Document:

Exhibit
10.12

 

FOURTH AMENDMENT

 

FOURTH AMENDMENT, dated
as of July 13, 2004 (this “Fourth Amendment”), to the Note Purchase
Agreement, dated as of April 30, 2001 (as amended, supplemented or
otherwise modified prior to the date hereof, the “Existing Note Agreement”;
as modified hereby and as further amended, supplemented or otherwise modified
from time to time, the “Note Agreement”), by and among ADVANTAGE
MANAGEMENT GROUP, INC., an Ohio corporation (“AMG”), and KENAN TRANSPORT
COMPANY, a North Carolina corporation (“Kenan” and together with AMG
collectively, the “Company”), THE KENAN ADVANTAGE GROUP, INC., a
Delaware corporation (the “Parent”), RSTW PARTNERS III, L.P., a Delaware
limited partnership (“RSTW”), MASSACHUSETTS
MUTUAL LIFE INSURANCE COMPANY, a mutual life insurance company
established under the laws of the Commonwealth of Massachusetts (“MMLI”),
MASSMUTUAL CORPORATE INVESTORS,
a Massachusetts business trust (“MCI”), and MASSMUTUAL PARTICIPATION INVESTORS, a Massachusetts business trust
(“MPI”).  MMLI, MCI and MPI are
hereinafter referred to, collectively, as the “MassMutual Investors”.
RSTW and the MassMutual Investors are collectively referred to herein as the “Purchasers”.  Capitalized terms used but not otherwise
defined herein shall have the meanings assigned thereto by the Existing Note
Agreement.

 

RECITALS

 

The Company and
the Parent have requested the Purchasers to agree to amend the Existing Note
Agreement to modify certain of the financial covenants and certain other terms
contained therein.

 

The Purchasers are
willing to agree to such amendments, but only on the terms and subject to the
conditions set forth in this Fourth Amendment.

 

NOW, THEREFORE, in
consideration of the premises and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Company, the
Parent and the Purchasers hereby agree as follows:

 

1.                                       Amendments.

 

(a)                                  Section 2.3(b)
of the Existing Note Agreement is hereby amended by deleting the words
“$250,000” and inserting in lieu thereof “$1,000,000”.

 

(b)                                 Section 6.1(a)
of the Existing Note Agreement is hereby amended by deleting
Section 6.1(a) in its entirety and inserting in lieu thereof the following
new Section 6.1(a):

 

“(a)                            As
soon as available, and in any event within one hundred twenty (120) days after
the end of each Fiscal Year of the Company, beginning with the Fiscal Year
ending December 31, 2001, (i) a copy of the financial statements of the
Credit Parties for such Fiscal Year containing a consolidated balance sheet,
statement of income, statement of stockholders’ equity, and statement of cash
flows, each as at the end of such Fiscal Year and for the Fiscal Year then
ended and in each case setting forth in comparative form the figures for the
preceding

 

 

Fiscal Year, along with management’s discussion and analysis of
variances, all in reasonable detail and audited and certified, in the case of
the consolidated financial statements of Parent, Ernst & Young LLP, or
another firm of independent certified public accountants of recognized national
standing selected by the Parent and consented to by Purchasers, such consent
not to be unreasonably withheld; and (ii) a comparison of the actual results
during such Fiscal Year to those originally budgeted by the Parent prior to the
beginning of such Fiscal Year (or in respect of the Fiscal Year ended
December 31, 2001, the projections for such year provided to the
Purchasers on the Closing Date) and a narrative description and explanation of
any budget variances.  The annual audit
report required by this Agreement will not be qualified by or make reference to
any disclosure that any Credit Party may not continue as a going concern or
otherwise be qualified or limited because of restricted or limited examination
by the accountant of any portion of any of the records of any Credit Party.”

 

(c)                                  Section 6.2(a)
of the Existing Note Agreement is hereby amended by deleting
Section 6.2(a) in its entirety and inserting in lieu thereof the following
new Section 6.2(a):

 

“(a)                            Concurrently
with the delivery of each of the financial statements referred to in Section 6.1(a)
and Section 6.1(b), a certificate of an authorized officer of the
Company in the form of the officer’s certificate attached hereto as Exhibit
C (i) stating that no Potential Default or Event of Default has
occurred and is continuing or, if such officer has Knowledge of a Potential
Default or Event of Default, the nature thereof and specifying the steps taken
or proposed to remedy such matter, (ii) in the case of the financial
statements for the period ended March, June, September and
December of each year, showing in reasonable detail the calculations
showing compliance with Sections 6.23 and 7.11,
(iii) stating that the financial statements attached have been prepared in
accordance with GAAP (except that the unaudited financial statements do not
include footnotes) and fairly present in all material respects (subject to
year-end audit adjustments, for the monthly certificates) the consolidated
financial condition and results of operations of the Credit Parties at the date
and for the period indicated therein, (iv) containing summaries of accounts
receivable agings, (v) (A) containing a schedule of the outstanding
Indebtedness for borrowed money of the Credit Parties, and (B) making a
statement in respect of each thereof similar to the statement required in
clause (a)(i) above, (vi) containing a narrative report of the business
and affairs of the Credit Parties which includes, but is not limited to, a
discussion of the results of operations compared to those originally budgeted
for such period, (vii) a report detailing (A) all matters materially
affecting the value, enforceability or collectibility of any portion of its or
any Subsidiary’s assets exceeding $500,000, with respect to any single matter,
or $1,000,000 in the aggregate, including, without limitation, any Credit
Party’s reclamation or repossession of, or the return to any Credit Party of, a
material amount of goods and material claims or disputes asserted by any
customer or other obligor of which any Credit Party has become aware and were
not disclosed to Purchasers on prior certificates delivered to Purchasers
pursuant to this

 

2

 

Section 6.2(a), and (B) any material adverse
change in the relationship between any Credit Party and any of its material
suppliers or customers and (viii) identifying any Permitted Acquisitions that
have been consummated since the end of the previous fiscal year, including the
date on which each such Permitted Acquisition was consummated and the
consideration therefor.”

 

(d)                                 Section 6.23
of the Existing Note Agreement is hereby amended by deleting Section 6.23
in its entirety and inserting in lieu thereof the following new
Section 6.23:

 

“(a)  Maximum
Total Leverage Ratio.  The Parent
will not permit the Total Leverage Ratio of the Parent and its Subsidiaries, as
of each test date set forth in the table below, to be greater than the Total
Leverage Ratio set forth in the table below opposite such test date:

 

	
  Test Date

  	
   

  	
  Leverage
  Ratio

  	
   

  
	
  September 30,
  2004

  	
   

  	
  4.95 to 1.00

  	
   

  
	
  December 31,
  2004

  	
   

  	
  4.95 to 1.00

  	
   

  
	
  March 31,
  2005

  	
   

  	
  4.95 to 1.00

  	
   

  
	
  June 30,
  2005

  	
   

  	
  4.95 to 1.00

  	
   

  
	
  September 30,
  2005

  	
   

  	
  4.68 to 1.00

  	
   

  
	
  December 31,
  2005

  	
   

  	
  4.68 to 1.00

  	
   

  
	
  March 31,
  2006

  	
   

  	
  4.68 to 1.00

  	
   

  
	
  June 30,
  2006

  	
   

  	
  4.40 to 1.00

  	
   

  
	
  September 30,
  2006

  	
   

  	
  4.40 to 1.00

  	
   

  
	
  December 31,
  2006

  	
   

  	
  4.40 to 1.00

  	
   

  
	
  March 31,
  2007

  	
   

  	
  4.40 to 1.00

  	
   

  
	
  June 30,
  2007

  	
   

  	
  4.13 to 1.00

  	
   

  
	
  September 30,
  2007

  	
   

  	
  4.13 to 1.00

  	
   

  
	
  December 31,
  2007

  	
   

  	
  4.13 to 1.00

  	
   

  
	
  March 31,
  2008

  	
   

  	
  4.13 to 1.00

  	
   

  
	
  June 30,
  2008

  	
   

  	
  3.85 to 1.00

  	
   

  
	
  September 30,
  2008

  	
   

  	
  3.85 to 1.00

  	
   

  
	
  December 31,
  2008

  	
   

  	
  3.85 to 1.00

  	
   

  
	
  the
  last day of each fiscal quarter of the Parent thereafter

  	
   

  	
  3.58 to 1.00

  	
   

  

 

(b)                                 Maximum
Senior Leverage Ratio.  The Parent
will not permit the Senior Leverage Ratio of the Parent and its Subsidiaries,
as of each test date set forth in the table below, to be greater than the
Senior Leverage Ratio set forth in the table below opposite such test date:

 

3

 

	
  Test Date

  	
   

  	
  Senior
  Leverage

  Ratio

  	
   

  
	
  September 30,
  2004

  	
   

  	
  4.13 to 1.00

  	
   

  
	
  December 31,
  2004

  	
   

  	
  4.13 to 1.00

  	
   

  
	
  March 31,
  2005

  	
   

  	
  4.13 to 1.00

  	
   

  
	
  June 30,
  2005

  	
   

  	
  4.13 to 1.00

  	
   

  
	
  September 30,
  2005

  	
   

  	
  3.85 to 1.00

  	
   

  
	
  December 31,
  2005

  	
   

  	
  3.85 to 1.00

  	
   

  
	
  March 31,
  2006

  	
   

  	
  3.85 to 1.00

  	
   

  
	
  June 30,
  2006

  	
   

  	
  3.58 to 1.00

  	
   

  
	
  September 30,
  2006

  	
   

  	
  3.58 to 1.00

  	
   

  
	
  December 31,
  2006

  	
   

  	
  3.58 to 1.00

  	
   

  
	
  March 31,
  2007

  	
   

  	
  3.58 to 1.00

  	
   

  
	
  June 30,
  2007

  	
   

  	
  3.30 to 1.00

  	
   

  
	
  September 30,
  2007

  	
   

  	
  3.30 to 1.00

  	
   

  
	
  December 31,
  2007

  	
   

  	
  3.30 to 1.00

  	
   

  
	
  March 31,
  2008

  	
   

  	
  3.30 to 1.00

  	
   

  
	
  June 30,
  2008

  	
   

  	
  3.03 to 1.00

  	
   

  
	
  September 30,
  2008

  	
   

  	
  3.03 to 1.00

  	
   

  
	
  December 31,
  2008

  	
   

  	
  3.03 to 1.00

  	
   

  
	
  The
  last day of each fiscal quarter of the Parent and its Subsidiaries thereafter

  	
   

  	
  2.75 to 1.00

  	
   

  

 

(c)                                  Minimum
Fixed Charge Coverage.  The Parent
will not permit the Fixed Charge Coverage Ratio for any period of four
consecutive fiscal quarters of the Parent and its Subsidiaries, commencing such
period of consecutive fiscal quarters ended December 31, 2004, to be less
than 1.00 to 1.00.”

 

(e)                                  Section 7.8
of the Existing Note Agreement is hereby amended by deleting the words
“June 30, 2008” and inserting in lieu thereof “September 30, 2010”.

 

(f)                                    Section 7.3
of the Existing Note Agreement is hereby amended by deleting Section 7.3
in its entirety and inserting in lieu thereof the following new
Section 7.3:

 

“7.3                           Merger,
Acquisition, Dissolution and Sale of Assets.  Except for the B-K Acquisitions and any Permitted Acquisition,
the Company shall not, and shall not permit any other Credit Party to, become a
party to a merger or consolidation, or purchase or otherwise acquire all or a
substantial part of the assets of any Person or any shares or other evidence of
beneficial ownership of any Person, or dissolve or liquidate; provided,
however, that the Company and the other Credit Parties may acquire private
fleets, and a hauling contract from the seller as long as (i) the Credit
Parties do not assume any liabilities other than in respect of the equipment purchased,
liabilities in respect of any hauling contract entered into and compensation
liability after the closing of the purchase for

 

4

 

drivers hired from
the seller, (ii) the purchase price for such assets will be treated as Capital
Expenditures for purposes of this Agreement (including Section 7.11)
and (iii) the Credit Parties will not, as a result of such acquisition be in
violation of Section 7.11. 
The Company shall not, and shall not permit any other Credit Party to,
form, acquire or permit the existence of any Subsidiary or Subsidiaries of the
Company, AMHC or the Parent (other than (x) those in existence on the date of
this Agreement, (y) KAG Logistics, Inc. or (z) those formed in connection with
the B-K Acquisitions or a Permitted Acquisition) unless (i) the Company gives
prior written notice thereof to the Holders, and (ii) the investments in or
debts incurred or liabilities assumed by the Company, AMHC or the Parent on
behalf of such Subsidiary or Subsidiaries (A) do not exceed $500,000 per year
in the aggregate and (B) do not exceed $1,500,000, from and after the Closing
Date in the aggregate.  The Company
shall not, and shall not permit any other Credit Party to, without Purchasers’
prior written consent, pledge, sell (except inventory in the ordinary course of
business and other assets reasonably and in good faith determined by the Credit
Parties to be obsolete or no longer necessary to the business of the Credit
Parties) assign, transfer, create or suffer to exist a Lien (except for
Permitted Liens) upon any of the assets of any Credit Party.”

 

(g)                                 Section 7.4
of the Existing Note Agreement is hereby amended by deleting the words
“$200,000” and inserting in lieu thereof “$750,000”.

 

(h)                                 Section 7.5
of the Existing Note Agreement is hereby amended by deleting the words “One
Hundred Thousand Dollars ($100,000)” and inserting in lieu thereof
“$1,000,000”.

 

(i)                                     Section 7.11
of the Existing Note Agreement is hereby amended by deleting Section 7.11
in its entirety and inserting in lieu thereof the following new
Section 7.11:

 

“The Parent will not, and shall not permit any other Credit Party to,
make or commit to make (by way of the acquisition of securities of a Person or
otherwise) any Capital Expenditure (excluding any Capital Expenditure in
respect of an asset acquired in connection with normal replacement and
maintenance programs properly charged to current operations, and excluding, to
the extent the same would be deemed to be Capital Expenditures, any Permitted
Acquisitions) except for expenditures in the ordinary course of business not
exceeding $30,000,000, in the aggregate for the Parent and its Subsidiaries
during any fiscal year.”

 

(j)                                     Section 8.1(b)
of the Existing Note Agreement is hereby amended by deleting the words
“$500,000” and inserting in lieu thereof “$1,000,000”.

 

(k)                                  Section 8.1(e)
of the Existing Note Agreement is hereby amended by deleting the words
“$500,000” and inserting in lieu thereof “$1,000,000”.

 

5

 

(l)                                     Section 8.1(h)
of the Existing Note Agreement is hereby amended by deleting the words
“$500,000 individually, or $500,000 in the aggregate” and inserting in lieu
thereof “$2,000,000 individually, or $2,000,000 in the aggregate”.

 

(m)                               Section 11.1
of the Existing Note Agreement is hereby amended by adding the following new
definitions thereto in the appropriate alphabetical order:

 

““Acquired Business” means with respect to
any Permitted Acquisition, the Person, business unit, division or subdivision
the assets of which are so acquired or, in the case of a Domestic Person, 100%
of the Capital Stock of which is so acquired.

 

“Acquisition Closing Date” means in respect of any Permitted
Acquisition, the date on which all of the conditions precedent to the
consummation of the Permitted Acquisition pursuant to the applicable Permitted
Acquisition Documents and the Agreement and the Other Agreements shall have
been satisfied and such Permitted Acquisition shall have been consummated.

 

“Adjusted EBITDA” means for any period, the Consolidated EBITDA
for such period plus, if and to the extent the Company or any Subsidiary has
consummated any Permitted Acquisition during such period, the Consolidated
EBITDA of any Acquired Business for such period in respect of such Permitted
Acquisition (substituting such Acquired Business for the Parent and its
Subsidiaries for the purposes of calculating such Consolidated EBITDA),
calculated on a pro forma basis without duplication, as if such
Permitted Acquisition had occurred on the first day of such period.

 

“Consolidated Net Debt” means Consolidated Funded Debt minus
the amount of cash on the Company’s consolidated balance sheet in excess of
$2,000,000.

 

“Domestic Person” means with respect to any natural Person, any
such Person domiciled in the United States, and with respect to any nonnatural
Person any such Person organized under the laws of the United States of
America, any State thereof or the District of Columbia.

 

“Fixed Charge Coverage Ratio” means, at any time, the ratio of
Consolidated EBITDA at such time less Maintenance Capital Expenditures at such
time to Consolidated Fixed Charges for the most recently ended four consecutive
fiscal quarters.

 

“Maintenance Capital Expenditures” means any Capital Expenditures
by any Person that are made to maintain, restore, replace or refurbish the
condition or usefulness of Property of such Person, or otherwise to support the
continuation of such Person’s day-to-day operations as then conducted, but that
are not properly chargeable to repairs and maintenance in accordance with GAAP.

 

6

 

“Permitted Acquisition” means an acquisition of (a) 100% of the
common stock or other ownership interests of a Domestic Person (by means of
stock purchase or merger) or (b) all or substantially all of the assets of a
Person engaged in or relating to a line of business substantially similar to
the line of business engaged in by the Company on the Closing Date; provided
that (i) the Company has $5,000,000 of
liquidity under the Revolving Credit Loan on a pro  forma basis
after giving effect to such acquisition, (ii) the Company demonstrated on a pro
forma basis, after giving effect to such acquisition, that their current
Total Leverage Ratio is at least (x) 0.15 below the Total Leverage Ratio
requirement in Section 9.1(a) of the Senior Loan Agreement for the
applicable period and (y) in the case of any acquisition or series of related
acquisitions with aggregate consideration equal to or greater than $20,000,000,
equal to or less than their Total Leverage Ratio immediately prior to such
acquisition, (iii) the Company demonstrated that the business to be acquired
has positive pro  forma Consolidated EBITDA for the most recent
twelve month period then ended, (iv) the Company has delivered copies of the
most recent audited financial statements or, if no such audited financial
statements shall be reasonably available, financial statements reasonably
acceptable to the Purchasers, together with any other information that
Purchasers may reasonably request, (v) no Potential Default or Event of Default
shall have occurred or be continuing both before and after giving effect to the
acquisition, (vi) the total consideration, together with all costs and expenses
paid in connection therewith, of any single acquisition shall not exceed
$25,000,000 and the aggregate of all acquisitions consummated after the Closing
Date shall not exceed $25,000,000, (vii) no later than ten (10)
Business Days prior to the consummation of such acquisition, the Purchasers
shall have received a certificate of a Responsible Officer with detailed
calculations establishing to the reasonable satisfaction of the Purchasers that
the foregoing requirements have been satisfied, and (viii) each of the
conditions set forth on Schedule 10 hereto have been satisfied.

 

“Permitted Acquisition Documents” means with respect to any
Permitted Acquisition, the stock purchase agreement, asset purchase agreement,
agreement and plan of merger, or similar agreement regarding such Permitted
Acquisition, and all other agreements, instruments and documents delivered in
connection with the consummation thereof (including, without limitation, any
equity financing documents related thereto).

 

“Responsible Officer” means as to any Person, the chief
executive officer and the president of such Person or, with respect to
financial matters, the chief financial officer of such Person.  Unless otherwise specified, “Responsible
Officer” refers to a Responsible Officer of the Company.

 

“Senior Leverage Ratio” means, at any time, the ratio of
Consolidated Senior Indebtedness at such time to Adjusted EBITDA for the most
recently ended four consecutive fiscal quarters.

 

7

 

“Total Leverage Ratio” means, at any time, the ratio of
Consolidated Net Debt at such time to Adjusted EBITDA for the most recently
ended four consecutive fiscal quarters.”

 

(n)                                 Section 11.1
of the Existing Note Agreement is hereby amended by deleting the following
definitions in their entirety and substituting in lieu thereof new definitions
to read as follows:

 

““Change of
Control” means (a) AMGI shall cease to own and control, beneficially and of
record, 100% of the issued and outstanding shares of capital stock of Geni
Management Corporation (unless Geni Management Corporation is dissolved prior
to December 31, 2004), McDaniel, NCT or ATL, free and clear of all Liens
other than Permitted Liens and Geni Management Corporation shall cease to own
and control, beneficially and of record, 100% of the issued and outstanding
shares of capital stock of Geni Transport, Inc. (unless Geni Management
Corporation and Geni Transport, Inc. are dissolved prior to December 31,
2004), free and clear of all Liens other than Permitted Liens; (b) AMHC shall
cease to own and control, beneficially and of record, 100% of the issued and
outstanding shares of capital stock of AMGI (c) the Parent shall cease to own
and control, beneficially and of record, 100% of the issued and outstanding
shares of capital stock of AMHC and Kenan, free and clear of all Liens other
than Permitted Liens; (d) Kenan shall cease to own and control, beneficially
and of record, 100% of the issued and outstanding shares of Capital Stock of
PCT, free and clear of all Liens other than Permitted Liens, (e) any sale or
other disposition of all or substantially all of the consolidated assets of the
Company in a single transaction or series of related transactions; (f) (i)
prior to the consummation of an Initial Public Offering, Persons holding
capital stock of the Parent as of July 13, 2004 and their Permitted
Transferees (as such term is defined in the Stockholders’ Agreement in effect
on the date hereof), determined on a fully diluted basis, shall cease to own at
least 51% of all shares of Capital Stock of the Parent or Sterling and/or RFE
shall cease to have the power to appoint a majority of the Parent’s Board of
Directors or (ii) after the consummation of an Initial Public Offering,
any Person or two or more Persons acting in concert (other than Sterling and
RFE) shall have acquired beneficial ownership, directly or indirectly, or shall
have acquired by contract or otherwise, or shall have entered into a contract
or arrangement that, upon consummation, will, directly or indirectly, result in
its or their acquisition of control over, voting Capital Stock of Parent (or
other securities convertible into such voting Capital Stock) representing 25%
or more of the combined voting power of all voting Capital Stock of Parent, and
such Person or Persons acting in concert have beneficial ownership of more voting
Capital Stock of Parent than Sterling, RFE and their Affiliates; (g) the
acquisition by any Person, or two or more Persons acting in concert (other than
the Persons described in clause (f) above), of beneficial ownership (within the
meaning of Rule 13d-3 of the Securities and Exchange Commission under the
Securities Exchange Act of 1934) of 40% or more of the outstanding shares of
capital stock of the Parent; (h) Sterling ceases to be represented on the Board
of Directors of the Parent; (i) more than two of the Sterling Principals shall
(other

 

8

 

than by reason of death
or disability) cease to have (together with the other Sterling Principals) the
right or ability by voting power, contract or otherwise to direct or cause the
direction of the management and policies of Sterling; or (j) more than two of
the Sterling Principals shall (other than by reason of death or disability)
cease to be managing members of the sole general partner of Sterling; provided,
that, for purposes of clauses (a), (b), (c) or (d) above, a merger or
consolidation of the Company into, or with, any of its Subsidiaries, or any
Subsidiary with or into any other Subsidiary or the merger or consolidation of
AMHC into or with Parent or AMGI, shall not be deemed a “Change of Control”.

 

“Consolidated
Current Assets” means, at a particular date, all amounts which would, in
conformity with GAAP, be included under current assets on a consolidated
balance sheet of the Credit Parties as at such date; provided, however,
that such amounts shall not include (a) any amounts for any Indebtedness
owing by an Affiliate of the Parent, unless such Indebtedness arose in connection
with the sale of goods or other property in the ordinary course of business and
would otherwise constitute current assets in conformity with GAAP, or
(b) any shares of stock issued by an Affiliate of the Parent.

 

“Consolidated
EBITDA” means for any period, the sum for such period of
(a) Consolidated Net Income for such period, (b) the sum of
provisions for such period for income taxes, interest expense, and depreciation
and amortization expense used in determining such Consolidated Net Income,
(c) amounts deducted in such period in respect of non-cash expenses in
accordance with GAAP, (d) the amount of any aggregate net loss (or minus
the amount of any gain) during such period arising from the sale, exchange or
other disposition of capital assets, (e) non-cash expenses deducted in
such period in connection with any earn-out agreements, stock appreciation
rights, “phantom” stock plans, employment agreements, non-competition
agreements, subscription and stockholders agreements and incentive stock option
plans made in connection with acquisitions of Persons or businesses by any
Credit Party or the retention of executives, officers or employees by any
Credit Party, including (but without duplication) any Person that has become a
Subsidiary during such period, on a pro forma basis as if such acquisition had
occurred on the first day of such period, and (f) any stay bonuses, severance
and lease continuations and any other cash expenses associated with closing
facilities or operations, in an aggregate amount for all such items referred to
in this clause (f) not to exceed $1,000,000; provided, that Consolidated EBITDA
shall in any event exclude, from and after July 13, 2004, (i) the
effect of any write-up of any assets acquired in any Permitted Acquisition, and
(ii) the amount of any non-cash income recognized during any period for which
Consolidated EBITDA is determined.

 

“Consolidated
Funded Debt” means at any date, the sum of (a) Consolidated Senior
Indebtedness for such period and (b) all other Indebtedness of the Credit
Parties of the type set forth in clauses (a), (b), (c), (d) (other than letters
of credit issued to support the payment of deductibles or retentions payable

 

9

 

under insurance programs
obtained by any Credit Parties), (e) and (g) of the definition of Indebtedness
as of the last day of such period, determined on a consolidated basis in
accordance with GAAP, including, in any event, and any purchase money
Indebtedness; but excluding any Qualified Put Notes that are not treated as
indebtedness under GAAP, but only to the extent the aggregate outstanding
principal amount thereof does not exceed $25,000,000 (and any Put Guaranty or
other Put Debt to the extent relating to such portion of such Qualified Put
Notes) and to the same extent that it is excluded from the computation of
“Consolidated Funded Debt” (as such term is defined in the Senior Loan
Agreement) under the Senior Loan Agreement.

 

“Consolidated
Senior Indebtedness” means at any date, the sum of (a) the aggregate
outstanding principal amount of the Term Loans at such date, and (b) the
aggregate outstanding principal amount of the Revolving Credit Loans and
letters of credit at such date, less (c) the amount of cash on the Company’s
consolidated balance sheet in excess of $2,000,000, and less (d) letters of
credit issued to support the payment of deductible retentions payable under
insurance programs obtained by Parent or any of its Subsidiaries.

 

“Credit Parties”
means each of Parent, AMHC, AMGI, Kenan, KTC, ATL, NCT, McDaniel, Geni
Management Corporation, Geni Transport, Inc., PCT, Klemm, Beneto LLC, KAG
Logistics, Inc. and any other Subsidiaries.

 

“Guaranty”
means (i) the guaranty dated the date hereof executed by Parent, AMHC and each
Subsidiary of the Company in favor of Purchasers in respect of any of the
Senior Subordinated Obligations, as the same may be amended, restated, modified
or extended from time to time, (ii) the guaranty dated as of the Initial Second
Amendment Closing Date executed by Beneto LLC in favor of Purchasers in respect
of any of the Senior Subordinated Obligations, as the same may be amended,
restated, modified or extended from time to time, (iii) the guaranty dated as
of the Final Second Amendment Closing Date executed by Klemm in favor of
Purchasers in respect of any of the Senior Subordinated Obligations, as the
same may be amended, restated, modified or extended from time to time, and (iv)
the guaranty dated as of July 13, 2004 executed by KAG Logistics, Inc. in
favor of Purchasers in respect of any of the Senior Subordinated Obligations,
as the same may be amended, restated, modified or extended from time to time.

