10-K

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

FOR ANNUAL AND TRANSITION REPORTS
PURSUANT TO SECTIONS 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

(Mark One)
ý	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2002
OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                            to

Commission file number 1-7516

KEANE, INC
(Exact Name of Registrant as Specified in Its Charter)

Massachusetts (State or Other Jurisdiction of Incorporation or Organization)	04-2437166 (I.R.S. Employer Identification Number)
100 City Square, Boston, Massachusetts (Address of Principal Executive Offices)	02129 (Zip Code)

Registrant's telephone number, including area code: (617) 241-9200

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class
Common Stock, $.10 par value Name of Each Exchange on Which Registered
American Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

        Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý    No o

        Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Yes o    No ý

        Indicate by check mark whether the registrant is an accelerated filer as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended. Yes ý    No o

        The aggregate market value of the common stock held by non-affiliates of the registrant, based on the last sale price of the common stock on the AMEX on June 28, 2002, was $749,037,388. As of March 7, 2003, 68,331,059 shares of common stock, $.10 par value per share, and 284,599 shares of class B common stock, $.10 par value per share, were issued and outstanding.

        Documents Incorporated by Reference. The Registrant intends to file a definitive proxy statement pursuant to Regulation 14A, promulgated under the Securities Exchange Act of 1934, as amended, to be used in connection with the Registrant's Annual Meeting of Stockholders to be held on May 28, 2003. The information required in response to Items 10–13 of Part III of this Form 10-K is hereby incorporated by reference to such proxy statement.

PART I

        This Report contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. For purposes of these Acts, any statement that is not a statement of historical fact may be deemed a forward-looking statement. For example, statements containing the words "believes," "anticipates," "plans," "expects," and similar expressions may be forward-looking statements. However, Keane cautions investors not to place undue reliance on any forward-looking statements in this Report because these statements speak only as of the date when made. Keane undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. There are a number of factors that could cause our actual results to differ materially from those indicated by these forward-looking statements, including without limitation, the factors set forth under the caption "Certain Factors That May Affect Future Results."

ITEM 1.    BUSINESS

OVERVIEW

        Keane, Inc. (collectively with its subsidiaries, "Keane" or "the Company," unless the context requires otherwise) is a leading provider of Information Technology (IT) and business consulting services. In business since 1965, Keane's mission is to help clients optimize the performance of their IT organizations. The Company helps clients improve business performance by planning, building, managing, and rationalizing application software through its Business Consulting, Application Development and Integration (AD&I), and Application Development and Management Outsourcing (Applications Outsourcing) services.

        Keane delivers its services through an integrated network of local branch offices in North America and the United Kingdom, and through Advanced Development Centers (ADCs) in the United States, Canada, and India. This global delivery model enables Keane to provide its services to customers on-site, at its near-shore facilities in Canada, and through its offshore development centers in India. Branch offices work in conjunction with the Company's business consulting arm, Keane Consulting Group (KCG), and are supported by centralized Strategic Practices and Quality Assurance Groups.

        Keane's clients consist primarily of Global 2000 companies across every major industry, healthcare organizations, and government agencies. Keane strives to build long-term relationships with customers by providing a broad range of service offerings that enable clients to optimize their portfolio of software applications throughout their useful life. Keane also achieves recurring revenue as a result of its multi-year outsourcing contracts and its focus on process, management disciplines, and metrics as a means to consistently generate high business value for its customers.

        Keane is a Massachusetts corporation headquartered in Boston. Its common stock is traded on the American Stock Exchange under the symbol KEA. Keane maintains a website with the address www.keane.com. Keane is not including the information contained in its website as part of, or incorporating it by reference into, this annual report on Form 10-K. Keane makes available, free of charge, through its website its annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K, and amendments to these reports, as soon as reasonably practical after Keane electronically files these materials with, or otherwise furnishes them to, the Securities and Exchange Commission.

        Keane's registered trademarks include EZ-Access®. Keane's trademarks include: Keane, Enterprise Application Integration, Keane InSight and VistaKeane. Keane's registered service marks include: Applications Rationalization^SM Service and Application Lifecycle Optimization^SM Services. Keane's service marks include: Application Development and Integration services and Application

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Development and Management Outsourcing Services. All other trademarks, service marks, or tradenames referenced in this Form 10-K are the property of their respective owners.

SERVICES

        Keane helps clients plan, build, manage, and rationalize their application software. Specifically, Keane focuses on three synergistic service offerings: Business Consulting, Application Development and Integration (AD&I), and Applications Outsourcing, which is Keane's flagship service offering. As part of its Build services, the Company also provides a full-line of healthcare information systems and related IT consulting and IT integration services for healthcare organizations. Keane believes its broad range of services position it as a strategic partner to clients, enabling it to identify and implement comprehensive solutions that meet clients' specific business requirements.

Business Consulting (Plan services)

        Keane's business consulting services play an important role in the Company's ability to help clients align their businesses for today's economy. Business Consulting revenue is reported within the Company's Plan sector. The Company provides its business consulting services through Keane Consulting Group (KCG), the Company's business and management consulting arm. KCG helps companies maximize productivity, reduce costs, and create capacity for future growth by identifying high-value business opportunities and implementing its operations improvement recommendations. In addition, KCG enables customers to lower costs and improve the flexibility and scalability of their IT assets through Keane's Applications Rationalization Service. As part of this service, the Company analyzes a client's applications portfolio and helps the company to identify and eliminate software with redundant functionality, end-of-life systems, and software that uses non-core technology.

        KCG delivers its services by taking a broad view of business processes, organizational design, and technology architecture. KCG provides operations improvement services in four core competency areas: insurance and financial services, manufacturing and distribution, technology, and public sector services. Typical KCG client engagements include: streamlining customer processes and operations, optimizing supply chains, and aligning IT and business strategies. KCG helps Keane develop strong relationships with senior business executives because their assignments often involve work for these decision makers who may, in the future, request that the Company perform critical services. In addition, KCG consulting engagements can lead to follow-on IT projects as clients rely on Keane to support an idea or concept from its genesis through implementation and eventual management.

Application Development and Integration (AD&I) (Build services)

        As application software becomes more complex, it requires sophisticated integration between front-end and back-end systems to enhance access to critical corporate data, enable process improvements, and improve customer service. Many of Keane's AD&I projects focus on solutions for Enterprise Application Integration (EAI), supply chain, and customer service problems. AD&I revenue is reported within the Company's Build sector.

        As a result of its significant expertise and experience, Keane has become a top-tier provider of large, complex software development and integration projects for Global 2000 companies. The Company also provides AD&I services to the public sector, which includes agencies within the United States Federal Government, various states, and other local government entities.

        Given the recent economic downturn, many clients have deferred investments in new information systems. As a result, Keane has concentrated its short-term marketing efforts on helping clients to better integrate and enhance existing applications, and on projects that rapidly improve efficiency and immediately lower costs.

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        Keane believes that it is well positioned to capture large-scale AD&I projects from both the commercial and public sector markets due to its core competencies in project management, integration, and global delivery. The Company anticipates that these competencies, together with its long-term relationships with Global 2000 companies, particularly those clients for which Keane provides Applications Outsourcing services, will enable it to benefit from an economic recovery and an increase in spending on information technology.

Application Development and Management Outsourcing (Applications Outsourcing) (Manage services)

        Keane's Applications Outsourcing service helps clients manage existing business systems more efficiently and more reliably, improving the performance of these applications while frequently reducing costs. Application Outsourcing revenue is reported within the Company's Manage sector. Under this service offering, Keane assumes responsibility for managing a client's business applications with the goal of instituting operational efficiencies that enhance flexibility, freeing up client personnel resources, and achieving higher user satisfaction.

        Keane seeks to obtain competitive advantages in the application outsourcing market by targeting its Global 2000 client base and generating measurable client business benefit. The Company achieves this client benefit through the use of its world-class methodologies, continuous process improvement, and its global delivery model. On March 15, 2002, Keane acquired SignalTree Solutions, a United States-based corporation with offshore development capabilities in India. The addition of SignalTree Solutions' delivery capability, now called Keane India Ltd., expanded Keane's delivery model to include two Advanced Development Centers (ADCs) in India. Keane's global delivery model now offers customers the flexibility and economic advantage of allocating work between a variety of delivery options, including on-site at a client's facility, near-shore in Halifax, Nova Scotia, and offshore in India. Keane believes the addition of offshore ADCs strengthens its Applications Outsourcing offering.

        Forty-three of the Company's Applications Outsourcing engagements have been independently assessed at Level 3 or 4 on the Software Engineering Institute's (SEI) Capability Maturity Model (CMM). In addition, Keane's ADCs in India, located in Hyderabad and Delhi, are independently evaluated at Level 5 on the SEI CMM and comply with ISO 9001: 2000 standards. Keane's ADC in Halifax, Nova Scotia, has been independently evaluated at Level 3 on the SEI CMM, and is transitioning its processes in alignment with SEI CMM Level 5. The SEI CMM has five levels of process maturity, and many IT organizations typically operate at Level 1, the lowest level of maturity. Since 1997, Keane has used the SEI CMM as a standard for objectively measuring its success in improving its clients' application management environments. The SEI CMM has become the industry's standard method for evaluating the effectiveness of an IT environment and the process maturity of outsourcing vendors.

        Applications Outsourcing provides Keane with larger, longer-term contracts. These client engagements usually span three-to-five years. Outsourcing projects typically supply Keane with contractually-obligated recurring revenue, and with an incumbent position from which to cross-sell other solutions. The Company has observed historically that consistently providing measurable business value within an existing client account strongly positions it to win additional outsourcing engagements and development and integration projects.

Healthcare Solutions (Build services)

        Keane's Healthcare Solutions Division (HSD) develops and markets a complete line of open-architecture financial management, patient care, clinical operations, enterprise information, long-term care, and practice management systems for healthcare organizations. In addition, HSD provides healthcare-related IT consulting, outsourcing, and IT integration services. Because the healthcare market is less cyclical in nature than most of the commercial IT market, Keane's HSD

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business compliments the Company's commercial AD&I revenue and typically acts as a stabilizing influence on Build revenue during periods of slower economic growth. HSD revenue is reported within Keane's AD&I (Build) sector.

        HSD's products help healthcare organizations overcome the challenge of providing higher quality patient care while administering more efficient operations through the use of information technology. HSD's core healthcare solutions include EZ-Access, Keane InSight, and VistaKEANE. EZ-Access is a browser-based family of healthcare information systems designed to improve access to patient data, reduce the occurrence of medical errors, and protect client investment in information technology. EZ-Access includes Keane's highly rated and widely installed Patcom Plus, a patient management system. Keane InSight is a comprehensive healthcare information system that provides immediate access to patient information using secure, browser-based technology. VistaKEANE is a fully integrated financial and clinical solution for long-term and post-acute care providers. HSD's customers include integrated delivery networks, hospitals, long-term care facilities, and physician group practices. HSD currently provides proprietary software and services to more than 300 hospital-based clients and 4,300 long-term care facilities throughout the United States.

        In addition, Keane's broad range of services help healthcare clients address ongoing Health Insurance Portability and Accountability Act (HIPAA) requirements. HIPAA is Federal legislation designed to improve efficiency in the national healthcare system and protect the privacy of health information. It is expected to have far-reaching implications on the healthcare industry's IT infrastructure and business operations. The Company's HIPAA related services include Enterprise Assessment and Planning, Compliance Implementation, and Ongoing Compliance Management.

STRATEGY

        Keane's vision is to be recognized as one of the world's great IT services firms by its clients, employees, and shareholders. The Company believes it can achieve this vision by leveraging its position as a provider of Application Lifecycle Optimization Services to build strong long-term relationships with clients. To support its customers in better managing their application portfolios over a long period of time, Keane's Application Lifecycle Optimization framework has three phases: Application Development, Application Management, and Applications Rationalization. Through its rigorous adherence to process management disciplines, and performance metrics, Keane believes it can deliver measurable business benefit to its clients, and ultimately grow per share value by consistently generating cash from operations.

        The Company has four major strategic priorities for 2003. Keane believes these strategic priorities will enable the Company to gain competitive strength during the current economic downturn, as well as to strongly position itself to take advantage of future increases in IT spending.

        Grow long-term per share value.    The Company is focused on continuing to increase operating cash flow, which it believes is the ultimate driver of valuation. The Company plans to use excess cash to repurchase shares and to complete attractive acquisitions. In order to maximize cash flow, the Company is focused on increasing revenue, improving operating margins, and continuing to aggressively manage its balance sheet. The Company believes that long-term revenue growth will be achieved by Keane's Applications Outsourcing business as well as the Company's strong position in less cyclical vertical industries such as healthcare and the public sector. The Company expects to increase its operating margins over the short-term by aggressively controlling its Selling, General, and Administrative (SG&A) spending and by improving billing rates and utilization as the economy recovers. Finally, Keane's ability to effectively manage its balance sheet, most notably Days Sales Outstanding (DSO) and capital spending, is expected to enable the Company to generate strong operating cash flow in the current economic climate.

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        Expand offshore global delivery.    Global sourcing has become an important component of our clients' overall sourcing strategies. Use of offshore delivery enables clients to gain access to a large pool of cost-effective technical personnel, while enhancing productivity via a 24 hours a day, 7 days a week development approach. As a result, the Company believes offshore delivery is critical for success in today's IT services market. During 2002, Keane added an offshore sourcing component through its acquisition of SignalTree Solutions, now called Keane India Ltd. Keane India has over 20 years of experience servicing customers in North America and Europe and is known for its project management expertise and quality initiatives. During 2003, Keane plans to target both existing clients and new customers for development and outsourcing engagements that involve an offshore component. In addition, the Company plans to invest in and expand its two ADCs in India, as well as its ADC in Halifax, Nova Scotia, to support new opportunities. In addition to offshore solutions, components of Keane's next generation global delivery model include on-site and near-shore solutions.

        Strengthen position as leading provider of Applications Outsourcing services.    Industry analysts and clients recognize Keane as one of the leading application outsourcing vendors in North America. Given changes in customer buying behavior, Keane's ability to provide high-quality service to its clients has been significantly enhanced by the addition of an offshore delivery capability in India. As a result, Keane is intensifying its efforts during 2003 to position itself as a full lifecycle, global provider of outsourcing, and a means for clients to gain the economic advantage of offshore delivery while reducing their associated risks. The Company also seeks opportunities to proactively target its existing customer base of Global 2000 customers to cross-sell its Applications Outsourcing service.

        Improve Organizational Effectiveness and operational leverage.    Keane endeavors to continuously build its sales and management team by hiring, developing, and retaining high-potential employees. During 2003, Keane plans to add high-potential personnel resources to further strengthen its sales and management team. In addition, Keane plans to enhance its sales and management processes as well as its information systems to boost the effectiveness of these critical functions. Keane is currently implementing a PeopleSoft suite of enterprise software applications, which when completed and installed, will provide real-time data on sales pursuits and significant sales trends. In addition, during 2003, Keane plans to better align its internal focus, measurement processes, and compensation systems to promote a high performance culture, encouraging intra-company cooperation, and create a more positive and supportive work environment for its employees. The Company anticipates that the results of these efforts will be the elimination of bureaucracy, a more efficient response system to client needs, and an increased focus on client satisfaction.

COMPETITION

        The IT services market is highly competitive and driven by continual changes in client business requirements and advances in technology. The Company's competition varies by the type of service provided and by geographic markets.

        The Company competes with traditional players in the IT services industry, including large integrators (such as Accenture (ACN), Electronic Data Systems (EDS), Computer Sciences Corporation (CSC), IBM Global Services (IBM), and Perot Systems (PER)); IT solutions providers (such as Sapient Corporation (SAPE), American Management Systems (AMSY), BearingPoint (BP), and Ciber (CBR)); and management consulting firms (such as McKinsey and Booz Allen). Some of these competitors are larger and have greater financial resources than the Company.

        The Company believes that the basis for competition in the IT services industry includes the ability to create an integrated solution that best meets the needs of an individual customer, provide competitive cost pricing models, develop strong client relationships, generate recurring revenue, and offer flexible client-service delivery options. The Company believes that it competes favorably with respect to these factors. There can be no assurance that the Company will continue to compete

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successfully with its existing competitors or will be able to compete successfully with any new competitors.

CLIENTS

        Keane's clients consist primarily of Global 2000 organizations, government agencies, and healthcare organizations. These organizations generally have significant IT budgets and frequently depend on service providers for Application Lifecycle Optimization services.

        In 2002, the Company derived its revenue from the following industry groups:

Industry	Percentage of Revenue
Financial services	20.2	%
Manufacturing	19.8	%
Government	18.5	%
Healthcare	17.8	%
High Technology/Software	8.1	%
Energy/Utilities	6.5	%
Retail/Consumer goods	4.7	%
Other	2.7	%
Telecommunications	1.7	%

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        The following table is a representative list of clients for which Keane provided services in 2002:

3M Corporation	Massachusetts General Hospital
Allmerica	MemorialCare
American Honda Motors	Miller Brewing
Aon	State of Missouri
AT&T Corporation	Moody's Investor Services
AXA	MPO
Baylor Health Care System	NOAA
Biogen	New York State Division of Budget
Blue Cross & Blue Shield of South Carolina	State of North Carolina
Britannic	PacifiCare
Carrier	PBGC
City of Chicago	Pfizer
Countrywide Home Loans	Procter & Gamble Company
Crawford & Company	Prudential
CSX Technologies	PSE&G
Defense Commissary Agency	Putnam Investments
Defense Logistics Agency	Royal & Sun Alliance
DEA	Square D
District of Columbia	State Street Bank & Trust
Exxon Corporation	SUPERVALU
Fidelity	State of Tennessee
First National Bank	Toyota
State of Florida	Tufts Health Plan
Gateway	Unipart
GEICO	United States Air Force
General Electric Company	United States Customs Service
GMAC	United States Marine Corps
Great American Insurance	United States State Department
HBOS	Unisys
HealthSouth	Wachovia
State of Indiana	Warner Bros.
International Business Machines Corporation	Wawa
Invacare	Whirlpool Corporation
Legal & General	The Williams Companies, Inc.
State of Maine	Zurich Financial Services Group
State of Maryland

        Keane's ten largest clients accounted for approximately 29% and 32% of the Company's total revenue during each of the years ended December 31, 2002 and 2001, respectively. The Company's two largest clients during 2002 and 2001 were various agencies within the Federal Government and IBM. Federal Government contracts accounted for approximately 7.6% and 6.9% of the Company's total revenue in 2002 and 2001, respectively. IBM accounted for approximately 4.4% and 6.5% of the Company's total revenue for 2002 and 2001, respectively. A significant decline in revenue from IBM or the Federal Government would have a material adverse effect upon the Company's total revenue. With the exception of IBM and the Federal Government, no single client accounted for more than 5% of the Company's total revenue during any of the three years ended on or before December 31, 2002.

        In accordance with industry practice, many of the Company's orders are terminable by either the client or the Company on short notice. Moreover, any and all orders relating to the Federal Government may be subject to renegotiation of profits or termination of contract or subcontractors at

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the election of the Federal Government. The Company had orders at December 31, 2002 of approximately $1.46 billion, in comparison to orders of approximately $843 million at December 31, 2001. Because Keane's clients can cancel or reduce the scope of their engagements on short notice, the Company does not believe that backlog is a reliable indication of future business.

SALES, MARKETING AND ACCOUNT MANAGEMENT

        Keane markets its services and software products through its direct sales force, which is based in its branch offices and regional areas, as well as through its Applications Outsourcing Corporate Practice. Keane's account executives are assigned to a limited number of accounts so they can develop an in-depth understanding of each client's individual needs and form strong client relationships. Under the direction of Regional Sales Vice Presidents, these account executives identify IT services needs within clients and are responsible for creating a solution that meets these requirements better than any other alternative. In addition, account executives ensure that clients receive responsive service that achieves their objectives. Account executives receive in-depth training in Keane's sales processes and service offerings and are supported by enterprise knowledge management systems in order to efficiently share organizational learning. Account executives collaborate with Keane's Applications Outsourcing Practice, other branch offices, and Global Services Group as needed to address specialized customer requirements.

        Keane's Applications Outsourcing Practice employs specialized senior sales professionals to respond to client requirements and to pursue and close large, strategic outsourcing engagements. Applications Outsourcing engagements provide a strong base of recurring revenue and afford the opportunity to cross-sell Keane's other strategic services.

        Keane focuses its marketing efforts on organizations with significant IT budgets and recurring software development and outsourcing needs. The Company maintains a corporate branding campaign focused on communicating Keane's value proposition of reliably delivering application solutions with quantifiable business results. These branding efforts are actively executed through multiple channels.

EMPLOYEES

        On December 31, 2002, Keane had 7,331 employees, including 6,175 business and technical professionals whose services are billable to clients. The Company sometimes supplements its technical staff by utilizing subcontractors.

        Management believes Keane's growth and success are dependent on the caliber of its people and will continue to dedicate significant resources to hiring, training and development, and career advancement programs. Keane's efforts in these areas are grounded in the Company's core values, namely respect for the individual, commitment to client success, achievement through teamwork, integrity, continuous improvement, and commitment to shareholder value. Keane strives to hire, promote, and recognize individuals and teams who embody these values.

        The Company generally does not have employment contracts with its key employees. None of the Company's employees are subject to a collective bargaining agreement. The Company believes that its relations with its employees are good.

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ITEM 2.    PROPERTIES

        The principal executive office of the Company as of December 31, 2002, was located at Ten City Square, Boston, Massachusetts 02129, in an approximately 34,000 square foot office building which is leased from City Square Limited Partnership. Some of the Company's officers and directors are limited partners in this partnership. (See Item 13 "Certain Relationships and Related Transactions)." At December 31, 2002, the Company leased and maintained sales and support offices in more than seventy locations in North America, the United Kingdom, and India. The aggregate annual rental expense for the Company's sales and support offices was approximately $27.7 million in 2002. The aggregate annual rental expense for all of the Company's facilities was approximately $30.8 million in 2002. For additional information regarding the Company's lease obligations, see Note J of Notes to Consolidated Financial Statements.

        In October 2001, the Company entered into a lease with Gateway Developers LLC ("Gateway LLC") for a term of twelve years, pursuant to which the Company agreed to lease approximately 95,000 square feet of office and development space in a building located at 100 City Square in Boston, Massachusetts (the "New Facility"). The Company leases approximately 57% of the New Facility and the remaining 43% is or will be occupied by other tenants. John Keane Family LLC is a member of Gateway LLC. The members of John Keane Family LLC are trusts for the benefit of John F. Keane, Chairman of the Board of the Company, and his immediate family members.

        On October 31, 2001, Gateway LLC entered into a $39.4 million construction loan with Citizens Bank of Massachusetts (the "Gateway Loan") in connection with the New Facility and an adjacent building located at 20 City Square, Boston, Massachusetts. John Keane Family LLC and John F. Keane are each liable for certain obligations under the Gateway Loan if and to the extent Gateway LLC requires funds to comply with its obligations under the Gateway Loan. Stephen D. Steinour, a director of the Company, is Chief Executive Officer of Citizens Bank of Pennsylvania. Citizens Bank of Massachusetts and Citizens Bank of Pennsylvania are subsidiaries of Citizens Financial Group, Inc. Mr. Steinour was not involved in the process of approving the loan.

        The Company began occupying the New Facility and vacating its offices at Ten City Square in March 2003. Based upon its knowledge of rental payments for comparable facilities in the Boston area, the Company believes that the rental payments under the lease for the New Facility, which will be approximately $3.2 million per year ($33.00 per square foot for the first 75,000 square feet and $35.00 per square foot for the remainder of the premises) for the first six years of the lease term and approximately $3.5 million per year ($36.00 per square foot for the first 75,000 square feet and $40.00 per square foot for the remainder of the premises) for the remainder of the lease term, plus specified percentages of any annual increases in real estate taxes and operating expenses, were, at the time the Company entered into the lease, as favorable to the Company as those which could have been obtained from an independent third party.

ITEM 3.    LEGAL PROCEEDINGS

        In April 1998, United Services Planning Association, Inc. and Independent Research Agency for Life Insurance, Inc. filed a complaint in the District Court for Tarrant County, Texas (Civil Action No. 96-173235-98) against the Company and two of its employees alleging that the Company misrepresented its ability to complete a project contracted for by the plaintiffs and concealed from the plaintiffs material facts related to the status of the project. The parties are currently engaged in discovery. It is not likely that the case will go to trial before the fall of 2003. The plaintiffs seek monetary relief. The Company believes that it has a meritorious defense to the plaintiff's complaint and intends to contest the claims vigorously. However, the Company is presently unable to assess the likely outcome of the matter.

        On September 25, 2000, the United States Equal Employment Opportunity Commission ("EEOC") commenced a civil action against the Company in the United States District Court for the

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District of Massachusetts alleging that the Company discriminated against former employee Michael Randolph and other unspecified "similarly-situated individuals" by acts of racial harassment, retaliation and constructive discharge. This matter was settled and dismissed, and a consent decree entered by the Court, in May 2002. This settlement was not material to the Company's financial position or results of operations.

        The Company is involved in other litigation and various legal matters, which have arisen in the ordinary course of business. The Company does not believe that the ultimate resolution of these matters will have a material adverse effect on its financial condition, results of operations, or cash flows. The Company believes these litigation matters are without merit and intends to defend these matters vigorously.

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

        No matters were submitted to a vote of the Company's security holders during the fourth quarter of the year ended December 31, 2002.

        DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY:    The executive officers and directors of the Company are as follows:

Name	Committee	Age	Position
John F. Keane	(3)(4)	71	Chairman of the Board and Director
Brian T. Keane		42	President, Chief Executive Officer and Director
John J. Leahy		45	Senior Vice President of Finance and Chief Financial Officer
Donald E. Hillier		55	Senior Vice President of Human Resources
Robert B. Atwell		54	Senior Vice President
Russell A. Cappellino		61	Senior Vice President
Raymond W. Paris		65	Senior Vice President
Laurence D. Shaw		41	Senior Vice President
Linda B. Toops		48	Senior Vice President
Maria A. Cirino	(1)(2)	39	Director
John H. Fain	(3)(4)	54	Director
Philip J. Harkins	(2)(3)(4)(5)	55	Director
Winston R. Hindle, Jr.	(1)(3)(4)(5)	72	Director
John F. Keane, Jr.	(3)(4)	43	Director
John F. Rockart	(1)(2)(5)	71	Director
Stephen D. Steinour	(1)(2)	44	Director

(1)

Audit Committee

(2)

Compensation Committee

(3)

Former Governance and Nominating Committee (The Company had, until February 2003, a Governance and Nominating Committee. The Governance and Nominating Committee was reconstituted in February 2003 into two separate committees, a Nominating Committee and a Governance Committee.)

(4)

Governance Committee

(5)

Nominating Committee

        All Directors hold office until the next Annual Meeting of Stockholders and until their successors have been elected and qualified. Officers of the Company serve at the discretion of the Board of Directors.

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        Mr. John Keane, the founder of the Company, has been Chairman of the Board of Directors since the Company's incorporation in March 1967. Mr. Keane served as Chief Executive Officer and President of the Company from 1967 to November 1999. Prior to joining the Company, Mr. Keane worked for IBM's Data Processing Division and was employed as a consultant by Arthur D. Little, Inc., a Cambridge, Massachusetts management consulting firm. Mr. Keane is also a director of Firstwave Technologies, Inc. and APC, Inc.

        Mr. Brian Keane joined the Company in 1986 and has served as the Company's President and Chief Executive Officer since November 1999. From September 1997 to November 1999, Mr. Keane served as Executive Vice President and a member of the Office of the President of the Company. From December 1996 to September 1997, he served as Senior Vice President. From December 1994 to December 1996, he was an Area Vice President. From July 1992 to December 1994, Mr. Keane served as a Business Area Manager, and from January 1990 to July 1992, he served as a Branch Manager. Mr. Keane has been a director of the Company since May 1998. Mr. Keane has served as a trustee of Mount Holyoke College since May 2000. Brian Keane is a son of John Keane, the founder, and Chairman of the Company, and the brother of John Keane, Jr., a director.

        Mr. Leahy joined the Company in August 1999 as Senior Vice President—Finance and Administration and Chief Financial Officer. From 1982 to August 1999, Mr. Leahy was employed by PepsiCo, during which time he held a number of positions, serving most recently as Vice President of Business Planning and Development for Pepsi-Cola International.

        Mr. Hillier joined the Company in July 2002 as Senior Vice President, Human Resources. From June 1999 to February 2002, Mr. Hillier was Senior Vice President of Human Resources for CGU/One Beacon, an insurance company. From June 1990 to May 1999, Mr. Hillier served as Senior Vice President of Human Resources and Operations for Zurich Financial Services Group.

        Mr. Atwell joined the Company in 1974 and served as a Branch Manager from 1974 to 1985 and as head of Seminars Projects & Services (SPS), formerly Productivity Management Services Group (PMSG), from 1985 to 1986. Mr. Atwell left the Company from 1986 to 1991. During that time, he served as Regional Sales Vice President for Palladian Software, Vice President of Sales for Applied Expert Systems, Vice President of Sales and Marketing for Access Development Corporation, and Vice President of Broadway and Seymour. In 1991, Keane acquired Broadway and Seymour and appointed Mr. Atwell Managing Director of the Company's Raleigh/Durham Branch. Since that time, Mr. Atwell has served as Area Manager from 1993 to 1994, Area Vice President from 1995 to 1999, and Senior Vice President of North American Branch Operations from 1999 to present.

        Mr. Cappellino joined the Company as Senior Vice President, Offshore Solutions in March of 2002. From 1995 to March 2002, Mr. Cappellino served as Chairman and CEO of SignalTree Solutions, Inc. From 1993 to 1995, Mr. Cappellino was President of Network Solutions and Vice President/General Manager of Worldwide Telecommunications Marketing at Tandem Computers.

        Mr. Paris joined the Company in November 1976. Mr. Paris has served as Senior Vice President—Healthcare Solutions since January 2000 and as Vice President and General Manager of the Healthcare Solutions Practice from August 1986 to January 2000. Mr. Paris also served as Area Manager of the Healthcare Solutions Practice from 1981 to 1986.

        Mr. Shaw joined the Company in September 2002 as Senior Vice President and Managing Director of Keane Ltd. From 1996 to September 2002, Mr. Shaw was employed by Headstrong, a global restructuring corporation, during which time he held a number of positions, serving most recently as Chief Operating Officer of European Operations.

        Ms. Toops joined the Company in August of 1992. Ms. Toops has served as President of Keane Consulting Group (KCG) and Senior Vice President of Keane, Inc. since June 2000. From 1992 to June 2000, Ms. Toops served as Executive Vice President of KCG. From 1977 through 1992, Ms. Toops held a variety of sales and management positions within the IBM Corporation.

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        Ms. Cirino has been a director of the Company since July 2001. Since 2000, Ms. Cirino has held the position of CEO and Chairman of Guardent, Inc., a managed security services corporation. Prior to 2000, Ms. Cirino served as Vice President of Sales and Marketing for Razorfish, an internet company. From 1997 to 1999, Ms. Cirino held the same position of Vice President of Sales and Marketing for I-cube, an internet company, which was acquired by Razorfish in October of 1999. Prior to 1997, Ms. Cirino held the position of Vice President of Sales for Shiva Corporation, a developer of remote access products for enterprise networks.

        Mr. Fain has been a director of the Company since November 2001 and served as Senior Vice President of the Company from November 2001 through March 2002. Prior to joining the Company, Mr. Fain was the founder, Chief Executive Officer and Chairman of the Board of Directors of Metro Information Services, which was acquired by the Company in November 2001. Mr. Fain's role at Metro Information Services also included serving as President until January 2001 and Chairman of the Compensation Committee until February 1999.

        Mr. Harkins has been a director of the Company since February 1997. Mr. Harkins is currently the President and Chief Executive Officer of Linkage, Inc., an organizational development company founded by Mr. Harkins in 1988. Prior to 1988, Mr. Harkins was Vice President of Human Resources of the Company.

        Mr. Hindle has been a director of the Company since February 1995. Mr. Hindle is currently retired. From September 1962 to July 1994, Mr. Hindle served as a Vice President and, subsequently, Senior Vice President of Digital Equipment Corporation. Mr. Hindle is also a director of Mestek, Inc. and CareCentric, Inc.

        Mr. John Keane, Jr. has been a director of the Company since May 1998. Mr. Keane is the founder of ArcStream Solutions, Inc., a consulting and systems integration firm focusing on cable and wireless solutions, and has been its President and Chief Executive Officer since July 2000. From September 1997 to July 2000, he was Executive Vice President and a member of the Office of the President of the Company. From December 1996 to September 1997, he served as Senior Vice President. From December 1994 to December 1996, he was an Area Vice President. From January 1994 to December 1994, Mr. Keane served as a Business Area Manager. From July 1992 to January 1994, he acted as manager of Software Reengineering, and from January 1991 to July 1992, he served as Director of Corporate Development. John Keane, Jr. is a son of John Keane, the founder and Chairman of the Company, and a brother of Brian Keane. Mr. Keane is also a director of Ezenia! Inc., a collaboration software company.

        Dr. Rockart has been a director of the Company since the Company's incorporation in March 1967. Dr. Rockart has been a Senior Lecturer Emeritus at the Alfred J. Sloan School of Management of the Massachusetts Institute of Technology (MIT) since July 2002. Dr. Rockart served as a Senior Lecturer at the Alfred J. Sloan School of Management of MIT from 1974 to July 2002 and was the Director of the Center for Information Systems Research from 1976 to 2000. Dr. Rockart is also a director of Comshare, Inc. and Selective Insurance Group.

        Mr. Steinour has been director of the Company since July 2001. Since July 2001, Mr. Steinour has served as the Chief Executive Officer of Citizens Bank of Pennsylvania. From January 1997 to July 2001, Mr. Steinour served as Vice Chairman of Citizens Financial Group, a commercial bank holding company. From October 1992 to December 1996, Mr. Steinour served as the Executive Vice President and Chief Credit Officer of Citizens Wholesale Banking Group of Citizens Financial Group.

        Compensation of the Company's non-employee directors currently consists of an annual directors' fee of $4,000 plus $1,000 and expense reimbursement for each meeting of the Board of Directors

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attended. Effective for the annual directors term beginning with the Company's 2003 Annual Meeting of Stockholders, the compensation of the members of the Board of Directors will be as follows:

Compensation	Amount
Annual retainer	$20,000
Additional compensation:
Fee per Board Meeting	2,000
Annual fee for Chairperson of Nominating Committee	5,000
Annual fee for Chairperson of Governance Committee	5,000
Annual fee for Chairperson of Compensation Committee	15,000
Annual fee for Chairperson of Audit Committee	25,000
Committee meetings and telephonic meetings of the Board	No additional fee (part of annual retainer)
Initial stock option grant for a new Director	10,000 shares of common stock to be granted on the date of election. Such options shall vest in 3 equal annual installments and the exercise price shall be the closing price of the Company's common stock on the American Stock Exchange on the date of grant.
Annual stock option grant	5,000 shares of common stock to be granted on the date of the Annual Meeting. Such options shall vest in 3 equal annual installments and the exercise price shall be the closing price of the Company's common stock on the American Stock Exchange on the date of grant.

        The compensation of the Company's non-employee directors is determined on an approximate fifty-two week period (the "Annual Directors Term") that runs from annual meeting date to annual meeting date rather than on a calendar year. A director may elect to receive his or her annual fee or meeting attendance fees for an Annual Directors Term in the form of shares of common stock in lieu of cash payments. If a director elects to receive shares of common stock in lieu of cash as payment for the annual fee or meeting attendance fees, the number of shares to be received by the director will be determined by dividing the dollar value of the annual fee or the meeting attendance fees owed by the closing price of Keane's common stock as reported on the American Stock Exchange on the last day of the Annual Directors Term.

        Directors generally make their elections as to the form of compensation for his or her annual fee or meeting attendance fees in July of each year and such election is valid for the Annual Directors Term beginning in the calendar year in which the election is made.

        Non-employee directors are also eligible to receive stock options under the Company's stock incentive plans. During 2002, the Company did not grant stock options to non-employee directors. Directors who are officers or employees of the Company do not receive any additional compensation for their services as directors.

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PART II

ITEM 5.    MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

        The Company's authorized capital stock consists of 200,000,000 shares of common stock, $.10 par value per share; 503,797 shares of class B common stock, $.10 par value per share; and 2,000,000 shares of Preferred Stock, $.01 par value per share. As of March 7, 2003, there were 68,331,059 shares of common stock outstanding and held of record by approximately 2,843 registered stockholders; 284,599 shares of class B common stock outstanding and held of record by approximately 108 registered stockholders; and no shares of preferred stock outstanding.

COMMON STOCK AND CLASS B COMMON STOCK

        Voting.    Each share of common stock is entitled to one vote on all matters submitted to stockholders and each share of class B common stock is entitled to ten votes on all matters submitted to stockholders. The holders of common stock and class B common stock vote as a single class on all actions submitted to a vote of the Company's stockholders, except that separate class votes of the holders of common stock and class B common stock are required with respect to amendments to the articles of organization that alter or change the powers, preferences, or special rights of their respective classes or as to affect them adversely, and with respect to such other matters as may require class votes under Massachusetts law. Voting for directors is non-cumulative.

        As of March 7, 2003, the class B common stock represented less than 1.0% of the Company's outstanding equity, but had approximately 4.0% of the combined voting power of the Company's outstanding common stock and class B common stock. The voting rights of the class B common stock may make Keane less attractive as the potential target of a hostile tender offer or other proposal to acquire the stock or business of Keane and render merger proposals more difficult, even if such actions would be in the best interests of the holders of the common stock.

        Dividends and Other Distributions.    The holders of common stock and class B common stock are entitled to receive ratably such dividends, if any, as may be declared by Keane's Board of Directors, out of funds legally available therefore, except that the Board of Directors may not declare and pay a regular quarterly cash dividend on the shares of class B common stock unless a non-cumulative per share dividend which is $.05 per share greater than the per shares dividend paid on the class B common stock is paid at the same time on the shares of common stock. In the event of a liquidation, dissolution, or winding up of Keane, holders of common stock and class B common stock have the right to ratable portions of Keane's net assets after the payment of all debts and other liabilities.

        Trading Markets.    Shares of class B common stock are not transferable by a stockholder except for transfers:

•

By gift,



•

In the event of the death of a stockholder, or



•

By a trust to a person who is the grantor or a principal beneficiary of that trust.

        Individuals or entities receiving shares of class B common stock pursuant to these transfers are referred to as "permitted transferees." The class B common stock is not listed or traded on any exchange or in any market, and no trading market exists for shares of the class B common stock. The class B common stock is, however, convertible at all times, and without cost to the stockholder, into shares of common stock on a share-for-share basis. Shares of class B common stock are automatically converted into an equal number of shares of common stock in connection with any transfer of those shares other than to a permitted transferee. In addition, all of the outstanding shares of class B

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common stock are convertible into shares of common stock upon a majority vote of the Board of Directors.

        Future Issuance of Class B Common Stock; Retirement of Class B Common Stock Upon Conversion into Common Stock.    The Company may not issue any additional shares of class B common stock without stockholder approval. All shares of class B common stock converted into common stock are retired and may not be reissued.

        Other Matters.    The holders of common stock and class B common stock have no preemptive rights or, except as described above, rights to convert their stock into any other securities and are not subject to future calls or assessments by the Company. The common stock is listed on the American Stock Exchange under the symbol "KEA." All outstanding shares of common stock and class B common stock are fully paid and non-assessable. The rights, preferences, and privileges of holders of common stock and class B common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of preferred stock which the Company may designate and issue in the future.

PREFERRED STOCK

        The Company's Articles of Organization authorize the issuance of up to 2,000,000 shares of Preferred Stock. Shares of Preferred Stock may be issued from time to time in one or more series, and the Board of Directors is authorized to determine the rights, preferences, privileges, and restrictions, including the dividend rights, conversion rights, voting rights, terms of redemption, redemption price or prices, and liquidation preferences, of any series of Preferred Stock, and to fix the number of shares of any such series of Preferred Stock without any further vote or action by the stockholders. The voting and other rights of the holders of common stock and class B common stock will be subject to, and may be adversely affected by, the rights of holders of any Preferred Stock that may be issued in the future. The issuance of shares of Preferred Stock, while providing desirable flexibility in connection with acquisitions and other corporate purposes, could have the effect of making it more difficult for a third party to acquire, or of discouraging a third party from acquiring, a majority of the outstanding voting stock of the Company. The Company has no present plans to issue any shares of Preferred Stock.

PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY

        The Company's common stock is traded on the American Stock Exchange under the symbol "KEA." The following table sets forth, for the periods indicated, the high and low sales price per share as reported by the American Stock Exchange.

Stock Price
Period	High		Low
2002
First Quarter	$	19.18	$	14.30
Second Quarter		16.82		12.30
Third Quarter		12.70		5.99
Fourth Quarter		10.10		5.29
2001
First Quarter	$	18.75	$	9.28
Second Quarter		22.00		11.40
Third Quarter		21.01		12.45
Fourth Quarter		20.05		13.25

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        The closing price of the common stock on the American Stock Exchange on March 7, 2003 was $7.67.

        The Company has not paid any cash dividend since June 1986. The Company currently intends to retain all of its earnings to finance future growth and therefore does not anticipate paying any cash dividend in the foreseeable future. The Company's new $50.0 million credit facility with two banks contains restrictions that may limit its ability to pay cash dividends in the future.

        The Company's Articles of Organization restrict the ability of the Board of Directors to declare regular quarterly dividends on the class B common stock.

SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

	First quarter		Second quarter		Third quarter		Fourth quarter
For the year ended December 31, 2002
Total revenues	$	221,259	$	226,062	$	213,383	$	212,499
Gross profit		63,426		64,157		58,669		56,904
Income (loss) before income taxes		9,254		9,200		6,517		(11,335	)
Net income (loss)		5,553		5,521		3,910		(6,803	)
Net income (loss) per share (basic)		0.07		0.07		0.05		(0.10	)
Net income (loss) per share (diluted)		0.07		0.07		0.05		(0.10	)
For the year ended December 31, 2001
Total revenues	$	208,346	$	196,995	$	186,637	$	187,181
Gross profit		63,197		59,208		57,223		51,648
Income (loss) before income taxes		14,211		11,256		8,908		(5,154	)
Net income (loss)		8,454		6,698		5,302		(3,067	)
Net income (loss) per share (basic)		0.12		0.10		0.08		(0.04	)
Net income (loss) per share (diluted)		0.12		0.10		0.08		(0.04	)

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ITEM 6.    SELECTED FINANCIAL DATA

FINANCIAL HIGHLIGHTS

For the years ended December 31,	2002			2001			2000			1999			1998
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
Income Statement Data:
Total revenues	$	873,203		$	779,159		$	871,956		$	1,041,092		$	1,076,198
Operating income		10,357			19,753			27,921			116,466			170,187
Net income		8,181			17,387			20,354			73,074			96,349
Net income per share (basic)		0.11			0.25			0.29			1.02			1.36
Net income per share (diluted)		0.11			0.25			0.29			1.01			1.33
Weighted average common shares outstanding (basic)		74,018			68,474			69,646			71,571			71,053
Weighted average common share equivalents outstanding (diluted)		74,406			69,396			69,993			72,395			72,284
Balance Sheet Data:
Total cash and marketable securities	$	68,255		$	129,243		$	115,212		$	142,763		$	129,229
Total assets		685,674			679,903			463,594			519,307			458,959
Total debt		45,647			15,357			8,616			11,403			3,930
Stockholders' equity		490,584			529,173			370,677			422,799			363,784
Book value per share		7.06			7.00			5.48			5.95			5.10
Number of shares outstanding		69,521			75,509			67,675			71,051			71,336
Financial Performance:
Total revenue growth (decline)		12.1	%		(10.6	)%		(16.2	)%		(3.3	)%		52.3	%
Net margin		0.9	%		2.2	%		2.3	%		7.0	%		9.0	%

All amounts prior to 1999 have been restated to reflect the acquisitions of Bricker & Associates, Inc., Icom Systems Limited, and Fourth Tier, Inc., which were accounted for as poolings-of-interests.

ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

        This Annual Report on Form 10-K contains forward-looking statements. For this purpose, any statements contained herein that are not statements of historical fact may be deemed forward-looking statements. Without limiting the foregoing, the words "believes," "anticipates," "plans," "expects," and similar expressions are intended to identify forward-looking statements. There are a number of important factors that could cause the Company's actual results to differ materially from those indicated by such forward-looking statements. These factors include, without limitation, those set forth below under the caption "Certain Factors That May Affect Future Results."

OVERVIEW

        Keane plans, builds, manages, and rationalizes application software through its Business Consulting, Application Development and Integration (AD&I), and Application Development and Management Outsourcing (Applications Outsourcing) services. Keane develops long-term relationships with customers by providing a broad range of service offerings delivered on a local basis through an integrated network of branch offices in North America and in the United Kingdom. Branch offices work in conjunction with the Company's business consulting arm, Keane Consulting Group (KCG), and are supported by centralized Strategic Practices. The practices focus on developing repeatable approaches to common customer needs and challenges and help to gather and institutionalize the Company's best practices. Branch offices are also supported by Advanced Development Centers

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(ADCs) in the United States, Canada, and India, which enable the Company to further improve the efficiency and economic advantage of the services it provides customers.

        Given the recent economic downturn, many customers have deferred their investments in new information systems. As a result, Keane has concentrated its short-term efforts on helping customers to more efficiently manage their existing applications. This mix of services includes Applications Outsourcing and Applications Rationalization, a service that helps customers to identify and eliminate higher cost, non-core, and end-of-life applications. Applications Outsourcing is the Company's flagship service offering, because it represents a large, growing market, and provides Keane with long-term contracts and a high percentage of recurring revenue. Keane has also increased its focus on providing services to vertical markets, such as healthcare and the public sector, that have been less impacted by reductions in technology spending. In addition, the Company seeks to provide cost-effective services and to enhance its operating margins through the use of its near-shore Advanced Development Center in Halifax, Nova Scotia, and its offshore Advanced Development Centers in Hyderabad and Delhi, India. The Company acquired its offshore facilities as a result of its acquisition of SignalTree Solutions Holding, Inc. (SignalTree). The Company anticipates that use of its near-shore and offshore facilities will increase as a result of its focus on global delivery and the need of customers to continue to decrease costs associated with investments in technology. Finally, Keane has maintained tight control of its costs while executing a strategy that has created a business model with high operating leverage.

        In order for Keane to remain successful in the near term, Keane must continue to maintain and grow its client base, provide high quality service and satisfaction to its existing clients, and continue to take advantage of cross selling opportunities. In the current economic environment, Keane must also provide clients with service offerings that are appropriately priced, satisfy clients' IT needs, and provide clients with measurable business benefit.

        Keane believes that maximizing the generation of cash from operations is fundamental to building long-term per share value. To accomplish this, Keane believes that its ability to sell and deliver Applications Outsourcing and to cross-sell other services is critical to its long-term success. Attracting, retaining, and developing talented sales, management, and technical professionals is another essential component. In addition, the Company's ability to leverage Selling, General & Administrative (SG&A) expense over a broader base of revenue is crucial to increasing net income and cash provided from operations. Keane's management measures Keane's performance on a quarter by quarter and year-over-year basis by comparing plan, build, and manage revenues, Applications Outsourcing revenues, the number of billable personnel, gross margins, and SG&A as a percentage of revenues for such periods. Another key metric used by Keane's management is bookings, or new sales to customers.

APPLICATION OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES

        The discussion and analysis of Keane's financial condition and results of operations are based on consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires Keane to make estimates and judgments that affect the reported amount of assets and liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities at the date of its financial statements. Actual results may differ from these estimates under different assumptions or conditions.

        Critical accounting policies are defined as those that are reflective of significant judgments and uncertainties, and potentially result in materially different results under different assumptions and conditions. Application of these policies is particularly important to the portrayal of Keane's financial condition and results of operations. The Company believes that the accounting policies described below meet these characteristics. Keane's significant accounting policies are more fully described in the notes to the consolidated financial statements.

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Revenue Recognition

        Keane recognizes revenue as services are performed or products are delivered in accordance with contractual agreements and generally accepted accounting principles. For general consulting engagements, revenue is recognized on a time and materials basis as services are delivered. For the majority of our outsourcing engagements, the Company provides a specific level of service each month for which it bills a standard monthly fee. Revenue for these engagements is recognized in monthly installments over the billable portion of the contract. These installments may be adjusted to reflect changes in staffing requirements and service levels consistent with terms of the contract.

        For fixed price engagements, revenue is recognized on a percentage of completion basis over the life of the contract. The Company uses estimated labor-to-complete to measure the percentage of completion. Percentage of completion recognition relies on accurate estimates of the cost, scope, and duration of each engagement. If the Company does not accurately estimate the resources required or the scope of the work to be performed, then future revenues may be negatively affected or losses on existing contracts may need to be recognized. All future anticipated losses are recognized in the period they are identified.

        Revenue associated with application software products is recognized as the software products are installed and as implementation services are delivered. Software maintenance fees on installed products are recognized on a pro-rated basis over the term of the agreement.

        For the majority of outsourcing engagements, the Company provides a specific level of service each month for which it bills a standard monthly amount. Revenue for these engagements can be recognized in monthly installments over the billable portion of the contract or on a time and materials basis. Installment amounts may be adjusted to reflect changes in staffing requirements or service level agreements. Costs of transitioning the employees and ensuring the Company meets required service level agreements may be capitalized over defined periods of time.

        In all consulting engagements, outsourcing engagements, and software application sales, the risk of issues associated with satisfactory service delivery exists. Although management believes these risks are adequately addressed by the Company's adherence to proven project management methodologies, proprietary frameworks, and internal project audits, the potential exists for future revenue charges relating to service delivery issues.

Allowance for Bad Debts

        Each accounting period, Keane evaluates accounts receivable for risk associated with a client's inability to make contractual payments or unresolved issues with the adequacy of Keane's services. Billed and unbilled receivables that are specifically identified as being at risk are provided for with a charge to revenue in the period the risk is identified. Considerable judgment is used in assessing the ultimate realization of these receivables including reviewing the financial stability of the client, evaluating the successful mitigation of service delivery disputes, and gauging current market conditions. If the Company's evaluation of service delivery issues or a client's ability to pay is incorrect, the Company may incur future adjustments to revenue.

Property and Equipment

        The Company periodically reviews its property and equipment for impairment in accordance with Statement of Financial Accounting Standards No. 144 (FAS 144), "Accounting for the Impairment or Disposal of Long-Lived Assets." In determining whether an asset is impaired, the Company must make assumptions regarding recoverability of costs, estimated future cash flows from the asset, intended use of the asset, and other related factors. If these estimates or their related assumptions change, the Company may be required to record impairment charges for these assets.

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Goodwill and Intangible Assets

        In assessing the recoverability of the Company's goodwill and other intangible assets, the Company must make assumptions regarding estimated future cash flows and other factors to determine the fair value of the respective assets. This process is subjective and requires judgment at many points throughout the analysis. If these estimates or their related assumptions change in the future, the Company may be required to record impairment charges for these assets not previously recorded.

        On January 1, 2002, the Company adopted Statement of Financial Accounting Standards No. 142 (FAS 142), "Goodwill and Other Intangible Assets," and was, therefore, required to perform an impairment test on its goodwill and other intangibles with indefinite lives during the first six months of 2002, and then on a periodic basis thereafter. The Company's initial goodwill impairment analysis was completed during the second quarter of 2002, and was based on January 1, 2002 balances. Through this analysis it was determined that there was no impairment as of that date. Subsequently, during the fourth quarter of 2002, the company completed its annual impairment review based on September 30, 2002 balances and determined that there was no impairment as of that date. Future changes in estimates may result in a non-cash goodwill impairment that could have a material adverse impact on our financial condition and results of operations.

        The Company periodically reviews its identifiable intangible assets for impairment in accordance with Statement of Financial Accounting Standards No. 144 (FAS 144), "Accounting for the Impairment of Disposal of Long-lived Assets." In determining whether an intangible asset is impaired, the Company must make assumptions regarding estimated future cash flows from the asset, intended use of the asset and other related factors. If the estimates or the related assumptions used to determine the value of the intangible assets change, the Company may be required to record impairment charges for these assets.

Income Taxes

        Keane accounts for income taxes in accordance with FAS No. 109, "Accounting for Income Taxes," which requires that deferred tax assets and liabilities be recognized using enacted tax rates for the effect of temporary differences between the book and tax basis of recorded assets and liabilities. FAS 109 also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized. Based on prior taxable income and estimates of future taxable income, the Company has determined that it is more likely than not that its net deferred tax assets will be fully realized in the future. If actual taxable income varies from these estimates, the Company may be required to record a valuation allowance against its deferred tax assets resulting in additional income tax expense which will be recorded in the Company's consolidated statement of operations.

Stock-based Compensation

        The Company grants stock options for a fixed number of shares to employees with an exercise price equal to the closing price of the shares at the date of grant. The Company adopted the disclosure provisions of FAS 123, (FAS 123) "Accounting for Stock-Based Compensation," and applies APB Opinion 25, "Accounting for Stock Issued to Employees," to its grants of stock options and accordingly, recognizes no compensation expense for stock-based employee compensation provided options are issued at the current market value. The Company also grants restricted stock for a fixed number of shares to employees for nominal consideration. Compensation expense related to restricted stock awards is recorded ratably over the restriction period.

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Restructuring

        Keane has recorded restructuring charges and reserves associated with restructuring plans approved by management over the last four years. These reserves include estimates pertaining to employee separation costs and real estate lease obligations. The reserve associated with lease obligations could be materially affected by factors such as the ability to obtain subleases, the creditworthiness of sub-lessees, market value of properties, and the ability to negotiate early termination agreements with lessors. While the Company believes that its current estimates regarding lease obligations are adequate, future events could necessitate significant adjustments to these estimates. Future changes in estimates may result in adjustments to the Company's consolidated financial statements.

Results of Operations, 2002 vs. 2001

        The Company's total revenue for 2002 was $873.2 million, a 12% increase from revenue of $779.2 million for 2001. This increase in total revenue was primarily the result of new clients and new client billings due to the acquisition of Metro Information Services, Inc. (Metro), which was completed on November 30, 2001, and the acquisition of SignalTree Solutions Holding, Inc., which was completed on March 15, 2002.

        Revenue from the Company's Plan services was $66.9 million in 2002, a decrease of 11% from $75.3 million in 2001. Plan revenue is comprised primarily of business consulting services delivered by KCG, the Company's business consulting arm, and IT consulting services, which are sold and implemented out of Keane's network of branch offices. Plan services include Keane's Applications Rationalization Service. The decrease in Plan revenue was primarily the result of the deferral of consulting projects and a decrease in billing rates caused by general economic conditions.

        Revenue from the Company's Build services was $216.2 million in 2002, a decrease of 19% from $265.9 million in 2001. Keane's Build revenue, which consists primarily of Application Development and Integration (AD&I) business, was also adversely affected during 2002 by the deferral of software development projects in both North America and the United Kingdom, as well as by reduced billing rates due to the current reduction in capital spending related to technology. However, the decline in the Company's Build services revenue was offset in part by revenue generated from the less cyclical public sector and healthcare related vertical markets, which contributed growing and more stable revenue streams within the Build services sector.

        Revenue from the Company's Manage services, which consist primarily of Keane's Applications Outsourcing service, as well as Staff Augmentation services and other Maintenance and Migration services, were $590.1 million during 2002, an increase of 35% from $437.9 million in 2001. This improvement was the result of increasing revenue from Keane's Applications Outsourcing service, and the acquisitions of Metro Information Services, Inc. and SignalTree Solutions Holding, Inc. Although not immune from economic fluctuations, Applications Outsourcing revenues are more stable than those associated with Plan or Build due to the long-term and recurring nature of outsourcing contracts and the cost-saving benefits related to outsourcing. Generally, under an Applications Outsourcing agreement, the Company receives a fixed monthly fee in return for meeting or exceeding a contractually agreed upon service level. Applications Outsourcing agreements generally do not require any capital outlay from the Company, which recognizes outsourcing revenue and expense on a monthly basis consistent with the service provided to its customers. The Company does not employ percentage-of-completion accounting on its outsourcing agreements.

        Applications Outsourcing revenue was $408.5 million during 2002, and represented 47% of total revenue, up 4% from $393.9 million in 2001. The increase in Applications Outsourcing was a result of clients' ongoing needs to efficiently manage existing software portfolios.

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        The Company observed no clear trend of an increase in discretionary IT spending during 2002 or the first two months of 2003. As a result, the Company anticipates continuing softness in its AD&I business, which represents a majority of its Build sector, and its Plan sector, until economic conditions improve and customers once again begin funding technology projects. However, the Company continues to see ongoing opportunities in its Applications Outsourcing business, which represents a majority of its Manage sector as well as opportunities within the healthcare sector. The Company believes that outsourcing provides greater stability of revenue due to long-term contracts and recurring revenue.

        Total billable employees for all operations were 6,175 billable employees as of December 31, 2002, down from 6,566 total billable as of December 31, 2001. This year-over-year decrease resulted from a need to bring personnel resources, which account for the vast majority of Keane's direct costs, in alignment with anticipated revenue. The Company's base of billable employees within its India operation was 413 billable employees as of December 31, 2002. The Company did not have billable employees in India during 2001.

        On March 15, 2002, Keane acquired SignalTree Solutions Holding, Inc., a privately-held, United States-based corporation with two software development facilities in India and additional operations in the United States, by the merger of a wholly-owned subsidiary of Keane into SignalTree Solutions. Under the terms of the merger agreement, Keane paid $68.2 million in cash for SignalTree Solutions. Keane expects the addition of SignalTree Solutions to enhance its value proposition to customers by providing access to world-class software development processes as well as the economic advantage of a large pool of cost-effective technical professionals.

        As of December 31, 2002, in connection with a third quarter acquisition, the Company had a recorded contingent liability of $895,000 related to certain earn-out considerations. The $895,000 is expected to be paid out during the first quarter of 2003. Future earn-outs are based on specific net revenue targets. Payments for achieving these goals will range from $1.0 to $2.0 million in future periods. The Company also recorded $3.0 million as deferred revenue related to contingent service credits and issued a $3.0 million non-interest bearing note payable as partial consideration. The note has a one-year term with a possible one-year extension based on additional acquisition service credits.

        Salaries, wages, and other direct costs for 2002 were $630.0 million, or 72.2% of total revenue, compared to $547.9 million, or 70.3% of total revenue, for 2001. The increase in direct costs was primarily attributable to the Metro and SignalTree Solutions acquisitions. The Company's gross margins for 2002 were 27.8%, as compared to 29.7% for 2001. The decrease in gross margins reflects continuing softness in the demand for IT services resulting in lower billing rates and utilization of billable personnel.

        Selling, General & Administrative ("SG&A") expenses for 2002 were $198.8 million, or 22.8% of total revenue, as compared to $186.7 million, or 24.0% of total revenue, for 2001. The decrease in SG&A as a percentage of revenue was the result of cost synergies obtained from the acquisition of Metro Information Services, Inc. as well as the Company's continuing focus on tightly controlling discretionary expenses. The increase in SG&A expenses was attributable to personnel costs incurred in connection with the Metro and SignalTree Solutions acquisitions, as more fully described below.

        During the first quarter of 2002, the Company completed the integration of Metro's corporate functions with its own, and during the second quarter of 2002, the Company completed the consolidation and relocation of overlapping branch offices. During the second quarter of 2002, the Company also integrated United States-based operations acquired from SignalTree Solutions with its own. During the third quarter of 2002, the Company integrated all corporate functions of SignalTree Solutions into its corporate headquarters in Boston, Massachusetts.

        During the fourth quarter of 2002, due to changes in assumptions and pursuant to plans and acquisitions, Keane recorded a restructuring charge of $17.6 million, including $12.8 million associated

23

with real estate, $1.9 million associated with fixed assets, and $2.9 million associated with workforce reductions. The real estate charges represent consolidation of both corporate and field properties, as well as changes in estimates for previously recorded restructuring charges. During the fourth quarter of 2001, Keane recorded a restructuring charge of $10.4 million relating to the costs of workforce reductions, consolidation of branch offices, impaired assets, and certain other expenditures.

        Amortization of intangible assets for 2002 was $16.4 million, or 1.9% of total revenue, compared to $14.5 million, or 1.9% of total revenue, for 2001. The increase in amortization of intangible assets was primarily attributable to additional intangible assets resulting from the Company's acquisitions of Metro Information Services, Inc, and SignalTree Solutions offset by the impact of the adoption of FAS 142, under which goodwill is no longer amortized.

        Interest and dividend income totaled $2.5 million for 2002, compared to $7.0 million for 2001. The decrease in interest and dividend income was attributable to fewer cash reserves earning interest and dividends due to the use of cash to retire debt associated with the acquisition of Metro Information Services, Inc., the acquisition of SignalTree Solutions, and the repurchase of shares of the Company's common stock, as well as interest rate declines. Other income was $1.0 million for 2002, as compared to other income of $2.7 million in 2001. Other income during 2001 related to (i) a gain of $4.0 million from the sale of the Company's Help Desk business partially offset by the Company's decision to write-off certain equity investments totaling $2.0 million, and (ii) gains from the sale of investments.

        The Company's effective tax rate was 40.0% for 2002, down from 40.5% in 2001. This decrease was a direct result of the adoption of FAS 142, offset by an adjustment of prior year's estimated tax liability.

        Net cash provided from operations was $56.7 million during 2002, as compared to $83.2 million during 2001. Cash provided from operations in 2002 includes the effects of payments related to restructuring in the amount of $16.5 million. The decrease in net cash from operations was primarily attributable to a decrease in net income. The Company continues to focus on using cash flow to fund potential acquisitions, stock repurchases, and to build long-term per share value.

Results of Operations, 2001 vs. 2000

        The Company's revenue for 2001 was $779.2 million compared to $876.9 million in 2000. Revenue from Keane's divested Help Desk business totaled $5.2 million and $43.3 million for 2001 and 2000, respectively. Keane's revenue during 2001 was negatively impacted by the economic slowdown and the related reduction in technology spending. However, this was partially offset by a $16.8 million increase in revenue from the Company's public sector business and a $31.0 million increase in revenue from its Applications Outsourcing service. Applications Outsourcing revenue represented 51% of total revenue during 2001 or $393.9 million, an increase of 8.5% from $363.0 million during 2000.

        Revenue from the Company's Plan services was $75.3 million, a decrease of 30% from $107.1 million in 2000. Plan revenue for 2001 was negatively impacted by a general deferral of capital expenditures and consulting projects.

        Revenue from the Company's Build services was $265.9 million in 2001, a decrease of 17% from $322.2 million in 2000. During the fourth quarter of 2000, Keane incurred a charge of $13.5 million, of which $8.6 million was related to the consolidation and/or closing of certain non-profitable branch offices, employee severance costs, facility leases, and for other miscellaneous purposes with the balance related to increased reserves against accounts receivable. During the fourth quarter of 2001, Keane booked $10.4 million in restructuring charges relating to the costs of workforce reductions, consolidation of branch offices, impaired assets, and certain other expenditures.

        As anticipated, Keane's Build revenue was also adversely affected in 2001 by the challenging economic environment and the related deferral of new software development projects in both North

24

America and the United Kingdom. This decline was offset in part by ongoing Build project revenue from existing Global 2000 customers and revenue of $128.4 million attributable to public sector business from federal and state governments. Engagements within the public sector represented approximately 16.5% of Keane's total revenue in 2001.

        Revenue from the Company's Manage services was $437.9 million in 2001 and $437.6 million in 2000. Keane's 2001 revenue from Manage services included approximately $16.0 million as a result of its acquisition of Metro Information Services, on November 30, 2001. Revenue from the Company's divested Help Desk business was approximately $5.2 million during 2001 and $43.3 million during 2000. On February 12, 2001, the Company sold its Help Desk operation to Convergys Corporation in return for $15.7 million in cash.

        The increase in Keane's Manage revenue during 2001 was driven by continuing sales growth in the Company's Applications Outsourcing business, as Global 2000 customers sought to improve productivity and efficiencies associated with the management and enhancement of their application portfolios. This business has not been as negatively impacted by the economy as Keane's Build business.

        In response to this challenging business climate, the Company expanded its customer base and critical mass with its acquisition of Metro Information Services. Metro provided Keane with hundreds of new customers to whom the Company can cross-sell its services. Of Metro's 300 largest customers that accounted for 90% of its revenue for the twelve months ended June 30, 2001, 236 were new customers for Keane. In addition, the Company improved operational leverage by combining corporate functions and consolidating overlapping branch offices. Of Metro's 33 branch offices, 26 were within geographic markets currently served by Keane.

        Salaries, wages, and other direct costs for 2001 were $547.9 million, or 70.3% of total revenue, compared to $621.2 million, or 71.2% of total revenue, for 2000. The decline in costs resulted from the sale of the Company's lower margin Help Desk operations and its ongoing efforts to bring costs in alignment with revenue. As a result, Keane's gross margins for 2001 increased to 29.7%, up from 28.8% during 2000.

        Selling, General & Administrative ("SG&A") expenses for 2001 were $186.7 million, or 24.0% of total revenue, compared to $201.9 million, or 23.1% of total revenue, for 2000. The decline in SG&A expenditures during 2001 was a result of the sale of the Company's Help Desk operations and aggressive control of discretionary spending to bring cost in alignment with revenue. The Company intends to continue to control aggressively its discretionary expenditures until economic conditions improve and spending on IT projects increases.

        Amortization of goodwill and other intangible assets for 2001 was $14.5 million, or 1.9% of total revenue, compared to $12.4 million, or 1.4% of total revenue, in 2000. The increase in amortization for 2001 was attributable to additional intangible assets as a result of the Company's acquisition of Metro Information Services in November of 2001 and the acquisitions of Denver Management Group and Care Computer Systems in July and September of 2000.

        Interest and dividend income totaled $7.0 million for 2001, compared to $7.7 million for 2000. The slight decrease in interest and dividend income was attributable to having less cash earning interest and dividend income as a result of using cash for acquisitions and the repurchase of Keane stock, and as a result of interest rate declines. Other income was $2.7 million for 2001 as compared to other expense of $0.9 million in 2000. This increase in other income was related to a gain of $4.0 million from the sale of Keane's Help Desk operation, partially offset by the Company's decision to write-off certain equity investments totaling $2.0 million during the first quarter of 2001, and gains from the sale of investments.

        The Company's effective tax rate was 40.5% in 2001 and 2000.

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        Net cash provided from operations was $83.2 million during 2001, before proceeds from the sale of the Help Desk business of $15.7 million and the investment of $4.0 million for the repurchase of Keane shares, and $96.1 million during 2000. The Company is focused on continuing to optimize cash flow in order to fund potential mergers and acquisitions, stock repurchases, and to build long-term shareholder value.

RECENT ACCOUNTING PRONOUNCEMENTS

        In April 2002, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 145 (FAS 145), "Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections." Under FAS 145, gains and losses on extinguishments of debt are to be classified as income or loss from continuing operations rather than extraordinary items. The Company is required to adopt FAS 145 in the first quarter of 2003 and does not expect the adoption of this statement to have a material impact on its financial condition or results of operations.

        In July 2002, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 146 (FAS 146), "Accounting for Costs Associated with Exit or Disposal Activities." The statement requires companies to recognize costs associated with exit or disposal activities when they are incurred rather than at the date of a commitment to exit or disposal plan. Costs covered by the standard include lease termination costs and certain employee severance costs that are associated with a restructuring, branch closing, or other exit disposal activity. This statement is effective for exit or disposal activities initiated after December 31, 2002. FAS 146 may affect the timing of the Company's recognition of future exit or disposal costs, if any.

        In November 2002, the Financial Accounting Standards Board issued Interpretation No. 45 (FIN 45), "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others." The statement requires a guarantor to record certain guarantees at fair value and to make significant new disclosures, even when the likelihood of making any payments under the guarantee is remote. The interpretation and its disclosure requirements are effective for financial statements of interim or annual periods ending after December 15, 2002. The interpretation's initial recognition and initial measurement provisions are applicable on a prospective basis to guarantees issued or modified after December 31, 2002. The guarantor's previous accounting for guarantees issued prior to December 31, 2002 should not be revised or restated as a result of this interpretation.

        On December 31, 2002, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 148 (FAS 148) "Accounting for Stock-Based Compensation—Transition and Disclosure," an amendment to FAS 123, "Accounting for Stock-Based Compensation." The statement provides three transition methods for entities electing to adopt the fair value recognition provisions of Statement 123 for stock-based employee compensation. FAS 148 also amends the disclosure provisions of FAS 123 to require prominent disclosure about the effects of an entity's accounting policy decisions with respect to stock-based compensation on reported net income and earnings per share in annual and interim financial statements. The statement is effective for fiscal years ending after December 15, 2002. Currently, the Company does not elect to transition from the intrinsic value method of accounting for stock-based compensation to the fair value method. Adoption of disclosure provisions of this statement will not impact the Company's financial condition or results of operations.

        In January 2003, the Financial Accounting Standards Board issued Interpretation No. 46 (FIN 46), "Consolidation of Variable Interest Entities," which requires the consolidation of a variable interest entity, as defined by its primary beneficiary. Primary beneficiaries are those companies that are subject to a majority of the risk of loss or entitled to receive a majority of the entity's residual returns, or both. In determining whether it is the primary beneficiary of a variable interest entity, an entity with a

26

variable interest shall treat variable interests in that same entity held by its related parties as its own interests.

        The Company is presently evaluating whether or not City Square and Gateway LLC are variable interest entities and, if so, whether or not the Company is the primary beneficiary of these entities.

        If the Company determines that City Square or Gateway LLC, or both, are variable interest entities of which they are the primary beneficiary, the Company will be required to consolidate the financial position and results of operation of the entities for which it determines it is the primary beneficiary. Such consolidation will be required beginning July 1, 2003.

        If the Company concludes it is not required to consolidate either of these entities, the Company will continue to account for its lease with City Square consistent with its past practice. As for its lease with Gateway LLC, if the Company concludes it is not required to consolidate this entity, the Company will amortize the asset and liability recorded during the construction of the facility, and believes the net effect of such amortization included in its operating results will approximate the rent expense resulting from payments it is required to make under the lease.

