<SUBMISSION>
<ACCESSION-NUMBER>0000950123-02-011039
<TYPE>10-Q
<PUBLIC-DOCUMENT-COUNT>4
<PERIOD>20020930
<FILING-DATE>20021115
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>BOWNE & CO INC
<CIK>0000013610
<ASSIGNED-SIC>2750
<IRS-NUMBER>132618477
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>10-Q
<ACT>34
<FILE-NUMBER>001-05842
<FILM-NUMBER>02829420
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>345 HUDSON ST
<CITY>NEW YORK
<STATE>NY
<ZIP>10014
<PHONE>2129245500
</BUSINESS-ADDRESS>
</FILER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>y65302e10vq.htm
<DESCRIPTION>BOWNE & CO., INC.
<TEXT>
<HTML>
<HEAD>
<TITLE>BOWNE & CO., INC.</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
 <HR size="1" width="100%" align="center" noshade>
</DIV>

<DIV align="center">
<HR size="1" width="100%" align="center" noshade>
</DIV>

<P align="center">
<B><FONT size="4">SECURITIES AND EXCHANGE COMMISSION</FONT></B>

<DIV align="center">
<B>Washington, D.C. 20549</B>
</DIV>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="center">
<B><FONT size="5">Form&nbsp;10-Q</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="89%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2"><FONT face="wingdings">&#254;</FONT>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <B><FONT size="2">QUARTERLY REPORT PURSUANT TO SECTION&nbsp;13
    OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <B><FONT size="2">For the quarterly period ended
    September&nbsp;30, 2002</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <B><FONT size="2">or</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2"><FONT face="wingdings">&#111;</FONT></FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <B><FONT size="2">TRANSITION REPORT PURSUANT TO SECTION&nbsp;13
    OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</FONT></B></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <B><FONT size="2">For the transition period
    from &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to</FONT></B></TD>
</TR>

</TABLE>
</CENTER>

<P align="center">
<B><FONT size="2">Commission File Number 1-5842</FONT></B>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="center">
<B><FONT size="6">Bowne &#38; Co., Inc.</FONT></B>

<DIV align="center">
<I><FONT size="2">(Exact name of registrant as specified in its
charter)</FONT></I>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="56%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="41%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Delaware</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <B><FONT size="2">13-2618477</FONT></B></TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <I><FONT size="2">(State or other jurisdiction of<BR>
    incorporation or organization)</FONT></I></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <I><FONT size="2">(I.R.S. Employer<BR>
    Identification Number)</FONT></I></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <B><FONT size="2">345 Hudson Street<BR>
    New York, New York</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <BR>
    <B><FONT size="2">10014</FONT></B></TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <I><FONT size="2">(Address of principal executive
    offices)</FONT></I></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <I><FONT size="2">(Zip Code)</FONT></I></TD>
</TR>

</TABLE>
</CENTER>

<P align="center">
<B><FONT size="2">(212)&nbsp;924-5500</FONT></B>

<DIV align="center">
<I><FONT size="2">(Registrant&#146;s telephone number, including
area code)</FONT></I>
</DIV>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="center">
<B><FONT size="2">Not Applicable</FONT></B>

<DIV align="center">
<I><FONT size="2">(Former name, former address and former fiscal
year,</FONT></I>
</DIV>

<DIV align="center">
<I><FONT size="2">if changed since last report)</FONT></I>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Indicate by check mark whether the registrant
(1)&nbsp;has filed all reports required to be filed by
Section&nbsp;13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12&nbsp;months, and (2)&nbsp;has been
subject to such filing requirements for the past
90&nbsp;days.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Yes&nbsp;<FONT face="wingdings">&#254;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No&nbsp;<FONT face="wingdings">&#111;</FONT>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The number of shares outstanding of each of the
issuer&#146;s classes of common stock was 33,554,308 shares of
common stock, par value $.01, outstanding as of November&nbsp;8,
2002.
</FONT>

<P align="center">
<HR size="1" width="100%" align="center" noshade>

<DIV align="center">
<HR size="1" width="100%" align="center" noshade>
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>

<!-- TOC -->
<A name="toc"><DIV align="CENTER" style="page-break-before:always"><U><B>TABLE OF CONTENTS</B></U></DIV></A>

<P><CENTER>
<TABLE border="0" width="90%" cellpadding="0" cellspacing="0">
<TR>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="76%"></TD>
</TR>
<TR><TD colspan="9"><A HREF="#000">BOWNE &#38; CO., INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#001">BOWNE &#38; CO., INC. AND SUBSIDIARIES MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#002">PART II OTHER INFORMATION</A></TD></TR>
<TR><TD colspan="9"><A HREF="#003">SIGNATURES</A></TD></TR>
<TR><TD colspan="9"><A HREF="#004">CERTIFICATIONS PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002</A></TD></TR>
<TR><TD colspan="9"><A HREF="y65302exv10w17.htm">EX-10.17: STOCK PURCHASE AGREEMENT</A></TD></TR>
<TR><TD colspan="9"><A HREF="y65302exv99w1.htm">EX-99.1: CERTIFICATION</A></TD></TR>
<TR><TD colspan="9"><A HREF="y65302exv99w2.htm">EX-99.2: CERTIFICATION</A></TD></TR>
</TABLE>
</CENTER>
<!-- /TOC -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">BOWNE &#38; CO., INC. AND
SUBSIDIARIES</FONT></B>

<P align="center">
<B><FONT size="2">CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS</FONT></B>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="70%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Three Months Ended</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">September&nbsp;30,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">(Unaudited)</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">(000&#146;s omitted except</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">per&nbsp;share amounts)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Revenue
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">214,156</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">242,055</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Expenses:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cost of revenue
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">151,041</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">173,534</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Selling and administrative
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">58,079</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">58,082</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Depreciation
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10,033</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,617</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Amortization
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">430</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,427</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Restructuring and asset impairment charges
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,605</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Purchased in-process research and development
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">800</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">223,188</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">244,460</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Operating loss
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(9,032</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,405</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Interest expense
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,844</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,446</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Gain on sale of subsidiary
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14,869</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Gain on sale of building
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,889</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other (expense)&nbsp;income, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(683</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">387</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Income (loss) before income taxes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,199</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,464</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Income tax expense
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,550</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(239</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net income (loss)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,649</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,703</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Earnings (loss) per share:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Basic
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">.14</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(.11</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Diluted
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">.13</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(.11</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Dividends per share
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">.055</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">.055</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center">
<FONT size="2">See Notes to Condensed Consolidated Financial
Statements.
</FONT>

<P align="center"><FONT size="2">1
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">BOWNE &#38; CO., INC. AND
SUBSIDIARIES</FONT></B>

<P align="center">
<B><FONT size="2">CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS</FONT></B>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="70%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Nine Months Ended</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">September&nbsp;30,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">(Unaudited)</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">(000&#146;s omitted except</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">per&nbsp;share amounts)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Revenue
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">767,107</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">823,149</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Expenses:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cost of revenue
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">509,360</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">561,952</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Selling and administrative
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">202,299</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">202,326</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Depreciation
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">31,351</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">31,602</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Amortization
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,290</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,133</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Restructuring and asset impairment charges
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,605</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,228</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Purchased in-process research and development
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">800</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">747,905</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">811,041</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Operating income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19,202</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,108</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Interest expense
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,951</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,741</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Gain (loss) on sale of subsidiary
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14,869</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,858</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Gain on sale of building
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,889</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other (expense)&nbsp;income, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(224</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,014</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Income from continuing operations before income
    taxes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">33,785</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,523</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Income tax expense
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(14,527</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(5,558</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Income from continuing operations
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19,258</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">965</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Loss from discontinued operations (less
    applicable tax benefit of $9,060)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(16,363</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net income (loss)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19,258</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(15,398</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Earnings per share from continuing operations:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Basic
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">.58</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">.03</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Diluted
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">.54</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">.03</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Loss per share from discontinued operations:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Basic
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(.50</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Diluted
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(.50</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total earnings (loss) per share:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Basic
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">.58</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(.47</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Diluted
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">.54</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(.47</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Dividends per share
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">.165</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">.165</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center">
<FONT size="2">See Notes to Condensed Consolidated Financial
Statements.
</FONT>

<P align="center"><FONT size="2">2
</FONT>

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

<P align="center">
<B><FONT size="2">BOWNE &#38; CO., INC. AND
SUBSIDIARIES</FONT></B>

<P align="center">
<B><FONT size="2">CONDENSED CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME (LOSS)</FONT></B>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="75%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Three Months Ended</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">September&nbsp;30,</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">(Unaudited)</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">(000&#146;s omitted)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net income (loss)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,649</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,703</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Foreign currency translation adjustment
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,194</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,338</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net unrealized losses arising from marketable
    securities during the period, after crediting taxes of $129 and
    $999 for 2002 and 2001, respectively
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(195</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,497</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Comprehensive income (loss)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,260</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,862</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="74%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Nine Months Ended</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">September&nbsp;30,</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">(Unaudited)</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">(000&#146;s omitted)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net income (loss)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19,258</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(15,398</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Foreign currency translation adjustment, net of
    $1,262 reclassification adjustment in 2001 for the recognized
    loss relating to the sale of subsidiary
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,083</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(339</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net unrealized losses arising from marketable
    securities during the period, after crediting taxes of $576 and
    $235 for 2002 and 2001, respectively
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(865</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(211</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Comprehensive income (loss)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25,476</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(15,948</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center">
<FONT size="2">See Notes to Condensed Consolidated Financial
Statements.
</FONT>

<P align="center"><FONT size="2">3
</FONT>

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

<P align="center">
<B><FONT size="2">BOWNE &#38; CO., INC. AND
SUBSIDIARIES</FONT></B>

<P align="center">
<B><FONT size="2">CONDENSED CONSOLIDATED BALANCE
SHEETS</FONT></B>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="55%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">September&nbsp;30,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(Unaudited)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">(000&#146;s omitted</FONT></B></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">except share amounts)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="12" align="center" valign="top">
    <B><FONT size="2">ASSETS</FONT></B></TD>
</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Current assets:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cash and cash equivalents
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">47,791</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">27,769</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Marketable securities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,707</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,407</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Trade accounts receivable, less allowance for
    doubtful accounts of $18,469 (2002) and $14,808 (2001)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">200,695</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">174,598</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Inventories
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">23,858</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19,453</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Prepaid expenses and other current assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">30,585</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">39,471</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total current assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">304,636</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">264,698</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Property, plant and equipment, less accumulated
    depreciation of $270,191 (2002) and $255,670 (2001)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">155,452</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">163,838</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Goodwill, less accumulated amortization of
    $30,756 (2002) and $30,337 (2001)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">208,087</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">172,321</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Intangible assets, less accumulated amortization
    of $4,350 (2002) and $3,050 (2001)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">27,528</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">18,150</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Deferred income taxes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,272</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,052</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,086</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,171</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">710,061</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">630,230</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="12" align="center" valign="top">
    <B><FONT size="2">LIABILITIES AND STOCKHOLDERS&#146;
    EQUITY</FONT></B></TD>
</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Current liabilities:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Current portion of long-term debt and other
    short-term borrowings
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">604</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">38,079</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accounts payable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">36,537</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">40,252</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Employee compensation and benefits
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">52,597</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">47,011</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accrued expenses and other obligations
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">60,182</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">61,214</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total current liabilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">149,920</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">186,556</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Long-term debt&nbsp;&#151; net of current portion
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">165,660</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">76,941</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Deferred employee compensation and other benefits
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">40,617</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">36,704</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total liabilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">356,197</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">300,201</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Stockholders&#146; equity:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Preferred stock:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Authorized 2,000,000 shares, par value $.01,
    Issuable in series&nbsp;&#151; none issued
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Common stock:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Authorized 60,000,000&nbsp;shares, par value
    $.01, Issued 40,118,933&nbsp;shares (2002) and
    39,855,734&nbsp;shares (2001)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">401</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">398</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Additional paid-in capital
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">53,864</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">50,879</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Retained earnings
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">360,661</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">346,920</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Treasury stock, at cost, 6,578,546&nbsp;shares
    (2002) and, 6,683,653&nbsp;shares (2001)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(58,020</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(58,908</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accumulated other comprehensive loss, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,042</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(9,260</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total stockholders&#146; equity
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">353,864</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">330,029</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total liabilities and stockholders&#146; equity
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">710,061</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">630,230</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center">
<FONT size="2">See Notes to Condensed Consolidated Financial
Statements.
</FONT>

<P align="center"><FONT size="2">4
</FONT>

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

<P align="center">
<B><FONT size="2">BOWNE &#38; CO., INC. AND
SUBSIDIARIES</FONT></B>

<P align="center">
<B><FONT size="2">CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS</FONT></B>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="67%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Nine Months Ended</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">September&nbsp;30,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">(Unaudited)</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">(000&#146;s omitted)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cash flows from operating activities:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net income (loss)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19,258</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(15,398</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Adjustments to reconcile net income (loss) to net
    cash provided by operating activities:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Depreciation
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">31,351</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">31,602</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Amortization
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,290</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,133</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Asset impairment charges
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,300</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,174</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Purchased in-process research and development
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">800</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Loss from discontinued operations, net of tax
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16,363</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">(Gain) loss on sale of subsidiary
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(14,869</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,858</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Gain on sale of building
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,889</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cash used in discontinued operations
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,959</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(12,499</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Changes in other assets and liabilities, net of
    acquisitions and discontinued operations and certain non-cash
    transactions
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,498</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(21,975</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net cash provided by operating activities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">28,984</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,058</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cash flows from investing activities:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Acquisitions of businesses, net of cash acquired
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(56,750</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(63,145</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Proceeds from sale of subsidiary
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14,500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,876</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Proceeds from sale of building
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,295</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Purchase of other investments
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,000</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Proceeds from the sale of fixed assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">668</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,627</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Purchase of property, plant and equipment
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(23,541</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(26,409</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net cash used in investing activities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(56,828</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(84,051</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cash flows from financing activities:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Proceeds from borrowings
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">307,527</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">275,872</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Payment of debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(256,885</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(197,495</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Proceeds from stock options exercised
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,741</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,088</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Purchase of treasury stock
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(90</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Payment of dividends
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(5,517</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(5,454</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net cash provided by financing activities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">47,866</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">73,921</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Increase (decrease) in cash and cash equivalents
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20,022</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,072</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cash and cash equivalents, beginning of period
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">27,769</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">30,302</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cash and cash equivalents, end of period
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">47,791</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">28,230</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Supplemental cash flow information:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cash paid for interest
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,065</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,426</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net cash paid (refunded) for income taxes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,287</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,606</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center">
<FONT size="2">See Notes to Condensed Consolidated Financial
Statements.
</FONT>

<P align="center"><FONT size="2">5
</FONT>

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

<!-- link1 "BOWNE &#38; CO., INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS" -->
<DIV align="left"><A NAME="000"></A></DIV>

<P align="center">
<B><FONT size="2">BOWNE &#38; CO., INC. AND
SUBSIDIARIES</FONT></B>

<P align="center">
<B><FONT size="2">NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS</FONT></B>

<DIV align="center">
<B><FONT size="2">(Unaudited)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(000&#146;s omitted, except share information
and where noted)</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">Note 1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basis of
Presentation</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The financial information as of
September&nbsp;30, 2002 and for the three and nine month periods
ended September&nbsp;30, 2002 and 2001 has been prepared without
audit, pursuant to the rules and regulations of the Securities
and Exchange Commission. In the opinion of management, all
adjustments (consisting of only normal recurring adjustments)
necessary for a fair presentation of the consolidated financial
position, results of operations and of cash flows for each
period presented have been made on a consistent basis. Certain
information and footnote disclosures normally included in
consolidated financial statements prepared in accordance with
generally accepted accounting principles have been condensed or
omitted. These financial statements should be read in
conjunction with the Company&#146;s annual report on
Form&nbsp;10-K and consolidated financial statements. Operating
results for the three and nine months ended September&nbsp;30,
2002 may not be indicative of the results that may be expected
for the full-year.
</FONT>

<P align="left">
<B><FONT size="2">Note
2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Inventories of $23,858 at September&nbsp;30, 2002
included raw materials of $7,021 and work-in-process of $16,837.
At December&nbsp;31, 2001, inventories of $19,453 included raw
materials of $6,489 and work-in-process of $12,964.
</FONT>

<P align="left">
<B><FONT size="2">Note 3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Earnings
(Loss) Per Share</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Shares used in the calculation of basic earnings
per share are based on the weighted-average number of shares
outstanding, and for diluted earnings per share after adjustment
for the assumed conversion of all potentially dilutive
securities. Basic and diluted loss per share is calculated by
dividing the net loss by the weighted-average number of shares
outstanding during each period. The incremental shares from
assumed conversion of all potentially dilutive securities are
not included in the calculation of diluted loss per share since
their effect would have been antidilutive. The weighted average
diluted shares outstanding for the three months ended
September&nbsp;30, 2002 and 2001 excludes the dilutive effect of
approximately 3,523,126 and 2,178,306 options, respectively,
since such options have an exercise price in excess of the
average market value of the Company&#146;s common stock during
the respective period. The weighted average diluted shares
outstanding for the nine months ended September&nbsp;30, 2002
and 2001 excludes the dilutive effect of approximately 1,090,636
and 2,420,047 options, respectively.
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="71%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Three Months Ended</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">September 30,</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Basic shares
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">33,530,908</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">33,113,280</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Diluted shares
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">34,653,874</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">33,113,280</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="71%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Nine Months Ended</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">September 30,</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Basic shares
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">33,444,469</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">33,063,081</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Diluted shares
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">34,822,231</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">34,095,085</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<B><FONT size="2">Note
4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Marketable Securities and Other
Comprehensive Income (Loss) Items</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company classifies its investments in
marketable securities as available-for-sale. Available-for-sale
securities are carried at fair value, with the unrealized gains
and losses, net of tax, reported as a separate component of
stockholders&#146; equity. At September&nbsp;30, 2002, the fair
value of marketable securities exceeded
</FONT>

<P align="center"><FONT size="2">6
</FONT>
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">cost by $761. At December&nbsp;31, 2001, the fair
value of marketable securities exceeded cost by $2,202. The net
unrealized gains, after deferred taxes, were $457 and $1,322 at
September&nbsp;30, 2002 and December&nbsp;31, 2001, respectively.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The cumulative foreign currency translation
adjustment was $(3,499) and $(10,582) at September&nbsp;30, 2002
and December&nbsp;31, 2001, respectively.
</FONT>

<P align="left">
<B><FONT size="2">Note
5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Acquisitions</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Berlitz GlobalNet</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On September&nbsp;27, 2002, BGS Companies, Inc.,
a subsidiary of the Company, acquired all of the issued and
outstanding stock of Berlitz GlobalNet, Inc.
(&#147;GlobalNet&#148;) from Berlitz International, Inc. and
Berlitz Investment Corporation for $75&nbsp;million in cash. The
acquisition took place at the end of the quarter, accordingly,
no operating results were included in the condensed consolidated
statement of operations. GlobalNet provides globalization and
localization services, software testing, translation and
interpretation services and is included as part of the
globalization segment. The Company expects that the acquisition
of GlobalNet will strengthen BGS&#146;s position in the
globalization and localization industry and enhance BGS&#146;s
results by enabling BGS to combine complementary services,
improve efficiencies, and diversify its customer base.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The net cash outlay of $56.8&nbsp;million, which
includes approximately $1.1&nbsp;million of acquisition costs
and is net of $19.3&nbsp;million of cash in the business, has
been allocated to assets acquired and liabilities assumed based
upon estimated fair value at the date of acquisition. The excess
of the purchase price over the estimated fair value of net
tangible assets, totaling approximately $39.8&nbsp;million, has
been allocated between goodwill and other identifiable
intangible assets based upon estimated fair values. Based upon
preliminary estimates, $9.5&nbsp;million has been allocated to
the value of customer contracts and customer relationships and
$0.4&nbsp;million has been allocated to the value of proprietary
technology. The amount allocated to customer relationships will
be amortized over its estimated life of 5-10&nbsp;years, and the
amount allocated to the proprietary technology will be amortized
over its estimated useful life of 3&nbsp;years. The portion
allocated to goodwill will not be amortized. Further refinements
to the purchase price allocation are likely to be made based
upon the completion of a third party valuation. The final
purchase price allocation is not expected to have a material
effect on the Company&#146;s financial statements.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company accrued $3.4&nbsp;million of costs
associated with the acquisition of GlobalNet&#146;s operations.
The integration is expected to eliminate redundant functions and
excess facilities in geographical regions where the Company has
globalization operations in the same location as GlobalNet.
These costs include estimated severance costs
($2.3&nbsp;million) and lease termination costs
($1.1&nbsp;million) associated with eliminating GlobalNet
facilities and terminating certain GlobalNet employees.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, the Company will incur certain costs
to integrate the GlobalNet operations, including costs to shut
down certain BGS facilities and terminate certain BGS employees.
These costs, which are estimated to be approximately $4.5 to
$5&nbsp;million, will be included as part of restructuring and
integration expenses in the consolidated statements of
operations during the fourth quarter of 2002.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of September&nbsp;30, 2002, all of the costs
associated with the integration were unpaid, and are expected to
be paid during 2002 and 2003.
</FONT>

<P align="center"><FONT size="2">7
</FONT>
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following unaudited pro forma consolidated
results of operations for the Company as a whole are presented
as if the acquisition of GlobalNet had been made at the
beginning of the periods presented.
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="70%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Three Months Ended</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">September 30,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">(In thousands except</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">per share amounts)</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">(Unaudited)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Revenue
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">240,722</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">268,759</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Income (loss)&nbsp;from continuing operations
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,387</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,700</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net income (loss)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,387</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,700</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Earnings (loss)&nbsp;per share from continuing
    operations:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Basic
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">.10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(.14</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Diluted
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">.10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(.14</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total earnings (loss)&nbsp;per share:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Basic
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">.10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(.14</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Diluted
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">.10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(.14</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="70%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Nine Months Ended</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">September 30,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">(In thousands except</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">per share amounts)</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">(Unaudited)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Revenue
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">842,504</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">908,209</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Income from continuing operations
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17,475</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,184</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net income (loss)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17,475</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(15,179</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Earnings per share from continuing operations:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Basic
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">.52</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">.04</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Diluted
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">.50</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">.03</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total earnings (loss)&nbsp;per share:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Basic
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">.52</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(.46</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Diluted
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">.50</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(.46</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The pro forma amounts include interest expense on
acquisition debt and amortization of identifiable intangible
assets and do not include any amortization of goodwill
associated with the GlobalNet acquisition, as required under
SFAS No.&nbsp;141. In addition, the pro forma amounts exclude
royalty expenses relating to the use of the Berlitz trade name
since such expenses will not be incurred prospectively. The pro
forma amounts were tax-effected using the Company&#146;s
effective tax rate. In addition, the pro forma amounts do not
reflect any benefits from economies or synergies that might be
achieved from integrating operations. The pro forma information
is unaudited and is not necessarily indicative of the results of
operations that would have occurred had the purchase been made
at the beginning of the periods presented or the future results
of the combined operations.
</FONT>

<P align="left">
<B><FONT size="2">Note 6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Goodwill
and Intangible Assets</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In June 2001, the FASB issued Statement
No.&nbsp;141, &#147;Business Combinations&#148; (&#147;SFAS
141&#148;), and Statement No.&nbsp;142, &#147;Goodwill and Other
Intangible Assets&#148; (&#147;SFAS 142&#148;). SFAS 141
required the purchase method of accounting be used for all
business combinations initiated after June&nbsp;30, 2001. SFAS
141 also provided new criteria to determine whether an acquired
intangible asset should be recognized separately from goodwill.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under the provisions of SFAS 142, upon adoption,
amortization of existing goodwill ceases and the remaining book
value is to be tested for impairment at least annually at the
reporting unit level using a new
</FONT>

<P align="center"><FONT size="2">8
</FONT>

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

<DIV align="left">
<FONT size="2">two-step impairment test. The general provisions
of SFAS 142 were effective for the Company as of January&nbsp;1,
2002. However, certain provisions were effective for all
business combinations consummated after June&nbsp;30, 2001. The
Company applied the accounting and disclosure provisions of SFAS
141 and the applicable provisions of SFAS 142 to its acquisition
of Mendez S.A. (&#147;Mendez&#148;) during the third quarter of
2001 and BGS&#146;s acquisition of GlobalNet during the third
quarter of 2002.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In connection with SFAS 142&#146;s transitional
goodwill impairment evaluation, the Statement requires the
Company to perform an assessment of whether there is an
indication that goodwill is impaired as of the date of adoption,
January&nbsp;1, 2002. To accomplish this, the Company determined
the fair value of each reporting unit and compared it to the
carrying amount of the reporting unit at that date. No
impairment charges resulted from this evaluation since the fair
value of each reporting unit exceeded the carrying amount.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of the date of adoption, the Company had
unamortized goodwill in the amount of $172,321 and unamortized
identifiable intangible assets in the amount of $18,150.
Goodwill not subject to amortization (net of accumulated
amortization through December 31, 2001) is $208,087 at
September&nbsp;30, 2002. Goodwill increased $35,766 in 2002,
primarily as a result of the acquisition of GlobalNet in
September 2002, as well as foreign currency translation
adjustments and adjustments to preliminary purchase price
allocations made in prior periods, primarily to goodwill
recorded in the globalization segment.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The gross amounts and accumulated amortization of
identifiable intangible assets is as follows:
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="42%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">September 30, 2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">December 31, 2001</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Accumulated</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Accumulated</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Gross Amount</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Amortization</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Gross Amount</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Amortization</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Customer lists
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">30,322</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,165</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20,100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,022</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Software licenses and proprietary technology
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,556</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">185</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">28</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">31,878</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,350</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21,200</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,050</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Amortization expense related to identifiable
intangible assets was $1,290 for the nine months ended
September&nbsp;30, 2002. Estimated annual amortization expense
for the years ended December&nbsp;31, 2002 through
December&nbsp;31, 2006, including the effect of the GlobalNet
acquisition, is shown below:
</FONT>

<CENTER>
<TABLE width="60%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="89%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2002
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,030</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2003
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,920</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2004
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,920</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2005
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,888</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2006
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,720</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following adjusted financial information
reflects the impact that SFAS 142 would have had on prior year
income (loss) from continuing operations and diluted earnings
(loss) per share from continuing operations for the three months
ended September&nbsp;30, 2001 if adopted in 2001:
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="63%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Three Months Ended</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">September 30, 2001</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Earnings (Loss)</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Income (loss)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Per Share From</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">From Continuing</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Continuing</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Operations</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Operations</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Amounts as reported
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,703</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(.11</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Amortization, net of income taxes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,794</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">.05</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Adjusted amounts
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,909</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(.06</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">9
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following adjusted financial information
reflects the impact that SFAS 142 would have had on prior year
income from continuing operations and diluted earnings per share
from continuing operations for the nine months ended
September&nbsp;30, 2001 if adopted in 2001:
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="65%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Nine Months Ended</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">September&nbsp;30, 2001</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Earnings Per</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Income From</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Share From</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Continuing</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Continuing</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Operations</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Operations</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Amounts as reported
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">965</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">.03</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Amortization, net of income taxes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,693</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">.13</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Adjusted amounts
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,658</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">.16</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<B><FONT size="2">Note
7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Debt</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On July&nbsp;2, 2002, the Company completed its
new $175&nbsp;million unsecured three-year revolving credit
facility. The new credit agreement bears interest at LIBOR plus
80-160&nbsp;basis points or an alternative base rate (greater of
Federal Funds rate plus 50&nbsp;basis points or the Prime rate)
depending on certain leverage ratios. Prior to July&nbsp;2,
2002, the Company had borrowings under its $300&nbsp;million
unsecured five-year revolving credit agreement, with a weighted
average interest rate of approximately 2%. The weighted average
interest rate for that credit agreement was based on LIBOR plus
25 basis points.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">At September&nbsp;30, 2002, the Company had
borrowings of $87&nbsp;million under the new $175&nbsp;million
revolving credit agreement, with a weighted average interest
rate of approximately 5% for the quarter ended
September&nbsp;30, 2002. At December&nbsp;31, 2001, the Company
had borrowings of $112&nbsp;million under its former revolving
credit agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On February&nbsp;6, 2002, the Company completed a
$75&nbsp;million private placement of senior unsecured notes
with several institutional lenders. The notes have an average
life of 7.2&nbsp;years (ranging from 5-10&nbsp;years), with an
average fixed interest rate during the first nine months of 2002
of approximately 7%. Interest is payable every six months. The
proceeds from the private placement were used to pay down a
portion of the Company&#146;s former revolving credit facility.
This amount was classified as long-term debt on the balance
sheet as of December&nbsp;31, 2001 and September&nbsp;30, 2002.
The remainder of the Company&#146;s borrowings under the
revolving credit agreement were included in the current portion
of long-term debt in the condensed consolidated balance sheet as
of December&nbsp;31, 2001, since it was due to expire in July
2002. The Company completed its new credit facility on
July&nbsp;2, 2002, therefore the outstanding borrowings at
September&nbsp;30, 2002 have been included in long-term debt in
the condensed consolidated balance sheet.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The terms of the new notes and revolving credit
agreement provide certain limitations on additional
indebtedness, sale and leaseback transactions, asset sales and
certain other transactions. Additionally, the Company is subject
to certain financial covenants based on its results of
operations.
</FONT>

<P align="left">
<B><FONT size="2">Note
8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Discontinued
Operations</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In April 2001, management determined that it
would no longer invest in its Internet consulting and
development segment (Immersant) and announced its decision to
exit the operation. Effective with the second quarter of 2001,
this segment is reflected as a discontinued operation. All prior
period results have been restated accordingly, including the
reallocation of fixed overhead charges to other business
segments.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The discontinued operations had net liabilities
(including accrued restructuring and discontinuance costs) of
$3,365 and $5,324 at September&nbsp;30, 2002 and
December&nbsp;31, 2001, respectively.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The balance in accrued restructuring and
discontinuance costs represents the estimated remaining costs to
exit this operation, as well as the remaining previously
recorded restructuring costs. Prior to the second quarter of
2001, this accrual had been reflected as part of the
Company&#146;s overall restructuring accrual. The
</FONT>

<P align="center"><FONT size="2">10
</FONT>

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

<DIV align="left">
<FONT size="2">activity in accrued restructuring and
discontinuance costs through September&nbsp;30, 2002, including
additions and payments made on that accrual, is summarized below.
</FONT>
</DIV>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="51%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Severance and</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Personnel-</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Occupancy</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Related Costs</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Costs</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Other</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Total</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Balance at December&nbsp;31, 2000
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,160</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">762</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">106</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,028</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2001 Expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,291</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,097</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">323</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,711</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Paid in 2001
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,451</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,823</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(289</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,563</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Balance at December&nbsp;31, 2001
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,036</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">140</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,176</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Paid in 2002
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,274</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(64</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,338</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Balance at September&nbsp;30, 2002
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,762</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">76</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,838</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<B><FONT size="2">Note 9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued
Restructuring and Integration Charges</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During the second quarter of 2001, the Company
recorded restructuring charges in connection with cost
reductions impacting all three of its segments. The cost
reduction program included the closing of an office in the
globalization segment, downsizing several locations in the
outsourcing segment, and a reduction in workforce of
approximately 10% of the Company&#146;s financial print
operations. In October 2001, the Company reduced the workforce
of its domestic and international financial printing operations
by an additional 10%, or approximately 350&nbsp;employees. The
Company recorded $10,789 in restructuring charges related to
these activities during the year ended December&nbsp;31, 2001.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In September 2002, the Company recorded
restructuring charges of $2,305 in connection with an additional
reduction in workforce of approximately 2.5% of the
Company&#146;s total workforce, or approximately 200 employees,
primarily in the financial printing segment. The third quarter
charges also include a non-cash asset impairment charge of
$1,300.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In connection with the Company&#146;s acquisition
of Mendez in August 2001, the Company incurred certain costs to
integrate the operations of Mendez, including costs to shut down
certain BGS facilities and terminate certain BGS employees.
These costs, which totaled $2,704, were included as part of
restructuring and integration expenses in the consolidated
statements of operations during the year ended December&nbsp;31,
2001.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The activity related to these accruals through
September&nbsp;30, 2002, including additions and payments made,
are summarized below.
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="51%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Severance and</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Personnel-</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Occupancy</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Related Costs</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Costs</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Other</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Total</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Balance at December&nbsp;31, 2000
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">851</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">865</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2001 Expense
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10,565</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,741</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,187</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13,493</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Paid in 2001
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(7,172</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,213</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(597</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(8,982</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Balance at December&nbsp;31, 2001
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,244</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">528</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">604</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,376</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2002 Expense
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,255</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">50</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,305</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Paid in 2002
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,135</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(321</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(654</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(5,110</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Balance at September&nbsp;30, 2002
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,364</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">207</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,571</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Occupancy costs represent facility exit costs
associated with the closing of an office in the globalization
segment and the downsizing of several locations in the
outsourcing segment. The remaining accrued severance and
personnel-related costs are expected to be paid during 2002 and
2003.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company also accrued $5,100 of costs
associated with the acquisition of Mendez&#146; operations
during the year ended December&nbsp;31, 2001, which were
accounted for as part of the cost of the acquisition. These
costs included costs to shut down certain Mendez facilities and
terminate certain Mendez employees.
</FONT>

