Document:

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                                                                    Exhibit 10.9
                                                                    ------------

                     AMENDED AND RESTATED CREDIT AGREEMENT

          AMENDED AND RESTATED CREDIT AGREEMENT dated as of April 25, 2000 among
ARTHUR D. LITTLE, INC., a Massachusetts corporation (a "Borrower" or "ADL"),
                                                        --------      ---
ARTHUR D. LITTLE INTERNATIONAL, INC., a Massachusetts corporation (a "Borrower",
                                                                      --------
and together with ADL, the "Borrowers"), the banks, financial institutions and
                            ---------
other institutional lenders (the "Initial Lenders") listed on the signature
                                  ---------------
pages hereof, and CITIBANK, N.A. ("Citibank"), as agent (together with any
                                   --------
successor appointed pursuant to Section 8.06, the "Agent") for the Lenders (as
                                                   -----
hereinafter defined).

PRELIMINARY STATEMENTS:

          (1) The Borrowers entered into a Credit Agreement dated as of June 22,
1998 (the "Existing Credit Agreement") with the Initial Lenders (as defined
           -------------------------
therein) and the Agent.  Pursuant to the Existing Credit Agreement, the Initial
Lenders made Advances to the Borrowers and, as at the date of this Agreement,
Advances in the aggregate amount of $29,000,000 are outstanding.

          (2) The Initial Lenders and the Borrowers have agreed to amend and
restate the Existing Credit Agreement in order to (i) waive certain defaults
under the Existing Credit Agreement and (ii) provide for the repayment of
Advances as set forth herein.

          NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto hereby agree that,
subject to the satisfaction of the conditions set forth in Section 3.02, the
Existing Credit Agreement is amended and restated in its entirety to read as
follows:

                                   ARTICLE I

                       DEFINITIONS AND ACCOUNTING TERMS

          SECTION 1.01.  Certain Defined Terms.  As used in this Agreement, the
                         ---------------------
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):

          "ADL" has the meaning specified in the recital of parties to this
           ---
Agreement.

          "ADL Guaranty" has the meaning specified in Section 6.01.
           ------------

          "Advance" means an advance by a Lender to a Borrower as part of a
           -------
     Borrowing and refers to a Base Rate Advance or a Eurocurrency Rate Advance
     (each of which shall be a "Type" of Advance). The total amount of Advances
                                ----
     available to be made to the Borrowers has been made as of the date hereof
     pursuant to the Existing Credit Agreement.

          "Affiliate" means, as to any Person, any other Person that, directly
           ---------
     or indirectly, controls, is controlled by or is under common control with
     such Person or is a director or

                                       1
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                                       2

     officer of such Person. For purposes of this definition, the term "control"
     (including the terms "controlling", "controlled by" and "under common
     control with") of a Person means the possession, direct or indirect, of the
     power to vote 5% or more of the Voting Stock of such Person or to direct or
     cause the direction of the management and policies of such Person, whether
     through the ownership of Voting Stock, by contract or otherwise.

          "Agent" has the meaning specified in the recital of parties to this
           -----
     Agreement.

          "Agent's Account" means (a) the account of the Agent maintained by the
           ---------------
     Agent at Citibank at its office at 399 Park Avenue, New York, New York
     10043, Account No. 3685-2248, Attention:  Global Loans Support Center, 2
     Penns Way, Suite 200, New Castle, DE 19720, and (b) such other account of
     the Agent as is designated in writing from time to time by the Agent to the
     Borrowers and the Lenders for such purpose.

          "Applicable Lending Office" means, with respect to each Lender, such
           -------------------------
     Lender's Domestic Lending Office in the case of a Base Rate Advance and
     such Lender's Eurocurrency Lending Office in the case of a Eurocurrency
     Rate Advance.

          "Applicable Margin" means (i) as of any date of determination prior to
           -----------------
     the Effective Date, the applicable percentage per annum indicated below
     which corresponds to the Debt to EBITDA Ratio indicated below:

<TABLE>
<CAPTION>
===============================================================================

                                                  Applicable Margin
                                       ----------------------------------------
            Debt to EBITDA Ratio           Eurocurrency Rate         Base Rate
                                               Advances              Advances
-------------------------------------------------------------------------------
<S>                                    <C>                             <C>
  Less than or equal to 1.00 to 1.00              .275%                .00%
-------------------------------------------------------------------------------
  Greater than 1.00 to 1.00, but
  less than or equal to 2.25 to 1.00              .375%                .00%
-------------------------------------------------------------------------------
  Greater than 2.25 to 1.00                        .50%                .00%
===============================================================================
</TABLE>

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     and (ii) as of any date of determination on or after the Effective Date,
     the applicable percentage per annum indicated below for each period
     indicated below:

--------------------------------------------------------------------------------
               Period                                    Applicable Margin
--------------------------------------------------------------------------------
  Effective Date to                                            3.00%
  December 31, 2000
--------------------------------------------------------------------------------
  January 1, 2001 to                                           3.50%
  January 31, 2001
--------------------------------------------------------------------------------
  February 1, 2001 to                                          4.00%
  February 28, 2001
--------------------------------------------------------------------------------
  March 1, 2001 to                                             4.50%
  March 31, 2001
--------------------------------------------------------------------------------
  April 1, 2001 to                                             5.00%
  April 30, 2001
--------------------------------------------------------------------------------
  May 1, 2001 and thereafter                                   5.50%

--------------------------------------------------------------------------------

          The Applicable Margin for each Eurocurrency Rate Advance made prior to
     the Effective Date shall be determined by reference to the Debt to EBITDA
     Ratio in effect on the first day of each Interest Period for such Advance.

          "Applicable Telerate Page" means page 3750 of the Dow Jones Telerate
           ------------------------
     Service or such other page that may replace any such page from time to time
     on such service.

          "Assignment and Acceptance" means an assignment and acceptance entered
           -------------------------
     into by a Lender and an Eligible Assignee, and accepted by the Agent, in
     substantially the form of Exhibit B hereto.

          "Base Rate" means a fluctuating interest rate per annum in effect from
           ---------
     time to time, which rate per annum shall at all times be equal to the
     highest of:

               (a) the rate of interest announced publicly by Citibank in New
          York, New York, from time to time, as Citibank's base rate;

               (b) the sum (adjusted to the nearest 1/16 of 1% or, if there is
          no nearest 1/16 of 1% to the next higher 1/16 of 1%) of (i)  1/2 of 1%
          per annum, plus (ii) the rate obtained by dividing (A) the latest
                     ----
          three-week moving average of secondary market morning offering rates
          in the United States for three-month certificates of deposit of major
          United States money market banks, such three-week moving average
          (adjusted to the basis of a year of 360 days) being determined weekly
          on

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          each Monday (or, if such day is not a Business Day, on the next
          succeeding Business Day) for the three-week period ending on the
          previous Friday by Citibank on the basis of such rates reported by
          certificate of deposit dealers to and published by the Federal Reserve
          Bank of New York or, if such publication shall be suspended or
          terminated, on the basis of quotations for such rates received by
          Citibank from three New York certificate of deposit dealers of
          recognized standing selected by Citibank, by (B) a percentage equal to
          100% minus the average of the daily percentages specified during such
          three-week period by the Board of Governors of the Federal Reserve
          System (or any successor) for determining the maximum reserve
          requirement (including, but not limited to, any emergency,
          supplemental or other marginal reserve requirement) for Citibank with
          respect to liabilities consisting of or including (among other
          liabilities) three-month US Dollar non-personal time deposits in the
          United States, plus (iii) the average during such three-week period of
                         ----
          the annual assessment rates estimated by Citibank for determining the
          then current annual assessment payable by Citibank to the Federal
          Deposit Insurance Corporation (or any successor) for insuring US
          Dollar deposits of Citibank in the United States; and

               (c) 1/2 of one percent per annum above the Federal Funds Rate.

          "Base Rate Advance" means an Advance denominated in US Dollars that
           -----------------
     bears interest as provided in Section 2.04(a)(i).

          "Borrower" has the meaning specified in the introductory paragraph to
           --------
     this Agreement.

          "Borrowing" means a borrowing consisting of simultaneous Advances of
           ---------
     the same Type made by the Lenders pursuant to Section 2.01.  The total
     amount of Borrowings available to be made by the Borrowers have been made
     as of the date hereof pursuant to the Existing Credit Agreement.

          "Business Day" means a day of the year on which banks are not required
           ------------
     or authorized by law to close in Massachusetts or New York City and, if the
     applicable Business Day relates to any Eurocurrency Rate Advances, on which
     dealings are carried on in the London interbank market and banks are open
     for business in London and in the country of issue of the currency of such
     Eurocurrency Rate Advance.

          "Capitalized Leases" means all leases that have been or should be, in
           ------------------
     accordance with GAAP, recorded as capitalized leases.

          "Citibank" means Citibank, N.A.
           --------

          "Collateral Agency and Intercreditor Agreement" means the collateral
           ---------------------------------------------
     agency and intercreditor agreement dated as of the date of this Agreement
     among the Borrowers, the Agent on behalf of the Lenders and the Noteholders
     substantially in the form of Exhibit I hereto.

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                                       5

          "Collateral Agent" means Citicorp USA, Inc. or any other person
           ----------------
     appointed pursuant to section 5 of the Collateral Agency and Intercreditor
     Agreement.

          "Collateral Documents" means the Security Agreement and the Pledge
           --------------------
     Agreement.

          "Commitment", for each Lender, means the US Dollar amount set forth
           ----------
     opposite such Lender's name on the signature pages hereof or, if such
     Lender has entered into any Assignment and Acceptance, set forth for such
     Lender in the Register maintained by the Agent pursuant to Section 9.07(c),
     as such amount may be reduced pursuant to Section 2.03.

          "Confidential Information" means (i) information that any Borrower
           ------------------------
     furnishes to the Agent or any Lender which such Borrower in its reasonable
     judgment designates, prior to its receipt, as confidential, (ii) all
     financial information with respect to any Borrower or any of its
     Subsidiaries and (iii) all information obtained during any inspection of
     any Borrower by the Agent or any Lender that is designated by such Borrower
     as confidential, in each case excluding any such information that is or
     becomes generally available on a non-confidential basis to the public or
     that is or becomes available to the Agent or such Lender from a source
     other than the Borrowers.

          "Consolidated" refers to the consolidation of accounts in accordance
           ------------
     with GAAP.

          "Convert", "Conversion" and "Converted" each refers to a conversion of
           -------    ----------       ---------
     Advances of one Type into Advances of the other Type pursuant to Section
     2.05.

          "Debt" of any Person means, without duplication, (a) all indebtedness
           ----
     of such Person for borrowed money, (b) all Obligations of such Person for
     the deferred purchase price of property or services (other than (i) any
     obligations in connection with any deferred compensation plan for employees
     of such Person and (ii) any trade payable that is (x) in an amount of
     $10,000 or less or (y) not overdue by more than 60 days, in all cases
     incurred in the ordinary course of such Person's business), (c) all
     Obligations of such Person evidenced by notes, bonds, debentures or other
     similar instruments, (d) all Obligations of such Person created or arising
     under any conditional sale or other title retention agreement with respect
     to property acquired by such Person (even though the rights and remedies of
     the seller or lender under such agreement in the event of default are
     limited to repossession or sale of such property), (e) all Obligations of
     such Person as lessee under Capitalized Leases, (f) all Obligations,
     contingent or otherwise, of such Person in respect of acceptances, letters
     of credit or similar extensions of credit, (g) all Obligations of such
     Person in respect of Hedge Agreements, (h) all Debt of others referred to
     in clauses (a) through (g) above or clause (i) below guaranteed directly or
     indirectly in any manner by such Person, or in effect guaranteed directly
     or indirectly by such Person through an agreement (1) to pay or purchase
     such Debt or to advance or supply funds for the payment or purchase of such
     Debt, (2) to purchase, sell or lease (as lessee or lessor) property, or to
     purchase or sell services, primarily for the purpose of

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                                       6

     enabling the debtor to make payment of such Debt or to assure the holder of
     such Debt against loss, (3) to supply funds to or in any other manner
     invest in the debtor (including any agreement to pay for property or
     services irrespective of whether such property is received or such services
     are rendered) or (4) otherwise to assure a creditor against loss, and (i)
     all Debt referred to in clauses (a) through (h) above secured by (or for
     which the holder of such Debt has an existing right, contingent or
     otherwise, to be secured by) any Lien on property (including, without
     limitation, accounts and contract rights) owned by such Person, even though
     such Person has not assumed or become liable for the payment of such Debt.

          "Debt to EBITDA Ratio" means, as of any date of determination prior to
           --------------------
     the Effective Date, the ratio of (i) Consolidated Debt of ADL and its
     Subsidiaries as of such date to (ii) Consolidated EBITDA of ADL and its
     Subsidiaries for the four most recent fiscal quarters ended on or prior to
     such date.

          "Default" means any Event of Default or any event that would
           -------
     constitute an Event of Default but for the requirement that notice be given
     or time elapse or both.

          "DeNora" means DeNora Fuel Cells S.p.A, a corporation organized under
           ------
     the laws of Italy.

          "Domestic Lending Office" means, with respect to any Lender, the
           -----------------------
     office of such Lender specified as its "Domestic Lending Office" opposite
     its name on Schedule I hereto or in the Assignment and Acceptance pursuant
     to which it became a Lender, or such other office of such Lender as such
     Lender may from time to time specify to the Borrowers and the Agent.

          "Domestic Subsidiary" means any Subsidiary of ADL organized under the
           -------------------
     laws of the United States.

          "EBITDA" means, for any period, Net Income (or net loss) plus the sum
           ------                                                  ----
     of (a) interest expense, (b) income tax expense, (c) depreciation expense,
     (d) amortization expense and (e) any non-cash expense in respect of the
     sale of stock at a discount pursuant to Section 5.02(e)(v), in each case
     determined in accordance with GAAP for such period.

          "Effective Date" has the meaning specified in Section 3.02.
           --------------

          "Eligible Assignee" means (i) a Lender; (ii) an Affiliate of a Lender;
           -----------------
     (iii) a commercial bank organized under the laws of the United States, or
     any State thereof, and having total assets in excess of $250,000,000; (iv)
     a savings and loan association or savings bank organized under the laws of
     the United States, or any State thereof, and having total assets in excess
     of $250,000,000; (v) a commercial bank organized under the laws of any
     other country that is a member of the Organization for Economic Cooperation
     and Development or has concluded special lending arrangements with the
     International Monetary Fund associated with its General Arrangements to
     Borrow or of the Cayman

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                                       7

     Islands, or a political subdivision of any such country, and having total
     assets in excess of $250,000,000, so long as such bank is acting through a
     branch or agency located in the United States; (vi) the central bank of any
     country that is a member of the Organization for Economic Cooperation and
     Development; and (vii) any other Person approved by the Agent and the
     Borrowers, such approval not to be unreasonably withheld or delayed;
     provided, however, that neither Borrower nor an Affiliate of a Borrower
     --------  -------
     shall qualify as an Eligible Assignee.

          "Environmental Action" means any action, suit, written demand, demand
           --------------------
     letter, written claim, notice of non-compliance or violation, notice of
     liability, notice of potential liability, investigation, proceeding,
     consent order or consent agreement relating in any way to any Environmental
     Law, Environmental Permit or Hazardous Materials or arising from alleged
     injury or threat of injury to health, safety or the environment, including,
     without limitation, (a) by any governmental or regulatory authority for
     enforcement, cleanup, removal, response, remedial or other actions or
     damages and (b) by any governmental or regulatory authority or any third
     party for damages, contribution, indemnification, cost recovery,
     compensation or injunctive relief.

          "Environmental Law" means any federal, state, local or foreign
           -----------------
     statute, law, ordinance, rule, regulation, code, order, judgment, decree or
     judicial or agency interpretation, policy or guidance relating to pollution
     or protection of the environment, health, safety or natural resources,
     including, without limitation, those relating to the use, handling,
     transportation, treatment, storage, disposal, release or discharge of
     Hazardous Materials.

          "Environmental Permit" means any permit, approval, identification
           --------------------
     number, license or other authorization required under any Environmental
     Law.

          "EPYX" means EPYX Corporation, a Delaware corporation.
           ----

          "EPYX Escrow Account" means a segregated escrow account in the name of
           -------------------
     ADL with such bank as the Agent shall in its reasonable discretion approve,
     subject to the terms and conditions set forth in an escrow agreement in
     form and substance satisfactory to the Agent and providing, inter alia,
     that the proceeds of such account may only be withdrawn by ADL (a) for the
     purpose of making an Investment pursuant to Section 5.02(f)(vii) and (b)
     upon presentation of a certificate by ADL certifying (i) that such funds
     will be invested pursuant to Section 5.02(f)(vii), and (ii) that no Default
     has occurred and is continuing hereunder.

          "EPYX Transaction" means the sale of any portion of the capital stock
           ----------------
     of EPYX or its corporate parent to DeNora or any other equity investor in,
     or strategic partner of, EPYX in one or more transactions.

          "Equity Interests" means, with respect to any Person, shares of
           ----------------
     capital stock of (or other ownership or profit interests in) such Person,
     warrants, options or other rights for the purchase or other acquisition
     from such Person of shares of capital stock of (or other

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                                       8

     ownership or profit interests in) such Person, securities convertible into
     or exchangeable for shares of capital stock of (or other ownership or
     profit interests in) such Person or warrants, rights or options for the
     purchase or other acquisition from such Person of such shares (or such
     other interests), and other ownership or profit interests in such Person
     (including, without limitation, partnership, member or trust interests
     therein), whether voting or nonvoting, and whether or not such shares,
     warrants, options, rights or other interests are authorized or otherwise
     existing on any date of determination.

          "ERISA" means the Employee Retirement Income Security Act of 1974, as
           -----
     amended from time to time, and the regulations promulgated and rulings
     issued thereunder.

          "ERISA Affiliate" means any Person that for purposes of Title IV of
           ---------------
     ERISA is a member of any Borrower's controlled group, or under common
     control with any Borrower, within the meaning of Section 414 of the
     Internal Revenue Code.

          "ERISA Event" means (a) (i) the occurrence of a reportable event,
           -----------
     within the meaning of Section 4043 of ERISA, with respect to any Plan
     unless the 30-day notice requirement with respect to such event has been
     waived by the PBGC, or (ii) the requirements of subsection (1) of Section
     4043(b) of ERISA (without regard to subsection (2) of such Section) are met
     with a contributing sponsor, as defined in Section 4001(a)(13) of ERISA, of
     a Plan, and an event described in paragraph (9), (10), (11), (12) or (13)
     of Section 4043(c) of ERISA is reasonably expected to occur with respect to
     such Plan within the following 30 days; (b) the application for a minimum
     funding waiver with respect to a Plan; (c) the provision by the
     administrator of any Plan of a notice of intent to terminate such Plan
     pursuant to Section 4041(a)(2) of ERISA (including any such notice with
     respect to a plan amendment referred to in Section 4041(e) of ERISA); (d)
     the cessation of operations at a facility of any Borrower or any ERISA
     Affiliate in the circumstances described in Section 4062(e) of ERISA; (e)
     the withdrawal by any Borrower or any ERISA Affiliate from a Multiple
     Employer Plan during a plan year for which it was a substantial employer,
     as defined in Section 4001(a)(2) of ERISA; (f) the conditions for the
     imposition of a lien under Section 302(f) of ERISA shall have been met with
     respect to any Plan; (g) the adoption of an amendment to a Plan requiring
     the provision of security to such Plan pursuant to Section 307 of ERISA; or
     (h) the institution by the PBGC of proceedings to terminate a Plan pursuant
     to Section 4042 of ERISA, or the occurrence of any event or condition
     described in Section 4042 of ERISA that constitutes grounds for the
     termination of, or the appointment of a trustee to administer, a Plan.

          "ESOP" means ADL's Employee Stock Ownership Plan and Trust.
           ----

          "Eurocurrency Lending Office" means, with respect to any Lender, the
           ---------------------------
     office of such Lender specified as its "Eurocurrency Lending Office"
     opposite its name on Schedule I hereto or in the Assignment and Acceptance
     pursuant to which it became a Lender (or, if no such office is specified,
     its Domestic Lending Office), or such other

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                                       9

     office of such Lender as such Lender may from time to time specify to the
     Borrowers and the Agent.

          "Eurocurrency Liabilities" has the meaning assigned to that term in
           ------------------------
     Regulation D of the Board of Governors of the Federal Reserve System, as in
     effect from time to time.

          "Eurocurrency Rate" means, for any Interest Period for all
           -----------------
     Eurocurrency Rate Advances comprising part of the same Borrowing, (a) an
     interest rate per annum equal to the rate per annum that is set forth on
     the Applicable Telerate Page as of 11:00 A.M. (London time) two Business
     Days before the first day of such Interest Period for deposits in US
     Dollars having a term equal to the duration of such Interest Period or (b)
     if a rate cannot be determined pursuant to clause (a) above, an interest
     rate per annum obtained by dividing (i) the average (rounded upward to the
     nearest whole multiple of 1/16 of 1% per annum, if such average is not such
     a multiple) of the rate per annum at which deposits in US Dollars are
     offered by the principal office of each of the Reference Banks in London,
     England to prime banks in the London interbank market at 11:00 A.M. (London
     time) two Business Days before the first day of such Interest Period in an
     amount substantially equal to such Reference Bank's Eurocurrency Rate
     Advance comprising part of such Borrowing to be outstanding during such
     Interest Period and for a period equal to such Interest Period by (ii) a
     percentage equal to 100% minus the Eurocurrency Rate Reserve Percentage for
     such Interest Period. In the event that the Eurocurrency Rate for any
     Interest Period is to be determined in accordance with clause (b) of the
     preceding sentence, the Eurocurrency Rate for any Interest Period for each
     Eurocurrency Rate Advance comprising part of the same Borrowing shall be
     determined by the Agent on the basis of applicable rates furnished to and
     received by the Agent from the Reference Banks two Business Days before the
     first day of such Interest Period, subject, however, to the provisions of
                                        -------  -------
     Section 2.04.

          "Eurocurrency Rate Advance" means an Advance denominated in US Dollars
           -------------------------
     that bears interest as provided in Section 2.04(a)(ii).

          "Eurocurrency Rate Reserve Percentage" for any Interest Period for all
           ------------------------------------
     Eurocurrency Rate Advances comprising part of the same Borrowing means the
     reserve percentage applicable two Business Days before the first day of
     such Interest Period under regulations issued from time to time by the
     Board of Governors of the Federal Reserve System (or any successor) for
     determining the maximum reserve requirement (including, without limitation,
     any emergency, supplemental or other marginal reserve requirement) for a
     member bank of the Federal Reserve System in New York City with respect to
     liabilities or assets consisting of or including Eurocurrency Liabilities
     (or with respect to any other category of liabilities that includes
     deposits by reference to which the interest rate on Eurocurrency Rate
     Advances is determined) having a term equal to such Interest Period.

          "Events of Default" has the meaning specified in Section 7.01.
           -----------------

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                                      10

          "Excess Cash Flow" means, for any period, total revenue for such
           ----------------
     period (without giving effect to extraordinary gains and losses from sales
     and other dispositions of property outside the ordinary course of business)
     less (i) operating expenses, (ii) corporate office, general and
     administrative expenses for such period, (iii) regularly scheduled payments
     and voluntary prepayments of principal and interest on the Facility and the
     Senior Notes, and regularly scheduled payments on other indebtedness for
     such period, (iv) capital expenditures for such period, (v) positive
     changes in working capital for such period, and (vi) taxes and other
     similar payments for such period.

          "Excess Contribution Plan" means ADL's Excess Contribution Plan as in
           ------------------------
     effect on the date hereof.

          "Existing Credit Agreement" has the meaning specified in the
           -------------------------
     Preliminary Statements.

          "Existing Debt" has the meaning specified in Section 5.02(d)(i)(B).
           -------------

          "Extraordinary Receipts" means any cash received by or paid to or for
           ----------------------
     the account of any Person not in the ordinary course of business,
     including, without limitation, tax refunds (other than tax refunds received
     in the ordinary course of such Person's tax planning, provided such cash is
     applied against corresponding tax liabilities of an Affiliate during the
     same tax year in which such cash is received), pension plan reversions,
     proceeds received from sales of assets or capital stock other than proceeds
     of the sale of stock to employees of such Person pursuant to any Stock Plan
     in accordance with Section 5.02(g), proceeds of insurance (including,
     without limitation, any key man life insurance but excluding proceeds of
     business interruption insurance to the extent such proceeds constitute
     compensation for lost earnings), condemnation awards (and payments in lieu
     thereof), indemnity payments and any purchase price adjustment received in
     connection with any purchase agreement; provided, however, that an
                                             --------  -------
     Extraordinary Receipt shall not include cash receipts received from
     proceeds of insurance, condemnation awards (or payments in lieu thereof) or
     indemnity payments to the extent that such proceeds, awards or payments in
     respect of loss or damage to equipment, fixed assets or real property (A)
     are applied (or in respect of which expenditures were previously incurred)
     to replace or repair the equipment, fixed assets or real property in
     respect of which such proceeds were received in accordance with the terms
     of the Loan Documents, so long as such application is made within 6 months
     after the occurrence of such damage or loss or (B) are received by any
     Person in respect of any third party claim against such Person and applied
     to pay (or to reimburse such Person for its prior payment of) such claim
     and the costs and expenses of such Person with respect thereto; and

     provided, further that an Extraordinary Receipt shall not include any Net
     --------  -------
     Cash Proceeds expressly excluded from clauses (A), (B) or (C) of Section
     2.06(b)(ii).

          "Federal Funds Rate" means, for any period, a fluctuating interest
           ------------------
     rate per annum equal for each day during such period 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,

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                                       11

     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 Agent from three Federal funds brokers of recognized
     standing selected by it.

          "Financial Officer" means, with respect to any Borrower, the chief
           -----------------
     financial officer of such Borrower, or if such chief financial officer is
     not available, the treasurer, the controller or the assistant controller of
     such Borrower.

          "Fixed Charge Coverage Ratio" means, for any period set forth in
           ---------------------------
     Section 5.03(c), Consolidated EBITDA for ADL and its Subsidiaries divided
     by the sum of (a) the expenses of ADL and its Subsidiaries for interest
     accrued in respect of Debt (including the current portion thereof), (b)
     dividends paid by ADL and its Subsidiaries to Persons other than ADL and
     its Subsidiaries and (c) rental expenses on real property of ADL and its
     Subsidiaries, in each case (x) for such period and (y) as determined in
     accordance with GAAP.

          "Foreign Subsidiary" means any Subsidiary of ADL other than a Domestic
           ------------------
     Subsidiary.

          "GAAP" has the meaning specified in Section 1.03.
           ----

          "Guarantied Obligations" has the meaning specified in Section 6.01.
           ----------------------
          "Guaranties" means the ADL Guaranty, the TIME Guaranty and the
           ----------
     Subsidiary Guaranty.

          "Guarantors" means ADL and the Subsidiary Guarantors.
           ----------

          "Hazardous Materials" means (a) petroleum and petroleum products,
           -------------------
     byproducts or breakdown products, radioactive materials, asbestos-
     containing materials, polychlorinated biphenyls and radon gas and (b) any
     other chemicals, materials or substances designated, classified or
     regulated as hazardous or toxic or as a pollutant or contaminant under any
     Environmental Law.

          "Hedge Agreements" means interest rate swap, cap or collar agreements,
           ----------------
     interest rate future or option contracts, currency swap agreements,
     currency future or option contracts and other similar agreements.

          "Hess Proceeds" has the meaning set forth in Section 4.01(x).
           -------------

          "Initial Lenders" has the meaning specified in the recital of parties
           ---------------
     to this Agreement.

          "Insufficiency" means, with respect to any Plan, the amount, if any,
           -------------
     of its unfunded benefit liabilities, as defined in Section 4001(a)(18) of
     ERISA.
<PAGE>

                                       12

          "Interest Period" means, for each Eurocurrency Rate Advance comprising
           ---------------
     part of the same Borrowing, the period commencing on the date of such
     Eurocurrency Rate Advance or the date of the Conversion of any Base Rate
     Advance into such Eurocurrency Rate Advance and ending on the last day of
     the period selected by any Borrower requesting a Borrowing pursuant to the
     provisions below and, thereafter, each subsequent period commencing on the
     last day of the immediately preceding Interest Period and ending on the
     last day of the period selected by such Borrower pursuant to the provisions
     below.  The duration of each such Interest Period shall be one, two, three
     or six months, as such Borrower may, upon notice received by the Agent not
     later than 11:00 A.M. (New York City time) on the third Business Day prior
     to the first day of such Interest Period, select; provided, however, that:
                                                       --------  -------

               (i)   such Borrower may not select any Interest Period that ends
          after the Termination Date;

               (ii)  Interest Periods commencing on the same date for
          Eurocurrency Rate Advances comprising part of the same Borrowing shall
          be of the same duration;

               (iii) whenever the last day of any Interest Period would
          otherwise occur on a day other than a Business Day, the last day of
          such Interest Period shall be extended to occur on the next succeeding
          Business Day, provided, however, that, if such extension would cause
                        --------  -------
          the last day of such Interest Period to occur in the next following
          calendar month, the last day of such Interest Period shall occur on
          the next preceding Business Day; and

               (iv)  whenever the first day of any Interest Period occurs on a
          day of an initial calendar month for which there is no numerically
          corresponding day in the calendar month that succeeds such initial
          calendar month by the number of months equal to the number of months
          in such Interest Period, such Interest Period shall end on the last
          Business Day of such succeeding calendar month.

          "Internal Revenue Code" means the Internal Revenue Code of 1986, as
           ---------------------
     amended from time to time, and the regulations promulgated and rulings
     issued thereunder.

          "Investment" in any Person means any loan or advance to such Person,
           ----------
     any purchase or other acquisition of any capital stock or other ownership
     or profit interest, warrants, rights, options, obligations or other
     securities or all or substantially all of the assets of such Person, any
     capital contribution to such Person or any other investment in such Person,
     including, without limitation, any arrangement pursuant to which the
     investor incurs Debt of the types referred to in clauses (h) and (i) of the
     definition of "Debt" in respect of such Person.
                    ----

          "Lender Share" means, at any time, 45.31%.
           ------------
<PAGE>

                                       13

          "Lenders" means the Initial Lenders and each Person that shall become
           -------
     a party hereto pursuant to Section 9.07.

          "Lien" means any lien, security interest or other charge or
           ----
     encumbrance of any kind, or any other type of preferential arrangement,
     including, without limitation, the lien or retained security title of a
     conditional vendor and any easement, right of way or other encumbrance on
     title to real property.

          "Loan Documents" means (i) this Agreement, (ii) the Notes, (iii) the
           --------------
     Guaranties; (iv) the Collateral Agency and Intercreditor Agreement, (v) the
     Collateral Documents, and (vi) any other document, agreement or instrument
     executed or delivered in connection therewith, in each case as amended.

          "Loan Parties" means the Borrowers, the Subsidiary Guarantors and any
           ------------
     Subsidiary of any Borrower party to any of the Collateral Documents.

          "Marketable Securities" means any of the following, to the extent
           ---------------------
     owned by ADL or any of its Subsidiaries free and clear of all Liens and
     having a maturity of not greater than 360 days from the date of acquisition
     thereof (except for any Marketable Securities held by Acorn Insurance
     Company, Ltd. that may have a maturity of up to 30 years): (a) readily
     marketable direct obligations of the Government of the United States or any
     agency or instrumentality thereof or obligations unconditionally guaranteed
     by the full faith and credit of the Government of the United States, (b)
     insured certificates of deposit of or time deposits with any commercial
     bank that is a Lender or a member of the Federal Reserve System, issues (or
     the parent of which issues) commercial paper rated as described in clause
     (d), is organized under the laws of the United States or any state thereof
     and has combined capital and surplus of at least $1 billion, (c) time
     deposits with any foreign commercial bank or (d) commercial paper in an
     aggregate amount of no more than $2,000,000 per issuer outstanding at any
     time, issued by any corporation organized under the laws of any state of
     the United States and rated at least "Prime-1" (or the then equivalent
     grade) by Moody's Investors Service, Inc. or "A-1" (or the then equivalent
     grade) by Standard & Poor's Ratings Group, a division of McGraw-Hill, Inc.

          "Material Adverse Change" means any material adverse change in the
           -----------------------
     business, condition (financial or otherwise), performance, properties or
     prospects of the Borrowers or ADL and its Subsidiaries, taken as a whole.

          "Material Adverse Effect" means a material adverse effect on (a) the
           -----------------------
     business, condition (financial or otherwise), operations, assets or
     properties of ADL or ADL and its Subsidiaries taken as a whole, (b) the
     rights and remedies of the Agent or any Lender under this Agreement or any
     Note or (c) the ability of any Borrower to perform its obligations under
     this Agreement or any Note.

          "Material Subsidiary" means at any time, a Domestic Subsidiary that
           -------------------
     either:
<PAGE>

                                       14

               (a) has assets with a book value equal to 5% or more of total
          assets of ADL and its Subsidiaries determined on a Consolidated basis
          as of the end of the most recently ended fiscal quarter of ADL, or

               (b) had revenues for the then most recently ended fiscal quarter
          of ADL equal to 5% or more of total Consolidated revenues of ADL and
          its Subsidiaries for such fiscal quarter.

          "Memorial Drive Trust" means ADL's Employees' Memorial Drive Trust
           --------------------
     Retirement Plan.

          "Multiemployer Plan" means a multiemployer plan, as defined in Section
           ------------------
     4001(a)(3) of ERISA, to which any Borrower or any ERISA Affiliate is making
     or accruing an obligation to make contributions, or has within any of the
     preceding five plan years made or accrued an obligation to make
     contributions.

          "Multiple Employer Plan" means a single employer plan, as defined in
           ----------------------
     Section 4001(a)(15) of ERISA, that (a) is maintained for employees of any
     Borrower or any ERISA Affiliate and at least one Person other than such
     Borrower and the ERISA Affiliates or (b) was so maintained and in respect
     of which any Borrower or any ERISA Affiliate could have liability under
     Section 4064 or 4069 of ERISA in the event such plan has been or were to be
     terminated.

          "Net Cash Proceeds" means, with respect to any sale of any capital
           -----------------
     stock, Equity Interests or any warrants, rights or options to acquire
     capital stock, Equity Interests or other ownership or profit interests by
     any Person (other than any stock of any Borrower or its Subsidiaries issued
     pursuant to any Stock Plan), the aggregate amount of cash received from
     time to time by or on behalf of such Person (other than amounts received
     from an Affiliate or participant in the ESOP or other Stock Plan) in
     connection with such transaction after deducting therefrom (without
     duplication) (a) reasonable and customary brokerage commissions,
     underwriting fees and discounts, legal fees, finder's fees and other
     similar fees and commissions and (b) the amount of taxes payable in
     connection with or as a result of such transaction in each case to the
     extent, but only to the extent, that the amounts so deducted are, at the
     time of receipt of such cash, actually paid to a Person that is not an
     Affiliate and are properly attributable to such transaction or to the asset
     that is the subject thereof.

          "Net Income" means, with respect to any Person, as of any date, the
           ----------
     net after-tax income of such Person, determined in accordance with GAAP;
     provided that extraordinary gains and losses and any increase or decrease
     --------
     to net income which is required to be recorded in such Person's
     consolidated statement of income because of the adoption of accounting
     principles adopted after the date hereof shall be excluded.

          "Note" means a promissory note of any Borrower payable to the order of
           ----
     any Lender, in substantially the form of Exhibit A hereto, evidencing the
     aggregate
<PAGE>

                                       15

     indebtedness of such Borrower to such Lender resulting from the Advances
     made by such Lender.

          "Noteholder" means, with respect to any Senior Note, the Person in
           ----------
     whose name such Senior Note is registered in the register maintained by ADL
     pursuant to section 13.1 of the Note Purchase Agreement.

          "Note Purchase Agreement" means the Amended and Restated Note Purchase
           -----------------------
     Agreement dated as of April 25, 2000 among ADL and the Noteholders as in
     effect on the Effective Date.

          "Notice of Conversion" has the meaning set forth in Section 2.05(a).
           --------------------

          "Obligation" means, with respect to any Person, any obligation of such
           ----------
     Person of any kind, including, without limitation, any liability of such
     Person on any claim, whether or not the right of any creditor to payment in
     respect of such claim is reduced to judgment, liquidated, unliquidated,
     fixed, contingent, matured, disputed, undisputed, legal, equitable, secured
     or unsecured, and whether or not such claim is discharged, stayed or
     otherwise affected by any proceeding referred to in Section 7.01(e).
     Without limiting the generality of the foregoing, the Obligations of the
     Borrowers under this Agreement and the Notes include (a) the obligation to
     pay principal, interest, charges, expenses, fees, attorneys' fees and
     disbursements, indemnities and other amounts payable by the Borrowers under
     this Agreement and the Notes and (b) the obligation to reimburse any amount
     in respect of any of the foregoing that any Lender, in its sole discretion,
     may elect to pay or advance on behalf of the Borrowers.

          "PBGC" means the Pension Benefit Guaranty Corporation (or any
           ----
     successor).

          "Permitted Liens" means such of the following as to which no
           ---------------
     enforcement, collection, execution, levy or foreclosure proceeding shall
     have been commenced:

               (a) Liens for taxes, assessments and governmental charges or
          levies to the extent not required to be paid under Section 5.01(b)
          hereof;

               (b) Liens imposed by law such as liens of carriers, warehousemen,
          mechanics and materialmen and other similar liens arising out of the
          ordinary course of business and that are in existence less than 90
          days from the date of creation thereof in respect of obligations not
          yet overdue;

               (c) pledges or deposits to secure Obligations under workers'
          compensation, unemployment, old age pensions, or other social security
          benefits, and good faith deposits in connection with tenders,
          contracts or leases or deposits to secure, or in lieu of, surety
          bonds, performance bonds and other similar obligations in each case,
          in the ordinary course of business and that do not secure Debt;
<PAGE>

                                       16

               (d) minor defects, irregularities, easements and rights-of-way
          and other encumbrances on title to real property as normally exist
          with respect to similar real property which, in each case, do not
          render title to the property encumbered thereby unmarketable or
          materially adversely affect the use of such property for its present
          purposes;

               (e) landlords' Liens under leases in the ordinary course of
          business; and

               (f) Liens arising from any law, ordinance or governmental
          regulation, including, without limitation, building and zoning
          ordinances, restricting or regulating or prohibiting the occupancy,
          use or enjoyment of real property or regulating the character,
          dimensions or location of any improvement now or hereafter erected on
          real property, or prohibiting a separation in ownership or a change in
          the dimensions or area of real property, or any parcel of which such
          real property was a part that, in each case, do not render title to
          the property encumbered thereby unmarketable or materially adversely
          affect the use of such property for its present purposes.

          "Person" means an individual, partnership, corporation (including a
           ------
     business trust), joint stock company, trust, unincorporated association,
     joint venture, limited liability company or other entity, or a government
     or any political subdivision or agency thereof.

          "Plan" means a Single Employer Plan or a Multiple Employer Plan.
           ----

          "Pledge Agreements" has the meaning set forth in Section 3.02(c).
           -----------------

          "Reference Banks" means Citibank and The Chase Manhattan Bank.
           ---------------

          "Register" has the meaning specified in Section 9.07(c).
           --------

          "Required Lenders" means at any time Lenders owed more than 66-2/3% of
           ----------------
     the then aggregate unpaid principal amount (based on the Currency
     Equivalent thereof in US Dollars at such time) of the Advances owing to
     Lenders, or, if no such principal amount is then outstanding, Lenders
     having more than 66-2/3% of the Commitments.

          "Secured Parties" has the meaning set forth in the Collateral Agency
           ---------------
     and Intercreditor Agreement.

          "Security Agreement" has the meaning specified in Section 3.02(c).
           ------------------

          "Senior Note Share" means, at any time, 54.69%.
           -----------------

          "Senior Notes" means the $35,000,000 secured Senior Notes of ADL due
           ------------
     2001.
<PAGE>

                                       17

          "Single Employer Plan" means a single employer plan, as defined in
           --------------------
     Section 4001(a)(15) of ERISA, that (a) is maintained for employees of any
     Borrower or any ERISA Affiliate and no Person other than such Borrower and
     the ERISA Affiliates or (b) was so maintained and in respect of which any
     Borrower or any ERISA Affiliate could have liability under Section 4069 of
     ERISA in the event such plan has been or were to be terminated.

          "Stock Collateral" has the meaning specified in the Pledge Agreement.
           ----------------

          "Stock Plan" means each of (a) the Senior Staff Stock Purchase Plan,
           ----------
     the Stock Incentive Plan, the International Stock Purchase Plan, the
     Directors Stock Plan, the Trust Under Compensation Plan for Directors, the
     Trust Under Excess Contribution Plan, the Stock Award Plan, the IA Stock
     Acquisition Plan, the 1996 Dividend Reinvestment Plan, the CSC Stock
     Acquisition Plan, the Stock-Based Deferred Plan for Incentive Compensation,
     the Senior Staff Tax-Deferred Stock Retention Plan, the Stock-Based
     Deferred Plan for Incentive Compensation-U.K., the Stock-Based Deferred
     Plan for Incentive Compensation-Spain, the Employee Stock Account Trust-
     Sweden, the Employee Stock Fund-Brazil, the Employee Stock Ownership Plan-
     Sweden, the Deferred Compensation Plan for Senior Staff, the Employee Stock
     Ownership Plan Equivalent, the Stock-Based Deferred Compensation Plan 1,
     the Stock-Based Deferred Compensation Plan 3, the Stock-Based Deferred
     Compensation Plan 4, the Stock-Based Plan for Incentive Compensation -
     Germany, the Stock-Based Latin America Plan, the Stock Ownership Program,
     the Stock Retention Plan - Jersey, the Stock Retention Purchase Plan, the
     ESOP and the Memorial Drive Trust in each case as in effect on the date
     hereof, or as the same may be amended from time to time, provided that such
                                                              --------
     amendment (i) does not substantially alter the form or effect of such plan
     and (ii) does not cause a material increase in the liability or other
     obligations of ADL and its Subsidiaries taken as a whole, and (b) any other
     stock plan that may be sponsored and/or maintained by ADL or any of its
     Subsidiaries that does not materially increase the liability or other
     obligations of ADL and its Subsidiaries taken as a whole.