LIQUIDITY AND CAPITAL RESOURCES

        The Company's cash and investments at December 31, 2002 decreased to $68.3 million from $129.2 million at December 31, 2001. This decrease was primarily attributable to the cost of the SignalTree Solutions acquisition of $68.2 million, which occurred in March of 2002, along with the cost associated with the Company's stock repurchase program, which totaled $54.1 million for the year. The Company experienced strong operating cash flow of $56.7 million, of which, $50.0 million was related to its continuing effort to decrease its Days Sales Outstanding (DSO), which helped fund its stock repurchase programs. The decrease in accounts receivable was offset additionally by purchases of property and equipment of $7.8 million.

        On September 21, 2001, the Company announced that its Board of Directors had authorized the Company to repurchase up to 1,542,800 shares of its common stock over the next 12 months. A total of 175,000 shares of common stock were repurchased under this authorization during the second quarter of 2002, at an average price of $12.88 for a cost to $2.2 million. The remaining authorized amount of 1,367,800 shares, which would have expired on September 18, 2002, was added to the July 25, 2002 share authorization amount of 3,632,200 shares, for a total of 5 million shares authorized. The Company completed the purchase of the total authorized amount during the fourth quarter of 2002. The Company's total investment in this authorized share repurchase was $39.1 million at an average price per share of $7.83.

        On October 25, 2002, the Board of Directors authorized the Company to repurchase an additional 5 million shares of its common stock over the next 12 months. The repurchases may be made on the open market or in negotiated transactions, and the timing and amount of shares repurchased will be determined by the Company's management based on its evaluation of market and economic conditions and other factors. During the fourth quarter of 2002 the Company purchased 1,323,600 shares of its common stock under this authorization for a total investment of $12.7 million at an average price per share of $9.59. The remaining authorized amount is 3,676,400 shares.

        Between May 1999 and December 31, 2002, the Company has invested $163.0 million to repurchase 11,955,800 shares of its common stock under seven separate authorizations.

        During 2002, the Company paid $16.5 million associated with restructuring charges from previous years. Refer to Note N to the audited condensed consolidated financial statements for a summary of the restructuring activity.

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        On September 25, 2002, the Company completed an acquisition of a business complementary to the Company's business strategy. The Company purchased all of the stock of the acquired business at a total cost of $6.2 million, consisting of $2.9 million in cash along with a note payable for $3.0 million and the remaining balance related to transaction costs. The note payable has an initial term of one year and may be settled, at the option of the holder, through cash payments or through services rendered by the Company to the holder. Based upon certain earn-out targets and other criteria, future consideration related to the acquisition could amount to $6.9 million.

        On February 10, 2003, the Company received a $7.3 million award in connection with an arbitration proceeding initiated by the Company in 2000 against Signal Corporation for a breach of an agreement between Signal Corporation and the Company's Federal Systems subsidiary.

        On February 28, 2003, the Company entered into a new $50.0 million revolving credit agreement with two banks. The credit facility replaces the previous $10 million demand line of credit, which expired in July 2002. The terms of the credit facility require the Company to maintain a maximum total funded debt and other financial ratios. Based on the Company's current operating plan, the Company believes that its cash, cash equivalents, and marketable securities, cash flows from operations, and its new line of credit will be sufficient to meet its current capital requirements for at least the next twelve months.

        In 2002, the Company financed its operations exclusively through its ability to generate cash from operations. If the Company were to experience a decrease in revenue as a result of a decrease in demand for its services or a decrease in its ability to collect receivables, the Company would be required to curtail discretionary spending related to SG&A expenses and adjust its workforce in an effort to maintain profitability. The Company has no significant debt but does have commitments for cash as follows:

	Payments due by period (in millions)
Contractual obligations	Less than 1 year		1-3 years	4-5 years	After 5 years	Total
Capital lease obligations	$	0.9	0.9			$	1.8
Operating leases		25.7	35.6	15.2	28.4		104.9
Total contractual cash obligations	$	26.6	36.5	15.2	28.4	$	106.7

        The Company's material commitments are primarily related to office rentals and capital expenditures. Contractual obligations related to operating leases reflect existing rental leases and the proposed new corporate facility as noted in Footnote J "Related Parties, Commitments and Contingencies."

OFF-BALANCE SHEET ARRANGEMENTS

        In January 2003, the Financial Accounting Standards Board issued Interpretation No. 46 (FIN 46), "Consolidation of Variable Interest Entities," which requires the consolidation of a variable interest entity, as defined, by its primary beneficiary. Currently the Company does not consider any off balance sheet arrangements with respect to any variable interest entities. However, the Company is presently evaluating whether or not City Square or Gateway LLC, or both, are variable interest entities and, if so, whether or not the Company is the primary beneficiary of these entities.

        If the Company determines that City Square or Gateway LLC, or both, are variable interest entities, the Company will be required to consolidate the financial position and results of operations of the entities. Such consolidation will be required beginning July 1, 2003.

        In November 2002, the Financial Accounting Standards Board issued Interpretation No. 45 (FIN 45), "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect

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Guarantees of Indebtedness of Others." The statement requires a guarantor to record certain guarantees at fair value and to make significant new disclosures, even when the likelihood of making any payments under the guarantee is remote. The interpretation and its disclosure requirements are effective for financial statements of interim or annual periods ending after December 15, 2002. The interpretation's initial recognition and initial measurement provisions are applicable on a prospective basis to guarantees issued or modified after December 31, 2002. Under FIN 45, the guarantor's previous accounting for guarantees issued prior to December 31, 2002 will not be revised or restated.

        The Company is a guarantor with respect to a line of credit for Innovate EC, an entity in which the Company acquired a minor equity position as a result of a previous acquisition. The total line of credit is for $600,000. The Company guarantees $300,000 of this obligation. The line is subject to review by the lending institution. The Company would be required to meet its guarantor obligation in the event the lending institution refuses to extend the credit facility and Innovate EC is unable to satisfy its obligation.

IMPACT OF INFLATION AND CHANGING PRICES

        Inflationary increases in costs have not been material in recent years and, to the extent permitted by competitive pressures, are passed on to clients through increased billing rates. Rates charged by the Company are based on the cost of labor and market conditions within the industry.

CERTAIN FACTORS THAT MAY AFFECT FUTURE RESULTS

        The following important factors, among others, could cause actual results to differ materially from those indicated by forward-looking statements made in this Annual Report on Form 10-K and presented elsewhere by management from time to time.

        Keane's quarterly operating results have varied, and are likely to continue to vary significantly. This may result in volatility in the market price of Keane's shares.    Keane has experienced and expects to continue to experience fluctuations in its quarterly results. Keane's gross margins vary based on a variety of factors including employee utilization rates and the number and type of services performed by Keane during a particular period. A variety of factors influence Keane's revenue in a particular quarter, including:

•

general economic conditions which may influence investment decisions or cause downsizing;



•

the number and requirements of client engagements;



•

employee utilization rates;



•

changes in the rates Keane can charge clients for services;



•

acquisitions; and



•

other factors, many of which are beyond Keane's control.

        A significant portion of Keane's expenses do not vary relative to revenue. As a result, if revenue in a particular quarter does not meet expectations, Keane's operating results could be materially adversely affected, which in turn may have a material adverse impact on the market price of Keane common stock. In addition, many of Keane's engagements are terminable without client penalty. An unanticipated termination of a major project could result in an increase in underutilized employees and a decrease in revenue and profits.

        Keane has pursued, and intends to continue to pursue, strategic acquisitions. Failure to successfully integrate acquired businesses or assets may adversely affect Keane's financial performance.    In the past five years, Keane has grown significantly through acquisitions. From January 1, 1999 through December 31, 2002, Keane has completed eleven acquisitions. The aggregate

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merger and consideration costs of these acquisitions totaled approximately $359.8 million. Keane's future growth may be based in part on selected acquisitions. At any given time, Keane may be in various stages of considering acquisition opportunities. Keane can provide no assurances that it will be able to find and identify desirable acquisition targets or that it will be successful in entering into a definitive agreement with any one target. In addition, even if Keane reaches a definitive agreement with a target, there is no assurance that Keane will complete any future acquisition.

        Keane typically anticipates that each acquisition will bring benefits, such as an increase in revenue. Prior to completing an acquisition, however, it is difficult to determine if Keane can realize these benefits. Accordingly, there is a risk that an acquired company may not achieve an increase in revenue or other benefits for Keane. In addition, an acquisition may result in unexpected costs, expenses, and liabilities. Any of these events could have a material adverse effect on Keane's business, financial condition, and results of operations.

        The process of integrating acquired companies into Keane's existing business may also result in unforeseen difficulties. Unforeseen operating difficulties may absorb significant management attention, which Keane might otherwise devote to its existing business. In addition, the process may require significant financial resources that Keane might otherwise allocate to other activities, including the ongoing development or expansion of Keane's existing operations.

        Finally, future acquisitions could result in Keane having to incur additional debt and/or contingent liabilities. Any of these possibilities could have a material adverse effect on Keane's business, financial condition, and result of operations.

        Keane may not realize the expected benefits or synergies of its acquisitions of Metro and SignalTree Solutions.    Although the integration of the operations and personnel of Metro, which Keane acquired in November 2001, and SignalTree Solutions, Inc., which Keane acquired in March 2002, are complete, Keane may not achieve the anticipated benefits or synergies of each acquisition. Achieving the benefits of these acquisitions will depend in part on Keane's ability to retain clients acquired through the mergers and cross-sell services to these new clients and the ability of Keane's sales organization to satisfactorily meet the needs of these new clients. If Keane is unable to retain Metro and SignalTree Solutions clients or effectively cross-sell to such clients, the combined company could suffer a loss of momentum in the activities of its business, which could have a material adverse effect on Keane's business, financial condition, and results of operations.

        Keane faces significant competition for its services, and its failure to remain competitive could limit its ability to maintain existing clients or attract new clients.    The market for Keane's services is highly competitive. The technology for custom software services can change rapidly. The market is fragmented, and no company holds a dominant position. Consequently, Keane's competition for client assignments and experienced personnel varies significantly from city to city and by the type of service provided. Some of Keane's competitors are larger and have greater technical, financial, and marketing resources and greater name recognition in the markets they serve than does Keane. In addition, clients may elect to increase their internal information systems resources to satisfy their custom software development and integration needs.

        In the healthcare software systems market, Keane competes with some companies that are larger in the healthcare market and have greater financial resources than Keane. Keane believes that significant competitive factors in the healthcare software systems market include size and demonstrated ability to provide service to targeted healthcare markets.

        Keane may not be able to compete successfully against current or future competitors. In addition, competitive pressures faced by Keane may materially adversely affect its business, financial condition, and results of operations.

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        Keane conducts business in the United Kingdom, Canada, and India, which exposes it to a number of difficulties inherent in international activities.    As a result of its acquisition of SignalTree Solutions in March 2002, Keane has two software development facilities in India and has added approximately 400 technical professionals to its professional services organization. India is currently experiencing conflicts with Pakistan over the disputed territory of Kashmir as well as clashes between different religious groups within the country. These conflicts, in addition to other unpredictable developments in the political, economic, and social conditions in India, could eliminate or reduce the availability of these development and professional services. If access to these services were to be unexpectedly eliminated or significantly reduced, Keane's ability to meet development objectives important to its new strategy would be hindered, and its business could be harmed.

        If Keane fails to manage its geographically dispersed organization, it may fail to meet or exceed its financial objectives and its revenues may decline. Keane performs development activities in the United States, Canada, and in India, and has offices throughout the United States, the United Kingdom, Canada, and India. This geographic dispersion requires substantial management resources that locally-based competitors do not need to devote to their operations.

        Keane's operations in the United Kingdom, Canada, and India are subject to currency exchange rate fluctuations, foreign exchange restrictions, changes in taxation, and other difficulties in managing operations overseas. Keane may not be successful in its international operations.

        Keane may be unable to redeploy its professionals effectively if engagements are terminated unexpectedly, which would adversely affect its results of operations.    Keane's clients can cancel or reduce the scope of their engagements with Keane on short notice. If they do so, Keane may be unable to reassign its professionals to new engagements without delay. The cancellation or reduction in scope of an engagement could, therefore, reduce the utilization rate of Keane's professionals, which would have a negative impact on Keane's business, financial condition, and results of operations.

        As a result of these and other factors, the Company's past financial performance should not be relied on as an indication of future performance. Keane believes that period-to-period comparisons of its financial results are not necessarily meaningful and it expects that results of operations may fluctuate from period to period in the future.

        Keane's growth could be limited if it is unable to attract personnel in the Information Technology and business consulting industries.    Keane believes that its future success will depend in large part on its ability to continue to attract and retain highly skilled technical and management personnel. The competition for such personnel is intense. Keane may not succeed in attracting and retaining the personnel necessary to develop its business. If Keane does not, its business, financial condition, and result of operations could be materially adversely affected.

ITEM 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

        The Company does not engage in trading market-risk, sensitive instruments or purchasing hedging instruments or "other than trading" instruments that are likely to expose the Company to market risk, whether interest rate, foreign currency exchange, and commodity price or equity price risk. The Company has not purchased options or entered into swaps or forward or futures contracts. The Company's primary market risk exposure is that of interest rate risk on its investments, which would affect the carrying value of those investments. Since January 1, 2001, the United States Federal Reserve Board has significantly decreased certain benchmark interest rates, which has led to a general decline in market interest rates. The decline in market interest rates has resulted in a significant decline in the Company's interest income. Additionally, the Company transacts business in the United Kingdom, Canada, and India and as such has exposure associated with movement in foreign currency exchange rates.

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ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of independent auditors	33
Consolidated balance sheets as of December 31, 2002 and 2001	34
Consolidated statements of income for the years ended December 31, 2002, 2001, and 2000	35
Consolidated statements of stockholders' equity for the years ended December 31, 2002, 2001, and 2000	36
Consolidated statement of cash flows for the years ended December 31, 2002, 2001, and 2000	37
Notes to consolidated financial statements	38-67

32

REPORT OF INDEPENDENT AUDITORS
THE BOARD OF DIRECTORS AND STOCKHOLDERS OF KEANE, INC.:

        We have audited the accompanying consolidated balance sheets of Keane, Inc. as of December 31, 2002 and 2001, and the related consolidated statements of income, stockholders' equity, and cash flows for each of the three years in the period ended December 31, 2002. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

        We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

        In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Keane, Inc. at December 31, 2002 and 2001, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2002, in conformity with accounting principles generally accepted in the United States.

        As discussed in Note E to the consolidated financial statements, in 2002 the Company changed its method of accounting for goodwill and other intangible assets in accordance with the adoption of Statement of Financial Accounting Standards No. 142.

/s/ Ernst and Young LLP

Boston, Massachusetts
February 10, 2003, except for Note P,
as to which the date is February 28, 2003

33

KEANE, INC.

CONSOLIDATED BALANCE SHEETS

			As of December 31,
			2002			2001
			(In thousands except share amounts)
Assets
Current:
	Cash and cash equivalents		$	46,383		$	65,556
	Marketable securities			21,872			63,687
	Accounts receivable, net:
		Trade		129,432			160,172
		Other		1,004			3,109
	Prepaid expenses and deferred taxes			37,430			20,026
		Total current assets		236,121			312,550
Property and equipment, net				24,729			20,701
Construction in progress				40,888			13,000
Goodwill, net				277,435			224,891
Customer lists, net				69,193			53,659
Other intangible assets, net				17,613			26,292
Deferred taxes and other assets, net				19,695			28,810
			$	685,674		$	679,903
Liabilities
Current:
	Accounts payable			11,986			13,723
	Accrued expenses and other liabilities			61,152			51,980
	Accrued compensation			36,346			34,161
	Note payable			3,100			—
	Accrued income taxes			81			4,675
	Unearned income			11,535			5,178
	Current capital lease obligations			887			1,154
		Total current liabilities		125,087			110,871
Accrued long-term construction-in-progress costs				40,888			13,000
Deferred income taxes				28,343			25,656
Long-term portion of capital lease obligations				772			1,203
Stockholders' equity
Preferred stock, par value $.01, authorized 2,000,000 shares, issued none				—			—
Common stock, par value $.10, authorized 200,000,000 shares, issued and outstanding 75,545,386 at December 31, 2002 and 75,223,971 at December 31, 2001				7,555			7,522
Class B common stock, par value $.10, authorized 503,797 shares, issued and outstanding 284,604 at December 31, 2002 and 284,891 at December 31, 2001				28			28
Additional paid-in capital				166,598			162,269
Accumulated other comprehensive income				(1,411	)		(2,007	)
Retained earnings				369,542			361,361
Less treasury stock at cost, 6,309,416 shares at December 31, 2002				(51,728	)		—
		Total Stockholders' equity		490,584			529,173
			$	685,674		$	679,903

The accompanying notes are an integral part of the consolidated financial statements.

34

KEANE, INC.

CONSOLIDATED STATEMENTS OF INCOME

	For the years ended December 31,
	2002			2001			2000
	(In thousands except per share amounts)
Total revenues	$	873,203		$	779,159		$	871,956
Salaries, wages and other direct costs		630,047			547,883			621,208
Selling, general, and administrative expenses		198,813			186,708			201,852
Amortization of goodwill and other intangible assets		16,382			14,457			12,351
Restructuring charges		17,604			10,358			8,624
Operating income		10,357			19,753			27,921
Interest and dividend income		2,526			7,043			7,725
Interest expense		255			295			588
Other (income) expenses, net		(1,008	)		(2,720	)		872
Income before income taxes		13,636			29,221			34,186
Provision for income taxes		5,455			11,834			13,832
Net income	$	8,181		$	17,387		$	20,354
Net income per share (basic)	$	0.11		$	0.25		$	0.29
Net income per share (diluted)	$	0.11		$	0.25		$	0.29
Weighted average common shares outstanding (basic)		74,018			68,474			69,646
Weighted average common shares and common share equivalents outstanding (diluted)		74,406			69,396			69,993

The accompanying notes are an integral part of the consolidated financial statements.

35

KEANE, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

				Class B Common stock													Treasury stock at cost
For the years ended December 31, 2000, 2001 and 2002	Common stock											Other Compre- hensive income
									Additional paid-in capital						Retained earnings							Total stockholders' equity
	Shares	Amount		Shares		Amount											Shares		Amount
	(In thousands except share amounts)
Balance January 1, 2000	72,085,356	$	7,208	285,112		$	29		$	120,810		$	(2,027	)	$	323,620	(1,319,396	)	$	(26,841	)	$	422,799
Common stock issued under stock option and employee purchase plans	360,524		36							320							394,794			10,389			10,745
Conversions of class B common stock into common stock	221		1	(221	)		(1	)															—
Income tax benefit from stock option plans										314													314
Repurchase of common stock																	(4,131,000	)		(80,925	)		(80,925	)
Investments valuation adjustment													538										538
Foreign currency translation													(3,148	)									(3,148	)
Net income																20,354							20,354
Comprehensive income																							17,744
Balance December 31, 2000	72,446,101		7,245	284,891			28			121,444			(4,637	)		343,974	(5,055,602	)		(97,377	)		370,677
Common stock issued under stock option and employee purchase plans	18,000		1							(8,894	)						737,348			15,186			6,293
Common stock issued in connection with acquisition of Metro Information Services, Inc.	2,759,870		276							49,460							4,644,454			86,236			135,972
Income tax benefit from stock option plans										259													259
Repurchase of common stock																	(326,200	)		(4,045	)		(4,045	)
Investments valuation adjustment													1,181										1,181
Foreign currency translation adjustment													1,449										1,449
Net income																17,387							17,387
Comprehensive income																							20,017
Balance December 31, 2001	75,223,971		7,522	284,891			28			162,269			(2,007	)		361,361	—			—			529,173
Common stock issued under stock option and employee purchase plans	321,128		33							4,045							189,184			2,364			6,442
Conversions of common stock into common stock	287		—	(287	)		—																—
Income tax benefit from stock option plans										284													284
Repurchase of common stock																	(6,498,600	)		(54,092	)		(54,092	)
Minimum pension liability													(1,159	)									(1,159	)
Investments valuation adjustment													(273	)									(273	)
Foreign currency translation													2,028										2,028
Net income																8,181							8,181
Comprehensive income																							8,777
Balance December 31, 2002	75,545,386	$	7,555	284,604		$	28		$	166,598		$	(1,411	)	$	369,542	(6,309,416	)	$	(51,728	)	$	490,584

The accompanying notes are an integral part of the consolidated financial statements.

36

KEANE, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

			For the years ended December 31,
			2002			2001			2000
			(In thousands)
Cash flows from operating activities:
Net income			$	8,181		$	17,387		$	20,354
Adjustments to reconcile net income to net cash provided by operating activities:
	Depreciation and amortization			27,452			26,113			28,991
	Deferred income taxes			(3,796	)		1,808			(5,444	)
	Provision for doubtful accounts			(5,514	)		2,024			3,086
	Loss on sale of property and equipment			(46	)		(167	)		—
	Gain on sale of investments			(387	)		(1,233	)		—
	Non-cash restructuring charges			1,847			825			3,403
	Impairment of long-term investments			—			2,000			—
	Gain on sale of business unit			—			(4,302	)		—
	Income tax benefit from stock options			284			259			314
	Changes in operating assets and liabilities, net of acquisitions:
		Decrease in accounts receivable		49,888			41,691			48,432
		(Decrease) increase in prepaid expenses and other assets		(10,754	)		(1,065	)		6,748
		(Decrease) increase in accounts payable, accrued expenses, unearned income and other liabilities		(5,789	)		758			(18,415	)
		(Decrease) increase in income taxes payable		(4,695	)		(2,916	)		8,609
Net cash provided by operating activities				56,671			83,182			96,078
Cash flows from investing activities:
Purchase of investments				(27,859	)		(104,591	)		(30,875	)
Sale and maturities of investments				69,788			102,340			60,191
Purchase of property and equipment				(7,802	)		(7,609	)		(11,386	)
Proceeds from the sale of property and equipment				410			419			182
Proceeds from sale of business unit				—			16,087			—
Payments for current year acquisitions				(63,236	)		(7,148	)		(32,516	)
Payments for prior years acquisitions				(184	)		(1,266	)		(3,756	)
Net cash used for investing activities				(28,883	)		(1,768	)		(18,160	)
Cash flows from financing activities:
Payments on acquired debt				—			(65,938	)		—
Payments under long-term debt, net				—			(5,006	)		(3,523	)
Principal payments under capital lease obligations				(1,227	)		(1,303	)		(1,376	)
Proceeds from issuance of common stock				6,330			6,293			10,745
Repurchase of common stock				(54,092	)		(4,045	)		(80,925	)
Net cash used for financing activities				(48,989	)		(69,999	)		(75,079	)
Effect of exchange rate changes on cash				2,028			358			(2,074	)
Net (decrease) increase in cash and cash equivalents				(19,173	)		11,773			765
Cash and cash equivalents at beginning of year				65,556			53,783			53,018
Cash and cash equivalents at end of year			$	46,383		$	65,556		$	53,783
Supplemental information:
Income taxes paid			$	16,511		$	14,922		$	10,469

The accompanying notes are an integral part of the consolidated financial statements.

37

KEANE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, 2002, 2001, and 2000

(All amounts in thousands unless stated otherwise and except for share and per share amounts).

A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

        The consolidated financial statements include the accounts of Keane, Inc. (the "Company") and all of its wholly owned subsidiaries. Upon consolidation, all significant intercompany accounts and transactions are eliminated. The Company's fiscal year ends on December 31st.

        NATURE OF OPERATIONS:    Keane provides Information Technology (IT) and business consulting services. The Company divides its business into three main lines: Business Consulting, Application Development and Integration (AD&I), and Application Development and Management Outsourcing (Applications Outsourcing).

        Keane's clients consist primarily of Global 2000 organizations, government agencies, and healthcare organizations. The Company services clients through branch office operations in major markets of North America and the United Kingdom. These offices are supported by Keane Consulting Group (KCG), a centralized Strategic Practices Group representing Keane's core services and key competencies, and seven Advanced Development Centers ("ADC") in the United States, Canada, and India. This delivery structure allows the Company to provide clients with world-class capabilities representing the organizational experience and best practices of the entire Company on a responsive and cost-effective local level.

        REVENUE RECOGNITION:    The Company provides three synergistic service offerings: Business Consulting, AD&I, and Applications Outsourcing. The Company recognizes revenue primarily through either time and materials or fixed price basis for each type of offering.

        Revenue on time and materials contracts is recorded at contractually agreed upon rates. For these types of contracts, revenue is recognized as the services are performed. In some cases, the Company invoices customers prior to performing the service, resulting in deferred revenues, which is reported as a current liability in the consolidated financial statements.

        For fixed price contracts, revenue is recognized using the percentage of completion method. The Company uses estimated labor-to-complete to measure percentage complete. Percentage of completion recognition relies on accurate estimates of cost, scope, and duration of each engagement. If the Company does not accurately estimate the cost or scope or does not manage its projects properly within the expected period of the project, future revenues may be negatively impacted. Adjustments to revenue are recorded in the period of which the over/under estimate is detected. Management regularly reviews profitability and underlying estimates for fixed price contracts. Losses, if any, on fixed price contracts are recorded in the period in which the loss is identified.

        Revenue associated with application software products is recognized as the software products are installed and as implementation services are delivered. Software maintenance fees on installed products are recognized on a pro-rated basis over the term of the agreement.

        For the majority of outsourcing engagements, the Company provides a specific level of service each month for which it bills a standard monthly amount. Revenue for these engagements can be recognized in monthly installments over the billable portion of the contract or on a time and materials basis. Installment amounts may be adjusted to reflect changes in staffing requirements or service level agreements. Costs of transitioning the employees and ensuring the Company meets required service level agreements may be capitalized over defined periods of time.

38

        ALLOWANCE FOR BAD DEBTS:    Each accounting period, Keane evaluates accounts receivable for risk associated with a client's inability to make contractual payments or unresolved issues with the adequacy of Keane's services. Billed and unbilled receivables that are specifically identified as being at risk are provided for with a charge to revenue in the period the risk is identified. Considerable judgment is used in assessing the ultimate realization of these receivables including reviewing the financial stability of the client, evaluating the successful mitigation of service delivery disputes, and gauging current market conditions. If the Company's evaluation of service delivery issues or a client's ability to pay is incorrect, the Company may incur future charges to revenue.

        FOREIGN CURRENCY TRANSLATION:    For the Company's subsidiaries in Canada, the United Kingdom, and India, the Canadian dollar, British pound, and Indian rupee, respectively, are the functional currencies. All assets and liabilities of the Company's Canadian, English, and Indian subsidiaries are translated at exchange rates in effect at the end of the period. Income and expenses are translated at rates that approximate those in effect on transaction dates. The translation differences are charged or credited directly to the translation adjustment account included as part of stockholders' equity. Realized foreign exchange gains and losses are included in other income (expense).

        CASH AND CASH EQUIVALENTS:    Cash and cash equivalents consist of highly liquid investments with a maturity of three months or less at the time of purchase. Cash equivalents are currently designated as available-for-sale. Cash equivalents at December 31, 2002 included investments in commercial paper ($24.5 million) and money market funds ($12.8 million). Cash equivalents at December 31, 2001 included investments in commercial paper ($15.0 million) and money market funds ($33.8 million).

        FINANCIAL INSTRUMENTS:    The amounts reflected in the consolidated balance sheets for cash and cash equivalents, accounts receivable, and accounts payable approximate their fair value due to their short maturities. Based on the borrowing rates currently available to the Company for bank loans with similar terms and maturities, the fair value of the Company's debt obligations approximates their carrying value. Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of investments and trade receivables. The Company's cash, cash equivalents, and investments are held with a local financial institution. The Company's customer base consists of geographically dispersed customers in many different industries. Therefore, concentration of credit risk with respect to trade receivables is not considered significant.

        MARKETABLE SECURITIES:    Marketable securities are stated at fair value as reported by the investment custodian. The Company determines the appropriate classification of debt and equity securities at the time of purchase and re-evaluates such designations as of each balance sheet date. Marketable securities are currently designated as available-for-sale, and as such, unrealized gains and losses are reported in Other Comprehensive Income. The Company invests primarily in tax-exempt municipal bonds with at least a single A rating by Moody's grading service. In addition, the Company invests in United States government obligations and corporate bonds. All investments must have a maturity date of not more than five years. In the case of a puttable security, the put date will be within five years. The Company views its marketable securities portfolio as available for use in its current operations, and accordingly, these marketable securities are classified as current assets in the

39

accompanying balance sheet. As of December 31, 2002, the Company's marketable securities reflect an increase in market value of $0.3 million, which has been reflected in the statement of stockholders' equity. At December 31, 2001, the Company's marketable securities reflected an increase in market value of $0.8 million. Realized gains and losses, as well as interest, dividends, and capital gain/loss distributions on all securities, are included in income.

        PROPERTY AND EQUIPMENT:    Property and equipment is carried at cost less accumulated depreciation and amortization. Property and equipment are reviewed periodically for indicators of impairment and assets are written down as appropriate. Depreciation is computed on a straight-line basis over estimated useful lives of 25 to 40 years for buildings and improvements, and two to seven years for office equipment, computer equipment, and software. Leasehold improvements are amortized over the shorter of the estimated useful life of the improvement or the term of the lease not to exceed seven years. Repair and maintenance costs are charged to expense. Upon disposition, the cost and related accumulated depreciation are removed from the accounts, and any gain or loss is included in income.

        GOODWILL AND INTANGIBLE ASSETS:    Statement of Financial Accounting Standards No. 142 (FAS 142), "Goodwill and Other Intangible Assets," clarified criteria to recognize intangible assets from goodwill and established requirements to cease amortizing goodwill and indefinite lived intangibles and to begin an annual review for impairment. On January 1, 2002, the Company adopted FAS 142 and was, therefore, required to perform an impairment test on its goodwill and other intangibles with indefinite lives during the first six months of 2002, and then on a periodic basis thereafter. The Company's initial goodwill impairment analysis was completed during the second quarter of 2002, and was based on January 1, 2002 balances. Through this analysis it was determined that there was no impairment as of that date. Subsequently, during the fourth quarter of 2002, the Company completed its annual impairment review based on September 30, 2002 balances and determined that there was no impairment as of that date. Future changes in estimates may result in a non-cash goodwill impairment that could have a material adverse impact on the Company's financial condition and results of operations. As of December 31, 2002 and 2001, respectively, the Company reported total intangibles of customer lists and other intangibles of $86.8 million and $79.9 million. Intangibles are amortized on a straight-line basis over three to 15 years.

        The Company periodically reviews its identifiable intangible assets for impairment in accordance with Statement FAS 144. In determining whether an intangible asset is impaired, the Company must make assumptions regarding estimated future cash flows from the asset, intended use of the asset, and other related factors. If the estimates or the related assumptions used to determine the value of the intangible assets change, the Company may be required to record impairment charges for these assets.

        INCOME TAXES:    Keane accounts for income taxes in accordance with Statement of Financial Accounting Standards No. 109 (FAS 109), "Accounting for Income Taxes," which requires that deferred tax assets and liabilities be recognized using enacted tax rates for the effect of temporary differences between the book and tax basis of recorded assets and liabilities. FAS 109 also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized. The Company accounts for income taxes under the asset and

40

liability method, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.

        COMPREHENSIVE INCOME:    Statement of Financial Accounting Standards No. 130 (FAS 130), "Reporting Comprehensive Income," establishes rules for the reporting and display of comprehensive income and its components. Components of comprehensive income include net income and certain transactions that have generally been reported in the consolidated statement of stockholders' equity. Other comprehensive income is comprised of currency translation adjustments, available-for-sale securities valuation adjustments, and adjustments related to a foreign defined benefit plan. At December 31, 2002, accumulated other comprehensive income was comprised of foreign currency translation adjustment of $0.4 million, securities valuation adjustment of ($0.2) million, net of tax, and defined benefit plan adjustment of $1.2 million, net of tax. At December 31, 2001, accumulated other comprehensive income was comprised of foreign currency translation adjustment of $2.5 million and securities valuation adjustment of $(0.5) million, net of tax.

        STOCK-BASED COMPENSATION:    The Company grants stock options for a fixed number of shares to employees with an exercise price equal to the closing price of the shares at the date of grant. The Company adopted the disclosure provisions of Statement of Financial Accounting Standards 123 (FAS 123), "Accounting for Stock-Based Compensation," and applies APB Opinion 25, "Accounting for Stock Issued to Employees," to its grants of stock options. Accordingly, the Company recognizes no compensation expense for stock-based employee compensation, provided options are issued at the current market value. Had compensation cost for the Company's stock-based compensation plans been determined based on the fair value at the grant dates as calculated in accordance with FAS 123, the Company's net income and earnings per share for the years ended December 31, 2002, 2001 and 2000 would have been reduced to the pro forma amounts indicated below:

	For the years ended December 31,
	2002			2001		2000
Gross income—as reported	$	8,181		$	17,387	$	20,354
Less: Total stock-based employee compensation expense determined under the fair value method for all awards, net of tax effects		9,882			9,342		17,758
Net income—pro forma		(1,701	)		8,045		2,596
Net income per share—as reported (diluted)		0.11			0.25		0.29
Net (loss) income per share—pro forma (diluted)		(0.02	)		0.12		0.04

        The Company also grants restricted stock for a fixed number of shares to employees for nominal consideration. Compensation expense related to restricted stock awards is recorded ratably over the restriction period.

41

        LEGAL COSTS:    The Company accrues costs of settlement, damages, and under certain conditions, costs of defense when such costs are probable and estimable. Otherwise, such costs are expensed as incurred.

        USE OF ESTIMATES:    The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

        INDUSTRY SEGMENT INFORMATION:    Based on qualitative and quantitative criteria established by Statement of Financial Accounting Standards No. 131 (FAS 131), "Disclosures about Segments of an Enterprise and Related Information," the Company operates within one reportable segment: Professional Services. In this segment, the Company offers an integrated mix of end-to-end business solutions, such as Business Consulting (Plan), Application Development and Integration (Build), and Application Development and Management Outsourcing (Manage).

RECENT ACCOUNTING PRONOUNCEMENTS

        In April 2002, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 145 (FAS 145), "Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections." Under FAS 145, gains and losses on extinguishments of debt are to be classified as income or loss from continuing operations rather than extraordinary items. The Company is required to adopt FAS 145 in the first quarter of 2003 and does not expect the adoption of this statement to have a material impact on its financial condition or results of operations.

        In July 2002, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 146 (FAS 146), "Accounting for Costs Associated with Exit or Disposal Activities." The statement requires companies to recognize costs associated with exit or disposal activities when they are incurred rather than at the date of a commitment to exit or disposal plan. Costs covered by FAS 146 include lease termination costs and certain employee severance costs that are associated with a restructuring, branch closing, or other exit disposal activity. This statement is effective for exit or disposal activities initiated after December 31, 2002. FAS 146 may affect the timing of the Company's recognition of future exit or disposal costs, if any.

        In November 2002, the Financial Accounting Standards Board issued Interpretation No. 45 (FIN 45), "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others." FIN 45 requires a guarantor to record certain guarantees at fair value and to make significant new disclosures, even when the likelihood of making any payments under the guarantee is remote. The interpretation and its disclosure requirements are effective for financial statements of interim or annual periods ending after December 15, 2002. The interpretation's initial recognition and initial measurement provisions are applicable on a prospective basis to guarantees issued or modified after December 31, 2002. The guarantor's previous accounting for guarantees issued prior to December 31, 2002 should not be revised or restated due to the adoption of this interpretation.

42

        On December 31, 2002, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 148 (FAS 148), "Accounting for Stock-Based Compensation—Transition and Disclosure," an amendment to FAS 123, "Accounting for Stock-Based Compensation." The statement provides three transition methods for entities electing to adopt the fair value recognition provisions of Statement 123 for stock-based employee compensation. FAS 148 also amends the disclosure provisions of FAS 123 to require prominent disclosure about the effects of an entity's accounting policy decisions with respect to stock-based compensation on reported net income and earnings per share in annual and interim financial statements. The statement is effective for fiscal years ending after December 15, 2002. Currently, the Company does not elect to transition from the intrinsic value method of accounting for stock-based compensation to the fair value method. Adoption of disclosure provisions of this statement will not impact the Company's financial condition or results of operations.

        In January 2003, the Financial Accounting Standards Board issued Interpretation No. 46 (FIN 46), "Consolidation of Variable Interest Entities," which requires the consolidation of a variable interest entity, as defined, by its primary beneficiary. Primary beneficiaries are those companies that are subject to a majority of the risk of loss or entitled to receive a majority of the entity's residual returns, or both. In determining whether it is the primary beneficiary of a variable interest entity, an entity with a variable interest shall treat variable interests in that same entity held by its related parties as its own interests. The Company is currently evaluating the existence of variable interest entities, if any, and the impact of adopting the interpretation on the consolidated financial statements. Refer to Note J to the audited condensed consolidated financial statements for additional disclosures regarding related parties, commitments, and contingencies.

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B. MARKETABLE SECURITIES

        The following is a summary of available-for-sale securities:

			Gross unrealized
							Estimated fair value
	Cost		Gains		Losses
As of December 31, 2002
United States Government obligations	$	2,827	$	103	$	1	$	2,929
Corporate bonds		2,251		39		17		2,273
Municipal bonds		16,489		181		—		16,670
Total		21,567		323		18		21,872
Due in one year or less		3,960		—		—		3,946
Due after one year through three years		6,054		—		—		6,170
Due after three years		11,553		—		—		11,756
		21,567		—		—		21,872
As of December 31, 2001
United States Government obligations		30,017		338		11		30,344
Corporate bonds		27,906		651		285		28,272
Corporate passthroughs		4,997		75		1		5,071
Total		62,920		1,064		297		63,687
Due in one year or less		8,517		—		—		8,705
Due after one year through three years		22,927		—		—		23,133
Due after three years		31,476		—		—		31,849
	$	62,920	$	—	$	—	$	63,687

        Proceeds from the sale and maturity of available for sale securities were approximately $69.7 million, with $0.4 million realized as net gains, $102.3 million with $1.2 million realized as net gains, and $60.2 million with no realized gains or losses based on a specific identification method for the years ended 2002, 2001, and 2000, respectively.

C. TRADE ACCOUNTS RECEIVABLE

        Trade accounts receivable consists of the following:

	As of December 31,
	2002			2001
Billed	$	103,820		$	144,896
Unbilled		33,491			28,290
Allowance for doubtful accounts		(7,879	)		(13,014	)
Total	$	129,432		$	160,172

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        Trade accounts receivable is presented net of doubtful accounts. The activity in the allowance account is as follows:

	For the years ended December 31,
	2002			2001			2000
Beginning of year balance	$	13,014		$	10,990		$	7,904
Provision charged, net		1,893			10,258			6,778
Write-offs		(7,028	)		(8,234	)		(3,692	)
End of year balance	$	7,879		$	13,014		$	10,990

D. PROPERTY AND EQUIPMENT

        Property and equipment consist of the following:

	As of December 31,
	2002		2001
Buildings and improvements	$	6,768	$	2,599
Office equipment		63,955		52,537
Computer equipment and software		14,064		12,019
Leasehold improvements		10,504		10,752
Construction in progress		40,888		13,000
		136,179		90,907
Less accumulated depreciation and amortization		70,562		57,206
Total	$	65,617	$	33,701

        Depreciation expense totaled $11.0 million, $11.7 million, and $16.2 million in 2002, 2001, and 2000, respectively. Computer equipment and software includes assets arising from capital lease obligations at a cost of $3.1 million, $5.2 million, and $6.6 million with accumulated amortization totaling $1.8 million, $3.1 million, and $3.3 million in 2002, 2001, and 2000, respectively. Please see Footnote J Related Parties, Commitments, and Contingencies for additional information.

        Effective January 1, 2002, the Company adopted Statement of Financial Accounting Standards No. 144 (FAS 144), "Accounting for the Impairment or Disposal of Long-lived Assets." FAS No. 144 supersedes Statement of Financial Accounting Standards No. 121 (FAS 121), "Accounting for the Impairment of Long-lived Assets and for Long-lived Assets to Be Disposed of," and provides a single accounting model for long-lived assets to be disposed of. Adoption of this statement did not have a material effect on the Company's results of operations for the year ended December 31, 2002.

E. GOODWILL AND OTHER INTANGIBLE ASSETS

        Effective January 1, 2002, the Company adopted Statement of Financial Accounting Standards No. 142 (FAS 142), "Goodwill and Other Intangible Assets." Under FAS 142, goodwill and indefinite

45

lived intangible assets are no longer amortized but are reviewed annually (or more frequently if impairment indicators arise) for impairment. Separable intangible assets that are not deemed to have an indefinite life will continue to be amortized over their useful lives. The amortization provisions of FAS 142 apply to goodwill and intangible assets acquired on or after June 30, 2001. With respect to goodwill and intangible assets acquired prior to June 30, 2001, companies are required to adopt FAS 142 in their first fiscal year beginning after December 15, 2001. Because of the different transition dates for goodwill and intangible assets acquired on or before June 30, 2001 and those acquired after that date, pre-existing goodwill and intangibles will be amortized during this transition period until adoption whereas new goodwill and indefinite lived intangible assets acquired after June 30, 2001 will not.

        The following table discloses the reconciliation of reported net income to the adjusted net income.

GOODWILL AND OTHER INTANGIBLE ASSETS—ADOPTION OF FAS 142

		For the years ended December 31,
		2002		2001		2000
Reported net income		$	8,181	$	17,387	$	20,354
Goodwill amortization			—		3,177		3,133
Closing costs amortization			—		43		32
Employee value amortization			—		1,165		944
Adjusted net income			8,181		21,772		24,463
Basic earnings per share:
	Reported net income		0.11		0.25		0.29
	Goodwill amortization		—		0.05		0.05
	Closing costs amortization		—		—		—
	Employee value amortization		—		0.02		0.01
	Adjusted net income per share		0.11		0.32		0.35
Diluted earnings per share:
	Reported net income		0.11		0.25		0.29
	Goodwill amortization		—		0.05		0.05
	Closing costs amortization		—		—		—
	Employee value amortization		—		0.02		0.01
	Adjusted net income per share	$	0.11	$	0.32	$	0.35

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Amortized intangible assets:	Gross carrying amount		Accumulated amortization			Net
As of December 31, 2002
Customer lists	$	81,532	$	(12,339	)	$	69,193
Contracts		29,250		(19,158	)		10,092
Non-compete agreements		7,524		(4,601	)		2,923
Technology		7,775		(3,177	)		4,598
Total	$	126,081	$	(39,275	)	$	86,806
As of December 31, 2001
Customer lists	$	56,132	$	(2,473	)	$	53,659
Contracts		29,250		(16,261	)		12,989
Non-compete agreements		4,824		(2,320	)		2,504
Technology		7,775		(2,066	)		5,709
Total	$	97,981	$	(23,120	)	$	74,861

		For the years ended December 31,
		2002		2001
Aggregate amortization expense		$	16,382	$	14,457
Estimated amortization expense
	For the year ended December 31, 2003	$	14,831
	For the year ended December 31, 2004		14,470
	For the year ended December 31, 2005		13,518
	For the year ended December 31, 2006		13,286
	For the year ended December 31, 2007		11,258

CHANGES IN CARRYING AMOUNTS OF GOODWILL

	For the year ended December 31, 2002
Balance as of January 1, 2002	$	224,891
Goodwill acquired during the year		47,454
Unamortizable intangible assets reclassified as goodwill		5,090
Balance as of December 31, 2002	$	277,435

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F. ACCRUED EXPENSES AND OTHER LIABILITIES

        Accrued expenses and other liabilities consist of the following:

	As of December 31,
	2002		2001
Accrued employee benefits	$	12,830	$	8,322
Accrued restructuring		26,235		21,723
Other		22,087		21,935
	$	61,152	$	51,980

        Please refer to Footnote O for additional information on restructuring.

G. NOTES PAYABLE

        In connection with the purchase of a business complimentary to the Company's own operations during the third quarter of 2002, the Company issued a $3.0 million non-interest bearing note payable as partial consideration. The note has a one-year term with a possible one-year extension based on additional acquisition service credits. Additionally, the Company acquired an existing $100,000 non-interest bearing note payable in connection with employment credits. During 2001, the Company paid the remaining balance of a $4.0 million note related to a previous acquisition.

H. CAPITAL STOCK

        The Company has three classes of stock: preferred stock, common stock, and class B common stock. Holders of common stock are entitled to one vote for each share held. Holders of class B common stock generally vote together with holders of common stock as a single class but are entitled to 10 votes for each share held. The Board of Directors is authorized to determine the rights, preferences, privileges and restrictions of any series of Preferred Stock, and to fix the number of shares of any such series. The common stock and class B common stock have equal liquidation and dividend rights except that any regular quarterly dividend declared shall be $.05 per share less for holders of class B common stock. Class B common stock is nontransferable, except under certain conditions, but may be converted into common stock on a share-for-share basis at any time. Conversions to common stock totaled 287 and 221 shares in 2002 and 2000, respectively. There were no conversions during 2001. Shares of common stock reserved for conversions totaled 284,604 at December 31, 2002.

        On September 21, 2001, the Company announced that its Board of Directors had authorized the Company to repurchase up to 1,542,800 shares of its common stock over the next 12 months. A total of 175,000 shares of common stock was repurchased under this authorization during the second quarter of 2002, at an average price of $12.88 for a cost to $2.2 million. The remaining authorized amount of 1,367,800 shares, which would have expired on September 18, 2002, was added to the July 25, 2002 share authorization amount of 3,632,200 shares, for a total of 5 million shares authorized. The Company completed the purchase of the total authorized amount during the fourth quarter of 2002. The Company's total investment in this authorized share repurchase was $39.1 million at an average price per share of $7.83.

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H. CAPITAL STOCK (Continued)

        On October 25, 2002, the Board of Directors authorized the Company to repurchase an additional 5 million shares of its common stock over the next 12 months. The repurchases may be made on the open market or in negotiated transactions, and the timing and amount of shares repurchased will be determined by the Company's management based on its evaluation of market and economic conditions and other factors. During the fourth quarter, the Company purchased 1,323,600 shares of its common stock under this authorization for a total investment of $12.7 million at an average price per share of $9.59. The remaining authorized amount at December 31, 2002 was 3,676,400 shares. Between May 1999 and December 31, 2002, the Company has invested $163.0 million to repurchase 11,955,800 shares of its common stock under seven separate authorizations.

I. BENEFIT PLANS

        STOCK OPTION PLANS:    On December 31, 2002, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 148 (FAS 148), "Accounting for Stock-Based Compensation—Transition and Disclosure," an amendment to Statement of Financial Accounting Standards No. 123 (FAS 123), "Accounting for Stock-Based Compensation." FAS 148 provides three transition methods for entities electing to adopt the fair value recognition provisions of Statement 123 for stock-based employee compensation. FAS 148 also amends the disclosure provisions of FAS 123 to require prominent disclosure about the effects of an entity's accounting policy decisions with respect to stock-based compensation on reported net income and earnings per share in annual and interim financial statements. The statement is effective for fiscal years ending after December 15, 2002. Currently, the Company does not elect to transition from the intrinsic value method of accounting for stock-based compensation proscribed by Accounting Principles Board No. 25 (APB 25), "Accounting for Stock Issued to Employees," and related Interpretations to this fair value method proscribed by FAS 148. In addition, the Company will continue to apply the disclosure provisions of FAS 123. Accordingly, the Company's adoption of disclosure provisions of FAS 148 will not impact the Company's financial condition or results of operations.

        The fair market value of each stock option is estimated using the Black Scholes option pricing method, assuming no expected dividends with the following weighted-average assumptions:

	For the years ended December 31,
	2002		2001		2000
Expected life	4.9		4.8		4.4
Expected stock price volatility	65	%	65	%	93	%
Risk-free interest rate	4.24	%	5.00	%	5.00	%

        The Company has four stock-based compensation plans, which are described below.

        The 1992 Stock Option Plan provides for grants of stock options for up to 3,600,000 shares of the Company's common stock to employees, officers and directors of, and consultants and advisors to, the Company. Generally, options expire five years from the date of grant, require a purchase price of not less than 100% of the fair market value of the stock as of the date of grant, and are exercisable at such time or times as the Board of Directors in each case determines. The Company may grant options that

49

are intended to qualify as incentive stock options under Section 422 of the Internal Revenue Code ("incentive stock options") or nonstatutory options not intended to qualify as incentive stock options.

        The 1998 Stock Incentive Plan, amended in December 1999, provides for grants of stock options for up to 7,000,000 shares of the Company's common stock to employees, officers and directors of, and consultants and advisors to, the Company. Generally, options expire five years from the date of grant, require a purchase price of not less than 100% of the fair market value of the stock as of the date of grant, and are exercisable at such time or times as the Board of Directors in each case determines. The Company may grant options that are intended to qualify as incentive stock options or nonstatutory options, restricted stock awards and other stock-based awards.

        In December 2000, the Company initiated a new "Time Accelerated Restricted Stock Award Plan" (TARSAP) under its 1998 Stock Incentive Plan, whereby the vesting of certain stock options is directly impacted by the performance of the Company. The vesting of stock options granted under the TARSAP accelerates upon the meeting of certain profitability criteria. If these criteria are not met, such options will vest five years after the date of grant and expire at the end of 10 years.

        The Company believes that tying the vesting of larger blocks of certain stock options directly to financial performance more effectively utilizes options that would have been granted in future years, while making employees true stakeholders. The Company also anticipates that more closely aligning the interest of management and key employees with shareholders will focus employees on the goals and objectives most important to shareholders, and that the granting of such options was an important factor in securing employee confidence, commitment, and trust at a critical junction in the implementation of its strategic plans. Finally, the Company believes that the cost to shareholders of these additional options can be kept reasonable as a result of its stock repurchase program. Since May of 1999, the Company has invested $163.0 million to repurchase 11,955,800 million shares of its common stock under seven separate authorizations.

        The 2001 Stock Incentive Plan provides for grants of stock options for up to 7,000,000 shares of the Company's common stock to employees, officers and directors of, and consultants and advisors to, the Company. Generally, options expire five years from the date of grant, require a purchase price of not less than 100% of the fair market value of the stock as of the date of grant, and are exercisable at such time or times as the Board of Directors in each case determines. The Company may grant options that are intended to qualify as incentive stock options or nonstatutory options, restricted stock awards and other stock-based awards.

        The weighted-average fair value of options granted under the option plans during the years ended December 31, 2002, 2001, and 2000 was $13.43, $11.96, and $11.53, respectively.

        In November 2001, the Company completed its merger with Metro Information Services, Inc. In connection with the merger, the Company assumed all options, whether vested or unvested, to purchase Metro's common stock, issued under Metro's stock option plans. Each option to purchase shares of Metro's common stock outstanding as of November 30, 2001 became an option to acquire a number of shares of Keane common stock equal to the number of shares of Metro's common stock subject to such option, multiplied by a conversion ratio of 0.48. The option price has been proportionally adjusted. The

50

number of adjusted shares under the Metro plan is 571,058, of which, 13,394 were exercised during 2002.

        In September of 2002, the Company completed the purchase of a business complementary to the Company's business strategy. In connection with this acquisition, the Company assumed all options, whether vested or unvested, to purchase the stock of the acquired company, under the respective stock option plans. Each option to purchase shares of the acquired company as of September 25, 2002 became an option to acquire a number of shares of Keane common stock equal to the number of shares of the acquired company subject to such option, multiplied by conversion ratio of 0.1766. The option price has been proportionally adjusted. The number of adjusted shares under the acquired company's plan is 87,502. During the fourth quarter of 2002, there were 14,184 shares exercised from this plan.

        On September 26, 2002, the Company filed a Tender Offer Statement in connection with its offer to exchange currently held stock options with new options. The downturn in the stock market and the corresponding impact on the Company's stock price created a potential motivation and retention issue with key employees and executives of the Company. Consistent with the Company's philosophy of using stock options to motivate and retain management and employees, on August 20, 2002, the Company's Board of Directors approved the opportunity for employees to request that the Company exchange outstanding options to purchase shares of the Company's common stock, which were granted on or after January 1, 2000 and have an exercise price of $12.00 or greater per share, for new options to purchase shares of common stock on substantially the following terms ("the Offer"). Pursuant to the terms of the Offer:

i.

all eligible and outstanding options issued under all of the Company's stock option plans could be exchanged for new options at an exchange rate of four for every five surrendered;

ii.

the grant date of the new options would be the first business day that is at least six months and one day after the date of the expiration of the Offer; and

iii.

the exercise price of each new option would be the closing price of the Company's common stock on the new grant date.

        The Offer expired on October 7, 2002 ("expiration date"). Options for 1,888,394 shares of the Company's common stock with a weighted average exercise price of $20.45 were eligible for the Offer. Of this amount, 1,458,298 options were surrendered for exchange, with 324,902 options being retained, with the balance of the 105,194 being cancelled because of terminations. As a result, the Company anticipates that on April 8, 2003, the first business day that is at least six months and one day from the expiration date, the Company will grant new options for 1,166,638 shares of the Company's common stock.

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        Information with respect to activity under the Company's stock option plans is set forth below:

	Common stock		Weighted average exercise price
Outstanding at December 31, 1999	2,893,859		$	21.76
Granted	3,580,618			16.58
Exercised	(382,078	)		8.75
Canceled/Expired	(870,830	)		25.36
Outstanding at December 31, 2000	5,221,569			18.55
Granted	1,723,024			20.14
Exercised	(192,095	)		8.98
Canceled/Expired	(475,328	)		20.13
Outstanding at December 31, 2001	6,277,170			19.20
Granted	689,342			13.43
Exercised	(145,734	)		13.08
Canceled/Expired	(2,466,150	)		21.16
Outstanding at December 31, 2002	4,354,628		$	17.25

        Shares available for future issuance under the Company's stock option plans at December 31, 2002 are 11,178,189.

        The following table summarizes information about stock options that were outstanding at December 31, 2002:

Range of exercise prices	Number outstanding	Weighted average remaining contractual life	Weighted average exercise price of options outstanding		Number exercisable	Weighted average exercise price of exercisable options
$  0.04–$  4.99	22,744	4.4	$	2.89	22,744	$	2.89
5.00–    9.99	1,881,331	7.4		9.56	846,351		9.66
10.00–  14.99	171,363	8.0		11.95	64,264		11.92
15.00–  19.99	1,224,152	4.6		17.64	617,404		17.89
20.00–  24.99	266,625	1.9		22.47	156,500		22.53
25.00–  29.99	175,255	1.3		27.59	135,005		27.69
30.00–  39.99	517,028	4.2		34.37	493,579		34.44
40.00–  49.99	54,100	1.3		44.25	52,372		44.16
50.00–  59.99	41,070	4.2		57.14	37,231		57.13
60.00–  74.99	960	—		74.48	960		74.48
$  0.04–$74.99	4,354,628				2,426,410

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        STOCK PURCHASE PLANS:    The Company's 1992 Employee Stock Purchase Plan provides for the purchase of 4,550,000 shares of common stock by qualifying employees at a purchase price of 85% of the market value of the stock on the purchase date. During 2002, 2001, and 2000 participants in this plan purchased 378,333, 575,841, and 384,209 shares, respectively. Shares available for future purchases totaled 1,585,598 at December 31, 2002.

        INCENTIVE COMPENSATION PLANS:    The Company has established incentive compensation plans for certain officers and selected employees. Payments under the plans are based on actual performance compared to stated plan objectives. Compensation expense under the plans in 2002, 2001, and 2000 approximated $16.8 million, $18.3 million, and $11.2 million, respectively. In addition, management may award discretionary bonuses based upon an individual's performance and/or contribution to the Company.

        DEFERRED SAVINGS AND PROFIT SHARING PLAN:    During 1984, the Company established a deferred savings and profit sharing plan under Section 401(k) of the Internal Revenue Code. The plan enables eligible employees to reduce their taxable income by contributing up to 15% of their salary to the plan. The Company makes discretionary contributions to the plan based on a percentage of contributions made by the eligible employees and profits of the Company. The Company's contributions vest after the employee has completed 42 months of service and for 2002, 2001, and 2000 amounted to approximately $8.4 million, $4.5 million, and $5.0 million, respectively.

        DEFINED BENEFIT PLAN:    The Company has a defined benefit pension plan that provides pension benefits to employees of the Company's subsidiary located in the United Kingdom. Such benefits are available to employees who were active on August 4, 1998 and not to employees who joined the Company after that date, and are based on the employees' compensation and service. The Company's policy is to fund amounts required by applicable government regulations. Total pension expense for 2002, 2001, and 2000 was approximately $1.3 million, $1.2 million and $1.4 million, respectively.

        The following table sets forth the benefit obligation, fair value of plan assets, and the funded status of the Company's Plan; amounts recognized in the Company's financial statements; and the principal weighted average assumptions used:

		For the years ended December 31,
		2002			2001
Change in projected benefit obligation:
Benefit obligation at January 1,		$	16,780		$	15,140
	Service cost		1,518			1,604
	Interest cost		1,159			956
	Employee contributions		301			348
	Actuarial loss (gain)		1,942			(984	)
	Benefits paid		(423	)		(284	)
Benefit obligation at December 31,			21,277			16,780

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Change in plan assets:
Fair value of plan assets at January 1,			15,546			16,949
	Actual return on plan assets		(4,221	)		(2,606	)
	Employer contributions		979			1,139
	Employee contributions		301			348
	Benefits paid		(423	)		(284	)
Fair value of plan assets at end of year			12,182			15,546
Funded status			(9,095	)		(1,234	)
	Unrecognized net loss (gain)		8,725			1,234
Accrued pension cost			(370	)		—
Amounts recognized in the statement of financial position consist of:
	Deferred tax asset, long term		773			—
	Accrued benefit liability		(2,302	)		—
	Other comprehensive income		1,159			—
Net amount recognized		$	(370	)	$	—

		For the years ended December 31,
		2002		2001
Weighted average assumptions
	Discount rate at end of the year	5.75	%	6.00	%
	Expected return on plan assets for the year	8.00	%	8.25	%
	Rate of compensation increase at end of the year	3.75	%	4.00	%
	Discretionary pension increased LPI pension increases	0.00	%	2.00	%
	LPI pension increases	2.25	%	2.25	%
	Statutory revaluation of benefits (GMP)*	3.50	%	3.50	%

*

(Guaranteed Minimum Pension)

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			For the years ended December 31,
			2002			2001
Components of net periodic benefit cost
	Service cost—benefits earned during the period		$	1,518		$	1,604
	Interest cost on projected benefit obligations			1,159			957
	Expected return on plan assets			(1,420	)		(1,397	)
	Net amortization and deferral
		—amortization of unrecognized net loss (gain)		92			(6	)
Total net periodic benefit cost			$	1,349		$	1,158

J. RELATED PARTIES, COMMITMENTS, AND CONTINGENCIES

        The principal executive office of the Company as of December 31, 2002, was located at Ten City Square in Boston, Massachusetts and leased from the City Square Limited Partnership as described below. The Company leases additional office space and apartments in more than seventy locations in North America, the United Kingdom, and India under operating leases and capital leases, some of which may be renewed for periods up to five years, subject to increased rental fees. Rental expense for all of the Company's facilities amounted to approximately $30.8 million in 2002, $19.4 million in 2001, and $22.4 million in 2000. The Company is committed to minimum annual rental payments under all leases of approximately $26.7 million in 2003, $20.8 million in 2004, $15.6 million in 2005, $9.6 million in 2006, $5.6 million in 2007, and an aggregate of $28.4 million for 2008 and thereafter.

        In February 1985, the Company entered into a lease, which subsequently was extended to a term of 20 years, with City Square Limited Partnership ("City Square"), pursuant to which the Company leased approximately 34,000 square feet of office and development space in a building located at Ten City Square, in Boston, Massachusetts. The Company now leases approximately 88% of this building and the remaining 12% is leased by other tenants. At December 31, 2002, the leased space was used as the Company's corporate offices. John F. Keane, Chairman of the Board of the Company, and Philip J. Harkins, a director of the Company, are limited partners of City Square. Based upon its knowledge of rental payments for comparable facilities in the Boston area, the Company believes that the rental payments under this lease, which will be approximately $0.8 million per year ($25.00 per square foot) for the remainder of the lease term (until February 2006), plus specified percentages of any annual increases in real estate taxes and operating expenses, were, at the time the Company entered into the lease, as favorable to the Company as those which could have been obtained from an independent third party. As a result of its occupancy of the New Facility (as described below), the Company is in the process of finding a third party to sublease the space it occupies at Ten City Square.

        As a result of the planned vacancy at Ten City Square, the Company has reserved the remaining lease payments due to City Square during the remainder of the lease term, resulting in a charge of approximately $3.9 million in the accompanying 2002 financial statements.

        In October 2001, the Company entered into a lease with Gateway Developers LLC ("Gateway LLC") for a term of twelve years, pursuant to which the Company agreed to lease approximately

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95,000 square feet of office and development space in a building located at 100 City Square in Boston, Massachusetts (the "New Facility"). The Company leases approximately 57% of the New Facility and the remaining 43% is or will be occupied by other tenants. John Keane Family LLC is a member of Gateway LLC. The members of John Keane Family LLC are trusts for the benefit of John F. Keane, Chairman of the Board of the Company, and his immediate family members.

        On October 31, 2001, Gateway LLC entered into a $39.4 million construction loan with Citizens Bank of Massachusetts (the "Gateway Loan") in connection with the New Facility and an adjacent building to be located at 20 City Square, Boston, Massachusetts. John Keane Family LLC and John F. Keane are each liable for certain obligations under the Gateway Loan if and to the extent Gateway LLC requires funds to comply with its obligations under the Gateway Loan. Stephen D. Steinour, a director of the Company, is Chief Executive Officer of Citizens Bank of Pennsylvania. Citizens Bank of Massachusetts and Citizens Bank of Pennsylvania are subsidiaries of Citizens Financial Group, Inc. Mr. Steinour was not involved in the process of approving the loan.

        The Company began occupying the New Facility and making lease payments in March 2003. Based upon its knowledge of lease payments for comparable facilities in the Boston area, the Company believes that the lease payments under the lease for the New Facility, which will be approximately $3.2 million per year ($33.00 per square foot for the first 75,000 square feet and $35.00 per square foot for the remainder of the premises) for the first six years of the lease term and approximately $3.5 million per year ($36.00 per square foot for the first 75,000 square feet and $40.00 per square foot for the remainder of the premises) for the remainder of the lease term, plus specified percentages of any annual increases in real estate taxes and operating expenses, were, at the time the Company entered into the lease, as favorable to the Company as those which could have been obtained from an independent third party.

        In view of the related party ownership of the New Facility, the Company concluded that during the construction phase of the New Facility, the estimated construction in progress costs for the project would be capitalized in accordance with EITF No. 97-10, "The Effect of Lessee Involvement in Asset Construction." A credit for the same amount is reflected in the accrued long-term construction-in-progress costs in the accompanying balance sheet. For purposes of the consolidated statement of cash flows, the Company characterizes this treatment as a non-cash financing activity.

        In January 2003, the Financial Accounting Standards Board issued Interpretation No. 46 (FIN 46), "Consolidation of Variable Interest Entities," which requires the consolidation of a variable interest entity, as defined, by its primary beneficiary. Primary beneficiaries are those companies that are subject to a majority of the risk of loss or entitled to receive a majority of the entity's residual returns, or both. In determining whether it is the primary beneficiary of a variable interest entity, an entity with a variable interest shall treat variable interests in that same entity held by its related parties as its own interests.

        The Company is currently evaluating whether or not City Square and Gateway LLC are variable interest entities as defined by FIN 46 and, if so, whether or not the Company is the primary beneficiary of these entities.

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        If the Company determines that City Square or Gateway LLC, or both, are variable interest entities, and that it is the primary beneficiary, the Company will be required to consolidate the financial position and results of operation of the entities for which it determines it is the primary beneficiary. Such consolidation will be required beginning July 1, 2003.

        If the Company concludes it is not required to consolidate either of these entities, the Company will continue to account for its leases with City Square and Gateway LLC in accordance with generally accepted accounting principles. With respect to the Gateway LLC lease, if the Company concludes it is not required to consolidate this entity, the Company will amortize the asset and liability recorded during the construction of the facility, and estimates that the net effect of such amortization included in its operating results will approximate the rent expense resulting from contractual payments it is required to make under the lease.

        In December 2002, the Company's Audit Committee and Board of Directors each approved two related party transactions involving directors of the Company. The Company has subcontracted with Guardent, Inc. ("Guardent") for a customer project involving the State of California. Ms. Cirino, a director of the Company, is an executive officer and shareholder of Guardent. The payments from the Company to Guardent are not expected to exceed approximately $160,000. The Company repurchased 400,000 shares of common stock from Mr. Fain, a director of the Company. These shares were repurchased on December 6, 2002 in a negotiated transaction at a price of $9.50 per share for an aggregate purchase price of $3.8 million. The closing price for the Company's common stock on the American Stock Exchange on December 6, 2002 was $9.65.

        As of December 31, 2002, in connection with a third quarter acquisition, the Company had a recorded contingent liability of $895,000 related to certain earn-out considerations. The $895,000 is expected to be paid out during the first quarter of 2003. Future earn-outs are based on specific net revenue targets. Payments for achieving these goals will range form $1.0 to $2.0 million in future periods. The Company also recorded $3.0 million as deferred revenue related to contingent service credits and issued a $3.0 million non-interest bearing note payable as partial consideration. The note has a one-year term with a possible one-year extension based on additional acquisition service credits.

        The Company is a guarantor with respect to a line of credit for Innovate EC, an entity in which the Company acquired a minor equity position as a result of a previous acquisition. The total line of credit is for $600,000. The Company guarantees $300,000 of this obligation. The line is subject to review by the lending institution. The Company would be required to meet its guarantor obligation in the event the lending institution refuses to extend the credit facility and Innovate EC is unable to satisfy its obligation.

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J. RELATED PARTIES, COMMITMENTS AND CONTINGENCIES (Continued)

        In April 1998, United Services Planning Association, Inc. and Independent Research Agency for Life Insurance, Inc. filed a complaint in the District Court for Tarrant County, Texas (Civil Action No. 96-173235-98) against the Company and two of its employees alleging that the Company misrepresented its ability to complete a project contracted for by the plaintiffs and concealed from the plaintiffs material facts related to the status of the project. The parties are currently engaged in discovery. It is not likely that the case will go to trial before the fall of 2003. The plaintiffs seek monetary relief. The Company believes that it has meritorious defenses to the plaintiff's complaint and intends to contest the claims vigorously. However, the Company is presently unable to assess the likely outcome of the matter.

        The Company is involved in litigation and various legal matters, which have arisen in the ordinary course of business. The Company does not believe that the ultimate resolution of these matters will have a material adverse effect on its financial condition, results of operations, or cash flows. The Company believes these litigation matters are without merit and intends to defend these matters vigorously. Refer to Note P to the audited condensed consolidated financial statements for additional disclosures with respect to legal matters.

K. INCOME TAXES

        For financial reporting purposes, income before income taxes includes the following components:

	For the year ended December 31, 2002
Income before income taxes:
Domestic	$	13,085
Foreign		551
Total income before provision for income taxes	$	13,636

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        The provision for income taxes consists of the following:

	For the years ended December 31,
	2002			2001			2000
Current:
Federal	$	5,996		$	8,993		$	16,748
State		2,573			147			1,958
Foreign		682			886			570
Total		9,251			10,026			19,276
Deferred:
Federal		(2,960	)		1,605			(4,283	)
State		(836	)		412			(898	)
Foreign		—			(209	)		(263	)
Total		(3,796	)		1,808			(5,444	)
Total income tax provision	$	5,455		$	11,834		$	13,832

        A reconciliation of the statutory income tax provision with the effective income tax provision is as follows:

	For the years ended December 31,
	2002			2001			2000
Federal income taxes at 35%	$	4,772		$	10,228		$	11,965
State income taxes, net		1,129			363			1,060
Disallowed meals expense		508			506			806
Foreign tax		489			(81	)		(594	)
Adjustment of prior year's estimated tax liability		(1,532	)		—			—
Merger related costs		—			1,048			856
Other, net		89			(230	)		(261	)
Total	$	5,455		$	11,834		$	13,832

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        The components of the net deferred tax assets and liabilities are as follows:

	As of December 31,
	2002			2001
Deferred tax assets:
Allowance for doubtful accounts and other reserves	$	2,022		$	2,208
Accrued expenses		17,490			9,167
Amortization of intangible assets		975			12,453
Depreciation and other		9,108			11,496
Acquired United States net operating loss carry-forwards		3,214			2,298
Total deferred tax assets		32,809			37,622
Deferred tax liabilities:
Intangibles		(28,343	)		(28,150	)
Total deferred tax liabilities		(28,343	)		(28,150	)
Total net deferred tax asset	$	4,466		$	9,472

        At December 31, 2002, the Company had domestic net operating loss (NOL) carry forwards for tax purposes of $7.9 million expiring in 2017 through 2021. These NOL carry forward amounts relate to prior acquisitions and are subject to limitation pursuit to IRC Section 382.

        Cumulative undistributed earnings of the Company's foreign subsidiaries amounted to approximately $16 million at December 31, 2002. No provision for United States income tax has been made for the repatriation of these earnings because the Company considers the earnings to be indefinitely reinvested. If such earnings were distributed, tax expense would increase by approximately $500,000. Additionally, the Company's India subsidiary, part of the SignalTree Solutions acquisition, has tax holidays in India, which reduce or eliminate the income tax in that country. The holidays expire between 2006 and 2009. Based on the currently enacted regular corporate income tax rate in India, the benefit to the Company of the tax holidays was approximately $325,000, of which the per diluted share amount is immaterial, for the year ended December 31, 2002.

L. BUSINESS ACQUISITIONS

        On March 15, 2002, Keane acquired SignalTree Solutions Holding, Inc. (SignalTree), a privately held, United States-based corporation with two software development facilities in India and additional operations in the United States. Under the terms of the merger agreement, Keane paid $68.2 million in cash for SignalTree Solutions.

        The Company accounted for the acquisition as a purchase, pursuant to which the assets and liabilities of SignalTree Solutions, including intangible assets, were recorded at their respective fair values. All identifiable intangible assets are being amortized over their estimated useful life with the exception of goodwill. The financial position, results of operations and cash flows of SignalTree Solutions were included in the Company's financial statements effective as of the purchase date.