<P align="center"><FONT size="2">11
</FONT>

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

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The payments made on that accrual are summarized
below.
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="50%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Severance and</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Personnel-</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Occupancy</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Related Costs</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Costs</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Other</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Total</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Opening balance
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,865</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,013</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">222</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Paid in 2001
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,281</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(369</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(192</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,842</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Balance at December&nbsp;31, 2001
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,584</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">644</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">30</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,258</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Paid in 2002
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,470</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(274</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,744</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Balance at September&nbsp;30, 2002
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,114</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">370</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">30</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,514</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In connection with the Company&#146;s acquisition
of GlobalNet in September 2002, the Company accrued $3,419 of
costs associated with the integration of GlobalNet&#146;s
operations, which were accounted for as part of the cost of the
acquisition. These costs include estimated severance costs
($2.3&nbsp;million) and lease termination costs
($1.1&nbsp;million) associated with eliminating GlobalNet
facilities and terminating certain GlobalNet employees. In
addition, the Company is expected to incur certain costs to
integrate the operations of GlobalNet, including costs to shut
down certain BGS facilities and terminate certain BGS employees.
These costs, estimated to be approximately $4.5 to
$5&nbsp;million, have not been accrued at September&nbsp;30,
2002, as the criteria for accrual had not been met. Such costs
will be included as part of restructuring and integration
expenses in the consolidated statements of operations during the
quarter ended December&nbsp;31, 2002.
</FONT>

<P align="left">
<B><FONT size="2">Note 10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sale of
Chicago Building</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In June 2002, Bowne&#146;s financial printing
operations moved to a new leased facility in Chicago. The
Company completed the sale of its former Chicago facility in
September 2002 for approximately $8.3&nbsp;million. The net
carrying amount of the facility was approximately
$3.4&nbsp;million, and as such, this transaction resulted in a
gain of approximately $4.9&nbsp;million for the period ended
September&nbsp;30, 2002.
</FONT>

<P align="left">
<B><FONT size="2">Note 11.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sale of
Publishing Division</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In September 2002, the Company sold its
publishing division for approximately $15&nbsp;million, of which
$14&nbsp;million was received in cash. The remainder is being
held in escrow until March&nbsp;27, 2003 for the purpose of
providing a source of payment for indemnity claims under the
asset purchase agreement. During 2001, this division had sales
of approximately $5.6&nbsp;million, with net liabilities of
approximately $0.8&nbsp;million at closing. This transaction
resulted in a gain of approximately $14.9&nbsp;million,
$0.5&nbsp;million which may be recognized upon the expiration of
the escrow agreement.
</FONT>

<P align="left">
<B><FONT size="2">Note 12.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Segment
Information</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company continues to focus its business on
&#147;Empowering Your Information,&#148;<SUP>TM</SUP> a term
used to define the management, repurposing and distribution of a
client&#146;s information. The Company manages and repurposes
information for distribution by digital, Internet or paper
media. It manages documents on the clients&#146; site or at its
own facilities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company&#146;s continuing operations are
classified into three reportable business segments: financial
printing, outsourcing and globalization. The services of each
segment are marketed throughout the world. The major services
provided by each segment are as follows:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <I><FONT size="2">Financial
    Printing</FONT></I><FONT size="2">&nbsp;&#151; transactional
    financial, corporate reporting, mutual fund, investment company
    services, commercial and digital printing.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <I><FONT size="2">Outsourcing</FONT></I><FONT size="2">&nbsp;&#151;
    document management solutions primarily for the legal and
    financial communities. This segment is commonly referred to as
    Bowne Business Solutions (BBS). The results for the outsourcing
    segment include the operating results of Document Management
    Services, Inc., from its date of acquisition, April 6, 2001.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">12
</FONT>

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

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <I><FONT size="2">Globalization</FONT></I><FONT size="2">&nbsp;&#151;
    outsourced globalization solutions, including technical writing
    and content creation, terminology and content management, and
    localization and translation services. This segment is commonly
    referred to as Bowne Global Solutions. The results for the
    globalization segment include the operating results of Mendez
    from its date of acquisition, August&nbsp;29, 2001. The results
    for the globalization segment for the fourth quarter of 2002
    will include the operating results of Berlitz GlobalNet,
    acquired by the Company on September&nbsp;27, 2002.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A fourth segment (Internet consulting and
development) which previously provided integrated Internet
applications primarily for the financial services sector was
discontinued effective with the second quarter of 2001.
Accordingly, segment information is no longer being presented
for that segment.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Information regarding the operations of each
business segment is set forth below. Performance is evaluated
based on several factors, of which the primary financial measure
is business segment earnings before interest, income taxes,
depreciation and amortization expense (&#147;EBITDA&#148;). The
Company also uses earnings before interest, income taxes, and
amortization expense (&#147;EBITA&#148;) as a measure of
performance; therefore, this information is also presented. The
Company manages income taxes on a global basis. Segment
performance is evaluated exclusive of the disposal of business
units, purchased in-process research and development charges,
restructuring, integration and asset impairment charges, other
expenses, and other income.
</FONT>

<P align="center"><FONT size="2">13
</FONT>

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

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="72%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Three Months Ended</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">September 30,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">(000&#146;s omitted)</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">(Unaudited)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Revenue from external customers:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Financial printing
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">130,205</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">157,913</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Outsourcing
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">57,940</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">58,763</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Globalization
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26,011</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25,379</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">214,156</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">242,055</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">EBITDA:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Financial printing
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,776</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,207</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Outsourcing
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,601</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,259</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Globalization
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,341</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,973</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other (see note below)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,470</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(413</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20,506</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10,026</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Depreciation expense:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Financial printing
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,287</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,361</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Outsourcing
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,246</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,383</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Globalization
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">873</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10,033</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,617</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">EBITA:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Financial printing
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,511</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,154</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Outsourcing
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,355</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,876</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Globalization
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,841</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other (see note below)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,470</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(413</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10,473</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">409</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Amortization expense
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(430</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,427</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Interest expense
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,844</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,446</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Income (loss) before income taxes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,199</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,464</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">Note:&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">In 2002, other includes gains on the sale of the
    publishing division ($14,869) and the Chicago building ($4,889),
    offset by restructuring and impairment charges ($3,605). In
    2001, other includes purchased in-process research and
    development charges ($800).
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">14
</FONT>

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

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="72%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Nine Months Ended</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">September&nbsp;30,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">(000&#146;s omitted)</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">(Unaudited)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Revenue from external customers:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Financial printing
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">511,879</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">582,045</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Outsourcing
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">175,798</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">173,508</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Globalization
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">79,430</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">67,596</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">767,107</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">823,149</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">EBITDA:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Financial printing
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">51,579</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">45,319</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Outsourcing
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,722</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,061</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Globalization
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(5,853</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,491</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other (see note below)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,929</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(9,872</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">71,377</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">48,999</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Depreciation expense:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Financial printing
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">23,236</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">24,825</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Outsourcing
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,839</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,144</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Globalization
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,276</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,633</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">31,351</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">31,602</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">EBITA:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Financial printing
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">28,343</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20,494</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Outsourcing
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,883</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,917</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Globalization
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(10,129</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,858</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other (see note below)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,929</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(9,872</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">40,026</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17,397</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Amortization expense
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,290</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(6,133</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Interest expense
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,951</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,741</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Income from continuing operations before income
    taxes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">33,785</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,523</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">Note:&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">In 2002, other includes gains on the sale of the
    publishing division ($14,869) and the Chicago building ($4,889),
    offset by restructuring and impairment charges ($3,605). In
    2001, other includes the loss on the sale of the Montreal
    commercial printing operation ($1,858), restructuring and
    impairment charges ($8,228) and purchased in-process research
    and development charges ($800).
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">15
</FONT>

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

<!-- link1 "BOWNE &#38; CO., INC. AND SUBSIDIARIES MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS" -->
<DIV align="left"><A NAME="001"></A></DIV>

<P align="center">
<B><FONT size="2">BOWNE &#38; CO., INC. AND
SUBSIDIARIES</FONT></B>

<P align="center">
<B><FONT size="2">MANAGEMENT&#146;S DISCUSSION AND ANALYSIS
OF</FONT></B>

<DIV align="center">
<B><FONT size="2">FINANCIAL CONDITION AND RESULTS OF
OPERATIONS</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(000&#146;s omitted, except share information
and where noted)</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">Cautionary Statement Concerning
Forward-Looking Statements</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company desires to take advantage of the
&#147;safe harbor&#148; provisions of the Private Securities
Litigation Reform Act of 1995 (the &#147;1995 Act&#148;). The
1995 Act provides a &#147;safe harbor&#148; for forward-looking
statements to encourage companies to provide information without
fear of litigation so long as those statements are identified as
forward-looking and are accompanied by meaningful cautionary
statements identifying important factors that could cause actual
results to differ materially from those projected.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Set forth below is a summary of factors the
Company believes are important to its business and that could
cause actual results to differ from the Company&#146;s
expectations. The Company is publishing these factors pursuant
to the 1995 Act. Such factors should not be construed as
exhaustive or as an admission regarding the adequacy of
disclosure made by the Company prior to the effective date of
the 1995 Act. Readers should understand that many factors govern
whether any forward-looking statements can or will be achieved.
Any one of those factors could cause actual results to differ
materially from those projected. The words &#147;believe,&#148;
&#147;expect,&#148; &#147;anticipate,&#148; &#147;intend,&#148;
&#147;aim,&#148; &#147;will&#148; and similar words identify
forward-looking statements. The Company cautions readers that
the following important factors, among others, could affect the
Company&#146;s actual results and could cause the Company&#146;s
actual results to differ materially from those expressed either
orally or in writing in any forward-looking statements made by
or on behalf of the Company:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Loss or retirement of key executives, employees
    or technical personnel.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The effect of changes within the Company&#146;s
    organization or in the compensation and benefit plans and the
    ability of the Company to attract and retain experienced and
    qualified management and sales personnel.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Natural events and acts of God such as
    earthquakes, fires or floods.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The effects of war or acts of terrorism.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The ability of the Company to integrate the
    operations of acquisitions into its operations.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">General economic or market conditions affecting
    the demand for transactional financial printing or other
    solution offerings.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">Results of Operations</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Historically, the Company has primarily provided
financial printing and other related services. Revenue related
to transactional financial printing services is affected by
cyclical conditions of the capital markets. Over the past few
years the Company has diversified and expanded its service
offerings to be less dependent on transactional financial
printing and to reduce the exposure that earnings have to the
cyclical financial markets. Revenue (as a percentage of the
Company&#146;s total revenue) relating to the financial printing
segment represents 67% for the nine months ended
September&nbsp;30, 2002, compared to 71% for the nine months
ended September&nbsp;30, 2001. Revenue relating to the financial
printing segment has declined as a percentage of total revenue
due to a combination of the Company&#146;s diversification
efforts and the overall slowdown in capital market activity.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Management evaluates the performance of its
operating segments separately to monitor the different factors
affecting financial results. Each segment is subject to review
and evaluation as management monitors current market conditions,
market opportunities and available resources. The performance of
each segment is discussed over the next few pages. The Internet
consulting and development segment is no longer being discussed
as it was classified as a discontinued operation during the
second quarter of 2001, based on management&#146;s decision to
exit this segment.
</FONT>

<P align="center"><FONT size="2">16
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition to measures of operating performance
determined in accordance with generally accepted accounting
principles, management also uses EBITDA and EBITA to evaluate
performance. EBITDA is defined as earnings before interest,
income taxes, depreciation and amortization expense. EBITA is
defined as earnings before interest, income taxes and
amortization expense. Segment performance is evaluated exclusive
of the disposal of business units, purchased in-process research
and development charges, restructuring, integration and asset
impairment charges, other expenses and other income. EBITDA and
EBITA, as adjusted for these items, are measured because
management believes that such information is useful in
evaluating the results of certain segments relative to other
entities that operate within these industries and to its
affiliated segments. EBITDA and EBITA are alternatives to, and
not replacement measures of, operating performance as determined
in accordance with generally accepted accounting principles.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company continually reviews its business,
manages costs, and aligns its resources with market demand,
especially in light of the recent volatility of the capital
markets and sustained decrease in transactional financial
printing activity. As a result, the Company took several steps
over the last two years to bring its costs in line with the
level of current market activity.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the fourth quarter of 2000 the Company
undertook cost cutting initiatives resulting in reductions in
fixed and variable costs, and a staff reduction of approximately
3% of the Bowne worldwide workforce. In April 2001 the Company
undertook an additional 10% reduction in the financial print
segment and related corporate overhead staff.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In August 2001, in conjunction with the upgrades
and investments made to its manufacturing network, Bowne
announced the discontinuance of its Chicago pressroom, thus
furthering the consolidation of the worldwide manufacturing
network. In October 2001, the Company undertook an additional
10% reduction in financial print staffing and related corporate
overhead. In total, the cost reduction initiatives taken by the
Company in 2001 have resulted in a reduction of Bowne&#146;s
annual cost base for continuing operations by approximately
$70&nbsp;million.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In September 2002, the Company undertook
additional cost cutting initiatives resulting in reductions in
fixed and variable costs, and a staff reduction of approximately
2.5% of the Bowne worldwide workforce, primarily in the
financial printing segment. These staff reductions resulted in
approximately $2.3&nbsp;million in severance and related
personnel costs. These cost reduction initiatives taken by the
Company are expected to result in an additional $10&nbsp;million
reduction of Bowne&#146;s annual cost base.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Much of these expense reductions are the result
of the elimination of redundant staff and facilities that the
Company maintained while it was bringing new technology
solutions and manufacturing capacity on-line to support the
unprecedented growth in transactional financial print work from
1996-2000. The Company does not anticipate the need to fully
replace this staff or the discontinued facilities in order to
service the anticipated eventual return of the capital
transactional market. In addition to the cost reductions in its
financial printing segment, the Company has also made workforce
reductions in its outsourcing and globalization segments due to
softness in those markets.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company recently announced that it expects to
make additional cost reductions to its fixed cost base over the
next 12&nbsp;months. The Company is refining its plans, and is
targeting approximately $35&nbsp;million of annualized cost
savings. In addition, the Company expects to reduce capital
spending in 2003. These cost reductions are expected to
primarily impact the financial printing segment, but will also
impact the globalization segment as well, as described in Note 5
to the condensed consolidated financial statements.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company completed two acquisitions during
2001 that affect comparability of results. In April 2001, the
Company completed the acquisition of Document Management
Services, Inc. (&#147;DMS&#148;), an outsourcing business in
Boston that is complementary to the Company&#146;s existing
outsourcing business and has strengthened its position in this
important market. In August 2001, the Company completed the
acquisition of Mendez S.A., which strengthened the
Company&#146;s leadership position in the globalization and
localization industry by combining complementary lines of
business, enhancing service offerings, and adding clients in the
transportation, aerospace and health care sectors, among others.
</FONT>

<P align="center"><FONT size="2">17
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On September&nbsp;27, 2002, BGS Companies, Inc.
completed the acquisition of Berlitz GlobalNet, Inc.
(&#147;GlobalNet&#148;) from Berlitz International, Inc. and
Berlitz Investment Corporation for $75&nbsp;million. GlobalNet
is headquartered in Princeton, New Jersey and provides
globalization and localization services, software testing,
translation and interpretation services. The Company expects
that the acquisition of GlobalNet will strengthen BGS&#146;s
position in the globalization and localization industry and
enhance BGS&#146;s results by enabling BGS to combine
complementary services, improve efficiencies, and diversify its
customer base. This acquisition became part of the globalization
segment.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">With regard to future acquisition activity, the
Company will continue to evaluate potential acquisition
candidates in areas that will enhance its existing businesses.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company also completed two other transactions
in the third quarter of 2002 that affect comparability of
results. The Company sold its securities publishing division for
approximately $15&nbsp;million, and recognized a gain on the
sale of approximately $14.9&nbsp;million. During 2001, this
operation had sales of approximately $5.6&nbsp;million, with net
liabilities of approximately $0.8&nbsp;million at closing. The
Company also completed the sale of the Chicago office building
for approximately $8.3&nbsp;million, resulting in a gain of
$4.9&nbsp;million during the third quarter of 2002.
</FONT>

<P align="left">
<B><FONT size="2">Quarter Ended September&nbsp;30, 2002 Compared
to Quarter Ended September&nbsp;30, 2001</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Financial Printing</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Revenue decreased $27,708, or 18%, with the
largest class of service in this segment, transactional
financial printing, down $21,949, or 30%, compared to the year
earlier period. Overall, the market for transactional financial
printing remained low due to the continued lack of capital
market activity, both domestic and international. For example,
world-wide merger and acquisition activity decreased
approximately 37% in the third quarter of 2002, compared to the
prior year. In addition, the number of IPO transactions
decreased to its lowest level in 25&nbsp;years. This is a
continued decline from the level that the Company experienced
over the last two years in the domestic capital markets. The
Company continues to maintain its industry leading market share
in both the domestic and international markets. During the third
quarter, the Company provided its services on more mergers and
acquisitions transactions than its two largest competitors
combined.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Commercial printing revenue decreased $2,643, or
26%, primarily as the result of decreased demand for commercial
printing services and a decision by the Company to focus on
higher margin work. Mutual fund services revenue decreased
$4,287, or 11%, which is primarily due to the consolidation of
funds and tightened spending by mutual funds in reaction to the
slowness in the financial markets. The decrease is also
partially due to timing differences in job completion between
the current year and prior year.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Gross margin contribution of this segment
decreased by $3,624, or 8%, but the margin percentage increased
by approximately four percentage points to 34%, reflecting
better resource utilization due primarily to the cost savings
realized as a result of the Company&#146;s cost reduction
initiatives, and also due to the focus on higher margin business.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Selling and administrative expenses decreased
$3,193, or 8%, to $39,256 primarily as a result of cost
reductions implemented during the year, including the workforce
reductions during the fourth quarter of 2001. The decrease was
also the result of lower expenses that are directly associated
with sales such as selling expenses (including commissions) and
certain variable administrative expenses. As a percent of sales,
selling and administrative expenses increased by approximately
three percentage points to 30%. This increase is primarily a
result of lower revenues available to absorb certain fixed
selling and administrative expenses.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">EBITDA decreased $431, or 8%, to $4,776 as a
result of the foregoing.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Outsourcing</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Revenue decreased $823, or approximately 1% as
compared to the same period in the prior year. Decreased revenue
from certain existing customers due to client downsizings, as
well as bankruptcy filings by former customers and the sustained
downturn in the capital markets more than offset volume growth
on certain existing client contracts and new customers.
</FONT>

<P align="center"><FONT size="2">18
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The outsourcing segment primarily provides
services to the legal, investment banking and financial services
industries. Activity from existing clients can decrease when the
financial markets experience downturns such as the one we are
currently in. Services are contractual and, therefore, help
provide a means to manage business volatility more effectively.
Declining volumes can be offset somewhat through monthly minimum
charges on certain contracts. At the same time, additional
outsourcing opportunities from new clients are becoming more
prevalent as businesses continue to focus on core competencies
and look for cost effective alternatives to managing their
document and infrastructure requirements.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Gross margin from this segment decreased $166, or
1%, while the margin percentage remained consistent at 20%. This
decrease in gross margin is directly related to the reduced
level of revenues.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Selling and administrative expenses increased
$492, or 6%, to $8,821, and as a percent of sales, these
expenses increased one percentage point to 15%. This increase is
caused by certain administrative costs, including facilities
costs, increasing, despite decreased revenue.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">EBITDA from this segment decreased by $658, or
20%, to $2,601, and decreased by approximately one percentage
point as a percentage of sales.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Globalization</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Revenue increased $632, or 3%. This is due to the
acquisition of Mendez in August 2001, offset by lower spending
by some of our largest clients in the technology industry,
caused primarily by delays in their new product releases. None
of GlobalNet&#146;s results are included in our results of
operations since the acquisition was completed at the end of the
quarter. We will begin to realize the impact of revenues from
the GlobalNet acquisition during the fourth quarter of this year.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Gross margin from this segment decreased $1,616,
or 17%, and the gross margin percentage decreased approximately
seven percentage points to 30%. Lower than expected revenue
growth on a higher fixed cost base, resulting from the Mendez
acquisition, is the principal cause of the margin decline. On a
sequential basis, gross margin percentage increased from 23% in
the second quarter of 2002 to 30% in the third quarter of 2002,
as a result of certain cost cutting initiatives taken during the
second quarter of 2002. The Company anticipates additional
margin improvement as it merges redundant facilities and
integrates its workforce with that of GlobalNet.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Selling and administrative expenses increased
$2,698, or 37%, to $10,002, and as a percentage of revenue
increased approximately ten percentage points to 39%. The
increase in selling and administrative expenses is generally
related to the acquisition of Mendez. The increase as a
percentage of revenue is primarily due to lower than expected
revenue growth on a higher fixed cost base. The Company expects
this segment to benefit from economies of scale created by the
acquisition of GlobalNet and anticipates cost savings as it
merges redundant facilities and integrates the two workforces.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As a result of the foregoing, EBITDA decreased to
a loss of $2,341 from earnings of $1,973 for the same period in
2001.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Summary</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As a result of the foregoing, overall revenue
decreased $27,899, or approximately 12%, to $214,156. The
decrease is primarily attributed to the decrease in financial
printing. There was an $5,406, or 8%, decrease in gross margin;
and the gross margin percentage increased approximately one
percentage point to approximately 29%. This increase in gross
margin percentage was attributable to the improvements generated
from better resource utilization due to workforce reductions
during 2001, as well as a focus on higher margin business,
offset by declining margin percentages in globalization.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Selling and administrative expenses on a
company-wide basis remained flat at $58,079. This category is
affected by decreases primarily due to lower costs directly
related to the decrease in sales, such as selling expenses
(including commissions and bonuses) and certain variable
administrative expenses, as well as decreases in administrative
expenses as a result of workforce reductions and reductions in
discretionary
</FONT>

<P align="center"><FONT size="2">19
</FONT>

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<DIV align="left">
<FONT size="2">spending, offset by increased selling and
administrative expenses from the acquisition of Mendez. As a
percentage of sales, these expenses increased by 3% to
approximately 27%. This increase is primarily a result of lower
revenues available to absorb certain fixed selling and
administrative expenses.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Depreciation increased $416, and amortization
decreased $1,997 as a result of the adoption of SFAS 142 which
eliminated goodwill amortization effective January&nbsp;1, 2002.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">There were $3,605 in restructuring and asset
impairment charges in the current year. Restructuring charges of
$2,305 were recorded in connection with the reduction in
workforce of approximately 2.5% of the Company&#146;s total
workforce, or approximately 200 employees, primarily in the
financial printing segment. In addition, there was a non-cash
asset impairment charge of $1,300 in the outsourcing segment.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Interest expense increased $398 as a result of a
combination of a higher average interest rate in the current
year, offset by lower average borrowings in 2002
($117&nbsp;million for the three months ended September&nbsp;30,
2002 as compared to $133&nbsp;million for the same period in
2001).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The gain on sale of subsidiary relates to the
sale of the Company&#146;s publishing division (gain of $14,869)
in the current year, as discussed in Note 11 to the financial
statements.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The gain on the sale of building relates to the
sale of the Company&#146;s Chicago office building (gain of
$4,889) in the current year, as discussed in Note 10 to the
financial statements.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The overall effective income tax rate for the
third quarter of 2002 was 43%. The overall effective tax rate
for the third quarter of 2001 was impacted by the loss in the
third quarter of 2001 versus income in the current quarter. The
change in the effective income tax rate is primarily due to the
change in non-deductible items, primarily the elimination of
goodwill amortization, while the rate applied to taxable income
remained at approximately 39%.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As a result of the foregoing, net income was
$4,649 in 2002 as compared to a net loss of $3,703 for the same
period last year.
</FONT>

<P align="left">
<B><FONT size="2">Nine Months Ended September&nbsp;30, 2002
Compared to Nine Months Ended September&nbsp;30, 2001</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Financial Printing</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Revenue decreased $70,166, or 12%, with the
largest class of service in this segment, transactional
financial printing, down $29,784, or 13% compared to the year
earlier period. The market for transactional financial printing
remained low and was down during the first nine months of 2002,
as compared to 2001, primarily due to the lack of capital market
activity in the nine months of 2002, both domestic and
international. This is a continued decline from what the Company
experienced over the last two years in the capital markets.
Despite this downturn, the Company continues to maintain its
industry leading market share in both the domestic and
international markets. During the nine months ended
September&nbsp;30, 2002, the Company performed financial
printing services for two of the largest IPOs in the market, for
Travelers Property Casualty and for Nestle&#146;s spin-off of
Alcon, and for 41% of all IPOs in that period, an increase in
market share of eleven percentage points over the prior period.
The Company also performed financial printing services for some
significant mergers and acquisitions transactions during the
nine months ended September&nbsp;30, 2002. In Europe, the
Company performed the financial printing services for the
Schering acquisition of Collateral Theurapeutics, and
Barilla&#146;s acquisition of Kamps. Also, revenue increased in
Asia, mainly from China, Korea and Taiwan, and the Company
performed financial printing services during the second quarter
of 2002 for the Bank of China initial public offering.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Commercial printing revenue decreased $28,077, or
51%, primarily as a result of the decreased demand for
commercial printing services, as well as the sale of the
Company&#146;s Montreal commercial printing operations in
June&nbsp;2001 and a decision by the Company to focus on higher
margin work. Digital printing revenue decreased $4,735, or 22%,
due to decreased volumes of statement printing, as well as a
decision by the Company to focus on higher margin digital
printing work.
</FONT>

<P align="center"><FONT size="2">20
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Gross margin contribution of this segment
decreased by $5,315, or 3%; however, the gross margin percentage
increased by approximately four percentage points to 39%,
reflecting better resource utilization due primarily to the cost
savings realized as a result of the Company&#146;s cost
reduction initiatives, and also due to the focus on higher
margin business.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Selling and administrative expenses decreased
$11,575 or 7%, to $146,263, primarily as a result of cost
reductions implemented during the year, including the workforce
reductions during the second and fourth quarters of 2001. The
decrease was also the result of lower expenses that are directly
associated with sales such as selling expenses (including
commissions) and certain variable administrative expenses. As a
percent of sales, selling and administrative expenses increased
by approximately two percentage points to 29%. This increase is
primarily the result of lower revenues available to absorb
certain fixed selling and administrative expenses.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">EBITDA increased $6,260, or 14%, to $51,579
primarily as a result of the Company&#146;s cost reduction
initiatives.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Outsourcing</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Revenue increased $2,290, or 1%. The increase is
attributed to the acquisition of DMS in April 2001. Other
revenue decreased approximately 1% compared to the prior year.
Volume growth on existing client contracts and new customers was
more than offset by decreased revenue from certain existing
customers due to client downsizings and the sustained downturn
in the capital markets, as well as lost revenue from former
customers in bankruptcy.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The outsourcing segment primarily provides
services to the legal, investment banking and financial services
industries. Activity from existing clients can decrease when the
financial markets experience downturns such as the one we are
currently in. Services are contractual and, therefore, help
provide a means to manage business volatility more effectively.
Declining volumes can be offset somewhat through monthly minimum
charges on certain contracts. At the same time, additional
outsourcing opportunities from new clients are becoming more
prevalent as businesses continue to focus on core competencies
and look for cost effective alternatives to managing their
document and infrastructure requirements.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Gross margin from this segment increased $3,044,
or 9%, while the margin percentage increased approximately two
percentage points to 21%. This increase in gross margin
percentage is directly related to cost cutting initiatives such
as the 2001 workforce reduction, a continued focus on driving
productivity while improving costs, and improving bottom line
growth through effective asset management and automation.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Selling and administrative expenses increased
$2,383, or 10%, to $26,472, and as a percent of sales, it
increased by approximately one percentage point to 15%. This
increase is caused by certain administrative costs, including
facilities costs, increasing, and the acquisition of DMS.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">EBITDA from this segment increased by $661, or
7%, to $9,722 and remained flat as a percentage of sales.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp; </FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Globalization</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Revenue increased $11,834 or 18%. This is due to
the acquisition of Mendez in August 2001, offset by lower
spending by some of our largest clients in the technology
industry, caused primarily by delays in their new product
releases. None of GlobalNet&#146;s results are included in our
results of operations since the acquisition was completed at the
end of the quarter. We will begin to realize the impact of
revenues from the GlobalNet acquisition during the fourth
quarter of this year.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Gross margin from this segment decreased $1,179,
or 5%, while the gross margin percentage decreased approximately
seven percentage points to 30%. Lower than expected revenue
growth on a higher fixed cost base, resulting from the Mendez
acquisition, is the principal cause of the margin decline. The
Company anticipates margin improvement as it merges redundant
facilities and integrates BGS&#146;s workforce with that of
GlobalNet.
</FONT>

<P align="center"><FONT size="2">21
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Selling and administrative expenses increased
$9,165, or 45%, to $29,564, and as a percentage of revenue
increased seven percentage points to approximately 37%. The
increase in selling and administrative expenses is directly
related to the acquisition of Mendez. The increase as a
percentage of revenue is primarily due to lower than expected
revenue growth on a higher fixed cost base. The Company expects
this segment to benefit from economies of scale created by the
acquisition of GlobalNet and anticipates cost savings as it
merges redundant facilities and integrates the two workforces.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As a result of the foregoing, EBITDA decreased to
a loss of $5,853 from earnings of $4,491 for the same period in
2001.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Summary</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Overall revenue decreased $56,042, or 7%, to
$767,107. The decrease is attributed to the decline in financial
printing offset by increases in outsourcing and globalization.
There was a $3,450, or 1%, decrease in gross margin; and the
gross margin percentage increased approximately two percentage
points to 34%. This increase in gross margin percentage was
attributable to the improvements generated from better resource
utilization due to workforce reductions during 2001, as well as
a focus on higher margin business, offset by declining margin
percentages in globalization.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Selling and administrative expenses on a
company-wide basis remained flat at $202,299. This category is
affected by decreases primarily due to lower costs directly
related to the decrease in sales, such as selling expenses
(including commissions and bonuses) and certain variable
administrative expenses, as well as decreases in administrative
expenses as a result of workforce reductions and reductions in
discretionary spending, offset by increased selling and
administrative expenses from the acquisitions of Mendez and DMS.
As a percentage of sales, these expenses increased by
approximately two percentage points to 26%. This increase is
primarily the result of lower revenues available to absorb
certain fixed selling and administrative expenses.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Depreciation decreased $251, primarily as a
result of the sale of the commercial printing operations in
Montreal, Quebec in June 2001, and amortization decreased $4,843
as a result of the adoption of SFAS&nbsp;142 which eliminated
goodwill amortization effective January&nbsp;1, 2002.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">There were $3,605 in restructuring and asset
impairment charges in 2002, as compared to $8,228 in the prior
year, as previously discussed in Note&nbsp;9 to the financial
statements.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Interest expense increased $210 as a result of a
combination of a higher average interest rate in the current
year (7% for the nine months ended September&nbsp;30, 2002, as
compared to 5% for the same period in 2001), and higher average
borrowings in 2002 ($128&nbsp;million for the nine months ended
September 30, 2002, as compared to $119&nbsp;million for the
same period in 2001).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The gain (loss) on sale of subsidiary relates to
the sale of the Company&#146;s publishing division (gain of
$14,869) in 2002, as discussed in Note 11 to the financial
statements, and to the sale of the commercial print operation in
our Montreal location (loss of $1,858) in 2001.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The gain on the sale of building relates to the
sale of the Company&#146;s Chicago office building (gain of
$4,889) in the current year, as discussed in Note 10 to the
financial statements.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The overall effective income tax rate for the
first nine months of 2002 was 43%. The overall effective income
tax rate for the first nine months of 2001 was impacted by the
non-deductibility of the loss on discontinued operations during
that period. After taking this into consideration, the overall
effective income tax rate for the first nine months of 2001 was
slightly higher than in 2002 due to the change in non-deductible
items, primarily the elimination of goodwill amortization, while
the rate applied to taxable income remained at approximately 39%.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As a result of the foregoing, income from
continuing operations for the first nine months of 2002 was
$19,258 as compared to $965 for the same period last year.
</FONT>

<P align="center"><FONT size="2">22
</FONT>

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<P align="left">
<B><FONT size="2">Business Outlook</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following statements and certain statements
made elsewhere in this document are based upon current
expectations. These statements are forward looking and actual
results may differ materially. Current trends in the global
economy, particularly in the domestic and international capital
markets, make it difficult at present to project future activity.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company expects the fourth quarter results
from continuing operations to be consistent with the third
quarter. The results of its financial print business will
continue to be adversely affected by the anticipated continued
softness in the capital markets, both domestically and
internationally.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Although several circumstances, including
volatile market conditions, have limited the Company&#146;s
visibility into future financial results, we estimate the fourth
quarter and full year 2002 results will be in the ranges shown
below. The outlook reflects results from continuing operations,
and the EBITDA and per share information excludes any
restructuring charges or one-time items.
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="53%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="21%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="20%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">4th Quarter</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Full-year</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Revenues, approximately
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">$215 to $230&nbsp;million
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">$1.0&nbsp;billion
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">EBITDA, in the range of
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">$3 to $8&nbsp;million
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">$60 to $65&nbsp;million
    </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Depreciation and amortization, approximately
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">$11&nbsp;million
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">$44&nbsp;million
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Interest expense, approximately
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">$2&nbsp;million
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">$7&nbsp;million
    </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Diluted (loss) earnings per share, in the range of
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">$(0.10) to $(0.20)
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">$0.11 to $0.17
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Capital expenditures, approximately
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">$15&nbsp;million
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">$38&nbsp;million
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">For comparison purposes, if the new accounting
standards for goodwill amortization had been effective for all
of 2001, this would have added approximately $0.05 and $0.18 per
diluted share to the Company&#146;s fourth quarter and full-year
2001 financial results, respectively.
</FONT>