          "Sub-Agent" means Citibank International plc.
           ---------

          "Subsidiary" of any Person means any corporation, partnership, joint
           ----------
     venture, limited liability company, trust or estate of which (or in which)
     more than 50% of (a) the issued and outstanding capital stock having
     ordinary voting power to elect a majority of the Board of Directors of such
     corporation (irrespective of whether at the time capital stock of any other
     class or classes of such corporation shall or might have voting power upon
     the occurrence of any contingency), (b) the interest in the capital or
     profits of such limited liability company, partnership or joint venture or
     (c) the beneficial interest in such trust or estate is at the time directly
     or indirectly owned or controlled by such Person, by such Person and one or
     more of its other Subsidiaries or by one or more of such Person's other
     Subsidiaries.

          "Subsidiary Guarantors" means the Subsidiaries of ADL listed on
           ---------------------
     Schedule II hereto and each other Subsidiary of ADL that has executed and
     delivered or shall be
<PAGE>

                                       18

     required to execute and deliver a guaranty or guaranty supplement pursuant
     to Section 5.01(k) or Section 5.01(m).

          "Subsidiary Guaranty" has the meaning specified in Section
           -------------------
     3.02(c)(ii).

          "Tangible Net Worth" means, with respect to ADL and its Subsidiaries
           ------------------
     as of any date of determination, the excess of Total Tangible Assets over
     Total Liabilities.

          "Termination Date" means the earlier of June 1, 2001 and the date of
           ----------------
     termination in whole of the Commitments pursuant to Section 2.03,
     2.06(b)(iii) or 7.01. .

          "TIME" means c-quential, Inc., a Delaware corporation.
           ----

          "TIME Guaranty" has the meaning specified in Section 3.02(c)(ii).
           -------------

          "TIME IPO" means the sale by TIME of not less than 8% of the Equity
           --------
     Interests of TIME pursuant to an initial public offering.

          "Total Assets" means, with respect to ADL and its Subsidiaries as of
           ------------
     any date of determination, the total assets of ADL or any of its
     Subsidiaries determined on a Consolidated basis and in accordance with
     GAAP.

          "Total Liabilities" means, with respect to ADL and its Subsidiaries as
           -----------------
     of any date of determination, the total liabilities of ADL or any of its
     Subsidiaries in each case determined on a Consolidated basis and in
     accordance with GAAP.

          "Total Tangible Assets" means, with respect to ADL and its
           ---------------------
     Subsidiaries as of any date of determination, Total Assets, excluding,
                                                                 ---------
     however, from the determination of Total Assets (a) any goodwill (other
     -------
     than goodwill arising solely in connection with the Innovation Associates
     transaction), experimental or organizational expenses, research and
     development expenses, franchises, trademarks, service marks, trade names,
     copyrights, patents, patent applications, licenses and rights in any
     thereof, and other similar intangibles, (b) all reserves carried and not
     deducted from assets, (c) securities which are not readily marketable
     (excluding Investments existing on the date hereof in ADL Ventures LP in an
     aggregate amount not to exceed $2,600,000), (d) any write-up in the book
     value of any asset resulting from a revaluation thereof subsequent to
     December 31, 1997, and (e) any items not included in clauses (a) through
     (d) above which are treated as intangibles in conformity with GAAP, in each
     case determined on a Consolidated basis and in accordance with GAAP.

          "UCC" means the Uniform Commercial Code as in effect on the date
           ---
     hereof in the State of New York; provided that, if, by reason of mandatory
                                      --------
     provisions of law, the perfection or the effect of perfection or non-
     perfection of the security interest in any collateral is governed by the
     Uniform Commercial Code as in effect in a jurisdiction other than New York,
     "UCC" means the Uniform Commercial Code or other law as in effect in such
     other jurisdiction for purposes of the provisions of the Collateral
     Documents relating to such perfection or to the effect of perfection or
     non-perfection.
<PAGE>

                                       19

          "US Dollars", "US$" or "$" means lawful money of the United States of
           ----------    ---      -
     America.

          "Voting Stock" means capital stock issued by a corporation, or
           ------------
     equivalent interests in any other Person, the holders of which are
     ordinarily, in the absence of contingencies, entitled to vote for the
     election of directors (or persons performing similar functions) of such
     Person, even if the right so to vote has been suspended by the happening of
     such a contingency.

          "Withdrawal Liability" has the meaning specified in Part I of Subtitle
           --------------------
     E of Title IV of ERISA.

          SECTION 1.02.  Computation of Time Periods.  In this Agreement in the
                         ---------------------------
computation of periods of time from a specified date to a later specified date,
the word "from"  means "from and including" and the words "to" and "until" each
mean "to but excluding".

          SECTION 1.03.  Accounting Terms.  All accounting terms not
                         ----------------
specifically defined herein shall be construed in accordance with generally
accepted accounting principles consistent with those applied in the preparation
of the financial statements referred to in Section 4.01(f) ("GAAP").
                                                             ----

                                  ARTICLE II

                       AMOUNTS AND TERMS OF THE ADVANCES

          SECTION 2.01.  The Advances.  Each Lender severally agrees, on the
                         ------------
terms and conditions hereinafter set forth, to make Advances to the Borrowers
from time to time on any Business Day during the period from the Effective Date
until the Termination Date in an aggregate amount not to exceed at any time
outstanding such Lender's Commitment.  Amounts borrowed under this Section 2.01
and repaid or prepaid may not be reborrowed and the Commitments shall be
permanently reduced by the amount of any such repayment or prepayment.  The
Borrowers hereby acknowledge that the total amount of Advances available to be
made under this Section 2.01 have been made as of the date hereof pursuant to
the Existing Credit Agreement.  All Advances made under the Existing Agreement
shall be deemed to be Advances made under this Agreement as of the date hereof,
with each Borrowing deemed, as of the date hereof, to be of the same Type of
Advance and to have the same Interest Period as existed under the Existing
Credit Agreement.

          SECTION 2.02.  Fees.  (a)  Agent's Fees.  ADL shall pay to the Agent
                         ----        ------------
for its own account such fees as may from time to time be agreed between the
Borrowers and the Agent.

          (b)  Restructuring Fee.  ADL shall pay to the Agent for the account of
               -----------------
each Lender a restructuring fee equal to (i) 1% of such Lender's Commitment on
the date hereof, payable upon execution of this Agreement by each of the parties
hereto and (ii) 2% of such Lender's Commitment on the date hereof, payable on
the Termination Date.
<PAGE>

                                       20

          SECTION 2.03.  Repayment of Advances.  The Borrower shall repay to the
                         ---------------------
Agent for the ratable account of the Lenders the aggregate outstanding principal
amount of the Advances on the following dates in the amounts indicated (which
amounts shall be reduced as a result of the application of prepayments in
accordance with the order of priority set forth in Section 2.06):

          ---------------------------------------------------------
          Date                                 Amount
          ----                                 ------
          ---------------------------------------------------------
          July 1, 2000                         $ 1,125,000
          ---------------------------------------------------------
          August 1, 2000                       $ 1,125,000
          ---------------------------------------------------------
          September 1, 2000                    $ 1,125,000
          ---------------------------------------------------------
          October 1, 2000                      $ 1,125,000
          ---------------------------------------------------------
          November 1, 2000                     $ 1,125,000
          ---------------------------------------------------------
          December 1, 2000                     $ 1,125,000
          ---------------------------------------------------------
          January 1, 2001                      $ 1,350,000
          ---------------------------------------------------------
          February 1, 2001                     $ 1,350,000
          ---------------------------------------------------------
          March 1, 2001                        $ 1,350,000
          ---------------------------------------------------------
          April 1, 2001                        $ 1,350,000
          ---------------------------------------------------------
          May 1, 2001                          $ 1,350,000
          ---------------------------------------------------------
          June 1, 2001                         $15,500,000
          ---------------------------------------------------------

provided, however, that the final principal installment shall be repaid on the
--------  -------
Termination Date and in any event shall be in an amount equal to the aggregate
principal amount of the Advances outstanding on such date.

          SECTION 2.04.  Interest.  (a)  Scheduled Interest.  Each Borrower
                         --------        ------------------
shall pay interest on the unpaid principal amount of each Advance to it owing to
each Lender from the date of such Advance until such principal amount shall be
paid in full, at the following rates per annum:

          (i) Base Rate Advances.  During such periods as such Advance is a Base
              ------------------
     Rate Advance, a rate per annum equal at all times to the sum of (x) the
     Base Rate in effect from time to time plus (y) the Applicable Margin in
                                           ----
     effect from time to time, payable in arrears monthly on the first day of
     each month during such periods and on the date such Base Rate Advance shall
     be Converted or paid in full.
<PAGE>

                                       21

          (ii) Eurocurrency Rate Advances.  During such periods as such Advance
               --------------------------
     is a Eurocurrency Rate Advance, a rate per annum equal at all times during
     each Interest Period for such Advance to the sum of (x) the Eurocurrency
     Rate for such Interest Period for such Advance plus (y) the Applicable
                                                    ----
     Margin in effect from time to time, payable in arrears on the last day of
     such Interest Period and, if such Interest Period has a duration of more
     than three months, on each day that occurs during such Interest Period
     every three months from the first day of such Interest Period and on the
     date such Eurocurrency Rate Advance shall be Converted or paid in full.

          (b)  Default Interest.  Upon the occurrence and during the continuance
               ----------------
of a Default, each Borrower shall pay interest on (i) the unpaid principal
amount of each Advance to such Borrower owing to each Lender, payable in arrears
on the dates referred to in clause (a)(i) or (a)(ii) above, at a rate per annum
equal at all times to 2% per annum above the rate per annum required to be paid
on such Advance pursuant to clause (a)(i) or (a)(ii) above and (ii) to the
fullest extent permitted by law, the amount of any interest, fee or other amount
payable hereunder that is not paid when due, from the date such amount shall be
due until such amount shall be paid in full, payable in arrears on the date such
amount shall be paid in full and on demand, at a rate per annum equal at all
times to 2% per annum above the rate per annum required to be paid on Base Rate
Advances pursuant to clause (a)(i) above.

          (c)  Notice of Interest Period and Interest Rate.  Promptly after
               -------------------------------------------
receipt of a Notice of Conversion pursuant to Section 2.05 or a notice of
selection of an Interest Period pursuant to the terms of the definition of
"Interest Period", the Agent shall give notice to the Borrowers and each Lender
of the applicable Interest Period and the applicable interest rate determined by
the Agent for purposes of clause (a)(i) or (a)(ii) above, and the applicable
rate, if any, furnished by each Reference Bank for the purpose of determining
the applicable interest rate under clause (a)(ii) above.

          (d)  Interest Rate Determination.  (i)  Each Reference Bank agrees to
               ---------------------------
furnish to the Agent timely information for the purpose of determining each
Eurocurrency Rate.  If any one or more of the Reference Banks shall not furnish
such timely information to the Agent for the purpose of determining any such
interest rate, the Agent shall determine such interest rate on the basis of
timely information furnished by the remaining Reference Banks.

          (ii) In the event that the interest rate applicable to any
Eurocurrency Rate Advance is to be determined in accordance with clause (b) of
the definition of "Eurocurrency Rate", if fewer than two Reference Banks furnish
timely information to the Agent for determining the Eurocurrency Rate for such
Eurocurrency Rate Advances,

          (A)  the Agent shall forthwith notify the Borrower requesting such
     Advances and the Lenders that the interest rate cannot be determined for
     such Eurocurrency Rate Advances,

          (B)  with respect to Eurocurrency Rate Advances, each such Advance
     will automatically, on the last day of the then existing Interest Period
     therefor, be automatically Converted into a Base Rate Advance, and
<PAGE>

                                       22

          (C) the obligation of the Lenders to Convert Advances into
     Eurocurrency Rate Advances shall be suspended until the Agent shall notify
     the Borrowers and the Lenders that the circumstances causing such
     suspension no longer exist.

          (D) If, with respect to any Eurocurrency Rate Advances, the Required
     Lenders notify the Agent that (i) they are unable to obtain matching
     deposits on the London inter-bank market at or about 11:00 A.M. (London
     time) on the second Business Day before the making of a Borrowing in
     sufficient amounts to fund their respective Advances as a part of such
     Borrowing during its Interest Period, or (ii) the Eurocurrency Rate for any
     Interest Period for any Advance will not adequately reflect the cost to
     such Required Lenders of funding or maintaining their respective
     Eurocurrency Rate Advances for such Interest Period, the Agent shall
     forthwith so notify the Borrowers and the Lenders, whereupon (1) the
     Borrower will, on the last day of the then existing Interest Period
     therefor, Convert such Advances into Base Rate Advances and (2) the
     obligation of the Lenders to Convert Advances into, Eurocurrency Rate
     Advances shall be suspended until the Agent shall notify the Borrowers and
     the Lenders that the circumstances causing such suspension no longer exist.
     Each Lender shall certify its cost of funds for each Interest Period to the
     Agent and the Borrowers as soon as practicable (but in any event not later
     than ten Business Days after the first day of such Interest Period).

          SECTION 2.05.  Conversion of Advances.  (a)  Optional.  The Borrowers
                         ----------------------        --------
may on any Business Day, upon notice given to the Agent not later than 11:00
A.M. (New York City time) on the third Business Day prior to the date of the
proposed Conversion and subject to the provisions of Section 2.10, Convert all
or any portion of the Advances of one Type comprising the same Borrowing into
Advances of the other Type; provided, however, that any Conversion of
                            --------  -------
Eurocurrency Rate Advances into Base Rate Advances shall be made only on the
last day of an Interest Period for such Eurocurrency Rate Advances, any
Conversion of Base Rate Advances into Eurocurrency Rate Advances shall be in
integral multiples of $1,000,000, no Conversion of any Advances shall result in
more than five Types of separate Borrowings and each Conversion of Advances
comprising part of the same Borrowing shall be made ratably among the Lenders in
accordance with their Commitments.  Each such notice of Conversion (a "Notice of
                                                                       ---------
Conversion") shall be in writing, in substantially the form of Exhibit G hereto,
----------
and shall, within the restrictions specified above, specify (i) the date of such
Conversion, (ii) the Advances to be Converted and (iii) if such Conversion is
into Eurocurrency Rate Advances, the duration of the initial Interest Period for
such Advances.  Each notice of Conversion shall be irrevocable and binding on
the Borrowers.

          (b)  Mandatory.  (i)  If a Borrower shall fail to select the duration
               ---------
of any Interest Period for any Eurocurrency Rate Advances in accordance with the
provisions contained in the definition of "Interest Period" in Section 1.01, the
Agent will forthwith so notify such Borrower and the Lenders and such Advances
will automatically, on the last day of the then existing Interest Period
therefor, Convert into Base Rate Advances.

          (ii) On the date on which the aggregate unpaid principal amount of
Eurocurrency Rate Advances comprising any Borrowing shall be reduced, by payment
or
<PAGE>

                                       23

prepayment or otherwise, to less than $3,000,000, such Advances shall
automatically Convert into Base Rate Advances.

          (iii)  Upon the occurrence and during the continuance of any Default,
(A) each Eurocurrency Rate Advance will automatically, on the last day of the
then existing Interest Period therefor, be Converted into Base Rate Advances and
(B) the obligation of the Lenders to make, or to Convert Advances into,
Eurocurrency Rate Advances shall be suspended.

          SECTION 2.06.  Prepayments.  (a)  Optional.  A Borrower may, (i) in
                         -----------        --------
the case of Eurocurrency Rate Advances upon at least two Business Days prior
notice to the Agent and (ii) in the case of Base Rate Advances, upon notice not
later than 11:00 A.M. on the applicable Business Day to the Agent, which notice
in each case shall be irrevocable and state the proposed date and aggregate
principal amount of the prepayment, and if such notice is given such Borrower
shall, prepay the outstanding principal amount of the Advances comprising part
of the same Borrowing in whole or ratably in part, together with accrued
interest to the date of such prepayment on the principal amount prepaid;
provided, however, that in the event of any such prepayment of a Eurocurrency
--------  -------
Rate Advance (x) each partial prepayment shall be in an aggregate principal
amount of $1,000,000 or an integral multiple of $500,000 in excess thereof and
(y) such Borrower shall be obligated to reimburse the Lenders in respect thereof
pursuant to Section 9.04(c).

          (b)  Mandatory.  (i)  The Borrower shall, on July 1, 2000, in respect
               ---------
of the period January 1, 2000 to June 30, 2000, and thereafter quarterly, prepay
an aggregate principal amount of the Advances comprising part of the same
Borrowings in an amount equal to the Lender Share of 50% of the Excess Cash Flow
for such period.  Each such prepayment shall be applied ratably first to Base
Rate Advances and second to Eurocurrency Rate Advances and to the installments
thereof in inverse order of maturity.

          (ii) The Borrower shall, (x) on the date of receipt of the Net Cash
Proceeds by any Loan Party or any of its Subsidiaries from:

     (A) the sale, lease, transfer or other disposition of any assets of any
     Loan Party or any of its Subsidiaries (other than any sale, lease, transfer
     or other disposition of assets pursuant to Section 5.02(e)(i) or, unless
     such proceeds shall have been invested pursuant to Section 5.02(f)(vii),
     Section 5.02(e)(iii));

     (B) the incurrence or issuance by any Loan Party or any of its Subsidiaries
     of any Debt (other than Debt incurred or issued pursuant to clause (i)(A),
     (i)(B), (i)(C), (i)(D), (i)(E), (i)(F), (iii)(A), (iii)(B) or (iii)(C) of
     Section 5.02(d));

     (C) the sale or issuance by any Loan Party or any of its Subsidiaries of
     any Equity Interests (including, without limitation, receipt of any capital
     contribution) other than (x) the proceeds of any transaction permitted
     pursuant to Section 5.02(e)(iii) or Section 5.02(g)(iii) and (y) proceeds
     of the TIME IPO except to the extent such proceeds are received by or for
     the account of the Borrowers; and
<PAGE>

                                       24

(y) within seven Business Days of receipt of the Net Cash Proceeds by any Loan
Party or any of its Subsidiaries from:

     (D) any Extraordinary Receipt received by or paid to or for the account of
     any Loan Party or any of its Subsidiaries and not otherwise included in
     clause (A), (B) or (C) above;

prepay an aggregate principal amount of the Advances comprising part of the same
Borrowings in an amount equal to the Lender Share of such Net Cash Proceeds.
Each such prepayment shall be applied ratably first to Base Rate Advances and
second to Eurocurrency Rate Advances and to the installments thereof in inverse
order of maturity.

          (iii)  In the event that the TIME IPO occurs on or prior to December
29, 2000, the Borrowers shall, notwithstanding any other provision of the Loan
Documents, prepay the whole of the outstanding principal amount of the Advances,
together with accrued interest to the date of such prepayment on the principal
amount prepaid, fees and expenses on or prior to December 29, 2000 and all
Commitments shall thereupon terminate.

          (iv)   Each prepayment made pursuant to this Section 2.06(b) shall be
made together with any interest accrued to the date of such prepayment on the
principal amounts prepaid and, in the case of any prepayment of a Eurocurrency
Rate Advance on a date other than the last day of an Interest Period or at its
maturity, any additional amounts which the Borrowers shall be obligated to
reimburse to the Lenders in respect thereof pursuant to Section 9.04(c).  The
Agent shall give prompt notice of any prepayment required under this Section
2.06(b) to the Borrowers and the Lenders.

          (c)    Prepayment of Senior Notes.  Neither ADL nor any of its
                 --------------------------
Subsidiaries shall make any prepayment of any amount due under the Note Purchase
Agreement other than any regularly scheduled prepayment or any mandatory
prepayment as set forth in the Note Purchase Agreement as of the date hereof;
provided, however, that the Borrowers may make such payment if simultaneously
--------  -------
therewith, it prepays a proportionate amount of the outstanding Obligations
hereunder, such that of the aggregate prepayments made, the Lender Share thereof
is applied to the outstanding Obligations hereunder and the Senior Note Share
thereof is applied to the Senior Notes.

          SECTION 2.07.  Increased Costs.  (a)  If after the date hereof, due to
                         ---------------
either (i) the introduction of or any change in or in the interpretation of any
law or regulation or (ii) the compliance with any guideline or request from any
central bank or other governmental authority including, without limitation, any
agency of the European Union or similar monetary or multinational authority
(whether or not having the force of law), there shall be any increase in the
cost to any Lender of agreeing to make or making, funding or maintaining
Eurocurrency Rate Advances (excluding for purposes of this Section 2.07 any such
increased costs resulting from (i) Taxes or Other Taxes (as to which Section
2.10 shall govern) and (ii) changes in the basis of taxation of overall net
income or overall gross income by the United States or by the foreign
jurisdiction or state under the laws of which such Lender is organized or has
its Applicable Lending Office or any political subdivision thereof), in any case
to or for the account of any
<PAGE>

                                       25

Borrower, then such Borrower shall from time to time, upon written demand by
such Lender (with a copy of such demand to the Agent), pay to the Agent for the
account of such Lender additional amounts sufficient to compensate such Lender
for such increased cost. A certificate as to the amount of such increased cost,
submitted to such Borrower and the Agent by such Lender, shall be conclusive and
binding for all purposes, absent manifest error.

          (b) If any Lender determines that compliance with any law or
regulation or any guideline or request from any central bank or other
governmental authority (whether or not having the force of law) affects or would
affect the amount of capital required or expected to be maintained by such
Lender or any corporation controlling such Lender and that the amount of such
capital is increased by or based upon the existence of such Lender's commitment
to lend hereunder and other commitments of this type, in any case to or for the
account of any Borrower, then, upon written demand by such Lender (with a copy
of such demand to the Agent), such Borrower shall pay to the Agent for the
account of such Lender, from time to time as specified by such Lender,
additional amounts sufficient to compensate such Lender or such corporation in
the light of such circumstances, to the extent that such Lender reasonably
determines such increase in capital to be allocable to the existence of such
Lender's commitment to lend hereunder.  A certificate as to such amounts
submitted to such Borrower and the Agent by such Lender shall be conclusive and
binding for all purposes, absent manifest error.

          SECTION 2.08.  Illegality.  Notwithstanding any other provision of
                         ----------
this Agreement, if any Lender shall notify the Agent that the introduction of or
any change in or in the interpretation of any law or regulation makes it
unlawful, or any central bank or other governmental authority asserts that it is
unlawful, for any Lender or its Eurocurrency Lending Office to perform its
obligations hereunder to make Eurocurrency Rate Advances or to fund or maintain
Eurocurrency Rate Advances, (a) each Eurocurrency Rate Advance will
automatically, upon such demand, be Converted into a Base Rate Advance, and (b)
the obligation of the Lenders to make, or to Convert Advances into, Eurocurrency
Rate Advances shall be suspended until the Agent shall notify the Borrowers and
the Lenders that the circumstances causing such suspension no longer exist.

          SECTION 2.09.  Payments and Computations.  (a)  Each Borrower shall
                         -------------------------
make each payment hereunder not later than 11:00 A.M. (New York City time) on
the day when due in US Dollars to the Agent at the applicable Agent's Account in
same day funds.  The Agent will promptly thereafter cause to be distributed like
funds relating to the payment of principal or interest ratably (other than
amounts payable pursuant to Section 2.07, 2.10 or 9.04(c)) to the Lenders for
the account of their respective Applicable Lending Offices, and like funds
relating to the payment of any other amount payable to any Lender to such Lender
for the account of its Applicable Lending Office, in each case to be applied in
accordance with the terms of this Agreement.  Upon its acceptance of an
Assignment and Acceptance and recording of the information contained therein in
the Register pursuant to Section 9.07(c), from and after the effective date
specified in such Assignment and Acceptance, the Agent shall make all payments
hereunder and under the Notes in respect of the interest assigned thereby to the
Lender assignee thereunder, and the parties to such Assignment and Acceptance
shall make all appropriate adjustments in such payments for periods prior to
such effective date directly between themselves.
<PAGE>

                                       26

          (b) Each Borrower hereby authorizes each Lender, if and to the extent
payment owed to such Lender is not made when due hereunder or under the Note
held by such Lender, to charge from time to time against any or all of such
Borrower's accounts with such Lender any amount so due.

          (c) All computations of interest based on the Base Rate shall be made
by the Agent on the basis of a year of 365 or 366 days, as the case may be, and
all computations of interest based on the Eurocurrency Rate or the Federal Funds
Rate shall be made by the Agent on the basis of a year of 360 days, in each case
for the actual number of days (including the first day but excluding the last
day) occurring in the period for which such interest is payable.  Each
determination by the Agent of an interest rate hereunder shall be conclusive and
binding for all purposes, absent manifest error.

          (d) Whenever any payment hereunder or under the Notes shall be stated
to be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest; provided, however, that, if
                                                    --------  -------
such extension would cause payment of interest on or principal of Eurocurrency
Rate Advances to be made in the next following calendar month, such payment
shall be made on the next preceding Business Day.

          (e) Unless the Agent shall have received notice from a Borrower prior
to the date on which any payment is due to the Lenders hereunder that such
Borrower will not make such payment in full, the Agent may assume that such
Borrower has made such payment in full to the Agent on such date and the Agent
may, in reliance upon such assumption, cause to be distributed to each Lender on
such due date an amount equal to the amount then due such Lender.  If and to the
extent a Borrower shall not have so made such payment in full to the Agent, each
Lender shall repay to the Agent forthwith on demand such amount distributed to
such Lender together with interest thereon, for each day from the date such
amount is distributed to such Lender until the date such Lender repays such
amount to the Agent, at (i) the Federal Funds Rate in the case of Advances
denominated in US Dollars or (ii) the cost of funds incurred by the Agent in
respect of such amount in the case of Advances denominated in Alternate
Currencies.

          SECTION 2.10.  Taxes.  (a)  Any and all payments by the Loan Parties
                         -----
hereunder or under the Notes shall be made, in accordance with Section 2.09,
free and clear of and without deduction for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding, in the case of each Lender and the Agent, taxes
                 ---------
imposed on its overall net income, and franchise taxes imposed on it in lieu of
net income taxes, by the jurisdiction under the laws of which such Lender or the
Agent (as the case may be) is organized or any political subdivision thereof
and, in the case of each Lender, taxes imposed on its overall net income, and
franchise taxes imposed on it in lieu of net income taxes, by the jurisdiction
of such Lender's Applicable Lending Office or any political subdivision thereof
(all such non-excluded taxes, levies, imposts, deductions, charges, withholdings
and liabilities in respect of payments hereunder or under the Notes being
hereinafter referred to as "Taxes").  If the Loan Parties shall be required by
                            -----
law to deduct any Taxes from or in respect of any sum payable hereunder or under
any Note to any Lender or the Agent, (i) the sum payable
<PAGE>

                                       27

shall be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 2.10) such Lender or the Agent (as the case may be) receives an
amount equal to the sum it would have received had no such deductions been made,
(ii) the Loan Parties shall make such deductions and (iii) the Loan Parties
shall pay the full amount deducted to the relevant taxation authority or other
authority in accordance with applicable law.

          (b) In addition, the Loan Parties shall pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies that arise from any payment made hereunder or under the Notes or
from the execution, delivery or registration of, performing under, or otherwise
with respect to, this Agreement or the Notes (hereinafter referred to as "Other
                                                                          -----
Taxes").
-----

          (c) The Loan Parties shall indemnify each Lender and the Agent for the
full amount of Taxes or Other Taxes (including, without limitation, any taxes
imposed by any jurisdiction on amounts payable under this Section 2.10) imposed
on or paid by such Lender or the Agent (as the case may be) and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto.  This indemnification shall be made within 30 days from the date such
Lender or the Agent (as the case may be) makes written demand therefor.

          (d) Within 30 days after the date of any payment of Taxes, the Loan
Parties shall furnish to the Agent, at its address referred to in Section 9.02,
the original or a certified copy of a receipt evidencing payment thereof.  In
the case of any payment hereunder or under the Notes by or on behalf of the Loan
Parties through an account or branch outside the United States or by or on
behalf of the Loan Parties by a payor that is not a United States person, if the
Loan Parties determine that no Taxes are payable in respect thereof, the Loan
Parties shall furnish, or shall cause such payor to furnish, to the Agent, at
such address, an opinion of counsel acceptable to the Agent stating that such
payment is exempt from Taxes.  For purposes of this subsection (d) and
subsection (e), the terms "United States" and "United States person" shall have
                           -------------       --------------------
the meanings specified in Section 7701 of the Internal Revenue Code.

          (e) Each Lender organized under the laws of a jurisdiction outside the
United States, on or prior to the date of its execution and delivery of this
Agreement in the case of each Initial Lender and on the date of the Assignment
and Acceptance pursuant to which it becomes a Lender in the case of each other
Lender, and from time to time thereafter as requested in writing by a Loan Party
(but only so long as such Lender remains lawfully able to do so), shall provide
each of the Agent and such Loan Party with two original Internal Revenue Service
forms 1001 or 4224, as appropriate, or any successor or other form prescribed by
the Internal Revenue Service, certifying that such Lender is exempt from or
entitled to a reduced rate of United States withholding tax on payments pursuant
to this Agreement or the Notes.  If the forms provided by a Lender at the time
such Lender first becomes a party to this Agreement indicates a United States
interest withholding tax rate in excess of zero, withholding tax at such rate
shall be considered excluded from Taxes unless and until such Lender provides
the appropriate forms certifying that a lesser rate applies, whereupon
withholding tax at such lesser rate only shall be considered excluded from Taxes
for periods governed by such form; provided, however, that, if at the date of
                                   --------  -------
the Assignment and Acceptance pursuant to which a Lender assignee becomes a
<PAGE>

                                       28

party to this Agreement, the Lender assignor was entitled to payments under
subsection (a) in respect of United States withholding tax with respect to
interest paid at such date, then, to such extent, the term Taxes shall include
(in addition to withholding taxes that may be imposed in the future or other
amounts otherwise includable in Taxes) United States withholding tax, if any,
applicable with respect to the Lender assignee on such date.  If any form or
document referred to in this subsection (e) requires the disclosure of
information, other than information necessary to compute the tax payable and
information required on the date hereof by Internal Revenue Service form 1001 or
4224, that the Lender reasonably considers to be confidential, the Lender shall
give notice thereof to the Loan Parties and shall not be obligated to include in
such form or document such confidential information.

          (f) For any period with respect to which a Lender has failed to
provide the Loan Parties with the appropriate form described in Section 2.10(e)
(other than if such failure is due to a change in law occurring subsequent to
 ----- ----
the date on which a form originally was required to be provided, or if such form
otherwise is not required under the first sentence of subsection (e) above),
such Lender shall not be entitled to indemnification under Section 2.10(a) or
(c) with respect to Taxes imposed by the United States by reason of such
failure; provided, however, that should a Lender become subject to Taxes because
         --------  -------
of its failure to deliver a form required hereunder, the Loan Parties shall take
such steps as the Lender shall reasonably request to assist the Lender to
recover such Taxes.

          (g) Any Lender claiming any additional amounts payable pursuant to
this Section 2.10 agrees to use reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions) to change the jurisdiction of its
Eurocurrency Lending Office if the making of such a change would avoid the need
for, or reduce the amount of, any such additional amounts that may thereafter
accrue and would not, in the reasonable judgment of such Lender, be otherwise
disadvantageous to such Lender.

          SECTION 2.11.  Sharing of Payments, Etc.  If any Lender shall obtain
                         ------------------------
any payment (whether voluntary, involuntary, through the exercise of any right
of set-off, or otherwise) on account of the Advances owing to it (other than
pursuant to Section 2.07, 2.10 or 9.04(c)) in excess of its ratable share of
payments on account of the Advances obtained by all the Lenders, such Lender
shall forthwith purchase from the other Lenders such participations in the
Advances owing to them as shall be necessary to cause such purchasing Lender to
share the excess payment ratably with each of them; provided, however, that if
                                                    --------  -------
all or any portion of such excess payment is thereafter recovered from such
purchasing Lender, such purchase from each Lender shall be rescinded and such
Lender shall repay to the purchasing Lender the purchase price to the extent of
such recovery together with an amount equal to such Lender's ratable share
(according to the proportion of (i) the amount of such Lender's required
repayment to (ii) the total amount so recovered from the purchasing Lender) of
any interest or other amount paid or payable by the purchasing Lender in respect
of the total amount so recovered.  Each Borrower agrees that any Lender so
purchasing a participation from another Lender pursuant to this Section 2.11
may, to the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Lender were the direct creditor of such Borrower in the amount of such
participation.
<PAGE>

                                       29

          SECTION 2.12.  Use of Proceeds.  The proceeds of the Advances shall be
                         ---------------
available (and each Borrower agrees that it shall use such proceeds) for general
corporate purposes of ADL and its Subsidiaries.

                                  ARTICLE III

                          CONDITIONS TO EFFECTIVENESS

          SECTION 3.01.  Conditions Precedent to Lending.  The obligation of the
                         -------------------------------
Lenders to make Advances was subject to the satisfaction of the conditions
precedent specified in the Existing Credit Agreement.

          SECTION 3.02.  Conditions Precedent to Effectiveness.  This Agreement
                         -------------------------------------
shall become effective on and as of the first date (the "Effective Date") on
                                                         --------------
which the following conditions precedent have been satisfied:

          (a)  There shall have occurred no Material Adverse Change since
     December 31, 1999.

          (b)  On the Effective Date, the following statements shall be true and
     the Agent shall have received for the account of each Lender a certificate
     signed by a duly authorized officer of ADL, dated the Effective Date,
     stating that:

               (i)  the representations and warranties contained in Section 4.01
          are correct on and as of the Effective Date, and
               (ii) no event has occurred and is continuing that constitutes a
          Default.

          (c)  The Agent shall have received on or before the Effective Date the
     following, each dated such day, in form and substance satisfactory to the
     Agent and (except for the Notes) in sufficient copies for each Lender:

               (i) A security agreement in substantially the form of Exhibit C
          hereto (together with each other security agreement and security
          agreement supplement delivered pursuant to Section 5.01(l), in each
          case as amended, the "Security Agreement") and stock pledge
                                ------------------
          agreements, substantially in the form of Exhibits D-1 to D-5 hereto
          (as amended, the "Pledge Agreements"), in each case duly executed by
                            -----------------
          each Loan Party, together with:

                    (A) certificates representing the Stock Collateral referred
               to therein accompanied by undated stock powers executed in blank,

                    (B) acknowledgment copies of proper financing statements,
               under the UCC, to be filed pursuant to the Security Agreement in
               all jurisdictions that the Agent may deem necessary or desirable
               in order to perfect and protect the first priority liens and
               security interests created
<PAGE>

                                       30

               under the Security Agreement, covering the Collateral described
               in the Security Agreement,

                      (C) completed requests for information, dated on or before
               the Effective Date, listing the financing statements referred to
               in clause (B) above and all other effective financing statements
               filed in the jurisdictions referred to in clause (B) above that
               name any Loan Party as debtor, together with copies of such other
               financing statements, and

                      (D) evidence that all other action that the Agent may deem
               necessary or desirable in order to perfect and protect the first
               priority liens and security interests created under the
               Collateral Documents has been taken.

               (ii)   A guaranty in substantially the form of Exhibit E hereto
          (together with each other guaranty and guaranty supplement delivered
          pursuant to Section 5.01(k) or Section 5.01(m), in each case as
          amended, the "Subsidiary Guaranty"), duly executed by each Subsidiary
                        -------------------
          Guarantor and a guaranty in substantially the form of Exhibit F hereto
          (as amended, the "TIME Guaranty"), duly executed by TIME.
                            -------------

               (iii)  The Collateral Agency and Intercreditor Agreement duly
          executed by each party thereto.

               (iv)   Certified copies of the resolutions of the Board of
          Directors of each Loan Party approving the Loan Documents to which it
          is or is to be a party, and of all documents evidencing other
          necessary corporate action and governmental approvals, if any, with
          respect to this Agreement and the Notes.

               (v)    A certificate of the Secretary or an Assistant Secretary
          of each Loan Party certifying the names and true signatures of the
          officers of such Loan Party authorized to sign each Loan Document to
          which it is or is to be a party and the other documents to be
          delivered hereunder.

               (vi)   A copy of the organizational documents of each Loan Party
          and each amendment thereto certified (as of a date reasonably near the
          Effective Date) by an authorized official of the jurisdiction of
          organization of such Loan Party as being a true and correct copy
          thereof.

               (vii)  Evidence from an authorized official of the jurisdiction
          of organization of each Loan Party certifying that such Loan Party is
          duly incorporated and in good corporate standing under the laws of
          such jurisdiction on or about the Effective Date.

               (viii) Such financial, business and other information regarding
          each Loan Party and its Subsidiaries as the Lenders shall have
          requested, including,
<PAGE>

                                       31

          without limitation, (A) information as to possible contingent
          liabilities, tax matters, environmental matters, obligations under
          Plans, Multiemployer Plans and Welfare Plans, collective bargaining
          agreements and other arrangements with employees, and (B) copies,
          certified by a responsible officer of ADL, of interim financial
          statements for EPYX dated the end of the most recent fiscal quarter
          for which financial statements are available.

               (ix) Drafts of the Consolidated balance sheet of ADL and its
          Subsidiaries as at December 31, 1999, and the related Consolidated
          statements of income and cash flows of ADL and its Subsidiaries for
          the fiscal year then ended.

               (x)  A favorable opinion of Hale and Dorr, counsel for the Loan
          Parties, substantially in the form of Exhibit H hereto and as to such
          other matters as any Lender through the Agent may reasonably request.

               (xi) A favorable opinion of Shearman & Sterling, counsel for the
          Agent, in form and substance satisfactory to the Agent.

          (d) This Agreement and each of the other Loan Documents shall have
     been executed in form and substance satisfactory to the Agent.

          (e) The Note Purchase Agreement shall have been executed in form and
substance satisfactory to the Agent, and ADL shall have delivered to the Agent
an executed copy thereof, certified by an authorized officer of ADL.

          (f) The Borrowers shall have paid all accrued and unpaid interest
owing under the Existing Credit Agreement up to the Effective Date.

          (g) The Borrowers shall have paid all accrued fees and expenses of the
Agent and the Lenders including, without limitation, allocated costs of in-house
counsel to any Lenders.

          SECTION 3.03.  Determinations Under Section 3.02.  For purposes of
                         ---------------------------------
determining compliance with the conditions specified in Section 3.02, each
Lender shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to the Lenders unless an officer
of the Agent responsible for the transactions contemplated by this Agreement
shall have received notice from such Lender prior to the date that ADL, by
notice to the Lenders, designates as the proposed Effective Date or, in the case
of the initial Borrowing hereunder or the initial Borrowing by any additional
Eligible Subsidiary that becomes a Borrower after the date hereof, the proposed
date of such initial Borrowing, specifying its objection thereto.  The Agent
shall promptly notify the Lenders of the occurrence of the Effective Date.
<PAGE>

                                       32

                                  ARTICLE IV

                        REPRESENTATIONS AND WARRANTIES

          SECTION 4.01.  Representations and Warranties of the Borrowers.  Each
                         -----------------------------------------------
Borrower represents and warrants as follows:

          (a)  Each Loan Party and each of its Subsidiaries is a corporation
     duly organized, validly existing and in good standing under the laws of the
     jurisdiction of its organization.

          (b)  The execution, delivery and performance by each Loan Party of the
     Loan Documents to which it is or is to be a party, and the consummation of
     the transactions contemplated thereby, are within such Loan Party's
     corporate powers, have been duly authorized by all necessary corporate
     action, and do not contravene (i) such Loan Party's charter or by-laws or
     (ii) law or any contractual restriction binding on or affecting such Loan
     Party.

          (c)  Set forth on Schedule 4.01(c) hereto is a complete and accurate
     list of all Subsidiaries of each Loan Party, showing as of the date hereof
     (as to each such Subsidiary) the jurisdiction of its incorporation, the
     number of shares of each class of its Equity Interests authorized, and the
     number outstanding, on the date hereof and the percentage of each such
     class of its Equity Interests owned (directly or indirectly) by such Loan
     Party and the number of shares covered by all outstanding options,
     warrants, rights of conversion or purchase and similar rights at the date
     hereof.  All of the outstanding Equity Interests in each Loan Party's
     Subsidiaries has been validly issued, are fully paid and non-assessable and
     are owned by such Loan Party or one or more of its Subsidiaries free and
     clear of all Liens, except those created under the Collateral Documents.

          (d)  No authorization or approval or other action by, and no notice to
     or filing with, any governmental authority or regulatory body or any other
     third party is required for the due execution, delivery and performance by
     any Loan Party of the Loan Documents to which it is or is to be a party.

          (e)  Each of the Loan Documents has been duly executed and delivered
     by each Loan Party party thereto. Each of the Loan Documents is the legal,
     valid and binding obligation of such Loan Party enforceable against such
     Loan Party in accordance with its terms.

          (f)  The Consolidated balance sheet of ADL and its Subsidiaries as at
     December 31, 1999, and the related Consolidated statements of income and
     cash flows of ADL and its Subsidiaries for the fiscal year then ended,
     accompanied by an opinion of Deloitte & Touche LLP, independent public
     accountants, drafts of which have been furnished to each Lender, fairly
     present the Consolidated financial condition of ADL and its Subsidiaries as
     at such dates and the Consolidated results of the operations of ADL and its
     Subsidiaries for the periods ended on such dates, all in accordance with
     generally
<PAGE>

                                       33

     accepted accounting principles consistently applied. Since December 31,
     1999, there has been no Material Adverse Change.

          (g)  There is no pending or threatened action, suit, investigation,
     litigation or proceeding including, without limitation, any Environmental
     Action, affecting ADL or any of its Subsidiaries before any court,
     governmental agency or arbitrator that (i) could be reasonably likely to
     have a Material Adverse Effect or (ii) purports to affect the legality,
     validity or enforceability of this Agreement or any Note or the
     consummation of the transactions contemplated hereby.