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        The total cost of the merger was $78.9 million. Portions of the purchase price, including intangible assets, were identified by independent appraisers utilizing proven valuation procedures and techniques. Goodwill was recorded at $41.3 million and other identified intangible assets were valued at $21.5 million. At the date of acquisition, the Company entered a plan to exit certain activities and consolidate facilities. As a result, the Company recorded a restructuring liability of $1.6 million related to the lease obligation and certain other costs for those facilities. In accordance with EITF 94-3, "Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain costs Incurred in a Restructuring)," these costs have been reflected in the purchase price.

        The components of the purchase price allocation is as follows:

Consideration and merger costs:
Consideration paid	$	66,927
Transaction costs		1,303
Restructuring		1,553
Deferred tax liability		9,120
Total	$	78,903

Allocation of purchase price:
Net asset value acquired	$	16,133
Customer lists (seven-year life)		18,800
Non-compete agreements (three-year life)		2,700
Goodwill		41,270
Total	$	78,903

        The following table presents the condensed balance sheet disclosing the amounts assigned to each of the major assets acquired and liabilities assumed of SignalTree Solutions at the acquisition date:

Condensed balance sheet:
Cash	$	2,650
Accounts receivable		7,304
Other current assets		3,562
Property, plant, equipment, net		8,011
Total assets		21,527
Accounts payable		569
Accrued compensation		1,569
Other liabilities		3,256
Net assets	$	16,133

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        On November 30, 2001, the Company completed the merger of Metro Information Services, Inc. (Metro), a provider of information technology, or IT, consulting and custom software development services and solutions. The merger was completed by exchanging all of the common stock of Metro for 7.4 million shares of the Company's common stock. Each share of Metro was exchanged for 0.48 of one share of Keane common stock. In addition, outstanding Metro stock options were converted at the same ratio into options to purchase 571,058 shares of Keane common stock.

        The Company accounted for the acquisition as a purchase, pursuant to which the assets and liabilities of Metro, including identifiable intangible assets, were recorded at their respective fair values. All identifiable intangible assets will be amortized over their estimated useful life with the exception of goodwill. The financial position, results of operations and cash flows of Metro were included in the Company's financial statements effective as of the merger date.

        The total cost of the merger was $164.5 million. Portions of the purchase price, including intangible assets, were identified by independent appraisers utilizing proven valuation procedures and techniques. Initial goodwill was recorded at $154.3 million and other identified intangible assets were valued at $46.1 million. At the date of acquisition, the Company entered a plan to exit certain activities and consolidate facilities. As a result, the Company recorded a restructuring liability of $11.0 million in 2001 related to the lease obligation and certain other costs for those facilities. In accordance with EITF 94-3, "Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (Including Certain Costs Incurred in a Restructuring)," these costs, which are not associated with the generation of future revenues and have no future economic benefit, be reflected as assumed liabilities in the allocation of the purchase price to the net assets acquired. During 2002, the Company adjusted the purchase price allocation principally as a result of an adjustment in the valuation of the liability assumed for the restructured facilities and for other matters unresolved at the time of acquisition. As a result of these non-cash adjustments, the goodwill balance was increased by $3.1 million.

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        The components of the purchase price allocation as of date of merger with 2002 adjustments is as follows:

Consideration and merger costs:	November 30, 2001		2002 adjustments			Total
Value of stock issued	$	130,796	$	—		$	130,796
Fair value of options exchanged		4,754		—			4,754
Transaction costs		7,786		258			8,044
Restructuring		10,972		3,052			14,024
Deferred tax liability		8,141		—			8,141
Deferred tax asset		—		(1,249	)		(1,249	)
Total	$	162,449	$	2,061		$	164,510

Allocation of purchase price:	November 30, 2001			2002 adjustments			Total
Net liabilities assumed	$	(37,984	)	$	(1,034	)	$	(39,018	)
Customer lists (seven-year life)		45,200			—			45,200
Non-compete agreements (three-year life)		900			—			900
Goodwill		154,333			3,095			157,428
Total	$	162,449		$	2,061		$	164,510

        The following table presents the condensed balance sheet disclosing the amounts assigned to each of the major assets acquired and liabilities assumed of Metro as of the date of the acquisition and adjustments:

Condensed balance sheet:	November 30, 2001			2002 adjustments			Total
Cash	$	622		$	—		$	622
Accounts receivable		40,820			141			40,961
Other current assets		1,004			—			1,004
Property, plant, equipment, net		2,780			(401	)		2,379
Total assets		45,226			(260	)		44,966
Accounts payable		3,583			13			3,596
Accrued compensation		9,800			65			9,865
Other liabilities		3,889			696			4,585
Note payable		65,938			—			65,938
Net liabilities	$	(37,984	)	$	(1,034	)	$	(39,018	)

        The unaudited pro forma combined condensed statements of income below present the historical statements of the Company and its acquisitions of Metro on November 30, 2001 and SignalTree Solutions on March 15, 2002 as if the purchases had occurred at January 1, 2001. Unaudited pro forma combined condensed financial information is presented for comparative purposes only and is not

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necessarily indicative of the results of operations that would have actually been reported had the purchase occurred at the beginning of the periods presented, nor is it necessarily indicative of future financial position or results of operations.

	For the years ended December 31,
	2002		2001
Total revenues	$	883,412	$	1,070,451
Net income		8,910		16,013
Net income per share (basic)		0.12		0.23
Net income per share (diluted)		0.12		0.23

        In addition to the SignalTree Solutions and Metro acquisitions, the Company completed several acquisitions of businesses complementary to the Company's business strategy during the third quarter of 2002 and during 2000. The Company did not complete any acquisitions other than Metro during 2001. The merger and consideration costs of these acquisitions, which were accounted for using the purchase method of accounting, totaled $13.4 million in 2002 and $35.3 million in 2000. In certain cases, the purchase price included contingent consideration based upon operating performance of the acquired business. During 2001, the Company paid an additional $1.2 million related to earn-outs and has recorded these amounts as additional purchase price. As of December 31, 2002, in connection with a third quarter acquisition, the Company had a recorded contingent liability of $895,000 related to certain earn-out considerations. The $895,000 is expected to be paid out during the first quarter of 2003. Future earn-outs are based on specific net revenue targets. Payments for achieving these goals will range from $1.0 to $2.0 million in future periods. The Company also recorded $3.0 million as deferred revenue related to contingent service credits and issued a $3.0 million non-interest bearing note payable as partial consideration. The note has a one-year term with a possible one-year extension based on additional acquisition service credits.

        The results of operations of these acquired companies have been included in the Company's consolidated statement of income from the date of acquisition. The excess of the purchase price over the fair value of the net assets has been allocated to identifiable intangible assets and goodwill and the intangibles are being amortized on a straight-line basis over periods ranging from three to 15 years. Pro forma results of operations for these acquisitions have not been provided, as they were not material to the Company on either an individual or an aggregate basis.

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M. EARNINGS PER SHARE

        A summary of the Company's calculation of earnings per share is as follows:

	Years Ended December 31,
	2002		2001		2000
Net income	$	8,181	$	17,387	$	20,354
Weighted average number of common shares outstanding used in calculation of basic earnings per share		74,018		68,474		69,646
Incremental shares from the assumed exercise of dilutive stock options		388		922		347
Weighted average number of common shares outstanding used in calculation of diluted earnings per share		74,406		69,396		69,993
Earnings per share
Basic	$	0.11	$	0.25	$	0.29
Diluted	$	0.11	$	0.25	$	0.29

        For the period ending December 31, 2002, 2001, and 2000, there were 2,373,570, 2,348,368, and 3,063,740 options for common stock, respectively, which were excluded because they were anti-dilutive.

N. RESTRUCTURING CHARGES

        In the fourth quarter of 2002, 2001, and 2000, the Company recorded restructuring charges of $17.6 million, $10.4 million, and $8.6 million, respectively. Of these charges, $3.2 million, $4.4 million, and $1.7 million related to a workforce reduction of approximately 229, 900, and 200 employees for the years 2002, 2001, and 2000, respectively. In 2002, the Company also released excess accruals of $251,000 in connection with workforce reduction, which resulted in a net workforce restructuring charge of $2.9 million. Cash expenditures in 2002 of $10.2 million related to prior-year's income statement charges and acquisition expenditures were $3.9 million and $6.3 million, respectively.

        The Company also performed a review of its business strategy and concluded that consolidating some of its branch offices was key to its success. As a result of this review, the Company charges included $12.1 million in 2002, $4.0 million in 2001, and $3.5 million in 2000 for branch office closings and certain other expenditures. In conjunction with the review during the fourth quarter, the Company also performed a review of accrual balances for properties restructured in prior years. As a result, the Company determined that the cost to consolidate and/or close certain non-profitable offices would be higher than the original estimate. The change in estimates resulted in a net charge to the Company's restructuring liability of $756,000 and $1.2 million in 2002 and 2001, respectively. The resulting net charge in 2002 and 2001 was $12.9 million and $5.1 million, respectively. Cash expenditures in 2002 of $6.3 million related to prior-year's income statement charges and acquisition expenditures were $3.8 million and $2.5 million, respectively.

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        The Company also wrote off $1.9 million, $0.8 million, and $3.4 million in 2002, 2001, and 2000, respectively, of assets, which became impaired as a result of these restructuring actions.

        A summary of restructuring activity during the years 2002, 2001 and 2000, which is reported in the consolidated accrued expenses in the accompanying balance sheet, is as follows:

	Workforce reduction			Branch office closures & other expenditures			Impaired assets			Total
Beginning balance in fiscal 2000	$	2,800		$	4,281		$	—		$	7,081
Charges in fiscal 2000		1,743			3,478			3,403			8,624
Cash expenditures in fiscal 2000		(3,138	)		(2,832	)		—			(5,970	)
Fixed asset impairment charges in fiscal 2000		—			—			(3,403	)		(3,403	)
Beginning balance in fiscal 2001		1,405			4,927			—			6,332
Charges in fiscal 2001		4,417			3,957			825			9,199
Change in prior year's estimate		—			1,159			—			1,159
Cash expenditures in fiscal 2001		(2,620	)		(2,494	)		—			(5,114	)
Acquisition related charge in fiscal 2001		7,226			3,746			—			10,972
Fixed asset impairment charges in fiscal 2001		—			—			(825	)		(825	)
Beginning balance in fiscal 2002		10,428			11,295			—			21,723
Charges in fiscal 2002		3,192			12,060			1,847			17,099
Change in prior year's estimate		(251	)		756			—			505
Cash expenditures in fiscal 2002		(10,177	)		(6,318	)		—			(16,495	)
Acquisition related charge in fiscal 2002		93			1,760			187			2,040
Acquisition related charge in fiscal 2002:
Acquisition related charges to increase prior year estimate		—			3,397			—			3,397
Fixed asset impairment charges in fiscal 2002		—			—			(2,034	)		(2,034	)
Balance as of December 31, 2002	$	3,285		$	22,950		$	—		$	26,235

        As of December 31, 2002, the balance in the branch office closures reserve consisted of amounts for properties identified in 2002, 2001, 2000, and 1999 in the amounts of $15.4, $6.1, $0.8, and $0.6 million, respectively.

O. SEGMENT REPORTING

        Based on qualitative and quantitative criteria established by Statement of Financial Accounting Standards No. 131 (FAS 131), "Disclosures about Segments of an Enterprise and Related Information," the Company operates within one reportable segment: Professional Services.

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        In accordance with the enterprise wide disclosure requirements of FAS 131, the Company's geographic information is as follows:

	Geographic Location
									Balance per consolidated financial statements
	Domestic		Domestic deferred tax assets		International		International deferred tax assets
2002
Revenues	$	843,918			$	29,285			$	873,203
Long-lived assets		409,513	$	11,609		26,601	$	1,830		449,553
2001
Revenues		730,714				48,445				779,159
Long-lived assets		322,307		22,684		21,304		1,058		367,353
2000
Revenues		808,783				63,173				871,956
Long-lived assets		126,295		18,761		22,996		913		168,965

        The Company has no single customer that provides revenues that equal or exceed 10 percent of its consolidated revenues.

P. SUBSEQUENT EVENTS

        On February 10, 2003, the Company received a $7.3 million award in connection with an arbitration proceeding initiated by the Company in 2000 against Signal Corporation for a breach of an agreement between Signal Corporation and the Company's Federal Systems subsidiary. The Company will account for this award in the first quarter of 2003.

        On February 13, 2003, the Company's Board of Directors approved a new United Kingdom Employee Stock Purchase Plan. The Company has allocated 500,000 shares of the total number of shares reserved under the Company's 1992 Employee Stock Purchase Plan for issuance under the United Kingdom Employee Stock Purchase Plan.

        On February 28, 2003, the Company entered into a new three-year, $50 million credit facility with two banks. This new credit facility replaces the Company's previous $10 million demand line credit, which expired in July 2002. The terms of the credit facility require the Company to maintain certain financial ratios and earnings before interest, taxes, depreciation, and amortization (EBITDA). Borrowings will bear interest at one of the bank's base rate or the Euro currency reserve rate.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

        Not applicable.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

        The response to this Item is contained in part under the caption "Directors and Executive Officers of the Company" in Item 4 of Part I hereof and the remainder is incorporated herein by reference to the Company's Proxy Statement for the Annual Meeting of Stockholders to be held May 28, 2003 (the "2003 Proxy Statement") under the caption "Election of Directors."

ITEM 11. EXECUTIVE COMPENSATION

        The response to this Item is incorporated herein by reference to the Company's 2003 Proxy Statement under the caption "Executive Compensation."

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

        The response to this Item is incorporated herein by reference to the Company's 2003 Proxy Statement under the caption "Stock Ownership of Certain Beneficial Owners and Management" and "Equity Compensation Plan Information."

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

        The response to this Item is incorporated herein by reference to the Company's 2003 Proxy Statement under the caption "Certain Related Party Transactions."

ITEM 14. CONTROLS AND PROCEDURES

a)

Evaluation of Disclosure Controls and Procedures. Based on their evaluation of the Company's disclosure controls and procedures (as defined in Rules 13a-14(c) and 15d-14(c) under the Securities Exchange Act of 1934) as of a date within 90 days of the filing date of this Annual Report on Form 10-K, the Company's Chief Executive Officer and Chief Financial Officer have concluded that the Company's disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission's (SEC) rules and forms and are operating in an effective manner.

b)

Changes in Internal Controls. There were no significant changes in the Company's internal controls or in other factors that could significantly affect these controls subsequent to the date of their most recent evaluation.

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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a) Financial Statements

Report of independent auditors	33
Consolidated balance sheets as of December 31, 2002 and 2001	34
Consolidated statements of income for the years ended December 31, 2002, 2001, and 2000	35
Consolidated statements of stockholders' equity for the years ended December 31, 2002, 2001, and 2000	36
Consolidated statement of cash flows for the years ended December 31, 2002, 2001, and 2000	37
Notes to consolidated financial statements	38-67

(b) Exhibits

The Exhibits set forth in the attached Exhibit Index are filed as part of this Annual Report.

(c) Reports on Form 8-K

The Company filed the following Current Reports on Form 8-K during the three-month period ended December 31, 2002.

i.

Current Report on Form 8-K filed with the SEC on October 30, 2002 announcing the Board of Directors authorization for the Company to purchase 5,000,000 shares of common stock.

69

SIGNATURES

        Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	KEANE, INC. (Registrant)
	/s/  BRIAN T. KEANE Brian T. Keane President and Chief Executive Officer
Date: March 21, 2003

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

/s/  JOHN F. KEANE John F. Keane Chairman	/s/  JOHN J. LEAHY John J. Leahy Senior Vice President and Chief Financial Officer (Principal Financial Officer) (Principal Accounting Officer)
/s/  BRIAN T. KEANE Brian T. Keane President, Chief Executive Officer and Director	/s/  JOHN F. KEANE, JR. John F. Keane, Jr. Director
/s/  JOHN F. ROCKART John F. Rockart Director	/s/  MARIA A. CIRINO Maria A. Cirino Director
/s/  PHILIP J. HARKINS Philip J. Harkins Director	/s/  WINSTON R. HINDLE, JR. Winston R. Hindle, Jr. Director
/s/  STEPHEN D. STEINOUR Stephen D. Steinour Director	/s/  JOHN H. FAIN John H. Fain Director

70

CERTIFICATIONS

I, Brian T. Keane, certify that:

1.

I have reviewed this annual report on Form 10-K of Keane, Inc.;

2.

Based on my knowledge, this annual 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 annual report;

3.

Based on my knowledge, the financial statements, and other financial information included in this annual 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 annual report;

4.

The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a)

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 annual report is being prepared;

b)

evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and

c)

presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5.

The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a)

all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize, and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and

b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and

6.

The registrant's other certifying officers and I have indicated in this annual report whether 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.

Dated: March 21, 2003 /s/  BRIAN T. KEANE Brian T. Keane
President and Chief Executive Officer

71

I, John J. Leahy, certify that:

1.

I have reviewed this annual report on Form 10-K of Keane, Inc.;

2.

Based on my knowledge, this annual 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 annual report;

3.

Based on my knowledge, the financial statements, and other financial information included in this annual 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 annual report;

4.

The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a)

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 annual report is being prepared;

b)

evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and

c)

presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5.

The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a)

all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize, and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and

b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and

6.

The registrant's other certifying officers and I have indicated in this annual report whether 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.

Dated: March 24, 2003 /s/  JOHN J. LEAHY John J. Leahy
Senior Vice President of Finance and
Chief Financial Officer

72

Exhibit Index
2.1	Agreement and Plan of Merger, dated as of August 20, 2001, by and among the Registrant, Veritas Acquisition Corp., and Metro Information Services, Inc. is incorporated herein by reference to Exhibit 2.1 to the Registrant's Current Report on Form 8-K dated August 20, 2001, filed on August 21, 2001.
3.1	Articles of Organization of the Registrant, as amended, are incorporated herein by reference to Exhibit 4.1 to the Registrant's Registration Statement on Form S-3 (File No. 33-85206) (the "Registration Statement").
3.2	Articles of Amendment to Registrant's Articles of Organization, filed on May 29, 1998, are incorporated herein by reference to Exhibit 99.1 to the Registrant's Current Report on 8-K, filed on June 3, 1998.
3.3	Second Amended and Restated By-Laws of the Registrant are incorporated herein by reference to Exhibit 3 to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2000.
3.4	Amendment to Second Amended and Restated Bylaws of the Registrant is incorporated by reference to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2001.
*10.1	Keane, Inc. 401(k) Deferred Savings and Profit Sharing Plan is incorporated herein by reference to Exhibit to the Registration Statement.
*10.2	1992 Stock Option Plan is incorporated herein by reference to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1992.
*10.3	1998 Stock Incentive Plan is incorporated herein by reference to Exhibit 10 to the Company's Registration Statement on Form S-8 (File No. 333-56119), as filed with and declared effective by the Commission on June 5, 1998.
*10.4	Amendment to 1998 Stock Incentive Plan is incorporated herein by reference to Exhibit 10.10 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2000.
*10.5	Amended and Restated 1992 Employee Stock Purchase Plan, as amended, is incorporated herein by reference to Exhibit 10.1 to the Registrants Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2001.
10.6	Metro Information Services, Inc. Amended and Restated 1997 Stock Option Plan is incorporated by reference to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2001.
10.7	Lease dated February 20, 1985, between the Registrant and Jonathan G. Davis, as Trustee of City Square Development Trust (the "Trust"), is incorporated herein by reference to Exhibit 10.6 to the Registration Statement.
10.8	First Amendment of Lease dated March 19, 1985, between the Registrant and the Trust, is incorporated herein by reference to Exhibit 10.7 to the Registration Statement.
10.9	Second Amendment of Lease dated November 1985, between the Registrant and the Trust, is incorporated herein by reference to Exhibit 10.8 to the Registration Statement.
*10.10	Keane, Inc. 2001 Stock Incentive Plan is incorporated by reference to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2001.
*10.11	Keane, Inc. United Kingdom Employee Stock Purchase Plan.
10.12	Revolving Credit Agreement dated February 28, 2003, by and between the Registrant, Fleet National Bank, as Agent, and several lenders party thereto.

73

10.13	Lease, dated October 25, 2001 between the Registrant and Gateway Developers LLC.
21.0	Schedule of Subsidiaries of the Registrant.
23.1	Consent of Ernst & Young LLP.
99.1	Certification by the Registrant's President and Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99.2	Certification by the Registrant's Senior Vice President of Finance and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

*

Management contract or compensatory plan or arrangement required filed as an exhibit pursuant to Item 14(A) and (C) of this report.

74

QuickLinks

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
KEANE, INC. CONSOLIDATED BALANCE SHEETS
KEANE, INC. CONSOLIDATED STATEMENTS OF INCOME
KEANE, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
KEANE, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS
KEANE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2002, 2001, and 2000 (All amounts in thousands unless stated otherwise and except for share and per share amounts).
SIGNATURES
CERTIFICATIONS

EX-10.11

                                                                   EXHIBIT 10.11

                                   KEANE, INC.

                         UK EMPLOYEE STOCK PURCHASE PLAN

1.   PURPOSE.

     The Keane, Inc. UK Employee Stock Purchase Plan (the "Plan"), is intended
to provide eligible employees of Keane Ltd. ("Ltd."), a wholly owned subsidiary
of Keane, Inc. (the "Company") an opportunity to acquire a proprietary interest
in the Company through the purchase of shares of common stock of the Company,
Ten Cents ($0.10) par value (the "Common Stock" or "Stock"). The Company intends
that the Plan offer eligible employees of Ltd. rights to purchase Stock on
substantially the same terms and conditions as available to other employees of
the Company under the Keane, Inc. 1992 Employee Stock Purchase Plan.

2.   DEFINITIONS.

     For purposes hereof, in addition to those terms defined elsewhere herein,
the following terms shall have the meanings indicated unless the context or
applicable law shall otherwise require.

     (a)  "BENEFICIARY" means one or more individuals designated as such
pursuant to Section 13 hereof.

     (b)  "BOARD" means the Board of Directors of the Company.

     (c)  "COMPENSATION" means regular straight-time earnings, sales commissions
and recruiter bonuses all prior to deduction of taxes and other withholding
charges and employee contributions to employee benefit plans, but excludes
employer contributions to or benefits payable under such plans.

     (d)  "EMPLOYEE" means any person who is customarily employed for more than
twenty (20) hours per week by Ltd.

     (e)  "MONTH OF SERVICE" means a calendar month in which an Employee has
completed an hour of service.

     (f)  "OFFERING COMMENCEMENT DATE" with respect to an Offering under the
Plan means the first day of the applicable semi-annual period for such Offering
pursuant to Section 4 hereof.

     (g)  "OFFERING TERMINATION DATE" with respect to an Offering under the Plan
means the last day of the applicable semi-annual period for such Offering
pursuant to Section 4 hereof.

     (h)  "PARTICIPANT" means an Employee who is participating in this Plan in
accordance with the provisions hereof.

     (i)  "PLAN ADMINISTRATOR" means the Treasurer of the Company.



3.   ELIGIBILITY.

     (a)  Any Employee who shall have completed twelve (12) Months of Service
with Ltd., based upon the Employee's adjusted date of hire as computed by the
Company or Ltd. in accordance with its usual policies and procedures, and shall
be employed by Ltd. on the last day of such twelve (12) month period and upon
the first Offering Commencement Date thereafter, shall be eligible to
participate in the Plan.

     (b)  Any provision of the Plan to the contrary notwithstanding, no Employee
may participate, or continue to participate, in the Plan:

          (i)     if, immediately after the grant of any option to purchase
     Common Stock hereunder, such Employee would own and/or hold outstanding
     options to purchase stock possessing five percent (5%) or more of the total
     combined voting power or value of all classes of stock of the Company or of
     any parent or subsidiary thereof; or

          (ii)    if any option to purchase Common Stock hereunder would permit
     such Employee's rights to purchase stock under all employee stock purchase
     plans of the Company and its parent and subsidiary corporations to accrue
     at a rate which exceeds Twenty-Five Thousand Dollars ($25,000) of the fair
     market value of the Common Stock determined at the time such option is
     granted) for each calendar year in which such Option is outstanding at any
     time.

4.   OFFERINGS.

     The Plan will be implemented by consecutive semi-annual offerings (referred
to herein collectively as "Offerings" and individually as an "Offering").
Offerings will begin each January 1 and July 1, or the first business day
thereafter. The Board may, at its discretion, choose a different offering period
of twelve (12) months or less for subsequent Offerings. Participation in any one
or more of the Offerings under the Plan shall neither limit, nor require,
participation in any other Offering

5.   PARTICIPATION.

     (a)  An eligible Employee may participate in the Plan by completing an
authorization for payroll deduction on the form provided (an "Authorization")
and filing it with the Plan Administrator. Each Authorization shall authorize a
regular payroll deduction from the Employee's Compensation. Once an Employee has
filed an Authorization, he or she will automatically participate in subsequent
Offerings until and unless he or she withdraws from an Offering pursuant to
Sections 7(b) or 9 hereof, or his or her participation is terminated by the
Company pursuant to Section 14 hereof.

     (b)  The Plan Administrator will maintain payroll deduction accounts for
all Participants. A Participant may authorize a payroll deduction of a specified
whole percentage of Compensation, up to a maximum of ten percent (10%) of his or
her Compensation for the period during which he or she elects to participate in
the Plan, but in no event may any Participant authorize a deduction of more than
Twenty Thousand Dollars ($20,000) in any calendar year.

                                        2


All payroll deductions made for a Participant shall be credited to his or her
account under the Plan. No Participant may make any separate cash payment into
such account.

     (c)  Except as provided in this paragraph (c) and Sections 7(b) or 9, a
Participant may not make any changes to his or her participation during an
Offering, except insofar as a change in the amount of Compensation affects the
amount represented by the percentage of Compensation elected by the Participant.
By written notice to the Plan Administrator, a Participant may make a change in
his or her payroll deduction once during each Offering. A Participant may make a
change in his or her payroll deduction for a subsequent Offering by filing a new
Authorization with the Plan Administrator prior to the Offering Commencement
Date of such Offering.

6.   GRANTING OF OPTION.

     (a)  For each of the Offerings, a Participant shall be deemed to have been
granted an option (the "Option") to purchase, on the applicable Offering
Termination Date, that number of shares of Common Stock determined by dividing
the market value of a share of Common Stock on the applicable Offering
Commencement Date into Twelve Thousand Five Hundred Dollars ($12,500).

     (b)  For purposes hereof, the market value of Common Stock shall be the
official closing price of the Common Stock on the American Stock Exchange or
such other exchange or automated quotation system upon which the Common Stock
shall from time to time be regularly traded, on the Offering Commencement Date
and Offering Termination Date applicable to such Offering (or on the next
regular business date on which shares of Common Stock shall be traded in the
event that no shares of Common Stock shall have been traded on the relevant
date).

7.   EXERCISE OF OPTION.

     With respect to each Offering during the term of the Plan:

     (a)  Unless a Participant gives written notice of withdrawal to the Plan
Administrator or his or her employment is terminated, or his or her
participation is terminated by the Company pursuant to Section 14 hereof, in
each case as hereinafter provided, his or her Option will be deemed to have been
exercised automatically on the Offering Termination Date applicable to such
Offering to the extent of that number of shares (including fractional shares) of
Common Stock which the accumulated payroll deductions credited to his or her
account at that time will purchase at the applicable Option Exercise Price,
defined for purposes of each such Offering as eighty-five percent (85%) of the
market value of a share of Common Stock on (i) the applicable Offering
Commencement Date, or (ii) the applicable Offering Termination Date, whichever
is lower. If the amount then credited to the Participant's account exceeds the
purchase price of the number of shares of Common Stock with respect to which an
Option has been granted to the Participant as provided in Section 6 hereof
pursuant to such Offering, any excess shall be paid to the Participant (or if
the Participant dies prior to payment, to his or her Beneficiary) within a
reasonable period following said Offering Termination Date.

     (b)  By written notice to the Plan Administrator a minimum of one (1) month
prior to the Offering Termination Date applicable to any such Offering, a
Participant may elect to cease all future payroll deductions and to withdraw all
accumulated payroll deductions in his or her

                                        3


account. Such accumulated payroll deductions shall be paid to the Participant
(or, if the Participant dies prior to payment, to his or her Beneficiary) within
a reasonable period following said Offering Termination Date.

8.   DELIVERY.

     Within a reasonable period after the Offering Termination Date of each
Offering, the Plan Administrator will deliver the shares of Common Stock
purchased upon the exercise of such Participant's Option to the Participant's
account with the its agent. Upon the Participant's request, the agent will
deliver one or more certificates representing such shares to the Participant by
mail or, at the Participant's option, directly to a broker designated by the
Participant.

9.   WITHDRAWAL.

     (a)  As provided in Section 7(b), a Participant may withdraw all, but not
less than all, payroll deductions credited to his or her account under any
Offering by giving written notice of withdrawal to the Plan Administrator a
minimum of one (1) month prior to the Offering Termination Date. All of the
Participant's payroll deductions credited to his or her account will be paid to
the Participant (or if the Participant dies subsequent to such notice but prior
to payment, to his or her Beneficiary) within a reasonable period following said
Offering Termination Date, and no further payroll deductions will be made from
his or her pay during such Offering. The Plan Administrator may, at its option,
treat an attempt by a Participant to borrow on the security of accumulated
payroll deductions as an election pursuant to Section 7(b) to withdraw such
deductions.

     (b)  A Participant's withdrawal from an Offering will not have any effect
upon his or her eligibility to participate in any succeeding Offering or in any
similar plan which may hereafter be adopted by the Company or Ltd.

     (c)  Upon termination of the Participant's employment with Ltd. for any
reason other than death or disability, the payroll deductions credited to his or
her account will be returned to the Participant (or, if the Participant dies
subsequent to such termination of employment, to his or her Beneficiary) if such
termination occurred a minimum of one (1) month prior to the Offering
Termination Date. If such termination occurred less than one (1) month prior to
such Date, the Participant's Option will be deemed to have been automatically
exercised in accordance with Section 7(a) hereof.

     (d)  Upon termination of the Participant's employment due to death or
disability, the Participant or his or her Beneficiary, by written notice given
to the Plan Administrator within thirty (30) days following such termination,
but in any event prior to the Offering Termination Date, may elect to:

          (i)     withdraw all payroll deductions credited to the Participant's
                  account under the Plan; or

          (ii)    exercise the Participant's option pursuant to Section 7(a)
                  hereof.

                                        4


     In the event that no such written notice of election shall be timely
received by the Plan Administrator, the Participant or Beneficiary shall
automatically be deemed to have elected to withdraw the payroll deductions
credited to the Participant's account and the same shall be paid within a
reasonable period to the Participant or said Beneficiary.

10.  INTEREST.

     No interest will be paid or allowed on any money paid into the Plan or
credited to the account of any Participant.

11.  STOCK.

     (a)  The maximum number of shares of Common Stock which shall be made
available for sale under the Plan is 500,000 shares, subject to further
adjustment upon changes in capitalization of the Company as provided in Section
16 hereof. If the total number of shares for which Options are exercised on any
Offering Termination Date in accordance with Section 7 hereof exceeds the number
of shares of Common Stock which remain available for issue under the Plan, the
Plan Administrator shall make a pro rata allocation of the shares available for
delivery and distribution in as nearly a uniform manner as shall be practicable
and as it shall determine to be equitable, and the balance of payroll deductions
credited to the account of each Participant under the Plan shall be returned to
him or her as promptly as possible. The Company may purchase shares on the open
market in order to have shares available for purchase by Participants in each
Offering.

     (b)  The Participant will have no interest in Common Stock to which his or
her Option pertains until such Option has been exercised.

     (c)  Common Stock to be delivered to a Participant under the Plan will be
registered in the name of the Participant or, if the Participant so directs by
written notice to the Plan Administrator prior to the Offering Termination Date
applicable thereto, in the names of the Participant and one such other adult
natural person as may be designated by the Participant, as joint tenants with
rights of survivorship, to the extent permitted by applicable law.

12.  ADMINISTRATION.

     The Plan shall be administered by the Plan Administrator. The
interpretation and construction of any provision of the Plan and the adoption of
rules and regulations for administering the Plan shall be made by the Plan
Administrator, subject to review and modification by the Board, at its option.
Determinations made by the Plan Administrator or the Board with respect to any
matter or provision contained in the Plan shall, subject to Board review at its
option, be final, conclusive and binding upon the Company, Ltd., and upon all
Participants, their heirs or legal representatives. Any rule or regulation
adopted by the Plan Administrator shall remain in full force and effect unless
and until altered, amended, or repealed by the Plan Administrator or the Board.
The Company shall indemnify the Plan Administrator and Board members to the
fullest extent permitted by applicable law for any expenses incurred in
defending a civil or criminal action or proceeding arising out of such
individual's actions with respect to administration of the Plan in advance of
the final disposition of such action or proceeding, upon receipt of an
undertaking by the person indemnified to repay such payment if

                                        5


such individual shall be adjudicated not to have acted in good faith in the
reasonable belief that such individual's action was in the best interest of the
Company.

13.  DESIGNATION OF BENEFICIARY.

     A Participant may file a written designation of a Beneficiary who is to
receive any shares of Common Stock and/or cash in the event of the death of the
Participant prior to the delivery of such shares or cash to the Participant.
Such designation of Beneficiary may be changed by the Participant at any time by
written notice to the Plan Administrator. Within thirty (30) days after the
death of a Participant, the Beneficiary may, as provided in paragraph 9(d)
hereof, elect to exercise the Participant's Option when it becomes exercisable
on the Offering Termination Date of the then-current Offering. Upon the death of
a Participant and upon receipt by the Plan Administrator of proof of identity
and existence at the Participant's death of a Beneficiary validly designated by
the Participant under the Plan, and notice of election of the Beneficiary to
exercise the Option, the Plan Administrator shall deliver such Stock and/or cash
to such Beneficiary. In the event of the death of a Participant and in the
absence of a Beneficiary validly designated under the Plan who is living at the
time of such Participant's death, the Plan Administrator shall deliver such
Stock and/or cash to the executor or administrator of the estate of the
Participant or, if no such executor or administrator has been appointed (to the
knowledge of the Plan Administrator), the Plan Administrator, in its discretion,
may deliver such Stock and/or cash to the spouse or to any one or more
dependents of the Participant as the Plan Administrator may designate, and such
persons shall be deemed Beneficiaries for purposes hereof. No Beneficiary shall,
prior to the death of the Participant by whom he or she has been designated,
acquire any interest in the Stock or cash credited to the Participant.

14.  UK TAX LIABILITY.

     Participants shall agree to pay all income tax and employee's national
insurance contributions arising on the exercise of each such Option, and shall
either enter into an election to assume liability for, or will reimburse Ltd. or
its affiliates for all liabilities for, employer's national insurance
contributions arising on the exercise of each such Option. The Company or Ltd
shall from time to time determine the form and substance of the agreement or
election to be signed by Participants pursuant to this Section 14. If a
Participant is in breach of any such agreement or election, or fails to sign
such an election or agreement when requested to do so, pursuant to this Section
14 the Company may, acting in its absolute discretion, terminate the
Participants right to participate in current and/or future Offerings. In the
event of such termination prior to an Offering Termination Date, any payroll
deductions credited to the Participant's account under such Offering shall be
returned to the Participant (subject to deduction for any amounts of income tax
and/or national insurance for which the Participant is liable).

15.  TRANSFERABILITY.

     Neither payroll deductions credited to a Participant's account nor any
rights with regard to the exercise of an Option or to receive Stock under the
Plan may be assigned, transferred, pledged, or otherwise disposed of in any way
by the Participant otherwise than by will or the laws of descent and
distribution, and any such rights are exercisable during the lifetime of the

                                        6


Participant only by him or her. Any such attempted assignment transfer, pledge,
or other disposition, or exercise of such rights, shall be without effect,
except that the Plan Administrator may treat such act as an election to withdraw
funds in accordance with Section 7(b) hereof.

16.  USE OF FUNDS.

     All payroll deductions received or held by Ltd. under this Plan may be used
by Ltd. for any corporate purpose, and Ltd. shall not be obligated to segregate
such payroll deductions.

17.  EFFECT OF CHANGES OF COMMON STOCK.

     In the event of any changes in the outstanding shares of the Common Stock
by reason of stock dividends, subdivisions, combinations and exchanges of
shares, recapitalizations or merger in which the Company is the surviving
corporation, the aggregate number and class of shares available under this Plan
and the Option Exercise Price per share shall be appropriately adjusted by the
Plan Administrator, subject to review by the Board at its option, whose
determination shall be conclusive. Any such adjustments may provide for the
elimination of any fractional shares which would otherwise become subject to any
Options.

18.  AMENDMENT OR TERMINATION.

     The Board may at any time terminate or amend the Plan. Except as
hereinafter provided, no such termination shall affect Options previously
granted, nor shall an amendment make any change in any Option theretofore
granted which would adversely affect the rights of any Participant.

19.  NOTICES.

     All notices or other communications by a Participant or Beneficiary to Ltd.
or the Company under or in connection with the Plan shall be deemed to have been
duly given when received by the Plan Administrator.

20.  MERGER OR CONSOLIDATION.

     If the Company shall at any time merge into or consolidate with another
corporation and the Company is the surviving entity, the holder of each Option
then outstanding will thereafter be entitled to receive at the next Offering
Termination Date upon the exercise of such Option for each share as to which
such Option shall be exercised the securities or property which a holder of one
share of the Common Stock was entitled to upon and at the time of such merger or
consolidation, and the Board shall take such steps in connection with such
merger or consolidation as the Board shall deem necessary to assure that the
provisions of Section 16 hereof shall thereafter be applicable, as nearly as
reasonably may be, in relation to the said securities or property as to which
such holder of such Option might thereafter be entitled to receive thereunder.
In the event of a merger or consolidation in which the Company is not the
surviving entity, or of a sale of assets in which the Company is not the
surviving entity, the Plan shall terminate, and all payroll deductions credited
to Participants' accounts shall be returned to them; PROVIDED, HOWEVER, that the
Board may, in the event of such merger, consolidation or sale,

                                        7


accelerate the Offering Termination Date of the Offering then in effect and
permit Participants to purchase shares under the Plan at such accelerated
Offering Termination Date.

21.  REGISTRATION AND QUALIFICATION OF THE PLAN UNDER APPLICABLE SECURITIES
LAWS.

     No Option shall be exercised under the Plan until such time as the Company
has qualified or registered the shares which are subject to the Options under
the applicable securities laws, to the extent required by such laws.

                                        8

EX-10.12

                                                           Exhibit 10.12

                           REVOLVING CREDIT AGREEMENT


                          dated as of February 28, 2003


                                      among


                                   KEANE, INC.


                     THE LENDERS LISTED ON SCHEDULE 1 HERETO


                                       and


                               FLEET NATIONAL BANK


                                      with


       KEY CORPORATE CAPITAL INC. having acted as Documentation Agent, and


                  FLEET NATIONAL BANK having acted as Arranger



                                TABLE OF CONTENTS

                                                                                       
1.   DEFINITIONS AND RULES OF INTERPRETATION...............................................1
         1.1.   DEFINITIONS................................................................1
         1.2.   RULES OF INTERPRETATION...................................................17

2.   THE REVOLVING CREDIT FACILITY........................................................18
         2.1.   COMMITMENT TO LEND........................................................18
         2.2.   COMMITMENT FEE............................................................19
         2.3.   REDUCTION OF TOTAL COMMITMENT.............................................19
         2.4.   THE REVOLVING CREDIT NOTES................................................19
         2.5.   INTEREST ON REVOLVING CREDIT LOANS........................................20
         2.6.   REQUESTS FOR REVOLVING CREDIT LOANS.......................................20
         2.7.   CONVERSION OPTIONS........................................................21
                  2.7.1.   CONVERSION TO DIFFERENT TYPE OF REVOLVING CREDIT LOAN..........21
                  2.7.2.   CONTINUATION OF TYPE OF REVOLVING CREDIT LOAN..................21
                  2.7.3.   EURODOLLAR RATE LOANS..........................................21
         2.8.   FUNDS FOR REVOLVING CREDIT LOAN...........................................22
                  2.8.1.   FUNDING PROCEDURES.............................................22
                  2.8.2.   ADVANCES BY ADMINISTRATIVE AGENT...............................22

3.   REPAYMENT OF THE REVOLVING CREDIT LOANS..............................................23
         3.1.   MATURITY..................................................................23
         3.2.   MANDATORY REPAYMENTS......................................................23
                  3.2.1.   GENERAL........................................................23
                  3.2.2.   PROCEEDS OF CERTAIN EVENTS.....................................23
         3.3.   OPTIONAL REPAYMENTS OF REVOLVING CREDIT LOANS.............................24

4.   LETTERS OF CREDIT....................................................................24
         4.1.   LETTER OF CREDIT COMMITMENTS..............................................24
                  4.1.1.   COMMITMENT TO ISSUE LETTERS OF CREDIT..........................24
                  4.1.2.   LETTER OF CREDIT APPLICATIONS..................................25
                  4.1.3.   TERMS OF LETTERS OF CREDIT.....................................25
                  4.1.4.   REIMBURSEMENT OBLIGATIONS OF LENDERS...........................25
                  4.1.5.   PARTICIPATIONS OF LENDERS......................................25
         4.2.   REIMBURSEMENT OBLIGATION OF THE BORROWER..................................25
         4.3.   LETTER OF CREDIT PAYMENTS.................................................26
         4.4.   OBLIGATIONS ABSOLUTE......................................................27
         4.5.   RELIANCE BY ISSUER........................................................27
         4.6.   LETTER OF CREDIT FEE......................................................27

5.   CERTAIN GENERAL PROVISIONS...........................................................28
         5.1.   CLOSING FEES..............................................................28
         5.2.   ADMINISTRATIVE AGENT'S FEE................................................28
         5.3.   FUNDS FOR PAYMENTS........................................................28
                  5.3.1.   PAYMENTS TO ADMINISTRATIVE AGENT...............................28





                                      -ii-

                                                                                       
                  5.3.2.   NO OFFSET, ETC.................................................28
                  5.3.3.   NON U.S. LENDERS...............................................29
         5.4.   COMPUTATIONS..............................................................30
         5.5.   INABILITY TO DETERMINE EURODOLLAR RATE....................................30
         5.6.   ILLEGALITY................................................................31
         5.7.   ADDITIONAL COSTS, ETC.....................................................31
         5.8.   CAPITAL ADEQUACY..........................................................32
         5.9.   CERTIFICATE...............................................................33
         5.10.  INDEMNITY.................................................................33
         5.11.  INTEREST AFTER DEFAULT....................................................34
                  5.11.1.  OVERDUE AMOUNTS................................................34
                  5.11.2.  AMOUNTS NOT OVERDUE............................................34
         5.12.  REPLACEMENT OF LENDERS....................................................34

6.   GUARANTEES...........................................................................35
         6.1.   GUARANTEES OF SUBSIDIARIES................................................35

7.   REPRESENTATIONS AND WARRANTIES.......................................................35
         7.1.   CORPORATE AUTHORITY.......................................................35
                  7.1.1.   INCORPORATION; GOOD STANDING...................................35
                  7.1.2.   AUTHORIZATION..................................................35
                  7.1.3.   ENFORCEABILITY.................................................36
         7.2.   GOVERNMENTAL APPROVALS....................................................36
         7.3.   TITLE TO PROPERTIES; LEASES...............................................36
         7.4.   FINANCIAL STATEMENTS, PROJECTIONS AND SOLVENCY............................36
                  7.4.1.   FISCAL YEAR....................................................36
                  7.4.2.   FINANCIAL STATEMENTS...........................................36
                  7.4.3.   PROJECTIONS....................................................37
                  7.4.4.   SOLVENCY.......................................................37
         7.5.   NO MATERIAL ADVERSE CHANGES, ETC..........................................37
         7.6.   FRANCHISES, PATENTS, COPYRIGHTS, ETC......................................37
         7.7.   LITIGATION................................................................37
         7.8.   NO MATERIALLY ADVERSE CONTRACTS, ETC......................................38
         7.9.   COMPLIANCE WITH OTHER INSTRUMENTS, LAWS, ETC..............................38
         7.10.  TAX STATUS................................................................38
         7.11.  NO EVENT OF DEFAULT.......................................................38
         7.12.  HOLDING COMPANY AND INVESTMENT COMPANY ACTS...............................38
         7.13.  ABSENCE OF FINANCING STATEMENTS, ETC......................................38
         7.14.  INSURANCE.................................................................39
         7.15.  CERTAIN TRANSACTIONS......................................................39
         7.16.  EMPLOYEE BENEFIT PLANS....................................................39
                  7.16.1.  IN GENERAL.....................................................39
                  7.16.2.  TERMINABILITY OF WELFARE PLANS.................................39
                  7.16.3.  GUARANTEED PENSION PLANS.......................................39
                  7.16.4.  MULTIEMPLOYER PLANS............................................40
         7.17.  USE OF PROCEEDS...........................................................40
                  7.17.1.  GENERAL........................................................40





                                      -iii-

                                                                                       
                  7.17.2.  REGULATIONS U AND X............................................40
                  7.17.3.  INELIGIBLE SECURITIES..........................................40
         7.18.  ENVIRONMENTAL COMPLIANCE..................................................41
         7.19.  SUBSIDIARIES, ETC.........................................................42
         7.20.  DISCLOSURE................................................................42

8.   AFFIRMATIVE COVENANTS................................................................43
         8.1.   PUNCTUAL PAYMENT..........................................................43
         8.2.   MAINTENANCE OF OFFICE.....................................................43
         8.3.   RECORDS AND ACCOUNTS......................................................43
         8.4.   FINANCIAL STATEMENTS, CERTIFICATES AND INFORMATION........................43
         8.5.   NOTICES...................................................................44
                  8.5.1.   DEFAULTS.......................................................44
                  8.5.2.   ENVIRONMENTAL EVENTS...........................................45
                  8.5.3.   NOTIFICATION OF CLAIM AGAINST ASSETS...........................45
                  8.5.4.   NOTICE OF LITIGATION AND JUDGMENTS.............................45
         8.6.   LEGAL EXISTENCE; MAINTENANCE OF PROPERTIES................................45
         8.7.   INSURANCE.................................................................46
         8.8.   TAXES.....................................................................46
         8.9.   INSPECTION RIGHTS.........................................................46
         8.10.  COMPLIANCE WITH LAWS, CONTRACTS, LICENSES, AND PERMITS....................46
         8.11.  EMPLOYEE BENEFIT PLANS....................................................47
         8.12.  USE OF PROCEEDS...........................................................47
         8.13.  ADDITIONAL SUBSIDIARIES...................................................47
         8.14.  NEW GUARANTORS............................................................47
         8.15.  AMENDMENTS TO GOVERNING DOCUMENTS.........................................47
         8.16.  FURTHER ASSURANCES........................................................48

9.   CERTAIN NEGATIVE COVENANTS...........................................................48
         9.1.   RESTRICTIONS ON INDEBTEDNESS..............................................48
         9.2.   RESTRICTIONS ON LIENS.....................................................49
         9.3.   RESTRICTIONS ON INVESTMENTS...............................................51
         9.4.   RESTRICTED PAYMENTS.......................................................52
         9.5.   MERGER, CONSOLIDATION AND DISPOSITION OF ASSETS...........................52
                  9.5.1.   MERGERS AND ACQUISITIONS.......................................52
                  9.5.2.   DISPOSITION OF ASSETS..........................................54
         9.6.   SALE AND LEASEBACK........................................................55
         9.7.   COMPLIANCE WITH ENVIRONMENTAL LAWS........................................55
         9.8.   EMPLOYEE BENEFIT PLANS....................................................55
         9.9.   BUSINESS ACTIVITIES.......................................................56
         9.10.  FISCAL YEAR...............................................................56
         9.11.  TRANSACTIONS WITH AFFILIATES..............................................56
         9.12.  MODIFICATION OF GOVERNING DOCUMENTS.......................................56

10.  FINANCIAL COVENANTS..................................................................57
         10.1.  MINIMUM EBITDA............................................................57
         10.2.  LEVERAGE RATIO............................................................57
         10.3.  QUICK RATIO...............................................................57





                                      -iv-

                                                                                       
11.  CLOSING CONDITIONS...................................................................57
         11.1.  LOAN DOCUMENTS............................................................57
         11.2.  CERTIFIED COPIES OF GOVERNING DOCUMENTS...................................57
         11.3.  CORPORATE OR OTHER ACTION.................................................57
         11.4.  INCUMBENCY CERTIFICATE....................................................57
         11.5.  UCC SEARCH RESULTS........................................................58
         11.6.  CERTIFICATES OF INSURANCE.................................................58
         11.7.  OPINION OF COUNSEL........................................................58
         11.8.  PAYMENT OF FEES...........................................................58

12.  CONDITIONS TO ALL BORROWINGS.........................................................58
         12.1.  REPRESENTATIONS TRUE; NO EVENT OF DEFAULT.................................58
         12.2.  NO LEGAL IMPEDIMENT.......................................................59
         12.3.  PROCEEDINGS AND DOCUMENTS.................................................59
         12.4.  GOVERNMENTAL REGULATION...................................................59

13.  EVENTS OF DEFAULT; ACCELERATION; ETC.................................................59
         13.1.  EVENTS OF DEFAULT AND ACCELERATION........................................59
         13.2.  TERMINATION OF COMMITMENTS................................................62
         13.3.  REMEDIES..................................................................62
         13.4.  DISTRIBUTION OF PROCEEDS..................................................63

14.  THE ADMINISTRATIVE AGENT.............................................................63
         14.1.  AUTHORIZATION.............................................................63
         14.2.  EMPLOYEES AND ADMINISTRATIVE AGENTS.......................................64
         14.3.  NO LIABILITY..............................................................64
         14.4.  NO REPRESENTATIONS........................................................65
                  14.4.1.  GENERAL........................................................65
                  14.4.2.  CLOSING DOCUMENTATION, ETC.....................................65
         14.5.  PAYMENTS..................................................................65
                  14.5.1.  PAYMENTS TO ADMINISTRATIVE AGENT...............................66
                  14.5.2.  DISTRIBUTION BY ADMINISTRATIVE AGENT...........................66
                  14.5.3.  DELINQUENT LENDERS.............................................66
         14.6.  HOLDERS OF REVOLVING CREDIT NOTES.........................................67
         14.7.  INDEMNITY.................................................................67
         14.8.  ADMINISTRATIVE AGENT AS LENDER............................................67
         14.9.  RESIGNATION...............................................................67
         14.10. NOTIFICATION OF DEFAULTS AND EVENTS OF DEFAULT............................69
         14.11. DUTIES IN THE CASE OF ENFORCEMENT.........................................69

15.  SUCCESSORS AND ASSIGNS...............................................................69
         15.1.  GENERAL CONDITIONS........................................................69
         15.2.  ASSIGNMENTS...............................................................69
         15.3.  REGISTER..................................................................70
         15.4.  PARTICIPATIONS............................................................71
         15.5.  MISCELLANEOUS ASSIGNMENT PROVISIONS.......................................71
         15.6.  ASSIGNEE OR PARTICIPANT AFFILIATED WITH THE BORROWER......................71
         15.7.  NEW REVOLVING CREDIT NOTES................................................72





                                       -v-

                                                                                       
         15.8.  SPECIAL PURPOSE FUNDING VEHICLE...........................................72

16.  PROVISIONS OF GENERAL APPLICATIONS...................................................73
         16.1.  SETOFF....................................................................73
         16.2.  EXPENSES..................................................................74
         16.3.  INDEMNIFICATION...........................................................75
         16.4.  TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION.............................76
                  16.4.1.  CONFIDENTIALITY................................................76
                  16.4.2.  PRIOR NOTIFICATION.............................................76
                  16.4.3.  OTHER..........................................................77
         16.5.  SURVIVAL OF COVENANTS, ETC................................................77
         16.6.  NOTICES...................................................................77
         16.7.  GOVERNING LAW.............................................................78
         16.8.  HEADINGS..................................................................78
         16.9.  COUNTERPARTS..............................................................78
         16.10. ENTIRE AGREEMENT, ETC.....................................................79
         16.11. WAIVER OF JURY TRIAL......................................................79
         16.12. CONSENTS, AMENDMENTS, WAIVERS, ETC........................................79
         16.13. SEVERABILITY..............................................................81





                                      -vi-

                                    EXHIBITS


EXHIBIT A         Form of Revolving Credit Note
EXHIBIT B         Form of Loan Request
EXHIBIT C         Form of Compliance Certificate
EXHIBIT D         Assignment and Acceptance

                                    SCHEDULES

SCHEDULE 1        Lenders and Commitments
SCHEDULE 7.3      Title to Properties; Leases
SCHEDULE 7.7      Litigation
SCHEDULE 7.18     Environmental Compliance
SCHEDULE 7.19     Subsidiaries Etc.
SCHEDULE 9.1      Existing Indebtedness
SCHEDULE 9.2      Existing Liens
SCHEDULE 9.3      Existing Investments



                           REVOLVING CREDIT AGREEMENT

     This REVOLVING CREDIT AGREEMENT is made as of February 28, 2003, by and
among KEANE, INC. (the "BORROWER"), a Massachusetts corporation having its
principal place of business at Ten City Square, Boston, Massachusetts 02129, and
FLEET NATIONAL BANK, a national banking association and the other lending
institutions listed on SCHEDULE 1 and FLEET NATIONAL BANK as agent for itself
and such other lending institutions.

                   1. DEFINITIONS AND RULES OF INTERPRETATION.

     1.1. DEFINITIONS. The following terms shall have the meanings set forth in
this Section 1 or elsewhere in the provisions of this Credit Agreement referred
to below:

     ACCOUNTS RECEIVABLE. All rights of the Borrower or any of its Subsidiaries
to payment for goods sold, leased or otherwise marketed in the ordinary course
of business and all rights of the Borrower or any of its Subsidiaries to payment
for services rendered in the ordinary course of business and all sums of money
or other proceeds due thereon pursuant to transactions with account debtors
recorded on books of account in accordance with GAAP.

     ADMINISTRATIVE AGENT'S OFFICE. The Administrative Agent's office located at
100 Federal Street, Boston, Massachusetts 02110, or at such other location as
the Administrative Agent may designate from time to time.

     ADMINISTRATIVE AGENT. Fleet National Bank, acting as agent for the Lenders
and each other Person appointed as the successor Administrative Agent in
accordance with Section 15.9.

     ADMINISTRATIVE AGENT'S SPECIAL COUNSEL. Bingham McCutchen LLP or such other
counsel as may be approved by the Administrative Agent.

     ADMINISTRATIVE QUESTIONNAIRE. An Administrative Questionnaire in a form
supplied by the Administrative Agent.

     AFFILIATE. Any Person which, directly or indirectly, controls, is
controlled by or is under common control with the Borrower. "Control" of the
Borrower means the power, directly or indirectly, (a) to vote ten percent (10%)
or more of the Capital Stock (on a fully diluted basis) of the Borrower having
ordinary voting power for the election of directors, managing members or general
partners (as applicable); or (b) to direct or cause the direction of the
management and policies of the Borrower (whether by contract or otherwise).

     APPLICABLE MARGIN. For each day, the Applicable Margin shall be the
applicable margin set forth below with respect to the Utilized Amount for each
such day:



                                       -2-


                                              BASE RATE      EURODOLLAR
       LEVEL           UTILIZED AMOUNT          LOANS        RATE LOANS     LETTER OF CREDIT FEES
    ----------------------------------------------------------------------------------------------
                                                                        
        I          Greater than or equal
                   to 33% of the Total            0%            2.00%               2.00%
                   Commitment

        II         Less than 33% of the           0%            1.75%               1.75%
                   Total Commitment


     APPLICABLE PENSION LEGISLATION. At any time, any pension or retirement
benefits legislation (be it national, federal, provincial, territorial or
otherwise) then applicable to the Borrower or any of its Subsidiaries.

     APPROVED FUND. Any Fund that is administered or managed by (a) a Lender,
(b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender and which Fund is approved by (i) the
Administrative Agent and (ii) unless a Default or an Event of Default has
occurred and is continuing, the Borrower (each such approval not to be
unreasonably withheld or delayed).

     ARRANGER. Fleet National Bank, or any of its affiliates.

     ASSET SALE. Any one or series of related transactions in which the Borrower
or any of its Subsidiaries conveys, sells, leases, licenses or otherwise
disposes of, directly or indirectly, any of its properties, businesses or assets
(including the sale or issuance of capital stock of any Subsidiary other than to
the Borrower or any Subsidiary of the Borrower) whether owned on the Closing
Date or thereafter acquired.

     ASSIGNMENT AND ACCEPTANCE. An assignment and acceptance entered into by a
Lender and an Eligible Assignee (with the consent of any party whose consent is
required by Section 15.2), and accepted by the Administrative Agent, in
substantially the form of EXHIBIT D or any other form approved by the
Administrative Agent.

     BALANCE SHEET DATE. December 31, 2001.

     BASE RATE. The higher of (a) the variable annual rate of interest so
designated from time to time by Fleet as its "prime rate", such rate being a
reference rate and not necessarily representing the lowest or best rate being
charged to any customer, and (b) one-half of one percent (1/2%) above the
Federal Funds Effective Rate. For the purposes of this definition, "FEDERAL
FUNDS EFFECTIVE RATE" shall mean for any day, the rate per annum equal to the
weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average of the
quotations for such day on such transactions received by the Administrative
Agent from three funds brokers of recognized standing selected by the
Administrative Agent. Changes in the Base Rate



                                       -3-

resulting from any changes in Fleet's "PRIME RATE" shall take place immediately
without notice or demand of any kind.

     BASE RATE LOANS. Revolving Credit Loans bearing interest calculated by
reference to the Base Rate.

     BORROWER. As defined in the preamble hereto.

     BUSINESS DAY. Any day other than a Saturday or Sunday on which banking
institutions in Boston, Massachusetts, are open for the transaction of banking
business and, in the case of Eurodollar Rate Loans, also a day which is a
Eurodollar Business Day.

     CAPITALIZED LEASES. Leases under which the Borrower or any of its
Subsidiaries is the lessee or obligor, the discounted future rental payment
obligations under which are required to be capitalized on the balance sheet of
the lessee or obligor in accordance with GAAP.

     CAPITAL STOCK. Any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and all
equivalent ownership interests in a Person (other than a corporation) and any
and all warrants, rights or options to purchase any of the foregoing.

     CASH EQUIVALENTS. As to the Borrower and its Subsidiaries, (a) securities
issued or directly and fully guaranteed or insured by the United States of
America and having a maturity of not more than six (6) months from the date of
acquisition; (b) certificates of deposit, time deposits and eurodollar time
deposits with maturities of six (6) months or less from the date of acquisition,
bankers' acceptances with maturities not exceeding six (6) months and overnight
bank deposits, in each case, (i) with any Lenders or (ii) with any domestic
commercial bank organized under the laws of the United States of America or any
state thereof or a foreign subsidiary of such bank, in each case having a rating
of not less than A or its equivalent by S&P or any successor and having capital
and surplus in excess of $1,000,000,000; (c) certificates of deposit, time
deposits and eurodollar time deposits with maturities of six (6) months or less
from the date of acquisition, bankers' acceptances with maturities not exceeding
six (6) months and overnight bank deposits, in each case, in an aggregate amount
not to exceed $10,000,000 and with any commercial bank organized under the laws
of a country which is a member of the Organization for Economic Cooperation and
Development, or a political subdivision of such country, in each case having
capital and surplus in excess of $400,000,000; (d) repurchase obligations with a
term of not more than seven (7) days for underlying securities of the types
described in clauses (a), (b) and (c) above; and (e) any commercial paper or
finance company paper issued by (i) any Lender or any holding company
controlling any Lender or (ii) any other Person that is rated not less than
"P-1" or "A-1" or their equivalents by Moody's or S&P or their successors.

     CERCLA. See Section 7.18(a).



                                       -4-

     CHANGE OF CONTROL. An event or series of events by which (a) any person or
group of persons, excluding John Keane and any member of his family, (within the
meaning of Section 13 or 14 of the Securities Exchange Act of 1934) shall have
acquired beneficial ownership (within the meaning of Rule 13d-3 promulgated by
the Securities and Exchange Commission under said Act), directly or indirectly,
of thirty five percent (35%) or more of the outstanding shares of Capital Stock
of the Borrower; or, (b) the board of directors of the Borrower shall cease to
consist of directors who were on such board of directors as a director on the
Closing Date, and each other director whose election by the board of directors
of the Borrower or whose nomination for election by the stockholders of the
Borrower was approved by a vote of at least a majority of directors who were
either directors of the Borrower on the Closing Date or whose election or
nomination for election was previously approved by such directors.

     CLOSING DATE. The first date on which the conditions set forth in Section
11 have been satisfied and any Revolving Credit Loans are to be made or any
Letter of Credit is to be issued hereunder.

     CLOSING FEE. See Section 5.1.

     CODE. The Internal Revenue Code of 1986.

     COMMITMENT. With respect to each Lender, the amount set forth on SCHEDULE 1
hereto as the amount of such Lender's commitment to make Revolving Credit Loans
to, and to participate in the issuance, extension and renewal of Letters of
Credit for the account of, the Borrower, as the same may be reduced from time to
time; or if such commitment is terminated pursuant to the provisions hereof,
zero.

     COMMITMENT FEE. See Section 2.2.

     COMMITMENT PERCENTAGE. With respect to each Lender, the percentage set
forth on SCHEDULE 1 hereto as such Lender's percentage of the aggregate
Commitments of all of the Lenders.

     COMPLIANCE CERTIFICATE. See Section 8.4(c).

     CONSOLIDATED OR CONSOLIDATED. With reference to any term defined herein,
shall mean that term as applied to the accounts of the Borrower and its
Subsidiaries, consolidated in accordance with GAAP.

     CONSOLIDATED CURRENT LIABILITIES. All liabilities and other Indebtedness of
the Borrower and its Subsidiaries on a consolidated basis maturing on demand or
within one (1) year from the date as of which Consolidated Current Liabilities
are to be determined, and such other liabilities as may properly be classified
as current liabilities in accordance with GAAP.

     CONSOLIDATED EBITDA. With respect to any fiscal period, an amount equal to
the sum of (a) Consolidated Net Income of the Borrower and its Subsidiaries for
such fiscal



                                       -5-

period, PLUS (b) in each case to the extent deducted in the calculation of such
Person's Consolidated Net Income and without duplication, (i) depreciation and
amortization for such period, PLUS (ii) income tax expense for such period, PLUS
(iii) Consolidated Total Interest Expense paid or accrued during such period,
PLUS (iv) other noncash charges for such period, MINUS (c) to the extent added
in computing Consolidated Net Income, and without duplication, all noncash gains
(including income tax benefits) for such period, in each case as determined in
accordance with GAAP.

     CONSOLIDATED NET INCOME (OR DEFICIT). The consolidated net income (or
deficit) of the Borrower and its Subsidiaries, after deduction of all expenses,
taxes, and other proper charges, determined in accordance with GAAP, after
eliminating therefrom all extraordinary nonrecurring items of income and all
extraordinary nonrecurring noncash items of loss.

     CONSOLIDATED QUICK ASSETS. All cash, Cash Equivalents and Accounts
Receivable of the Borrower and its Subsidiaries on a consolidated basis that, in
accordance with GAAP, are properly classified as current assets, PROVIDED that
Accounts Receivable shall be included only if good and collectible as determined
by the Borrower in accordance with established practice consistently applied and
only if payable and outstanding not more than ninety (90) days after the invoice
date relating to such Accounts Receivable; and such Accounts Receivable shall be
taken at their face value less reserves determined to be sufficient in
accordance with GAAP.

     CONSOLIDATED TOTAL ASSETS. All assets ("CONSOLIDATED BALANCE SHEET ASSETS")
of the Borrower and its Subsidiaries determined on a consolidated basis in
accordance with GAAP.

     CONSOLIDATED TOTAL FUNDED DEBT. With respect to the Borrower and its
Subsidiaries, the sum, without duplication, of (a) the aggregate amount of
Indebtedness of the Borrower and its Subsidiaries, on a consolidated basis,
relating to (i) the borrowing of money or the obtaining of credit, including the
issuance of notes or bonds, (ii) the deferred purchase price of assets (other
than trade payables incurred in the ordinary course of business), (iii) in
respect of any Synthetic Leases or any Capitalized Leases, and (iv) the maximum
drawing amount of all letters of credit outstanding and bankers acceptances PLUS
(b) Indebtedness of the type referred to in clause (a) of another Person
guaranteed by the Borrower or any of its Subsidiaries.

     CONSOLIDATED TOTAL INTEREST EXPENSE. For any period, the aggregate amount
of interest required to be paid or accrued by the Borrower and its Subsidiaries
during such period on all Indebtedness of the Borrower and its Subsidiaries
outstanding during all or any part of such period, whether such interest was or
is required to be reflected as an item of expense or capitalized, including
payments consisting of interest in respect of any Capitalized Lease or any
Synthetic Lease, and including commitment fees, agency fees, facility fees,
balance deficiency fees and similar fees or expenses in connection with the
borrowing of money.



                                       -6-

     CONVERSION REQUEST. A notice given by the Borrower to the Administrative
Agent of the Borrower's election to convert or continue a Revolving Credit Loan
in accordance with Section 2.7.

     CREDIT AGREEMENT. This Revolving Credit Agreement, including the Schedules
and Exhibits hereto.

     DEFAULT. See Section 13.1.

     DELINQUENT LENDER. See Section 14.5.3.

     DE MINIMIS SUBSIDIARY. Any Subsidiary (a) the consolidated revenues of
which for the most recent period of four fiscal quarters for which financial
statements have been delivered pursuant to Section 8.4 were not greater than 5%
of the Borrower's consolidated revenues for such period or (b) the consolidated
assets of which as of the end of such period were not greater than 5% of the
Borrower's consolidated assets as of the end of such period, PROVIDED, HOWEVER,
to the extent such Subsidiary makes an assignment for the benefit of creditors,
admits in writing its inability to pay or generally fails to pay its debts as
they mature or become due, petitions or applies for the appointment of a trustee
or other custodian, liquidator or receiver of such Subsidiary or of any
substantial part of its assets, or shall commence any case or proceeding under
any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt,
dissolution or liquidation or similar law of any jurisdiction, or if any such
petition or application shall be filed or any such case or other proceeding
shall be commenced against such Subsidiary or such Subsidiary shall indicate its
approval thereof, consent thereto or acquiesce therein, or a decree or order is
entered appointing any such trustee, custodian, liquidator or receiver or
adjudicating such Subsidiary bankrupt or insolvent (collectively, an "Insolvency
Event") and such Insolvency Event could reasonably be expected to have a
Material Adverse Effect, such Subsidiary shall not be considered a De Minimis
Subsidiary hereunder.

     DISTRIBUTION. The declaration or payment of any dividend on or in respect
of any shares of any class of Capital Stock of the Borrower, other than
dividends payable solely in shares of common stock of the Borrower; the
purchase, redemption, defeasance, retirement or other acquisition of any shares
of any class of Capital Stock of the Borrower, directly or indirectly through a
Subsidiary of the Borrower or otherwise (including the setting apart of assets
for a sinking or other analogous fund to be used for such purpose); the return
of capital by the Borrower to its shareholders as such; or any other
distribution on or in respect of any shares of any class of Capital Stock of the
Borrower.

     DOLLARS or $. Dollars in lawful currency of the United States of America.

     DOMESTIC LENDING OFFICE. Initially, the office of each Lender designated as
such in SCHEDULE 1 hereto; thereafter, such other office of such Lender, if any,
located within the United States that will be making or maintaining Base Rate
Loans.



                                       -7-

     DOMESTIC SUBSIDIARY. Any Subsidiary which is not a Foreign Subsidiary.

     DRAWDOWN DATE. The date on which any Revolving Credit Loan is made or is to
be made, and the date on which any Revolving Credit Loan is converted or
continued in accordance with Section 2.7.

     ELIGIBLE ASSIGNEE. Any of (a) a Lender, (b) an Affiliate of a Lender so
long as such Affiliate is approved by (i) the Administrative Agent and (ii)
unless a Default or an Event of Default has occurred and is continuing, the
Borrower (each such approval not to be unreasonably withheld or delayed), (c) an
Approved Fund and (d) any other Person (other than a natural person) approved by
(i) the Administrative Agent and (ii) unless a Default or an Event of Default
has occurred and is continuing, the Borrower (each such approval not to be
unreasonably withheld or delayed).

     EMPLOYEE BENEFIT PLAN. Any employee benefit plan within the meaning of
Section 3(3) of ERISA maintained or contributed to by the Borrower or any ERISA
Affiliate, other than a Guaranteed Pension Plan or a Multi-employer Plan.

     ENVIRONMENTAL LAWS. See Section 7.18(a).

     EPA. See Section 7.18(b).

     EQUITY ISSUANCE. The sale or issuance by the Borrower or any of its
Subsidiaries of any of its Capital Stock.

     ERISA. The Employee Retirement Income Security Act of 1974.

     ERISA AFFILIATE. Any Person which is treated as a single employer with the
Borrower under Section 414 of the Code.

     ERISA REPORTABLE EVENT. A reportable event with respect to a Guaranteed
Pension Plan within the meaning of Section 4043 of ERISA and the regulations
promulgated thereunder.

     EUROCURRENCY RESERVE RATE. For any day with respect to a Eurodollar Rate
Loan, the maximum rate (expressed as a decimal) at which any bank subject
thereto would be required to maintain reserves under Regulation D of the Board
of Governors of the Federal Reserve System (or any successor or similar
regulations relating to such reserve requirements) against "EUROCURRENCY
LIABILITIES" (as that term is used in Regulation D), if such liabilities were
outstanding. The Eurocurrency Reserve Rate shall be adjusted automatically on
and as of the effective date of any change in the Eurocurrency Reserve Rate.

     EURODOLLAR BUSINESS DAY. Any day on which commercial banks are open for
international business (including dealings in Dollar deposits) in London or such
other eurodollar interbank market as may be selected by the Administrative Agent
in its sole discretion acting in good faith.



                                       -8-

     EURODOLLAR LENDING OFFICE. Initially, the office of each Lender designated
as such in SCHEDULE 1 hereto; thereafter, such other office of such Lender, if
any, that shall be making or maintaining Eurodollar Rate Loans.