<P align="left">
<B><FONT size="2">Liquidity and Capital Resources</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">At September&nbsp;30, 2002, the Company had a
working capital ratio of 2.03 to 1 and working capital of
$154,716 compared to a ratio of 1.42 to 1 and working capital of
$78,142 at December&nbsp;31, 2001. Approximately
$37&nbsp;million of the increase in working capital is due to
the decrease in the current portion of long-term debt as a
result of renewing the revolving line of credit, since this debt
was classified as current at December&nbsp;31, 2001 and is
classified as long-term at September&nbsp;30, 2002. In addition,
approximately $31&nbsp;million of the increase in working
capital is due to the acquisition of GlobalNet on
September&nbsp;27, 2002. This acquisition was funded with
long-term debt.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In February 2002, the Company completed a
$75&nbsp;million private placement of senior unsecured notes
with several institutional lenders. The notes have an average
life of 7.2&nbsp;years with an approximate interest rate of
7.3%. The proceeds from the private placement were used to pay
down a portion of the Company&#146;s existing revolving credit
facility. The Company completed its new three-year $175 million
revolving credit facility on July&nbsp;2, 2002, which had an
outstanding balance of $87 million at September 30, 2002. The
new credit agreement bears interest at LIBOR plus 80-160 basis
points or an alternative base rate (greater of Federal Funds
rate plus 50 basis points or the Prime rate) depending on
certain leverage ratios.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The terms of the new notes and revolving credit
agreement provide certain limitations on additional
indebtedness, sale and leaseback transactions, asset sales and
certain other transactions. Additionally, the Company is subject
to certain financial covenants based on its results of
operations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">It is expected that the cash generated from
operations, working capital and the Company&#146;s borrowing
capacity will be sufficient to fund its development and
integration needs (both foreign and domestic), finance future
acquisitions and capital expenditures, provide for the payment
of dividends, and meet the Company&#146;s debt service
requirements. The Company experiences certain seasonal factors
with respect to its borrowing
</FONT>

<P align="center"><FONT size="2">23
</FONT>

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<DIV align="left">
<FONT size="2">needs; the heaviest period for borrowing is
normally the second quarter. The Company&#146;s existing
borrowing capacity provides for this seasonal increase.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Capital expenditures for the nine months ended
September&nbsp;30, 2002 were $23,541. Capital expenditures for
the full year 2002 are expected to be approximately
$38&nbsp;million. The Company plans to reduce capital spending
in 2003.
</FONT>

<P align="left">
<B><FONT size="2">Cash Flows</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company&#146;s focus on working capital
management continues, including managing receivables, inventory
and free cash flow. Average days sales outstanding improved to
73&nbsp;days for the nine months ended September&nbsp;30, 2002
from 74&nbsp;days for the nine months ended September&nbsp;30,
2001. The Company&#146;s net cash provided by operating
activities was $28,984 and $8,058 for the nine months ended
September&nbsp;30, 2002 and 2001, respectively. The increase in
cash provided by operations is primarily a result of lower
payments for employee compensation and accounts payable in 2002
as compared to 2001, along with less cash used in discontinued
operations in the current year.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Net cash used in investing activities was $56,828
and $84,051 for the nine months ended September&nbsp;30, 2002
and 2001, respectively. The decrease was primarily the result of
increased proceeds from the sale of the publishing division and
the sale of the Chicago facility in the current year, as well as
less net cash used in the acquisition of businesses in the
current year.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Net cash provided by financing activities was
$47,866 and $73,921 for the nine months ended September&nbsp;30,
2002 and 2001, respectively. Lower net borrowings in the current
year were the primary cause of the decrease.
</FONT>

<P align="left">
<B><FONT size="2">Recent Accounting Pronouncements</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In July 2001, the FASB issued Statement of
Financial Accounting Standards No.&nbsp;143
(&#147;SFAS&nbsp;143&#148;), &#147;Accounting for Asset
Retirement Obligations&#148;. SFAS&nbsp;143 requires entities to
record the fair value of a liability for an asset retirement
obligation in the period in which it is incurred. When the
liability is initially recorded, the entity is required to
capitalize the cost by increasing the carrying amount of the
related long-lived asset. Over time, the liability is accreted
to its present value each period, and the capitalized cost is
depreciated over the useful life of the related asset.
SFAS&nbsp;143 is effective for fiscal years beginning after
June&nbsp;15, 2002 and will be adopted by the Company effective
fiscal 2003. The Company believes adoption of this standard will
not have a material effect on its financial statements.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In July 2002, the FASB issued Statement of
Financial Accounting Standard No.&nbsp;146
(&#147;SFAS&nbsp;146&#148;), &#147;Accounting for Costs
Associated with Exit or Disposal Activities&#148;, which
nullifies Emerging Issues Task Force Issue No.&nbsp;94-3
(&#147;EITF&nbsp;94-3&#148;). SFAS&nbsp;146 requires that a
liability for a cost associated with an exit or disposal
activity be recognized when the liability is incurred, whereas
under EITF&nbsp;94-3, the liability was recognized at the
commitment date to an exit plan. The Company is required to
adopt the provisions of SFAS&nbsp;146 effective for exit or
disposal activities initiated after December&nbsp;31, 2002. The
Company is currently evaluating the impact of adoption of this
statement.
</FONT>

<P align="left">
<B><FONT size="2">Quantitative and Qualitative Disclosure about
Market Risk</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company&#146;s market risk is principally
associated with trends in the domestic and international capital
markets, particularly in the financial print segment and to a
limited degree, in the outsourcing segment. This includes trends
in the initial public offerings and mergers and acquisitions
markets, both important components of the financial printing
segment. The Company also has market risk tied to interest rate
fluctuations related to its debt obligations and fluctuations in
foreign currency, as discussed below.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Interest Rate Risk</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our exposure to market risk for changes in
interest rates relates primarily to our short-term investment
portfolio, long-term debt obligations, revolving credit
agreement and synthetic lease commitment. We do not
</FONT>

<P align="center"><FONT size="2">24
</FONT>

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<DIV align="left">
<FONT size="2">use derivative instruments in our short-term
investment portfolio. Our senior unsecured notes issued in
February 2002 consist of fixed rate instruments, and therefore,
would not be impacted by changes in interest rates. The notes
have an average life of 7.2&nbsp;years (ranging from
5-10&nbsp;years), and had an average interest rate of
approximately 7% for the nine months ended September&nbsp;30,
2002. Amounts borrowed under the revolving credit agreement
(which expired in July 2002) bore interest at LIBOR plus 25
basis points or an alternative base rate (greater of Federal
Funds rate plus 50 basis points or adjusted Eurodollar rate plus
25 basis points) depending on certain leverage ratios plus ten
basis points on the unused portion. During the six months ended
June&nbsp;30, 2002, the average interest rate approximated 2%.
Amounts borrowed under the new three-year $175&nbsp;million
revolving credit facility that was signed in July 2002 bear
interest at LIBOR plus 80-160 basis points or an alternative
base rate (greater of Federal Funds rate plus 50 basis points or
the Prime rate) depending on certain leverage ratios. During the
three months ended September 30, 2002, the average interest rate
approximated 5%. A hypothetical change in the annual interest
rate of 1% per annum would result in a change in interest
expense of approximately $0.5 million, based on the average
outstanding balances under the revolving credit facility during
the nine months ended September 30, 2002. The rental payments on
the Company&#146;s synthetic lease are based upon the cost of
the equipment plus LIBOR plus 150 or 200 basis points (while the
Canadian portion of the lease is based on Canadian LIBOR plus 35
basis points). The synthetic lease had a remaining principal
balance of $17.7&nbsp;million as of September&nbsp;30, 2002.
</FONT>
</DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Foreign Exchange Rates</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company derives a portion of its revenues
from various foreign sources. To date, the Company has not
experienced significant gains or losses as a result of
fluctuations in the exchange rates of the related foreign
currencies. However, as the Company expands its global presence,
fluctuations may become significant. The Company&#146;s
globalization segment is impacted by foreign currency
fluctuations since its labor costs are predominantly denominated
in foreign currencies, while a significant portion of its
revenue is denominated in U.S.&nbsp;dollars. This is somewhat
mitigated by the fact that revenue from the Company&#146;s
international financial print operations is denominated in
foreign currencies, while some of its costs are denominated in
U.S.&nbsp;dollars. To date, the Company has not used foreign
currency hedging instruments to reduce its exposure to foreign
exchange fluctuations. The Company has reflected translation
(loss) income of $(1,194) and $7,083 in its statements of
comprehensive income (loss) for the three and nine months ended
September&nbsp;30, 2002, respectively. This income is primarily
attributed to the fluctuation in value between the
U.S.&nbsp;dollar and the euro, pound sterling and Canadian
dollar.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Equity Price Risk</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We currently do not have any significant
investments in marketable equity securities. The Company&#146;s
defined benefit pension plan holds investments in both equity
and fixed income securities. The amount of the Company&#146;s
annual contribution to the plan is dependent upon, among other
things, the return on the plan&#146;s assets. To the extent
there are fluctuations in equity prices, the amount of the
Company&#146;s annual contribution could be affected. For
example, a decrease in equity prices could increase the amount
of the Company&#146;s annual contributions to the plan.
</FONT>

<P align="left">
<B><FONT size="2">Controls and Procedures</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company maintains a system of controls and
procedures designed to provide reasonable assurance as to the
reliability of the financial statements and other disclosures
included in this report, as well as to safeguard assets from
unauthorized use or disposition. The Company&#146;s management,
including the Chief Executive Officer and Chief Financial
Officer, evaluated the effectiveness of the design and operation
of the Company&#146;s disclosure controls and procedures within
90&nbsp;days prior to the filing date of this report, pursuant
to Exchange Act Rule&nbsp;13a-14. Based on that evaluation, the
Chief Executive Officer and Chief Financial Officer concluded
that the Company&#146;s disclosure controls and procedures are
effective in ensuring that all material information required to
be filed in this quarterly report has been made known to them in
a timely fashion. There have been no significant changes in
internal controls, or in other factors that could significantly
affect internal controls, subsequent to the date the Chief
Executive Officer and Chief Financial Officer completed their
evaluation.
</FONT>

<P align="center"><FONT size="2">25
</FONT>
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<!-- link1 "PART II OTHER INFORMATION" -->
<DIV align="left"><A NAME="002"></A></DIV>

<P align="center">
<B><FONT size="2">PART II</FONT></B>

<P align="center">
<B><FONT size="2">OTHER INFORMATION</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="8%"></TD>
    <TD width="92%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">Item&nbsp;6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Exhibits and Reports on
    Form&nbsp;8-K</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">(a)&nbsp;Exhibits
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2"> Exhibit&nbsp;10.17&nbsp;&#151; Stock Purchase
Agreement by and among BGS Companies, Inc. and Berlitz
International, Inc. and Berlitz Investment Corporation dated
August&nbsp;7, 2002
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2"> Exhibit&nbsp;99.1&nbsp;&#151; Certification
pursuant to 18&nbsp;U.S.C. Section&nbsp;1350 as adopted pursuant
to section&nbsp;906 of the Sarbanes-Oxley Act of 2002, signed by
Robert M. Johnson, Chairman of the Board and Chief Executive
Officer
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2"> Exhibit&nbsp;99.2&nbsp;&#151; Certification
pursuant to 18&nbsp;U.S.C. Section&nbsp;1350 as adopted pursuant
to section&nbsp;906 of the Sarbanes-Oxley Act of 2002, signed by
C. Cody Colquitt, Senior Vice President and Chief Financial
Officer
</FONT>

<P align="left">
<FONT size="2">(b)&nbsp;Reports on Form&nbsp;8-K
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2"> Report dated September&nbsp;30, 2002, including
press release announcing the completion of the acquisition of
Berlitz GlobalNet, Inc. from Berlitz International, Inc.
</FONT>

<P align="center"><FONT size="2">26
</FONT>

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

<!-- link1 "SIGNATURES" -->
<DIV align="left"><A NAME="003"></A></DIV>

<P align="center">
<B><FONT size="2">SIGNATURES</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report
to be signed on its behalf by the undersigned thereunto duly
authorized.
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">BOWNE &#38; CO., INC.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <FONT size="2">/s/ ROBERT M. JOHNSON
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <FONT size="2">_______________________________________ <BR>
     Robert M. Johnson
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <I><FONT size="2">(Chairman of the Board</FONT></I></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <I><FONT size="2">and Chief Executive Officer)</FONT></I></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Date: November&nbsp;14, 2002
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <FONT size="2">/s/ C.&nbsp;CODY COLQUITT
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <FONT size="2">_______________________________________ <BR>
     C.&nbsp;Cody Colquitt
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <I><FONT size="2">(Senior Vice President and Chief</FONT></I></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <I><FONT size="2">Financial Officer)</FONT></I></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Date: November&nbsp;14, 2002
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <FONT size="2">/s/ RICHARD BAMBACH&nbsp;JR.
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <FONT size="2">_______________________________________ <BR>
     Richard Bambach&nbsp;Jr.
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <I><FONT size="2">(Vice President and Corporate
    Controller)</FONT></I></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <I><FONT size="2">(Principal Accounting Officer)</FONT></I></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Date: November&nbsp;14, 2002
</FONT>

<P align="center"><FONT size="2">27
</FONT>

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

<!-- link1 "CERTIFICATIONS PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002" -->
<DIV align="left"><A NAME="004"></A></DIV>

<P align="center">
<B><FONT size="2">CERTIFICATIONS PURSUANT TO</FONT></B>

<DIV align="center">
<B><FONT size="2">SECTION&nbsp;302 OF</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">THE SARBANES-OXLEY ACT OF 2002</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">CERTIFICATION</FONT></B>

<P align="left">
<FONT size="2">I, Robert M. Johnson, certify that:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I have reviewed
    this quarterly report on Form&nbsp;10-Q of Bowne&nbsp;&#38; Co.,
    Inc.;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based on my
    knowledge, this quarterly report does not contain any untrue
    statement of a material fact or omit to state a material fact
    necessary to make the statements made, in light of the
    circumstances under which such statements were made, not
    misleading with respect to the period covered by this quarterly
    report;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based on my
    knowledge, the financial statements, and other financial
    information included in this quarterly report, fairly present in
    all material respects the financial condition, results of
    operations and cash flows of the registrant as of, and for, the
    periods presented in this quarterly report;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
    registrant&#146;s other certifying officers and I are
    responsible for establishing and maintaining disclosure controls
    and procedures (as defined in Exchange Act Rules&nbsp;13a-14 and
    15d-14) for the registrant and we have:
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">a)&nbsp;designed such disclosure controls and
    procedures to ensure that material information relating to the
    registrant, including its consolidated subsidiaries, is made
    known to us by others within those entities, particularly during
    the period in which this quarterly report is being prepared;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">b)&nbsp;evaluated the effectiveness of the
    registrant&#146;s disclosure controls and procedures as of a
    date within 90&nbsp;days prior to the filing date of this
    quarterly report (the &#147;Evaluation Date&#148;); and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">c)&nbsp;presented in this quarterly report our
    conclusions about the effectiveness of the disclosure controls
    and procedures based on our evaluation as of the Evaluation Date;
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
    registrant&#146;s other certifying officers and I have
    disclosed, based on our most recent evaluation, to the
    registrant&#146;s auditors and the audit committee of
    registrant&#146;s board of directors (or persons performing the
    equivalent function):
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">a)&nbsp;all significant deficiencies in the
    design or operation of internal controls which could adversely
    affect the registrant&#146;s ability to record, process,
    summarize and report financial data and have identified for the
    registrant&#146;s auditors any material weaknesses in internal
    controls; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">b)&nbsp;any fraud, whether or not material, that
    involves management or other employees who have a significant
    role in the registrant&#146;s internal controls; and
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
    registrant&#146;s other certifying officers and I have indicated
    in this quarterly report whether or not there were significant
    changes in internal controls or in other factors that could
    significantly affect internal controls subsequent to the date of
    our most recent evaluation, including any corrective actions
    with regard to significant deficiencies and material weaknesses.
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <FONT size="2">/s/ ROBERT M. JOHNSON
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <FONT size="2">_______________________________________ <BR>
     Robert M. Johnson
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <I><FONT size="2">Chairman of the Board and Chief Executive
    Officer</FONT></I></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Date: November&nbsp;14, 2002
</FONT>

<P align="center"><FONT size="2">28
</FONT>

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

<P align="left">
<B><FONT size="2">CERTIFICATION</FONT></B>

<P align="left">
<FONT size="2">I, C. Cody Colquitt, certify that:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I have reviewed
    this quarterly report on Form&nbsp;10-Q of Bowne&nbsp;&#38; Co.,
    Inc.;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based on my
    knowledge, this quarterly report does not contain any untrue
    statement of a material fact or omit to state a material fact
    necessary to make the statements made, in light of the
    circumstances under which such statements were made, not
    misleading with respect to the period covered by this quarterly
    report;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based on my
    knowledge, the financial statements, and other financial
    information included in this quarterly report, fairly present in
    all material respects the financial condition, results of
    operations and cash flows of the registrant as of, and for, the
    periods presented in this quarterly report;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
    registrant&#146;s other certifying officers and I are
    responsible for establishing and maintaining disclosure controls
    and procedures (as defined in Exchange Act Rules&nbsp;13a-14 and
    15d-14) for the registrant and we have:
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">a)&nbsp;designed such disclosure controls and
    procedures to ensure that material information relating to the
    registrant, including its consolidated subsidiaries, is made
    known to us by others within those entities, particularly during
    the period in which this quarterly report is being prepared;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">b)&nbsp;evaluated the effectiveness of the
    registrant&#146;s disclosure controls and procedures as of a
    date within 90&nbsp;days prior to the filing date of this
    quarterly report (the &#147;Evaluation Date&#148;); and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">c)&nbsp;presented in this quarterly report our
    conclusions about the effectiveness of the disclosure controls
    and procedures based on our evaluation as of the Evaluation Date;
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
    registrant&#146;s other certifying officers and I have
    disclosed, based on our most recent evaluation, to the
    registrant&#146;s auditors and the audit committee of
    registrant&#146;s board of directors (or persons performing the
    equivalent function):
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">a)&nbsp;all significant deficiencies in the
    design or operation of internal controls which could adversely
    affect the registrant&#146;s ability to record, process,
    summarize and report financial data and have identified for the
    registrant&#146;s auditors any material weaknesses in internal
    controls; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">b)&nbsp;any fraud, whether or not material, that
    involves management or other employees who have a significant
    role in the registrant&#146;s internal controls; and
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
    registrant&#146;s other certifying officers and I have indicated
    in this quarterly report whether or not there were significant
    changes in internal controls or in other factors that could
    significantly affect internal controls subsequent to the date of
    our most recent evaluation, including any corrective actions
    with regard to significant deficiencies and material weaknesses.
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <FONT size="2">/s/ C.&nbsp;CODY COLQUITT
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <HR size="1" align="left" noshade></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <FONT size="2">C. Cody Colquitt
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <I><FONT size="2">Senior Vice President and Chief Financial
    Officer</FONT></I></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Date: November&nbsp;14, 2002
</FONT>

<P align="center"><FONT size="2">29
</FONT>

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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.17
<SEQUENCE>3
<FILENAME>y65302exv10w17.htm
<DESCRIPTION>EX-10.17: STOCK PURCHASE AGREEMENT
<TEXT>
<HTML>
<HEAD>
<TITLE>EX-10.17: STOCK PURCHASE AGREEMENT</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P align="right"><FONT face="Times New Roman" size="2">EXECUTION COPY
</FONT>
<P>
<HR size="4" noshade color="#000000" style="margin-top: -5px">
<HR size="1" noshade color="#000000" style="margin-top: -10px">
<P align="center"><FONT face="Times New Roman" size="2"><B>BERLITZ GLOBALNET, INC.</B>
</FONT>
<P align="center"><FONT face="Times New Roman" size="2"><B>STOCK PURCHASE AGREEMENT</B>
</FONT>
<P align="center"><FONT face="Times New Roman" size="2"><B>by and among</B>
</FONT>
<P align="center"><FONT face="Times New Roman" size="2"><B>BGS COMPANIES, INC.,</B>
</FONT>
<P align="center"><FONT face="Times New Roman" size="2"><B>as Buyer,</B>
</FONT>
<P align="center"><FONT face="Times New Roman" size="2"><B>and</B>
</FONT>
<P align="center"><FONT face="Times New Roman" size="2"><B>BERLITZ INTERNATIONAL, INC.</B>
</FONT>
<P align="center"><FONT face="Times New Roman" size="2"><B>and</B>
</FONT>
<P align="center"><FONT face="Times New Roman" size="2"><B>BERLITZ INVESTMENT CORPORATION,</B>
</FONT>
<P align="center"><FONT face="Times New Roman" size="2"><B>as Sellers</B>
</FONT>
<P align="center"><HR size="1" noshade width="22%">
<BR>
<P align="center"><FONT face="Times New Roman" size="2"><B>Dated as of August 7, 2002</B>
</FONT>
<BR>
<P align="center"><HR size="1" noshade width="22%">
<BR>
<HR size="1" noshade color="#000000" style="margin-top: -5px">
<HR size="4" noshade color="#000000" style="margin-top: -10px">
<!-- PAGEBREAK -->
<P><HR noshade><P>
<!-- TOC -->
<A name="toc"><DIV align="CENTER" style="page-break-before:always"><U><B>TABLE OF CONTENTS</B></U></DIV></A>

<P><CENTER>
<TABLE border="0" width="90%" cellpadding="0" cellspacing="0">
<TR>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="76%"></TD>
</TR>
<TR><TD colspan="9"><A HREF="y65302exv10w17.htm">EX-10.17: STOCK PURCHASE AGREEMENT</A></TD></TR>
<TR><TD colspan="9"><A HREF="y65302exv99w1.htm">EX-99.1: CERTIFICATION</A></TD></TR>
<TR><TD colspan="9"><A HREF="y65302exv99w2.htm">EX-99.2: CERTIFICATION</A></TD></TR>
</TABLE>
</CENTER>
<!-- /TOC -->
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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P>
<TABLE border="0" cellpadding="0" cellspacing="0" width="100%">
<TR>
<TD valign="top" align="center" colspan="4"><FONT face="Times New Roman" size="2"><B>Table of Contents</B>
</FONT></TD>
</TR>
<TR>
<TD valign="top" align="center" colspan="4"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
</TR>
<TR>
<TD valign="top"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="1"><B>Page</B>
</FONT></TD>
</TR>
<TR>
<TD colspan="3"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD><HR align="right" width="90%" size="1" noshade></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">1.
</FONT></TD>
<TD colspan="2" valign="top" align="left"><FONT face="Times New Roman" size="2">Sale and Purchase of Shares
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">1
</FONT></TD>
</TR>
<TR>
<TD width="5%" valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD width="5%" valign="top" align="left"><FONT face="Times New Roman" size="2">1.1
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Sale and Purchase of Shares
</FONT></TD>
<TD width="3%" valign="top" align="right"><FONT face="Times New Roman" size="2">1
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">1.2
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Payment of Purchase Price
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">1
</FONT></TD>
</TR>
<TR>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">1.3
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Delivery of Shares
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">1
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">1.4
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Purchase Price Adjustment
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">1
</FONT></TD>
</TR>
<TR>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">2.
</FONT></TD>
<TD colspan="2" valign="top" align="left"><FONT face="Times New Roman" size="2">Closing; Closing Date
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">3
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">3.
</FONT></TD>
<TD colspan="2" valign="top" align="left"><FONT face="Times New Roman" size="2">Representations
 and Warranties of the Sellers as to the Company
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">3
</FONT></TD>
</TR>
<TR>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">3.1
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Due Organization and Authority
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">3
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">3.2
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Subsidiaries
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">3
</FONT></TD>
</TR>
<TR>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">3.3
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Qualification
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">3
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">3.4
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Capitalization
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">4
</FONT></TD>
</TR>
<TR>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">3.5
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Options or Other Rights
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">4
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">3.6
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Organizational Documents and
 Corporate Records
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">4
</FONT></TD>
</TR>
<TR>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">3.7
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Financial Statements
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">5
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">3.8
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Undisclosed Liabilities
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">5
</FONT></TD>
</TR>
<TR>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">3.9
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Absence of Changes
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">6
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">3.10
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Tax Matters
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">7
</FONT></TD>
</TR>
<TR>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">3.11
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Compliance with Laws
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">8
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">3.12
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Permits
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">8
</FONT></TD>
</TR>
<TR>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">3.13
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Environmental Compliance
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">8
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">3.14
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">No Breach
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">8
</FONT></TD>
</TR>
<TR>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">3.15
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Contracts
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">9
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">3.16
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Property
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">10
</FONT></TD>
</TR>
<TR>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">3.17
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Intellectual Property
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">11
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">3.18
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Litigation
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">12
</FONT></TD>
</TR>
<TR>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">3.19
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Brokers
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">12
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">3.20
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Employee Benefit Plans
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">12
</FONT></TD>
</TR>
<TR>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">3.21
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Employee Relations
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">14
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">3.22
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Accounts Receivable
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">14
</FONT></TD>
</TR>
<TR>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">3.23
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Banks, Brokers and Powers of Attorney
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">15
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">3.24
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Affiliate Transactions
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">15
</FONT></TD>
</TR>
<TR>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">3.25
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Insurance
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">15
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">3.26
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Customers
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">15
</FONT></TD>
</TR>
<TR>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">3.27
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Full Disclosure
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">16
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">3.28
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Exclusivity of Representations
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">16
</FONT></TD>
</TR>
<TR>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">4.
</FONT></TD>
<TD colspan="2" valign="top" align="left"><FONT face="Times New Roman" size="2">Representations and
 Warranties of Sellers as to the Shares and this Agreement
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">16
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">4.1
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Title to the Shares
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">16
</FONT></TD>
</TR>
<TR>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">4.2
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Authority to Execute and
 Perform Agreement
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">16
</FONT></TD>
</TR>
</TABLE>
<P align="center"><FONT face="Times New Roman" size="2">i
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P>
<TABLE border="0" cellpadding="0" cellspacing="0" width="100%">
<TR>
<TD valign="top"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="1"><B>Page</B>
</FONT></TD>
</TR>
<TR>
<TD colspan="3"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD><HR align="right" width="90%" size="1" noshade></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">5.
</FONT></TD>
<TD colspan="2" valign="top" align="left"><FONT face="Times New Roman" size="2">Representations and
 Warranties of the Buyer
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">17
</FONT></TD>
</TR>
<TR>
<TD width="5%" valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD width="5%" valign="top" align="left"><FONT face="Times New Roman" size="2">5.1
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Due Incorporation and Authority
</FONT></TD>
<TD width="3%" valign="top" align="right"><FONT face="Times New Roman" size="2">17
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">5.2
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Authority to Execute and
 Perform Agreement
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">17
</FONT></TD>
</TR>
<TR>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">5.3
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Brokers
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">18
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">5.4
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Purchase for Investment
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">18
</FONT></TD>
</TR>
<TR>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">5.5
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Financial Ability
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">18
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">5.6
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Exclusivity of Representations
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">18
</FONT></TD>
</TR>
<TR>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">6.
</FONT></TD>
<TD colspan="2" valign="top" align="left"><FONT face="Times New Roman" size="2">Covenants and
 Agreements
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">19
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">6.1
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Conduct of Business
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">19
</FONT></TD>
</TR>
<TR>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">6.2
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Confidentiality
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">20
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">6.3
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Expenses
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">20
</FONT></TD>
</TR>
<TR>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">6.4
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Publicity
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">20
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">6.5
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Intercompany Payables
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">20
</FONT></TD>
</TR>
<TR>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">6.6
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Required Consents
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">21
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">6.7
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Access to Information and Cooperation
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">21
</FONT></TD>
</TR>
<TR>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">6.8
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Further Assurances
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">22
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">6.9
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Transfer Taxes
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">22
</FONT></TD>
</TR>
<TR>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">6.10
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Berlitz Names and Marks
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">22
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">6.11
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Employee Matters
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">23
</FONT></TD>
</TR>
<TR>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">6.12
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Stock Options
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">25
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">6.13
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Covenant Not to Compete
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">25
</FONT></TD>
</TR>
<TR>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">6.14
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Website Traffic
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">26
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">6.15
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Transfers of Subsidiary Shares
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">26
</FONT></TD>
</TR>
<TR>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">6.16
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Termination of Subleases
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">27
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">6.17
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Transition Services
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">27
</FONT></TD>
</TR>
<TR>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">6.18
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Distributions
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">27
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">7.
</FONT></TD>
<TD colspan="2" valign="top" align="left"><FONT face="Times New Roman" size="2">Conditions Precedent to
 the Obligation of the Buyer to Close
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">28
</FONT></TD>
</TR>
<TR>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">7.1
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Representations and Covenants
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">28
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">7.2
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">HSR Act and Other Antitrust Filings
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">28
</FONT></TD>
</TR>
<TR>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">7.3
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">No Orders or Proceedings
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">28
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">7.4
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Consents
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">28
</FONT></TD>
</TR>
<TR>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">7.5
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Resignations
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">28
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">7.6
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Intercompany Payables
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">28
</FONT></TD>
</TR>
<TR>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">7.7
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Opinion of Sellers&#146; Counsel
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">29
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">8.
</FONT></TD>
<TD colspan="2" valign="top" align="left"><FONT face="Times New Roman" size="2">Conditions Precedent
 to the Obligation of the Sellers to Close
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">29
</FONT></TD>
</TR>
<TR>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">8.1
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Representations and Covenants
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">29
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">8.2
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">HSR Act and Other Antitrust Filings
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">29
</FONT></TD>
</TR>
<TR>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">8.3
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">No Orders or Proceedings
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">29
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">8.4
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Consents
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">29
</FONT></TD>
</TR>
<TR>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">8.5
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Opinion of Buyer&#146;s Counsel
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">29
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">9.
</FONT></TD>
<TD colspan="2" valign="top" align="left"><FONT face="Times New Roman" size="2">Survival
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">30
</FONT></TD>
</TR>
<TR>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">10.
</FONT></TD>
<TD colspan="2" valign="top" align="left"><FONT face="Times New Roman" size="2">Indemnification
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">30
</FONT></TD>
</TR>
</TABLE>
<P align="center"><FONT face="Times New Roman" size="2">ii
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P>
<TABLE border="0" cellpadding="0" cellspacing="0" width="100%">
<TR>
<TD valign="top"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="1"><B>Page</B>
</FONT></TD>
</TR>
<TR>
<TD colspan="3"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD><HR align="right" width="90%" size="1" noshade></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD width="5%" valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD width="5%" valign="top" align="left"><FONT face="Times New Roman" size="2">10.1
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Obligation of the Sellers
 to Indemnify
</FONT></TD>
<TD width="3%" valign="top" align="right"><FONT face="Times New Roman" size="2">30
</FONT></TD>
</TR>
<TR>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">10.2
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Obligation of the Buyer to Indemnify
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">31
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">10.3
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Indemnification Procedure
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">31
</FONT></TD>
</TR>
<TR>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">10.4
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Measure of and Limitations
 upon Indemnification
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">32
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">10.5
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Exclusivity of Indemnity
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">33
</FONT></TD>
</TR>
<TR>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">10.6
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Subrogation
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">33
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">11.
</FONT></TD>
<TD colspan="2" valign="top" align="left"><FONT face="Times New Roman" size="2">Tax Indemnification;
 Tax Matters
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">33
</FONT></TD>
</TR>
<TR>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">11.1
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Preparation of Tax Returns
 and Payment of Taxes
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">33
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">11.2
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Tax Indemnification by the Sellers
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">35
</FONT></TD>
</TR>
<TR>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">11.3
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Tax Indemnification by Buyer
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">35
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">11.4
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Tax Indemnification Procedures
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">35
</FONT></TD>
</TR>
<TR>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">11.5
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Cooperation
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">36
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">11.6
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Tax Treatment of Certain Payments
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">36
</FONT></TD>
</TR>
<TR>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">11.7
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Section&#160;338(h)(10) Election
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">37
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">12.
</FONT></TD>
<TD colspan="2" valign="top" align="left"><FONT face="Times New Roman" size="2">Termination of Agreement
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">38
</FONT></TD>
</TR>
<TR>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">12.1
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Termination
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">38
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">12.2
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Survival After Termination
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">39
</FONT></TD>
</TR>
<TR>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">13.
</FONT></TD>
<TD colspan="2" valign="top" align="left"><FONT face="Times New Roman" size="2">Miscellaneous
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">39
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">13.1
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Certain Definitions
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">39
</FONT></TD>
</TR>
<TR>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">13.2
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Consent to Jurisdiction; Service
 of Process; Waiver of Jury Trial
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">42
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">13.3
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Notices
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">43
</FONT></TD>
</TR>
<TR>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">13.4
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Entire Agreement
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">44
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">13.5
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Waivers and Amendments
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">44
</FONT></TD>
</TR>
<TR>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">13.6
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Governing Law
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">44
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">13.7
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Binding Effect; Assignment
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">44
</FONT></TD>
</TR>
<TR>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">13.8
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Usage
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">45
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">13.9
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Articles and Sections
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">45
</FONT></TD>
</TR>
<TR>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">13.10
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Interpretation
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">45
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">13.11
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Severability of Provisions
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">45
</FONT></TD>
</TR>
<TR>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">13.12
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">Counterparts
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">45
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">13.13
</FONT></TD>
<TD valign="top" align="left"><FONT face="Times New Roman" size="2">No Third Party Beneficiaries
</FONT></TD>
<TD valign="top" align="right"><FONT face="Times New Roman" size="2">45
</FONT></TD>
</TR>
</TABLE>
<P>
<TABLE border="0" cellpadding="0" cellspacing="0" width="100%">
<TR>