 

“Indebtedness”
means for any Person, without duplication: 
(a) all indebtedness, whether or not represented by bonds, debentures,
notes, securities, or other evidences of indebtedness, for the repayment of
money borrowed, (b) all indebtedness representing deferred payment of the
purchase price of property or assets, (c) all indebtedness under any lease which,
in conformity with GAAP, is required to be capitalized for balance sheet
purposes and leases of property or assets made as a part of any sale and
lease-back transaction if required to be capitalized, (d) all indebtedness
under guaranties, endorsements, assumptions, or

 

10

 

other contractual
obligations, including any letters of credit, or the obligations in respect of,
or to purchase or otherwise acquire, indebtedness of others, (e) all
indebtedness secured by a Lien existing on property owned, subject to such
Lien, whether or not the indebtedness secured thereby shall have been assumed
by the owner thereof, (f) trade accounts payable more than 120 days past due
(other than trade accounts payable being disputed in good faith by a Credit
Party to the extent recorded and reserved for), and (g) all amendments,
renewals, extensions, modifications and refundings of any indebtedness or
obligations referred to above in (a), (b), (c), (d), (e) or (f), excluding trade
accounts payable in the ordinary course of business and excluding the
Contingent Payments; provided, however, that (i) reserves for
retention or deductible amount under insurance programs, (ii) deferred taxes
and (iii) the Klemm Earn-Out shall not be considered “Indebtedness” for
purposes of this definition.

 

“Leases”
mean the collective reference to (i) that certain Lease Agreement, dated as of
March 1, 1999, between AMGI and Freedom Investments, Inc. (“Freedom”)
covering the property on which the Borrowers’ headquarters are located, (ii)
that certain Lease Agreement, dated as of March 1, 1999, between NCT and
NCT Development Inc. and (iii) the Lease Agreement, dated November 1,
2003, between AMGI and Freedom covering the additional office space at
4895 Dressler Road, N.W., Canton, Ohio.

 

“Permitted
Indebtedness” means (a) any Indebtedness in favor of the Senior Lender
under the Senior Loan Agreement and created pursuant thereto but only to the
extent that the same constituted Senior Debt at the time that it was incurred,
(b) any Indebtedness in favor of Purchasers under this Agreement and/or the
Other Agreements and created pursuant thereto, (c) presently existing or
hereafter arising purchase money Indebtedness incurred by the Company to
finance the acquisition of capital assets by the Company, subject to the
limitations placed on Capital Expenditures in Section 7.11, (d)
Indebtedness in an aggregate amount not to exceed $2,500,000 at any time
outstanding secured by a Lien on accounts receivable, tangible assets or
Inventory of Subsidiaries of the Company, (e) the Contingent Payments, provided
that with respect to the Contingent Payment under the Original Acquisition
Agreement payment thereunder is made in accordance with the Seller
Subordination Agreement,  (f) the
other Indebtedness set forth on Exhibit D, (g) Indebtedness of any
Credit Party to any other Credit Party and (h) any Indebtedness under Interest
Rate Protection Agreements (as such term is defined the Senior Loan Agreement)
required under Section 8.12 of the Senior Loan Agreement.

 

“Permitted
Investments” means the following:

 

(a)                                  securities
issued or directly and fully guaranteed or insured by the United States
Government or any agency or instrumentality thereof (provided that the full
faith and credit of the United States Government is pledged in support

 

11

 

thereof), having maturities of not more than twelve months from the
date of acquisition;

 

(b)                                 time
deposits and certificates of deposit of any commercial bank incorporated in the
United States of recognized standing having capital and surplus in excess of
$100,000,000 with maturities of not more than twelve months from the date of
acquisition and rated AA- (or the equivalent thereof) or higher by Standard
& Poor’s Corporation with respect to its long-term senior debt;

 

(c)                                  commercial
paper issued by any Person incorporated in the United States rated at least A-1
or the equivalent thereof by Standard & Poor’s, a division of The
McGraw-Hill Companies, Inc. or at least P-1 or the equivalent thereof by
Moody’s Investors Service, Inc. and in each case maturing not more than twelve
months after the date of acquisition;

 

(d)                                 investments
in money market funds substantially all of whose assets are comprised of
securities of the types described in clauses (a) through (c)
above;

 

(e)                                  investments
in, or debts incurred or liabilities assumed on behalf and for the benefit of,
the Subsidiaries or joint ventures or companies in which the Company owns at
least 50% of the voting rights thereof, which investments, debts incurred and
liabilities assumed (i) do not exceed $500,000 per year in the aggregate and
(ii) do not exceed $1,000,000, from and after the Closing Date in the
aggregate; notwithstanding and in addition to the foregoing the Company shall
be permitted to make advances and capital contributions to each of its
Subsidiaries which at such time is a guarantor of the Senior Subordinated
Obligation pursuant to the Guaranty, and each such Subsidiary shall be permitted
to make advances and capital contributions to the Company, if such advances are
consistent with the policies of the Company’s board of directors; and

 

(f)                                    investments
pursuant to the B-K Acquisitions and Permitted Acquisitions.

 

“Put Guaranty”
means the guaranty of AMHC, KAG Logistics, Inc., the Company and each
Subsidiary of the obligations of the Parent under the Warrant Documents.

 

“Seller”
means with respect to any Permitted Acquisition, the seller or sellers of the
assets to be acquired by the Company or their Subsidiaries pursuant thereto.

 

“Senior Debt”
means the principal amount of any Indebtedness of the Company and its
Subsidiaries for borrowed money under the Senior Loan Documents, now or
hereafter outstanding, together with any interest (including any post-petition
interest accruing after the commencement of any case,

 

12

 

proceeding or other
action relating to the bankruptcy, insolvency or reorganization of the Company
at the interest rate provided for in the Senior Loan Agreement, whether or not
such interest is an allowable claim in any such proceeding) or premium due
thereon and any other amount payable with respect thereto, provided that:

 

(i)                                     in
no event shall the aggregate principal amount of Senior Debt exceed an amount
equal to the sum of:

 

(a) an amount equal to (1) the sum of (x) up to $50,000,000
of Revolving Credit Loans, plus (y) up to $130,000,000 of Term Loans, plus
(2) the sum of (I) up to $15,000,000 in additional Term Loans if and to the
extent the Greenshoe Option (as defined in the Senior Loan Agreement) is, from
time to time, actually exercised, plus (II) the amount of any additional Term
Loans made under the Greenshoe Option, to the extent consented to in writing by
the Purchasers, minus (3) the aggregate amount of any permanent
reductions in the maximum committed amount of the Revolving Credit Loans, minus
(4) the aggregate amount of any and all principal payments or prepayments
from time to time made in respect of the Term Loans; plus

 

(b) the sum of (I) an amount representing indebtedness
incurred only in connection with a “workout” as determined by the Senior Lender
in its good faith judgment following notice to the Holders in an aggregate
amount which does not exceed the greater of (A) $10,500,000 or
(B) 10% of the principal amount of the loans described in subparagraph
(a) above (subject to the limitations therein) which are outstanding on
the first date (the “Reference Date”) upon which there occurs the earlier of
(x) the Holders’ receipt of a Stop Payment Notice (as such term is defined
in the Senior Subordination Agreement) under the Senior Subordination Agreement
from the Senior Lender or (y) the occurrence of a default in the payment
of principal or interest under the Senior Loan Agreement, minus (II) the
amount of any fees, expenses or other obligations or liabilities (other than
principal and interest) under the Senior Loan Documents which are outstanding
at or incurred after the Reference Date; plus

 

(c) the amount of indebtedness, if any, owed pursuant to any Interest
Rate Protection Agreement (as defined in the Senior Loan Agreement) or other
similar hedging agreement entered into and owed to the Senior Lender;

 

(ii)                                  in
no event shall Senior Debt include (a) any indebtedness of any Person which, by
its terms, by the terms of the instrument creating or evidencing it, by
contract or otherwise, is subordinate in right of payment to any other
indebtedness of any Person or (b) any trade debt of the Company, whether or not
initially owing to any Person other than the Senior Lender under the Senior
Loan Agreement (or under the agreements, documents and instruments related to
any refinancing thereof) and subsequently acquired by the Senior Lender.

 

13

 

Senior Debt shall also
include any Indebtedness of the Company incurred in connection with a
refinancing of the Senior Debt under the Senior Loan Documents if the terms and
conditions of the agreements, documents and instruments related to such
refinancing, taken as a whole, are not materially more onerous to the Holders
than those set forth in the Senior Loan Documents, as in effect on the date
hereof.  Senior Debt shall continue to
constitute Senior Debt notwithstanding the fact that such Senior Debt or any
claim for such Senior Debt is involuntarily subordinated, avoided or disallowed
under the Federal Bankruptcy Code or any other applicable law.

 

“Senior Loan
Agreement” means the Second Amended and Restated Credit Agreement among the
Parent, the Company and the Senior Lender, dated as of July 13, 2004, as
may be amended to the extent permitted under Section 7.8, and all
documents and instruments delivered pursuant thereto in connection with the
loans and advances made thereunder.

 

“Senior Subordination Agreement” means that certain Amended and
Restated Senior Subordination Agreement dated as of July 13, 2004 executed
by the Company, the Senior Lender and Purchasers, as may be amended pursuant
the terms thereof, pursuant to which the relative priorities of the Senior
Lender and Purchasers with respect to the repayment of Senior Debt and the
Senior Subordinated Obligations are established.”

 

(o)                                 Section 11.1
of the Existing Note Agreement is hereby amended by deleting the definition of
“Leverage Ratio” in its entirety.

 

(p)                                 Section 12.2
of the Existing Note Agreement is hereby amended by deleting Section 12.2
in its entirety and inserting in lieu thereof the following new
Section 12.2:

 

“12.2                     Indemnification.  In addition to and not in limitation of the
other indemnities provided for herein or in any Other Agreements, the Company
hereby indemnifies and holds harmless Purchasers and any other Holders, and
every Affiliate of any of the foregoing, and their respective officers, directors,
employees and agents, from any claims, actions, damages, costs, attorneys’ fees
and expenses (including any of the same arising out of the sole or contributory
negligence of the Person to be indemnified) to which any of them may become
subject, insofar as such losses, liabilities, claims, actions, damages, costs
and expenses arise from or relate to this Agreement, the Other Agreements, any
Permitted Acquisition Document, any Permitted Acquisition, or any of the
transactions contemplated thereby, or from any investigation, litigation, or
other proceeding, including, without limitation, any threatened investigation,
litigation or other proceeding relating to any of the foregoing, or from any
violation or claim of violation of any applicable environmental laws with
respect to any real or personal property, or from any governmental or judicial
claim, order or judgment with respect to any real or personal property of the
Company, or from any breach of the warranties, representations or covenants
contained in this Agreement, the Other Agreements or any Permitted Acquisition
Document.  The

 

14

 

foregoing
indemnification includes any such claims, actions, damages, costs, and expenses
incurred by reason of the sole or contributory negligence of the Person to be
indemnified, but excludes any of the same incurred by reason of such Person’s
gross negligence or willful misconduct.”

 

(q)                                 The
Existing Note Agreement is hereby amended by adding Schedule 10 in the
form attached to this Fourth Amendment.

 

2.                                       Conditions
Precedent.  This Fourth Amendment
shall become effective on the first date on which all of the following
conditions precedent shall have been satisfied (the “Fourth Amendment
Effective Date”):

 

(a)                                  Fourth
Amendment.  The Purchasers shall
have received this Fourth Amendment, executed and delivered by a duly
authorized officer of each of the Company, the Parent and the Purchasers;

 

(b)                                 Guaranty
and Put Guaranty.  The Purchasers
shall receive a Guaranty and Put Guaranty from KAG Logistics, Inc., each in
form satisfactory to the Purchasers (the “Fourth Amendment Documents”).

 

(c)                                  Amendment
to Senior Loan Documents. The Purchasers shall have received amendments to
the Senior Loan Documents, each in form and substance satisfactory to the
Purchasers.

 

(d)                                 Corporate
Proceedings of the Credit Parties. 
The Purchasers shall have received a copy of the resolutions, in form
and substance satisfactory to the Purchasers, of each of the Board of Directors
of the Parent, the Company and KAG Logistics, Inc., as applicable, authorizing
the execution, delivery and performance of this Fourth Amendment and the Fourth
Amendment Documents.

 

(e)                                  Incumbency
Certificate.  The Purchasers shall
have received a certificate of each the Company, Parent and KAG Logistics,
Inc., dated July 13, 2004, as to the incumbency and signature of the
officers of such party executing this Fourth Amendment or the Fourth Amendment
Documents, satisfactory in form and substance to the Purchasers, executed by
the President or any Vice President and the Secretary or any Assistant
Secretary of such party.

 

(f)                                    Corporate
Documents.  The Purchasers shall
have received true and complete copies of the certificate of incorporation,
certificate of formation, operating agreement, partnership agreement or other
applicable governing documents and the by-laws of KAG Logistics, Inc.,
certified as of July 13, 2004 as complete and correct copies thereof by
the Secretary or an Assistant Secretary of KAG Logistics, Inc.

 

(g)                                 Good
Standing Certificate.  The
Purchasers shall have received a certificate dated as of a recent date from the
Secretary of State or other appropriate authority, evidencing the good standing
of KAG Logistics, Inc., (i) in the jurisdiction of its organization and (ii) in
each other jurisdiction where its ownership, lease or operation of property or
the conduct of its business requires it to qualify as a foreign Person except,
as to this subclause (ii),

 

15

 

where the failure to so
qualify could not reasonably be expected to have a Material Adverse Effect.

 

(h)                                 Other
Documents.  The Purchasers shall
have received such other documents as the Purchasers or counsel to the
Purchasers may reasonably request; and

 

(i)                                     No
Default.  After giving effect to
amendments set forth in Section 1 hereof, each Credit Party shall be in
compliance with all of the terms and provisions set forth in the Existing Note
Agreement and the Other Agreements on its part to be observed or performed and,
no Default or Event of Default shall have occurred and be continuing.

 

3.                                       Limited
Waiver.  Upon satisfaction of the
terms and conditions in Section 2 hereof, Purchasers hereby waive
the Event of Default arising due to the Company’s failure to comply with
Section 7.3 of the Existing Note Agreement when it formed KAG Logistics,
Inc. without the consent of Purchasers. 
Except as specifically set forth in this Section 3, nothing
contained herein shall be construed as a waiver by the Purchasers of any covenant
or provision of the Note Agreement, the Other Agreements, this Fourth
Amendment, or of any other contract or instrument between the Credit Parties
and the Purchasers, and the failure of the Purchasers at any time or times
hereafter to require strict performance by the Credit Parties of any provision
thereof shall not waive, affect or diminish any right of the Purchasers to
thereafter demand strict compliance therewith. 
Except as specifically set forth above in this Section 3,
the Purchasers hereby reserve all rights granted under the Note Agreement, the
Other Agreements, this Fourth Amendment and any other contract or instrument
between the Credit Parties and the Purchasers.

 

4.                                       Limited
Effect.  Except as expressly amended
and modified by this Fourth Amendment, the Existing Note Agreement shall
continue to be, and shall remain, in full force and effect in accordance with
its terms.  Each reference to the Note
Agreement in any of the Other Agreements shall be deemed to be a reference to
the Note Agreement as amended hereby.

 

5.                                       Counterparts.  This Fourth Amendment may be executed by one
or more of the parties hereto on any number of separate counterparts and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument.  Delivery of an executed
counterpart of a signature page to this Fourth Amendment by facsimile
transmission shall be effective as delivery of a manually executed counterpart
thereof.

 

6.                                       Expenses.  The Company agrees to pay and reimburse the
Purchasers for all of the out-of-pocket costs and expenses incurred by the
Purchasers in connection with the preparation, execution and delivery of this
Fourth Amendment, including, without limitation, the reasonable fees and
disbursements of Patton Boggs LLP, counsel to the Purchasers.

 

7.                                       Indemnification.  The Company and the Parent shall, jointly
and severally, indemnify, pay and hold harmless the Purchasers (and their
respective directors, officers, employees and agents) against any loss,
liability, cost or expense incurred in respect of the financing contemplated
hereby or the use or the proposed use of proceeds thereof (except to the extent
resulting from the gross negligence or willful misconduct of the indemnified
party).

 

8.                                       Applicable
Law.  This Fourth Amendment shall be
governed by, and construed and interpreted in accordance with, the laws of the
State of New York.

 

16

 

[SIGNATURE PAGES FOLLOW]

 

17

 

IN WITNESS WHEREOF,
the parties hereto have caused this Fourth Amendment to be duly executed and
delivered as of the day and year first above written.

 

	
   

  	
  ADVANTAGE MANAGEMENT GROUP,

  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
      /s/ Carl H. Young

  	
   

  
	
   

  	
   

  	
  Name: Carl H. Young

  
	
   

  	
   

  	
  Title: CFO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  KENAN
  TRANSPORT COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
      /s/ Carl H. Young

  	
   

  
	
   

  	
   

  	
  Name: Carl H. Young

  
	
   

  	
   

  	
  Title: CFO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE
  KENAN ADVANTAGE GROUP, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
      /s/ Carl H. Young

  	
   

  
	
   

  	
   

  	
  Name: Carl H. Young

  
	
   

  	
   

  	
  Title: CFO

  

 

 

	
   

  	
  PURCHASERS:

  
	
   

  	
   

  
	
   

  	
  RSTW PARTNERS III, L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  RSTW Management, L.P.,

  
	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Rice Mezzanine
  Corporation,

  
	
   

  	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
    /s/

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
    Kurt G.
  Keene

  
	
   

  	
   

  	
   

  	
   

  	
    Managing
  Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MASSACHUSETTS MUTUAL
  LIFE

  INSURANCE COMPANY

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Babson Capital
  Management LLC,

  
	
   

  	
   

  	
  its Investment Adviser

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
      /s/

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MASSMUTUAL CORPORATE
  INVESTORS

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
      /s/

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  The foregoing is
  executed on behalf of MassMutual Corporate Investors, organized under a
  Declaration of Trust, dated September 13, 1985, as amended from time to
  time.  The obligations of such Trust
  are not personally binding upon, nor shall resort be had to the property of,
  any of the Trustees, shareholders, officers, employees or agents of such
  Trust, but the Trust’s property only shall be bound.

  
													

 

19

 

	
   

  	
  MASSMUTUAL
  PARTICIPATION INVESTORS

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
      /s/

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  The foregoing is
  executed on behalf of MassMutual Participation Investors, organized under a
  Declaration of Trust, dated April 7, 1988, as amended from time to
  time.  The obligations of such Trust
  are not personally binding upon, nor shall resort be had to the property of,
  any of the Trustees, shareholders, officers, employees or agents of such
  Trust, but the Trust’s property only shall be bound.

  
						

 

20

 

The undersigned, as
Administrative Agent under that certain Amended and Restated Senior
Subordination Agreement, dated July 13, 2004, as amended from time to
time, by and among Senior Lender and the Purchasers, as amended from time to
time, hereby acknowledges and consents to the terms and conditions of this
Amendment.

 

	
   

  	
  CANADIAN IMPERIAL BANK
  OF COMMERCE,

  
	
   

  	
  as Administrative Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  

 

21

 

SCHEDULE 10

 

CONDITIONS TO PERMITTED
ACQUISITIONS

 

1.                                       Permitted
Acquisition Documents. 
(A) The Purchasers shall have received, not later than
ten (10) Business Days prior to the proposed closing date for such
Permitted Acquisition, drafts of each of the Permitted Acquisition Documents
substantially in the form as will be executed at the closing of the Permitted
Acquisition (and thereafter copies of all subsequent drafts marked to show
changes) and on the Acquisition Closing Date the Purchasers shall have received
copies of the executed material Permitted Acquisition Documents certified as to
authenticity by the Company on the Acquisition Closing Date, and such other
documents or instruments as may be reasonably requested by the Purchasers,
including, without limitation, a copy of any debt instrument, security
agreement or other material contract to which any Company or any Subsidiary of
the Company may be a party, and if requested by the Purchasers, the Company
shall use its best efforts to obtain reliance letters from counsel rendering
opinions pursuant to such Permitted Acquisition Documents.

 

(B)
The Purchasers shall have received a certificate from a duly authorized officer
of each of the Credit Parties party to such Permitted Acquisition Documents
addressed to the Purchasers, to the effect that none of the Permitted
Acquisition Documents as delivered to the Purchasers has been amended,
supplemented or otherwise modified except as approved by the Purchasers, that,
to the knowledge of the Company, each of the representations and warranties set
forth in such Permitted Acquisition Documents continue to be true, complete and
correct in all material respects as of the Acquisition Closing Date as if made
on and as of the Acquisition Closing Date, that the Purchasers may rely on such
representations and warranties as if such representations and warranties were
made to the Purchasers directly, and that no material default, breach or violation
of any of the Permitted Acquisition Documents has occurred and is continuing.

 

2.                                       Documents;
Additional Loan Documents.  The
Purchasers shall have received:

 

i.                  if
there shall be any new Subsidiary acquired or formed in connection with the
proposed Permitted Acquisition, a Guaranty and Put Guaranty, substantially in
the form of the existing Guaranties and Put Guaranties, executed and delivered
by a duly authorized officer of the party thereto, and

 

ii.               if
requested by the Purchasers, evidence satisfactory to the Purchasers that
environmental insurance satisfactory to the Purchasers has been obtained with
respect to the Acquired Business acquired in such Permitted Acquisition.

 

3.                                       Consummation of
Acquisition. The Permitted Acquisition shall be consummated in
accordance with the terms of the Permitted Acquisition Documents therefor,
without any material amendment thereto or modification or waiver thereof,
except with the

 

22

 

consent of the Purchasers
and with notice of all amendments thereto and modifications and waivers
thereof, and the Purchasers shall have received evidence satisfactory to it to
that effect.

 

4.                                       Corporate
Proceedings of the Credit Parties.  The Purchasers shall have received, a copy of the resolutions, in
form and substance reasonably satisfactory to the Purchasers, of the Board of
Directors of each Credit Party authorizing the execution, delivery and
performance of the Permitted Acquisition Documents and the Other Agreements and
supplements thereto to which it is a party being executed and delivered in
connection with such Permitted Acquisition.

 

5.                                       Incumbency
Certificate.  The
Purchasers shall have received a certificate of each Credit Party, dated such
Acquisition Closing Date, as to the incumbency and signature of the officers of
such Credit Party executing any Other Agreement being executed and delivered in
connection with such Permitted Acquisition, satisfactory in form and substance
to the Purchasers, executed by the President or any Vice President and the
Secretary or any Assistant Secretary of such Credit Party.

 

6.                                       Corporate
Documents.  The
Purchasers shall have received true and complete copies of the certificate
of incorporation and by-laws of each Credit Party as to which such corporate
documents were not theretofore delivered, certified as of the Acquisition
Closing Date as complete and correct copies thereof by the Secretary or an
Assistant Secretary of such Credit Party.

 

7.                                       Good Standing
Certificates.  The
Purchasers shall have received certificates dated as of a recent date from the
Secretary of State or other appropriate authority, evidencing the good standing
of each Person becoming a Credit Party as of such Acquisition Closing Date
(i) in the jurisdiction of its organization and (ii) in each other
jurisdiction where its ownership, lease or operation of property or the conduct
of its business requires it to qualify as a foreign Person except, as to this
subclause (ii), where the failure to so qualify could not have a Material
Adverse Effect.

 

8.                                       Legal Opinions.  (i) 
The Purchasers shall have received copies of such executed legal
opinions with respect to, and to the extent delivered in connection with, such
Permitted Acquisition, and the Company shall use its best efforts to obtain
letters from counsel delivering such opinions permitting the Purchasers to rely
thereon and (ii) an opinion of counsel to the Credit Parties, in form and
substance satisfactory to the Purchasers.

 

9.                                       Lien Searches.  The Purchasers shall have received the
results of a recent search, by a Person satisfactory to the Purchasers, of the
Uniform Commercial Code, judgment and tax lien filings which may have been
filed with respect to personal property of each Subsidiary formed or acquired
in connection with such Permitted Acquisition, the Company, to the extent that
such Permitted Acquisition results in the Company owning property or conducting
operations in new jurisdictions, and if requested by the Purchasers, the seller
of the property to be acquired in such Permitted Acquisition, and the results
of such search shall be satisfactory to the Purchasers.

 

23

 

10.                                 Environmental
Reports.  If requested by the
Purchasers, receipt of Phase I environmental reports, and, if further requested
by the Purchasers based upon its review of the Phase I environmental reports,
Phase II or other environmental reports, prepared by a Person reasonably
satisfactory to the Purchasers, and which such Person shall have confirmed in
writing that the Purchasers shall be entitled to rely upon, with respect to
each of the properties acquired pursuant to the Permitted Acquisition, and such
environmental reports shall be in form and substance satisfactory to the Purchasers.

 

11.                                 Representations
and Warranties; No Default.  As of the Acquisition Closing Date, (a) each of the
representations and warranties made by the Company and the other Credit Parties
in or pursuant to the Agreement or the Other Agreements shall be true and
correct in all material respects on and as of such date as if made on and as of
such date, and (b) no Default or Event of Default shall have occurred and be continuing
on such date or after giving effect to transactions to be consummated on such Acquisition
Closing Date.

 

24Exhibit
10.13

 

PPN: 48853 11 3

 

WARRANT
PURCHASE AGREEMENT

 

WARRANT PURCHASE AGREEMENT
(the “Agreement”) made as of April 30, 2001, by and among KTC/AMG
HOLDINGS CORP. (to be renamed The Kenan Advantage Group, Inc.
immediately following the closing), a Delaware corporation (the “Company”),
RSTW
PARTNERS III, L.P., a Delaware limited partnership (“RSTW”),
and MASSACHUSETTS
MUTUAL LIFE INSURANCE COMPANY, a mutual life insurance company
established under the laws of the Commonwealth of Massachusetts, MASSMUTUAL
CORPORATE INVESTORS, a Massachusetts business trust, and MASSMUTUAL
PARTICIPATION INVESTORS, a Massachusetts business trust
(collectively, the “MassMutual Investors”) (RSTW and the MassMutual
Investors are collectively referred to herein as the “Purchasers”).

 

W I T N E S S E T H:

 

WHEREAS, the
Company, Advantage Management Holdings Corp., a Delaware corporation (“AMHC”),
Kenan Transport Company, a North Carolina corporation (“Kenan”), and KTC
Acquisition Corp., a North Carolina corporation (“KTC”), have entered
into that certain Agreement and Plan of Merger, dated as of January 25, 2001
(the “Kenan Merger Agreement”), pursuant to which the Company will
acquire all of the issued and outstanding shares of common stock of Kenan (the
“Kenan Acquisition Transaction”).

 

WHEREAS, pursuant
to the terms of the Kenan Merger Agreement, KTC will merge (the “Kenan
Merger”) with and into Kenan, with Kenan as the surviving corporation.

 

WHEREAS, AMHC,
AMHC Acquisition Corp., a Delaware corporation (“AMHC Acquisition Corp.”)
and the Company have entered into that certain Agreement and Plan of Merger,
dated as of April 19, 2001 (the “Advantage Merger Agreement”)
pursuant to which (a) the Company will exchange shares of its capital
stock, warrants and options for AMHC’s Capital Stock, warrants and options (the
“Advantage Acquisition Transaction”) and (b) AMHC Acquisition Corp.
will merge (the “Advantage Merger”) with and into AMHC, with AMHC as the
surviving corporation.