     EURODOLLAR RATE. For any Interest Period with respect to a Eurodollar Rate
Loan, the rate of interest equal to (a) the rate determined by the
Administrative Agent at which Dollar deposits for such Interest Period are
offered based on information presented on Page 3750 of the Dow Jones Market
Service (formerly known as the Telerate Service) as of 11:00 a.m. London time on
the second Eurodollar Business Day prior to the first day of such Interest
Period, divided by (b) a number equal to 1.00 MINUS the Eurocurrency Reserve
Rate. If the rate described above does not appear on the Dow Jones Market
Service on any applicable interest determination date, the Eurodollar Rate shall
be the rate (rounded upward, if necessary, to the nearest one hundred-thousandth
of a percentage point), determined on the basis of the offered rates for
deposits in Dollars for a period of time comparable to such Eurodollar Rate Loan
which are offered by four major banks in the London interbank market at
approximately 11:00 a.m. London time, on the second Eurodollar Business Day
prior to the first day of such Interest Period as selected by the Administrative
Agent. The principal London office of each of the four major London banks will
be requested to provide a quotation of its Dollar deposit offered rate. If at
least two such quotations are provided, the rate for that date will be the
arithmetic mean of the quotations. If fewer than two quotations are provided as
requested, the rate for that date will be determined on the basis of the rates
quoted for loans in Dollars to leading European banks for a period of time
comparable to such Interest Period offered by major banks in New York City at
approximately 11:00 a.m. New York City time, on the second Eurodollar Business
Day prior to the first day of such Interest Period. In the event that the
Administrative Agent is unable to obtain any such quotation as provided above,
it will be considered that Eurodollar Rate pursuant to a Eurodollar Rate Loan
cannot be determined.

     EURODOLLAR RATE LOANS. Revolving Credit Loans bearing interest calculated
by reference to the Eurodollar Rate.

     EVENT OF DEFAULT. See Section 13.1.

     FEE LETTER. The fee letter dated on or prior to the Closing Date among the
Borrower, the Administrative Agent and the Arranger.

     FEES. Collectively, the Commitment Fee, the Letter of Credit Fees, the
Administrative Agent's Fee and the Closing Fee.

     FINANCIAL AFFILIATE. A Subsidiary of the bank holding company controlling
any Lender, which Subsidiary is engaging in any of the activities permitted by
Section 4(e) of the Bank Holding Company Act of 1956 (12 U.S.C. Section 1843).

     FLEET. Fleet National Bank, a national banking association, in its
individual capacity.



                                       -9-

     FOREIGN SUBSIDIARY. Any Subsidiary that is organized under the laws of a
jurisdiction other than the United States of America and the States (or the
District of Columbia) thereof.

     FUND. Any Person (other than a natural person) that is (or will be) engaged
in making, purchasing, holding or otherwise investing in commercial loans and
similar extensions of credit in the ordinary course of its business.

     GAAP OR GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. (a) When used in Section
10, whether directly or indirectly through reference to a capitalized term used
therein, means (i) principles that are consistent with the principles
promulgated or adopted by the Financial Accounting Standards Board and its
predecessors, in effect for the fiscal year ended on the Balance Sheet Date, and
(ii) to the extent consistent with such principles, the accounting practice of
the Borrower reflected in its financial statements for the year ended on the
Balance Sheet Date, and (b) when used in general, other than as provided above,
means principles that are (i) consistent with the principles promulgated or
adopted by the Financial Accounting Standards Board and its predecessors, as in
effect from time to time, and (ii) consistently applied with past financial
statements of the Borrower adopting the same principles, provided that in each
case referred to in this definition of "GAAP" a certified public accountant
would, insofar as the use of such accounting principles is pertinent, be in a
position to deliver an unqualified opinion (other than a qualification regarding
changes in GAAP) as to financial statements in which such principles have been
properly applied.

     GOVERNING DOCUMENTS. With respect to any Person, its certificate or
articles of incorporation, certificate of formation, or, as the case may be,
certificate of limited partnership, its by-laws, operating agreement or, as the
case may be, partnership agreement or other constitutive documents and all
shareholder agreements, voting trusts and similar arrangements applicable to any
of its Capital Stock.

     GOVERNMENTAL AUTHORITY. Any foreign, federal, state, regional, local,
municipal or other government, or any department, commission, board, bureau,
agency, public authority or instrumentality thereof, or any court of competent
jurisdiction or arbitrator.

     GUARANTEED PENSION PLAN. Any employee pension benefit plan within the
meaning of Section 3(2) of ERISA maintained or contributed to by the Borrower or
any ERISA Affiliate the benefits of which are guaranteed on termination in full
or in part by the PBGC pursuant to Title IV of ERISA, other than a
Multi-employer Plan.

     GUARANTEES. Collectively, (a) the Guarantee, dated or to be dated on or
prior to the Closing Date, made by each Guarantor in favor of the Lenders and
the Administrative Agent and (b) the Guarantees dated as of the date required by
Section 8.14 hereof made by the applicable Guarantors in favor of the Lenders
and the Administrative Agent, and in each case pursuant to which each Guarantor
guarantees to the Lenders and the Administrative Agent the payment and
performance of the Obligations and in form and substance satisfactory to the
Lenders and the Administrative Agent.



                                      -10-

     GUARANTORS. All Domestic Subsidiaries of the Borrower.

     HAZARDOUS SUBSTANCES. See Section 7.18(b).

     HEDGING AGREEMENT. Any interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate futures contract,
interest rate option agreement, interest rate exchange agreement, forward
currency exchange agreement, forward rate currency agreement or other similar
agreement or arrangement to which the Borrower or any of its Subsidiaries and
any Lender is a party, designed to protect the Borrower or any of its
Subsidiaries against fluctuations in interest rates, exchange rates or forward
rates.

     INDEBTEDNESS. As to any Person and whether recourse is secured by or is
otherwise available against all or only a portion of the assets of such Person
and whether or not contingent, but without duplication:

            (a)     every obligation of such Person for money borrowed,

            (b)     every obligation of such Person evidenced by bonds,
     debentures, notes or other similar instruments, including obligations
     incurred in connection with the acquisition of property, assets or
     businesses (but excluding trade account payables arising in the ordinary
     course of business),

            (c)     every reimbursement obligation of such Person with respect
     to letters of credit, bankers' acceptances or similar facilities issued for
     the account of such Person,

            (d)     every obligation of such Person issued or assumed as the
     deferred purchase price of property or services (including securities
     repurchase agreements but excluding trade accounts payable or accrued
     liabilities arising in the ordinary course of business),

            (e)     every obligation of such Person under any Capitalized Lease,

            (f)     every obligation of such Person under any Synthetic Lease,

            (g)     all sales by such Person of (i) accounts or general
     intangibles for money due or to become due, (ii) chattel paper, instruments
     or documents creating or evidencing a right to payment of money or (iii)
     other receivables (collectively "RECEIVABLES"), whether pursuant to a
     purchase facility or otherwise, other than in connection with the
     disposition of the business operations of such Person relating thereto or a
     disposition of defaulted receivables for collection and not as a financing
     arrangement, and together with any obligation of such Person to pay any
     discount, interest, fees, indemnities, penalties, recourse, expenses or
     other amounts in connection therewith,



                                      -11-

            (h)     every obligation of such Person (an "EQUITY RELATED PURCHASE
     OBLIGATION") to purchase, redeem, retire or otherwise acquire for value any
     shares of Capital Stock issued by such Person or any rights measured by the
     value of such Capital Stock,

            (i)     every obligation of such Person under any forward contract,
     futures contract, swap, option or other financing agreement or arrangement
     (including, without limitation, caps, floors, collars and similar
     agreements), the value of which is dependent upon interest rates, currency
     exchange rates, commodities or other indices (a "DERIVATIVE CONTRACT"),

            (j)     every obligation in respect of Indebtedness of any other
     entity (including any partnership in which such Person is a general
     partner) to the extent that such Person is liable therefor as a result of
     such Person's ownership interest in or other relationship with such entity,
     except to the extent that the terms of such Indebtedness provide that such
     Person is not liable therefor and such terms are enforceable under
     applicable law,

            (k)     every obligation, contingent or otherwise, of such Person
     guaranteeing, or having the economic effect of guarantying or otherwise
     acting as surety for, any obligation of a type described in any of clauses
     (a) through (j) (the "PRIMARY OBLIGATION") of another Person (the "PRIMARY
     OBLIGOR"), in any manner, whether directly or indirectly, and including,
     without limitation, any obligation of such Person (i) to purchase or pay
     (or advance or supply funds for the purchase of) any security for the
     payment of such primary obligation, (ii) to purchase property, securities
     or services for the purpose of assuring the payment of such primary
     obligation, or (iii) to maintain working capital, equity capital or other
     financial statement condition or liquidity of the primary obligor so as to
     enable the primary obligor to pay such primary obligation.

     The "AMOUNT" or "PRINCIPAL AMOUNT" of any Indebtedness at any time of
determination represented by (t) any Indebtedness issued at a price that is less
than the principal amount at maturity thereof shall be the amount of the
liability in respect thereof determined in accordance with GAAP, (u) any
Capitalized Lease shall be the principal component of the aggregate of the
rentals obligation under such Capitalized Lease payable over the term thereof
that is not subject to termination by the lessee, (v) any sale of receivables
shall be the amount of unrecovered capital or principal investment of the
purchaser (other than the Borrower or any of its wholly-owned Subsidiaries)
thereof, excluding amounts representative of yield or interest earned on such
investment, (w) any Synthetic Lease shall be the stipulated loss value,
termination value or other equivalent amount, (x) any derivative contract shall
be the maximum amount of any termination or loss payment required to be paid by
such Person if such derivative contract were, at the time of determination, to
be terminated by reason of any event of default or early termination event
thereunder, whether or not such event of default or early termination event has
in fact occurred, (y) any equity related purchase obligation shall be the
maximum fixed redemption or purchase price thereof inclusive of any accrued and
unpaid dividends to be comprised in such redemption or purchase



                                      -12-

price and (z) any guaranty or other contingent liability referred to in clause
(k) shall be an amount equal to the stated or determinable amount of the primary
obligation in respect of which such guaranty or other contingent obligation is
made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof (assuming such Person is required to perform
thereunder) as determined by such Person in good faith.

     INELIGIBLE SECURITIES. Securities which may not be underwritten or dealt in
by member banks of the Federal Reserve System under Section 16 of the Banking
Act of 1933 (12 U.S.C. Section 24, Seventh), as amended.

     INTEREST PAYMENT DATE. (a) As to any Base Rate Loan, the last day of the
calendar quarter with respect to interest accrued during such calendar quarter,
including, without limitation, the calendar quarter which includes the Drawdown
Date of such Base Rate Loan; and (b) as to any Eurodollar Rate Loan in respect
of which the Interest Period is (i) 3 months or less, the last day of such
Interest Period and (ii) more than 3 months, the date that is 3 months from the
first day of such Interest Period and, in addition, the last day of such
Interest Period.

     INTEREST PERIOD. With respect to each Revolving Credit Loan, (a) initially,
the period commencing on the Drawdown Date of such Revolving Credit Loan and
ending on the last day of one of the periods set forth below, as selected by the
Borrower in a Loan Request or as otherwise required by the terms of this Credit
Agreement (i) for any Base Rate Loan, the last day of the calendar quarter; and
(ii) for any Eurodollar Rate Loan, 1, 2, 3, or 6 months; and (b) thereafter,
each period commencing on the last day of the next preceding Interest Period
applicable to such Revolving Credit Loan and ending on the last day of one of
the periods set forth above, as selected by the Borrower in a Conversion
Request; PROVIDED that all of the foregoing provisions relating to Interest
Periods are subject to the following:

            (A)     if any Interest Period with respect to a Eurodollar Rate
     Loan would otherwise end on a day that is not a Eurodollar Business Day,
     that Interest Period shall be extended to the next succeeding Eurodollar
     Business Day unless the result of such extension would be to carry such
     Interest Period into another calendar month, in which event such Interest
     Period shall end on the immediately preceding Eurodollar Business Day;

            (B)     if any Interest Period with respect to a Base Rate Loan
     would end on a day that is not a Business Day, that Interest Period shall
     end on the next succeeding Business Day;

            (C)     if the Borrower shall fail to give notice as provided in
     Section 2.7, the Borrower shall be deemed to have requested a conversion of
     the affected Eurodollar Rate Loan to a Base Rate Loan and the continuance
     of all Base Rate Loans as Base Rate Loans on the last day of the then
     current Interest Period with respect thereto;



                                      -13-

            (D)     any Interest Period relating to any Eurodollar Rate Loan
     that begins on the last Eurodollar Business Day of a calendar month (or on
     a day for which there is no numerically corresponding day in the calendar
     month at the end of such Interest Period) shall end on the last Eurodollar
     Business Day of a calendar month; and

            (E)     any Interest Period that would otherwise extend beyond the
     Revolving Credit Loan Maturity Date shall end on the Revolving Credit Loan
     Maturity Date.

     INVESTMENT POLICY GUIDELINE. The [Investment Policy] as in effect on the
Closing Date, a copy of which has been delivered to the Administrative Agent.

     INVESTMENTS. All expenditures made and all liabilities incurred
(contingently or otherwise) for the acquisition of stock or Indebtedness of, or
for loans, advances, capital contributions or transfers of property to, or in
respect of any guarantees (or other commitments as described under
Indebtedness), or obligations of, any Person. In determining the aggregate
amount of Investments outstanding at any particular time: (a) the amount of any
Investment represented by a guaranty shall be taken at not less than the
principal amount of the obligations guaranteed and still outstanding; (b) there
shall be included as an Investment all interest accrued with respect to
Indebtedness constituting an Investment unless and until such interest is paid;
(c) there shall be deducted in respect of each such Investment any amount
received as a return of capital (but only by repurchase, redemption, retirement,
repayment, liquidating dividend or liquidating distribution); (d) there shall
not be deducted in respect of any Investment any amounts received as earnings on
such Investment, whether as dividends, interest or otherwise, except that
accrued interest included as provided in the foregoing clause (b) may be
deducted when paid; and (e) there shall not be deducted from the aggregate
amount of Investments any decrease in the value thereof.

     LENDER AFFILIATE. With respect to any Lender, (a) an Affiliate of such
Lender or (b) any Approved Fund.

     LENDERS. Fleet and the other lending institutions listed on SCHEDULE 1
hereto and any other Person who becomes an assignee of any rights and
obligations of a Lender pursuant to Section 15.

     LETTER OF CREDIT. See Section 4.1.1.

     LETTER OF CREDIT APPLICATION. See Section 4.1.1.

     LETTER OF CREDIT FEE. See Section 4.6.

     LETTER OF CREDIT PARTICIPATION. See Section 4.1.4.

     LEVERAGE RATIO. As at any date of determination, the ratio of (a)
Consolidated Total Funded Debt outstanding on such date to (b) Consolidated
EBITDA for the



                                      -14-

Reference Period ending on such date (or if such date is not a fiscal quarter
end date, the fiscal quarter most recently ended).

     LIEN. Any mortgage, deed of trust, security interest, pledge,
hypothecation, assignment, attachment, deposit arrangement, encumbrance, lien
(statutory, judgment or otherwise), or other security agreement or preferential
arrangement of any kind or nature whatsoever (including any conditional sale or
other title retention agreement, any Capitalized Lease, any Synthetic Lease, any
financing lease involving substantially the same economic effect as any of the
foregoing and the filing of any financing statement under the UCC or comparable
law of any jurisdiction) (other than financing statements filed with respect to
leases solely for notification purposes).

     LOAN DOCUMENTS. This Credit Agreement, the Revolving Credit Notes, the
Letter of Credit Applications, the Letters of Credit, the Fee Letter and the
Guarantees.

     LOAN REQUEST. See Section 2.6.

     MATERIAL ADVERSE EFFECT. With respect to any event or occurrence of
whatever nature (including any adverse determination in any litigation,
arbitration or governmental investigation or proceeding):

     (a) a material adverse effect on the business, properties, condition
(financial or otherwise), assets, operations or income of the Borrower
individually, or the Borrower and its Subsidiaries, taken as a whole;

     (b) an adverse effect on the ability of the Borrower and the Guarantors,
taken as a whole, or the Borrower and its Subsidiaries, taken as a whole, to
perform any of their respective Obligations under any of the Loan Documents to
which it is a party; or

     (c) any impairment of the validity, binding effect or enforceability of
this Credit Agreement or any of the other Loan Documents, or any material
impairment of the rights, remedies or benefits available to the Administrative
Agent or any Lender under any Loan Document.

In determining whether any individual event could reasonably be expected to
result in a Material Adverse Effect, notwithstanding that such event does not of
itself have such effect, a Material Adverse Effect shall be deemed to have
occurred if the cumulative effect of such event and all other then existing
events could reasonably be expected to result in a Material Adverse Effect.

     MAXIMUM DRAWING AMOUNT. The maximum aggregate amount that the beneficiaries
may at any time draw under outstanding Letters of Credit, as such aggregate
amount may be reduced from time to time pursuant to the terms of the Letters of
Credit.

     MOODY'S. Moody's Investors Services, Inc.



                                      -15-

     MULTI-EMPLOYER PLAN. Any multi-employer plan within the meaning of Section
3(37) of ERISA maintained or contributed to by the Borrower or any ERISA
Affiliate.

     NET CASH EQUITY ISSUANCE PROCEEDS. With respect to any Equity Issuance, the
excess of the gross cash proceeds received by such Person for such Equity
Issuance after deduction of all reasonable and customary transaction expenses
(including, without limitation, underwriting discounts and commissions) actually
incurred in connection with such a sale or other issuance.

     NON-U.S. LENDER. See Section 5.3.3.

     OBLIGATIONS. All indebtedness, obligations and liabilities of any of the
Borrower and its Subsidiaries to any of the Lenders and the Administrative
Agent, individually or collectively, existing on the date of this Credit
Agreement or arising thereafter, direct or indirect, joint or several, absolute
or contingent, matured or unmatured, liquidated or unliquidated, secured or
unsecured, arising by contract, operation of law or otherwise, arising or
incurred under this Credit Agreement or any of the other Loan Documents or any
Hedging Agreement or in respect of any of the Revolving Credit Loans made or
Reimbursement Obligations incurred or any of the Revolving Credit Notes, Letter
of Credit Application, Letter of Credit or other instruments at any time
evidencing any thereof.

     OUTSTANDING. With respect to the Revolving Credit Loans, the aggregate
unpaid principal thereof as of any date of determination.

     PARTICIPANT. See Section 15.4.

     PBGC. The Pension Benefit Guaranty Corporation created by Section 4002 of
ERISA and any successor entity or entities having similar responsibilities.

     PERMITTED ACQUISITION. See Section 9.5.1.

     PERMITTED LIENS. Liens permitted by Section 9.2.

     PERSON. Any individual, corporation, limited liability company partnership,
limited liability partnership, trust, other unincorporated association,
business, or other legal entity, and any Governmental Authority.

     RCRA. See Section 7.18(a).

     REAL ESTATE. All real property at any time owned or leased (as lessee or
sublessee) by the Borrower or any of its Subsidiaries.

     RECORD. The grid attached to a Revolving Credit Note, or the continuation
of such grid, or any other similar record, including computer records,
maintained by any Lender with respect to any Revolving Credit Loan referred to
in such Revolving Credit Note.



                                      -16-

     REFERENCE PERIOD. As of any date of determination, the period of four (4)
consecutive fiscal quarters of the Borrower and its Subsidiaries ending on such
date, or if such date is not a fiscal quarter end date, the period of four (4)
consecutive fiscal quarters most recently ended (in each case treated as a
single accounting period).

     REGISTER. See Section 15.3.

     REIMBURSEMENT OBLIGATION. The Borrower's obligation to reimburse the
Administrative Agent and the Lenders on account of any drawing under any Letter
of Credit as provided in Section 4.2.

     RELATED PARTIES. With respect to any specified Person, such Person's
Affiliates and the respective directors, officers, employees, agents and
advisors of such Person and such Person's Affiliates.

     REQUIRED LENDERS. As of any date, (a) if there are fewer than three (3)
Lenders on such date, all the Lenders and (b) if there are three or more Lenders
on such date, the Lenders holding at least sixty six and two thirds percent
(66 2/3%) of the outstanding principal amount of the Revolving Credit Notes on
such date; and if no such principal is outstanding, the Lenders whose aggregate
Commitments constitutes at sixty six and two thirds percent (66 2/3%) of the
Total Commitment.

     RESTRICTED PAYMENT. In relation to the Borrower and its Subsidiaries, any
(a) Distribution, (b) payment or prepayment by the Borrower or its Subsidiaries
to the Borrower's shareholders (or other equity holders) and, if a Subsidiary's
shareholder is a Person other than the Borrower or another Subsidiary, to such
shareholder (or other equity holder) (a "NONAFFILIATED SHAREHOLDER") unless an
equal and ratable payment is simultaneously being made to such Subsidiary's
other shareholders which are not Nonaffiliated Shareholders, (c) derivatives or
other transactions with any financial institution, commodities or stock exchange
or clearinghouse (a "DERIVATIVES COUNTERPARTY") obligating the Borrower or any
Subsidiary to make payments to such Derivatives Counterparty as a result of any
change in market value of any Capital Stock of the Borrower or such Subsidiary
or (d) payment in respect of any phantom stock plan or similar interests.

     REVOLVING CREDIT LOAN MATURITY DATE. February 24, 2006.

     REVOLVING CREDIT LOANS. Revolving credit loans made or to be made by the
Lenders to the Borrower pursuant to Section 2.

     REVOLVING CREDIT NOTES. See Section 2.4.

     SARA. See Section 7.18(a).

     S&P. Standard & Poor's Ratings Group.



                                      -17-

     SUBSIDIARY. Any corporation, association, trust, or other business entity
of which the designated parent shall at any time own directly or indirectly
through a Subsidiary or Subsidiaries at least a majority (by number of votes) of
the outstanding Voting Stock.

     SYNTHETIC LEASE. Any lease of goods or other property, whether real or
personal, which is treated as an operating lease under GAAP and as a loan or
financing for U.S. income tax purposes.

     TOTAL COMMITMENT. The sum of the Commitments of the Lenders, as in effect
from time to time.

     TOTAL OUTSTANDINGS. As of any date of determination, the sum of all
Revolving Credit Loans outstanding on such date, plus all Unpaid Reimbursement
Obligations plus all the Maximum Drawing Amount of all issued and outstanding
Letters of Credit.

     TYPE. As to any Revolving Credit Loan, its nature as a Base Rate Loan or a
Eurodollar Rate Loan.

     UNENCUMBERED CASH. The aggregate amount of cash and Cash Equivalents of the
Borrower and its Subsidiaries which is not subject to any Lien or other claim
whatsoever.

     UNPAID REIMBURSEMENT OBLIGATION. Any Reimbursement Obligation for which the
Borrower does not reimburse the Administrative Agent and the Lenders on the date
specified in, and in accordance with, Section 4.2.

     UTILIZED AMOUNT. As of any date of determination, the Total Outstandings on
such date.

     VOTING STOCK. Stock or similar interests, of any class or classes (however
designated), the holders of which are at the time entitled, as such holders, to
vote for the election of a majority of the directors (or persons performing
similar functions) of the corporation, association, trust or other business
entity involved, whether or not the right so to vote exists by reason of the
happening of a contingency.

     1.2. RULES OF INTERPRETATION.

            (a)     A reference to any document or agreement shall include such
     document or agreement as amended, modified or supplemented from time to
     time in accordance with its terms and the terms of this Credit Agreement.

            (b)     The singular includes the plural and the plural includes the
     singular.

            (c)     A reference to any law includes any amendment or
     modification to such law.



                                      -18-

            (d)     A reference to any Person includes its permitted successors
     and permitted assigns.

            (e)     Accounting terms not otherwise defined herein have the
     meanings assigned to them by GAAP applied on a consistent basis by the
     accounting entity to which they refer.

            (f)     The words "include", "includes" and "including" are not
     limiting.

            (g)     All terms not specifically defined herein or by GAAP, which
     terms are defined in the Uniform Commercial Code as in effect in the
     Commonwealth of Massachusetts, have the meanings assigned to them therein,
     with the term "INSTRUMENT" being that defined under Article 9 of the
     Uniform Commercial Code.

            (h)     Reference to a particular "Section" refers to that section
     of this Credit Agreement unless otherwise indicated.

            (i)     The words "herein", "hereof", "hereunder" and words of like
     import shall refer to this Credit Agreement as a whole and not to any
     particular section or subdivision of this Credit Agreement.

            (j)     Unless otherwise expressly indicated, in the computation of
     periods of time from a specified date to a later specified date, the word
     "from" means "from and including," the words "to" and "until" each mean "to
     but excluding," and the word "through" means "to and including."

            (k)     This Credit Agreement and the other Loan Documents may use
     several different limitations, tests or measurements to regulate the same
     or similar matters. All such limitations, tests and measurements are,
     however, cumulative and are to be performed in accordance with the terms
     thereof.

            (l)     This Credit Agreement and the other Loan Documents are the
     result of negotiation among, and have been reviewed by counsel to, among
     others, the Administrative Agent and the Borrower and are the product of
     discussions and negotiations among all parties. Accordingly, this Credit
     Agreement and the other Loan Documents are not intended to be construed
     against the Administrative Agent or any of the Lenders merely on account of
     the Administrative Agent's or any Lender's involvement in the preparation
     of such documents.

                        2. THE REVOLVING CREDIT FACILITY.

     2.1. COMMITMENT TO LEND. Subject to the terms and conditions set forth in
this Credit Agreement, each of the Lenders severally agrees to lend to the
Borrower and the Borrower may borrow, repay, and reborrow from time to time from
the Closing Date up to but not including the Revolving Credit Loan Maturity Date
upon notice by the



                                      -19-

Borrower to the Administrative Agent given in accordance with Section 2.6, such
sums as are requested by the Borrower up to a maximum aggregate amount
outstanding (after giving effect to all amounts requested) at any one time equal
to such Lender's Commitment MINUS such Lender's Commitment Percentage of the sum
of the Maximum Drawing Amount and all Unpaid Reimbursement Obligations, PROVIDED
that the sum of the outstanding amount of the Revolving Credit Loans (after
giving effect to all amounts requested) PLUS the Maximum Drawing Amount and all
Unpaid Reimbursement Obligations shall not at any time exceed the Total
Commitment at such time. The Revolving Credit Loans shall be made PRO RATA in
accordance with each Lender's Commitment Percentage. Each request for a
Revolving Credit Loan hereunder shall constitute a representation and warranty
by the Borrower that the conditions set forth in Section 11 and Section 12, in
the case of the initial Revolving Credit Loans to be made on the Closing Date,
and Section 12, in the case of all other Revolving Credit Loans, have been
satisfied on the date of such request.

     2.2. COMMITMENT FEE. The Borrower agrees to pay to the Administrative Agent
for the accounts of the Lenders in accordance with their respective Commitment
Percentages a commitment fee (the "COMMITMENT FEE") calculated at the rate of
thirty basis points per annum on the average daily amount during each calendar
quarter or portion thereof from the date hereof to the Revolving Credit Loan
Maturity Date by which the Total Commitment MINUS the sum of the Maximum Drawing
Amount and all Unpaid Reimbursement Obligations exceeds the outstanding amount
of Revolving Credit Loans during such calendar quarter. The Commitment Fee shall
be payable quarterly in arrears on the first day of each calendar quarter for
the immediately preceding calendar quarter commencing on the first such date
following the date hereof, with a final payment on the Revolving Credit Loan
Maturity Date or any earlier date on which the Commitments shall terminate.

     2.3. REDUCTION OF TOTAL COMMITMENT. The Borrower shall have the right at
any time and from time to time upon five (5) Business Days prior written notice
to the Administrative Agent to reduce by $5,000,000 or an integral multiple of
$1,000,000 in excess thereof or to terminate entirely the Total Commitment,
whereupon the Commitments of the Lenders shall be reduced PRO RATA in accordance
with their respective Commitment Percentages of the amount specified in such
notice or, as the case may be, terminated. Promptly after receiving any notice
of the Borrower delivered pursuant to this Section 2.3, the Administrative Agent
will notify the Lenders of the substance thereof. Upon the effective date of any
such reduction or termination, the Borrower shall pay to the Administrative
Agent for the respective accounts of the Lenders the full amount of any
Commitment Fee then accrued on the amount of the reduction. No reduction or
termination of the Commitments may be reinstated.

     2.4. THE REVOLVING CREDIT NOTES. The Revolving Credit Loans shall be
evidenced by separate promissory notes of the Borrower in substantially the form
of EXHIBIT A hereto (each a "REVOLVING CREDIT NOTE"), dated as of the Closing
Date (or such other date on which a Lender may become a party hereto in
accordance with Section 15 hereof) and completed with appropriate insertions.
One Revolving Credit Note shall be payable



                                      -20-

to the order of each Lender in a principal amount equal to such Lender's
Commitment or, if less, the outstanding amount of all Revolving Credit Loans
made by such Lender, plus interest accrued thereon, as set forth below. The
Borrower irrevocably authorizes each Lender to make or cause to be made, at or
about the time of the Drawdown Date of any Revolving Credit Loan or at the time
of receipt of any payment of principal on such Lender's Revolving Credit Note,
an appropriate notation on such Lender's Record reflecting the making of such
Revolving Credit Loan or (as the case may be) the receipt of such payment. The
outstanding amount of the Revolving Credit Loans set forth on such Lender's
Record shall be PRIMA FACIE evidence of the principal amount thereof owing and
unpaid to such Lender, but the failure to record, or any error in so recording,
any such amount on such Lender's Record shall not limit or otherwise affect the
obligations of the Borrower hereunder or under any Revolving Credit Note to make
payments of principal of or interest on any Revolving Credit Note when due.

     2.5. INTEREST ON REVOLVING CREDIT LOANS. Except as otherwise provided in
Section 5.11,

            (a)     Each Revolving Credit Loan which is a Base Rate Loan shall
     bear interest for the period commencing with the Drawdown Date thereof and
     ending on the last day of the Interest Period with respect thereto at the
     rate per annum equal to the Base Rate PLUS the Applicable Margin with
     respect to Base Rate Loans as in effect from time to time.

            (b)     Each Revolving Credit Loan which is a Eurodollar Rate Loan
     shall bear interest for the period commencing with the Drawdown Date
     thereof and ending on the last day of the Interest Period with respect
     thereto at the rate per annum equal to the Eurodollar Rate determined for
     such Interest Period PLUS the Applicable Margin with respect to Eurodollar
     Rate Loans as in effect from time to time.

The Borrower promises to pay interest on each Revolving Credit Loan in arrears
on each Interest Payment Date with respect thereto.

     2.6. REQUESTS FOR REVOLVING CREDIT LOANS. The Borrower shall give to the
Administrative Agent written notice in the form of EXHIBIT B hereto (or
telephonic notice confirmed in a writing in the form of EXHIBIT C hereto) of
each Revolving Credit Loan requested hereunder (a "Loan Request") no less than
(a) one (1) Business Day prior to the proposed Drawdown Date of any Base Rate
Loan and (b) three (3) Eurodollar Business Days prior to the proposed Drawdown
Date of any Eurodollar Rate Loan. Each such notice shall specify (i) the
principal amount of the Revolving Credit Loan requested, (ii) the proposed
Drawdown Date of such Revolving Credit Loan, (iii) the Interest Period for such
Revolving Credit Loan; (iv) the Type of such Revolving Credit Loan and (v)
whether all or any portion of the proceeds of such Revolving Credit Loan are to
be used for the purpose of purchasing or carrying any "MARGIN SECURITY" or
"MARGIN STOCK" (as such terms are used in Regulations U and X of the Board of
Governors of the Federal Reserve System, 12 C.F.R. Parts 221 and 224). Promptly
upon receipt of any such notice, the Administrative Agent shall notify each of
the Lenders thereof. Each Loan Request shall be irrevocable and binding on the
Borrower and shall obligate the Borrower to



                                      -21-

accept the Revolving Credit Loan requested from the Lenders on the proposed
Drawdown Date. Each Loan Request shall be in a minimum aggregate amount of
$500,000 or an integral multiple of $250,000 in excess thereof.

     2.7. CONVERSION OPTIONS.

            2.7.1. CONVERSION TO DIFFERENT TYPE OF REVOLVING CREDIT LOAN. The
     Borrower may elect from time to time to convert any outstanding Revolving
     Credit Loan to a Revolving Credit Loan of another Type, PROVIDED that (a)
     with respect to any such conversion of a Eurodollar Rate Loan to a Base
     Rate Loan, the Borrower shall give the Administrative Agent at least one
     (1) Business Days prior written notice of such election; (b) with respect
     to any such conversion of a Base Rate Loan to a Eurodollar Rate Loan, the
     Borrower shall give the Administrative Agent at least three (3) Eurodollar
     Business Days prior written notice of such election; (c) with respect to
     any such conversion of a Eurodollar Rate Loan into a Base Rate Loan, such
     conversion shall only be made on the last day of the Interest Period with
     respect thereto and (d) no Revolving Credit Loan may be converted into a
     Eurodollar Rate Loan when any Default or Event of Default has occurred and
     is continuing. On the date on which such conversion is being made each
     Lender shall take such action as is necessary to transfer its Commitment
     Percentage of such Revolving Credit Loans to its Domestic Lending Office or
     its Eurodollar Lending Office, as the case may be. All or any part of
     outstanding Revolving Credit Loans of any Type may be converted into a
     Revolving Credit Loan of another Type as provided herein, PROVIDED that any
     partial conversion shall be in an aggregate principal amount of $500,000 or
     a whole multiple of $250,000 in excess thereof. Each Conversion Request
     relating to the conversion of a Revolving Credit Loan to a Eurodollar Rate
     Loan shall be irrevocable by the Borrower.

            2.7.2. CONTINUATION OF TYPE OF REVOLVING CREDIT LOAN. Any Revolving
     Credit Loan of any Type may be continued as a Revolving Credit Loan of the
     same Type upon the expiration of an Interest Period with respect thereto by
     compliance by the Borrower with the notice provisions contained in Section
     2.7.1; PROVIDED that no Eurodollar Rate Loan may be continued as such when
     any Default or Event of Default has occurred and is continuing, but shall
     be automatically converted to a Base Rate Loan on the last day of the first
     Interest Period relating thereto ending during the continuance of any
     Default or Event of Default of which officers of the Administrative Agent
     active upon the Borrower's account have actual knowledge. In the event that
     the Borrower fails to provide any such notice with respect to the
     continuation of any Eurodollar Rate Loan as such, then such Eurodollar Rate
     Loan shall be automatically converted to a Base Rate Loan on the last day
     of the first Interest Period relating thereto. The Administrative Agent
     shall notify the Lenders promptly when any such automatic conversion
     contemplated by this Section 2.7 is scheduled to occur.

            2.7.3. EURODOLLAR RATE LOANS. Any conversion to or from Eurodollar
     Rate Loans shall be in such amounts and be made pursuant to such elections
     so that,



                                      -22-

     after giving effect thereto, the aggregate principal amount of all
     Eurodollar Rate Loans having the same Interest Period shall not be less
     than $500,000 or a whole multiple of $250,000 in excess thereof. No more
     than four (4) Eurodollar Rate Loans having different Interest Periods may
     be outstanding at any time.

     2.8. FUNDS FOR REVOLVING CREDIT LOAN.

            2.8.1. FUNDING PROCEDURES. Not later than 11:00 a.m. (Boston time)
     on the proposed Drawdown Date of any Revolving Credit Loans, each of the
     Lenders will make available to the Administrative Agent, at the
     Administrative Agent's Office, in immediately available funds, the amount
     of such Lender's Commitment Percentage of the amount of the requested
     Revolving Credit Loans. Upon receipt from each Lender of such amount, and
     upon receipt of the documents required by Sections 11 (only in the case of
     the initial Revolving Credit Loans) and 12 (in the case of any Revolving
     Credit Loan) and the satisfaction of the other conditions set forth
     therein, to the extent applicable, the Administrative Agent will make
     available to the Borrower the aggregate amount of such Revolving Credit
     Loans made available to the Administrative Agent by the Lenders. The
     failure or refusal of any Lender to make available to the Administrative
     Agent at the aforesaid time and place on any Drawdown Date the amount of
     its Commitment Percentage of the requested Revolving Credit Loans shall not
     relieve any other Lender from its several obligation hereunder to make
     available to the Administrative Agent the amount of such other Lender's
     Commitment Percentage of any requested Revolving Credit Loans.

            2.8.2. ADVANCES BY ADMINISTRATIVE AGENT. The Administrative Agent
     may, unless notified to the contrary by any Lender prior to a Drawdown
     Date, assume that such Lender has made available to the Administrative
     Agent on such Drawdown Date the amount of such Lender's Commitment
     Percentage of the Revolving Credit Loans to be made on such Drawdown Date,
     and the Administrative Agent may (but it shall not be required to), in
     reliance upon such assumption, make available to the Borrower a
     corresponding amount. If any Lender makes available to the Administrative
     Agent such amount on a date after such Drawdown Date, such Lender shall pay
     to the Administrative Agent on demand an amount equal to the product of (a)
     the average computed for the period referred to in clause (c) below, of the
     weighted average interest rate paid by the Administrative Agent for federal
     funds acquired by the Administrative Agent during each day included in such
     period, TIMES (b) the amount of such Lender's Commitment Percentage of such
     Revolving Credit Loans, TIMES (c) a fraction, the numerator of which is the
     number of days that elapse from and including such Drawdown Date to the
     date on which the amount of such Lender's Commitment Percentage of such
     Revolving Credit Loans shall become immediately available to the
     Administrative Agent, and the denominator of which is 360. A statement of
     the Administrative Agent submitted to such Lender with respect to any
     amounts owing under this paragraph shall be PRIMA FACIE evidence of the
     amount due and owing to the Administrative Agent by such Lender. If the
     amount of such Lender's Commitment Percentage of such



                                      -23-

     Revolving Credit Loans is not made available to the Administrative Agent by
     such Lender within three (3) Business Days following such Drawdown Date,
     the Administrative Agent shall be entitled to recover such amount from the
     Borrower on demand, with interest thereon at the rate per annum applicable
     to the Revolving Credit Loans made on such Drawdown Date.

                   3. REPAYMENT OF THE REVOLVING CREDIT LOANS.

     3.1. MATURITY. The Borrower promises to pay on the Revolving Credit Loan
Maturity Date, and there shall become absolutely due and payable on the
Revolving Credit Loan Maturity Date, all of the Revolving Credit Loans
outstanding on such date, together with any and all accrued and unpaid interest
thereon.

     3.2.  MANDATORY REPAYMENTS.

            3.2.1. GENERAL. If at any time the sum of the outstanding amount of
     the Revolving Credit Loans, the Maximum Drawing Amount and all Unpaid
     Reimbursement Obligations exceeds the Total Commitment at such time, then
     the Borrower shall immediately pay the amount of such excess to the
     Administrative Agent for the respective accounts of the Lenders for
     application: first, to any Unpaid Reimbursement Obligations; second, to the
     Revolving Credit Loans; and third, to provide to the Administrative Agent
     cash collateral for Reimbursement Obligations as contemplated by Section
     4.2(b) and (c). Each payment of any Unpaid Reimbursement Obligations or
     prepayment of Revolving Credit Loans shall be allocated among the Lenders,
     in proportion, as nearly as practicable, to each Reimbursement Obligation
     or (as the case may be) the respective unpaid principal amount of each
     Lender's Revolving Credit Note, with adjustments to the extent practicable
     to equalize any prior payments or repayments not exactly in proportion.

            3.2.2. PROCEEDS OF CERTAIN EVENTS. Concurrently with the receipt by
     the Borrower or any Subsidiary of Net Cash Equity Issuance Proceeds of the
     Borrower or any of its Subsidiaries, the Borrower shall pay to the
     Administrative Agent for the respective accounts of the Lenders an amount
     equal to one hundred percent (100%) of such proceeds, to be applied to
     reduce the outstanding amount of the Revolving Credit Loans (and, for the
     avoidance of doubt, will not require any mandatory reduction in the Total
     Commitment), PROVIDED, HOWEVER, notwithstanding the foregoing, to the
     extent the Borrower or any Subsidiary receives any Net Cash Equity Issuance
     Proceeds directly from the sale of a Subsidiary which is expressly
     permitted by the terms of this Credit Agreement, the Borrower shall not be
     required to pay such proceeds to the Lenders so long as no Default or Event
     of Default has occurred and is continuing both immediately prior to, and
     immediately after, receiving such Net Cash Equity Issuance Proceeds. Such
     mandatory prepayments shall be allocated among the Lenders in proportion,
     as nearly as practicable, to the respective outstanding amounts of each
     Lender's Revolving Credit Note, with adjustments



                                      -24-

     to the extent practicable to equalize any prior prepayments not exactly in
     proportion.

     3.3. OPTIONAL REPAYMENTS OF REVOLVING CREDIT LOANS. The Borrower shall have
the right, at its election, to repay the outstanding amount of the Revolving
Credit Loans, as a whole or in part, at any time without penalty or premium,
PROVIDED that any full or partial prepayment of the outstanding amount of any
Eurodollar Rate Loans pursuant to this Section 3.3 which is made on any date
other than the last day of the Interest Period relating thereto shall be subject
to Section 5.10 hereof. The Borrower shall give the Administrative Agent, no
later than 10:00 a.m., Boston time, at least one (1) Business Days prior written
notice of any proposed prepayment pursuant to this Section 3.3 of Base Rate
Loans, and three (3) Eurodollar Business Days notice of any proposed prepayment
pursuant to this Section 3.3 of Eurodollar Rate Loans, in each case specifying
the proposed date of prepayment of Revolving Credit Loans and the principal
amount to be prepaid. Each such partial prepayment of the Revolving Credit Loans
shall be in an integral multiple of $500,000, shall be accompanied by the
payment of accrued interest on the principal prepaid to the date of prepayment
and shall be applied, in the absence of instruction by the Borrower, first to
the principal of Base Rate Loans and then to the principal of Eurodollar Rate
Loans. Each partial prepayment shall be allocated among the Lenders, in
proportion, as nearly as practicable, to the respective unpaid principal amount
of each Lender's Revolving Credit Note, with adjustments to the extent
practicable to equalize any prior repayments not exactly in proportion.

                              4. LETTERS OF CREDIT.

     4.1. LETTER OF CREDIT COMMITMENTS.

            4.1.1. COMMITMENT TO ISSUE LETTERS OF CREDIT. Subject to the terms
     and conditions hereof and the execution and delivery by the Borrower of a
     letter of credit application on the Administrative Agent's customary form
     (a "LETTER OF CREDIT APPLICATION"), the Administrative Agent on behalf of
     the Lenders and in reliance upon the agreement of the Lenders set forth in
     Section 4.1.4 and upon the representations and warranties of the Borrower
     contained herein, agrees, in its individual capacity, to issue, extend and
     renew for the account of the Borrower one or more standby or documentary
     letters of credit (individually, a "LETTER OF CREDIT"), in such form as may
     be requested from time to time by the Borrower and agreed to by the
     Administrative Agent and in such currency other than Dollars as the
     Borrower may request and which is approved in writing by all of the
     Lenders; PROVIDED, HOWEVER, that, after giving effect to such request, (a)
     the sum of the aggregate Maximum Drawing Amount and all Unpaid
     Reimbursement Obligations shall not exceed the Dollar equivalent of
     $15,000,000 at any one time and (b) the sum of (i) the Maximum Drawing
     Amount on all Letters of Credit, (ii) all Unpaid Reimbursement Obligations,
     and (iii) the amount of all Revolving Credit Loans outstanding shall not
     exceed the Total Commitment at such time.



                                      -25-

            4.1.2. LETTER OF CREDIT APPLICATIONS. Each Letter of Credit
     Application shall be completed to the satisfaction of the Administrative
     Agent. In the event that any provision of any Letter of Credit Application
     shall be inconsistent with any provision of this Credit Agreement, then the
     provisions of this Credit Agreement shall, to the extent of any such
     inconsistency, govern.

            4.1.3. TERMS OF LETTERS OF CREDIT. Each Letter of Credit issued,
     extended or renewed hereunder shall, among other things, (a) provide for
     the payment of sight drafts for honor thereunder when presented in
     accordance with the terms thereof and when accompanied by the documents
     described therein, and (b) have an expiry date no later than the date which
     is fourteen (14) days (or, if the Letter of Credit is confirmed by a
     confirmer or otherwise provides for one or more nominated persons,
     forty-five (45) days) prior to the Revolving Credit Loan Maturity Date.
     Each Letter of Credit so issued, extended or renewed shall be subject to
     the Uniform Customs and Practice for Documentary Credits (1993 Revision),
     International Chamber of Commerce Publication No. 500 or any successor
     version thereto adopted by the Administrative Agent in the ordinary course
     of its business as a letter of credit issuer and in effect at the time of
     issuance of such Letter of Credit (the "UNIFORM CUSTOMS") or, in the case
     of a standby Letter of Credit, either the Uniform Customs or the
     International Standby Practices (ISP98), International Chamber of Commerce
     Publication No. 590, or any successor code of standby letter of credit
     practices among banks adopted by the Administrative Agent in the ordinary
     course of its business as a standby letter of credit issuer and in effect
     at the time of issuance of such Letter of Credit.

            4.1.4. REIMBURSEMENT OBLIGATIONS OF LENDERS. Each Lender severally
     agrees that it shall be absolutely liable, without regard to the occurrence
     of any Default or Event of Default or any other condition precedent
     whatsoever, to the extent of such Lender's Commitment Percentage, to
     reimburse the Administrative Agent on demand for the amount of each draft
     paid by the Administrative Agent under each Letter of Credit to the extent
     that such amount is not reimbursed by the Borrower pursuant to Section 4.2
     (such agreement for a Lender being called herein the "LETTER OF CREDIT
     PARTICIPATION" of such Lender).

            4.1.5. PARTICIPATIONS OF LENDERS. Each such payment made by a Lender
     shall be treated as the purchase by such Lender of a participating interest
     in the Borrower's Reimbursement Obligation under Section 4.2 in an amount
     equal to such payment. Each Lender shall share in accordance with its
     participating interest in any interest which accrues pursuant to Section
     4.2.

     4.2. REIMBURSEMENT OBLIGATION OF THE BORROWER. In order to induce the
Administrative Agent to issue, extend and renew each Letter of Credit and the
Lenders to participate therein, the Borrower hereby agrees to reimburse or pay
to the Administrative Agent, for the account of the Administrative Agent or (as
the case may be) the Lenders, with respect to each Letter of Credit issued,
extended or renewed by the Administrative Agent hereunder,



                                      -26-

            (a)     except as otherwise expressly provided in Section 4.2(b) and
     (c), on each date that any draft presented under such Letter of Credit is
     honored by the Administrative Agent, or the Administrative Agent otherwise
     makes a payment with respect thereto, (i) the amount paid by the
     Administrative Agent under or with respect to such Letter of Credit, and
     (ii) the amount of any taxes, fees, charges or other costs and expenses
     whatsoever incurred by the Administrative Agent or any Lender in connection
     with any payment made by the Administrative Agent or any Lender under, or
     with respect to, such Letter of Credit,

            (b)     upon the reduction (but not termination) of the Total
     Commitment to an amount less than the Maximum Drawing Amount, an amount
     equal to such difference, which amount shall be held by the Administrative
     Agent for the benefit of the Lenders and the Administrative Agent as cash
     collateral for all Reimbursement Obligations, and

            (c)     upon the termination of the Total Commitment, or the
     acceleration of the Reimbursement Obligations with respect to all Letters
     of Credit in accordance with Section 13, an amount equal to the then
     Maximum Drawing Amount on all Letters of Credit, which amount shall be held
     by the Administrative Agent for the benefit of the Lenders and the
     Administrative Agent as cash collateral for all Reimbursement Obligations.

Each such payment shall be made to the Administrative Agent at the
Administrative Agent's Office in immediately available funds. Interest on any
and all amounts remaining unpaid by the Borrower under this Section 4.2 at any
time from the date such amounts become due and payable (whether as stated in
this Section 4.2, by acceleration or otherwise) until payment in full (whether
before or after judgment) shall be payable to the Administrative Agent on demand
at the rate specified in Section 5.11 for overdue principal on the Revolving
Credit Loans.

     4.3. LETTER OF CREDIT PAYMENTS. If any draft shall be presented or other
demand for payment shall be made under any Letter of Credit, the Administrative
Agent shall notify the Borrower of the date and amount of the draft presented or
demand for payment and of the date and time when it expects to pay such draft or
honor such demand for payment. If the Borrower fails to reimburse the
Administrative Agent as provided in Section 4.2 on or before the date that such
draft is paid or other payment is made by the Administrative Agent, the
Administrative Agent may at any time thereafter notify the Lenders of the amount
of any such Unpaid Reimbursement Obligation. No later than 3:00 p.m. (Boston
time) on the Business Day next following the receipt of such notice, each Lender
shall make available to the Administrative Agent, at the Administrative Agent's
Office, in immediately available funds, such Lender's Commitment Percentage of
such Unpaid Reimbursement Obligation, together with an amount equal to the
product of (a) the average, computed for the period referred to in clause (c)
below, of the weighted average interest rate paid by the Administrative Agent
for federal funds acquired by the Administrative Agent during each day included
in such period, TIMES (b) the amount equal to such Lender's Commitment
Percentage of



                                      -27-

such Unpaid Reimbursement Obligation, TIMES (c) a fraction, the numerator of
which is the number of days that elapse from and including the date the
Administrative Agent paid the draft presented for honor or otherwise made
payment to the date on which such Lender's Commitment Percentage of such Unpaid
Reimbursement Obligation shall become immediately available to the
Administrative Agent, and the denominator of which is 360. The responsibility of
the Administrative Agent to the Borrower and the Lenders shall be only to
determine that the documents (including each draft) delivered under each Letter
of Credit in connection with such presentment shall be in conformity in all
material respects with such Letter of Credit.

     4.4. OBLIGATIONS ABSOLUTE. The Borrower's obligations under this Section 4
shall be absolute and unconditional under any and all circumstances and
irrespective of the occurrence of any Default or Event of Default or any
condition precedent whatsoever or any setoff, counterclaim or defense to payment
which the Borrower may have or have had against the Administrative Agent, any
Lender or any beneficiary of a Letter of Credit. The Borrower further agrees
with the Administrative Agent and the Lenders that the Administrative Agent and
the Lenders shall not be responsible for, and the Borrower's Reimbursement
Obligations under Section 4.2 shall not be affected by, among other things, the
validity or genuineness of documents or of any endorsements thereon, even if
such documents should in fact prove to be in any or all respects invalid,
fraudulent or forged, or any dispute between or among the Borrower, the
beneficiary of any Letter of Credit or any financing institution or other party
to which any Letter of Credit may be transferred or any claims or defenses
whatsoever of the Borrower against the beneficiary of any Letter of Credit or
any such transferee. The Administrative Agent and the Lenders shall not be
liable for any error, omission, interruption or delay in transmission, dispatch
or delivery of any message or advice, however transmitted, in connection with
any Letter of Credit. The Borrower agrees that any action taken or omitted by
the Administrative Agent or any Lender under or in connection with each Letter
of Credit and the related drafts and documents, if done in good faith, shall be
binding upon the Borrower and shall not result in any liability on the part of
the Administrative Agent or any Lender to the Borrower. Nothing contained in
this Section 4.4 shall in any manner limit or otherwise affect any claims the
Borrower may have against the Administrative Agent arising from the gross
negligence or willful misconduct of the Administrative Agent as the issuer of
any Letter of Credit.

     4.5. RELIANCE BY ISSUER. To the extent not inconsistent with Section 4.4,
the Administrative Agent shall be entitled to rely, and shall be fully protected
in relying upon, any Letter of Credit, draft, writing, resolution, notice,
consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or
teletype message, statement, order or other document believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons and upon advice and statements of legal counsel, independent
accountants and other experts selected by the Administrative Agent.

     4.6. LETTER OF CREDIT FEE. The Borrower shall pay a fee (in each case, a
"LETTER OF CREDIT FEE") to the Administrative Agent in respect of each Letter of
Credit in an amount



                                      -28-

equal to the Applicable Margin per annum with respect to Letter of Credit Fees
of the face amount of such Letter of Credit plus an amount equal to one eighth
of one percent (1/8%) per annum of the face amount of such Letter of Credit
which shall be for the account of the Administrative Agent, as a fronting fee,
and the balance of which Letter of Credit Fee shall be for the accounts of the
Lenders in accordance with their respective Commitment Percentages. Such Letter
of Credit Fees shall be payable quarterly in arrears on the first day of the
calendar quarter for the calendar quarter most recently ended. In respect of
each Letter of Credit, the Borrower shall also pay to the Administrative Agent
for the Administrative Agent's own account, at such other time or times as such
charges are customarily made by the Administrative Agent, the Administrative
Agent's customary issuance, amendment, negotiation or document examination and
other administrative fees as in effect from time to time.

                         5. CERTAIN GENERAL PROVISIONS.

     5.1. CLOSING FEES. The Borrower agrees to pay to the Administrative Agent
on the Closing Date a closing fee (the "CLOSING FEE") as set forth in the Fee
Letter.

     5.2. ADMINISTRATIVE AGENT'S FEE. The Borrower shall pay to the
Administrative Agent, for the Administrative Agent's own account, an
Administrative Agent's fee as set forth in the Fee Letter.

     5.3. FUNDS FOR PAYMENTS.

            5.3.1. PAYMENTS TO ADMINISTRATIVE AGENT. All payments of principal,
     interest, Reimbursement Obligations, Fees and any other amounts due
     hereunder or under any of the other Loan Documents shall be made on the due
     date thereof to the Administrative Agent in Dollars (other than
     Reimbursement Obligations for Letters of Credit issued in a currency other
     than Dollars, which shall be paid in the currency in which such Letter of
     Credit was issued), for the respective accounts of the Lenders and the
     Administrative Agent, at the Administrative Agent's Office or at such other
     place that the Administrative Agent may from time to time designate, in
     each case at or about 11:00 a.m. (Boston, Massachusetts, time or other
     local time at the place of payment) and in immediately available funds.

            5.3.2. NO OFFSET, ETC. All payments by the Borrower hereunder and
     under any of the other Loan Documents shall be made without recoupment,
     setoff or counterclaim and free and clear of and without deduction for any
     taxes, levies, imposts, duties, charges, fees, deductions, withholdings,
     compulsory loans, restrictions or conditions of any nature now or hereafter
     imposed or levied by any jurisdiction or any political subdivision thereof
     or taxing or other authority therein unless the Borrower is compelled by
     law to make such deduction or withholding. Subject to the provisions of
     Section 5.3.3 hereof, if any such obligation is imposed upon the Borrower
     with respect to any amount payable by it hereunder or under any of the
     other Loan Documents, the Borrower will pay to the Administrative Agent,
     for the account of the Lenders or (as the case may be)



                                      -29-

     the Administrative Agent, on the date on which such amount is due and
     payable hereunder or under such other Loan Document, such additional amount
     in Dollars as shall be necessary to enable the Lenders or the
     Administrative Agent to receive the same net amount which the Lenders or
     the Administrative Agent would have received on such due date had no such
     obligation been imposed upon the Borrower. The Borrower will deliver
     promptly to the Administrative Agent certificates or other valid vouchers
     for all taxes or other charges deducted from or paid with respect to
     payments made by the Borrower hereunder or under such other Loan Document.

            5.3.3. NON-U.S. LENDERS. Each Lender and the Administrative Agent
     that is not a U.S. Person as defined in Section 7701(a)(30) of the Code for
     federal income tax purposes (a "NON-U.S. LENDER") hereby agrees that prior
     to becoming a Lender hereunder, and as and when required by the Code or
     Treasurer Regulations issued pursuant thereto, it shall deliver to the
     Borrower and the Administrative Agent, as applicable, such certificates,
     documents or other evidence, including (a) in the case of a Non-U.S. Lender
     that is a "bank" for purposes of Section 881(c)(3)(A) of the Code, two (2)
     duly completed copies of Internal Revenue Service Form W-8BEN or Form
     W-8ECI and any other certificate or statement of exemption required by
     Treasury Regulations, or any subsequent versions thereof or successors
     thereto, properly completed and duly executed by such Lender or the
     Administrative Agent establishing that with respect to payments of
     principal, interest or fees hereunder it is (i) not subject to United
     States federal withholding tax under the Code because such payment is
     effectively connected with the conduct by such Lender or Administrative
     Agent of a trade or business in the United States or (ii) totally exempt or
     partially exempt from United States federal withholding tax under a
     provision of an applicable tax treaty (but if partially exempt, still will
     not subject the Borrower to any withholding tax hereunder) and (b) in the
     case of a Non-U.S. Lender that is not a "bank" for purposes of Section
     881(c)(3)(A) of the Code, a certificate in form and substance reasonably
     satisfactory to the Administrative Agent and the Borrower and to the effect
     that (i) such Non-U.S. Lender is not a "bank" for purposes of Section
     881(c)(3)(A) of the Code, is not subject to regulatory or other legal
     requirements as a bank in any jurisdiction, and has not been treated as a
     bank for purposes of any tax, securities law or other filing or submission
     made to any governmental authority, any application made to a rating agency
     or qualification for any exemption from any tax, securities law or other
     legal requirements, (ii) is not a ten (10) percent shareholder for purposes
     of Section 881(c)(3)(B) of the Code and (iii) is not a controlled foreign
     corporation receiving interest from a related person for purposes of
     Section 881(c)(3)(C) of the Code, together with a properly completed
     Internal Revenue Service Form W-8 or W-9, as applicable (or successor
     forms). Each Lender or the Administrative Agent agrees that it shall,
     promptly upon a change of its lending office or the selection of any
     additional lending office, to the extent the forms previously delivered by
     it pursuant to this section are no longer effective, and promptly upon the
     Borrower's or the Administrative Agent's reasonable request after the
     occurrence



                                      -30-

     of any other event (including the passage of time) requiring the delivery
     of a Form W-8BEN, Form W-8ECI, Form W-8 or W-9 in addition to or in
     replacement of the forms previously delivered, deliver to the Borrower and
     the Administrative Agent, as applicable, a properly completed and executed
     Form W-8BEN, Form W-8ECI, Form W-8 or W-9, as applicable (or any successor
     forms thereto). The Borrower shall not be required to pay any additional
     amounts to any Non-U.S. Lender in respect of United States federal
     withholding tax pursuant to Section 5.3.2 above to the extent that the
     obligation to pay such additional amounts would not have arisen but for a
     failure by such Non-U.S. Lender to comply with the provisions of this
     Section 5.3.3; PROVIDED, HOWEVER, that the foregoing shall not relieve the
     Borrower of its obligation to pay additional amounts pursuant to Section
     5.3.2 in the event that, as a result of any change in any applicable law,
     treaty or governmental rule, regulation or order, or any change in
     interpretation, administration or application thereof, a Non-US Lender that
     was previously entitled to receive all payments under this Credit Agreement
     and the Revolving Credit Notes without deduction or withholding of any
     United States federal income taxes is no longer properly entitled to
     deliver forms, certificates or other evidence at a subsequent date
     establishing the fact that such Lender is not subject to withholding.

     5.4. COMPUTATIONS. All computations of interest on the Loans and of Fees
shall be based on a 360-day year and paid for the actual number of days elapsed.
Except as otherwise provided in the definition of the term "INTEREST PERIOD"
with respect to Eurodollar Rate Loans, whenever a payment hereunder or under any
of the other Loan Documents becomes due on a day that is not a Business Day, the
due date for such payment shall be extended to the next succeeding Business Day,
and interest shall accrue during such extension. The outstanding amount of the
Revolving Credit Loans as reflected on the Records from time to time shall be
considered prima facie evidence of the amounts owing thereunder.

     5.5. INABILITY TO DETERMINE EURODOLLAR RATE. In the event, prior to the
commencement of any Interest Period relating to any Eurodollar Rate Loan, the
Administrative Agent shall determine or be notified by the Required Lenders that
(a) adequate and reasonable methods do not exist for ascertaining the Eurodollar
Rate that would otherwise determine the rate of interest to be applicable to any
Eurodollar Rate Loan during any Interest Period or (b) the Eurodollar Rate
determined or to be determined for such Interest Period will not adequately and
fairly reflect the cost to the Required Lenders of making or maintaining their
Eurodollar Rate Loans during such period, the Administrative Agent shall
forthwith give notice of such determination (which shall be conclusive and
binding on the Borrower and the Lenders) to the Borrower and the Lenders. In
such event (i) any Loan Request or Conversion Request with respect to Eurodollar
Rate Loans shall be automatically withdrawn and shall be deemed a request for
Base Rate Loans, (ii) each Eurodollar Rate Loan will automatically, on the last
day of the then current Interest Period relating thereto, become a Base Rate
Loan, and (iii) the obligations of the Lenders to make Eurodollar Rate Loans
shall be suspended until the Administrative Agent or the Required Lenders
determine that the



                                      -31-

circumstances giving rise to such suspension no longer exist, whereupon the
Administrative Agent or, as the case may be, the Administrative Agent upon the
instruction of the Required Lenders, shall so notify the Borrower and the
Lenders.

     5.6. ILLEGALITY. Notwithstanding any other provisions herein, if any
present or future law, regulation, treaty or directive or the interpretation or
application thereof shall make it unlawful for any Lender to make or maintain
Eurodollar Rate Loans, such Lender shall forthwith give notice of such
circumstances to the Borrower and the other Lenders and thereupon (a) the
commitment of such Lender to make Eurodollar Rate Loans or convert Base Rate
Loans to Eurodollar Rate Loans shall forthwith be suspended and (b) such
Lender's Revolving Credit Loans then outstanding as Eurodollar Rate Loans, if
any, shall be converted automatically to Base Rate Loans on the last day of each
Interest Period applicable to such Eurodollar Rate Loans or within such earlier
period as may be required by law. The Borrower hereby agrees promptly to pay the
Administrative Agent for the account of such Lender, upon demand by such Lender,
any additional amounts necessary to compensate such Lender for any costs
incurred by such Lender in making any conversion in accordance with this Section
5.6, including any interest or fees payable by such Lender to lenders of funds
obtained by it in order to make or maintain its Eurodollar Rate Loans hereunder.

     5.7. ADDITIONAL COSTS, ETC. If any present or future applicable law, which
expression, as used herein, includes statutes, rules and regulations thereunder
and interpretations thereof by any competent court or by any governmental or
other regulatory body or official charged with the administration or the
interpretation thereof and requests, directives, instructions and notices at any
time or from time to time hereafter made upon or otherwise issued to any Lender
or the Administrative Agent by any central bank or other fiscal, monetary or
other authority (whether or not having the force of law), shall:

            (a)     subject any Lender or the Administrative Agent to any tax,
     levy, impost, duty, charge, fee, deduction or withholding of any nature
     with respect to this Credit Agreement, the other Loan Documents, any
     Letters of Credit, such Lender's Commitment or the Revolving Credit Loans
     (other than taxes based upon or measured by the income or profits of such
     Lender or the Administrative Agent), or

            (b)     materially change the basis of taxation (except for changes
     in taxes on income or profits) of payments to any Lender of the principal
     of or the interest on any Revolving Credit Loans or any other amounts
     payable to any Lender or the Administrative Agent under this Credit
     Agreement or any of the other Loan Documents, or

            (c)     impose or increase or render applicable (other than to the
     extent specifically provided for elsewhere in this Credit Agreement) any
     special deposit, reserve, assessment, liquidity, capital adequacy or other
     similar requirements (whether or not having the force of law) against
     assets held by, or



                                      -32-

     deposits in or for the account of, or loans by, or letters of credit issued
     by, or commitments of an office of any Lender, or

            (d)     impose on any Lender or the Administrative Agent any other
     conditions or requirements with respect to this Credit Agreement, the other
     Loan Documents, any Letters of Credit, the Revolving Credit Loans, such
     Lender's Commitment, or any class of loans, letters of credit or
     commitments of which any of the Revolving Credit Loans or such Lender's
     Commitment forms a part, and the result of any of the foregoing is

                    (i)     to increase the cost to any Lender of making,
            funding, issuing, renewing, extending or maintaining any of the
            Revolving Credit Loans or such Lender's Commitment or any Letter of
            Credit, or

                    (ii)    to reduce the amount of principal, interest,
            Reimbursement Obligation or other amount payable to such Lender or
            the Administrative Agent hereunder on account of such Lender's
            Commitment, any Letter of Credit or any of the Revolving Credit
            Loans, or

                    (iii)   to require such Lender or the Administrative Agent
            to make any payment or to forego any interest or Reimbursement
            Obligation or other sum payable hereunder, the amount of which
            payment or foregone interest or Reimbursement Obligation or other
            sum is calculated by reference to the gross amount of any sum
            receivable or deemed received by such Lender or the Administrative
            Agent from the Borrower hereunder,

then, and in each such case, the Borrower will, upon demand made by such Lender
or (as the case may be) the Administrative Agent at any time and from time to
time and as often as the occasion therefor may arise, pay to such Lender or the
Administrative Agent such additional amounts as will be sufficient to compensate
such Lender or the Administrative Agent for such additional cost, reduction,
payment or foregone interest or Reimbursement Obligation or other sum, PROVIDED
that the Borrower shall not be liable to any Lender or the Administrative Agent
for costs incurred more than ninety (90) days prior to receipt by the Borrower
of such demand for payment from such Lender or, as the case may be, the
Administrative Agent, unless such costs were incurred prior to such one hundred
eighty (180) day period as a result of such present or future applicable law
being retroactive to a date which occurred prior to such ninety (90) day period
and such Lender or, as the case may be, the Administrative Agent, has given
notice to the Borrower of the effectiveness of such law within ninety (90) days
after the effective date thereof.

     5.8. CAPITAL ADEQUACY. If after the date hereof any Lender or the
Administrative Agent determines that (a) the adoption of or change in any law,
governmental rule, regulation, policy, guideline or directive (whether or not
having the force of law) regarding capital requirements for banks or bank
holding companies or any change in



                                      -33-

the interpretation or application thereof by a Governmental Authority with
appropriate jurisdiction, or (b) compliance by such Lender or the Administrative
Agent or any corporation controlling such Lender or the Administrative Agent
with any law, governmental rule, regulation, policy, guideline or directive
(whether or not having the force of law) of any such entity regarding capital
adequacy, has the effect of reducing the return on such Lender's or the
Administrative Agent's commitment with respect to any Revolving Credit Loans to
a level below that which such Lender or the Administrative Agent could have
achieved but for such adoption, change or compliance (taking into consideration
such Lender's or the Administrative Agent's then existing policies with respect
to capital adequacy and assuming full utilization of such entity's capital) by
any amount deemed by such Lender or (as the case may be) the Administrative
Agent to be material, then such Lender or the Administrative Agent may notify
the Borrower of such fact. To the extent that the amount of such reduction in
the return on capital is not reflected in the Base Rate, the Borrower and such
Lender shall thereafter attempt to negotiate in good faith, within thirty (30)
days of the day on which the Borrower receives such notice, an adjustment
payable hereunder that will adequately compensate such Lender in light of these
circumstances. If the Borrower and such Lender are unable to agree to such
adjustment within thirty (30) days of the date on which the Borrower receives
such notice, then commencing on the date of such notice (but not earlier than
the effective date of any such increased capital requirement), the fees payable
hereunder shall increase by an amount that will, in such Lender's reasonable
determination, provide adequate compensation, PROVIDED that the Borrower shall
not be liable to any Lender or the Administrative Agent for costs incurred more
than ninety (90) days prior to receipt by the Borrower of the notice referred to
in the immediately preceding sentence from such Lender or the Administrative
Agent, as the case may be. Each Lender shall allocate such cost increases among
its customers in good faith and on an equitable basis.

     5.9. CERTIFICATE. A certificate setting forth any additional amounts
payable pursuant to Sections 5.7 or 5.8 and a brief explanation of such amounts
which are due, submitted by any Lender or the Administrative Agent to the
Borrower, shall be conclusive, absent manifest error, that such amounts are due
and owing.

     5.10. INDEMNITY. The Borrower agrees to indemnify each Lender and to hold
each Lender harmless from and against any loss, cost or expense (excluding loss
of anticipated profits) that such Lender may sustain or incur as a consequence
of (a) default by the Borrower in payment of the principal amount of or any
interest on any Eurodollar Rate Loans as and when due and payable, including any
such loss or expense arising from interest or fees payable by such Lender to
lenders of funds obtained by it in order to maintain its Eurodollar Rate Loans,
(b) default by the Borrower in making a borrowing or conversion after the
Borrower has given (or is deemed to have given) a Loan Request or a Conversion
Request relating thereto in accordance with Section 2.6 or Section 2.7 or (c)
the making of any payment of a Eurodollar Rate Loan or the making of any
conversion of any such Revolving Credit Loan to a Base Rate Loan on a day that
is not the last day of the applicable Interest Period with respect thereto,
including interest or



                                      -34-

fees payable by such Lender to lenders of funds obtained by it in order to
maintain any such Revolving Credit Loans.

     5.11.  INTEREST AFTER DEFAULT.

            5.11.1. OVERDUE AMOUNTS. Overdue principal and (to the extent
     permitted by applicable law) interest on the Revolving Credit Loans and all
     other overdue amounts payable hereunder or under any of the other Loan
     Documents shall bear interest compounded monthly and payable on demand at a
     rate per annum equal to two percent (2%) above the rate of interest then
     applicable thereto (or, if no rate of interest is then applicable thereto,
     the Base Rate) until such amount shall be paid in full (after as well as
     before judgment).

            5.11.2. AMOUNTS NOT OVERDUE. During the continuance of a Default or
     an Event of Default the principal of the Revolving Credit Loans not overdue
     shall, until such Default or Event of Default has been cured or remedied or
     such Default or Event of Default has been waived by the Required Lenders
     pursuant to Section 16.12, bear interest at a rate per annum equal to two
     percent (2%) above the rate of interest otherwise applicable to such
     Revolving Credit Loans pursuant to Section 2.5 (or, if no rate of interest
     is then applicable thereto, the Base Rate).

