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<P ALIGN=CENTER><A NAME="JI048_v1"></A><FONT SIZE=2><B>SPECIAL FACTORS</B></FONT></P>

<P><A NAME="JI049_v1"></A><FONT SIZE=2><B>Purpose
of and Reasons for the Transaction</B></FONT></P>

<P><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><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><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Reduced Costs and Expenses.</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><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 STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:0IN; '><FONT SIZE=2>20</FONT></P>

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<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="34%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="10%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="12%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="11%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="12%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P>&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>
<P ALIGN=CENTER><FONT SIZE=2><B>Actual 2007</B><BR>
  <B>Expenses</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>Projected 2008</B><BR>
  <B>Expenses</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>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>
<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>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>140,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM nowrap>
<P><FONT SIZE=2>(1)&nbsp;&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><FONT SIZE=2>(2)</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><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><B>Total</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
</TABLE>
<BR>
<HR NOSHADE SIZE=1 WIDTH=120 COLOR=BLACK ALIGN=LEFT>
<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><FONT SIZE=2>(2) The SEC has proposed,
but has not yet formally adopted, a rule that would 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>

<P><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 reflect, among other things: </FONT></P>

<P><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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>

<P><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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>

<P><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
reduction in directors&#146; fees by reducing the size of our Board of Directors
from nine to seven members; </FONT></P>

<P><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a
reduction in legal fees associated with securities law compliance of
approximately $25,000; and </FONT></P>

<P><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 listed on the OTCQX<SUP>SM </SUP>tier of the pink sheets. </FONT></P>

<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><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 in printing and other related costs of
distributions to stockholders. </FONT></P>

<P><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 as of January 31, 2008 furnished to us by our transfer agent, as well as
information we have received as of January 31, 2008 regarding the holdings of
beneficial owners of our common stock held in &#147;street name,&#148; we estimate that
there are approximately 360 holders of record of fewer than 250 shares and
approximately 510 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><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><A NAME="JI050_v1"></A><FONT SIZE=2><B>Special Committee and Board of Directors&#146; Protections
for Continuing Stockholders </B></FONT></P>

<P><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 continuance of certain corporate
governance and other stockholder protections following the Transaction,
including: </FONT></P>

<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 COLSPAN=2>
<P>&nbsp;</P>
</TD>
<TD WIDTH="95%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><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>
<TR>
<TD VALIGN=TOP COLSPAN=2>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><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 COLSPAN=2>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>the public dissemination
  of press releases for material events; </FONT></P>
</TD>
</TR>
<TR>

<TD VALIGN=TOP COLSPAN=2>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><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 COLSPAN=2>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><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 COLSPAN=2>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>holding annual
  stockholders&#146; meetings; and </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP COLSPAN=2>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><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><FONT SIZE=2>&nbsp;&nbsp;&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><FONT SIZE=2>&nbsp;&nbsp;&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 listed on the OTCQX<SUP>SM </SUP>tier of the
pink sheets and that at least two market makers have indicated their intent to
quote our common stock on the OTCQX<SUP>SM</SUP> tier when it has been listed.
The pink sheets is a tiered listing service that offers a 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 colspan=2>
<P>&nbsp;</P>
</TD>
<TD WIDTH="90%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>preparing annual and
  quarterly financial reports; </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP COLSPAN=2>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>performing annual audits; </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP COLSPAN=2>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><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 </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>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="5%" VALIGN=TOP COLSPAN=2>
<P>&nbsp;</P>
</TD>
<TD WIDTH="90%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>

<TD VALIGN=TOP COLSPAN=2>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>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 COLSPAN=2>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP COLSPAN=2>
<P ALIGN="CENTER"><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><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><A NAME="JI051_v1"></A><FONT SIZE=2><B>Background of the Transaction </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&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 proposed, but has yet
not formally adopted, a rule to delay for one year auditors&#146; attestation
reports for smaller reporting companies (companies with a public float of less
than $75,000,000), which would include the Company. 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. If the SEC delays the auditors&#146;
reports attestation requirement for smaller public companies for one year, 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><FONT SIZE=2>&nbsp;&nbsp;&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 other professional advisors, 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><FONT SIZE=2>&nbsp;&nbsp;&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
</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><FONT SIZE=2>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><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><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>&nbsp;</P>
</TD>
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="90%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN="CENTER"><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN="CENTER"><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN="CENTER"><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN="CENTER"><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN="CENTER"><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN="CENTER"><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><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><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
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 </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><FONT SIZE=2>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><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><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><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 </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><FONT SIZE=2>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><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><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 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 </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><FONT SIZE=2>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><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><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 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 </FONT></P>

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

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<P><FONT SIZE=2>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><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><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,
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>&nbsp;</P>
</TD>
<TD WIDTH="95%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>The common stock of the Company must be listed on
  the OTCQX<SUP>SM</SUP> tier of pink sheets and at least two market makers must
  have indicated their intent to quote our common stock on the OTCQX<SUP>SM</SUP>
  tier when it has been listed. </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><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><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>
</TABLE>

<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>
<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="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><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><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><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><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><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><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><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><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><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><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><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><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><FONT SIZE=2>Annual meetings of
  stockholders must be held.</FONT></P>
</TD>
</TR>
</TABLE>

<P><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><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 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><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 </FONT></P>

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

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<P><FONT SIZE=2>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><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>

<P><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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>

<P><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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>

<P><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the limited trading volume and liquidity of the Company&#146;s shares of common
stock; </FONT></P>

<P><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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>

<P><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the business and operations of the Company are expected to continue
substantially as presently conducted; </FONT></P>

<P><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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>

<P><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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>

<P><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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>

<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>

<P><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&#151;Special
Committee and Board of Directors&#146; Protections for Continuing Stockholders.&#148;</FONT></P>

<P><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><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><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
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 </FONT></P>

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

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<P><FONT SIZE=2>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><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 considered by and
the 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><FONT SIZE=2><B>A<A NAME="JI052_v1"></A>lternatives to the Transaction</B></FONT></P>

<P><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 our
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><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 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><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 the Record Date, there were
approximately 273 holders of record owning 99 or fewer shares of our common </FONT></P>

<P ALIGN=CENTER STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:0IN; '><FONT SIZE=2>33</FONT></P>

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<P><FONT SIZE=2>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><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 provide 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><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><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><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Maintaining
the Status Quo.</B> 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. 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><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B>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><A NAME="JI053_v1"></A><FONT SIZE=2><B>Effects of the Transaction </B></FONT></P>

<P><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. In
determining whether the number of our stockholders of record falls below 300 as
a result of the Transaction, we will count stockholders of record in accordance
with Rule 12g5-1 under the Exchange Act. Rule 12g5-1 provides, with certain
exceptions, that in determining whether issuers, including the </FONT></P>

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

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<P><FONT SIZE=2>Company, are
subject to the registration provisions of the Exchange Act, securities are
considered to be &#147;held of record&#148; by each person who is identified as the owner
of such securities on the respective records of security holders maintained by
or on behalf of the issuers. However, institutional custodians such as Cede
&amp; Co. and other commercial depositories are not considered a single holder
of record for purposes of these provisions. Rather, Cede &amp; Co.&#146;s and these
depositories&#146; accounts are treated as the record holder of our shares. Based on
information available to us as of January 31, 2008, we expect that as a result
of the Transaction the number of our stockholders of record would be reduced
from approximately 515 to approximately 155, and we estimate that there are
approximately 510 holders in street name who own fewer than 250 shares of our
common stock whose shares would be cashed out in the Transaction. </FONT></P>

<P><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B>We
also believe the Transaction will have the following additional effects: </FONT></P>

<P><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>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 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><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>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 list our
common stock on the OTCQX<SUP>SM</SUP> tier of the pink sheets and at least two
market makers must have indicated their intent to quote our common stock on the
OTCQX<SUP>SM</SUP> tier when it has been listed. 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 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><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>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 </FONT></P>

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

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<P><FONT SIZE=2>Exchange rules
were 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 list
our common stock on the OTCQX<SUP>SM</SUP> tier of the pink sheets and at least
two market makers must have indicated their intent to quote our common stock on
the OTCQX<SUP>SM</SUP> tier once our common stock has been listed, 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><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Financial
Effect of the Transaction.</I></B> Based on information we have received
as of January 31, 2008 from our transfer agent, Continental Stock Transfer
&amp; Trust Company, and from Broadridge Corporate Issuer Services, a division
of Broadridge Financial Solutions, Inc., we estimate that the cost of payment
to Cashed Out Stockholders, professional fees and other expenses will total
approximately $3,728,000. 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><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>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><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Aggregate
Stockholders&#146; Equity.</I></B>
Our aggregate stockholders&#146; equity will decrease from approximately $20,046,000
as of December 31, 2007 to approximately $16,848,000 on a pro forma basis
(after giving effect to payment of Transaction Costs in the amount of
$3,244,000, consisting of approximately $3,128,000 for the cash out of the shares
of Cashed Out Stockholders, and approximately $116,000 representing the amount
of other Transaction Costs that have not been included in our historical
financial statements). </FONT></P>

<P><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Book
Value Per Share.</I></B>
Our book value per share of our common stock will decrease from $7.95 as of
December 31, 2007 to approximately $7.61 per share of common stock on a pro
forma basis (after giving effect to payment of Transaction Costs in the amount
of $3,244,000). </FONT></P>