 

WHEREAS, Advantage
Management Group, Inc., an Ohio corporation (“AMGI”) and KTC have
entered into a Note Purchase Agreement (the “Note Agreement”) dated of
even date with this Agreement with the Purchasers;

 

WHEREAS, the
Company has entered into a Stockholders’ Agreement (the “Stockholders’
Agreement”) and the Registration Rights Agreement (the “Registration
Rights Agreement”) each dated of even date with this Agreement with the
Purchasers and the other signatories thereto; and

 

WHEREAS, the
Purchasers are willing to enter into and consummate the transactions contemplated
by the Note Agreement only if, among other things, the Company enters into, and

 

1

 

performs under,
this Agreement and the Stockholders’ Agreement and the Registration Rights
Agreement.

 

NOW, THEREFORE, in
consideration of the foregoing, the mutual covenants contained in this
Agreement, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Purchasers and the Company,
intending to be legally bound, agree as follows:

 

Article I

Definitions

 

1.01         Definitions. As used in this
Agreement, the following terms have the meanings indicated:

 

2001 MassMutual
Investors Warrants: This term is defined in Section 2.01
of this Agreement.

 

2001 RSTW Merger
Warrants: This term is defined in Section 2.01 of this
Agreement.

 

2001 RSTW New
Warrants: This term is defined in Section 2.01 of this
Agreement.

 

1998 RSTW Warrant:
This term is defined in Section 2.01 of this Agreement.

 

2000 RSTW Warrant:
This term is defined in Section 2.01 of this Agreement.

 

Acquisition
Documents. This term shall have the meaning ascribed to it in
Section 11.1 of the Note Agreement.

 

Active Public
Market. With respect to any Qualified Sale, an Active Public
Market exists with respect to a security if the security is traded in the
organized domestic securities markets and the number of securities held by the
Holders at the time of the determination does not exceed 200% of the number of
securities equal to the Trailing Six-Week Volume of the surviving company
determined on the date three days immediately prior to the closing of the
proposed Qualified Sale. “Trailing Six-Week Volume” means the reported volume
of trading in such securities on all national securities exchanges (or, in the
case of reported volume of trading in such securities reported through the
automated quotation system of a registered securities association, one-half (1⁄2)
of the amount so reported) during the six weeks immediately preceding the date
of determination.

 

Additional
Securities. This term is defined in Section 2.12(a)(iv)
of this Agreement.

 

Adjustment Event.
Any event in which (a) the Company or any Subsidiary issues any shares of
Capital Stock or any shares of capital stock of any Subsidiary in an Adjustment
Public Offering; (b) any Person other than an Affiliate of the Company on the
date of this Agreement acquires, without the approval of the Board of Directors
of the Company, Capital Stock in connection with the acquisition of the
beneficial ownership of more than fifty percent (50%) of

 

2

 

the voting
securities of the Company, or acquires, without the approval of the Board of
Directors of the Company, Capital Stock and the right to elect a majority of
the members of the Company’s board of directors for a consideration per share
or unit of Common Stock (assuming conversion and exchange of any convertible or
exchangeable securities) that exceeds the amount received per share of Common
Stock (assuming conversion of all Series D Convertible Preferred Stock owned by
such Holder as if there were a sale of the Company to which Section 3 of
the Certificate of Designations would be applicable) by any such Holder plus
the Exercise Price of the Warrants in connection with the exercise of such Call
Option; (c) the Company or any Subsidiary sells all or substantially all
of its assets or revenue or income generating capacity for such amount of
consideration that, if the Company was liquidated on the date that such sale is
consummated, the Fair Market Value of the Series D Convertible Preferred Stock
and Common Stock would exceed the amount received per share by any such Holder
plus the Exercise Price of the Warrants in connection with the exercise of such
Call Option; or (d) the Company or any Subsidiary participates in any
merger, consolidation, reorganization, share exchange, recapitalization, or
similar transaction or series of related transactions involving a change of
control of the Company or any Subsidiary or disposition of all or substantially
all of its assets or revenue or income generating capacity, directly or
indirectly, in which the Fair Market Value of the Series D Convertible
Preferred Stock and Common Stock would exceed the amount received per share by
such Holder plus the Exercise Price of the Warrants in connection with the
exercise of such Call Option.

 

Adjustment Public
Offering. Each primary public offering of shares of any class
of Capital Stock or shares of any class of capital stock of any Subsidiary
pursuant to a registration statement filed with the Commission prior to and
including the Initial Public Offering.

 

Advantage
Acquisition Transaction. 
This term is defined in the recitals of this Agreement.

 

Advantage Merger.  This term is defined in the recitals of this
Agreement.

 

Advantage Merger
Agreement.  This term
is defined in the recitals of this Agreement.

 

Affiliate.
With respect to any Person, a Person that, directly or indirectly or through
one or more intermediaries, controls, is controlled by, or is under common
control with, such Person. The term “control” as used with respect to any
Person, means the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of such Person, whether
through the ownership of voting securities, by contract, or otherwise.

 

Agreement.
This term is defined in the preamble.

 

AMGI.
This term is defined in the recitals of this Agreement.

 

AMHC.  This term is defined in the recitals of this
Agreement.

 

Appraiser.
This term is defined in the definition of Fair Market Value.

 

3

 

Average Market
Value. The average of the Closing Prices for the security in
question for the thirty (30) trading days immediately preceding the date of
determination.

 

Big-Five
Accounting Firm. Any of Arthur Andersen LLP, Deloitte &
Touche LLP, Ernst & Young LLP, KPMG Peat Marwick LLP,
PricewaterhouseCoopers LLP and any successor thereof.

 

Business Day.  Each day of the week except Saturdays,
Sundays, and days on which banking institutions are authorized by law to close
in the State of Ohio.

 

Call Option.
This term is defined in Section 2.11 of this Agreement.

 

Call Option
Closing. This term is defined in Section 2.11.3 of
this Agreement.

 

Call Option Period.
This term is defined in Section 2.11 of this Agreement.

 

Capital Stock.
The Common Stock, the Preferred Stock and any other capital stock of the
Company authorized from time to time, and any other shares, options, warrants,
rights, interests, participations or equivalents (however designated) of or in
the Company, whether voting or nonvoting, including, without limitation, common
stock, options, warrants, preferred stock, phantom stock, stock appreciation
rights, preferred stock, convertible notes or debentures, stock purchase
rights, and all agreements, instruments, documents, and securities convertible,
exercisable, or exchangeable, in whole or in part, into any one or more of the
foregoing.

 

Certificate of
Designations. The Certificate of the Designations, Powers,
Preferences and Rights of the Series A Convertible Preferred Stock (Par Value
$0.001 Per Share), Series B Convertible Preferred Stock (Par Value $0.001 Per
Share), Series C Convertible Preferred Stock (Par Value $0.001 Per Share) and
Series D Convertible Preferred Stock (Par Value $0.001 Per Share) of the
Company.

 

Closing Date.
April 30, 2001.

 

Closing Price.

 

(a)           If the primary
market for the security in question is a national securities exchange
registered under the Exchange Act, the Nasdaq — National Market, or other
market or quotation system in which last sale transactions are reported on a
contemporaneous basis, the last reported sales price, regular way, of such
security for such day, or, if there has not been a sale on such trading day,
the highest closing or last bid quotation therefor on such trading day
(excluding, in any case, any price that is not the result of bona fide arm’s
length trading); or

 

(b)           if the primary
market for such security is not an exchange or quotation system in which last
sale transactions are contemporaneously reported, the greater of

 

4

 

(i) the
highest closing price or (ii) one-half of the sum of (A) the last
bona fide bid and (B) the last bona fide asked quotation by disinterested
Persons in the over-the-counter market on such trading day as reported by the
National Association of Securities Dealers through its Automated Quotation
System or its successor or such other generally accepted source of publicly reported
bid quotations as the Holders designate.

 

Common Stock.
The common stock, $0.0001 par value, of the Company.

 

Commission.
The Securities and Exchange Commission and any successor federal agency having
similar powers.

 

Company.
KTC/AMG Holdings Corp. (to be renamed The Kenan Advantage Group, Inc.,
immediately following the closing).

 

Contingent Options.
Those certain options to purchase Common Stock issued to (i) Dennis Nash and
Carl Young pursuant to Contingent Option Agreements, which permit each holder
thereof to purchase up to an aggregate of 161,000 shares of Common Stock and
(ii) Jerry L. McDaniel pursuant to a Contingent Option Agreement, which permits
the holder thereof to purchase up to an aggregate of 21,400 shares of Common
Stock.

 

Contingent Option
Agreements. Those certain Amended and Restated Contingent
Senior Management Option Agreements dated as of or about April 30, 2001
executed by the Company and each of Dennis Nash, Carl Young and Jerry L.
McDaniel, respectively.

 

Contingent Options
Adjustment Number. This term is defined in Section 2.12(b)
of this Agreement.

 

Dilution Fee.
This term is defined in Section 2.09 of this Agreement.

 

Emery Asset
Purchase Agreement. 
That certain Agreement for Purchase of Assets of Emery Transportation,
Inc. dated as of July 17, 2000, as amended, by Advantage Tank Lines, Inc.,
Emery Transportation, Inc., Emery Oil Company, Inc., Richard A. Emery, Jr. and
Alison Sue Hess.

 

Employment
Agreements. This term is defined in Section 11.1 of the Note
Agreement.

 

Excess
Consideration. The amount that a Holder would have realized
following the Adjustment Event had the Call Option not been exercised with
respect to such Holder until such time, minus the amount that such Holder
realized due to the exercise of the Call Option; provided, however,
that the amount of Excess Consideration will in all events be deemed to be at
least zero.

 

Exchange Act.
The Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder.

 

5

 

Exchange Company.
This term is defined in Section 2.08 of this Agreement.

 

Exchange Notice.
This term is defined in Section 2.08 of this Agreement.

 

Exchange Stock.
This term is defined in Section 2.08 of this Agreement.

 

Exercise Price.
The price per share specified in Section 2.03 of this Agreement as
adjusted from time to time pursuant to the provisions of this Agreement.

 

Fair Market Value.

 

(a)           As to securities
regularly traded in the organized securities markets, the Average Market Value;
and

 

(b)           As to all securities
not regularly traded in the securities markets and other property, the fair
market value of such securities or property as determined in good faith by the
Board of Directors of the Company at the time it authorizes the transaction (a
“Valuation Event”) requiring a determination of Fair Market Value under this
Agreement; provided, however, that, at the election of the
Holders, the Fair Market Value of such securities and other property will be
determined as set forth below. For a period of 30 days after the date of a
Valuation Event (the “Negotiation Period”), each party to this Agreement agrees
to negotiate in good faith to reach agreement upon the Fair Market Value of
such securities or property, as of the date of the Valuation Event. In the
event that the parties are unable to agree upon the Fair Market Value of such
securities or other property by the end of the Negotiation Period, then the
Fair Market Value of such securities or property will be determined for
purposes of this Agreement by an appraiser agreed upon by the parties or
selected by the Company from a group of three (3) nationally recognized
appraisers selected by a majority in interest of the Holders which are
independent of each Holder (the “Appraiser”) and whose appraisal will be
conclusive and binding on all parties to this Agreement. Fair Market Value of
each share of Common Stock, Series D Convertible Preferred Stock or Other
Securities at a time when (i) the Company is not a reporting company under the Exchange
Act and (ii) such Common Stock, Series D Convertible Preferred Stock or Other
Securities, as the case may be, is not traded in the organized securities
markets, will, in all cases, be calculated by determining the Fair Market Value
of the entire Company taken as a whole (plus the exercise price of all options
and other rights to acquire any Common Stock, Series D Preferred Stock or Other
Securities having an exercise price per share of Common Stock, Series D
Convertible Preferred Stock or Other Securities, as the case may be, less than
the Fair Market Value thereof) and dividing that value by the sum of (x) the
number of shares of Common Stock, Series D Convertible Preferred Stock and
Other Securities then outstanding assuming conversion of all Series D
Convertible Preferred Stock and Other Securities on such date to the extent
that the same would be converted or convertible on such date upon a sale or
transfer of all or substantially all of the assets of the Company to another
entity on such date, plus (y) the number of shares of Common Stock, Series D
Convertible Preferred Stock and Other Securities, as the case may be, then
issuable upon

 

6

 

exercise of the
Warrants and outstanding options and other rights to acquire Common Stock or
Preferred Stock having an exercise price per share less than the Fair Market
Value thereof (as if such an event had occurred), without premium for control
or liquidation preference or discount for minority interests, illiquidity, or
restrictions on transfer. The costs of the Appraiser will be borne by the
Company. In no event will the Fair Market Value of the Common Stock, Series D
Convertible Preferred Stock or Other Securities be less than the per share
consideration received or receivable with respect to the Common Stock, Series D
Convertible Preferred Stock or Other Securities, as the case may be, in
connection with a pending transaction involving a sale, merger,
recapitalization, reorganization, consolidation, or share exchange, involving
the Company, a dissolution of the Company, a sale of all or a majority of its
assets, or similar transaction. In the case of determinations of the Fair
Market Value of the Exchange Stock or any other security in question,
references in this subparagraph (b) to Common Stock, Series D Convertible
Preferred Stock or Other Securities, shall instead be deemed references to the
Exchange Stock or such other security, as the case may be.

 

GAAP.
Generally accepted accounting principles consistently applied as set forth from
time to time in the opinions and pronouncements of the Accounting Principles
Board of the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board (or agencies
with similar functions of comparable stature and authority within the U.S.
accounting profession) which are applicable to the circumstances as of the date
of application.

 

Holders.
Purchasers, and all Persons holding Registrable Securities. Unless otherwise
provided in this Agreement, in each instance that Purchasers or Holders are
required to request or consent to an action, Purchasers or Holders will be
deemed to have requested or consented to such action if the Holders of a
majority in interest of the Registrable Securities initially issued to
Purchasers on the date hereof so requests or consents.

 

Indebtedness.
For any Person: (a) all indebtedness, whether or not represented by bonds,
debentures, notes, securities, or other evidences of indebtedness, for the
repayment of money borrowed, (b) all indebtedness representing deferred
payment of the purchase price of property or assets, (c) all indebtedness
under any lease which, in conformity with GAAP, is required to be capitalized
for balance sheet purposes and leases of property or assets made as a part of
any sale and lease-back transaction if required to be capitalized, (d) all
indebtedness under guaranties, endorsements, assumptions, or other contractual
obligations, including any letters of credit, or the obligations in respect of,
or to purchase or otherwise acquire, indebtedness of others, (e) all
indebtedness secured by a Lien existing on property owned, subject to such
Lien, whether or not the indebtedness secured thereby shall have been assumed
by the owner thereof, (f) trade accounts payable more than 120 days past
due, (g) all amendments, renewals, extensions, modifications and
refundings of any indebtedness or obligations referred to in clauses  (a), (b), (c), (d) or
(e), excluding trade accounts payable in the ordinary course of
business.

 

Indemnified Party.
This term is defined in Section 6.01 of this Agreement.

 

7

 

Initial Public
Offering. The first firm commitment, underwritten public
offering of Common Stock to the general public under the Securities Act,
completed by the Company and resulting in gross proceeds (before underwriting
discounts and commissions) to the Company of at least $25,000,000 from
purchasers thereunder which are not Affiliates of the Company and which results
in an aggregate valuation of all the outstanding shares of the Company’s Common
Stock on a fully diluted basis immediately prior to the consummation of such
offering of at least $75,000,000 and which results in each holder of the
Company’s Series A Preferred Stock, each holder of the Company’s Series B
Preferred Stock and each holder of the Company’s Series D Preferred Stock
receiving, upon conversion of such Preferred Stock in connection with such
offering, a number of shares of Common Stock (exclusive of shares of Common
Stock representing dividends which are converted into Common Stock) having a
value, based on the initial public offering price, of at least twice the
aggregate Liquidation Amount (as such term is defined in the Certificate of
Designations) of such holder’s respective shares of Preferred Stock.

 

Issuable Warrant
Shares. Shares of Series D Convertible Preferred Stock and/or
Common Stock issuable on exercise of the Warrants.

 

Issued Warrant
Shares. Shares of Series D Convertible Preferred Stock and/or
Common Stock issued on exercise of the Warrants.

 

Intellectual
Property. All patents, patent rights, patent applications,
licenses, inventions, trade secrets, know-how, proprietary techniques
(including processes and substances), trademarks, service marks, trade names
and copyrights.

 

Kenan.  This term is defined in the recitals of this
Agreement.

 

Kenan Acquisition
Transaction.  This
term is defined in the recitals of this Agreement.

 

Kenan Merger
Agreement.  The term
is defined in the recitals of this Agreement.

 

KTC.  This term is defined in the recitals of this
Agreement.

 

Lease.
This term is defined in Section 11.1 of the Note Agreement.

 

Lien.
Any lien, mortgage, security interest, tax lien, pledge, encumbrance, financing
statement, or conditional sale or title retention agreement, or any other
interest in property designed to secure the repayment of Indebtedness or any
other obligation, whether arising by agreement, operation of law, or otherwise.

 

Management
Agreement. 
Collectively, (i) that certain Amended and Restated Management
Agreement, dated as of April 30, 2001, by and among Sterling Ventures Limited,
the Company, AMGI and KTC, (ii) that certain Management Agreement, dated as of
April 30, 2001, by and among Sterling Investment Partners Advisors, LLC, the
Company, AMGI and KTC and (iii) that certain Management Agreement, dated as of
April 30, 2001, by and among RFE Management Corporation, the Company, AMGI and
KTC.

 

8

 

Management Options.  Options to purchase Common Stock issued to
or to be issued to employees of the Company and/or its Subsidiaries to purchase
up to 592,189 shares in the aggregate of the Common Stock on a fully diluted
basis pursuant to a stock option or benefit plan described in Section
4.04(m) of this Agreement adopted by the Company and approved by a majority
of the disinterested members of the Company’s board of directors.

 

MassMutual
Investors.  This term
is defined in the preamble of this Agreement.

 

Material Adverse
Effect. (a) Any material adverse effect upon the business,
operations, properties, assets or condition (financial or otherwise) of the
Company and its Subsidiaries taken as a whole or (b) the impairment of the
ability of the Company to perform its obligations under the Agreement or any of
the Other Agreements to which it is a party or of any Holder to enforce or
collect any of the obligations of the Company under this Agreement. In
determining whether an individual event would result in a Material Adverse
Effect, notwithstanding that such event does not of itself have such an effect,
a Material Adverse Effect shall be deemed to have occurred if the cumulative
effect of such event and all other existing events would result in a Material
Adverse Effect.

 

Negotiation Period.
This term is defined in the definition of Fair Market Value.

 

Note Agreement.
This term is defined in the preamble and includes the Note Purchase Agreement
of even date with this Agreement among AMGI, KTC and the Purchasers and all
documents evidencing indebtedness thereunder or otherwise related to the Note
Agreement as the same may be amended from time to time, and any refinancing,
refunding, or replacements of the indebtedness under the Note Agreement.

 

Note.
All or any portion of any of the Senior Subordinated Notes (as defined in the
Note Agreement) and any and all documents evidencing the indebtedness under the
Notes and any refinancing, refunding, or replacement of the Notes.

 

Original Closing
Date.  This term means
December 31, 1998.

 

Original RSTW
Warrants.  This term
is defined in Section 2.01.

 

Original Warrant
Agreement.  This term
shall mean that certain Warrant Purchase Agreement dated as of December 31,
1998 (as amended by that certain First Amendment to Note Purchase Agreement and
First Amendment to Warrant Purchase Agreement dated as of the July, 17, 2000).

 

Other Agreements.
This term shall have the meaning ascribed to it in Section 11.1 of the Note
Agreement.

 

9

 

Other Securities.
Any capital stock, other securities, property or other rights (other than
shares of Series D Convertible Preferred Stock or shares of Common Stock
issuable upon the conversion of the Series D Convertible Preferred Stock).

 

Permitted Liens.
This term shall have the meaning ascribed to it in Section 11.1 of the Note
Agreement.

 

Permitted Stock.
The following shares of Common Stock, Series A Convertible Preferred Stock,
Series B Convertible Preferred Stock, Series C Convertible Preferred Stock,
Series D Convertible Preferred Stock and Other Securities (or options or
warrants to acquire Common Stock or Series D Convertible Preferred Stock):

 

(i) shares of Common Stock and Series D Convertible Preferred
Stock to be issued pursuant to the Warrants or the exercise thereof;

 

(ii) shares of Series B Convertible Preferred Stock to be issued
pursuant to the Stockholders’ Agreement as in effect on the date hereof without
giving effect to any amendment or modification thereto;

 

(iii) shares of Common Stock to be issued upon conversion of the
Preferred Stock as set forth in the Certificate of Designations;

 

(iv) shares of Common Stock to be issued upon exercise of the
Contingent Options;

 

(v) shares of Common Stock to be issued upon the exercise of the
Management Options (provided, however, that in no event will the number of such
shares of Permitted Stock issued or reserved for issuance under the Management
Options in the aggregate exceed upon exercise the number of shares constituting
ten percent (10%) of the Common Stock on a fully-diluted basis on (a) the date
of this Agreement or (b) the date issued); and

 

(vi) shares of Common Stock issuable to Richard A. Emery pursuant to
the terms of the Emery Asset Purchase Agreement.

 

Person.
This term will be interpreted broadly to include any individual, sole
proprietorship, partnership, joint venture, trust, unincorporated organization,
association, corporation, company, institution, entity, party, or government
(whether national, federal, state, county, city, municipal, or otherwise,
including, without limitation, any instrumentality, division, agency, body, or
department of any of the foregoing).

 

Preferred Stock.
The Series A Convertible Preferred Stock, the Series B Convertible Preferred Stock,
the Series C Convertible Preferred Stock and the Series D Convertible Preferred
Stock.

 

10

 

Purchaser
Ownership Percentage. 
An amount equal to one minus the quotient determined by dividing (i) the
number of Warrant Shares (assuming conversion of the Series D Preferred Stock
into Common Stock but excluding shares of Common Stock issuable pursuant to
Section 2.12(b) by (ii) the number of shares of Common Stock outstanding
(assuming conversion of all outstanding Preferred Stock, conversion of all
Warrant Shares and exercise of all Management Options (whether or not options
therefor have been granted) but excluding shares of Common Stock issuable
pursuant to the Contingent Options and pursuant to Section 2.12(b) hereof.

 

Purchasers.
This term is defined in the preamble.

 

Put Event Exercise
Payment Default. Any failure of payment or other default by
the Company or any Subsidiary in the obligation to purchase all or such portion
of the Put Shares as to which any holder of Put Shares exercised its Put Option
pursuant to subclause (a), (b), (c), (d), (e), (f), (g), (h), (i), (j) or (k)
of Section 2.10 of this Agreement.

 

Put Option.
This term is defined in Section 2.10 of this Agreement.

 

Put Option Closing.
This term is defined in Section 2.10.4 of this Agreement.

 

Put Option Period.
This term is defined in Section 2.10 of this Agreement.

 

Put Price.
This term is defined in Section 2.10.1 of this Agreement.

 

Put Shares.
The Warrant Shares plus any other shares of Capital Stock owned from time to
time by a Holder which were issued in respect of the Warrant Shares.

 

Qualified Public
Securities. Securities with respect to which an Active Public
Market exists, which are either registered or with respect to which the holders
thereof have demand registration rights covering all of the same (which demand
registration rights are not subject to any exclusion from registration if
marketing factors require a limitation on the number of shares to be
registered), which are issued to a Holder in exchange for the Warrants or the
Warrant Shares pursuant to a Qualified Sale, and with respect to which such
Holder is not in any way restricted from selling, assigning, marketing or
otherwise disposing to any Person (except that in a transaction which qualifies
as a “pooling of interests” under Accounting Principles Board Opinion No. 16 a
restriction may exist to the extent required by applicable accounting
principles until financial statements that include at least thirty
(30) days of combined financial results of such Company have been
published following the consummation of such “pooling of interests”
transaction).

 

Qualified Put Note.
This term is defined in Section 2.10.3 of this Agreement.

 

Qualified Sale.
A sale of all of the outstanding shares of Capital Stock of the Company to any
Person or group of Persons unaffiliated with the Company, Sterling and RFE in a
transaction where none of Carl Young, Dennis Nash, nor any Affiliate of
Sterling or RFE, receives any compensation, directly or indirectly, except in
respect of his or its shares of Capital Stock of the

 

11

 

Company and fees
pursuant to the Management Agreement or as permitted by Section 4.04(f)
of this Agreement.

 

Qualified Secondary
Offering. A public or private offering of the Common Stock
which occurs more than three months following the consummation of an Initial
Public Offering and is for an offering price per share of not less than eighty
percent (80%) of the Average Market Value of the Common Stock on the closing
date of such public or private offering.

 

“Register,”
“registered,” and “registration” refer to a registration effected
by preparing and filing a registration statement in compliance with the
Securities Act, and the declaration or ordering of the effectiveness of such
registration statement.

 

Registrable
Securities. (a) The Issuable Warrant Shares and (b) the
Issued Warrant Shares that have not been previously sold to the public.

 

Registration
Rights Agreement. That certain Registration Rights Agreement,
dated as of the Closing Date, among the Company, the Purchasers and certain
stockholders of the Company in substantially the same form as attached to as Annex
C to this Agreement.

 

RFE.
This term shall mean collectively RFE Investment Partners VI, L.P. and RFE VI
SBIC, L.P.

 

RSTW.  This term is defined in the preamble of this
Agreement.

 

Sale Event.
This term is defined in Section 2.10(i) of this Agreement.

 

Securities Act.
The Securities Act of 1933, as amended, and the rules and regulations
thereunder.

 

Senior Loan
Agreement. The Amended and Restated Credit Agreement dated as
of April 30, 2001, among the Company, AMGI, KTC, the lenders named therein
and Canadian Imperial Bank of Commerce, as Administrative Agent, and all
documents delivered pursuant thereto in connection with the loans and advances
made thereunder, and any permitted replacements and refinancing thereof.

 

Senior
Subordinated Obligations. This term shall have the meaning
ascribed to it in Section 11.1 of the Note Agreement.

 

Senior
Subordination Agreement. 
That certain Senior Subordination Agreement of even date herewith
executed by AMGI, KTC, the Senior Lender and the Purchasers pursuant to which
the relative priorities of the Senior Lender and the Purchasers with respect to
the repayment of Senior Debt and the Senior Subordinated Obligations are
established.

 

Series A
Convertible Preferred Stock. The Series A Convertible
Preferred Stock, $0.001 par value, of the Company having the rights,
restrictions, privileges and preferences of the series

 

12

 

of preferred stock
designated as “Series A Convertible Preferred Stock” set forth in the
Certificate of Designations.

 

Series B
Convertible Preferred Stock. The Series B Convertible
Preferred Stock, $0.001 par value, of the Company having the rights,
restrictions, privileges and preferences of the series of preferred stock
designated as “Series B Convertible Preferred Stock” set forth in the
Certificate of Designations.

 

Series C
Convertible Preferred Stock. The Series C Convertible
Preferred Stock, $0.001 par value, of the Company having the rights,
restrictions, privileges and preferences of the series of preferred stock
designated as “Series C Convertible Preferred Stock” set forth in the
Certificate of Designations.

 

Series D
Convertible Preferred Stock. The Series D Convertible
Preferred Stock, $0.001 par value, of the Company having the rights,
restrictions, privileges and preferences of the series of preferred stock
designated as “Series D Convertible Preferred Stock” set forth in the
Certificate of Designations.

 

Sterling.
This term shall mean Sterling Investment Partners, L.P., a Delaware limited
partnership.