     5.12. REPLACEMENT OF LENDERS. If any Lender (an "AFFECTED LENDER") (a)
makes demand upon the Borrower for (or if the Borrower is otherwise required to
pay) amounts pursuant to Sections 5.7 or 5.8, (b) is unable to make or maintain
Eurodollar Rate Loans as a result of a condition described in Section 5.6 or (c)
defaults in its obligation to make Revolving Credit Loans in accordance with the
terms of this Credit Agreement or purchase any Letter of Credit Participation,
the Borrower may, so long as no Default or Event of Default has occurred and is
then continuing, within ninety (90) days of receipt of such demand, notice (or
the occurrence of such other event causing the Borrower to be required to pay
such compensation or causing Section 5.6 to be applicable), or default, as the
case may be, by notice (a "REPLACEMENT NOTICE") in writing to the Administrative
Agent and such Affected Lender (i) request the Affected Lender to cooperate with
the Borrower in obtaining a replacement Lender satisfactory to the
Administrative Agent and the Borrower (the "REPLACEMENT LENDER"); (ii) request
the non-Affected Lenders to acquire and assume all of the Affected Lender's
Revolving Credit Loans and Commitment as provided herein, but none of such
Lenders shall be under an obligation to do so; or (iii) designate a Replacement
Lender approved by the Administrative Agent, such approval not to be
unreasonably withheld or delayed. If any satisfactory Replacement Lender shall
be obtained, and/or if any one or more of the non-Affected Lenders shall agree
to acquire and assume all of the Affected Lender's Revolving Credit Loans and
Commitment, then such Affected Lender shall assign, in accordance with Section
15, all of its Commitment, Revolving Credit Loans, Letter of Credit
Participations, Revolving Credit Notes and other rights and obligations under
this Credit Agreement and all other Loan Documents to such Replacement Lender or
non-Affected Lenders, as the case may be, in exchange for payment of the
principal amount so assigned and all interest and fees accrued on the amount so
assigned, plus all other Obligations then due and payable to the Affected
Lender; PROVIDED, HOWEVER, that (A) such assignment shall



                                      -35-

be without recourse, representation or warranty and shall be on terms and
conditions reasonably satisfactory to such Affected Lender and such Replacement
Lender and/or non-Affected Lenders, as the case may be, and (B) prior to any
such assignment, the Borrower shall have paid to such Affected Lender all
amounts properly demanded and unreimbursed under Sections 5.7 and 5.8. Upon the
effective date of such assignment, the Borrower shall issue replacement
Revolving Credit Notes to such Replacement Lender and/or non-Affected Lenders,
as the case may be, and such institution shall become a "Lender" for all
purposes under this Credit Agreement and the other Loan Documents.

                                 6. GUARANTEES.

     6.1. GUARANTEES OF SUBSIDIARIES. The Obligations shall be guaranteed
pursuant to the terms of the Guaranty.

                       7. REPRESENTATIONS AND WARRANTIES.

     The Borrower represents and warrants to the Lenders and the Administrative
Agent as follows:

     7.1. CORPORATE AUTHORITY.

            7.1.1. INCORPORATION; GOOD STANDING. Each of the Borrower and its
     Subsidiaries (a) is a corporation (or similar business entity) duly
     organized, validly existing and, other than Keane Business Trust, is in
     good standing under the laws of its jurisdiction of incorporation or
     formation, (b) has all requisite corporate (or the equivalent company)
     power to own its property and conduct its business as now conducted and as
     presently contemplated, and (c) is in good standing as a foreign
     corporation (or similar business entity) and is duly authorized to do
     business in each jurisdiction where such qualification is necessary except
     where a failure to be so qualified would not have a Material Adverse
     Effect.

            7.1.2. AUTHORIZATION. The execution, delivery and performance of
     this Credit Agreement and the other Loan Documents to which the Borrower or
     any of its Subsidiaries is or is to become a party and the transactions
     contemplated hereby and thereby (a) are within the corporate (or the
     equivalent company) authority of such Person, (b) have been duly authorized
     by all necessary corporate (or the equivalent company) proceedings, (c) do
     not and will not conflict with or result in any breach or contravention of
     any provision of law, statute, rule or regulation to which the Borrower or
     any of its Subsidiaries is subject or any judgment, order, writ,
     injunction, license or permit applicable to the Borrower or any of its
     Subsidiaries and (d) do not conflict with any provision of the Governing
     Documents of, or any agreement or other instrument binding upon, the
     Borrower or any of its Subsidiaries unless any conflict to any agreement or
     other instrument (other than the Governing Documents) could not reasonably
     be expected to have a Material Adverse Effect.



                                      -36-

            7.1.3. ENFORCEABILITY. The execution and delivery of this Credit
     Agreement and the other Loan Documents to which the Borrower or any of its
     Subsidiaries is or is to become a party will result in valid and legally
     binding obligations of such Person enforceable against it in accordance
     with the respective terms and provisions hereof and thereof, except as
     enforceability is limited by bankruptcy, insolvency, reorganization,
     moratorium or other laws relating to or affecting generally the enforcement
     of creditors' rights and except to the extent that availability of the
     remedy of specific performance or injunctive relief is subject to the
     discretion of the court before which any proceeding therefor may be
     brought.

     7.2. GOVERNMENTAL APPROVALS. The execution, delivery and performance by the
Borrower and any of its Subsidiaries of this Credit Agreement and the other Loan
Documents to which the Borrower or any of its Subsidiaries is or is to become a
party and the transactions contemplated hereby and thereby do not require the
approval or consent of, or filing with, any governmental agency or authority
other than those already obtained.

     7.3. TITLE TO PROPERTIES; LEASES. Except as indicated on SCHEDULE 7.3
hereto, the Borrower and its Subsidiaries own all of the assets reflected in the
consolidated balance sheet of the Borrower and its Subsidiaries as at the
Balance Sheet Date or acquired since that date (except property and assets sold
or otherwise disposed of in the ordinary course of business since that date or
property and assets sold or otherwise disposed of in accordance with Section
9.5.2. hereof), subject to no Liens or other rights of others, except Permitted
Liens.

     7.4. FINANCIAL STATEMENTS, PROJECTIONS AND SOLVENCY.

            7.4.1. FISCAL YEAR. The Borrower and each of its Subsidiaries has a
     fiscal year which is the twelve months ending on December 31 of each
     calendar year.

            7.4.2. FINANCIAL STATEMENTS. There has been furnished to each of the
     Lenders a consolidated balance sheet of the Borrower and its Subsidiaries
     as at the Balance Sheet Date, and a consolidated statement of income of the
     Borrower and its Subsidiaries for the fiscal year then ended, certified by
     Ernst & Young LLP, together with a consolidated balance sheet of the
     Borrower and its Subsidiaries for the fiscal quarter ended September 30,
     2002, and a consolidated statement of income of the Borrower and its
     Subsidiaries for such fiscal quarter then ended. Each such balance sheet
     and statement of income have been prepared in accordance with GAAP and
     fairly present the financial condition of the Borrower as at the close of
     business on the date thereof and the results of operations for the fiscal
     year or fiscal quarter, as the case may be, then ended (subject to year end
     adjustments in the case of the quarterly statements). There are no
     contingent liabilities of the Borrower or any of its Subsidiaries as of
     such date involving material amounts, known to the officers of the
     Borrower, which were not disclosed in such balance sheet and the notes
     related thereto.



                                      -37-

            7.4.3. PROJECTIONS. Copies of the projections of income statements
     of the Borrower and its Subsidiaries on a consolidated basis for the 2003
     to 2005 fiscal years have been delivered to each Lender. To the knowledge
     of the Borrower or any of its Subsidiaries, no facts exist that
     (individually or in the aggregate) would result in any material change in
     any of such projections. The projections are based upon reasonable
     estimates and assumptions, have been prepared on the basis of the
     assumptions stated therein and reflect the reasonable estimates of the
     Borrower and its Subsidiaries of the results of operations and other
     information projected therein.

            7.4.4. SOLVENCY. The Borrower on a consolidating basis, and the
     Borrower and its Subsidiaries, on a consolidated basis, both before and
     after giving effect to the transactions contemplated by this Credit
     Agreement, the other Loan Documents and all contribution arrangements among
     the Borrower and its Subsidiaries (a) are solvent, (b) the fair value of
     the property of such Person(s) exceeds its or their total liabilities
     (including contingent liabilities but without duplication of any underlying
     liability related thereto), (c) the present fair saleable value on a going
     concern basis of the assets of such Person(s) is not less than the amount
     required to pay its or their probable liabilities on its or their debts as
     they become absolute and mature, (d) do(es) not intend to, and do(es) not
     believe that it or they will, incur debts or liabilities beyond its or
     their ability to pay as such debts and liabilities mature, and (e) is or
     are not engaged, and is or are not about to engage, in business or a
     transaction for which its or their property would constitute unreasonably
     small capital.

     7.5. NO MATERIAL ADVERSE CHANGES, ETC. Since the Balance Sheet Date there
has been no event or occurrence which has had a Material Adverse Effect. Since
the Balance Sheet Date, the Borrower has not made any Restricted Payments.

     7.6. FRANCHISES, PATENTS, COPYRIGHTS, ETC. The Borrower and each of its
Subsidiaries possesses all franchises, patents, copyrights, trademarks, trade
names, licenses and permits, and rights in respect of the foregoing, adequate
for the conduct of its business substantially as now conducted without known
conflict with any rights of others.

     7.7. LITIGATION. Except as set forth in SCHEDULE 7.7 hereto, there are no
actions, suits, proceedings or investigations of any kind pending or threatened
against the Borrower or any of its Subsidiaries before any Governmental
Authority, that, (a) if adversely determined, could reasonably be expected to,
either in any case or in the aggregate, (i) have a Material Adverse Effect or
(ii) materially impair the right of the Borrower and its Subsidiaries,
considered as a whole, to carry on business substantially as now conducted by
them, or result in any substantial liability not adequately covered by
insurance, or for which adequate reserves are not maintained on the consolidated
balance sheet of the Borrower and its Subsidiaries, or (b) which question the
validity of this Credit Agreement or any of the other Loan Documents, or any
action taken or to be taken pursuant hereto or thereto.



                                      -38-

     7.8. NO MATERIALLY ADVERSE CONTRACTS, ETC. Neither the Borrower nor any of
its Subsidiaries is subject to any Governing Document or other legal
restriction, or any judgment, decree, order, law, statute, rule or regulation
that has or is expected in the future to have a Material Adverse Effect. Neither
the Borrower nor any of its Subsidiaries is a party to any contract or agreement
that has or is expected, in the judgment of the Borrower's officers, to have any
Material Adverse Effect.

     7.9. COMPLIANCE WITH OTHER INSTRUMENTS, LAWS, ETC. Neither the Borrower nor
any of its Subsidiaries is in violation of any provision of its Governing
Documents, or any agreement or instrument to which it may be subject or by which
it or any of its properties may be bound or any decree, order, judgment,
statute, license, rule or regulation, in any of the foregoing cases in a manner
that could result in the imposition of substantial penalties or have a Material
Adverse Effect.

     7.10. TAX STATUS. The Borrower and its Subsidiaries (a) have made or filed
all federal, state and foreign income and all other tax returns, reports and
declarations required by any jurisdiction to which any of them is subject except
where the failure to so file could not reasonably be expected to have a Material
Adverse Effect, (b) have paid all taxes and other governmental assessments and
charges shown or determined to be due on such returns, reports and declarations,
except those being contested in good faith and by appropriate proceedings and
(c) have set aside on their books provisions reasonably adequate for the payment
of all taxes for periods subsequent to the periods to which such returns,
reports or declarations apply. There are no unpaid taxes in any material amount
claimed to be due by the taxing authority of any jurisdiction, and none of the
officers of the Borrower know of any basis for any such claim.

     7.11. NO EVENT OF DEFAULT. No Default or Event of Default has occurred and
is continuing.

     7.12. HOLDING COMPANY AND INVESTMENT COMPANY ACTS. Neither the Borrower nor
any of its Subsidiaries is a "HOLDING COMPANY", or a "SUBSIDIARY COMPANY" of a
"HOLDING COMPANY", or an "AFFILIATE" of a "HOLDING COMPANY", as such terms are
defined in the Public Utility Holding Company Act of 1935; nor is it an
"INVESTMENT COMPANY", or an "AFFILIATED COMPANY" or a "PRINCIPAL UNDERWRITER" of
an "INVESTMENT COMPANY", as such terms are defined in the Investment Company Act
of 1940.

     7.13. ABSENCE OF FINANCING STATEMENTS, ETC. Except with respect to
Permitted Liens, there is no financing statement, security agreement, chattel
mortgage, real estate mortgage or other document filed or recorded with any
filing records, registry or other public office, that purports to cover, affect
or give notice of any present or possible future Lien on any assets or property
of the Borrower or any of its Subsidiaries or any rights relating thereto other
than financing statements on record on the Closing Date which relate to
obligations of the Borrower or any Subsidiary which have been paid in full and
otherwise terminated and in which the Borrower has provided the Administrative
Agent with evidence of such satisfaction and termination.



                                      -39-

     7.14. INSURANCE. The Borrower and each of its Subsidiaries maintain, with
financially sound and reputable insurers, insurance with respect to its
properties and businesses against such casualties and contingencies as are in
accordance with sound business practices.

     7.15. CERTAIN TRANSACTIONS. Except for arm's length transactions pursuant
to which the Borrower or any of its Subsidiaries makes payments in the ordinary
course of business upon terms no less favorable than the Borrower or such
Subsidiary could obtain from third parties, none of the officers, directors, or
employees of the Borrower or any of its Subsidiaries is presently a party to any
transaction with the Borrower or any of its Subsidiaries (other than for
services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to the
knowledge of the Borrower, any corporation, partnership, trust or other entity
in which any officer, director, or any such employee has a substantial interest
or is an officer, director, trustee or partner.

     7.16. EMPLOYEE BENEFIT PLANS.

            7.16.1. IN GENERAL. Each Employee Benefit Plan and each Guaranteed
     Pension Plan has been maintained and operated in compliance in all material
     respects with the provisions of ERISA and all Applicable Pension
     Legislation and, to the extent applicable, the Code, including but not
     limited to the provisions thereunder respecting prohibited transactions and
     the bonding of fiduciaries and other persons handling plan funds as
     required by Section 412 of ERISA. The Borrower has heretofore delivered to
     the Administrative Agent the most recently completed annual report, Form
     5500, with all required attachments, and actuarial statement required to be
     submitted under Section 103(d) of ERISA, with respect to each Guaranteed
     Pension Plan.

            7.16.2. TERMINABILITY OF WELFARE PLANS. No Employee Benefit Plan,
     which is an employee welfare benefit plan within the meaning of Section
     3(1) or Section 3(2)(B) of ERISA, provides benefit coverage subsequent to
     termination of employment, except as required by Title I, Part 6 of ERISA
     or the applicable state insurance laws. The Borrower may terminate each
     such Plan at any time (or at any time subsequent to the expiration of any
     applicable bargaining agreement) in the discretion of the Borrower without
     liability to any Person other than for claims arising prior to termination.

            7.16.3. GUARANTEED PENSION PLANS. Each contribution required to be
     made to a Guaranteed Pension Plan, whether required to be made to avoid the
     incurrence of an accumulated funding deficiency, the notice or lien
     provisions of Section 302(f) of ERISA, or otherwise, has been timely made.
     No waiver of an accumulated funding deficiency or extension of amortization
     periods has been received with respect to any Guaranteed Pension Plan, and
     neither the Borrower nor any ERISA Affiliate is obligated to or has posted
     security in connection with



                                      -40-

     an amendment to a Guaranteed Pension Plan pursuant to Section 307 of ERISA
     or Section 401(a)(29) of the Code. No liability to the PBGC (other than
     required insurance premiums, all of which have been paid) has been incurred
     by the Borrower or any ERISA Affiliate with respect to any Guaranteed
     Pension Plan and there has not been any ERISA Reportable Event (other than
     an ERISA Reportable Event as to which the requirement of 30 days notice has
     been waived), or any other event or condition which presents a material
     risk of termination of any Guaranteed Pension Plan by the PBGC. Based on
     the latest valuation of each Guaranteed Pension Plan (which in each case
     occurred within twelve months of the date of this representation), and on
     the actuarial methods and assumptions employed for that valuation, the
     aggregate benefit liabilities of all such Guaranteed Pension Plans within
     the meaning of Section 4001 of ERISA did not exceed the aggregate value of
     the assets of all such Guaranteed Pension Plans, disregarding for this
     purpose the benefit liabilities and assets of any Guaranteed Pension Plan
     with assets in excess of benefit liabilities.

            7.16.4. MULTI-EMPLOYER PLANS. Neither the Borrower nor any ERISA
     Affiliate has incurred any material liability (including secondary
     liability) to any Multi-employer Plan as a result of a complete or partial
     withdrawal from such Multi-employer Plan under Section 4201 of ERISA or as
     a result of a sale of assets described in Section 4204 of ERISA. Neither
     the Borrower nor any ERISA Affiliate has been notified that any
     Multi-employer Plan is in reorganization or insolvent under and within the
     meaning of Section 4241 or Section 4245 of ERISA or is at risk of entering
     reorganization or becoming insolvent, or that any Multi-employer Plan
     intends to terminate or has been terminated under Section 4041A of ERISA.

     7.17. USE OF PROCEEDS.

            7.17.1. GENERAL. The proceeds of the Revolving Credit Loans shall be
     used for working capital and general corporate purposes (including, without
     limitation, financing all or a portion of a Permitted Acquisition). The
     Borrower will obtain Letters of Credit solely for working capital and
     general corporate purposes.

            7.17.2. REGULATIONS U AND X. No portion of any Revolving Credit Loan
     is to be used, and no portion of any Letter of Credit is to be obtained,
     for the purpose of purchasing or carrying any "MARGIN SECURITY" or "MARGIN
     STOCK" (as such terms are used in Regulations U and X of the Board of
     Governors of the Federal Reserve System, 12 C.F.R. Parts 221 and 224)
     unless the purchasing or carrying of any such margin security or margin
     stock would not violate such Regulations U and/or X.

            7.17.3. INELIGIBLE SECURITIES. No portion of the proceeds of any
     Revolving Credit Loans is to be used, and no portion of any Letter of
     Credit is to be obtained, for the purpose of knowingly purchasing, or
     providing credit support for the purchase of, during the underwriting or
     placement period or



                                      -41-

     within thirty (30) days thereafter, any Ineligible Securities underwritten
     or privately placed by a Financial Affiliate.

     7.18. ENVIRONMENTAL COMPLIANCE. The Borrower has taken all reasonably
necessary steps to investigate the past and present condition and usage of the
Real Estate and the operations conducted by the Borrower, its Subsidiaries or
any of its agents thereon and, based upon such diligent investigation, has
determined that:

            (a)     none of the Borrower, its Subsidiaries or any operator of
     the Real Estate or any operations thereon is in violation, or alleged
     violation, of any judgment, decree, order, law, license, rule or regulation
     pertaining to environmental matters, including without limitation, those
     arising under the Resource Conservation and Recovery Act ("RCRA"), the
     Comprehensive Environmental Response, Compensation and Liability Act of
     1980 as amended ("CERCLA"), the Superfund Amendments and Reauthorization
     Act of 1986 ("SARA"), the Federal Clean Water Act, the Federal Clean Air
     Act, the Toxic Substances Control Act, or any state, local or foreign law,
     statute, regulation, ordinance, order or decree relating to health, safety
     or the environment (hereinafter "ENVIRONMENTAL LAWS"), which violation
     would have a Material Adverse Effect;

            (b)     neither the Borrower nor any of its Subsidiaries has
     received notice from any third party including, without limitation, any
     Governmental Authority, (i) that any one of them has been identified by the
     United States Environmental Protection Agency ("EPA") as a potentially
     responsible party under CERCLA with respect to a site listed on the
     National Priorities List, 40 C.F.R. Part 300 Appendix B; (ii) that any
     hazardous waste, as defined by 42 U.S.C. Section 6903(5), any hazardous
     substances as defined by 42 U.S.C. Section 9601(14), any pollutant or
     contaminant as defined by 42 U.S.C. Section 9601(33) and any toxic
     substances, oil or hazardous materials or other chemicals or substances
     regulated by any Environmental Laws ("HAZARDOUS SUBSTANCES") which any one
     of them has generated, transported or disposed of has been found at any
     site at which a Governmental Authority has conducted or has ordered that
     the Borrower or any of its Subsidiaries conduct a remedial investigation,
     removal or other response action pursuant to any Environmental Law; or
     (iii) that it is or shall be a named party to any claim, action, cause of
     action, complaint, or legal or administrative proceeding (in each case,
     contingent or otherwise) arising out of any third party's incurrence of
     costs, expenses, losses or damages of any kind whatsoever in connection
     with the release of Hazardous Substances which, in each case, could
     reasonably be expected to have a Material Adverse Effect;

            (c)     except as set forth on SCHEDULE 7.18 attached hereto: (i) no
     portion of the Real Estate has been used for the handling, processing,
     storage or disposal of Hazardous Substances except in accordance with
     applicable Environmental Laws or where the noncompliance with such
     Environmental Laws could not reasonably be expected to have a Material
     Adverse Effect; and no underground tank or other underground storage
     receptacle for Hazardous Substances is



                                      -42-

     located on any portion of the Real Estate; (ii) in the course of any
     activities conducted by the Borrower, its Subsidiaries or operators of its
     properties, no Hazardous Substances have been generated or are being used
     on the Real Estate except in accordance with applicable Environmental Laws
     or where the noncompliance with such Environmental Laws could not
     reasonably be expected to have a Material Adverse Effect; (iii) there have
     been no releases (i.e. any past or present releasing, spilling, leaking,
     pumping, pouring, emitting, emptying, discharging, injecting, escaping,
     disposing or dumping) or threatened releases of Hazardous Substances on,
     upon, into or from the properties of the Borrower or its Subsidiaries,
     which releases would have a material adverse effect on the value of any of
     the Real Estate or adjacent properties or the environment; (iv) to the best
     of the Borrower's knowledge, there have been no releases on, upon, from or
     into any real property in the vicinity of any of the Real Estate which,
     through soil or groundwater contamination, may have come to be located on,
     and which would have a material adverse effect on the value of, the Real
     Estate; and (v) in addition, any Hazardous Substances that have been
     generated on any of the Real Estate have been transported offsite only by
     carriers having an identification number issued by the EPA (or the
     equivalent thereof in any foreign jurisdiction), treated or disposed of
     only by treatment or disposal facilities maintaining valid permits as
     required under applicable Environmental Laws, which transporters and
     facilities have been and are, to the best of the Borrower's knowledge,
     operating in compliance with such permits and applicable Environmental
     Laws; and

            (d)     none of the Borrower and its Subsidiaries, or any of the
     Real Estate is subject to any applicable Environmental Law requiring the
     performance of Hazardous Substances site assessments, or the removal or
     remediation of Hazardous Substances, or the giving of notice to any
     Governmental Authority or the recording or delivery to other Persons of an
     environmental disclosure document or statement by virtue of the
     transactions set forth herein and contemplated hereby, or as a condition to
     the effectiveness of any other transactions contemplated hereby.

     7.19. SUBSIDIARIES, ETC. SCHEDULE 7.19(a) (as the same may be amended from
time to time in accordance with Section 8.13 hereof) sets forth the only
Subsidiaries of the Borrower. Except as set forth on SCHEDULE 7.19(b) hereto,
neither the Borrower nor any Subsidiary of the Borrower is engaged in any joint
venture or partnership with any other Person. The jurisdiction of
incorporation/formation and principal place of business of each Subsidiary of
the Borrower is listed on SCHEDULE 7.19(a) hereto.

     7.20. DISCLOSURE. None of this Credit Agreement or any of the other Loan
Documents contains any untrue statement of a material fact or omits to state a
material fact (known to the Borrower or any of its Subsidiaries in the case of
any document or information not furnished by it or any of its Subsidiaries)
necessary in order to make the statements herein or therein not misleading.
There is no fact known to the Borrower or any of its Subsidiaries which has a
Material Adverse Effect, or which is reasonably likely



                                      -43-

in the future to have a Material Adverse Effect, exclusive of effects resulting
from changes in general economic conditions, legal standards or regulatory
conditions.

                            8. AFFIRMATIVE COVENANTS.

     The Borrower covenants and agrees that, so long as any Revolving Credit
Loan, Unpaid Reimbursement Obligation, Letter of Credit or Revolving Credit Note
is outstanding or any Lender has any obligation to make any Revolving Credit
Loans or the Administrative Agent has any obligation to issue, extend or renew
any Letters of Credit:

     8.1. PUNCTUAL PAYMENT. The Borrower will duly and punctually pay or cause
to be paid the principal and interest on the Revolving Credit Loans, all
Reimbursement Obligations, the Letter of Credit Fees, the commitment fees, the
Administrative Agent's fee and all other amounts provided for in this Credit
Agreement and the other Loan Documents to which the Borrower or any of its
Subsidiaries is a party, all in accordance with the terms of this Credit
Agreement and such other Loan Documents.

     8.2. MAINTENANCE OF OFFICE. The Borrower will maintain its chief executive
office in Boston, Massachusetts, or at such other place in the United States of
America as the Borrower shall designate upon written notice to the
Administrative Agent, where notices, presentations and demands to or upon the
Borrower in respect of the Loan Documents to which the Borrower is a party may
be given or made.

     8.3. RECORDS AND ACCOUNTS. The Borrower will (a) keep, and cause each of
its Subsidiaries to keep, true and accurate records and books of account in
which full, true and correct entries will be made in accordance with GAAP, (b)
maintain adequate accounts and reserves for all taxes (including income taxes),
depreciation, depletion, obsolescence and amortization of its properties and the
properties of its Subsidiaries, contingencies, and other reserves, and (c) at
all times engage Ernst & Young LLP or other nationally recognized independent
certified public accountants as the independent certified public accountants of
the Borrower and its Subsidiaries and will not permit more than thirty (30) days
to elapse between the cessation of such firm's (or any successor firm's)
engagement as the independent certified public accountants of the Borrower and
its Subsidiaries and the appointment in such capacity of a successor firm.

     8.4. FINANCIAL STATEMENTS, CERTIFICATES AND INFORMATION. The Borrower will
deliver to each of the Lenders:

            (a)     as soon as practicable, but in any event not later than
     ninety (90) days after the end of each fiscal year of the Borrower, the
     consolidated balance sheet of the Borrower and its Subsidiaries as at the
     end of such year, and the related consolidated statement of income and
     consolidated statement of cash flow, each setting forth in comparative form
     the figures for the previous fiscal year and all such consolidated
     statements to be in reasonable detail, prepared in accordance with GAAP,
     and certified, without qualification and without an expression of
     uncertainty as to the ability of the Borrower or any of its



                                      -44-

     Subsidiaries to continue as going concerns, by Ernst & Young LLP or by
     other independent certified public accountants reasonably satisfactory to
     the Administrative Agent;

            (b)     as soon as practicable, but in any event not later than
     forty-five (45) days after the end of each of the fiscal quarters of the
     Borrower, copies of the unaudited consolidated balance sheet of the
     Borrower and its Subsidiaries as at the end of such quarter, and the
     related consolidated statement of income and consolidated statement of cash
     flow for the portion of the Borrower's fiscal year then elapsed, all in
     reasonable detail and prepared in accordance with GAAP, together with a
     certification by the principal financial or accounting officer of the
     Borrower that the information contained in such financial statements fairly
     presents the financial position of the Borrower and its Subsidiaries on the
     date thereof (subject to year-end adjustments);

            (c)     simultaneously with the delivery of the financial statements
     referred to in subsections (a) and (b) above, a statement certified by the
     principal financial or accounting officer of the Borrower in substantially
     the form of EXHIBIT C hereto (a "COMPLIANCE CERTIFICATE") and setting forth
     in reasonable detail computations evidencing compliance with the covenants
     contained in Section 10 and (if applicable) reconciliations to reflect
     changes in GAAP since the Balance Sheet Date;

            (d)     contemporaneously with the filing or mailing thereof, copies
     of all material of a financial nature filed with the Securities and
     Exchange Commission or sent to the stockholders of the Borrower;

            (e)     from time to time upon request of the Administrative Agent,
     projections of the Borrower and its Subsidiaries updating those projections
     delivered to the Lenders and referred to in Section 7.4.3 or, if
     applicable, updating any later such projections delivered in response to a
     request pursuant to this Section 8.4(e); and

            (f)     from time to time such other financial data and information
     as the Administrative Agent or any Lender may reasonably request.

     8.5. NOTICES.

            8.5.1. DEFAULTS. The Borrower will promptly notify the
     Administrative Agent and each of the Lenders in writing of the occurrence
     of any Default or Event of Default, together with a reasonably detailed
     description thereof, and the actions the Borrower proposes to take with
     respect thereto. If any Person shall give any notice or take any other
     action in respect of a claimed default under this Credit Agreement or any
     other note, evidence of indebtedness, indenture or other obligation to
     which or with respect to which the Borrower or any of its Subsidiaries is a
     party or obligor, whether as principal, guarantor, surety or otherwise, to
     the extent such claimed default would constitute an Event of



                                      -45-

     Default hereunder if such claim were accurate, the Borrower shall forthwith
     give written notice thereof to the Administrative Agent and each of the
     Lenders, describing the notice or action and the nature of the claimed
     default.

            8.5.2. ENVIRONMENTAL EVENTS. The Borrower will promptly give notice
     to the Administrative Agent and each of the Lenders (a) of any violation of
     any Environmental Law that the Borrower or any of its Subsidiaries reports
     in writing or is reportable by such Person in writing (or for which any
     written report supplemental to any oral report is made) to any Governmental
     Authority and (b) upon becoming aware thereof, of any inquiry, proceeding,
     investigation, or other action, including a notice from any agency of
     potential environmental liability, of any Governmental Authority that could
     have a Material Adverse Effect.

            8.5.3. NOTIFICATION OF CLAIM AGAINST ASSETS. The Borrower will,
     immediately upon becoming aware thereof, notify the Administrative Agent
     and each of the Lenders in writing of any setoff, claims (including, with
     respect to the Real Estate, environmental claims), withholdings or other
     defenses to which any of the Borrower's assets are subject if such setoff,
     claim, withholding or defense could reasonably be expected to have a
     Material Adverse Effect.

            8.5.4. NOTICE OF LITIGATION AND JUDGMENTS. The Borrower will, and
     will cause each of its Subsidiaries to, give notice to the Administrative
     Agent and each of the Lenders in writing within fifteen (15) days of
     becoming aware of any litigation or proceedings threatened in writing or
     any pending litigation and proceedings affecting the Borrower or any of its
     Subsidiaries or to which the Borrower or any of its Subsidiaries is or
     becomes a party involving an uninsured claim against the Borrower or any of
     its Subsidiaries that could reasonably be expected to have a Material
     Adverse Effect on the Borrower or any of its Subsidiaries and stating the
     nature and status of such litigation or proceedings. The Borrower will, and
     will cause each of its Subsidiaries to, give notice to the Administrative
     Agent and each of the Lenders, in writing, in form and detail satisfactory
     to the Administrative Agent, within ten (10) days of any judgment not
     covered by insurance, final or otherwise, against the Borrower or any of
     its Subsidiaries in an amount in excess of $1,000,000.

     8.6. LEGAL EXISTENCE; MAINTENANCE OF PROPERTIES. The Borrower will do or
cause to be done all things necessary to preserve and keep in full force and
effect its legal existence, rights and franchises and those of its Subsidiaries
and will not, and will not cause or permit any of its Subsidiaries to, convert
to a limited liability company or a limited liability partnership. It (a) will
cause all of its properties and those of its Subsidiaries used or useful in the
conduct of its business or the business of its Subsidiaries to be maintained and
kept in good condition, repair and working order and supplied with all necessary
equipment, (b) will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Borrower may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times, and (c)
will, and



                                      -46-

will cause each of its Subsidiaries to, continue to engage primarily in the
businesses now conducted by them and in related businesses; PROVIDED that
nothing in this Section 8.6 shall prevent the Borrower from discontinuing the
operation and maintenance of any of its properties or any of those of its
Subsidiaries if such discontinuance is, in the judgment of the Borrower,
desirable in the conduct of its or their business and that do not in the
aggregate have a Material Adverse Effect.

     8.7. INSURANCE. The Borrower will, and will cause each of its Subsidiaries
to, maintain with financially sound and reputable insurers insurance with
respect to its properties and business against such casualties and contingencies
as shall be in accordance with the general practices of businesses engaged in
similar activities in similar geographic areas and in amounts, containing such
terms, in such forms and for such periods as may be reasonable and prudent.

     8.8. TAXES. The Borrower will, and will cause each of its Subsidiaries to,
duly pay and discharge, or cause to be paid and discharged, before the same
shall become overdue, all taxes, assessments and other governmental charges
imposed upon it and its Real Estate, sales and activities, or any part thereof,
or upon the income or profits therefrom, as well as all claims for labor,
materials, or supplies that if unpaid might by law become a Lien or charge upon
any of its property; PROVIDED that any such tax, assessment, charge, levy or
claim need not be paid if the validity or amount thereof shall currently be
contested in good faith by appropriate proceedings and if the Borrower or such
Subsidiary shall have set aside on its books adequate reserves with respect
thereto; and PROVIDED FURTHER that the Borrower and each Subsidiary of the
Borrower will pay all such taxes, assessments, charges, levies or claims
forthwith upon the commencement of proceedings to foreclose any Lien that may
have attached as security therefor.

     8.9. INSPECTION RIGHTS. No more frequently than once each calendar year, or
more frequently as determined by the Administrative Agent if an Event of Default
shall have occurred and be continuing, the Borrower shall permit the Lenders,
through the Administrative Agent or any of the Lenders' other designated
representatives, to visit and inspect any of the properties of the Borrower or
any of its Subsidiaries, to examine the books of account of the Borrower and its
Subsidiaries (and to make copies thereof and extracts therefrom), and to discuss
the affairs, finances and accounts of the Borrower and its Subsidiaries with,
and to be advised as to the same by, its and their officers, all at such
reasonable times and intervals and, so long as no Event of Default has occurred
and is continuing, upon prior written notice by the Administrative Agent, as the
Administrative Agent or any Lender may reasonably request.

     8.10. COMPLIANCE WITH LAWS, CONTRACTS, LICENSES, AND PERMITS. The Borrower
will, and will cause each of its Subsidiaries to, comply with (a) the applicable
laws and regulations wherever its business is conducted, including all
Environmental Laws, except where the failure to so comply could not reasonably
be expected to have a Material Adverse Effect (b) the provisions of its
Governing Documents except where the failure to so comply could not reasonably
be expected to have a Material Adverse Effect, (c) all agreements and
instruments by which it or any of its properties may be bound, except where the
failure to so comply could not reasonably be expected to have a



                                      -47-

Material Adverse Effect and (d) all applicable decrees, orders, and judgments,
except where the failure to so comply could not reasonably be expected to have a
Material Adverse Effect. If any authorization, consent, approval, permit or
license from any officer, agency or instrumentality of any government shall
become necessary or required in order that the Borrower or any of its
Subsidiaries may fulfill any of its obligations hereunder or any of the other
Loan Documents to which the Borrower or such Subsidiary is a party, the Borrower
will, or (as the case may be) will cause such Subsidiary to, immediately take or
cause to be taken all reasonable steps within the power of the Borrower or such
Subsidiary to obtain such authorization, consent, approval, permit or license
and furnish the Administrative Agent and the Lenders with evidence thereof.

     8.11. EMPLOYEE BENEFIT PLANS. The Borrower will (a) promptly upon filing
the same with the Department of Labor or Internal Revenue Service, furnish to
the Administrative Agent a copy of the most recent actuarial statement required
to be submitted under Section 103(d) of ERISA and Annual Report, Form 5500, with
all required attachments, in respect of each Guaranteed Pension Plan, (b)
promptly upon receipt or dispatch, furnish to the Administrative Agent any
notice, report or demand sent or received in respect of a Guaranteed Pension
Plan under Sections 302, 4041, 4042, 4043, 4063, 4065, 4066 and 4068 of ERISA,
or in respect of a Multi-employer Plan, under Sections 4041A, 4202, 4219, 4242,
or 4245 of ERISA and (c) promptly furnish to the Administrative Agent a copy of
all actuarial statements required to be submitted under all Applicable Pension
Legislation.

     8.12. USE OF PROCEEDS. The Borrower will use the proceeds of the Revolving
Credit Loans and obtain Letters of Credit solely for the purposes set forth in
Section 7.17.1.

     8.13. ADDITIONAL SUBSIDIARIES. If, after the Closing Date, the Borrower or
any of its Subsidiaries creates or acquires, either directly or indirectly, any
Subsidiary, it will immediately notify the Administrative Agent of such creation
or acquisition, as the case may be, and provide the Administrative Agent and the
Lenders with an updated SCHEDULE 7.18(a) hereto and take all other action
required by Section 8.14.

     8.14. NEW GUARANTORS. The Borrower will cause each Domestic Subsidiary
created, acquired or otherwise existing on or after the Closing Date to
immediately become a Guarantor hereunder and shall cause such Subsidiary to
execute and deliver to the Administrative Agent, for the benefit of the
Administrative Agent and the Lenders, a Guaranty and certified copies of such
Subsidiary's Governing Documents, together with legal opinions in form and
substance satisfactory to the Administrative Agent opining as to authorization,
validity and enforceability of such Guaranty.

     8.15. AMENDMENTS TO GOVERNING DOCUMENTS. The Borrower will, and will cause
each of its Subsidiaries to, promptly furnish to the Administrative Agent any
amendment, supplement or modification to any of such Person's Governing
Documents permitted by Section 9.12.



                                      -48-

     8.16. FURTHER ASSURANCES. The Borrower will, and will cause each of its
Subsidiaries to, cooperate with the Lenders and the Administrative Agent and
execute such further instruments and documents as the Lenders or the
Administrative Agent shall reasonably request to carry out to their reasonable
satisfaction the transactions contemplated by this Credit Agreement and the
other Loan Documents.

                         9. CERTAIN NEGATIVE COVENANTS.

     The Borrower covenants and agrees that, so long as any Revolving Credit
Loan, Unpaid Reimbursement Obligation, Letter of Credit or Revolving Credit Note
is outstanding or any Lender has any obligation to make any Revolving Credit
Loans or the Administrative Agent has any obligations to issue, extend or renew
any Letters of Credit:

     9.1. RESTRICTIONS ON INDEBTEDNESS. The Borrower will not, and will not
permit any of its Subsidiaries to, create, incur, assume, guarantee or be or
remain liable, contingently or otherwise, with respect to any Indebtedness other
than:

            (a)     Indebtedness to the Lenders and the Administrative Agent
     arising under any of the Loan Documents;

            (b)     endorsements for collection, deposit or negotiation and
     warranties of products or services, in each case incurred in the ordinary
     course of business;

            (c)     Indebtedness incurred in connection with the acquisition
     after the date hereof of any real or personal property by the Borrower or
     such Subsidiary or under any Capitalized Lease, PROVIDED that the aggregate
     principal amount of such Indebtedness of the Borrower and its Subsidiaries
     shall not exceed the aggregate amount of $2,500,000 at any one time;

            (d)     Indebtedness in respect of Hedging Agreements so long as
     such arrangements are in the ordinary course of business and are not for
     speculative purposes;

            (e)     Indebtedness existing on the date hereof and listed and
     described on SCHEDULE 9.1 hereto;

            (f)     Indebtedness of (i) a Guarantor to the Borrower, so long as
     such Person is a Guarantor hereunder and remains a Subsidiary of the
     Borrower; (ii) the Borrower to a Guarantor, so long as such Guarantor
     remains a Subsidiary of the Borrower; and (iii) a Subsidiary which is not a
     Guarantor to another Subsidiary which is also not a Guarantor;

            (g)     Indebtedness of the Borrower or any Guarantor to any
     Subsidiary which is not a Guarantor consisting of an intercompany loan so
     long as (i) the aggregate amount of all such Indebtedness under this
     Section 9.1(g) does not exceed $10,000,000 at any time; and (ii) the
     payment obligations thereunder are



                                      -49-

     subordinated to the prior payment in full in cash of all Obligations
     pursuant to subordination terms acceptable to the Administrative Agent;

            (h)     Indebtedness of a Subsidiary which is not a Guarantor to the
     Borrower or a Guarantor so long as the aggregate amount of all such
     Indebtedness under this Section 9.1(h) does not exceed $10,000,000 at any
     time;

            (i)     third party Indebtedness of the Borrower or any Subsidiary
     incurred or assumed in connection with any Permitted Acquisition
     (including, without limitation, Indebtedness consisting of earnout
     arrangements) so long as the aggregate amount of all such Indebtedness
     under this Section 9.1(i) does not exceed $10,000,000 at any time;

            (j)     Indebtedness of the Borrower and any Subsidiary incurred in
     connection with the issuance by a financial institution (other than the
     Administrative Agent) of a letter of credit or other bank guarantee in a
     currency other than Dollars for the account of the Borrower or such
     Subsidiary, so long as (i) the Borrower had, prior to incurrence such
     Indebtedness, requested that such letter of credit be issued under this
     Credit Agreement in a currency other than Dollars and the Lenders did not
     approve such currency; and (ii) the aggregate amount of all such
     Indebtedness under this Section 9.1(j) does not exceed $2,500,000 at any
     time; and

            (k)     any extension, renewal, refunding, refinancing or
     replacement of the Indebtedness permitted under clauses (c), (e), and (i)
     above, PROVIDED that the aggregate principal amount of such replacement
     Indebtedness shall not exceed the outstanding principal amount of the
     Indebtedness existing on the date of such refinancing and the terms
     governing the Indebtedness incurred in connection with any such extension,
     renewal, refunding, refinancing or replacement thereof shall be no more
     restrictive in any material respect than the corresponding terms governing
     such Indebtedness as in effect on the Closing Date.

     9.2. RESTRICTIONS ON LIENS.

            9.2.1. PERMITTED LIENS. The Borrower will not, and will not permit
any of its Subsidiaries to, (a) create or incur or suffer to be created or
incurred or to exist any Lien upon any of its property or assets of any
character whether now owned or hereafter acquired, or upon the income or profits
therefrom; (b) transfer any of such property or assets or the income or profits
therefrom for the purpose of subjecting the same to the payment of Indebtedness
or performance of any other obligation in priority to payment of its general
creditors; (c) acquire, or agree or have an option to acquire, any property or
assets upon conditional sale or other title retention or purchase money security
agreement, device or arrangement; (d) suffer to exist for a period of more than
thirty (30) days after the same shall have been incurred any Indebtedness or
claim or demand against it that if unpaid might by law or upon bankruptcy or
insolvency, or otherwise, be given any priority whatsoever over its general
creditors; or (e) sell, assign, pledge or



                                      -50-

otherwise transfer any "RECEIVABLES" as defined in clause (g) of the definition
of the term "INDEBTEDNESS," with or without recourse; PROVIDED that the Borrower
or any of its Subsidiaries may create or incur or suffer to be created or
incurred or to exist (collectively, the "Permitted Liens"):

            (i)     Liens in favor of the Borrower on all or part of the assets
     of Subsidiaries of the Borrower securing Indebtedness owing by Subsidiaries
     of the Borrower to the Borrower;

            (ii)    Liens to secure taxes, assessments and other government
     charges in respect of obligations not overdue or being contested in good
     faith in compliance with Section 8.8 hereof (provided such Lien shall no
     longer be permitted immediately upon the commencement of proceedings to
     foreclose any Lien) or Liens on properties to secure claims for labor,
     material or supplies in respect of obligations not overdue or being
     contested in good faith in compliance with Section 8.8 hereof (provided
     such Lien shall no longer be permitted immediately upon the commencement of
     proceedings to foreclose any Lien);

            (iii)   deposits or pledges made in connection with, or to secure
     payment of, workmen's compensation, unemployment insurance, old age
     pensions or other social security obligations;

            (iv)    Liens on properties in respect of judgments or awards that
     have been in force for less than the applicable period for taking an appeal
     so long as execution is not levied thereunder or in respect of which the
     Borrower or such Subsidiary shall at the time in good faith be prosecuting
     an appeal or proceedings for review and in respect of which a stay of
     execution shall have been obtained pending such appeal or review;

            (v)     Liens of carriers, warehousemen, mechanics and materialmen,
     and other like Liens on properties in existence less than 120 days from the
     date of creation thereof in respect of obligations not overdue or being
     contested in good faith in compliance with Section 8.8 hereof (provided
     such Lien shall no longer be permitted immediately upon the commencement of
     proceedings to foreclose any Lien);

            (vi)    encumbrances on Real Estate consisting of easements, rights
     of way, zoning restrictions, restrictions on the use of real property and
     defects and irregularities in the title thereto, landlord's or lessor's
     liens and other minor Liens, PROVIDED that none of such Liens (A)
     interferes materially with the use of the property affected in the ordinary
     conduct of the business of the Borrower and its Subsidiaries, and (B)
     individually or in the aggregate have a Material Adverse Effect;

            (vii)   Liens existing on the date hereof and listed on SCHEDULE 9.2
     hereto;



                                      -51-

            (viii)  Liens to secure the Indebtedness permitted by Section 9.1(j)
     and liens securing the performance of bids, trade contracts (other than
     borrowed money), statutory obligations, surety and appeal bonds,
     performance bonds and other obligations of a like nature incurred in the
     ordinary course of business; and

            (ix)    purchase money security interests in or purchase money
     mortgages on real or personal property acquired after the date hereof to
     secure purchase money Indebtedness of the type and amount permitted by
     Section 9.1(c), incurred in connection with the acquisition of such
     property, which security interests or mortgages cover only the real or
     personal property so acquired.

                    9.2.2. RESTRICTIONS ON NEGATIVE PLEDGES AND UPSTREAM
     LIMITATIONS. The Borrower will not, nor will it permit any of its
     Subsidiaries to (a) enter into or permit to exist any arrangement or
     agreement (excluding the Credit Agreement and the other Loan Documents)
     which directly or indirectly prohibits the Borrower or any of its
     Subsidiaries from creating, assuming or incurring any Lien upon its
     properties, revenues or assets or those of any of its Subsidiaries whether
     now owned or hereafter acquired, or (b) enter into any agreement, contract
     or arrangement (excluding the Credit Agreement and the other Loan
     Documents) restricting the ability of any Subsidiary of the Borrower to pay
     or make dividends or distributions in cash or kind to the Borrower, to make
     loans, advances or other payments of whatsoever nature to the Borrower, or
     to make transfers or distributions of all or any part of its assets to the
     Borrower; in each case other than (i) restrictions on specific assets which
     assets are the subject of purchase money security interests to the extent
     permitted under Section 9.2.1, and (ii) customary anti-assignment
     provisions contained in leases and licensing agreements entered into by the
     Borrower or such Subsidiary in the ordinary course of its business.

     9.3. RESTRICTIONS ON INVESTMENTS. The Borrower will not, and will not
permit any of its Subsidiaries to, make or permit to exist or to remain
outstanding any Investment except Investments in:

            (a)     marketable direct or guaranteed obligations of the United
     States of America that mature within one (1) year from the date of purchase
     by the Borrower;

            (b)     demand deposits, certificates of deposit, bankers'
     acceptances and time deposits of United States banks having total assets in
     excess of $1,000,000,000;

            (c)     securities commonly known as "COMMERCIAL PAPER" issued by a
     corporation organized and existing under the laws of the United States of
     America or any state thereof that at the time of purchase have been rated
     and the ratings for which are not less than "P 1" if rated by Moody's, and
     not less than "A 1" if rated by S&P;



                                      -52-

            (d)     Investments existing on the date hereof and listed on
     SCHEDULE 9.3 hereto and [Investments made in connection with the Borrower's
     Investment Policy Guideline, provided, notwithstanding such Investment
     Policy Guidelines, the Borrower shall not be permitted to make any
     Investment in any Subsidiary which is not a Guarantor unless expressly
     permitted by Section 9.3(e)(iii) hereof);

            (e)     Investments with respect to (i) Indebtedness permitted by
     Section 9.1(f) so long as such entities remain Subsidiaries of the Borrower
     and Guarantors hereunder; (ii) Indebtedness permitted by Section 9.1(g) and
     (iii) Indebtedness permitted by Section 9.1(h);

            (f)     Investments consisting of the Guaranty or Investments by the
     Borrower in Guarantors, so long as such Guarantors remain a Guarantor
     hereunder and a Subsidiary of the Borrower;

            (g)     Investments consisting of promissory notes received as
     proceeds of asset dispositions permitted by Section 9.5.2 and Investments
     consisting of a Permitted Acquisition to the extent made in accordance with
     Section 9.5.1;

            (h)     Investments consisting of loans and advances to employees
     for moving, entertainment, travel and other similar expenses in the
     ordinary course of business not to exceed $500,000 in the aggregate at any
     time outstanding; and

            (i)     Investments consisting of the repurchase by the Borrower or
     any of its Subsidiaries of the Capital Stock of the Borrower, PROVIDED,
     unless waived in writing by the Required Lenders prior to such repurchase,
     (i) no Default or Event of Default has occurred and is continuing or would
     exist as a result of such purchase; (ii) the Borrower has no Revolving
     Credit Loans outstanding both immediately prior to and after giving effect
     to such repurchase; and (iii) the Borrower has demonstrated to the
     satisfaction of the Administrative Agent that the Borrower's Unencumbered
     Cash is not less than $10,000,000.

     9.4. RESTRICTED PAYMENTS. The Borrower will not make any Restricted
Payments except that, so long as no Default or Event of Default then exists or
would result from such payment, (a) any Subsidiary may make a Restricted Payment
to any Guarantor or the Borrower and (b) the Borrower or any of its Subsidiaries
may repurchase the Capital Stock of the Borrower, PROVIDED (i) the Borrower has
no Revolving Credit Loans outstanding both immediately prior to and after giving
effect to such repurchase; and (ii) the Borrower has demonstrated to the
satisfaction of the Administrative Agent that the Borrower's Unencumbered Cash
is not less than $10,000,000.

     9.5. MERGER, CONSOLIDATION AND DISPOSITION OF ASSETS.

            9.5.1. MERGERS AND ACQUISITIONS. The Borrower will not, and will not
     permit any of its Subsidiaries to, become a party to any merger,
     amalgamation or consolidation, or agree to or effect any asset acquisition
     or stock acquisition (other than the acquisition of assets in the ordinary
     course of business consistent



                                      -53-

     with past practices) except (a) the merger or consolidation of one or more
     of the Subsidiaries of the Borrower with and into the Borrower, (b) the
     merger or consolidation of two or more Subsidiaries of the Borrower
     provided if only one such Person is a Guarantor, then the Guarantor shall
     be the survivor, and (c) any merger or asset or stock acquisition by the
     Borrower or any of its Subsidiaries of Persons (or, in the case of an asset
     acquisition, assets of a Person) in the same or similar line of business as
     the Borrower (a "PERMITTED ACQUISITION") so long as:

            (i) the Borrower has provided the Administrative Agent with prior
     written notice of such acquisition, which notice shall include a reasonably
     detailed description of such Permitted Acquisition;

            (ii) the board of directors and (if required by applicable law) the
     shareholders, or the equivalent thereof, of each of the Borrower or the
     applicable Subsidiary and of the Person to be acquired has approved such
     merger, consolidation or acquisition;

            (iii) any Indebtedness incurred or assumed in connection with such
     Permitted Acquisition (including, without limitation, any assumed
     Indebtedness, earnout arrangements, seller Indebtedness and non-compete
     payments) shall have been permitted to be incurred or assumed pursuant to
     Section 9.1;

            (iv) not less than five (5) days prior to the consummation of the
     proposed acquisition, the Borrower shall have delivered to the
     Administrative Agent (A) evidence satisfactory to the Administrative Agent
     that the Person (or assets, as the case may be) to be acquired has a
     positive EBITDA for the most recent twelve calendar months and had a
     positive EBITDA for the most recent fiscal year end, as demonstrated by
     audited financial statements (or, to the extent such Person so acquired has
     no audited historical financial results, the management prepared financial
     results of such Person so acquired) but with the Borrower being permitted
     to adjust such historical calculations to include in such calculations of
     EBTIDA reasonable cost savings, expenses and other income statement or
     operating statement adjustments which are attributable to the change in
     ownership and/or management resulting from such Permitted Acquisition and
     are effected on the closing of such Permitted Acquisition, as may be
     reasonably acceptable to the Administrative Agent, which adjustments shall
     be deemed to have been realized on the consummation of such Permitted
     Acquisition), with such results to be in form and substance reasonably
     acceptable to the Administrative Agent, PROVIDED, HOWEVER, in each case, in
     the event that either no historical financial results are available with
     respect to the Person to be acquired, the Person to be acquired is not a
     separate legal entity, the Borrower or Subsidiary effecting the acquisition
     is acquiring only assets of another Person or, in the Administrative
     Agent's reasonable discretion it determines the historical financial
     results do not adequately reflect the financial results of the Person or
     assets to be acquired, such calculations shall be made with reference to
     reasonable estimates of such past performance made by the Borrower based on
     existing data and other available information, such estimates to be
     reasonably



                                      -54-

     acceptable in all respects to the Administrative Agent; (B) a Compliance
     Certificate prepared on a pro forma basis demonstrating compliance with the
     financial covenants set forth in Section 10 hereof both before and after
     giving effect to such Permitted Acquisition (with the Borrower being
     permitted to include in such pro forma statements reasonable cost savings,
     expenses and other income statement or operating statement adjustments
     which are attributable to the change in ownership and/or management
     resulting from such Permitted Acquisition and are effected on the closing
     of such Permitted Acquisition, as may be reasonably acceptable to the
     Administrative Agent, which adjustments shall be deemed to have been
     realized on the consummation of such Permitted Acquisition); and (C) a
     certificate from the chief financial officer of the Borrower to the effect
     that (1) the Borrower on a consolidating basis, and the Borrower and its
     Subsidiaries, on a consolidated basis, will be solvent both before and
     after consummating the Permitted Acquisition and (2) no Default or Event of
     Default then exists or would result after giving effect to the Permitted
     Acquisition;

            (v) in the event of a stock acquisition, the Person so acquired
     shall become a wholly owned Subsidiary of the Borrower and shall comply
     with the terms and conditions set forth in Section 8.14;

            (vi) the business to be acquired would not subject the
     Administrative Agent or any Lender to regulatory or third party approvals
     in connection with the exercise of any of its rights and remedies under
     this Credit Agreement or any other Loan Document;

            (vii) no contingent obligations or liabilities will be incurred or
     assumed in connection with such acquisition which could reasonably be
     expected to have a Material Adverse Effect;

            (viii) the aggregate amount of the purchase price for any single
     acquisition or series of related acquisitions which is payable in anything
     other than the Capital Stock of the Parent (and such Capital Stock shall
     have no redemption or repurchase rights prior to a date which is one (1)
     year after the Revolving Credit Loan Maturity Date and shall not have the
     ability to convert into any form of Indebtedness) shall not exceed
     $35,000,000; and

            (ix) the aggregate amount of the purchase price for all acquisitions
     over any twelve consecutive calendar month period which is payable in
     anything other than the Capital Stock of the Parent (and such Capital Stock
     shall have no redemption or repurchase rights prior to a date which is one
     (1) year after the Revolving Credit Loan Maturity Date and shall not have
     the ability to convert into any form of Indebtedness) shall not exceed
     $70,000,000.

            9.5.2. DISPOSITION OF ASSETS. The Borrower will not, and will not
     permit any of its Subsidiaries to, become a party to or agree to or effect
     any disposition of assets, other than (a) the sale of inventory, the
     licensing of intellectual property and the disposition of obsolete assets,
     in each case in the ordinary course of



                                      -55-

     business consistent with past practices and (b) so long as no Default or
     Event of Default has occurred and is continuing or would exist as a result
     thereof, the sale or other disposition of assets so long as the value of
     all assets sold pursuant to this Section 9.5.2(b) during the term of this
     Credit Agreement does not exceed, in the aggregate, five percent (5%) of
     the Borrower's Consolidated Total Assets as of the date of each such sale.
     To the extent the Borrower sells 100% of the Capital Stock of any Guarantor
     pursuant to the express terms of Section 9.5.2(b) hereof and, as a result
     of such sale, such Guarantor is no longer a Domestic Subsidiary, then the
     Administrative Agent shall, upon the consummation of such sale, release the
     Guaranty of such permitted disposed Subsidiary, all at the expense of the
     Borrower.

            9.5.3. CAPITAL STOCK OF GUARANTORS. The Borrower will not at any
     time, legally or beneficially, own less than 100% of the Capital Stock of
     any Guarantor (unless such Guarantor is permitted to be released from its
     Guaranty by the express terms of this Credit Agreement).

     9.6. SALE AND LEASEBACK. The Borrower will not, and will not permit any of
its Subsidiaries to, enter into any arrangement, directly or indirectly, whereby
the Borrower or any Subsidiary of the Borrower shall sell or transfer any
property owned by it in order then or thereafter to lease such property or lease
other property that the Borrower or any Subsidiary of the Borrower intends to
use for substantially the same purpose as the property being sold or
transferred.

     9.7. COMPLIANCE WITH ENVIRONMENTAL LAWS. The Borrower will not, and will
not permit any of its Subsidiaries to, (a) use any of the Real Estate or any
portion thereof for the handling, processing, storage or disposal of Hazardous
Substances except in accordance with applicable law, (b) cause or permit to be
located on any of the Real Estate any underground tank or other underground
storage receptacle for Hazardous Substances except in accordance with applicable
law, (c) generate any Hazardous Substances on any of the Real Estate except in
accordance with applicable law, (d) conduct any activity at any Real Estate or
use any Real Estate in any manner so as to cause a release (i.e. releasing,
spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting,
escaping, leaching, disposing or dumping) or threatened release of Hazardous
Substances on, upon or into the Real Estate or (e) otherwise conduct any
activity at any Real Estate or use any Real Estate in any manner that would
violate any Environmental Law or bring such Real Estate in violation of any
Environmental Law.

     9.8. EMPLOYEE BENEFIT PLANS. Neither the Borrower nor any ERISA Affiliate
will:

            (a)     engage in any "PROHIBITED TRANSACTION" within the meaning of
     Section 406 of ERISA or Section 4975 of the Code which could result in a
     material liability for the Borrower or any of its Subsidiaries; or



                                      -56-

            (b)     permit any Guaranteed Pension Plan to incur an "ACCUMULATED
     FUNDING DEFICIENCY", as such term is defined in Section 302 of ERISA,
     whether or not such deficiency is or may be waived; or

            (c)     fail to contribute to any Guaranteed Pension Plan to an
     extent which, or terminate any Guaranteed Pension Plan in a manner which,
     could result in the imposition of a lien or encumbrance on the assets of
     the Borrower or any of its Subsidiaries pursuant to Section 302(f) or
     Section 4068 of ERISA; or

            (d)     amend any Guaranteed Pension Plan in circumstances requiring
     the posting of security pursuant to Section 307 of ERISA or Section
     401(a)(29) of the Code;

            (e)     permit or take any action which would result in the
     aggregate benefit liabilities (with the meaning of Section 4001 of ERISA)
     of all Guaranteed Pension Plans exceeding the value of the aggregate assets
     of such Plans, disregarding for this purpose the benefit liabilities and
     assets of any such Plan with assets in excess of benefit liabilities; or

            (f)     permit or take any action which would contravene any
     Applicable Pension Legislation if such contravention could reasonably be
     expected to have a Material Adverse Effect.

     9.9. BUSINESS ACTIVITIES. The Borrower will not, and will not permit any of
its Subsidiaries to, engage directly or indirectly (whether through Subsidiaries
or otherwise) in any type of business other than the businesses conducted by
them on the Closing Date and in related businesses.

     9.10. FISCAL YEAR. The Borrower will not, and will not permit any of it
Subsidiaries to, change the date of the end of its fiscal year from that set
forth in Section 7.4.1.

     9.11. TRANSACTIONS WITH AFFILIATES. The Borrower will not, and will not
permit any of its Subsidiaries to, engage in any transaction with any Affiliate
(other than for services as employees, officers and directors) other than the
Borrower or a Subsidiary, including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for rental of real
or personal property to or from, or otherwise requiring payments to or from any
such Affiliate or, to the knowledge of the Borrower, any corporation,
partnership, trust or other entity in which any such Affiliate has a substantial
interest or is an officer, director, trustee or partner, on terms more favorable
to such Person than would have been obtainable on an arm's-length basis in the
ordinary course of business.

     9.12. MODIFICATION OF GOVERNING DOCUMENTS. Neither the Borrower nor any of
its Subsidiaries will consent to or agree to any amendment, supplement or other
modification to the Governing Documents without the prior written consent of the
Administrative Agent unless such amendment, supplement or modification could not
reasonably be expected to have a Material Adverse Effect on the Administrative
Agent's



                                      -57-

or the Lenders rights under the Loan Documents or the Borrower's or any of its
Subsidiaries obligations under the Loan Documents.

                            10. FINANCIAL COVENANTS.

     The Borrower covenants and agrees that, so long as any Revolving Credit
Loan, Unpaid Reimbursement Obligation, Letter of Credit or Revolving Credit Note
is outstanding or any Lender has any obligation to make any Revolving Credit
Loans or the Administrative Agent has any obligation to issue, extend or renew
any Letters of Credit:

     10.1. MINIMUM EBITDA. The Borrower will not permit Consolidated EBITDA for
any fiscal quarter, commencing with the fiscal quarter ending March 31, 2003, to
be less than $5,000,000 for each such fiscal quarter.

     10.2. LEVERAGE RATIO. The Borrower will not permit the Leverage Ratio to
exceed 1.75:1.00 at any time.

     10.3. QUICK RATIO. The Borrower will not permit the ratio of Consolidated
Quick Assets to the sum of Consolidated Current Liabilities plus Total
Outstandings to be less than 1.25:1.00 at any time.

                             11. CLOSING CONDITIONS.

     The obligations of the Lenders to make the initial Revolving Credit Loans
and of the Administrative Agent to issue any initial Letters of Credit shall be
subject to the satisfaction of the following conditions precedent:

     11.1. LOAN DOCUMENTS. Each of the Loan Documents shall have been duly
executed and delivered by the respective parties thereto, shall be in full force
and effect and shall be in form and substance satisfactory to each of the
Lenders. Each Lender shall have received a fully executed copy of each such
document.

     11.2. CERTIFIED COPIES OF GOVERNING DOCUMENTS. Each of the Lenders shall
have received from the Borrower and each Guarantor a copy, certified by a duly
authorized officer of such Person to be true and complete on the Closing Date,
of each of its Governing Documents as in effect on such date of certification.

     11.3. CORPORATE OR OTHER ACTION. All corporate (or other) action necessary
for the valid execution, delivery and performance by the Borrower and each
Guarantor of this Credit Agreement and the other Loan Documents to which it is
or is to become a party shall have been duly and effectively taken, and evidence
thereof satisfactory to the Lenders shall have been provided to each of the
Lenders.

     11.4. INCUMBENCY CERTIFICATE. Each of the Lenders shall have received from
the Borrower and each of the Guarantors an incumbency certificate, dated as of
the Closing Date, signed by a duly authorized officer of the Borrower or such
Guarantor, and giving



                                      -58-

the name and bearing a specimen signature of each individual who shall be
authorized: (a) to sign, in the name and on behalf of each of the Borrower of
such Guarantor, each of the Loan Documents to which the Borrower or such
Guarantor is or is to become a party; (b) in the case of the Borrower, to make
Loan Requests and Conversion Requests and to apply for Letters of Credit; and
(c) to give notices and to take other action on its behalf under the Loan
Documents.

     11.5. UCC SEARCH RESULTS. The Administrative Agent shall have received from
each of the Borrower and its Subsidiaries the results of UCC searches indicating
no Liens other than Permitted Liens and otherwise in form and substance
satisfactory to the Administrative Agent.

     11.6. CERTIFICATES OF INSURANCE. The Administrative Agent shall have
received a certificate of insurance from an independent insurance broker dated
as of the Closing Date, identifying insurers, types of insurance, insurance
limits, and policy terms, and otherwise describing the insurance obtained.

     11.7. OPINION OF COUNSEL. Each of the Lenders and the Administrative Agent
shall have received a favorable legal opinion addressed to the Lenders and the
Administrative Agent, dated as of the Closing Date, in form and substance
satisfactory to the Lenders and the Administrative Agent, from Hale and Dorr
LLP, counsel to the Borrower and its Subsidiaries.

     11.8. PAYMENT OF FEES. The Borrower shall have paid to the Lenders or the
Administrative Agent, as appropriate, the Fees pursuant to Sections 4.6, 5.1 and
5.2.

                        12. CONDITIONS TO ALL BORROWINGS.

     The obligations of the Lenders to make any Revolving Credit Loan and of the
Administrative Agent to issue, extend or renew any Letter of Credit, in each
case whether on or after the Closing Date, shall also be subject to the
satisfaction of the following conditions precedent:

     12.1. REPRESENTATIONS TRUE; NO EVENT OF DEFAULT. Each of the
representations and warranties of any of the Borrower and its Subsidiaries
contained in this Credit Agreement, the other Loan Documents or in any document
or instrument delivered pursuant to or in connection with this Credit Agreement
shall be true as of the date as of which they were made and shall also be true
at and as of the time of the making of such Revolving Credit Loan or the
issuance, extension or renewal of such Letter of Credit, with the same effect as
if made at and as of that time (except to the extent of changes resulting from
transactions contemplated or permitted by this Credit Agreement and the other
Loan Documents and changes occurring in the ordinary course of business that
singly or in the aggregate are not materially adverse, and to the extent that
such representations and warranties relate expressly to an earlier date) and no
Default or Event of Default shall have occurred and be continuing.



                                      -59-

     12.2. NO LEGAL IMPEDIMENT. No change shall have occurred in any law or
regulations thereunder or interpretations thereof that in the reasonable opinion
of any Lender would make it illegal for such Lender to make such Revolving
Credit Loan or to participate in the issuance, extension or renewal of such
Letter of Credit or in the reasonable opinion of the Administrative Agent would
make it illegal for the Administrative Agent to issue, extend or renew such
Letter of Credit.

     12.3. PROCEEDINGS AND DOCUMENTS. All proceedings in connection with the
transactions contemplated by this Credit Agreement, the other Loan Documents and
all other documents incident thereto shall be satisfactory in substance and in
form to the Lenders and to the Administrative Agent and the Administrative
Agent's Special Counsel, and the Lenders, the Administrative Agent and such
counsel shall have received all information and such counterpart originals or
certified or other copies of such documents as the Administrative Agent may
reasonably request.

     12.4. GOVERNMENTAL REGULATION. Each Lender shall have received such
statements in substance and form reasonably satisfactory to such Lender as such
Lender shall require for the purpose of compliance with any applicable
regulations of the Comptroller of the Currency or the Board of Governors of the
Federal Reserve System. To the extent the Borrower notifies the Administrative
Agent in any Loan Request that all or any portion of the proceeds of such
Revolving Credit Loan are to be used for the purpose of purchasing or carrying
any "MARGIN SECURITY" or "MARGIN STOCK" (as such terms are used in Regulations U
and X of the Board of Governors of the Federal Reserve System, 12 C.F.R. Parts
221 and 224), the Borrower shall deliver to the Administrative Agent evidence
that all applicable regulations (including, without limitation, Regulations U
and X) have been complied with (including, without limitation, the deliver of a
Form U-1 or evidence that execution and delivery of such Form U-1 is not
required).