<P><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>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 December 31, 2007 net earnings per fully diluted
share for the six-months then ended were $.36. On a pro forma basis (after
giving effect to the payment of the estimated $285,000 and $122,000 for
additional interests costs for the twelve-month period ended June 30, 2007 and
the six-month period ended December 31, 2007, respectively, in the
Transaction), net earnings per fully diluted share for those periods would have
been $0.25 and $0.50, respectively. </FONT></P>

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<P><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 and Treatment of Multiple
Accounts.</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><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
number of shares held by a stockholder of record in two or more separate but
identical record holder accounts will be combined to determine the number of
shares of our common stock owned by that holder and, accordingly, whether the
holder will be a Cashed Out Stockholder or a Continuing Stockholder. Shares
held by record holders in joint accounts, such as by a husband and wife, and
shares held in similar capacities will be treated separately, and will not be
combined with individual accounts in determining whether a holder will be a
Cashed Out Stockholder or a Continuing Stockholder. </FONT></P>

<P><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 than registered stockholders
for processing the Transaction. As a result, a stockholder owning 250 or more
shares of common stock may nevertheless have those shares cashed out if the
stockholder holds shares in a combination of street name accounts and record
holder accounts, or holds shares in separate accounts 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 account prior to the effective date.
Conversely, if you hold an account with 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 a record holder
account in your own name so that you will be a record owner of the shares. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Examples
of the effect of the Transaction on both Cashed Out Stockholders and Continuing
Stockholders are set forth below under the caption &#147;Effects of the Transaction--Examples.&#148;
</FONT></P>

<P><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><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>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 </FONT></P>

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

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<P><FONT SIZE=2>comply with
the requirements of the proxy rules and to file proxy statements under Section
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><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>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 list our
common stock on the OTCQX<SUP>SM</SUP> tier of the pink sheets and at least two
market makers must have indicated their intent to quote our common stock on the
OTCQX<SUP>SM</SUP> tier once our common stock has been listed. 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><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>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><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
part of the corporate governance and other stockholder protections adopted by
the Special Committee and the Board, we are required to list our common stock
on the OTCQX<SUP>SM</SUP> tier of the pink sheets and at least two market
makers must have indicated their intent to quote our common stock on the OTCQX<SUP>SM</SUP>
tier once our common stock has been listed, 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><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Cost
Savings. </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 were 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. As we noted above, we ultimately expect to realize
recurring annual cost savings of approximately $500,000 as a result of the
Transaction. Our Continuing Stockholders, including our affiliated
stockholders, will be the beneficiaries of these savings. See &#147;Special
Factors&#151;Purpose and Reasons for the Transaction.&#148; </FONT></P>

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

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

<P><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>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 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><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>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><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Aggregate
Stockholders&#146; Equity.</I></B>
Our aggregate stockholders&#146; equity will decrease from approximately $20,046,000
as of December 31, 2007 to approximately $16,848,000 on a pro forma basis
(after giving effect to payment of Transaction Costs in the amount of
$3,244,000). </FONT></P>

<P><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Book
Value Per Share.</I></B>
Our book value per share of our common stock will decrease from $7.95 as of
December 31, 2007 to approximately $7.61 per share of common stock on a pro
forma basis (after giving effect to payment of Transaction Costs in the amount
of $3,244,000). </FONT></P>

<P><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>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 December 31, 2007 net earnings per fully diluted
share for the six-months then ended were $.36. On a pro forma basis (after
giving effect to the payment of the estimated $285,000 and $122,000 for
additional interests costs for the twelve-month period ended June 30, 2007 and
the six-month period ended December 31, 2007, respectively, in the
Transaction), net earnings per fully diluted share for those periods would have
been $0.25 and $0.50, respectively. </FONT></P>

<P><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 voting 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 </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><FONT SIZE=2>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><FONT SIZE=2>&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 remain the
same. The ownership percentage of the shares of our common stock subject to the
Stockholders Agreement will increase from approximately 50.9% to approximately
58.2% as a result of the reduction of the number of shares of our common stock
outstanding by up to 306,319 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 that we received as of
January 31, 2008 from our transfer agent, Continental Stock Transfer &amp;
Trust Company, and a share range analysis we received from Broadridge Corporate
Issuer Services, a division of 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. The share range
analysis from Broadridge Corporate Issuer Services reflects the share ranges of
896,080 shares, or approximately 82%, of the 1,094,221 outstanding shares of
our common stock held in street name as of January 31, 2008. We have assumed
for purposes of determining ownership percentages and the reduction in the
number of shares outstanding following the Transaction that the remaining
198,141 street name shares also will be cashed out in the Transaction. However,
the ownership percentage and the reduction in the number of shares outstanding
following the Transaction may increase or decrease depending on purchases,
sales and other transfers of our shares of common stock by our stockholders
prior to the effective time of the Transaction, and the number of street name
shares that are actually cashed out in 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, and depending on the number of street name shares that are
actually cashed out in the Transaction. </FONT></P>

<P><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>

<P><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Richard
Chestnov, a director of the Company who is also a party to the Stockholders
Agreement, holds 33,050 shares of our common stock directly, and 31,223 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. Mr.
Chestnov will retain these shares after the Transaction. </FONT></P>

<P><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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>

<P><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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>

<P><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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>

<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><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;After
the Transaction, the beneficial ownership of the executive officers and
directors who are not parties to the Stockholders Agreement will increase from
approximately 1.6% to approximately 1.8% as a result of the reduction of the
number of shares of common stock outstanding. </FONT></P>

<P><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><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 were 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. As we noted above, we ultimately expect to realize
recurring annual cost savings of approximately $500,000 as a result of the
Transaction. Our Continuing Stockholders, including our affiliated
stockholders, will be the beneficiaries of these savings. See &#147;Special
Factors&#151;Purpose and Reasons for the Transaction.&#148; </FONT></P>

<P><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>

<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>


<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="40%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="57%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE="2"><B><I>Hypothetical Scenario</I></B> </FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE="2"><B><I>Result</I></B> </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="45%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="9%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
</TR>

<tr>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</tr>
<TR>
<TD VALIGN=TOP>
<P><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. Smith holds no other shares.</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><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 VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Ms. Jones holds 100 shares
 of our common stock in a brokerage account at the effective time of the
 Transaction. Ms. Jones holds no other shares.</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><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. 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 VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><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 VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><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 VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><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>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Ms. Wilson holds 200
 shares in one record holder account and 200 shares in another identical
 record holder account at the effective time of the Transaction.</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Ms. Wilson will continue
 to hold 400 shares of common stock after the reverse stock split.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Mr. Jefferson and Ms.
 Jefferson each hold 250 shares in separate, individual record holder
 accounts, but also hold 100 sharers of common stock jointly in another record
 holder account.</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Shares held in joint
 accounts will not be added to shares held individually in determining whether
 a stockholder will be a Cashed Out Stockholder or a Continuing Stockholder.
 Accordingly, Mr. Jefferson and Ms. Jefferson will each continue to own 250
 shares of common stock after the Transaction in their separate accounts, but
 will receive $1,021, without interest, for the shares held in their joint
 account.</FONT></P>
</TD>
</TR>
</TABLE>

<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><A NAME="JI054_v1"></A><FONT SIZE=2><B>American Stock Exchange Listing; Pink Sheets
Listing </B></FONT></P>

<P><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><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;However,
in order to ensure that our Continuing Stockholders will have 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 listed on the OTCQX<SUP>SM</SUP> tier of the pink sheets and at
least two market makers must have indicated their intent to quote our common
stock on the OTCQX<SUP>SM</SUP> tier once our common stock has been listed. The
pink sheets is a tiered listing service that offers a 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="2%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="95%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>preparing
 quarterly and annual financial reports; </FONT></P>
</TD>
</TR>

<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>

<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>performing
 annual audits; </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><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><A NAME="JI055_v1"></A><FONT SIZE=2><B>Fairness of the Transaction </B></FONT></P>

<P><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><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Substantive Fairness</B>. 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
</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><FONT SIZE=2>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><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 rules were 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><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><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 listed on the OTCQX<SUP>SM</SUP> tier of the pink sheets. </FONT></P>

<P><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, an approximately 70% premium
over the $6.00 closing sales price of common stock on December 4, 2007 and an
approximately 19% premium over the $8.58 closing sales price of common stock on
the Record Date. </FONT></P>

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

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<P><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Going
Concern Value.</I> In determining the cash amount to be
paid to Cashed Out Stockholders in the Transaction, the Special Committee and
the Board of Directors considered the valuations of the Company&#146;s common stock
on a going concern basis as presented in Houlihan&#146;s valuation report. The
guideline public company method, comparable transactions method and discounted
cash flow method used by Houlihan to assess the fairness of the $10.21 per
share to be paid to Cashed Out Stockholders and to our unaffiliated Continuing
Stockholders, each as described in more detail below under &#147;Special
Factors&#151;Fairness Opinion of Financial Advisor,&#148; were performed by Houlihan on a
going concern basis. As is also noted below in the discussion under &#147;Special
Factors&#151;Fairness Opinion of Financial Advisor-Fair Value Summary,&#148; Houlihan
weighted each of these methods equally in arriving at an implied common equity
value per share range of $8.89-$10.88 per share of common stock. The Special
Committee and the Board have relied upon Houlihan&#146;s going concern analyses and
Houlihan&#146;s written fairness opinion to the effect that 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. </FONT></P>