          (h)  Such Borrower is not engaged in the business of extending credit
     for the purpose of purchasing or carrying margin stock (within the meaning
     of Regulation U issued by the Board of Governors of the Federal Reserve
     System).

          (i)  Following application of the proceeds of each Advance, not more
     than 25 percent of the value of the assets (either of such Borrower only or
     of such Borrower and its Subsidiaries on a Consolidated basis) subject to
     the provisions of Section 5.02(a) or subject to any restriction contained
     in any agreement or instrument between such Borrower and any Lender or any
     Affiliate of any Lender relating to Debt and within the scope of Section
     7.01(d) will be margin stock (within the meaning of Regulation U issued by
     the Board of Governors of the Federal Reserve System).

          (j)  No ERISA Event has occurred or is reasonably expected to occur
     with respect to any Plan.

          (k)  As of the last annual actuarial valuation date, the funded
     current liability percentage, as defined in Section 302(d)(8) of ERISA, of
     each Plan exceeds 90% and there has been no material adverse change in the
     funding status of any such Plan since such date.

          (l)  Neither such Borrower nor any ERISA Affiliate has incurred or is
     reasonably expected to incur any Withdrawal Liability to any Multiemployer
     Plan.

          (m)  Neither such Borrower nor any ERISA Affiliate has been notified
     by the sponsor of a Multiemployer Plan that such Multiemployer Plan is in
     reorganization or has been terminated, within the meaning of Title IV of
     ERISA, and no such Multiemployer Plan is reasonably expected to be in
     reorganization or to be terminated, within the meaning of Title IV of
     ERISA.

          (n)  Except as set forth in the financial statements referred to in
     this Section 4.01 and in Section 5.01, such Borrower and its Subsidiaries
     have no material liability with respect to "expected post retirement
     benefit obligations" within the meaning of Statement of Financial
     Accounting Standards No. 106.

          (o)  Except as set forth in Schedule 4.01(o) hereto, the operations
     and properties of such Borrower and each of its Subsidiaries comply in all
     material respects
<PAGE>

                                       34

     with all applicable Environmental Laws and Environmental Permits known to
     such Borrower or any of its Subsidiaries or of which such Borrower or any
     of its Subsidiaries should have known, all past non-compliance with such
     Environmental Laws and Environmental Permits has been resolved without
     ongoing obligations or costs, and no circumstances exist that could be
     reasonably likely to (i) form the basis of an Environmental Action against
     such Borrower or any of its Subsidiaries or any of their properties that
     could have a Material Adverse Effect or (ii) cause any such property to be
     subject to any restrictions on ownership, occupancy, use or transferability
     under any Environmental Law that could have a Material Adverse Effect.

          (p)  None of the properties currently or, to the extent such Borrower
     or any of its Subsidiaries knows or should have known, formerly owned or
     operated by such Borrower or any of its Subsidiaries (other than with
     respect to sites currently or formerly evaluated and supervised for third
     parties) is listed or, to the best knowledge of such Borrower, proposed for
     listing on the National Priorities List under the Comprehensive
     Environmental Response, Compensation and Liability Act of 1980 ("NPL") or
                                                                      ---
     on the Comprehensive Environmental Response, Compensation and Liability
     Information System maintained by the U.S. Environmental Protection Agency
     ("CERCLIS") or any analogous foreign, state or local list or, to the extent
       -------
     such Borrower or any of its Subsidiaries knows or should have known, is
     adjacent to any such property; and except as set forth in Schedule 4.01
     hereto, (i) there are no and never have been any underground or aboveground
     storage tanks or any surface impoundments, septic tanks, pits, sumps or
     lagoons in which Hazardous Materials are being or have been treated, stored
     or disposed of on any property currently owned or operated by such Borrower
     or any of its Subsidiaries or, on any property formerly owned or operated
     by such Borrower or any of its Subsidiaries (other than with respect to
     sites currently or formerly evaluated and supervised for third parties),
     (ii) there is no asbestos or asbestos-containing material on any property
     currently owned or operated by such Borrower or any of its Subsidiaries,
     and (iii) Hazardous Materials have not been released, discharged or
     disposed of on any property currently or to the extent such Borrower or any
     of its Subsidiaries knows or should have known formerly owned or operated
     by such Borrower or any of its Subsidiaries or, any adjoining property,
     except for any of the foregoing that, either individually or in the
     aggregate, could not reasonably be expected to have a Material Adverse
     Effect.

          (q)  Neither such Borrower nor any of its Subsidiaries is undertaking,
     and has not completed, either individually or together with other
     potentially responsible parties, any investigation or assessment or
     remedial or response action relating to any actual or threatened release,
     discharge or disposal of Hazardous Materials at any site, location or
     operation, either voluntarily or pursuant to the order of any governmental
     or regulatory authority or the requirements of any Environmental Law (other
     than with respect to sites currently or formerly evaluated and supervised
     for third parties), except for any of the foregoing that, either
     individually or in the aggregate, could not reasonably be expected to have
     a Material Adverse Effect; and to the extent that such Borrower or any of
     its Subsidiaries knows or should have known, all Hazardous Materials
     generated, used, treated, handled or stored at or transported to or from
     any property currently or formerly
<PAGE>

                                       35

     owned or operated by such Borrower or any of its Subsidiaries have been
     disposed of in a manner not reasonably expected to result in material
     liability to such Borrower or any of its Subsidiaries.

          (r)  Such Borrower and each of its Subsidiaries has filed, has caused
     to be filed or has been included in all tax returns (Federal, state, local
     and foreign) required to be filed and has paid all taxes shown thereon to
     be due, together with applicable interest and penalties except for (i) any
     such taxes which taken individually or in the aggregate are immaterial or
     (ii) any such tax that (x) is being contested in good faith and by proper
     proceedings, (y) as to which appropriate reserves are being maintained, and
     (z) with respect which no Lien has attached to any portion of the property
     of such Borrower or any of its Subsidiaries and become enforceable against
     its other creditors.

          (s)  Neither such Borrower nor any of its Subsidiaries is an
     "investment company," or an "affiliated person" of, or "promoter" or
     "principal underwriter" for, an "investment company," as such terms are
     defined in the Investment Company Act of 1940, as amended.  Neither the
     making of any Advances, nor the application of the proceeds or repayment
     thereof by such Borrower, nor the consummation of the other transactions
     contemplated hereby, will violate any provision of such Act or any rule,
     regulation or order of the Securities and Exchange Commission thereunder.

          (t)  Each of such Borrower and each of its Subsidiaries owns all
     trademarks, permits, service marks, trade names, copyrights, license,
     franchises and formulas, or rights with respect to the foregoing necessary
     for the conduct of their respective business, presently conducted without
     any known conflict with the rights of others.  Each such trademark, permit,
     service mark, trade name, copyright, license, franchise and formula is
     valid and in full force and effect; no event has occurred that could be
     reasonably likely to (i) result in the revocation, termination or adverse
     modification of any such franchise or (ii) materially and adversely affect
     any rights of such Borrower or the rights of such Borrower and its
     Subsidiaries taken as a whole; and such Borrower has no knowledge that such
     trademark, permit, service mark, trade name, copyright, license, franchise
     or formula will not be renewed in the ordinary course.

          (u)  Such Borrower and its Subsidiaries own all of the assets
     reflected in the Consolidated balance sheet of such Borrower as at the date
     of such balance sheet or acquired since that date (except property and
     assets sold or otherwise disposed of in accordance with the provisions of
     the Agreement since that date).

          (v)  The ESOP (i) has been duly formed, (ii) is validly existing under
     the laws of the Commonwealth of Massachusetts, (iii) is qualified under
     Section 401(a) and 501(a) of the Internal Revenue Code and (iv) constitutes
     an "employee stock ownership plan" under ERISA and Section 4975(e)(7) of
     the Internal Revenue Code.

          (w)  Any reprogramming required to permit the proper functioning, in
     and following the year 2000, of (i) such Borrower's computer systems and
     (ii) equipment containing embedded microchips (including systems and
     equipment supplied by others or with which such Borrower's systems
     interface) and the testing of all such systems and
<PAGE>

                                       36

     equipment, as so reprogrammed, will be completed in sufficient time so as
     to prevent the occurrence of an Event of Default or a Material Adverse
     Effect. The cost to such Borrower of such reprogramming and testing and of
     the reasonably foreseeable consequences of year 2000 to such Borrower
     (including, without limitation, reprogramming errors and the failure of
     other systems or equipment) will not result in an Event of Default or a
     Material Adverse Effect. Except for such of the reprogramming referred to
     in the preceding sentence as may be necessary, the computer and management
     information systems of such Borrower and its Subsidiaries are and, with
     ordinary course upgrading and maintenance, will continue for the term of
     this Agreement to be, sufficient to permit such Borrower to conduct its
     business without Material Adverse Effect.

          (x)  As of the Effective Date, $7,000,000 is held in the name of ADL
     at BankBoston representing the balance of the proceeds of the EPYX
     Transaction with Amerada Hess Corporation pursuant to an Investment
     Agreement dated as of March 30, 2000 (the "Hess Proceeds")
                                                -------------

                                   ARTICLE V

                           COVENANTS OF THE BORROWER

          SECTION 5.01.  Affirmative Covenants.  So long as any Advance shall
                         ---------------------
remain unpaid or any Lender shall have any Commitment hereunder, each Borrower
will:

          (a)  Compliance with Laws, Etc.  Comply, and cause each of its
               -------------------------
     Subsidiaries to comply, in all material respects, with all applicable laws,
     rules, regulations and orders, such compliance to include, without
     limitation, compliance with ERISA and Environmental Laws as provided in
     Section 5.01(j) hereof.

          (b)  Payment of Taxes, Etc.  Pay and discharge, and cause each of its
               ---------------------
     Subsidiaries to pay and discharge, before the same shall become delinquent,
     (i) all taxes, assessments and governmental charges or levies imposed upon
     it or upon its property (other than such taxes, assessments, governmental
     charges or levies which taken individually or in the aggregate are
     immaterial) and (ii) all lawful claims that, if unpaid, might by law become
     a Lien upon its property; provided, however, that neither such Borrower nor
                               --------  -------
     any of its Subsidiaries shall be required to pay or discharge any such tax,
     assessment, charge or claim that is being contested in good faith and by
     proper proceedings and as to which appropriate reserves are being
     maintained, unless and until any Lien resulting therefrom attaches to its
     property and becomes enforceable against its other creditors.

          (c)  Maintenance of Insurance.  Maintain, and cause each of its
               ------------------------
     Subsidiaries to maintain, insurance with responsible and reputable
     insurance companies or associations in such amounts and covering such risks
     as is usually carried by companies engaged in similar businesses and owning
     similar properties in the same general areas in which such Borrower or such
     Subsidiary operates.
<PAGE>

                                       37

          (d)  Preservation of Corporate Existence, Etc.  Preserve and maintain,
               ----------------------------------------
     and cause each of its Subsidiaries to preserve and maintain, its corporate
     existence, rights (charter and statutory) and franchises; provided,
                                                               --------
     however, that such Borrower and its Subsidiaries may consummate any merger
     -------
     or consolidation permitted under Section 5.02(b) and provided further that
                                                          -------- -------
     neither such Borrower nor any of its Subsidiaries shall be required to
     preserve any right or franchise if the Board of Directors of such Borrower
     or such Subsidiary shall determine that the preservation thereof is no
     longer desirable in the conduct of the business of such Borrower or such
     Subsidiary, as the case may be, and that the loss thereof is not
     disadvantageous in any material respect to such Borrower, such Subsidiary
     or the Lenders.

          (e)  Visitation Rights.  At any time during normal business hours and
               -----------------
     from time to time, with reasonable prior notice, permit the Agent or any of
     the Lenders or any agents or representatives thereof, to examine and make
     copies of and abstracts from the records and books of account of, and visit
     the properties of, such Borrower and any of its Subsidiaries, and to
     discuss the affairs, finances and accounts of such Borrower and any of its
     Subsidiaries with any of their officers or directors and with their
     independent certified public accountants.  If any representative or agent
     of the Agent or any Lender (other than counsel to the Agent or such Lender)
     shall not be an employee of the Agent or such Lender or any Affiliate of
     the Agent or such Lender, such representative or agent shall be reputable
     and of recognized standing and shall agree in writing to treat any
     Confidential Information obtained during such inspection in accordance with
     the provisions of Section 9.08 hereof.

          (f)  Keeping of Books.  Keep, and cause each of its Subsidiaries to
               ----------------
     keep, proper books of record and account, in which full and correct entries
     shall be made of all financial transactions and the assets and business of
     such Borrower and each such Subsidiary in accordance with generally
     accepted accounting principles in effect from time to time.

          (g)  Maintenance of Properties, Etc.  Maintain and preserve, and cause
               ------------------------------
     each of its Subsidiaries to maintain and preserve, all of its properties
     that are used or useful in the conduct of its business in good working
     order and condition, ordinary wear and tear excepted.

          (h)  Transactions with Affiliates.  Conduct, and cause each of its
               ----------------------------
     Subsidiaries to conduct, all transactions otherwise permitted under this
     Agreement with any of their Affiliates on terms that are fair and
     reasonable and no less favorable to such Borrower or such Subsidiary than
     it would obtain in a comparable arm's-length transaction with a Person not
     an Affiliate.

          (i)  Reporting Requirements.  Furnish to the Lenders:
               ----------------------

               (i)  as soon as available and in any event within 45 days after
          the end of each of the first three quarters of each fiscal year of ADL
          and to the extent such
<PAGE>

                                       38

          financial information (including, without limitation, the certificate
          of the Financial Officer described herein) described in this
          subsection (i) has not been previously delivered, the Consolidated
          balance sheet of ADL and its Subsidiaries and a balance sheet of each
          of EPYX and TIME as of the end of such quarter and Consolidated
          statements of income and cash flows of ADL and its Subsidiaries and
          statements of income and cash flows of each of EPYX and TIME for the
          period commencing at the end of the previous fiscal year and ending
          with the end of such quarter, duly certified (subject to year-end
          audit adjustments) by a Financial Officer of ADL as having been
          prepared in accordance with GAAP and certificates of a Financial
          Officer of ADL as to compliance with the terms of this Agreement and
          setting forth in reasonable detail the calculations necessary to
          demonstrate compliance with Section 5.03, provided that, in the event
                                                    --------
          of any change in GAAP used in the preparation of such financial
          statements, ADL shall also provide, if necessary for the determination
          of compliance with Section 5.03, a statement of reconciliation
          conforming such financial statements to GAAP;

               (ii)  as soon as available and in any event within 90 days after
          the end of each fiscal year of ADL, or, in the case of the fiscal year
          ending December 31, 1999, within 15 days of the Effective Date, a copy
          of the annual audit report for such year for ADL and its Subsidiaries,
          containing the Consolidated balance sheet of ADL and its Subsidiaries
          and a balance sheet of each of EPYX and TIME as of the end of such
          fiscal year and Consolidated statements of income and cash flows of
          ADL and its Subsidiaries and statements of income and cash flows of
          each of EPYX and TIME for such fiscal year, in each case accompanied
          by an opinion acceptable to the Required Lenders by Deloitte & Touche
          LLP or other independent public accountants of recognized national
          standing acceptable to the Required Lenders, provided that, in the
                                                       --------
          event of any change in GAAP used in the preparation of such financial
          statements, ADL shall also provide, if necessary for the determination
          of compliance with Section 5.03, a statement of reconciliation
          conforming such financial statements to GAAP;

               (iii)  as soon as available and in any event no later than 30
          days after the end of each month (other than the month of January if
          no such report is prepared), the Financial Report (Blue Book) prepared
          by the management of ADL, which will contain, without limitation, (x)
          Consolidated income statements for ADL and its Subsidiaries on a
          monthly, quarterly and year to date basis reflecting actual, planned
          and prior year amounts, (y) Consolidated balance sheets for ADL and
          its Subsidiaries for the end of the previous fiscal year then ended
          and as of the date of the report and (z) Consolidated statement of
          cash flow for ADL and its Subsidiaries for the period commencing at
          the end of the previous fiscal year and ending with the end of such
          quarter;

               (iv) as soon as available and in any event not later than
          November 30, 2000, a copy of the draft plan and forecast (including a
          projected balance sheet, income statement and statement of cash flows)
          of ADL and its Subsidiaries for the fiscal year of ADL commencing
          January 1, 2001 and, as soon as available and in
<PAGE>

                                       39

          any event not later than December 31, 2000, a copy of such plan and
          forecast as approved by the board of directors of ADL.

               (v)  promptly after receipt thereof, such information respecting
          the business, condition (financial or otherwise), operations,
          performance, properties or prospects of TIME or EPYX, including,
          without limitation:

                    (A) any plan and forecast (including any projected balance
               sheet, statement of income and statement of cash flow) for TIME
               and EPYX for any period for which such information is available,
               and

                    (B) any agreement, letter of intent, prospectus, purchase
               and sale agreement, underwriting agreement, registration
               statement or other document or agreement in respect of any
               Person's commitment to enter into any EPYX Transaction.

               (vi)   as soon as possible and in any event within five days
          after the occurrence of each Default continuing on the date of such
          statement, a statement of a Financial Officer of ADL setting forth
          details of such Default, and the action that ADL has taken and
          proposes to take with respect thereto;

               (vii)  promptly after the sending or filing thereof, copies of
          all reports that ADL sends to any of its security holders (other than
          reports that relate solely to the amount of security holder's
          individual holdings and certain incidental matters related thereto),
          and copies of all reports and registration statements that such
          Borrower or any Subsidiary files with the Securities and Exchange
          Commission or any national securities exchange;

               (viii) promptly after the commencement thereof, notice of all
          actions and proceedings before any court, governmental agency or
          arbitrator affecting such Borrower or any of its Subsidiaries of the
          type described in Section 4.01(g) when the claim against such Borrower
          or any of its Subsidiaries as a result of such action or proceeding
          could reasonably be expected to exceed $1,000,000;

               (ix)   promptly and in any event within 10 days after such
          Borrower or any ERISA Affiliate knows or has reason to know that any
          ERISA Event has occurred, a statement of a Financial Officer of such
          Borrower describing such ERISA Event and the action, if any, that such
          Borrower or such ERISA Affiliate has taken and proposes to take with
          respect thereto and on the date any records, documents or other
          information must be furnished to the PBGC with respect to any Plan
          pursuant to Section 4010 of ERISA, a copy of such records, documents
          and information;

               (x)    promptly and in any event within two Business Days after
          receipt thereof by such Borrower or any ERISA Affiliate, copies of
          each notice from the
<PAGE>

                                       40

          PBGC stating its intention to terminate any Plan or to have a trustee
          appointed to administer any Plan;

               (xi)   promptly and in any event within 30 days after the receipt
          thereof by such Borrower or any ERISA Affiliate, a copy of the annual
          actuarial report for each Plan the funded current liability percentage
          (as defined in Section 302(d)(8) of ERISA) of which is less than 90%
          or the unfunded current liability of which exceeds $1,000,000;

               (xii)  promptly and in any event within five Business Days after
          receipt thereof by such Borrower or any ERISA Affiliate from the
          sponsor of a Multiemployer Plan, copies of each notice concerning (A)
          the imposition of Withdrawal Liability by any such Multiemployer Plan,
          (B) the reorganization or termination, within the meaning of Title IV
          of ERISA, of any such Multiemployer Plan or (C) the amount of
          liability incurred, or that may be incurred, by such Borrower or any
          ERISA Affiliate in connection with any event described in clause (A)
          or (B);

               (xiii) promptly and in any event within 5 Business Days of
          receipt thereof, a copy of the management letter of Deloitte and
          Touche LLP or other independent accountants of recognized national
          standing acceptable to the Required Lenders in respect of the
          financial statements required to be delivered pursuant to Section
          5.01(i)(ii); and

               (xiv)  with reasonable promptness, such other data and
          information relating to the business, operations, affairs, financial
          condition, assets or properties of such Borrower or any of its
          Subsidiaries or relating to the ability of such Borrower to perform
          its obligations hereunder as from time to time may be reasonably
          requested by the Agent.

          (j)    Compliance with Environmental Laws.  Comply, and as soon as it
                 ----------------------------------
     becomes aware, or should have been aware of a compliance issue, cause each
     of its Subsidiaries and all lessees and other Persons operating or
     occupying its properties to comply, in all material respects, with all
     applicable Environmental Laws and Environmental Permits obtain and renew
     and cause each of its Subsidiaries to obtain and renew all Environmental
     Permits necessary for its operations and properties; and conduct, and cause
     each of its Subsidiaries to conduct, any investigation, study, sampling and
     testing, and undertake any cleanup, removal, remedial or other action
     necessary to remove and clean up all Hazardous Materials from any of its
     properties, in accordance with the requirements of all Environmental Laws;
     provided, however, that neither such Borrower nor any of its Subsidiaries
     --------  -------
     shall be required to undertake any such cleanup, removal, remedial or other
     action to the extent that its obligation to do so is being contested in
     good faith and by proper proceedings and appropriate reserves are being
     maintained with respect to such circumstances or if failure to take such
     action could not be reasonably expected to have a Material Adverse Effect.
<PAGE>

                                       41

          (k) Covenant to Guarantee Obligations and Give Security.  Upon (x) the
              ---------------------------------------------------
     request of the Collateral Agent following the occurrence and during the
     continuance of a Default, (y) any Subsidiary becoming a Material Subsidiary
     or (z) the formation or acquisition of any new direct or indirect
     Subsidiary by any Loan Party, then the Borrowers shall, in each case at the
     Borrowers' expense:

               (i)    in connection with the formation or acquisition of a
          Subsidiary that is a Material Subsidiary or upon any Subsidiary
          becoming a Material Subsidiary, within 10 days after such creation,
          formation or acquisition, cause each such Material Subsidiary, and
          cause each direct and indirect parent of such Material Subsidiary (if
          it has not already done so), to duly execute and deliver to the
          Collateral Agent a guaranty or guaranty supplement, in form and
          substance satisfactory to the Collateral Agent, guaranteeing the other
          Loan Parties' obligations under the Loan Documents,

               (ii)   within 10 days after such request, creation, formation or
          acquisition, furnish to the Collateral Agent a description of the real
          and personal properties of the Loan Parties and their respective
          Subsidiaries in detail satisfactory to the Collateral Agent,

               (iii)  within 15 days after such request, creation, formation or
          acquisition, duly execute and deliver, and cause each such Subsidiary
          that is a Domestic Subsidiary or a Material Subsidiary and each direct
          and indirect parent of such Subsidiary (if it has not already done so)
          to duly execute and deliver, to the Collateral Agent pledges, security
          agreement supplements and other security agreements, as specified by
          and in form and substance satisfactory to the Collateral Agent,
          securing payment of all the Obligations of the applicable Loan Party,
          such Subsidiary or such parent, as the case may be, under the Loan
          Documents and constituting Liens on all accounts receivable of such
          Subsidiary,

               (iv)   within 30 days after such request, formation or
          acquisition, take, and cause such Subsidiary that is a Domestic
          Subsidiary or a Material Subsidiary or such parent to take, whatever
          action (including, without limitation, the filing of Uniform
          Commercial Code financing statements and the giving of notices) may be
          necessary or advisable in the opinion of the Collateral Agent to vest
          in the Collateral Agent (or in any representative of the Collateral
          Agent designated by it) valid and subsisting Liens on the properties
          purported to be subject to the pledges, security agreement supplements
          and security agreements delivered pursuant to this Section 5.01(k),
          enforceable against all third parties in accordance with their terms,

               (v)    within 60 days after such request, creation, formation or
          acquisition, deliver to the Collateral Agent, upon the request of the
          Collateral Agent in its sole discretion, a signed copy of a favorable
          opinion, addressed to the Collateral Agent and the other Secured
          Parties, of counsel for the Loan Parties acceptable to the Collateral
          Agent as to the matters contained in clauses (i), (iii) and (iv)
          above, as to such guaranties, guaranty supplements, pledges,
          assignments,
<PAGE>

                                       42

          security agreement supplements and security agreements being legal,
          valid and binding obligations of each Loan Party thereto enforceable
          in accordance with their terms, as to the matters contained in clause
          (iv) above, as to such filings, notices and other actions being
          sufficient to create valid perfected Liens on such properties, and as
          to such other matters as the Collateral Agent may reasonably request,
          and

               (vi)  at any time and from time to time, promptly execute and
          deliver any and all further instruments and documents and take all
          such other action as the Collateral Agent may deem necessary or
          desirable in obtaining the full benefits of, or in perfecting and
          preserving the Liens of, such guaranties, pledges, security agreement
          supplements and security agreements.

          (l)  Further Assurances.  (i)  Promptly upon request by any Agent, or
               ------------------
     any Lender Party through any Agent, correct, and cause each of its
     Subsidiaries promptly to correct, any material defect or error that may be
     discovered in any Loan Document or in the execution, acknowledgment, filing
     or recordation thereof, and

          (ii) Promptly upon request by any Agent, or any Lender Party through
     any  Agent, do, execute, acknowledge, deliver, record, re-record, file, re-
     file, register and re-register any and all such further acts, pledge
     agreements, assignments, financing statements and continuations thereof,
     termination statements, notices of assignment, transfers, certificates,
     assurances and other instruments as any Agent, or any Lender Party through
     any Agent, may reasonably require from time to time in order to (A) carry
     out more effectively the purposes of the Loan Documents, (B) to the fullest
     extent permitted by applicable law, subject any Loan Party's or any of its
     Subsidiaries' properties, assets, rights or interests to the Liens now or
     hereafter intended to be covered by any of the Collateral Documents, (C)
     perfect and maintain the validity, effectiveness and priority of any of the
     Collateral Documents and any of the Liens intended to be created thereunder
     and (D) assure, convey, grant, assign, transfer, preserve, protect and
     confirm more effectively unto the Secured Parties the rights granted or now
     or hereafter intended to be granted to the Secured Parties under any Loan
     Document or under any other instrument executed in connection with any Loan
     Document to which any Loan Party or any of its Subsidiaries is or is to be
     a party, and cause each of its Subsidiaries to do so.

          (m)  Covenant to Grant Further Security.  In the event that the TIME
               ----------------------------------
     IPO does not occur on or prior to December 31, 2000, the Borrowers shall:

               (i)   not later than January 10, 2001 duly execute and deliver,
          and cause each Subsidiary (if it has not already done so) to duly
          execute and deliver, to the Collateral Agent pledges, security
          agreement supplements and other security agreements, as specified by
          and in form and substance satisfactory to the Collateral Agent,
          securing payment of all the Obligations of the applicable Loan Party
          and such Subsidiary under the Loan Documents and constituting Liens on
          all accounts receivable of the Borrowers and each of their
          Subsidiaries,
<PAGE>

                                       43

               (ii)   not later than January 10, 2001, take, and cause each
          Subsidiary to take, whatever action (including, without limitation,
          the filing of Uniform Commercial Code financing statements and the
          giving of notices) may be necessary or advisable in the opinion of the
          Collateral Agent to vest in the Collateral Agent (or in any
          representative of the Collateral Agent designated by it) valid and
          subsisting Liens on the properties purported to be subject to the
          pledges, security agreement supplements and security agreements
          delivered pursuant to this Section 5.01(m), enforceable against all
          third parties in accordance with their terms,

               (iii)  not later than January 20, 2001, deliver to the Collateral
          Agent, upon the request of the Collateral Agent in its sole
          discretion, a signed copy of a favorable opinion, addressed to the
          Collateral Agent and the other Secured Parties, of counsel for the
          Loan Parties acceptable to the Collateral Agent as to the matters
          contained in clauses (i) and (ii) above, as to such pledges,
          assignments, security agreement supplements and security agreements
          being legal, valid and binding obligations of each Loan Party party
          thereto enforceable in accordance with their terms, and as to such
          other matters as the Collateral Agent may reasonably request.

          (n)  Quarterly Meetings.  Within ten Business Days of the delivery of
               ------------------
     the financial statements provided pursuant to Section 5.01(i)(i) for each
     quarterly period beginning with the fiscal period ending March 31, 2000,
     ADL will cause its chief financial officer and its executive vice president
     of finance and development and, following delivery of such financial
     statements for the fiscal period ending December 31, 2000, its chief
     executive officer, to meet, at ADL's expense, either in person at ADL's
     executive office or via telephone conference call, with the Agent and the
     Lenders to discuss the financial condition, results of operations,
     prospects and other matters relating to the business plan of the Borrowers
     and their Subsidiaries.

          (o)  Repayment of Senior Notes.  Subject to Section 2.06(c), ADL shall
               -------------------------
     repay the Senior Notes in accordance with the following payment schedule:

            ---------------------------------------
              Date                    Payment
              ----                    -------
            ---------------------------------------
              July 1, 2000            $ 1,375,000
            ---------------------------------------
              August 1, 2000          $ 1,375,000
            ---------------------------------------
              September 1, 2000       $ 1,375,000
            ---------------------------------------
              October 1, 2000         $ 1,375,000
            ---------------------------------------
              November 1, 2000        $ 1,375,000
            ---------------------------------------
              December 1, 2000        $ 1,375,000
            ---------------------------------------
            ---------------------------------------

<PAGE>

                                       44

            ---------------------------------------
              Date                    Payment
              ----                    -------
            ---------------------------------------
              January 1, 2001         $ 1,650,000
            ---------------------------------------
              February 1, 2001        $ 1,650,000
            ---------------------------------------
              March 1, 2001           $ 1,650,000
            ---------------------------------------
              April 1, 2001           $ 1,650,000
            ---------------------------------------
              May 1, 2001             $ 1,650,000
            ---------------------------------------
              June 1, 2001            $18,500,000
            ---------------------------------------

          (p)  Within 10 Business Days of the Effective Date, ADL will either
     (i) pay the Hess Proceeds into the EPYX Escrow Account or, in ADL's
     discretion, (ii) invest the Hess Proceeds in accordance with Section
     5.02(f)(vii).

          SECTION 5.02.  Negative Covenants.  So long as any Advance shall
                         ------------------
remain unpaid or any Lender shall have any Commitment hereunder, each Borrower
agrees that it will not:

          (a)  Liens, Etc.  Create or suffer to exist, or permit any of its
               ----------
     Subsidiaries to create or suffer to exist, any Lien on or with respect to
     any of its properties, whether now owned or hereafter acquired, or assign,
     or permit any of its Subsidiaries to assign, any right to receive income,
     other than:

               (i)    Permitted Liens,

               (ii)   purchase money Liens upon or in any real property or
          equipment acquired or held by such Borrower or any Subsidiary in the
          ordinary course of business to secure the purchase price of such real
          property or equipment or to secure Debt incurred solely for the
          purpose of financing the acquisition of such real property or
          equipment, or Liens existing on such real property or equipment at the
          time of its acquisition (other than any such Liens created in
          contemplation of such acquisition that were not incurred to finance
          the acquisition of such property) or extensions, renewals or
          replacements of any of the foregoing for the same or a lesser amount,
          provided, however, that no such Lien shall extend to or cover any
          --------  -------
          properties of any character other than the real property or equipment
          being acquired, and no such extension, renewal or replacement shall
          extend to or cover any properties not theretofore subject to the Lien
          being extended, renewed or replaced, provided further that the
                                               -------- -------
          aggregate principal amount of the Debt secured by the Liens referred
          to in this clause (ii) shall not exceed $2,500,000 at any time
          outstanding,

               (iii)  the Liens existing on the date hereof and described on
          Schedule 5.02(a) hereto,
<PAGE>

                                       45

               (iv)    Liens on property of a Person existing at the time such
          Person is merged into or consolidated with such Borrower or any
          Subsidiary of such Borrower or becomes a Subsidiary of such Borrower
          after the date hereof; provided that (x) such Liens were not created
                                 --------
          in contemplation of such merger, consolidation or acquisition and do
          not extend to any assets other than those of the Person so merged into
          or consolidated with such Borrower or such Subsidiary or acquired by
          such Borrower or such Subsidiary and (y) no Default shall have
          occurred and be continuing at the time of the proposed transaction or
          would result therefrom,

               (v)     Liens created pursuant to the Collateral Documents in
          favor of the Collateral Agent,

               (vi)    Liens in respect of collateralized letters of credit
          permitted pursuant to Section 5.02(d)(i)(C) at any one time
          outstanding not to exceed $10,000,000 less the amount of any letters
          of credit collateralized pursuant to Section 5.02(a)(ix),

               (vii)   Liens in respect of Capitalized Leases permitted pursuant
          to Section 5.02(d)(i)(E) hereof; provided that no such Lien shall
                                           --------
          extend to or cover any Collateral or assets other than the assets
          subject to such Capitalized Leases,

               (viii)  in the case of TIME and its Subsidiaries following the
          TIME IPO, Liens securing Debt permitted pursuant to Section
          5.02(d)(iii)(C),

               (ix)    Liens in favor of Citibank or any of its Affiliates
          securing Existing Debt owing to Citibank or any of its Affiliates;
          provided that the Existing Debt secured by such Liens shall not at any
          --------
          time, in the aggregate, exceed the lesser of such Existing Debt owing
          to Citibank or its Affiliates at such time and $5,000,000, and

               (x)     the replacement, extension or renewal of any Lien
          permitted by clause (iii) or (iv) above upon or in the same property
          theretofore subject thereto or the replacement, extension or renewal
          (without increase in the amount or change in any direct or contingent
          obligor) of the Debt secured thereby.

          (b)  Mergers, Etc.  Merge or consolidate with or into, or convey,
               ------------
     transfer, lease or otherwise dispose of (whether in one transaction or in a
     series of transactions) all or substantially all of its assets (whether now
     owned or hereafter acquired) to any Person, or permit any of its
     Subsidiaries to do so, except:

               (i)     for transactions permitted under Section 5.02(e)(iii)
          hereof,
<PAGE>

                                       46

               (ii)    any wholly-owned Subsidiary of any Borrower may merge or
          consolidate with or into any other wholly-owned Subsidiary of such
          Borrower or any wholly-owned Subsidiary of any other Borrower, and

               (iii)   any wholly-owned Subsidiary of such Borrower may merge
          into such Borrower,

     provided, however, that (x) in each such case, no Default shall have
     --------  -------
     occurred and be continuing at the time of such proposed transaction or
     would result therefrom, (y) in the case of any such merger in which such
     Borrower is a party (A) such Borrower is the surviving corporation (except
     in the case of any such merger in which ADL is a party, in which case ADL
     shall be the surviving corporation) and (B) such Borrower shall be in the
     same line of business as conducted by it immediately prior to such merger
     and (z) in the case of any such merger or consolidation of any Domestic
     Subsidiary with any Foreign Subsidiary, the surviving entity shall be a
     Domestic Subsidiary.

          (c)  Accounting Changes.  Make or permit, or permit any of its
               ------------------
     Subsidiaries to make or permit, any change in accounting policies or
     reporting practices, except as required by generally accepted accounting
     principles.

          (d)  Debt.  Create, incur, assume or suffer to exist, or permit any of
               ----
     its Subsidiaries to create, incur, assume or suffer to exist, any Debt
     other than:

               (i)     in the case of such Borrower and any of its Subsidiaries,

                       (A)  Debt secured by Liens permitted by Section
               5.02(a)(ii) hereof not to exceed in the aggregate $2,500,000 at
               any time outstanding,

                       (B)  Debt existing on the date hereof and described on
               Schedule 5.02(d) hereto (the "Existing Debt"), and any Debt
                                             -------------
               extending the maturity of, or refunding or refinancing, in whole
               or in part, any Existing Debt, provided that the principal amount
                                              --------
               of such Existing Debt shall not be increased above the principal
               amount thereof outstanding immediately prior to such extension,
               refunding or refinancing, and the direct and contingent obligors
               therefor shall not be changed, as a result of or in connection
               with such extension, refunding or refinancing,

                       (C)  Debt to banks outside of the United States of
               America, including letters of credit in the ordinary course of
               business of such Borrower and its Subsidiaries, in a maximum
               aggregate available amount for the Borrowers and their
               Subsidiaries, taken together, at any one time outstanding not to
               exceed (x) $20,000,000 less (y) an amount equal to the maximum
                                      ----
               aggregate available amount of all letters of credit issued by the
               Agent or otherwise outstanding under clause (i)(B),
<PAGE>

                                       47

                       (D)  indorsement of negotiable instruments for deposit or
               collection or similar transactions in the ordinary course of
               business,

                       (E)  Capitalized Leases not to exceed in the aggregate
               $2,500,000 for the Borrowers and their Subsidiaries, taken
               together, at any time outstanding,

                       (F)  Debt in respect of currency swap agreements designed
               to hedge against fluctuations in foreign exchange rates incurred
               in the ordinary course of business of such Borrower and its
               Subsidiaries and consistent with prudent business practice,

                       (G)  Debt  arising under this Agreement, and

                       (H)  Debt of such Borrower of the type described in
               clause (h) of the definition of "Debt" guaranteeing the
               Obligations of any of its Subsidiaries of the type described in
               clause (i)(C) above;

               (ii)    in the case of ADL, the Senior Notes in an aggregate
          principal amount at any time outstanding not to exceed $35,000,000,
          provided, however, that the proceeds of such Senior Notes be used
          --------  -------
          solely for the purpose of effecting the MDT Buyback in compliance with
          applicable law; and

               (iii)   in addition to any Debt permitted pursuant to Section
          5.02(d)(i) and (ii),

                       (A)  in the case of Arthur D. Little International, Inc.,
               unsecured Debt of the type described in clause (h) of the
               definition of "Debt" guaranteeing the obligations of ADL in
               respect of the Senior Notes,

                       (B)  in the case of any Subsidiary of such Borrower, Debt
               owed to such Borrower or to a wholly-owned Subsidiary of such
               Borrower other than Debt owed by a Foreign Subsidiary, and

                       (C)  in the case of TIME and its Subsidiaries following
               the TIME IPO, Debt, the proceeds of which are used for the
               working capital, acquisitions and other general corporate
               purposes of TIME and its Subsidiaries and which does not at any
               time exceed the lesser of (x) the Net Cash Proceeds received by
               TIME pursuant to the TIME IPO and (y) $50,000,000;

     provided that the aggregate amount of all Debt outstanding (excluding any
     --------
     Debt arising under Section 5.02(d)(i)(D), 5.02(d)(iii)(A) or
     5.02(d)(iii)(C) for the Borrowers and all of their Subsidiaries shall not
     exceed at any time $95,000,000.
<PAGE>

                                       48

          (e)  Sales, Etc. of Assets. Sell, lease, transfer or otherwise dispose
               ---------------------
     of, or permit any of its Subsidiaries to sell, lease, transfer or otherwise
     dispose of, any assets, or grant any option or other right to purchase,
     lease or otherwise acquire any assets, except:

               (i)    sales of inventory in the ordinary course of its business,

               (ii)   in a transaction authorized by subsection (b) of this
          Section,

               (iii)  the sale of Equity Interests in EPYX pursuant to any EPYX
          Transaction; provided that the proceeds of all such sales are
                       --------
          deposited into the EPYX Escrow Account pending investment of such
          funds pursuant to Section 5.02(f)(vii) subject, however, in the case
          of the Hess Proceeds to the provisions of Section 5.01(p).

               (iv)   the sale of Equity Interests in TIME pursuant to the TIME
          IPO,

               (v)    other sales of assets by such Borrower or any of its
          Subsidiaries, provided that the aggregate book value of all assets
                        --------
          sold by the Borrowers and their respective Subsidiaries on or after
          June 22, 1998 shall not exceed $15,000,000, and provided further that,
                                                          -------- -------
          in the case of the sale of any asset in a single transaction or a
          series of related transactions in an aggregate amount exceeding
          $1,000,000, the fair value of such asset shall have been determined in
          good faith by the Board of Directors of such Borrower,

               (vi)   disposal of obsolete or worn-out equipment, and

               (vii)  (A) any Loan Party or Domestic Subsidiary may sell, lease
          transfer or otherwise dispose of any of its property or assets to any
          other Loan Party or Domestic Subsidiary and (B) any Foreign Subsidiary
          (other than a Subsidiary Guarantor) may sell, lease, transfer or
          otherwise dispose of any of its property or assets to any Loan Party
          or any Subsidiary of any Loan Party, provided that any such sale,
          lease, transfer or disposal to any Subsidiary that is not a Loan Party
          shall be for fair market value.

          (f)  Investments in Other Persons.  Make or hold, or permit any of its
               ----------------------------
     Subsidiaries to make or hold, any Investment in any Person for cash and/or
     that would require such Borrower or any of its Subsidiaries to create,
     incur, assume or suffer to exist any Debt other than:

               (i)    such Investments in any fiscal year that in the aggregate
          do not exceed 5% of Consolidated Total Assets for such fiscal year,

               (ii)   Investments by such Borrower and its Subsidiaries in any
          of their wholly-owned Subsidiaries,
<PAGE>

                                       49

               (iii)   loans and advances to employees in the ordinary course of
          business of such Borrower and its Subsidiaries as presently conducted
          in an aggregate principal amount for the Borrowers and their
          Subsidiaries, taken together, not to exceed $5,000,000 at any time
          outstanding,

               (iv)    Investments existing on the date hereof and described in
          Schedule 5.02(f) hereto,

               (v)     Investments in Marketable Securities,

               (vi)    Investments consisting of intercompany Debt permitted
          under Section 5.02(d)(iii)(B) hereof,

               (vii)   so long as no default shall have occurred and be
          continuing, Investment of the Net Cash Proceeds of any sale pursuant
          to Section 5.02(e)(iii) in the working capital of EPYX, and

               (viii)  non-cash loans to employees of any Loan Party or any
          Subsidiary of any Loan Party for the purchase, in whole or in part, of
          shares of capital stock of the Borrowers issued and sold to such
          employees pursuant to any Stock Plan and in accordance with Section
          5.02(g)(v).