</TR>
</TABLE>
<P align="center"><FONT face="Times New Roman" size="2">iii
</FONT>
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<P align="center"><FONT face="Times New Roman" size="2"><B>STOCK PURCHASE AGREEMENT</B>
</FONT>
<P>
<DIV style="margin-left:0px; text-indent:50px">
<FONT face="Times New Roman" size="2">Stock Purchase Agreement, dated as of
 August 7, 2002 (this &#147;<B>Agreement</B>&#148;), by and among BGS Companies,
 Inc., a Delaware corporation (the &#147;<B>Buyer</B>&#148;), Berlitz International,
 Inc., a New York corporation (&#147;<B>Berlitz International</B>&#148;), and Berlitz
 Investment Corporation, a Delaware corporation (&#147;<B>Berlitz Investment</B>&#148; and
 together with Berlitz International, the &#147;<B>Sellers</B>&#148;),
 for the purchase and sale of all of the issued and outstanding shares of capital
 stock of Berlitz GlobalNET, Inc., a New York corporation (the &#147;<B>Company</B>&#148;).
</FONT></DIV>
<P>
<DIV style="margin-left:0px; text-indent:50px">
<FONT face="Times New Roman" size="2">The Sellers are the beneficial and record
 owners of all of the issued and outstanding shares of common stock, par value $0.01
 per share, of the Company (the &#147;<B>Shares</B>&#148;). The Sellers wish to
 sell to the Buyer, and the Buyer wishes to purchase from the Sellers, all of the
 Shares upon the terms and subject to the conditions of this Agreement.
</FONT></DIV>
<P>
<DIV style="margin-left:0px; text-indent:50px">
<FONT face="Times New Roman" size="2">Certain terms used herein are defined as
 provided in Section 13.1.
</FONT></DIV>
<P>
<DIV style="margin-left:0px; text-indent:50px">
<FONT face="Times New Roman" size="2">Accordingly, the parties agree as follows:
</FONT></DIV>
<P>
<DIV style="margin-left:0px; text-indent:50px">
<FONT face="Times New Roman" size="2">
1.&#160;&#160;&#160;&#160;&#160;&#160;&#160;Sale and Purchase of Shares.
</FONT></DIV>
<P>
<DIV style="margin-left:0px; text-indent:80px">
<FONT face="Times New Roman" size="2">
1.1&#160;&#160;&#160;&#160;&#160;&#160;&#160;Sale and
 Purchase of Shares. At the Closing provided for in Article 2, upon the terms
 and subject to the conditions of this Agreement and in reliance upon the
 representations, warranties and agreements contained herein, the Sellers shall
 sell to the Buyer, and the Buyer shall purchase from the Sellers, all of
 the Shares for an aggregate purchase price (the &#147;<B>Purchase Price</B>&#148;)
 equal to $75,000,000, subject to adjustment as set forth in Section 1.4, such Purchase
 Price to be paid in cash in accordance with Section 1.2.
</FONT></DIV>
<P>
<DIV style="margin-left:0px; text-indent:80px">
<FONT face="Times New Roman" size="2">
1.2&#160;&#160;&#160;&#160;&#160;&#160;&#160;Payment
 of Purchase Price. At the Closing,
 the Purchase Price shall be paid by the Buyer to the Sellers in cash by wire transfer
 of immediately available funds in United States dollars to the respective bank accounts
 designated by the Sellers in writing at least two Business Days prior to the Closing,
 which funds shall be allocated between the Sellers in the percentages set forth
 opposite each Seller&#146;s name in Section 3.4(a) of the Sellers&#146; Disclosure
 Letter.
</FONT></DIV>
<P>
<DIV style="margin-left:0px; text-indent:80px">
<FONT face="Times New Roman" size="2">
1.3&#160;&#160;&#160;&#160;&#160;&#160;&#160;Delivery
 of Shares. At the Closing,
 the Sellers shall deliver, or cause to be delivered, to the Buyer stock certificates
 representing the Shares, constituting all of the issued and outstanding capital
 stock of the Company, duly endorsed in blank or accompanied by stock powers duly
 executed in blank, in proper form for transfer.
</FONT></DIV>
<P>
<DIV style="margin-left:0px; text-indent:80px">
<FONT face="Times New Roman" size="2">
1.4&#160;&#160;&#160;&#160;&#160;&#160;&#160;Purchase
 Price Adjustment. The Purchase
 Price shall be subject to adjustment as follows:
</FONT></DIV>
<P>
<DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;As soon as
 practicable following the
 Closing, but in no event later than 30 days after the Closing Date, the Sellers
 shall prepare and deliver to
</FONT></DIV>
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<P align="right"><FONT face="Times New Roman" size="2">2
</FONT>
<P>
<DIV style="margin-left:0px; text-indent:0px">
<FONT face="Times New Roman" size="2">the Buyer a statement setting forth the
 Net Current Assets of the Company and the Subsidiaries as at Closing (the &#147;<B>Net
 Current Assets Statement</B>&#148;). The Net Current Assets Statement shall (i) set forth
 the amounts of the components of Net Current Assets as they would appear on a combined
 balance sheet of the Company and the Subsidiaries prepared in a manner consistent
 with the Company Financial Statements and (ii) present such amounts in accordance
 with GAAP consistently applied and calculated in a manner consistent with the accounting
 principles and practices used in the preparation of the Company Financial Statements.
 Without limiting the foregoing, accounts receivable shall be calculated on the
 same basis and using the same percentage reserve for non-collectibility as was utilized
 in the preparation of the Company Financial Statements. For purposes of this Agreement,
 &#147;<B>Net Current Assets</B>&#148; shall mean the excess of (i) total current
 assets over (ii) total current liabilities, as reflected on the final Net Current
 Assets Statement. For purposes of this Agreement, &#147;<B>Cash</B>&#148; shall
 mean the total amount of cash and temporary investments of the Company and the Subsidiaries.
</FONT></DIV>
<P>
<DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;Each party
 will cooperate with the other
 party in the determination of Net Current Assets, including allowing the Sellers
 and their representatives reasonable access after the Closing to the books and records
 of the Company and the Subsidiaries. Upon receipt of the Net Current Assets Statement,
 the Buyer shall be permitted to examine the work papers prepared by the Sellers.
 If the Buyer disputes the Sellers&#146; calculation of Net Current Assets, as set
 forth in the Net Current Assets Statement, the Buyer shall notify the Sellers in
 writing, setting forth its objections in detail, within 30 days after delivery of
 the Net Current Assets Statement. If the Buyer does not object within such 30-day
 period, the Net Current Assets Statement shall be deemed to have been accepted by
 the Buyer and shall be final, binding and conclusive on the parties. If the Buyer
 does object within such period, the Buyer and the Sellers shall endeavor for 30
 days in good faith to resolve any dispute over the calculation of Net Current Assets,
 and, upon such resolution, the Net Current Assets Statement shall be final, binding
 and conclusive on the parties. If the parties cannot resolve their dispute within
 this time period, such dispute shall be submitted to a nationally recognized accounting
 firm in the United States (other than Deloitte &#038; Touche LLP, KPMG LLP or Arthur
 Andersen LLP) as is mutually acceptable to the Buyer and the Sellers (the &#147;
<B>Independent Accounting Firm</B>&#148;), which shall resolve all such disputes
 within 30 days from their submission. The decision of the Independent Accounting
 Firm shall be final, binding and conclusive on the parties. The Independent Accounting
 Firm shall address only those items in dispute and may not assign a value greater
 than the greatest value for such items claimed by either party or smaller than the
 smallest value for such items claimed by either party. The fees and expenses of
 the Independent Accounting Firm shall be paid by the party whose calculation of
 Net Current Assets is farther from the value calculated by the Independent Accounting
 Firm.
</FONT></DIV>
<P>
<DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(c)&#160;&#160;&#160;&#160;&#160;&#160;&#160;To the
 extent that (i) Cash, as set forth
 in the final Net Current Assets Statement, is less than $16,000,000 or (ii) Net
 Current Assets, as set forth in the final Net Current Assets Statement, is less
 than $32,000,000, the Purchase Price shall be decreased by the difference. The
 Sellers shall pay to the Buyer the amount of any such decrease in the Purchase Price
 within ten days after the date on which the Net Current Assets Statement has become
 final, binding and conclusive on the parties. Such
</FONT></DIV>
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<P align="right"><FONT face="Times New Roman" size="2">3
</FONT>
<P>
<DIV style="margin-left:0px; text-indent:0px">
<FONT face="Times New Roman" size="2">payment shall be made by wire
 transfer of immediately available funds in United States dollars to the bank account
 or accounts designated in writing by the Buyer.
</FONT></DIV>
<P>
<DIV style="margin-left:0px; text-indent:50px">
<FONT face="Times New Roman" size="2">
2.&#160;&#160;&#160;&#160;&#160;&#160;&#160;Closing;
 Closing Date. The closing of
 the sale and purchase of the Shares contemplated hereby (the &#147;<B>Closing</B>&#148;) shall
 take place at the offices of Paul, Weiss, Rifkind, Wharton &#038; Garrison,
 1285 Avenue of the Americas, New York, New York, at 10:00 a.m. local time, on the
 tenth Business Day after the conditions to closing set forth in Sections 7.2 and
 8.2 have been satisfied, or such other time or date as the parties may mutually
 agree in writing; <I>provided</I>, that all of the conditions to the Closing set
 forth in Articles 7 and 8 have been satisfied or waived by the party or parties
 entitled to waive them. The time and date upon which the Closing occurs is referred
 to herein as the &#147;<B>Closing Date</B>.&#148;
</FONT></DIV>
<P>
<DIV style="margin-left:0px; text-indent:50px">
<FONT face="Times New Roman" size="2">
3.&#160;&#160;&#160;&#160;&#160;&#160;&#160;Representations
 and Warranties of the Sellers as to the Company. The Sellers, jointly and severally, represent and warrant
 to the Buyer that, as of the date of this Agreement and as of the Closing Date,
 except as set forth in the disclosure letter relating to this Agreement (the &#147;
<B>Sellers&#146; Disclosure Letter</B>&#148;) delivered by the Sellers to the Buyer
 on the date hereof:
</FONT></DIV>
<P>
<DIV style="margin-left:0px; text-indent:80px">
<FONT face="Times New Roman" size="2">
3.1&#160;&#160;&#160;&#160;&#160;&#160;&#160;Due Organization
 and Authority. The Company is a corporation duly organized and validly existing under the laws of the
 State of New York. The Company has all requisite corporate power and authority
 to own, lease and operate its properties and to carry on its business as now being
 conducted.
</FONT></DIV>
<P>
<DIV style="margin-left:0px; text-indent:80px">
<FONT face="Times New Roman" size="2">
3.2&#160;&#160;&#160;&#160;&#160;&#160;&#160;Subsidiaries.
</FONT></DIV>
<P>
<DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;Section 3.2(a)
 of the Sellers&#146; Disclosure
 Letter sets forth the name and jurisdiction of organization of each corporation
 or other entity (collectively, the &#147;<B>Subsidiaries</B>&#148;) in which the
 Company directly or indirectly owns or has the power to vote shares of any capital
 stock or other ownership interests having voting power to elect a majority of the
 directors of such corporation or other Persons performing similar functions for
 such entity, as the case may be. Except for the Subsidiaries, the Company does
 not directly or indirectly own any interest in any other Person.
</FONT></DIV>
<P>
<DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;Each of the
 Subsidiaries is an entity duly
 organized, validly existing and (to the extent the concept of good standing exists
 in the applicable jurisdiction) in good standing under the laws of its jurisdiction
 of organization. Each of the Subsidiaries has all requisite corporate or other
 power and authority to own, lease and operate its properties and to carry on its
 business as now being conducted.
</FONT></DIV>
<P>
<DIV style="margin-left:0px; text-indent:80px">
<FONT face="Times New Roman" size="2">
3.3&#160;&#160;&#160;&#160;&#160;&#160;&#160;Qualification. Each
 of the Company and
 the Subsidiaries is duly qualified or licensed to do business in all other jurisdictions
 where the Company or any of the Subsidiaries currently conducts business that require
 such qualification or licensing, except where the failure to so qualify or be licensed
 would not have, individually or in the aggregate, a Company Material Adverse Effect.
 As used in this Agreement, a &#147;<B>Company Material Adverse Effect</B>&#148;
 means any effect (i) that is, or
</FONT></DIV>
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<P align="right"><FONT face="Times New Roman" size="2">4
</FONT>
<P>
<DIV style="margin-left:0px; text-indent:0px">
<FONT face="Times New Roman" size="2">insofar as reasonably can be foreseen in the future
 is reasonably likely to be, materially adverse to the financial condition, business,
 results of operations, properties or assets of the Company and the Subsidiaries,
 taken as a whole, except that events, changes, developments, impairments, conditions
 or circumstances resulting from any of the following shall not constitute a Company
 Material Adverse Effect: (A) events, changes, developments or impairments in worldwide,
 national or local conditions or circumstances (political, economic or regulatory),
 (B) the departure of management personnel or other employees, or the loss of business
 from customers, as a result of the announcement of this Agreement and the transactions
 contemplated hereby or (C) any changes in law or accounting principles (and any
 changes resulting therefrom) that adversely affect enterprises or the Company&#146;s
 industry generally and do not specifically relate to (or have the effect of specifically
 relating to or having a materially disproportionate effect (relative to most other
 industry participants) on) the Company and the Subsidiaries, taken as a whole, or
 (ii) that could reasonably be expected to materially impair or delay the ability
 of the Sellers to consummate the transactions contemplated hereby.
</FONT></DIV>
<P>
<DIV style="margin-left:0px; text-indent:80px">
<FONT face="Times New Roman" size="2">
3.4&#160;&#160;&#160;&#160;&#160;&#160;&#160;Capitalization.
</FONT></DIV>
<P>
<DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;The Company is
 authorized to issue 10,000,000
 shares of common stock, par value $0.01 per share, of the Company (&#147;<B>Company
 Common Stock</B>&#148;), of which 8,500,000 shares of Company Common Stock are issued
 and outstanding. All of the Shares are owned by the Sellers, free and clear of
 any Lien, and the Sellers&#146; respective ownership of the Shares is set forth
 in Section 3.4(a) of the Sellers&#146; Disclosure Letter. All of the Shares are
 duly authorized and validly issued, fully paid and nonassessable. No other class
 of capital stock or other ownership interests of the Company is authorized or outstanding.
</FONT></DIV>
<P>
<DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;The authorized
 and issued shares of capital
 stock or other ownership interests of each of the Subsidiaries are set forth in
 Section 3.4(b) of the Sellers&#146; Disclosure Letter. All of the issued and outstanding
 capital stock and other ownership interests of each of the Subsidiaries is owned
 by the Company, free and clear of any Lien. All of the outstanding shares of capital
 stock of each of the Subsidiaries are duly authorized and validly issued, fully
 paid and nonassessable. No other class of capital stock or other ownership interests
 of any of the Subsidiaries is authorized or outstanding.
</FONT></DIV>
<P>
<DIV style="margin-left:0px; text-indent:80px">
<FONT face="Times New Roman" size="2">
3.5&#160;&#160;&#160;&#160;&#160;&#160;&#160;Options or Other
 Rights. As of August
 1, 2002, there were outstanding, under the Option Plan, options to purchase an aggregate
 of 1,456,000 shares of Company Common Stock (the &#147;<B>Options</B>&#148;). Other
 than the Options, there is no outstanding right, subscription, warrant, call, unsatisfied
 preemptive right, option or other agreement to purchase, or otherwise to receive
 from the Company or any of the Subsidiaries, any shares of the capital stock or
 any other equity security of the Company or any of the Subsidiaries, and there is
 no outstanding security of the Company or any of the Subsidiaries convertible into
 any such capital stock or other equity security.
</FONT></DIV>
<P>
<DIV style="margin-left:0px; text-indent:80px">
<FONT face="Times New Roman" size="2">
3.6&#160;&#160;&#160;&#160;&#160;&#160;&#160;Organizational
 Documents and Corporate Records. The Sellers have previously made available to the Buyer copies of the
 certificate of
</FONT></DIV>
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<P align="right"><FONT face="Times New Roman" size="2">5
</FONT>
<P>
<DIV style="margin-left:0px; text-indent:0px">
<FONT face="Times New Roman" size="2">incorporation and by-laws, or comparable instruments, of the
 Company
 and each of the Subsidiaries as in effect on the date hereof. True and complete
 copies of the minute books, or comparable records, of the Company and the principal
 Subsidiaries listed on Section 3.6 of the Sellers&#146; Disclosure Schedule have
 previously been made available to the Buyer for its inspection. The names of the
 officers and directors of the Company and each Subsidiary as of the date hereof
 are set forth on Section 3.6 of the Sellers&#146; Disclosure Letter.
</FONT></DIV>
<P>
<DIV style="margin-left:0px; text-indent:80px">
<FONT face="Times New Roman" size="2">
3.7&#160;&#160;&#160;&#160;&#160;&#160;&#160;Financial
 Statements. The Sellers have
 previously made available to the Buyer copies of (i) the audited combined balance
 sheet of the Company, the Subsidiaries and the affiliated entities set forth on
 Section 3.7 of the Sellers&#146; Disclosure Letter (the &#147;<B>Affiliated Entities
</B>&#148;) as of December 31, 2001 and the related statements of operations and
 cash flows for the year then ended (the &#147;<B>Audited Financial Statements</B>&#148;)
 and (ii) the unaudited combined balance sheet of the Company, the Subsidiaries
 and the Affiliated Entities as of March 31, 2002 and the related statement of earnings
 before interest, taxes and amortization for the three months then ended (the &#147;
<B>Interim Financial Statements</B>&#148; and, together with the Audited Financial
 Statements, the &#147;<B>Company Financial Statements</B>&#148;). The Company Financial
 Statements fairly present in all material respects the financial position of the
 Company, the Subsidiaries and the Affiliated Entities as of the dates presented
 therein, and fairly present in all material respects the results of the operations
 of the Company, the Subsidiaries and the Affiliated Entities for the fiscal periods
 then ended. The Company Financial Statements have been prepared in accordance with
 United States generally accepted accounting principles (&#147;<B>GAAP</B>&#148;)
 consistently applied during the periods involved (except as indicated in any notes
 thereto), except that the Interim Financial Statements do not contain normal audit
 adjustments (the effect of which will not have or reflect, individually or in the
 aggregate, a Company Material Adverse Effect) and certain footnote disclosure required
 by GAAP. The Company maintains internal accounting controls that provide reasonable
 assurance that material transactions are recorded as necessary in order to permit
 preparation of the Company&#146;s financial statements and maintain accountability
 for the assets and liabilities of the Company and the Subsidiaries.
</FONT></DIV>
<P>
<DIV style="margin-left:0px; text-indent:80px">
<FONT face="Times New Roman" size="2">
3.8&#160;&#160;&#160;&#160;&#160;&#160;&#160;Undisclosed
 Liabilities. Neither the
 Company nor any of the Subsidiaries has any liabilities (including service warranties
 or guarantees of obligations of any Person other than the Company or any of the
 Subsidiaries) other than (a) liabilities reflected on the face of the Company Financial
 Statements, (b) contractual and service obligations arising in the ordinary course
 of business (other than obligations arising out of a material default or alleged
 material default), (c) liabilities accruing after March 31, 2002 in the ordinary
 course of business or in accordance with this Agreement, (d) liabilities otherwise
 disclosed herein and (e) other liabilities that are not significant. For purposes
 of clause (e) only, it is understood that (i) with respect to any liability that
 is specifically addressed in any representation or warranty contained herein, &#147;significant&#148;
 shall be determined by the applicable materiality standards contained in such
 representation or warranty and (ii) in any other case, &#147;significant&#148; shall
 mean an amount greater than $50,000.
</FONT></DIV>
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<P align="right"><FONT face="Times New Roman" size="2">6
</FONT>
<P>
<DIV style="margin-left:0px; text-indent:80px">
<FONT face="Times New Roman" size="2">
3.9&#160;&#160;&#160;&#160;&#160;&#160;&#160;Absence of
 Changes. Except as disclosed
 in the Company Financial Statements and except as contemplated or permitted by this
 Agreement, since April 1, 2002 there has not been:
</FONT></DIV>
<P>
<DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;any damage,
 destruction or loss, whether
 or not covered by insurance, that would have, individually or in the aggregate,
 a Company Material Adverse Effect;
</FONT></DIV>
<P>
<DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;any declaration,
 setting aside or payment
 of any dividend or other distribution (whether in cash or property) with respect
 to any of the Shares;
</FONT></DIV>
<P>
<DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(c)&#160;&#160;&#160;&#160;&#160;&#160;&#160;any change,
 occurrence or circumstance in
 the financial condition, business, results of operations, properties or assets of
 the Company or any of the Subsidiaries that would have, individually or in the aggregate,
 a Company Material Adverse Effect;
</FONT></DIV>
<P>
<DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(d)&#160;&#160;&#160;&#160;&#160;&#160;&#160;any loan or
 advance by the Company or any
 of the Subsidiaries to any Seller or any Affiliate of any Seller (other than the
 Company or any of the Subsidiaries);
</FONT></DIV>
<P>
<DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(e)&#160;&#160;&#160;&#160;&#160;&#160;&#160;any sale or
 conveyance of any assets of
 the Company or any of the Subsidiaries, except in the ordinary course of business
 or transfers among the Company and the Subsidiaries;
</FONT></DIV>
<P>
<DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(f)&#160;&#160;&#160;&#160;&#160;&#160;&#160;any change in
 the accounting methods or
 practices of the Company or any of the Subsidiaries, or any change in depreciation
 or amortization policies or rates adopted by any of them, except as may be required
 by law or GAAP;
</FONT></DIV>
<P>
<DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(g)&#160;&#160;&#160;&#160;&#160;&#160;&#160;any cancellation
 of any material debt, any
 waiver or release of any material right or claim or any payment, discharge, release,
 compromise, waiver or satisfaction of any material claim or liability by the Company
 or any of the Subsidiaries;
</FONT></DIV>
<P>
<DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(h)&#160;&#160;&#160;&#160;&#160;&#160;&#160;any material
 increase in the compensation
 payable to any executive officers or directors of the Company or any of the Subsidiaries,
 except in the ordinary course of business or as may be required by law;
</FONT></DIV>
<P>
<DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(i)&#160;&#160;&#160;&#160;&#160;&#160;&#160;any material
 amendment to or the entering
 into of any employment, severance, retention or similar agreement with any Company
 Employee, or any material amendment to or the adoption of any Benefit Plan by the
 Company or any of the Subsidiaries; or
</FONT></DIV>
<P>
<DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(j)&#160;&#160;&#160;&#160;&#160;&#160;&#160;any agreement
 to do any of the foregoing.
</FONT></DIV>
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<P align="right"><FONT face="Times New Roman" size="2">7
</FONT>
<P><DIV style="margin-left:0px; text-indent:80px">
<FONT face="Times New Roman" size="2">
3.10&#160;&#160;&#160;&#160;&#160;Tax Matters.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;Each of
 the Company and the Subsidiaries has filed or has caused to be filed in a timely manner (within
 any applicable extensions of time) all Tax Returns required to be filed by it through the
 date of this Agreement, and will prepare and file, in a manner consistent with prior years, all
 Tax Returns required to be filed by it on or before the Closing Date. Such Tax Returns have
 been and will be correctly prepared in all material respects.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;All Taxes
 shown on such previously filed Tax Returns have been paid or, in the case of such Tax
 Returns that will be filed prior to Closing, will be timely paid upon the filing of
 such Tax Returns.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(c)&#160;&#160;&#160;&#160;&#160;&#160;&#160;With respect
 to any period for which Tax Returns have not yet been filed, or with respect to which
 Taxes are not yet due or owing, each of the Company and the Subsidiaries has made sufficient current
 accruals for such Taxes in accordance with GAAP. Neither the Company nor any of the Subsidiaries has
 incurred any Tax liabilities since December 31, 2001, except in
 the ordinary course of business.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(d)&#160;&#160;&#160;&#160;&#160;&#160;&#160;No penalties or
 other charges are or will become due with respect to the late filing of any Tax Return or payment
 of any Tax of the Company or any of the Subsidiaries required to be filed or paid on
 or before the Closing Date.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(e)&#160;&#160;&#160;&#160;&#160;&#160;&#160;There
 are no outstanding agreements, waivers or arrangements extending the statutory period of
 limitations applicable to any claim for Taxes due from or with respect to the Company or any
 of the Subsidiaries for any taxable period.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(f)&#160;&#160;&#160;&#160;&#160;&#160;&#160;No closing
 agreement that could affect the Taxes of the Company or any of the Subsidiaries for periods
 ending after the Closing Date pursuant to Section 7121 of the Code (or any predecessor provision) or
 any similar provision of any state, local or foreign law has been entered into by or with respect
 to the Company or any of the Subsidiaries.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(g)&#160;&#160;&#160;&#160;&#160;&#160;&#160;Neither the Company
 nor any of the Subsidiaries (i) has agreed to or is required to make any adjustment pursuant to
 Section 481 of the Code (or any predecessor or similar provision of other laws or regulations) by reason of
 a change in accounting method or otherwise; (ii) has any knowledge that any taxing authority has
 proposed any such adjustment or change which proposal is currently pending; or (iii) has an application pending
 with any taxing authority requesting permission for any change in accounting methods that relates to
 its business and operations.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(h)&#160;&#160;&#160;&#160;&#160;&#160;&#160;As of the
 Closing Date, neither the Company nor any of the Subsidiaries will be bound by any tax sharing, allocation or
 indemnification agreement and, after the Closing Date, no payments will be due to or payable by
 the Company or any of the Subsidiaries under any such agreement. As of the Closing Date,
</FONT></DIV>
<P>
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<P align="right"><FONT face="Times New Roman" size="2">8
</FONT>
<P><FONT face="Times New Roman" size="2">neither the Company nor any of the Subsidiaries will
 have any material liability for any unpaid Taxes of any other entity by reason of being a member
 of a consolidated, combined or unitary group for Tax purposes.
</FONT>
<P><DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(i)&#160;&#160;&#160;&#160;&#160;&#160;&#160;To the
 Knowledge of the Sellers, (i) the Tax Returns of the Company and the Subsidiaries are not currently under
 audit or examination by the IRS, and (ii) no audit or other proceeding by any court, governmental or
 regulatory authority or similar authority is pending, and neither the Company nor any of the Subsidiaries
 has received any written notification that such an audit or proceeding may be commenced, with respect to
 any Taxes due from the Company or any of the Subsidiaries.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px">
<FONT face="Times New Roman" size="2">
3.11&#160;&#160;&#160;&#160;&#160;Compliance with
 Laws. Neither the Company nor any of the Subsidiaries is in violation of any applicable
 orders, judgments, injunctions, awards, decrees or writs (collectively, &#147;<B>Orders</B>&#148;), or
 any applicable laws, statutes, regulations or other requirements, including the U.S. Foreign
 Corrupt Practices Act of 1977, as amended (collectively, &#147;<B>Laws</B>&#148;), of any
 courts, administrative agencies or commissions or other governmental authorities (collectively, &#147;<B>
Governmental Bodies</B>&#148;), which violations would have, individually or in
 the aggregate, a Company Material Adverse Effect; <I>provided</I>, <I>however</I>, that
 the Sellers make no representation or warranty in this Section 3.11 with respect to
 tax Laws, Environmental Laws or ERISA and employee benefit Laws, which are specifically and
 exclusively addressed in Sections 3.10, 3.13 and 3.20, respectively.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px">
<FONT face="Times New Roman" size="2">
3.12&#160;&#160;&#160;&#160;&#160;Permits. Each of the
 Company and the Subsidiaries has all licenses, franchises, permits and authorizations of any Governmental
 Bodies as are necessary for the lawful conduct of the business of the Company and the
 Subsidiaries (collectively, &#147;<B>Permits</B>&#148;),
 except where the failure to have such Permits would not have, individually
 or in the aggregate, a Company Material Adverse Effect.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px">
<FONT face="Times New Roman" size="2">
3.13&#160;&#160;&#160;&#160;&#160;Environmental
 Compliance. Each of the Company and the Subsidiaries has complied, and is currently
 in compliance, in all material respects with all applicable laws, regulations, codes
 or ordinances relating to pollution or protection of the environment (collectively,
 &#147;<B>Environmental Laws</B>&#148;).
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px">
<FONT face="Times New Roman" size="2">
3.14&#160;&#160;&#160;&#160;&#160;No Breach.
 The execution and delivery by the Sellers of this Agreement, the consummation of
 the transactions contemplated hereby, and the performance by the Sellers of this
 Agreement in accordance with its terms will not:
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;violate the
 certificate of incorporation or by-laws (or comparable instruments) of the Company
 or any of the Subsidiaries;
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;require
 the Company to obtain any consents, approvals, authorizations or actions of, or
 make any filings with or give any notices to, any Governmental Bodies or any other
 Person in order to permit the business of the Company and the Subsidiaries to continue
 to be conducted substantially in the same manner as currently conducted immediately
 following the Closing Date, except for the
</FONT></DIV>
<P>
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<P align="right"><FONT face="Times New Roman" size="2">9
</FONT>
<P><FONT face="Times New Roman" size="2">notification requirements of the HSR
 Act or as set forth in Section 3.14(b) of the Sellers&#146; Disclosure Letter (the
 &#147;<B>Company Consents and Notices</B>&#148;);
</FONT>
<P><DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(c)&#160;&#160;&#160;&#160;&#160;&#160;&#160;if the Company
 Consents and Notices are obtained or made, violate or result in the breach of any
 of the terms and conditions of, cause the termination of or give any other contracting
 party the right to terminate, or constitute (or with notice or lapse of time, or
 both, constitute) a material default under, or result in the acceleration of any
 monetary liabilities under, any Material Contract or result in the creation of any
 Lien upon any of the properties of the Company or any of the Subsidiaries pursuant
 to the terms of any Material Contract; or
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(d)&#160;&#160;&#160;&#160;&#160;&#160;&#160;if the Company
 Consents and Notices are obtained or made, violate or result in the revocation or
 suspension of any Permits held by the Company or any of the Subsidiaries;
</FONT></DIV>
<P><FONT face="Times New Roman" size="2"><I>provided, however</I>, that
 each of the cases set forth in clauses (b) through (d) above
 is subject to exceptions that would not have, individually or in the aggregate, a Company Material Adverse
 Effect.
</FONT>
<P><DIV style="margin-left:0px; text-indent:80px">
<FONT face="Times New Roman" size="2">
3.15&#160;&#160;&#160;&#160;&#160;Contracts.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;Each of
 the contracts, agreements, leases and licenses to which the Company or any of the
 Subsidiaries is a party or is bound and that are of the type listed below (collectively,
 the &#147;<B>Material Contracts</B>&#148;) is set forth in Section 3.15(a) of the
 Sellers&#146; Disclosure Letter:
</FONT></DIV>
<P><DIV style="margin-left:30px; text-indent:120px">
<FONT face="Times New Roman" size="2">(i)&#160;&#160;&#160;&#160;&#160;&#160;&#160;contracts
 or agreements with customers of the Company or any of the Subsidiaries for whom
 the Company and the Subsidiaries, taken as a whole, have recognized revenue in excess
 of $100,000 for either (A) the year ended December 31, 2001 or (B) the period between
 January 1, 2002 and May 31, 2002, which contracts or agreements as to each customer
 shall be represented herein by either (x) a master or umbrella contract or agreement
 with such customer or (y) a contract or agreement (including a purchase order) with
 such customer covering a recent or ongoing project that represents the Company&#146;s
 or the applicable Subsidiary&#146;s customary terms and conditions and contractual
 relationship with such customer;
</FONT></DIV>
<P><DIV style="margin-left:30px; text-indent:120px">
<FONT face="Times New Roman" size="2">(ii)&#160;&#160;&#160;&#160;&#160;&#160;other than
 contracts or agreements with customers or employees, any contracts or agreements
 that involve aggregate payments or other consideration in excess of $50,000 per
 year, including contracts with suppliers;
</FONT></DIV>
<P><DIV style="margin-left:30px; text-indent:120px">
<FONT face="Times New Roman" size="2">(iii)&#160;&#160;&#160;&#160;&#160;any contracts
 or agreements pursuant to which the Company or any of its Subsidiaries has made
 any loan or advance to any of its directors, officers or employees outside the ordinary
 course of business;
</FONT></DIV>
<P><DIV style="margin-left:30px; text-indent:120px">
<FONT face="Times New Roman" size="2">(iv)&#160;&#160;&#160;&#160;&#160;any joint
 venture or partnership contracts or agreements;
</FONT></DIV>
<P>
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<P align="right"><FONT face="Times New Roman" size="2">10
</FONT>
<P><DIV style="margin-left:30px; text-indent:120px">
<FONT face="Times New Roman" size="2">(v)&#160;&#160;&#160;&#160;&#160;&#160;any contracts
 or agreements relating to the borrowing of money or any guarantee in respect thereof
 or any capitalized lease obligation by the Company or any of the Subsidiaries, in
 each case in excess of $50,000 or pursuant to which the Company or any of the Subsidiaries
 has granted a security interest in any of its assets, tangible or intangible;
</FONT></DIV>
<P><DIV style="margin-left:30px; text-indent:120px">
<FONT face="Times New Roman" size="2">(vi)&#160;&#160;&#160;&#160;&#160;any contracts
 or agreements that limit or restrict the Company or any of the Subsidiaries from
 engaging in any line of business or with any Person in any geographical area; or
</FONT></DIV>
<P><DIV style="margin-left:30px; text-indent:120px">
<FONT face="Times New Roman" size="2">(vii)&#160;&#160;&#160;&#160;any collective
 bargaining contracts or agreements.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;The Sellers
 have delivered to the Buyer a correct and complete copy of each of the Material
 Contracts and a brief description of each Material Contract that is written in a
 language other than English. Each such description includes information regarding
 the names of the parties, the duration or term, the nature of the work to be performed,
 any change of control provisions and any material limitations on liabilities contained
 therein and is substantially accurate with respect to the information contained
 therein. None of the Material Contracts set forth in Section 3.15(a)(i) of the
 Sellers&#146; Disclosure Letter contains any provision imposing any material obligations
 or liabilities on the Company or any of the Subsidiaries other than obligations
 or liabilities related to or arising out of the provision of services to customers.
 Each of the Material Contracts is valid and binding on the Company or such Subsidiary
 and, to the Knowledge of the Sellers, on the other party or parties thereto and
 is in full force and effect. Neither the Company nor any of the Subsidiaries has
 received notice of any uncured or unwaived material default by the Company or any
 of the Subsidiaries or, to the Knowledge of the Sellers, by any other party or parties
 thereto, nor does there exist any condition that with the passage of time or the
 giving of notice or both would cause such a material default under any Material
 Contract by the Company or any of the Subsidiaries or, to the Knowledge of the Sellers,
 by any other party or parties thereto. None of the Sellers, the Company or any
 of the Subsidiaries has received from any party to any Material Contract written
 notice of its intention to cancel or terminate such Material Contract.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px">
<FONT face="Times New Roman" size="2">
3.16&#160;&#160;&#160;&#160;&#160;Property.
 Each of the Company and the Subsidiaries has good title, free and clear of all
 Liens, to all of its owned properties and assets, real and personal, tangible or
 intangible, that are material to the business of the Company and the Subsidiaries
 as currently being conducted, including the owned property and assets that are reflected
 on the Company Financial Statements or were acquired after March 31, 2002, except
 for (i) Liens incurred in the ordinary course of business, (ii) Liens relating to
 purchase money security interests entered into in the ordinary course of business,
 (iii) properties or assets disposed of in the ordinary course of business, (iv)
 mechanics&#146;, materialmen&#146;s, workmen&#146;s, repairmen&#146;s, warehousemen&#146;s,
 carrier&#146;s and other similar Liens arising in the ordinary course of
 business, (v) Liens for current Taxes and assessments not yet past due or delinquent
 or that are being contested in good faith by appropriate proceedings or (vi) Liens
 that would not have, individually or in the
</FONT></DIV>
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<P align="right"><FONT face="Times New Roman" size="2">11
</FONT>
<P><FONT face="Times New Roman" size="2">aggregate, a Company Material Adverse
 Effect. All of the real property owned or leased by the Company and the Subsidiaries,
 and all real property owned or leased by any Seller or any Affiliate of any Seller
 (other than the Company or any Subsidiary) and leased to, or otherwise used by,
 the Company and the Subsidiaries, is set forth in Section 3.16 of the Sellers&#146; Disclosure
 Letter. All leases pursuant to which the Company or any of the Subsidiaries,
 as lessee, leases real or personal property are valid and binding on the Company
 and the Subsidiaries and, to the Knowledge of the Sellers, on the other parties
 thereto and neither the Company nor such Subsidiary nor, to the Knowledge of the
 Sellers, any other party thereto, is in material default thereunder. There are
 no leases, subleases, licenses or other agreements granting to any Person other
 than the Company or any of the Subsidiaries any right to the possession, use, occupancy
 or enjoyment of the real property owned or leased by the Company or any of the Subsidiaries,
 or any portion thereof. To the Knowledge of the Sellers, all buildings, structures
 and other improvements included within the real property owned or leased by the
 Company and the Subsidiaries are presently in a condition that is adequate for the
 intended uses of such property, subject to continued repair and replacement in accordance
 with past practice, and normal wear and tear excepted.
</FONT>
<P><DIV style="margin-left:0px; text-indent:80px">
<FONT face="Times New Roman" size="2">
3.17&#160;&#160;&#160;&#160;&#160;Intellectual Property.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;Section 3.17(a)
 of the Sellers&#146; Disclosure Letter sets forth all patents and patent applications,
 trademark and service mark registrations and applications, Internet domain name
 registrations and applications, copyright registrations and applications and other
 material registered or unregistered Intellectual Property owned or filed by the
 Company and/or the Subsidiaries as of the date hereof. Section 3.17(a) of the Sellers&#146;
 Disclosure Letter sets forth all material licenses under which the Company
 or a Subsidiary is a licensee or licensor of Intellectual Property, except such
 licenses and other agreements relating to &#147;off-the-shelf&#148; products, standard
 products or any products subject to mass market licenses or that are commercially
 available on a retail basis. Section 3.17(a) of the Sellers&#146; Disclosure Letter
 sets forth details regarding any outstanding payment obligations of the Company
 or any Subsidiary under any agreement under which the Intellectual Property is licensed
 to the Company or any Subsidiary in excess of $10,000 per agreement.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;The Company
 or one of the Subsidiaries owns or has the right to use pursuant to a valid license
 all Intellectual Property that is necessary to conduct the business of the Company
 and the Subsidiaries as presently conducted, free and clear of all liens and encumbrances.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(c)&#160;&#160;&#160;&#160;&#160;&#160;&#160;Neither the
 Company nor any Subsidiary has received any written notice nor, to the Knowledge
 of the Sellers, any other notice, asserting (i) the invalidity, misuse or unenforceability
 of any Intellectual Property or (ii) the infringement or misappropriation of any
 third party intellectual property rights (including any demand or request that the
 Company or any Subsidiary license any rights from a third party) and, to the Knowledge
 of the Sellers, there are no valid grounds for such claims. To the Knowledge of
 the Sellers, no Person is infringing upon or otherwise violating the Intellectual
 Property. None of the products or services owned, used,
</FONT></DIV>
<P>
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<P align="right"><FONT face="Times New Roman" size="2">12
</FONT>
<P><FONT face="Times New Roman" size="2">provided or sold by the
 Company or any Subsidiary infringes upon or violates any third party intellectual
 property rights, except as would not have, individually or in the aggregate, a Company
 Material Adverse Effect.
</FONT>
<P><DIV style="margin-left:0px; text-indent:80px">
<FONT face="Times New Roman" size="2">
3.18&#160;&#160;&#160;&#160;&#160;Litigation.
 There are no actions, suits, proceedings or investigations pending or, to the Knowledge
 of the Sellers, threatened against the Company or any of the Subsidiaries or any
 Benefit Plan (other than routine claims for benefits). There is no pending governmental
 audit or inquiry with respect to any Benefit Plan. Neither the Company nor any
 of the Subsidiaries is subject to any outstanding Orders that would restrict or
 limit the conduct of the business of the Company and the Subsidiaries as currently
 being conducted.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px">
<FONT face="Times New Roman" size="2">
3.19&#160;&#160;&#160;&#160;&#160;Brokers.
 None of the Sellers, the Company or any of the Subsidiaries has used any broker
 or paid or agreed to pay, or received any claim with respect to, any brokerage commissions,
 finders&#146; fees or similar compensation in connection with the transactions contemplated
 hereby.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px">
<FONT face="Times New Roman" size="2">
3.20&#160;&#160;&#160;&#160;&#160;Employee
 Benefit Plans.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;Each Benefit
 Plan is set forth in Section 3.20(a) of the Sellers&#146; Disclosure Letter. There
 is no Benefit Plan that (i) is a multiemployer plan within the meaning of Section
 3(37) of ERISA, or (ii) is a plan, other than a multiemployer plan, subject to Title
 IV of ERISA.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;The Sellers
 have previously made available to the Buyer written summaries of the Foreign Plans
 and copies of the Benefit Plans (other than the Foreign Plans) (and, if applicable,
 related trust agreements) and all amendments thereto, together with the most recent
 annual report (Form 5500 including, if applicable, Schedule B thereto), the most
 recent actuarial valuation report prepared in connection with any Benefit Plan (other
 than the Foreign Plans), the most recent determination letter received from any
 taxation authority with respect to any Benefit Plan (other than the Foreign Plans),
 and each summary plan description, summary of material modification and registration
 statement, permit application and prospectus prepared in connection with any Benefit
 Plan (other than the Foreign Plans).
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(c)&#160;&#160;&#160;&#160;&#160;&#160;&#160;Each Benefit
 Plan that is intended to be qualified under an applicable provision of the Code
 or any regulation thereunder, including Section 401(a) of the Code, is so qualified
 and has been so qualified during the period since its adoption; each trust created
 under any such Benefit Plan is exempt from tax and has been so exempt since its
 creation and, to the Knowledge of the Sellers, nothing has occurred with respect
 to the operation of any Benefit Plan that would cause the loss of such qualification
 or exemption. Each Benefit Plan (other than the Foreign Plans) has been maintained
 in substantial compliance with its terms and with the requirements prescribed by
 any applicable statutes, orders, rules and regulations, including ERISA and the Code.
</FONT></DIV>
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</FONT>
<P><DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(d)&#160;&#160;&#160;&#160;&#160;&#160;&#160;Neither the
 Company nor any of the Subsidiaries has any material current or projected liability
 in respect of post-employment or post-retirement health or medical or life insurance
 benefits for retired, former or current employees of the Company, except as required