 

Sterling
Principals.  This term
shall mean M. William Macey, Jr., Douglas Newhouse, Charles W. Santoro and
William L. Selden.

 

Stockholders’
Agreement. This term is defined in the preamble and includes
the Stockholders’ Agreement dated as of the Closing Date among the Company, the
Purchasers and each other stockholder or option holder of the Company in
substantially the form attached to this Agreement as Annex B.

 

Subsidiary.
Each Person of which or in which the Company or its other Subsidiaries own
directly or indirectly more than fifty percent (50%) of (i) the combined voting
power of all classes of stock having general voting power under ordinary
circumstances to elect a majority of the board of directors or equivalent body
of such Person, if it is a corporation or similar person; (ii) the capital interest
or profits interest of such Person, if it is a partnership, joint venture, or
similar entity; or (iii) the beneficial interest of such Person, if it is a
trust, association, or other unincorporated organization.

 

Valuation Event.
This term is defined in the definition of Fair Market Value.

 

Warrants.  Individually and collectively, the Warrants
referred to in Section 2.01, and all Warrants issued upon the transfer
or division of, or in substitution for, such Warrants.

 

Warrant Shares.
Collectively, the Issued Warrant Shares and the Issuable Warrant Shares,
together with all shares of Preferred Stock, Common Stock or Other Securities
into which any or all of the Issued Warrant Shares or Issuable Warrant Shares
may be converted.

 

13

 

1.02.        Accounting Principles. Where the
character or amount of any asset or liability or item of income or expense is
required to be determined or any consolidation or other accounting computation
is required to be made for the purposes of this Agreement, the same shall be
done, unless specified otherwise, in accordance with GAAP, except where such
principles are inconsistent with the requirements of this Agreement. Unless
otherwise indicated in this Agreement all accounting terms used in this
Agreement shall be construed, and all accounting and financial information or
computations shall be prepared or computed, in accordance with GAAP.

 

1.03         Other Interpretive Provisions.
Where any provision in this Agreement refers to action to be taken by any
Person, or which such Person is prohibited from taking, such provision shall be
applicable whether the action in question is taken directly or indirectly by
such Person. The words “herein,” “hereof,” “hereto,” “hereunder” and similar
forms refer to this Agreement as a whole and not to any particular provision of
this Agreement unless otherwise specified. The word “or” shall not be
exclusive; the singular includes the plural and the plural includes the
singular; and the word “including” is not limiting and means “including without
limitation”. References to this Agreement or any of the Other Agreements shall
mean the Agreement or such of the Other Agreements, as the case may be, as
amended, modified, supplemented or extended from time to time and any number of
substitutions, renewals and replacements thereto or therefor. References to
governmental laws, statutes, ordinances, rules and regulations shall be
construed as including all amendments, consolidations and replacements thereof
or therefor.

 

Article II

The Warrants

 

2.01         The Warrants.  On the Closing Date, each of the MassMutual
Investors agree to purchase from the Company at the purchase price set forth
beneath the name of such Purchaser on the signature page of this Agreement and
the Company agrees to issue to the MassMutual Investors, a warrant in
substantially the form attached to this Agreement as Annex A-1 and
incorporated in this Agreement by reference to purchase (a) the number of
shares of Series D Convertible Preferred Stock set forth beneath the name of
such MassMutual Investor on the signature page of this Agreement, plus (b) upon
the exercise of the Contingent Options, the number of shares of Common Stock
equal to the Contingent Options Adjustment Number, plus (c) upon the occurrence
of an event described in Section 2.12 of this Agreement, the number of
shares of Series D Convertible Preferred Stock or Common Stock provided for
therein, as such number of shares purchasable under such Warrant shall be
adjusted from time to time pursuant to the provisions of this Agreement, all in
accordance with the terms and conditions of this Agreement (the warrants
referred to in this sentence are hereinafter referred to as the “2001
MassMutual Investors Warrants”). On the Closing Date, RSTW agrees to
purchase from the Company at the purchase price set forth beneath the name of
RSTW on the signature page of this Agreement and the Company agrees to issue to
RSTW, a warrant in substantially the form attached to this Agreement as Annex A
and incorporated in this Agreement by reference to purchase (a) the number of
shares of Series D Convertible Preferred Stock set forth beneath the name of
RSTW as the number of warrant shares pertaining to the 2001 RSTW New Warrant on
the signature page of this Agreement,

 

14

 

plus (b) upon the
exercise of the Contingent Options, the number of shares of Common Stock equal
to the Contingent Options Adjustment Number, plus (c) upon the occurrence of an
event described in Section 2.12 of this Agreement, the number of shares
of Series D Convertible Preferred Stock or Common Stock provided for therein,
as such number of shares purchasable under such Warrant shall be adjusted from
time to time pursuant to the provisions of this Agreement, all in accordance
with the terms and conditions of this Agreement (the warrant referred to in
this sentence is hereinafter referred to as the “2001 RSTW New Warrants”).  On the Original Closing Date, RSTW purchased
from AMHC at the purchase price of One Hundred Dollars ($100), and AMHC issued
to RSTW, a warrant in the form attached to this Agreement as Annex A-2
and incorporated in this Agreement by reference to purchase the number of
shares of AMHC’s Series D Convertible Preferred Stock and AMHC’s common stock
provided for therein set forth, as such number of shares purchasable under such
warrant are to be adjusted from time to time (the warrant referred to in this
sentence is hereinafter referred to as the “1998 RSTW Warrant”).  Effective as of September 25, 2000, RSTW
purchased from AMHC at the purchase price of One Hundred Dollars ($100), and
AMHC issued to RSTW, a warrant in the form attached to this Agreement as Annex A-3
and incorporated in this Agreement to purchase the number of shares of AMHC’s
Series D Convertible Preferred Stock and AMHC’s Common Stock provided for
therein, as such number of shares purchasable under such warrant are to be
adjusted from time to time (the warrant referred to in this sentence is
hereinafter referred to as the “2000 RSTW Warrant”; and together with
the 1998 RSTW Warrant are hereinafter referred to as the “Original RSTW
Warrants”).  On the Closing Date,
the Original RSTW Warrants will be converted, pursuant to the Advantage Merger,
into one or more warrants which will be exchanged pursuant to this Agreement
for Warrants in substantially the form attached to this Agreement as Annex A-4
and incorporated in this Agreement by reference to purchase (a) the number of
shares of Series D Convertible Preferred Stock set forth beneath the name
of RSTW on the signature page of this Agreement, plus (b) upon the exercise of
the Contingent Options, the number of shares of Common Stock equal to the
Contingent Options Adjustment Number, plus (c) upon each occurrence of an event
described in Section 2.12 of this Agreement, the number of shares
of Series D Convertible Preferred Stock or Common Stock provided for therein,
as such number of shares purchasable under such warrant shall be adjusted from
time to time pursuant to the provisions of this Agreement, all in accordance
with the terms and conditions of this Agreement (the warrant referred to in
this sentence is hereinafter referred to as the “2001 RSTW Merger Warrants”).  Without limiting any other rights and
benefits to which the 2001 RSTW Merger Warrant shall be entitled under the
Advantage Merger or otherwise, the 2001 RSTW Merger Warrant also shall be
treated as purchased and issued under this Agreement and entitled to all of the
rights and benefits of this Agreement inuring to the Warrants purchased and
issued hereunder (including, but not limited to, the rights and benefits
inuring to such Warrants under the Stockholders’ Agreement and the Registration
Rights Agreement).

 

2.02         Legend. The Company will deliver
to Purchasers on the Closing Date one or more certificates representing the
Warrants purchased by such Purchaser in such denominations as such Purchaser
requests. Such certificates will be issued in the Purchasers name. It is
understood and agreed that the certificates evidencing the Warrants will bear
the following legend:

 

15

 

“THIS WARRANT AND
THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE BEEN ACQUIRED FOR INVESTMENT
AND NOT WITH A VIEW TO OR FOR SALE IN CONNECTION WITH THE DISTRIBUTION HEREOF.
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS, AND MAY NOT BE PLEDGED, SOLD, OFFERED FOR SALE, TRANSFERRED, OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF REGISTRATION UNDER OR EXEMPTION FROM
SUCH ACT AND ALL APPLICABLE STATE SECURITIES LAWS.”

 

“THIS WARRANT AND
THE SECURITIES ISSUABLE UPON EXERCISE HEREOF ARE SUBJECT TO THE TERMS AND
PROVISIONS OF A WARRANT PURCHASE AGREEMENT (‘THE WARRANT PURCHASE AGREEMENT’),
A STOCKHOLDERS’ AGREEMENT AND A REGISTRATION RIGHTS AGREEMENT, EACH DATED AS OF
APRIL 30, 2001, AMONG KTC/AMG HOLDINGS CORP. (TO BE RENAMED THE KENAN ADVANTAGE
GROUP, INC., AND REFERRED TO HEREIN AS THE ‘COMPANY’), RSTW PARTNERS III, L.P.,
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY, MASSMUTUAL CORPORATE INVESTORS,
MASSMUTUAL PARTICIPATION INVESTORS AND THE OTHER SIGNATORIES THERETO (AS SUCH
AGREEMENTS MAY BE SUPPLEMENTED, MODIFIED, AMENDED, OR RESTATED FROM TIME TO
TIME, THE ‘AGREEMENTS’). COPIES OF THE AGREEMENTS ARE AVAILABLE AT THE
EXECUTIVE OFFICES OF THE COMPANY.”

 

2.03         Exercise Price. The Exercise
Price per share will be $0.01 for each share of Series D Convertible
Preferred Stock and $0.001 for each share of Common Stock and/or Other
Securities covered by the Warrants; provided, however, that in no
event will the aggregate Exercise Price for all of the shares of Series D
Convertible Preferred Stock, Common Stock and/or Other Securities covered by
the Warrants exceed $150.00, whether as a result of any change in the par value
of the Series D Convertible Preferred Stock or the Common Stock, as a
result of any change in the number of shares purchasable as provided in this Article
II, or otherwise; provided, further, that such limitation of
the aggregate Exercise Price will have no limiting effect whatsoever upon the
amount or number of Warrant Shares for which the Warrants may be exercised.

 

2.04         Exercise.

 

(a)           The Warrants may be
exercised at any time or from time to time on or after the Closing Date until
April 30, 2011, on any day that is a Business Day, for all or any part of
the number of Issuable Warrant Shares purchasable upon its exercise. In order
to exercise any Warrants, in  whole or in part, the Holder will deliver
to the Company at the address designated by the Company pursuant to Section
6.06 of this Agreement, (i) a written notice of such Holder’s election
to exercise its Warrant, which notice will specify the number and type of
Issuable Warrant Shares to be purchased pursuant to such exercise, (ii) payment
of the Exercise Price, in an amount equal to the aggregate purchase

 

16

 

price for all
Issuable Warrant Shares to be purchased pursuant to such exercise, and (iii)
the Warrants. Such notice will be substantially in the form of the Subscription
Form appearing at the end of the Warrants. Upon receipt of such notice, the
Company will, as promptly as practicable, and in any event within five (5)
Business Days, execute, or cause to be executed, and deliver to such Holder a
certificate or certificates representing the aggregate number of full shares of
Series D Convertible Preferred Stock and/or Common Stock, as the case may be,
issuable upon such exercise, as provided in this Agreement. The stock
certificate or certificates so delivered will be in such denominations as may
be specified in such notice and will be registered in the name of such
Holder.  Warrants will be deemed to have
been exercised, such certificate or certificates will be deemed to have been
issued, and such Holder or any other Person so designated or named in such
notice will be deemed to have become a holder of record of such shares for all
purposes, as of the close of business on the date that such notice, together
with payment of the Exercise Price and the Warrants, are received by the
Company. If the Warrants have been exercised in part, the Company will, at the
time of delivery of such certificate or certificates, deliver to such Holder
new Warrants evidencing the rights of such Holder to purchase a number of
Issuable Warrant Shares with respect to which the Warrants have not been
exercised, which new Warrants will, in all other respects, be identical with
the Warrants, or, at the request of such Holder, appropriate notation may be
made on the Warrants and the Warrants returned to such Holder.

 

(b)           Payment of the Exercise Price will be
made, at the option of the Holder, by (i) wire transfer or certified or
official bank check, (ii) cancellation of any debt owed by the Company or any
Subsidiary to the Holder, or (iii) cancellation of warrant, valued at Fair
Market Value. If the Holder surrenders a combination of cash or cancellation of
any debt owed by the Company to the Holder of Warrants, the Holder will specify
the respective number of shares of Series D Convertible Preferred Stock and/or
Common Stock to be purchased with each form of consideration, and the foregoing
provisions will be applied to each form of consideration with the same effect
as if the Warrants were being separately exercised with respect to each form of
consideration; provided, however, that a Holder may designate
that any cash to be remitted to a Holder in payment of debt be applied,
together with other monies, to the exercise of the portion of the Warrants
being exercised for cash.

 

2.05         Taxes. The issuance of any
Series D Convertible Preferred Stock and/or Common Stock upon the exercise of
the Warrants will be made without charge to any Holder for any tax, other than income
taxes assessed on such Holder, in respect of such issuance.

 

2.06         Warrant Register. The Company
will, at all times while any of the Warrants remains outstanding and
exercisable, keep and maintain at its principal office a register in which the
registration, transfer, and exchange of the Warrants will be provided for. The
Company will not at any time, except upon the dissolution, liquidation, or
winding up of the Company, close such register so as to result in preventing or
delaying the exercise or transfer of any Warrants.

 

17

 

2.07         Transfer. The Warrants and all
options and rights under the Warrants are transferable, as to all or any part
of the number of Issuable Warrant Shares purchasable upon its exercise, by the
Holders of the Warrants, in person or by duly authorized attorney, on the books
of the Company upon surrender of the Warrants at the principal offices of the
Company, together with the form of transfer authorization attached to the
Warrants duly executed, subject to compliance with the provisions of Sections 4.01
and 4.03 of the Stockholders’ Agreement. Absent any such transfer and
subject to the Stockholders’ Agreement, the Company may deem and treat the
registered Holders of the Warrants at any time as the absolute owners of the
Warrants for all purposes and will not be affected by any notice to the
contrary. If any Warrant is transferred in part, the Company will, at the time
of surrender of such Warrant, issue to the transferee a Warrant covering the
number of Issuable Warrant Shares transferred and to the transferor a Warrant
covering the number of Issuable Warrant Shares not transferred. Notwithstanding
the foregoing, before any public offering of any Capital Stock of the Company,
no Holder shall transfer its Warrant Shares to any Person which the Board of
Directors of the Company, in its good faith sole discretion, determines is a
direct competitor of the Company, unless there has occurred either (i) an Event
of Default (as defined in the Note Agreement) under Section 8.1(a) of the Note
Agreement (other than a default by the Company in its obligation to purchase
all or such portion of the Put Shares in a circumstance which does not
constitute a Put Event Exercise Payment Default) or Section 8.1(g) of the Note
Agreement or (ii) a Put Event Exercise Payment Default.

 

2.08         Exchange Rights. At the option
of any Holder at any time prior to the consummation of an Initial Public
Offering of the Company, any such Holder may exchange its Warrants or Warrant
Shares for fully paid and nonassessable shares (calculated as to each exchange
to the nearest 1/10,000 of a share and rounded upward to the next 1/10,000) of
any class of capital stock of any Subsidiary of the Company that on the date of
receipt of the Exchange Notice has a class of capital stock which is publicly
traded (any such Subsidiary will be referred to in this Agreement as the
“Exchange Company” and the class of capital stock of any such Subsidiary which
is publicly traded will be referred to in this Agreement as “Exchange Stock”).
Each $1,000 worth of Warrants or Warrant Shares (valued at Fair Market Value on
the date that the Exchange Notice was sent), will be exchangeable for $1,000
worth of Exchange Stock (valued at Fair Market Value on the date that the
Exchange Notice was sent). To exchange Warrants or Warrant Shares into Exchange
Stock, the Holder will surrender at the principal office of the Exchange
Company the Warrants or certificate or certificates evidencing the Warrant
Shares duly endorsed or assigned to the Company, and give written notice to the
Company at such office that it elects to exchange such Warrants or Warrant
Shares (the “Exchange Notice”). Warrants or Warrant Shares will be deemed to
have been exchanged immediately prior to the close of business on the day of
the surrender for exchange in accordance with the foregoing provisions, and the
Person or Persons entitled to receive the Exchange Stock issuable upon any such
exchange will thereupon be treated for all purposes as the record holder or
holders of the Exchange Stock. As promptly as practicable on or after the
exchange date, the Exchange Company will issue and deliver a certificate or
certificates for the number of full shares of Exchange Stock issuable upon
exchange to the Person or Persons entitled to receive such shares. Upon
exchange of any Issued Warrant Shares, the Company will pay or make with
respect to Issued Warrant Shares any dividends or other distributions that have
been declared on

 

18

 

the Warrant Shares
in kind or cash (including without limitation the Dilution Fee described in Section
2.09 of this Agreement), as the case may be. If any Holder exchanges its
Warrants or Warrant Shares for shares of Exchange Stock pursuant to this Section
2.08, such Holder will have all of the rights set forth in this Article II,
except that for the purposes of this Article II the term “Company” will
refer instead to the Exchange Company and the term “Registrable Securities”
will refer to the shares of Exchange Stock held by such Holder.

 

2.09         Dilution Fee.
In the event that, during the term of the Warrants, the Company pays any cash
dividend or makes any cash distribution to any holder of any class of its
Capital Stock with respect to such Capital Stock, other than a distribution
pursuant to Section 2 or Section 3 of the Certificate of Designations, each
Holder of the Warrants will be entitled to receive in respect of its Warrants a
dilution fee in cash (the “Dilution Fee”) on the date of payment of such
dividend or distribution, which Dilution Fee will be equal to the highest
amount per share paid to any class of Capital Stock times the number of Issued
Warrant Shares then owned by such Holder plus the number of Issuable Warrant
Shares then owned by such Holder, less the amount of such dividend or
distribution otherwise paid to such Holder as a result of its ownership of such
Capital Stock.

 

2.10         Put Option.
The Company hereby grants to each Holder an option to sell to the Company, and
the Company is obligated to purchase from each Holder under such option (the
“Put Option”), all (or such portion as is designated by any such Holder) of the
Put Shares. The Put Option will be effective at any time or times after the
fifth (5th) anniversary of the date of this Agreement, or at any time or times
upon or after the occurrence of any of the following events (the “Put Option
Period”):

 

(a)           AMGI and Kenan shall
cease to own and control, beneficially and of record, 100% of the issued and
outstanding shares of capital stock of J. McDaniel, Inc., Evalia Acquisition
Corp., Petro-Chemical Transport, Inc., North Canton Transfer Co., Geni
Management Corporation or Advantage Tank Lines, Inc., free and clear of all
Liens other than Permitted Liens or Geni Management Corporation shall cease to
own and control, beneficially and of record, 100% of the issued and outstanding
shares of capital stock of Geni Transport, Inc.; or

 

(b)           AMHC shall cease to
own and control, beneficially and of record, 100% of the issued and outstanding
shares of capital stock of AMGI (except as a result of a merger of AMHC with
and into the Company or AMGI); or

 

(c)           the Company shall
cease to own and control, beneficially and of record, 100% of the issued and
outstanding shares of capital stock of AMHC (or, upon a merger of AMHC with and
into the Company, AMGI) and Kenan, free and clear of all Liens other than
Permitted Liens; or

 

(d)           any sale or other
disposition of all or substantially all of the consolidated assets of AMGI and
Kenan in a single transaction or series of related transactions; or

 

19

 

(e)           prior to the
consummation of an Initial Public Offering, (i) Persons holding Capital Stock
of the Company as of the Closing Date and their Permitted Transferees (as such
term is defined in the Stockholders’ Agreement in effect on the date hereof),
determined on a fully diluted basis, shall cease to own at least 51% of all
shares of Capital Stock of the Company or (ii) Sterling and/or RFE shall cease
to have the power to appoint a majority of the Company’s Board of Directors; or

 

(f)            the acquisition by
any Person, or two or more Persons acting in concert (other than the Persons
described in clause (e) above), of beneficial ownership (within the meaning of
Rule 13d-3 of the Commission under the Exchange Act) of 40% or more of the
outstanding shares of capital stock of the Company; or

 

(g)           Sterling ceases to
be represented on the Board of Directors of the Company; or

 

(h)           (i) more than two of
the Sterling Principals shall (other than by reason of death or disability)
cease to have (together with the other Sterling Principals) the right or
ability by voting power, contract or otherwise to direct or cause the direction
of the management and policies of Sterling or (ii) more than two of the
Sterling Principals shall (other than by reason of death or disability) cease
to be managing members of the sole general partner of Sterling; or

 

(i)            a merger (other
than a merger of AMHC with and into the Company), consolidation, share
exchange, or similar transaction involving the Company or sale in one or more
related transactions of all or substantially all of the assets, business, or
revenue or income generating operations of the Company, including the stock or
assets of its Subsidiaries (collectively, a “Sale Event”) or any
substantial change in the type of business conducted by the Company; or

 

(j)            after the
occurrence and during the continuance of an Event of Default (as defined in the
Note Agreement) pursuant to Section 8.1(a) of the Note Agreement or any failure
of the Company to perform any of its obligations hereunder, and such failure
shall continue uncured for a period of thirty (30) days following the earlier
of the date the Company is notified of such failure by a Holder or the date
upon which the Company first knew or should have known of such failure; provided,
however, that the Put Option Period will continue with respect to such
event, even after such default has been cured, if notice of exercise is
provided pursuant to this Article II during the existence of such Event
of Default or failure of performance hereunder; or

 

(k)           payment in full of
the Note, unless such payment is made out of the proceeds of an Initial Public
Offering;

 

provided, that, (i) the
Put Option shall expire upon the consummation of an Initial Public Offering to
the extent that it has not been exercised prior thereto and (ii) for purposes
of clauses (a), (b) or (c) above, a merger or consolidation of AMGI or Kenan into,
or with, any of their

 

20

 

Subsidiaries, or any
Subsidiary with or into any other Subsidiary, shall not cause the Put Option
Period to begin.

 

2.10.1      Put Price. In the event that any
Holder exercises the Put Option, the price (the “Put Price”) to be paid
to each such Holder pursuant to this Agreement will be cash in the sum of the
amount determined by (a) adding the products determined by multiplying the Fair
Market Value per share of each of the Series D Convertible Preferred Stock and
Common Stock as of the end of the month immediately preceding the date notice
is given of the exercise of the Put Option pursuant to Section 2.10.2 of
this Agreement times the number of shares of such Series D Convertible Preferred
Stock and Common Stock that would be issuable on such date upon the exercise of
the Warrants for which the Put Option is being exercised by such Holder and
subtracting therefrom (b) an amount equal to the Exercise Price times the
number of shares of Series D Convertible Preferred Stock and/or Common Stock
issuable pursuant to any unexercised portion of the Warrants for which the Put
Option is being exercised by such Holder; provided, however, in the event (i) a
Sale Event with a bona fide third party occurs which is a Qualified Sale (or
would have constituted a Qualified Sale but for the fact that it is not a sale
of all of the outstanding shares of Capital Stock of the Company) and (ii) one
or more Holders elects to exercise the Put Option and either (A) such Holder(s)
have agreed to the price to be paid to holders of Common Stock and all classes
of Preferred Stock in connection with such Sale Event or (B) the Holders have
been provided with a “fairness opinion” from an investment banker agreed upon by
the parties hereto or selected by the Company from a group of three (3)
nationally recognized investment bankers selected by a sixty-six and two-thirds
percent (66 2/3%) in interest of the Holders which are independent of each
Holder, stating that the price per Warrant Share to be received by the Holders
in the Sale Event is fair to such Holders from a financial point of view, the
Put Price to be paid to each such Holder pursuant to this Agreement will be
cash in the sum of the amount determined by multiplying the price per share of
such Warrant Shares set by the Company in connection with such Sale Event times
the number of Warrant Shares for which the Put Option is being exercised by
such Holder, except that in the case of a Qualified Sale in which the Purchase
Price being paid for the Company’s Capital Stock is being paid in Qualified
Public Securities the Put Price to be paid to each such Holder pursuant to this
Agreement will be paid in Qualified Public Securities in the exchange ratio
specified in such “fairness opinion”, but in no event shall the Holders
exercising the Put Option receive less cash (other than cash paid in respect of
fractional shares) as a percentage of the per-share consideration received by
them in respect of their Series D Convertible Preferred Stock or Common Stock,
as the case may be, than the other holders of Preferred Stock or Common Stock,
respectively, received in such Qualified Sale. The Put Price shall be
determined without premium for control or discount for minority interests,
illiquidity, or restrictions on transfer.

 

2.10.2      Exercise of Put Option. The Put
Option may be exercised during the Put Option Period with respect to all or any
portion of the Put Shares, by such Holder giving notice to the Company and to
each other Holder, either prior to or during the Put Option Period, of the
Holder’s election to exercise the Put Option, and the date of the Put Option
Closing, which will be not less than ninety (90) days after the date of such
notice. The Company will provide each Holder desiring to exercise its Put
Option the name and address of each other Holder. Notwithstanding the
foregoing, if a Holder receives such notice of another Holder’s exercise of

 

21

 

such other
Holder’s Put Option, the Holder receiving such notice may elect to exercise its
Put Option and designate a Put Option Closing simultaneous and pari passu with
that of such other Holder if the Holder electing to exercise its Put Option
under the circumstances described in this sentence gives notice of its election
to the Company and such other Holder at least forty-five (45) days prior to
such Put Option Closing.

 

2.10.3      Certain Remedies.

 

(a)           In the event that
the Company defaults in its obligation to purchase all or any portion of the
Put Shares upon exercise of the Put Option and either (i) such Holder’s
exercise of the Put Option was based upon the occurrence of an event described
in any of subsections (a), (b), (c), (d), (e), (f), (g), (h), (i), (j) and (k)
of Section 2.10 of this Agreement, or (ii) an Initial Public Offering
has been consummated (whether or not it was or is consummated prior to or
subsequent to the date of such default), in addition to any other rights or
remedies of each Holder, the unpaid portion of the Put Price will bear interest
at the rate of fifteen percent (15%) per annum at all times from and after the
date of such default.  In the event that
the Company is prohibited by the terms of the Senior Loan Agreement from paying
all or any portion of the Put Price in cash upon the exercise of the Put Option
during the period after the fifth (5th) anniversary of the Closing
Date but prior to the eighth (8th) anniversary of the Closing Date
in any case other than that described in the immediately preceding sentence,
the Company may issue a Qualified Put Note (as defined below) to the extent not
paid in cash because of such prohibition. 
The Qualified Put Notes will be subordinate to the Senior Debt (as such
term is defined in Senior Subordination Agreement) pursuant to the terms of the
Senior Subordination Agreement.