<P><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net
Book Value and Liquidation Value</I>. While 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 December 31, 2007 was
$7.95, and the cash out price of $10.21 represents a $2.26, or 28%, 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><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><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Disadvantages of the Transaction</B></I>.
The Special Committee and the Board of Directors also considered the
disadvantages of the Transaction, including that: </FONT></P>

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<TR style="font-size:1px">
<TD WIDTH="2%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="95%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2> &#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><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. As a result 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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2> &#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><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 listed 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 </FONT></P>
</TD>
</TR>
</TABLE>

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<TR style="font-size:1px">
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="90%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>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 our common stock be
 listed on the OTCQX<SUP>SM</SUP> tier of the pink sheets and that at least
 two market makers have indicated their intent to quote our common stock on
 the OTCQX<SUP>SM</SUP> tier once our common stock has been listed, 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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2> &#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><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>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><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 $3,728,000. 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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><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 we have more than 300 stockholders, then we must resume reporting
 pursuant to Section 15(d) of the Exchange Act. </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><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 serve as directors after the Transaction has been
 effected. </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><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>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>See &#147;Special
 Factors&#151;Effects of the Transaction&#148;.</FONT></P>
</TD>
</TR>
</TABLE>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Procedural Fairness.</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 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><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><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><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 of January
31, 2008 as to our record holders, and Broadridge Corporate Issuer Services, a
division of 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 306,319 shares out of
2,468,614 issued and outstanding shares of our common stock (consisting of an
estimated 20,756 shares owned by record holders and up to an estimated 285,563
owned by holders of shares in street name) will be eliminated as a result of
the Transaction. The Special Committee also noted that on the Record Date 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 that after
the Transaction, we expect those shares will represent approximately 58.2% of
our issued and outstanding shares, subject to change based on the actual number
of shares that would be purchased in the Transaction. </FONT></P>

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<P><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><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><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><A NAME="JI056_v1"></A><FONT SIZE=2><B>Fairness Opinion of Financial Advisor </B></FONT></P>

<P><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 B. </FONT></P>

<P><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 </FONT></P>

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

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<P><FONT SIZE=2>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><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><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><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 Houlihan: </FONT></P>

<P><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
 reviewed the financial terms and
conditions of the Transaction; </FONT></P>

<P><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
 reviewed the Company&#146;s publicly
available financial information and other data with respect to the Company,
including the Company&#146;s Form 10-Ks for the fiscal years ended June 30, 2002 to
June 30, 2007 and quarterly reports on Form 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>

<P><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
 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>

<P><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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>

<P><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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>

<P><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;reviewed
the financial terms of certain recent business combinations in the apparel and
accessories industries specifically; </FONT></P>

<P><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;analyzed
historic trading prices and volume in the Company&#146;s common stock; </FONT></P>

<P><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;analyzed
other recent reverse and forward split transactions and premiums paid in such
transactions as fractional share consideration; </FONT></P>

<P><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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>

<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><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;reviewed
other financial studies, analyses and investigations, and considered such other
information as Houlihan deemed necessary or appropriate. </FONT></P>

<P><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><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 STYLE='MARGIN-RIGHT:0IN; MARGIN-LEFT:0IN'><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 one-year period ended
November 16, 2007: </FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px" >
<TD WIDTH="32%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="34%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="32%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP >
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP >
<P ALIGN=CENTER><FONT SIZE=2><B>Historical Price and Volume Analysis (1)</B></FONT></P>
</TD>
<TD VALIGN=TOP >
<P><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="26%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="8%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="8%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="8%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="8%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="8%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="8%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<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>Current</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>1 Week<BR>
  Average</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>1 Month<BR>
  Average</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>3 Month<BR>
  Average</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>6 Month<BR>
  Average</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>1 Year<BR>
  Average</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><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>
<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>
<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 bgcolor="#eaf9e8">
<TD VALIGN=BOTTOM >
<P><FONT SIZE=2>Average
  Price</FONT></P>
</TD>
<TD VALIGN=BOTTOM >
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM >
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM >
<P ALIGN=CENTER><FONT SIZE=2>$6.25</FONT></P>
</TD>
<TD VALIGN=BOTTOM >
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM >
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM >
<P ALIGN=CENTER><FONT SIZE=2>&nbsp;&nbsp;$5.39</FONT></P>
</TD>
<TD VALIGN=BOTTOM >
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM >
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM >
<P ALIGN=CENTER><FONT SIZE=2>$5.89</FONT></P>
</TD>
<TD VALIGN=BOTTOM >
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM >
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM >
<P ALIGN=CENTER><FONT SIZE=2>&nbsp;&nbsp;$7.54</FONT></P>
</TD>
<TD VALIGN=BOTTOM >
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM >
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM >
<P ALIGN=CENTER><FONT SIZE=2>$8.95</FONT></P>
</TD>
<TD VALIGN=BOTTOM >
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM >
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM >
<P ALIGN=CENTER><FONT SIZE=2>$10.08</FONT></P>
</TD>
<TD VALIGN=BOTTOM >
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>Average
  Daily Volume</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>2,200</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>12,200</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>8,771</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>10,006</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>6,517</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>&nbsp;&nbsp;8,783</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
</TABLE>

<P><HR NOSHADE WIDTH=120 COLOR=black size=1 ALIGN=LEFT>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px" >
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="95%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>(1)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><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><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><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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><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 </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><FONT SIZE=2>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><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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><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 twelve month period ended September 30, 2007 to calculate the
enterprise value based upon the comparable transactions method. </FONT></P>

<P STYLE='MARGIN-RIGHT:0IN; MARGIN-LEFT:0IN'><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="9%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="21%" VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="7%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="25%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="9%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="9%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1><B>Announced<BR>
  Date</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER STYLE='MARGIN-LEFT:8.65PT;   TEXT-INDENT:-8.65PT'><FONT SIZE=1><B>Target/Issuer</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=1><B>Total<BR>
  Transac-<BR>
  tion<BR>
  Amount</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><B>Industry Classification</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=1><B>Implied</B><FONT SIZE=1><BR>
  <B>Enterprise</B><BR>
  <B>Value/EBITDA</B></FONT></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=1><B>Implied</B><FONT SIZE=1><BR>
  <B>Enterprise</B><BR>
  <B>Value/EBIDTA</B></FONT></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=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD 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>
<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>
<TD 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>
<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>
<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 BGCOLOR="#EAF9E8">
<TD VALIGN=BOTTOM >
<P><FONT SIZE=1>10/03/2003</FONT></P>
</TD>
<TD VALIGN=BOTTOM >
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM >
<P ><FONT   SIZE=1>Royal Robbins Inc.</FONT></P>
</TD>
<TD VALIGN=BOTTOM >
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM >
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM >
<P ALIGN=center><FONT SIZE=1>$16.5</FONT></P>
</TD>
<TD VALIGN=BOTTOM >
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM >
<P><FONT SIZE=1>Women&#146;s, Misses&#146;, and
  Juniors&#146; Apparel</FONT></P>
</TD>
<TD VALIGN=BOTTOM >
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM >
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM >
<P ALIGN=RIGHT><FONT SIZE=1>10.3x&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM >
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM >
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM >
<P ALIGN=RIGHT><FONT SIZE=1>11.9x&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM >
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>10/02/2003</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=1>GFSI Holdings Inc.</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=center><FONT SIZE=1>$268.6</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>Women&#146;s, Misses&#146;, and
  Juniors&#146; Apparel</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>9.5x&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>11.2x&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR BGCOLOR="#EAF9E8">
<TD VALIGN=TOP >
<P><FONT SIZE=1>07/07/2003</FONT></P>
</TD>
<TD VALIGN=TOP >
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP >
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=1>Nautica Enterprises, Inc.</FONT></P>
</TD>
<TD VALIGN=TOP >
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP >
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP >
<P ALIGN=center><FONT SIZE=1>$650.0</FONT></P>
</TD>
<TD VALIGN=TOP >
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP >
<P><FONT SIZE=1>Boys&#146; Apparel, Girls&#146;
  Apparel, Women&#146;s, Misses&#146;, and Juniors&#146; Apparel</FONT></P>
</TD>
<TD VALIGN=TOP >
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP >
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP >
<P ALIGN=RIGHT><FONT SIZE=1>6.8x&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP >
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP >
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP >
<P ALIGN=RIGHT><FONT SIZE=1>10.5x&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP >
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>07/10/2001</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=1>Full Line Distributors, Inc.</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=center><FONT SIZE=1>$26.0</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>Girls&#146; Apparel, Women&#146;s,
  Misses&#146;, and Juniors&#146; Apparel</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>8.2x&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>10.0x&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR BGCOLOR="#EAF9E8">
<TD VALIGN=BOTTOM >
<P><FONT SIZE=1>06/04/2004</FONT></P>
</TD>
<TD VALIGN=BOTTOM >
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM >
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=1>The First Years Inc.</FONT></P>
</TD>
<TD VALIGN=BOTTOM >
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM >
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM >
<P ALIGN=center><FONT SIZE=1>$170.1</FONT></P>
</TD>
<TD VALIGN=BOTTOM >
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM >
<P><FONT SIZE=1>Girls&#146; Apparel</FONT></P>
</TD>
<TD VALIGN=BOTTOM >
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM >
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM >
<P ALIGN=RIGHT><FONT SIZE=1>8.0x&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM >
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM >
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM >
<P ALIGN=RIGHT><FONT SIZE=1>9.5x&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM >
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>06/13/2005</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=1>CFS International Inc.</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=center><FONT SIZE=1>$14.1</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>Women&#146;s, Misses&#146;, and
  Juniors&#146; Apparel</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>5.7x&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>6.8x&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR BGCOLOR="#EAF9E8">
<TD VALIGN=TOP >
<P><FONT SIZE=1>07/02/2002</FONT></P>
</TD>
<TD VALIGN=TOP >
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP >
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=1>Garan Incorporated</FONT></P>
</TD>
<TD VALIGN=TOP >
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP >
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP >
<P ALIGN=center><FONT SIZE=1>$275.6</FONT></P>
</TD>
<TD VALIGN=TOP >
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP >
<P><FONT SIZE=1>Boys&#146; Apparel, Girls&#146;
  Apparel, Women&#146;s, Misses&#146;, and Juniors&#146; Apparel</FONT></P>
</TD>
<TD VALIGN=TOP >
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP >
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP >
<P ALIGN=RIGHT><FONT SIZE=1>4.6x&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP >
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP >
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP >
<P ALIGN=RIGHT><FONT SIZE=1>5.3x&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP >
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>05/15/2002</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=1>Gerber Childrenswear Inc.</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=center><FONT SIZE=1>$137.2</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>Girls&#146; Apparel, Women&#146;s,
  Misses&#146;, and Junior&#146;s Apparel</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>3.8x&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>5.2x&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR BGCOLOR="#EAF9E8">
<TD VALIGN=TOP>
<P><FONT SIZE=1>09/27/2006</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=1>Hanesbrands Inc.</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=center><FONT SIZE=1>$43.0</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>Apparel, Accessories and
  Luxury Goods</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>4.1x&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>5.2x&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>07/07/2003</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=1>M. J. Soffe Co.</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=center><FONT SIZE=1>$71.8</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>Boys&#146; Apparel, Women&#146;s,
  Misses&#146;, and Juniors Apparel</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>4.1x&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>5.0x&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR BGCOLOR="#EAF9E8">
<TD VALIGN=TOP>
<P><FONT SIZE=1>02/04/2003</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=1>Salant Corporation</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=center><FONT SIZE=1>$86.8</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>Boys&#146; Apparel, Women&#146;s,
  Misses&#146;, and Juniors&#146; Apparel</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>3.4x&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>4.6x&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP >
<P><FONT SIZE=1>05/01/2006</FONT></P>
</TD>
<TD VALIGN=TOP >
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP >
<P ><FONT   SIZE=1>Oxford Industries Inc., Womenswear Group</FONT></P>
</TD>
<TD VALIGN=TOP >
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP >
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP >
<P ALIGN=center><FONT SIZE=1>$37.0</FONT></P>
</TD>
<TD VALIGN=TOP >
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP >
<P><FONT SIZE=1>Women&#146;s, Misses&#146;, and
  Juniors&#146; Apparel</FONT></P>
</TD>
<TD VALIGN=TOP >
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP >
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP >
<P ALIGN=RIGHT><FONT SIZE=1>NA&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP >
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP >
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP >
<P ALIGN=RIGHT><FONT SIZE=1>3.7x&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP >
<P><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>
<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>
<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 BGCOLOR="#EAF9E8">
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1><B>Median</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1><B>5.7x&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1><B>6.0x&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=black ALIGN=CENTER>
</TD>
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</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>
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<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>
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<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=black ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
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<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
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<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD COLSPAN="7" VALIGN=TOP>
<P><FONT SIZE=2 COLOR=BLACK>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The source of all data was
  CapitalIQ.</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
</TABLE>