          (g)  Restricted Payments.  Declare or pay any dividends, purchase,
               -------------------
     redeem, retire, defease or otherwise acquire for value any of its Equity
     Interests now or hereafter outstanding, return any capital to its
     stockholders, partners or members (or the equivalent Persons thereof) as
     such, make any distribution of assets, Equity Interests, obligations or
     securities to its stockholders, partners or members (or the equivalent
     Persons thereof) as such or issue or sell any Equity Interests or accept
     any capital contributions, or permit any of its Subsidiaries to do any of
     the foregoing, or permit any of its Subsidiaries to purchase, redeem,
     retire, defease or otherwise acquire for value any Equity Interests in the
     Borrowers or to issue or sell any Equity Interests therein, except that, so
     long as no Default shall have occurred and be continuing at the time of any
     action described in clause (i), (ii), (iii), (iv) or (v) below or would
     result therefrom:

               (i)     ADL may (A) declare and pay dividends and distributions
          payable only in common stock of ADL, (B) repurchase common stock held
          by employees or former employees of ADL and its Subsidiaries in
          accordance with the terms of any Stock Plan and (C) pay regularly
          scheduled cash dividends on its "Series A Participating Non-Voting
          Preferred Stock, $1 par value" (as in effect on the date hereof),

               (ii)    any Subsidiary of the Borrowers may (A) declare and pay
          cash dividends to the Borrowers, (B) declare and pay cash dividends to
          any other Loan Party of which it is a Subsidiary and (C) accept
          capital contributions from its parent to the extent permitted under
          Section 5.02(f)(ii),
<PAGE>

                                       50

               (iii)   EPYX may issue and sell shares of its capital stock
          pursuant to any EPYX Transaction,

               (iv)    TIME may issue and sell shares of its capital stock
          pursuant to the TIME IPO, and

               (v)     the Borrowers may issue and sell shares of their capital
          stock pursuant to any Stock Plan.

          (h)  Conduct of Business.  Make, or permit any of its Subsidiaries to
               -------------------
     make, (x) any material change in the nature of the business of such
     Borrower and its Subsidiaries taken as a whole as carried on at the date
     hereof or (y) any change in the nature of the business of such Borrower and
     its Subsidiaries taken as a whole that would result in such Borrower and
     its Subsidiaries not being principally engaged in the consulting business.

          (i)  Prepayment of Debt.  Make, or permit any of its Subsidiaries to
               ------------------
     make, any payments of any amount due under the Note Purchase Agreement
     other than regularly scheduled payments and mandatory prepayments as
     required by the terms of the Note Purchase Agreement as in effect on the
     Effective Date; provided, however, that the Borrowers or any of their
                     --------  -------
     Subsidiaries may make such prepayment if, simultaneously therewith, a
     proportionate amount of the Indebtedness hereunder is prepaid such that, of
     the aggregate prepayments made, an amount equal to the Lender Share thereof
     is made to the Agent hereunder and an amount equal to the Senior Note Share
     thereof is made to the Noteholders.

          SECTION 5.03.  Financial Covenants.  So long as any Advance shall
                         -------------------
remain unpaid or any Lender shall have any Commitment hereunder, ADL will:

          (a)  Tangible Net Worth. Maintain at all times a Consolidated Tangible
               ------------------
     Net Worth greater than or equal to the sum of (a) 80% of the Consolidated
     Tangible Net Worth as of the fiscal year ended December 31, 1999 plus (b)
                                                                      ----
     an amount equal to 75% of Consolidated Net Income of ADL and its
     Subsidiaries for each fiscal quarter following December 31, 1999 through
     the date of such calculation (but in each case, only if a positive number)
     plus (c) an amount equal to 100% of the Net Cash Proceeds received by ADL
     ----
     after the date hereof from the sale of new issues of capital stock or any
     warrants, rights or options to acquire capital stock to any Person (other
     than to an Affiliate of ADL or any of its Subsidiaries); provided that
                                                              --------
     notwithstanding any other provision of this Agreement to the contrary, ADL
     shall not be in default of this Section 5.03(a) as of the end of any fiscal
     quarter if it could have been in compliance with this Section 5.03(a) at
     such time but for the application, in accordance with GAAP, of non-cash
     expenses accrued in respect of the sale of stock at a discount pursuant to
     one or more Stock Plans during such fiscal quarter.

          (b)  Debt to EBITDA Ratio.  ADL will not permit the ratio of:
               --------------------
<PAGE>

                                       51

               (i)     Consolidated Debt of ADL and its Subsidiaries at any time
          during the period commencing on the Effective Date and ending on June
          30, 2000 to 400% of Consolidated EBITDA of ADL and its Subsidiaries
          for the fiscal quarter ending on March 31, 2000 to exceed 2.59:1.00;

               (ii)    Consolidated Debt of ADL and its Subsidiaries at any time
          during the period commencing on July 1, 2000 and ending on September
          30, 2000 to 200% of Consolidated EBITDA of ADL and its Subsidiaries
          for the two consecutive fiscal quarters ending on June 30, 2000 to
          exceed 2.43:1.00;

               (iii)   Consolidated Debt of ADL and its Subsidiaries at any time
          during the period commencing on October 1, 2000 and ending on December
          31,2000 to 133% of Consolidated EBITDA of ADL and its Subsidiaries for
          the three consecutive fiscal quarters ending on September 30, 2000 to
          exceed 2.10:1.00;

               (iv)    Consolidated Debt of ADL and its Subsidiaries at any time
          during the period commencing January 1, 2001 and ending March 31, 2001
          to Consolidated EBITDA of ADL and its Subsidiaries for the four
          consecutive fiscal quarters ending on December 31, 2000 to exceed
          1.60:1.00;

               (v)     Consolidated Debt of ADL and its Subsidiaries at any time
          during the period commencing on April 1, 2001 and ending on May 31,
          2001 to Consolidated EBITDA of ADL and its Subsidiaries for the four
          consecutive fiscal quarters ending on March 31, 2001 to exceed
          1.60:1.00.

          (c)  Fixed Charge Coverage Ratio.  Maintain, at the end of each period
               ---------------------------
     set forth below, a Consolidated Fixed Charge Coverage Ratio of not less
     than the amount set forth below for such period:

         ====================================================
                    Period                    Ratio
                    ------                    -----
         ----------------------------------------------------
          fiscal quarter ending              0.9:1.0
          March 31, 2000
         ----------------------------------------------------
          two fiscal quarters ending         0.9:1.0
          June 30, 2000
         ----------------------------------------------------
          three fiscal quarters ending       1.0:1.0
          September 30, 2000
         ----------------------------------------------------
          four fiscal quarters ending        1.0:1.0
          December 31, 2000
         ----------------------------------------------------
          four fiscal quarters ending        1.0:1.0
         ====================================================
<PAGE>

                                       52

         ----------------------------------------------------
          March 31, 2001
         ====================================================

                                  ARTICLE VI

                                 ADL GUARANTY

          SECTION 6.01.  ADL Guaranty.  ADL hereby unconditionally guaranties
                         ------------
(the undertaking by ADL under this Article VI being the "ADL Guaranty") the
                                                         ------------
punctual payment when due, whether at stated maturity, by acceleration or
otherwise, of all Obligations of each other Loan Party now or hereafter existing
under this Agreement and the Notes, whether for principal, interest (including,
without limitation, interest accruing after the filing of a petition initiating
a proceeding referred to in Section 7.01(e), whether or not such interest
constitutes an allowed claim for purposes of such proceeding), fees, expenses or
otherwise (such Obligations being the "Guarantied Obligations"), and agrees to
                                       ----------------------
pay any and all reasonable expenses (including, without limitation, reasonable
fees and expenses of counsel) incurred by the Agent or the Lenders in enforcing
any rights under this ADL Guaranty.  Without limiting the generality of the
foregoing, ADL's liability shall extend to all amounts that constitute part of
the Guarantied Obligations and would be owed by any other Loan Party to the
Agent or the Lenders under this Agreement and the Notes but for the fact that
they are unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving such other Loan Party.

          SECTION 6.02.  Guaranty Absolute.   ADL guaranties that the Guarantied
                         -----------------
Obligations will be paid strictly in accordance with the terms of this Agreement
and the Notes, regardless of any law, regulation or order now or hereafter in
effect in any jurisdiction affecting any of such terms or the rights of the
Agent or the Lender with respect thereto.  The Obligations of ADL under this ADL
Guaranty are independent of the Guarantied Obligations, and a separate action or
actions may be brought and prosecuted against ADL to enforce this ADL Guaranty,
irrespective of whether any action is brought against any other Loan Party or
whether any other Loan Party is joined in any such action or actions.  The
liability of ADL under this ADL Guaranty shall be absolute and unconditional
irrespective of, and ADL hereby irrevocably waives any defenses it may now or
hereafter have in any way relating to, any and all of the following:

          (a)  any lack of validity or enforceability of this Agreement or any
     Note, or any other agreement or instrument relating thereto;

          (b)  any change in the time, manner or place of payment of, or in any
     other term of, all or any of the Guarantied Obligations, or any other
     amendment or waiver of or any consent to departure from this Agreement or
     any Note (including, without limitation, any increase in the Guarantied
     Obligations resulting from the extension of additional credit to the
     Borrowers or any of their Subsidiaries or otherwise);

          (c)  any taking, release or amendment or waiver of or consent to
     departure from any other guaranty for all or any of the Guarantied
     Obligations;
<PAGE>

                                       53

          (d)  any manner of sale or other disposition of any property and
     assets of any other Loan Party or any of its Subsidiaries;

          (e)  any change, restructuring or termination of the corporate
     structure or existence of any other Loan Party or any of its Subsidiaries;
     or

          (f)  any other circumstance (including, without limitation, any
     statute of limitations or any existence of or reliance on any
     representation by the Agent or any Lender) that might otherwise constitute
     a defense (other than the defense of payment) available to, or a discharge
     of, any other Loan Party, ADL or any other guarantor or surety.

This ADL Guaranty shall continue to be effective or be reinstated, as the case
may be, if at any time any payment of any of the Guarantied Obligations is
rescinded or must otherwise be returned by any Agent or any Lender upon the
insolvency, bankruptcy or reorganization of any other Loan Party or otherwise,
all as though such payment had not been made.

          SECTION 6.03.  Waivers.  (a)  ADL hereby irrevocably and
                         -------
unconditionally waives promptness, diligence, notice of acceptance and any other
notice with respect to any of the Guarantied Obligations and this ADL Guaranty
and any requirement that the Agent or any Lender protect, secure, perfect or
insure any Lien or any property or assets subject thereto or exhaust any right
or take any action against any other Loan Party or any other Person.

          (b)  ADL hereby irrevocably and unconditionally waives any duty on the
part of the Agent or any Lender to disclose to ADL any matter, fact or thing
relating to the business, operation or condition of any other Loan Party or any
to its Subsidiaries or its property and assets now or hereafter known by the
Agent or such Lender.

          (c)  ADL hereby irrevocably waives any claim or other right that it
may now or hereafter acquire against any other Loan Party or any other insider
guarantor that arise from the existence, payment, performance or enforcement of
ADL's Obligations under this ADL Guaranty, this Agreement or the Notes,
including, without limitation, any right of subrogation, reimbursement,
exoneration, contribution or indemnification and any right to participate in any
claim or remedy of the Agent or any Lender against such other Loan Party or any
other insider guarantor, whether or not such claim, remedy or right arises in
equity or under contract, statute or common law, including, without limitation,
the right to take or receive from such other Loan Party or any other insider
guarantor, directly or indirectly, in cash or other property or by setoff or in
any other manner, payment or security on account of such claim, remedy or right.
If any amount shall be paid to ADL in violation of the immediately preceding
sentence at any time prior to the cash payment in full of the Guarantied
Obligations and all other amounts payable under this ADL Guaranty, such amount
shall be held in trust for the benefit of the Agent and the Lenders and (A) if a
Default shall have occurred and be continuing, shall forthwith be paid to the
Agent to be credited and applied to the Guarantied Obligations and all other
amounts payable under this ADL Guaranty, whether matured or unmatured, in
accordance with the terms of this Agreement and the Notes, or to be held as
collateral for any Guarantied Obligations or other amounts payable under this
ADL Guaranty thereafter arising and (B) if no Default shall have
<PAGE>

                                       54

occurred and be continuing, shall be remitted promptly to the applicable payor.
ADL acknowledges that it will receive direct and indirect benefits from the
financing arrangements contemplated by this Agreement and the Notes and that the
waiver set forth in this Section 6.03(c) is knowingly made in contemplation of
such benefits.

          (d)  ADL hereby waives any right to revoke this ADL Guaranty, and
acknowledges that this ADL Guaranty is continuing in nature and applies to all
Guarantied Obligations, whether now or hereafter existing.

          SECTION 6.04.  Continuing Guaranty; Assignments.  This ADL Guaranty
                         --------------------------------
shall (a) remain in full force and effect until the cash payment in full of the
Guarantied Obligations and all other amounts payable under this ADL Guaranty,
(b) be binding upon ADL, its successors and assigns and (c) inure to the benefit
of, and be enforceable by, the Lenders, the Agent and their successors,
transferees and assigns.  Without limiting the generality of clause (c) of the
immediately preceding sentence, any Lender may, in accordance with Section 9.07,
assign or otherwise transfer all or any portion of its rights and obligations
under this Agreement (including, without limitation, all or any portion of its
Commitment or Commitments, the Advances owing to it and the Note or Notes held
by it) to another Person, and such other Person shall thereupon become vested
with all the benefits in respect thereof granted to such Lender under this
Article VI or otherwise, in each case as provided in Section 9.07.

                                  ARTICLE VII

                               EVENTS OF DEFAULT

          SECTION 7.01.  Events of Default.  If any of the following events
                         -----------------
("Events of Default") shall occur and be continuing:
  -----------------

          (a)  Any Borrower shall fail to pay any principal of any Advance when
     the same becomes due and payable, or any Loan Party shall fail to pay any
     interest on any Advance or make any other payment of fees or other amounts
     payable under the Loan Documents within three Business Days after the same
     becomes due and payable; or

          (b)  Any representation or warranty made by any Loan Party herein or
     in a Loan Document, or by any Borrower (or any of its officers) in
     connection with this Agreement shall prove to have been incorrect in any
     material respect when made; or

          (c)  (i) Any Loan Party shall fail to perform or observe any term,
     covenant or agreement contained in Section 5.01(d), (e), (f), (h), (i),
     (k), (m), (n) or (o), 5.02 or 5.03 on its part to be performed or observed
     or (ii) any Loan Party shall fail to perform or observe any other term,
     covenant or agreement contained in any Loan Document on its part to be
     performed or observed, if such failure shall remain unremedied for 10
     Business Days after written notice thereof shall have been given to such
     Borrower by the Agent or any Lender; or
<PAGE>

                                       55

          (d)  Any Borrower or any of its Subsidiaries shall fail to pay any
     principal of or premium or interest on any Debt that is outstanding in a
     principal or notional amount of at least $2,000,000 in the aggregate (but
     excluding Debt outstanding hereunder) of such Borrower or such Subsidiary
     (as the case may be), when the same becomes due and payable (whether by
     scheduled maturity, required prepayment, acceleration, demand or
     otherwise), and such failure shall continue after the applicable grace
     period, if any, specified in the agreement or instrument relating to such
     Debt; or any other event shall occur or condition shall exist under any
     agreement or instrument relating to any such Debt and shall continue after
     the applicable grace period, if any, specified in such agreement or
     instrument, if the effect of such event or condition is to accelerate, or
     to permit the acceleration of, the maturity of such Debt; or any such Debt
     shall be declared to be due and payable, or required to be prepaid or
     redeemed (other than by a regularly scheduled required prepayment or
     redemption), purchased or defeased, or an offer to prepay, redeem, purchase
     or defease such Debt shall be required to be made, in each case prior to
     the stated maturity thereof; or

          (e)  Any Borrower or any of its Subsidiaries shall generally not pay
     its debts as such debts become due, or shall admit in writing its inability
     to pay its debts generally, or shall make a general assignment for the
     benefit of creditors; or any proceeding shall be instituted by or against
     such Borrower or any of its Subsidiaries seeking to adjudicate it a
     bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
     arrangement, adjustment, protection, relief, or composition of it or its
     debts under any law relating to bankruptcy, insolvency or reorganization or
     relief of debtors, or seeking the entry of an order for relief or the
     appointment of a receiver, trustee, custodian or other similar official for
     it or for any substantial part of its property and, in the case of any such
     proceeding instituted against it (but not instituted by it), either such
     proceeding shall remain undismissed or unstayed for a period of 45 days, or
     any of the actions sought in such proceeding (including, without
     limitation, the entry of an order for relief against, or the appointment of
     a receiver, trustee, custodian or other similar official for, it or for any
     substantial part of its property) shall occur; or any Borrower or any of
     its Subsidiaries shall take any corporate action to authorize any of the
     actions set forth above in this subsection (e); or

          (f)  Any judgment or order for the payment of money in excess of
     $2,000,000 shall be rendered against any Borrower or any of its
     Subsidiaries and either (i) enforcement proceedings shall have been
     commenced by any creditor upon such judgment or order or (ii) there shall
     be any period of 10 consecutive days during which a stay of enforcement of
     such judgment or order, by reason of a pending appeal or otherwise, shall
     not be in effect; provided, however, that any such judgment or order shall
                       --------  -------
     not be an Event of Default under this Section 7.01(f) if and for so long as
     (i) the amount of such judgment or order is covered by a valid and binding
     policy of insurance between the defendant and the insurer covering payment
     thereof and (ii) such insurer, which shall be rated at least "A-" by A.M.
     Best Company, or, a foreign insurer of equivalent stature, has been
     notified of, and has not disputed the claim made for payment of, the amount
     of such judgment or order; or
<PAGE>

                                       56

          (g)  Any non-monetary judgment or order shall be rendered against any
     Borrower or any of its Subsidiaries that could be reasonably expected to
     have a Material Adverse Effect, and there shall be any period of 10
     consecutive days during which a stay of enforcement of such judgment or
     order, by reason of a pending appeal or otherwise, shall not be in effect;
     or

          (h)  More than 5% of the issued and outstanding capital stock of ADL
     shall become held by any Person other than the Memorial Drive Trust, the
     ESOP, one or more employee benefit plans of ADL or its Subsidiaries, or
     employees, or former employees, of ADL or any of its Subsidiaries or any
     Stock Plans who have received such capital stock in accordance with a
     distribution pursuant to the ESOP, any other employee benefit plan or any
     Stock Plan or the Memorial Drive Trust, the ESOP and any Stock Plan, taken
                --
     together, shall own less than 50.1% of the issued and outstanding capital
     stock of ADL; or

          (i)  Any ERISA Event shall have occurred with respect to a Plan and
     the sum (determined as of the date of occurrence of such ERISA Event) of
     the Insufficiency of such Plan and the Insufficiency of any and all other
     Plans with respect to which an ERISA Event shall have occurred and then
     exist (or the liability of any Borrower and the ERISA Affiliates related to
     such ERISA Event) exceeds $2,000,000; or

          (j)  Any Borrower or any ERISA Affiliate shall have been notified by
     the sponsor of a Multiemployer Plan that it has incurred Withdrawal
     Liability to such Multiemployer Plan in an amount that, when aggregated
     with all other amounts required to be paid to Multiemployer Plans by such
     Borrower and the ERISA Affiliates as Withdrawal Liability (determined as of
     the date of such notification), exceeds $2,000,000 or requires payments
     exceeding $2,000,000 per annum; or

          (k)  Any Borrower or any ERISA Affiliate shall have been notified by
     the sponsor of a Multiemployer Plan that such Multiemployer Plan is in
     reorganization or is being terminated, within the meaning of Title IV of
     ERISA, and as a result of such reorganization or termination the aggregate
     annual contributions of such Borrower and the ERISA Affiliates to all
     Multiemployer Plans that are then in reorganization or being terminated
     have been or will be increased over the amounts contributed to such
     Multiemployer Plans for the plan years of such Multiemployer Plans
     immediately preceding the plan year in which such reorganization or
     termination occurs by an amount exceeding $2,000,000; or

          (l)  Any event shall occur or any condition shall exist under the Note
     Purchase Agreement, or any agreement relating thereto, that immediately or
     with the passage of time or the giving of notice causes (or permits any one
     or more of the Noteholders or their agent to cause) the Senior Notes, or
     any portion thereof, to become due prior to their stated maturity or prior
     to their regularly scheduled date or dates of payment;

then, and in any such event, the Agent (i) shall at the request, or may with the
consent, of the Required Lenders, by notice to the Borrowers, declare the
obligation of each Lender to make Advances to be terminated, whereupon the same
shall forthwith terminate, and (ii) shall at the
<PAGE>

                                       57

request, or may with the consent, of the Required Lenders, by notice to the
Borrowers, declare the Notes, all interest thereon and all other amounts payable
under this Agreement to be forthwith due and payable, whereupon the Notes, all
such interest and all such amounts shall become and be forthwith due and
payable, without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by the Borrowers; provided, however, that
                                                       --------  -------
in the event of an actual or deemed entry of an order for relief with respect to
any Borrower under the Federal Bankruptcy Code, (A) the obligation of each
Lender to make Advances shall automatically be terminated and (B) the Notes, all
such interest and all such amounts shall automatically become and be due and
payable, without presentment, demand, protest or any notice of any kind, all of
which are hereby expressly waived by the Borrower.

                                 ARTICLE VIII

                                   THE AGENT

          SECTION 8.01.  Authorization and Action.  Each Lender hereby appoints
                         ------------------------
and authorizes the Agent to take such action as agent on its behalf and to
exercise such powers and discretion under this Agreement as are delegated to the
Agent by the terms hereof, together with such powers and discretion as are
reasonably incidental thereto.  As to any matters not expressly provided for by
this Agreement (including, without limitation, enforcement or collection of the
Notes), the Agent shall not be required to exercise any discretion or take any
action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Required Lenders, and such instructions shall be binding upon all Lenders
and all holders of Notes; provided, however, that the Agent shall not be
                          --------  -------
required to take any action that exposes the Agent to personal liability or that
is contrary to this Agreement or applicable law.  The Agent agrees to give to
each Lender and the Collateral Agent prompt notice of each notice given to it by
the Borrowers pursuant to the terms of this Agreement.

          SECTION 8.02.  Agent's Reliance, Etc.  Neither the Agent nor any of
                         ---------------------
its directors, officers, agents or employees shall be liable for any action
taken or omitted to be taken by it or them under or in connection with this
Agreement, except for its or their own gross negligence or willful misconduct.
Without limitation of the generality of the foregoing, the Agent:  (i) may treat
the payee of any Note as the holder thereof until the Agent receives and accepts
an Assignment and Acceptance entered into by the Lender that is the payee of
such Note, as assignor, and an Eligible Assignee, as assignee, as provided in
Section 9.07; (ii) may consult with legal counsel (including counsel for the
Borrowers), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts; (iii)
makes no warranty or representation to any Lender and shall not be responsible
to any Lender for any statements, warranties or representations (whether written
or oral) made in or in connection with this Agreement; (iv) shall not have any
duty to ascertain or to inquire as to the performance or observance of any of
the terms, covenants or conditions of this Agreement on the part of the
Borrowers or to inspect the property (including the books and records) of the
Borrowers; (v) shall not be responsible to any Lender for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
Agreement or any other instrument or document
<PAGE>

                                       58

furnished pursuant hereto; and (vi) shall incur no liability under or in respect
of this Agreement by acting upon any notice, consent, certificate or other
instrument or writing (which may be by telecopier, telegram or telex) believed
by it to be genuine and signed or sent by the proper party or parties.

          SECTION 8.03.  Citibank and Affiliates.  With respect to its
                         -----------------------
Commitment, the Advances made by it and the Note issued to it, Citibank shall
have the same rights and powers under this Agreement as any other Lender and may
exercise the same as though it were not the Agent; and the term "Lender" or
"Lenders" shall, unless otherwise expressly indicated, include Citibank in its
individual capacity.  Citibank and its Affiliates may accept deposits from, lend
money to, act as trustee under indentures of, accept investment banking
engagements from and generally engage in any kind of business with, the
Borrowers, any of their respective Subsidiaries and any Person who may do
business with or own securities of the Borrowers or any such Subsidiary, all as
if Citibank were not the Agent and without any duty to account therefor to the
Lenders.

          SECTION 8.04.  Lender Credit Decision.  Each Lender acknowledges that
                         ----------------------
it has, independently and without reliance upon the Agent or any other Lender
and based on the financial statements referred to in Section 4.01 and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement.  Each Lender also
acknowledges that it will, independently and without reliance upon the Agent or
any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement.

          SECTION 8.05.  Indemnification.  The Lenders agree to indemnify the
                         ---------------
Agent (to the extent not reimbursed by the Borrowers), ratably according to the
respective principal amounts of the Notes then held by each of them (or if no
Notes are at the time outstanding or if any Notes are held by Persons that are
not Lenders, ratably according to the respective amounts of their Commitments),
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever that may be imposed on, incurred by, or asserted
against the Agent in any way relating to or arising out of this Agreement or any
action taken or omitted by the Agent under this Agreement (collectively, the
"Indemnified Costs"), provided that no Lender shall be liable for any portion of
 -----------------    --------
the Indemnified Costs resulting from the Agent's gross negligence or willful
misconduct.  Without limitation of the foregoing, each Lender agrees to
reimburse the Agent promptly upon demand for its ratable share of any out-of-
pocket expenses (including counsel fees) incurred by the Agent in connection
with the preparation, execution, delivery, administration, modification,
amendment or enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or responsibilities under,
this Agreement, to the extent that the Agent is not reimbursed for such expenses
by the Borrowers.  In the case of any investigation, litigation or proceeding
giving rise to any Indemnified Costs, this Section 8.05 applies whether any such
investigation, litigation or proceeding is brought by the Agent, any Lender or a
third party.
<PAGE>

                                       59

          SECTION 8.06.  Successor Agent.  The Agent may resign at any time by
                         ---------------
giving written notice thereof to the Lenders and the Borrowers and may be
removed at any time with or without cause by the Required Lenders.  Upon any
such removal, the Required Lenders shall give notice thereof to ADL; provided
                                                                     --------
that the failure to give such notice shall not affect the validity or
effectiveness of such removal.  Upon any such resignation or removal, the
Required Lenders shall have the right to appoint a successor Agent.  If no
successor Agent shall have been so appointed by the Required Lenders, and shall
have accepted such appointment, within 30 days after the retiring Agent's giving
of notice of resignation or the Required Lenders' removal of the retiring Agent,
then the retiring Agent may, on behalf of the Lenders, appoint a successor
Agent, which shall be a commercial bank organized under the laws of the United
States of America or of any State thereof and having a combined capital and
surplus of at least $125,000,000.  Upon the acceptance of any appointment as
Agent hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, discretion, privileges
and duties of the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations under this Agreement.  After any retiring
Agent's resignation or removal hereunder as Agent, the provisions of this
Article VII shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent under this Agreement.

          SECTION 8.07.  Sub-Agent. The Sub-Agent has been designated under this
                         ---------
Agreement to carry out duties of the Agent. The Sub-Agent shall be subject to
each of the obligations in this Agreement to be performed by the Sub-Agent, and
each of the Borrowers and the Lenders agrees that the Sub-Agent shall be
entitled to exercise each of the rights and shall be entitled to each of the
benefits of the Agent under this Agreement as relate to the performance of its
obligations hereunder.
<PAGE>

                                       60

                                  ARTICLE IX

                                 MISCELLANEOUS

          SECTION 9.01.  Amendments, Etc.  No amendment or waiver of any
                         ---------------
provision of this Agreement or the Notes, nor consent to any departure by any
Borrower therefrom, shall in any event be effective unless the same shall be in
writing and signed by the Required Lenders, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given; provided, however, that no amendment, waiver or consent shall,
                 --------  -------
unless in writing and signed by all the Lenders, do any of the following:  (a)
waive any of the conditions specified in Section 3.02, (b) increase the
Commitments of the Lenders or subject the Lenders to any additional obligations,
(c) reduce the principal of, or interest on, the Notes or any fees or other
amounts payable hereunder, (d) postpone any date fixed for any payment of
principal of, or interest on, the Notes or any fees or other amounts payable
hereunder, (e) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Notes, or the number of Lenders, that shall be
required for the Lenders or any of them to take any action hereunder, (f) modify
the provisions of Section 9.06 insofar as they relate to assignments by any
Borrower of its rights and obligations under the Agreement or (g) amend this
Section 9.01; and provided further that no amendment, waiver or consent shall,
                  -------- -------
unless in writing and signed by the Agent in addition to the Lenders required
above to take such action, affect the rights or duties of the Agent under this
Agreement or any Note.

          SECTION 9.02.  Notices, Etc.  All notices and other communications
                         ------------
provided for hereunder shall be in writing (including telecopier, telegraphic or
telex communication) and mailed, telecopied, telegraphed, telexed or delivered,
if to any Borrower, at its address at Acorn Park, Cambridge, Massachusetts
02140, Attention:  John F. Burns, Senior Vice President and Chief Financial
Officer; if to any Initial Lender, at its Domestic Lending Office specified
opposite its name on Schedule I hereto; if to any other Lender, at its Domestic
Lending Office specified in the Assignment and Acceptance pursuant to which it
became a Lender; and if to the Agent, at its address at 399 Park Avenue, New
York, New York 10043, Attention:  New York Region Department; or, as to any
Borrower or the Agent, at such other address as shall be designated by such
party in a written notice to the other parties and, as to each other party, at
such other address as shall be designated by such party in a written notice to
the Borrowers and the Agent.  All such notices and communications shall, when
mailed, telecopied, telegraphed or telexed, be effective when deposited in the
mails, telecopied, delivered to the telegraph company or confirmed by telex
answerback, respectively, except that notices and communications to the Agent
pursuant to Article II, III or VII shall not be effective until received by the
Agent.  Delivery by telecopier of an executed counterpart of any amendment or
waiver of any provision of this Agreement or the Notes or of any Exhibit hereto
to be executed and delivered hereunder shall be effective as delivery of a
manually executed counterpart thereof.

          SECTION 9.03.  No Waiver; Remedies.  No failure on the part of any
                         -------------------
Lender or the Agent to exercise, and no delay in exercising, any right hereunder
or under any Note shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right.  The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
<PAGE>

                                       61

          SECTION 9.04.  Costs and Expenses.  (a)  The Borrowers agree to pay on
                         ------------------
demand all reasonable costs and expenses of the Agent and the Arranger in
connection with the preparation, execution, delivery, administration,
modification and amendment of this Agreement, the Notes and the other documents
to be delivered hereunder, including, without limitation, (A) all due diligence,
syndication (including printing, distribution and bank meetings),
transportation, computer, duplication, appraisal, consultant, and audit expenses
and (B) the reasonable fees and expenses of counsel for the Agent with respect
thereto and with respect to advising the Agent as to its rights and
responsibilities under this Agreement.  The Borrowers further agree to pay on
demand all costs and expenses of the Agent and the Lenders, if any (including,
without limitation, reasonable fees and expenses) of counsel and allocated costs
of in-house counsel to any Lender, in connection with the enforcement (whether
through negotiations, legal proceedings or otherwise) of this Agreement, the
Notes and the other documents to be delivered hereunder, including, without
limitation, reasonable fees and expenses of counsel for the Agent and each
Lender in connection with the enforcement of rights under this Section 9.04(a).

          (b)  The Borrowers agree to indemnify and hold harmless the Agent and
each Lender and each of their Affiliates and their officers, directors,
employees, agents and advisors (each, an "Indemnified Party") from and against
                                          -----------------
any and all claims, damages, losses, liabilities and expenses (including,
without limitation, reasonable fees and expenses of counsel) that may be
incurred by or asserted or awarded against any Indemnified Party, in each case
arising out of or in connection with or by reason of, or in connection with the
preparation for a defense of, any investigation, litigation or proceeding
arising out of, related to or in connection with (i) the Notes, this Agreement,
any of the transactions contemplated hereby or the actual or proposed use of the
proceeds of the Advances or (ii) the actual or alleged presence of Hazardous
Materials on any property of the Borrowers or any of their Subsidiaries or any
Environmental Action relating in any way to the Borrowers or any of their
Subsidiaries, in each case whether or not such investigation, litigation or
proceeding is brought by a Borrower, its directors, shareholders or creditors or
an Indemnified Party or any other Person or any Indemnified Party is otherwise a
party thereto and whether or not the transactions contemplated hereby are
consummated, except to the extent such claim, damage, loss, liability or expense
is found in a final, non-appealable judgment by a court of competent
jurisdiction to have resulted from such Indemnified Party's gross negligence or
willful misconduct.  Each Borrower also agrees not to assert any claim against
the Agent, any Lender, any of their Affiliates, or any of their respective
directors, officers, employees, attorneys and agents, on any theory of
liability, for special, indirect, consequential or punitive damages arising out
of or otherwise relating to the Notes, this Agreement, any of the transactions
contemplated herein or the actual or proposed use of the proceeds of the
Advances.

          (c)  If any payment of principal of, or Conversion of, any
Eurocurrency Rate Advance is made by a Borrower to or for the account of a
Lender other than on the last day of the Interest Period for such Advance, as a
result of a payment or Conversion pursuant to Section 2.06 or, acceleration of
the maturity of the Notes pursuant to Section 7.01 or for any other reason, or
by an Eligible Assignee to a Lender other than on the last day of the Interest
Period for such Advance upon an assignment of rights and obligations under this
Agreement pursuant to Section
<PAGE>

                                       62

9.07 as a result of a demand by a Borrower pursuant to Section 9.07(a), such
Borrower shall, upon demand by such Lender (with a copy of such demand to the
Agent), pay to the Agent for the account of such Lender any amounts required to
compensate such Lender for any additional losses, costs or expenses that it may
reasonably incur as a result of such payment or Conversion, including, without
limitation, any loss, cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by any Lender to fund or
maintain such Advance.

          (d)  Without prejudice to the survival of any other agreement of the
Borrowers hereunder, the agreements and obligations of the Borrowers contained
in Sections 2.07, 2.10 and 9.04 shall survive the payment in full of principal,
interest and all other amounts payable hereunder and under the Notes.

          SECTION 9.05.  Right of Set-off.  Upon (i) the occurrence and during
                         ----------------
the continuance of any Event of Default and (ii) the making of the request or
the granting of the consent specified by Section 7.01 to authorize the Agent to
declare the Notes due and payable pursuant to the provisions of Section 7.01,
each Lender and each of its Affiliates is hereby authorized at any time and from
time to time, to the fullest extent permitted by law, to set off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other indebtedness at any time owing by such Lender or such
Affiliate to or for the credit or the account of a Borrower against any and all
of the obligations of such Borrower now or hereafter existing under this
Agreement and the Note held by such Lender, whether or not such Lender shall
have made any demand under this Agreement or such Note and although such
obligations may be unmatured.  Each Lender agrees promptly to notify such
Borrower after any such set-off and application, provided that the failure to
                                                 --------
give such notice shall not affect the validity of such set-off and application.
The rights of each Lender and its Affiliates under this Section 9.05 are in
addition to other rights and remedies (including, without limitation, other
rights of set-off) that such Lender and its Affiliates may have.

          SECTION 9.06.  Binding Effect; Third Party Rights.  (a)  This
                         ----------------------------------
Agreement shall become effective (other than Section 2.01, which shall only
become effective upon satisfaction of the conditions precedent set forth in
Section 3.02) when it shall have been executed by the Borrowers and the Agent
and when the Agent shall have been notified by each Initial Lender that such
Initial Lender has executed it and thereafter shall be binding upon and inure to
the benefit of such Borrower, the Agent and each Lender and their respective
successors and assigns, except that such Borrower shall not have the right to
assign its rights hereunder or any interest herein without the prior written
consent of the Lenders.

          (b)  This Agreement is solely for the benefit of the Agent, the
Lenders, the Loan Parties and their respective successors and assigns, and no
other Person shall have any right, remedy, claim, benefit, priority or other
interest under, or because of the existence of, this Agreement.

          SECTION 9.07.  Assignments and Participations.  (a)  Each Lender may
                         ------------------------------
and, if demanded by a Borrower (following a demand by such Lender pursuant to
Section 2.07 or 2.10) upon at least five Business Days' notice to such Lender
and the Agent and so long as no Default
<PAGE>

                                       63

or Event of Default shall have occurred and be continuing, will assign to one or
more Persons all or a portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its Commitment, the Advances
owing to it and the Note or Notes held by it); provided, however, that (i) other
                                               --------  -------
than in the case of an assignment to an Affiliate of a Lender, another Lender or
an assignment of the type described in subsection (g) below, such Lender shall
have obtained the prior written consent of the Agent and, so long as no Default
shall have occurred and be continuing, ADL, in each case, such consent not to be
unreasonably withheld, (ii) each such assignment shall be of a constant, and not
a varying, percentage of all rights and obligations under this Agreement, (iii)
except in the case of an assignment to a Person that, immediately prior to such
assignment, was a Lender or an assignment of all of a Lender's rights and
obligations under this Agreement, the amount of the Commitment of the assigning
Lender being assigned pursuant to each such assignment (determined as of the
date of the Assignment and Acceptance with respect to such assignment) shall in
no event be less than $3,000,000 or an integral multiple of $500,000 in excess
thereof, (iv) each such assignment shall be to an Eligible Assignee, (v) each
such assignment made as a result of a demand by a Borrower pursuant to this
Section 9.07(a) hereof shall be arranged by such Borrower after consultation
with the Agent (and each proposed assignee shall be acceptable to the Agent) and
shall be either an assignment of all of the rights and obligations of the
assigning Lender under this Agreement or an assignment of a portion of such
rights and obligations made concurrently with another such assignment or other
such assignments that together cover all of the rights and obligations of the
assigning Lender under this Agreement, (vi) no Lender shall be obligated to make
any such assignment as a result of a demand by a Borrower pursuant to this
Section 9.07(a) unless and until such Lender shall have received one or more
payments from either such Borrower or one or more Eligible Assignees in an
aggregate amount at least equal to the aggregate outstanding principal amount of
the Advances owing to such Lender, together with accrued interest thereon to the
date of payment of such principal amount and all other amounts payable to such
Lender under this Agreement, and (vii) the parties to each such assignment shall
execute and deliver to the Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance, together with any Note subject to such
assignment and a processing and recordation fee of $3,000; provided that in
                                                           --------
connection with any assignment demanded by a Borrower, such recordation fee
shall be paid by such Borrower. Upon such execution, delivery, acceptance and
recording, from and after the effective date specified in each Assignment and
Acceptance, (x) the assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned to it pursuant
to such Assignment and Acceptance, have the rights and obligations of a Lender
hereunder and (y) the Lender assignor thereunder shall, to the extent that
rights and obligations hereunder have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights and be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement, such Lender shall cease to be a party
hereto).

          (b)  By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows:  (i) other than as provided
in such Assignment and Acceptance, such assigning Lender makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value
<PAGE>

                                       64

of this Agreement or any other instrument or document furnished pursuant hereto;
(ii) such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrowers or the
performance or observance by the Borrowers of any of their respective
obligations under this Agreement or any other instrument or document furnished
pursuant hereto; (iii) such assignee confirms that it has received a copy of
this Agreement, together with copies of the financial statements referred to in
Section 4.01 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such assignee will, independently and without
reliance upon the Agent, such assigning Lender or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement; (v) such assignee confirms that it is an Eligible Assignee; (vi)
such assignee appoints and authorizes the Agent to take such action as agent on
its behalf and to exercise such powers and discretion under this Agreement as
are delegated to the Agent by the terms hereof, together with such powers and
discretion as are reasonably incidental thereto; and (vii) such assignee agrees
that it will perform in accordance with their terms all of the obligations that
by the terms of this Agreement are required to be performed by it as a Lender.

          (c)  The Agent shall maintain at its address referred to in Section
9.02 a copy of each Assignment and Acceptance delivered to and accepted by it
and a register for the recordation of the names and addresses of the Lenders and
the Commitment of, and principal amount of the Advances owing to, each Lender
from time to time (the "Register").  The entries in the Register shall be
                        --------
conclusive and binding for all purposes, absent manifest error, and the
Borrowers, the Agent and the Lenders may treat each Person whose name is
recorded in the Register as a Lender hereunder for all purposes of this
Agreement.  The Register shall be available for inspection by the Borrowers or
any Lender at any reasonable time and from time to time upon reasonable prior
notice.

          (d)  Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee representing that it is an Eligible Assignee,
together with any Note or Notes subject to such assignment, the Agent shall, if
such Assignment and Acceptance has been completed and is in substantially the
form of Exhibit B hereto, (i) accept such Assignment and Acceptance, (ii) record
the information contained therein in the Register and (iii) give prompt notice
thereof to the Borrowers.  Within five Business Days after its receipt of such
notice, the Borrowers, at their own expense, shall execute and deliver to the
Agent in exchange for the surrendered Note a new Note to the order of such
Eligible Assignee in an amount equal to the Commitment assumed by it pursuant to
such Assignment and Acceptance and, if the assigning Lender has retained a
Commitment hereunder, a new Note to the order of the assigning Lender in an
amount equal to the Commitment retained by it hereunder.  Such new Note or Notes
shall be in an aggregate principal amount equal to the aggregate principal
amount of such surrendered Note or Notes, shall be dated the effective date of
such Assignment and Acceptance and shall otherwise be in substantially the form
of Exhibit A hereto.

          (e)  Each Lender may sell participations to one or more banks or other
entities (other than the Borrowers or any of their Affiliates) in or to all or a
portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its

<PAGE>

                                       65

Commitment, the Advances owing to it and the Note or Notes held by it);
provided, however, that (i) such Lender's obligations under this Agreement
--------  -------
(including, without limitation, its Commitment hereunder) shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations, (iii) such Lender shall remain
the holder of any such Note for all purposes of this Agreement, (iv) the
Borrowers, the 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 Agreement and (v) no participant under any such
participation shall have any right to approve any amendment or waiver of any
provision of this Agreement or any Note, or any consent to any departure by the
Borrowers therefrom, except to the extent that such amendment, waiver or consent
would reduce the principal of, or interest on, the Notes or any fees or other
amounts payable hereunder, in each case to the extent subject to such
participation, or postpone any date fixed for any payment of principal of, or
interest on, the Notes or any fees or other amounts payable hereunder, in each
case to the extent subject to such participation.