 

(b)           As used in this
Agreement, “Qualified Put Note” means a promissory note made by the Company
payable to the Holders which have exercised their Put Option but have not been
paid in full in cash with respect thereto because of the operation of the
second sentence of subparagraph (a) of Section 2.10.3, which promissory
note shall be guarantied by Kenan, AMHC, AMGI, and all other present and future
Subsidiaries of the Company and all other present and future obligors or
guarantors of all or any part of the Senior Subordinated Obligations, and have
the same rights, benefits, protections and priority as the Note, except as
follows:

 

(i)            the scheduled maturity date upon
which all interest and principal thereon is due and payable is the earliest of
(A) the eighth (8th) anniversary of the Closing Date, (B) the
earliest date upon which payment thereunder would not be prohibited from being
made under the Senior Loan Agreement, and (C) the date of the repayment in full
of the Senior Debt (as such term is defined in the Note Agreement), and prior
to such date no portion of the principal, interest or other amounts owing
thereunder shall become due, whether in cash, kind, other securities or
otherwise; and

 

(ii)           the rate of interest which accrues on
the unpaid amount thereof is (A) 15.0% per annum during the first 12 month
period following the date of exercise of the Put Option which gave rise to the
Put Price covered by the such promissory note, (B) 17.5%

 

22

 

per annum during
the next ensuing 9 month period following the date of exercise of the Put
Option which gave rise to the Put Price covered by the such promissory note,
and (C) 20.0% per annum thereafter.

 

(c)           In addition to, and not in limitation
of, any and all other rights and remedies of the Holders under this Agreement
or otherwise, in the event that at any time all or any portion of any Put Price
has not been paid in full in cash for any reason whatsoever (including, but not
limited to the operation of any provision of this Section 2.10.3) at the
time of any exercise by any Holder of the Put Option, the Company, Sterling
Investment Partners, L.P. and RFE Investment Partners shall promptly commence
and diligently pursue the sale of the Company in accordance with the agreement
delivered pursuant to Section 5.06 of this Agreement.

 

2.10.4      Put Option Closing.
The closing for the purchase and sale of all or such portion of the Put Shares
as to which the Holder has notified the Company of its intention to exercise
the Put Option, will take place at the office of the Company on the date
specified in such notice of exercise (a “Put Option Closing”). At any Put
Option Closing, to the extent applicable, the Holder of the Put Shares will
deliver the certificate or certificates evidencing the Put Shares being
purchased, duly endorsed in blank. In consideration therefor, the Company will
deliver to the Holder the Put Price, which will be payable in cash.

 

2.11         Call Option. Each Holder hereby
severally grants to the Company an option to require such Holder to sell to the
Company, and each Holder is obligated to sell to the Company under this option
(the “Call Option”), all of its Warrants and its Warrant Shares. The Call
Option will be effective after the sixth (6th) anniversary of the date of this
Agreement but shall expire upon the consummation of an Initial Public Offering
(the “Call Option Period”).

 

2.11.1      Call Price. In the event that the
Company exercises the Call Option, the exercise price to be paid in cash to
each Holder will be equal to the Put Price determined in accordance with Section
2.10.1 of this Agreement, except that the Call Option will be exercised
with respect to the entire Warrant and all Warrant Shares, and will be
increased by an amount in cash equal to any Excess Consideration received
within two hundred seventy (270) days following the exercise of the Call Option
due to an Adjustment Event.

 

2.11.2      Exercise of Call Option. The Call
Option may be exercised during the Call Option Period with respect to all of
the Warrants and the Warrant Shares of all Holders, by the Company giving
notice to each Holder during the Call Option Period of the election of the
Company to exercise the Call Option, and the date of the Call Option Closing
(as defined below), which in all events will be at least sixty (60) days but no
more than ninety (90) days after the date of such notice.

 

2.11.3      Call Option Closing. The closing
for the purchase and sale of all of the Warrants and Warrant Shares that the
Company has elected to purchase under this Agreement, will take place at the
office of the Company, on the date specified in such notice of exercise (the
“Call Option Closing”). At the Call Option Closing, the Holders of the Warrants
will deliver the

 

23

 

Warrants and the
certificate or certificates representing the Warrant Shares, duly endorsed in
blank. In consideration therefor, the Company will deliver to each Holder the
purchase price, which will be payable in immediately available funds.

 

2.12         Adjustments to Number of Shares
Purchasable.

 

(a)           The
Warrants will be exercisable for the number of shares of Series D
Convertible Preferred Stock and Common Stock in such manner that, following the
complete and full exercise of the Warrants of each Holder, the amount of
Series D Convertible Preferred Stock and Common Stock issued to all
Holders will equal 6,731 shares of Series D Convertible Preferred Stock plus up
to 44,037 shares of Common Stock for the Contingent Option Adjustment Number,
subject to antidilution adjustments from time to time, and as adjusted, to the
extent necessary, to give effect to the following events:

 

(i)            In
case at any time or from time to time, the holders of any class of Capital
Stock have received, or (on or after the record date fixed for the
determination of shareholders eligible to receive) have become entitled to
receive, without payment therefor:

 

(A)          consideration (other
than cash) by way of dividend or distribution; or

 

(B)           consideration
(including cash) by way of spin-off, split-up, reclassification (including any
reclassification in connection with a consolidation or merger in which the
Company is the surviving corporation), recapitalization, combination of shares
into a smaller number of shares, or similar corporate restructuring;

 

other than
additional shares of Series D Convertible Preferred Stock or Common Stock
issued to holders thereof in a transaction for which adjustments are provided
for in Sections 2.12(a)(ii) and (iii) of this Agreement,
then, and in each such case, the Holders, on the exercise of the Warrants, will
be entitled in addition to receive for each share of Series D Convertible
Preferred Stock or Common Stock, as the case may be, issuable under the
Warrants as of the record date fixed for such distribution, the amount of
consideration equal to the quotient determined by (i) dividing the amount of
such distribution by the Purchaser Ownership Percentage and subtracting from such
amount the amount of such distribution and (ii) then dividing the remainder by
the number of shares of Series D Convertible Preferred Stock then issuable
to such Holder upon exercise of the Warrants less the amount of any Dilution
Fee actually and indefeasibly paid to such Holders. All such consideration
receivable upon exercise of the Warrants with respect to such a distribution
will be deemed to be outstanding and owned by such Holder for purposes of
determining the amount of consideration to which such Holder is entitled upon
exercise of the Warrants with respect to any subsequent distribution.

 

24

 

(ii)           If at any time
there occurs any stock split, stock dividend, reverse stock split, or other
subdivision of the Series D Convertible Preferred Stock or the Common Stock,
then the number of shares of Series D Preferred Stock or Common Stock, as the
case may be, to be received by the Holder of the Warrants and the Exercise
Price, subject to the limitations set forth in this Agreement, will be
proportionately adjusted.

 

(iii)          In case of any
reclassification or change of outstanding shares of any class of Capital Stock
(other than a change in par value, or from par value to no par value, or from
no par value to par value), or in the case of any consolidation of the Company
with, or merger or share exchange of the Company with or into, another Person,
or in case of any sale of all or substantially all of the property, assets,
business, income or revenue generating capacity, or goodwill of the Company,
the Company, or such successor or other Person, as the case may be, will
provide that the Holder of the Warrants and/or the Warrant Shares will
thereafter be entitled in addition to receive the highest per share kind and
amount of consideration received or receivable (including cash) upon such
reclassification, change, consolidation, merger, share exchange, or sale had
they owned such Series D Convertible Preferred Stock and Common Stock
immediately prior to such reclassification, change, consolidation, merger,
share exchange, or sale (as adjusted pursuant to Section 2.12(a)(i) of
this Agreement and otherwise in this Agreement). Any such successor Person,
which thereafter will be deemed to be the Company for purposes of the Warrants
and the Warrant Shares, will provide for adjustments that are as nearly
equivalent as may be possible to the adjustments provided for by this Section
2.12 of this Agreement; provided, however, that the foregoing portion of
this sentence shall not apply in the case of a Qualified Sale in which
(i) the Holders have been provided with a “fairness opinion” from a
nationally recognized investment banker selected by the Company (other than one
as to which a majority in interest of the Holders has a reasonable objection),
(ii) the consideration received by the Holders in exchange for all of the
Warrants and the Warrant Shares consists exclusively of Qualified Public
Securities of the kind and amount of consideration received or receivable by
the holders of the Common Stock and the Preferred Stock and/or cash in an
amount equal to the Fair Market Value of such consideration, and (iii) (A)
the Holders have been afforded the opportunity to exercise new Put Option
rights on the same terms and conditions as described under Section 2.10
of this Agreement, mutatis mutandis with respect thereto
(notwithstanding the fact that the unexercised portion of the Put Option has
otherwise expired upon the consummation of an Initial Public Offering), (B) in
the event that the Holders have exercised any such rights hereof prior to or in
connection with any such Qualified Sale, such Holders have been paid in full in
cash in respect thereof prior to or simultaneously with the closing of such
Qualified Sale, and (C) no restrictions shall at such time be in existence on
the Holders with respect to such cash or such payment under the terms of any
subordination agreement or similar

 

25

 

agreement,
document or instrument (e.g., the Holders are not prohibited from receiving any
such cash or payment or obligated to turnover any such cash or payment to any
senior lender to the Company or any Subsidiary).

 

(iv)          If
at any time after the Closing Date the Company issues or sells any shares of
any Capital Stock (other than Permitted Stock, shares of Capital Stock upon
exercise, exchange or conversion of a security which, at the time of its
issuance or sale, was issued at a per unit price which either (a) was less than
the Exercise Price or the then current Fair Market Value per share of Common
Stock, and as a result, an adjustment was made pursuant to this clause (iv) or
(b) was equal to or greater than the Exercise Price or the then current Fair
Market Value per share of Common Stock, or in a situation covered by
subparagraph (iii) above or in a Qualified Secondary Offering), at a per unit
or share price less than the Exercise Price or the then current Fair Market
Value per share of Common Stock immediately prior to the time such Capital Stock
is issued or sold (the “Additional Securities”), then:

 

(A)          the Exercise Price
will be reduced (but not increased) to the lower of the prices calculated by:

 

(I)            dividing (x) an
amount equal to the sum of (1) the number of shares of Capital Stock outstanding
on a fully diluted basis immediately prior to such issuance or sale multiplied
by the then existing Exercise Price plus (2) the aggregate consideration, if
any, received by the Company upon such issuance or sale, by (y) the total
number of shares of Capital Stock outstanding immediately after such issuance
or sale; and

 

(II)           multiplying the
then existing Exercise Price by a fraction, the numerator of which is (x) the
sum of (1) the number of shares of Capital Stock outstanding on a fully diluted
basis immediately prior to such issuance or sale, multiplied by the Fair Market
Value per share of Common Stock immediately prior to such issuance or sale,
plus (2) the aggregate consideration received by the Company upon such issuance
or sale, divided by the total number of shares of Capital Stock outstanding
immediately after such issuance or sale, and the denominator of which is the
(y) Fair Market Value per share of Common Stock immediately prior to such
issuance or sale (for purposes of this subsection (II), the date as of
which the Fair Market Value per share of Common Stock will be computed will be
the earlier of the date upon which the Company will (aa) enter into a firm
contract for the issuance of such shares, or (bb) issue such shares); and

 

26

 

(B)           the number of shares
of Series D Convertible Preferred Stock and Common Stock (other than shares of
Common Stock issuable pursuant to Section 2.12(b), if the Contingent Options
have not been exercised) for which any of the Warrants may be exercised at the
Exercise Price resulting from the adjustment described in subsection (A)
above will be equal to the product of the number of shares of Series D
Convertible Preferred Stock and Common Stock (other than shares of Common Stock
issuable pursuant to Section 2.12(b), if the Contingent Options have not been
exercised), as the case may be, purchasable under such Warrants immediately
prior to such adjustment multiplied by a fraction, the numerator of which is
the Exercise Price in effect immediately prior to such adjustment and the
denominator of which is the Exercise Price resulting from such adjustment.

 

(v)           In
case any event occurs as to which the preceding Sections 12.12(a)(i)
through (iv) of this Agreement are not strictly applicable, but as to
which the failure to make any adjustment would not fairly protect the purchase
rights represented by the Warrants in accordance with the essential intent and
principles of this Agreement, then, in each such case, unless such firm is
otherwise agreed to by the parties hereto, the Company shall select an
independent investment bank or firm of independent public accountants, such
investment bank or firm of independent public accountants to be selected from a
group of three nationally recognized investment banks or firms of public
accountants chosen by a majority-in-interest of the Holders, which will give
its opinion as to the adjustment, if any, on a basis consistent with the
essential intent and principles established in this Agreement, necessary to
preserve the purchase rights represented by the Warrants. Upon receipt of such
opinion, the Company will promptly deliver a copy of such opinion to the Holder
and will make the adjustments described in such opinion. The fees and expenses
of such investment bank or independent public accountants will be borne by the
Company.

 

(b)           In
addition to, and not in limitation of, the other provisions of this Section 2.12,
upon the exercise of each Contingent Option the number of shares of Common Stock
for which the Warrants shall be exercisable, and the number of Warrant Shares,
shall be increased to also include an additional number of shares of Common
Stock equal to the Contingent Options Adjustment Number. As used herein,
“Contingent Options Adjustment Number” means a number of shares of Common Stock
equal to the sum of (a) the quotient of the number of shares of Common Stock
issued upon the exercise of the Contingent Options divided by the Purchaser
Ownership Percentage minus (b) the number of shares of Common Stock issued upon
the exercise of the Contingent Options.

 

(c)           The
Company will not by any action including, without limitation, amending, or
permitting the amendment of, the charter documents, bylaws, or similar
instruments of the Company or through any reorganization, reclassification,
transfer of

 

27

 

assets, consolidation, merger, share exchange, dissolution, issue or
sale of securities, or any other similar voluntary action, avoid or seek to
avoid the observance or performance of any of the terms of this Agreement or
the Warrants, but will at all times in good faith assist in the carrying out of
all such terms and in the taking of all such actions as may be necessary or
appropriate to protect the rights of the Holders against impairment or
dilution. Without limiting the generality of the foregoing, the Company will
(i) take all such action as may be necessary or appropriate in order that
the Company may validly and legally issue fully paid and nonassessable shares
of Series D Convertible Preferred Stock and/or Common Stock, as the case
may be, free and clear of all liens, encumbrances, equities, and claims and
(ii) use its best efforts to obtain all such authorizations, exemptions, or
consents from any public regulatory body having jurisdiction over the Company
as may be necessary to enable the Company to perform its obligations under the
Warrants. Without limiting the generality of the foregoing, the Company
represents and warrants that the board of directors of the Company has
determined the Exercise Price to be adequate and the issuance of the Warrants
to be in the best interests of the Company.

 

(d)           Any calculation
under this Section 2.12 will be made to the nearest one ten-thousandth
(1/10,000) of a share and the number of Issuable Warrant Shares resulting from
such calculation will be rounded up to the next one ten-thousandth (1/10,000)
share of the Series D Convertible Preferred Stock and/or Common Stock, as
the case may be, comprising Issuable Warrant Shares.

 

2.13         Lost, Stolen,
Mutilated or Destroyed Warrants. Upon receipt of evidence satisfactory to
the Company of the loss, theft, mutilation or destruction of a Warrant, and, in
the case of any such loss, theft or destruction, upon delivery of a bond of
indemnity in such form and amount as shall be reasonably satisfactory to the
Company or, in the event of such mutilation upon surrender and cancellation of
a Warrant, the Company, without charge to the Holder thereof, will make and deliver
a new Warrant of like tenor and the same series in lieu of such lost, stolen,
destroyed or mutilated Warrant. If any such lost, stolen or destroyed Warrant
is owned by a Purchaser or any other Holder whose credit is satisfactory to the
Company, then the affidavit of an authorized officer of such owner setting
forth the fact of loss, theft or destruction and of its ownership of the
Warrant at the time of such loss, theft or destruction shall be accepted as
satisfactory evidence thereof, and no further indemnity shall be required as a
condition to the execution and delivery of a new Warrant, other than a written
agreement of such owner (in form reasonably satisfactory to the Company) to
indemnify the Company.

 

2.14         Stock Legend.
The Warrants and the Warrant Shares have not been registered under the
Securities Act or qualified under applicable state securities laws.
Accordingly, unless there is an effective registration statement and
qualification respecting the Warrants and the Warrant Shares under the Securities
Act or under applicable state securities laws at the time of exercise of a
Warrant, any stock certificate issued pursuant to the exercise of a Warrant
will bear the following legend:

 

28

 

“THE SHARES REPRESENTED BY THIS CERTIFICATE (A) HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS, AND MAY NOT BE PLEDGED, SOLD, OFFERED FOR SALE, TRANSFERRED,
OR OTHERWISE DISPOSED OF IN THE ABSENCE OF REGISTRATION UNDER OR EXEMPTION FROM
SUCH ACT AND ALL APPLICABLE STATE SECURITIES LAWS AND (B) ARE SUBJECT TO THE
TERMS OF AND PROVISIONS OF A WARRANT PURCHASE AGREEMENT, A STOCKHOLDERS’
AGREEMENT AND A REGISTRATION RIGHTS AGREEMENT, EACH DATED AS OF APRIL 30, 2001
AMONG KTC/AMG HOLDINGS CORP. (THE “COMPANY”), RSTW PARTNERS III, L.P.,
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY, MASSMUTUAL CORPORATE INVESTORS,
MASSMUTUAL PARTICIPATION INVESTORS AND THE OTHER SIGNATORIES THERETO (AS SUCH
AGREEMENTS MAY BE SUPPLEMENTED, MODIFIED, AMENDED, OR RESTATED FROM TIME TO
TIME, THE “AGREEMENTS”). COPIES OF THE AGREEMENTS ARE AVAILABLE AT THE OFFICES
OF THE COMPANY.”

 

Article III

Representations and Warranties

 

3.01         Representations
and Warranties of the Company. The Company represents and warrants to the
Purchasers that:

 

(a)           The Company is a
corporation duly organized and existing and in good standing under the laws of
its state of incorporation and is qualified or licensed to do business in all
other countries, states, and jurisdictions the laws of which require it to be
so qualified or licensed except where the failure to be so qualified or
licensed would not have a Material Adverse Effect on the Company and its
Subsidiaries taken as a whole. A true and correct copy of the Certificate of
Incorporation of the Company, together with all amendments thereto through the
Closing Date and the Certificate of Designations, is attached hereto as Annex
D. The Company has no Subsidiaries or debt or equity investment in any
Person other than Kenan and AMHC, which are wholly-owned subsidiaries of the
Company after giving effect to the consummation of the transactions
contemplated by the Acquisition Documents, and indirectly, those Subsidiares
set forth on Schedule 3.01.  No
Person has any rights, whether granted by the Company or any other Person, to
acquire any portion of the equity interest of the Company or the assets of the
Company or any of its Subsidiaries, except as set forth in the Stockholders’
Agreement and the Emery Asset Purchase Agreement and except for the Management
Options, the Contingent Options and the Warrants.

 

(b)           The Company has, and
at all times that this Agreement is in force will have, the right and power,
and is duly authorized, to enter into, execute, deliver, and perform this
Agreement, the Stockholders’ Agreement, the Registration Rights Agreement and
the Warrants, and the officers of Company executing and delivering this
Agreement, the Stockholders’ Agreement, the Registration Rights Agreement and
the Warrants are

 

29

 

duly authorized to
do so. This Agreement, the Stockholders’ Agreement, the Registration Rights
Agreement and the Warrants have been duly and validly executed, issued, and
delivered and constitute the legal, valid, and binding obligations of Company
enforceable in accordance with their respective terms subject to applicable
bankruptcy, insolvency, reorganization and moratorium laws and other laws of
general application affecting enforcement of creditors’ rights generally and to
general equitable principles.

 

(c)           The execution,
delivery, and performance of this Agreement, the Stockholders’ Agreement, the
Registration Rights Agreement and the Warrants will not, by the lapse of time,
the giving of notice, or otherwise, constitute a violation of any applicable
provision contained in the charter, bylaws, or organizational documents of the
Company or contained in any agreement, instrument, or document to which the
Company is a party or by which it is bound.

 

(d)           As of the Closing
Date and after giving effect to the transactions contemplated by the Note
Agreement, the Stockholders’ Agreement, and the Acquisition Agreements (as
defined in the Note Agreement), the authorized capital stock of the Company
consists of:

 

(i) 7,000,000 shares of Common Stock, of which, after giving effect to
the transactions contemplated by the Stockholders’ Agreement, 200,800 shares
are issued and outstanding and 335,200 are reserved for issuance upon
conversion of the Series A Convertible Preferred Stock, 4,000,000 are reserved
for issuance upon conversion of the Series B Convertible Preferred Stock,
128,000 are reserved for issuance upon conversion of the Series C Convertible
Preferred Stock and 800,000 are reserved for issuance upon conversion of the
Series D Convertible Preferred Stock and 44,037 are reserved for issuance upon
the exercise of the Warrants pursuant to the adjustments provided for in Section
2.12(b) of this Agreement, 592,189 are reserved for issuance upon exercise
of the Management Options, and 343,400 are reserved for issuance upon the
exercise of the Contingent Options;

 

(ii) 3,352 shares of Series A Convertible Preferred Stock, all of which
shares are issued and outstanding;

 

(iii) 40,000 shares of Series B Convertible Preferred Stock, of which
39,926 shares are issued and outstanding;

 

(iv) 1,280 shares of Series C Convertible Preferred Stock, all of which
shares are issued and outstanding; and

 

(v) 8,000 shares of Series D Convertible Preferred Stock, of which none
are issued and outstanding and all shares of which are reserved for issuance
upon exercise of the Warrants, including the adjustments provided for in Article
II of this Agreement.

 

30

 

All such issued
and outstanding shares have been duly authorized and validly issued, are fully
paid and nonassessable, and have been offered, issued, sold, and delivered by
the Company free from preemptive rights, rights of first refusal, or similar
rights and in compliance with applicable federal and state securities laws.
Except pursuant to this Agreement and except for the Permitted Stock, the
Company is not obligated to issue or sell any Capital Stock, and except for the
Stockholders’ Agreement, the Company is not party to, or otherwise bound by,
any agreement affecting the voting of any Capital Stock.

 

(e)           The shares of Series
D Convertible Preferred Stock and Common Stock issuable on exercise of the
Warrants have been duly and validly authorized and reserved for issuance and,
when issued in accordance with the terms of the Warrants will be validly
issued, fully paid, and nonassessable and free of preemptive rights, rights of
first refusal, or similar rights (other than as set forth in Section 4.03 of
the Stockholders’ Agreement).

 

(f)            After giving effect
to the Kenan Acquisition Transaction and the Advantage Acquisition Transaction,
the Company has no assets other than 100% of the issued and outstanding shares
of capital stock of Kenan and AMHC, and the sole business of the Company is to
own such stock.

 

(g)           There is no
agreement, arrangement, or understanding involving the Company, other than this
Agreement, the Stockholders’ Agreement, and the documents contemplated hereby
and thereby, modifying, restricting, or in any way affecting the rights of any
securityholder to vote securities of the Company.

 

(h)           Each of the
representations and warranties made by the Company pursuant to the
Stockholders’ Agreement is true and correct.

 

(i)            None of the
documents, instruments or other information furnished to the Purchasers by the
Company contains any untrue statement of a material fact or omits to state any
material fact necessary in order to make any statements made therein not
misleading. No representation, warranty, or statement made by the Company in
this Agreement, the Stockholders’ Agreement, or the Registration Rights
Agreement, or in any document, certificate, exhibit or schedule attached hereto
or thereto or delivered in connection herewith or therewith, contains or will
contain any untrue statement of a material fact, or omits or will omit to state
a material fact necessary to make any statements made herein or therein not
misleading. There is no fact that materially and adversely affects the
condition (financial or otherwise), results of operations, business,
properties, or (other than facts relating to the economy generally) prospects
of the Company that has not been disclosed in the documents provided to the
Purchasers.

 

(j)            As of the Closing
Date and after giving effect to the transactions contemplated by the Note
Agreement, the Stockholders’ Agreement, and the Acquisition Documents, the
authorized capital stock of each Subsidiary of the Company and the

 

31

 

identity of the
holders (and respective holdings) of all of the issued and outstanding shares
of capital stock of each such Subsidiary are as set forth on Schedule
3.01(j) of this Agreement. All such issued and outstanding shares have been
duly authorized and validly issued, are fully paid and nonassessable, and have
been offered, issued, sold, and delivered by the respective Subsidiary of the
Company free from preemptive rights, rights of first refusal, or similar rights
and in compliance with applicable federal and state securities laws. There are
no outstanding contracts, options, warrants, instruments, documents or
agreements binding upon the Company or any Subsidiary of the Company granting
to any Person or group of Persons any right to purchase or acquire shares of
any such Subsidiary’s capital stock, and, except for the Stockholders’
Agreement, neither the Company nor any of its Subsidiaries is a party to, or
otherwise bound by, any agreement affecting the voting of any capital stock of
any of them. Except for the Registration Rights Agreement, neither the Company
nor any of its Subsidiaries is a party to, or otherwise bound by, any agreement
obligating it to register any of the capital stock of any of them.

 

(k)           A true and correct
copy of the Management Agreement is attached hereto as Annex E.

 

(l)            A true and correct
copy of each of the Contingent Option Agreements is attached hereto as Annex
F.

 

(m)          A true and current
copy of the (i) the Amended and Restated Senior Management Option Agreement
dated as of the date hereof executed by the Company in favor of Dennis Nash and
Carl Young and (ii) the plan, if such plan exists, and form of agreement
pursuant to which all other options will be issued and a list of all grantees
thereunder (including the number of options to be issued to such grantees and
the exercise price of such options) is attached hereto as Annex G.

 

3.02         Representations and Warranties of
the Purchasers.  Each Purchaser
represents and warrants to the Company with respect to only itself:

 

(a)           It is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization.

 

(b)           It has the right,
power and authority to enter into, execute, deliver and perform its obligations
under this Agreement, and its partners, officers or agents executing and
delivering this Agreement are duly authorized to do so. This Agreement has been
duly and validly executed and delivered and constitutes the legal, valid and
binding obligation of it, enforceable in accordance with its terms.

 

(c)           It (i) is an “accredited
investor,” as that term is defined in Regulation D under the Securities Act; or
(ii) has such knowledge, skill, and experience in business and financial
matters, based on actual participation, that it is capable of evaluating the
merits

 

32

 

and risks of an
investment in the Company and the suitability thereof as an investment for it.

 

(d)           It is acquiring its
Warrants and any securities issuable upon exercise of the Warrants for
investment for its own account and not with a view to any distribution thereof
in violation of applicable securities laws.

 

(e)           It agrees that the
certificates representing its Warrants and any Issued Warrant Shares will bear
the legends referenced in this Agreement, and such Warrants or securities
issuable upon exercise of the Warrants will not be offered, sold, or
transferred in the absence of registration or exemption under applicable
securities laws.

 

Article IV

Covenants

 

The Company
covenants and agrees as follows:

 

4.01         Financial Statements. The
Company will keep books of account and prepare financial statements and will
cause to be furnished to the Purchasers and each other Holder (all of the
foregoing and following to be kept and prepared in accordance with United
States generally accepted accounting principles applied on a consistent basis):

 

(a)           As soon as
available, and in any event within one hundred twenty (120) days after the end
of each fiscal year of the Company, beginning with the fiscal year ending
December 31, 2001, (i) a copy of the financial statements of the Company
and each Subsidiary for such fiscal year containing a consolidated and
consolidating balance sheet, statement of income, statement of stockholders’
equity, and statement of cash flows, each as at the end of such fiscal year and
for the fiscal year then ended and in each case setting forth in comparative
form the figures for the preceding fiscal year, along with management’s
discussion and analysis of variances, all in reasonable detail and audited and
certified, in the case of the consolidated financial statements, by Ernst &
Young LLP or other independent certified public accountants of recognized
standing selected by the Company and consented to by the Purchasers, such
consent not to be unreasonably withheld; and (ii) a comparison of the actual
results during such fiscal year to those originally budgeted by the Company
prior to the beginning of such fiscal year (or in respect of the fiscal year
ended December 31, 2001, the projections for such year provided to the
Purchasers on the Closing Date) and a narrative description and explanation of
any budget variances. The annual audit report required by this Agreement will
not be qualified by or make reference to any disclosure that the Company or any
Subsidiary may not continue as a going concern or otherwise be qualified or
limited because of restricted or limited examination by the accountant of any
portion of any of the records of the Company or any Subsidiary.