<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><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><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 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><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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><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><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=CENTER STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:0IN; '><FONT SIZE=2>52</FONT></P>

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


<P><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fair
Value Summary</B>. Houlihan weighted each of its three approaches
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="70%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="5%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="4%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="5%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="4%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD COLSPAN="10" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2><B>Fair Value
 Summary</B></FONT></P>
</TD>
</TR>
<TR>
<TD COLSPAN="9" 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><FONT SIZE=1>&nbsp;</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>Low</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>High</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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="3" 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="3" 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><FONT SIZE=2>Guideline Public Company
 Method</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>8.54</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN="RIGHT"><FONT SIZE=2>$</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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>Comparable Transaction
 Method</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>9.14</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>10.21</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>DCF Method</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>9.00</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN="RIGHT"><FONT SIZE=2>$</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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2><B>Implied Common Equity Value per Share Range</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2><B>8.89</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN="RIGHT"><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2><B>10.88</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
</TABLE>

<P><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><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 prior to
the date of its report 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="36%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="4%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="4%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="4%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="22" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2><B>Premium
 Paid On Average Price Over The Following Periods</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="23" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>

</TD>

<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<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="3" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2><B>1 Day</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>30 Day</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>60 Day</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>90 Day</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>120 Day</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>1 Year</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2><B>Median
 Premium From Sample</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&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><FONT SIZE=2>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&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><FONT SIZE=2>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&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><FONT SIZE=2>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&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><FONT SIZE=2>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&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><FONT SIZE=2>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&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><FONT SIZE=2>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2><B>Jaclyn&#146;s
 Common Equity Average Price</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>$6.25</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>$5.87</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>$6.71</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>$7.54</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>$8.30</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>$10.08</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><B>Premium
 Applied to Jaclyn&#146;s Average Price</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</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=RIGHT><FONT SIZE=2>$7.59</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</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=RIGHT><FONT SIZE=2>$7.16</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</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=RIGHT><FONT SIZE=2>$7.91</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</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=RIGHT><FONT SIZE=2>$8.94</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</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=RIGHT><FONT SIZE=2>$9.71</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</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=RIGHT><FONT SIZE=2>$12.09</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
</TABLE>

<P><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><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><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><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=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><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><FONT SIZE=2><B>Prospective Financial Information</B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any prospective
financial information included or referred to in this proxy statement was, in the
view of the Company&#146;s management, prepared on a reasonable basis, reflects the
best available estimates and judgments, and presents, to the best of management&#146;s
knowledge and belief, the expected course of action and the expected future
financial performance of the Company at the time the forecasts were prepared.
However, this information is not fact and should not be relied upon as being
necessarily indicative of future results, and you are cautioned not to place
undue reliance on the prospective financial information.</FONT></P>

<P ALIGN="JUSTIFY"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Neither
the Company&#146;s independent auditors, nor any other independent accountants, have
compiled, examined, or performed any procedures with respect to the prospective
financial information contained or referred to in this proxy statement, nor
have they expressed any opinion or any other form of assurance on such
information or its achievability, and assume no responsibility for, and
disclaim any association with, the prospective financial information.</FONT></P>

<P><A NAME="JI057_v1"></A><FONT SIZE=2><B>Conduct
of the Company&#146;s Business After the Transaction.</B></FONT></P>

<P><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><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 </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><FONT SIZE=2>members of the Board of Directors, including the
independent directors, may not continue to serve as directors 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><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&#151; 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><A NAME="JI058_v1"></A><FONT SIZE=2><B>Material
Federal Income Tax Consequences</B></FONT></P>

<P><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 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>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
summary assumes that you are one of 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>&nbsp;</P>
</TD>
<TD WIDTH="95%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=center><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>a citizen or resident of the
 United States;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><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><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><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><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><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><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><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><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><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NO
RULING FROM THE INTERNAL REVENUE SERVICE OR OPINION OF COUNSEL HAS BEEN OR WILL
BE OBTAINED REGARDING THE UNITED STATES</B></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><FONT SIZE=2><B>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><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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><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 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><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><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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</FONT></P>

<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>

<P><FONT SIZE=2>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><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><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% federal income tax rate 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><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><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 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><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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><A NAME="JI059_v1"></A><FONT SIZE=2><B>Potential
Conflicts of Interests of Officers, Directors, and Certain Affiliated Persons</B></FONT></P>

<P><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 </FONT></P>

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

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<P><FONT SIZE=2>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><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&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 remain the
same. However, the ownership percentage of the shares of our common stock
subject to the Stockholders Agreement will increase from approximately 50.9% to
approximately 58.2% as a result of the reduction of the number of shares of our
common stock outstanding by up to 306,319 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 that we received as of
January 31, 2008 from our transfer agent, Continental Stock Transfer &amp;
Trust Company, and a share range analysis we received from Broadridge Corporate
Issuer Services, a division of 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. The share range
analysis from Broadridge Corporate Issuer Services reflects the share ranges of
896,080 shares, or approximately 82%, of the 1,094,221 outstanding shares of
our common stock held in street name as of January 31, 2008. We have assumed
for purposes of determining ownership percentages and the reduction in the
number of shares outstanding following the Transaction that the remaining
198,141 street name shares also will be cashed out in the Transaction. However,
the ownership percentage and the reduction in the number of shares outstanding
following the Transaction may increase or decrease depending on purchases,
sales and other transfers of our shares of common stock by our stockholders
prior to the effective time of the Transaction, and the number of street name
shares that are actually cashed out in 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, and depending on the number of street name shares that are
actually cashed out in the Transaction. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;See
&#147;Special Factors&#151;Effects of the Transaction&#151;Effect on Affiliated Stockholders.&#148;
</FONT></P>

<P><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>

<P><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Richard
Chestnov, a director of the Company who is also a party to the Stockholders
Agreement, holds 33,050 shares of our common stock directly, and 31,223 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. Mr.
Chestnov will retain these shares after the Transaction.</FONT></P>