 under applicable Laws or pursuant to binding contracts in existence on the date
 hereof and listed on Section 3.20(a) of the Sellers&#146; Disclosure Letter.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(e)&#160;&#160;&#160;&#160;&#160;&#160;&#160;The Sellers
 have previously made available to the Buyer a true and complete list and copies
 of each Benefit Plan that covers employees of the Company and the Subsidiaries (&#147;<B>Company
 Employees</B>&#148;) outside of the United States (each, a &#147;
<B>Foreign Plan</B>&#148;). Except as would not have, individually or in the aggregate,
 a Company Material Adverse Effect, each Foreign Plan has been maintained in substantial
 compliance with its terms and with the requirements of all applicable Laws and has
 been maintained in good standing with applicable Governmental Bodies. Except as
 would not have, individually or in the aggregate, a Company Material Adverse Effect,
 all material contributions to, and material payments from, the Foreign Plans that
 may have been required to be made in accordance with the terms of any such Foreign
 Plan, and, when applicable, the law of the jurisdiction in which such Foreign Plan
 is maintained, have been timely made or shall be made by the Closing Date, and all
 such contributions to the Foreign Plans, and all payments under the Foreign Plans,
 for any period ending before the Closing Date that are not yet, but will be, required
 to be made, are reflected as an accrued liability in accordance with GAAP on the
 Company Financial Statements, or disclosed to the Buyer in writing within fifteen
 days following the date hereof, and the consummation of the transactions contemplated
 by this Agreement will not by itself create or otherwise result in any liability
 with respect to any Foreign Plan other than the triggering of payment to participants.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(f)&#160;&#160;&#160;&#160;&#160;&#160;&#160;From and after
 the Closing Date, the Buyer will have no liability under any Benefit Plan sponsored
 by Berlitz International in connection with the transactions contemplated by this
 Agreement.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(g)&#160;&#160;&#160;&#160;&#160;&#160;&#160;The Sellers
 have previously made available to the Buyer true, complete and correct copies of
 (i) all severance plans, agreements, programs and policies of either Seller, the
 Company and each Subsidiary that are applicable to any employee, director or consultant
 of the Company or any Subsidiary, and (ii) all plans, programs, agreements and other
 arrangements of either Seller, the Company and each Subsidiary with or relating
 to any employee, director or consultant of the Company or any Subsidiary that contain
 &#147;change of control&#148; provisions that would result in a financial obligation
 of the Company or any Subsidiary and are listed in Section 3.20(a) of the Sellers&#146;
 Disclosure Letter.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(h)&#160;&#160;&#160;&#160;&#160;&#160;&#160;Section 3.20(h)
 of the Sellers&#146; Disclosure Letter sets forth the name of each Company Employee
 whose annual base salary exceeded $100,000 for calendar year 2001 (except for the
 president of the Company, who is expected to resign as of the Closing). No payment
 or benefit that may be required to be made by the Company or any Subsidiary or that
 may otherwise be required to be made under the
</FONT></DIV>
<P>
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<P align="right"><FONT face="Times New Roman" size="2">14
</FONT>
<P><FONT face="Times New Roman" size="2">terms of any Benefit Plan or other
 arrangement will constitute a parachute payment under Section 280(G)(1) of the Code.
</FONT>
<P><DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(i)&#160;&#160;&#160;&#160;&#160;&#160;&#160;Neither the
 Company nor any Subsidiary is required to obtain the consent of any Option Holder
 in connection with the consummation of the transactions described in and contemplated
 by Section 6.12 of this Agreement.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px">
<FONT face="Times New Roman" size="2">
3.21&#160;&#160;&#160;&#160;&#160;Employee
 Relations.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;None of the
 individuals employed by the Company or any of the Subsidiaries is represented by
 a union, local works council or similar organization. Neither the Company nor any
 of the Subsidiaries has at any time during the last three years had, or, to the
 Knowledge of the Sellers, is there now threatened, any strike, work stoppage or
 other material labor dispute. To the Knowledge of the Sellers, there are no current
 activities or proceedings of any union, local works council or similar organization
 in connection with an attempt to organize the Company&#146;s or any Subsidiary&#146;s
 employees.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;As of the
 date hereof, none of the Company Employees covered by the 2002 GlobalNET Management
 Incentive Plan or the Berlitz International, Inc. Short Term Executive Incentive
 Compensation Plan (the &#147;<B>Bonus Plans</B>&#148;) has given formal notice of
 or formally expressed to the Sellers such employee&#146;s intent to terminate his
 or her employment with the Company or any Subsidiary (except for the president of
 the Company, who is expected to resign as of the Closing).
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(c)&#160;&#160;&#160;&#160;&#160;&#160;&#160;All employees
 who are active in the business of the Company and the Subsidiaries are employed
 by the Company or one of the Subsidiaries, other than certain senior-level executives,
 the accounting, legal and tax departments and employees conducting internal audits,
 handling insurance matters and performing headquarters administrative functions.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(d)&#160;&#160;&#160;&#160;&#160;&#160;&#160;The Sellers
 have previously made available to the Buyer a copy of Berlitz International&#146;s
 code of corporate conduct in existence as of the date hereof (the &#147;<B>Code
 of Corporate Conduct</B>&#148;). The Code of Corporate Conduct sets forth the general
 corporate policies and guidelines of Berlitz International and its subsidiaries,
 including the Company and the Subsidiaries, with respect to business ethics, including
 the treatment of proprietary and other confidential information.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px">
<FONT face="Times New Roman" size="2">
3.22&#160;&#160;&#160;&#160;&#160;Accounts
 Receivable. All accounts receivable reflected on the March 31, 2002 balance sheet
 included in the Company Financial Statements, and all accounts receivable arising
 subsequent to March 31, 2002, have arisen in the ordinary course of business and
 the reserves in respect thereof (including the reserves included in the general
 reserve provision) are reflected on the March 31, 2002 balance sheet included in
 the Company Financial Statements or, with respect to accounts receivable arising
 subsequent to March 31, 2002, on the accounting records of the Company and the Subsidiaries,
 in each case in amounts not less than those that would be required to be established
 in accordance with GAAP. As of the date hereof, the outstanding accounts
</FONT></DIV>
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<P align="right"><FONT face="Times New Roman" size="2">15
</FONT>
<P><FONT face="Times New Roman" size="2">receivable
 of (i) the 10 largest customers of the Company and the Subsidiaries, taken as a
 whole, by revenue recognized for the year ended December 31, 2001, and (ii) the
 10 largest customers of the Company and the Subsidiaries, taken as whole, by revenue
 recognized for the period between January 1, 2002 and May 31, 2002, are at least
 as collectible as the outstanding accounts receivable of the customers of the Company
 and the Subsidiaries, taken as a whole, in the aggregate.
</FONT>
<P><DIV style="margin-left:0px; text-indent:80px">
<FONT face="Times New Roman" size="2">
3.23&#160;&#160;&#160;&#160;&#160;Banks,
 Brokers and Powers of Attorney. Section 3.23 of the Sellers&#146; Disclosure Letter
 sets forth (a) the name of each bank, safe deposit company or other financial institution
 with which the Company or any of the Subsidiaries has an account, safe deposit box
 or lock box, (b) the name of each person authorized by the Company or any of the
 Subsidiaries to draw on any account or to have access to any safe deposit box or
 lock box and (c) the names of all persons authorized by powers of attorney to act
 on behalf of the Company or any of the Subsidiaries in matters concerning its business
 or affairs.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px">
<FONT face="Times New Roman" size="2">
3.24&#160;&#160;&#160;&#160;&#160;Affiliate
 Transactions. Except for employment relationships and compensation and benefits
 in the ordinary course of business, neither the Company nor any Subsidiary is a
 party to any agreement, arrangement or understanding (whether written or oral) with,
 or involving the making of any payment or transfer of assets to, any Seller or any
 Affiliate of any Seller (other than the Company or any Subsidiary) or any stockholder,
 officer or director of any Seller or of any Affiliate of any Seller.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px">
<FONT face="Times New Roman" size="2">
3.25&#160;&#160;&#160;&#160;&#160;Insurance.
 Set forth in Section 3.25 of the Sellers&#146; Disclosure Letter is a list of all
 insurance policies maintained with respect to the Company and the Subsidiaries (the
 &#147;<B>Insurance Policies</B>&#148;). Each of the Company and the Subsidiaries
 is, and at all times during the past two years has been, insured with reputable
 insurers (or self-insured) against all risks normally insured against by companies
 in similar lines of business, except as would not have, individually or in the aggregate,
 a Company Material Adverse Effect. All of the Insurance Policies required to be
 maintained with respect to the Company and the Subsidiaries are valid and binding
 in accordance with their terms and are in full force and effect, except as would
 not have, individually or in the aggregate, a Company Material Adverse Effect.
 Neither the Company nor any of the Subsidiaries is in material breach or default
 with respect to any provision contained in any Insurance Policy, nor does there
 exist any condition that with the passage of time or the giving of notice or both
 would cause any material breach or default with respect to any provision contained
 in any Insurance Policy by the Company or any of the Subsidiaries.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px">
<FONT face="Times New Roman" size="2">
3.26&#160;&#160;&#160;&#160;&#160;Customers.
 Since December 31, 2001 until the date hereof, none of (i) the 10 largest customers
 of the Company and the Subsidiaries, taken as a whole, by revenue recognized for
 the year ended December 31, 2001, or (ii) the 10 largest customers of the Company
 and the Subsidiaries, taken as whole, by revenue recognized for the period between
 January 1, 2002 and May 31, 2002, has terminated or materially reduced or, to the
 Knowledge of the Sellers, has threatened to terminate or materially reduce its business
 relationship with the Company or any of the Subsidiaries.
</FONT></DIV>
<P>
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<P align="right"><FONT face="Times New Roman" size="2">16
</FONT>
<P><DIV style="margin-left:0px; text-indent:80px">
<FONT face="Times New Roman" size="2">
3.27&#160;&#160;&#160;&#160;&#160;Full Disclosure.
 In providing documents to the Buyer in connection with the Buyer&#146;s due diligence
 review, the Sellers have not knowingly (i) provided any document that contains an
 untrue statement of a material fact or omits to state a material fact required to
 be stated therein or necessary to make the statements made, in the context in which
 made, not materially false or misleading, except for documents or omissions corrected
 by a subsequent document delivered, or (ii) failed to provide any material document
 in response to the Buyer&#146;s reasonable requests, except for documents that the
 Sellers have previously informed the Buyer would not be provided, which are described
 on Section 3.27 of the Sellers&#146; Disclosure Letter. In connection with the
 Buyer&#146;s due diligence review, the Sellers have provided certain information
 regarding the gross margins of the Company and the Subsidiaries by allowing the
 Buyer&#146;s accountants to access the Company&#146;s customer database and to interview
 relevant Company Employees, and all such information provided to the Buyer&#146;s
 accountants was materially accurate and not misleading.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px">
<FONT face="Times New Roman" size="2">
3.28&#160;&#160;&#160;&#160;&#160;Exclusivity
 of Representations. The representations and warranties made by the Sellers in this
 Agreement are in lieu of and are exclusive of all other representations and warranties,
 including any implied warranties. The Sellers hereby disclaim any such other or
 implied representations or warranties, notwithstanding the delivery or disclosure
 to the Buyer or its officers, directors, employees, agents or representatives of
 any documentation or other information (including any pro forma financial information,
 supplemental data or financial projections or other forward-looking statements).
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:50px">
<FONT face="Times New Roman" size="2">
4.&#160;&#160;&#160;&#160;&#160;&#160;&#160;Representations
 and Warranties of Sellers as to the Shares and this Agreement. The Sellers, jointly
 and severally, represent and warrant to the Buyer as follows:
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px">
<FONT face="Times New Roman" size="2">
4.1&#160;&#160;&#160;&#160;&#160;&#160;&#160;Title to
 the Shares. Each Seller owns beneficially and of record, free and clear of any
 Lien, and has full power and authority to convey free and clear of any Lien, the
 Shares set forth opposite such Seller&#146;s name in Section 3.4(a) of the Sellers&#146;
 Disclosure Letter and, upon payment for such Shares at the Closing as herein
 provided, such Seller will convey to the Buyer good and valid title thereto, free
 and clear of any Lien.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px">
<FONT face="Times New Roman" size="2">
4.2&#160;&#160;&#160;&#160;&#160;&#160;&#160;Authority to Execute and Perform Agreement.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;Each Seller
 is a corporation duly organized, validly existing and in good standing under the
 laws of its state of incorporation, and has the full legal right and power and all
 authority and approvals required to enter into, execute and deliver this Agreement
 and to perform fully such Seller&#146;s obligations hereunder. This Agreement has
 been duly executed and delivered by such Seller, and assuming due execution and
 delivery hereof by the Buyer, this Agreement will be a valid and binding obligation
 of such Seller enforceable against such Seller in accordance with its terms.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;The execution
 and delivery by such Seller of this Agreement, the consummation of the transactions
 contemplated hereby, and the
</FONT></DIV>
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<P align="right"><FONT face="Times New Roman" size="2">17
</FONT>
<P><FONT face="Times New Roman" size="2">performance by such Seller of this Agreement in accordance
 with its terms has been duly authorized by such Seller and will not:
</FONT>
<P><DIV style="margin-left:30px; text-indent:120px">
<FONT face="Times New Roman" size="2">(i)&#160;&#160;&#160;&#160;&#160;&#160;&#160;violate the
 certificate of incorporation or by-laws of such Seller;
</FONT></DIV>
<P><DIV style="margin-left:30px; text-indent:120px">
<FONT face="Times New Roman" size="2">(ii)&#160;&#160;&#160;&#160;&#160;&#160;require such Seller
 to obtain any material consents, approvals, authorizations or actions of, or make any filings with
 or give any notices to, any Governmental Bodies or any other Person, except for the notification
 requirements of the HSR Act or as set forth in Section 4.2(b) of the Sellers&#146; Disclosure
 Letter (collectively, the &#147;<B>Seller Consents and Notices</B>&#148;);
</FONT></DIV>
<P><DIV style="margin-left:30px; text-indent:120px">
<FONT face="Times New Roman" size="2">(iii)&#160;&#160;&#160;&#160;&#160;if the Seller Consents and
 Notices are obtained or made, violate or result in the breach of any of the terms and conditions of,
 cause the termination of or give any other contracting party the right to terminate, or constitute
 (or with notice or lapse of time, or both, constitute) a material default under, any material
 contract, agreement, lease or license to which such Seller is a party or by or to which such
 Seller, any of its properties or the Shares held by such Seller is or may be bound or subject,
 except as could not reasonably be expected to materially impair or delay the ability of the
 Sellers to consummate the transactions contemplated hereby; or
</FONT></DIV>
<P><DIV style="margin-left:30px; text-indent:120px">
<FONT face="Times New Roman" size="2">(iv)&#160;&#160;&#160;&#160;&#160;result in the creation of
 any Lien on the Shares held by such Seller.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:50px">
<FONT face="Times New Roman" size="2">
5.&#160;&#160;&#160;&#160;&#160;&#160;&#160;Representations
 and Warranties of the Buyer. The Buyer represents and warrants to the Sellers as follows:
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px">
<FONT face="Times New Roman" size="2">
5.1&#160;&#160;&#160;&#160;&#160;&#160;&#160;Due Incorporation
 and Authority. The Buyer is a corporation duly organized, validly existing and in good standing
 under the laws of its state of incorporation or organization. The Buyer has all requisite power
 and authority to own, lease and operate its properties and to carry on its business as now being
 conducted, except where the failure to have such power and authority could not reasonably be
 expected to materially impair or delay the ability of the Buyer to consummate the transactions
 contemplated hereby.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px">
<FONT face="Times New Roman" size="2">
5.2&#160;&#160;&#160;&#160;&#160;&#160;&#160;Authority to
 Execute and Perform Agreement.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;The Buyer has
 the full legal right and power and all authority and approvals required to enter into, execute
 and deliver this Agreement and to perform fully its obligations hereunder. This Agreement has
 been duly executed and delivered by the Buyer, and assuming due execution and delivery hereof
 by the Sellers, this Agreement will be a valid and binding obligation of the Buyer enforceable
 against the Buyer in accordance with its terms.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;The execution
 and delivery by the Buyer of this Agreement, the consummation of the transactions contemplated
 hereby, and the
</FONT></DIV>
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<P align="right"><FONT face="Times New Roman" size="2">18
</FONT>
<P><FONT face="Times New Roman" size="2">performance by the Buyer of this Agreement in accordance
 with its terms have been duly authorized by the Buyer and will not:
</FONT>
<P><DIV style="margin-left:30px; text-indent:120px">
<FONT face="Times New Roman" size="2">(i)&#160;&#160;&#160;&#160;&#160;&#160;&#160;violate the
 certificate of incorporation or by-laws (or comparable instruments) of the Buyer;
</FONT></DIV>
<P><DIV style="margin-left:30px; text-indent:120px">
<FONT face="Times New Roman" size="2">(ii)&#160;&#160;&#160;&#160;&#160;&#160;require the
 Buyer to obtain any material consents, approvals, authorizations or actions of, or make any
 filings with or give any notices to, any Governmental Bodies or any other Person, except for
 the notification requirements of the HSR Act and filings or notices required under Foreign
 Antitrust Laws in Brazil, Ireland and Finland (collectively, the &#147;<B>Buyer Consents
 and Notices</B>&#148; and, together with the Company Consents and Notices and the Seller
 Consents and Notices, the &#147;<B>Required Consents and Notices</B>&#148;); or
</FONT></DIV>
<P><DIV style="margin-left:30px; text-indent:120px">
<FONT face="Times New Roman" size="2">(iii)&#160;&#160;&#160;&#160;&#160;if the Buyer
 Consents and Notices are obtained or made, violate or result in the breach of any of the terms
 and conditions of, cause the termination of or give any other contracting party the right to
 terminate, or constitute (or with notice or lapse of time, or both, constitute) a material
 default under, any material contract, agreement, lease or license to which the Buyer is a
 party or by or to which the Buyer or any of its properties is or may be bound or subject,
 except as could not reasonably be expected to materially impair or delay the ability of the
 Buyer to consummate the transactions contemplated hereby.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px">
<FONT face="Times New Roman" size="2">
5.3&#160;&#160;&#160;&#160;&#160;&#160;&#160;Brokers.
 No Person retained by or on behalf of the Buyer or any of its Affiliates is entitled to any
 brokerage commissions, finders&#146; fees or similar compensation in connection with the
 transactions contemplated hereby.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px">
<FONT face="Times New Roman" size="2">
5.4&#160;&#160;&#160;&#160;&#160;&#160;&#160;Purchase
 for Investment. The Buyer is purchasing the Shares for its own account for investment and
 not for resale or distribution in any transaction that would be in violation of the securities
 laws of the United States of America or any state thereof. The Buyer is an &#147;accredited
 investor&#148; as defined in Rule 501 of Regulation D promulgated under the Securities Act
 of 1933, as amended.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px">
<FONT face="Times New Roman" size="2">
5.5&#160;&#160;&#160;&#160;&#160;&#160;&#160;Financial
 Ability. The Buyer has cash available or has existing borrowing facilities or unconditional,
 binding funding commitments that are sufficient to enable it to consummate the transactions
 contemplated by this Agreement. The financing, if any, required to consummate the transactions
 contemplated by this Agreement is referred to herein as the &#147;<B> Financing</B>.&#148; Each
 of the conditions to the Financing will be satisfied and the Financing will be available for the
 transactions contemplated hereby on a timely basis and in no event later than the tenth Business
 Day after the conditions to Closing set forth in Sections 7.2 and 8.2 have been satisfied.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px">
<FONT face="Times New Roman" size="2">
5.6&#160;&#160;&#160;&#160;&#160;&#160;&#160;Exclusivity
 of Representations. The representations and warranties made by the Buyer in this Agreement are
 in lieu of and are exclusive of all other representations and warranties, including any implied
 warranties.
</FONT></DIV>
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<P align="right"><FONT face="Times New Roman" size="2">19
</FONT>
<P><DIV style="margin-left:0px; text-indent:50px">
<FONT face="Times New Roman" size="2">
6.&#160;&#160;&#160;&#160;&#160;&#160;&#160;Covenants
 and Agreements.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px">
<FONT face="Times New Roman" size="2">
6.1&#160;&#160;&#160;&#160;&#160;&#160;&#160;Conduct of
 Business. The Sellers agree that:
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;Between
 the date of this Agreement and the Closing Date, except as set forth in this Agreement or
 in Section 6.1(a) of the Sellers&#146; Disclosure Letter or otherwise agreed to in writing
 by the Buyer (which agrees to respond promptly to any request for such agreement and not
 to unreasonably withhold such agreement), the Sellers shall cause each of the Company and
 the Subsidiaries to operate in the ordinary course of business consistent with past practice
 and, to the extent consistent therewith, the Sellers shall cause each of the Company and the
 Subsidiaries to continue to use the same efforts it currently expends to preserve its
 business organization and to preserve its present relationships with its customers and
 all other Persons having business relationships with the Company and the Subsidiaries,
 and the Sellers shall cause each of the Company and the Subsidiaries to cooperate fully,
 between the date hereof and the Closing Date, in the Buyer&#146;s efforts to retain senior
 management personnel and other employees of the Company and the Subsidiaries. The Sellers
 will use reasonable efforts to cause the Company to have at least $16,000,000 in Cash as
 of the Closing Date.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;Between
 the date of this Agreement and the Closing Date, except as provided for in this Agreement,
 as set forth in Section 6.1(b) of the Sellers&#146; Disclosure Letter or as otherwise agreed
 to in writing by the Buyer (which agrees to respond promptly to any request for such agreement
 and not to unreasonably withhold such agreement), the Sellers shall:
</FONT></DIV>
<P><DIV style="margin-left:30px; text-indent:120px">
<FONT face="Times New Roman" size="2">(i)&#160;&#160;&#160;&#160;&#160;&#160;&#160;not permit
 the Company or any of the Subsidiaries to amend its certificate of incorporation or by-laws
 (or comparable instruments);
</FONT></DIV>
<P><DIV style="margin-left:30px; text-indent:120px">
<FONT face="Times New Roman" size="2">(ii)&#160;&#160;&#160;&#160;&#160;&#160;not
 permit the Company or any of the Subsidiaries to incur any additional indebtedness for
 borrowed money;
</FONT></DIV>
<P><DIV style="margin-left:30px; text-indent:120px">
<FONT face="Times New Roman" size="2">(iii)&#160;&#160;&#160;&#160;&#160;not permit
 the Company or any of the Subsidiaries to issue, deliver, sell or authorize, or propose
 the issuance, delivery, sale or purchase of, any shares of capital stock or any other
 equity security, or any class of securities convertible into, or rights, warrants or
 options to acquire, any such capital stock or other equity securities;
</FONT></DIV>
<P><DIV style="margin-left:30px; text-indent:120px">
<FONT face="Times New Roman" size="2">(iv)&#160;&#160;&#160;&#160;&#160;not permit
 the Company or any of the Subsidiaries to cancel, terminate or materially amend any Material
 Contract, except in the ordinary course of business;
</FONT></DIV>
<P><DIV style="margin-left:30px; text-indent:120px">
<FONT face="Times New Roman" size="2">(v)&#160;&#160;&#160;&#160;&#160;&#160;not
 knowingly take or omit to take, or cause the Company or any Subsidiary to take or
 omit to take, any action that would result in a breach of any of the Sellers&#146;
 representations or warranties contained in Articles 3 and 4; and
</FONT></DIV>
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<P align="right"><FONT face="Times New Roman" size="2">20
</FONT>
<P><DIV style="margin-left:30px; text-indent:120px">
<FONT face="Times New Roman" size="2">(vi)&#160;&#160;&#160;&#160;&#160;cause
 the Company and the Subsidiaries to maintain insurance at presently existing levels so
 long as such insurance is available on commercially reasonable terms.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px">
<FONT face="Times New Roman" size="2">
6.2&#160;&#160;&#160;&#160;&#160;&#160;&#160;Confidentiality.
 The Buyer reaffirms the confidentiality letter agreement, dated January 29, 2002 (the
 &#147;<B>Confidentiality Agreement</B>&#148;), between the Company and the Buyer, and
 agrees to fulfill its obligations thereunder. If this Agreement is, for any reason, terminated
 prior to the Closing, the Confidentiality Agreement shall nonetheless continue in full force and
 effect. The Buyer and the Sellers agree to maintain, before and after the Closing, the
 confidentiality of all information concerning the Sellers (including the amounts paid to
 each Seller hereunder) or the Buyer, as the case may be, except as may be required by
 applicable Law, in which case the Buyer or the Sellers, as the case may be, shall promptly
 notify the Sellers or the Buyer, as the case may be, of any such requirement and the Sellers
 or the Buyer, as the case may be, shall be permitted to seek confidential treatment for such
 information.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px">
<FONT face="Times New Roman" size="2">
6.3&#160;&#160;&#160;&#160;&#160;&#160;&#160;Expenses.
 Other than all HSR Act filing fees, which shall be the responsibility of the Buyer, and except
 as otherwise specifically provided herein, the Buyer and the Sellers (and not the Company) shall
 bear their respective expenses, including all fees and expenses of agents, representatives,
 counsel and accountants, incurred in connection with the preparation, execution and performance
 of this Agreement and the transactions contemplated hereby. The Buyer shall reimburse the Sellers
 for all out-of-pocket expenses incurred in connection with the audit of the Audited Financial
 Statements, including all fees and expenses of the Sellers&#146; independent certified public
 accountants; <I>provided</I>, that such reimbursement obligation shall not exceed $300,000.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px">
<FONT face="Times New Roman" size="2">
6.4&#160;&#160;&#160;&#160;&#160;&#160;&#160;Publicity.
 Except as may be required by law, the parties agree that no publicity release or announcement
 concerning this Agreement or the transactions contemplated hereby shall be made without advance
 approval thereof by the Sellers and the Buyer. If any public announcement is required by law to
 be made by any party hereto, prior to making such announcement, such party will deliver a draft
 of such announcement to the other parties and shall give the other parties reasonable opportunity
 to comment thereon. Attached hereto as Exhibit A are the forms of press releases to be issued upon
 execution of this Agreement.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px">
<FONT face="Times New Roman" size="2">
6.5&#160;&#160;&#160;&#160;&#160;&#160;&#160;Intercompany
 Payables. On or before the Closing, the Sellers shall cause (i) any amounts that are owed by the
 Sellers or any of the Affiliates of the Sellers (other than the Company or any Subsidiary) to be
 set off against any amounts due and owing by the Company or any of the Subsidiaries to the Sellers
 or any of the Affiliates of the Sellers (other than the Company or any Subsidiary) and (ii) any net
 amounts due and owing by the Company or any of the Subsidiaries to the Sellers or any of the
 Affiliates of the Sellers (other than the Company or any Subsidiary) to be settled, forgiven
 or converted into equity (including by the contemporaneous contribution of an equivalent amount
 of capital), as described in Section 6.5 of the Sellers&#146; Disclosure Letter.
</FONT></DIV>
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</FONT>
<P><DIV style="margin-left:0px; text-indent:80px">
<FONT face="Times New Roman" size="2">
6.6&#160;&#160;&#160;&#160;&#160;&#160;&#160;Required Consents.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;Each
 of the Sellers and the Buyer shall use all reasonable efforts to obtain or make all Required
 Consents and Notices. In the event that any of the Company Consents and Notices are not
 obtained or made and the Buyer proceeds with the Closing without such Company Consents
 and Notices having been obtained or made, the Sellers shall, or shall cause their agents
 to use all reasonable efforts to assist the Buyer in obtaining or making any such Company
 Consents and Notices after the Closing Date until such time as such Company Consents and
 Notices have been obtained or made; <I>provided</I>, that the Sellers shall not be liable
 to the Buyer in the event that the Buyer and the Sellers are unable to secure any such Company
 Consents and Notices.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;At
 all times prior to the Closing, the parties shall cooperate and coordinate with each other,
 as appropriate, with respect to filings and notifications to Governmental Bodies in connection
 with obtaining or making the Required Consents and Notices. Without limiting the generality of
 the foregoing, the Sellers, on the one hand, and the Buyer, on the other hand, shall make or
 cause to be made available all information reasonably requested by the other party to permit
 all necessary filings and notices to be made with or to Governmental Bodies as promptly as
 practicable after the date hereof. Each party shall promptly furnish or cause to be furnished
 all information and documents reasonably required by the relevant Governmental Bodies as may
 be appropriate in order to obtain or make the Required Consents and Notices.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px">
<FONT face="Times New Roman" size="2">
6.7&#160;&#160;&#160;&#160;&#160;&#160;&#160;Access to Information and Cooperation.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;From
 and after the date hereof until the Closing, the Sellers shall, and shall cause the Company
 and the Subsidiaries to, give to the Buyer&#146;s officers, employees, agents, attorneys,
 consultants and accountants, reasonable access during normal business hours upon reasonable
 notice to all of the properties, books, contracts, documents and records with respect to the
 Company and the Subsidiaries and shall furnish to the Buyer and such Persons as the Buyer shall
 designate to the Sellers such information relating to the Company or any Subsidiary as the Buyer
 or such Persons may at any time and from time to time reasonably request. No investigation
 pursuant to this Section 6.7(a) shall affect any representation or warranty made by the Sellers
 to the Buyer hereunder or otherwise affect the indemnification obligations of the Sellers
 hereunder.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;From
 and after the Closing, the Buyer (including, for the purpose of this Section 6.7(b), the Company
 and the Subsidiaries after the Closing) shall provide the Sellers and their professional advisors
 with reasonable access to the books and records of the Company and the Subsidiaries (i) in
 connection with the preparation of the Net Current Assets Statement contemplated by Section
 1.4, (ii) if reasonably required in connection with any litigation, investigation, tax audit,
 discovery or similar proceeding, or in the preparation of Tax Returns, and (iii) as may be
 necessary in order to enable the Sellers and their professional advisors to investigate claims for
</FONT></DIV>
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<P align="right"><FONT face="Times New Roman" size="2">22
</FONT>
<P align="left"><FONT face="Times New Roman" size="2">indemnification under Article 10 or Article
 11 and to exercise fully all rights they may have in connection with such claims. If any Seller
 shall reasonably request the assistance (including testimony) of employees of the Buyer, the
 Company or any of the Subsidiaries after the Closing (or any successors thereto) in connection
 with any third-party litigation, investigation, tax audit, discovery, similar proceeding or
 claim against any Seller, the Buyer shall make such employees available for a reasonable period
 of time; <I>provided</I>, that all out-of-pocket costs shall be borne by the Seller or Sellers
 making such request.
</FONT>
<P><DIV style="margin-left:0px; text-indent:80px">
<FONT face="Times New Roman" size="2">
6.8&#160;&#160;&#160;&#160;&#160;&#160;&#160;Further Assurances. The Buyer and the Sellers shall
 execute such documents and take such further actions as may be reasonably required or desirable
 to carry out the provisions hereof and the transactions contemplated hereby. Without limiting the
 generality of the foregoing, each such party shall use commercially reasonable efforts to fulfill
 or obtain the fulfillment of the conditions to the Closing set forth in Articles 7 and 8.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px">
<FONT face="Times New Roman" size="2">
6.9&#160;&#160;&#160;&#160;&#160;&#160;&#160;Transfer
 Taxes. The Buyer, on the one hand, and the Sellers, on the other hand, shall each be liable
 for, and shall pay, 50% of all transfer, real property, sales, use, goods and services,
 conveyance, recording or any other similar fees or taxes, and all documentary or other
 stamp taxes, arising out of or related to the transactions contemplated by this Agreement
 (but not including any income, franchise, profits, gross receipts or similar taxes).
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px">
<FONT face="Times New Roman" size="2">
6.10&#160;&#160;&#160;&#160;&#160;Berlitz Names and Marks.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;Subject
 to the terms of the License Agreement, the Buyer acknowledges and agrees that the Buyer has no
 rights in and to (i) the names or marks &#147;BERLITZ&#148; and &#147;BERLITZIT&#148;, (ii)
 any other trade names, trademarks or Internet domain names in which the word &#147;BERLITZ&#148;
 appears, (iii) the trade name &#147;GLOBALNET&#148; or (iv) any other marks or names owned, used
 or licensed by the Sellers or any of their Affiliates (the &#147;<B>Berlitz Names and Marks</B>&#148;)
 and, following the Closing Date, the Buyer shall not have any right, title or interest in and to, or
 right to use, the Berlitz Names and Marks or any marks or names confusingly similar thereto. The Buyer
 covenants that it will not hereafter adopt, use, or register or authorize others to adopt, use,
 or register, any trade names, trademarks, service marks or Internet domain names consisting of
 or incorporating the Berlitz Names and Marks or any marks, names or Internet domain names
 confusingly similar thereto. Notwithstanding anything in this Agreement to the contrary,
 the representations and warranties provided by the Sellers pursuant to Article 3 hereof shall
 not apply to the Berlitz Names and Marks. On the Closing Date, Berlitz Investment and the
 Company shall enter into a license agreement, substantially in the form attached hereto as
 Exhibit A (the &#147;<B>License Agreement</B>&#148;), pursuant to which the Company and the
 Subsidiaries will be permitted to use (x) the Berlitz Names and Marks for a period not to
 exceed 90 days and (y) if (but only to the extent that) the names of any non-U.S. Subsidiaries
 cannot be changed within such 90-day period using all reasonable efforts, the &#147;BERLITZ&#148;
 or &#147;BERLITZ GLOBALNET&#148; names as a corporate name in non-U.S. Subsidiaries for a period
 and within the parameters set forth in the License Agreement, each for the limited purpose
 of ensuring a
</FONT></DIV>
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<P align="right"><FONT face="Times New Roman" size="2">23
</FONT>
<P align="left"><FONT face="Times New Roman" size="2">smooth transition of the business of
 the Company and the Subsidiaries and deterring consumer confusion, as more fully set forth
 in the License Agreement.
</FONT>
<P><DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;If
 at any time the Buyer is deemed to have acquired any right, title or interest in and to any
 Berlitz Names and Marks (other than the license granted pursuant to the License Agreement),
 or marks, names or Internet domain names similar thereto, the Buyer hereby assigns to Berlitz
 Investment all right, title and interest in and to such marks and names. The Buyer shall
 execute and sign all such instruments, applications and documents and shall take all such
 actions as are reasonably requested by Berlitz Investment to enable Berlitz Investment and
 its Affiliates, nominees and successors to enjoy the full benefit of the Berlitz Names and
 Marks and to secure the vesting in Berlitz Investment absolutely of the Buyer&#146;s right,
 title and interest in and to such Berlitz Names and Marks.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(c)&#160;&#160;&#160;&#160;&#160;&#160;&#160;Within
 five Business Days after the Closing, the Buyer will cause an amendment to the certificate of
 incorporation of the Company to be filed with the Secretary of State of the State of New York,
 and as soon as reasonably practicable based upon the legal requirements in each applicable
 jurisdiction, but in no event more than 60 days after the Closing, the Buyer will cause
 amendments to the certificate of incorporation (or comparable instruments) for each of
 the Subsidiaries to be filed with the appropriate Governmental Bodies in the relevant
 jurisdictions, to change the name of each of the Company and the Subsidiaries to a name
 not containing any of the Berlitz Names and Marks or any marks or names confusingly similar
 thereto and will cause to be filed as soon as practicable after the Closing based upon the
 legal requirements in each applicable jurisdiction, in all jurisdictions in which the Company
 and the Subsidiaries are qualified to do business, any documents necessary to (i) reflect such
 change in their corporate names, (ii) terminate their qualification or de-register their names
 with the appropriate Governmental Bodies and (iii) register their new corporate names with the
 appropriate Governmental Bodies. The Buyer shall send copies of all amendments and filings under
 this Section 6.10(c) to the attention of the Legal Department at the address of the Sellers listed
 in Section 13.3.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(d)&#160;&#160;&#160;&#160;&#160;&#160;&#160;For
 a period of nine months following the Closing Date, none of the Sellers or their subsidiaries
 shall use the name &#147;GLOBALNET&#148; as part of its corporate name or otherwise conduct
 business using the &#147;GLOBALNET&#148; name.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px">
<FONT face="Times New Roman" size="2">
6.11&#160;&#160;&#160;&#160;&#160;Employee Matters.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;On
 or as soon as practicable following the Closing Date, those employees of the Company and the
 Subsidiaries who become employees of the Buyer shall be eligible to participate in those
 benefit plans and programs maintained for similarly situated employees of the Buyer (or in
 substantially similar programs), on the same terms applicable to similarly situated employees
 of the Company and the Subsidiaries and to the extent that such plans and programs provide the
 following benefits: medical/dental/vision care, life insurance, disability income, sick pay,
 holiday and vacation pay, 401(k) plan coverage, Code Section 125 benefit arrangements, bonus,
</FONT></DIV>
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<P align="right"><FONT face="Times New Roman" size="2">24
</FONT>
<P align="left"><FONT face="Times New Roman" size="2">profit-sharing or other incentive plans,
 pension or retirement programs, dependent care assistance, severance benefits, and employee stock
 option and stock purchase plans.
</FONT>
<P><DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;Except
 as otherwise specifically provided herein, on and after the Closing Date, the Buyer shall cause
 the Company and the Subsidiaries to recognize the service of each Company Employee for the
 Company and the Subsidiaries and any Affiliates thereof before the Closing Date for all
 employment-related purposes other than (to the extent permitted by applicable Law) with
 respect to the accrual of benefits under any defined benefit pension plan maintained by
 the Buyer). To the extent applicable, the Buyer shall cause (i) all pre-existing condition
 exclusions under the Buyer&#146;s welfare and other employee benefit plans to be waived for
 each Company Employee and his or her covered dependents to the extent that such exclusion did
 not operate to prohibit coverage of such Company Employee and his or her covered dependents under
 the analogous Benefit Plan immediately prior to the commencement of coverage under the Buyer&#146;s
 welfare and other employee benefit plans and (ii) any eligible expenses incurred by any Company
 Employee and his or her covered dependents during the portion of the year that ends on the
 commencement of coverage under the Buyer&#146;s welfare and other employee benefit plans to be
 taken into account under the Buyer&#146;s welfare and other employee benefit plans for purposes
 of satisfying all deductible, co-insurance and maximum out-of-pocket requirements applicable to
 such Company Employee and his or her covered dependents for such plan year as if such amounts had
 been paid in accordance with the Buyer&#146;s welfare and other employee benefit plans.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(c)&#160;&#160;&#160;&#160;&#160;&#160;&#160;Company
 Employees shall not accrue benefits under any employee benefit policies, plans, arrangements,
 programs, practices or agreements of the Sellers or any of their Affiliates after the Closing
 Date. After the Closing has occurred, the Buyer shall be obligated to pay the Company Employees
 who are employed by the Company or one of the Subsidiaries immediately prior to the Closing Date
 and (i) who are employed by the Buyer as of December 31, 2002 or (ii) whose employment with the
 Buyer has been involuntarily severed other than for cause, any bonuses accrued on the &#147;Payroll
 and Commissions&#148; item of the Net Current Assets Statement, as have been adjusted to reflect
 actual Company performance through the period ending on the last day of the month ending prior to
 the date of this Agreement, with respect to the Bonus Plans plus any additional bonus amounts
 determined at the discretion of the Buyer; <I>provided</I>, that the Sellers shall provide
 the Buyer, no later than the Closing Date, with reasonable substantiation of such performance
 and corresponding bonus payments in accordance with the terms of the Bonus Plans, as determined
 by the board of directors of Berlitz International; <I>provided</I>,<I> further</I>, that any
 accrued benefits under the Bonus Plans for the president of the Company shall be paid by the
 Company prior to Closing. For purposes of this section, &#147;cause&#148; is defined as (i)
 the Company Employee&#146;s indictment for any felony or any crime involving moral turpitude,
 (ii) gross negligence or willful misconduct by the Company Employee in connection with his
 position hereunder or (iii) the Company Employee&#146;s willful and continuing refusal to
 perform his duties. Payment of bonuses under the Bonus Plans pursuant to this Section 6.11(c)
 shall be made no later than March 31, 2003. The Buyer shall not assume any obligations under
 the Berlitz International, Inc. Supplemental Executive Retirement Plan.
</FONT></DIV>
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</FONT>
<P><DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(d)&#160;&#160;&#160;&#160;&#160;&#160;&#160;On
 and after the Closing Date, the Buyer shall be responsible with respect to Company Employees
 and their beneficiaries for compliance with the Worker Adjustment and Retraining Notification
 Act of 1988 and any other applicable Law, including any requirement to provide for and discharge
 any and all notifications, benefits and liabilities to Company Employees and Governmental Bodies
 that might be imposed as a result of the consummation of the transactions contemplated by this
 Agreement or otherwise.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px">
<FONT face="Times New Roman" size="2">
6.12&#160;&#160;&#160;&#160;&#160;Stock
 Options. On or prior to the Closing Date, the Sellers shall (i) pay to each holder of an
 Option (an &#147;<B>Option Holder</B>&#148;) the consideration payable in respect of all