 

(b)           As soon as
available, and in any event within thirty (30) days after the end of each
calendar month, a copy of unaudited consolidated and consolidating financial

 

33

 

statements of the
Company and all Subsidiaries as of the end of such calendar month and for the
portion of the fiscal year then ended, subject to year-end audit adjustments,
containing a balance sheet, statement of income, and statement of cash flows,
in each case setting forth in comparative form the figures for the corresponding
period of the preceding fiscal year and all in reasonable detail, including,
without limitation, a comparison of the actual results during such period to
those originally budgeted by the Company prior to the beginning of such fiscal
period (or in respect of the fiscal year ended December 31, 2001, the
projections for such year provided to the Purchasers on the Closing Date) and
for the fiscal year to date.

 

(c)           On or before January
31 of each fiscal year, an annual budget or business plan for such fiscal year,
including a projected consolidated and consolidating balance sheet, income
statement, and cash flow statement for such year, and, promptly during each
fiscal year, all revisions thereto approved by the board of directors of the
Company.

 

(d)           As soon as
available, copies of all final reports or letters submitted to the Company by
its independent certified public accountants in connection with each annual,
interim or special audit of the financial statements of the Company made by
such accountants, including, without limitation, any management report, and the
Company agrees to obtain such a report in connection with each of the annual
audits.

 

(e)           Concurrently with
the delivery of each of the financial statements referred to in Section
4.01(a) of this Agreement and within thirty (30) days after the end of each
calendar quarter, a certificate of an authorized officer of the Company in form
and substance satisfactory to the Holders (i) with respect to the certificates
delivered in connection with the financial statements referred to in Section
4.01(b) of this Agreement, certifying that the financial statements
attached have been prepared in accordance with GAAP consistently applied
(except that the unaudited financial statements do not include footnotes) and
fairly present in all material respects (subject to year-end audit adjustments)
the consolidated and consolidating financial condition and results of
operations of the Company at the date and for the period indicated therein, and
(ii) containing a narrative report of the business and affairs of the
Company and each Subsidiary that includes, but is not limited to, a discussion
of the results of operations compared to those originally budgeted for such
period.

 

(f)            As soon as
available, a copy of each (i) financial statement, report, notice, or proxy
statement sent by the Company to its stockholders; (ii) regular, periodic, or
special report, registration statement, or prospectus filed by the Company with
any securities exchange, state securities regulator, or the Commission; (iii)
material order issued by any court, governmental authority, or arbitrator in
any material proceeding to which the Company is a party or to which any of its
assets is subject; (iv) press release or other statement made available generally
by the Company to the public generally concerning material developments in the
business of the Company; and (v) a copy of all material correspondence,
reports, and other information sent by the Company to any

 

34

 

holder of any
material indebtedness for borrowed money, including, without limitation the
lender under the Senior Loan Agreement.

 

(g)           Promptly, such
additional information concerning the Company and any Subsidiary as any Holder
may reasonably request, including, without limitation, auditor management
reports and audit “waive” lists.

 

4.02         Laws. The Company will, and will
cause any and all Subsidiaries to, comply with all applicable statutes,
regulations, and orders of the United States, domestic and foreign states, and
municipalities, agencies, and instrumentalities of the foregoing applicable to
the Company or any Subsidiary, the non-compliance with which would have a
material adverse effect on the Company and its Subsidiaries taken as a whole.
The Company and its Subsidiaries may, however, contest or dispute any acts,
rules, regulations, orders and directions of those bodies or officials in any
reasonable manner, provided that adequate reserves with respect thereto are
established to the reasonable satisfaction of the Purchasers.

 

4.03         Inspection. Upon at least five
(5) days’ notice and during business hours, the Company will, and will cause
any and all Subsidiaries to, permit any representative designated by the
Holders to (a) visit and inspect any of the properties of the Company or any
Subsidiary (provided that the costs and expenses incurred by the Holders in
connection with any visit and inspection of any properties of any Subsidiary
which at such time is not a material Subsidiary shall be borne by such
Holders); (b) examine the corporate and financial records of the Company or any
Subsidiary and make copies thereof or extracts therefrom; and (c) discuss the
affairs, finances, and accounts of the Company or any Subsidiary with the
directors, officers, key employees, and independent accountants of the Company.
In addition to any rights under this Agreement, the Company will give the
Holders actual notice of all regular meetings and all special meetings of the
Company’s Board of Directors and all committees thereof at the time that notice
thereof is given to the Company’s Board of Directors, will permit at least one
(1) person designated from time to time by the MassMutual Investors as a whole
and up to two (2) persons designated from time to time by RSTW to attend such
meetings as observers, and will provide Purchasers with all information
available to the directors of the Company. 
Each Holder agrees that such Holder and its designee shall not disclose
any confidential information obtained in connection with this Section 4.03
to any Person (other than Persons in a confidential relationship with such
Holder) unless such Person has agreed in writing to maintain such information
confidential; provided, however, that nothing herein shall be deemed to prevent
the disclosure of any confidential information if such disclosure is (i)
required to be made in a  judicial, administrative or governmental
proceeding, (ii) required by any applicable law or regulation, (iii) made to
any governmental agency or regulatory body having or claiming authority over
any aspect of such Holder’s or its Affiliates’ businesses in connection with
the exercise of such authority or claimed authority, (iv) subject to subpoena,
or (v) made, on a confidential basis as such Holder deems reasonably necessary
or appropriate to any of its investors, any bank or financial institution
and/or counsel to or other representatives of such investors, bank or financial
institution. Such regular meetings will be held at least quarterly. The Company
will reimburse at least one (1) person designated from time to time by the
MassMutual Investors as a whole and up to two (2) persons designated from time
to time by RSTW for reasonable out-of pocket expenses

 

35

 

incurred in
traveling to and attending such meetings. Notwithstanding anything to the
contrary set forth in this Section 4.03, (i) the designees of the
Holders described above shall not be permitted to exercise the inspection,
access and other rights contemplated in this Section 4.03 at any
time during which the Holders of the Notes are exercising similar rights
pursuant to the terms of the Note Agreement.

 

4.04         Certain Actions. Without the
prior written consent of the Holders, which consent may be withheld in the sole
discretion of the Holders:

 

(a)           the Company shall
not permit to occur any (i) amendment, alteration, or modification of the
Bylaws of the Company, as constituted on the date of this Agreement, the effect
of which, in the sole judgment of the Holders, would be to alter, impair, or
affect adversely, either the rights and benefits of the Holders or the duties
and obligations of the Company under this Agreement, the Warrants, the
Stockholders’ Agreement or the Registration Rights Agreement or
(ii) amendment, alteration, or modification of the Certificate of
Incorporation, the Certificate of Designations, other charter or organizational
documents of the Company, as constituted on the date of this Agreement or
authorize or designate (through board of directors designation or otherwise)
any class or series of any Capital Stock which rank on parity with or senior to
the Series D Convertible Preferred Stock upon payment of dividends,
liquidation or other distributions except to the extent necessary to comply
with Sections 4.04(k) and 4.10 of this Agreement;

 

(b)           the Company shall
not, and shall not permit any Subsidiary to, declare or make any dividends or
distributions of its cash, stock, property, or assets (other than general
dividends and distributions to its shareholders in instances in which the
Dilution Fee is applicable and has been indefeasibly paid to the Holders (e.g.,
the Holder is not obligated to disgorge the payment or turn over the payment to
the senior lender of the Company or any of its Subsidiaries) and stock
dividends to which the adjustments provided for in Section 2.12 of this
Agreement have been made) or redeem, retire, purchase, or otherwise acquire,
directly or indirectly, any of the Capital Stock or capital stock or securities
of any Affiliate of the Company, or any securities convertible or exchangeable
into Capital Stock or capital stock or securities of any Affiliate of the
Company, except that (i) any Subsidiary shall be permitted to do any of the
foregoing for the benefit of the Company or any other Subsidiary and (ii) the
Company shall be permitted to repurchase shares of Capital Stock from employees
upon termination of employment; provided,  that, such repurchases
are approved by the Board of Directors and; provided further, that,
such repurchases shall not exceed $500,000 cumulatively in the aggregate during
the term of this Agreement;

 

(c)           the Company shall
not issue or sell, or otherwise dispose of or permit any Subsidiary to issue,
sell or dispose of, any capital stock or securities of any Subsidiary, or
dissolve or liquidate, or effect any consolidation or merger involving the
Company or any Subsidiary or any reclassification, corporate reorganization,
stock split or reverse stock split, or other change of any class of Capital
Stock (unless the adjustments provided for

 

36

 

by Section 2.12
of this Agreement have been made); except that the Company shall be permitted
to issue and sell Permitted Stock;

 

(d)           the Company shall
not, except for the Registration Rights Agreement, become a party to, or
otherwise be bound by, any agreement obligating it to register any of its
Capital Stock;

 

(e)           the Company shall
not, and shall not permit any Subsidiary to, enter into any business which is
not substantially related to that which the Company or any Subsidiary, as the
case may be, is conducting on the date of this Agreement or acquire any
substantial business operation or assets (through a stock or asset purchase or
otherwise);

 

(f)            the Company shall
not, and shall not permit any Subsidiary to, except for Permitted Stock, the
Lease, the Stockholders’ Agreement, the Registration Rights Agreement and the
Management Agreement and as listed on Schedule 7.6 of the Note Agreement
as in effect on the date hereof, enter into any transaction or transactions
with any director, officer, employee, or shareholder of the Company or
Subsidiary, as the case may be, or any Affiliate or relative of the foregoing,
except upon terms that are disclosed in advance and approved by a majority of
the outside directors of the Company, and that are, in any event, at least as
favorable as would result in a comparable arm’s-length transaction with a
Person not a director, officer, employee, shareholder, or Affiliate of the
Company or Subsidiary, as the case may be, or any Affiliate or related party of
the foregoing, or advance any monies to any such Persons, except for travel
advances in the ordinary course of business (provided that nothing herein shall
prevent the Company from providing insurance and similar benefits to all its
directors) and except for transactions between the Company and any of its
Subsidiaries or between any of the Company’s Subsidiaries (provided that each
Subsidiary in such transaction is a guarantor of the obligations of the Company
to the Holders and any sale of the capital stock or substantially all of the
assets of such Subsidiary would constitute an Event of Default (as defined in
the Note Agreement); provided, however, that neither the Company nor any of its
Subsidiaries shall be permitted to make any payment under the Management
Agreement upon the occurrence and during the continuation of either (i) an
Event of Default under Section 8.1(a) of the Note Agreement or Section 8.1(g)
of the Note Agreement (other than a default by the Company or any Subsidiary of
the obligation to purchase all or a portion of the Put Shares in a circumstance
which does not constitute a Put Event Exercise Payment Default) or (ii) a Put
Event Exercise Payment Default;

 

(g)           the Company shall
not, and shall not permit any Subsidiary to, as the case may be, permit the
aggregate amount of salary and other direct and indirect remuneration
(including, but not limited to, employee benefits and professional, consulting
and management fees and expenses (but excluding out-of-pocket expenses incurred
in attending meetings of the Company’s Board of Directors) paid by the Company
or any Subsidiary, as the case may be, during any fiscal year to Sterling
Investment Partners Advisors, LLC, any Affiliate of Sterling Investment
Partners Advisors, LLC, or any successor or transferee of any such Person(s),
or any member of such Person’s immediate

 

37

 

family, directly
or indirectly, without the prior written consent of a majority in interest of
the Holders) to exceed the amounts provided for in the Management Agreement or Section
7.12 of the Stockholders’ Agreement (provided that nothing herein shall
prevent the Company from providing insurance and similar benefits to all its
directors and, in connection with and following the Initial Public Offering,
granting options to all non-employee directors, having an exercise price equal
to Fair Market Value on the date of the grant); provided, however,
that neither the Company nor any of its Subsidiaries shall be permitted to make
any payment under the Management Agreement upon the occurrence and during the
continuation of either (i) an Event of Default under Section 8.1(a) of the Note
Agreement (other than a default by the Company or any Subsidiary of the
obligation to purchase all or a portion of the Put Shares in a circumstance
which does not constitute a Put Event Exercise Payment Default) or Section
8.1(g) of the Note Agreement or (ii) a Put Event Exercise Payment Default;

 

(h)           the Company shall
not, and shall not permit any Subsidiary to, acquire any debt or equity
interest in any Person or establish or acquire a Subsidiary or make any
additional capital contribution or any loans to or purchase any additional
equity in any Subsidiary or make any advances or loans to any Subsidiary (other
than a Subsidiary which is a guarantor of the obligations of the Company to the
Holders and with respect to which any sale of the capital stock or substantially
all of the assets of such Subsidiary would constitute an Event of Default (as
defined in the Note Agreement)) or acquire all or substantially all of the
assets of any Person except those which do not involve the investment,
incurrence of debt or liability or contribution of more than (i) $500,000 per
year in the aggregate and (ii) $1,000,000, from and after the Closing Date in
the aggregate, or transfer any technology or assets to any Subsidiary (other
than a Subsidiary which is a guarantor of the obligations of the Company to the
Holders and with respect to which any sale of the capital stock or
substantially all of the assets of such Subsidiary would constitute an Event of
Default (as defined in the Note Agreement)) unless the Holders have been given
prior written notice thereof and such transfer has been approved by a majority
of the outside directors of the Company;

 

(i)            the Company shall
not, and shall not permit any Subsidiary to, (I) modify, amend, terminate or
waive any provision of any Employment Agreement (except as permitted by the
Note Purchase Agreement), or (II) allow or permit Dennis Nash (or any successor
thereto consented to by the Holders) to cease to  perform the functions of
chief executive officer (or president) of the Company unless the Company shall
have within a reasonable period not to exceed one hundred eighty (180) days
obtained a successor chief executive officer (or president) of at least
comparable background, experience and ability who is acceptable to and
consented to by a group of Holders holding not less than two-thirds (2/3) of
the Warrant Shares, or (III) allow or permit Carl Young (or any successor
thereto consented to by the Holders) to cease to perform the functions of chief
financial officer of the Company unless the Company shall have within a
reasonable period not to exceed one hundred eighty (180) days obtained a
successor chief financial officer of at

 

38

 

least comparable
background, experience and ability who is acceptable to and consented to by a
group of Holders holding not less than two-thirds (2/3) of the Warrant Shares;

 

(j)            the Company shall
not, and shall not permit any Subsidiary to, enter into, or otherwise become
bound by, any agreement, arrangement or understanding, other than this
Agreement or the Stockholders’ Agreement and the documents contemplated hereby
and thereby, modifying, restricting or in any way affecting the rights of any
securityholder to vote the securities of the Company;

 

(k)           the Company shall
not permit the aggregate par value of the Capital Stock subject to the Warrants
from time to time to exceed the price payable upon the exercise of the
Warrants, as adjusted from time to time;

 

(l)            the Company shall
not take any action, or permit any Subsidiary to take any action, which could
reasonably be expected to cause a “Regulatory Violation” or “Regulatory
Problem,” as such terms are defined in the Stockholders’ Agreement;

 

(m)          the Company shall
not, and shall not permit any Subsidiary to, enter into any employee stock
option or benefit plan with respect to shares of Capital Stock of the Company
unless (i) such plan shall be approved by a majority of the disinterested
directors of the Board of Directors of the Company, (ii) the options shall
contain an exercise price equal to the fair market value thereof at the date of
grant, and (iii) the options shall be exercisable into not more than 592,189
shares of the Common Stock (subject to adjustments for stock splits and reverse
stock splits and similar events as to which corresponding adjustments are made
to the number of shares of Capital Stock issuable upon exercise of the
Warrants); and

 

(n)           the Company shall
not obligate itself or otherwise agree to take, permit or enter into any of the
events described in subsections (a) through (m) above.

 

4.05         Books and Records. The Company
shall, and shall cause each Subsidiary to, keep (a) proper books of record
and account in which full, true and correct entries will be made of all
dealings or transactions of or in relation to its business and affairs; (b) set
up on its books accruals with respect to all taxes, assessments, charges,
levies and claims; and (c) on a  reasonably current basis set up on its
books from its earnings allowances against doubtful receivables, advances and
investments and all other proper accruals (including, without limitation, by
reason of enumeration, accruals for premiums, if any, due on required payments
and accruals for depreciation, obsolescence, or amortization of properties),
which should be set aside from such earnings in connection with its business.
All determinations pursuant to this subsection shall be made in accordance
with, or as required by, GAAP consistently applied.

 

4.06         Accountants. The Company will
retain a Big-Five Accounting Firm of independent public accountants who will
certify the consolidated financial statements of the Company at the end of each
fiscal year. The Company hereby irrevocably authorizes and directs all
accountants and auditors employed by it at any time during the term of this
Agreement to

 

39

 

exhibit and
deliver to the Holders copies of any of the Company’s financial statements,
trial balances or other accounting records of any sort in the accountant’s or
auditor’s possession, and to disclose to the Holders any information they may
have concerning the Company’s financial status and business operations. The
Company hereby irrevocably authorizes all federal, state and municipal
authorities to furnish to the Holders copies of reports or examinations
relating to the Company, whether made by the Company or otherwise. In the event
that the services of the independent public accountants so selected, or any
firm of independent public accountants hereafter employed by Company, are
terminated, the Company will promptly thereafter notify each Holder and upon
the Holders’ request, the Company will request the firm of independent public
accountants whose services are terminated to deliver (without liability for
such firm) to each Holder a letter of such firm setting forth the reasons for
the termination of their services and in its notice to each Holder the Company
will state whether the change of accountants was recommended or approved by the
board of directors of the Company or any committee thereof.

 

4.07         Existence. The Company will, and
will cause each Subsidiary to, maintain in full force and effect (i) the
corporate existence, rights and franchises of the Company or Subsidiary, as the
case may be and (ii) all licenses and other rights to use Intellectual Property
held or owned by the Company or any Subsidiary, if any of the foregoing are
reasonably necessary to the business of the Company or any Subsidiary.

 

4.08         Notice.

 

(a)           In the event of (i)
any setting by the Company of a record date with respect to the holders of any
class of Capital Stock for the purpose of determining which of such holders are
entitled to dividends, repurchases of securities or other distributions, or any
right to subscribe for, purchase or otherwise acquire any shares of Capital
Stock or other property or to receive any other right; or (ii) any capital
reorganization of the Company, or reclassification or recapitalization of the
Capital Stock or any transfer of all or substantially all of the assets,
business, or revenue or income generating capacity of the Company, or
consolidation, merger, share exchange, reorganization, or similar transaction
involving the Company; or (iii) any voluntary or involuntary dissolution,
liquidation, or winding up of the Company; or (iv) any proposed issue, sale or
grant by the Company of any Capital Stock, or capital stock or securities of
any Subsidiary or any right or option to subscribe for, purchase, or otherwise
acquire any Capital Stock or capital stock or securities of any Subsidiary
(other than the issue of Permitted Stock and of Issuable Warrant Shares upon
exercise of the Warrants), then, in each such event, either prior to or after
an Initial Public Offering, as the case may be, the Company will deliver or
cause to be delivered to the Holders a notice specifying, as the case may be,
(A) the date on which any such record is to be set for the purpose of such
dividend, distribution, or right, and stating the amount and character of such
dividend, distribution, or right; (B) the date as of which the holders of
record will be entitled to vote on any reorganization, reclassification,
recapitalization, transfer, consolidation, merger, share exchange, conveyance,
dissolution, liquidation, or winding-up; (C) the date on which any such
reorganization, reclassification, recapitalization, transfer, consolidation,
merger, share exchange, conveyance, dissolution, liquidation, or winding-up is
to take place and the time, if any is

 

40

 

to be fixed, as of
which the holders of record of any class of Capital Stock will be entitled to
exchange their shares of Capital Stock for securities or other property
deliverable upon such event; (D) the amount and character of any Capital Stock,
property, or rights proposed to be issued or granted, the consideration to be
received therefor, and, in the case of rights or options, the exercise price
thereof, and the date of such proposed issue or grant and the Persons or class
of Persons to whom such proposed issue or grant will be offered or made; and
(E) such other information as the Holders may reasonably request. Any such
notice will be deposited in the United States mail, postage prepaid, at least
fifteen (15) days prior to the date therein specified, and notwithstanding
anything in this Agreement or the Warrants to the contrary the Holders may
exercise the Warrants within fifteen (15) days from the receipt of such notice.

 

(b)           If there is any
adjustment as provided above in Article II, the Company will immediately
cause written notice thereof to be sent to each Holder, which notice will be
accompanied by a certificate of the independent public accountants of the
Company setting forth in reasonable detail the basis for the Holders’ becoming entitled
to receive such adjustment, the facts requiring any such adjustment and the
number of shares receivable after such adjustment. At the request of any Holder
and upon surrender of the Warrants of such Holder, the Company will reissue the
Warrants of such Holder in a form conforming to such adjustments.

 

(c)           The Company shall
provide all Holders with copies of all (a) notices (including notices of
default), statements and financial information, including notices of default
received by any Subsidiary from the lender under the Senior Loan Agreement and
any other creditor or lessor with respect to the acceleration of the maturity
of any item of indebtedness for borrowed money or the repossession of property
from such Subsidiary, and (b) material information concerning the assets of the
Company and all Subsidiaries taken as a whole, including, without limitation,
significant contracts, schedules of equipment, changes of equipment or real
property.

 

4.09         Payment of Taxes and Claims. The
Company will, and will cause any and all Subsidiaries to, pay or discharge, at
or before maturity or before becoming delinquent (a)  all material taxes, levies,
assessments, water and sewer rents, rates, charges, levies, permits, inspection
and license fees and other governmental and quasi-governmental charges and any
penalties or interest for nonpayment thereof, heretofore or hereafter imposed
or which may become a Lien upon any material property owned by the Company or
Subsidiary, as the case may be, or arising with respect to the occupancy, use,
possession or leasing thereof (collectively the “Impositions”) and (b) all
lawful claims for labor, material, and supplies, which, if unpaid, might become
a Lien upon any property of the Company or Subsidiary, as the case may be; provided,
however, that neither the Company nor any of its Subsidiaries shall be
required to pay or discharge any claim for labor, material, or supplies or any
Imposition which is being contested in good faith by appropriate proceedings
diligently pursued, and for which adequate reserves in conformity with GAAP
have been established.

 

41

 

4.10         Warrant Rights. The Company
covenants and agrees that during the term of this Agreement and so long as any
Warrant is outstanding, (a)  the Company will at all times have
authorized and reserved a sufficient number of shares of Series D Convertible
Preferred Stock and Common Stock to provide for the exercise in full of the
rights represented by the Warrants and the exercise in full of the other rights
of the Holders; (b) the Company will not increase or permit to be increased the
par value per share or stated capital of the Issuable Warrant Shares or the
consideration receivable upon issuance of its Issuable Warrant Shares, subject
to adjustments made in accordance with the provision of Section 2.12 of
this Agreement; and (c) in the event that the exercise of the Warrants would
require the payment by the Holder of consideration for the Series D Convertible
Preferred Stock and/or Common Stock receivable upon such exercise of less than
the par or stated value of such Issuable Warrant Shares, the Company will
promptly take such action as may be necessary to change the par or stated value
of such Issuable Warrant Shares to an amount less than or equal to such
consideration.

 

4.11         Disclosure of Material Matters.
The Company will, and will cause any and all Subsidiaries to, promptly upon
learning thereof, report to each Holder (a) all matters materially affecting
the value, enforceability or collectibility of any portion of its assets or the
assets of any Subsidiary in excess of $500,000 per individual matter, or
$1,000,000 in the aggregate, as the case may be, including, without limitation,
the Company’s or Subsidiary’s reclamation or repossession of, or the return to
the Company or Subsidiary of, a material amount of goods and material claims or
disputes asserted by any customer or other obligor, and (b) any material
adverse change in the relationship between the Company or Subsidiary and any of
their material suppliers or customers.

 

4.12         Performance of Obligations. The
Company will duly and punctually pay and perform its obligations under this
Agreement, and will cause any and all Subsidiaries to duly and punctually pay
and perform their obligations under the Note Agreement, the Senior Loan
Agreement and the Other Agreements to which it or any such Subsidiary is a
party when due or prior to the expiration of the applicable grace period, if
any, pertaining thereto or in any event, within applicable cure periods.

 

4.13         Maintenance of Properties. The
Company will, and will cause any and all  Subsidiaries to, operate and maintain in
good condition and repair (ordinary wear and tear excepted) and replace as
necessary, all of the assets and properties of the Company or Subsidiary, as
the case may be, which are necessary or useful in accordance with sound
business practices in the judgment of the Company or Subsidiary, as the case
may be, in the proper conduct of its business. The Company will, and will cause
any and all Subsidiaries to, at all times maintain its Intellectual Property,
in full force and effect, and will defend and protect the Intellectual Property
against all adverse claims until such time that it is immaterial to the
Company’s and its Subsidiaries’ business taken as a whole.

 

4.14         Negative Pledge. Until payment
and performance in full of all of the Senior Subordinated Obligations and all
indebtedness, liabilities and other obligations under this Agreement and the
termination of this Agreement, the Company shall not, and shall not permit any
Subsidiary to, without prior written consent of the Holders, pledge, sell
(except inventory in

 

42

 

the ordinary
course of business), assign, transfer, create or suffer to exist any Lien
(except for Permitted Liens) upon any property, assets, or revenues, including,
but not limited to, its shares of capital stock of any and all Subsidiaries,
whether now owned or hereafter acquired.

 

4.15         Maintenance of Equipment. The
Company’s equipment and the material equipment of each and every Subsidiary
shall be maintained in as good and substantial repair and condition as the same
is now (reasonable wear and tear excepted) and all necessary replacements of
and repairs thereto shall be made so that the value and operating efficiency of
the equipment shall be maintained and preserved.

 

4.16         Environmental Costs.

 

(a)           The Company hereby
indemnifies and holds each and every Holder harmless from and against any liability,
loss (other than that portion of any loss attributable solely to the decline in
value of any rights under the Put Option described in Section 2.10 of
this Agreement or the decline in the value of the Warrants or the Warrant
Shares), damage, suit, action or proceeding that relates to the Company or any
and all of its Subsidiaries pertaining to solid or hazardous waste materials or
other waste-like or toxic substances, including, but not limited to, claims of
any federal, state or municipal government or quasi-governmental agency or any
third person, whether arising under any federal, state or municipal law or
regulation, or tort, contract or common law.

 

(b)           To the extent the
laws of the United States or any state in which property, leased or owned, of the
Company or any and all of its Subsidiaries provide that a Lien upon the
property of the Company or any and all of its Subsidiaries may be obtained for
the removal of Polluting Substances, as defined in Section 11.1 of the
Note Agreement, which have been or may be released, no later than 90 days after
notice is given by any Holder to the Company, the Company shall deliver to each
and every Holder a  report issued by a qualified, third party
engineer certifying as to the existence of any Polluting Substances located
upon or beneath the specified property, leased or owned. To the extent any such
Polluting Substance is located therein or thereunder that either (i) subjects
the property to Lien or (ii) requires removal to safeguard the health of any
Person, the Company shall remove, or cause to be removed, such lien and such
Polluting Substance at the Company’s expense.

