Agreement ("Agreement") made as of this 30th day of September, 2005 by and between TSR, Inc., a Delaware
corporation ("TSR"), and Ernest G. Bago ("Consultant").
1. Last Day of Employment; Retention as Consultant.
(a) Consultant hereby resigns from his employment with TSR and its subsidiaries and Consultant's last day of
employment with TSR shall be September 30 2005 (the "Effective Date").
(b) On the Effective Date, TSR hereby retains Consultant as a consultant for a term commencing on the Effective
Date and ending on May 31, 2007, unless terminated earlier in accordance with this Agreement (the "Term").
The Consultant agrees to provide such advisory and consulting services as TSR may reasonably request. It is
agreed that such requests shall be made by TSR's Chief Executive Officer or Vice President, Finance and
(c) The Consultant's duties shall include the following specific matters: advice and assistance with respect to (i)
matters as to which he had responsibility prior to his resignation from his employment, (ii) any legal disputes,
claims or investigations that have arisen or may in the future arise from matters for which he was responsible, and
(iii) effecting the transition of administrative responsibilities previously performed by him.
(a) As full compensation for his services hereunder, TSR will pay to Consultant compensation at the rate of Two
Hundred Thousand ($200,000) Dollars per annum, payable in equal semi-monthly installments in arrears.
(b) Consultant shall be paid an amount equal to the balance of the bonus to which he would have been entitled
based on TSR's pre-tax profits for the quarter ended August 31, 2005, in excess of the draws previously paid to
him on account of the bonus, payable within thirty days after the filing of TSR's Quarterly Report on Form 10-Q.
3. Reimbursement of Expenses. TSR shall reimburse Consultant for expenses reasonably incurred by him in
connection with the performance of