 Options held by such Option Holder in accordance with the Company&#146;s 2000 Stock Option
 Plan (the &#147;<B>Option Plan</B>&#148;), (ii) cause all Options outstanding under the
 Option Plan to be cancelled as of the Closing Date, and (iii) cause the Option Plan to be
 terminated effective immediately prior to the Closing Date.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px">
<FONT face="Times New Roman" size="2">
6.13&#160;&#160;&#160;&#160;&#160;Covenant Not to Compete.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;Each
 of the Sellers agrees that, for a period of five years after the Closing (the &#147;<B>Restricted
 Period</B>&#148;), it shall not, and shall not permit any of its subsidiaries to, directly or
 indirectly, engage, anywhere in the world, whether as a partner, stockholder, principal, agent
 or consultant, in any business involving the provision of translation, interpretation or
 localization services that competes, in whole or in part, with the business of the Buyer,
 its subsidiaries, the Company and the Subsidiaries as currently being conducted (the
 &#147;<B>Restricted Business</B>&#148;).
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;During
 the Restricted Period, none of the Sellers or any of their subsidiaries shall, directly or
 indirectly, (i) induce any customer of the Company or any of the Subsidiaries, or any other
 Person with whom the Company or any of the Subsidiaries has a business relationship, whether
 contractual or otherwise, to discontinue, or alter in a manner materially adverse to the
 business of the Company and the Subsidiaries, such business relationship, or (ii) solicit
 or induce any employee of the Company or any of the Subsidiaries to leave the employment
 of the Company or any of the Subsidiaries; <I>provided</I>, <I>however</I>, that the
 foregoing shall not preclude any solicitation by either Seller or any of their subsidiaries
 through a general advertising not specifically directed at the employees of the Company or
 any of the Subsidiaries.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(c)&#160;&#160;&#160;&#160;&#160;&#160;&#160;Notwithstanding
 anything to the contrary contained in this Agreement, each of the Sellers and their subsidiaries
 may (i) engage in the businesses and activities described in Section 6.13(c) of the Sellers&#146;
 Disclosure Letter or (ii) own or acquire, directly or indirectly, solely as an investment,
 securities of any Person, whether or not traded on any securities exchange, if such Seller
 or subsidiary or any of its Affiliates is not a controlling Person of, or a member of a group
 that controls, such Person and does not, directly or indirectly, own 10% or more of any class
 of equity securities of such Person.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(d)&#160;&#160;&#160;&#160;&#160;&#160;&#160;If any
 Seller breaches, or threatens to commit a breach of, any of the provisions of this Section 6.13
 (the &#147;<B>Restrictive Covenants</B>&#148;), the
</FONT></DIV>
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</FONT>
<P align="left"><FONT face="Times New Roman" size="2">Buyer shall have the right and remedy
 without regard to any other available remedy to (i) have the Restrictive Covenants specifically
 enforced by any court of competent jurisdiction and (ii) have issued an injunction restraining
 any such breach; it being agreed that such Seller will not challenge an assertion by the Buyer
 that any breach of any of the Restrictive Covenants will cause irreparable injury to the Buyer,
 nor will such Seller assert as a defense to any such attempt to obtain equitable relief that
 money damages will provide an adequate remedy to the Buyer. Each Seller further agrees that
 if any Seller breaches this covenant, it would be difficult or impossible to quantify actual
 damages. As a result, the Sellers, jointly and severally, agree to pay liquidated damages in
 an amount equal to 100% of all revenues received in connection with any conduct that is in
 breach of this covenant and not rectified by the Sellers within 60 days&#146; notice of such
 breach. This amount does not constitute a penalty but is a reasonable approximation of damages.
 Under no circumstances shall the Buyer be required to post a bond to enforce this covenant.
</FONT>
<P><DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(e)&#160;&#160;&#160;&#160;&#160;&#160;&#160;It
 is the desire and intent of the parties that the Restrictive Covenants will be enforced to
 the fullest extent permissible under the laws and public policies applied in each jurisdiction
 in which enforcement is sought. Accordingly, if any Restrictive Covenant shall be adjudicated
 to be invalid or unenforceable, such Restrictive Covenant shall be deemed amended to the extent
 necessary in order that such provision be valid and enforceable, such amendment to apply only
 with respect to the operation of such Restrictive Covenant in the particular jurisdiction in
 which such adjudication is made.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(f)&#160;&#160;&#160;&#160;&#160;&#160;&#160;Each
 of the Sellers acknowledges and agrees that the Restrictive Covenants are reasonable and valid
 in geographical and temporal scope and in all other respects. If any court determines that any
 of the Restricted Covenants, or any part thereof, is invalid or unenforceable, the remainder of
 the Restrictive Covenants shall not be affected thereby and shall be given full effect without
 regard to the invalid portions.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px">
<FONT face="Times New Roman" size="2">
6.14&#160;&#160;&#160;&#160;&#160;Website Traffic.
 From and after the Closing Date, the Sellers shall promptly redirect all Internet traffic
 containing references to &#147;Berlitz GlobalNET&#148; or translation, localization and
 interpretation services that exist on the Berlitz.com website to the Buyer&#146;s website,
 <I>www.bowneglobal.com</I>, or to such other website as may be designated by the Buyer to
 the Sellers at least five Business Days prior to the Closing Date.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px">
<FONT face="Times New Roman" size="2">
6.15&#160;&#160;&#160;&#160;&#160;Transfers
 of Subsidiary Shares.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;From
 and after the date hereof until the Closing, the Sellers shall, and shall cause the Company
 and the Subsidiaries to, use all reasonable efforts to complete the transfer of shares of
 any Subsidiary in which the Company or one of the Subsidiaries does not own all of the issued
 and outstanding shares of capital stock and other ownership interests (other than Berlitz Global
 Services Ltda., Berlitz GlobalNET Chile Traducciones Ltda. and Berlitz Translations s.r.l.) to
 the Company or one of the Subsidiaries prior to Closing. If any such transfer is not completed
 prior to
</FONT></DIV>
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</FONT>
<P><DIV style="margin-left:0px; text-indent:0px"><FONT face="Times New Roman" size="2">
Closing, the Sellers shall transfer all economic
 and other beneficial interests in any such Subsidiary to the Company or one of the
 Subsidiaries as of the Closing Date and shall use all reasonable efforts to complete
 such transfer as soon as practicable.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:115px"><FONT face="Times New Roman" size="2">
(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;With respect to the transfer of any shares
 not owned by the Company or one of the Subsidiaries in each of Berlitz Global Services
 Ltda., Berlitz GlobalNET Chile Traducciones Ltda. and Berlitz Translations s.r.l.,
 (i) the Sellers shall transfer all economic and other beneficial interests in any
 such Subsidiary to the Company or one of the Subsidiaries as of the Closing Date,
 (ii) as soon as practicable but in any event within 30 days following the Closing
 Date, the Buyer shall designate in writing one or more affiliated or associated
 companies to whom such shares should be transferred, and (iii) following such designation,
 the Sellers shall use all reasonable efforts to complete such transfers as soon
 as practicable.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:115px"><FONT face="Times New Roman" size="2">
(c)&#160;&#160;&#160;&#160;&#160;&#160;&#160;If any transfer contemplated under Section
 6.15(a) or (b) cannot be completed for any reason, the Sellers shall use all reasonable
 efforts to transfer, or cause to be transferred, all of the assets, properties,
 rights, licenses, permits, contracts, causes of action, claims and operations of
 such Subsidiary, and all of the liabilities and obligations of such Subsidiary,
 that relate to the ownership and conduct of the business of such Subsidiary, as
 the same existed on the Closing Date, to the Company or one of its Subsidiaries
 (or the Buyer&#146;s designee, in the case of transfers contemplated under Section
 6.15(b)), whether by asset transfer or other means permitted in the relevant jurisdiction.
 The Sellers shall pay all expenses incurred in connection with any transfer contemplated
 under this Section 6.15, including the Buyer&#146;s reasonable attorney&#146;s fees.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px"><FONT face="Times New Roman" size="2">
6.16&#160;&#160;&#160;&#160;&#160;&#160;Termination of Subleases. Within three
 months following the Closing Date, the Buyer shall notify the Sellers in writing
 if the Buyer desires to terminate any sublease arrangement in the offices currently
 occupied by the Company or one of the Subsidiaries in Canada, Italy or Japan. If
 the Buyer desires to terminate any such sublease arrangement, the Buyer shall pay
 the Sellers an amount equal to 50% of the remaining obligations under such sublease
 arrangement from the date of such payment through the end of the term of such sublease
 arrangement. Upon receipt of such payment, the Sellers shall, or shall cause their
 Affiliates to, terminate such sublease arrangement, such termination to be effective
 as of the date of such payment.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px"><FONT face="Times New Roman" size="2">
6.17&#160;&#160;&#160;&#160;&#160;&#160;Transition Services. Upon Closing and
 for a period of up to 90 days following the Closing Date, at the Company&#146;s
 request, Berlitz International agrees to provide the Company and the Subsidiaries
 with such accounting, computer, administrative and other services as Berlitz International
 provides to the Company and the Subsidiaries on the date hereof (except for services
 provided by Berlitz International headquarters) for such compensation and on such
 terms as such services are now provided to the Company and the Subsidiaries.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px"><FONT face="Times New Roman" size="2">
6.18&#160;&#160;&#160;&#160;&#160;&#160;Distributions. Each of the Sellers agrees
 that, for a period of 18 months following the Closing, it shall not distribute all
 or any portion of the Purchase Price received by it hereunder to any Person, unless,
 as a condition to such distribution, such Seller obtains a written instrument for
 the benefit of the Buyer pursuant
</FONT></DIV>
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</FONT>
<P><FONT face="Times New Roman" size="2">to which the Person to whom such distribution
 is ultimately distributed agrees to be liable for such Seller&#146;s obligations
 hereunder to the extent of the amount of such distribution.
</FONT>
<P><DIV style="margin-left:0px; text-indent:50px"><FONT face="Times New Roman" size="2">
7.&#160;&#160;&#160;&#160;&#160;&#160;&#160;Conditions Precedent to the Obligation
 of the Buyer to Close. The obligation of the Buyer to enter into and complete the
 Closing is subject to the fulfillment on or prior to the Closing Date of the following
 conditions, any one or more of which may be waived by the Buyer:
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px"><FONT face="Times New Roman" size="2">
7.1&#160;&#160;&#160;&#160;&#160;&#160;&#160;Representations and Covenants. The representations
 and warranties of the Sellers contained in Articles 3 and 4 to the extent qualified
 by materiality or by reference to a Company Material Adverse Effect shall be true
 and correct in all respects and, to the extent not so qualified, shall be true and
 correct in all material respects, in each case on and as of the Closing Date with
 the same force and effect as though made on and as of the Closing Date, except for
 those representations and warranties that are expressly limited by their terms to
 dates or times other than the Closing Date, which representations and warranties
 need only be true and correct as aforesaid as of such other dates or times. The
 Sellers shall have performed and complied in all material respects with all covenants
 and agreements required by this Agreement to be performed or complied with by the
 Sellers on or prior to the Closing Date. Each Seller shall have delivered to the
 Buyer a certificate, dated the date of the Closing and signed by an officer of such
 Seller, to the foregoing effect.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px"><FONT face="Times New Roman" size="2">
7.2&#160;&#160;&#160;&#160;&#160;&#160;&#160;HSR Act and Other Antitrust Filings.
 Any Person required in connection with the transactions contemplated hereby to
 file a notification and report form in compliance with the HSR Act shall have filed
 such form and the applicable waiting period with respect to each such form (including
 any extension thereof by reason of a request for additional information) shall have
 expired or been terminated, and any approvals required under the Foreign Antitrust
 Laws in connection with the transactions contemplated hereby shall have been obtained.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px"><FONT face="Times New Roman" size="2">
7.3&#160;&#160;&#160;&#160;&#160;&#160;&#160;No Orders or Proceedings. No Order shall
 have been issued or proceeding or litigation initiated by any Governmental Body
 to restrain or prohibit, or to obtain damages or a discovery order in respect of,
 this Agreement or the consummation of the transactions contemplated hereby.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px"><FONT face="Times New Roman" size="2">
7.4&#160;&#160;&#160;&#160;&#160;&#160;&#160;Consents. All of the Required Consents
 and Notices (other than those referred to in Section 7.2) shall have been obtained
 or made.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px"><FONT face="Times New Roman" size="2">
7.5&#160;&#160;&#160;&#160;&#160;&#160;&#160;Resignations. The Sellers shall cause
 to be delivered to the Buyer on the Closing Date all resignations of members of
 the Board of Directors and officers of the Company and the Subsidiaries that have
 been requested in writing by the Buyer at least two Business Days prior to the Closing,
 such resignations to be effective immediately after the Closing.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px"><FONT face="Times New Roman" size="2">
7.6&#160;&#160;&#160;&#160;&#160;&#160;&#160;Intercompany Payables. Pursuant to Section
 6.5, the Sellers shall have caused any net amounts due and owing by the Company
 or any of the Subsidiaries to the Sellers or any of the Affiliates of the Sellers
 (other than the Company
</FONT></DIV>
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</FONT>
<P><FONT face="Times New Roman" size="2">or any Subsidiary) to be settled, forgiven or converted
 into equity (including by the contemporaneous contribution of an equivalent amount
 of capital).
</FONT>
<P><DIV style="margin-left:0px; text-indent:80px"><FONT face="Times New Roman" size="2">
7.7&#160;&#160;&#160;&#160;&#160;&#160;&#160;Opinion of Sellers&#146; Counsel. The
 Buyer shall have received (i) the opinion of Paul, Weiss, Rifkind, Wharton &#038; Garrison,
 counsel to the Sellers, dated as of the Closing Date, substantially in the form
 attached hereto as Exhibit C, and (ii) the opinion of the general counsel of the
 Sellers, dated as of the Closing Date, substantially in the form attached hereto
 as Exhibit D.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:50px"><FONT face="Times New Roman" size="2">
8.&#160;&#160;&#160;&#160;&#160;&#160;&#160;Conditions Precedent to the Obligation
 of the Sellers to Close. The obligation of the Sellers to enter into and complete
 the Closing is subject to the fulfillment on or prior to the Closing Date of the
 following conditions, any one or more of which may be waived by the Sellers:
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px"><FONT face="Times New Roman" size="2">
8.1&#160;&#160;&#160;&#160;&#160;&#160;&#160;Representations and Covenants. The representations
 and warranties of the Buyer contained in Article 5 to the extent qualified by materiality
 shall be true and correct in all respects and, to the extent not so qualified, shall
 be true and correct in all material respects, in each case on and as of the Closing
 Date with the same force and effect as though made on and as of the Closing Date,
 except for those representations and warranties that are expressly limited by their
 terms to dates or times other than the Closing Date, which representations or warranties
 need only be true and correct as aforesaid as of such other dates or times. The
 Buyer shall have performed and complied in all material respects with all covenants
 and agreements required by this Agreement to be performed or complied with by the
 Buyer on or prior to the Closing Date. The Buyer shall have delivered to the Sellers
 a certificate, dated the date of the Closing and signed by an officer of the Buyer,
 to the foregoing effect.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px"><FONT face="Times New Roman" size="2">
8.2&#160;&#160;&#160;&#160;&#160;&#160;&#160;HSR Act and Other Antitrust Filings.
 Any Person required in connection with the transactions contemplated hereby to
 file a notification and report form in compliance with the HSR Act shall have filed
 such form and the applicable waiting period with respect to each such form (including
 any extension thereof by reason of a request for additional information) shall have
 expired or been terminated, and any approvals required under the Foreign Antitrust
 Laws in connection with the transactions contemplated hereby shall have been obtained.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px"><FONT face="Times New Roman" size="2">
8.3&#160;&#160;&#160;&#160;&#160;&#160;&#160;No Orders or Proceedings. No Order shall
 have been issued or proceeding or litigation initiated by any Governmental Body
 to restrain or prohibit, or to obtain damages or a discovery order in respect of,
 this Agreement or the consummation of the transactions contemplated hereby.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px"><FONT face="Times New Roman" size="2">
8.4&#160;&#160;&#160;&#160;&#160;&#160;&#160;Consents. All of the Required Consents
 and Notices (other than those referred to in Section 8.2) shall have been made or
 obtained.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px"><FONT face="Times New Roman" size="2">
8.5&#160;&#160;&#160;&#160;&#160;&#160;&#160;Opinion of Buyer&#146;s Counsel. The
 Sellers shall have received the opinion of Brobeck, Phleger &#038; Harrison LLP, counsel
 to the Buyer, dated as of the Closing Date, substantially in the form attached hereto
 as Exhibit E.
</FONT></DIV>
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</FONT>
<P><DIV style="margin-left:0px; text-indent:50px"><FONT face="Times New Roman" size="2">
9.&#160;&#160;&#160;&#160;&#160;&#160;&#160;Survival. The representations and warranties
 of the Sellers and the Buyer contained herein shall survive the Closing for the
 respective periods set forth in this Article 9. All of the representations and
 warranties of the Sellers contained in Articles 3 and 4 shall terminate 18 months
 from the Closing Date, except that the representations and warranties contained
 in Sections 3.10 and 4.1 shall survive until the expiration of the applicable statute
 of limitations with respect to the subject matter thereof. Thereafter all such
 representations and warranties of the Sellers shall be extinguished and no claim
 for the recovery of any Losses may be asserted against either Seller in respect
 thereof; <I>provided, however</I>, that claims first asserted in writing with specificity
 within the applicable period referred to above shall not thereafter be barred.
 All of the representations and warranties of the Buyer contained in Article 5 shall
 terminate one year from the Closing Date. The provisions of Article 11 shall survive
 until the later of (i) the expiration of the applicable statute of limitations or
 (ii) the conclusion of litigation, including appeals, plus 30 days. The agreements
 of the Buyer and the Sellers contained in this Agreement shall survive beyond the
 Closing, except for those agreements that are expressly limited by their terms to
 other dates or times, which shall survive only to such dates or times.
</FONT>
<P><DIV style="margin-left:0px; text-indent:50px"><FONT face="Times New Roman" size="2">
10.&#160;&#160;&#160;&#160;&#160;&#160;Indemnification.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px"><FONT face="Times New Roman" size="2">
10.1&#160;&#160;&#160;&#160;&#160;Obligation of the Sellers to Indemnify.
 From and after the Closing Date, subject to Sections 10.3, 10.4 and 10.5, the Sellers
 shall, jointly and severally, indemnify, defend and hold harmless the Buyer and
 each of its Affiliates, directors, officers, employees, agents and representatives,
 and each of the heirs, executors, successors and assigns of any of the foregoing
 (the &#147;<B>Buyer Indemnified Parties</B>&#148;), from and against all liabilities,
 losses, claims, costs and damages (whether absolute, accrued, conditional or otherwise
 and whether or not resulting from third party claims), including interest and penalties
 with respect thereto and reasonable attorneys&#146; fees, court costs and other
 out-of-pocket expenses (collectively, &#147;<B>Losses</B>&#148;) that arise out
 of, or result from, (a) the breach of any representation, warranty, covenant or
 agreement of the Sellers that survives the Closing to the extent not waived by the
 Buyer, (b) the Company&#146;s or any Subsidiary&#146;s use of the name &#147;GlobalNET&#148;
 prior to the Closing Date, (c) any claim relating to (i) the cancellation
 of the Options and the termination of the Option Plan pursuant to Section 6.12 and
 the assertion of any rights in connection therewith by any Option Holder or (ii)
 any withholding Taxes required to be paid in connection with the payment to the
 Option Holders pursuant to Section 6.12, and (d) any claim relating to the repayment
 of grants by the Industrial Development Agency (Ireland) to Berlitz (Ireland) Limited;
 <I>provided</I>, that the Sellers&#146; obligation to indemnify for any Losses pursuant
 to this Section 10.1(d) shall terminate upon the earliest of (i) the Buyer&#146;s
 announcement of its intention to discontinue the Company&#146;s operations in Ireland
 or materially reduce the number of its employees or the level of its operations
 or investment in Ireland, (ii) the Buyer&#146;s termination of the Company&#146;s
 operations in Ireland or material reduction in the number of its employees or the
 level of its operations or investment in Ireland and (iii) 18 months from the Closing
 Date. From and after the Closing Date, subject to Sections 10.3, 10.4 and 10.5,
 the Sellers shall, jointly and severally, indemnify, defend and hold harmless the
 Buyer Indemnified Parties for all Immaterial Losses if and to the extent that the
 Threshold Amount has been exceeded pursuant to Section 10.4(b).
</FONT></DIV>
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</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px"><FONT face="Times New Roman" size="2">
10.2&#160;&#160;&#160;&#160;&#160;Obligation of the Buyer to Indemnify.
 From and after the Closing Date, subject to Sections 10.3, 10.4 and 10.5, the Buyer
 shall indemnify, defend and hold harmless the Sellers and each of their respective
 Affiliates, directors, officers, employees, agents and representatives, and each
 of the heirs, executors, successors and assigns of any of the foregoing, from and
 against all Losses that arise out, of or result from, the breach of any representation,
 warranty, covenant or agreement of the Buyer that survives the Closing to the extent
 not waived by the Sellers. From and after the Closing Date, the Company and the
 Subsidiaries shall be jointly and severally liable for the Buyer&#146;s indemnification
 obligations pursuant to this Article 10 and Article 11.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px"><FONT face="Times New Roman" size="2">
10.3&#160;&#160;&#160;&#160;&#160;Indemnification Procedure.
</FONT>
<P><DIV style="margin-left:0px; text-indent:115px"><FONT face="Times New Roman" size="2">
(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;Any indemnified party seeking indemnification
 under this Agreement (each, an &#147;<B>Indemnified Party</B>&#148;) shall promptly
 notify the indemnifying party or parties (collectively, the &#147;<B>Indemnifying
 Party</B>&#148;) of any third party claim or demand for which the Indemnified Party
 is asserting a claim hereunder. Such notice shall be accompanied by a reasonably
 complete description of the basis for such claim or demand (including an estimate
 of the amount thereof and copies of all correspondence, process, legal pleadings
 and other relevant documentation relating thereto) and reference to the provisions
 of this Agreement under which liability is asserted. The failure to provide such
 notice shall not relieve the Indemnifying Party of any of its obligations hereunder,
 or impair the right of the Indemnified Party to indemnification hereunder, except
 to the extent that such failure shall actually prejudice the Indemnifying Party.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:115px"><FONT face="Times New Roman" size="2">
(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;The Indemnifying Party shall have the right,
 at its own cost, to participate jointly in the defense of any claim or demand in
 connection with which the Indemnified Party has claimed indemnification hereunder,
 and may elect to take over the defense of such claim or demand through counsel of
 its own choosing by so notifying the Indemnified Party within 30 days of receipt
 of the Indemnified Party&#146;s notice of such claim or demand. If the Indemnifying
 Party makes such an election:
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:150px"><FONT face="Times New Roman" size="2">
(i)&#160;&#160;&#160;&#160;&#160;&#160;&#160;it shall keep the Indemnified Party reasonably
 informed as to the status of such matter and shall promptly send copies of all pleadings
 to the Indemnified Party;
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:150px"><FONT face="Times New Roman" size="2">
(ii)&#160;&#160;&#160;&#160;&#160;&#160;with respect to any issue involved in such
 claim or demand, it shall have the sole right to settle or otherwise dispose of
 such claim or demand on such terms as it, in its sole discretion, shall deem appropriate;
 <I>provided</I>, <I>however</I>, that the consent of the Indemnified Party to the
 settlement or disposition of any claim or demand shall be required if such settlement
 or disposition shall result in any liability to, or equitable relief against, the
 Indemnified Party, which consent shall not be unreasonably withheld; and
</FONT>
<P><DIV style="margin-left:0px; text-indent:150px"><FONT face="Times New Roman" size="2">
(iii)&#160;&#160;&#160;&#160;&#160;the Indemnified Party shall have the right
 to participate jointly in the defense of such claim or demand, but shall do so at
 its own cost not subject to reimbursement under Section 10.1 or 10.2.
</FONT></DIV>
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</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:115px"><FONT face="Times New Roman" size="2">
(c)&#160;&#160;&#160;&#160;&#160;&#160;&#160;If the Indemnifying Party does not elect
 to take over the defense of a claim or demand, the Indemnified Party shall have
 the right to contest, compromise or settle such claim or demand in the exercise
 of its reasonable judgment; <I>provided</I>, <I>however</I>, that the consent of
 the Indemnifying Party to any compromise or settlement of such claim or demand shall
 be required, which consent shall not be unreasonably withheld.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:115px"><FONT face="Times New Roman" size="2">
(d)&#160;&#160;&#160;&#160;&#160;&#160;&#160;The parties shall use commercially reasonable
 efforts to minimize Losses from claims by third parties and shall act in good faith
 in responding to, defending against, settling or otherwise dealing with such claims.
 Without limiting the generality of the foregoing, each party agrees to pursue any
 available claims against insurers who may have provided insurance coverage for any
 Losses and further agrees to use commercially reasonable efforts to pursue, or to
 assign to the Indemnifying Party, any claims or rights it may have against any Person
 that may reduce the Losses otherwise incurred by the Indemnified Party. Each party
 agrees that it shall cooperate with the other parties in the defense of any claim
 or action.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80"><FONT face="Times New Roman" size="2">
10.4&#160;&#160;&#160;&#160;&#160;Measure of and Limitations upon Indemnification.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:115px"><FONT face="Times New Roman" size="2">
(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;The amount of the Indemnifying Party&#146;s
 liability under this Agreement shall be determined taking into account any applicable
 insurance proceeds received by the Indemnified Party.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:115px"><FONT face="Times New Roman" size="2">
(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;The Sellers&#146; liability for any Losses
 under this Article 10 and for any Tax Losses attributable to Pre-Closing Foreign
 Taxes under Article 11 shall be subject to the following limitations: (i) the Sellers
 shall have no liability for any such Losses or Tax Losses (other than those arising
 out of, or resulting from, the breach by either Seller of its representations and
 warranties in Article 4) unless and until the aggregate amount of such Losses and
 Tax Losses for which the Sellers are obligated to indemnify pursuant to Section
 10.1(a) or Section 11.2, and other Losses suffered by the Buyer that would have
 been indemnifiable under Section 10.1(a) but for their exclusion under standards
 of materiality (indicated by the use of the words &#147;Company Material Adverse
 Effect,&#148; &#147;material,&#148; &#147;significant&#148; or &#147;substantial&#148;) set
 forth in Sections 3.3, 3.8(e), 3.9(a), 3.11, 3.12, 3.13, 3.14, 3.17(c),
 3.20(c) and 3.20(e), the third line and the third sentence of Section 3.16 and the
 third and fourth sentences of Section 3.25 (&#147;<B>Immaterial Losses</B>&#148;)
 shall exceed $1,000,000 (the &#147;<B>Threshold Amount</B>&#148;), in which case
 the Sellers shall be liable only to the extent that the aggregate amount of such
 Losses, Immaterial Losses and Tax Losses, as finally determined, shall exceed the
 Threshold Amount; (ii) the aggregate liability of the Sellers for all such Losses,
 Immaterial Losses and Tax Losses pursuant to Section 10.1(a) or Section 11.2 (other
 than those arising out of, or resulting from, the breach by either Seller of its
 representations and warranties in Article 4) shall not exceed, in the aggregate,
 the Purchase Price and (iii) the aggregate liability of the Sellers for all Losses
 arising out of, or resulting from, Section 10.1(d) shall not exceed, in the aggregate,
 Euro 936,000.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:115px"><FONT face="Times New Roman" size="2">
(c)&#160;&#160;&#160;&#160;&#160;&#160;&#160;<B>EXCEPT IN THE CASE OF FRAUD (FOR WHICH
 LIABILITY SHALL BE GOVERNED BY APPLICABLE LAW) AND AS</B>
</FONT></DIV>
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</FONT></DIV>
<P><FONT face="Times New Roman" size="2"><B>PROVIDED BELOW, IN NO EVENT
 SHALL ANY INDEMNIFYING PARTY BE LIABLE TO ANY INDEMNIFIED PARTY FOR ANY DAMAGES
 THAT ARE NOT REASONABLY FORESEEABLE, SUCH AS CONSEQUENTIAL, INDIRECT, INCIDENTAL
 OR OTHER SIMILAR DAMAGES, FOR ANY BREACH OR DEFAULT UNDER, OR ANY ACT OR OMISSION
 ARISING OUT OF OR IN ANY WAY RELATING TO, THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
 HEREBY, UNDER ANY FORM OF ACTION WHATSOEVER, WHETHER IN CONTRACT OR OTHERWISE.
 THE FOREGOING SHALL NOT, HOWEVER, LIMIT THE ABILITY OF THE BUYER TO ALLEGE DAMAGES
 FOR THE DIMINUTION IN PRESENT VALUE OF THE COMPANY ASSOCIATED WITH ANY BREACH OF
 THE SELLERS&#146; REPRESENTATIONS AND WARRANTIES RELATING TO THE COMPANY AND THE
 SUBSIDIARIES.</B>
</FONT>
<P><DIV style="margin-left:0px; text-indent:80px"><FONT face="Times New Roman" size="2">
10.5&#160;&#160;&#160;&#160;&#160;Exclusivity of Indemnity. Except in
 the event the Buyer is seeking equitable relief or liquidated damages pursuant to
 Section 6.13 or in the case of fraud (for which liability shall be governed by applicable
 law), the indemnification provided in this Article 10 and the Tax indemnification
 provided in Article 11 shall be the sole and exclusive remedy after the Closing
 Date for damages available to the parties to this Agreement for breach of any of
 the representations, warranties, covenants and agreements contained herein or any
 right, claim or action arising from the transactions contemplated hereby. Except
 in the event the Buyer is seeking equitable relief or liquidated damages pursuant
 to Section 6.13 or in the case of fraud (for which liability shall be governed by
 applicable law), the Buyer expressly waives, releases and agrees not to make any
 claim against the Sellers, except for indemnification claims made pursuant to this
 Article 10 or Article 11, for the recovery of any costs or damages, whether directly
 or by way of contribution, or for any other relief whatsoever, under any applicable
 Laws, whether now existing or applicable or hereinafter enacted or applicable (including
 claims for breach of contract or failure of disclosure).
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px"><FONT face="Times New Roman" size="2">
10.6&#160;&#160;&#160;&#160;&#160;&#160;Subrogation. In the event of payment
 by or on behalf of any Indemnifying Party to any Indemnified Party (including pursuant
 to this Article 10 or Article 11) in connection with any claim or demand by any
 Person other than the parties hereto or their respective Affiliates, such Indemnifying
 Party shall be subrogated to and shall stand in the place of such Indemnified Party
 as to any events or circumstances in respect of which such Indemnified Party may
 have any right, defense or claim relating to such claim or demand against any claimant
 or plaintiff asserting such claim or demand. Such Indemnified Party shall cooperate
 with such Indemnifying Party in a reasonable manner, and at the cost of such Indemnifying
 Party, in presenting any subrogated right, defense or claim.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:50px"><FONT face="Times New Roman" size="2">
11&#160;&#160;&#160;&#160;&#160;&#160;Tax Indemnification; Tax Matters.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px"><FONT face="Times New Roman" size="2">
11.1&#160;&#160;&#160;&#160;&#160;&#160;Preparation of Tax Returns and Payment
 of Taxes.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:115px"><FONT face="Times New Roman" size="2">
(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;The Sellers shall prepare or cause to
 be prepared and file all Tax Returns of the affiliated group or consolidated, combined
 or unitary
</FONT></DIV>
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</FONT>
<P><FONT face="Times New Roman" size="2">group, within the meaning of Section 1504(a) of the Code or comparable
 provision of state or local law, filing consolidated federal income Tax Returns
 or consolidated, combined or unitary state and local income Tax Returns of which
 the Sellers and the Company or any of the Subsidiaries are or were members on or
 prior to the Closing Date (the &#147;<B>Seller Group</B>&#148;) required to be filed
 with any Tax authority for Tax periods or portions thereof ending on or before the
 Closing Date, which are filed after the Closing Date (any such consolidated federal
 income Tax Returns together with any such consolidated, combined or unitary state
 and local income Tax Returns are referred to herein as &#147;<B>Pre-Closing Seller
 Group Tax Returns</B>&#148;). The Sellers also shall prepare or cause to be prepared
 and file all other Tax Returns required to be filed with respect to the Company
 or any of the Subsidiaries on or prior to the Closing Date.
</FONT>
<P><DIV style="margin-left:0px; text-indent:115px"><FONT face="Times New Roman" size="2">
(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;The Sellers shall include the income
 and deductions of the Company and the Subsidiaries that are members of the Seller
 Group (including any deferred income triggered into income under Treasury Regulation
 Sections 1.1502-13 and 1.1502-14, any excess loss accounts taken into income under
 Treasury Regulation Section 1.1502-19 resulting from or related to transactions
 contemplated under this Agreement and any Taxes resulting from the Section 338(h)(10)
 Election, any Section 338(g) Election and any Check-the-Box Election) on the Pre-Closing
 Seller Group Tax Returns for all periods or portions thereof through and including
 the Closing Date and pay any federal, state, or local income Taxes attributable
 to such income (&#147;<B>Pre-Closing Seller Group Taxes</B>&#148;).
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:115px"><FONT face="Times New Roman" size="2">
(c)&#160;&#160;&#160;&#160;&#160;&#160;&#160;Other than as set forth in Sections 11.1(a)
 and 11.1(b), the Buyer shall prepare or cause to be prepared and file all Tax Returns
 of the Company and the Subsidiaries required to be filed with any Tax authority
 after the Closing Date. Such Tax Returns shall include the Tax Returns of any non-United
 States Subsidiaries, which are not members of the Seller Group, required to be filed
 with any Tax authority after the Closing Date (&#147;<B>Foreign Tax Returns</B>&#148;). In the
 event that any Taxes payable are shown on such Foreign Tax Returns
 for Tax periods or portions thereof through and including the Closing Date (&#147;
<B>Pre-Closing Foreign Taxes</B>&#148;) exceed Taxes which are included as current
 liabilities (excluding any reserve for deferred taxes established to reflect timing
 differences between book and Tax income (a &#147;<B>Deferred Tax Reserve</B>&#148;))
 on the Net Current Assets Statement as finally determined pursuant to Section 1.4,
 the Buyer shall permit the Sellers to review and comment on such Foreign Tax Returns
 prior to filing. The Buyer shall notify the Sellers of the amount of such Pre-Closing
 Foreign Taxes and any other Taxes with respect to such Tax Returns for which the
 Sellers are liable pursuant to Section 11.2. The Sellers shall pay the amount of
 such Taxes to the Buyer in immediately available funds at least five Business Days
 prior to the date such Taxes are required to be paid.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:115px"><FONT face="Times New Roman" size="2">
(d)&#160;&#160;&#160;&#160;&#160;&#160;&#160;For purposes of this Agreement, in the
 case of any Taxes of the Company or any of the Subsidiaries that are payable with
 respect to any Tax period beginning before and ending after the Closing Date (a
 &#147;<B>Straddle Period</B>&#148;), the portion of any such Taxes that are allocable
 to the portion of the Straddle Period ending on the Closing Date shall: (i) in
 the case of Taxes that are either (x) based upon or related to income or receipts,
 or (y) imposed in connection with any sale or other transfer
</FONT></DIV>
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</FONT>
<P><FONT face="Times New Roman" size="2">or assignment of property
 (real or personal, tangible or intangible) (other than conveyances pursuant to this
 Agreement, which are covered under Section 6.9), be deemed equal to the amount that
 would be payable if the Tax year or period ended on the Closing Date; and (ii) in
 the case of Taxes (other than those described in clause (i) above) that are imposed
 on a periodic basis with respect to the business or assets of the Company or the
 Subsidiaries or otherwise measured by the level of any item, be deemed to be the
 amount of such Taxes for the entire Straddle Period (or, in the case of such Taxes
 determined on an arrears basis, the amount of such Taxes for the immediately preceding
 Tax period) multiplied by a fraction, the numerator of which is the number of calendar
 days in the portion of the Straddle Period ending on the Closing Date and the denominator
 of which is the number of calendar days in the entire Straddle Period. All determinations
 necessary to give effect to the foregoing allocations shall be made in a manner
 consistent with past practice of the Company and the Subsidiaries.
</FONT>
<P><DIV style="margin-left:0px; text-indent:80px"><FONT face="Times New Roman" size="2">
11.2&#160;&#160;&#160;&#160;&#160;&#160;Tax Indemnification by the Sellers.
 From and after the Closing Date, the Sellers shall (without duplication of the payments
 required by Section 11.1(c)), jointly and severally, indemnify the Buyer, the Company,
 the Subsidiaries and their respective Affiliates (each, a &#147;<B>Tax Indemnified
 Buyer Party</B>&#148; and collectively, the &#147;<B>Tax Indemnified Buyer Parties
</B>&#148;) against and hold harmless from any and all liabilities, losses, damages,
 claims, costs, expenses, interest, awards, judgments and penalties (including reasonable
 fees for both in-house and outside counsel, accountants and other outside consultants)
 suffered or incurred (each a &#147;<B>Tax Loss</B>&#148; and collectively, the
&#147;<B>Tax Losses</B>&#148;) arising out of (i) any Taxes imposed on the Company
 or the Subsidiaries for all periods or portions of periods through the Closing Date,
 including the Pre-Closing Seller Group Taxes or Pre-Closing Foreign Taxes of the
 Company or any of the Subsidiaries, in excess of Taxes which are included as current
 liabilities (excluding any Deferred Tax Reserve) on the Net Current Assets Statement
 as finally determined pursuant to Section 1.4; (ii) Taxes of any member of an affiliated,
 consolidated, combined or unitary group of which the Company or any of the Subsidiaries
 is or was a member on or prior to the Closing Date by reason of liability under
 Treasury Regulation Section 1.1502-6, Treasury Regulation Section 1.1502-78 or comparable
 provision of foreign, state or local law; and (iii) Taxes imposed on a Tax Indemnified
 Buyer Party as a result of a breach of a representation or warranty set forth in
 Section 3.10.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px"><FONT face="Times New Roman" size="2">
11.3&#160;&#160;&#160;&#160;&#160;&#160;Tax Indemnification by Buyer. From and
 after the Closing Date, the Buyer shall indemnify the Sellers and their Affiliates
 (each, a &#147;<B>Tax Indemnified Seller Party</B>&#148; and collectively, the
&#147;<B>Tax Indemnified Seller Parties</B>&#148;) against and hold harmless from
 any and all Tax Losses arising out of Taxes of the Company or the Subsidiaries other
 than amounts for which a Tax Indemnified Buyer Party is indemnified by the Sellers
 under Section 11.2.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px"><FONT face="Times New Roman" size="2">
11.4&#160;&#160;&#160;&#160;&#160;&#160;Tax Indemnification Procedures.
</FONT>
<P><DIV style="margin-left:0px; text-indent:115px"><FONT face="Times New Roman" size="2">
(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;After the Closing, each party to this Agreement
 (whether the Buyer or the Sellers, as the case may be) shall promptly notify the
 other party in writing of any demand, claim or notice of the commencement of an
 audit received by such party from any Tax authority or any other Person with respect
 to Taxes
</FONT></DIV>
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</FONT></DIV>
<P><FONT face="Times New Roman" size="2">for which such other party is liable pursuant
 to Sections 11.2 or 11.3; <I>provided</I>, <I>however</I>, that a failure to give such
 notice will not affect such other party&#146;s rights to indemnification under this Article
 11. Such notice shall contain factual information (to the extent known) describing the asserted
 Tax liability and shall include copies of the relevant portion of any notice or
 other document received from any Tax authority or any other Person in respect of
 any such asserted Tax liability.
</FONT>
<P><DIV style="margin-left:0px; text-indent:115px"><FONT face="Times New Roman" size="2">
(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;Payment by an indemnitor of any amount due
 to an indemnitee under this Article 11 shall be made within 10 days following written
 notice by the indemnitee that payment of such amounts to the appropriate Tax authority
 or other applicable third party is due by the indemnitee; <I>provided</I>, that
 the indemnitor shall not be required to make any payment earlier than five Business
 Days before it is due to the appropriate Tax authority or applicable third party.
 In the case of a Tax that is contested in accordance with the provisions of Section
 11.5, payment of such contested Tax will not be considered due earlier than the
 date a final determination to such effect is made by such Tax authority or a court.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:115px"><FONT face="Times New Roman" size="2">
(c)&#160;&#160;&#160;&#160;&#160;&#160;&#160;All amounts required to be paid pursuant
 to this Article 11 shall be paid promptly in immediately available funds by wire
 transfer to a bank account designated by the indemnified party.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px"><FONT face="Times New Roman" size="2">
11.5&#160;&#160;&#160;&#160;&#160;&#160;Cooperation. The Sellers and the Buyer
 agree to furnish or cause to be furnished to each other, upon request, as promptly
 as practicable, such information (including access to books and records) and assistance
 relating to the Company and the Subsidiaries as is reasonably requested for the
 filing of any Tax Returns and the preparation, prosecution, defense or conduct of
 any audit, claim for refund, or administrative or judicial proceeding involving
 any asserted Tax liability or refund with respect to the Company or any of the Subsidiaries
 (any such audit, claim for refund or proceeding is referred to herein as a &#147;
<B>Contest</B>&#148;). The Sellers and the Buyer shall each be entitled to participate
 in the proceedings relating to any Contest and shall reasonably cooperate with each
 other in the conduct of any Contest or other proceeding involving or otherwise relating
 to the Company or the Subsidiaries (or their income or assets) with respect to any
 Tax and each shall execute and deliver such powers of attorney and other documents
 as are necessary to carry out the intent of this Section 11.5. No Contest shall
 be settled without the consent of the party that is responsible for the resulting
 Taxes hereunder, which consent shall not be unreasonably withheld or delayed. Any
 information obtained under this Section 11.5 shall be kept confidential, except
 as may be otherwise necessary in connection with the filing of Tax Returns or in