 

4.17         Restricted Payments. The Company
will not at any time make or become obligated to make, directly or indirectly,
any (a) declaration of any dividend on, or any other payment or distribution in
respect of, any shares of the Company or (b) payment or distribution on account
of the purchase, repurchase, redemption, put, call or other retirement of any
shares of the Company or of any Warrants, option or other right to acquire such
shares (except pursuant to this Agreement) or the payment of management fees if
and for so long as Holder is not receiving any and all payments due it under
this Agreement or the Note Agreement.

 

4.18         Right of First Refusal for New
Securities.  The Company hereby
agrees that the Purchasers shall have such rights of first refusal to purchase
New Securities (as defined in the

 

43

 

Stockholders’
Agreement) as are set forth in the Stockholders’ Agreement as of the date
hereof and that such rights shall not be modified, amended or waived with
respect to the Warrant Shares or Purchasers rights with respect thereto without
the prior written consent of Purchasers.

 

Article V

Conditions

 

The obligations of
the Purchasers to effect the transactions contemplated by this Agreement are
subject to the following conditions precedent:

 

5.01         Opinion. The Purchasers will
have received favorable opinions, dated the Closing Date, from Fulbright &
Jaworski L.L.P., Buckingham, Doolittle & Burroughs LLP, and Smith, Helms,
Mulliss & Moore, L.L.P., counsel for Company covering matters raised by
this Agreement, the Stockholders’ Agreement, and such other matters as the
Purchasers or its counsel may request, and otherwise in form and substance
satisfactory to the Purchasers and their counsel.

 

5.02         Note Agreement Conditions. All
of the conditions precedent to the obligations of the Purchasers under the Note
Agreement will have been satisfied in full or waived.

 

5.03         Reservation of Series D Convertible
Preferred Stock and Common Stock. The Purchasers will have received
evidence satisfactory to the Purchasers that the Company has reserved a
sufficient number of shares of Series D Convertible Preferred Stock and Common
Stock for the Purchasers to exercise the Warrants.

 

5.04         Material Change. There will have
occurred no material adverse change in the business, prospects, results,
operations, or condition, financial or otherwise, of the Company.

 

5.05         Stockholders’ Agreement and
Registration Rights Agreement. The Company will have entered into the
Stockholders’ Agreement and the Registration Rights Agreement with the
Purchasers and other parties thereto.

 

5.06         Agreement Regarding Certain Put
Option Actions. Sterling Investment Partners, L.P. and RFE Investment
Partners will have entered into a written agreement in favor of the Purchasers
in substantially the form attached hereto as Exhibit I.

 

5.07         Representations and Agreements.
Each representation and warranty of the Company set forth in this Agreement
will be true and correct when made and as of the Closing Date, and the Company
will have fully performed all their covenants and agreements set forth in this
Agreement.

 

5.08         Proceedings; Consents. All
proceedings taken in connection with the transactions contemplated by this
Agreement, and all documents necessary to the consummation of this Agreement,
will be satisfactory in form and substance to the Purchasers and their counsel,
and the Purchasers and their counsel will have received certificates of
compliance and copies

 

44

 

(executed or
certified as may be appropriate) of all documents, instruments, and agreements
that the Purchasers or such counsel may request in connection with the
consummation of such transactions. All consents of any Person necessary to the
consummation of the transactions contemplated by this Agreement and the
Stockholders’ Agreement will have been received, be in full force and effect,
and not be subject to any onerous condition.

 

Article VI

Miscellaneous

 

6.01         Indemnification. In addition to
any other rights or remedies to which the Purchasers and the Holders may be
entitled, the Company agrees to and will indemnify and hold harmless the Purchasers,
the Holders, and their respective successors, assigns, officers, directors,
employees, attorneys, and agents (individually and collectively, an “Indemnified
Party”) from and against any and all losses, claims, obligations,
liabilities, deficiencies, penalties, causes of action, damages, costs, and
expenses (including, without limitation, costs of investigation and defense,
attorneys’ fees, and expenses), including, without limitation, those arising
out of the sole or contributory negligence of any Indemnified Party that the
Indemnified Party may suffer, incur, or be responsible for, arising or
resulting from any misrepresentation, breach of warranty, or nonfulfillment of
any covenant or agreement on the part of the Company under this Agreement, or from
any misrepresentation in or omission from any certificate or other instrument
furnished or to be furnished to the Purchasers or the Holders under this
Agreement. The foregoing indemnification excludes (i) any such claims, actions,
damages, costs and expense incurred by reason of the sole or contributory
negligence or willful misconduct of the Indemnified Party and (ii) the portion
of any loss attributable solely to a decline in the value of any right under
the Put Option described in Section 2.10 of this Agreement or a decline
in the value of the Warrants or the Warrant Shares.

 

6.02         Default. It is agreed that a
violation by any party of the terms of this Agreement cannot be adequately
measured or compensated in money damages, and that any breach or threatened
breach of this Agreement by a party to this Agreement would do irreparable
injury to the nondefaulting party. It is, therefore, agreed that in the event
of any breach or threatened breach by a party to this Agreement of the terms
and conditions set forth in this Agreement, the nondefaulting party will be
entitled, in addition to any and all other rights and remedies that it may have
in law or in equity, to apply for and obtain injunctive relief requiring the
defaulting party to be restrained from any such breach or threatened breach or
to refrain from a continuation of any actual breach.

 

6.03         Integration. This Agreement, the
Other Agreements, the Stockholders’ Agreement and the Registration Rights
Agreement constitute the entire agreement between the parties with respect to
the subject matter hereof and thereof and supersede all previous written, and
all previous or contemporaneous oral, negotiations, understandings,
arrangements, and agreements including but not limited to (a) that certain
commitment letter of RSTW, dated January 25, 2001, executed by RSTW, and
acknowledged and agreed to by the Company, KTC and AMGI, and (b) that certain
commitment letter of the MassMutual Investors, dated January 24, 2001, executed
by the MassMutual Investors, and acknowledged and agreed to by the Company and
AMHC.  This

 

45

 

Agreement may not
be amended or supplemented except by a writing signed by Company and the
Purchasers.

 

6.04         Headings. The headings in this
Agreement are for convenience and reference only and are not part of the
substance of this Agreement. References in this Agreement to Sections and
Articles are references to the Sections and Articles of this Agreement unless
otherwise specified.

 

6.05         Severability. The parties to
this Agreement expressly agree that it is not the intention of any of them to
violate any public policy, statutory or common law rules, regulations, or
decisions of any governmental or regulatory body. If any provision of this
Agreement is judicially or administratively interpreted or construed as being
in violation of any such policy, rule, regulation, or decision, the provision,
section, sentence, word, clause, or combination thereof causing such violation
will be inoperative (and in lieu thereof there will be inserted such provision,
sentence, word, clause, or combination thereof as may be valid and consistent
with the intent of the parties under this Agreement) and the remainder of this
Agreement, as amended, will remain binding upon the parties, unless the
inoperative provision would cause enforcement of the remainder of this
Agreement to be inequitable under the circumstances.

 

6.06         Notices. Whenever it is provided
herein that any notice, demand, request, consent, approval, declaration, or
other communication be given to or served upon any of the parties by another,
such notice, demand, request, consent, approval, declaration, or other
communication will be in writing and will be deemed to have been validly
served, given or delivered (and “the date of such notice” or words of similar
effect will mean the date) five (5) days after deposit in the United States
mails, certified mail, return receipt requested, with proper postage prepaid,
or upon receipt thereof (whether by non-certified mail, telecopy, telegram,
express delivery, or otherwise), whichever is earlier, and addressed to the
party to be notified as follows:

 

	
  If to RSTW:

  	
   

  	
  RSTW Partners III, L.P.

  
	
   

  	
   

  	
  c/o Rice Sangalis Toole
  & Wilson

  
	
   

  	
   

  	
  5847 San Felipe, Suite
  4350

  
	
   

  	
   

  	
  Houston, Texas 77057

  
	
   

  	
   

  	
  Attn:  Kurt G. Keene

  
	
   

  	
   

  	
  Facsimile: (713)
  783-9750

  
	
   

  	
   

  	
   

  
	
  with courtesy copies to

  	
   

  	
   

  
	
  (which shall not
  constitute notice):

  	
   

  	
  Patton Boggs LLP

  
	
   

  	
   

  	
  2001 Ross Avenue, Suite
  3000

  
	
   

  	
   

  	
  Dallas, Texas 75201

  
	
   

  	
   

  	
  Attn:  James C. Chadwick, Esq.

  
	
   

  	
   

  	
  Facsimile:  (214) 758-1550

  

 

46

 

	
  If to a MassMutual
  Investor:

  	
   

  	
  Massachusetts Mutual
  Life Insurance Company,

  
	
   

  	
   

  	
  MassMutual Corporate
  Investors and

  
	
   

  	
   

  	
  MassMutual
  Participation Investors

  
	
   

  	
   

  	
  c/o Massachusetts
  Mutual Life Insurance Company

  
	
   

  	
   

  	
  1295 State Street

  
	
   

  	
   

  	
  Springfield,
  Massachusetts  01111

  
	
   

  	
   

  	
  Attn:  Robert Shettle

  
	
   

  	
   

  	
  Facsimile:  (413) 744-3310

  
	
   

  	
   

  	
   

  
	
  with courtesy copies to

  	
   

  	
   

  
	
  (which shall not
  constitute notice):

  	
   

  	
  Patton Boggs LLP

  
	
   

  	
   

  	
  2001 Ross Avenue, Suite
  3000

  
	
   

  	
   

  	
  Dallas, Texas 75201

  
	
   

  	
   

  	
  Attn:  James C. Chadwick, Esq.

  
	
   

  	
   

  	
  Facsimile:  (214) 758-1550

  
	
   

  	
   

  	
   

  
	
  If to the Company:

  	
   

  	
  KTC/AMG Holdings Corp.

  
	
   

  	
   

  	
  4895 Dressler Road
  N.W., #100

  
	
   

  	
   

  	
  Canton, Ohio 44718

  
	
   

  	
   

  	
  Attn:  Chief Executive Officer

  
	
   

  	
   

  	
  Facsimile:  (330) 305-9905

  
	
   

  	
   

  	
   

  
	
  with courtesy copies to

  	
   

  	
   

  
	
  (which shall not
  constitute notice):

  	
   

  	
  Sterling Investment
  Partners Management, LLC

  
	
   

  	
   

  	
  276 Post Road West

  
	
   

  	
   

  	
  Westport, Connecticut
  06880

  
	
   

  	
   

  	
  Attn:  Douglas L. Newhouse

  
	
   

  	
   

  	
  Facsimile: (203)
  454-5780

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  and

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Fulbright &
  Jaworski, L.L.P.

  
	
   

  	
   

  	
  666 Fifth Avenue

  
	
   

  	
   

  	
  New York, New York
  10103

  
	
   

  	
   

  	
  Attn: Paul Jacobs, Esq.

  
	
   

  	
   

  	
  Facsimile:  (212) 318-3400

  

 

or to such other address
as each party may designate for itself by like notice. Notice to any Holder
other than the Purchasers will be delivered as set forth above to the address
shown on the stock transfer books of the Company or the Warrant Register unless
such Holder has advised the Company in writing of a different address to which
notices are to be sent under this Agreement. Failure or delay in delivering
courtesy copies of any notice, demand, request, consent, approval, declaration,
or other communication to the persons designated above to receive copies of the
actual notice will in no way adversely affect the effectiveness of such notice,
demand, request,

 

47

 

consent, approval,
declaration, or other communication. No notice, demand, request, consent,
approval, declaration or other communication will be deemed to have been given
or received unless and until it sets forth all items of information required to
be set forth therein pursuant to the terms of this Agreement.

 

6.07         Successors. This Agreement will
be binding upon and inure to the benefit of the parties and their respective
successors and assigns.

 

6.08         Remedies. The failure of any
party to enforce any right or remedy under this Agreement, or promptly to
enforce any such right or remedy, will not constitute a waiver thereof, nor
give rise to any estoppel against such party, nor excuse any other party from
its obligations under this Agreement. Any waiver of any such right or remedy by
any party must be in writing and signed by the party against which such waiver
is sought to be enforced.

 

6.09         Survival. All warranties,
representations, and covenants made by any party in this Agreement or in any
certificate or other instrument delivered by such party or on its behalf under
this Agreement will be considered to have been relied upon by the party to
which it is delivered and will survive the Closing Date, regardless of any
investigation made by such party or on its behalf. All statements in any such
certificate or other instrument will constitute warranties and representations
under this Agreement.

 

6.10         Fees. Any and all fees, costs,
and expenses, of whatever kind and nature, including attorneys’ fees and
expenses, incurred by the Holders in connection with the defense or prosecution
of any actions or proceedings arising out of or in connection with this
Agreement will be borne and paid by the Company within ten (10) days of demand
by the Holders.

 

6.11         Counterparts. This Agreement may
be executed in any number of counterparts, which will individually and
collectively constitute one agreement.

 

6.12         Other Business. It is understood
and accepted that the Purchasers, the Holders, and their Affiliates have
interests in other business ventures that may be in conflict with the
activities of the Company and that nothing in this Agreement will limit the
current or future business activities of such parties whether or not such
activities are competitive with those of the Company. The Company agrees that
all business opportunities in any field substantially related to the business
of the Company will be pursued exclusively through the Company.

 

6.13        CHOICE
OF LAW. THIS AGREEMENT, THE NOTE PURCHASE AGREEMENT, THE SENIOR
SUBORDINATED NOTES, AND THE WARRANTS HAVE BEEN SUBSTANTIALLY NEGOTIATED AND ARE
BEING EXECUTED, DELIVERED, AND ACCEPTED, AND ARE INTENDED TO BE PERFORMED, IN
PART, IN THE STATE OF NEW YORK. ALL OBLIGATIONS, RIGHTS AND REMEDIES HEREUNDER
SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK. IF NOTWITHSTANDING THE CHOICE OF LAW BY THE PARTIES
AS SET FORTH IN THE IMMEDIATELY PRECEDING SENTENCE, A COURT DECLINES

 

48

 

TO GIVE EFFECT TO SUCH CHOICE OF LAW
FOR ANY REASON, THEN ALL OBLIGATIONS, RIGHTS AND REMEDIES HEREUNDER SHALL BE
GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF OHIO. PURCHASER RETAINS ALL RIGHTS UNDER THE LAWS OF THE UNITED STATES OF
AMERICA, INCLUDING THOSE RELATING TO THE CHARGE OF INTEREST.

 

6.14         Duties Among Holders. Each
Holder agrees that no other Holder will by virtue of this Agreement be under
any fiduciary or other duty to give or withhold any consent or approval under
this Agreement or to take any other action or omit to take any action under
this Agreement, and that each other Holder may act or refrain from acting under
this Agreement as such other Holder may, in its discretion, elect.

 

6.15         Covenants in Effect. Upon
consummation of an Initial Public Offering, Sections 4.01, 4.02, 4.03,
4.04(a), (b), (c), (d), (e), (g), (h), (i), (j), (k), (l), (m), 4.05, 4.06,
4.07, 4.08, 4.09, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16, 4.17 and 4.18
of this Agreement shall cease to be in effect during (i) the ninety (90) day
period immediately following such Initial Public Offering and (ii) any
period(s) of time thereafter which the Company is a reporting company under
Section 12 of the Exchange Act.

 

6.16         Termination. This Agreement, and
the rights granted and duties and obligations imposed hereby, shall terminate
with respect to (i) any Warrants and/or Warrant Shares sold by a Holder into
the public market following an Initial Public Offering and (ii) all Warrants
and Warrant Shares upon the consummation of a Sale Event which is a Qualified
Sale in which all of Warrants and Warrant Shares are exchanged solely for
Qualified Public Securities or cash or any combination thereof.

 

6.17         Amendment and Restatement.  This Agreement is given in amendment,
restatement, modification and extension, but not in extinguishment or novation,
of the Original Warrant Agreement and the liabilities and obligations of the
parties thereunder.  With respect to
matters relating to the period prior to the date hereof, all of the provisions
of the Original Warrant Agreement are hereby ratified and confirmed and shall
remain in full force and effect.

 

[REMAINDER OF THIS PAGE
IS INTENTIONALLY BLANK]

 

49

 

IN WITNESS WHEREOF, the parties have executed and
delivered this Agreement as of the date first above written.

 

	
   

  	
  COMPANY:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  KTC/AMG HOLDINGS CORP.

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Dennis A. Nash

  	
   

  
	
   

  	
  Name:

  	
  Dennis A. Nash

  	
   

  
	
   

  	
  Title:

  	
  President and Chief Executive Officer

  	
   

  
					

 

 

IN WITNESS WHEREOF, the parties have executed and
delivered this Agreement as of the date first above written.

 

	
   

  	
  PURCHASER:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  RSTW PARTNERS III, L.P.

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  RSTW Management, L.P.,
  its general partner

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Rice Mezzanine
  Corporation,

  
	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Kurt G. Keene

  	
   

  
	
   

  	
   

  	
   

  	
  Kurt G. Keene,

  	
   

  
	
   

  	
   

  	
   

  	
  Managing Director

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  	
  c/o Rice
  Sangalis Toole & Wilson

  
	
   

  	
   

  	
  5847 San Felipe,
  Suite 4350

  
	
   

  	
   

  	
  Houston, Texas 77057

  
	
   

  	
   

  	
  Attn:  Kurt G. Keene

  
	
   

  	
   

  	
  Fax: (713) 783-9750

  
	
   

  	
   

  	
   

  
	
   

  	
  Purchase Price of 2001
  RSTW New Warrant: $100

  
	
   

  	
   

  
	
   

  	
  Number of Warrant
  Shares pertaining to 2001 RSTW New Warrant: 
  1,922 shares of Series D Convertible Preferred Stock plus up to 12,574
  shares of Common Stock for the Contingent Option Adjustment Number, subject
  to antidilution adjustments from time to time.

  
	
   

  	
   

  
	
   

  	
  Number of Warrant
  Shares pertaining to 2001 RSTW Merger Warrants:  2,887 shares of Series D Convertible Preferred Stock plus up to
  18,888 shares of Common Stock for the Contingent Option Adjustment Number,
  subject to antidilution adjustments from time to time.

  
									

 

 

IN WITNESS WHEREOF, the parties have executed and
delivered this Agreement as of the date first above written.

 

	
   

  	
  MASSACHUSETTS MUTUAL
  LIFE

  
	
   

  	
  INSURANCE COMPANY

  
	
   

  	
   

  
	
   

  	
  By

  	
  David L. Babson &
  Company Inc.,

  
	
   

  	
   

  	
  its Investment Adviser

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Michael P. Hermsen

  	
   

  
	
   

  	
   

  	
  Name:

  	
    Michael P.
  Hermsen

  	
   

  
	
   

  	
   

  	
  Title:

  	
    Managing
  Director

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
  1295 State Street

  
	
   

  	
   

  	
  Springfield, Massachusetts 01111

  
	
   

  	
   

  	
  Attn: Robert Shettle

  
	
   

  	
   

  	
  Facsimile: (413) 744-3310

  
	
   

  	
   

  	
   

  
	
   

  	
  Purchase Price: $59.00

  
	
   

  	
   

  	
   

  
	
   

  	
  Warrant #1

  	
   

  
	
   

  	
  Number of Warrant
  Shares: 1,133 shares of Series D Convertible Preferred Stock plus up to 7,415
  shares of Common Stock for the Contingent Options Adjustment Number, subject
  to antidilution adjustments from time to time.

  
	
   

  	
   

  
	
   

  	
  Purchase Price: $19.64

  
	
   

  	
   

  
	
   

  	
  Warrant #2

  
	
   

  	
  Number of Warrant
  Shares: 378 shares of Series D Convertible Preferred Stock plus up to 2,471
  shares of Common Stock for the Contingent Options Adjustment Number, subject
  to antidilution adjustments from time to time.

  
								

 

 

IN WITNESS WHEREOF, the parties have executed and
delivered this Agreement as of the date first above written.

 

	
   

  	
  MASSMUTUAL CORPORATE
  INVESTORS

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Michael
  P. Hermsen

  	
   

  
	
   

  	
  Name:

  	
    Michael P.
  Hermsen

  	
   

  
	
   

  	
  Title:

  	
    Vice
  President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  The foregoing is
  executed on behalf of MassMutual Corporate Investors, organized under a
  Declaration of Trust, dated September 13, 1985, as amended from time to
  time.  The obligations of such Trust
  are not personally binding upon, nor shall resort be had to the property of,
  any of the Trustees, shareholders, officers, employees or agents of such
  Trust, but the Trust’s property only shall be bound.

  
	
   

  	
   

  
	
   

  	
  Address:

  	
  1295 State
  Street

  
	
   

  	
   

  	
  Springfield,
  Massachusetts 01111

  
	
   

  	
   

  	
  Attn: Robert
  Shettle

  
	
   

  	
   

  	
  Facsimile: (413)
  744-3310

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Purchase Price: $13.95

  
	
   

  	
   

  
	
   

  	
  Number of Warrant
  Shares: 269 shares of Series D Convertible Preferred Stock plus up to 1,758
  shares of Common Stock for the Contingent Options Adjustment Number, subject
  to antidilution adjustments from time to time.

  
							

 

 

	
   

  	
  MASSMUTUAL
  PARTICIPATION INVESTORS

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Michael
  P. Hermsen

  	
   

  
	
   

  	
  Name:

  	
    Michael P.
  Hermsen

  	
   

  
	
   

  	
  Title:

  	
    Vice
  President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  The foregoing is
  executed on behalf of MassMutual Participation Investors, organized under a
  Declaration of Trust, dated April 7, 1988, as amended from time to time.  The obligations of such Trust are not
  personally binding upon, nor shall resort be had to the property of, any of
  the Trustees, shareholders, officers, employees or agents of such Trust, but
  the Trust’s property only shall be bound.

  
	
   

  	
   

  
	
   

  	
  Address:

  	
  1295 State
  Street

  
	
   

  	
   

  	
  Springfield,
  Massachusetts 01111

  
	
   

  	
   

  	
  Attn: Robert
  Shettle

  
	
   

  	
   

  	
  Facsimile: (413)
  744-3310

  
	
   

  	
   

  	
   

  
	
   

  	
  Purchase Price:
  $7.41

  
	
   

  	
   

  
	
   

  	
  Number of Warrant
  Shares: 142 shares of Series D Convertible Preferred Stock plus up to 931
  shares of Common Stock for the Contingent Options Adjustment Number, subject
  to antidilution adjustments from time to time.

  
							

 

 

Annex A-1

to

Warrant Purchase Agreement

 

Form of MassMutual Investors Warrant

 

THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF
HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO OR FOR SALE IN
CONNECTION WITH THE DISTRIBUTION HEREOF. THIS WARRANT AND THE SECURITIES
ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE PLEDGED,
SOLD, OFFERED FOR SALE, TRANSFERRED, OR OTHERWISE DISPOSED OF IN THE ABSENCE OF
REGISTRATION UNDER OR EXEMPTION FROM SUCH ACT AND ALL APPLICABLE STATE
SECURITIES LAWS.

 

THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF
ARE SUBJECT TO THE TERMS AND PROVISIONS OF A WARRANT PURCHASE AGREEMENT (THE
“WARRANT PURCHASE AGREEMENT”), A STOCKHOLDERS’ AGREEMENT, AND A REGISTRATION
RIGHTS AGREEMENT, EACH DATED AS OF APRIL 30, 2001, AMONG KTC/AMG HOLDINGS CORP.
(TO BE RENAMED THE KENAN ADVANTAGE GROUP, INC., AND REFERRED TO HEREIN AS THE
“COMPANY”), RSTW PARTNERS III, L.P., MASSACHUSETTS MUTUAL LIFE INSURANCE
COMPANY, MASSMUTUAL CORPORATE INVESTORS, MASSMUTUAL PARTICIPATION INVESTORS AND
THE OTHER SIGNATORIES THERETO (AS SUCH AGREEMENTS MAY BE SUPPLEMENTED,
MODIFIED, AMENDED, OR RESTATED FROM TIME TO TIME, THE “AGREEMENTS”).  COPIES OF THE AGREEMENTS ARE AVAILABLE AT
THE EXECUTIVE OFFICES OF THE COMPANY.

 

 

	
                 shares
  of Series D Convertible Preferred Stock,

  	
   

  	
   

  
	
  $0.001 par value, of
  the Company

  	
   

  	
   

  
	
  plus up to
                 
  shares of Common Stock,

  	
   

  	
   

  
	
  $0.0001 par value, of
  the Company for the

  	
   

  	
   

  
	
  Contingent Options
  Adjustment Number,

  	
   

  	
   

  
	
  subject to adjustment
  for antidilution from time to time

  	
   

  	
  Warrant No.

  
	
   

  	
   

  	
   

  
	
  PPN:

  	
   

  	
   

  

 

WARRANT TO PURCHASE SERIES D CONVERTIBLE PREFERRED STOCK AND
COMMON STOCK OF

KTC/AMG HOLDINGS CORP.

(to be renamed The Kenan
Advantage Group, Inc.)

 

 

This is to certify
that, in consideration of
                                      
dollars
($                 )
and other valuable consideration, which is hereby acknowledged as received,
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY, its successors and registered
assigns, is entitled at any time after the date hereof and prior to 12:00
midnight April 30, 2011 to exercise this Warrant to purchase (a)
                                              
(                  )
shares of the Series D Convertible Preferred Stock, $0.001 par value per share,
plus (b) upon the exercise of the Contingent Options, the number of shares of
Common Stock equal to the Contingent Options Adjustment Number, plus (c) upon
each occurrence of an event described in Section 2.12 of the Warrant
Purchase Agreement, the number of shares of Series D Convertible Preferred
Stock or Common Stock provided for therein, of the Company, as the same shall
be adjusted from time to time pursuant to the provisions of the Agreements at a
price per share as specified in the Agreements and to exercise the other
rights, powers, and privileges hereinafter provided, all on the terms and
subject to the conditions specified in this Warrant and in the Agreements.  This Warrant is one of the “2001
MassMutual Investors Warrants” described in the Warrant Purchase
Agreement.  Capitalized terms used
herein and not defined herein shall have the meanings assigned to such terms in
the Warrant Purchase Agreement (as amended from time to time).

 

This Warrant is
issued under, and the rights represented hereby are subject to the terms and
provisions contained in the Agreements, to all terms and provisions of which
the registered holder of this Warrant, by acceptance of this Warrant, assents.  Reference is hereby made to the Agreements
for a more complete statement of the rights and limitations of rights of the
registered holder of this Warrant and the rights and duties of the Company
under this Warrant.  Copies of the
Agreements are on file at the office of the Company.

 

[THE REMAINDER OF THIS
PAGE INTENTIONALLY LEFT BLANK.]

 

 

IN WITNESS WHEREOF, the Company has caused this
Warrant to be duly executed on this 30th day of April, 2001.