                    13. EVENTS OF DEFAULT; ACCELERATION; ETC.

     13.1. EVENTS OF DEFAULT AND ACCELERATION. If any of the following events
("EVENTS OF DEFAULT" or, if the giving of notice or the lapse of time or both is
required, then, prior to such notice or lapse of time, "DEFAULTS") shall occur:

            (a)     the Borrower shall fail to pay any principal of the
     Revolving Credit Loans or any Reimbursement Obligation when the same shall
     become due and payable, whether at the stated date of maturity or any
     accelerated date of maturity or at any other date fixed for payment;

            (b)     the Borrower or any of its Subsidiaries shall fail to pay
     any interest on the Revolving Credit Loans, any Fees, or other sums due
     hereunder or under any of the other Loan Documents, within three (3)
     Business Days after the same shall become due and payable, whether at the
     stated date of maturity or any accelerated date of maturity or at any other
     date fixed for payment;



                                      -60-

            (c)     the Borrower shall fail to (i) comply with any of its
     covenants contained in Sections 8.1, 8.4, the first sentence of 8.6, 8.12,
     9 or 10; or (ii) comply with any of it covenants contained in Section 8.14
     for five (5) days after written notice of such failure has been given to
     the Borrower by the Administrative Agent;

            (d)     the Borrower or any of its Subsidiaries shall fail to
     perform any term, covenant or agreement contained herein or in any of the
     other Loan Documents (other than those specified elsewhere in this Section
     13.1) for fifteen (15) days after written notice of such failure has been
     given to the Borrower by the Administrative Agent;

            (e)     any representation or warranty of the Borrower or any of its
     Subsidiaries in this Credit Agreement or any of the other Loan Documents or
     in any other document or instrument delivered pursuant to or in connection
     with this Credit Agreement shall prove to have been false in any material
     respect upon the date when made or deemed to have been made or repeated;

            (f)     the Borrower or any of its Subsidiaries shall fail to pay at
     maturity, or within any applicable period of grace, any obligation for
     borrowed money or credit received or in respect of any Capitalized Leases
     or Synthetic Lease, in an amount in excess of $5,000,000 or fail to observe
     or perform any material term, covenant or agreement contained in any
     agreement by which it is bound, evidencing or securing borrowed money or
     credit received or in respect of any Capitalized Leases or Synthetic
     Leases, in an amount in excess of $5,000,000 for such period of time as
     would permit (assuming the giving of appropriate notice if required) the
     holder or holders thereof or of any obligations issued thereunder to
     accelerate the maturity thereof, or any such holder or holders shall
     rescind or shall have a right to rescind the purchase of any such
     obligations;

            (g)     the Borrower or any of its Subsidiaries (other than a De
     Minimis Subsidiary) shall make an assignment for the benefit of creditors,
     or admit in writing its inability to pay or generally fail to pay its debts
     as they mature or become due, or shall petition or apply for the
     appointment of a trustee or other custodian, liquidator or receiver of the
     Borrower or any of its Subsidiaries (other than a De Minimis Subsidiary) or
     of any substantial part of the assets of the Borrower or any of its
     Subsidiaries (other than a De Minimis Subsidiary) or shall commence any
     case or other proceeding relating to the Borrower or any of its
     Subsidiaries (other than a De Minimis Subsidiary) under any bankruptcy,
     reorganization, arrangement, insolvency, readjustment of debt, dissolution
     or liquidation or similar law of any jurisdiction, now or hereafter in
     effect, or shall take any action to authorize or in furtherance of any of
     the foregoing, or if any such petition or application shall be filed or any
     such case or other proceeding shall be commenced against the Borrower or
     any of its Subsidiaries (other than a De Minimis Subsidiary) and the
     Borrower or any of its Subsidiaries (other than a De Minimis Subsidiary)
     shall indicate its approval thereof, consent thereto or



                                      -61-

     acquiescence therein or such petition or application shall not have been
     dismissed within sixty (60) days following the filing thereof;

            (h)     a decree or order is entered appointing any such trustee,
     custodian, liquidator or receiver or adjudicating the Borrower or any of
     its Subsidiaries (other than a De Minimis Subsidiary) bankrupt or
     insolvent, or approving a petition in any such case or other proceeding, or
     a decree or order for relief is entered in respect of the Borrower or any
     Subsidiary of the Borrower (other than a De Minimis Subsidiary) in an
     involuntary case under federal bankruptcy laws as now or hereafter
     constituted;

            (i)     there shall remain in force, undischarged, unsatisfied and
     unstayed, for more than thirty days, whether or not consecutive, any final
     judgment against the Borrower or any of its Subsidiaries that, with other
     outstanding final judgments, undischarged, against the Borrower or any of
     its Subsidiaries exceeds in the aggregate $2,500,000;

            (j)     if any of the Loan Documents shall be cancelled, terminated,
     revoked or rescinded otherwise than in accordance with the terms thereof or
     with the express prior written agreement, consent or approval of the
     Lenders, or any action at law, suit or in equity or other legal proceeding
     to cancel, revoke or rescind any of the Loan Documents shall be commenced
     by or on behalf of the Borrower or any of its Subsidiaries party thereto or
     any of their respective stockholders, or any court or any other
     governmental or regulatory authority or agency of competent jurisdiction
     shall make a determination that, or issue a judgment, order, decree or
     ruling to the effect that, any one or more of the Loan Documents is
     illegal, invalid or unenforceable in accordance with the terms thereof;

            (k)     the Borrower or any ERISA Affiliate incurs any liability to
     the PBGC or a Guaranteed Pension Plan pursuant to Title IV of ERISA in an
     aggregate amount exceeding $1,000,000, or the Borrower or any ERISA
     Affiliate is assessed withdrawal liability pursuant to Title IV of ERISA by
     a Multi-employer Plan requiring aggregate annual payments exceeding
     $1,000,000, or any of the following occurs with respect to a Guaranteed
     Pension Plan: (i) an ERISA Reportable Event, or a failure to make a
     required installment or other payment (within the meaning of Section
     302(f)(1) of ERISA), PROVIDED that the Administrative Agent determines in
     its reasonable discretion that such event (A) could be expected to result
     in liability of the Borrower or any of its Subsidiaries to the PBGC or such
     Guaranteed Pension Plan in an aggregate amount exceeding $1,000,000 and (B)
     could constitute grounds for the termination of such Guaranteed Pension
     Plan by the PBGC, for the appointment by the appropriate United States
     District Court of a trustee to administer such Guaranteed Pension Plan or
     for the imposition of a lien in favor of such Guaranteed Pension Plan; or
     (ii) the appointment by a United States District Court of a trustee to
     administer such Guaranteed Pension Plan; or (iii) the institution by the
     PBGC of proceedings to terminate such Guaranteed Pension Plan;



                                      -62-

            (l)     the Borrower or any of its Subsidiaries shall be enjoined,
     restrained or in any way prevented by the order of any Governmental
     Authority from conducting any material part of its business which could
     reasonably be expected to have a Material Adverse Effect and such order
     shall continue in effect for more than thirty (30) days;

            (m)     there shall occur any strike, lockout, labor dispute,
     embargo, condemnation, act of God or public enemy, or other casualty, which
     in any such case causes, for more than fifteen (15) consecutive days, the
     cessation or substantial curtailment of revenue producing activities at any
     facility of the Borrower or any of its Subsidiaries if such event or
     circumstance is not covered by business interruption insurance and would
     have a Material Adverse Effect; or

            (n)     a Change of Control shall occur;

then, and in any such event, so long as the same may be continuing, the
Administrative Agent may, and upon the request of the Required Lenders shall, by
notice in writing to the Borrower declare all amounts owing with respect to this
Credit Agreement, the Revolving Credit Notes and the other Loan Documents and
all Reimbursement Obligations to be, and they shall thereupon forthwith become,
immediately due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby expressly waived by the Borrower; PROVIDED
that in the event of any Event of Default specified in Sections 13.1(g) or
13.1(h), all such amounts shall become immediately due and payable automatically
and without any requirement of notice from the Administrative Agent or any
Lender.

     13.2. TERMINATION OF COMMITMENTS. If any one or more of the Events of
Default specified in Section 13.1(g) or Section 13.1(h) shall occur, any unused
portion of the credit hereunder shall forthwith terminate and each of the
Lenders shall be relieved of all further obligations to make Revolving Credit
Loans to the Borrower and the Administrative Agent shall be relieved of all
further obligations to issue, extend or renew Letters of Credit. If any other
Event of Default shall have occurred and be continuing, the Administrative Agent
may and, upon the request of the Required Lenders, shall, by notice to the
Borrower, terminate the unused portion of the credit hereunder, and upon such
notice being given such unused portion of the credit hereunder shall terminate
immediately and each of the Lenders shall be relieved of all further obligations
to make Revolving Credit Loans and the Administrative Agent shall be relieved of
all further obligations to issue, extend or renew Letters of Credit. No
termination of the credit hereunder shall relieve the Borrower or any of its
Subsidiaries of any of the Obligations.

     13.3. REMEDIES. In case any one or more of the Events of Default shall have
occurred and be continuing, and whether or not the Lenders shall have
accelerated the maturity of the Revolving Credit Loans pursuant to Section 13.1,
each Lender, if owed any amount with respect to the Revolving Credit Loans or
the Reimbursement Obligations, may, with the consent of the Required Lenders but
not otherwise, proceed to protect and enforce its rights by suit in equity,
action at law or other appropriate proceeding, whether for the specific
performance of any covenant or agreement contained in this



                                      -63-

Credit Agreement and the other Loan Documents or any instrument pursuant to
which the Obligations to such Lender are evidenced, including as permitted by
applicable law the obtaining of the EX PARTE appointment of a receiver, and, if
such amount shall have become due, by declaration or otherwise, proceed to
enforce the payment thereof or any other legal or equitable right of such
Lender. No remedy herein conferred upon any Lender or the Administrative Agent
or the holder of any Revolving Credit Note or purchaser of any Letter of Credit
Participation is intended to be exclusive of any other remedy and each and every
remedy shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute or any
other provision of law.

     13.4. DISTRIBUTION OF PROCEEDS. In the event that the Administrative Agent
or any Lender, as the case may be, receives any monies in connection with the
enforcement of any the Loan Documents, such monies shall be distributed for
application as follows:

            (a)     First, to the payment of, or (as the case may be) the
     reimbursement of the Administrative Agent for or in respect of all
     reasonable costs, expenses, disbursements and losses which shall have been
     incurred or sustained by the Administrative Agent in connection with the
     collection of such monies by the Administrative Agent, for the exercise,
     protection or enforcement by the Administrative Agent of all or any of the
     rights, remedies, powers and privileges of the Administrative Agent under
     this Credit Agreement or any of the other Loan Documents or in support of
     any provision of adequate indemnity to the Administrative Agent against any
     taxes or liens which by law shall have, or may have, priority over the
     rights of the Administrative Agent to such monies;

            (b)     Second, to all other Obligations in such order or preference
     as the Required Lenders may determine; PROVIDED, HOWEVER, that (i)
     distributions shall be made (A) PARI PASSU among Obligations with respect
     to the Administrative Agent's Fee and all other Obligations and (B) with
     respect to each type of Obligation owing to the Lenders, such as interest,
     principal, fees and expenses, among the Lenders PRO RATA, and (ii) the
     Administrative Agent may in its discretion make proper allowance to take
     into account any Obligations not then due and payable;

            (c)     Third, upon payment and satisfaction in full or other
     provisions for payment in full satisfactory to the Lenders and the
     Administrative Agent of all of the Obligations, to the extent applicable,
     to the payment of any obligations required to be paid pursuant to Section
     9-608(a)(1)(C) or 9-615(a)(3) of the Uniform Commercial Code of the
     Commonwealth of Massachusetts; and

            (d)     Fourth, the excess, if any, shall be returned to the
     Borrower or to such other Persons as are entitled thereto.

                          14. THE ADMINISTRATIVE AGENT.

     14.1. AUTHORIZATION.



                                      -64-

            (a)     The Administrative Agent is authorized to take such action
     on behalf of each of the Lenders and to exercise all such powers as are
     hereunder and under any of the other Loan Documents and any related
     documents delegated to the Administrative Agent, together with such powers
     as are reasonably incident thereto, PROVIDED that no duties or
     responsibilities not expressly assumed herein or therein shall be implied
     to have been assumed by the Administrative Agent.

            (b)     The relationship between the Administrative Agent and each
     of the Lenders is that of an independent contractor. The use of the term
     "ADMINISTRATIVE AGENT" is for convenience only and is used to describe, as
     a form of convention, the independent contractual relationship between the
     Administrative Agent and each of the Lenders. Nothing contained in this
     Credit Agreement nor the other Loan Documents shall be construed to create
     an agency, trust or other fiduciary relationship between the Administrative
     Agent and any of the Lenders.

            (c)     As an independent contractor empowered by the Lenders to
     exercise certain rights and perform certain duties and responsibilities
     hereunder and under the other Loan Documents, the Administrative Agent is
     nevertheless a "REPRESENTATIVE" of the Lenders, as that term is defined in
     Article 1 of the Uniform Commercial Code, for purposes of actions for the
     benefit of the Lenders and the Administrative Agent with respect to all
     guarantees contemplated by the Loan Documents.

     14.2. EMPLOYEES AND ADMINISTRATIVE AGENTS. The Administrative Agent may
exercise its powers and execute its duties by or through employees or agents and
shall be entitled to take, and to rely on, advice of counsel concerning all
matters pertaining to its rights and duties under this Credit Agreement and the
other Loan Documents. The Administrative Agent may utilize the services of such
Persons as the Administrative Agent in its sole discretion may reasonably
determine, and all reasonable fees and expenses of any such Persons shall be
paid by the Borrower.

     14.3. NO LIABILITY. Neither the Administrative Agent nor any of its
shareholders, directors, officers or employees nor any other Person assisting
them in their duties nor any agent or employee thereof, shall be liable to any
Lender for any waiver, consent or approval given or any action taken, or omitted
to be taken, in good faith by it or them hereunder or under any of the other
Loan Documents, or in connection herewith or therewith, or be responsible to any
Lender for the consequences of any oversight or error of judgment whatsoever,
except that the Administrative Agent or such other Person, as the case may be,
may be liable for losses due to its willful misconduct or gross negligence. The
Administrative Agent shall be fully justified in failing or refusing to take any
action under this Credit Agreement unless it shall first have received such
advice or concurrence of the Required Lenders as it reasonably deems appropriate
or it shall first be indemnified to its reasonable satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Administrative Agent shall
in all



                                      -65-

cases be fully protected in acting, or in refraining from acting, under this
Credit Agreement in accordance with a request of the Required Lenders, and such
request and any action taken or failure to act pursuant thereto shall be binding
upon the Lenders and all future holders of the Revolving Credit Notes or of a
Letter of Credit Participation.

     14.4. NO REPRESENTATIONS.

            14.4.1. GENERAL. The Administrative Agent shall not be responsible
     for the execution or validity or enforceability of this Credit Agreement,
     the Revolving Credit Notes, the Letters of Credit, any of the other Loan
     Documents or any instrument at any time constituting, or intended to
     constitute, collateral security for the Revolving Credit Notes, or for the
     value of any such collateral security or for the validity, enforceability
     or collectability of any such amounts owing with respect to the Revolving
     Credit Notes, or for any recitals or statements, warranties or
     representations made herein or in any of the other Loan Documents or in any
     certificate or instrument hereafter furnished to it by or on behalf of the
     Borrower or any of its Subsidiaries, or be bound to ascertain or inquire as
     to the performance or observance of any of the terms, conditions, covenants
     or agreements herein or in any instrument at any time constituting, or
     intended to constitute, collateral security for the Revolving Credit Notes
     or to inspect any of the properties, books or records of the Borrower or
     any of its Subsidiaries. The Administrative Agent shall not be bound to
     ascertain whether any notice, consent, waiver or request delivered to it by
     the Borrower or any holder of any of the Revolving Credit Notes shall have
     been duly authorized or is true, accurate and complete. The Administrative
     Agent has not made nor does it now make any representations or warranties,
     express or implied, nor does it assume any liability to the Lenders, with
     respect to the credit worthiness or financial conditions of the Borrower or
     any of its Subsidiaries. Each Lender acknowledges that it has,
     independently and without reliance upon the Administrative Agent or any
     other Lender, and based upon such information and documents as it has
     deemed appropriate, made its own credit analysis and decision to enter into
     this Credit Agreement.

            14.4.2. CLOSING DOCUMENTATION, ETC. For purposes of determining
     compliance with the conditions set forth in Section 11, each Lender that
     has executed this Credit Agreement shall be deemed to have consented to,
     approved or accepted, or to be satisfied with, each document and matter
     either sent, or made available, by the Administrative Agent to such Lender
     for consent, approval, acceptance or satisfaction, or required thereunder
     to be consented to or approved by or acceptable or satisfactory to such
     Lender, unless an officer of the Administrative Agent active upon the
     Borrower's account shall have received notice from such Lender prior to the
     Closing Date specifying such Lender's objection thereto and such objection
     shall not have been withdrawn by notice to the Administrative Agent to such
     effect on or prior to the Closing Date.

     14.5. PAYMENTS.



                                      -66-

            14.5.1. PAYMENTS TO ADMINISTRATIVE AGENT. A payment by the Borrower
     to the Administrative Agent hereunder or any of the other Loan Documents
     for the account of any Lender shall constitute a payment to such Lender.
     The Administrative Agent agrees promptly to distribute to each Lender such
     Lender's PRO RATA share of payments received by the Administrative Agent
     for the account of the Lenders except as otherwise expressly provided
     herein or in any of the other Loan Documents.

            14.5.2. DISTRIBUTION BY ADMINISTRATIVE AGENT. If in the opinion of
     the Administrative Agent the distribution of any amount received by it in
     such capacity hereunder, under the Revolving Credit Notes or under any of
     the other Loan Documents might involve it in liability, it may refrain from
     making distribution until its right to make distribution shall have been
     adjudicated by a court of competent jurisdiction. If a court of competent
     jurisdiction shall adjudge that any amount received and distributed by the
     Administrative Agent is to be repaid, each Person to whom any such
     distribution shall have been made shall either repay to the Administrative
     Agent its proportionate share of the amount so adjudged to be repaid or
     shall pay over the same in such manner and to such Persons as shall be
     determined by such court.

            14.5.3. DELINQUENT LENDERS. Notwithstanding anything to the contrary
     contained in this Credit Agreement or any of the other Loan Documents, any
     Lender that fails (a) to make available to the Administrative Agent its PRO
     RATA share of any Revolving Credit Loan or to purchase any Letter of Credit
     Participation or (b) to comply with the provisions of Section 16.1 with
     respect to making dispositions and arrangements with the other Lenders,
     where such Lender's share of any payment received, whether by setoff or
     otherwise, is in excess of its PRO RATA share of such payments due and
     payable to all of the Lenders, in each case as, when and to the full extent
     required by the provisions of this Credit Agreement, shall be deemed
     delinquent (a "DELINQUENT LENDER") and shall be deemed a Delinquent Lender
     until such time as such delinquency is satisfied. A Delinquent Lender shall
     be deemed to have assigned any and all payments due to it from the
     Borrower, whether on account of outstanding Revolving Credit Loans, Unpaid
     Reimbursement Obligations, interest, fees or otherwise, to the remaining
     nondelinquent Lenders for application to, and reduction of, their
     respective PRO RATA shares of all outstanding Revolving Credit Loans and
     Unpaid Reimbursement Obligations. The Delinquent Lender hereby authorizes
     the Administrative Agent to distribute such payments to the nondelinquent
     Lenders in proportion to their respective PRO RATA shares of all
     outstanding Revolving Credit Loans and Unpaid Reimbursement Obligations. A
     Delinquent Lender shall be deemed to have satisfied in full a delinquency
     when and if, as a result of application of the assigned payments to all
     outstanding Revolving Credit Loans and Unpaid Reimbursement Obligations of
     the nondelinquent Lenders, the Lenders' respective PRO RATA shares of all
     outstanding Revolving Credit Loans and Unpaid Reimbursement Obligations
     have returned to those in effect



                                      -67-

     immediately prior to such delinquency and without giving effect to the
     nonpayment causing such delinquency.

     14.6. HOLDERS OF REVOLVING CREDIT NOTES. The Administrative Agent may deem
and treat the payee of any Revolving Credit Note or the purchaser of any Letter
of Credit Participation as the absolute owner or purchaser thereof for all
purposes hereof until it shall have been furnished in writing with a different
name by such payee or by a subsequent holder, assignee or transferee.

     14.7. INDEMNITY. The Lenders ratably agree hereby to indemnify and hold
harmless the Administrative Agent and its affiliates from and against any and
all claims, actions and suits (whether groundless or otherwise), losses,
damages, costs, expenses (including any expenses for which the Administrative
Agent or such affiliate has not been reimbursed by the Borrower as required by
Section 15.2), and liabilities of every nature and character arising out of or
related to this Credit Agreement, the Revolving Credit Notes, or any of the
other Loan Documents or the transactions contemplated or evidenced hereby or
thereby, or the Administrative Agent's actions taken hereunder or thereunder,
except to the extent that any of the same shall be directly caused by the
Administrative Agent's willful misconduct or gross negligence.

     14.8. ADMINISTRATIVE AGENT AS LENDER. In its individual capacity, Fleet
shall have the same obligations and the same rights, powers and privileges in
respect to its Commitment and the Revolving Credit Loans made by it, and as the
holder of any of the Revolving Credit Notes and as the purchaser of any Letter
of Credit Participations, as it would have were it not also the Administrative
Agent.

     14.9. RESIGNATION. The Administrative Agent may resign at any time by
giving sixty (60) days prior written notice thereof to the Lenders and the
Borrower. Upon any such resignation, the Required Lenders shall have the right
to appoint a successor Administrative Agent. If no successor Administrative
Agent shall have been so appointed by the Required Lenders and shall have
accepted such appointment within thirty (30) days after the retiring
Administrative Agent's giving of notice of resignation, then the retiring
Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent, which shall be a financial institution having a rating of
not less than A or its equivalent by S&P. In all cases, unless a Default or
Event of Default shall have occurred and be continuing, such successor
Administrative Agent shall be reasonably acceptable to the Borrower. Upon the
acceptance of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Administrative Agent, and the retiring Administrative Agent
shall be discharged from its duties and obligations hereunder. After any
retiring Administrative Agent's resignation, the provisions of this Credit
Agreement and the other Loan Documents shall continue in effect for its benefit
in respect of any actions taken or omitted to be taken by it while it was acting
as Administrative Agent.

     14.10. ADMINISTRATIVE AGENT MAY FILE PROOFS OF CLAIM.



                                      -68-

            (a)     In case of the pendency of any receivership, insolvency,
     liquidation, bankruptcy, reorganization, arrangement, adjustment,
     composition or other judicial, administrative or like proceeding or any
     assignment for the benefit of creditors relative to the Borrower or any of
     its Subsidiaries, the Administrative Agent (irrespective of whether the
     principal of any Revolving Credit Loan, Reimbursement Obligation or Unpaid
     Reimbursement Obligation shall then be due and payable as herein expressed
     or by declaration or otherwise and irrespective of whether the
     Administrative Agent shall have made any demand on the Borrower) shall be
     entitled and empowered, by intervention in such proceeding, under any such
     assignment or otherwise:

                    (i)     to file and prove a claim for the whole amount of
            the principal and interest owing and unpaid in respect of the
            Revolving Credit Loans, Reimbursement Obligations or Unpaid
            Reimbursement Obligations and all other Obligations that are owing
            and unpaid and to file such other documents as may be necessary or
            advisable in order to have the claims of the Lenders and the
            Administrative Agent (including any claim for the reasonable
            compensation, expenses, disbursements and advances of the Lenders
            and the Administrative Agent and their respective agents and counsel
            and all other amounts due the Lenders and the Administrative Agent
            under Sections 2.2, 4.6, 5.1, 5.2 and 16.2) allowed in such
            proceeding or under any such assignment; and

                    (ii)    to collect and receive any monies or other property
            payable or deliverable on any such claims and to distribute the
            same;

            (b)     Any custodian, receiver, assignee, trustee, liquidator,
     sequestrator or other similar official in any such proceeding or under any
     such assignment is hereby authorized by each Lender to make such payments
     to the Administrative Agent and, in the event that the Administrative Agent
     shall consent to the making of such payments directly to the Lenders,
     nevertheless to pay to the Administrative Agent any amount due for the
     reasonable compensation, expenses, disbursements and advances of the
     Administrative Agent and its agents and counsel, and any other amounts due
     the Administrative Agent under Sections 2.2, 4.6, 5.1, 5.2 and 16.2.

            (c)     Nothing contained herein shall authorize the Administrative
     Agent to consent to or accept or adopt on behalf of any Lender any plan of
     reorganization, arrangement, adjustment or composition affecting the
     Obligations owed to such Lender or the rights of any Lender or to authorize
     the Administrative Agent to vote in respect of the claim of any Lender in
     any such proceeding or under any such assignment.



                                      -69-

     14.11. NOTIFICATION OF DEFAULTS AND EVENTS OF DEFAULT. Each Lender hereby
agrees that, upon learning of the existence of a Default or an Event of Default,
it shall promptly notify the Administrative Agent thereof. The Administrative
Agent hereby agrees that upon receipt of any notice under this Section 14.10 it
shall promptly notify the other Lenders of the existence of such Default or
Event of Default.

     14.12. DUTIES IN THE CASE OF ENFORCEMENT. In case one of more Events of
Default have occurred and shall be continuing, and whether or not acceleration
of the Obligations shall have occurred, the Administrative Agent shall, if (a)
so requested by the Required Lenders and (b) the Lenders have provided to the
Administrative Agent such additional indemnities and assurances against expenses
and liabilities as the Administrative Agent may reasonably request, proceed to
enforce the provisions of the Loan Documents. The Required Lenders may direct
the Administrative Agent in writing as to the method and the extent of any such
sale or other disposition, the Lenders hereby agreeing to indemnify and hold the
Administrative Agent, harmless from all liabilities incurred in respect of all
actions taken or omitted in accordance with such directions, PROVIDED that the
Administrative Agent need not comply with any such direction to the extent that
the Administrative Agent reasonably believes the Administrative Agent's
compliance with such direction to be unlawful or commercially unreasonable in
any applicable jurisdiction.

                           15. SUCCESSORS AND ASSIGNS.

     15.1. GENERAL CONDITIONS. The provisions of this Credit Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby, except that the Borrower may not assign
or otherwise transfer any of its rights or obligations hereunder without the
prior written consent of each Lender and no Lender may assign or otherwise
transfer any of its rights or obligations hereunder except (a) to an Eligible
Assignee in accordance with the provisions of Section 15.2, (b) by way of
participation in accordance with the provisions of Section 15.4 or (c) by way of
pledge or assignment of a security interest subject to the restrictions of
Section 15.6 (and any other attempted assignment or transfer by any party hereto
shall be null and void). Nothing in this Credit Agreement, expressed or implied,
shall be construed to confer upon any Person (other than the parties hereto,
their respective successors and assigns permitted hereby, Participants to the
extent provided in Section 15.4 and, to the extent expressly contemplated
hereby, the Related Parties of each of the Administrative Agent and the Lenders)
any legal or equitable right, remedy or claim under or by reason of this Credit
Agreement or any of the other Loan Documents.

     15.2. ASSIGNMENTS. Any Lender may at any time assign to one or more
Eligible Assignees all or a portion of its rights and obligations under this
Credit Agreement (including all or a portion of its Commitment and the Revolving
Credit Loans at the time owing to it); PROVIDED that (a) except in the cases of
an assignment of the entire remaining amount of the assigning Lender's
Commitment and the Revolving Credit Loans at the time owing to it or, of an
assignment to a Lender or a Lender Affiliate, the



                                      -70-

aggregate amount of the Commitment (which for this purpose includes Revolving
Credit Loans outstanding thereunder) or, if the applicable Commitment is not
then in effect, the principal outstanding balance of the Revolving Credit Loan
of the assigning Lender subject to each such assignment (determined as of the
date on which the Assignment and Acceptance with respect to such assignment is
delivered to the Administrative Agent) shall not be less than $1,000,000 unless
each of the Administrative Agent and, so long as no Default or Event of Default
has occurred and is continuing, the Borrower otherwise consent (each such
consent not to be unreasonably withheld or delayed); (b) each partial assignment
shall be made as an assignment of a proportionate part of all the assigning
Lender's rights and obligations under this Credit Agreement with respect to the
Revolving Credit Loan or the Commitment assigned, it being understood that
non-PRO RATA assignments of or among any of the Commitments, the Revolving
Credit Loans, and the Reimbursement Obligations are not permitted; (c) any
assignment of a Commitment must be approved by the Administrative Agent and,
unless an Event of Default has occurred and is continuing, the Borrower, unless
the Person that is the proposed assignee is itself a Lender with a Commitment
(whether or not the proposed assignee would otherwise qualify as an Eligible
Assignee); and (d) the parties to each assignment shall execute and deliver to
the Administrative Agent an Assignment and Acceptance, together with a
processing and recordation fee of $2,500, and the Eligible Assignee, if it shall
not be a Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire. Subject to acceptance and recording thereof by the Administrative
Agent pursuant to Section 15.3, from and after the effective date specified in
each Assignment and Acceptance, the Eligible Assignee thereunder shall be a
party to this Credit Agreement and, to the extent of the interest assigned by
such Assignment and Acceptance have the rights and obligations of a Lender under
this Credit Agreement, and the assigning Lender thereunder shall, to the extent
of the interest assigned by such Assignment and Acceptance, be released from its
obligations under this Credit Agreement (and, in the case of an Assignment and
Acceptance covering all of the assigning Lender's rights and obligations under
this Credit Agreement, such Lender shall cease to be a party hereto) but shall
continue to be entitled to the benefits of Sections 5.3.2, 5.7, 5.8, 5.10 and
16.3 with respect to facts and circumstances occurring prior to the effective
date of such assignment. Any assignment or transfer by a Lender of rights or
obligations under this Credit Agreement that does not comply with this paragraph
shall be treated for purposes of this Credit Agreement as a sale by such Lender
of a participation in such rights and obligations in accordance with Section
15.4.

     15.3. REGISTER. The Administrative Agent, acting solely for this purpose as
an agent of the Borrower, shall maintain at the Administrative Agent's Office a
copy of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amounts of the Revolving Credit Loans owing to, each Lender
pursuant to the terms hereof from time to time (the "REGISTER"). The entries in
the Register shall be prima facie evidence of amounts owing, and the Borrower,
the Administrative Agent and the Lenders may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Credit Agreement, notwithstanding notice to



                                      -71-

the contrary. The Register shall be available for inspection by the Borrower and
any Lender, at any reasonable time and from time to time upon reasonable prior
notice.

     15.4. PARTICIPATIONS. Any Lender may at any time, without the consent of,
or notice to, the Borrower or the Administrative Agent, sell participations to
any Person (other than a natural person) (each, a "PARTICIPANT") in all or a
portion of such Lender's rights and/or obligations under this Credit Agreement
(including all or a portion of its Commitment and/or the Revolving Credit Loans
owing to it); PROVIDED that (a) such Lender's obligations under this Credit
Agreement shall remain unchanged, (b) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (c) the Borrower, the Administrative Agent and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Credit Agreement. Any agreement or
instrument pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Credit Agreement
and to approve any amendment, modification or waiver of any provision of this
Credit Agreement; PROVIDED that such agreement or instrument may provide that
such Lender will not, without the consent of the Participant, agree to any
amendment, modification or waiver that would reduce the principal of or the
interest rate on any Revolving Credit Loans, extend the term or increase the
amount of the Commitment of such Lender as it relates to such Participant,
reduce the amount of any Commitment Fee or Letter of Credit Fees to which such
Participant is entitled or extend any regularly scheduled payment date for
principal or interest. To the extent permitted by law, each Participant also
shall be entitled to the benefits of Section 16.1 as though it were a Lender,
provided such Participant agrees to be subject to Section 16.1 as though it were
a Lender.

     15.5. MISCELLANEOUS ASSIGNMENT PROVISIONS. A Lender may at any time grant a
security interest in all or any portion of its rights under this Credit
Agreement to secure obligations of such Lender, including without limitation (a)
any pledge or assignment to secure obligations to any of the twelve Federal
Reserve Banks organized under Section 4 of the Federal Reserve Act, 12 U.S.C.
Section 341 and (b) with respect to any Lender that is a Fund, to any lender or
any trustee for, or any other representative of, holders of obligations owed or
securities issued by such Fund as security for such obligations or securities or
any institutional custodian for such Fund or for such lender; PROVIDED that no
such grant shall release such Lender from any of its obligations hereunder,
provide any voting rights hereunder to the secured party thereof, substitute any
such secured party for such Lender as a party hereto or affect any rights or
obligations of the Borrower or Administrative Agent hereunder.

     15.6. ASSIGNEE OR PARTICIPANT AFFILIATED WITH THE BORROWER. If any assignee
Lender is an Affiliate of the Borrower, then any such assignee Lender shall have
no right to vote as a Lender hereunder or under any of the other Loan Documents
for purposes of granting consents or waivers or for purposes of agreeing to
amendments or other modifications to any of the Loan Documents or for purposes
of making requests to the Administrative Agent pursuant to Section 13.1 or
Section 13.2, and the determination of the Required Lenders shall for all
purposes of this Credit Agreement and the other Loan Documents



                                      -72-

be made without regard to such assignee Lender's interest in any of the
Revolving Credit Loans or Reimbursement Obligations. If any Lender sells a
participating interest in any of the Revolving Credit Loans or Reimbursement
Obligations to a Participant, and such Participant is the Borrower or an
Affiliate of the Borrower, then such transferor Lender shall promptly notify the
Administrative Agent of the sale of such participation. A transferor Lender
shall have no right to vote as a Lender hereunder or under any of the other Loan
Documents for purposes of granting consents or waivers or for purposes of
agreeing to amendments or modifications to any of the Loan Documents or for
purposes of making requests to the Administrative Agent pursuant to Section 13.1
or Section 13.2 to the extent that such participation is beneficially owned by
the Borrower or any Affiliate of the Borrower, and the determination of the
Required Lenders shall for all purposes of this Credit Agreement and the other
Loan Documents be made without regard to the interest of such transferor Lender
in the Revolving Credit Loans or Reimbursement Obligations to the extent of such
participation.

     15.7. NEW REVOLVING CREDIT NOTES. Upon its receipt of an Assignment and
Acceptance executed by the parties to such assignment, together with each
Revolving Credit Note subject to such assignment, the Administrative Agent shall
(a) record the information contained therein in the Register, and (b) give
prompt notice thereof to the Borrower and the Lenders (other than the assigning
Lender). Within five (5) Business Days after receipt of such notice, the
Borrower, at its own expense, shall execute and deliver to the Administrative
Agent, in exchange for each surrendered Revolving Credit Note, a new Revolving
Credit Note to the order of such Assignee in an amount equal to the amount
assumed by such Assignee pursuant to such Assignment and Acceptance and, if the
assigning Lender has retained some portion of its obligations hereunder, a new
Revolving Credit Note to the order of the assigning Lender in an amount equal to
the amount retained by it hereunder. Such new Revolving Credit Notes shall
provide that they are replacements for the surrendered Revolving Credit Notes,
shall be in an aggregate principal amount equal to the aggregate principal
amount of the surrendered Revolving Credit Notes, shall be dated the effective
date of such Assignment and Acceptance and shall otherwise be in substantially
the form of the assigned Revolving Credit Notes. The surrendered Revolving
Credit Notes shall be cancelled and returned to the Borrower.

     15.8. SPECIAL PURPOSE FUNDING VEHICLE. Notwithstanding anything to the
contrary contained in this Section 15, any Lender (a "GRANTING LENDER") may
grant to a special purpose funding vehicle (an "SPC") of such Granting Lender,
identified as such in writing from time to time delivered by the Granting Lender
to the Administrative Agent and the Borrower, the option to provide to the
Borrower all or any part of any Revolving Credit Loan that such Granting Lender
would otherwise be obligated to make to the Borrower pursuant to this Credit
Agreement, PROVIDED that (a) nothing herein shall constitute a commitment to
make any Revolving Credit Loan by any SPC, (b) the Granting Bank's obligations
under this Credit Agreement shall remain unchanged, (c) the Granting Lender
should retain the sole right to enforce this Credit Agreement and to approve any
amendment, modification or waiver of any provision of this Credit Agreement and
(d) if an SPC elects not to exercise such option or otherwise fails to



                                      -73-

provide all or any part of such Revolving Credit Loan, the Granting Lender shall
be obligated to make such Revolving Credit Loan pursuant to the terms hereof.
The making of a Revolving Credit Loan by an SPC hereunder shall utilize the
Commitment of the Granting Lender to the same extent, and as if, such Revolving
Credit Loan were made by the Granting Lender. Each party hereto hereby agrees
that no SPC shall be liable for any expense reimbursement, indemnity or similar
payment obligation under this Credit Agreement (all liability for which shall
remain with the Granting Lender). In furtherance of the foregoing, each party
hereto hereby agrees (which agreement shall survive the termination of this
Credit Agreement) that, prior to the date that is one year and one day after the
later of (i) the payment in full of all outstanding senior indebtedness of any
SPC and (ii) the Revolving Credit Loan Maturity Date, it will not institute
against, or join any other person in instituting against, such SPC any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
or similar proceedings under the laws of the United States of America or any
State thereof. In addition, notwithstanding anything to the contrary contained
in this Section 16.9, any SPC may (A) with notice to, but (except as specified
below) without the prior written consent of, the Borrower or the Administrative
Agent and without paying any processing fee therefor, assign all or a portion of
its interests in any Revolving Credit Loans to its Granting Lender or to any
financial institutions (consented to by the Administrative Agent and, so long as
no Default or Event of Default has occurred and is continuing, the Borrower,
which consents shall not be unreasonably withheld or delayed) providing
liquidity and/or credit facilities to or for the account of such SPC to fund the
Revolving Credit Loans made by such SPC or to support the securities (if any)
issued by such SPC to fund such Revolving Credit Loans and (B) disclose on a
confidential basis any non-public information relating to its Revolving Credit
Loans (other than financial statements referred to in Sections 7.4 or 8.4) to
any rating agency, commercial paper dealer or provider of a surety, guarantee or
credit or liquidity enhancement to such SPC. In no event shall the Borrower be
obligated to pay to an SPC that has made a Revolving Credit Loan any greater
amount than the Borrower would have been obligated to pay under this Agreement
if the Granting Lender had made such Revolving Credit Loan. An amendment to this
Section 15.9 without the written consent of an SPC shall be ineffective insofar
as it alters the rights and obligations of such SPC.

                     16. PROVISIONS OF GENERAL APPLICATIONS.

     16.1. SETOFF. The Borrower hereby grants to the Administrative Agent and
each of the Lenders a continuing lien, security interest and right of setoff as
security for all liabilities and obligations to the Administrative Agent and
each Lender, whether now existing or hereafter arising, upon and against all
deposits, credits, collateral and property, now or hereafter in the possession,
custody, safekeeping or control of the Administrative Agent or such Lender or
any Lender Affiliate and their successors and assigns or in transit to any of
them. Regardless of the adequacy of any collateral, if any of the Obligations
are due and payable and have not been paid or any Event of Default shall have
occurred, any deposits or other sums credited by or due from any of the Lenders
to the Borrower and any securities or other property of the Borrower in the
possession of such Lender may be applied to or set off by such Lender against
the



                                      -74-

payment of Obligations and any and all other liabilities, direct, or indirect,
absolute or contingent, due or to become due, now existing or hereafter arising,
of the Borrower to such Lender. ANY AND ALL RIGHTS TO REQUIRE ANY LENDER TO
EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH
SECURES THE OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO
SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF THE BORROWER ARE HEREBY KNOWINGLY,
VOLUNTARILY AND IRREVOCABLY WAIVED. Each of the Lenders agree with each other
Lender that (a) if an amount to be set off is to be applied to Indebtedness of
the Borrower to such Lender, other than Indebtedness evidenced by the Revolving
Credit Notes held by such Lender or constituting Reimbursement Obligations owed
to such Lender, such amount shall be applied ratably to such other Indebtedness
and to the Indebtedness evidenced by all such Revolving Credit Notes held by
such Lender or constituting Reimbursement Obligations owed to such Lender, and
(b) if such Lender shall receive from the Borrower, whether by voluntary
payment, exercise of the right of setoff, counterclaim, cross action,
enforcement of the claim evidenced by the Revolving Credit Notes held by, or
constituting Reimbursement Obligations owed to, such Lender by proceedings
against the Borrower at law or in equity or by proof thereof in bankruptcy,
reorganization, liquidation, receivership or similar proceedings, or otherwise,
and shall retain and apply to the payment of the Revolving Credit Note or
Revolving Credit Notes held by, or Reimbursement Obligations owed to, such
Lender any amount in excess of its ratable portion of the payments received by
all of the Lenders with respect to the Revolving Credit Notes held by, and
Reimbursement Obligations owed to, all of the Lenders, such Lender will make
such disposition and arrangements with the other Lenders with respect to such
excess, either by way of distribution, PRO TANTO assignment of claims,
subrogation or otherwise as shall result in each Lender receiving in respect of
the Revolving Credit Notes held by it or Reimbursement Obligations owed it, its
proportionate payment as contemplated by this Credit Agreement; PROVIDED that if
all or any part of such excess payment is thereafter recovered from such Lender,
such disposition and arrangements shall be rescinded and the amount restored to
the extent of such recovery, but without interest.

     16.2. EXPENSES. The Borrower agrees to pay (a) the reasonable costs of the
Administrative Agent (including the Administrative Agent's Special Counsel) of
producing and reproducing this Credit Agreement, the other Loan Documents and
the other agreements and instruments mentioned herein, (b) without duplication
of amounts payable pursuant to Section 5.3 hereof, any taxes (including any
interest and penalties in respect thereto) payable by the Administrative Agent
or any of the Lenders (other than taxes based upon the Administrative Agent's or
any Lender's net income) on or with respect to the transactions contemplated by
this Credit Agreement (the Borrower hereby agreeing to indemnify the
Administrative Agent and each Lender with respect thereto), (c) the reasonable
and documented fees, expenses and disbursements of the Administrative Agent's
Special Counsel or any local counsel to the Administrative Agent incurred in
connection with the preparation, syndication, administration or interpretation
of the Loan Documents and other instruments mentioned herein, each closing
hereunder, any amendments, modifications, approvals, consents or waivers



                                      -75-

hereto or hereunder, or the cancellation of any Loan Document upon payment in
full in cash of all of the Obligations or pursuant to any terms of such Loan
Document for providing for such cancellation, (d) the fees, expenses and
disbursements of the Administrative Agent or any of its affiliates incurred by
the Administrative Agent or such affiliate in connection with the preparation,
syndication, administration or interpretation of the Loan Documents and other
instruments mentioned herein, (e) all reasonable and documented out-of-pocket
expenses (including without limitation reasonable attorneys' fees and costs, and
reasonable consulting, accounting, appraisal, investment banking and similar
professional fees and charges) incurred by any Lender or the Administrative
Agent in connection with (i) the enforcement of or preservation of rights under
any of the Loan Documents against the Borrower or any of its Subsidiaries or the
administration thereof after the occurrence of a Default or Event of Default and
(ii) any litigation, proceeding or dispute whether arising hereunder or
otherwise, in any way related to any Lender's or the Administrative Agent's
relationship with the Borrower or any of its Subsidiaries and (f) all reasonable
fees, expenses and disbursements of the Administrative Agent incurred in
connection with UCC searches. The covenants contained in this Section 16.2 shall
survive payment or satisfaction in full of all other obligations.

     16.3. INDEMNIFICATION. The Borrower agrees to indemnify and hold harmless
the Administrative Agent, its affiliates and the Lenders from and against any
and all claims, actions and suits whether groundless or otherwise, and from and
against any and all liabilities, losses, damages and expenses of every nature
and character arising out of this Credit Agreement or any of the other Loan
Documents or the transactions contemplated hereby including, without limitation,
(a) any actual or proposed use by the Borrower or any of its Subsidiaries of the
proceeds of any of the Revolving Credit Loans or Letters of Credit, (b) the
reversal or withdrawal of any provisional credits granted by the Administrative
Agent upon the transfer of funds from lock box, bank agency, concentration
accounts or otherwise under any cash management arrangements with the Borrower
or any Subsidiary or in connection with the provisional honoring of funds
transfers, checks or other items, (c) the Borrower or any of its Subsidiaries
entering into or performing this Credit Agreement or any of the other Loan
Documents or (d) with respect to the Borrower and its Subsidiaries and their
respective properties and assets, the violation of any Environmental Law, the
presence, disposal, escape, seepage, leakage, spillage, discharge, emission,
release or threatened release of any Hazardous Substances or any action, suit,
proceeding or investigation brought or threatened with respect to any Hazardous
Substances (including, but not limited to, claims with respect to wrongful
death, personal injury or damage to property), in each case including, without
limitation, the reasonable and documented fees and disbursements of incurred in
connection with any such investigation, litigation or other proceeding, except
to the extent that any of the foregoing are directly caused by the gross
negligence or willful misconduct of the otherwise indemnified party. In
litigation, or the preparation therefor, the Lenders and the Administrative
Agent and its affiliates shall be entitled to select their own counsel and, in
addition to the foregoing indemnity, the Borrower agrees to pay promptly the
reasonable and documented fees and expenses of such counsel. If, and to the
extent that the obligations of the Borrower under this Section 16.3 are



                                      -76-

unenforceable for any reason, the Borrower hereby agrees to make the maximum
contribution to the payment in satisfaction of such obligations which is
permissible under applicable law. The covenants contained in this Section 16.3
shall survive payment or satisfaction in full of all other Obligations.

     16.4. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION.

            16.4.1. CONFIDENTIALITY. Each of the Lenders and the Administrative
     Agent agrees, on behalf of itself and each of its affiliates, directors,
     officers, employees and representatives, to use reasonable precautions to
     keep confidential, in accordance with their customary procedures for
     handling confidential information of the same nature and in accordance with
     safe and sound banking practices, any non-public information supplied to it
     by the Borrower or any of its Subsidiaries pursuant to this Credit
     Agreement that is identified by such Person as being confidential at the
     time the same is delivered to the Lenders or the Administrative Agent,
     PROVIDED that nothing herein shall limit the disclosure of any such
     information (a) after such information shall have become public other than
     through a violation of this Section 16.4, or becomes available to any of
     the Lenders or the Administrative Agent on a nonconfidential basis from a
     source other than the Borrower, (b) to the extent required by statute,
     rule, regulation or judicial process, (c) to counsel for any of the Lenders
     or the Administrative Agent, (d) to bank examiners or any other regulatory
     authority having jurisdiction over any Lender or the Administrative Agent,
     or to auditors or accountants, (e) to the Administrative Agent or any
     Lender, (f) in connection with any litigation to which any one or more of
     the Lenders, the Administrative Agent or any Financial Affiliate is a
     party, or in connection with the enforcement of rights or remedies
     hereunder or under any other Loan Document, (g) to a Lender Affiliate or a
     Subsidiary or affiliate of the Administrative Agent in connection with this
     Credit Agreement so long as such Person is bound by the provisions of this
     Section 16.4, (h) to any actual or prospective assignee or participant or
     any actual or prospective counterparty (or its advisors) to any swap or
     derivative transactions referenced to credit or other risks or events
     arising under this Credit Agreement or any other Loan Document so long as
     such assignee, participant or counterparty, as the case may be, agrees to
     be bound by the provisions of Section 16.4 or (i) with the consent of the
     Borrower. Moreover, each of the Administrative Agent and the Lenders (and
     their respective Affiliates) is hereby expressly permitted by the Borrower
     to refer to any of the Borrower and its Subsidiaries in connection with any
     advertising, promotion or marketing undertaken by the Administrative Agent,
     such Lender or such Affiliate and, for such purpose, the Administrative
     Agent, such Lender or such Affiliate may utilize any trade name, trademark,
     logo or other distinctive symbol associated with the Borrower or any of its
     Subsidiaries or any of their businesses.

            16.4.2. PRIOR NOTIFICATION. Unless specifically prohibited by
     applicable law or court order, each of the Lenders and the Administrative
     Agent shall, prior to disclosure thereof, notify the Borrower of any
     request for disclosure of any such non-public information by any
     governmental agency or representative



                                      -77-

     thereof (other than any such request in connection with an examination of
     the financial condition of such Lender by such governmental agency) or
     pursuant to legal process.

            16.4.3. OTHER. In no event shall any Lender or the Administrative
     Agent be obligated or required to return any materials furnished to it or
     any Financial Affiliate by the Borrower or any of its Subsidiaries. The
     obligations of each Lender under this Section 16.4 shall supersede and
     replace the obligations of such Lender under any confidentiality letter in
     respect of this financing signed and delivered by such Lender to the
     Borrower prior to the date hereof and shall be binding upon any assignee
     of, or purchaser of any participation in, any interest in any of the
     Revolving Credit Loans or Reimbursement Obligations from any Lender.

     16.5. SURVIVAL OF COVENANTS, ETC. All covenants, agreements,
representations and warranties made herein, in the Revolving Credit Notes, in
any of the other Loan Documents or in any documents or other papers delivered by
or on behalf of the Borrower or any of its Subsidiaries pursuant hereto shall be
deemed to have been relied upon by the Lenders and the Administrative Agent,
notwithstanding any investigation heretofore or hereafter made by any of them,
and shall survive the making by the Lenders of any of the Revolving Credit Loans
and the issuance, extension or renewal of any Letters of Credit, as herein
contemplated, and shall continue in full force and effect so long as any Letter
of Credit or any amount due under this Credit Agreement or the Revolving Credit
Notes or any of the other Loan Documents remains outstanding or any Lender has
any obligation to make any Revolving Credit Loans or the Administrative Agent
has any obligation to issue, extend or renew any Letter of Credit, and for such
further time as may be otherwise expressly specified in this Credit Agreement.
All statements contained in any certificate or other paper delivered to any
Lender or the Administrative Agent at any time by or on behalf of the Borrower
or any of its Subsidiaries pursuant hereto or in connection with the
transactions contemplated hereby shall constitute representations and warranties
by the Borrower or such Subsidiary hereunder.

     16.6. NOTICES. Except as otherwise expressly provided in this Credit
Agreement, all notices and other communications made or required to be given
pursuant to this Credit Agreement or the Revolving Credit Notes or any Letter of
Credit Applications shall be in writing and shall be delivered in hand, mailed
by United States registered or certified first class mail, postage prepaid, sent
by overnight courier, or sent by telegraph, telecopy, facsimile or telex and
confirmed by delivery via courier or postal service, addressed as follows:

            (a)     if to the Borrower, at Ten City Square, Boston,
     Massachusetts 02129, Attention: Francis M. Cleary, Treasurer, or at such
     other address for notice as the Borrower shall last have furnished in
     writing to the Person giving the notice, with a copy to Hal J. Leibowitz,
     Esq., Hale and Dorr LLP, 60 State Street, Boston, Massachusetts 02109;



                                      -78-

            (b)     if to the Administrative Agent, at 100 Federal Street,
     Boston, Massachusetts 02110, USA, Attention: John B. Desmond, Director, or
     such other address for notice as the Administrative Agent shall last have
     furnished in writing to the Person giving the notice; and

            (c)     if to any Lender, at such Lender's address set forth on
     SCHEDULE 1 hereto, or such other address for notice as such Lender shall
     have last furnished in writing to the Person giving the notice.

     Any such notice or demand shall be deemed to have been duly given or made
and to have become effective (i) if delivered by hand, overnight courier or
facsimile to a responsible officer of the party to which it is directed, at the
time of the receipt thereof by such officer or the sending of such facsimile and
(ii) if sent by registered or certified first-class mail, postage prepaid, on
the third Business Day following the mailing thereof.

     16.7. GOVERNING LAW. THIS CREDIT AGREEMENT AND, EXCEPT AS OTHERWISE
SPECIFICALLY PROVIDED THEREIN, EACH OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS
UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR ALL PURPOSES
BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID COMMONWEALTH OF
MASSACHUSETTS (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). THE
BORROWER AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS CREDIT AGREEMENT OR
ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH
OF MASSACHUSETTS OR ANY FEDERAL COURT SITTING THEREIN AND CONSENTS TO THE
NONEXCLUSIVE JURISDICTION OF SUCH COURT AND SERVICE OF PROCESS IN ANY SUCH SUIT
BEING MADE UPON THE BORROWER BY MAIL AT THE ADDRESS SPECIFIED IN Section 16.6.
THE BORROWER HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO
THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN
INCONVENIENT COURT.

     16.8. HEADINGS. The captions in this Credit Agreement are for convenience
of reference only and shall not define or limit the provisions hereof.

     16.9. COUNTERPARTS. This Credit Agreement and any amendment hereof may be
executed in several counterparts and by each party on a separate counterpart,
each of which when executed and delivered shall be an original, and all of which
together shall constitute one instrument. In proving this Credit Agreement it
shall not be necessary to produce or account for more than one such counterpart
signed by the party against whom enforcement is sought. Delivery by facsimile by
any of the parties hereto of an executed counterpart hereof or of any amendment
or waiver hereto shall be as effective as an original executed counterpart
hereof or of such amendment or waiver and shall be considered a representation
that an original executed counterpart hereof or such amendment or waiver, as the
case may be, will be delivered.



                                      -79-

     16.10. ENTIRE AGREEMENT, ETC. The Loan Documents and any other documents
executed in connection herewith or therewith express the entire understanding of
the parties with respect to the transactions contemplated hereby. Neither this
Credit Agreement nor any term hereof may be changed, waived, discharged or
terminated, except as provided in Section 16.12.

     16.11. WAIVER OF JURY TRIAL. THE BORROWER HEREBY WAIVES ITS RIGHT TO A JURY
TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN
CONNECTION WITH THIS CREDIT AGREEMENT, THE REVOLVING CREDIT NOTES OR ANY OF THE
OTHER LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER OR THE
PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS OR ANY COURSE OF CONDUCT, COURSE OF
DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY,
INCLUDING ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS OR ACTIONS OF
THE ADMINISTRATIVE AGENT OR ANY LENDER RELATING TO THE ADMINISTRATION OF THE
REVOLVING CREDIT LOANS OR ENFORCEMENT OF THE LOAN DOCUMENTS AND AGREES THAT IT
WILL NOT SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A
JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. Except as prohibited by law, the
Borrower hereby waives any right it may have to claim or recover in any
litigation referred to in the preceding sentence any special, exemplary,
punitive or consequential damages or any damages other than, or in addition to,
actual damages. The Borrower (a) certifies that no representative, agent or
attorney of any Lender or the Administrative Agent has represented, expressly or
otherwise, that such Lender or the Administrative Agent would not, in the event
of litigation, seek to enforce the foregoing waivers and (b) acknowledges that
the Administrative Agent and the Lenders have been induced to enter into this
Credit Agreement, the other Loan Documents to which it is a party by, among
other things, the waivers and certifications contained herein.

     16.12. CONSENTS, AMENDMENTS, WAIVERS, ETC. Any consent or approval required
or permitted by this Credit Agreement to be given by the Lenders may be given,
and any term of this Credit Agreement, the other Loan Documents or any other
instrument related hereto or mentioned herein may be amended, and the
performance or observance by the Borrower or any of its Subsidiaries of any
terms of this Credit Agreement, the other Loan Documents or such other
instrument or the continuance of any Default or Event of Default may be waived
(either generally or in a particular instance and either retroactively or
prospectively) with, but only with, the written consent of the Borrower and the
written consent of the Required Lenders. Notwithstanding the foregoing, no
amendment, modification or waiver shall:

            (a) without the written consent of the Borrower and each Lender
     directly affected thereby:

                    (i) reduce or forgive the principal amount of any Revolving
            Credit Loans or Reimbursement Obligations, or reduce the rate of
            interest on the Revolving Credit Notes or the amount of the
            Commitment Fee or Letter



                                      -80-

            of Credit Fees (other than interest accruing pursuant to Section
            5.11.2 following the effective date of any waiver by the Required
            Lenders of the Default or Event of Default relating thereto, with
            the Required Lenders being permitted to reduce or forgive any such
            interest from the first day such interest accrued);

                    (ii) increase the amount of such Lender's Commitment or
            extend the expiration date of such Lender's Commitment;

                    (iii) postpone or extend the Revolving Credit Loan Maturity
            Date or any other regularly scheduled dates for payments of
            principal of, or interest on, the Revolving Credit Loans or
            Reimbursement Obligations or any Fees or other amounts payable to
            such Lender (it being understood that (A) a waiver of the
            application of the default rate of interest pursuant to Section
            5.11.2 (including a waiver retroactive to the date such interest
            began accruing), and (B) any vote to rescind any acceleration made
            pursuant to Section 13.1 of amounts owing with respect to the
            Revolving Credit Loans and other Obligations shall require only the
            approval of the Required Lenders); and

                    (iv) other than pursuant to a transaction permitted by the
            terms of this Credit Agreement (including, without limitation, the
            sale of a Guarantor), release all or substantially all of the
            Guarantors from their guaranty obligations under the Guarantees;

            (b) without the written consent of all of the Lenders, amend or
     waive this Section 16.12 or the definition of Required Lenders (it being
     understood that the addition of one or more additional credit facilities,
     the allowance of the credit extensions, interest and fees thereunder to
     share ratably or on a subordinated basis with the Revolving Credit Loans,
     Letters of Credit, interest and Fees in the benefits of the Loan Documents
     and the inclusion of the holders of such facilities in the determination of
     Required Lenders shall require only the approval of the Required Lenders);

            (c) without the written consent of the Administrative Agent, amend
     or waive Section 14, the amount or time of payment of the Administrative
     Agent's Fee or any Letter of Credit Fees payable for the Administrative
     Agent's account or any other provision applicable to the Administrative
     Agent.

No waiver shall extend to or affect any obligation not expressly waived or
impair any right consequent thereon. No course of dealing or delay or omission
on the part of the Administrative Agent or any Lender in exercising any right
shall operate as a waiver thereof or otherwise be prejudicial thereto. No notice
to or demand upon the Borrower shall entitle the Borrower to other or further
notice or demand in similar or other circumstances.



                                      -81-

     16.13. SEVERABILITY. The provisions of this Credit Agreement are severable
and if any one clause or provision hereof shall be held invalid or unenforceable
in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect only such clause or provision, or part thereof, in
such jurisdiction, and shall not in any manner affect such clause or provision
in any other jurisdiction, or any other clause or provision of this Credit
Agreement in any jurisdiction.



                                      -82-

     IN WITNESS WHEREOF, the undersigned have duly executed this Credit
Agreement as a sealed instrument as of the date first set forth above.

                                     KEANE, INC.


                                     By: /s/ John J. Leahy
                                     -------------------------------------------
                                          Name: John J. Leahy
                                          Title: Senior Vice President and Chief
                                                  Financial Officer

                                          /s/ Francis M. Cleary
                                          --------------------------------------
                                          Name: Francis M. Cleary
                                          Title: Treasurer

                                     FLEET NATIONAL BANK, individually
                                     and as Administrative Agent


                                     By:  /s/
                                     -------------------------------------------
                                          Name:
                                          Director

                                     KEY CORPORATE CAPITAL INC.


                                     By:  /s/
                                     -------------------------------------------
                                          Name:
                                          Title:



                                   Schedule 1
                              Lenders; Commitments

                                   SCHEDULE 1
                                BANKS/COMMITMENTS



               Lenders                       Commitment         Commitment Percentage
- ----------------------------------------------------------------------------------------
                                                                   
FLEET NATIONAL BANK                          $ 30,000,000                 60%
DOMESTIC LENDING OFFICE:
100 Federal Street, 01-08-06
Boston, Massachusetts 02110
Attn: John B. Desmond, Director

EURODOLLAR LENDING OFFICE:
Same as above

- ----------------------------------------------------------------------------------------
KEY CORPORATE CAPITAL INC.                   $ 20,000,000                 40%
DOMESTIC LENDING OFFICE:
127 Public Square, 4th Floor
Cleveland, Ohio 44114
Attn: Jeff Kalinowski, Vice President

EURODOLLAR LENDING OFFICE:
Same as above

- ----------------------------------------------------------------------------------------
                           Totals:           $ 50,000,000                100%
========================================================================================

EX-10.13

                                                                   EXHIBIT 10.13

                             GATEWAY DEVELOPERS, LLC

                                  OFFICE LEASE

                                   CITY SQUARE

                       BOSTON (CHARLESTOWN), MASSACHUSETTS



ARTICLE       SECTION                     CAPTION                        PAGE
- -------       -------                     -------                        ----
                                                                 
   I.                    BASIC LEASE PROVISIONS                            1
                1.1      Introduction                                      1
                1.2      Basic Data                                        1

   II.                   DESCRIPTION OF PREMISES AND
                         APPURTENANT RIGHTS:  TERM                         3
                2.1      Location of Premises; Term                        3
                2.2      Appurtenant Rights and Reservations               5
                2.3      Parking Rights                                    7

   III.                  RENT                                              8
                3.1      Fixed Rent                                        8

   IV.                   USE OF PREMISES                                   8
                4.1      Permitted Use                                     8
                4.2      Alterations                                      11

   V.                    ASSIGNMENT AND SUBLETTING                        12
                5.1      Prohibition                                      12

   VI.                   DELIVERY OF PREMISES AND RESPONSIBILITY
                         AND RESPONSIBILITY FOR REPAIRS CONDITION
                         OF PREMISES                                      14
                6.1      Delivery of Possession of Premises               14
                6.2      Plans and Specifications                         16
                6.3      Preparation of Premises                          17
                6.3A     Landlord's Payment                               19
                6.3B     Subtenant Completion                             20
                6.4      Repairs to be Made by Landlord                   22
                6.5      Tenant's Agreement                               23
                6.6      Floor Loan - Heavy Machinery                     24






ARTICLE       SECTION                     CAPTION                        PAGE
- -------       -------                     -------                        ----
                                                                 
   VII.                  SERVICES TO BE FURNISHED BY LANDLORD
                         AND UTILITY CHARGES                              24
                7.1      Landlord's Services                              24
                7.2      Payment of Utility Charges                       26

   VIII.                 REAL ESTATE TAXES AND OTHER EXPENSES             26
                8.1      Tenant's Share of Real Estate Taxes              26
                8.2      Tenant's Share of Operating Expenses             29

   IX.                   INDEMNITY AND PUBLIC LIABILITY INSURANCE         36
                9.1      Tenant's Indemnity                               36
                9.2      Public Liability Insurance                       36
                9.3      Tenant's Risk                                    37
                9.4      Injury Caused by Third Parties                   37

   X.                    LANDLORD'S ACCESS TO PREMISES                    38
                10.1     Landlord's Right of Access                       38
                10.2     Exhibition of Space to Prospective Tenants       38

   XI.                   FIRE, EMINENT DOMAIN, ETC.                       39
                11.1     Damage                                           39
                11.2     Substantial Damage                               39
                11.3     Rent Abatement                                   41
                11.4     Damage to Building                               41
                11.5     Definition of Substantial Damage                 41
                11.6     Taking                                           41
                11.7     Rent Abatement                                   42
                11.8     Award                                            42

   XII.                  LANDLORD'S REMEDIES                              43
                12.1     Events of Default                                43
                12.2     Remedies                                         44
                12.3     Landlord's Default                               46

   XIII.                 MISCELLANEOUS PROVISIONS                         46
                13.1     Extra Hazardous Use                              46
                13.2     Waiver                                           47
                13.3     Covenant of Quite Enjoyment                      48
                13.4     Notice to Mortgagee and Ground Lessor            49
                13.5     Assignment of Rents                              49
                13.6     Mechanics' Liens                                 50
                13.7     No Brokerage                                     50
                13.8     Invalidity of Particular Provisions              51
                13.9     Provisions Binding, Etc.                         51


                                      -iii-




ARTICLE       SECTION                     CAPTION                        PAGE
- -------       -------                     -------                        ----
                                                                 
                13.10    Recording                                        51
                13.11    Notices                                          51
                13.12    When Lease Becomes Binding                       52
                13.13    Paragraph Headings                               52
                13.14    Rights of Mortgagee/Ground Lease                 52
                13.15    Status Report                                    53
                13.16    Tenant's Financial Condition                     53
                13.17    No Partnership                                   54
                13.18    Holding Over                                     54
                13.19    Non-Subrogation                                  54
                13.20    Governing Law                                    54
                13.21    Definition of Additional Rent                    54
                13.22    Extension Option                                 54
                13.23    Right of First Offer                             55


EXHIBITS   A       Description of Premises
           B       Description of Lot
           C       Description of Work
           C-1     Landlord/Tenant Matrix
           D       Broker's Determination
           E       Parking Plan
           F       HVAC Specifications
           G       Notice of Lease
           H       Ground Lessor SNDA
           I       Cleaning Specifications

                                      -iv-


        THIS INSTRUMENT IS AN INDENTURE OF LEASE in which the Landlord and the
Tenant are the parties hereinafter named, and which relates to space in the
Building (as defined below) to be constructed in Boston (Charlestown),
Massachusetts on the lot (the "Lot") described on Exhibit "B" hereto.

        The parties to this instrument hereby agree with each other as follows:

                                    ARTICLE I
                             BASIC LEASE PROVISIONS

1.1     INTRODUCTION. As further supplemented in the balance of this instrument
        and its Exhibits, the following sets forth the basic terms of this Lease
        and, where appropriate, constitutes definitions of certain terms used in
        this Lease.

1.2     BASIC DATA.

        Date:

        Landlord:                     Gateway Developers, LLC, a Massachusetts
                                      limited liability company

        Present Mailing Address:      725 Canton Street
                                      Norwood, MA 02062

        Tenant:                       Keane, Inc.

        Present Mailing Address
        of Tenant:                    10 City Square
                                      Charlestown, MA 02129

        Lease Term or Term:           144 calendar months (plus the partial
                                      month, if any, immediately following the
                                      Commencement Date as defined in
                                      Section 6.2(e).

        Target Date:                  August 1, 2002

        Fixed Rent:                   For and with respect to the first
                                      seventy-two (72) calendar months of the
                                      term of this lease, plus the partial
                                      month, if any, immediately succeeding the
                                      Commencement Date at the rate of $33.00
                                      per square foot per annum of rentable area
                                      for the first 75,000 square feet of
                                      rentable area and $35.00 per square foot
                                      per annum of rentable area of the Premises
                                      for the remainder of the Premises; and for
                                      and with respect to the balance of the
                                      initial term of

                                       -1-


                                      this lease at the rate of $36.00 per
                                      square foot per annum of the rentable area
                                      of the Premises for the first 75,000
                                      square feet of rentable area and $40.00
                                      per square foot per annum of the rentable
                                      area of the Premises for the remainder of
                                      the Premises. Fixed Rent shall be payable
                                      in monthly installments equal to 1/12th of
                                      the annual Fixed Rent.

        Use:                          For general office purposes only.

        Description of Space:
        (Herein the "Premises")       See attached Exhibit A, containing
                                      approximately 95,000 square feet of
                                      rentable area to be determined using the
                                      BOMA method of measurement subject to
                                      adjustment as set forth in Article VI, not
                                      to exceed 95,000 square feet of rentable
                                      area.

        Tenant's Tax Share:           A fraction the numerator of which is the
                                      rentable area of the Premises and the
                                      denominator of which is the rentable area
                                      of the Building.

        Base Taxes:                   The Taxes (as hereinafter defined) for and
                                      with respect to the first fiscal tax year
                                      in which the Building is fully assessed as
                                      a completed structure ("1st Tax Period").

        Base Operating Expenses:      The Operating Expenses (as hereinafter
                                      defined) for and with respect to the first
                                      twelve (12) calendar months of the Term of
                                      this lease (the "Base Year"), grossed up
                                      in accordance with Section 8.2(g).

        Lot:                          The parcel of land described on Exhibit B
                                      hereto.

        Building:                     The interconnected building including the
                                      Garage located on the Lot (the Premises
                                      being located in each wing thereof, "Wing
                                      One" (North Washington Street) and "Wing
                                      Two" (Water Street).

        Rentable Floor Area
        of the Building:              168,000 rentable square feet of floor area
                                      as determined using BOMA method of
                                      measurement, subject to adjustment as set
                                      forth in Article VI.

        Security Deposit:             N/A

                                       -2-


        Guarantor of Tenant's
        Obligations:                  N/A

        Brokers                       None

                                   ARTICLE II
                             DESCRIPTION OF PREMISES
                          AND APPURTENANT RIGHTS; TERM

2.1     LOCATION OF PREMISES; TERM. (a) Landlord hereby demises and leases to
        Tenant, and Tenant hereby accepts from Landlord, the Premises identified
        in the foregoing portions of this Lease for and during the Lease Term.

        (a)     The Lease Term shall begin on the Commencement Date as defined
                in Article VI. The Lease Term shall continue for the period set
                forth in Section 1.2 hereof, unless sooner terminated as
                hereinafter provided, and without any right of renewal or
                extension, except as expressly set forth in this Lease. After
                the Commencement Date, upon the request of either party,
                Landlord and Tenant shall enter unto an instrument confirming
                the Commencement Date and the expiration date of the Lease.

        (b)     As used herein the following terms shall have the following
                meanings:

                For the purposes of this Lease, a "Tenant Delay" shall mean any
                actual delay in the completion of Landlord's Work caused by a
                Tenant Change Order (as hereinafter defined) or any act or
                negligence of Tenant or its agents, employees, contractors or
                invitees or any failure by Tenant to act when Tenant has a duty
                so to act under the law or under the terms of this Lease,
                including, without limitation, (i) any failure by Tenant to
                deliver to Landlord any draft, revised or final versions of
                Tenant's Plans or to take any other action required of Tenant
                under this Lease within the period specified in this Lease, (ii)
                in instances for which the Lease specifies no period in which
                Tenant shall act, any failure by Tenant to respond to any
                reasonable request for information relating to Tenant's Work or
                otherwise to cooperate reasonably with Landlord, within a
                reasonable time after receiving from Landlord a written request
                for such information or cooperation.

                For the purposes of this Lease, a "Landlord Delay" shall mean
                any actual delay in the completion or commencement of the Tenant
                Work caused by any act or negligence of Landlord or its agents,
                employees, or contractors or any failure by Landlord to act when
                Landlord has a duty so to act under the terms of this Lease,
                including, without limitation, (i) any failure by Landlord to
                deliver to Tenant any draft, revised or final versions of plans
                to be prepared by or at the direction of Landlord hereunder or
                to take any

                                       -3-


                other action required of Landlord under this Lease within the
                periods specified in this Lease, (ii) in instances for which
                this Lease specifies no period in which Landlord shall act, any
                failure by Landlord to respond to any reasonable request for
                information relating to Tenant's Work or otherwise to cooperate
                reasonably with Tenant, within a reasonable time after receiving
                from Tenant a written request for such information or
                cooperation, or (iii) any failure by Landlord to complete the
                Landlord's Work by the Target Date (as hereinafter defined).

                In the event that either party claims that the other has caused
                a Landlord Delay or a Tenant Delay, as applicable, the parties
                shall continue to perform their obligations hereunder in a
                manner so as to avoid any further delay. Landlord and Tenant
                each agree to promptly notify each other of any delay claimed by
                it against the other, and to notify each other in advance of any
                reasonably foreseeable delay, and the parties shall meet as soon
                as reasonably possible to discuss such delay claim, or such
                foreseeable delay claim, as applicable, but in no event shall
                the failure to reach agreement on such delay excuse either party
                from performing hereunder and waive such party's right to such
                delay claim.

                For purposes of this Lease, "Landlord's Force Majeure" shall
                mean any actual delay due to governmental regulations, unusual
                scarcity of or inability to obtain labor or materials (despite
                the exercise of reasonable efforts to obtain the same), labor
                difficulties fire or casualty or other causes reasonably beyond
                Landlord's control.

                For the purposes of this Lease, "Tenant's Force Majeure" shall
                mean any actual delay due to governmental regulation, unusual
                scarcity of or inability to obtain labor or materials (despite
                the exercise of reasonable efforts to obtain the same), labor
                difficulties, fire or casualty or other causes reasonably beyond
                the Tenant's control.

                Each party shall provide the other with written notice as
                promptly as possible after the occurrence of a claimed Force
                Majeure event hereunder and of the expected duration of the
                anticipated delay, and shall also notify the other as soon as
                such first party's Force Majeure event has ended, and shall use
                all reasonable efforts to cure the Force Majeure event.

        (c)     Subject to Tenant Delay and Landlord's Force Majeure, Landlord
                shall use reasonable speed and diligence in the construction of
                the Building and shall use its best efforts "to deliver" the
                Building and Premises to Tenant for its occupancy on or before
                August 1, 2002 (the "Target Date"). The failure "to deliver" the
                Premises and Building to Tenant for its occupancy by the Target
                Date shall in no way affect the validity of this Lease or the

                                       -4-


                obligations of Tenant hereunder nor shall the same be construed
                in any way to extend the term of this Lease. Notwithstanding the
                foregoing, if the Premises and Building shall have not been
                delivered to Tenant within the meaning of Section 6.1 hereof
                within thirty (30) days after the Target Date, then except as
                expressly provided herein, Tenant shall not have any claim
                against Landlord and Landlord shall have no liability to Tenant,
                by reason thereof. If the Premises and the Building are not
                deemed delivered to Tenant under Section 6.1 hereof by the
                Target Date (extended to the extent of any Tenant Delay or
                Landlord's Force Majeure) then as Tenant's sole right and remedy
                in respect thereof, Tenant shall have, so long as Tenant is not
                in default under this Lease beyond the expiration of applicable
                notice and/or cure periods, a credit against the Fixed Rent
                first coming due hereunder in an amount equal to one (1) day's
                Fixed Rent for the Premises for each day after the Target Date
                (as so extended) until such delivery has been deemed made, but
                in any event such credit shall cease upon the date the Tenant
                shall first open for business in the Premises. (By way of
                example only, if the Premises and the Building are "delivered"
                on October 1, 2002, and the Target Date was August 1, 2002,
                then, following the Commencement Date, Tenant shall be entitled
                to a credit equal to the daily Fixed Rent rate for the Premises
                multiplied by 31, which amount Tenant may apply to the Fixed
                Rent due after the Commencement Date until the balance of said
                credit is equal to zero.)