 the conduct of a Contest or other Tax proceeding.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px"><FONT face="Times New Roman" size="2">
11.6&#160;&#160;&#160;&#160;&#160;&#160;Tax Treatment of Certain Payments. The
 parties agree to treat any adjustment to the Purchase Price under Section 1.4(c),
 any payment made under Section 6.16 and any indemnity payment made under this Agreement,
 including any indemnity payment made under Article 10 or this Article 11, as an
 adjustment to the Purchase Price for all Tax purposes and the parties agree to file
 their Tax Returns accordingly.
</FONT></DIV>
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</FONT>
<DIV style="margin-left:0px; text-indent:80px">
<FONT face="Times New Roman" size="2">
11.7&#160;&#160;&#160;&#160;&#160;Section 338(h)(10) Election.
</FONT></DIV>
<P>
<DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;Upon the
 request of the Buyer made no later than 60 days after the Closing Date, the Sellers
 shall join with the Buyer in making an election under Section 338(h)(10) of the
 Code and any corresponding or similar elections under state, local or foreign law
 (collectively, the &#147;<B>Section 338(h)(10) Election</B>&#148;) with respect
 to the purchase and sale of the stock of the Company and any domestic Subsidiaries
 hereunder and agree that the Buyer also may make an election under Section 338(g)
 of the Code and any corresponding or similar elections under state, local or foreign
 law (collectively, the &#147;<B>Section 338(g) Elections</B>&#148;) with respect
 to any foreign Subsidiaries hereunder; <I>provided, however</I>, that (i) the Buyer
 agrees that upon the request of the Sellers, the Buyer will make (or cause the Company
 and any foreign Subsidiary designated by the Sellers to make) an election, to be
 effective at least 10 days prior to the Closing Date, under Treasury Regulation
 Sections 301.7701-1 to 301.7701-3 to treat any foreign Subsidiary designated by
 the Sellers as disregarded as an entity separate from its owner (the &#147;<B>Check-the-Box
 Elections</B>&#148;), in which case the Buyer shall be entitled to make a protective
 Section 338(g) Election with respect to such entity; and (ii) if the combined effect
 of the Section 338(h)(10) Election, any Section 338(g) Election and any Check-the-Box
 Election is to increase the amount of Taxes payable by the Sellers compared with
 the Taxes that would be payable by the Sellers in the absence of all such elections,
 the Sellers are not required to join with the Buyer in making the Section 338(h)(10)
 Election unless the Buyer reimburses the Sellers for such increased Taxes. In the
 event the Buyer does not request that the Sellers join in making the Section 338(h)(10)
 Election, the remainder of the provisions of this Section 11.7 shall not apply.
</FONT></DIV>
<P>
<DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;The Sellers
 currently estimate that the amount that will be required to be reimbursed to the
 Sellers under clause (ii) of the proviso to Section 11.7(a) will not exceed $2,000,000.
 At the Buyer&#146;s request, no later than 20 days after the completion of the
 allocation of the purchase price under Section 11.7(c), the Sellers will provide
 the Buyer with the final calculation of the amount required to be reimbursed to
 the Sellers under clause (ii) of the proviso to Section 11.7(a) (including documentation
 showing the manner in which the amount was calculated) and a list of the foreign
 Subsidiaries with respect to which the Sellers wish to make the Check-the-Box Elections.
</FONT></DIV>
<P>
<DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(c)&#160;&#160;&#160;&#160;&#160;&#160;&#160;The Buyer
 shall determine and allocate the &#147;aggregate deemed sales price&#148;
 (&#147;<B>ADSP</B>&#148;) with respect to the assets of the Company and the Subsidiaries
 in accordance with Section 338 of the Code and the applicable Treasury Regulations
 promulgated thereunder or comparable provisions of state, local and foreign law
 (the <B>&#147;ADSP Allocation&#148;</B>). The Buyer shall forward a draft of the
 ADSP Allocation to the Sellers for the Sellers&#146; consent, which consent shall
 not be unreasonably withheld or delayed. The Buyer and the Sellers and their respective
 Affiliates shall be bound by the ADSP Allocation for all Tax purposes. The Buyer
 and the Sellers shall file, and shall cause their respective Affiliates to file,
 all Tax Returns in a manner consistent with the Section 338(h)(10) Election, any
 Section 338(g) Election, any Check-the-Box Election and the ADSP Allocation and
 shall take no position contrary thereto unless required to do so by applicable Tax
 laws.
</FONT></DIV>
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</FONT>
<P>
<DIV style="margin-left:0px; text-indent:50px">
<FONT face="Times New Roman" size="2">
12.&#160;&#160;&#160;&#160;&#160;Termination of Agreement.
</FONT></DIV>
<P>
<DIV style="margin-left:0px; text-indent:80px">
<FONT face="Times New Roman" size="2">
12.1&#160;&#160;&#160;&#160;&#160;Termination.
</FONT></DIV>
<P>
<DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;
This Agreement may be terminated prior to the Closing as follows:
</FONT></DIV>
<P>
<DIV style="margin-left:30px; text-indent:120px">
<FONT face="Times New Roman" size="2">(i)&#160;&#160;&#160;&#160;&#160;&#160;&#160;at
 the election of the Sellers, if any one or more of the conditions to the obligation of the Sellers
 to close set forth in Article 8 (other than those that by their nature cannot be satisfied
 prior to the Closing) has not been fulfilled as of the close of business on September
 30, 2002;
</FONT></DIV>
<P>
<DIV style="margin-left:30px; text-indent:120px">
<FONT face="Times New Roman" size="2">(ii)&#160;&#160;&#160;&#160;&#160;&#160;at the election
 of the Buyer, if any one or more of the conditions to the obligation of the Buyer
 to close set forth in Article 7 (other than those that by their nature cannot be
 satisfied prior to the Closing) has not been fulfilled as of the close of business
 on September 30, 2002;
</FONT></DIV>
<P>
<DIV style="margin-left:30px; text-indent:120px">
<FONT face="Times New Roman" size="2">(iii)&#160;&#160;&#160;&#160;&#160;at the election
 of the Sellers or the Buyer, if any legal proceeding is commenced by any Governmental
 Body seeking to prevent the consummation of the Closing or any other transaction
 contemplated hereby and either the Sellers, on the one hand, or the Buyer, on the
 other hand, as the case may be, reasonably and in good faith deems it impracticable
 or inadvisable to proceed in view of such legal proceeding;
</FONT></DIV>
<P>
<DIV style="margin-left:30px; text-indent:120px">
<FONT face="Times New Roman" size="2">(iv)&#160;&#160;&#160;&#160;&#160;at the election
 of the Sellers, if the Buyer has breached any material representation, warranty,
 covenant or agreement contained in this Agreement, which breach is incapable of
 being, or is not, cured within five Business Days after written notice of such breach
 from the Sellers to the Buyer, it being understood that the mere disclosure of such
 breach shall not constitute a cure;
</FONT></DIV>
<P>
<DIV style="margin-left:30px; text-indent:120px">
<FONT face="Times New Roman" size="2">(v)&#160;&#160;&#160;&#160;&#160;&#160;at the election
 of the Buyer, if the Sellers have breached any material representation, warranty,
 covenant or agreement contained in this Agreement, which breach is incapable of
 being, or is not, cured within five Business Days after written notice of such breach
 from the Buyer to the Sellers, it being understood that the mere disclosure of such
 breach shall not constitute a cure; or
</FONT></DIV>
<P>
<DIV style="margin-left:30px; text-indent:120px">
<FONT face="Times New Roman" size="2">(vi)&#160;&#160;&#160;&#160;&#160;at any time
 on or prior to the Closing Date, by mutual written consent of the Sellers and the
 Buyer.
</FONT></DIV>
<P>
<DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;If this Agreement
 terminates in accordance with Section 12.1(a)(i), (ii), (iii), (iv) or (vi), it
 shall become null and void and have no further force or effect, except as provided
 in Section 12.2.
</FONT></DIV>
<P>
<DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(c)&#160;&#160;&#160;&#160;&#160;&#160;&#160;If the Buyer
 validly terminates this Agreement pursuant to Section 12.1(a)(v), the Sellers shall
 (i) reimburse the Buyer for all of its reasonable out-of-pocket expenses incurred
 in connection with the preparation, execution
</FONT></DIV>
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</FONT>
<P>
<DIV style="margin-left:10px; text-indent:0px">
<FONT face="Times New Roman" size="2">and performance of this Agreement
 and the transactions contemplated hereby, including all reasonable fees and expenses
 of agents, representatives, counsel and accountants, and (ii) refund to the Buyer
 any amounts previously paid to the Sellers pursuant to Section 6.3 to reimburse
 expenses incurred in connection with the audit contemplated by Section 6.15. The
 Buyer and the Sellers agree that the remedy provided by this Section 12.1(c) shall
 be the Buyer&#146;s sole and exclusive remedy hereunder for the termination of this
 Agreement pursuant to Section 12.1(a)(v).
</FONT></DIV>
<P>
<DIV style="margin-left:0px; text-indent:80px">
<FONT face="Times New Roman" size="2">
12.2&#160;&#160;&#160;&#160;&#160;Survival After Termination. If this Agreement terminates pursuant
 to Section 12.1 and the transactions contemplated hereby are not consummated, this Agreement shall
 become null and void and have no further force or effect; <I>provided</I>, that any such
 termination shall not affect the rights set forth in Section 12.1(c) and shall be
 without prejudice to the rights of any party on account of the nonsatisfaction of
 the conditions set forth in Articles 7 and 8 resulting from the intentional or willful
 breach or violation of the representations, warranties, covenants or agreements
 of another party under this Agreement. Notwithstanding anything in this Agreement
 to the contrary, the provisions of Sections 6.2, 6.3, 6.4 and 12.1(c), this Section
 12.2 and Article 13 shall survive any termination of this Agreement.
</FONT>
</DIV>
<P>
<DIV style="margin-left:0px; text-indent:50px">
<FONT face="Times New Roman" size="2">
13.&#160;&#160;&#160;&#160;&#160;Miscellaneous.
</FONT></DIV>
<P>
<DIV style="margin-left:0px; text-indent:80px">
<FONT face="Times New Roman" size="2">
13.1&#160;&#160;&#160;&#160;&#160;Certain Definitions.
</FONT></DIV>
<P>
<DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;As used in
 this Agreement, the following terms have the following meanings:
</FONT></DIV>
<P>
<DIV style="margin-left:0px; text-indent:50px">
<FONT face="Times New Roman" size="2">&#147;<B>Affiliate</B>&#148;
 means, with respect to any Person, any other Person controlling,
 controlled by or under common control with such Person.
</FONT></DIV>
<P>
<DIV style="margin-left:0px; text-indent:50px">
<FONT face="Times New Roman" size="2">&#147;<B>Benefit Plan</B>&#148;
 means any employee benefit plan, arrangement, policy or commitment
 (whether or not an employee benefit plan within the meaning of Section 3(3) of ERISA),
 including any material employment, consulting or deferred compensation agreement,
 executive compensation, bonus, incentive, pension, profit-sharing, savings, retirement,
 stock option, stock purchase or severance pay plan, any life, health, disability
 or accident insurance plan or any holiday or vacation practice, as to which the
 Company or any of the Subsidiaries has, or in the future could have, any material
 liability, other than plans mandated by applicable laws.
</FONT></DIV>
<P>
<DIV style="margin-left:0px; text-indent:50px">
<FONT face="Times New Roman" size="2">&#147;<B>Business Day</B>&#148;
 means a day other than Saturday, Sunday or any day on which
 banks located in New York, New York are authorized or obligated to close.
</FONT>
</DIV>
<P>
<DIV style="margin-left:0px; text-indent:50px">
<FONT face="Times New Roman" size="2">&#147;<B>Code</B>&#148;
 means the Internal Revenue Code of 1986, as amended.
</FONT></DIV>
<P>
<DIV style="margin-left:0px; text-indent:50px">
<FONT face="Times New Roman" size="2">&#147;<B>ERISA</B>&#148;
 means the Employee Retirement Income Security Act of 1974, as amended.
</FONT></DIV>
<P>
<DIV style="margin-left:0px; text-indent:50px">
<FONT face="Times New Roman" size="2">&#147;<B>Foreign
 Antitrust Laws</B>&#148; means any applicable antitrust, competition or trade
 regulatory laws, rules or regulations of any foreign Governmental Body.
</FONT>
</DIV>
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</FONT>
<P>
<DIV style="margin-left:0px; text-indent:50px">
<FONT face="Times New Roman" size="2">&#147;<B>HSR
 Act</B>&#148; means the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
 as amended, and the rules and regulations promulgated thereunder.
</FONT></DIV>
<P>
<DIV style="margin-left:0px; text-indent:50px">
<FONT face="Times New Roman" size="2">&#147;<B>IRS</B>&#148;
 means the Internal Revenue Service.
</FONT></DIV>
<P>
<DIV style="margin-left:0px; text-indent:50px">
<FONT face="Times New Roman" size="2">&#147;<B>Intellectual
 Property</B>&#148; means all of the following, to the extent used by
 the Company or any of the Subsidiaries: (i) patents, patent applications, patent
 disclosures and inventions, designs and improvements; (ii) copyrights (registered
 and unregistered), including all renewals and extensions thereof and all applications
 for registration thereof; (iii) trademarks, service marks, trade names, trade dress,
 brand names, designs, logos or corporate names, Internet domain names, and all applications
 and registrations thereof, together with all of the goodwill associated therewith;
 (iv) trade secrets, know-how, processes, procedures and databases; (v) computer
 software programs, data, databases and documentation related thereto and (vi) other
 proprietary confidential information (including ideas, formulas, compositions, inventions
 (whether patentable or unpatentable and whether or not reduced to practice), manufacturing
 and production processes and techniques, internal processes and systems, research
 and development information, drawings, specifications, designs, plans, proposals,
 technical data, financial and marketing plans and customer and supplier lists and
 information); <I>provided</I>, that, notwithstanding anything to the contrary contained
 herein, &#147;Intellectual Property&#148; shall not include the Berlitz Names and
 Marks.
</FONT></DIV>
<P>
<DIV style="margin-left:0px; text-indent:50px">
<FONT face="Times New Roman" size="2">&#147;<B>Knowledge</B>&#148;
 of the Sellers means the actual knowledge, after due inquiry,
 where appropriate, of local country managers and finance officers, of any of the
 following individuals: James B. Lewis, Brian Kelly, Brian Giambagno, Deane Dayton,
 Ken Murphy, John Murphy, Alistair Gatoff, Ronald Stark, Charles Court, Adam Ratner,
 Paul Weinstein and Karl Chase.
</FONT></DIV>
<P>
<DIV style="margin-left:0px; text-indent:50px">
<FONT face="Times New Roman" size="2">&#147;<B>Lien</B>&#148;
 means any lien, pledge, mortgage, deed of trust, security interest,
 claim, lease, license, charge, option, right of first refusal, easement, servitude,
 transfer restriction, encumbrance or any other restriction or limitation whatsoever.
</FONT></DIV>
<P>
<DIV style="margin-left:0px; text-indent:50px">
<FONT face="Times New Roman" size="2">&#147;<B>Person</B>&#148;
 means any individual, corporation, partnership, limited liability
 company, limited liability partnership, firm, joint venture, association, joint-stock
 company, trust, unincorporated organization, Governmental Body or other entity.
</FONT></DIV>
<P>
<DIV style="margin-left:0px; text-indent:50px">
<FONT face="Times New Roman" size="2">&#147;<B>Tax</B>&#148;
 or &#147;<B>Taxes</B>&#148; means all taxes, charges, fees, imposts,
 levies or other assessments, including all net income, franchise, profits, gross
 receipts, capital, sales, use, ad valorem, value added, transfer, transfer gains,
 inventory, capital stock, license, withholding, payroll, employment, social security,
 unemployment, excise, severance, stamp, occupation, real or personal property, and
 estimated taxes, customs duties, fees, assessments and charges of any kind whatsoever,
 together with any interest and any penalties, fines, additions to tax or additional
 amounts thereon, imposed by any taxing authority (federal, state, local or foreign)
 and shall include any transferee liability in respect of Taxes and any liability
 arising by virtue of being a member of a consolidated, combined or unitary group.
</FONT></DIV>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P align="right"><FONT face="Times New Roman" size="2">41
</FONT>
<P>
<DIV style="margin-left:0px; text-indent:50px">
<FONT face="Times New Roman" size="2">&#147;<B>Tax
 Returns</B>&#148; means all returns, declarations, reports, forms, estimates,
 information returns and statements required to be filed in respect of any Taxes
 or to be supplied to a taxing authority in connection with any Taxes.
</FONT>
</DIV>
<P>
<DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;The
 following capitalized terms are defined in the following Sections of this Agreement:
</FONT></DIV>
<P>
<TABLE border="0" cellpadding="0" cellspacing="0" width="100%">
<TR>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="1"><B>Term</B>
</FONT></TD>
<TD valign="bottom" align="left" width="8%"><FONT face="Times New Roman" size="1">
<B>Section</B>
</FONT></TD>
</TR>
<TR>
<TD valign="bottom"><HR size="1" noshade width="3%" align="left"></TD>
<TD valign="bottom" align="left" width="8%"><HR size="1" noshade width="57%" align="left"></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">ADSP
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">1.4(a)
</FONT></TD>
</TR>
<TR>
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">ADSP Allocation
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">11.7(c)
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Affiliated Entities
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">3.7
</FONT></TD>
</TR>
<TR>
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Agreement
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">Preamble
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Audited
 Financial Statements
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">3.7
</FONT></TD>
</TR>
<TR>
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Berlitz
 International
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">Preamble
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Berlitz Investment
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">Preamble
</FONT></TD>
</TR>
<TR>
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Berlitz Names and Marks
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">6.10(a)
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Bonus Plans
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">3.21(b)
</FONT></TD>
</TR>
<TR>
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Buyer
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">Preamble
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Buyer Consents
 and Notices
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">5.2(b)(ii)
</FONT></TD>
</TR>
<TR>
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Buyer
 Indemnified Parties
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">10.1
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Cash
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">1.4(a)
</FONT></TD>
</TR>
<TR>
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Check-the-Box
 Elections
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">11.7(a)
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Closing
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">2
</FONT></TD>
</TR>
<TR>
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Closing Date
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">2
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Code of
 Corporate Conduct
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">3.21(d)
</FONT></TD>
</TR>
<TR>
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Company
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">Preamble
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Company Common Stock
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">3.4(a)
</FONT></TD>
</TR>
<TR>
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Company Consents
 and Notices
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">3.14(b)
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Company Employees
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">3.20(e)
</FONT></TD>
</TR>
<TR>
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Company Financial
 Statements
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">3.7
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Company
 Material Adverse Effect
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">3.3
</FONT></TD>
</TR>
<TR>
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Confidentiality
 Agreement
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">6.2
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Contest
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">11.5
</FONT></TD>
</TR>
<TR>
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Deferred Tax Reserve
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">11.1(c)
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Environmental Laws
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">3.13
</FONT></TD>
</TR>
<TR>
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Financing
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">5.5
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Foreign Plan
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">3.20(e)
</FONT></TD>
</TR>
<TR>
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Foreign Tax Returns
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">11.1(c)
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">GAAP
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">3.7
</FONT></TD>
</TR>
<TR>
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Governmental Bodies
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">3.11
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Indemnified Party
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">10.3(a)
</FONT></TD>
</TR>
<TR>
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Indemnifying Party
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">10.3(a)
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Immaterial Losses
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">10.4(b)
</FONT></TD>
</TR>
<TR>
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Independent
 Accounting Firm
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">1.4(b)
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Insurance Policies
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">3.25
</FONT></TD>
</TR>
<TR>
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Interim
 Financial Statements
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">3.7
</FONT></TD>
</TR>
</TABLE>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P align="right"><FONT face="Times New Roman" size="2">42
</FONT>
<P>
<TABLE border="0" cellpadding="0" cellspacing="0" width="100%">
<TR>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="1"><B>Term</B>
</FONT></TD>
<TD valign="bottom" align="left" width="8%"><FONT face="Times New Roman" size="1">
<B>Section</B>
</FONT></TD>
</TR>
<TR>
<TD valign="bottom" align="left"><HR size="1" noshade width="3%" align="left"></TD>
<TD valign="bottom" align="left" width="8%"><HR size="1" noshade width="57%" align="left"></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Laws
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">3.11
</FONT></TD>
</TR>
<TR>
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">License Agreement
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">6.10(a)
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Losses
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">10.1
</FONT></TD>
</TR>
<TR>
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Material Contracts
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">3.15(a)
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Net Current Assets
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">1.4(a)
</FONT></TD>
</TR>
<TR>
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Net
 Current Assets Statement
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">1.4(a)
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Option
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">3.5
</FONT></TD>
</TR>
<TR>
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Option Holder
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">6.12
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Option Plan
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">6.12
</FONT></TD>
</TR>
<TR>
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Orders
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">3.11
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Permits
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">3.12
</FONT></TD>
</TR>
<TR>
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Pre-Closing
 Foreign Taxes
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">11.1(c)
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Pre-Closing
 Seller Group Taxes
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">11.1(b)
</FONT></TD>
</TR>
<TR>
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Pre-Closing
 Seller Group Tax Returns
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">11.1(a)
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Purchase Price
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">1.1
</FONT></TD>
</TR>
<TR>
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Required
 Consents and Notices
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">5.2(b)(ii)
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Restricted Business
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">6.13(a)
</FONT></TD>
</TR>
<TR>
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Restricted Period
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">6.13(a)
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Restrictive Covenants
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">6.13(d)
</FONT></TD>
</TR>
<TR>
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Section
 338(g) Elections
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">11.7(a)
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Section
 338(h)(10) Election
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">11.7(a)
</FONT></TD>
</TR>
<TR>
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Seller
 Consents and Notices
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">4.2(b)(ii)
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Seller Group
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">11.1(a)
</FONT></TD>
</TR>
<TR>
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Sellers
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">Preamble
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Sellers&#146;
 Disclosure Letter
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">3
</FONT></TD>
</TR>
<TR>
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Shares
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">Recitals
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Straddle Period
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">11.1(d)
</FONT></TD>
</TR>
<TR>
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Subsidiaries
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">3.2(a)
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Tax Indemnified
 Buyer Parties
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">11.2
</FONT></TD>
</TR>
<TR>
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Tax Indemnified
 Seller Parties
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">11.3
</FONT></TD>
</TR>
<TR bgcolor="#eeeeee">
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Tax Losses
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">11.2
</FONT></TD>
</TR>
<TR>
<TD valign="bottom" align="left"><DIV style="margin-left:10px; text-indent:-10px">
<FONT face="Times New Roman" size="2">Threshold Amount
</FONT></DIV></TD>
<TD valign="bottom" align="left"><FONT face="Times New Roman" size="2">10.4(b)
</FONT></TD>
</TR>
</TABLE>
<P>
<DIV style="margin-left:0px; text-indent:80px">
<FONT face="Times New Roman" size="2">
13.2&#160;&#160;&#160;&#160;&#160;Consent to Jurisdiction; Service of Process; Waiver of Jury Trial.
</FONT></DIV>
<P>
<DIV style="margin-left:0px; text-indent:115px">
<FONT face="Times New Roman" size="2">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;Any claim
 arising out of or relating to this Agreement or the transactions contemplated hereby
 may be instituted in any Federal court in the State of New York, and each party
 agrees not to assert, by way of motion, as a defense or otherwise, in any such claim,
 that it is not subject personally to the jurisdiction of such court, that the claim
 is brought in an inconvenient forum, that the venue of the claim is improper or
 that this Agreement or the subject matter hereof may not be enforced in or by such
 court. Each party further irrevocably submits to the jurisdiction of such court
 in any such claim.
</FONT></DIV>
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<P align="right"><FONT face="Times New Roman" size="2">43
</FONT>
<P><DIV style="margin-left:0px; text-indent:115px"><FONT face="Times New Roman" size="2">(b)&#160;&#160;
&#160;&#160;&#160;&#160;&#160;Any and all service of process and
 any other notice in any such claim shall be effective against any party if given
 personally or by registered or certified mail, return receipt requested, or by any
 other means of mail that requires a signed receipt, postage prepaid, mailed to such
 party as herein provided. Nothing herein contained shall be deemed to affect the
 right of any party to serve process in any manner permitted by law or to commence
 legal proceedings or otherwise proceed against any other party in any other jurisdiction.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:115px"><FONT face="Times New Roman" size="2">(c)&#160;&#160;
&#160;&#160;&#160;&#160;&#160;<B>EACH PARTY ACKNOWLEDGES AND AGREES
 THAT ANY CONTROVERSY THAT MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED
 AND DIFFICULT ISSUES, AND THEREFORE EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY
 WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY.</B>
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:115px"><FONT face="Times New Roman" size="2">(d)&#160;&#160;
&#160;&#160;&#160;&#160;&#160;<B>EACH PARTY CERTIFIES AND ACKNOWLEDGES
 THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
 EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION,
 SEEK TO ENFORCE THE WAIVER IN SECTION 13.2(c), (ii) SUCH PARTY UNDERSTANDS AND HAS
 CONSIDERED THE IMPLICATIONS OF SUCH WAIVER, (iii) SUCH PARTY MAKES SUCH WAIVER VOLUNTARILY
 AND (iv) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
 THINGS, THE MUTUAL WAIVERS, AGREEMENTS AND CERTIFICATIONS IN SECTION 13.2(c) AND
 THIS SECTION 13.2(d).</B>
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px"><FONT face="Times New Roman" size="2">
13.3&#160;&#160;&#160;&#160;Notices.&#160;&#160;Any notice or
 other communication required or permitted hereunder shall be in writing and shall
 be deemed to have been duly given (a) on the day of delivery if delivered in person,
 or if delivered by facsimile upon confirmation of receipt, (b) on the first Business
 Day following the date of dispatch if delivered by a nationally recognized express
 courier service, or (c) on the tenth Business Day following the date of mailing
 if delivered by registered or certified mail, return receipt requested, postage
 prepaid. All notices hereunder shall be delivered as set forth below, or pursuant
 to such other instructions as may be designated by notice given in accordance with
 this Section 13.3 by the party to receive such notice:
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:115px"><FONT face="Times New Roman" size="2">(a)&#160;&#160;
&#160;&#160;&#160;&#160;&#160;if to the Buyer, to:
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:150px"><FONT face="Times New Roman" size="2">BGS Companies, Inc.
</FONT></DIV>
<DIV style="margin-left:0px; text-indent:150px"><FONT face="Times New Roman" size="2">14 Walsh Drive
</FONT></DIV>
<DIV style="margin-left:0px; text-indent:150px"><FONT face="Times New Roman" size="2">Parsippany, New Jersey 07054
</FONT></DIV>
<DIV style="margin-left:0px; text-indent:150px"><FONT face="Times New Roman" size="2">Attention: Carl D. Glaeser
</FONT></DIV>
<DIV style="margin-left:0px; text-indent:150px"><FONT face="Times New Roman" size="2">Facsimile: (973) 394-2013
</FONT></DIV>
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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P align="right"><FONT face="Times New Roman" size="2">44
</FONT>
<P><DIV style="margin-left:0px; text-indent:150px"><FONT face="Times New Roman" size="2">with a copy to:
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:150px"><FONT face="Times New Roman" size="2">Brobeck, Phleger &#038; Harrison LLP
</FONT></DIV>
<DIV style="margin-left:0px; text-indent:150px"><FONT face="Times New Roman" size="2">1633 Broadway
</FONT></DIV>
<DIV style="margin-left:0px; text-indent:150px"><FONT face="Times New Roman" size="2">New York, New York 10019
</FONT></DIV>
<DIV style="margin-left:0px; text-indent:150px"><FONT face="Times New Roman" size="2">Attention: Mark L. Mandel, Esq.
</FONT></DIV>
<DIV style="margin-left:0px; text-indent:150px"><FONT face="Times New Roman" size="2">Facsimile: (212) 586-7878
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:150px"><FONT face="Times New Roman" size="2">if to the Sellers, to:
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:150px"><FONT face="Times New Roman" size="2">Berlitz International, Inc.
</FONT></DIV>
<DIV style="margin-left:0px; text-indent:150px"><FONT face="Times New Roman" size="2">400 Alexander Park
</FONT></DIV>
<DIV style="margin-left:0px; text-indent:150px"><FONT face="Times New Roman" size="2">Princeton, New Jersey 08540-6306
</FONT></DIV>
<DIV style="margin-left:0px; text-indent:150px"><FONT face="Times New Roman" size="2">Attention: Legal Dept.
</FONT></DIV>
<DIV style="margin-left:0px; text-indent:150px"><FONT face="Times New Roman" size="2">Facsimile: (609) 514-9670
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:150px"><FONT face="Times New Roman" size="2">with a copy to:
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:150px"><FONT face="Times New Roman" size="2">Paul, Weiss, Rifkind, Wharton
 &#038; Garrison
</FONT></DIV>
<DIV style="margin-left:0px; text-indent:150px"><FONT face="Times New Roman" size="2">1285 Avenue of the Americas
</FONT></DIV>
<DIV style="margin-left:0px; text-indent:150px"><FONT face="Times New Roman" size="2">New York, New York 10019-6064
</FONT></DIV>
<DIV style="margin-left:0px; text-indent:150px"><FONT face="Times New Roman" size="2">United States of America
</FONT></DIV>
<DIV style="margin-left:0px; text-indent:150px"><FONT face="Times New Roman" size="2">Attention: David K. Lakhdhir, Esq.
</FONT></DIV>
<DIV style="margin-left:0px; text-indent:150px"><FONT face="Times New Roman" size="2">Facsimile: (212) 757-3990
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px"><FONT face="Times New Roman" size="2">
13.4&#160;&#160;&#160;&#160;Entire Agreement.&#160;&#160;This Agreement, together with the
 Confidentiality Agreement and any other collateral agreements executed in connection with the
 consummation of the transactions contemplated hereby, contain the entire agreement among the parties
 with respect to the sale and purchase of the Shares and supersede all prior agreements, written or
 oral, with respect thereto.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px"><FONT face="Times New Roman" size="2">
13.5&#160;&#160;&#160;&#160;Waivers and Amendments.&#160;&#160;This
 Agreement may be amended, superseded, canceled, renewed or extended, and the terms
 hereof may be waived, only by a written instrument signed by the Buyer and the Sellers
 or, in the case of a waiver, by the party waiving compliance. No delay on the part
 of any party in exercising any right, power or privilege hereunder shall operate
 as a waiver thereof, nor shall any waiver on the part of any party of any such right,
 power or privilege, nor any single or partial exercise of any such right, power
 or privilege, preclude any further exercise thereof or the exercise of any other
 such right, power or privilege.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px"><FONT face="Times New Roman" size="2">
13.6&#160;&#160;&#160;&#160;Governing Law.&#160;&#160;This Agreement
 shall be governed by and construed in accordance with the laws of the State of New
 York without regard to any conflict of laws rules thereof that might indicate the
 application of the laws of any other jurisdiction.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px"><FONT face="Times New Roman" size="2">
13.7&#160;&#160;&#160;&#160;Binding Effect; Assignment.&#160;&#160;This
 Agreement shall be binding upon and inure to the benefit of the parties and their
 respective successors and assigns. This Agreement is not assignable by any party
 without the prior written consent
</FONT></DIV>
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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P align="right"><FONT face="Times New Roman" size="2">45
</FONT>
<P><DIV style="margin-left:0px; text-indent:0px"><FONT face="Times New Roman" size="2">of the other parties,
 except that the Buyer may assign its rights hereunder to any of its Affiliates without the prior written consent
 of any other party hereto; <I>provided</I>, <I>however,</I> that such assignee also assumes all of the
 Buyer&#146;s obligations hereunder and the Buyer remains liable for the performance of all of the Buyer&#146;s
 obligations hereunder.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px"><FONT face="Times New Roman" size="2">
13.8&#160;&#160;&#160;&#160;Usage.&#160;&#160;All pronouns and any
 variations thereof refer to the masculine, feminine or neuter, singular or plural,
 as the context may require. All terms defined in this Agreement in their singular
 or plural forms have correlative meanings when used herein in their plural or singular
 forms, respectively. Unless otherwise expressly provided, the words &#147;include,&#148;
 &#147;includes&#148; and &#147;including&#148; do not limit the preceding
 words or terms and shall be deemed to be followed by the words &#147;without limitation.&#148;
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px"><FONT face="Times New Roman" size="2">
13.9&#160;&#160;&#160;&#160;Articles and Sections.&#160;&#160;All
 references herein to Articles and Sections shall be deemed references to such parts
 of this Agreement, unless the context shall otherwise require. The Article and
 Section headings in this Agreement are for reference only and shall not affect the
 interpretation of this Agreement.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px"><FONT face="Times New Roman" size="2">
13.10&#160;&#160;Interpretation.&#160;&#160;The parties
 acknowledge and agree that (a) each party and its counsel reviewed and negotiated
 the terms and provisions of this Agreement and have contributed to its revision,
 (b) the rule of construction to the effect that any ambiguities are resolved against
 the drafting party shall not be employed in the interpretation of this Agreement,
 and (c) the terms and provisions of this Agreement shall be construed fairly as
 to all parties, regardless of which party was generally responsible for the preparation
 of this Agreement.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px"><FONT face="Times New Roman" size="2">
13.11&#160;&#160;Severability of Provisions.&#160;&#160;If
 any provision or any portion of any provision of this Agreement shall be held invalid
 or unenforceable, the remaining portion of such provision and the remaining provisions
 of this Agreement shall not be affected thereby. If the application of any provision
 or any portion of any provision of this Agreement to any Person or circumstance
 shall be held invalid or unenforceable, the application of such provision or portion
 of such provision to Persons or circumstances other than those as to which it is
 held invalid or unenforceable shall not be affected thereby.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px"><FONT face="Times New Roman" size="2">
13.12&#160;&#160;Counterparts.&#160;&#160;This Agreement
 may be executed by the parties hereto in separate counterparts, each of which when
 so executed and delivered shall be an original, but all such counterparts together
 shall constitute one and the same instrument. Each counterpart may consist of a
 number of copies hereof each signed by less than all, but together signed by all,
 of the parties hereto.
</FONT></DIV>
<P><DIV style="margin-left:0px; text-indent:80px"><FONT face="Times New Roman" size="2">
13.13&#160;&#160;No Third Party Beneficiaries.&#160;&#160;Except
 as otherwise provided in Articles 10 and 11, no provision of this Agreement is intended
 to, or shall, confer any third party beneficiary or other rights or remedies upon
 any Person other than the parties hereto. Without limiting the generality of the
 foregoing, no provision of this Agreement (including Section 6.11) shall create
 any third party beneficiary rights in any employee or former employee of the Company
 or any of the Subsidiaries (including any
</FONT></DIV>
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<P align="right"><FONT face="Times New Roman" size="2">46
</FONT>
<P><DIV style="margin-left:0px; text-indent:0px"><FONT face="Times New Roman" size="2">beneficiary or dependent thereof) in
 respect of continued employment by the Company or any of the Subsidiaries or otherwise.
</FONT></DIV>
<P align="center"><FONT face="Times New Roman" size="2">[Remainder of page intentionally
 left blank]
</FONT>
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<P align="right"><FONT face="Times New Roman" size="2">47
</FONT>
<P><FONT face="Times New Roman" size="2">&#160;&#160;&#160;&#160;&#160;&#160;&#160;
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first
 above written.
</FONT>
<P>
<TABLE border="0" cellpadding="0" cellspacing="0" width="70%">
<TR>
<TD><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD width="3%"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD width="8%"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD width="30%"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
</TR>
<TR>
<TD><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD colspan="3"><FONT face="Times New Roman" size="2">BUYER:
</FONT></TD>
</TR>
<TR>
<TD><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD colspan="3"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
</TR>
<TR>
<TD><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD colspan="3"><FONT face="Times New Roman" size="2">BGS COMPANIES, INC.
</FONT></TD>
</TR>
<TR>
<TD><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD colspan="3"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
</TR>
<TR>
<TD><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD><FONT face="Times New Roman" size="2">By:&#160;
</FONT></TD>
<TD><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD><FONT face="Times New Roman" size="2">/s/ Carl D. Glaeser
</FONT></TD>
</TR>
<TR>
<TD><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD colspan="2"><HR align="left" noshade size="1" width="70%"></TD>
</TR>
<TR>
<TD><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD colspan="3"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
</TR>
<TR>
<TD><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD colspan="2"><FONT face="Times New Roman" size="2">Name:
</FONT></TD>
<TD><FONT face="Times New Roman" size="2">Carl D. Glaeser
</FONT></TD>
</TR>
<TR>
<TD><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD colspan="2"><FONT face="Times New Roman" size="2">Title:
</FONT></TD>
<TD><FONT face="Times New Roman" size="2">President &#038; CEO
</FONT></TD>
</TR>
<TR>
<TD><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD colspan="3"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
</TR>
<TR>
<TD><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD colspan="3"><FONT face="Times New Roman" size="2">SELLERS:
</FONT></TD>
</TR>
<TR>
<TD><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD colspan="3"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
</TR>
<TR>
<TD><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD colspan="3"><FONT face="Times New Roman" size="2">BERLITZ INTERNATIONAL, INC.
</FONT></TD>
</TR>
<TR>
<TD><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD colspan="3"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
</TR>
<TR>
<TD><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD><FONT face="Times New Roman" size="2">By:
</FONT></TD>
<TD><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD><FONT face="Times New Roman" size="2">/s/ James B. Lewis
</FONT></TD>
</TR>
<TR>
<TD><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD colspan="2"><HR align="left" noshade size="1" width="70%"></TD>
</TR>
<TR>
<TD><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD><FONT face="Times New Roman" size="2">Name:
</FONT></TD>
<TD><FONT face="Times New Roman" size="2">James B. Lewis
</FONT></TD>
</TR>
<TR>
<TD><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD><FONT face="Times New Roman" size="2">Title:
</FONT></TD>
<TD><FONT face="Times New Roman" size="2">Executive Vice President
</FONT></TD>
</TR>
<TR>
<TD><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD colspan="3"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
</TR>
<TR>
<TD><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD colspan="3"><FONT face="Times New Roman" size="2">BERLITZ INVESTMENT
</FONT></TD>
</TR>
<TR>
<TD><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD colspan="3"><FONT face="Times New Roman" size="2">CORPORATION
</FONT></TD>
</TR>
<TR>
<TD><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD colspan="3"><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
</TR>
<TR>
<TD><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD><FONT face="Times New Roman" size="2">By:
</FONT></TD>
<TD><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD><FONT face="Times New Roman" size="2">/s/ Paul H. Weinstein
</FONT></TD>
</TR>
<TR>
<TD><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD colspan="2"><HR align="left" noshade size="1" width="79%"></TD>
</TR>
<TR>
<TD><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD><FONT face="Times New Roman" size="2">Name:
</FONT></TD>
<TD><FONT face="Times New Roman" size="2">Paul H. Weinstein
</FONT></TD>
</TR>
<TR>
<TD><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD><FONT face="Times New Roman" size="2">&#160;
</FONT></TD>
<TD><FONT face="Times New Roman" size="2">Title:
</FONT></TD>
<TD><FONT face="Times New Roman" size="2">Vice President
</FONT></TD>
</TR>
</TABLE>
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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>4
<FILENAME>y65302exv99w1.htm
<DESCRIPTION>EX-99.1: CERTIFICATION
<TEXT>
<HTML>
<HEAD>
<TITLE>EX-99.1: CERTIFICATION</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="right">
<B><FONT size="2">Exhibit&nbsp;99.1</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">CERTIFICATION PURSUANT TO</FONT></B>