 

	
   

  	
  KTC/AMG Holdings Corp,

  
	
   

  	
  a Delaware corporation
  (to be renamed The Kenan Advantage Group, Inc.)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

 

SUBSCRIPTION FORM

SERIES D CONVERTIBLE PREFERRED STOCK

 

(To be executed
only upon exercise of Warrant)

 

The undersigned
registered owner of this Warrant irrevocably exercises this Warrant for and
purchases
                     
of the number of shares of Series D Convertible Preferred Stock of KTC/AMG
Holdings Corp., a Delaware corporation (to be renamed The Kenan Advantage
Group, Inc.), purchasable with this Warrant, and herewith makes payment
therefor, all at the price and on the terms and conditions specified in this
Warrant and requests that certificates for the shares of Series D Convertible
Preferred Stock hereby purchased (and any securities or other property issuable
upon such exercise) be issued in the name of and delivered to
                                                     
whose address is
                                                                  ,
and if such shares of Series D Convertible Preferred Stock do not include all
of the shares of Series D Convertible Preferred Stock issuable as provided in
this Warrant, that a new Warrant of like tenor and date for the balance of the
shares of Series D Convertible Preferred Stock issuable thereunder to be
delivered to the undersigned.

 

	
  Dated:

  	
   

  	
  ,

  	
   

  	
  .

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  
								

 

 

ASSIGNMENT FORM

SERIES D CONVERTIBLE PREFERRED STOCK

 

FOR VALUE RECEIVED the undersigned registered owner of
this Warrant hereby sells, assigns and transfers unto the Assignee named below
all of the rights of the undersigned under this Warrant, with respect to the
number of shares of Series D Convertible Preferred Stock set forth below:

 

	
  No. of
  Shares

  	
   

  	
  Name and
  Address of Assignee

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

and does hereby irrevocably
constitute and appoint as attorney
                                             
to register such transfer on the books of KTC/AMG Holdings Corp., a Delaware
corporation (to be renamed The Kenan Advantage Group, Inc.), maintained for the
purpose, with full power of substitution in the premises.

 

	
  Dated:

  	
   

  	
  ,

  	
   

  	
  .

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  

 

 

SUBSCRIPTION FORM

COMMON STOCK

 

(To be executed
only upon exercise of Warrant)

 

The undersigned
registered owner of this Warrant irrevocably exercises this Warrant for and
purchases
                       
of the number of shares of Common Stock of KTC/AMG Holdings Corp., a Delaware
corporation (to be renamed The Kenan Advantage Group, Inc.), purchasable with
this Warrant, and herewith makes payment therefor, all at the price and on the
terms and conditions specified in this Warrant and requests that certificates
for the shares of Common Stock hereby purchased (and any securities or other
property issuable upon such exercise) be issued in the name of and delivered to
                                                             
whose address is
                                                                     ,
and if such shares of Common Stock do not include all of the shares of Common
Stock issuable as provided in this Warrant, that a new Warrant of like tenor
and date for the balance of the shares of Common Stock issuable thereunder to
be delivered to the undersigned.

 

	
  Dated:

  	
   

  	
  ,

  	
   

  	
  .

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
									

 

 

ASSIGNMENT FORM

COMMON STOCK

 

FOR VALUE RECEIVED
the undersigned registered owner of this Warrant hereby sells, assigns and
transfers unto the Assignee named below all of the rights of the undersigned
under this Warrant, with respect to the number of shares of Common Stock set
forth below:

 

	
  No. of
  Shares

  	
   

  	
  Name and
  Address of Assignee

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

and does hereby
irrevocably constitute and appoint as attorney
                                                     
to register such transfer on the books of KTC/AMG Holdings Corp., a Delaware
corporation (to be renamed The Kenan Advantage Group, Inc.), maintained for the
purpose, with full power of substitution in the premises.

 

	
  Dated:

  	
   

  	
  ,

  	
   

  	
  .

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  

 

 

Annex A-2

To

Warrant Purchase Agreement

 

Form of 1998 RSTW Warrant

 

THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF
HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO OR FOR SALE IN
CONNECTION WITH THE DISTRIBUTION HEREOF. THIS WARRANT AND THE SECURITIES
ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE PLEDGED,
SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF
REGISTRATION UNDER OR EXEMPTION FROM SUCH ACT AND ALL APPLICABLE STATE
SECURITIES LAWS.

 

THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF
ARE SUBJECT TO THE TERMS AND PROVISIONS OF A WARRANT PURCHASE AGREEMENT (THE
“WARRANT PURCHASE AGREEMENT”) AND A STOCKHOLDERS’ AGREEMENT, EACH DATED AS OF
DECEMBER 31, 1998, AMONG ADVANTAGE MANAGEMENT HOLDINGS CORP. (THE “COMPANY”),
RSTW PARTNERS II, L.P., RFE INVESTMENT PARTNERS VI, L.P., RFE VI SBIC, L.P.,
RSTW PARTNERS III, L.P., STERLING VENTURES LIMITED AND THE OTHER SIGNATORIES
THERETO (AS SUCH AGREEMENTS MAY BE SUPPLEMENTED, MODIFIED, AMENDED, OR RESTATED
FROM TIME TO TIME, THE “AGREEMENTS”). 
COPIES OF THE AGREEMENTS ARE AVAILABLE AT THE EXECUTIVE OFFICES OF THE
COMPANY.

 

	
  2,615 shares of Series
  D Convertible Preferred Stock,

  	
   

  	
   

  
	
  $0.001 par value, of
  the Company

  	
   

  	
   

  
	
  plus up to 446 shares
  of Common Stock,

  	
   

  	
   

  
	
  $0.001 par value, of
  the Company for the

  	
   

  	
   

  
	
  Contingent Option
  Adjustment Number,

  	
   

  	
   

  
	
  subject to adjustment
  for antidilution from time to time

  	
   

  	
  Warrant No. 1

  

 

WARRANT TO PURCHASE AND COMMON STOCK OF

ADVANTAGE MANAGEMENT HOLDINGS CORP.

 

This is to certify
that, in consideration of one hundred dollars ($100.00) and other valuable
consideration, which is hereby acknowledged as received, RSTW PARTNERS III,
L.P. (“Purchaser”), its successors and registered assigns, is entitled
at any time after the Closing Date (as defined in the Agreements) and prior to
12:00 midnight December 31, 2008 to exercise this Warrant to purchase (a) two
thousand six hundred fifteen (2,615) shares of the Series D

 

 

Convertible
Preferred Stock, $0.001 par value per share, plus (b) upon the occurrence of
the Contingent Options Event, the number of shares of Common Stock equal to the
Contingent Options Adjustment Number, plus (c) upon each occurrence of an event
described in Section 2.12 of the Warrant Purchase Agreement, the number of
shares of Series D Convertible Preferred Stock or Common Stock provided for
therein, of Advantage Management Holdings Corp., a Delaware corporation (the “Company”),
as the same shall be adjusted from time to time pursuant to the provisions of
the Agreements at a price per share as specified in the Agreements and to
exercise the other rights, powers, and privileges hereinafter provided, all on
the terms and subject to the conditions specified in this Warrant and in the
Agreements.  Capitalized terms used
herein and not defined herein shall have the meanings amended to such terms in
the Warrant Purchase Agreement.

 

This Warrant is
issued under, and the rights represented hereby are subject to the terms and
provisions contained in the Agreements, to all terms and provisions of which
the registered holder of this Warrant, by acceptance of this Warrant,
assents.  Reference is hereby made to
the Agreements for a more complete statement of the rights and limitations of
rights of the registered holder of this Warrant and the rights and duties of
the Company under this Warrant.  Copies
of the Agreements are on file at the office of the Company.

 

[THE REMAINDER OF THIS
PAGE INTENTIONALLY LEFT BLANK.]

 

 

IN WITNESS WHEREOF, the Company has caused this
Warrant to be duly executed on this 31st day of December, 1998.

 

	
   

  	
  ADVANTAGE MANAGEMENT
  HOLDINGS CORP.,

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Dennis Nash

  
	
   

  	
   

  	
  Chief Executive Officer

  

 

 

SUBSCRIPTION FORM

SERIES D CONVERTIBLE PREFERRED STOCK

 

(To be executed
only upon exercise of Warrant)

 

The undersigned
registered owner of this Warrant irrevocably exercises this Warrant for and
purchases
                    
of the number of shares of Series D Convertible Preferred Stock of Advantage
Management Holdings Corp., a Delaware corporation, purchasable with this
Warrant, and herewith makes payment therefor, all at the price and on the terms
and conditions specified in this Warrant and requests that certificates for the
shares of Series D Convertible Preferred Stock hereby purchased (and any
securities or other property issuable upon such exercise) be issued in the name
of and delivered to                                                     
whose address is
                                                                   ,
and if such shares of Series D Convertible Preferred Stock do not include all
of the shares of Series D Convertible Preferred Stock issuable as provided in
this Warrant, that a new Warrant of like tenor and date for the balance of the
shares of Series D Convertible Preferred Stock issuable thereunder to be
delivered to the undersigned.

 

	
  Dated:

  	
   

  	
  ,

  	
   

  	
  .

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
									

 

 

ASSIGNMENT FORM

SERIES D CONVERTIBLE PREFERRED STOCK

 

FOR VALUE RECEIVED
the undersigned registered owner of this Warrant hereby sells, assigns and
transfers unto the Assignee named below all of the rights of the undersigned under
this Warrant, with respect to the number of shares of Series D Convertible
Preferred Stock set forth below:

 

	
  No. of
  Shares

  	
   

  	
  Name and
  Address of Assignee

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

and does hereby
irrevocably constitute and appoint as attorney
                                                          
to register such transfer on the books of Advantage Management Holdings Corp.,
a Delaware corporation, maintained for the purpose, with full power of
substitution in the premises.

 

	
  Dated:

  	
   

  	
  ,

  	
   

  	
  .

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  

 

 

SUBSCRIPTION FORM

COMMON STOCK

 

(To be executed
only upon exercise of Warrant)

 

The undersigned
registered owner of this Warrant irrevocably exercises this Warrant for and
purchases
                           
of the number of shares of Common Stock of Advantage Management Holdings Corp.,
a Delaware corporation, purchasable with this Warrant, and herewith makes
payment therefor, all at the price and on the terms and conditions specified in
this Warrant and requests that certificates for the shares of Common Stock
hereby purchased (and any securities or other property issuable upon such
exercise) be issued in the name of and delivered to
                                                   
whose address is                                                       ,
and if such shares of Common Stock do not include all of the shares of Common
Stock issuable as provided in this Warrant, that a new Warrant of like tenor
and date for the balance of the shares of Common Stock issuable thereunder to
be delivered to the undersigned.

 

	
  Dated:

  	
   

  	
  ,

  	
   

  	
  .

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
									

 

 

ASSIGNMENT FORM

COMMON STOCK

 

FOR VALUE RECEIVED
the undersigned registered owner of this Warrant hereby sells, assigns and
transfers unto the Assignee named below all of the rights of the undersigned
under this Warrant, with respect to the number of shares of Common Stock set
forth below:

 

	
  No. of
  Shares

  	
   

  	
  Name and
  Address of Assignee

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

and does hereby irrevocably
constitute and appoint as attorney
                                                              
to register such transfer on the books of Advantage Management Holdings Corp.,
a Delaware corporation, maintained for the purpose, with full power of substitution
in the premises.

 

	
  Dated:

  	
   

  	
  ,

  	
   

  	
  .

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  

 

 

Annex A-3

to

Warrant Purchase Agreement

 

Form of 2000 RSTW Warrant

 

THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF
HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO OR FOR SALE IN
CONNECTION WITH THE DISTRIBUTION HEREOF. THIS WARRANT AND THE SECURITIES
ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE PLEDGED,
SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF
REGISTRATION UNDER OR EXEMPTION FROM SUCH ACT AND ALL APPLICABLE STATE
SECURITIES LAWS.

 

THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF
ARE SUBJECT TO THE TERMS AND PROVISIONS OF A WARRANT PURCHASE AGREEMENT (THE
“WARRANT PURCHASE AGREEMENT”) AND A STOCKHOLDERS’ AGREEMENT, EACH DATED AS OF
DECEMBER 31, 1998, AMONG ADVANTAGE MANAGEMENT HOLDINGS CORP. (THE “COMPANY”),
RFE INVESTMENT PARTNERS VI, L.P., RFE VI SBIC, L.P., RSTW PARTNERS III, L.P.,
STERLING VENTURES LIMITED AND THE OTHER SIGNATORIES THERETO (AS SUCH AGREEMENTS
MAY BE SUPPLEMENTED, MODIFIED, AMENDED, OR RESTATED FROM TIME TO TIME, THE
“AGREEMENTS”).  COPIES OF THE AGREEMENTS
ARE AVAILABLE AT THE EXECUTIVE OFFICES OF THE COMPANY.

 

	
  272 shares of Series D
  Convertible Preferred Stock,

  	
   

  	
   

  
	
  $0.001 par value, of
  the Company

  	
   

  	
   

  
	
  plus up to 40  shares of Common Stock,

  	
   

  	
   

  
	
  $0.001 par value, of
  the Company for the

  	
   

  	
   

  
	
  Contingent Option
  Adjustment Number,

  	
   

  	
   

  
	
  subject to adjustment
  for antidilution from time to time

  	
   

  	
  Warrant No.

  

 

WARRANT TO PURCHASE SERIES D CONVERTIBLE PREFERRED STOCK AND
COMMON STOCK OF

ADVANTAGE MANAGEMENT HOLDINGS CORP.

 

This is to certify
that, in consideration of one hundred dollars ($100.00) and other valuable
consideration, which is hereby acknowledged as received, RSTW PARTNERS III,
L.P. (“Purchaser”), its successors and registered assigns, is entitled
at any time after the date hereof

 

 

and prior to 12:00
midnight December 31, 2008 to exercise this 2000 Warrant to purchase (a) two
hundred and seventy-two (272) shares of the Series D Convertible Preferred
Stock, $0.001 par value per share, plus (b) upon the occurrence of the
Contingent Options Event, the number of shares of Common Stock equal to the
Contingent Options Adjustment Number, plus (c) upon each occurrence of an event
described in Section 2.12 of the Warrant Purchase Agreement, the number
of shares of Series D Convertible Preferred Stock or Common Stock provided for
therein, of Advantage Management Holdings Corp., a Delaware corporation (the “Company”),
as the same shall be adjusted from time to time pursuant to the provisions of
the Agreements at a price per share as specified in the Agreements and to
exercise the other rights, powers, and privileges hereinafter provided, all on
the terms and subject to the conditions specified in this 2000 Warrant and in
the Agreements.  Capitalized terms used
herein and not defined herein shall have the meanings assigned to such terms in
the Warrant Purchase Agreement (as amended from time to time).

 

This 2000 Warrant
is issued under, and the rights represented hereby are subject to the terms and
provisions contained in the Agreements, to all terms and provisions of which
the registered holder of this 2000 Warrant, by acceptance of this 2000 Warrant,
assents.  Reference is hereby made to
the Agreements for a more complete statement of the rights and limitations of
rights of the registered holder of this 2000 Warrant and the rights and duties
of the Company under this 2000 Warrant. 
Copies of the Agreements are on file at the office of the Company.

 

[THE REMAINDER OF THIS
PAGE INTENTIONALLY LEFT BLANK.]

 

 

IN WITNESS WHEREOF, the Company has caused this
Warrant to be duly executed on this 25th day of September, 2000.

 

	
   

  	
  ADVANTAGE MANAGEMENT
  HOLDINGS CORP.,

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						

 

 

SUBSCRIPTION FORM

SERIES D CONVERTIBLE PREFERRED STOCK

 

(To be executed
only upon exercise of Warrant)

 

The undersigned
registered owner of this Warrant irrevocably exercises this Warrant for and
purchases
                        
of the number of shares of Series D Convertible Preferred Stock of Advantage
Management Holdings Corp., a Delaware corporation, purchasable with this Warrant,
and herewith makes payment therefor, all at the price and on the terms and
conditions specified in this Warrant and requests that certificates for the
shares of Series D Convertible Preferred Stock hereby purchased (and any
securities or other property issuable upon such exercise) be issued in the name
of and delivered to
                                                      
whose address is
                                                                     ,
and if such shares of Series D Convertible Preferred Stock do not include all
of the shares of Series D Convertible Preferred Stock issuable as provided in
this Warrant, that a new Warrant of like tenor and date for the balance of the
shares of Series D Convertible Preferred Stock issuable thereunder to be
delivered to the undersigned.

 

	
  Dated:

  	
   

  	
  ,

  	
   

  	
  .

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
									

 

 

ASSIGNMENT FORM

SERIES D CONVERTIBLE PREFERRED STOCK

 

FOR VALUE RECEIVED
the undersigned registered owner of this Warrant hereby sells, assigns and
transfers unto the Assignee named below all of the rights of the undersigned
under this Warrant, with respect to the number of shares of Series D
Convertible Preferred Stock set forth below:

 

	
  No. of
  Shares

  	
   

  	
  Name and
  Address of Assignee

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

and does hereby
irrevocably constitute and appoint as attorney
                                                        
to register such transfer on the books of Advantage Management Holdings Corp.,
a Delaware corporation, maintained for the purpose, with full power of
substitution in the premises.

 

	
  Dated:

  	
   

  	
  ,

  	
   

  	
  .

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  

 

 

SUBSCRIPTION FORM

COMMON STOCK

 

(To be executed
only upon exercise of Warrant)

 

The undersigned
registered owner of this Warrant irrevocably exercises this Warrant for and
purchases
                             
of the number of shares of Common Stock of Advantage Management Holdings Corp.,
a Delaware corporation, purchasable with this Warrant, and herewith makes payment
therefor, all at the price and on the terms and conditions specified in this
Warrant and requests that certificates for the shares of Common Stock hereby
purchased (and any securities or other property issuable upon such exercise) be
issued in the name of and delivered to
                                                 
whose address is
                                                              ,
and if such shares of Common Stock do not include

 

 

all of the shares
of Common Stock issuable as provided in this Warrant, that a new Warrant of
like tenor and date for the balance of the shares of Common Stock issuable
thereunder to be delivered to the undersigned.

 

	
  Dated:

  	
   

  	
  ,

  	
   

  	
  .

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
									

 

3

 

ASSIGNMENT FORM

COMMON STOCK

 

FOR VALUE RECEIVED
the undersigned registered owner of this Warrant hereby sells, assigns and
transfers unto the Assignee named below all of the rights of the undersigned
under this Warrant, with respect to the number of shares of Common Stock set
forth below:

 

	
  No. of
  Shares

  	
   

  	
  Name and
  Address of Assignee

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

and does hereby
irrevocably constitute and appoint as attorney
                                                          
to register such transfer on the books of Advantage Management Holdings Corp.,
a Delaware corporation, maintained for the purpose, with full power of
substitution in the premises.

 

	
  Dated:

  	
   

  	
  ,

  	
   

  	
  .

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  

 

4

 

Annex A-4

to

Warrant Purchase Agreement

 

Form of 2001 RSTW Merger Warrant

 

THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF
HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO OR FOR SALE IN
CONNECTION WITH THE DISTRIBUTION HEREOF. THIS WARRANT AND THE SECURITIES
ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE PLEDGED,
SOLD, OFFERED FOR SALE, TRANSFERRED, OR OTHERWISE DISPOSED OF IN THE ABSENCE OF
REGISTRATION UNDER OR EXEMPTION FROM SUCH ACT AND ALL APPLICABLE STATE
SECURITIES LAWS.

 

THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF
ARE SUBJECT TO THE TERMS AND PROVISIONS OF A WARRANT PURCHASE AGREEMENT (THE
“WARRANT PURCHASE AGREEMENT”), A STOCKHOLDERS’ AGREEMENT, AND A REGISTRATION
RIGHTS AGREEMENT, EACH DATED AS OF APRIL 30, 2001, AMONG KTC/AMG HOLDINGS CORP.
(TO BE RENAMED THE KENAN ADVANTAGE GROUP, INC., AND REFERRED TO HEREIN AS THE
“COMPANY”), RSTW PARTNERS III, L.P., MASSACHUSETTS MUTUAL LIFE INSURANCE
COMPANY, MASSMUTUAL CORPORATE INVESTORS, MASSMUTUAL PARTICIPATION INVESTORS AND
THE OTHER SIGNATORIES THERETO (AS SUCH AGREEMENTS MAY BE SUPPLEMENTED,
MODIFIED, AMENDED, OR RESTATED FROM TIME TO TIME, THE “AGREEMENTS”).  COPIES OF THE AGREEMENTS ARE AVAILABLE AT
THE EXECUTIVE OFFICES OF THE COMPANY.

 

	
             shares
  of Series D Convertible Preferred Stock,

  	
   

  	
   

  
	
  $0.001 par value, of
  the Company

  	
   

  	
   

  
	
  plus up to
                  
  shares of Common Stock,

  	
   

  	
   

  
	
  $0.0001 par value, of
  the Company for the

  	
   

  	
   

  
	
  Contingent Options
  Adjustment Number,

  	
   

  	
   

  
	
  subject to adjustment
  for antidilution from time to time

  	
   

  	
  Warrant No.

  
	
   

  	
   

  	
   

  
	
  PPN:  48853 11 3

  	
   

  	
   

  

 

WARRANT TO PURCHASE SERIES D CONVERTIBLE PREFERRED STOCK AND
COMMON STOCK OF

KTC/AMG HOLDINGS CORP.

(to be renamed The Kenan
Advantage Group, Inc.)

 

5

 

This is to certify
that, in consideration of the one hundred dollars ($100) paid by RSTW PARTNERS
III, L.P. (“Purchaser”), to Advantage Management Holdings Corp. (“AMHC”),
on
                            ,
and other valuable consideration, which is hereby acknowledged as received, Purchaser,
its successors and registered assigns, is entitled at any time after the date
hereof and prior to 12:00 midnight April 30, 2011 to exercise this Warrant to
purchase
                                   
(          ) shares of the
Series D Convertible Preferred Stock, $0.001 par value per share, plus (b) upon
the exercise of the Contingent Options, the number of shares of Common Stock
equal to the Contingent Options Adjustment Number, plus (c) upon each
occurrence of an event described in Section 2.12 of the Warrant Purchase
Agreement, the number of shares of Series D Convertible Preferred Stock or
Common Stock provided for therein, of the Company, as the same shall be
adjusted from time to time pursuant to the provisions of the Agreements at a
price per share as specified in the Agreements and to exercise the other rights,
powers, and privileges hereinafter provided, all on the terms and subject to
the conditions specified in this Warrant and in the Agreements.  This Warrant is one of the “2001 RSTW Merger
Warrants” described in the Warrant Purchase Agreement.  Capitalized terms used herein and not
defined herein shall have the meanings assigned to such terms in the Warrant
Purchase Agreement (as amended from time to time).

 

This Warrant is
given in amendment, restatement, modification and extension (but not
extinguishment or novation) of the warrant issued by AMHC to Purchaser as
                                                       ,
to purchase the number of shares of AMHC’s Series D Convertible Preferred Stock
and AMHC’s Common Stock provided for therein, as such number of shares
purchasable under such warrant are to be adjusted from time to time, which,
pursuant to a Merger Agreement dated as of April 30, 2001, among the Company,
AMHC, and AMHC Acquisition Corp. (the “AMHC Merger Agreement”), was
converted into this Warrant.  Without
limiting any other rights and benefits to which this Warrant is entitled under
the Advantage Merger or otherwise, this Warrant shall be treated as purchased
and issued under, and subject to the terms and provisions in, the Agreements,
to all terms and provisions of which the registered holder of this Warrant, by
acceptance of this Warrant, assents. 
Reference is hereby made to the Agreements for a more complete statement
of the rights and limitations of rights of the registered holder of this
Warrant and the rights and duties of the Company under this Warrant.  Copies of the Agreements are on file at the
office of the Company.

 

[THE REMAINDER OF THIS
PAGE INTENTIONALLY LEFT BLANK.]

 

6

 

IN WITNESS WHEREOF, the Company has caused this
Warrant to be duly executed on this 30th day of April, 2001.

 

	
   

  	
  KTC/AMG Holdings Corp,

  
	
   

  	
  a Delaware corporation
  (to be renamed The Kenan Advantage Group, Inc.)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						

 

 

SUBSCRIPTION FORM

SERIES D CONVERTIBLE PREFERRED STOCK

 

(To be executed
only upon exercise of Warrant)

 

The undersigned
registered owner of this Warrant irrevocably exercises this Warrant for and
purchases
                      
of the number of shares of Series D Convertible Preferred Stock of KTC/AMG
Holdings Corp., a Delaware corporation (to be renamed The Kenan Advantage
Group, Inc.), purchasable with this Warrant, and herewith makes payment
therefor, all at the price and on the terms and conditions specified in this
Warrant and requests that certificates for the shares of Series D Convertible
Preferred Stock hereby purchased (and any securities or other property issuable
upon such exercise) be issued in the name of and delivered to
                                                          
whose address is
                                                                         ,
and if such shares of Series D Convertible Preferred Stock do not include all
of the shares of Series D Convertible Preferred Stock issuable as provided in
this Warrant, that a new Warrant of like tenor and date for the balance of the
shares of Series D Convertible Preferred Stock issuable thereunder to be
delivered to the undersigned.

 

	
  Dated:

  	
   

  	
  ,

  	
   

  	
  .

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
									

 

 

ASSIGNMENT FORM

SERIES D CONVERTIBLE PREFERRED STOCK

 

FOR VALUE RECEIVED
the undersigned registered owner of this Warrant hereby sells, assigns and
transfers unto the Assignee named below all of the rights of the undersigned
under this Warrant, with respect to the number of shares of Series D
Convertible Preferred Stock set forth below:

 

	
  No. of
  Shares

  	
   

  	
  Name and
  Address of Assignee

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

and does hereby
irrevocably constitute and appoint as attorney
                                                          
to register such transfer on the books of KTC/AMG Holdings Corp., a Delaware
corporation (to be renamed The Kenan Advantage Group, Inc.), maintained for the
purpose, with full power of substitution in the premises.

 

	
  Dated:

  	
   

  	
  ,

  	
   

  	
  .

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  

 

 

SUBSCRIPTION FORM

COMMON STOCK

 

(To be executed
only upon exercise of Warrant)

 

The undersigned
registered owner of this Warrant irrevocably exercises this Warrant for and
purchases                      
of the number of shares of Common Stock of KTC/AMG Holdings Corp., a Delaware
corporation (to be renamed The Kenan Advantage Group, Inc.), purchasable with
this Warrant, and herewith makes payment therefor, all at the price and on the terms
and conditions specified in this Warrant and requests that certificates for the
shares of Common Stock hereby purchased (and any securities or other property
issuable upon such exercise) be issued in the name of and delivered to
                                                           
whose address is                                                                 ,
and if such shares of Common Stock do not include all of the shares of Common
Stock issuable as provided in this Warrant, that a new Warrant of like tenor
and date for the balance of the shares of Common Stock issuable thereunder to
be delivered to the undersigned.

 

	
  Dated:

  	
   

  	
  ,

  	
   

  	
  .

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
									

 

 

ASSIGNMENT FORM

COMMON STOCK

 

FOR VALUE RECEIVED
the undersigned registered owner of this Warrant hereby sells, assigns and
transfers unto the Assignee named below all of the rights of the undersigned
under this Warrant, with respect to the number of shares of Common Stock set forth
below:

 

	
  No. of
  Shares

  	
   

  	
  Name and
  Address of Assignee

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

and does hereby
irrevocably constitute and appoint as attorney
                                                           
to register such transfer on the books of KTC/AMG Holdings Corp., a Delaware
corporation (to be renamed The Kenan Advantage Group, Inc.), maintained for the
purpose, with full power of substitution in the premises.

 

	
  Dated:

  	
   

  	
  ,

  	
   

  	
  .

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00069-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00069-of-00352.parquet"}]]