<P><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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>

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

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;After
the Transaction, the beneficial ownership of the executive officers and
directors who are not parties to the Stockholders Agreement will increase from
approximately 1.6% to approximately 1.8% as a result of the reduction of the
number of shares of common stock outstanding.</FONT></P>

<P><A NAME="JI060_v1"></A><FONT SIZE=2><B>Source
of Funds and Expenses</B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based
on information we have received as of January 31, 2008 from our transfer agent,
Continental Stock Transfer &amp; Trust Company, as to holdings of our record
holders, and from Broadridge Corporate Issuer Services, a division of
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 $3,728,000. This amount includes approximately
$3,128,000 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 the number of street name shares that are actually cashed out
in the Transaction), and approximately $600,000 of legal, accounting, and
financial advisory fees and other costs to effect the Transaction as follows:</FONT></P>

<TABLE  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="80%" style=MARGIN-LEFT:5%>
<TR style="font-size:1px">
<TD WIDTH="82%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="9%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>Legal Fees</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>Investment Banker/Fairness Opinion</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>130,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>Accounting Fees</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>Transfer Agent Fees</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>20,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>Printing Costs</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>Pink Sheets Listing Fees and Related Costs</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>14,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>Miscellaneous Other</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2><B>Total
 Expenses</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2><B>$600,000</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
</TABLE>

<P><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 December 31, 2007. As long as no default or event of
default under the revolving loan agreement exists, we may repurchase, and we
may use the proceeds of loans we borrow under that agreement to repurchase, our
shares of common stock in the Transaction in an aggregate amount not to exceed
$3,000,000. In the event that the total cost of repurchases of our shares of
common stock in the Transaction exceeds $3,000,000, we have been advised by TD
Banknorth that it will work with us to enter into a mutually agreeable
amendment to our revolving loan agreement so that we may complete the
Transaction. 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=CENTER><FONT SIZE=2>59</FONT></P>

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<P><A NAME="JI061_v1"></A><FONT SIZE=2><B>Stockholder Approval</B></FONT></P>

<P><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 the majority of outstanding shares of our common stock
entitled to vote at the Special Meeting is required to approve each of the
Reverse Stock Split proposal and the Forward Stock Split proposal. Although stockholders will be voting
separately on the Reverse Stock Split and the Forward Stock Split, the Company
will not effect either the Reverse Stock Split and the Forward Stock Split
unless both proposals are approved by stockholders.</FONT></P>

<P><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><A NAME="JI062_v1"></A><FONT SIZE=2><B>Effective Date</B></FONT></P>

<P><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
certificates 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><A NAME="JI063_v1"></A><FONT SIZE=2><B>Termination of Transaction</B></FONT></P>

<P><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>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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>

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

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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>

<P><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><A NAME="JI064_v1"></A><FONT SIZE=2><B>Exchange of Certificates and Payment for
Fractional Shares</B></FONT></P>

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

<P><A NAME="JI065_v1"></A><FONT SIZE=2><B>No Appraisal or Dissenters&#146; Rights</B></FONT></P>

<P><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><A NAME="JI066_v1"></A><FONT SIZE=2><B>Escheat Laws</B></FONT></P>

<P><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 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 </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>

<P><FONT SIZE=2>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>63</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="JI067_v1"></A><FONT SIZE=2><B>INFORMATION
ABOUT THE COMPANY</B></FONT></P>

<P><A NAME="JI068_v1"></A><FONT SIZE=2><B>Market Price of Common Stock</B></FONT></P>

<P><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="80%">
<TR style="font-size:1px">
<TD WIDTH="73%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="7%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="7%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="90%" 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="90%" NOSHADE COLOR=BLACK ALIGN=CENTER>

</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2><B><U>Fiscal
 Year Ended June 30, 2008</U></B></FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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>First quarter</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>$11.50</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>$6.55</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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>Second quarter</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=2>$7.75</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=2>$4.55</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:8.65PT'><FONT SIZE=2>Third
 quarter<BR>
 (though February 15, 2008)</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>$7.67</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>$6.51</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2><B><U>Fiscal
 Year Ended June 30, 2007</U></B></FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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>First quarter</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>$7.70</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>$7.30</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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>Second quarter</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=2>$11.80</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=2>$7.70</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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>Third quarter</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>$14.25</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>$10.36</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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>Fourth quarter</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=2>$12.03</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=2>$8.50</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2><B><U>Fiscal Year Ended June 30, 2006</U></B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=2>$7.97</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=2>$6.34</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>$8.09</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>$7.25</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=2>$8.90</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=2>$7.40</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>$8.25</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>$7.28</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
</TABLE>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
December 4, 2007, the day before we announced the Transaction, and on the
Record Date, the closing prices of our common stock on the American Stock
Exchange were $6.00 and $8.58, respectively.</FONT></P>

<P><A NAME="JI069_v1"></A><FONT SIZE=2><B>Dividends</B></FONT></P>

<P><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><A NAME="JI070_v1"></A><FONT SIZE=2><B>Stockholders</B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
of March 31, 2008 there were approximately 512 holders of record of our common
stock.</FONT></P>

<P><A NAME="JI071_v1"></A><FONT SIZE=2><B>Stock Purchases</B></FONT></P>

<P><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><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>64</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="97%" style="margin-left:3%">
<TR style="font-size:1px">
<TD WIDTH="48%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="6%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="13%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="5%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="4" 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=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 COLSPAN="4" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2><B>(c) Average<BR>
 Price Paid per<BR>
 Share</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="4" 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>
<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="4" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT  SIZE=2><B><U>Fiscal Year Ended June 30,
2008</U></B></FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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>First quarter</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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>Second quarter</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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>Third quarter</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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>(though February 15, 2008)</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2><B><U>Fiscal
 Year Ended June 30, 2007</U></B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>6,548</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>$8.35
 - $9.45</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>$8.46</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=2>6,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=2>$12.88</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=2>$12.88</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>28,557</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>$12.55
 - $14.15</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>$13.03</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<tr>
<TD VALIGN=BOTTOM colspan=14>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>



<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2><B><U>Fiscal
 Year Ended June 30, 2006</U></B></FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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>First quarter</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>100,619</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>$6.79
 - $7.15</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>$7.15</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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>Second quarter</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=2>30,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=2>$7.50
 - $8.09</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=2>$7.71</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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>Third quarter</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>27,838</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>$7.73
 - $8.28</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>$7.87</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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>Fourth quarter</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
</TABLE>

<P><HR NOSHADE WIDTH=120 size=1 COLOR=black ALIGN=LEFT>

<P><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><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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><A NAME="JI072_v1"></A><FONT SIZE=2><B>Directors and Executive Officers </B></FONT></P>

<P><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>

<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>
<BR>
<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="97%" style="margin-left:3%">
<TR style="font-size:1px">
<TD WIDTH="29%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="6%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="57%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2><B>Name</B></FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2><B>Age</B></FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2><B>Position</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="17%" NOSHADE COLOR=BLACK ALIGN=left>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="50%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="12%" NOSHADE COLOR=BLACK ALIGN=left>
</TD>
</TR>
<TR>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>Abe Ginsburg</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=2>90</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>Chairman of the Executive
 Committee</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Allan Ginsburg</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>65</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Chairman of the Board</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>Robert Chestnov</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=2>59</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>President, Chief Executive
 Officer and Director</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Howard Ginsburg</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>65</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Vice Chairman of the Board</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>Martin Brody</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=2>86</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>Director</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Richard Chestnov</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>62</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Director</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>Albert Safer</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=2>59</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>Director</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Norman Axelrod</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>55</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Director</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>Harold Schechter</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P ALIGN=CENTER><FONT SIZE=2>63</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>Director</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Anthony Christon</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>62</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Chief Financial Officer</FONT></P>
</TD>
</TR>
</TABLE>

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

<P><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><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><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><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><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><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><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><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><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>66</FONT></P>

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

<P><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><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><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
Company. 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 Company, and
Richard Chestnov, a director of the Company, are brothers. </FONT></P>

<P><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, except that on February 8, 2008,
Richard Chestnov, a director of the Company, gifted 100 shares of our common
stock which he held directly to a custodial account for the benefit of his
child. </FONT></P>

<P><A NAME="JI073_v1"></A><FONT SIZE=2><B>Security Ownership of Certain Beneficial Owners </B></FONT></P>

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

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="95%" style="margin-left:5%">
<TR style="font-size:1px">
<TD WIDTH="42%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="12%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="8%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2><B>Name of
 Beneficial Owner</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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="4" 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="4" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2><B>Post Split#</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="4" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="4" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="90%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>Abe Ginsburg</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN="BOTTOM" BGCOLOR="#EAF9E8" ALIGN="RIGHT">
<P><FONT SIZE=2>69,223</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>(2)</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>2.8</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>3.2</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>Allan Ginsburg</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN="RIGHT"><FONT SIZE=2>196,861</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>(3)(4)</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>7.9</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>9.0</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>Robert Chestnov</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN="RIGHT"><FONT SIZE=2>176,654</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>(3)(5)</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>7.2</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>8.2</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>Howard Ginsburg</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN="RIGHT"><FONT SIZE=2>175,047</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>(3)(6)</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>7.0</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>8.0</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>Martin Brody</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P align=right><FONT SIZE=2>14,387</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>(7)</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>*</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>*</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>Richard Chestnov</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P align=right><FONT SIZE=2>64,273</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>(8)</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>2.6</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>2.7</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>Albert Safer</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>Norman Axelrod</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN="RIGHT"><FONT SIZE=2>12,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>(9)</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>*</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>*</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>Harold Schechter</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P align=right><FONT SIZE=2>6,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>(10)</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>*</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>*</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>Anthony Christon</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN="RIGHT"><FONT SIZE=2>7,500</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>*</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>*</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT SIZE=2>All directors and
 executive officers as a group (10 persons)</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=2>(11)</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=2>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>31.0</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2><I>Other 5%
 Stockholders</I></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>Bonnie Sue Levy</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN="RIGHT"><FONT SIZE=2>213,968</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>(3)(12)</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>8.7</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>9.9</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
</TABLE>