          (f)  Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
9.07, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Borrowers furnished to such Lender
by or on behalf of the Borrowers; provided that, prior to any such disclosure,
                                  --------
the assignee or participant or proposed assignee or participant shall agree to
preserve the confidentiality of any Confidential Information relating to the
Borrowers received by it from such Lender.

          (g)  Notwithstanding any other provision set forth in this Agreement,
any Lender may at any time create a security interest in all or any portion of
its rights under this Agreement (including, without limitation, the Advances
owing to it and the Note held by it) in favor of any Federal Reserve Bank in
accordance with Regulation A of the Board of Governors of the Federal Reserve
System.

          SECTION 9.08.  Confidentiality.  Neither the Agent nor any Lender
                         ---------------
shall disclose any Confidential Information to any other Person without the
consent of ADL, other than (a) to the Agent's or such Lender's Affiliates and
their officers, directors, employees, agents and advisors and, as contemplated
by Section 9.07(f), to actual or prospective assignees and participants, and
then only on a confidential basis, (b) as required by any law, rule or
regulation or judicial process and (c) as requested or required by any state,
federal or foreign authority or examiner regulating banks or banking.

          SECTION 9.09.  Governing Law.  This Agreement and the Notes shall be
                         -------------
governed by, and construed in accordance with, the laws of the State of New
York.

          SECTION 9.10.  Execution in Counterparts.  This Agreement may be
                         -------------------------
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement.  Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
<PAGE>

                                       66

          SECTION 9.11.  Judgment.  (a)  If for the purposes of obtaining
                         --------
judgment in any court it is necessary to convert a sum due hereunder in US
Dollars into another currency, the parties hereto agree, to the fullest extent
that they may effectively do so, that the rate of exchange used shall be that at
which in accordance with normal banking procedures the Agent could purchase US
Dollars with such other currency at Citibank's principal office in London at
11:00 A.M. (London time) on the Business Day preceding that on which final
judgment is given.

          (b)  The obligation of any Borrower in respect of any sum due from it
in any currency (the "Primary Currency") to any Lender or the Agent hereunder
                      ----------------
shall, notwithstanding any judgment in any other currency, be discharged only to
the extent that on the Business Day following receipt by such Lender or the
Agent (as the case may be), of any sum adjudged to be so due in such other
currency, such Lender or the Agent (as the case may be) may in accordance with
normal banking procedures purchase the applicable Primary Currency with such
other currency; if the amount of the applicable Primary Currency so purchased is
less than such sum due to such Lender or the Agent (as the case may be) in the
applicable Primary Currency, such Borrower agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify such Lender or the Agent (as the
case may be) against such loss, and if the amount of the applicable Primary
Currency so purchased exceeds such sum due to any Lender or the Agent (as the
case may be) in the applicable Primary Currency, such Lender or the Agent (as
the case may be) agrees to remit to such Borrower such excess.

          SECTION 9.12.  Jurisdiction, Etc.  (a)  Each of the parties hereto
                         -----------------
hereby irrevocably and unconditionally submits, for itself and its property, to
the nonexclusive jurisdiction of any New York State court or federal court of
the United States of America sitting in New York City, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement or the Notes, or for recognition or enforcement of any judgment, and
each of the parties hereto hereby irrevocably and unconditionally agrees that
all claims in respect of any such action or proceeding may be heard and
determined in any such New York State court or, to the extent permitted by law,
in such federal court.  Each of the parties hereto agrees that a final judgment
in any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by
law.  Nothing in this Agreement shall affect any right that any party may
otherwise have to bring any action or proceeding relating to this Agreement or
the Notes in the courts of any jurisdiction.

          (b)  Each of the parties hereto irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or the Notes
in any New York State or federal court. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.

          SECTION 9.13.  Waiver of Jury Trial.  Each of the Borrowers, the Agent
                         --------------------
and the Lenders hereby irrevocably waives all right to trial by jury in any
action, proceeding or counterclaim (whether based on contract, tort or
otherwise) arising out of or relating to this
<PAGE>

                                       67

Agreement or the Notes or the actions of the Agent or any Lender in the
negotiation, administration, performance or enforcement thereof.
<PAGE>

                                       68

              [Intentionally left blank; signature pages follow]
<PAGE>

                                       69

          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.

                                  ARTHUR D. LITTLE, INC.

                                  By____________________________________________
                                    Title:
<PAGE>

                                       70

                                  ARTHUR D. LITTLE INTERNATIONAL,
                                   INC.

                                  By____________________________________________
                                    Title:

                                  CITIBANK, N.A., as Agent

                                  By____________________________________________
                                    Title:
<PAGE>

                                       71

                              The Initial Lenders
                              -------------------

Commitment
----------

$14,500,000                       CITIBANK, N.A., as Lender

                                  By____________________________________________
                                    Title:

$14,500,000                       THE CHASE MANHATTAN BANK, as
                                   Lender

                                  By____________________________________________
                                    Title:

$29,000,000    Total of the Commitments
<PAGE>

                                                                      SCHEDULE I
                                                      APPLICABLE LENDING OFFICES

Name of Initial Lender    Domestic Lending Office   Eurocurrency Lending Office
----------------------    -----------------------   ---------------------------
Citibank, N.A.            599 Lexington Avenue      599 Lexington Avenue
                          New York, NY  10043       New York, NY  10043

The Chase Manhattan Bank  999 Broad Street          999 Broad Street
                          Bridgeport, CT  06604     Bridgeport, CT  06604
<PAGE>

                                                             EXHIBIT A - FORM OF
                                                                 PROMISSORY NOTE

U.S.$_______________                  Dated: __________________

          FOR VALUE RECEIVED, the undersigned, [THE BORROWER], a ___________
corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
                  --------
_________________________ (the "Lender") for the account of its Applicable
                                ------
Lending Office on the Termination Date (each as defined in the Credit Agreement
referred to below) the principal sum of U.S.$[amount of the outstanding Advances
in figures] or, if less, the aggregate principal amount of the Advances made by
the Lender to the Borrower pursuant to the Amended and Restated Credit Agreement
dated as of March __, 2000, among Arthur D. Little, Inc. and Arthur D. Little
International, Inc. (each a "Borrower" and together the "Borrowers"), the Lender
                             --------                    ---------
and certain other lenders parties thereto, and Citibank, N.A., as Agent for the
Lender and such other lenders (as amended or modified from time to time, the
"Credit Agreement"; the terms defined therein being used herein as therein
-----------------
defined) outstanding on the Termination Date.

          The Borrowers promise to pay interest on the unpaid principal amount
of each Advance from the date of such Advance until such principal amount is
paid in full, at such interest rates, and payable at such times, as are
specified in the Credit Agreement.  The obligations of the Borrowers hereunder
are joint and several.

          Both principal and interest in respect of each Advance are payable in
the lawful money of the United States of America to the Agent at its account
maintained at 399 Park Avenue, New York, New York 10043, in same day funds.
Each Advance owing to the Lender by the Borrowers pursuant to the Credit
Agreement, and all payments made on account of principal thereof, shall be
recorded by the Lender and, prior to any transfer hereof, endorsed on the grid
attached hereto which is part of this Promissory Note.

          This Promissory Note is one of the Notes referred to in, and is
entitled to the benefits of, the Credit Agreement.  The Credit Agreement, among
other things, (i) provides for the making of Advances by the Lender to the
Borrowers from time to time in an aggregate amount not to exceed at any time
outstanding the U.S. dollar amount first above mentioned, the indebtedness of
the Borrowers resulting from each such Advance being evidenced by this
Promissory Note, and (ii) contains provisions for acceleration of the maturity
hereof upon the happening of certain stated events and also for prepayments on
account of principal hereof prior to the maturity hereof upon the terms and
conditions therein specified.

ARTHUR D. LITTLE                    ARTHUR D. LITTLE, INC.
INTERNATIONAL, INC.

By_________________________               By__________________________
  Title                                     Title:
<PAGE>

                      ADVANCES AND PAYMENTS OF PRINCIPAL

<TABLE>
<CAPTION>
=================================================================================================
                                            Amount of
             Type of       Amount of      Principal Paid   Unpaid Principal        Notation
  Date       Advance        Advance         or Prepaid         Balance             Made By
-------------------------------------------------------------------------------------------------
<S>          <C>           <C>            <C>              <C>                     <C>
_________________________________________________________________________________________________

_________________________________________________________________________________________________

_________________________________________________________________________________________________

_________________________________________________________________________________________________

_________________________________________________________________________________________________

_________________________________________________________________________________________________

_________________________________________________________________________________________________

_________________________________________________________________________________________________

_________________________________________________________________________________________________

_________________________________________________________________________________________________

_________________________________________________________________________________________________

_________________________________________________________________________________________________

_________________________________________________________________________________________________

_________________________________________________________________________________________________

_________________________________________________________________________________________________

_________________________________________________________________________________________________

_________________________________________________________________________________________________

_________________________________________________________________________________________________

_________________________________________________________________________________________________

_________________________________________________________________________________________________

_________________________________________________________________________________________________

=================================================================================================
</TABLE>
<PAGE>

                                                             EXHIBIT B - FORM OF
                                                       ASSIGNMENT AND ACCEPTANCE

     Reference is made to the Amended and Restated Credit Agreement dated as of
March  __, 2000 (as amended or modified from time to time, the "Credit
                                                                ------
Agreement") among Arthur D. Little, Inc., a Massachusetts corporation ("ADL"),
---------                                                               ---
Arthur D. Little International, Inc., a Massachusetts corporation (together with
ADL, the "Borrowers"), the Lenders party thereto (as defined in the Credit
          ---------
Agreement) and Citibank, N.A., as agent for the Lenders (the "Agent").  Terms
                                                              -----
defined in the Credit Agreement are used herein with the same meaning.

     The "Assignor" and the "Assignee" referred to on Schedule 1 hereto agree as
follows:

     1.   The Assignor hereby sells and assigns to the Assignee, and the
  Assignee hereby purchases and assumes from the Assignor, an interest in and to
  the Assignor's rights and obligations under the Credit Agreement as of the
  date hereof equal to the percentage interest specified on Schedule 1 hereto of
  all outstanding rights and obligations under the Credit Agreement. After
  giving effect to such sale and assignment, the Assignee's Commitment and the
  amount of the Advances owing to the Assignee will be as set forth on
  Schedule 1 hereto.

     2.   The Assignor (i) represents and warrants that it is the legal and
  beneficial owner of the interest being assigned by it hereunder and that such
  interest is free and clear of any adverse claim; (ii) makes no representation
  or warranty and assumes no responsibility with respect to any statements,
  warranties or representations made in or in connection with the Credit
  Agreement or the execution, legality, validity, enforceability, genuineness,
  sufficiency or value of the Credit Agreement or any other instrument or
  document furnished pursuant thereto; (iii) makes no representation or warranty
  and assumes no responsibility with respect to the financial condition of the
  Borrowers or the performance or observance by the Borrowers of any of their
  obligations under the Credit Agreement or any other instrument or document
  furnished pursuant thereto; and (iv) attaches the Note held by the Assignor
  and requests that the Agent exchange such Note for a new Note payable to the
  order of the Assignee in an amount equal to the Commitment assumed by the
  Assignee pursuant hereto or new Notes payable to the order of the Assignee in
  an amount equal to the Commitment assumed by the Assignee pursuant hereto and
  the Assignor in an amount equal to the Commitment retained by the Assignor
  under the Credit Agreement, respectively, as specified on Schedule 1 hereto.

     3.   The Assignee (i) confirms that it has received a copy of the Credit
  Agreement, together with copies of the financial statements referred to in
  Section 4.01 thereof and such other documents and information as it has deemed
  appropriate to make its own credit analysis and decision to enter into this
  Assignment and Acceptance; (ii) agrees that it will, independently and without
  reliance upon the Agent, the Assignor or any other Lender and based on such
  documents and information as it shall deem appropriate at the time, continue
  to make its own credit decisions in taking or not taking action under the
  Credit Agreement; (iii) confirms that it is an Eligible Assignee; (iv)
  appoints and authorizes the Agent to take such action as agent on its behalf
  and to exercise such powers and discretion under the Credit
<PAGE>

                                      B-2

  Agreement as are delegated to the Agent by the terms thereof, together with
  such powers and discretion as are reasonably incidental thereto; (v) agrees
  that it will perform in accordance with their terms all of the obligations
  that by the terms of the Credit Agreement are required to be performed by it
  as a Lender; and (vi) attaches any U.S. Internal Revenue Service forms
  required under Section 2.12 of the Credit Agreement.

     4.   Following the execution of this Assignment and Acceptance, it will be
  delivered to the Agent for acceptance and recording by the Agent. The
  effective date for this Assignment and Acceptance (the "Effective Date") shall
                                                          --------------
  be the date of acceptance hereof by the Agent, unless otherwise specified on
  Schedule 1 hereto.

     5.   Upon such acceptance and recording by the Agent, as of the Effective
  Date, (i) the Assignee shall be a party to the Credit Agreement and, to the
  extent provided in this Assignment and Acceptance, have the rights and
  obligations of a Lender thereunder and (ii) the Assignor shall, to the extent
  provided in this Assignment and Acceptance, relinquish its rights and be
  released from its obligations under the Credit Agreement.

     6.   Upon such acceptance and recording by the Agent, from and after the
  Effective Date, the Agent shall make all payments under the Credit Agreement
  and the Notes in respect of the interest assigned hereby (including, without
  limitation, all payments of principal, interest, facility fees and utilization
  fees with respect thereto) to the Assignee. The Assignor and Assignee shall
  make all appropriate adjustments in payments under the Credit Agreement and
  the Notes for periods prior to the Effective Date directly between themselves.

     7.   This Assignment and Acceptance shall be governed by, and construed in
  accordance with, the laws of the State of New York.

     8.   This Assignment and Acceptance may be executed in any number of
  counterparts and by different parties hereto in separate counterparts, each of
  which when so executed shall be deemed to be an original and all of which
  taken together shall constitute one and the same agreement. Delivery of an
  executed counterpart of Schedule 1 to this Assignment and Acceptance by
  telecopier shall be effective as delivery of a manually executed counterpart
  of this Assignment and Acceptance.

     IN WITNESS WHEREOF, the Assignor and the Assignee have caused Schedule 1 to
this Assignment and Acceptance to be executed by their officers thereunto duly
authorized as of the date specified thereon.
<PAGE>

                                       3

                                  Schedule 1
                                      to
                           Assignment and Acceptance

Percentage interest assigned:                                _____%

Assignee's Commitment:                                       $______________

Aggregate outstanding principal amount of Advances assigned: $______________

Principal amount of Note payable to Assignee:                $______________

Principal amount of Note payable to Assignor:                $______________

Effective Date/1/:                                           _______________,___

                                   [NAME OF ASSIGNOR], as Assignor

                                   By__________________________________
                                     Title:

                                   Dated:  _______________, ____

                                   [NAME OF ASSIGNEE], as Assignee

                                   By__________________________________
                                     Title:

                                   Domestic Lending Office:
                                            [Address]

                                   Eurocurrency Lending Office:
                                            [Address]

Accepted and Approved this
__________ day of _______________, ____

/1/  This date should be no earlier than five Business Days after the delivery
     of this Assignment and Acceptance to the Agent.
<PAGE>

                                       4

CITIBANK, N.A., as Agent

By______________________________
 Title:

Approved this __________ day
of _______________, ____

ARTHUR D. LITTLE, INC.

By______________________________
 Title:

ARTHUR D. LITTLE INTERNATIONAL, INC.

By______________________________
 Title:
<PAGE>

                               U.S. $29,000,000

                     AMENDED AND RESTATED CREDIT AGREEMENT

                          Dated as of April 25, 2000

                                     Among

                            ARTHUR D. LITTLE, INC.

                                      and

                     ARTHUR D. LITTLE INTERNATIONAL, INC.,

                                 as Borrowers,
                                 -- ---------

                            ARTHUR D. LITTLE, INC.,

                                 as Guarantor,
                                 -- ---------

                       THE INITIAL LENDERS NAMED HEREIN,

                              as Initial Lenders,
                              -- ------- -------

                                      and

                                CITIBANK, N.A.,

                                   as Agent
                                   -- -----
<PAGE>

                                      vi

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                      Page
                                                                      ----
<S>                                                                   <C>
                  ARTICLE I DEFINITIONS AND ACCOUNTING TERMS

SECTION 1.01.  Certain Defined Terms............................       1
SECTION 1.02.  Computation of Time Periods......................      20
SECTION 1.03.  Accounting Terms.................................      20

                 ARTICLE II AMOUNTS AND TERMS OF THE ADVANCES

SECTION 2.01.  The Advances.....................................      20
SECTION 2.02.  Fees.............................................      20
SECTION 2.03.  Repayment of Advances............................      20
SECTION 2.04.  Interest.........................................      21
SECTION 2.05.  Conversion of Advances...........................      23
SECTION 2.06.  Prepayments......................................      24
SECTION 2.07.  Increased Costs..................................      25
SECTION 2.08.  Illegality.......................................      26
SECTION 2.09.  Payments and Computations........................      26
SECTION 2.10.  Taxes............................................      27
SECTION 2.11.  Sharing of Payments, Etc.........................      29
SECTION 2.12.  Use of Proceeds..................................      30

                    ARTICLE III CONDITIONS TO EFFECTIVENESS

SECTION 3.01.  Conditions Precedent to Lending..................      30
SECTION 3.02.  Conditions Precedent to Effectiveness............      30
SECTION 3.03.  Determinations Under Section 3.02................      33

                   ARTICLE IV REPRESENTATIONS AND WARRANTIES

SECTION 4.01.  Representations and Warranties of the Borrowers..      33

                      ARTICLE V COVENANTS OF THE BORROWER

SECTION 5.01.  Affirmative Covenants............................      38
SECTION 5.02.  Negative Covenants...............................      46
SECTION 5.03.  Financial Covenants..............................      52

                            ARTICLE VI ADL GUARANTY

SECTION 6.01.  ADL Guaranty.....................................      54
SECTION 6.02.  Guaranty Absolute................................      54
SECTION 6.03.  Waivers..........................................      55
</TABLE>
<PAGE>

                                      vii

<TABLE>
<CAPTION>
                                                                    Page
                                                                    ----
<S>                                                                 <C>
SECTION 6.04.  Continuing Guaranty; Assignments................       56

                         ARTICLE VII EVENTS OF DEFAULT

SECTION 7.01.  Events of Default...............................       57

                            ARTICLE VIII THE AGENT

SECTION 8.01.  Authorization and Action........................       60
SECTION 8.02.  Agent's Reliance, Etc...........................       60
SECTION 8.03.  Citibank and Affiliates.........................       60
SECTION 8.04.  Lender Credit Decision..........................       61
SECTION 8.05.  Indemnification.................................       61
SECTION 8.06.  Successor Agent.................................       61
SECTION 8.07.  Sub-Agent.......................................       62

                           ARTICLE IX MISCELLANEOUS

SECTION 9.01.  Amendments, Etc.................................       62
SECTION 9.02.  Notices, Etc....................................       62
SECTION 9.03.  No Waiver; Remedies.............................       63
SECTION 9.04.  Costs and Expenses..............................       63
SECTION 9.05.  Right of Set-off................................       64
SECTION 9.06.  Binding Effect; Third Party Rights..............       65
SECTION 9.07.  Assignments and Participations..................       65
SECTION 9.08.  Confidentiality.................................       68
SECTION 9.09.  Governing Law...................................       68
SECTION 9.10.  Execution in Counterparts.......................       68
SECTION 9.11.  Judgment........................................       68
SECTION 9.12.  Jurisdiction, Etc...............................       69
SECTION 9.13.  Waiver of Jury Trial............................       69
</TABLE>
<PAGE>

                                     viii

Schedules
---------

Schedule I        -   List of Applicable Lending Offices

Schedule II       -   Subsidiary Guarantors

Schedule 4.01     -   Environmental Disclosure

Schedule 4.01(c)  -   Subsidiaries

Schedule 5.02(a)  -   Existing Liens

Schedule 5.02(d)  -   Existing Debt

Schedule 5.02(f)  -   Existing Investments

Schedule 5.02(g)  -   Payments pursuant to Stock Plans

Exhibits
--------

Exhibit A - Form of Promissory Note

Exhibit B - Form of Assignment and Acceptance

Exhibit C - Form of Security Agreement

Exhibit D - Form of Pledge Agreement

Exhibit E - Form of Subsidiary Guaranty

Exhibit F - Form of TIME Guaranty

Exhibit G - Form of Notice of Conversion

Exhibit H - Form of Opinion of Counsel to the Loan Parties

Exhibit I - Form of Collateral Agency and Intercreditor Agreement<PAGE>

                                                                   Exhibit 10.10
                                                                   -------------

================================================================================

                             ARTHUR D. LITTLE, INC.

                      __________________________________

                 AMENDED AND RESTATED NOTE PURCHASE AGREEMENT

                      __________________________________

                          Dated As of April 25, 2000

                                  $35,000,000
           Adjustable Rate Amended and Restated Senior Secured Notes
                               Due June 1, 2001

================================================================================
<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                      Page
                                                                                                      ----
<S>                                                                                                   <C>
1.   BACKGROUND...................................................................................    1

2.   AMENDMENT AND RESTATEMENT; DESCRIPTION OF NOTES..............................................    1
     2.1.   Agreement and Consent of Company to Amendments and
            Restatements; Request for Waiver of Existing Defaults.................................    1
     2.2.   Agreement and Consent of Noteholders to Amendments
            and Restatements, Waiver..............................................................    2
     2.3.   Description of Notes..................................................................    2

3.   SUBSTITUTION OF NOTES ON EFFECTIVE DATE......................................................    3

4.   CONDITIONS TO CLOSING........................................................................    3
     4.1.   Representations and Warranties........................................................    3
     4.2.   Performance; No Default...............................................................    4
     4.3.   Compliance Certificates...............................................................    4
     4.4.   Opinions of Counsel...................................................................    4
     4.5.   Notes; Accrued Interest...............................................................    5
     4.6.   Credit Agreement......................................................................    5
     4.7.   Intercreditor Agreement...............................................................    5
     4.8.   Pledge Agreement......................................................................    5
     4.9.   Security Agreement....................................................................    5
     4.10.  Guaranty Agreement....................................................................    6
     4.11.  Perfection of Liens...................................................................    6
     4.12.  Restructuring Fee.....................................................................    6
     4.13.  Payment of Special Counsel Fees.......................................................    6
     4.14.  Private Placement Number..............................................................    6
     4.15.  Changes in Corporate Structure........................................................    6
     4.16.  Proceedings and Documents.............................................................    7

5.   REPRESENTATIONS AND WARRANTIES OF THE COMPANY................................................    7
     5.1.   Organization; Power and Authority.....................................................    7
     5.2.   Authorization, etc....................................................................    7
     5.3.   Disclosure............................................................................    8
     5.4.   Organization and Ownership of Shares of Subsidiaries; Affiliates......................    8
     5.5.   No Conflicts with Agreements, etc.....................................................    9
     5.6.   Governmental Authorizations, etc......................................................    9
</TABLE>
<PAGE>

<TABLE>
<S>                                                                                                  <C>
     5.7.   Litigation; Observance of Agreements, Statutes and Orders.............................   10
     5.8.   Compliance with Law...................................................................   11
     5.9.   Title to Property; Leases.............................................................   11
     5.10.  Licenses, Permits, etc................................................................   11
     5.11.  Existing Indebtedness, Future Liens...................................................   11
     5.12.  Foreign Assets Control Regulations, etc...............................................   12
     5.13.  Status under Certain Statutes.........................................................   12
     5.14.  Environmental Matters.................................................................   12
     5.15.  Taxes.................................................................................   13
     5.16.  Compliance with ERISA.................................................................   13
     5.17.  Pledge Agreement......................................................................   14
     5.18.  Solvency..............................................................................   14

6.   INTENTIONALLY OMITTED........................................................................   15

7.   INFORMATION AS TO COMPANY....................................................................   15
     7.1.   Financial and Business Information....................................................   15
     7.2.   Officer's Certificate.................................................................   19
     7.3.   Inspection............................................................................   20
     7.4.   Quarterly Review......................................................................   20

8.   PAYMENT OF THE NOTES.........................................................................   21
     8.1.   Scheduled Payments....................................................................   21
     8.2.   Other Mandatory Prepayments...........................................................   21
     8.3.   Optional Prepayments..................................................................   22
     8.4.   Allocation of Partial Prepayments.....................................................   23
     8.5.   Maturity; Surrender, etc..............................................................   23
     8.6.   No Other Optional Prepayments or Purchase of Notes....................................   23
     8.7.   Make-Whole Amount.....................................................................   24

9.  AFFIRMATIVE COVENANTS.........................................................................   25
    9.1.   Compliance with Law....................................................................   26
    9.2.   Insurance..............................................................................   26
    9.3.   Maintenance of Properties and Books....................................................   26
    9.4.   Payment of Taxes and Claims............................................................   26
    9.5.   Corporate Existence, etc...............................................................   27
    9.6.   Additional Collateral and Guarantors...................................................   27
    9.7.   Deferred Restructuring Fee.............................................................   29
    9.8.   Restrictive Account....................................................................   30
</TABLE>

                                      iii
<PAGE>

<TABLE>
<S>                                                                                                  <C>
10.  NEGATIVE COVENANTS...........................................................................   30
     10.1.   Transactions with Affiliates.........................................................   30
     10.2.   Merger; Consolidation................................................................   30
     10.3.   Liens................................................................................   30
     10.4.   Limitation on Indebtedness...........................................................   33
     10.5.   Consolidated Tangible Net Worth......................................................   34
     10.6.   Debt to EBITDA Ratio.................................................................   34
     10.7.   Fixed Charge Coverage Ratio..........................................................   35
     10.8.   Permitted Investments................................................................   36
     10.9.   Restricted Payments..................................................................   36
     10.10.  Asset Disposition....................................................................   36
     10.11.  Conduct of Business..................................................................   36
     10.12.  Debt Prepayment Restrictions.........................................................   36

11.  EVENTS OF DEFAULT............................................................................   37

12.  REMEDIES ON DEFAULT, ETC.....................................................................   42
     12.1.   Acceleration.........................................................................   42
     12.2.   Other Remedies.......................................................................   43
     12.3.   Rescission...........................................................................   43
     12.4.   No Waivers or Election of Remedies, Expenses, etc....................................   43

13.  REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES................................................   44
     13.1.   Registration of Notes................................................................   44
     13.2.   Transfer and Exchange of Notes.......................................................   44
     13.3.   Replacement of Notes.................................................................   45

14.  PAYMENTS ON NOTES............................................................................   45
     14.1.   Place of Payment.....................................................................   45
     14.2.   Home Office Payment..................................................................   45

15.  EXPENSES, ETC................................................................................   46
     15.1.   Transaction Expenses.................................................................   46
     15.2.   Survival.............................................................................   46

16.  SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.................................   47

17.  AMENDMENT AND WAIVER.........................................................................   47
     17.1.   Requirements.........................................................................   47
     17.2.   Solicitation of Holders of Notes.....................................................   48
     17.3.   Binding Effect, etc..................................................................   48
</TABLE>

                                      iv
<PAGE>

<TABLE>
<S>                                                                                                  <C>
     17.4.  Notes held by Company, etc............................................................   48

18.  NOTICES......................................................................................   49

19.  REPRODUCTION OF DOCUMENTS....................................................................   49

20.  CONFIDENTIAL INFORMATION.....................................................................   50

21.  MISCELLANEOUS................................................................................   52
     21.1.  Successors and Assigns................................................................   52
     21.2.  Payments Due on Non-Business Days.....................................................   52
     21.3.  Indemnity.............................................................................   52
     21.4.  Severability..........................................................................   53
     21.5.  Independent Construction..............................................................   53
     21.6.  Counterparts..........................................................................   53
     21.7.  Governing Law.........................................................................   53
</TABLE>

                                       v
<PAGE>

                             SCHEDULES & EXHIBITS

SCHEDULE A        --   Information Relating to Noteholders

SCHEDULE B        --   Defined Terms
SCHEDULE 5.4      --   Subsidiaries of the Company and Ownership of
                       Subsidiary Stock

SCHEDULE 5.7      --   Certain Litigation

SCHEDULE 5.11     --   Existing Indebtedness and Liens

SCHEDULE 10.11    --   Existing Investments

SCHEDULE 11       --   Existing Events of Default

EXHIBIT 1         --   Form of Adjustable Rate Amended and Restated Senior
                       Secured Note due June 1, 2001

EXHIBIT 4.4(a)    --   Form of Opinion of Special Counsel for the Obligors

EXHIBIT 4.4(b)    --   Form of Opinion of Special Counsel for the Noteholders

EXHIBIT 4.7       --   Form of Intercreditor Agreement

EXHIBIT 4.8(a)    --   Form of Pledge Agreements (Domestic Subsidiaries)

EXHIBIT 4.8(b)    --   Form of Pledge Agreements (Foreign Subsidiaries)

EXHIBIT 4.9       --   Form of Security Agreement

EXHIBIT 4.10      --   Form of Guaranty Agreement

                                      vi
<PAGE>

                            ARTHUR D. LITTLE, INC.
                                  Acorn Park
                           Cambridge, MA 02140-2390

                     ADJUSTABLE RATE AMENDED AND RESTATED
                     SENIOR SECURED NOTES DUE JUNE 1, 2001

                                                      Dated as of April 25, 2000

To each of the Noteholders named in
Schedule A Hereto

Ladies and Gentlemen:

     ARTHUR D. LITTLE, INC., a Massachusetts corporation (together with its
successors and assigns, the "Company"), agrees with each of you as follows:

1.   BACKGROUND

     The Company has issued its 7.16% Senior Notes (as amended up to, but
excluding, the Effective Date, the "Existing Notes"), in the aggregate principal
amount of $35,000,000, pursuant to those certain Note Purchase Agreements dated
as of December 17, 1996 (collectively, as amended up to, but excluding, the
Effective Date, the "Existing Note Purchase Agreement"), entered into by the
Company with each of the institutions named on Schedule A thereto.  The
institutions named on Schedule A to this Agreement were the holders of all of
the Existing Notes immediately prior to the substitution referred to in Section
3 and are referred to herein as the "Noteholders."  Certain capitalized terms
used in this Agreement are defined in Schedule B; references to a "Schedule" or
an "Exhibit" are, unless otherwise specified, to a Schedule or an Exhibit
attached to this Agreement.

2.   AMENDMENT AND RESTATEMENT; DESCRIPTION OF NOTES

     2.1. Agreement and Consent of Company to Amendments and Restatements;
          Request for Waiver of Existing Defaults.

          (a)  The Company has authorized, and (subject to the agreement and
     consent of each Noteholder as provided in Section 1.3) agrees and consents
     to, the amendment and restatement in their entirety of the Existing Notes,
     as provided for in this Agreement.  The Existing Notes as so amended and
     restated (including each note delivered pursuant to any provision of this
     Agreement and any note delivered in substitution for any such note pursuant
     to any such provisions) are hereinafter sometimes referred to,
     collectively, as the "Notes."  The Notes shall be
<PAGE>

     substituted in the place of the Existing Notes which shall be surrendered
     to the Company for cancellation.

          (b)  The Company desires that the Noteholders waive the Existing
     Events of Default and amend certain covenants in the Existing Note Purchase
     Agreement in exchange for the substitution of the Notes described in
     subsection (a) above, and certain other consideration referred to in
     Sections 4.8, 4.9, 4.10 and 4.12.

     2.2. Agreement and Consent of Noteholders to Amendments and Restatements,
          Waiver.

     Subject to the satisfaction of the conditions set forth in Section 4, each
Noteholder, by execution of this Agreement, hereby agrees and consents to the
waiver of the Existing Events of Default, and further agrees that the Existing
Note Purchase Agreement is amended and restated in the form of this Agreement
and that the Existing Notes are amended and restated in the form of Exhibit 1.

     2.3. Description of Notes.

          (a)  Description of Notes.  The Notes shall be issued in an aggregate
     principal amount of $35,000,000.  Each Note will (i) bear interest from the
     date thereof until maturity at the Note Interest Rate, payable monthly on
     the first day of each month in each year commencing May 1, 2000 and at
     maturity, (ii) bear interest, payable on demand, on any overdue principal
     (including any overdue prepayment of principal) and Make-Whole Amount, if
     any, and (to the extent permitted by applicable law) on any overdue
     installment of interest, at the Default Rate, (iii) mature on June 1, 2001,
     and (iv) be substantially in the form set out in Exhibit 1, with such
     changes therefrom, if any, as may be approved by the Noteholders and the
     Company.

          (b)  Note Interest Rate.  For purposes of this Agreement:

          "Note Interest Rate" means, as of the date of any determination
     thereof,

               (i)  during the period beginning on and including the Effective
          Date and ending on but not including January 1, 2001, 10% per annum;

               (ii) during the period beginning on and including January 1, 2001
          and ending on but not including February 1, 2001, 10.50% per annum;

                                      -2-
<PAGE>

               (iii) during the period beginning on and including February 1,
          2001 and ending on but not including March 1, 2001, 11% per annum;

               (iv)  during the period beginning on and including March 1, 2001
          and ending on but not including April 1, 2001, 11.50% per annum;

               (v)   during the period beginning on and including April 1, 2001
          and ending on but not including May 1, 2001, 12% per annum; and

               (vi)  during the period beginning on and including May 1, 2001
          and ending on but not including June 1, 2001, 12.5% per annum.

3.   SUBSTITUTION OF NOTES ON EFFECTIVE DATE

     On April 25, 2000 (the "Effective Date"), the Company will deliver to each
Noteholder, at the offices of Bingham Dana LLP, One State Street, Hartford,
Connecticut 06103, one or more Notes (as set forth below such Noteholder's name
on Schedule A hereto), in the denominations indicated on such Schedule, in the
aggregate principal amount equal to the principal amount of the Existing Notes
held by such Noteholder, dated the Effective Date, and registered in such
Noteholder's name (or in the name of its nominee), as indicated in Schedule A,
against delivery by such Noteholder of such Existing Notes to the Company for
cancellation.  All amounts owing under, and evidenced by, the Existing Notes as
of the Effective Date shall continue to be outstanding under, and shall after
the Effective Date be evidenced by, the Notes, and shall be repayable in
accordance with this Agreement and the Notes.  If on the Effective Date the
Company shall fail to tender such Notes to any Noteholder as provided above in
this Section 3, or any of the conditions specified in Section 4 shall not have
been fulfilled to the Noteholders' satisfaction, the Noteholders shall, at their
election, be relieved of all further obligations under this Agreement, without
thereby waiving any rights the Noteholders may have by reason of such failure or
such nonfulfillment, the Existing Note Purchase Agreement shall remain in full
force and effect and the waiver referred to in Section 2.2 shall be of no force
or effect.

4.   CONDITIONS TO CLOSING

     The effectiveness of this Agreement, as to the parties hereto, is subject
to the satisfaction of the following conditions precedent:

     4.1. Representations and Warranties.

                                      -3-
<PAGE>

     The representations and warranties of the Company in this Agreement shall
be correct on the Effective Date.

     4.2. Performance; No Default.

     The Company shall have performed and complied with all agreements and
conditions contained in this Agreement required to be performed or complied with
by it prior to or on the Effective Date and on the Effective Date, after giving
effect to the transactions contemplated by this Agreement, no Default or Event
of Default shall have occurred and be continuing.

     4.3. Compliance Certificates.

          (a)  Officer's Certificate.  The Company shall have delivered to the
     Noteholders an Officer's Certificate, dated the Effective Date, certifying
     that the conditions specified in Sections 4.1, 4.2 and 4.15 have been
     fulfilled.

          (b)  Company Secretary's Certificate. The Company shall have delivered
     to the Noteholders a certificate of its Secretary or one of its Assistant
     Secretaries, dated the Effective Date, certifying as to the resolutions
     attached thereto and other corporate proceedings relating to the
     authorization, execution and delivery of the Financing Documents to which
     it is a party.

          (c)  Domestic Subsidiary Secretary's Certificates.  Each of the
     Domestic Subsidiaries shall have delivered to the Noteholders a certificate
     of its Secretary or one of its Assistant Secretaries, dated the Effective
     Date, certifying as to the resolutions attached thereto and other corporate
     proceedings relating to the authorization, execution and delivery of the
     Financing Documents to which it is a party.

     4.4. Opinions of Counsel.

     The Noteholders shall have received opinions in form and substance
satisfactory to them, dated the Effective Date, from

          (a)  Hale and Dorr, special counsel for the Obligors, substantially in
     the form set out in Exhibit 4.4(a) and covering such other matters incident
     to the transactions contemplated hereby as the Noteholders or their counsel
     may reasonably request (and the Company hereby instructs such counsel to
     deliver such opinion to the Noteholders), and

                                      -4-
<PAGE>

          (b)  Bingham Dana LLP, the Noteholders' special counsel in connection
     with such transactions, substantially in the form set out in Exhibit 4.4(b)
     and covering such other matters incident to such transactions as the
     Noteholders may reasonably request.

     4.5. Notes; Accrued Interest.

     The substitution of Notes for the Existing Notes described in Section 3
shall have occurred between the Company and each Noteholder and the Company
shall have paid all accrued interest on the Existing Notes up to the Effective
Date.

     4.6. Credit Agreement.

     The Company, ADL International and the Banks shall have entered into the
Credit Agreement, in form and substance satisfactory to the Noteholders, and the
Company shall have delivered to the Noteholders an executed copy of the Credit
Agreement, certified as true and correct by a Responsible Officer.

     4.7. Intercreditor Agreement.

     The Company, the Guarantors, the Noteholders, the Banks and the Collateral
Agent shall have entered into the Intercreditor and Collateral Agency Agreement,
substantially in the form of Exhibit 4.7 (as amended or supplemented from time
to time, the "Intercreditor Agreement"), and the Intercreditor Agreement shall
be in full force and effect.

     4.8. Pledge Agreement.

     The Company and the Pledging Subsidiaries shall have entered into separate
Stock Pledge Agreements with the Collateral Agent, substantially in the form of
Exhibit 4.8(a) with respect to the stock of Domestic Subsidiaries and Exhibit
4.8(b) with respect to the stock of Foreign Subsidiaries (collectively, as
amended or supplemented from time to time, the "Pledge Agreement"), and the
Pledge Agreement shall be in full force and effect.

     4.9. Security Agreement.

     The Company, each of the Domestic Subsidiaries (other than TIME and EPYX)
and the Collateral Agent shall have entered into the Security Agreement,
substantially in the form of Exhibit 4.9 (as amended or supplemented from time
to time, the "Security Agreement"), and the Security Agreement shall be in full
force and effect.

                                      -5-
<PAGE>

     4.10.  Guaranty Agreement.

     The Noteholders shall have received a counterpart of the Guaranty
Agreement, duly executed and delivered by ADL International and TIME,
substantially in the form of Exhibit 4.10 (as amended or supplemented from time
to time, including any Joinder Agreement delivered pursuant to Section
9.6(b)(i), the "Guaranty Agreement"), and the Guaranty Agreement shall be in
full force and effect.

     4.11.  Perfection of Liens.

     The Company and each of the Pledging Subsidiaries shall have delivered to
the Collateral Agent stock certificates (together with undated stock powers duly
executed in blank) evidencing all of the issued and outstanding Stock Collateral
owned by them, and shall have taken all other actions necessary or desirable to
perfect the Liens of the Collateral Agent in such Stock Collateral (including,
without limitation, the filing of all appropriate Uniform Commercial Code
financing statements) in accordance with the provisions of the Pledge Agreement
and in the Collateral (as defined in the Security Agreement).

     4.12.  Restructuring Fee.

     Each Noteholder shall have received payment of a restructuring fee in an
amount equal to 1% of the aggregate principal amount of the Existing Notes held
by such Noteholder immediately prior to the substitution referred to in Section
4.5.

     4.13.  Payment of Special Counsel Fees.

     Without limiting the provisions of Section 15.1, the Company shall have
paid on or before the Effective Date the fees, charges and disbursements of the
Noteholders' special counsel referred to in Section 4.4(b) to the extent
reflected in a statement of such counsel rendered to the Company at least one
Business Day prior to the Effective Date.

     4.14.  Private Placement Number.

     A Private Placement Number issued by Standard & Poor's CUSIP Service Bureau
(in cooperation with the Securities Valuation Office of the National Association
of Insurance Commissioners) shall have been obtained for the Notes.

     4.15.  Changes in Corporate Structure.

     The Company shall not have changed its jurisdiction of incorporation or
been a party to any merger or consolidation and shall not have succeeded to all

                                      -6-
<PAGE>

or any substantial part of the liabilities of any other entity, at any time
following the date of the most recent financial statements delivered pursuant to
Section 7.1(b) of the Existing Note Purchase Agreement.

     4.16.  Proceedings and Documents.

     All corporate and other proceedings in connection with the transactions
contemplated by this Agreement and all documents and instruments incident to
such transactions shall be satisfactory to the Noteholders and their special
counsel, and the Noteholders and their special counsel shall have received all
such counterpart originals or certified or other copies of such documents as
they may reasonably request.

5.   REPRESENTATIONS AND WARRANTIES OF THE COMPANY

     The Company represents and warrants to the Noteholders, as of the Effective
Date, that:

     5.1.   Organization; Power and Authority.

     The Company is a corporation duly organized, validly existing and in good
standing under the laws of the Commonwealth of Massachusetts, and is duly
qualified as a foreign corporation and is in good standing in each jurisdiction
in which such qualification is required by law, other than those jurisdictions
as to which the failure to be so qualified or in good standing could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.  The Company has the corporate power and authority to own or
hold under lease the properties it purports to own or hold under lease, to
transact the business it transacts and proposes to transact, to execute and
deliver the Financing Documents to which it is a party and to perform the
provisions thereof.