                If the Premises are not deemed delivered to Tenant under Section
                6.1 hereof by August 1, 2003, Tenant shall have the right to
                terminate this Lease by written notice to Landlord given before
                the date of such delivery. If the Landlord having used
                reasonable efforts to deliver the Premises is unable to deliver
                the Premises by December 31, 2003 Landlord shall have the right
                to terminate this Lease by written notice to Tenant given before
                the date of such delivery.

2.2     APPURTENANT RIGHTS AND RESERVATIONS. Tenant shall have, as appurtenant
        to the Premises, the nonexclusive right to use and to permit its
        invitees to use in common with others, public or common lobbies, if any,
        elevators, hallways, stairways, loading docks and loading areas, service
        lifts, sanitary facilities, pipes, ducts, conduits, shafts, wires and
        appurtenant equipment providing electricity, telephone, water, sewer,
        telecommunications and other utilities to the Premises and equipment to
        the roof and all other common areas, if any, located in the Building and
        all sidewalks, access roads and driveways, located on the Lot and
        serving the Building (the "Common Areas"), but such rights shall always
        be subject to reasonable rules and regulations from time to time
        established by Landlord by suitable notice and to the right of Landlord
        to designate and change from time to time areas and facilities so to be
        used, provided that any such change shall not materially interfere with
        Tenant's use of, or access to, the Premises. All elevators serving Wing
        One and all parking levels of the

                                       -5-


        Garage that serve Wing One shall not be deemed part of the Premises, but
        shall be for the exclusive use of Tenant and its agents, employees and
        invitees. Landlord acknowledges that of the elevators in Wing One one
        serves all floors of the Garage and the first floor of Wing One above
        the Garage and the other two elevators serve the top floor of the Garage
        and all floors of Wing One above the Garage. The lobby of Wing One shall
        be deemed part of the Premises. At all times during the Term, Landlord
        shall make available at least one (1) elevator serving the portion of
        the Premises in Wing Two and the top level of the Garage, which elevator
        shall be for the exclusive use of Tenant and its agents, employees and
        invitees.

        Excepted and excluded from the Premises are the roof or ceiling, the
        structural floor and all perimeter walls of the Premises, except in each
        case the inner surfaces thereof, but the entry doors to the Premises are
        not excluded from the Premises and are a part thereof for all purposes;
        and Tenant agrees that Landlord shall have the right to place in the
        Premises (but in such manner as to reduce to a minimum interference with
        Tenant's use of the Premises) utility lines, pipes and the like to serve
        premises other than the Premises, and to replace, maintain and repair
        such utility lines, pipes and the like, in, over and upon the Premises.
        Notwithstanding the foregoing, Tenant's prior consent, which consent
        Tenant shall not unreasonably withhold or delay, shall be required with
        respect to any exhaust systems to be located within the Premises and
        which are to serve restaurants located outside of the Premises. Tenant
        shall have the right to place on the roof of Wing One and Wing Two,
        supplementary HVAC equipment, satellite antennae and satellite dishes
        which are to serve the Premises and are not to be utilized by any other
        person other than the occupants of the Premises and are to be placed on
        the roof in such location as shall be reasonably approved by Landlord;
        provided, however, that Tenant shall have Tenant's pro-rata share of all
        the roof space on Wing One and Wing Two that is made available or used
        for antennae and satellite dishes or supplementary HVAC equipment for
        its exclusive use. Any other antennae or satellite dishes on said roof
        shall be installed thereon in such a manner so as not to interfere with
        the antennae or dishes of Tenant. All antennae and satellite dishes and
        supplementary HVAC equipment shall be installed so as to minimize the
        visibility of such antennae or dishes or supplementary HVAC equipment
        from outside the Building. All of such installation and maintenance of
        such antennae, dishes and supplementary HVAC equipment shall be
        performed by contractors reasonably approved by Landlord and in a manner
        so as not to void any roofing warranty and Tenant shall be responsible
        for any damage to the roof caused by the installation or maintenance of
        the same, and at the end of the term of the Lease, the Tenant shall
        remove all of such antennae, dishes and supplementary HVAC equipment
        from the roof and shall repair all damage caused by the installation or
        removal of the same.

        Subject to reasonable rules and regulations imposed from time to time by
        Landlord, the Building shall be open and access to the Premises shall be
        freely

                                       -6-


        available, subject to interruption due to causes beyond Landlord's
        reasonable control, at all times. Tenant acknowledges that, in all
        events, Tenant is responsible for providing security to the Premises and
        its own personnel, and Tenant shall indemnify, defend with counsel
        reasonably acceptable to Landlord, and save Landlord harmless from any
        claim for injury to person or damage to property asserted by any
        personnel, employee, guest, invitee or agent of Tenant which injury or
        damage is suffered or occurs in the Premises by reason of the act of an
        intruder or any other person in or the Premises.

2.3     PARKING RIGHTS. During the term hereof, Tenant shall have the right to
        the daytime use (i.e. no later than 7 PM on any day) of 115 parking
        spaces ("daytime parking") located within the garage serving the
        Building. Such spaces may be on an assigned or unassigned basis at
        Landlord's discretion and Tenant shall comply with all reasonable rules
        and regulations which Landlord may impose from time to time for the
        regulation of such parking (such rules and regulations shall provide,
        INTER ALIA, that no towing can be made without reasonable advance
        notice). In addition, without charge to Tenant, Tenant shall have the
        exclusive use of 75 parking spaces in the Garage at all times. The
        location of Tenant's daytime parking spaces and of such exclusive spaces
        shall be as provided in the Parking Plan set forth on Exhibit E hereto.
        Except as otherwise set forth in this paragraph, no parking shall be
        allowed to Tenant on an overnight basis nor shall the parking rates so
        allocated to Tenant be utilized by other than Tenant's officers or
        employees or assigns or sublessees or invitees, and Tenant shall have no
        right to assign or sublicense any of its parking rights hereunder except
        to a permitted assignee of this Lease or sublesee of the Premises or to
        a party providing business services to Tenant. The foregoing, however,
        shall not limit Tenant from reimbursement by its employees or officers
        for any or all of such charges. Landlord shall bear no liability in
        respect of any vehicles (or their contents) parked in such facility and
        Tenant waives all liability which Landlord may have in respect thereof,
        except to the extent the same results from Landlord's negligence or
        willful misconduct. As consideration for such daytime parking rights
        Tenant shall pay to Landlord an amount equal to the then market charge,
        as imposed by Landlord, for the daytime parking rights (the other
        seventy-five of such parking rights shall be without charge). Initially
        such charge shall be at the rate of $150 per parking right per month but
        shall be subject to change from time to time (but not more than once
        annually) by the Landlord. Such payment shall be considered to be
        Additional Rent under this Lease and Tenant's failure to pay the same
        shall be considered a failure in the payment of rent under this Lease.
        Such payment shall be due at the same time as the monthly payments of
        Fixed Rent in advance. In the event that during the Lease Term,
        additional area shall be added to the Premises so that the Rentable
        Floor Area of the Premises shall increase ("Expansion Space") then the
        number of parking spaces available to Tenant under this section shall be
        increased by two spaces for each 1,000 square feet of Rentable Floor
        Area in the Expansion Space, which spaces shall be considered to be
        daytime parking spaces for all purposes; provided, however, that such

                                       -7-


        additional spaces shall be made available to Tenant only if, and to the
        extent, that Landlord has such spaces available and has not committed
        such spaces to other tenants or persons, but if the former tenant of the
        Expansion Space had any parking spaces for its use, such parking spaces
        shall be made available to Tenant. Whenever any other parking spaces
        within the Garage shall become available for monthly use by other than
        the tenants or occupants of the Building or their customers, Landlord
        shall notify Tenant thereof and of any terms for leasing of the same.
        The provisions of this Section 2.3 shall apply during the Original Lease
        Term and any extension thereof.

                                   ARTICLE III
                                      RENT

3.1     FIXED RENT. Tenant agrees to pay to Landlord at the Present Mailing
        Address of Landlord, or as directed by Landlord, without notice, demand,
        off-set or deduction (except as expressly permitted hereunder), on the
        Commencement Date and thereafter, monthly, in advance, on the first day
        of each and every calendar month during the Lease Term, a sum equal to
        the monthly Fixed Rent specified in Section 1.2 hereof; provided,
        however, that the first payment of monthly Fixed Rent coming due under
        this Lease shall be made on the first day of the second calendar month
        of the Term of this lease and shall be made for and with respect to the
        period of time from the Commencement Date of the term of this lease
        through the end of said calendar month.

        Fixed Rent for any partial month shall be paid by Tenant at such rate on
        a pro-rata basis (based on the per diem rate of Fixed Rent multiplied by
        the number of days in such partial month included in the Term) and, if
        the Lease Term commences on a day other than the first day of a calendar
        month, the first payment which Tenant shall make shall be a payment
        equal to a proportionate part of such monthly Fixed Rent for the partial
        month from the Commencement Date to the first day of the succeeding
        calendar month, and the monthly Fixed Rent for such succeeding calendar
        month.

                                   ARTICLE IV
                                 USE OF PREMISES

4.1     PERMITTED USE. Tenant agrees that the Premises shall be used and
        occupied by Tenant only for the purpose specified as the use thereof in
        Section 1.2 of this Lease, and for no other purpose or purposes.

        Tenant further agrees to conform to the following provisions during the
        entire Lease Term:

        (a)     Tenant shall cause all freight (including furniture, fixtures
                and equipment used by Tenant in the occupancy of the Premises)
                to be delivered to or

                                       -8-


                removed from the Building and the Premises in such areas
                reasonably designated by Landlord therefor and in accordance
                with reasonable rules and regulations established by Landlord
                therefor, the hours for such delivery to be fixed so as not to
                violate the terms of the transportation access plan agreement
                ("TAPA") entered into by Landlord with the City of Boston;

        (b)     Subject to Legal Requirements and so long as Tenant leases at
                least 50% of the office portions of the Building Tenant shall
                have the exclusive right to install signage on the door of the
                Premises and on the exterior of the Building, above the ground
                floor, subject only to the exceptions set forth below. The
                parties acknowledge that Vitale and Caturano ("V&C") is a
                current tenant in Wing Two and that Landlord has obligated
                itself to provide certain signage rights in its lease to V&C.
                Tenant acknowledges that it has been informed by Landlord that
                V&C has the one time option to choose the location of its
                signage on the exterior of Wing Two as follows: (i) between the
                first and second floor; or (ii) between the second and third
                floor. Landlord shall use continuing reasonable efforts to cause
                V&C (or its successors, assigns or sublessees) to select option
                (i). Thereafter, V&C may install signage ("V&C Sign") only as
                set forth above, which signage may not be altered during the
                term of the V&C lease except to change the name to any permitted
                assignee or sublessee of all or substantially all of the V&C
                premises but any such changed sign shall be of a similar size
                and style and shall be in lieu of the V&C sign, and signage
                rights shall not transfer to any subtenant of less than
                substantially all of the V&C premises or licensee, or any other
                party that may acquire rights to use and occupy a portion of the
                premises currently leased by V&C. Upon the expiration or earlier
                termination of the V&C lease, the signage rights set forth above
                shall terminate and the V&C Sign shall be promptly removed by
                Landlord, at its sole cost and expense. Landlord represents that
                the V&C lease has a 10 year initial term with 2-5 year options
                of extension. The Landlord shall have the right to install on
                the exterior of the Building in the signage band serving the
                ground floor retail premises signage for the ground floor retail
                tenants. Tenant shall not place on the exterior of exterior
                walls (including both interior and exterior surfaces of windows
                and doors) or on any part of the Building outside the Premises,
                any sign, symbol, advertisement or the like visible to public
                view outside of the Premises except for a sign on the door of
                the Premises of the type commonly and customarily found in
                first-class office buildings for the purpose of identifying and
                locating the Premises and except for a sign located on the
                exterior of Wing One, the size and design of which sign shall
                always be subject to the prior approval of Landlord which shall
                not be unreasonably withheld or delayed and to compliance with
                all applicable law and regulations. Without Tenant's prior
                written approval signed by an executive officer of Tenant, no
                sign of any other tenant shall be located on the exterior of the
                Building above the

                                       -9-


                ground floor level, except for the V&C sign as set forth above.
                Tenant will not install drapes, window blinds or other window
                coverings on exterior windows except for those reasonably
                approved by Landlord and in all events all such coverings shall
                be of a color reasonably approved by Landlord;

        (c)     Tenant shall not perform any act or any practice which injures
                the Premises, or any other part of the Building, or causes any
                offensive odors or loud noise, or constitutes a nuisance to any
                other tenant or tenants or occupants or other persons in the
                Building, or be detrimental to the reputation or appearance of
                the Building; Landlord shall impose a restriction to the
                substance of that set forth in this subsection (c) in leases of
                all other tenants in the Building and shall use reasonable
                efforts to enforce such restrictions, but Landlord shall have no
                liability to Tenant in respect of its failure to enforce such
                restriction.

        (d)     At Tenant's option, Landlord shall refer to Wing One of the
                Building as the "Keane Building" and shall not be entitled to
                change the name of Wing One during the Term and shall not name
                the Building or Wing Two after another tenant. Tenant shall not
                use the name of the Building directly or indirectly in
                connection with Tenant's business, except as a part of Tenant's
                address, and Landlord reserves the right to change the name of
                the Building at any time but in no event shall the name of the
                Building be changed to the name of any other tenant of the
                Building or any business organization so long as Tenant leases
                at least 35% of the office portion of the Building and no other
                tenant leases more space in the Building;

        (e)     The Tenant shall not use, handle, store, release or discharge
                hazardous materials, oil, or hazardous wastes in the Premises
                except for small amounts of cleaning materials and other
                materials normally used in office uses which might be deemed to
                be hazardous materials or hazardous waste under applicable law,
                provided that in its use, handling, storage, release and
                discharge thereof the Tenant shall comply with all applicable
                law and with the requirements of the manufacturers thereof;

        (f)     Within the Premises, Tenant shall comply with the Americans With
                Disabilities Act (42 U.S.C. Section 12101 et seq.) and the
                regulations and Accessibility Guidelines for Buildings and
                Facilities issued pursuant thereto (collectively the "ADA"), to
                the extent the same are applicable to the Premises; provided
                that Tenant shall not be required to so comply with the ADA to
                the extent that the Premises when delivered by Landlord to
                Tenant were not in compliance with the ADA or where compliance
                by Tenant is required as a result of any action by Landlord.

                                      -10-


4.2     ALTERATIONS. After initial completion of any work to be done by Tenant
        as provided in Article VI, Tenant shall not alter or add to the
        Premises, except in accordance with written consent from Landlord, which
        Landlord agrees not unreasonably to withhold or delay as to alterations
        or additions which (i) are not visible from the exterior of the Premises
        and (ii) do not materially affect the structure or any mechanical,
        electrical or plumbing systems of the Building. Notwithstanding the
        foregoing, Landlord's prior written consent shall not be required with
        respect to any non-structural, interior alterations to the Premises
        which do not adversely affect the mechanical, electrical or plumbing
        systems of the Building and have a cost, in each instance, of less than
        $100,000, but Tenant shall notify Landlord as and when it makes any such
        alterations which are permitted without Landlord's prior consent.
        Tenant's work as described in Article VI and all other alterations,
        changes, additions and work ("Alterations") made by Tenant shall be made
        in accordance with all applicable laws, in a good and first-class
        workmanlike manner and in accordance with the reasonable requirements of
        Landlord's insurers and Tenant's insurers. Without limitation, said
        Tenant's work as described in Article VI and all other Alterations made
        by Tenant shall be performed in accordance with the provisions of this
        Article IV and of Article VI. Any contractor or other person undertaking
        any Alterations of the Premises on behalf of Tenant shall be covered by
        Commercial General Liability and Workmen's Compensation insurance with
        coverage limits reasonably acceptable to Landlord and evidence thereof
        shall be furnished to Landlord prior to the performance by such
        contractor or person of any work in respect of the Premises. Except for
        generators and HVAC supplemental equipment which Tenant has installed at
        its sole cost and expense on the roof of the Building to exclusively
        serve the Premises (such installation hereby is approved but shall be
        made in accordance with plans and specifications approved by Landlord
        such approval not to be unreasonably withheld or delayed, and in a
        manner so as not to void any roofing warranty and by contractors
        reasonably approved by Landlord, and at the end of the Term of the
        Lease, Tenant shall remove all of such equipment from the roof and shall
        repair all damage caused by the installation or removal of the same),
        all work performed by Tenant in the Premises shall remain therein and,
        at termination, shall be surrendered as a part thereof, except for
        Tenant's usual trade fixtures, furniture and equipment, installed prior
        to or during the Lease Term at Tenant's cost, which trade fixtures,
        furniture and equipment Tenant shall remove upon the termination of this
        Lease. Tenant agrees to repair any and all damage to the Premises
        resulting from the installation thereof or such removal or, if Landlord
        so elects, to pay Landlord for the cost of any such repairs forthwith
        after actual completion thereof and billing therefor.

        Landlord has given Tenant notice that on or about February 8, 2002 is
        (i) the date when Landlord plans to finish its construction of the roof
        and to install the rubberized roofing; and (ii) the date when Landlord
        plans to install the concrete filling on the roof.

                                      -11-


                                    ARTICLE V
                            ASSIGNMENT AND SUBLETTING

5.1     PROHIBITION. Notwithstanding any other provisions of this Lease, Tenant
        covenants and agrees that it will not assign this Lease or sublet (which
        term, without limitation, shall include the granting of concessions,
        licenses, and the like) the whole or any part of the Premises without,
        in each instance, having first received the express written consent of
        Landlord, which consent the Landlord agrees not to unreasonably
        withhold, condition or delay, provided that the following conditions are
        satisfied, all in Landlord's reasonable judgment: (a) the proposed
        assignee or sublessee proposes office operations in the Premises which
        are consistent with the image and quality of the Building; (b) the
        proposed assignee or sublessee is not a governmental organization; (c)
        the proposed assignee or sublessee has the financial capacity necessary
        to carry out its obligations under this Lease or the sublease, as the
        case may be; (d) the operations proposed by the assignee or sublessee
        will not overload the Building's systems; and (e) any proposed
        subletting shall not result in a division of the Premises into more than
        two units per floor unless Tenant assumes in writing the cost and
        expense to restore the Premises upon the termination of this Lease.
        Landlord shall respond to any request for consent within thirty (30)
        days (ten (10) business days in the case of a subletting of one (1)
        floor or less), after receipt of Tenant's request for consent, and if
        such request contains a reminder in bold print of the timing for
        response, then if Landlord does not timely respond the consent shall be
        deemed granted.

        Any assignment of this Lease (which term shall include the subletting of
        the whole or any part of the Premises other than as permitted hereunder
        as set forth below) by Tenant without Landlord's express consent shall
        be invalid, void and of no force or effect. In any case where Landlord
        shall consent to such assignment or subletting, the Tenant named herein
        shall remain fully liable for the obligations of Tenant hereunder,
        including without limitation, the obligation to pay the Fixed Rent and
        other amounts provided under this Lease. Any such request shall set
        forth, in detail reasonably satisfactory to Landlord, the identification
        of the major business terms upon which proposed assignment or subletting
        is to be made, including, without limitation, the rent or any other
        consideration to be paid in respect thereto.

        It shall be a condition of the validity of any such assignment that the
        assignee agrees directly with Landlord, in form reasonably satisfactory
        to Landlord, to be bound by all the obligations of Tenant hereunder,
        including, without limitation, the obligation to pay Fixed Rent and
        other amounts provided for under this Lease and the covenant against
        further assignment and subletting, except as expressly permitted
        hereunder, but such assignment or subletting shall not relieve the
        Tenant named herein of any of the obligations of Tenant hereunder, and
        Tenant shall remain fully liable therefor. In no event, however, shall
        Tenant assign this

                                      -12-


        Lease or sublet the whole or any part of the Premises to a proposed
        assignee or sublessee which has been judicially declared bankrupt or
        insolvent according to law, or with respect to which an assignment has
        been made of property for the benefit of creditors, or with respect to
        which a receiver, guardian, conservator, trustee in involuntary
        bankruptcy or similar officer has been appointed to take charge of all
        or any substantial part of the proposed assignee's or sublessee's
        property by a court of competent jurisdiction, or with respect to which
        a petition has been filed for reorganization under any provisions of the
        Bankruptcy Code now or hereafter enacted, or if a proposed assignee or
        sublessee has filed a petition for such reorganization, or for
        arrangements under any provisions of the Bankruptcy Code now or
        hereafter enacted and providing a plan for a debtor to settle, satisfy
        or extend the time for the payment of debt. Tenant shall, within thirty
        days after demand, reimburse Landlord for the reasonable out-of-pocket
        legal fees and expenses (not to exceed $500 in any one instance)
        incurred by Landlord in processing any request to assign this Lease or
        to sublet all or any portion of the Premises, whether or not Landlord
        agrees thereto, and if Tenant shall fail to reimburse Landlord, the same
        shall be a default in Tenant's monetary obligations under this Lease.

        Without limitation of the rights of Landlord hereunder in respect
        thereto, if there is any assignment of this Lease by Tenant for
        consideration or a subletting of the whole of the Premises by Tenant at
        a rent or other consideration which exceeds the rent payable hereunder
        by Tenant, or if there is a subletting of a portion of the Premises by
        Tenant at a rent in excess of the subleased portion's pro rata share of
        the rent payable hereunder by Tenant (which shall not include any
        consideration given for the use of furniture, telecommunications
        equipment or other equipment), then Tenant shall pay to Landlord, as
        additional rent, forthwith upon Tenant's receipt of the consideration
        (or the cash equivalent thereof) therefor, 50% of any such excess, after
        Tenant has recouped the reasonable out-of-pocket costs and expenses
        which Tenant has incurred in entering into such assignment or sublet.
        The provisions of this paragraph shall apply to each and every
        assignment of this Lease and each and every subletting of all or a
        portion of the Premises, except to a Permitted Transferee (as defined
        below), in each case on the terms and conditions set forth herein. For
        the purposes of this Section 5.1, the term "rent" shall mean all Fixed
        Rent, additional rent or other payments and/or consideration payable by
        one party to another for the use and occupancy of all or a portion of
        the Premises.

        The provisions of this Section 5.1 relating to the necessity of
        Landlord's prior consent shall not, however, be applicable to an
        assignment of this Lease by Tenant to (i) a subsidiary (for such period
        of time as the stock of such subsidiary continues to be owned by Tenant,
        it being agreed that except as hereinafter set forth the subsequent sale
        or transfer of fifty percent (50%) or more of the stock of such
        subsidiary shall be treated as if such sale or transfer were, for all
        purposes, an assignment of this Lease governed by the Provisions of this
        Section 5.1); or (ii) controlling corporation; or (iii) corporation
        under common control with

                                      -13-


        Tenant (an "affiliate") (but if at any time such entity ceases to be an
        affiliate, then except as hereinafter set forth the same shall be
        treated as an assignment of this Lease governed by the provisions of
        this Section 5.1); or (iv) to an entity which is acquiring all of
        Tenant's assets whether through an acquisition of assets, merger, or
        consolidation (each such transferee herein a "Permitted Transferee");
        provided (and it shall be a condition of the validity of any such
        assignment) that such Permitted Transferee agree directly with Landlord
        to be bound by all of the obligations of Tenant hereunder, including,
        without limitation, the obligation to pay the rent and other amounts
        provided for under this Lease, the covenant to use the Premises only for
        the purposes specifically permitted under this Lease and the covenant
        against further assignment except as permitted herein; but such
        assignment shall not relieve Tenant herein named of any of its
        obligations hereunder, and Tenant shall remain fully liable therefor.
        Notwithstanding the foregoing, should Tenant enter into a sublease of a
        portion (being less than 50% of the floor area) of the Premises with a
        subsidiary or affiliate then the "spin off" of such subsidiary or
        affiliate through the sale of stock thereof to a third party or the
        merger or consolidation of such subsidiary or affiliate with such third
        party where such spin off is accomplished to further the business
        objectives of the Tenant and not to avoid the prohibition against
        subletting set forth herein shall be permitted without the necessity of
        the Landlord's consent, provided that (i) as herein set forth the Tenant
        shall remain obligated under this Lease notwithstanding such subletting
        and (ii) the sublessee shall agree directly with Landlord that its
        sublease is subject and subordinate to this Lease in all respects and
        that it will attorn to Landlord, at Landlord's request, should this
        Lease terminate for any reason.

                                   ARTICLE VI
                            DELIVERY OF PREMISES AND
                           RESPONSIBILITY FOR REPAIRS
                              CONDITION OF PREMISES

6.1     DELIVERY OF POSSESSION OF PREMISES.

        (a)     Subject to and in accordance with the terms and conditions of
                this Lease, Landlord shall, at its expense, commence and
                diligently prosecute to completion in a good and workmanlike
                manner in accordance with all applicable laws, rules,
                regulations, requirement, statutes, ordinances, by-laws and
                court decisions which are now or hereafter in force (the "Legal
                Requirements"): (i) the Building and other improvements
                associated therewith in accordance with Landlord's Plans and
                Specifications (as defined below); and (ii) all other
                improvements to be constructed on the Lot (including, without
                limitation, parking areas, roads, sidewalks, utility lines,
                lighting, fire safety systems and landscaping) necessary for the
                operation, use and maintenance of the Building for the purposes
                set forth herein. Landlord represents and warrants that to its
                knowledge as of the date hereof it has obtained all material
                federal, state and local permits and

                                      -14-


                approvals necessary for the construction and operation of the
                Building except for a building permit and a conditional use
                permit under the Boston Zoning Code and (ii) once such a
                conditional use permit is obtained and no longer subject to
                appeal, the Use is permitted as of right under applicable zoning
                ordinances and under the Ground Lease.

        (b)     Following substantial completion of the Landlord's Work,
                Landlord shall cause its architect Add Inc. (the "Architect"),
                to measure the rentable floor area of the Building and the
                Premises in accordance with BOMA standards for a multi-tenant
                building, but in no event shall the loss factor in connection
                therewith exceed 12%, and to certify such area and the final
                usable floor area of the Building and Premises in writing to
                Landlord and Tenant and to furnish a copy of such
                certifications, along with sufficiently detailed back-up
                information include a breakdown of the architect's calculation
                and CAD Discs in a commercially standard format, to Tenant for
                confirmation by Tenant and Tenant's architect. If within ten
                (10) business days after Tenant has received from Landlord such
                certifications and backup information Tenant has neither
                approved such certifications in writing or given written
                objection to the same stating the reasons therefor, then
                Landlord may give Tenant notice reminding Tenant that Tenant has
                not approved or rejected the same and if within ten (10)
                business days thereafter Tenant still fails to act then the
                certifications shall be deemed confirmed and approved by Tenant.
                However, if Tenant timely objects to such certifications, then
                the measurement of the Rentable Floor Area of the Building and
                Premises shall be made by an independent third party AIA
                certified architect chosen jointly by the Architect and Tenant's
                architect and the costs of such third party architect shall be
                borne jointly by Landlord and Tenant. Following agreement by the
                parties on the measurements so made or its determination by
                arbitration as set forth above, such measurements shall then be
                the "Rentable Floor Area of the Building" and "Rentable Floor
                Area of the Premises" and shall be substituted in the definition
                of "Rentable Floor Area of the Building" and "Rentable Floor
                Area of the Premises" as set forth in Section 1.2 of this Lease,
                and that determination of Rentable Floor Area of the Premises
                shall then be used in computing and determining the annual Fixed
                Rent payable during the original Lease Term (as set forth under
                the definition of annual Fixed Rent in Section 1.2 hereof), the
                Tenant Allowance (as set forth in Section 6.3A hereof) and the
                other provisions of this Lease involving the Rentable Floor Area
                of the Building or the Premises. In addition, Landlord and
                Tenant shall promptly execute a written statement in recordable
                form setting forth the recomputed figures resulting from such
                determination.

        (c)     Landlord shall not, without Tenant's prior written consent not
                to be unreasonably withheld or delayed, make any changes to
                Landlord's Work

                                      -15-


                that would (i) cause a delay in the Target Date, (ii) reduce or
                otherwise materially adversely affect the nature, quality or
                capacity of the heating, ventilating, air-conditioning,
                plumbing, mechanical (including elevators), electrical,
                telephone, telecommunications and other utilities, services,
                systems and equipment serving the Premises, or (iii) require any
                substantial revision to Tenant's Approved Plans (as defined in
                Section 6.2 below) or otherwise materially affect the design of
                the Tenant's Work (as defined below).

        (d)     The Premises shall be conclusively deemed delivered to Tenant as
                soon as the initial work to be done by Landlord as set forth in
                Exhibit C hereto (the "Landlord's Work or "Landlord Work") has
                been substantially completed by Landlord (as defined in Section
                6.3B) or would have been so completed except for Tenant Delay.
                If any delay in such substantial completion is

                (i)     due to any change in the Landlord's Work requested by
                        Tenant (a "Tenant Change Order"); or

                (ii)    caused in whole or in part by another Tenant Delay

        then the Premises shall be deemed ready on the date the same would have
        been ready except for such delay caused by a Tenant Change Order or
        Tenant Delay.

        If as hereinabove provided the Premises are so deemed ready for Tenant's
        occupancy prior to the time they are actually ready for Tenant's
        occupancy, Tenant shall not (except with Landlord's consent) be entitled
        to take possession of the Premises for use as set forth herein until the
        Premises are in fact actually ready for such occupancy, notwithstanding
        the fact because the premises shall have as above stated been deemed
        ready for such occupancy that the Term hereof shall on that account have
        commenced..

6.2     PLANS AND SPECIFICATIONS. Annexed hereto as Exhibit C-1 is a matrix
        showing the elements of Landlord's Work and Tenant's Work. Landlord has
        prepared and delivered to Tenant Landlord's plans and specifications
        ("Landlord's Plans and Specifications") for Landlord's Work. The same
        have been approved by Tenant. All of Landlord's Work shall be performed
        in accordance with Landlord's Plans and Specifications. Tenant agrees to
        deliver to Landlord by April 1, 2002 schematic and design plans (herein
        called "Schematic Tenant Plans") for the work to be undertaken to
        prepare the Premises for Tenant's use and occupancy by Tenant (the
        "Tenant Work") for Landlord's review and approval which approval shall
        not be unreasonably withheld, conditioned or delayed. Landlord shall
        cooperate reasonably with Tenant and its architect in connection with
        the preparation of the Schematic Tenant Plans, including, without
        limitation, providing copies of the Landlord's Plans and Specifications
        and any other information relating to the Building and the Landlord's
        Work as Tenant or

                                      -16-


        its architect may reasonably request and permitting Tenant or its
        architect reasonable access to the Building and the Lot to take
        measurements and to perform inspections.

        Any submittal to Landlord which is not responded to by Landlord in
        writing within fifteen (15) business days of receipt of the same (and
        with respect to any revised submittal, within five (5) business days of
        receipt of the same) shall be deemed approved provided that the
        submittal contains a statement at a prominent location and in bold type
        to the following effect: "If you do not respond to this submittal in
        writing within fifteen (15) business days [or five (5) business days, as
        applicable], this submittal shall be deemed approved." Tenant shall
        deliver to Landlord within the later of (i) April 1, 2002 or (ii) ninety
        (90) days after Landlord has approved Tenant's approved Schematic Tenant
        Plans, construction drawings (herein called "Initial Tenant Plans") for
        the Tenant Work for Landlord's review and approval, which approval shall
        not be unreasonably withheld, conditioned or delayed; provided, however,
        Landlord may not disapprove any matter that is consistent with Tenant's
        approved Schematic Tenant Plans. Landlord shall cooperate reasonably
        with Tenant and its architect in connection with the preparation of the
        Initial Tenant Plans, including, without limitation, providing such
        information as Tenant or its architect may reasonably request and
        permitting Tenant or its architect reasonable access to the Building and
        the Lot to take measurements and perform inspections.

        For the purposes of this Lease, "Tenant Approved Plans" shall mean the
        final version of the Initial Tenant Plans approved by Landlord.

        Tenant may, from time to time, submit to Landlord any material changes
        or additions to the Tenant's Approved Plans desired by Tenant, which
        changes or additions shall be subject to Landlord's approval, which
        shall not be unreasonably withheld, conditioned or delayed provided the
        same do not delay Landlord's Work or result in any increase to Landlord
        in cost, provided, however that in the case where the same do not delay
        Landlord's Work but do result in an increase to Landlord in cost then
        Landlord shall make the same provided that Tenant has agreed in writing
        with Landlord to pay all of such increased costs promptly upon billing
        therefor, in which case Tenant shall pay such costs to Landlord promptly
        upon billing therefor. Any non-material changes shall not require
        Landlord's consent.

6.3     PREPARATION OF PREMISES.

        (a)     Landlord. Landlord shall perform the work set forth on Exhibit C
                hereto and shall not be obligated to perform any other work to
                the Premises or Building, except as otherwise expressly set
                forth herein.

                                      -17-


        (b)     By Tenant. All work in addition to that set forth on Exhibit C
                to prepare the Premises for Tenant's occupancy shall be done by
                Tenant at its sole cost and expense in accordance with the terms
                of this Lease.

        (c)     Any additional cost to Landlord in connection with the
                completion of the Premises in accordance with the terms of this
                Lease (including Exhibit C) resulting from Tenant Change Orders
                or Tenant Delay shall be promptly paid by Tenant to Landlord.
                For the purposes of the next preceding sentence, the term
                "additional cost to Landlord" shall mean any cost in excess of
                $5000 in the aggregate over and above such cost as would have
                been the aggregate cost to Landlord of completing the Premises
                in accordance with the terms of this Lease and Exhibit C had
                there been no Tenant Change Order or Tenant Delay, as such cost
                is reasonably determined by Landlord's Architect. Landlord shall
                pay to Tenant any additional costs to Tenant (meaning any costs
                in excess of $5000 in the aggregate over and above such costs as
                would have been the aggregate cost to Tenant of performing
                Tenant's Work in accordance with the terms of this Lease had
                there been no Landlord Change (as hereinafter defined)) which
                has resulted from a change made by Landlord to Landlord's Plans
                and Specifications which has not been approved by Tenant (a
                "Landlord Change"). Nothing contained in this provision shall
                limit or qualify or prejudice any other covenants, agreements,
                terms, provisions and conditions contained in this Lease.

        (d)     With Landlord's prior written consent, Tenant shall have the
                right to enter the Premises prior to the Commencement Date,
                without payment of rent, to perform such work or decoration as
                to be performed by, or under the direction or control of,
                Tenant. Such right of entry shall be deemed a license from
                Landlord to Tenant and any entry thereunder shall be at the risk
                of Tenant.

        (e)     Tenant shall be conclusively deemed to have agreed that Landlord
                has performed all of its obligations under this Article VI
                unless not later than the end of the second calendar month next
                beginning after the Commencement Date, Tenant shall give
                Landlord written notice specifying the respects in which
                Landlord has not performed any such obligations, except that
                with respect to latent defects, such period shall be eleven
                months.

        Landlord shall cooperate with Tenant in obtaining all permits and
        approvals as are necessary for the construction of the Tenant Work. The
        Term of this Lease shall commence (the "Commencement Date") upon the
        earlier to occur of (i) 180 days after the date that the Landlord Work
        is substantially completed (as defined below) or (ii) the date that
        Tenant first commences business operations within any part of the
        Premises; provided, however, that if Tenant commences business

                                      -18-


        operations within some portion, but not all of the Premises prior to the
        expiration of such 180-day period then the Term shall only commence with
        respect to such portion.

        Landlord and Tenant and their contractors shall reasonably cooperate
        with each other in scheduling their work so that neither shall
        unreasonably delay or interfere with the work of the other. During the
        period when Landlord Work and Tenant Work are both being conducted,
        Landlord, Tenant and their architects and contractors shall have weekly
        meetings in order to discuss the status of the construction and
        coordinating construction activities with each other. In addition,
        Landlord shall permit Tenant and its contractors access to the Building
        prior to the date when the Landlord Work has been substantially
        completed at mutually agreed upon times so that Tenant may perform work
        which may be most timely and economically performed prior to the date of
        such substantial completion, such as, by way of example and not by way
        of limitation, access to part of the walls within the Building being
        enclosed so that Tenant and/or its contractors may install Tenant's
        computer, data and telephone lines, but in the performance of such early
        entry, Tenant shall not delay Landlord Work and Tenant's contractors
        shall cooperate completely with Landlord's contractors. Landlord shall
        give Tenant reasonable advance notice of its schedule for construction
        and reasonable dates for access by Tenant and its contractor.

        Landlord agrees to obtain from the general contractor performing the
        Landlord's Work and from the subcontractor performing portions thereof,
        construction warranties that for a period as determined by Landlord (but
        not less than one year) such work is free of material defects in
        workmanship and materials and conforms in all material respects to
        Landlord's final plans including a warranty for no less than ten years
        on the roof system of the Building. Landlord agrees to promptly replace
        or repair, at its expense, items of Landlord's Work which are then
        incomplete or do not conform to the Landlord's final plans as to which
        Tenant shall have given notice to Landlord within sixty days after the
        date of substantial completion of Landlord's Work except that with
        respect to latent defects, such period is extended to eleven months. All
        construction work required or permitted by this Lease shall be done in a
        good and workmanlike manner and in compliance with all applicable Legal
        Requirements. Each party or its architect may inspect the work of the
        other at reasonable times and shall promptly give notice of observed
        defect. Each party is authorized by the other to rely, in connection
        with design and construction upon approval and other actions on the
        party's behalf by any Construction Representative of the party named
        below or any person hereafter designated in substitution or addition by
        notice of the party relying: Tenant's Construction Representative: Kim
        Thurber, Landlord's Construction Representative: Fred Greatorex.

6.3A    LANDLORD'S PAYMENT. Upon satisfaction of the following conditions, and
        provided the Tenant is not then in default under this Lease beyond the
        expiration

                                      -19-


        of applicable notice and cure periods (but such amount shall become due
        when Tenant cures any such default), Landlord shall pay to Tenant an
        amount equal to $30.00 per square foot of rentable area of the Premises
        (the "Tenant Allowance") as an inducement to Tenant to enter into this
        Lease:

        (a)     one third of such amount shall be payable by Landlord to Tenant
                no later than thirty (30) days after the date when the Tenant
                Approved Plans shall have been approved by Landlord, provided
                that at such date Tenant is not in default under this Lease
                beyond the expiration of applicable cure and/or notice periods
                (but such amount shall become due when Tenant cures any such
                default); (b) an additional one-third of such amount shall be
                paid to Tenant within thirty days after Tenant shall have
                completed one-third of the Tenant's Work, shall have furnished
                to Landlord partial lien waivers and releases from all
                contractors, materialmen and suppliers with respect to such
                work, and a certificate of Tenant's general contractor that such
                work has been completed to such extent; and (c) the remainder of
                such amount shall be paid to Tenant upon satisfaction of the
                following conditions:

                (i)     Tenant shall have substantially completed all of
                        Tenant's Work, shall have paid for such work in full and
                        shall have delivered to Landlord lien waivers in
                        recordable form from all materialmen, contractors and
                        suppliers (in excess of $10,000) with respect to such
                        work (with respect to any contractor, materialman or
                        supplier in respect of which Tenant has not delivered to
                        Landlord a lien waiver where such lien waiver is
                        required, then Landlord shall withhold from the Tenant
                        Allowance an amount equal to the unpaid balance of such
                        work or materials to such materialman, contractor or
                        supplier until such lien waiver has been received but
                        shall pay the remainder of such Tenant Allowance to
                        Tenant), and

                (ii)    Tenant shall have delivered to Landlord reasonable
                        evidence of the cost of the work in the form of paid
                        invoices, receipts and the like, and

6.3B    SUBSTANTIAL COMPLETION.

        (a)     Landlord's Work shall be treated as having been "substantially
                completed" for purposes of this Lease on the latest of:

                (i)     The date on which the Landlord's Work in the Premises as
                        described in Landlord's Plans and Specifications has
                        been completed except for Punch List Items;

                (ii)    The Architect certifies to Tenant that Landlord's Work
                        in the

                                      -20-


                        Premises as described in Landlord's Plans and
                        Specifications has been substantially completed in
                        accordance with said plans;

                (iii)   the completion of any portion of the Landlord's Work
                        outside the Premises necessary to enable Tenant and its
                        contractor to commence the Tenant Work;

                (iv)    Building Systems, including, without limitation, the
                        heating, ventilation, air conditioning, plumbing,
                        mechanical, electrical, telephone, life safety and
                        telecommunications systems (to the extent to be provided
                        by Landlord according to the Landlord's Plans and
                        Specifications) are installed within the Building and
                        delivered to the Premises to the extent necessary to
                        permit the commencement, continuation and completion of
                        the Tenant's Work; and

                (v)     Landlord's Work outside the Premises shall be completed
                        to the extent necessary to deliver all utilities to the
                        Premises.

        On or about the date that Landlord's Work is substantially complete,
        Landlord's Construction Representative and Tenant's Construction
        Representative shall conduct a joint walk-through of the Premises and
        shall prepare a mutually acceptable inventory of "punch list" items (the
        "Punchlist Items"). With respect to Landlord's Work, Landlord shall
        cause all Punchlist Items to be completed within 30 days after the
        "delivery" thereof, except such Punchlist Items that cannot be completed
        due to seasonal conditions or because completion of the Tenant Work is
        necessary for the completion of such Landlord's Work, which in either
        case Landlord shall complete as soon as such condition reasonably
        permit, but in no event longer than 30 days, subject to delays due to
        Landlord's Force Majeure.

        Landlord and Tenant acknowledge that certain of Landlord's finish work
        in the lobby and in the bathrooms and in the elevators will not be
        performed by the date of such substantial completion but Landlord shall
        perform such work no later than 120 days after the date of substantial
        completion; provided, however, that if Tenant intends to occupy a
        portion or portions of the Premises prior to the expiration of such
        120-day period, Tenant may accelerate such period with respect to such
        portions by notice given to Landlord at least thirty (30) days prior to
        the end of such accelerated period.

        To the extent that any of Landlord's Work to the Building has not been
        completed and the lack of completion thereof delays Tenant in the
        completion of the Tenant Work (including any unreasonable interference
        with Tenant's contractors' access to the Premises) or in obtaining a
        certificate of occupancy then the 180 day period set forth above shall
        be extended to the extent of such Landlord Delay. In any

                                      -21-


        case, by the end of such 180 day period and subject to Landlord's Force
        Majeure Landlord shall complete the construction of the plaza area.

6.4     REPAIRS TO BE MADE BY LANDLORD. Landlord agrees to keep in good order,
        condition and repair the Common Areas and common facilities of the
        Building, including, but not limited to, all HVAC, electrical, plumbing,
        security, life safety and other mechanical systems ("Building Systems")
        and the driveways and other common areas of the Lot, and the structure,
        foundations and roof of the Building, insofar as any of the foregoing
        affects the Premises or access thereto or the use thereof, and shall
        maintain the same in accordance with applicable laws, ordinances,
        governmental rules and regulations, directions and orders of officers of
        governmental agencies having jurisdiction except that where the same
        results from the specific nature of Tenant's use or any alterations or
        changes made by Tenant, Tenant shall reimburse Landlord for the cost
        thereof upon demand. Landlord shall in no event be responsible to Tenant
        for the condition of glass in the Premises or for the entry doors to the
        Premises, or with respect to any condition in the Premises or the
        Building caused by any act or neglect of Tenant or any contractor,
        agent, employee or invitee of Tenant, or anyone claiming by, through or
        under Tenant, Landlord shall restore the same and Tenant shall reimburse
        Landlord for the cost thereof upon demand. Landlord shall not be
        responsible to make any improvements or repairs to the Building or the
        Premises other than as expressed in this Section 6.4 unless otherwise
        expressly provided in this Lease. Landlord shall use all commercially
        reasonable efforts to minimize noise or vibration on the roof of the
        Building, and in connection therewith Landlord's design of the HVAC
        units and other equipment located on the roof shall be such that noise
        levels will not exceed 44 dBA or RC II 37 [equivalent NC 34 more or
        less] (the "Noise Standard"). Landlord shall cause all equipment located
        on the roof by other tenants to be designed to satisfy the Noise
        Standard, and Tenant shall cause any of its equipment located on the
        roof to be designed to satisfy the Noise Standard. If any equipment
        located on the roof by Landlord or other tenants shall not satisfy the
        Noise Standard in operation, then Landlord shall perform such work as
        shall be necessary so that such equipment shall satisfy the Noise
        Standard in operation, and if any equipment located on the roof by
        Tenant does not satisfy the Noise Standard in operation then Tenant
        shall perform such work as shall be necessary to cause such equipment to
        satisfy the Noise Standard in operation.

        Landlord shall never be liable for any failure to make repairs which,
        under the provisions of this Section 6.4 or elsewhere in this Lease,
        Landlord has undertaken to make unless: (a) Tenant has given notice to
        Landlord of the need to make such repairs as a result of a condition in
        the Building or in the Premises requiring any repair for which Landlord
        is responsible except that to the extent that the Landlord or its agent
        otherwise has actual knowledge of the need for such repair then such
        notice shall not be required and Landlord shall be required to commence
        to make such repairs within a reasonable time after Landlord has actual
        knowledge thereof;

                                      -22-


        and (b) Landlord has failed to commence to make such repairs within five
        (5) business days after receipt of such notice or actual knowledge if
        any repairs are, in fact, necessary.

6.5     TENANT'S AGREEMENT. Tenant agrees that throughout the Lease Term Tenant
        will keep neat and clean and maintain in as good order, condition and
        repair as exists at the Commencement Date, reasonable wear and tear only
        excepted, the Premises and every part thereof, excepting only those
        repairs for which Landlord is responsible under the terms of this Lease
        or where the cause thereof is the result of Landlord's default under
        this lease and damage by fire or other casualty or as a consequence of
        the exercise of the power of eminent domain, and shall surrender the
        Premises at the end of the Term, in such condition. Without limitation,
        Tenant shall maintain and use the Premises in accordance with all
        applicable laws, ordinances, governmental rules and regulations,
        directions and orders of officers of governmental agencies having
        jurisdiction; and in accordance with the reasonable requirements of
        Landlord's and/or Tenant's insurers; provided, however, that in
        connection with such compliance with laws, etc. the Tenant shall not be
        required to make any structural alterations or changes to the Building
        or the Premises except where the same are required as a result of the
        specific nature of the use being made by Tenant of the Premises or by
        reason of any alterations or changes made by Tenant to the Premises.
        Tenant shall, at Tenant's own expense, obtain and maintain in effect all
        permits, licenses and the like required by applicable law for Tenant's
        particular use of the Premises or for any Alterations made by Tenant to
        the Premises. Landlord has entered into a certain traffic agreement with
        the Boston Redevelopment Authority and certain other agreements with the
        Boston Redevelopment Authority and in connection therewith encourages
        all employers at the Building to participate in the Corporate Pass
        Program of the Massachusetts Bay Transit Authority and the use of mass
        transit by persons working in Boston and to inform their employees of
        the benefit of using monthly transit passes and further encourages all
        employers in the Building to employ Boston residents. If required by any
        governmental authority, Landlord may request Tenant to report
        periodically on the number of Boston residents employed by Tenant at the
        Premises and the number of its employees who use mass transit passes
        issued under the Corporate Pass Program, and Tenant will use reasonable
        efforts to comply with such request. Tenant shall not permit or commit
        any waste, and Tenant shall be responsible for the cost of repairs which
        may be made necessary by reason of damage to any areas in the Building,
        including the Premises, by Tenant, Tenant's contractors or Tenant's
        agents, employees or invitees, or anyone claiming by, through or under
        Tenant.

        If repairs are required to be made by Tenant pursuant to the terms
        hereof, Landlord may demand that Tenant make the same forthwith, and if
        Tenant refuses or neglects to commence such repairs and complete the
        same within the applicable cure period after such demand, Landlord may
        (but shall not be required to do so)

                                      -23-


        make or cause such repairs to be made. If Landlord makes or causes such
        repairs to be made, Tenant agrees that Tenant will forthwith, on demand,
        pay to Landlord the cost thereof, and if Tenant shall default in such
        payment, Landlord shall have the remedies provided for the nonpayment of
        rent or other charges payable hereunder.

6.6     FLOOR LOAD - HEAVY MACHINERY. Tenant shall not place a load upon any
        floor in the Premises exceeding the lesser of (a) the floor load per
        square foot of area which such floor was designed to carry as certified
        by Landlord's architect and (b) the floor load per square foot of area
        which is allowed by law. Landlord reserves the right to prescribe the
        weight and position of all business machines and mechanical equipment,
        including scales, which shall be placed so as to distribute the weight.
        Business machines and mechanical equipment shall be placed and
        maintained by Tenant at Tenant's expense in settings sufficient, in
        Landlord's reasonable judgment, to absorb and prevent vibration, noise
        and annoyance. Tenant shall not move any safe, heavy machinery, heavy
        equipment, freight, bulky matter or fixtures into or out of the Building
        without Landlord's prior consent, which shall not be unreasonably
        withheld, conditioned or delayed.

        If such safe, machinery, equipment, freight, bulky matter or fixtures
        requires special handling, Tenant agrees to employ only persons holding
        a Master Rigger's License to do said work, and that all work in
        connection therewith shall comply with applicable laws and regulations.
        Any such moving shall be at the sole risk and hazard of Tenant and
        Tenant will exonerate, indemnify and save Landlord harmless against and
        from any liability, loss, injury, claim or suit resulting directly or
        indirectly from such moving. Tenant shall schedule such moving at such
        times as Landlord reasonably shall require for the convenience of the
        normal operations of the Building.

                                   ARTICLE VII
                      SERVICES TO BE FURNISHED BY LANDLORD
                               AND UTILITY CHARGES

7.1     LANDLORD'S SERVICES. At Landlord's sole cost and expense but subject to
        reimbursement pursuant to the terms hereof, Landlord covenants during
        the Lease Term during the hours of 8 a.m. to 6 p.m., Monday through
        Friday, and 8 a.m. to 1 p.m. on Saturdays, holidays (New Year's Day,
        President's Day, Memorial Day, July 4th, Labor Day, Thanksgiving and
        Christmas) excepted ("Normal Building Operating Hours"):

        (a)     to provide heating and air conditioning in the Premises during
                the normal heating and air conditioning seasons, and the
                Building heating and air conditioning systems shall be designed
                to provide heating and air conditioning in compliance with the
                specifications attached as Exhibit F;

                                      -24-


        (b)     at all times, to furnish hot and cold water for ordinary toilet,
                lavatory and drinking purposes (Landlord is not required to
                furnish water for kitchens or kitchenettes). If Tenant requires
                water for any other purpose, including without limitation for a
                kitchen, Tenant shall pay the Landlord a fair and equitable
                charge therefor determined by Landlord to reimburse Landlord for
                the cost of such water and related sewer use charge (including a
                charge to reimburse Landlord for the cost of metering Tenant's
                usage);

        (c)     to furnish non-exclusive passenger elevator service and, where
                provided, exclusive elevator service. Subject to the terms of
                Section 2.2 of this Lease, access to the Premises through
                elevators shall be provided on a 24-hour basis each day of the
                year, but subject to such reasonable rules and regulations for
                security as the Landlord may reasonably establish; and

        (d)     unless Tenant elects otherwise as provided below, to furnish
                cleaning services for the Premises and Common Areas and elevator
                reasonably consistent with such services set forth on Exhibit I
                hereto.

        (e)     to provide electricity to the Premises at least equal to eight
                watts per Rentable Square Foot, exclusive of HVAC; and

        (f)     provide for the clearance and removal of snow and ice from the
                driveways and walkways on the Lot and the maintenance, in a good
                and attractive condition, of all landscaping on the Lot.

        The services to be provided by Landlord under this Section 7.1 shall be
        at least consistent in quality with the quality of services in
        facilities similar to the Building in the general vicinity of the
        Building. In addition, Landlord agrees to furnish, at Tenant's expense,
        HVAC at times other than Normal Business Operating Hours, upon Tenant's
        request and such additional special services as may be mutually agreed
        upon by Landlord and Tenant, upon reasonable and equitable rates from
        time to time established by Landlord, and Tenant shall pay therefor
        promptly after receipt of billing at the time of Tenant's next Fixed
        Rent payment. Landlord's initial charge for overtime HVAC is $50.00 per
        hour.

        Tenant may elect to provide janitorial services to the Premises by
        notice to Landlord to such effect given no later than May 1, 2002.

        If Tenant has elected that it will provide its own janitorial service it
        may at any time thereafter elect that Landlord shall provide such
        service but such election cannot be made more than once in any two year
        period and then at least six months prior to date upon which Landlord is
        to begin furnishing such service. If, however, Tenant has at any time
        elected not to provide such service it may thereafter elect to provide
        such service for itself provided that it gives Landlord at least twelve
        months advance notice thereof and shall not make any such election

                                      -25-


        more often than once in any twenty-four month period. Landlord and
        Tenant shall coordinate so that Tenant's provision of its own janitorial
        service shall commence at a time when Landlord's then current contract
        for the provision of janitorial services to the Building is ending or up
        for renewal. If at any time Tenant has elected to provide its own
        janitorial service then there shall be a fair reduction in rent by the
        cost which Landlord would have incurred in an arms-length commercially
        reasonable context to provide such service less any extra cost which the
        Landlord incurs in providing janitorial service to the rest of the
        Building as a result of the deletion of Tenant's Premises from
        Landlord's contract with its janitorial contractor, and during such
        period of time, the Base Operating Expenses shall be reduced by the
        amount which Landlord would have incurred in providing such janitorial
        services to Tenant's Premises during the Base Year or in fact the amount
        which Landlord actually incurred during such Base Year, as the case may
        be.

7.2     PAYMENT OF UTILITY CHARGES. With respect to electricity for lighting and
        equipment in the Premises, prior to the Commencement Date the same shall
        be separately metered by Landlord, and Tenant agrees to pay all bills
        therefor promptly to the utility company furnishing the same and, if
        requested by Landlord, provide Landlord with evidence of such payment.
        If such utility company shall have a lien on the Premises for nonpayment
        of such charges and Tenant shall fail at any time to make payment of
        same, without limitation of Landlord's rights on account of such
        failure, Tenant shall thereafter, if requested by Landlord, pay to
        Landlord, when monthly Fixed Rent is next due and thereafter on
        Landlord's demand, an amount reasonably estimated by Landlord to be
        sufficient to discharge any such lien. Such amount or such portion
        thereof as shall be unexpended at the expiration of this Lease shall,
        upon full performance of all Tenant's obligations hereunder, be repaid
        to Tenant without interest.

                                  ARTICLE VIII
                      REAL ESTATE TAXES AND OTHER EXPENSES

8.1     TENANT'S SHARE OF REAL ESTATE TAXES.

        (a)     For the purposes of this Section:

                (i)     The term "Tax Period" shall mean the period during which
                        Taxes (as hereinafter defined) are required to be paid
                        under applicable law. Thus, under the law presently in
                        effect in the Commonwealth of Massachusetts, Tax Period
                        means the period from July 1 of a calendar year to June
                        30 of the subsequent calendar year. Suitable adjustment
                        in the determination of Tenant' obligation under this
                        Section 8.1 shall be made in the computation for any Tax
                        Period which is greater than or less than twelve (12)
                        full calendar months.

                                      -26-


                (ii)    The term "Taxes" shall mean all real estate taxes and
                        assessments (which term, for purposes of this provision,
                        shall include water and sewer use charges which are not
                        separately metered to Tenant or any other occupant of
                        the Building), special or otherwise, levied or assessed
                        upon or with respect to the Lot and Building or any part
                        thereof and all ad valorem taxes for any personal
                        property of Landlord used in connection therewith. As of
                        the date of delivery of the Premises to Tenant, the Lot
                        shall be a single tax parcel, separately assessed,
                        including no taxable improvements other than the
                        Building (upon its completion) and the Common Areas
                        existing as of the Commencement Date. Should the
                        Commonwealth of Massachusetts, or any political
                        subdivision thereof, or any other governmental authority
                        having jurisdiction over the Lot and Building, (1)
                        impose a tax, assessment, charge or fee, which Landlord
                        shall be required to pay, by way of substitution for or
                        as a supplement to such real estate taxes and ad valorem
                        personal property taxes, or (2) impose an income or
                        franchise tax or a tax on rents in substitution for or
                        as a supplement to a tax levied against the Lot and
                        Building or any part thereof and/or the personal
                        property used in connection with the Lot or Building or
                        any part thereof, all such taxes, assessments, fees or
                        charges (hereinafter defined as "in lieu of taxes")
                        shall be deemed to constitute Taxes hereunder. Except as
                        hereinabove provided with regard to "in lieu of taxes",
                        Taxes shall not include any inheritance, estate,
                        succession, transfer, gift, franchise, net income or
                        capital stock tax or any so-called linkage payments. If
                        any betterment assessment is made against the Lot, and
                        such assessment may be paid in installments over a
                        number of years, then there shall be included in each
                        Tax Period's taxes only the installment of (or portions
                        thereof) falling due within such Tax Period had Landlord
                        elected to pay the same over the longest period
                        permitted by law (together with any statutory interest
                        thereon) whether or not Landlord so elects. If Landlord
                        shall obtain any abatement or reduction in Taxes a
                        portion of which has already been paid by Tenant under
                        this Section 8.1, then after Landlord deducts therefrom
                        the reasonable costs and expenses incurred by Landlord
                        in obtaining such abatement or reduction, Landlord shall
                        pay to Tenant Tenant's Share of such abatement or
                        reduction but not in excess of the amount of Taxes paid
                        in respect thereof paid by Tenant under this Section 8.1
                        for the Tax Period in question.

        (b)     In the event that the Taxes imposed with respect to the Lot and
                Building shall be greater during any Tax Period than the Base
                Taxes:

                                      -27-


                (i)     Tenant shall pay to Landlord, as additional rent,
                        Tenant's Share of the amount by which the Taxes imposed
                        with respect to the Lot and Building for such Tax Period
                        exceed the Base Taxes, apportioned for any fraction of a
                        Tax Period contained within the Term, and

                (ii)    Landlord shall submit to Tenant a statement setting
                        forth the amount of such additional rent, and within
                        thirty (30) days after the delivery of such statement
                        (whether or not such statement shall be timely), Tenant
                        shall pay to Landlord the payment required under
                        subparagraph (i) above. So long as Taxes shall be
                        payable in installments under applicable law, Landlord
                        may submit such statements to Tenant in similar
                        installments. The failure by Landlord to send any
                        statement required by this subparagraph shall not be
                        deemed to be a waiver of Landlord's right to receive
                        such additional rent except that in no event shall
                        Tenant be responsible for Taxes not billed to Tenant
                        (other than in an abatement situation) within two years
                        after the date due to the appropriate governmental
                        authority. At Tenant's request, Landlord shall submit to
                        Tenant supporting back-up documentation with respect to
                        any statement which Landlord has delivered to Tenant for
                        payment.

        (c)     Tenant's payments in respect of increases in Taxes shall be
                adjusted on a per diem basis for and with respect to any portion
                of the Term which does not include an entire Tax Period.

        (d)     If Tenant is obligated to pay any additional rent as aforesaid
                with respect to any Tax Period or fraction thereof during the
                Term, then Tenant shall pay, as additional rent, on the first
                day of each month of the next ensuing Tax Period, estimated
                monthly tax escalation payments in an amount from time to time
                reasonably estimated by Landlord. Estimated monthly tax
                escalation payments for each ensuing Tax Period shall be made
                retroactively to the first day of the Tax Period in questions.
                Following the close of each Tax Period and with respect to which
                Tenant is obligated to pay any additional rent as aforesaid,
                Landlord shall submit the statement set forth in paragraph
                (b)(ii) of this Section 8.1 and in the event the total of the
                estimated monthly tax escalation payments theretofore made by
                Tenant to Landlord for such Tax Period does not equal Tenant's
                Share of the Taxes in excess of the Base Taxes, Tenant shall pay
                any deficiency to Landlord as shown by such statement within
                thirty (30) days after the delivery of such statement (whether
                or not such statement shall be timely). If the total of the
                estimated monthly tax escalation payments paid by Tenant during
                such Tax Period exceed the actual amount of Tenant's Share of
                the Taxes in excess of the Base Taxes, Landlord shall pay the

                                      -28-


                same to Tenant within thirty (30) days or, at Landlord's Option
                credit the amount of such overpayment against subsequent
                obligations of Tenant for rent under this lease (but Landlord
                shall refund such overpayment if the Term has ended and Tenant
                has no further obligations to Landlord under this lease).

        (e)     When the applicable tax bill is not available prior to the end
                of the Term, then a tentative computation shall be made by
                Landlord on the basis of the Taxes for the next prior Tax
                Period, with a final adjustment to be made between landlord and
                Tenant promptly after Landlord shall have received the
                applicable tax bill.

        (f)     Payments by Tenant to Landlord on account of Taxes shall not be
                considered as being held in trust, in escrow or the like, by
                Landlord,; it being the express intent of Landlord and Tenant
                that Tenant shall in no event be entitled to receive interest
                upon, or any payments on account of earnings or profits derived
                from, such payments by Tenant to Landlord. Landlord shall have
                the same rights and remedies for the non-payment by Tenant of
                any amounts due on account of such Taxes as Landlord has
                hereunder for the failure of Tenant to pay the Fixed Rent.

8.2     TENANT'S SHARE OF OPERATING EXPENSES.

        (a)     For the purposes of this Section:

                (i)     The term "Operating Year" shall mean a calendar year in
                        which any part of the term of this Lease shall fall.

                (ii)    The term "Operating Expenses" shall mean all reasonable
                        expenses, costs and disbursements of every kind and
                        nature, paid or incurred by Landlord in operating,
                        insuring, owning, managing, repairing and maintaining
                        the Lot and Building and its appurtenances; including,
                        but without limitation: premiums for fire, casualty,
                        liability and such other insurance as Landlord may from
                        time to time maintain; security expenses; compensation
                        and all fringe benefits, workmen's compensation
                        insurance premiums and payroll taxes paid by Landlord
                        to, for or with respect to all persons engaged in
                        operating, maintaining, managing or cleaning (to the
                        extent that any personnel provide services for more than
                        the Building such compensation and benefits shall be
                        prorated on an equitable basis); fuel costs; steam,
                        water, sewer, electric gas, telephone, and other utility
                        charges not otherwise billed to tenants by Landlord or
                        the utility; expenses incurred in connection with the
                        central plant furnishing heating, ventilating and air
                        conditioning to the Building; costs of lighting,
                        ventilating, (including maintaining

                                      -29-


                        and repairing ventilating fans and fan rooms); costs of
                        repairing and maintaining fire protection systems; costs
                        of building and cleaning supplies and equipment
                        (including rental); cost of maintenance, cleaning and
                        repairs; cost of snow plowing or removal, or both, and
                        care of interior and exterior landscaping; payments to
                        independent contractors under contracts for cleaning,
                        operating, management, maintenance and/or repair (which
                        payments may be to affiliates of Landlord); all other
                        expenses paid in connection with cleaning, operating,
                        management, maintenance and repair; costs of any capital
                        improvements completed after the Commencement Date which
                        are replacements of worn out or obsolescent items or are
                        mandated by law enacted after the date of this Lease, or
                        made in order to reduce other Operating Expenses to the
                        extent of such reduction, as such costs are reasonably
                        amortized by Landlord over the useful life thereof, with
                        interest on the unamortized amount at the rate of the
                        greater of (i) 12% per annum or (ii) 2% per annum above
                        the base rate of interest charged from time to time by
                        Fleet National Bank or any successor thereto (but in no
                        event at a rate which is more than the highest lawful
                        rate allowable in the Commonwealth of Massachusetts), to
                        the extent the cost of the particular capital
                        improvement exceeds the amount of the unused reserve, if
                        any, for the replacement thereof previously included in
                        Operating Expenses and insurance proceeds, if any,
                        received by Landlord on account of damage to the
                        particular capital improvement. Operating Expenses shall
                        not, however, include the following:

                        1.    Costs of alterations of any tenant's premises for
                              a particular tenant;

                        2.    Principal or interest payments on loans secured by
                              mortgages or trust deeds on the Building and/or
                              lot;

                        3.    Leasing expenses;

                        4.    Salaries, benefits or other expenses for personnel
                              above the rank of property manager;

                        5.    Services provided by Landlord to other tenants of
                              the Lot or Building and not to Tenant; and

                        6.    Capital expenses, except as hereinbefore
                              permitted.

                        7.    Financing and refinancing costs in respect of any
                              mortgage or security interest placed upon the
                              Building or the Lot or

                                      -30-


                              any portion thereof, including payments of
                              principle, interest, finance or other charges and
                              any points and commissions in connection
                              therewith;

                        8.    Interest or penalties for any late or failed
                              payments by Landlord under any contract or
                              agreement unless resulting from Tenant's failure
                              to pay when and as due, Tenant's Share of
                              Operating Expenses or Taxes;

                        9.    Costs (including, without limitation, attorneys'
                              fees and disbursements) incurred in connection
                              with any judgment, settlement or arbitration award
                              resulting from any tort liabilities;

                        10.   Rent or other charges payable under any ground or
                              underlying lease;

                        11.   Costs of any item which are reimbursed to Landlord
                              by other tenants or third parties (directly and
                              not through a reimbursement scheme such as that
                              contained in this Section 8.2) but which are
                              properly chargeable or attributable to a
                              particular tenant or particular tenants;

                        12.   Costs of electrical or other utility services
                              furnished directly to any premises of other
                              tenants of the Building where such utility is
                              separately metered to the Premises;

                        13.   Costs incurred in connection with Landlord's
                              preparation, negotiation, dispute, resolution
                              and/or enforcement of leases, including attorneys'
                              fees and disbursements in connection with any
                              summary proceedings, to dispossess any tenant or
                              incurred in connection with disputes with
                              prospective tenants, employees, consultants,
                              management agents, leasing agents, purchasers or
                              mortgagees;

                        14.   Costs (including increased Operating Expenses) of
                              any additions to or expansions of the Building or
                              the Lot (but in such case, the square footage of
                              any additions or expansions shall not be included
                              in determining Tenant's Share);

                        15.   Costs of repairs, restorations or replacements
                              occasioned by fire or casualty or caused by the
                              exercise of the right of eminent domain whether or
                              not the condemnation award

                                      -31-


                              proceeds or insurance proceeds are recovered or
                              adequate for such purposes;

                        16.   An amount equal to all amounts received by the
                              Landlord (x) through proceeds of insurance to the
                              extent the proceeds are compensation for expenses
                              which (i) previously were included in Operating
                              Expenses hereunder, (ii) are included in operating
                              expenses for the subsequent Operating Year in
                              which the insurance proceeds are received, or
                              (iii) will be included as Operating Expenses in a
                              subsequent Operating Year or (y) as rebates or
                              credits;

                        17.   Legal and other professional fees for matters not
                              relating to the normal administration and
                              operation of the Building or relating to matters
                              which are excluded from Operating Expenses for the
                              Building;

                        18.   The cost of environmental monitoring, compliance
                              testing and remediation performed in, on, about
                              and around the Building or the Lot;

                        19.   Depreciation (amortization of certain capital
                              items is included as hereinbefore set forth);

                        20.   Amounts paid to subsidiaries or affiliates of
                              Landlord for services rendered to the Building to
                              the extent such amounts exceed the competitive
                              costs for delivery of such services were they not
                              provided by such related parties;

                        21.   Management fees to the extent in excess of
                              competitive rates;

                        22.   Any costs incurred by Landlord in connection with
                              those portions of the Building being used by
                              purposes other than office space including for
                              retail space except as set forth in subsection (c)
                              below;

                        23.   Any other costs or expenses which, in accordance
                              with generally accepted accounting principles,
                              consistently applied, would not typically be
                              treated as an Operating Expense by landlords of
                              comparable properties, but in any event the
                              amortization of certain capital items as set forth
                              above shall be included as an Operating Expense;

                                      -32-


                        24.   Costs incurred by Landlord to correct of defects
                              in the design and construction of the Building;

                        25.   Expenses for services or other benefits which are
                              provided to another tenant or occupant of the
                              Building and are not the type that are offered to
                              Tenant;

                        26.   Increases in advertising and promotional costs
                              including tenant relation programs and events and
                              any costs, fees, dues, contributions or similar
                              expenses for political, charitable, industry
                              association or similar organizations in excess of
                              $500 per year after the Base Year (Base Year
                              amount therefor shall be assumed to be $3000 for
                              the purposes hereof);

                        27.   Any fines, costs, penalties or interest resulting
                              from the negligence, misconduct or omission of the
                              Landlord or its agents, contractors, or employees;

                        28.   Acquisition costs for sculptures, paintings, or
                              other objects of art or the display of such items;

                        29.   Costs incurred in connection with upgrading the
                              Building to comply with disability or life
                              insurance requirements, or life safety codes,
                              ordinances, statutes, or other laws in effect
                              prior to the Commencement Date, including, without
                              limitation, the Americans With Disabilities Act,
                              including penalties or damages incurred as a
                              result of non-compliance;

                        30.   Costs for reserves of any kind except as provided
                              above; and

                        31.   If the office portion of Wing Two not occupied by
                              Tenant shall hereafter be occupied by multi
                              tenants and a common lobby shall be provided for
                              such tenants then the costs and expenses of
                              maintaining and operating such common lobby shall
                              be excluded from Operating Expenses.