<P><HR NOSHADE WIDTH=120 COLOR=black size=1 ALIGN=LEFT>

<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><FONT SIZE=2># Assumes an aggregate of
306,319 shares of common stock are repurchased in the Transaction. </FONT></P>

<P><FONT SIZE=2>* Less than one (1%) percent. </FONT></P>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="95%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>(1)</FONT></P>
</TD>
<TD VALIGN=TOP>
<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 indicated as beneficially owned by such person or group. </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>(2)</FONT></P>
</TD>
<TD VALIGN=TOP>
<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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>(3)</FONT></P>
</TD>
<TD VALIGN=TOP>
<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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>(4)</FONT></P>
</TD>
<TD VALIGN=TOP>
<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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>(5)</FONT></P>
</TD>
<TD VALIGN=TOP>
<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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>(6)</FONT></P>
</TD>
<TD VALIGN=TOP>
<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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>(7)</FONT></P>
</TD>
<TD VALIGN=TOP>
<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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>(8)</FONT></P>
</TD>
<TD VALIGN=TOP>
<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 300 shares as custodian for his child. Mr. Chestnov
 disclaims beneficial ownership of such shares. </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>(9)</FONT></P>
</TD>
<TD VALIGN=TOP>
<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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>(10)</FONT></P>
</TD>
<TD VALIGN=TOP>
<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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>(11)</FONT></P>
</TD>
<TD VALIGN=TOP>
<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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>(12)</FONT></P>
</TD>
<TD VALIGN=TOP>
<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>68</FONT></P>

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

<P><A NAME="JI074_v1"></A><FONT SIZE=2><B>Stockholders Agreement </B></FONT></P>

<P><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 voting 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>69</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="JI075_v1"></A><FONT SIZE=2><B>MEETING
AND VOTING INFORMATION</B></FONT></P>

<P><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<A NAME="JI076_v1"></A>Outstanding Voting Securities
and Voting Rights.</B>
Only stockholders of record at the close of business on March 31, 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><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<A NAME="JI077_v1"></A>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 Avenue, 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><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<A NAME="JI078_v1"></A>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><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<A NAME="JI079_v1"></A>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 each of the Reverse Stock Split
proposal and to approve the Forward Stock Split proposal. 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><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although
stockholders will be voting separately on the Reverse Stock Split and the
Forward Stock Split, the Company will not effect either the Reverse Stock Split
and the Forward Stock Split unless both proposals are approved by stockholders.
</FONT></P>

<P><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<A NAME="JI080_v1"></A>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>70</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="JI081_v1"></A><FONT SIZE=2><B>FINANCIAL
INFORMATION</B></FONT></P>

<P><A NAME="JI082_v1"></A><FONT SIZE=2><B>Summary Historical Financial Information </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following summary of 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 six months ended December 31, 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 six months ended December 31, 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 the
information set forth below under the captions &#147;Where You Can Find More
Information&#148; and &#147;Documents Incorporated By Reference.&#148; </FONT></P>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="32%" VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="8%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="8%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="9%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="10%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="10%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="5" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2><B>Six Months Ended <BR>
 December 31,</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><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><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><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><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><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><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><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><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><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><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>$77,646,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>$88,208,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</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><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>59,755,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>67,845,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><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><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><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><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><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><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><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>17,891,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>20,363,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><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><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><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><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><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><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><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>16,038,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>16,039,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>360,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>716,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=2>)</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=2>)</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>592,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>1,429,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><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><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><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><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><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><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><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>901,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>2,179,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</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><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><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><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><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><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><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><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>2,469,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>2,481,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>$.36</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>$.88</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>$.29</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>$.62</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>$.40</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><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><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><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><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><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><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>2,521,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>2,544,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>$36</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>$.86</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>$.28</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>$.60</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>$.39</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><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><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><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><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><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><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>$38,748,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>$47,415,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>$38,077,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>$41,702,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>$32,492,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><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><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><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><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><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><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>$2,294,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>$2,476,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</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><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><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><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><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><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><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><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>$20,046,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>$21,181,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>$19,274,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>$19,047,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>$16,674,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><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><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><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><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><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
</TABLE>

<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><A NAME="JI083_v1"></A><FONT SIZE=2><B>Pro Forma Consolidated Financial Statements
(Unaudited) </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following unaudited pro forma consolidated balance sheet as of December 31,
2007, and the unaudited pro forma consolidated statements of earnings for the
six months ended December 31, 2007 and for the fiscal year ended June 30, 2007,
show the pro forma effect of the Transaction and related events as required by
Rule 11-02 of Regulation S-X. The historical figures as of and for the period
ended December 31, 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 quarter ended December 31, 2007. The historical figures for
the fiscal year ended June 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 30, 2007. </FONT></P>

<P><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 December 31, 2007 and
June 30, 2007. The Transaction assumes that 306,319 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 December 31, 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 non-recurring costs and expenses of the Transaction (see notes (8)
and (9) below of the Notes to the Unaudited Pro Forma Consolidated Financial
Statements). </FONT></P>

<P><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 1, 2006, or of the Company&#146;s financial
position or results of operations in the future. </FONT></P>

<P STYLE='MARGIN-RIGHT:0IN; MARGIN-LEFT:0IN'><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 30, 2007, and in
our Quarterly Report on Form 10-Q for the quarter ended December 31, 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>72</FONT></P>

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


<P><FONT SIZE=2><B>JACLYN, INC. AND SUBSIDIARIES<BR>
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET <BR>
DECEMBER 31, 2007</B></FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px" >
<TD WIDTH="53%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="12%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="10%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="5%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="12%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<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>December 31, <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 COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2><B>Pro Forma <BR>
  December 31, <BR>
  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=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>
<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 COLSPAN="2" 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 COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=black ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>ASSETS</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>CURRENT
  ASSETS:</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>CASH AND CASH
  EQUIVALENTS</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>$1,495,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>$(1,495,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>) (1)</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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>ACCOUNTS
  RECEIVABLE, LESS SALES RETURNS, SALES DISCOUNTS, SALES ALLOWANCE, &amp;
  ALLOWANCE FOR DOUBTFUL ACCOUNTS: $6,630,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>18,606,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>18,606,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>INVENTORIES</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>7,832,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>7,832,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>PREPAID
  EXPENSES AND OTHER CURRENT ASSETS</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>2,946,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>2,946,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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>
<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>
<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>
<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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>TOTAL
  CURRENT ASSETS</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>30,879,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>(1,495,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>)</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>29,384,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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>
<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>
<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>
<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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>PROPERTY,
  PLANT AND EQUIPMENT &#150; NET</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>3,839,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>3,839,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>ASSETS HELD
  FOR SALE</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>GOODWILL</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>OTHER ASSETS</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>335,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>335,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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>
<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>
<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>
<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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>$38,748,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>$(1,495,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>)</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>$37,253,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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>
<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>
<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>
<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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>LIABILITIES
  AND STOCKHOLDERS&#146; EQUITY</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>CURRENT
  LIABILITIES:</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>NOTES
  PAYABLE &#150; BANK</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>$2,905,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>$1,633,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>&nbsp;&nbsp;(1)</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>$4,538,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<tr>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>


<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>ACCOUNTS
  PAYABLE</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>7,061,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>116,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>&nbsp;&nbsp;(3)</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>7,177,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>OTHER
  CURRENT LIABILITIES</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>5,546,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>5,546,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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>
<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>
<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>
<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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>TOTAL
  CURRENT LIABILITIES</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>15,512,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>1,749,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>17,261,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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>
<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>
<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>
<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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>MORTGAGE
  PAYABLE</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>2,294,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>2,294,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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>
<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>
<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>
<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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>DEFERRED
  INCOME TAXES</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>571,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>(46,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>) (2)</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>525,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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>
<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>
<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>
<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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>OTHER
  LIABILITIES</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>325,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>325,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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>
<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>
<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>
<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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>COMMITMENTS
  AND CONTINGENCIES</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>STOCKHOLDERS&#146;
  EQUITY:</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><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>PREFERRED
  STOCK, PAR VALUE $1: AUTHORIZED, 1,000,000 SHARES; ISSUED AND OUTSTANDING,
  NONE</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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>COMMON
  STOCK, PAR VALUE $1: AUTHORIZED, 5,000,000 SHARES</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>3,369,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>3,369,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>ADDITIONAL
  PAID-IN CAPITAL</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>9,518,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>9,518,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>RETAINED
  EARNINGS</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>13,776,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>(70,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>) (2)</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>13,706,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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>
<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>
<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>
<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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>26,663,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>(70,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>)</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>26,593,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>LESS:
  TREASURY STOCK AT COST</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>6,617,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>3,128,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>&nbsp;&nbsp;(1)</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>9,745,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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>
<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>
<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>
<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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>TOTAL
  STOCKHOLDERS&#146; EQUITY</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>20,046,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>(3,198,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>)</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>16,848,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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>
<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>
<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>
<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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>$38,748,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>$(1,495,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>)</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>$37,253,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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>
<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>
<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>
<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=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
</TABLE>