     5.2.   Authorization, etc.

     The Financing Documents have been duly authorized by all necessary
corporate or other action on the part of each Obligor which is a party thereto,
and each Financing Document constitutes a legal, valid and binding obligation of
such Obligor, enforceable against it in accordance with its terms, except as
such enforceability may be limited by (a) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and (b) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).

                                      -7-
<PAGE>

     5.3.  Disclosure.

     The Financing Documents, the documents, certificates or other writings
delivered to the Noteholders by or on behalf of the Company in connection with
the transactions contemplated hereby and the financial statements most recently
delivered to the Noteholders pursuant to Section 7.1 of the Existing Note
Purchase Agreement, taken as a whole, do not contain any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein not misleading in light of the circumstances under which they
were made; provided, however, that no representation is made in this Section 5.3
regarding the financial projections delivered to the Noteholders in connection
with the transactions contemplated hereby other than (i) that such projections
are based upon information that the Company in good faith believes to be
accurate, and (ii) that such projections were calculated in a manner that the
Company in good faith believes to be reasonable.  Except as disclosed in the
Financing Documents or in one of the documents, certificates or other writings
identified therein, or in the financial statements most recently delivered to
the Noteholders pursuant to Section 7.1 of the Existing Note Purchase Agreement,
since December 31, 1998, there has been no change in the financial condition,
operations, business, properties or prospects of the Company or any Subsidiary,
except changes that individually or in the aggregate could not reasonably be
expected to have a Material Adverse Effect.  There is no fact known to the
Company that could reasonably be expected to have a Material Adverse Effect that
has not been set forth herein or in the other documents, certificates and other
writings delivered to the Noteholders by or on behalf of the Company
specifically for use in connection with the transactions contemplated hereby.

     5.4.  Organization and Ownership of Shares of Subsidiaries; Affiliates.

           (a)  Schedule 5.4 contains (except as noted therein) complete and
     correct lists of (i) the Company's Subsidiaries, showing, as to each
     Subsidiary, the correct name thereof, the jurisdiction of its organization,
     and the percentage of shares of each class of its capital stock outstanding
     owned by the Company and each other Subsidiary, (ii) the Company's
     Affiliates, other than Subsidiaries, and (iii) the Company's directors and
     senior officers.

           (b)  All of the outstanding shares of capital stock of each
     Subsidiary shown in Schedule 5.4 as being owned by the Company and its
     Subsidiaries have been validly issued, are fully paid and nonassessable and
     are owned by the Company or another Subsidiary free and clear of any Lien
     (except as otherwise disclosed in Schedule 5.4).

                                      -8-
<PAGE>

           (c)  Each Subsidiary identified in Schedule 5.4 is a corporation or
     other legal entity duly organized, validly existing and in good standing
     under the laws of its jurisdiction of organization, and is duly qualified
     as a foreign corporation or other legal entity and is in good standing in
     each jurisdiction in which such qualification is required by law, other
     than those jurisdictions as to which the failure to be so qualified or in
     good standing could not, individually or in the aggregate, reasonably be
     expected to have a Material Adverse Effect.  Each such Subsidiary has the
     corporate or other power and authority to own or hold under lease the
     properties it purports to own or hold under lease and to transact the
     business it transacts and proposes to transact.  Each of the Domestic
     Subsidiaries has the corporate or other power and authority to execute and
     deliver the Financing Documents to which it is a party and to perform the
     provisions thereof.

           (d)  No Subsidiary is a party to, or otherwise subject to any legal
     restriction or any agreement (other than this Agreement, the agreements
     listed in Schedule 5.4 and customary limitations imposed by corporate law
     statutes) restricting the ability of such Subsidiary to pay dividends out
     of profits or make any other similar distributions of profits to the
     Company or any of its Subsidiaries that owns outstanding shares of capital
     stock of such Subsidiary.

     5.5.  No Conflicts with Agreements, etc.

     The execution, delivery and performance by the Obligors of the Financing
Documents to which each such Obligor is a party will not

           (a)  contravene, result in any breach of, or constitute a default
     under, or result in the creation of any Lien in respect of any property of
     the Company or any Subsidiary under, any indenture, mortgage, deed of
     trust, loan, purchase or credit agreement, lease, corporate charter or
     bylaws, or any other agreement or instrument to which the Company or any
     Subsidiary is bound or by which the Company or any Subsidiary or any of
     their respective properties may be bound or affected,

           (b)  conflict with or result in a breach of any of the terms,
     conditions or provisions of any order, judgment, decree, or ruling of any
     court, arbitrator or Governmental Authority applicable to the Company or
     any Subsidiary, or

           (c)  violate any provision of any statute or other rule or regulation
     of any Governmental Authority applicable to the Company or any Subsidiary.

     5.6.  Governmental Authorizations, etc.

                                      -9-
<PAGE>

     No consent, approval or authorization of, or registration, filing (except
as contemplated by Section 4.9) or declaration with, any Governmental Authority
or any nongovernmental Person, including, without limitation, any creditor
(other than the Banks), stockholder or corporate general partner of the Company
or any Subsidiary is required in connection with the execution, delivery or
performance by the Obligors of the Financing Documents, except those which have
been obtained.

     5.7.  Litigation; Observance of Agreements, Statutes and Orders.

           (a)  Except as disclosed in Schedule 5.7, there are no actions, suits
     or proceedings pending or, to the knowledge of the Company, threatened
     against or affecting the Company or any Subsidiary or any property of the
     Company or any Subsidiary in any court or before any arbitrator of any kind
     or before or by any Governmental Authority that, individually or in the
     aggregate, could reasonably be expected to have a Material Adverse Effect.

           (b)  Neither the Company nor any Subsidiary is in violation in any
     respect of any term of any charter instrument or by-law and neither the
     Company nor any Subsidiary is in default of any order, judgment, decree or
     ruling of any court, arbitrator or Governmental Authority or is in
     violation of any applicable law, ordinance, rule or regulation (including,
     without limitation, Environmental Laws) of any Governmental Authority,
     which default or violation, individually or in the aggregate, could
     reasonably be expected to have a Material Adverse Effect.

           (c)  After giving effect to Section 2.2 and the Credit Agreement,
     neither the Company nor any Subsidiary is in default in the payment of
     principal or interest on any Indebtedness, or in default under any
     instrument or agreement under and subject to which any Indebtedness has
     been issued, and no event has occurred and is continuing under the
     provisions of any such instrument or agreement, or under any other
     instrument or agreement, that with the lapse of time or the giving of
     notice, or both, would constitute a default or an event of default
     thereunder, which in the case of any of the foregoing, individually or in
     the aggregate, could reasonably be expected to have a Material Adverse
     Effect.

           (d)  No event has occurred and is continuing and no condition exists
     which, upon execution and delivery of this Agreement (and giving effect to
     Section 2.2 and the Credit Agreement), would constitute a Default or Event
     of Default.

                                     -10-
<PAGE>

     5.8.  Compliance with Law.

     Neither the Company nor any Subsidiary is in violation of any law,
ordinance, governmental rule or regulation to which it is subject, except for
such violations that, in the aggregate, could not reasonably be expected to have
a Material Adverse Effect.

     5.9.  Title to Property; Leases.

     The Company and its Subsidiaries have good and sufficient title to their
respective properties that individually or in the aggregate are Material,
including all such properties reflected in the most recent audited balance sheet
delivered pursuant to Section 7.1(b) of the Existing Note Purchase Agreement or
purported to have been acquired by the Company or any Subsidiary after said date
(except as sold or otherwise disposed of in the ordinary course of business), in
each case free and clear of Liens prohibited by the Financing Documents.  All
leases that individually or in the aggregate are Material are valid and
subsisting and are in full force and effect in all material respects.

     5.10. Licenses, Permits, etc.

           (a)  The Company and its Subsidiaries own or possess all licenses,
     permits, franchises, authorizations, patents, copyrights, service marks,
     trademarks and trade names, or rights thereto, that individually or in the
     aggregate are Material, without known conflict with the rights of others.

           (b)  To the best knowledge of the Company, no product or practice of
     the Company or any Subsidiary infringes in any material respect any
     license, permit, franchise, authorization, patent, copyright, service mark,
     trademark, trade name or other right owned by any other Person.

           (c)  To the best knowledge of the Company, there is no Material
     violation by any Person of any right of the Company or any of its
     Subsidiaries with respect to any patent, copyright, service mark,
     trademark, trade name or other right owned or used by the Company or any of
     its Subsidiaries.

     5.11. Existing Indebtedness, Future Liens.

     Schedule 5.11 sets forth a complete and correct list of all outstanding
Indebtedness of the Company and its Subsidiaries as of the Effective Date and a
description of all consensual Liens, if any, securing such Indebtedness.
Neither the Company nor any Subsidiary has agreed or consented to cause or
permit in the future (upon the happening of a contingency or otherwise) any of

                                     -11-
<PAGE>

its property, whether now owned or hereafter acquired, to be subject to a Lien
not permitted by Section 10.3.

     5.12. Foreign Assets Control Regulations, etc.

     None of the transactions contemplated by the Financing Documents will
violate the Trading with the Enemy Act, as amended, or any of the foreign assets
control regulations of the United States Treasury Department (31 CFR, Subtitle
B, Chapter V, as amended) or any enabling legislation or executive order
relating thereto.

     5.13. Status under Certain Statutes.

     Neither the Company nor any Subsidiary is subject to regulation under the
Investment Company Act of 1940, as amended, the Public Utility Holding Company
Act of 1935, as amended, the Transportation Acts (49 U.S.C.), as amended, or the
Federal Power Act, as amended.

     5.14. Environmental Matters.

     Neither the Company nor any Subsidiary has knowledge of any claim or has
received any notice of any claim, and no proceeding has been instituted raising
any claim against the Company or any of its Subsidiaries or any of their
respective real properties now or formerly owned, leased or operated by any of
them or other assets, alleging any damage to the environment or violation of any
Environmental Laws, except, in each case, such as could not reasonably be
expected to result in a Material Adverse Effect.  Except as otherwise disclosed
to the Noteholders in writing,

           (a)  neither the Company nor any Subsidiary has knowledge of any
     facts which would give rise to any claim, public or private, of violation
     of Environmental Laws or damage to the environment emanating from,
     occurring on or in any way related to real properties now or formerly
     owned, leased or operated by any of them or to other assets or their use,
     except, in each case, such as could not reasonably be expected to result in
     a Material Adverse Effect;

           (b)  neither the Company nor any of its Subsidiaries has stored any
     Hazardous Materials on real properties now or formerly owned, leased or
     operated by any of them or disposed of any Hazardous Materials in a manner
     contrary to any Environmental Laws in each case in any manner that could
     reasonably be expected to result in a Material Adverse Effect; and

                                     -12-
<PAGE>

           (c)  all buildings on all real properties now owned, leased or
     operated by the Company or any of its Subsidiaries are in compliance with
     applicable Environmental Laws, except where failure to comply could not
     reasonably be expected to result in a Material Adverse Effect.

     5.15. Taxes.

     The Company and its Subsidiaries have filed all tax returns that are
required to have been filed in any jurisdiction, and have paid all taxes shown
to be due and payable on such returns and all other taxes and assessments levied
upon them or their properties, assets, income or franchises, to the extent such
taxes and assessments have become due and payable and before they have become
delinquent, except for any taxes and assessments (a) the amount of which is not
individually or in the aggregate Material or (b) the amount, applicability or
validity of which is currently being contested in good faith by appropriate
proceedings and with respect to which the Company or a Subsidiary, as the case
may be, has established adequate reserves in accordance with GAAP.  The Company
knows of no basis for any other tax or assessment that could reasonably be
expected to have a Material Adverse Effect.  The charges, accruals and reserves
on the books of the Company and its Subsidiaries in respect of Federal, state or
other taxes for all fiscal periods are adequate.  For the taxable years ending
on or before December 31, 1996, the Federal income tax liabilities of the
Company and its Subsidiaries have been satisfied and either the period of
limitations on assessment of additional Federal income tax has expired or the
Company and its Subsidiaries have entered into an agreement with the Internal
Revenue Service closing conclusively the total tax liability for the taxable
year.

     5.16. Compliance with ERISA.

           (a)  The Company and each ERISA Affiliate have operated and
     administered each Plan in compliance with all applicable laws except for
     such instances of noncompliance as have not resulted in and could not
     reasonably be expected to result in a Material Adverse Effect.  Neither the
     Company nor any ERISA Affiliate has incurred any liability pursuant to
     Title I or IV of ERISA or the penalty or excise tax provisions of the Code
     relating to employee benefit plans (as defined in section 3 of ERISA), and
     no event, transaction or condition has occurred or exists that could
     reasonably be expected to result in the incurrence of any such liability by
     the Company or any ERISA Affiliate, or in the imposition of any Lien on any
     of the rights, properties or assets of the Company or any ERISA Affiliate,
     in either case pursuant to Title I or IV of ERISA or to such penalty or
     excise tax provisions or to section 401(a)(29) or 412 of the Code, other
     than such liabilities or Liens as would not be individually or in the
     aggregate Material.

                                     -13-
<PAGE>

           (b)  The present value of the aggregate benefit liabilities under
     each of the Plans (other than Multiemployer Plans), determined as of the
     end of such Plan's most recently ended plan year on the basis of the
     actuarial assumptions specified for funding purposes in such Plan's most
     recent actuarial valuation report, did not exceed the aggregate current
     value of the assets of such Plan allocable to such benefit liabilities by
     more than $2,000,000 in the aggregate for all such Plans. The term "benefit
     liabilities" has the meaning specified in section 4001 of ERISA and the
     terms "current value" and "present value" have the meaning specified in
     section 3 of ERISA.

           (c)  The Company and the ERISA Affiliates have not incurred
     withdrawal liabilities (and are not subject to contingent withdrawal
     liabilities) under section 4201 or 4204 of ERISA in respect of
     Multiemployer Plans that individually or in the aggregate are Material.

           (d)  The expected postretirement benefit obligation (determined as of
     the last day of the Company's most recently ended fiscal year in accordance
     with Financial Accounting Standards Board Statement No. 106, without regard
     to liabilities attributable to continuation coverage mandated by section
     4980B of the Code) of the Company and its Subsidiaries is not Material.

           (e)  The execution and delivery of this Agreement will not involve
     any transaction that is subject to the prohibitions of section 406 of ERISA
     or in connection with which a tax could be imposed pursuant to section
     4975(c)(1)(A)-(D) of the Code.

     5.17. Pledge Agreement.

     The Pledge Agreement creates a valid and (upon delivery of the certificates
or instruments evidencing the Stock Collateral to the Collateral Agent) a
perfected first priority Lien in and to the Stock Collateral in favor of the
Collateral Agent, subject to no other Liens.  Stock certificates (together with
undated stock powers duly endorsed in blank) evidencing all of the Stock
Collateral have been delivered to the Collateral Agent.

     5.18. Solvency.

     After giving effect to the transactions contemplated by the Financing
Documents, neither the Company nor any Guarantor will be insolvent or be engaged
in any business or transaction, or about to engage in any business or
transaction, for which it has unreasonably small assets or capital (within the
meaning of the Uniform Fraudulent Transfer Act, the Uniform Fraudulent
Conveyance Act or Section 548 of Title 11 of the United States Code), and
neither the Company nor any Guarantor has any intent to hinder, delay or

                                     -14-
<PAGE>

defraud any entity to which it is, or will become, on or after the Effective
Date, indebted or incur debts that would be beyond its ability to pay as they
mature.

6.   INTENTIONALLY OMITTED

7.   INFORMATION AS TO COMPANY

     7.1.  Financial and Business Information.

     The Company shall deliver to each holder of Notes that is an Institutional
Investor:

           (a)  Monthly Statements -- promptly following, and in any event
     within 30 days after the end of each calendar month (other than the month
     of January if no such report is prepared), duplicate copies of the
     Financial Report (Blue Book) prepared by the management of the Company,
     containing, without limitation,

                (i)   consolidated balance sheets of the Company and its
           Subsidiaries as at the end of the most recently ended fiscal year of
           the Company and as at the end of such month,

                (ii)  consolidated statements of income of the Company and its
           Subsidiaries for such month and for the portion of the fiscal year
           ending on the final day of such month, in each case reflecting
           actual, projected and prior year amounts, and

                (iii) a consolidated statement of cash flows of the Company
           and its Subsidiaries for the period commencing at the end of the most
           recently ended fiscal year of the Company and ending on the last day
           of such month;

           (b)  Quarterly Statements -- within 45 days after the end of each
     quarterly fiscal period in each fiscal year of the Company (other than the
     last quarterly fiscal period of each such fiscal year), duplicate copies
     of,

                (i)   a consolidated balance sheet of the Company and its
           Subsidiaries, and a balance sheet of each of EPYX and TIME, in each
           case as at the end of such quarter,

                (ii)  consolidated statements of income, cash flows and changes
           in shareholders' equity of the Company and its Subsidiaries, for such
           quarter and (in the case of the second and third quarters) for the
           portion of the fiscal year ending with such quarter, and

                                     -15-
<PAGE>

               (iii) statements of income and cash flows of each of EPYX and
          TIME, for such quarter and (in the case of the second and third
          quarters) for the portion of the fiscal year ending with such quarter,

     setting forth in each case in comparative form the figures for the
     corresponding periods in the previous fiscal year, all in reasonable
     detail, prepared in accordance with GAAP applicable to quarterly financial
     statements generally, and, in the case of the consolidated financial
     statements, certified by a Senior Financial Officer as fairly presenting,
     in all material respects, the consolidated financial position of the
     companies being reported on and their consolidated results of operations
     and cash flows, subject to changes resulting from year-end adjustments;

          (c)  Annual Statements -- within 90 days after the end of each fiscal
     year of the Company, duplicate copies of,

               (i)   a consolidated balance sheet of the Company and its
          Subsidiaries, and a balance sheet of each of EPYX and TIME, as at the
          end of such year,

               (ii)  consolidated statements of income, cash flows and changes
          in shareholders' equity of the Company and its Subsidiaries, for such
          year, and

               (iii) statements of income and cash flows of each of EPYX and
          TIME, for such year,

     setting forth in comparative form, in the case of each of the consolidated
     financial statements, the figures for the previous fiscal year, all in
     reasonable detail, prepared in accordance with GAAP, and accompanied by

                     (A)  an opinion thereon of independent certified public
               accountants of recognized national standing, which opinion shall
               state that such consolidated financial statements present fairly,
               in all material respects, the consolidated financial position of
               the companies being reported upon and their consolidated results
               of operations and cash flows and have been prepared in conformity
               with GAAP, and that the examination of such accountants in
               connection with such financial statements has been made in
               accordance with generally accepted auditing standards, and that
               such audit provides a reasonable basis for such opinion in the
               circumstances, and

                                     -16-
<PAGE>

                    (B)  a certificate of such accountants stating that they
               have reviewed this Agreement and stating further whether, in
               making their audit, they have become aware of any condition or
               event that then constitutes a Default or an Event of Default
               under any of Sections 10.3 through 10.9, inclusive, and, if they
               are aware that any such condition or event then exists,
               specifying the nature and period of the existence thereof (it
               being understood that such accountants shall not be liable,
               directly or indirectly, for any failure to obtain knowledge of
               any Default or Event of Default unless such accountants should
               have obtained knowledge thereof in making an audit in accordance
               with generally accepted auditing standards or did not make such
               an audit);

          (d)  SEC and Other Reports -- promptly upon their becoming available,
     one copy of (i) in the event the Company becomes publicly owned, each proxy
     statement, financial statement or report sent by the Company or any
     Subsidiary to its public security holders, and copies of all regular,
     periodic and special reports that the Company files with the Securities and
     Exchange Commission; (ii) each material financial statement, report or
     notice sent by the Company or any Subsidiary to any bank or other
     institutional lender to the Company or any Subsidiary pursuant to the terms
     of any indenture, loan or credit or similar agreement (including, without
     limitation, the Credit Agreement) and not otherwise required to be
     furnished to you pursuant to any other provision of this Section 7.1; and
     (iii) all press releases and other statements made available generally by
     the Company or any Subsidiary to the public concerning developments that
     are Material;

          (e)  Notice of Default or Event of Default -- promptly, and in any
     event within five Business Days after a Responsible Officer becoming aware
     of the existence of any Default or Event of Default or that any Person has
     given any notice or taken any action with respect to a claimed default
     hereunder or that any Person has given any notice or taken any action with
     respect to a claimed default of the type referred to in Section 11(f), a
     written notice specifying the nature and period of existence thereof and
     what action the Company is taking or proposes to take with respect thereto;

          (f)  ERISA Matters -- promptly, and in any event within five Business
     Days after a Responsible Officer becoming aware of any of the following, a
     written notice setting forth the nature thereof and the action, if any,
     that the Company or an ERISA Affiliate proposes to take with respect
     thereto:

                                     -17-
<PAGE>

               (i)   with respect to any Plan, any reportable event, as defined
          in section 4043(c) of ERISA and the regulations thereunder, for which
          notice thereof has not been waived pursuant to such regulations as in
          effect on the Effective Date; or

               (ii)  the taking by the PBGC of steps to institute, or the
          threatening by the PBGC of the institution of, proceedings under
          section 4042 of ERISA for the termination of, or the appointment of a
          trustee to administer, any Plan, or the receipt by the Company or any
          ERISA Affiliate of a notice from a Multiemployer Plan that such action
          has been taken by the PBGC with respect to such Multiemployer Plan; or

               (iii) any event, transaction or condition that could result in
          the incurrence of any liability by the Company or any ERISA Affiliate
          pursuant to Title I or IV of ERISA or the penalty or excise tax
          provisions of the Code relating to employee benefit plans, or in the
          imposition of any Lien on any of the rights, properties or assets of
          the Company or any ERISA Affiliate pursuant to Title I or IV of ERISA
          or such penalty or excise tax provisions, if such liability or Lien,
          taken together with any other such liabilities or Liens then existing,
          could reasonably be expected to have a Material Adverse Effect;

          (g)  Notices from Governmental Authority -- promptly, and in any event
     within 30 days of receipt thereof, copies of any notice to the Company or
     any Subsidiary from any Federal or state Governmental Authority relating to
     any order, ruling, statute or other law or regulation that could reasonably
     be expected to have a Material Adverse Effect;

          (h)  Actions, Proceedings -- promptly after a Responsible Officer
     becomes aware of the commencement thereof, notice of any action or
     proceeding relating to the Company or any Subsidiary in any court or before
     any Governmental Authority or arbitration board or tribunal as to which
     there is a reasonable possibility of an adverse determination and that, if
     adversely determined, could reasonably be expected to have a Material
     Adverse Effect;

          (i)  Budgets; Business Plan; Forecasts -- as soon as practicable and
     in any event not later than January 31, 2001, a copy of the plan and
     forecast (including a projected balance sheet, income statement and
     statement of cash flows) of the Company and its Subsidiaries for the fiscal
     year of the Company commencing January 1, 2001;

                                     -18-
<PAGE>

          (j)  EPYX and TIME -- as soon as available or promptly upon the
     receipt thereof, as the case may be, such information relating to the
     business, condition (financial or otherwise), operations, performance,
     properties or prospects of EPYX and TIME, including, without limitation,
     duplicate copies of:

               (i)  any plan or forecast (including any projected balance sheet,
          statement of income and statement of cash flow) for EPYX and TIME for
          any period for which such information is available, and

               (ii) any agreement or letter of intent of any Person in respect
          of such Person's commitment to enter into any EPYX Transaction; and

          (k)  Requested Information -- with reasonable promptness, such other
     data and information relating to the business, operations, affairs,
     financial condition, assets or properties of the Company or any of its
     Subsidiaries or relating to the ability of the Company to perform its
     obligations hereunder and under the Notes as from time to time may be
     reasonably requested by any such holder that is an Institutional Investor.

     7.2. Officer's Certificate.

     Each set of financial statements delivered to a holder of Notes pursuant to
Section 7.1(b) or Section 7.1(c) hereof shall be accompanied by a certificate of
a Senior Financial Officer setting forth:

          (a)  Covenant Compliance -- the information (including detailed
     calculations) required in order to establish whether the Company was in
     compliance with the requirements of Sections 10.3 through 10.9, inclusive,
     during the quarterly or annual period covered by the statements then being
     furnished (including with respect to each such Section, where applicable,
     the calculations of the maximum or minimum amount, ratio or percentage, as
     the case may be, permissible under the terms of such Sections, and the
     calculations of the amount, ratio or percentage then in existence); and

          (b)  Event of Default -- a statement that such officer has reviewed
     the relevant terms hereof and has made, or caused to be made, under his or
     her supervision, a review of the transactions and conditions of the Company
     and its Subsidiaries from the beginning of the quarterly or annual period
     covered by the statements then being furnished to the date of the
     certificate and that such review has not disclosed the existence during
     such period of any condition or event that constitutes a

                                     -19-
<PAGE>

     Default or an Event of Default or, if any such condition or event existed
     or exists (including, without limitation, any such event or condition
     resulting from the failure of the Company or any Subsidiary to comply with
     any Environmental Law), specifying the nature and period of existence
     thereof and what action the Company shall have taken or proposes to take
     with respect thereto.

     7.3. Inspection.

     The Company shall permit the representatives of each holder of Notes that
is an Institutional Investor:

          (a)  No Default -- if no Default or Event of Default then exists, at
     the expense of such holder and upon reasonable prior notice to the Company,
     to visit the principal executive office of the Company, to discuss the
     affairs, finances and accounts of the Company and its Subsidiaries with the
     Company's officers, and (with the consent of the Company, which consent
     will not be unreasonably withheld) its independent public accountants, and
     (with the consent of the Company, which consent will not be unreasonably
     withheld) to visit the other offices and properties of the Company and each
     Subsidiary, all at such reasonable times and as often as may be reasonably
     requested in writing; and

          (b)  Default -- if a Default or Event of Default then exists, at the
     expense of the Company, to visit and inspect any of the offices or
     properties of the Company or any Subsidiary, to examine all their
     respective books of account, records, reports and other papers, to make
     copies and extracts therefrom, and to discuss their respective affairs,
     finances and accounts with their respective officers and independent public
     accountants (and by this provision the Company authorizes said accountants
     to discuss the affairs, finances and accounts of the Company and its
     Subsidiaries), all at such times and as often as may be requested.

     7.4. Quarterly Review.

     Within ten Business Days of the dates required for the delivery of
quarterly financial statements for the quarters ending in March, June, September
and December, in each fiscal year, the Company will cause its Chief Financial
Officer and its executive vice president for finance and development (and, in
addition, with respect to the quarter ending December 31,2000, its Chief
Executive Officer) to meet, at the Company's expense, either in person at the
Company's executive office or via telephone conference call, with
representatives of the Noteholders or such other Persons as may be designated
<PAGE>

by the Required Holders to discuss the Company's financial condition, results of
operations, prospects and other matters relating to the Company's business plan.

8.   PAYMENT OF THE NOTES

     8.1. Scheduled Payments.

     The Company shall pay, and there shall become due and payable, on each of
the dates set forth below, the principal amount of the Notes set forth below
opposite each such date, as follows:

     ---------------------------------------------------------------------
          Date of Required                        Amount of Required
          Principal Payment                       Principal Payment
     ---------------------------------------------------------------------
            July 1, 2000                             $ 1,375,000
     ---------------------------------------------------------------------
            August 1, 2000                           $ 1,375,000
     ---------------------------------------------------------------------
            September 1, 2000                        $ 1,375,000
     ---------------------------------------------------------------------
            October 1, 2000                          $ 1,375,000
     ---------------------------------------------------------------------
            November 1, 2000                         $ 1,375,000
     ---------------------------------------------------------------------
            December 1, 2000                         $ 1,375,000
     ---------------------------------------------------------------------
            January 1, 2001                          $ 1,650,000
     ---------------------------------------------------------------------
            February 1, 2001                         $ 1,650,000
     ---------------------------------------------------------------------
            March 1, 2001                            $ 1,650,000
     ---------------------------------------------------------------------
            April 1, 2001                            $ 1,650,000
     ---------------------------------------------------------------------
            May 1, 2001                              $ 1,650,000
     ---------------------------------------------------------------------
            June 1, 2001                             $18,500,000
     ---------------------------------------------------------------------

     Each partial prepayment of the Notes made pursuant to subsection (a), (b),
     (c) or (d) of Section 8.2 or made pursuant to Section 8.3 will be applied
     first, to the amount due on the maturity date of the Notes and second, to
     the mandatory prepayments applicable to the Notes, as set forth in this
     Section 8.1, in the inverse order of the maturity thereof.

     8.2. Other Mandatory Prepayments.

          (a)  Disposition Prepayments.  Within one Business Day after the
     receipt by the Company or any Subsidiary of the Net Proceeds Amount of any
     Asset Disposition, the Company shall pay to the holders of the Notes an
     aggregate amount equal to the Noteholder Portion of

                                     -21-
<PAGE>

     100% of the Net Proceeds Amount of such Asset Disposition, which shall be
     applied to the prepayment of the Notes together with accrued interest
     thereon to the date of such prepayment and the Make-Whole Amount in respect
     of such principal amount of Notes.

          (b)  Equity Issuance Prepayments.  Within one Business Day after the
     receipt by the Company or any Subsidiary of the net proceeds of any Equity
     Issuance, the Company shall pay to the holders of the Notes an aggregate
     amount equal to the Noteholder Portion of 100% of the net proceeds of such
     Equity Issuance, which shall be applied to the prepayment of the Notes
     together with accrued interest thereon to the date of such prepayment and
     the Make-Whole Amount in respect of such principal amount of Notes.

          (c)  Extraordinary Receipt Prepayments.  Within seven Business Days
     after receipt by the Company or any Subsidiary of any Extraordinary
     Receipt, the Company shall pay to the holders of the Notes an aggregate
     amount equal to the Noteholder Portion of 100% of such Extraordinary
     Receipt, which shall be applied to the prepayment of the Notes together
     with accrued interest thereon to the date of such prepayment and the Make-
     Whole Amount in respect of such principal amount of Notes.

          (d)  Excess Cash Flow Prepayments. On the first day of January, April,
     July and October in each year, commencing July 1, 2000, the Company shall
     pay to the holders of the Notes an aggregate amount equal to the Noteholder
     Portion of 50% of Excess Cash Flow (if positive) for the immediately
     preceding fiscal quarter of the Company (the preceding six months with
     respect to the July 1, 2000 payment), which shall be applied to the
     prepayment of the Notes together with accrued interest thereon to the date
     of such prepayment and the Make-Whole Amount in respect of such principal
     amount of Notes.

          (e)  TIME IPO Prepayment.  In the event the TIME IPO shall occur on or
     prior to December 29, 2000, the Company shall, no later than December 29,
     2000, prepay all of the Notes at 100% of the principal amount so prepaid,
     together with accrued interest thereon to the date of such prepayment and
     the Make-Whole Amount in respect of such principal amount of Notes.

     8.3. Optional Prepayments.

     The Company may, at its option, upon notice as provided below, prepay at
any time all, or from time to time any part of, the Notes at 100% of the
principal amount so prepaid, plus the Make-Whole Amount determined for the

                                     -22-
<PAGE>

prepayment date with respect to such principal amount.  The Company will give
each holder of Notes written notice of each optional prepayment under this
Section 8.3 not less than 30 days and not more than 60 days prior to the date
fixed for such prepayment.  Each such notice shall specify such prepayment date,
the aggregate principal amount of the Notes to be prepaid on such date, the
principal amount of each Note held by such holder to be prepaid (determined in
accordance with Section 8.4), and the interest to be paid on the prepayment date
with respect to such principal amount being prepaid, and shall be accompanied by
a certificate of a Senior Financial Officer as to the estimated Make-Whole
Amount due in connection with such prepayment (calculated as if the date of such
notice were the date of the prepayment), setting forth the details of such
computation.  Two Business Days prior to such prepayment, the Company shall
deliver to each holder of Notes a certificate of a Senior Financial Officer
specifying the calculation of such Make-Whole Amount as of the specified
prepayment date.

     8.4. Allocation of Partial Prepayments.

     In the case of each partial prepayment of the Notes, the principal amount
of the Notes to be prepaid shall be allocated among all of the Notes at the time
outstanding in proportion, as nearly as practicable, to the respective unpaid
principal amounts thereof not theretofore called for prepayment.

     8.5. Maturity; Surrender, etc.

     In the case of each prepayment of Notes pursuant to this Section 8, the
principal amount of each Note to be prepaid shall mature and become due and
payable on the date fixed for such prepayment, together with interest on such
principal amount accrued to such date and the applicable Make-Whole Amount, if
any.  From and after such date, unless the Company shall fail to pay such
principal amount when so due and payable, together with the interest and Make-
Whole Amount, if any, as aforesaid, interest on such principal amount shall
cease to accrue.  Any Note paid or prepaid in full shall be surrendered to the
Company and cancelled and shall not be reissued, and no Note shall be issued in
lieu of any prepaid principal amount of any Note.

     8.6. No Other Optional Prepayments or Purchase of Notes.

     The Company will not prepay (whether directly or indirectly by purchase,
redemption or other acquisition) any of the outstanding Notes except upon the
payment or prepayment of the Notes in accordance with the terms of this Section
8. The Company will promptly cancel all Notes acquired by it or any Affiliate
pursuant to any payment, prepayment or purchase of Notes pursuant to any
provision of this Section 8 and no Notes may be issued in substitution or
exchange for any such Notes.

                                     -23-
<PAGE>

     8.7. Make-Whole Amount.

     The term "Make-Whole Amount" means, with respect to any Note, an amount
equal to the excess, if any, of the Discounted Value of the Remaining Scheduled
Payments with respect to the Called Principal of such Note over the amount of
such Called Principal, provided that the Make-Whole Amount may in no event be
less than zero.  For the purposes of determining the Make-Whole Amount, the
following terms have the following meanings:

          "Called Principal" means, with respect to any Note, the principal of
     such Note that is to be prepaid pursuant to Section 8.2(a), (b), (c), (d)
     or (e), or Section 8.3, or has become or is declared to be immediately due
     and payable pursuant to Section 12.1, as the context requires.

          "Discounted Value" means, with respect to the Called Principal of any
     Note, the amount obtained by discounting all Remaining Scheduled Payments
     with respect to such Called Principal from their respective scheduled due
     dates to the Settlement Date with respect to such Called Principal, in
     accordance with accepted financial practice and at a discount factor
     (applied on the same periodic basis as that on which interest on the Notes
     is payable) equal to the Reinvestment Yield with respect to such Called
     Principal.  For purposes of calculating the Discounted Value of Remaining
     Scheduled Payments, it shall be assumed that the rate of interest payable
     on the Notes is 7.16% per annum.

          "Reinvestment Yield" means, with respect to the Called Principal of
     any Note, 0.50% over the yield to maturity implied by (a) the yields
     reported, as of 10:00 A.M. (New York City time) on the second Business Day
     preceding the Settlement Date with respect to such Called Principal, on the
     display designated as "Page 678" on Bridge Telerate (or such other display
     as may replace Page 678 on Bridge Telerate) for actively traded U.S.
     Treasury securities having a maturity equal to the Remaining Average Life
     of such Called Principal as of such Settlement Date, or (b) if such yields
     are not reported as of such time or the yields reported as of such time are
     not ascertainable, the Treasury Constant Maturity Series Yields reported,
     for the latest day for which such yields have been so reported as of the
     second Business Day preceding the Settlement Date with respect to such
     Called Principal, in Federal Reserve Statistical Release H.15 (519) (or any
     comparable successor publication) for actively traded U.S. Treasury
     securities having a constant maturity equal to the Remaining Average Life
     of such Called Principal as of such Settlement Date.  Such implied yield
     will be determined, if necessary, by (i) converting U.S. Treasury bill
     quotations to bond-equivalent yields in accordance with accepted financial
     practice and (ii) interpolating linearly

                                     -24-
<PAGE>

     between (1) the actively traded U.S. Treasury security with the duration
     closest to and greater than the Remaining Average Life and (2) the actively
     traded U.S. Treasury security with the duration closest to and less than
     the Remaining Average Life.

          "Remaining Average Life" means, with respect to any Called Principal,
     the number of years (calculated to the nearest one-twelfth year) obtained
     by dividing (a) such Called Principal into (b) the sum of the products
     obtained by multiplying (i) the principal component of each Remaining
     Scheduled Payment with respect to such Called Principal by (ii) the number
     of years (calculated to the nearest one-twelfth year) that will elapse
     between the Settlement Date with respect to such Called Principal and the
     scheduled due date of such Remaining Scheduled Payment.

          "Remaining Scheduled Payments" means, with respect to the Called
     Principal of any Note, all payments of such Called Principal and interest
     thereon that would be due after the Settlement Date with respect to such
     Called Principal if no payment of such Called Principal were made prior to
     its scheduled due date, provided that if such Settlement Date is not a date
     on which interest payments are due to be made under the terms of the Notes,
     then the amount of the next succeeding scheduled interest payment will be
     reduced by the amount of interest accrued to such Settlement Date and
     required to be paid on such Settlement Date pursuant to Section 8.2(a),
     (b), (c), (d) or (e), Section 8.3 or Section 12.1.

          "Settlement Date" means, with respect to the Called Principal of any
     Note, the date on which such Called Principal is to be prepaid pursuant to
     Section 8.2(a), (b), (c), (d) or (e), or Section 8.3, or has become or is
     declared to be immediately due and payable pursuant to Section 12.1, as the
     context requires.

9.   AFFIRMATIVE COVENANTS

     The Company covenants that so long as any of the Notes are outstanding:

     9.1. Compliance with Law.

     The Company will and will cause each of its Subsidiaries to comply with all
laws, ordinances or governmental rules or regulations to which each of them is
subject, and will obtain and maintain in effect all licenses, certificates,
permits, franchises and other governmental authorizations necessary to the
ownership of their respective properties or to the conduct of their respective
businesses, in each case to the extent necessary to ensure that non-

                                     -25-
<PAGE>

compliance with such laws, ordinances or governmental rules or regulations or
failures to obtain or maintain in effect such licenses, certificates, permits,
franchises and other governmental authorizations could not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.

     9.2. Insurance.

     The Company will and will cause each of its Subsidiaries to maintain, with
financially sound and reputable insurers, insurance with respect to their
respective properties and businesses against such casualties and contingencies,
of such types, on such terms and in such amounts (including deductibles, co-
insurance and self-insurance, if adequate reserves are maintained with respect
thereto) as is customary in the case of entities of established reputations
engaged in the same or a similar business and similarly situated.

     9.3. Maintenance of Properties and Books.

     The Company will and will cause each of its Subsidiaries to maintain and
keep, or cause to be maintained and kept, their respective properties in good
repair, working order and condition (other than ordinary wear and tear), so that
the business carried on in connection therewith may be properly conducted at all
times, provided that this Section shall not prevent the Company or any
Subsidiary from discontinuing the operation and the maintenance of any of its
properties if such discontinuance is desirable in the conduct of its business
and the Company has concluded that such discontinuance could not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.
The Company will and will cause each of its Subsidiaries to keep proper books of
record and account in which full and correct entries shall be made of  all
financial transactions and the assets and business of the Company and such
Subsidiaries in accordance with GAAP.

     9.4. Payment of Taxes and Claims.

     The Company will and will cause each of its Subsidiaries to file all tax
returns required to be filed in any jurisdiction and to pay and discharge all
taxes shown to be due and payable on such returns and all other taxes,
assessments, governmental charges, or levies imposed on them or any of their
properties, assets, income or franchises, to the extent such taxes, assessments,
charges or levies have become due and payable and before they have become
delinquent and all claims for which sums have become due and payable that have
or might become a Lien on properties or assets of the Company or any Subsidiary,
provided that neither the Company nor any Subsidiary need pay any such tax or
assessment or claims if (a) the amount, applicability or validity

                                     -26-
<PAGE>

thereof is contested by the Company or such Subsidiary on a timely basis in good
faith and in appropriate proceedings, and the Company or a Subsidiary has
established adequate reserves therefor in accordance with GAAP on the books of
the Company or such Subsidiary or (b) the nonpayment of all such taxes,
assessments, charges and levies in the aggregate could not reasonably be
expected to have a Material Adverse Effect.

     9.5. Corporate Existence, etc.

     The Company will at all times preserve and keep in full force and effect
its corporate existence.  Subject to Sections 10.2 and 10.10, the Company will
at all times preserve and keep in full force and effect the corporate existence
of each of its Subsidiaries (unless merged into the Company or a Subsidiary) and
all rights and franchises of the Company and its Subsidiaries unless, in the
good faith judgment of the Company, the termination of or failure to preserve
and keep in full force and effect such corporate existence, right or franchise
could not, individually or in the aggregate, have a Material Adverse Effect.

     9.6. Additional Collateral and Guarantors.

          (a)  TIME and Foreign Subsidiary A/R.  In the event that the TIME IPO
     does not occur on or prior to December 29, 2000, the Company shall:

               (i)   not later than January 10, 2001, cause TIME and each
          Foreign Subsidiary to duly execute and deliver to the Collateral Agent
          such security agreements and other documents as may be specified by
          (and in form and substance satisfactory to) the Collateral Agent,
          granting to the Collateral Agent a security interest in all accounts
          receivable of TIME and each of the Foreign Subsidiaries;

               (ii)  not later than January 10, 2001, take, and cause each
          Subsidiary to take, such action (including, without limitation, the
          filing of Uniform Commercial Code financing statements and the giving
          of notices) as may be necessary or advisable in the opinion of the
          Collateral Agent to vest in the Collateral Agent (or in any
          representative of the Collateral Agent designated by it) valid and
          perfected Liens on the properties purported to be subject to the
          security agreements delivered pursuant to this Section 9.6(a); and

               (iii) not later than January 20, 2001, deliver to the
          Noteholders legal opinions satisfactory to them to the effect that
          such security agreements and other documents are legal, valid and
          binding obligations of each Obligor party thereto enforceable in
          accordance with their terms, that such security agreements create

<PAGE>

          the Liens they purport to create upon the collateral purported to be
          encumbered thereby, that such Liens have been duly perfected against
          all third parties, and as to such other matters as the Collateral
          Agent and the Noteholders may reasonably request.