<P align="center">
<B><FONT size="2">18 U.S.C. Section&nbsp;1350</FONT></B>

<DIV align="center">
<B><FONT size="2">AS ADOPTED PURSUANT TO</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">SECTION&nbsp;906 OF THE SARBANES-OXLEY ACT OF
2002</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In connection with the Quarterly Report of
Bowne&nbsp;&#38; Co., Inc. (the &#147;Company&#148;) on
Form&nbsp;10-Q for the period ending September&nbsp;30, 2002 as
filed with the Securities and Exchange Commission on the date
hereof (the &#147;Report&#148;), I, Robert M. Johnson, Chairman
of the Board and Chief Executive Officer of the Company,
certify, pursuant to 18 U.S.C. Section&nbsp;1350, as adopted
pursuant to Section&nbsp;906 of the Sarbanes-Oxley Act of 2002,
that:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Report fully
    complies with the requirements of section&nbsp;13(a) or 15(d) of
    the Securities Exchange Act of 1934; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The information
    contained in the Report fairly presents, in all material
    respects, the financial condition and result of operations of
    the Company.
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <FONT size="2">/s/ ROBERT M. JOHNSON
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <FONT size="2">_______________________________________ <BR>
     Robert M. Johnson
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <I><FONT size="2">Chairman of the Board and</FONT></I></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <I><FONT size="2">Chief Executive Officer</FONT></I></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">November&nbsp;14, 2002
</FONT>

<P align="center"><FONT size="2">30
</FONT>

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<TYPE>EX-99.2
<SEQUENCE>5
<FILENAME>y65302exv99w2.htm
<DESCRIPTION>EX-99.2: CERTIFICATION
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<TITLE>EX-99.2: CERTIFICATION</TITLE>
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<B><FONT size="2">Exhibit&nbsp;99.2</FONT></B>
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<B><FONT size="2">CERTIFICATION PURSUANT TO</FONT></B>

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<B><FONT size="2">18 U.S.C. SECTION&nbsp;1350,</FONT></B>

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<B><FONT size="2">AS ADOPTED PURSUANT TO</FONT></B>
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<B><FONT size="2">SECTION 906 OF THE SARBANES-OXLEY ACT OF
2002</FONT></B>
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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In connection with the Quarterly Report of
Bowne&nbsp;&#38; Co., Inc. (the &#147;Company&#148;) on
Form&nbsp;10-Q for the period ending September&nbsp;30, 2002 as
filed with the Securities and Exchange Commission on the date
hereof (the &#147;Report&#148;), I, C.&nbsp;Cody Colquitt,
Senior Vice President and Chief Financial Officer of the
Company, certify, pursuant to 18 U.S.C. Section&nbsp;1350, as
adopted pursuant to Section&nbsp;906 of the Sarbanes-Oxley Act
of 2002, that:
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    <TD>&nbsp;</TD>
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    <FONT size="2">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Report fully
    complies with the requirements of section&nbsp;13(a) or 15(d) of
    the Securities Exchange Act of 1934; and
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    <FONT size="2">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The information
    contained in the Report fairly presents, in all material
    respects, the financial condition and result of operations of
    the Company.
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    <FONT size="2">/s/ C. CODY COLQUITT
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    <FONT size="2">_______________________________________ <BR>
     C. Cody Colquitt
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    <I><FONT size="2">Senior Vice President and</FONT></I></TD>
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    <I><FONT size="2">Chief Financial Officer</FONT></I></TD>
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<FONT size="2">November&nbsp;14, 2002
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<P align="center"><FONT size="2">31
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