<P><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><FONT SIZE=2><B>JACLYN, INC. AND SUBSIDIARIES<BR>
PROFORMA CONSOLIDATED STATEMENT OF EARNINGS<BR>
SIX MONTHS ENDED DECEMBER 31, 2007</B></FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px" >
<TD WIDTH="54%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="12%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="10%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="4%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="12%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<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>December 31, <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 COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2><B>Pro Forma<BR>
  December<BR>31, 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=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>
<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 COLSPAN="2" 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 COLSPAN="2" 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>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>Net sales</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>$77,646,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN="RIGHT"><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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=RIGHT><FONT SIZE=2>$77,646,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>Cost of
  goods sold</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>59,755,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>59,755,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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>
<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>
<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>
<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>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=black ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>Gross profit</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>17,891,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>17,891,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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>
<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>
<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>
<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>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=black ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>Shipping,
  selling and administrative expenses</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>16,038,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>(484,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>) (8)</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>15,554,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>Interest
  expense</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>360,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>122,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>&nbsp;&nbsp;(4)</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>482,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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>
<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>
<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>
<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>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=black ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>EARNINGS
  BEFORE PROVISION FOR INCOME TAXES</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>1,493,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>362,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>1,855,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>PROVISION
  FOR INCOME TAXES</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>592,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>145,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>&nbsp;&nbsp;(7)</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>737,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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>
<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>
<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>
<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>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=black ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>NET EARNINGS</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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=RIGHT><FONT SIZE=2>$901,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>217,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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=RIGHT><FONT SIZE=2>$1,118,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=black ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=black ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=black ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=black ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=black ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=black ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=black ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=black ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=black ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>NET EARNINGS
  PER COMMON SHARE &#150; BASIC</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN="RIGHT"><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>$.36</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><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=RIGHT><FONT SIZE=2>$.52</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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>
<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>
<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>
<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>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=black ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>Weighted
  average number of shares outstanding &#150; basic</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>2,469,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>(306,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>) (5)</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>2,163,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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>
<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>
<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>
<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>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=black ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>NET EARNINGS
  PER COMMON SHARE &#150; DILUTED</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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=RIGHT><FONT SIZE=2>$.36</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><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=RIGHT><FONT SIZE=2>$.50</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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>
<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>
<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>
<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>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=black ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>Weighted
  average number of shares outstanding &#150; diluted</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>2,521,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>(306,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>) (5)</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>2,215,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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>
<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>
<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>
<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>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=black ALIGN=CENTER>
</TD>
</TR>
</TABLE>

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

<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><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="53%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="9%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="4%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="6%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="5%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="9%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<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>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 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>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD COLSPAN="2" 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>
<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>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>Net sales</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>$154,507,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>$</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=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>Cost of
  goods sold</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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>
<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>
<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>
<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>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=black ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>Gross profit</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</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=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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>
<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>
<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>
<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>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=black ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>Shipping,
  selling and administrative expenses</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>(35,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>) (9)</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>30,538,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>Pension plan
  settlement</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><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><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>Interest
  expense</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>285,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>&nbsp;&nbsp;(6)</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>1,286,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>Interest
  income</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=2>)</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=2>)</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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>
<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>
<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>
<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>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=black ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>EARNINGS
  BEFORE PROVISION FOR INCOME TAXES</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>(250,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>)</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>1,352,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>PROVISION
  FOR INCOME TAXES</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>(100,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>)&nbsp;(7)</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>793,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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>
<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>
<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>
<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>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=black ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>NET EARNINGS</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>$709,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>(150,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>)</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>559,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=black ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=black ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=black ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=black ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=black ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=black ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=black ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=black ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=black ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>NET EARNINGS
  PER COMMON SHARE &#150; BASIC</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>$.29</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>$.26</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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>
<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>
<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>
<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>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=black ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>Weighted
  average number of shares outstanding &#150; basic</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>(306,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>) (5)</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>2,162,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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>
<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>
<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>
<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>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=black ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>NET EARNINGS
  PER COMMON SHARE &#150; DILUTED</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>$.28</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>$.25</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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>
<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>
<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>
<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>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=black ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>Weighted
  average number of shares outstanding &#150; diluted</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>(306,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>) (5)</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>2,222,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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>
<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>
<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>
<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>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=black ALIGN=CENTER>

</TD>
</TR>
</TABLE>

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

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

<P><FONT SIZE=2>(1) Represents
the impact on the December 31, 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 $3,128,000 for the shares subject to the
Transaction.</FONT></P>

<P><FONT SIZE=2>(2) Retained
earnings are reduced for the remaining estimated non-recurring costs and
expenses, as of December 31, 2007, related to the Transaction of $116,000
(approximately $70,000 net of tax using an assumed tax rate of 40%). The
remaining estimated expenses of $116,000 reflect an estimated $600,000 of
transaction costs, less approximately $484,000 expensed through December 31,
2007.</FONT></P>

<P><FONT SIZE=2>(3) Represents
the remaining estimated expenses related to the Transaction, totaling $116,000,
primarily for the legal costs, accounting costs, financial advisor fees, filing
and printing costs.</FONT></P>

<P><FONT SIZE=2>(4) Increased
interest costs of approximately $122,000 for the 6-month period ended December
31, 2007 at an assumed interest rate of 7.50% on the estimated $3,244,000 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 $2,000.</FONT></P>

<P><FONT SIZE=2>(5) Pro forma
basic and diluted weighted outstanding shares are adjusted based on the assumed
redemption of 306,319 shares.</FONT></P>

<P><FONT SIZE=2>(6) Reflects
increased interest costs of approximately $285,000 for the fiscal year ended June 30,
2007 at a weighted-average interest rate of 7.71% on the estimated $3,693,000 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 $4,600 per annum. </FONT></P>

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

<P><FONT SIZE=2>(8) Reflects
the elimination of non-recurring costs and expenses of the Transaction of
approximately $484,000 expensed through December 31, 2007.</FONT></P>

<P><FONT SIZE=2>(9) Reflects
the elimination of non-recurring costs and expenses of the Transaction of
approximately $35,000 expensed through June 30, 2007.</FONT></P>

<P><FONT SIZE=2>(10) Potential
Cost Savings</FONT></P>

<P STYLE='MARGIN-RIGHT:0IN; MARGIN-LEFT:0IN'><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   BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="60%">
<TR style="font-size:1px" >
<TD WIDTH="13%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="17%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="33%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="5%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="29%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P><FONT SIZE=2><B>Description</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2><B>Annualized Costs as<BR>
  a Public Company</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>Audit</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P><FONT SIZE=2>Legal</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>Other Sarbanes-Oxley Costs</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P><FONT SIZE=2>Corporate Governance Costs</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=2>Additional Costs &#150; Pink Sheets</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=2>)</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="45%" NOSHADE COLOR=black ALIGN=RIGHT>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P><FONT SIZE=2>Total estimated annualized costs, net</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>$509,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="45%" NOSHADE COLOR=black ALIGN=RIGHT>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
</TABLE>

<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 STYLE='MARGIN-RIGHT:0IN; MARGIN-LEFT:0IN'><FONT SIZE=2><B><A NAME="JI084_v1"></A>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="38%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="8%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="8%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="8%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="7%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="7%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<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</B><BR>
  <B>June
  30, 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</B><BR>
  <B>June
  30, 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</B><BR>
  <B>June
  30, 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 forma</B><BR>
  <B>December
  31, 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</B><BR>
  <B>December
  31, 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=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>
<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 ALIGN=RIGHT><FONT SIZE=2>Earnings before provision for income taxes</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>$1,352,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>$1,855,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>$1,493,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>1,746,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>716,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>594,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><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><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><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><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><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><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>$3,098,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>$2,571,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>$2,087,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><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><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><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><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><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><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>$1,286,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>$482,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>$360,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>234,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>234,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><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><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><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><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><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><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>$1,746,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>$1,461,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>$716,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P ALIGN=RIGHT><FONT SIZE=2>$594,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#EAF9E8">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=3>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=3>&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><FONT SIZE=3>&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><FONT SIZE=3>&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><FONT SIZE=3>&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><FONT SIZE=3>&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><FONT SIZE=3>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>1.8</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>x</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><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><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>3.5</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>x</FONT></P>
</TD>
</TR>
<TR>
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<P ALIGN=RIGHT><FONT SIZE=3>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=3>&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><FONT SIZE=3>&nbsp;</FONT></P>
</TD>
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</TD>
<TD VALIGN=BOTTOM>
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<P><FONT SIZE=3>&nbsp;</FONT></P>
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</TD>
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<P><FONT SIZE=3>&nbsp;</FONT></P>
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</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=black ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=3>&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><FONT SIZE=3>&nbsp;</FONT></P>
</TD>
</TR>
</TABLE>