          (b)  Additional Guarantors and Collateral. Upon (x) the request of the
     Collateral Agent following the occurrence and during the continuance of a
     Default, (y) any Subsidiary becoming a Material Subsidiary after the
     Effective Date, or (z) the formation or acquisition of any new direct or
     indirect Domestic Subsidiary after the Effective Date, the Company shall,
     in each case at its expense:

               (i)   in connection with the formation or acquisition of any
          Subsidiary that is a Material Subsidiary or upon any Subsidiary
          becoming a Material Subsidiary, within 10 days after such creation,
          formation or acquisition, cause such Subsidiary to execute and deliver
          to the Noteholders a copy of the Joinder Agreement in the form
          attached to the Guaranty Agreement as Annex 2;

               (ii)  within 10 days after such request, creation, formation or
          acquisition, furnish to the Collateral Agent and the Noteholders a
          description of the real and personal properties of each of the Company
          and its Subsidiaries in detail satisfactory to the Collateral Agent
          and the Required Holders;

               (iii) within 15 days after such request, creation, formation
          or acquisition, duly execute and deliver, and cause such Subsidiary
          and each other Domestic Subsidiary at such time (if it has not already
          done so) to duly execute and deliver, to the Collateral Agent such
          security agreements and other documents as may be specified by (and in
          form and substance satisfactory to) the Collateral Agent, granting to
          the Collateral Agent a security interest in all accounts receivable of
          such Subsidiary and such other Domestic Subsidiaries;

               (iv)  within 30 days after such request, formation or
          acquisition, take, and cause each Subsidiary to take, such action
          (including, without limitation, the filing of Uniform Commercial Code
          financing statements and the giving of notices) as may be necessary or
          advisable in the opinion of the Collateral Agent to vest in the
          Collateral Agent (or in any representative of the Collateral Agent
          designated by it) valid and perfected Liens on the properties
          purported to be subject to the security agreements delivered pursuant
          to this Section 9.6(b);

                                     -28-
<PAGE>

               (v)   within 60 days after such request, creation, formation or
          acquisition, deliver to the Noteholders legal opinions satisfactory to
          them, to the effect that such Joinder Agreements, security agreements
          and other documents are legal, valid and binding obligations of each
          Obligor party thereto enforceable in accordance with their terms, that
          such security agreements create the Liens they purport to create upon
          the collateral purported to be encumbered thereby, that such Liens
          have been duly perfected against all third parties, and as to such
          other matters as the Collateral Agent and the Noteholders may
          reasonably request; and

               (vi)  at any time and from time to time, promptly execute and
          deliver any and all further instruments and documents and take all
          such other action as the Collateral Agent may deem necessary or
          desirable in obtaining the full benefits of, or in perfecting and
          preserving the Liens of, such guaranties, pledges, security agreement
          supplements and security agreements.

          (c)  Further Assurances.  Promptly upon request by any Noteholder or
     the Collateral Agent, the Company shall, and shall cause its Subsidiaries
     to, do, execute, acknowledge, deliver, record, re-record, file, re-file,
     register and re-register any and all such further acts, pledge agreements,
     assignments, financing statements and continuations thereof, termination
     statements, notices of assignment, transfers, certificates, assurances and
     other instruments as any Noteholder or the Collateral Agent may reasonably
     require from time to time in order to (i) carry out more effectively the
     purposes of the Financing Documents, (ii) to the fullest extent permitted
     by applicable law, subject the properties, assets, rights or interests of
     the Company or any Subsidiary to the Liens now or hereafter intended to be
     covered by any of the Collateral Documents, (iii) perfect and maintain the
     validity, effectiveness and priority of any of the Collateral Documents and
     any of the Liens intended to be created thereunder and (iv) assure, convey,
     grant, assign, transfer, preserve, protect and confirm more effectively
     unto the Collateral Agent the rights granted or now or hereafter intended
     to be granted to it under the Pledge Agreement, the Security Agreement and
     the Additional Security Agreements or under any other instrument executed
     in connection therewith to which any Obligor is or is to be a party, and
     cause each of its Subsidiaries to do so.

     9.7. Deferred Restructuring Fee.

     The Company shall pay to each Noteholder, upon the payment in full of the
Notes, a deferred restructuring fee in an amount equal to 2% of the

                                     -29-
<PAGE>

aggregate principal amount of the Existing Notes held by such Noteholder
immediately prior to the substitution referred to in Section 4.5.

     9.8.  Restrictive Account.

     The Company shall apply all cash proceeds received from sales of the
capital stock of EPYX to one or more of the following: (i) its funding
obligations under section 7.4 of the DeNora Agreement, (ii) the pro rata
prepayment of the Notes and the Indebtedness outstanding under the Credit
Agreement, (iii) a contribution to the capital of EPYX, or (iv) a deposit into a
restricted deposit account (the "Restricted Account"). The Company shall not
expend funds withdrawn from the Restricted Account for any purpose other than
those purposes set out in clauses (i), (ii) or (iii) of this Section 9.8.

10.  NEGATIVE COVENANTS

     The Company covenants that so long as any of the Notes are outstanding:

     10.1. Transactions with Affiliates.

     The Company will not, and will not permit any Subsidiary to, enter into
directly or indirectly any transaction or group of related transactions
(including, without limitation, the purchase, lease, sale or exchange of
properties of any kind or the rendering of any service) with any Affiliate
(other than the Company or a Wholly-Owned Subsidiary), except in the ordinary
course and pursuant to the reasonable requirements of the Company's or such
Subsidiary's business and upon fair and reasonable terms no less favorable to
the Company or such Subsidiary than would be obtainable in a comparable arm's-
length transaction with a Person not an Affiliate.

     10.2. Merger; Consolidation.

     The Company will not, and will not permit any Subsidiary to, merge with or
into or consolidate with any other Person or permit any other Person to merge
with or into or consolidate with it; provided, however, so long as no Default or
Event of Default exists at the time thereof, or would exist immediately after
giving effect thereto, a Subsidiary (other than TIME) may (x) merge with or into
or consolidate with a Wholly-Owned Subsidiary (provided that in the case of any
merger or consolidation involving a Domestic Subsidiary, the survivor is a
Domestic Subsidiary) or (y) merge with or into the Company so long as the
Company is the survivor of such merger.

     10.3. Liens.

                                     -30-
<PAGE>

     The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly create, incur, assume or permit to exist (upon the
happening of a contingency or otherwise) any Lien on or with respect to any
property or asset (including, without limitation, any document or instrument in
respect of goods or accounts receivable) of the Company or any such Subsidiary,
whether now owned or hereafter acquired, or any income or profits therefrom, or
assign or otherwise convey any right to receive income or profits, except:

          (a)  Liens for taxes, assessments or other governmental charges which
     are not yet due and payable or the payment of which is not at the time
     required by Section 9.4;

          (b)  statutory Liens of landlords and Liens of carriers, warehousemen,
     mechanics, materialmen and other similar Liens, in each case, incurred in
     the ordinary course of business for sums not yet due and payable or being
     actively contested in good faith by appropriate proceedings;

          (c)  Liens of or resulting from any prejudgment attachment, judgment
     or award, the time for the appeal or petition for rehearing of which shall
     not have expired, or in respect of which the Company or a Subsidiary shall
     at all times in good faith be prosecuting a defense (in the case of a
     prejudgment attachment) or an appeal or proceeding for a review (in the
     case of a judgment or award) and in respect of which a stay of execution
     pending such appeal or proceeding for review shall have been secured;

          (d)  Liens incidental to the conduct of business or the ownership of
     properties and assets (including Liens in connection with worker's
     compensation, unemployment insurance and other like laws, warehousemen's
     and attorneys' liens and statutory landlords' liens) and Liens to secure
     the performance of bids, tenders or trade contracts, or to secure statutory
     obligations, surety or appeal bonds or other Liens of like general nature
     incurred in the ordinary course of business and not in connection with the
     borrowing of money; provided, in each case, the obligation secured is not
     overdue or, if overdue, is being contested in good faith by appropriate
     actions or proceedings;

          (e)  minor survey exceptions or minor encumbrances, easements,
     encroachments, covenants or reservations, or rights of others for rights-
     of-way, utilities and other similar purposes, or zoning or other
     restrictions as to the use of real properties, which are necessary for the
     conduct of the activities of the Company and its Subsidiaries or which
     customarily exist on properties of corporations engaged in similar

                                     -31-
<PAGE>

     activities and similarly situated and which do not in any event materially
     impair their use in the operation of the business of the Company and its
     Subsidiaries;

          (f)  Liens securing Indebtedness of a Subsidiary to the Company or to
     a Wholly-Owned Subsidiary;

          (g)  Liens existing as of the Effective Date and reflected in Schedule
     5.11 hereto;

          (h)  any Lien created by the Company or any Subsidiary to secure all
     or any part of the purchase price, or to secure Indebtedness incurred or
     assumed after the Effective Date to pay all or any part of the purchase
     price or cost of construction of fixed assets useful and intended to be
     used in carrying on the business of the Company or any such Subsidiary (or
     any improvement thereon), including Liens existing on such fixed assets at
     the time of acquisition thereof or at the time of acquisition by the
     Company or any such Subsidiary of any business entity then owning such
     fixed assets, whether or not such existing Liens were given to secure the
     payment of the purchase price of the fixed assets to which they attach so
     long as they were not incurred, extended or renewed in contemplation of
     such acquisition, provided, that any such Lien shall extend solely to the
     item or items of such fixed assets so acquired or constructed and do not
     extend to any other assets of the Company or its Subsidiaries; provided
     further that the aggregate amount of Indebtedness secured by Liens allowed
     solely by this Section 10.3(h) at any time outstanding shall not exceed
     $2,500,000;

          (i)  any Lien renewing, extending or refinancing any Lien permitted by
     clauses (g) or (h) of this Section 10.3, provided that (i) the principal
     amount of Indebtedness secured by such Lien immediately prior to such
     extension, renewal or refunding is not increased or the maturity thereof
     reduced, (ii) such Lien is not extended to any other property, and (iii)
     immediately after such extension, renewal or refunding no Default or Event
     of Default would exist;

          (j)  Liens in respect of collateralized letters of credit, provided
     that the aggregate amount of Indebtedness secured by Liens allowed solely
     by this Section 10.3(j) at any time outstanding shall not exceed
     $10,000,000;

          (k)  Liens in favor of the Collateral Agent securing the Secured
     Obligations (as defined in the Intercreditor Agreement);

          (l)  Liens securing Indebtedness permitted by Section 10.4(j); and

                                     -32-
<PAGE>

          (m)  Liens in favor of Citibank or any of its Affiliates securing
     Existing Debt (as defined in the Credit Agreement as in effect on the
     Effective Date) in an aggregate amount not greater than $3,367,000,
     provided that such liens do not encumber any collateral purported to be
     encumbered by the Security Agreement or the Pledge Agreement.

     10.4.  Limitation on Indebtedness.

     The Company will not, and will not permit any Subsidiary to, directly or
indirectly, create, assume, incur, or in any manner become or remain directly or
indirectly liable with respect to, any Indebtedness, except:

          (a)  Indebtedness of the Company or any Subsidiary secured by Liens
     permitted by Section 10.3(h);

          (b)  Indebtedness of the Company or any Subsidiary outstanding on the
     Effective Date and disclosed in Schedule 5.11 (excluding Indebtedness under
     the Barclays Facility), and any Indebtedness of the Company or any
     Subsidiary extending the maturity of, or refunding or refinancing, in whole
     or in part, any of such Indebtedness (other than Indebtedness under the
     Barclays Facility), provided that the principal amount of such Indebtedness
     shall not be increased above the principal amount outstanding immediately
     prior to such extension, renewal or refinancing, and the direct and
     contingent obligors therefor shall not be changed, as a result of or in
     connection with such extension, renewal or refunding;

          (c)  Indebtedness (including, without limitation, (i) Indebtedness
     outstanding from time to time under the Barclays Facility and (ii) the face
     amount of outstanding letters of credit) of the Company or any Subsidiary
     owed to banks not organized under the laws of the United States of America
     or a state thereof in an aggregate amount up to $20,000,000 at any time
     outstanding less the aggregate face amount of all other letters of credit
     then outstanding for the account of the Company or any such Subsidiary;

          (d)  indorsements of negotiable instruments for deposit or collection
     or similar transactions by the Company or any Subsidiary in the ordinary
     course of business;

          (e)  Capitalized Leases of the Company or any Subsidiary not to exceed
     in the aggregate $2,500,000 at any time outstanding;

          (f)  Indebtedness of the Company or any Subsidiary in respect of
     currency swap agreements designed to hedge against fluctuations in

                                     -33-
<PAGE>

     foreign exchange rates incurred in the ordinary course of business and
     consistent with prudent business practice;

          (g)  Indebtedness evidenced by the Notes and the Guaranty Agreement;

          (h)  Indebtedness of the Company or ADL International arising under
     the Credit Agreement;

          (i)  Guaranties by the Company or the Guarantors of obligations of the
     type described in clause (c) of this Section 10.4;

          (j)  Indebtedness of TIME incurred after the TIME IPO, provided that
     the aggregate principal amount of all such indebtedness outstanding shall
     not at any time exceed the lesser of (i) $50,000,000 and (ii) the aggregate
     net proceeds of the TIME IPO received by TIME; and

          (k)  Indebtedness owed to the Company or a Wholly-Owned Subsidiary
     other than Indebtedness owed by a Foreign Subsidiary;

provided that the aggregate principal amount of all Indebtedness of the Company
and its Subsidiaries (excluding (i) Indebtedness arising under Sections 10.4(d)
and 10.4(j) and (ii) Guaranties by the Guarantors of Indebtedness evidenced by
the Notes or incurred under the Credit Agreement) outstanding shall not at any
time exceed $95,000,000.

     10.5.  Consolidated Tangible Net Worth.

     The Company will not, as of the end of any fiscal quarter, permit
Consolidated Tangible Net Worth to be less than the sum of (a) $33,391,000, plus
(b) 75% of its Consolidated Net Income (but in each case, only if a positive
number) for each full fiscal quarter during the period beginning on January 1,
2000 and ending at the end of the then most recently completed fiscal quarter of
the Company, plus (c) an amount equal to 100% of the Net Cash Proceeds received
by the Company after the Effective Date from the sale of  new issues of its
capital stock or any warrants, rights or options to acquire shares of its
capital stock to any Person (other than a Subsidiary or an Affiliate). Anything
herein to the contrary notwithstanding, the Company shall not be in default of
this Section 10.5 as of the end of any fiscal quarter if it would have been in
compliance with this Section 10.5 at such time but for non-cash expenses accrued
in respect of sales of stock at a discount pursuant to one or more Stock Plans
during such fiscal quarter.

     10.6.  Debt to EBITDA Ratio.

     The Company will not permit the ratio of:

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<PAGE>

          (a)  Consolidated Indebtedness, at any time during the period
     commencing April 1, 2000 and ending on June 30, 2000, to 400% of
     Consolidated EBITDA for the fiscal quarter of the Company ending on March
     31, 2000, to exceed 2.59 to 1.0;

          (b)  Consolidated Indebtedness, at any time during the period
     commencing July 1, 2000 and ending on September 30, 2000, to 200%
     Consolidated EBITDA for the period of two consecutive fiscal quarters of
     the Company ending on June 30, 2000, to exceed 2.43 to 1.0;

          (c)  Consolidated Indebtedness, at any time during the period
     commencing October 1, 2000 and ending on December 31, 2000, to 133% of
     Consolidated EBITDA for the period of three consecutive fiscal quarters of
     the Company ending on September 30, 2000, to exceed 2.10 to 1.0;

          (d)  Consolidated Indebtedness, at any time during the period
     commencing January 1, 2001 and ending on March 31, 2001, to Consolidated
     EBITDA for the period of four consecutive fiscal quarters of the Company
     ending on December 31, 2000, to exceed 1.60 to 1.0; or

          (e)  Consolidated Indebtedness, at any time during the period
     commencing April 1, 2001 and ending on May 31, 2001, to Consolidated EBITDA
     for the period of four consecutive fiscal quarters of the Company ending on
     March 31, 2001, to exceed 1.60 to 1.0.

     10.7.  Fixed Charge Coverage Ratio.

     The Company will not permit:

          (a)  the Fixed Charge Coverage Ratio for the fiscal quarter of the
     Company ending on March 31, 2000, to be less than 0.9 to 1.0;

          (b)  the Fixed Charge Coverage Ratio for the period of two consecutive
     fiscal quarters of the Company ending on June 30, 2000, to be less than 0.9
     to 1.0;

          (c)  the Fixed Charge Coverage Ratio for the period of three
     consecutive fiscal quarters of the Company ending on September 30, 2000, to
     be less than 1.0 to 1.0;

          (d)  the Fixed Charge Coverage Ratio for the period of four
     consecutive fiscal quarters of the Company ending on December 31, 2000, to
     be less than 1.0 to 1.0; or

                                     -35-
<PAGE>

          (e)  the Fixed Charge Coverage Ratio for the period of four
     consecutive fiscal quarters of the Company ending on March 31, 2001, to be
     less than 1.0 to 1.0.

     10.8.  Permitted Investments.

     The Company will not, and will not permit any Subsidiary to, make any
Investment other than Permitted Investments.

     10.9.  Restricted Payments.

     The Company will not, and will not permit any Subsidiary to, declare or pay
any dividends, purchase, redeem, retire, defease or otherwise acquire for value
any of its Equity Interests now or hereafter outstanding, return any capital to
its stockholders, partners or members (or the equivalent Persons thereof) as
such, make any distribution of assets, Equity Interests, obligations or
securities to its stockholders, partners or members (or the equivalent Persons
thereof) as such, issue or sell any Equity Interests or accept any capital
contributions, or permit any of its Subsidiaries to do any of the foregoing, or
permit any of its Subsidiaries to purchase, redeem, retire, defease or otherwise
acquire for value any Equity Interests in the Company, except that, so long as
no Default shall exist at the time of any action described in clause (a), (b),
(c), (d) or (e) below or would result therefrom:

          (a)  the Company may (i) purchase common stock held by employees and
     former employees in accordance with the terms of any Stock Plan, (ii) pay
     regularly scheduled cash dividends on its Series A Participating Non-Voting
     Preferred Stock, $1.00 Par Value and (iii) declare and pay dividends and
     make distributions payable in its common stock;

          (b)  any Subsidiary may (i) declare and pay cash dividends to the
     Company, (ii) declare and pay cash dividends to any other Obligor and (C)
     if it is a Wholly-Owned Subsidiary, accept capital contributions from its
     parent;

          (c) the Company may sell shares of capital stock of EPYX, provided
     that it applies any cash proceeds of such sale in compliance with Section
     9.8.

          (d)  TIME may issue and sell shares of its capital stock pursuant to
     the TIME IPO; and

          (e)  the Company may issue and sell shares of its capital stock
     pursuant to the terms of any Stock Plan.

                                     -36-
<PAGE>

     10.10.  Asset Disposition.

     Except as permitted under Section 10.2, the Company will not, and will not
permit any Subsidiary to, make any Asset Disposition, unless the Net Proceeds
Amount is promptly applied to a pro rata prepayment of (a) the Notes pursuant to
Section 8.2(a), and (b) the Indebtedness outstanding under the Credit Agreement.

     10.11.  Conduct of Business.

     The Company will not, and will not permit any Subsidiary to, make (x) any
material change in the nature of the business of the Company and its
Subsidiaries, taken as a whole as of the Effective Date, or (y) any change in
the nature of the business of the Company and its Subsidiaries, taken as a whole
that would result in the Company and its Subsidiaries not being principally
engaged in the consulting business.

     10.12.  Debt Prepayment Restrictions.

     Neither the Company nor any Subsidiary shall make any payments of any
principal amount due under the Credit Agreement unless such prepayment is
required by the terms of the Credit Agreement as in effect on the Effective
Date; provided, however, that the Company may make such a payment if
simultaneously therewith, it prepays a proportionate amount of the Notes, such
that, of the aggregate prepayments made, 54.69% thereof are applied to the Notes
and 45.31% to the Credit Agreement Indebtedness.

11.  EVENTS OF DEFAULT

     An "Event of Default" shall exist if any of the following conditions or
events shall occur and be continuing:

          (a)  the Company defaults in the payment of any principal or Make-
     Whole Amount, if any, on any Note when the same becomes due and payable,
     whether at maturity or at a date fixed for prepayment or by declaration or
     otherwise; or

          (b)  the Company defaults in the payment of any interest on any Note
     for more than five Business Days after the same becomes due and payable; or

          (c)  the Company defaults in the performance of or compliance with any
     term contained in any of Sections 9.6, 10.2 through 10.12, inclusive, or
     7.1(e); or

                                     -37-
<PAGE>

          (d)  the Company defaults in the performance of or compliance with any
     term contained herein (other than those referred to in clauses (a), (b) and
     (c) of this Section 11) and such default is not remedied within 10 Business
     Days after the earlier of (i) a Responsible Officer obtaining actual
     knowledge of such default and (ii) the Company receiving written notice of
     such default from any holder of a Note; or

          (e)  any representation or warranty made in writing by or on behalf of
     any Obligor or by any officer of any Obligor in any Financing Document to
     which it is a party, or by any Obligor in any writing furnished in
     connection with the transactions contemplated by the Financing Documents
     proves to have been false or misleading in any material respect on the date
     as of which made; or

          (f)

               (i)    any event shall occur or any condition shall exist under
          the Credit Agreement, or under any agreement relating thereto, that
          immediately or with any one or more of the passage of time or the
          giving of notice causes (or permits any one or more of the lenders
          thereunder or a trustee or agent therefor to cause) the Indebtedness
          outstanding thereunder, or a portion thereof, to become due prior to
          its stated maturity or prior to its regularly scheduled date or dates
          of payment;

               (ii)   the Company or any Subsidiary is in default (as principal
          or as guarantor or other surety) in the payment of any principal of or
          premium or make-whole amount or interest on any Indebtedness (other
          than Indebtedness under this Agreement and the Notes) beyond any
          period of grace provided with respect thereto, that individually or
          together with such other Indebtedness as to which any such failure
          exists has an aggregate outstanding principal amount of at least
          $2,000,000, or

               (iii)  the Company or any Subsidiary is in default in the
          performance of or compliance with any term of any Indebtedness (other
          than Indebtedness under this Agreement and the Notes) that
          individually or together with other Indebtedness as to which any such
          failure exists has an aggregate outstanding principal balance of at
          least $2,000,000, or any other condition exists; and as a consequence
          of such default or condition such Indebtedness has become, or has been
          declared (or one or more Persons are entitled to declare such
          Indebtedness to be), due and payable before its stated maturity or
          before its regularly scheduled dates of payment, or

                                     -38-
<PAGE>

               (iv)  as a consequence of the occurrence or continuation of any
          event or condition (other than the passage of time or the right of the
          holder of Indebtedness to convert such Indebtedness into equity
          interests),

                     (A) the Company or any Subsidiary has become obligated to
               purchase or repay Indebtedness (other than Indebtedness
               outstanding under the Credit Agreement) before its regular
               maturity or before its regularly scheduled dates of payment in an
               aggregate outstanding principal amount of at least $2,000,000, or

                     (B) one or more Persons have the right to require the
               Company or any Subsidiary so to purchase or repay such
               Indebtedness (other than Indebtedness outstanding under the
               Credit Agreement); or

          (g)  the Company or any Subsidiary (i) is generally not paying, or
     admits in writing its inability to pay, its debts as they become due, (ii)
     files, or consents by answer or otherwise to the filing against it of, a
     petition for relief or reorganization or arrangement or any other petition
     in bankruptcy, for liquidation or to take advantage of any bankruptcy,
     insolvency, reorganization, moratorium or other similar law of any
     jurisdiction, (iii) makes an assignment for the benefit of its creditors,
     (iv) consents to the appointment of a custodian, receiver, trustee or other
     officer with similar powers with respect to it or with respect to any
     substantial part of its property, (v) is adjudicated as insolvent or to be
     liquidated, or (vi) takes corporate action for the purpose of any of the
     foregoing; or

          (h)  a court or governmental authority of competent jurisdiction
     enters an order appointing, without consent by the Company or any
     Subsidiary, a custodian, receiver, trustee or other officer with similar
     powers with respect to the Company or any Subsidiary or with respect to any
     substantial part of the property of the Company or any Subsidiary, or
     constituting an order for relief or approving a petition for relief or
     reorganization or any other petition in bankruptcy or for liquidation or to
     take advantage of any bankruptcy or insolvency law of any jurisdiction, or
     ordering the dissolution, winding-up or liquidation of the Company or any
     Subsidiary, or any such petition shall be filed against the Company or any
     Subsidiary and such petition shall not be dismissed within 45 days; or

          (i)  a final judgment or judgments for the payment of money
     aggregating in excess of $2,000,000 is or are rendered against one or

                                     -39-
<PAGE>

     more of the Company and its Subsidiaries and which judgments are not,
     within 10 days after entry thereof, bonded, discharged or stayed pending
     appeal, or are not discharged within 10 days after the expiration of such
     stay; provided, however, that if and to the extent that the amount of any
     judgment is covered by a valid and binding policy of insurance between the
     defendant and the insurer covering payment thereof and such insurer (1) has
     a rating of at least "A-" by A.M. Best Company, or comparable rating of
     another rating agency of equivalent stature in the case of a foreign
     insurer, and (2) has been notified of, and has not disputed the claim made
     for payment of, the amount of such judgment or order, such judgment (to the
     extent of the amount so covered) shall be excluded from this clause (i); or

          (j)  with respect to the Pledge Agreement and the Security Agreement,
     and, if the Additional Security Agreements become effective pursuant to
     Section 9.6, the Additional Security Agreements:

               (i)    any Obligor defaults in the performance of or compliance
          with any term contained in the Pledge Agreement, the Security
          Agreement or any of the Additional Security Agreements,

               (ii)   the Pledge Agreement, the Security Agreement or any of the
          Additional Security Agreements shall cease to be in full force and
          effect or shall be declared by a court or governmental authority of
          competent jurisdiction to be void, voidable or unenforceable against
          any Obligor that is a party thereto,

               (iii)  the validity or enforceability of the Pledge Agreement,
          the Security Agreement or any of the Additional Security Agreements
          shall be contested by any Obligor, or

               (iv)   any Obligor shall deny that it has any further liability
          or obligation under the Pledge Agreement, the Security Agreement or
          any of the Additional Security Agreements; or

          (k)  with respect to the Guaranty Agreement:

               (i)    the Guaranty Agreement shall cease to be in full force and
          effect as to any Guarantor (other than TIME after the TIME IPO) or
          shall be declared by a court or governmental authority of competent
          jurisdiction to be void, voidable or unenforceable against any
          Guarantor,

               (ii)   the validity or enforceability of the Guaranty Agreement
          shall be contested by any Guarantor, the Company or any Affiliate, or

                                     -40-
<PAGE>

               (iii)  the Company, any Affiliate or any Guarantor shall deny
          that any Guarantor has any further liability or obligation under the
          Guaranty Agreement; or

          (l)  if more than 5% of the outstanding capital stock of the Company
     shall become held by any Person other than the Memorial Drive Trust, the
     ESOP, one or more employee benefit plans of the Company or its
     Subsidiaries; or employees, or former employees, of the Company or any of
     its Subsidiaries or any Plans that have acquired such capital stock in
     accordance with a distribution pursuant to the ESOP, any other employee
     benefit plan or any Stock Plan or the Memorial Drive Trust, the ESOP and
     any Plan, collectively, shall own less than 50.1% of the issued and
     outstanding capital stock of the Company; or

          (m)  if

               (i)    any Plan shall fail to satisfy the minimum funding
          standards of ERISA or the Code for any plan year or part thereof or a
          waiver of such standards or extension of any amortization period is
          sought or granted under section 412 of the Code,

               (ii)   a notice of intent to terminate any Plan shall have been
          or is reasonably expected to be filed with the PBGC or the PBGC shall
          have instituted proceedings under ERISA section 4042 to terminate or
          appoint a trustee to administer any Plan or the PBGC shall have
          notified the Company or any ERISA Affiliate that a Plan may become a
          subject of any such proceedings,

               (iii)  the aggregate "amount of unfunded benefit liabilities"
          (within the meaning of section 4001(a)(18) of ERISA) under all Plans,
          determined in accordance with Title IV of ERISA, shall exceed
          $2,000,000,

               (iv)   the Company or any ERISA Affiliate shall have incurred or
          is reasonably expected to incur any liability pursuant to Title I or
          IV of ERISA or the penalty or excise tax provisions of the Code
          relating to employee benefit plans,

               (v)    the Company or any ERISA Affiliate withdraws from any
          Multiemployer Plan, or

               (vi)   the Company or any Subsidiary establishes or amends any
          employee welfare benefit plan that provides post-employment welfare
          benefits in a manner that would increase the liability of the Company
          or any Subsidiary thereunder;

                                     -41-
<PAGE>

     and any such event or events described in clauses (i) through (vi) above,
     either individually or together with any other such event or events, could
     reasonably be expected to have a Material Adverse Effect.

As used in this Section 11(m) the terms "employee benefit plan" and "employee
welfare benefit plan" shall have the respective meanings assigned to such terms
in section 3 of ERISA.

12.  REMEDIES ON DEFAULT, ETC.

     12.1.  Acceleration.

          (a)  If an Event of Default with respect to the Company described in
     Section 11(g) or 11(h) (other than an Event of Default described in clause
     (i) of Section 11(g) or described in clause (vi) of Section 11(g) by virtue
     of the fact that such clause encompasses clause (i) of 11(g)) has occurred,
     all the Notes then outstanding shall automatically become immediately due
     and payable.

          (b)  If any other Event of Default has occurred and is continuing, any
     holder or holders of more than 25% in principal amount of the Notes at the
     time outstanding may at any time at its or their option, by notice or
     notices to the Company, declare all the Notes then outstanding to be
     immediately due and payable.

          (c)  If any Event of Default described in clause (a) or (b) of Section
     11 has occurred and is continuing, any holder or holders of Notes at the
     time outstanding affected by such Event of Default may at any time, at its
     or their option, by notice or notices to the Company, declare all the Notes
     held by it or them to be immediately due and payable.

     Upon any Notes becoming due and payable under this Section 12.1, whether
automatically or by declaration, such Notes will forthwith mature and the entire
unpaid principal amount of such Notes, plus (x) all accrued and unpaid interest
thereon and (y) the Make-Whole Amount determined in respect of such principal
amount (to the full extent permitted by applicable law), shall all be
immediately due and payable, in each and every case without presentment, demand,
protest or further notice, all of which are hereby waived.  The Company
acknowledges, and the parties hereto agree, that each holder of a Note has the
right to maintain its investment in the Notes free from repayment by the Company
(except as herein specifically provided for) and that the provision for payment
of a Make-Whole Amount by the Company in the event that the Notes are prepaid or
are accelerated as a result of an Event of Default, is intended to provide
compensation for the deprivation of such right under such circumstances.

                                     -42-
<PAGE>

     12.2.  Other Remedies.

     If any Default or Event of Default has occurred and is continuing, and
irrespective of whether any Notes have become or have been declared immediately
due and payable under Section 12.1, the holder or holders of more than 25% in
principal amount of the Notes at the time outstanding may proceed to protect and
enforce the rights of such holder or holders by an action at law, suit in equity
or other appropriate proceeding, whether for the specific performance of any
agreement contained herein or in any Note, or for an injunction against a
violation of any of the terms hereof or thereof, or in aid of the exercise of
any power granted hereby or thereby or by law or otherwise.

     12.3.  Rescission.

     At any time after any Notes have been declared due and payable pursuant to
clause (b) or clause (c) of Section 12.1, the holders of not less than 51% in
principal amount of the Notes then outstanding, by written notice to the
Company, may rescind and annul any such declaration and its consequences if (a)
the Company has paid all overdue interest on the Notes, all principal of and
Make-Whole Amount, if any, due and payable on any Notes other than by reason of
such declaration, and all interest on such overdue principal and Make-Whole
Amount, if any, and (to the extent permitted by applicable law) any overdue
interest in respect of the Notes, at the Default Rate, (b) all Events of Default
and Defaults, other than non-payment of amounts that have become due solely by
reason of such declaration, have been cured or have been waived pursuant to
Section 17, and (c) no judgment or decree has been entered for the payment of
any monies due pursuant hereto or to the Notes.  No rescission and annulment
under this Section 12.3 will extend to or affect any subsequent Event of Default
or Default or impair any right consequent thereon.

     12.4.  No Waivers or Election of Remedies, Expenses, etc.

     No course of dealing and no delay on the part of any holder of any Note in
exercising any right, power or remedy shall operate as a waiver thereof or
otherwise prejudice such holder's rights, powers or remedies.  No right, power
or remedy conferred by this Agreement or by any Note upon any holder thereof
shall be exclusive of any other right, power or remedy referred to herein or
therein or now or

                                     -43-
<PAGE>

hereafter available at law, in equity, by statute or otherwise.  Without
limiting the obligations of the Company under Section 15, the Company will pay
to the holder of each Note on demand such further amount as shall be sufficient
to cover all costs and expenses of such holder incurred in any enforcement or
collection under this Section 12, including, without limitation, reasonable
attorneys' fees, expenses and disbursements.

13.  REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES

     13.1.  Registration of Notes.

     The Company shall keep at its principal executive office a register for the
registration and registration of transfers of Notes.  The name and address of
each holder of one or more Notes, each transfer thereof and the name and address
of each transferee of one or more Notes shall be registered in such register.
Prior to due presentment for registration of transfer, the Person in whose name
any Note shall be registered shall be deemed and treated as the owner and holder
thereof for all purposes hereof, and the Company shall not be affected by any
notice or knowledge to the contrary.  The Company shall give to any holder of a
Note that is an Institutional Investor promptly upon request therefor, a
complete and correct copy of the names and addresses of all registered holders
of Notes.

     13.2.  Transfer and Exchange of Notes.

     Upon surrender of any Note at the principal executive office of the Company
for registration of transfer or exchange (and in the case of a surrender for
registration of transfer, duly endorsed or accompanied by a written instrument
of transfer duly executed by the registered holder of such Note or his attorney
duly authorized in writing and accompanied by the address for notices of each
transferee of such Note or part thereof), the Company shall execute and deliver,
at the Company's expense (except as provided below), one or more new Notes (as
requested by the holder thereof) in exchange therefor, in an aggregate principal
amount equal to the unpaid principal amount of the surrendered Note.  Each such
new Note shall be payable to such Person as such holder may request and shall be
substantially in the form of Exhibit 1.  Each such new Note shall be dated and
bear interest from the date to which interest shall have been paid on the
surrendered Note or dated the date of the surrendered Note if no interest shall
have been paid thereon.  The Company may require payment of a sum sufficient to
cover any stamp tax or governmental charge imposed in respect of any such
transfer of Notes.  Notes shall not be transferred in denominations of less than
$1,000,000, provided that if necessary to enable the registration of transfer by
a holder of its entire holding of Notes, one Note may be in a denomination of
less than $1,000,000.

                                     -44-
<PAGE>

     13.3.  Replacement of Notes.

     Upon receipt by the Company of evidence reasonably satisfactory to it of
the ownership of and the loss, theft, destruction or mutilation of any Note
(which evidence shall be, in the case of an Institutional Investor, notice from
such Institutional Investor of such ownership and such loss, theft, destruction
or mutilation), and

          (a)  in the case of loss, theft or destruction, of indemnity
     reasonably satisfactory to it (provided that if the holder of such Note is,
     or is a nominee for, an original purchaser or another holder of a Note, in
     each case with a minimum net worth of at least $100,000,000, such Person's
     own unsecured agreement of indemnity shall be deemed to be satisfactory),
     or

          (b)  in the case of mutilation, upon surrender and cancellation
     thereof, the Company at its own expense shall execute and deliver, in lieu
     thereof, a new Note, dated and bearing interest from the date to which
     interest shall have been paid on such lost, stolen, destroyed or mutilated
     Note or dated the date of such lost, stolen, destroyed or mutilated Note if
     no interest shall have been paid thereon.

14.  PAYMENTS ON NOTES

     14.1.  Place of Payment.

     Subject to Section 14.2, payments of principal, Make-Whole Amount, if any,
and interest becoming due and payable on the Notes shall be made in the
Commonwealth of Massachusetts at the principal office of the Company in such
jurisdiction.  The Company may at any time, by notice to each holder of a Note,
change the place of payment of the Notes so long as such place of payment shall
be either the principal office of the Company in such jurisdiction or the
principal office of a bank or trust company in such jurisdiction.

     14.2.  Home Office Payment.

     So long as a Noteholder or its nominee shall be the holder of any Note, and
notwithstanding anything contained in Section 14.1 or in such Note to the
contrary, the Company will pay all sums becoming due on such Note for principal,
Make-Whole Amount, if any, and interest by the method and at the address
specified for such purpose below such Noteholder's name in Schedule A, or by
such other method or at such other address as it shall have from time to time
specified to the Company in writing for such purpose, without the presentation
or surrender of such Note or the making of any notation thereon,

                                     -45-
<PAGE>

except that upon written request of the Company made concurrently with or
reasonably promptly after payment or prepayment in full of any Note, such
Noteholder shall surrender such Note for cancellation, reasonably promptly after
any such request, to the Company at its principal executive office or at the
place of payment most recently designated by the Company pursuant to Section
14.1. Prior to any sale or other disposition of any Note held by any Noteholder
or its nominee it will, at its election, either endorse thereon the amount of
principal paid thereon and the last date to which interest has been paid thereon
or surrender such Note to the Company in exchange for a new Note or Notes
pursuant to Section 13.2. The Company will afford the benefits of this Section
14.2 to any Institutional Investor that is the direct or indirect transferee of
any Note purchased by any Noteholder under this Agreement and that has made the
same agreement relating to such Note as Noteholder has made in this Section
14.2.

15.  EXPENSES, ETC.

     15.1.  Transaction Expenses.

     Whether or not the transactions contemplated hereby are consummated, the
Company will pay all costs and expenses (including reasonable attorneys' fees of
a special counsel and, if reasonably required, local or other counsel) incurred
by each Noteholder or other holder of a Note and the Collateral Agent in
connection with such transactions and in connection with any amendments, waivers
or consents under or in respect of any Financing Document (whether or not such
amendment, waiver or consent becomes effective), including, without limitation:
(a) the costs and expenses incurred in enforcing or defending (or determining
whether or how to enforce or defend) any rights under any Financing Document or
in responding to any subpoena or other legal process or informal investigative
demand issued in connection with any Financing Document, or by reason of being a
holder of any Note, and (b) the costs and expenses, including financial
advisors' fees, incurred in connection with the insolvency or bankruptcy of the
Company or any Subsidiary or in connection with any work-out or restructuring of
the transactions contemplated hereby and by the other Financing Documents.  The
Company will pay, and will save each Noteholder and each other holder of a Note
harmless from, all claims in respect of any fees, costs or expenses if any, of
brokers and finders (other than those retained by the Noteholders).

     15.2.  Survival.

     The obligations of the Company under this Section 15 will survive the
payment or transfer of any Note, the enforcement, amendment or waiver of any
provision of this Agreement or the Notes, and the termination of this Agreement.

                                     -46-
<PAGE>

16.  SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT

     All representations and warranties contained herein shall survive the
execution and delivery of this Agreement and the Notes, the purchase or transfer
by  of any Note or portion thereof or interest therein by any Noteholder and the
payment of any Note, and may be relied upon by any subsequent holder of a Note,
regardless of any investigation made at any time by or on behalf of any
Noteholder or any other holder of a Note.  All statements contained in any
Financing Document or any certificate or other instrument delivered by or on
behalf of the Company or any Guarantor pursuant to this Agreement or any other
Financing Document (subject, with respect to the financial projections delivered
to the Noteholders in connection with the transactions contemplated hereby, to
the proviso set forth in the first sentence of Section 5.3) shall be deemed
representations and warranties of the Company under this Agreement.  Subject to
the preceding sentence, the Financing Documents embody the entire agreement and
understanding between the Noteholders and the Company and supersede all prior
agreements and understandings relating to the subject matter hereof.

17.  AMENDMENT AND WAIVER

     17.1.  Requirements.

     This Agreement and the Notes may be amended, and the observance of any term
hereof or of the Notes may be waived (either retroactively or prospectively),
with (and only with) the written consent of the Company and the Required
Holders, except that (a) no amendment or waiver of any of the provisions of any
of Sections 1, 2, 3, 4, 5, 6 and 21, or any defined term (as it is used
therein), will be effective as to any Noteholder unless consented to by such
Noteholder in writing, and (b) no such amendment or waiver may, without the
written consent of the holder of each Note at the time outstanding affected
thereby, (i) subject to the provisions of Section 12 relating to acceleration or
rescission, change the amount or time of any prepayment or payment of principal
of, or change the rate or change the time of payment or method of computation of
interest or of the Make-Whole Amount on, the Notes, (ii) change the percentage
of the principal amount of the Notes the holders of which are required to
consent to any such amendment or waiver, or (iii) amend any of Sections 8,
11(a), 11(b), 12, 17 and 20.

                                     -47-
<PAGE>

     17.2.  Solicitation of Holders of Notes.

          (a)  Solicitation.  The Company will provide each holder of the Notes
     (irrespective of the amount of Notes then owned by it) with sufficient
     information, sufficiently far in advance of the date a decision is
     required, to enable such holder to make an informed and considered decision
     with respect to any proposed amendment, waiver or consent in respect of any
     of the provisions hereof or of the Notes.  The Company will deliver
     executed or true and correct copies of each amendment, waiver or consent
     effected pursuant to the provisions of this Section 17 to each holder of
     outstanding Notes promptly following the date on which it is executed and
     delivered by, or receives the consent or approval of, the requisite holders
     of Notes.