        (b)     Within 120 days after the expiration of each Operating Year,
                Landlord shall furnish Tenant with a detailed statement setting
                forth the Operating Expenses for such Operating Year and
                Tenant's Share thereof. As Tenant's special audit right, at
                Tenant's request made no later than sixty (60) days after the
                receipt of such statement, Landlord shall furnish to

                                      -33-


                Tenant reasonable backup material evidencing the Operating
                Expenses for such Operating Year set forth in such statement.

        (c)     In the event Operating Expenses during any Operating Year shall
                exceed the Base Operating Expenses, Tenant shall pay to
                Landlord, as additional rent, an amount equal to Tenant's Share
                of such excess. For the purposes hereof Tenant Share of such
                excess shall be calculated as follows: with respect to insurance
                costs, Tenant's Share shall be a fraction equal to Tenant's Tax
                Share and with respect to all other Operating Expenses Tenant's
                Share shall be equal to a fraction, the numerator of which is
                the Rentable Area of the Premises and the denominator of which
                is the Rentable Area of all office space within the Building,
                including the Premises.

        (d)     Said additional rent shall, with respect to the Operating Years
                in which the Commencement Date and end of the Term of this Lease
                fall, be adjusted to that proportion thereof as the portion of
                the Term of this Lease falling within such Operating Year bears
                to the full Operating Year. If Landlord shall change its
                Operating Year, appropriate adjustment shall be made for any
                Operating Year less than twelve months which may result.

        (e)     Any additional rent payable by Tenant under this Section 8.2
                shall be paid within thirty (30) days after Landlord has
                furnished Tenant with the Statement described above in paragraph
                (b) of this Section 8.2.

        (f)     If with respect to any Operating Year or fraction thereof during
                the Term, Tenant is obligated to pay any additional rent in
                respect of increases in such Operating Expenses as aforesaid,
                then Tenant shall pay, as additional rent, on the first day of
                each month of the next ensuing Operating Year, estimated monthly
                operating escalation payments in an amount from time to time
                reasonably estimated by Landlord to be sufficient to cover, in
                the aggregate, a sum equal to Tenant's Share of such increase in
                Operating Expenses for such year. If the estimated monthly
                operating escalation payments theretofore made for such
                Operating Year by Tenant are greater than the amount due as
                additional rent in respect thereof according to the statement
                furnished Tenant by Landlord pursuant to paragraph (b) of this
                Section 8.2, Landlord shall pay the same to Tenant within thirty
                (30) days, or, at Landlord's election, credit the amount of such
                overpayment against subsequent obligations of Tenant for
                additional rent under this Lease (but Landlord shall refund such
                overpayment if the Term has ended and Tenant has no further
                obligation to Landlord under the Lease); but if such amount due
                as such additional rent for said Operating Year is greater than
                the estimated monthly operating escalation payments theretofore
                made on account of such period, Tenant shall make suitable
                payment to Landlord

                                      -34-


                within the time set forth in paragraph (e) of this Section 8.2.
                This provision shall survive the end of the Lease Term.

        (g)     If in the Base Year or any Operating Year the Building is not
                95% occupied (above the ground floor retail) during all or any
                portion of such year or if in the Base Year or in any Operating
                Year the Operating Expenses are artificially low due to
                incentives, credits, warranties, rebates, offsets and other
                extraordinary and one-time payments or the like ("Rebates"), the
                Operating Expenses shall be increased equitably to reflect such
                Rebates or the vacancies within the Building (above the retail
                ground floor) to the extent that Operating Expenses would be
                greater had the Building been at least 95% occupied (above the
                ground floor) during such year.

        (h)     Anything in this Lease to the contrary notwithstanding, it is
                expressly understood and agreed that the designation or use by
                Landlord from time to time of portions of the Lot or Building as
                common areas shall not restrict the Landlord's use of such areas
                for improvements, structures and/or for retail, office or such
                other purposes as the Landlord shall determine, the Landlord
                hereby reserving the unrestricted right to build, and to,
                subtract from, lease, license, relocate and/or otherwise use
                (temporarily and/or permanently), any improvements, kiosks or
                other structures, parking areas, sidewalks or other such common
                areas of facilities anywhere upon or within the Lot or Building
                for office, retail, or such other purposes as Landlord shall
                determine. Nothing herein shall limit the right of the Landlord
                to change the use to which any part of the Building will be used
                from the purposes specified herein. Landlord shall not exercise
                its rights under this Subsection (h) in a manner that will
                unreasonably interfere with Tenant's access to, or use of, the
                Premises, or that would materially increase Tenant's obligations
                or decrease Tenant's rights under this Lease.

        (i)     Within 90 days after receipt of each statement delivered under
                this Section, Tenant or its agent (if a certified public
                accountant) shall have the right to examine and copy Landlord's
                records relating to the Operating Expenses and Taxes and the
                calculation of Tenant's Share thereof. Landlord shall make all
                its records relating to the calculation of Operating Expenses
                available to Tenant or its agents, at reasonable times upon
                reasonable advance notice at Landlord's Present Mailing Address
                or such other location as Landlord shall specify. No such audit
                and examination may be made by any person or entity employed in
                whole or in part on a so-called contingency basis. Tenant shall
                maintain the confidentiality of all information which it
                receives as a result of such examination and shall not disclose
                the same except in connection with litigation between Landlord
                and Tenant. If Tenant fails to notify Landlord within such
                90-day period

                                      -35-


                that it determines to examine such statement, such statement
                shall be deemed an account between Landlord and Tenant. In the
                event Tenant has been overcharged for Operating Expenses and/or
                Taxes and such overcharge is five percent (5%) or more of the
                amount actually due from Tenant with respect to Operating
                Expenses or Taxes, as the case may be, Landlord shall also pay
                all reasonable costs incurred by Tenant in conducting such
                audit. Tenant may pay any charge in respect of Operating
                Expenses or Taxes under protest and if it shall be determined
                that Tenant has overpaid then Landlord shall promptly refund
                Tenant the amounts for which Tenant has overpaid.

                                   ARTICLE IX
                    INDEMNITY AND PUBLIC LIABILITY INSURANCE

9.1     TENANT'S INDEMNITY. To the maximum extent this agreement may be made
        effective according to law, Tenant agrees to indemnify and save harmless
        Landlord from and against all claims of whatever nature arising from any
        willful misconduct or negligence of Tenant, or Tenant's contractors,
        licensees, invitees, agents, servants or employees, or arising from any
        accident, injury or damage whatsoever caused to any person, or to the
        property of any person, occurring after the commencement of construction
        work by Tenant where Tenant has exclusive possession of the Premises,
        and until the end of the Lease Term and thereafter, so long as Tenant is
        in occupancy of any part of the Premises, within the Premises, or
        arising from any accident, injury or damage occurring outside of the
        Premises, where such accident, damage or injury results from a negligent
        act or omission or the willful misconduct on the part of Tenant or
        Tenant's agents, employees, contractors, or invitees. To the maximum
        extent this agreement may be made effective according to law, Landlord
        agrees to indemnify and save harmless Tenant from and against all claims
        of whatever nature arising from any act, omission or negligence of
        Landlord or Landlord's contractors, agents, servants or employees and
        occurring in the Building or the Lot.

        The foregoing indemnity and hold harmless agreements shall include
        indemnity against all costs, expenses and liabilities incurred in or in
        connection with any such claim or proceeding brought thereon, and the
        defense thereof.

9.2     PUBLIC LIABILITY INSURANCE. Tenant agrees to maintain in full force and
        effect from the date on which Tenant first enters the Premises for any
        reason, throughout the Lease Term, and thereafter so long as Tenant is
        in occupancy of any part of the Premises, a policy of Commercial General
        Liability insurance on an occurrence basis in accordance with the
        broadest form of such coverage as is available from time to time in the
        jurisdiction in which the Premises are located. The minimum limits of
        liability of such insurance shall be $3,000,000 combined single limit or
        shall be for such higher limits, if directed by Landlord, as are
        customarily carried in that area in which the Building is located upon
        buildings

                                      -36-


        such as the Building, but Landlord shall not require higher limits
        during the first five years of the term of this Lease.

        The policy shall also include, but shall not be limited to the following
        extensions of coverage:

        1.      Contractual Liability, covering Tenant's liability assumed under
                this Lease; and

        2.      Personal Injury Liability in the amount of $3 million annual
                aggregate, expressly deleting the exclusion relating to
                contractual assumptions of liability.

        Tenant's insurance under this Section 9.2 may be provided by a primary
        policy and a so-called umbrella policy.

        Tenant further agrees to maintain a Workers' Compensation and Employer's
        Liability Insurance policy. The limit of liability as respects
        Employers' Liability coverage shall be no less than $5,000,000 per
        accident.

        Except for Workers' Compensation and Employers' Liability coverage,
        Tenant agrees that Landlord (and such other persons as are in privity of
        estate with Landlord as may be set out in notice from time to time) are
        named as additional insureds on a primary basis. Further, all policies
        shall be noncancellable and nonamendable with respect to Landlord and
        Landlord's said designees without 30 days' prior written notice to
        landlord. A duplicate original or a Certificate of Insurance evidencing
        the above agreements shall be delivered to Landlord prior to entry on
        the Premises.

9.3     TENANT'S RISK. To the maximum extent this agreement may be made
        effective according to law, Tenant agrees to use and occupy the Premises
        and to use such other portions of the Building as Tenant is herein given
        the right to use at Tenant's own risk; and Landlord shall have no
        responsibility or liability for any loss of or damage to fixtures or
        other personal property of Tenant for any reason whatsoever. The
        provisions of this Section shall be applicable from and after the
        execution of this Lease and until the end of the Lease Term, and during
        such further period as Tenant may use or be in occupancy of any part of
        the Premises or of the Building. Nothing in this Section 9.3 shall act
        to exculpate the Landlord from its negligence or willful misconduct or
        the negligence or willful misconduct of its servants, agents or
        employees.

9.4     INJURY CAUSED BY THIRD PARTIES. To the maximum extent this agreement may
        be made effective according to law, Tenant agrees that Landlord shall
        not be responsible or liable to Tenant, or to those claiming by, through
        or under Tenant, for any loss or damage that may be occasioned by or
        through the

                                      -37-


        acts or omissions of persons occupying adjoining premises or any part of
        the premises adjacent to or connecting with the Premises or any part of
        the Building, or otherwise or for any loss or damage resulting to Tenant
        or those claiming by, through or under Tenant, or its or their property,
        from the breaking, bursting, stopping or leaking of electric cables and
        wires, water, gas, sewer or steam pipes, and from roof leaks and the
        like. Nothing in this Section 9.4 shall act to exculpate the Landlord
        from its negligence or willful misconduct or the negligence or willful
        misconduct of its servants, agents or employees.

9.5     The foregoing provisions of this Article IX (as well as any other
        provisions dealing with indemnity and like by Tenant of Landlord) shall
        be deemed to be modified in each case by the insertion in the
        appropriate place of the language "except as otherwise provided in Mass.
        GL. Ter. ED., c. 186, Section 15".

9.6     During the Lease Term, Landlord shall secure and carry (a) a policy of
        commercial general liability insurance covering Landlord on an
        occurrence basis in an amount not less than $5 million for claims based
        on bodily injury (including death), personal injury and property damage
        relating to the Building and the Lot; and (b) a policy of property
        insurance covering the Building and the other improvements on the Lot,
        not including the Tenant Work, for direct risk of physical loss, in an
        amount equal to the full replacement cost of the Building or other
        improvements on the Lot above footings and foundations. In the event
        either party fails to maintain and enforce the policies of insurance
        required hereunder, the party failing to maintain such policies shall be
        deemed to have received the maximum insurance proceeds which would have
        been payable under such policies had they been maintained for the
        purposes required.

                                    ARTICLE X
                          LANDLORD'S ACCESS TO PREMISES

10.1    LANDLORD'S RIGHT OF ACCESS. Upon reasonable advance notice to Tenant
        (which notice need not be given in the case of an emergency), Landlord
        shall have the right to enter the Premises at all reasonable business
        hours and after normal business hours for the purpose of inspecting or
        making repairs to the same, and upon reasonable advance notice to
        Tenant, Landlord shall also have the right to make access available at
        all reasonable hours to prospective or existing mortgagees or purchasers
        of any part of the Building. Any such right of entry shall be exercised
        in a manner so as to minimize interference with Tenant's use and
        occupancy of the Premises.

10.2    EXHIBITION OF SPACE TO PROSPECTIVE TENANTS. Upon reasonable advance
        notice to Tenant for a period of twelve (12) months prior to the
        expiration of the Lease Term (as the same has been extended), Landlord
        may have reasonable access to the Premises at all reasonable business
        hours for the purpose of exhibiting the same to prospective tenants, and
        may post suitable notice on the

                                      -38-


        Building advertising the same for rent. Any such right of entry shall be
        exercised in a manner so as to minimize interference with Tenant's use
        and occupancy of the Premises. Landlord shall not be permitted to post
        notices for re-letting on Wing One unless Tenant is vacating the
        Premises except that Landlord may post notices for re-letting on retail
        portions of Wing One pertaining to such retail portions at ground level.

                                   ARTICLE XI
                           FIRE, EMINENT DOMAIN, ETC.

11.1    DAMAGE. In case during the term hereof the Premises shall be partially
        damaged (as distinguished from "substantially damaged", as that term is
        hereinafter defined) by fire or other casualty, the Landlord shall
        forthwith proceed to repair such damage and restore the Premises to the
        extent required of Landlord hereunder, to substantially their condition
        at the time of such damage, but the Landlord shall not be responsible
        for any delay which may result from Landlord's Force Majeure. In no
        event shall any of Landlord's restoration obligations under this Article
        XI pertain to any of Tenant's property or any alterations, changes or
        additions made by Tenant or any fixtures or improvements or equipment
        installed by Tenant.

11.2    SUBSTANTIAL DAMAGE. In case during the term hereof the Premises or the
        Garage or access thereto shall be substantially damaged or destroyed by
        fire or other casualty, the risk of which is covered by the Landlord's
        insurance, this Lease shall, except as hereinafter provided, remain in
        full force and effect, and the Landlord shall promptly after such damage
        and the determination of the net amount of insurance proceeds available
        to the Landlord, expend so much as may be necessary of such net amount
        to restore the Premises to the extent required of Landlord hereunder, at
        its cost (and not at Tenant's expense) (consistent, however, with zoning
        laws and building codes then in existence), to substantially the
        condition in which Premises, the Garage and access thereto were in at
        the time of such damage, except as herein provided, but the Landlord
        shall not be responsible for delay which may result from any cause
        beyond the reasonable control of the Landlord. Should the net amount of
        insurance proceeds available to the Landlord be insufficient to cover
        the cost of restoring the Premises, in the reasonable estimate of the
        Landlord, the Landlord may, but shall have no obligation to, supply the
        amount of such insufficiency and restore the Premises with all
        reasonable diligence or the Landlord may terminate this Lease by giving
        notice to the Tenant not later than one hundred twenty (120) days after
        the Landlord has determined the estimated net amount of insurance
        proceeds available to Landlord and the estimated cost of such
        restoration. In case of substantial damage or destruction, as a result
        of a risk which is not covered by the Landlord's insurance, the Landlord
        shall likewise be obligated to rebuild the Premises, all as aforesaid,
        unless the Landlord, within ninety (90) day after the occurrence of such
        event, gives written notice to the Tenant of the Landlord's election to
        terminate this

                                      -39-


        Lease. For the purposes hereof, any deductible or other self-insurance
        by the Landlord shall be considered a part of the net insurance proceeds
        available for restoration.

        However, if the Premises, such access and the Garage shall be
        substantially damaged or destroyed by fire, windstorm, or otherwise
        within the last year of the Term of this Lease, as the same has been
        extended, either party shall have the right to terminate this Lease,
        provided that notice thereof is given to the other party not later than
        sixty (60) days after such damage or destruction; provided, however,
        that if Landlord has so exercised such option and if Tenant then has a
        right under this Lease to extend the term of this Lease then Tenant may
        render Landlord's exercise of such right of termination nugatory and of
        no force or effect provided that Tenant gives Landlord notice exercising
        such right of extension within ten (10) business days after its receipt
        of Landlord's notice of termination; and further provided that if only
        portions of the Premises have been damaged (on a floor by floor basis)
        and the access to such portions of the Premises have not been damaged
        Tenant shall have the right to occupy the portions of the Premises not
        so damaged for the remainder of what would have been the term of this
        Lease upon all the terms and conditions hereof but such occupancy must
        be on a floor by floor basis for any floor not so damaged. If said right
        of termination is exercised, this Lease and the term hereof shall cease
        and come to an end as of the date of said damage or destruction.
        Further, if the Premises, such access and the Garage shall be
        substantially damaged or destroyed by fire or casualty and the Landlord
        shall fail to commence the restoration thereof within sixty (60) days
        after the date of such damage or destruction (such 60 day period to be
        extended to the extent necessary for the Landlord to obtain insurance
        proceeds and building permits to effect such restoration and to the
        extent of any Landlord's Force Majeure), then Tenant may elect to
        terminate this Lease by notice to Landlord given before the Landlord has
        commenced such work and the termination shall take effect unless
        Landlord commences such work within thirty (30) days after such notice;
        and if after having commenced such restoration work, the Landlord shall
        fail to substantially complete such work within 270 days after its
        commencement, such 270-day period to be extended for up to ninety (90)
        days to the extent of delays due to Landlord's Force Majeure, then
        Tenant may elect to terminate this Lease by notice to Landlord given
        before Landlord shall have so completed such work and such termination
        shall take effect unless Landlord so completes such work within thirty
        (30) days after such notice.

        Unless this Lease is terminated as provided in this Section 11.2, or in
        Section 11.4, if the Premises shall be damaged or destroyed by fire or
        other casualty, then the Tenant shall (i) repair and restore all
        portions of the Premises not required to be restored by Landlord
        pursuant to this Article XI to substantially the condition which such
        portions of the Premises were in at the time of such casualty, (ii)
        equip the Premises with trade fixtures and all personal property

                                      -40-


        necessary or proper for the operation of the Tenant's business, and
        (iii) open for business in the Premises - as soon thereafter as
        possible.

11.3    RENT ABATEMENT. In the event that the provisions of Section 11.1 or
        Section 11.2 of this Article XI shall be become applicable, the Fixed
        Rent and all other charges shall be abated or reduced proportionately
        during any period in which, by reason of such damage or destruction,
        there is substantial interference with the operation of the business of
        the Tenant in or access to the Premises or use of the Garage, having
        regard to the extent to which the Tenant in the exercise in good faith
        and prudent business judgment may be required to discontinue its
        business in the Premises, and such abatement or reduction shall continue
        for the period commencing with such destruction or damage and ending on
        the earlier to occur of (i) 120 days after the substantial completion by
        the Landlord of such work of repair and/or reconstruction as the
        Landlord is obligated to do or (ii) the Tenant having recommenced full
        operations in the Premises. In the event of termination of this Lease
        pursuant to this Article XI, this lease and the term hereof shall cease
        and come to an end as of the date of such damage or destruction.

11.4    DAMAGE TO BUILDING. If, however, the Building shall be substantially
        damaged or destroyed by fire or casualty and there shall be no
        substantial damage to the Premises or the Garage (and/or any spaces in
        the Garage) or access thereto, the Landlord shall promptly restore or
        cause to be restored (consistent, however, with zoning laws and building
        codes then in existence), the Building to substantially the condition
        thereof at the time of such damage, unless the Landlord, within a
        reasonable time after such loss, gives notice to the Tenant of the
        Landlord's election to terminate this Lease. If Landlord shall give such
        notice, then anything to this Article XI to the contrary notwithstanding
        this Lease shall terminate as of the date of such notice with the same
        force and effect as if such date were the date originally established as
        the expiration date hereof.

11.5    DEFINITIONS OF SUBSTANTIAL DAMAGE. The terms "substantially damaged" and
        "substantial damage", as said in this Article, shall have reference to
        damage of such a character as cannot reasonably be expected to be
        repaired or the Premises restored within sixty (60) days from the time
        that such repair or restoration work would be commenced.

11.6    TAKING. If the Premises are taken by condemnation or right of eminent
        domain then this Lease shall terminate as of the date that Tenant has
        been deprived of possession. If, however, less than all the Premises has
        been taken by eminent domain but there has been taken such portion
        thereof as to render the balance (when reconstructed) unsuitable for the
        purposes of the Tenant shall be taken by condemnation or right of
        eminent domain, or if access to the Premises is materially, adversely
        and permanently affected by such a taking or if more than ten (10)
        parking spaces allocated to Tenant's use are taken by such condemnation
        or right of eminent domain and Landlord promptly does not provide
        alternative

                                      -41-


        spaces to Tenant reasonably acceptable to Tenant, Tenant, upon written
        notice to the Landlord, shall be entitled to terminate this lease,
        provided that such notice is given not later than thirty (30) days after
        the Tenant has been deprived of possession. For the purposes of this
        Article, any deed or other transfer of title in lieu of any such taking
        shall be treated as such a taking. Moreover, for the purposes of this
        Article, such a taking of the Tenant's entire leasehold interest
        hereunder in the Premises (or assignment or termination in lieu thereof)
        shall be treated as a taking of the entire Premises, and in such event
        the Tenant shall be treated as having been deprived of possession on the
        effective date thereof. Should any part of the Premises be so taken or
        condemned, and should this Lease not be terminated in accordance with
        the foregoing provision, the Landlord covenants and agrees within a
        reasonable time after such taking or condemnation, and the determination
        of the Landlord's award therein, to expend so much as may be necessary
        of the net amount which may be awarded to the Landlord in such
        condemnation proceedings, in restoring the Premises to an architectural
        unit as nearly like their condition prior to such taking as shall be
        practicable. Should the net amount so awarded to the Landlord be
        insufficient to cover the cost of restoring the Premises, as estimated
        by the Landlord's architect, the Landlord may, but shall not be
        obligated to, supply the amount of such insufficiency and restore the
        Premises as above provided, with all reasonable diligence, or terminate
        this Lease. Where the Tenant has not already exercised any right of
        termination accorded to it under the foregoing portion of this
        paragraph, the Landlord shall notify the Tenant of the Landlord's
        election not later than ninety (90) days after the final determination
        of the amount of the award.

11.7    RENT ABATEMENT. In the event of any such taking of the Premises, the
        Fixed Rent and other charges or a fair and just proportion thereof,
        according to the nature and extent of the damage sustained, shall be
        suspended or abated until there has been restoration as aforesaid. If
        there is a permanent taking of a portion of the Premises and this Lease
        is not terminated, then there shall be a permanent abatement of the
        fixed rent and other charges on a fair and equitable basis.

11.8    AWARD. Landlord shall have and hereby reserves and accepts, and Tenant
        hereby grants and assigns to Landlord, all rights to recover for damages
        to the Building and the Lot and any part thereof, and the leasehold
        interest hereby created, and to compensation accrued or hereafter to
        accrue by reason of such taking, damage or destruction, as aforesaid,
        and by way of confirming the foregoing, Tenant hereby grants and
        assigns, and covenants with Landlord to grant and assign to Landlord all
        rights to such damages or compensation. Nothing contained herein shall
        be construed to prevent Tenant from prosecuting in any condemnation
        proceedings a claim for the value of any Tenant's usual trade fixtures
        and other improvements installed in the Premises by Tenant at Tenant'
        expense and for relocation expenses, provided that such action shall not
        affect the amount of compensation otherwise recoverable by Landlord from
        the taking authority.

                                      -42-


                                   ARTICLE XII
                               LANDLORD'S REMEDIES

12.1    EVENTS OF DEFAULT. Any one of the following shall be deemed to an "Event
        of Default":

        A.      Failure on the part of Tenant to pay Fixed Rent, additional rent
                or other charges for which provision is made herein on or before
                the date on which the same become due and payable and such
                failure continues for ten (10) days after Landlord delivers to
                Tenant notice of such default.

                However, if (i) Landlord shall have sent to Tenant three (3)
                notices of default in the payment of Fixed Rent in any calendar
                year, even though the same shall have been cured and this Lease
                not terminated; and (ii) during the calendar year in which said
                notices of default have been sent by Landlord to Tenant, Tenant
                thereafter shall default in the payment of Fixed Rent - the same
                shall be deemed to be an Event of Default upon Landlord giving
                Tenant written notice thereof, without the ten (10) day grace
                period set forth above.

        B.      With respect to a non-monetary default under this Lease, failure
                of Tenant to cure the same within thirty (30) days following
                delivery of notice from Landlord to Tenant of such default or
                such longer period of time as is reasonably required to cure
                such default provided that Tenant commences to cure such default
                with due diligence and pursues the cure thereof with all due
                diligence. Notwithstanding the thirty (30) day cure period
                provided in the preceding sentence, Tenant shall be obligated to
                commence forthwith and to complete as soon as possible the
                curing of such default; and if Tenant fails so to do, the same
                shall be deemed to be an Event of Default.

                However, if (i) Landlord shall have sent to Tenant three notices
                of the same non-monetary default, in any calendar year, even
                though the same shall have been cured and this Lease not
                terminated; and (ii) during the calendar year in which said
                notices of default have been sent by Landlord to Tenant, Tenant
                thereafter shall default in the same or any similar non-monetary
                matter - the same shall be deemed to be an Event of Default upon
                Landlord giving the Tenant written notice thereof, and Tenant
                shall have no grace period within which to cure the same.

        C.      The commencement of any of the following proceedings, with such
                proceeding not being dismissed within sixty (60) days after it
                has begun: (i) the estate hereby created being taken on
                execution or by other process of law; (ii) Tenant being
                judicially declared bankrupt or insolvent

                                      -43-


                according to law; (iii) an assignment being made of the property
                of Tenant for the benefit of creditors; (iv) a received,
                guardian, conservator, trustee in involuntary bankruptcy or
                other similar officer being appointed to take charge of all or
                any substantial part of Tenant's property by a court of
                competent jurisdiction, or (v) a petition being filed for the
                reorganization of Tenant under any provisions of the Bankruptcy
                Code now or hereafter enacted.

        D.      Tenant filing a petition for reorganization or for
                rearrangements under any provisions of the Bankruptcy Code now
                or hereafter enacted, and providing a plan for a debtor to
                settle, satisfy or to extend the time for the payment of debts.

        E.      Execution by Tenant of an instrument purporting to assign
                Tenant's interest under this Lease or sublet the whole or a
                portion of the Premises to a third party without Tenant having
                first obtained Landlord's prior express consent to said
                assignment or subletting where such consent is required
                hereunder.

        F.      The Tenant abandoning the Premises. For the purposes hereof
                abandonment of the Premises is not merely a vacating of the
                Premises but is abandonment as that term is legally defined and
                Tenant's failure to perform its obligations hereunder.

12.2    REMEDIES. Should any Event of Default occur then, notwithstanding any
        license of any former breach of covenant or waiver of the benefit hereof
        or consent in a former instance, Landlord lawfully may, in addition to
        any remedies otherwise available to Landlord, immediately or at any time
        thereafter, and without demand or notice (but in accordance with
        applicable laws), enter into and upon the Premises or any part thereof
        in the name of the whole and repossess the same as of Landlord's former
        estate, and expel Tenant and those claiming by, through or under it and
        remove its or their effects (without breach of the peace) without being
        deemed guilty of any manner of trespass, and without prejudice to any
        remedies which might otherwise be used for arrears of rent or preceding
        breach of covenant and/or Landlord may send notice to Tenant terminating
        the Term of this Lease; and upon the first to occur of: (i) entry as
        aforesaid; or (ii) the fifth (5th) day following the mailing of such
        notice of termination, the Term of this Lease shall terminate, but
        Tenant shall remain liable for all damages as provided for herein.

        Tenant covenants and agrees, notwithstanding any termination of this
        Lease as aforesaid or any entry or re-entry by Landlord, whether by
        summary proceedings, termination, or otherwise, to pay and be liable for
        on the days originally fixed herein for the payment thereof, amounts
        equal to the several installments of Fixed Rent and other charges
        reserved as they would become due under the terms of this

                                      -44-


        Lease if this Lease had not been terminated or if Landlord had not
        entered or re-entered, as aforesaid, and whether the Premises be relet
        or remain vacant, in whole or in part, or for a period less than the
        remainder of the Term, or for the whole thereof, but in the event the
        Premises be relet by Landlord, Tenant shall be entitled to a credit in
        the net amount of rent received by Landlord in reletting, after
        deduction of all reasonable expenses incurred in reletting the Premises
        (including, without limitation, repairs, costs, brokerage fees, and the
        like but not remodeling costs), and in collecting the rent in connection
        therewith. It is specifically understood and agreed that Landlord shall
        be entitled to take into account in connection with any reletting of the
        Premises all relevant factors which would be taken into account by a
        sophisticated developer in securing a replacement tenant for the
        Premises, such as, but not limited to, the first class quality of the
        Building and the financial responsibility of any such replacement
        tenant; and Tenant hereby waives, to the extend permitted by applicable
        law, any obligation Landlord may have to mitigate Tenant's damages;
        provided, however, that in the event of the termination of this Lease as
        a result of the default of Tenant, Landlord shall use reasonable efforts
        to re-let the Premises, but in using such reasonable efforts, Landlord
        may take into account the factors set forth above and shall not be
        obligated to give priority to the re-letting of the Premises over other
        areas of the Building. As an alternative, at the election of Landlord,
        Tenant will upon such termination pay to Landlord, as damages, such a
        sum as at the time of such termination represents the present value
        (calculated using 2% in excess of the so-called Federal Funds Rate) of
        the amount of the excess, if any, of the total rent and other benefits
        which would have accrued to Landlord under this Lease for the remainder
        of the Lease Term if the lease terms had been fully complied with by
        Tenant over and above the then fair market rental value of the Premises
        for the balance of the Term. For purposes of this Article, if Landlord
        elects to require Tenant to pay damages in accordance with immediately
        preceding sentence, the total rent shall be computed by assuming that
        Tenant's payments in respect of increases in Taxes and Operating
        Expenses would be, for the balance of the unexpired term, the amount
        thereof (if any), respectively, for the immediately preceding Tax Period
        or Operating Year, as the case may be, payable by Tenant to Landlord.

        In the event of any breach by Tenant of any of the agreements, terms,
        covenants or conditions contained in this lease, Landlord shall be
        entitled to enjoin such breach and shall have the right to invoke any
        right or remedy allowed at law or in equity or by statute or otherwise
        as though reentry, summary proceedings, and other remedies were not
        provided for in this Lease.

        Each right and remedy of Landlord and Tenant provided for in this Lease
        shall be cumulative and shall be in addition to every other right or
        remedy provided for in this Lease not now or hereafter existing at law
        or in equity or by statute or otherwise, and the exercise or beginning
        of the exercise by Landlord or Tenant of any one or more of the rights
        or remedies provided for in this Lease or now or

                                      -45-


        hereafter existing at law or in equity or by statute or otherwise shall
        not preclude the simultaneous or later exercise by Landlord or Tenant of
        any or all other rights or remedies provided for in this Lease or now or
        hereafter existing at law or in equity or by statute or otherwise.

        If any payment of rent or any other payment payable hereunder by Tenant
        to Landlord or Landlord to Tenant shall not be paid within five (5) days
        after the date when due, the same shall bear interest from the date when
        the same was payable until the date paid at the lesser of (a) twelve
        percent (12%) per annum, compounded monthly, or (b) the highest lawful
        rate of interest which may be charged without violating any applicable
        law; provided, however, that the first time in each calendar year that
        Landlord shall determine to charge such interest, it shall give notice
        thereof to Tenant and such interest shall be deemed waived if Tenant
        makes payment of the same within ten (10) days after delivery of such
        notice. Such interest payable by Tenant shall constitute additional rent
        payable hereunder and be payable upon demand therefor by Landlord.

        In the event of any litigation between Landlord and Tenant relating to
        this Lease, the prevailing party in such litigation by final court
        order, decree or judgment shall be entitled to be reimbursed by the
        other party for the reasonable and actual legal costs and expenses
        incurred by it in such litigation.

12.3    LANDLORD'S DEFAULT. Landlord shall in no event be in default in the
        performance of any of Landlord's obligations hereunder unless and until
        Landlord shall have failed to perform such obligations within thirty
        (30) days, or such additional time as is reasonably required to correct
        any such default, after notice by Tenant to Landlord properly specifying
        wherein Landlord has failed to perform any such obligations; provided,
        however, that in the event that any default of Landlord in the
        performance of its obligations shall pose the immediate threat of injury
        to person or damage to property, then Landlord shall use all reasonable
        efforts to commence to cure such default as soon as reasonably possible
        after it has received notice thereof from Tenant. In the event of a
        default by Landlord after the expiration of such notice and cure period
        which is of an emergency nature and which pertains to the maintenance of
        the Premises the Tenant shall be entitled to perform such maintenance on
        behalf of Landlord upon notice by Tenant to Landlord thereof, and if
        Tenant shall perform such maintenance on behalf of Landlord then
        Landlord shall promptly reimburse Tenant for the reasonable and actual
        costs thereof, but Tenant shall have no right to set-off any amounts so
        owed from Fixed Rent or other charges or rents due hereunder.

                                  ARTICLE XIII
                            MISCELLANEOUS PROVISIONS

13.1    EXTRA HAZARDOUS USE. Tenant covenants and agrees that Tenant will not do
        or permit anything to be done in or upon the Premises, or bring in
        anything or

                                      -46-


        keep anything therein which shall increase the rate of insurance on the
        Premises or on the Building or any part thereof above the standard rate
        applicable to premises being occupied for the use to which Tenant has
        agreed to devote the Premises; and Tenant further agrees that in the
        event that Tenant shall do any of the foregoing, Tenant will promptly
        pay to Landlord, on demand, any such increase resulting therefrom which
        shall be due and payable as additional rent hereunder. Landlord will
        hold harmless, defend and indemnify Tenant and its successors and
        assigns against all claims, liabilities, loss, cost, and expenses,
        including reasonable attorneys' fees, incurred as a result of (i) any
        Hazardous Materials existing in, on or under the Premises, the Building
        or the Lot as of the date of this Lease, and (ii) the release, storage
        or disposal of Hazardous Materials in, on or under the Premises, the
        Building or the Lot by Landlord, its agents, employees or contractors,
        and the provision of this sentence shall survive the expiration or
        earlier termination of this Lease. The term "Hazardous Materials" shall
        mean any explosive, radioactive, hazardous wastes or hazardous
        substances or substances defined as "hazardous substances" in any
        federal, state or local laws, ordinance, regulation or governmental
        requirement including, without limitation, the Comprehensive
        Environmental Response, Compensation and Liability Act, 42 U.S.C.
        Sections 9601, et seq., Emergency Planning and Community Right-to-Know
        Act, 42 U.S.C. Sections 11001, et seq., Massachusetts Oil and Hazardous
        Material Release Prevention and Response Act, M.G.L. Chapter 21E, and
        Massachusetts Hazardous Waste Management Act, M.G.L. Chapter 21C.
        Landlord represents and warrants that, except as disclosed in the
        Release Abatement Measure (RAM) Plan dated March 2001 by Haley &
        Aldrich, Inc., it has no knowledge of the presence of any Hazardous
        Materials on the Premises, the Building or the Lot. Tenant will hold
        harmless, defend and indemnify Landlord and its successors and assigns
        against all claims, liabilities, loss, costs and expenses, including
        reasonable attorneys' fees, incurred as a result of the release, storage
        or disposal of Hazardous Materials in, on or under the Building or the
        Lot by Tenant, its agents, employees or contractors and the provisions
        of this sentence shall survive the expiration or earlier termination of
        this Lease.

13.2    WAIVER. Failure on the part of Landlord or Tenant to complain of any
        action or nonaction on the part of the other, no matter how long the
        same may continue, shall never be a waiver by Tenant or Landlord,
        respectively, of any of the other's rights hereunder. Further, no waiver
        at any time of any of the provisions hereof by Landlord or Tenant shall
        be construed as a waiver of any of the other provisions hereof, and a
        waiver at any time of any of the provisions hereof shall not be
        construed as a waiver at any subsequent time of the same provisions. The
        consent or approval of landlord or Tenant to or of any action by the
        other requiring such consent or approval shall not be construed to waive
        or render unnecessary Landlord's or Tenant's consent or approval to or
        of any subsequent similar act by the other. Any consent required of the
        Landlord in any provision of this Lease may be withheld by the Landlord
        in its sole discretion acting in good

                                      -47-


        faith unless the provision requiring such consent specifically states
        that the Landlord shall not withhold such consent unreasonably.

        No payment by Tenant or acceptance by Landlord of a lesser amount than
        shall be due from Tenant to Landlord shall be treated otherwise than as
        a payment on account. The acceptance by Landlord of a check for a lesser
        amount with an endorsement or statement thereon, or upon any letter
        accompanying such check that such lesser amount is payment in full,
        shall be given no effect, and Landlord may accept such check without
        prejudice to any other rights or remedies which Landlord may have
        against Tenant. In no event shall Tenant ever be entitled to receive
        interest upon, or any payments on account of earnings or profits derived
        from any payments hereunder by Tenant to Landlord.

13.3    COVENANT OF QUITE ENJOYMENT. Tenant, subject to the terms and provisions
        of this Lease, upon payment of the Fixed Rent and other charges due
        hereunder and the observing, keeping and performing of all of the terms
        and provisions of this Lease on Tenant's part to be observed, kept and
        performed, shall lawfully, peaceable and quietly have, hold, occupy and
        enjoy the Premises during the Term hereof, without hindrance or ejection
        by any persons lawfully claiming under Landlord to have title to the
        Premises superior to Tenant; the foregoing covenant of quiet enjoyment
        is in lieu of any other covenant, expressed or implied; and it
        understood and agreed that this covenant and any and all other covenants
        of Landlord contained in this Lease shall be binding upon Landlord and
        Landlord's successors only with respect to breaches occurring during
        Landlord's and Landlord's successors' respective ownership of Landlord's
        interests hereunder. Further, Tenant specifically agrees to look solely
        to Landlord's then equity interest in the Lot and Building and available
        insurance proceeds for recovery of any judgment from Landlord; it being
        specifically agreed that Landlord (original or successor) shall never be
        personally liable for any such judgment, or for the payment of any
        monetary obligation to Tenant. The provision contained in the foregoing
        sentence is not intended to, and shall not limit any right that Tenant
        might otherwise have to obtain injunctive relief against Landlord or
        Landlord's successors in interest, or any action not involving the
        personal liability of Landlord (original or successor) to respond in
        monetary damages from Landlord's assets other than Landlord's equity
        interest aforesaid in the Lot and Building. With respect to any
        services, including, without limitation, heat, air-conditioning or water
        to be furnished by Landlord, or obligations to be performed by Landlord
        or Tenant hereunder, such party shall in no event be liable for failure
        to furnish or perform the same when (and the date for performance of the
        same shall be postponed so long as such party is) prevented from doing
        so by strike, lockout, accident, order or regulation of or by any
        governmental authority, or failure of supply, or inability by the
        exercise of reasonable diligence to obtain supplies, parts or employees
        necessary to furnish such services, or perform such obligations or
        because of war or other emergency, or for any cause beyond its
        reasonable control, or for any cause due to any act or neglect of the
        other or the

                                      -48-


        other's servants, agents, employees, licensees, invitees or any person
        claiming by, through or under the other; provided, however, that in no
        event shall the foregoing excuse or delay such payment of rent or other
        monies. In no event shall either party ever be liable to the other for
        any indirect, special or consequential damages, including loss of
        business, suffered by it from whatever cause.

        In the event that due to the negligence or willful misconduct of
        Landlord or Landlord's agents or employees, if there is any interruption
        in utilities being supplied to the Premises and if as a result of such
        interruption, Tenant is prevented from using all or any material portion
        of the Premises for more than three (3) business days after notice
        thereof from Tenant to Landlord, than from and after the end of such
        3-business day period until the Premises (or such portion) is rendered
        usable, Annual Fixed Rent and additional charges for Operating Expenses
        allocable to the Premises or a just and proportionate part thereof shall
        be abated.

13.4    NOTICE TO MORTGAGEE AND GROUND LESSOR. After receiving notice (which
        notice contains an address for such holder or ground lessor from
        Landlord) that any person, firm or other entity holds a mortgage which
        includes the Premises as part of the mortgaged premises, or that is the
        ground lessor under a lease with Landlord, as ground lessee, which
        includes the Premises as part of the demised premises, no default or
        termination notice from Tenant to Landlord shall be effective unless and
        until a copy of the same is given to such holder or ground lessor, and
        the curing of any of Landlord's defaults by such holder or ground lessor
        shall be treated as performance by Landlord. For the purposes of this
        Section 13.4, Section 13.5 or Section 13.14, the term "mortgage"
        includes a mortgage on a leasehold interest of Landlord (but not one on
        Tenant's leasehold interest).

        The Tenant agrees that, in the event of foreclosure of any such mortgage
        or deed of trust to which this Lease is subordinate (or deed or
        assignment in lieu of foreclosure thereof), at the election of the
        holder, provided such holder has agreed or does agree to recognize
        Tenant's interest hereunder and not to disturb Tenant's occupancy of the
        Premises, the Tenant shall attorn to such holder (and its successors and
        assigns) as the successor holder of the Landlord's interest hereunder in
        which case, subject to any applicable terms and provisions of any
        written agreement between Tenant and such holder, this Lease shall
        continue in effect all as if it had been a lease entered into directly
        between Tenant and such holder (and its successors and assigns). The
        foregoing shall be self-operative; however, the Tenant agrees, upon
        receipt of written request so to do, to execute such instruments, if
        any, as may reasonably be required in order to give effect to the
        foregoing.

13.5    ASSIGNMENT OF RENTS. With reference to any assignment by Landlord of
        Landlord's interest in this Lease, or the rents payable hereunder,
        conditional in

                                      -49-


        nature or otherwise, which assignment is made to the holder of a
        mortgage or ground lease on property which includes the Premises. Tenant
        agrees:

        (i)     that the execution thereof by Landlord, and the acceptance
                thereof by the holder of such mortgage, or the ground lessor,
                shall never be treated as an assumption by such holder or ground
                lessor of any of the obligations of Landlord hereunder, unless
                such holder or ground lessor shall, by notice sent to Tenant,
                specifically otherwise elect; and

        (ii)    that, except as aforesaid, such holder or ground lessor shall be
                treated as having assumed Landlord's obligations hereunder only
                upon foreclosure of such holder's mortgage or the taking of
                possession of the Premises, or in the case of a ground lessor,
                the assumption of Landlord's position hereunder by such ground
                lessor. In no event shall the acquisition of title to the
                Building or Lot or any part thereof and the land on which the
                same is located by a purchaser which, simultaneously therewith,
                leases the same back to the seller thereof, be treated as an
                assumption by operation of law or otherwise of Landlord's
                obligations hereunder, but Tenant shall look solely to such
                seller-lessee, and its successors from time to time in title,
                for performance of Landlord's obligations hereunder. In any such
                event, this Lease shall be subject and subordinate to the lease
                to such seller, provided that such Seller executes, acknowledges
                and delivers to Tenant a commercially reasonable non-disturbance
                and attornment agreement reasonably concurrently with such
                sale-leaseback. For all purposes such seller-lessee, and its
                successors in title, shall be the Landlord hereunder unless and
                until Landlord's position shall have been assumed by such
                purchaser-lessor.

13.6    MECHANICS LIENS. Tenant agrees promptly to discharge of record (either
        by payment or by the filing of the necessary bond, or otherwise) any
        mechanics', materialmen's or other lien against the Premises and/or
        Landlord's interest therein, which liens may arise out of any payment
        due for, or purported to be due for, any labor, services, materials,
        supplies or equipment alleged to have been furnished to or for Tenant
        in, upon or about the Premises.

13.7    NO BROKERAGE. Each of Landlord and Tenant warrants and represents that
        it has not dealt with any broker, in connection with the consummation of
        this Lease, and in the event any claim is made against the other party
        relative to dealings with brokers other than any broker named in Section
        1.2, the warranting party shall defend the claim with counsel reasonably
        approved by the other party and save harmless and indemnify the other
        party on account of loss, cost or damage which may arise by reason of
        any such claim. Landlord is not responsible for any fee due to Leggatt
        McCall.

                                      -50-


13.8    INVALIDITY OF PARTICULAR PROVISIONS. If any term or provision of this
        Lease or the application thereof to any person or circumstance shall, to
        any extent, be invalid or unenforceable, the remainder of this Lease, or
        the application of such term or provision to persons or circumstances
        other than those as to which it is held invalid or unenforceable, shall
        not be affected thereby, and each term and provision of this Lease shall
        be valid and enforceable to the fullest extend permitted by law.

13.9    PROVISIONS BINDING, ETC. Except as herein otherwise provided, the terms
        hereof shall be binding upon and shall inure to the benefit of the
        successors and assigns, respectively, of Landlord and Tenant and, if
        Tenant shall be an individual, upon and to his heirs, executors,
        administrators, successors and assigns. If two or more persons are named
        as Tenant herein, each of such persons shall be jointly and severally
        liable for the obligations of the Tenant hereunder, and landlord may
        proceed against any one without first having commenced proceedings
        against any other of them. The reference contained to successors and
        assigns of Tenant is not intended to constitute a consent to assignment
        by Tenant, but has reference only to those instances in which Landlord
        may later give consent to a particular assignment as required by those
        provisions of Article V hereof.

13.10   RECORDING. Tenant agrees not to record the within Lease, but each party
        hereto agrees, on the request of the other, to execute a so-called
        notice of lease in form recordable and complying with applicable law and
        reasonably satisfactory to Landlord's and Tenant's attorneys. (The form
        annexed hereto as Exhibit G is so satisfactory). In no event shall such
        document set forth the rent or other charges payable by Tenant under
        this Lease, and any such document shall expressly state that it is
        executed pursuant to the provisions contained in this Lease and is not
        intended to vary the terms and conditions of this Lease.

13.11   NOTICES. Whenever, by the terms of this Lease, notice shall or may be
        given either to Landlord or to Tenant, such notice shall be in writing
        and shall be delivered in hand with a written acknowledgment of receipt
        or sent by registered or certified mail, postage prepaid or delivered by
        recognized overnight or same day courier or by telecopy provided such
        notice concurrently sent by mail or overnight service:

                If intended for Landlord, addressed to landlord
                at the address set forth in Section 1.2 of this
                Lease (or to such other address or addresses as
                may from time to time hereafter be designated by
                Landlord by like notice). Fax No.: (781)
                769-2250.

                If intended for Tenant, addressed to Tenant at
                the address set forth in Section 1.2 of this
                Lease prior to Tenant's occupancy of the
                Premises and thereafter addressed to Tenant at
                the Premises, (or to such other

                                      -51-


                address or addresses as may from time to time
                hereafter be designated by Tenant by like
                notice). Fax No.: (617) 241-8032

        All such notices shall be effective when delivered in hand, or on the
        earlier of receipt or refusal.

13.12   WHEN LEASE BECOMES BINDING. Employees or agents of Landlord have no
        authority to make or agree to make a lease or any other agreement or
        undertaking in connection herewith. The submission of this document for
        examination and negotiation does not constitute an offer to lease, or a
        reservation of, or option for, the Premises, and this document shall
        become effective and binding only upon the execution and delivery hereof
        by both Landlord and Tenant. All negotiations, considerations,
        representations and understandings between Landlord and Tenant are
        incorporated herein and may be modified or altered only by written
        agreement between Landlord and Tenant, and no act or omission of any
        employee or agent of Landlord shall alter, change or modify any of the
        provisions hereof.

13.13   PARAGRAPH HEADINGS. The paragraph headings throughout this instrument
        are for convenience and reference only, and the words contained therein
        shall in no way be held to explain, modify, amplify or aid in the
        interpretation, construction or meaning of the provisions of this Lease.

13.14   RIGHTS OF MORTGAGEE/GROUND LEASE. It is understood and agreed that the
        rights and interests of Tenant under this Lease shall be subject and
        subordinate to any mortgages or deeds of trust that may hereafter be
        placed upon the Building and/or the Lot, and/or any part of the
        foregoing, and to any and all advances to be made thereunder, and to the
        interest thereon, and all renewals, modifications, replacements and
        extensions thereof, if the mortgagee or trustee named in said mortgages
        or deeds of trust shall elect by notice delivered to Tenant to subject
        and subordinate the rights and interest of Tenant under this lease to
        the lien of its mortgage or deed of trust; it is further agreed that any
        mortgagee or trustee may elect to give the rights of interest of Tenant
        under this Lease priority over the lien of its mortgage or deed of
        trust. In the event of either such election, and upon notification by
        such mortgagee or trustee to Tenant to that effect, the rights and
        interest of Tenant under this Lease shall be deemed to be subordinate
        to, or to have priority over, as the case may be, the lien of said
        mortgage or deed of trust, whether this Lease is dated prior to or
        subsequent to the date of said mortgage or deed of trust. Tenant shall
        execute and deliver whatever instruments reasonably may be required for
        such purposes. It shall be a condition to any subordination of this
        Lease to any mortgage or deed of trust or ground lease encumbering the
        Building or Lot that Landlord shall obtain for Tenant an agreement (a
        "Non-Disturbance Agreement") from the holder thereof (each such party, a
        "Holder") which provides that (i) if any such Holder forecloses or takes
        a deed in lieu of foreclosure or otherwise exercises its rights under
        its mortgage or deed of trust or

                                      -52-


        ground lease or (ii) if such Holder otherwise acquires Landlord's
        interest in this Lease, such Holder shall recognize Tenant's rights
        under this Lease, shall not disturb Tenant's occupancy of this Premise
        under this Lease and, subject to the terms and conditions of such
        agreement, shall assume Landlord's obligations under this Lease.

        This Lease is subject and subordinate to a certain Ground Lease (the
        "Ground Lease") between Massachusetts Turnpike Authority as groundlessor
        ("Groundlessor") and Landlord as groundlessee, a copy of which has been
        provided by Landlord to Tenant (the "Ground Lease"). The Ground Lease
        may be amended from time to time by Landlord, and this Lease shall be
        subject and subordinate to the Ground Lease as so amended provided that
        any such amendment does not materially adversely affect the rights and
        obligations of the Tenant hereunder. As soon as reasonably possible,
        Landlord shall obtain from the Groundlessor a subtenant non-disturbance
        agreement in the form annexed to the Ground Lease (a copy of which is
        annexed as Exhibit H hereto) for the benefit of Tenant and Tenant agrees
        to execute and deliver the same (for convenience purposes Tenant may be
        required to execute and deliver the same prior to its execution and
        delivery by Groundlessor). If Landlord does not obtain such
        non-disturbance agreement within sixty (60) days after the date of this
        Lease, then Tenant may terminate this Lease by notice to such effect to
        Landlord and if Tenant so exercises such right of termination and
        Landlord does not deliver such non-disturbance agreement within ten days
        thereafter, then this Lease shall terminate without further recourse to
        the parties. Wherever any consent of Groundlessor is required in
        connection with any consents to be made by Landlord hereunder, the
        failure of Groundlessor to give such consent shall be deemed to be a
        reason for the withholding of such consent by Landlord.

13.15   STATUS REPORT. Recognizing that both parties may find it necessary to
        establish to third parties, such as accountants, banks, mortgagees or
        the like, the then current status of performance hereunder, either
        party, on the request of the other made from time to time, will promptly
        furnish to Landlord, or the holder of any mortgage encumbering the
        Premises, or to Tenant, as the case may be, a statement of the status of
        any factual matter pertaining to this Lease, including, without
        limitation, acknowledgments to the best of such party's knowledge, that
        (or the extent to which) each party is in compliance with its
        obligations under the terms of this Lease.

13.16   TENANT'S FINANCIAL CONDITION. Upon Landlord's demand, which may be made
        only if required by lender or prospective lender to Landlord, and then
        no more often than once per year, Tenant shall furnish to Landlord, at
        Tenant's sole cost and expense, then current financial statements of
        Tenant and its guarantor (if any), audited (if audited statements have
        been recently prepared on behalf of Tenant or such guarantor) or
        otherwise certified as being true and correct by the chief financial
        officer of Tenant or such guarantor, as the case may be. So long as

                                      -53-


        Tenant is a so-called public company, then Landlord waives the
        provisions of this Section 13.16.

13.17   NO PARTNERSHIP. The relationship of the parties hereto is that of
        landlord and tenant, and partnership, joint venture or participation is
        hereby created.

13.18.  HOLDING OVER. Any holding over by Tenant after the expiration of the
        Lease Term shall be treated as a tenancy at sufferance at 1.5 times the
        Fixed Rent and 10% of the additional rent herein provided to be paid
        during the last twelve (12) months of the Lease Term (prorated on a
        daily basis) and shall otherwise be on the terms and conditions set
        forth in this Lease, as far as applicable.

13.19   NON-SUBROGATION. Insofar as, and to the extent that, the following
        prevision may be effective without invalidating or making it impossible
        to secure insurance coverage obtainable from responsible insurance
        companies doing business in the locality in which the premises are
        located (even though extra premium may result therefrom): Landlord and
        Tenant mutually agree that, with respect to any hazard which is covered
        by insurance then being carried by them, or which could have been
        covered by a so-called All Risk policy, the one carrying (or who could
        have carried) such insurance and suffering such loss releases the other
        of and from any and all claims with respect to such loss; and they
        further mutually agree that their respective insurance companies shall
        have no right of subrogation against the other on account thereof.

13.20   GOVERNING LAW. This Lease shall be governed exclusively by the
        provisions hereof and by the laws of the Commonwealth of Massachusetts
        as the same may from time to time exist.

13.21   DEFINITION OF ADDITIONAL RENT. Without limiting any other provision of
        this Lease, it is expressly understood and agreed that Tenant's
        participation in Taxes, Operating Expenses, and all other charges which
        Tenant is required to pay hereunder, together with all interest and
        penalties that may accrue thereon, shall be deemed to be Additional
        Rent, and in the event of non-payment thereof by Tenant, Landlord shall
        have all of the rights and remedies with respect thereto as would accrue
        to Landlord for non-payment of Fixed Rent. Tenant's failure to object to
        any statement, invoice or billing rendered by Landlord within a period
        of three hundred sixty five (365) days after Tenant's receipt thereof
        shall constitute Tenant' acquiescence with respect thereto and shall
        render such statements, invoice or billing on account between landlord
        and Tenant.

13.22   EXTENSION OPTION. Upon and subject to the following terms and
        conditions, Tenant shall have the right to extend the term of this Lease
        for two consecutive periods of five (5) years each provided that (i)
        Tenant itself occupies at least 50% of the Premises, and (ii) it shall
        be a condition to the extension for the second such period that Tenant
        shall have timely and properly extended the term of this Lease

                                      -54-


        for the first such period, and (iii) at the time of its exercise of any
        such extension and at the commencement of such extension period Tenant
        shall not be in default under this Lease beyond the expiration of
        applicable notice and cure periods, and (iv) Tenant shall give notice of
        such extension at least twelve (12) months prior to the then expiration
        of the term of this Lease. Provided that the Tenant has timely and
        properly complied with all the foregoing conditions, then, without the
        necessity of any further action, the term of this Lease shall be
        extended for such five-year extension period on all the terms and
        conditions hereof except that there shall be no further rights of
        extension after Tenant extends for the second five-year period and for
        and with respect to each such extension period annual Fixed Rent shall
        be equal to the greater of (i) the annual Fixed Rent immediately in
        effect prior to such extension or (ii) an amount an equal to 87.5% of
        the then Fair Market Rental Value of the Premises.

        "Fair Market Rental Value" shall be determined based on the use of the
        Premises as first-class professional space utilizing properties of a
        similar character in comparable first-class office buildings within the
        City of Boston. At least sixty (60) days prior to the last day upon
        which the Tenant may give notice exercising such option Tenant may
        request that Landlord designate the annual Fixed Rent payable in respect
        of the extension period and Landlord shall designate such rent payable
        during the extended term in question within thirty days thereafter but
        Landlord shall not be required to make such designation more than
        seventeen (17) months prior to the commencement of the extended term in
        question. If Tenant disagrees with Landlord's designation then Tenant
        shall have the right in its notice exercising such extension to make a
        request of Landlord for a broker determination (the "Broker
        Determination") of the Fair Market Rental Value for such extended term
        which Broker Determination shall be made in the manner set forth in
        Exhibit D. If Tenant fails timely to request the Broker Determination
        then the term of the Lease shall be extended for the applicable extended
        term and the Fair Market Rent Value for the Premises for such extended
        term shall be equal to that designated by Landlord.

13.23   RIGHT OF FIRST OFFER. If at any time during the term of this Lease while
        the Tenant is not in default under this lease beyond applicable notice
        and/or cure periods and while Tenant itself occupies at least that
        portion of the Premises equivalent to at least 3 floors in either Wing
        One or Wing Two of the Building, additional space of the Building
        devoted to an Office Use shall become available for leasing (this right
        shall not apply to the initial leasing thereof but shall be a so-called
        second generation right), Landlord shall notify Tenant thereof setting
        forth in such notice the terms and conditions upon which Landlord shall
        be willing to lease such space to Tenant and by notice from Tenant to
        Landlord given within ten (10) business days thereafter Tenant may elect
        one of the following:

        (i)     it may accept such offer in which event Landlord and Tenant
                shall enter into an amendment to this Lease adding the
                additional space to the

                                      -55-


                Premises demised under this Lease in accordance with the terms
                and conditions offered by Landlord and in the case of space so
                offered which is no more than 5,000 square feet of rentable area
                the offer shall be made for a term which is coterminous with the
                term of this Lease and if more than 5,000 square feet then for a
                term which shall be the longer of the then term remaining under
                this Lease or five years; or

        (ii)    it may reject such offer (and Tenant's failure to respond within
                such ten (10) business day period shall be deemed to be a
                rejection of such offer) in which case Landlord may lease such
                offered space upon such terms and conditions as Landlord shall
                determine; or

        (iii)   it may give to Landlord a counteroffer setting forth the terms
                and conditions upon which Tenant is willing to accept such the
                leasing of such Space and if Tenant makes a counteroffer then
                Landlord may elect to (i) accept such counteroffer in which case
                Landlord and Tenant shall enter into an amendment to this Lease
                adding the additional space to this lease in accordance with the
                terms of such counteroffer or (ii) it may elect to lease such
                space to any third party but upon terms and conditions which are
                not substantially more advantageous to such third party than
                those contained in the Tenant's counteroffer. If the space being
                offered is the V&C premises consisting of approximately 40,000
                square feet of rentable area then Tenant may elect not to lease
                all of the V&C premises but must lease the same in at least
                whole floor increments starting with the top-most floor and
                working down, and in its offer to Tenant, Landlord shall set
                forth the Annual Fixed Rent which Landlord is prepared to accept
                for a leasing of less than all of the offered V&C premises.

                If at the time that Landlord makes an offer to Tenant to lease
                to Tenant any additional space of more than 5,000 square feet
                there is less than five (5) years remaining in the term of this
                Lease, then as a condition to Tenant's acceptance of such offer
                or making a counteroffer, Tenant must exercise any remaining
                option so that there shall be at least five (5) years remaining
                in the term of this Lease and if there are insufficient options
                then Tenant shall have no right to lease the offered space and
                Landlord need not make such offer

                                      -56-


        WITNESS the execution hereof, under seal, in any number of counterparts,
each of which counterparts shall be deemed an original for all purposes, as of
the day and year first above written.

                                        GATEWAY DEVELOPERS LLC
                                        By:   Cornerstone 1999, LLC, its Manager


                                        By:
                                              ------------------------------
                                              Its Manager
                                              Hereunto duly authorized

                                                  LANDLORD


                                        KEANE, INC.


                                        By:
                                              ------------------------------
                                              Its
                                              Hereunto duly authorized

                                                  TENANT

                                      -57-



                                    EXHIBIT D

                BROKER DETERMINATION OF FAIR MARKET RENTAL VALUE

        DEFINITION OF FAIR MARKET RENTAL VALUE:

        "Fair Market Rental Value" shall be computed as of the date in question,
and shall be the then current annual rental value, including provisions for
subsequent increases and other adjustments, of the Premises in their then
condition, upon and subject to the terms and conditions of this Lease, except
for annual Fixed Rent. In determining Fair Market Rental Value, all relevant
factors shall be taken into account and given effect (the parties agreeing that
any property outside the City of Boston is irrelevant for these purposes).
Tenant's notice shall specify whether Tenant requests a quotation of Fair Market
Rental Value for the Premises "as-is," and/or a quotation of Fair Market Rental
Value including a tenant improvement allowance. If Tenant requests that
Landlord's quotation include a tenant improvement allowance Landlord's quotation
shall include a tenant improvement allowance, in an amount (if any) which is
consistent with Landlord's then current practices and not less than 75% of the
then "market".

        Where in the Lease to which this Exhibit is attached provision is made
for a Broker Determination of Fair Market Rental Value, the following procedures
and requirements shall apply:

        1.      TENANT'S REQUEST. Tenant shall send a notice to Landlord in
                accordance with the applicable section of the Lease, requesting
                a Broker Determination of the Fair Market Rental Value, which
                notice to be effective must (i) make explicit reference to the
                Lease and to the specific section of the Lease pursuant to which
                said request is being made, (ii) include the name of a broker
                selected by Tenant to act for Tenant, which broker shall be
                affiliated with a major Boston commercial real estate brokerage
                firm selected by Tenant and which broker shall have at least ten
                (10) years experience dealing in properties of a nature and type
                generally similar to the Building located in the City of Boston,
                and (iii) explicitly state that Landlord is required to notify
                Tenant within thirty (30) days of an additional broker selected
                by Landlord.

        2.      LANDLORD'S RESPONSE. Within thirty (30) days after Landlord's
                receipt of Tenant's notice requesting the Broker Determination
                and stating the name of the broker selected by Tenant, Landlord
                shall give written notice to Tenant of Landlord's selection of a
                broker having at least the affiliation and experience referred
                to above.

                                       D-1


        3.      SELECTION OF THIRD BROKER. Within ten (10) days thereafter the
                two (2) brokers so selected shall select a third such broker
                also having at least the affiliation and experience referred to
                above.

        4.      RENTAL VALUE DETERMINATION. Within thirty (30) days after the
                selection of the third broker, the three (3) brokers so
                selected, by majority opinion, shall make a determination of the
                Fair Market Rental Value of the Premises for the Extended Term
                or the Expansion Space, as the case may be. Such Fair Market
                Rental Value determination (x) may include provision for annual
                increases in rent if so determined, (y) shall take into account
                the as-is condition of the Premises, and (z) shall take account
                of, and be expressed in relation to, the payment in respect of
                taxes and operating costs and provisions for paying for
                so-called tenant electricity as contained in the Lease. The
                brokers shall advise Landlord and Tenant in writing by the
                expiration of said thirty (30) day period of the Fair Market
                Rental Value as so determined.

        5.      RESOLUTION OF BROKER DEADLOCK. If the Brokers are unable to
                agree at least by majority on a determination of Fair Market
                Rental Value, then the brokers shall send a notice to Landlord
                and Tenant by the end of the thirty (30) day period for making
                said determination setting forth their individual determinations
                of Fair Market Rental Value, and the highest such determination
                and the lowest such determination shall be disregarded and the
                remaining determination shall be deemed to be the Fair Market
                Rental Value.

        6.      COSTS. Each party shall pay the costs and expenses of the broker
                selected by it and each shall pay one half (1/2) of the costs
                and expenses of the third broker.

        7.      FAILURE TO SELECT BROKER OR FAILURE OF BROKER TO SERVE. If
                Tenant shall have requested a Broker Determination and Landlord
                shall not have designated a broker within the time period
                provided therefor above and such failure shall continue for more
                than ten (10) days after notice thereof, then Tenant's broker
                shall alone make the determination of the Fair Market Rental
                Value in writing to Landlord and Tenant within thirty (30) days
                after the expiration of Landlord's right to designate a broker
                hereunder. If Tenant and Landlord have both designated brokers
                but the two brokers so designated do not, within a period of ten
                (10) days after the appointment of the second broker, agree upon
                and designate the third broker willing so to act, the Tenant,
                the Landlord or either broker previously designated may request
                the Greater Boston Real Estate Board, Inc. to designate the
                third broker willing so to act and a broker so appointed shall,
                for all purposes, have the same standing and powers as though he
                had been seasonably appointed by the brokers first appointed. In
                case of the inability or refusal

                                       D-2


                to serve of any person designated as a broker, or in case any
                broker for any reason ceases to be such, a broker to fill such
                vacancy shall be appointed by the Tenant, the Landlord, the
                brokers first appointed or the said Greater Boston Real Estate
                Board, Inc., as the case may be, whichever made the original
                appointment, or if the person who made the original appointment
                fails to fill such vacancy, upon application of any broker who
                continues to act or by the Landlord or Tenant such vacancy may
                be filled by the said Greater Boston Real Estate Board, Inc.,
                and any broker so appointed to fill such vacancy shall have the
                same standing and powers as though originally appointed.

                                       D-3



                                    EXHIBIT E

        Parking shall be provided on the following floors of the Garage:

        P-1: The entire floor will be for Tenant and V&C for reserved 24/7
spaces. If all of Tenant's 75 reserved 24/7 spaces cannot be accommodated on P-1
together with all of the V&C's reserved 24/7 spaces then Tenant shall have a pro
rata share thereof based on square footage and at least 25 of Tenant's spaces
shall be next to or very near the Wing Two elevator serving the Tenant's
Premises in Wing Two.

        P-2: Any 24/7 reserve not accommodated on P-1 will be accommodated on
P-2 and at least five visitor spaces will be placed next to or very near the
elevators for Wing One.

        P-2 and P-3: The remaining allocation of spaces shall be identified
either as Tenant or V&C spaces and numbered spaces located under each tenant's
respective wings as closely as reasonably possible.

        The allocation of compact to normal size spaces should be the same for
both Tenant and V&C for all spaces on all parking levels and the goal is to have
no more than 30% of all spaces as compact spaces but in any case there shall be
no more than 40% of all spaces as compact spaces.

        Nominal size spaces are being designed to be 8 1/2 feet by 18 feet and
compact size spaces 7 1/2 feet by 16 feet. So long as Tenant leases more than
50% of the office space of the Building, any change in the management company
for the Garage (after the initial manager) shall require Tenant's prior written
consent, which Tenant shall not unreasonably withhold or delay.

                                       E-1


                                    EXHIBIT F

        The air conditioning system shall be designed to provide 20 CFM per
person at one person/150 square feet; for cooling: 78 degrees dry bulb inside at
88 degrees Fahrenheit dry bulb outside; and for heating: 72 degrees Fahrenheit
inside at 9 degrees outside. Landlord represents and warrants that it has been
informed by its engineer that the foregoing standard complies with all
applicable codes.

                                       F-1

EX-21

EXHIBIT 21

SUBSIDIARIES

THE FOLLOWING IS A LIST OF THE COMPANY'S SUBSIDIARIES:

                                                          PERCENTAGE OF VOTING
                                                          SECURITIES OWNED BY
NAME                            ORGANIZED UNDER LAWS OF   KEANE, INC.
- -----------------------------   -----------------------   ---------------------

Dataskills, Inc.                Massachusetts             100%
Keane Federal Systems, Inc.     Delaware                  100%
Keane Canada, Inc.              Canada                    100%
169963 Canada, Inc.             Canada                    100%
Keane Securities Corporation    Massachusetts             100%
Keane UK Ltd.                   United Kingdom            100%
Keane Ltd.                      United Kingdom            100%
Keane Tech, LLC                 Delaware                  100%
Keane Business Trust            Massachusetts             100%
Keane Care, Inc.                Washington                100%
Keane Services Company          California                100%
Keane India Holdings, Inc.      Delaware                  100%
Keane Mauritius Ltd. One        Mauritius                 100%
Keane Mauritius Ltd. Two        Mauritius                 100%
Keane India Ltd.                India                     100%

EX-23.1

EXHIBIT 23.1

CONSENT OF INDEPENDENT AUDITORS

We consent to the incorporation by reference in the Registration Statements
(Forms S-8 Nos. 33-00175, 33-16187, 33-00176, 2-76657, 2-91931, 33-16188,
33-38361, 2-40012, 2-87193, 2-61721, 2-89418, 33-38360, 33-38361, 33-52760,
33-52758, 33-52756, 33-52762, 333-16113, 333-56119, 333-56752, 333-62759,
333-68566, and 333-100436 and Form S-3 No. 333-46329) of Keane, Inc. and in the
related Prospectuses of our report dated February 10, 2003, except for Note Q,
as to which the date is February 28, 2003, with respect to the consolidated
financial statements of Keane, Inc. included in this Annual Report (Form 10-K)
for the year ended December 31, 2002.


                                                  /s/ Ernst and Young LLP

BOSTON, MASSACHUSETTS
March 21, 2003

EX-99.1

                                                                   EXHIBIT 99.1



                CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

                             AS ADOPTED PURSUANT TO

                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

     In connection with the annual report on Form 10-K of Keane, Inc. (the
"Company) for the period ended December 31, 2002 as filed with the Securities
and Exchange Commission on the date hereof (the "Report"), the undersigned,
Brian T. Keane, President and Chief Executive Officer of the Company, hereby
certifies, pursuant to 18 U.S.C. Section 1350, that:

     (1) the Report fully complies with the requirements of Section 13(a) or
         15(d) of the Securities Exchange Act of 1934; and

     (2) the information contained in the Report fairly presents, in all
         material respects, the financial condition and results of operation
         of the Company.



Dated:   March 21, 2003                    /s/ Brian T. Keane
                                           -------------------------------------
                                           Brian T. Keane
                                           President and Chief Executive Officer









                                       1

EX-99.2

                                                                   EXHIBIT 99.2



                CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

                             AS ADOPTED PURSUANT TO

                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

     In connection with the annual report on Form 10-K of Keane, Inc. (the
"Company) for the period ended December 31, 2002 as filed with the Securities
and Exchange Commission on the date hereof (the "Report"), the undersigned, John
J. Leahy, Senior Vice President - Finance and Chief Financial Officer of the
Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, that:

     (1) the Report fully complies with the requirements of Section 13(a) or
         15(d) of the Securities Exchange Act of 1934; and

     (2) the information contained in the Report fairly presents, in all
         material respects, the financial condition and results of operations
         of the Company.



Dated:   March 21, 2003                         /s/ John J. Leahy
                                                --------------------------------
                                                John J. Leahy
                                                Senior Vice President and
                                                Chief Financial Officer







                                       1