<BR>

<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="90%">
<TR style="font-size:1px" >
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><HR NOSHADE WIDTH=120 COLOR=black size=1 ALIGN=LEFT>
</TD>
</TR>
<TR>
<TD 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>77</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="JI085_v1"></A><FONT SIZE=2><B>STOCKHOLDER PROPOSALS</B></FONT></P>

<P><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><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
Avenue, 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="JI086_v1"></A><FONT SIZE=2><B>WHERE
YOU CAN FIND MORE INFORMATION</B></FONT></P>

<P><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&nbsp;13e-3 of the
Exchange Act. The Company has filed a Rule&nbsp;13e-3 Transaction Statement on
Schedule&nbsp;13E-3 under the Exchange Act with respect to the Transaction. The
Schedule&nbsp;13E-3 contains additional information about the Company. Copies
of the Schedule&nbsp;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 Avenue, Maywood, New
Jersey 07607.</FONT></P>

<P><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><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>78</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="JI087_v1"></A><FONT SIZE=2><B>DOCUMENTS
INCORPORATED BY REFERENCE</B></FONT></P>

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

<P><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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&nbsp;30, 2007; and</FONT></P>

<P><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
Condensed Consolidated unaudited Balance Sheets as at December 31, 2007 and
June 30, 2007, our Condensed Consolidated unaudited Statements of Earnings for
the six months ended December 31, 2007 and 2006, our Condensed Consolidated
unaudited Statements of Cash Flow for the six months ended December 31, 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 December 31, 2007.</FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
are delivering to you with this Proxy Statement copies, without exhibits, 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 December 31, 2007.
Exhibits to these documents are not included, but they can be viewed over the
Internet at the SEC&#146;s Website at <U>http://www.sec.gov</U> or, if you request
them in writing, we will send them to you. Please address any request to Jaclyn
Hartstein, the Company&#146;s Secretary, at the following address: Jaclyn, Inc., 197
West Spring Valley Avenue, Maywood, New Jersey 07607.</FONT></P>

<P STYLE='MARGIN-RIGHT:0IN; MARGIN-LEFT:0IN'><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="50%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="12%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="38%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P><FONT SIZE=2>By Order of the Board of Directors</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>Jaclyn Hartstein<BR>
  <I>Secretary</I></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>April 7, 2008</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
</TABLE>

<P ALIGN=CENTER><FONT SIZE=2>79</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>

<P ALIGN="JUSTIFY"><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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>

<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)&nbsp;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.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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>&nbsp;</P>
</TD>
<TD WIDTH="4%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="28%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="18%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="3" VALIGN=BOTTOM>
<P><FONT SIZE=2>JACLYN, INC.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="3" VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P><FONT SIZE=2>By: </FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="3" VALIGN=BOTTOM>
<P><FONT SIZE=2>Name:</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="3" VALIGN=BOTTOM>
<P><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.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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)&nbsp;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)&nbsp;share held by any stockholder and each
fractional interest in excess of one (1)&nbsp;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.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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>&nbsp;</P>
</TD>
<TD WIDTH="4%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="28%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="18%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="3" VALIGN=BOTTOM>
<P><FONT SIZE=2>JACLYN, INC.</FONT></P>
</TD>
</TR>

<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</tr>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P><FONT SIZE=2>By: </FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><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><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="3" VALIGN=BOTTOM>
<P><FONT SIZE=2>Name:</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="3" VALIGN=BOTTOM>
<P><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=justify><FONT SIZE=2><IMG SRC="img001_v1.jpg" ALT="(HOULIHAN SMITH & COMPANY INC. LOGO)"></FONT></P>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH=434 VALIGN=TOP>
<P align=justify>&nbsp;</P>
</TD>
<TD WIDTH=217 VALIGN=TOP>
<P align=justify>&nbsp;</P>
</TD>
<TD WIDTH=217 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 COLSPAN="2" VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2><B><U>CONFIDENTIAL</U></B></FONT></P>
</TD>
</TR>
</TABLE>

<P align=justify><FONT SIZE=2>Special Committee to the
Board of Directors <BR>
Jaclyn, Inc. <BR>
197 West Spring Valley Ave <BR>
Maywood, NJ 07607 </FONT></P>

<P ALIGN=CENTER><FONT SIZE=2><B>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 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 cashed 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>Reviewed 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 relating to the
 potential sale and performed a site visit; </FONT></P>
</TD>
</TR>
</TABLE>

<BR>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="23%" VALIGN=TOP>
<P align=justify>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=TOP>
<P align=justify>&nbsp;</P>
</TD>
<TD WIDTH="32%" VALIGN=TOP>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=TOP>
<P align=justify>&nbsp;</P>
</TD>
<TD WIDTH="21%" VALIGN=TOP>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>105 W. Madison, Suite 1500</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>Tel:
 312.499.5900 Toll Free: 800.654.4977</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>www.houlihansmith.com</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P align=justify><FONT SIZE=2>Chicago, IL 60602</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>Fax:
 312.499.5901</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>www.fairnessopinion.com</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=justify><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>www.solvencyopinion.com</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>

<P align=justify><FONT SIZE=2>Special Committee to the
Board of Directors <BR>
Jaclyn, Inc. <BR>
Fairness Opinion - Confidential <BR>
November 28, 2007 </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>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 through 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 representations
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 not 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 to the unaffiliated shareholders.
Houlihan does not place any specific reliance or weight on any individual
analysis, but instead, concludes that its 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=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>Special Committee to the
Board of Directors <BR>
Jaclyn, Inc. <BR>
Fairness Opinion - Confidential <BR>
November 28, 2007 </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, 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 who would remain as shareholders is fair, from a
financial point of view, to such shareholders. </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=justify><FONT SIZE=2>Very truly yours, </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><IMG SRC="img002_v1.jpg" ALT="-s- Houlihan Smith &amp; Company"></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>Houlihan Smith &amp; Company, Inc. </FONT></P>
</TD>
</TR>
</TABLE>
<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><FONT SIZE=2><I><U>Front of Card</U></I></FONT></P>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR style="font-size:1px">
 <TD WIDTH="100%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2><B>JACLYN, INC.</B></FONT></P>
 </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><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=2>&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 Avenue, Maywood, New Jersey 07607 at 9:00&nbsp;a.m. (local time) on
May 7, 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="54%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="4%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="4%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="38%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP nowrap>
 <P><FONT SIZE=2><B>Date&nbsp;</B></FONT></P>
 </TD>
 <TD COLSPAN="2" VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><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><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD COLSPAN="2" VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD COLSPAN="2" VALIGN=TOP nowrap>
 <P><FONT SIZE=2><B>Signature&nbsp;</B></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD COLSPAN="2" VALIGN=TOP>
 <P><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><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD COLSPAN="2" VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD COLSPAN="2" VALIGN=TOP>
 <P><FONT SIZE=2><B>Signature</B></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD COLSPAN="2" VALIGN=TOP>
 <P><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><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD COLSPAN="3" VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD COLSPAN="3" VALIGN=TOP>
 <P ALIGN="JUSTIFY"><FONT SIZE=2><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>&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><FONT SIZE=2><I><U>Back of Card</U></I></FONT></P>
 </TD>
 </TR>
</TABLE>

<P ALIGN=CENTER><FONT SIZE=2>The Board of Directors recommends a vote &#147;For&#148; the following proposals:</FONT></P>

<P><FONT SIZE=2>1. Proposal to amend the
Company&#146;s Certificate of Incorporation to effect a 1-for-250 reverse stock
split (the &#147;Reverse Stock Split&#148;), all as described in the Company&#146;s proxy
statement dated April 7, 2008. </FONT></P>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="30%">
 <TR style="font-size:1px">
 <TD WIDTH="31%" VALIGN=TOP>
 <P ALIGN=CENTER>&nbsp;</P>
 </TD>
 <TD WIDTH="34%" VALIGN=TOP>
 <P ALIGN=CENTER>&nbsp;</P>
 </TD>
 <TD WIDTH="34%" VALIGN=TOP>
 <P ALIGN=CENTER>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2><B>For</B></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2><B>Against</B></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2><B>Abstain</B></FONT></P>
 </TD>
 </TR>

 <TR>
 <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=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>

 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2  FACE=WINGDINGS>o</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2  FACE=WINGDINGS>o</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2  FACE=WINGDINGS>o</FONT></P>
 </TD>
 </TR>
</TABLE>

<P><FONT SIZE=2>2. Proposal to amend the
Company&#146;s Certificate of Incorporation to effect, immediately after the Reverse
Stock Split, a 250-for-1 forward stock split, all as described in the Company&#146;s
proxy statement dated April 7, 2008. </FONT></P>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="30%">
 <TR style="font-size:1px">
 <TD WIDTH="31%" VALIGN=TOP>
 <P ALIGN=CENTER>&nbsp;</P>
 </TD>
 <TD WIDTH="34%" VALIGN=TOP>
 <P ALIGN=CENTER>&nbsp;</P>
 </TD>
 <TD WIDTH="34%" VALIGN=TOP>
 <P ALIGN=CENTER>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2><B>For</B></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2><B>Against</B></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2><B>Abstain</B></FONT></P>
 </TD>
 </TR>
 <TR>
 <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=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>

 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2  FACE=WINGDINGS>o</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2  FACE=WINGDINGS>o</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2  FACE=WINGDINGS>o</FONT></P>
 </TD>
 </TR>
</TABLE>

<P ALIGN="JUSTIFY"><FONT SIZE=2><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
Proposals No. 1 and No. 2, 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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