          (b)  Payment. The Company will not directly or indirectly pay or cause
     to be paid any remuneration, whether by way of supplemental or additional
     interest, fee or otherwise, or grant any security, to any holder of Notes
     as consideration for or as an inducement to the entering into by any holder
     of Notes of any waiver or amendment of any of the terms and provisions
     hereof unless such remuneration is concurrently paid, or security is
     concurrently granted, on the same terms, ratably to each holder of Notes
     then outstanding even if such holder did not consent to such waiver or
     amendment.

     17.3.  Binding Effect, etc.

     Any amendment or waiver consented to as provided in this Section 17 applies
equally to all holders of Notes and is binding upon them and upon each future
holder of any Note and upon the Company without regard to whether such Note has
been marked to indicate such amendment or waiver.  No such amendment or waiver
will extend to or affect any obligation, covenant, agreement, Default or Event
of Default not expressly amended or waived or impair any right consequent
thereon.  No course of dealing between the Company and the holder of any Note
nor any delay in exercising any rights hereunder or under any Note shall operate
as a waiver of any rights of any holder of such Note.  As used herein, the term
"this Agreement" and references thereto shall mean this Agreement as it may from
time to time be amended or supplemented.

     17.4.  Notes held by Company, etc.

     Solely for the purpose of determining whether the holders of the requisite
percentage of the aggregate principal amount of Notes then outstanding approved
or consented to any amendment, waiver or consent to be given under this
Agreement or the Notes, or have directed the taking of any action provided

                                     -48-
<PAGE>

herein or in the Notes to be taken upon the direction of the holders of a
specified percentage of the aggregate principal amount of Notes then
outstanding, Notes directly or indirectly owned by the Company or any of its
Affiliates shall be deemed not to be outstanding.

18.  NOTICES

     All notices and communications provided for hereunder shall be in writing
and sent (a) by telecopy if the sender on the same day sends a confirming copy
of such notice by a recognized overnight delivery service (charges prepaid), or
(b) by registered or certified mail with return receipt requested (postage
prepaid), or (c) by a recognized overnight delivery service (with charges
prepaid).  Any such notice must be sent:

               (i)    if to any Noteholder or its nominee, to it or such nominee
          at the address specified for such communications in Schedule A, or at
          such other address as it or such nominee shall have specified to the
          Company in writing,

               (ii)   if to any other holder of any Note, to such holder at such
          address as such other holder shall have specified to the Company in
          writing, or

               (iii)  if to the Company, to the Company at its address set
          forth at the beginning hereof to the attention of the Chief Financial
          Officer, telecopier:  (617) 498-7117, or at such other address as the
          Company shall have specified to the holder of each Note in writing.

Notices under this Section 18 will be deemed given only when actually received.

19.  REPRODUCTION OF DOCUMENTS

     This Agreement and all documents relating hereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by the Noteholders at the Closing (except the
Notes themselves), and (c) financial statements, certificates and other
information previously or hereafter furnished to the Noteholders, may be
reproduced by the Noteholders by any photographic, photostatic, microfilm,
microcard, miniature photographic or other similar process and the Noteholders
may destroy any original document so reproduced.  The Company agrees and
stipulates that, to the extent permitted by applicable law, any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by a Noteholder in the
regular course of business) and any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
This Section 19

                                     -49-
<PAGE>

shall not prohibit the Company or any other holder of Notes from contesting any
such reproduction to the same extent that it could contest the original, or from
introducing evidence to demonstrate the inaccuracy of any such reproduction.

20.  CONFIDENTIAL INFORMATION

     For the purposes of this Section 20, "Confidential Information" means
information delivered to a Noteholder by or on behalf of the Company or any
Subsidiary in connection with the transactions contemplated by or otherwise
pursuant to this Agreement that is proprietary in nature and that was clearly
marked or labeled or otherwise adequately identified when received by such
Noteholder as being confidential information of the Company or such Subsidiary,
provided that such term does not include information that

          (a)  was publicly known or otherwise known to such Noteholder prior to
     the time of such disclosure,

          (b)  subsequently becomes publicly known through no act or omission by
     such Noteholder or any person acting on its behalf,

          (c)  otherwise becomes known to such Noteholder other than through
     disclosure by the Company or any Subsidiary, or

          (d)  constitutes financial statements delivered to such Noteholder
     under Section 7.1 that are otherwise publicly available.

Each Noteholder will maintain the confidentiality of such Confidential
Information in accordance with procedures adopted by you in good faith to
protect confidential information of third parties delivered to it, provided that
any Noteholder may deliver or disclose Confidential Information to:

               (i)    its directors, officers, trustees, employees, agents,
          attorneys and affiliates (to the extent such disclosure reasonably
          relates to the administration of the investment represented by its
          Notes),

               (ii)   its financial advisors and other professional advisors who
          agree to hold confidential the Confidential Information substantially
          in accordance with the terms of this Section 20,

               (iii)  any other holder of any Note,

               (iv)   any Institutional Investor to which a Noteholder sells or
          offers to sell such Note or any part thereof or any participation
          therein (if such Person has agreed in writing prior to its receipt of

                                     -50-
<PAGE>

          such Confidential Information to be bound by the provisions of this
          Section 20),

               (v)    any federal or state regulatory authority having
          jurisdiction over a Noteholder,

               (vi)   the National Association of Insurance Commissioners or any
          similar organization, or any nationally recognized rating agency that
          requires access to information about a Noteholder's investment
          portfolio,

               (vii)  any other Person to which such delivery or disclosure
          may be necessary or appropriate

                      (A) to effect compliance with any law, rule, regulation or
               order applicable to a Noteholder,

                      (B) in response to any subpoena or other legal process,

                      (C) in connection with any litigation to which a
               Noteholder is a party,

          provided that in all cases described in clauses (B) and (C) above,
          each Noteholder will use reasonable efforts to give the Company
          sufficient written notice prior to delivering or disclosing such
          Confidential Information to permit the Company to contest such
          production of such information, or

               (viii) if an Event of Default has occurred and is continuing,
          to any other Person the extent a Noteholder may reasonably determine
          such delivery and disclosure to be necessary or appropriate in the
          enforcement or for the protection of the rights and remedies under its
          Notes and this Agreement.

Each holder of a Note, by its acceptance of a Note, will be deemed to have
agreed to be bound by and to be entitled to the benefits of this Section 20 as
though it were a party to this Agreement.  On reasonable request by the Company
in connection with the delivery to any holder of a Note of information required
to be delivered to such holder under this Agreement or requested by such holder
(other than a holder that is a party to this Agreement or its nominee), such
holder will enter into an agreement with the Company embodying the provisions of
this Section 20.

                                     -51-
<PAGE>

21.  MISCELLANEOUS

     21.1.  Successors and Assigns.

     All covenants and other agreements contained in this Agreement by or on
behalf of any of the parties hereto bind and inure to the benefit of their
respective successors and assigns (including, without limitation, any subsequent
holder of a Note) whether so expressed or not.

     21.2.  Payments Due on Non-Business Days.

     Anything in this Agreement or the Notes to the contrary notwithstanding,
any payment of principal of or Make-Whole Amount or interest on any Note that is
due on a date other than a Business Day shall be made on the next succeeding
Business Day without including the additional days elapsed in the computation of
the interest payable on such next succeeding Business Day.

     21.3.  Indemnity.

     The Company will indemnify and hold harmless each Noteholder and any other
holder of a Note and each of their affiliates and their officers, directors,
trustees, employees, agents and advisors (each an "Indemnified Party") from and
against any and all claims, damages, losses, liabilities and expenses
(including, without limitation, reasonable fees and expenses of counsel) that
may be incurred by or asserted or awarded against any Indemnified Party, in each
case arising out of or in connection with or by reason of (including, without
limitation, in connection with any investigation, litigation or proceeding or
preparation of a defense in connection therewith) (a) any of the transactions
contemplated by the Financing Documents, (b) any acquisition or similar business
combination or proposed business combination by the Company or any of its
Subsidiaries or Affiliates of all or any portion of the shares of capital stock
or substantially all of the property and assets of any other Person, (c) the
Existing Notes, the Notes and any use made or proposed to be made with the
proceeds thereof or (d) the actual or alleged presence of Hazardous Materials on
any property of the Company or any of its Subsidiaries or any environmental
action or proceeding relating in any way to the Company or any of its
Subsidiaries or any of their respective properties, except to the extent such
claim, damage, loss, liability or expense is found in a final, nonappealable
judgment by a court of competent jurisdiction to have resulted from such
Indemnified Party's gross negligence or willful misconduct.  In the case of an
investigation, litigation or proceeding to which the indemnify described in this
Section 21.3 applies, such indemnity shall be effective whether or not such
investigation, litigation or proceeding is brought by the Company, its
shareholders or creditors or an Indemnified Party or an Indemnified Party is
otherwise a party thereto.  The Company will further agree that no Indemnified

                                     -52-
<PAGE>

Party shall have any liability (whether direct or indirect, in contract or tort
or otherwise) to the Company or any of its Subsidiaries or to their respective
security holders or creditors arising out of, related to or in connection with
the transactions contemplated by the Financing Documents, except for direct, as
opposed to consequential, damages determined in a final nonappealable judgment
by a court of competent jurisdiction to have resulted from such Indemnified
Party's gross negligence or willful misconduct.

     21.4.  Severability.

     Any provision of this Agreement that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall (to the full extent permitted by law) not invalidate or
render unenforceable such provision in any other jurisdiction.

     21.5.  Independent Construction.

     Each covenant contained herein shall be construed (absent express provision
to the contrary) as being independent of each other covenant contained herein,
so that compliance with any one covenant shall not (absent such an express
contrary provision) be deemed to excuse compliance with any other covenant.
Where any provision herein refers to action to be taken by any Person, or which
such Person is prohibited from taking, such provision shall be applicable
whether such action is taken directly or indirectly by such Person.

     21.6.  Counterparts.

     This Agreement may be executed in any number of counterparts, each of shall
be an original but all of which together shall constitute one instrument.  Each
counterpart may consist of a number of copies hereof, each signed by less than
all, but together signed by all, of the parties hereto.

     21.7.  Governing Law.

     THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE
RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE OF NEW YORK
EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW OF SUCH STATE THAT WOULD REQUIRE
THE APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE.

     [Remainder of page intentionally blank. Next page is signature page.]

                                     -53-
<PAGE>

     If you are in agreement with the foregoing, please sign the form of
agreement on the accompanying counterpart of this Agreement and return it to the
Company, whereupon the foregoing shall become a binding agreement between you
and the Company.

                                        Very truly yours,

                                        ARTHUR D. LITTLE, INC.

                                        By: _______________________________
                                            Name:
                                            Title:

The foregoing is hereby
agreed to as of the
date thereof.

[NOTEHOLDERS]

By:  ________________________
Name:
Title:

                                     -54-
<PAGE>

                                   SCHEDULE B

                                 DEFINED TERMS
                                 -------------

     As used herein, the following terms have the respective meanings set forth
below or set forth in the Section hereof following such term:

     "Additional Security Agreements" means, collectively, the pledges, security
agreements, security agreement supplements and other collateral documents
executed and delivered from time to time pursuant to Section 9.6.

     "ADL International" means Arthur D. Little International, Inc., a
Massachusetts corporation, together with its successors and assigns.

     "Affiliate" means at any time, and with respect to any Person,

          (a) any other Person that at such time directly or indirectly through
     one or more intermediaries Controls, or is Controlled by, or is under
     common Control with, such first Person, and

          (b) any Person beneficially owning or holding, directly or indirectly,
     5% or more of any class of voting or equity interests of the Company or any
     Subsidiary or any corporation of which the Company and its Subsidiaries
     beneficially own or hold, in the aggregate, directly or indirectly, 5% or
     more of any class of voting or equity interests.

As used in this definition, "Control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise. Unless the context otherwise clearly requires, any
reference to an "Affiliate" is a reference to an Affiliate of the Company.

     "Agreement, this" is defined in Section 17.3.

     "Asset Disposition" means any Transfer except:

          (a)  any

               (i)  Transfer from a Domestic Subsidiary to the Company or a
          Wholly-Owned Domestic Subsidiary;

               (ii) Transfer from a Foreign Subsidiary to the Company or a
          Wholly-Owned Subsidiary;

                                 Schedule B-1
<PAGE>

               (iii) Transfer from the Company to a Wholly-Owned Domestic
          Subsidiary; and

               (iv)  Transfer from the Company to a Subsidiary (other than a
          Wholly-Owned Subsidiary) or from a Subsidiary to another Subsidiary
          (other than a Wholly-Owned Subsidiary), which in either case is for
          Fair Market Value, so long as immediately before and immediately after
          the consummation of any such Transfer and after giving effect thereto,
          no Default or Event of Default exists;

          (b)  any Transfer made in the ordinary course of business and
     involving only property that is either (i) inventory held for sale or (ii)
     equipment, fixtures, supplies or materials no longer required in the
     operation of the business of the Company or any of its Subsidiaries or that
     is obsolete;

          (c)  the EPYX Transaction, provided that Section 9.8 of this Agreement
     has been complied with;

          (d)  any transfer to TIME or any of its Subsidiaries of accounts
     receivable and related Collateral (as defined in the Security Agreement)
     owing to the Company or any Subsidiary by the account debtors identified on
     Schedule 1 to the Security Agreement or any other account debtors that
     shall have been approved in writing by the Collateral Agent; and

          (e)  the TIME IPO.

     "Banks" means the banks initially party to the Credit Agreement (namely,
Citibank, N.A. and The Chase Manhattan Bank) and each other bank or other Person
from time to time acting as a lender or other provider of financial
accommodations to the Company or any Subsidiary under the Credit Agreement.

     "Barclays Facility" means the line of credit between Barclays Bank and
Cambridge Consultants Limited, a limited company organized under the laws of
England, which provides for revolving and term loans in an aggregate principal
amount not exceeding $10,353,850.

     "Business Day" means (a) for the purposes of Section 8.7 only, any day
other than a Saturday, a Sunday or a day on which commercial banks in New York
City are required or authorized to be closed, and (b) for the purposes of any
other provision of this Agreement, any day other than a Saturday, a Sunday or a
day on which commercial banks in New York, New York are required or authorized
to be closed.

                                 Schedule B-2
<PAGE>

     "Capital Lease" means, at any time, any lease obligation for rentals with
respect to which the lessee is required concurrently to recognize the
acquisition of an asset and the incurrence of a liability in accordance with
GAAP.

     "Code" means the Internal Revenue Code of 1986, as amended from time to
time, and the rules and regulations promulgated thereunder from time to time.

     "Collateral Agent" means Citicorp USA, Inc., as collateral agent under the
Pledge Agreement, the Security Agreement and the Intercreditor Agreement, and
any successor or assign appointed in accordance with the provisions of the
Intercreditor Agreement.

     "Company" is defined in the introductory sentence of this Agreement.

     "Confidential Information" is defined in Section 20.

     "Consolidated EBITDA" means, for any period ending at the close of any
fiscal quarter of the Company, the sum of: (i) Consolidated Net Income for such
period, plus (ii) to the extent deducted in determining Consolidated Net Income,
income tax expense, consolidated interest expense, depreciation and amortization
expense and the non-cash expense associated with sales of stock at a discount to
employees pursuant to any Stock Plan.

     "Consolidated Indebtedness" means, at any time, all Indebtedness of the
Company and its Subsidiaries, determined at such time on a consolidated basis in
accordance with GAAP.

     "Consolidated Net Income" means the net after-tax income of the Company and
its Subsidiaries determined on a consolidated basis in accordance with GAAP,
provided that extraordinary gains and losses and any increase or decrease to net
income which is required to be recorded in the Company's consolidated statement
of income because of the adoption of accounting principles adopted after the
date hereof shall be excluded.

     "Consolidated Tangible Net Worth" means the excess of Consolidated Total
Tangible Assets over Consolidated Total Liabilities.

     "Consolidated Total Liabilities" means the total liabilities of the Company
and its Subsidiaries which would be shown as liabilities on a consolidated
balance sheet of the Company and its Subsidiaries prepared in accordance with
GAAP.

     "Consolidated Total Tangible Assets" means, at any time, all assets of the
Company and its Subsidiaries at such time, excluding, however, (a) any goodwill
(other than goodwill arising solely in connection with the Innovation

                                 Schedule B-3
<PAGE>

Associates transaction), experimental or organizational expenses, research and
development expenses, franchises, trademarks, service marks, trade names,
copyrights, patents, patent applications, licenses and rights in any thereof,
and other similar intangibles, (b) all reserves carried and not deducted from
assets, (c) securities which are not readily marketable (excluding Investments
existing on the date hereof in ADL Ventures LP in an aggregate amount not to
exceed $2,600,000), (d) any write-up in the book value of any asset resulting
from a revaluation thereof subsequent to December 31, 1997, and (e) any items
not included in clauses (a) through (d) above which are treated as intangibles
in conformity with GAAP, in each case determined on a consolidated basis and in
accordance with GAAP.

     "Credit Agreement" means the Amended and Restated Credit Agreement dated as
of April 25, 2000, among the Company, the ADL International, the Banks and
Citibank, N.A., as agent, as the same may be amended, restated or otherwise
modified from time to time; provided that if any such new agreement shall at any
time be entered into by the Company (with or without ADL International), then
concurrently therewith the Company shall, unless otherwise agreed by the
Required Holders, cause the Banks under such new agreement to enter into a new
intercreditor agreement with the holders of the Notes substantially in the form
of the Intercreditor Agreement.

     "Default" means an event or condition the occurrence or existence of which
would, with the lapse of time or the giving of notice or both, become an Event
of Default.

     "Default Rate" means, at any time, that rate of interest that is the
greater of (i) 2% per annum above the Note Interest Rate at such time or (ii) 2%
over the rate of interest publicly announced by The Chase Manhattan Bank in New
York, New York as its "base" or "prime" rate.

     "DeNora" means DeNora Fuel Cells S.p.A., a company organized under the laws
of Italy.

     "DeNora Agreement" means that certain Investment and Exchange Agreement
among the Company, DeNora, DeNora New Energy Investments B.V., and EPYX, dated
as of April 4, 2000.

     "Domestic Subsidiary" means any Subsidiary organized under the laws of the
United States, any state thereof, or the District of Columbia.

     "Effective Date" is defined in Section 3.

     "Environmental Laws" means any and all Federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or

                                 Schedule B-4
<PAGE>

governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including but
not limited to those related to hazardous substances or wastes, air emissions
and discharges to waste or public systems.

     "EPYX" means EPYX Corporation, a Delaware corporation, to be renamed Nuvera
Corporation.

     "EPYX Transaction" means, collectively, (a) the sale to Amerada Hess
Corporation of up to 100,000 shares of the capital stock of EPYX pursuant to the
Hess Agreement, and (b) the issuance of up to 500,000 shares of common stock of
EPYX to DeNora New Energy Investments B.V. pursuant to the DeNora Agreement.

     "Equity Interests" means, with respect to any Person, shares of capital
stock of (or other ownership or profit interests in) such Person, warrants,
options or other rights for the purchase or other acquisition from such Person
of shares of capital stock of (or other ownership or profit interests in) such
Person, securities convertible into or exchangeable for shares of capital stock
of (or other ownership or profit interests in) such Person or warrants, rights
or options for the purchase or other acquisition from such Person of such shares
(or such other interests), and other ownership or profit interests in such
Person (including, without limitation, partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such shares, warrants,
options, rights or other interests are authorized or otherwise existing on any
date of determination.

     "Equity Issuance" means the issuance or sale of capital stock or warrants,
options or other rights to acquire Equity Interests of the Company or any
Subsidiary to a Person other than the Company or any Subsidiary, but excluding
(a) the EPYX Transaction, (b) the TIME IPO, except to the extent that the net
proceeds thereof are distributed by TIME to the Company or ADL International,
and (c) the sale by the Company or any Subsidiary of shares of its capital stock
to employees pursuant to any Stock Plan in accordance with Section 10.9.

     "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated thereunder
from time to time in effect.

     "ERISA Affiliate" means any trade or business (whether or not incorporated)
that is treated as a single employer together with the Company under section 414
of the Code.

     "ESOP" means the Company's Employee Stock Ownership Plan and Trust.

                                 Schedule B-5
<PAGE>

     "Event of Default" is defined in Section 11.

     "Excess Cash Flow" means, for any period, total revenue (without giving
effect to extraordinary gains and losses from sales and other dispositions of
property outside the ordinary course of business or any Extraordinary Receipts
or Net Proceeds Amounts) of the Company and its Subsidiaries determined on a
consolidated basis in accordance with GAAP, for such period, minus, without
duplication,

          (a) the aggregate amount of operating expenses of the Company and its
     Subsidiaries for such period,

          (b) the aggregate amount of corporate office, general and
     administrative expenses of the Company and its Subsidiaries for such
     period,

          (c) the aggregate amount of mandatory and optional payments of
     principal and accrued interest on the Notes and the Indebtedness
     outstanding under the Credit Agreement and mandatory or regularly scheduled
     payments in respect of all other Indebtedness for borrowed money
     (including, without limitation, foreign lines of credit and foreign letters
     of credit) of the Company and its Subsidiaries made during such period,

          (d) the aggregate amount of Capital Expenditures of the Company and
     its Subsidiaries for such period,

          (e) the amount (but not less than zero) by which Consolidated Net
     Working Capital at the beginning of such period exceeds Consolidated Net
     Working Capital at the end of such period, and

          (f) the aggregate amount deducted on account of taxes in the
     computation of Consolidated Net Income for such period.

          For purposes of this definition,

               "Capital Expenditures" means expenditures (including payments
          under Capitalized Leases) made by any Person to acquire or construct
          fixed assets, plant and equipment (including, without limitation,
          renewals, improvements and replacements, but excluding repairs).

               "Consolidated Working Capital" means the excess of (a) the total
          assets of the Company and its Subsidiaries that would be shown as
          current assets on a balance sheet of the Company and its Subsidiaries
          prepared in accordance with GAAP at such time,
<PAGE>

          over (b) the total liabilities of the Company and its Subsidiaries
          that would be shown as current liabilities on such balance sheet.

     "Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time.

     "Existing Events of Default" means the Events of Default listed on Schedule
11 to this Agreement.

     "Existing Note Purchase Agreement" is defined in Section 1.

     "Existing Notes" is defined in Section 1.

     "Extraordinary Receipts" means moneys received by the Company or any
Subsidiary outside of the ordinary course of business and not consisting of
proceeds of an Equity Issuance or Asset Disposition (or a Transfer which would
constitute an Asset Disposition or Equity Issuance but for being specifically
excluded as such in the definition of Asset Disposition or Equity Issuance),
including, without limitation, Federal, state or local tax refunds (other than
tax refunds received in the ordinary course of such Person's tax planning which
are applied in full against corresponding tax liabilities of an Affiliate during
the same tax year in which such cash is received), pension plan reversions,
proceeds of insurance (including, without limitation, any key man life insurance
but excluding proceeds of business interruption insurance to the extent such
proceeds constitute compensation for lost earnings), condemnation awards (and
payments in lieu thereof), indemnity payments and any purchase price adjustment
received in connection with any purchase agreement; provided, however, that
Extraordinary Receipts shall not include cash receipts received from proceeds of
insurance, condemnation awards (or payments in lieu thereof) or indemnity
payments to the extent that such proceeds, awards or payments in respect of loss
or damage to equipment, fixed assets or real property (A) are applied (or in
respect of which expenditures were previously incurred) to replace or repair the
equipment, fixed assets or real property in respect of which such proceeds were
received in accordance with the terms of the Financing Documents, so long as
such application is made within six months after the occurrence of such damage
or loss or (B) are received by any Person in respect of any third party claim
against such Person and applied to pay (or to reimburse such Person for its
prior payment of) such claim and the costs and expenses of such Person with
respect thereto.  In no event shall Extraordinary Receipts include any amount
included within the definition of Excess Cash Flow.

     "Fair Market Value" means, at any time and with respect to any property,
the sale value of such property that would be realized in an arm's-

                                 Schedule B-7
<PAGE>

length sale at such time between an informed and willing buyer and an informed
and willing seller (neither being under a compulsion to buy or sell).

     "Financing Documents" means, collectively, this Agreement, the Notes, the
Guaranty Agreement, the Intercreditor Agreement, the Pledge Agreement, the
Security Agreement and the Additional Security Agreements.

     "Fixed Charge Coverage Ratio" means, for any period, Consolidated EBITDA
divided by the sum of (a) the expenses of the Company and its Subsidiaries for
interest accrued in respect of Indebtedness (including the current portion
thereof), (b) dividends paid by the Company and its Subsidiaries to Persons
other than the Company and its Subsidiaries and (c) rental expenses on real
property of the Company and its Subsidiaries, in each case (x) for such period
and (y) as determined in accordance with GAAP.

     "Foreign Subsidiary" means any Subsidiary that is not a Domestic
Subsidiary.

     "Funded Debt" of any Person means, without duplication (i) all Indebtedness
of such Person for borrowed money or which has been incurred in connection with
the acquisition of assets in each case having a final maturity of one or more
than one year from the date of origin thereof (or which is renewable or
extendible at the option of such Person for a period or periods more than one
year from the date of origin), including all payments in respect thereof that
are required to be made within one year from the date of any determination of
Funded Debt, whether or not the obligation to make such payments shall
constitute a current liability of such Person under GAAP; (ii) the portion of
obligations of such Person under Capital Leases that is required to be reflected
as a liability on a consolidated balance sheet of such Person in accordance with
GAAP; and (iii) Guaranties of obligations of others of the character referred to
in this definition.

     "GAAP" means generally accepted accounting principles as in effect from
time to time in the United States of America.

     "Governmental Authority" means

          (a)  the government of

               (i) the United States of America or any state or other political
          subdivision thereof, or

               (ii) any jurisdiction in which the Company or any Subsidiary
          conducts all or any part of its business, or that asserts jurisdiction
          over any properties of the Company or any Subsidiary, or

                                 Schedule B-8
<PAGE>

          (b) any entity exercising executive, legislative, judicial, regulatory
     or administrative functions of, or pertaining to, any such government.

     "Guarantors" means, at any time, each of ADL International, TIME and each
other Subsidiary that at such time is a guarantor under the Guaranty Agreement.

     "Guaranty" means, with respect to any Person, any obligation (except the
endorsement in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing any
indebtedness, dividend or other obligation of any other Person in any manner,
whether directly or indirectly, including, without limitation, obligations
incurred through an agreement, contingent or otherwise, by such Person:

          (a) to purchase such indebtedness or obligation or any property
     constituting security therefor;

          (b) to advance or supply funds (i) for the purchase or payment of such
     indebtedness or obligation, or (ii) to maintain any working capital or
     other balance sheet condition or any income statement condition of any
     other Person or otherwise to advance or make available funds for the
     purchase or payment of such indebtedness or obligation;

          (c) to lease properties or to purchase properties or services
     primarily for the purpose of assuring the owner of such indebtedness or
     obligation of the ability of any other Person to make payment of the
     indebtedness or obligation; or

          (d) otherwise to assure the owner of such indebtedness or obligation
     against loss in respect thereof.

In any computation of the indebtedness or other liabilities of the obligor under
any Guaranty, the indebtedness or other obligations that are the subject of such
Guaranty shall be assumed to be direct obligations of such obligor.

     "Guaranty Agreement" is defined in Section 4.10.

     "Hazardous Material" means any and all pollutants, toxic or hazardous
wastes or any other substances that might pose a hazard to health or safety, the
removal of which may be required or the generation, manufacture, refining,
production, processing, treatment, storage, handling, transportation, transfer,
use, disposal, release, discharge, spillage, seepage, or filtration of which is
or shall be restricted, prohibited or penalized by any applicable law
(including, without limitation, asbestos, urea formaldehyde foam insulation and
polychlorinated biphenyls).

                                 Schedule B-9
<PAGE>

     "Hess Agreement" means that certain Investment Agreement, dated as of March
30, 2000, among Amerada Hess Corporation, the Company, and EPYX.

     "holder" means, with respect to any Note, the Person in whose name such
Note is registered in the register maintained by the Company pursuant to Section
13.1.

     "Indebtedness" means, with respect to any Person, without duplication,

          (a) its liabilities for borrowed money and its redemption obligations
     in respect of mandatorily redeemable Preferred Stock (other than the
     Company's Series A Participating Non-Voting Preferred Stock);

          (b) its liabilities for the deferred purchase price of property
     acquired by such Person (other than (i) any obligations in connection with
     any deferred compensation plan for employees of such Person and (ii) any
     trade payable that is (x) in an amount of $10,000 or less or (y) not
     overdue by more than 60 days, in all cases arising in the ordinary course
     of business, but including all liabilities created or arising under any
     conditional sale or other title retention agreement with respect to any
     such property);

          (c) all liabilities appearing on its balance sheet in accordance with
     GAAP in respect of Capital Leases;

          (d) all liabilities for borrowed money secured by any Lien with
     respect to any property owned by such Person (whether or not it has assumed
     or otherwise become liable for such liabilities);

          (e) the face amount of all letters of credit issued for the account of
     such Person and all of such Person's reimbursement obligations with respect
     to letters of credit which have been paid;

          (f) all liabilities in respect of interest rate swap, cap or collar
     agreements, interest rate future or option contracts, currency swap
     agreements, currency future or option contracts and other similar
     agreements; and

          (g) any Guaranty of such Person with respect to liabilities of a type
     described in any of clauses (a) through (f) hereof.

Without limitation of the foregoing, Indebtedness of any Person shall (1)
include all obligations of such Person of the character described in clauses (a)
through (g) to the extent such Person remains legally liable in respect thereof
notwithstanding that any such obligation is deemed to be extinguished under

                                 Schedule B-10
<PAGE>

GAAP, and (2) exclude any reimbursement obligations with respect to any undrawn
letter of credit.

     "Indemnified Party" is defined in Section 21.3.

     "Institutional Investor" means (a) any original purchaser of a Note, and
(b) any United States or Canadian bank, trust company, savings and loan
association or other financial institution, any United States or Canadian
pension plan, any United States or Canadian investment company, any United
States or Canadian insurance company, any United States or Canadian broker or
dealer, or any other similar United States or Canadian financial institution or
entity, regardless of legal form.

     "Intercreditor Agreement" is defined in Section 4.7.

     "Investment" means any investment, made in cash or by delivery of property,
by the Company or any Subsidiary (x) in any Person, whether by acquisition of
stock, indebtedness or other obligation or security, or by loan, Guaranty,
advance or capital contribution, or otherwise, or (y) in any property.

     "Lien" means any interest in property securing an obligation owed to, or a
claim by, a Person other than the owner of the property, whether such interest
is based on the common law, statute or contract, and including but not limited
to the security interest lien arising from a mortgage, encumbrance, pledge,
conditional sale or trust receipt or a lease, consignment or bailment for
security purposes.  The term "Lien" shall include reservations, exceptions,
encroachments, easements, rights-of-way, covenants, conditions, restrictions,
leases and other title exceptions and encumbrances (including, with respect to
stock, stockholder agreements, voting trust agreements, buy-back agreements and
all similar arrangements) affecting property.  For the purposes hereunder, the
Company or a Subsidiary shall be deemed to be the owner of any property which it
has acquired or holds subject to a conditional sale agreement, Capital Lease or
other arrangement pursuant to which title to the property has been retained by
or vested in some other Person for security purposes an such retention or
vesting shall constitute a Lien.

     "Make-Whole Amount" is defined in Section 8.7.

     "Material" means material in relation to the business, operations, affairs,
financial condition, assets, properties, or prospects of the Company and its
Subsidiaries taken as a whole.

     "Material Adverse Effect" means a material adverse effect on (a) the
business, operations, affairs, financial condition, assets or properties of the
Company and its Subsidiaries taken as a whole, or (b) the ability of any Obligor

                                 Schedule B-11
<PAGE>

to perform its obligations under the Financing Documents to which it is a party,
or (c) the validity or enforceability of any of the Financing Documents.

     "Material Subsidiary" means, at any time, a Domestic Subsidiary that either

          (a) has assets with a book value equal to 5% or more of total assets
     of the Company and its Subsidiaries determined on a consolidated basis in
     accordance with GAAP as of the end of the most recently ended fiscal
     quarter of the Company, or

          (b) had revenues for the then most recently ended fiscal quarter of
     the Company equal to 5% or more of total consolidated revenues of the
     Company and its Subsidiaries for such fiscal quarter.

     "Memorial Drive Trust" means the Arthur D. Little, Inc. Employees' Memorial
Drive Trust Retirement Plan.

     "Multiemployer Plan" means any Plan that is a "multiemployer plan" (as such
term is defined in section 4001(a)(3) of ERISA).

     "Net Cash Proceeds" means, with respect to any sale of any capital stock or
any warrants, rights or options to acquire capital stock or other ownership or
profit interests by any Person (other than any stock of the Company or any
Subsidiary issued pursuant to any Stock Plan), the aggregate amount of cash
received from time to time by or on behalf of such Person (other than amounts
received from an Affiliate or participant in the ESOP or other Stock Plan) in
connection with such transaction after deducting therefrom (without duplication)
(a) reasonable and customary brokerage commissions, underwriting fees and
discounts, legal fees, finder's fees and other similar fees and commissions and
(b) the amount of taxes payable in connection with or as a result of such
transaction in each case to the extent, but only to the extent, that the amounts
so deducted are, at the time of receipt of such cash, actually paid to a Person
that is not an Affiliate and are properly attributable to such transaction or to
the asset that is the subject thereof.

     "Net Proceeds Amount" means, with respect to any Transfer of any property
by any Person, an amount equal to the difference of:

          (a) the aggregate amount of the consideration (valued at the Fair
     Market Value of such consideration at the time of the consummation of such
     Transfer) received by such Person in respect of such Transfer, minus

                                 Schedule B-12
<PAGE>

          (b) all ordinary and reasonable out-of-pocket costs and expenses
     actually incurred by such Person in connection with such Transfer, minus

          (c) the amount of taxes reasonably expected by the Company to be
     payable within two years of such Transfer in connection with any gain with
     respect to such Transfer.

     "Note Interest Rate" is defined in Section 2.3(b).

     "Noteholder Portion" means, at any time, 54.69%.

     "Noteholders" is defined in Section 1.

     "Notes" is defined in Section 2.1(a).

     "Obligors" means, at any time, the Company and each Subsidiary that at such
time is a party to one or more of the Financing Documents, together with their
respective successors and assigns.

     "Officer's Certificate" means a certificate of a Senior Financial Officer
or of any other officer of the Company whose responsibilities extend to the
subject matter of such certificate.

     "PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor thereto.

     "Permitted Investments" means each of the following Investments:

          (a) Investments by the Company or any Subsidiary in any Wholly-Owned
     Subsidiary;

          (b) loans and advances made in the ordinary course of business to
     employees of the Company or any Subsidiary in an aggregate principal amount
     not exceeding $5,000,000 at any time;

          (c) Investments existing on the date hereof and described in Schedule
     10.8;

          (d) Investments in any of the following, to the extent owned by the
     Company or any Subsidiary free and clear of all Liens and having a maturity
     of not greater than 360 days from the date of acquisition thereof (except
     that any of the Investments described below held by Acorn Insurance
     Company, Ltd. may have a maturity not greater than 30 years):

                                 Schedule B-13
<PAGE>

               (i)   readily marketable direct obligations of the Government of
          the United States or any agency or instrumentality thereof or
          obligations unconditionally guaranteed by the full faith and credit of
          the Government of the United States;

               (ii)  insured certificates of deposit or time deposits with any
          commercial bank that (A) is one of the Banks or is a member of the
          Federal Reserve System, (B) is organized under the laws of the United
          States or any state thereof, (C) has a combined capital and surplus of
          at least $1,000,000,000, and (D) issues (or the parent of which
          issues) commercial paper with a rating not less than the rating
          described in clause (iv);

               (iii) time deposits with any foreign commercial bank; and

               (iv)  commercial paper in an aggregate amount of no more than
          $2,000,000 per issuer outstanding at any time, issued by any
          corporation organized under the laws of the United States or any state
          thereof and rated at least "Prime-1" (or the then equivalent grade) by
          Moody's Investors Service, Inc. or "A-1" (or the then equivalent
          grade) by Standard & Poor's Ratings Group, a division of McGraw-Hill,
          Inc.;

          (e) Investments consisting of intercompany Indebtedness permitted
     under Section 10.4(j);

          (f) Investment of the Net Cash Proceeds of the EPYX Transaction made
     in accordance with Section 9.8;

          (g) non-cash loans to employees of the Company or any Subsidiary for
     the purchase, in whole or in part, of shares of capital stock of the
     Company or such Subsidiary issued and sold to such employees pursuant to
     any Stock Plan and in accordance with Section 10.9; and

          (h) other Investments not permitted by clauses (a) through (g) above,
     provided that the aggregate amount of such Investments made in any fiscal
     year of the Company does not exceed 5% of total assets of the Company and
     its Subsidiaries determined on a consolidated basis in accordance with
     GAAP.

     "Person" means an individual, partnership, corporation, limited liability
company, association, trust, unincorporated organization, or a government or
agency or political subdivision thereof.

                                 Schedule B-14
<PAGE>

     "Plan" means an "employee benefit plan" (as defined in section 3(3) of
ERISA) that is or, within the preceding five years, has been established or
maintained, or to which contributions are or, within the preceding five years,
have been made or required to be made, by the Company or any ERISA Affiliate or
with respect to which the Company or any ERISA Affiliate may have any liability.

     "Pledge Agreement" is defined in Section 4.8.

     "Pledging Subsidiaries" means each of ADL International, Arthur D. Little
Enterprises, Inc., a Massachusetts corporation, and Arthur D. Little India,
Inc., a Massachusetts corporation, together with their respective successors and
assigns.

     "Preferred Stock" means any class of capital stock of a Person that is
preferred over any other class of capital stock of such Person as to the payment
of dividends or other equity distributions or the payment of any amount upon
liquidation or dissolution of such Person.

     "Property or properties" means, unless otherwise specifically limited, real
or personal property of any kind, tangible or intangible, choate or inchoate.

     "Required Holders" means, at any time, the holder or holders of at least
60% in principal amount of the Notes at the time outstanding (exclusive of Notes
then owned by the Company or any of its Affiliates).

     "Responsible Officer" means any Senior Financial Officer and any other
officer of the Company with responsibility for the administration of the
relevant portion of this Agreement.

     "Securities Act" means the Securities Act of 1933, as amended from time to
time.

     "Security Agreement" is defined in Section 4.9.

     "Senior Financial Officer" means the chief financial officer, principal
accounting officer, treasurer or comptroller of the Company.

     "Stock Collateral" means the shares of capital stock of each Subsidiary
purported to be pledged to the Collateral Agent pursuant to the Pledge
Agreement.

     "Stock Plan" means each of the Senior Staff Stock Purchase Plan, the Stock
Incentive Plan, the International Stock Purchase Plan, the Directors Stock Plan,
the Trust Under Compensation Plan for Directors, the Trust Under Excess
Contribution Plan, the Stock Award Plan, the IA Stock Acquisition Plan,

                                 Schedule B-15
<PAGE>

the 1996 Dividend Reinvestment Plan, the CSC Stock Acquisition Plan, the Stock-
Based Deferred Plan for Incentive Compensation, the Senior Staff Tax-Deferred
Stock Retention Plan, the Stock-Based Deferred Plan for Incentive Compensation-
U.K., the Stock-Based Deferred Plan for Incentive Compensation-Spain, the
Employee Stock Account Trust-Sweden, the Employee Stock Fund-Brazil, the
Employee Stock Ownership Plan-Sweden, the ESOP, the Memorial Drive Trust, the
Deferred Compensation Plan for Selected Staff, the Employee Stock Ownership Plan
Equivalent, the Stock-Based Deferred Compensation Plan 1, the Stock-Based
Deferred Compensation Plan 3, the Stock-Based Deferred Compensation Plan 4, the
Stock-Based Plan for Incentive Compensation - Germany, the Stock-Based Latin
America Plan, the Stock Ownership Program, the Stock Retention Plan - Jersey,
and the Stock Retention Purchase Plan, in each case as in effect on the date
hereof, or as the same may be amended from time to time, provided that such
amendment (A) does not substantially alter the form or effect of such plan and
(B) does not cause a material increase in the liability or other obligations of
the Company and its Subsidiaries taken as a whole, and (ii) any other stock plan
that may be sponsored and/or maintained by the Company or any of its
Subsidiaries that does not materially increase the liability or other
obligations of the Company and its Subsidiaries taken as a whole.

     "Subsidiary" means, as to any Person, any corporation, association or other
business entity in which such Person or one or more of its Subsidiaries or such
Person and one or more of its Subsidiaries owns sufficient equity or voting
interests to enable it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons performing
similar functions) of such entity, and any partnership or joint venture if more
than a 50% interest in the profits or capital thereof is owned by such Person or
one or more of its Subsidiaries or such Person and one or more of its
Subsidiaries (unless such partnership or joint venture can and does ordinarily
take major business actions without the prior approval of such Person or one or
more of its Subsidiaries).  Unless the context otherwise clearly requires, any
reference to a "Subsidiary" is a reference to a Subsidiary of the Company.

     "TIME" means c-quential, Inc., a Delaware corporation.

     "TIME IPO" means the sale by TIME of shares of its common stock
constituting not less than 8% of the Equity Interests of TIME pursuant to an
initial public offering.

     "Transfer" means, with respect to any Person, any transaction in which such
Person sells, conveys, transfers (in each case, other than for security) or
leases (as lessor) any of its property.

                                 Schedule B-16
<PAGE>

     "Voting Stock" means securities of any class or classes, the holders of
which are ordinarily, in the absence of contingencies, entitled to elect a
majority of the corporate directors (or Persons performing similar functions).

     "Wholly-Owned Subsidiary" means, at any time, any Subsidiary 100% of all of
the equity interests (except directors' qualifying shares) and voting interests
of which are owned by any one or more of the Company and the Company's other
Wholly-Owned Subsidiaries at such time.

                                 Schedule B-17

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