FExhibit 10.46

[FORM OF SERIES C CONVERTIBLE NOTE]

ANYTHING HEREIN TO THE CONTRARY NOTWITHSTANDING, THE EXERCISE OF ANY RIGHT OR
REMEDY WITH RESPECT TO THIS NOTE AND CERTAIN OF THE RIGHTS OF THE HOLDER HEREOF
ARE SUBJECT TO THE PROVISIONS OF THE SUBORDINATION AGREEMENT DATED AS OF MAY 1,
2008 (AS AMENDED, RESTATED, SUPPLEMENTED, OR OTHERWISE MODIFIED FROM TIME TO
TIME, THE “SUBORDINATION AGREEMENT”), BY AND AMONG WELLS FARGO FOOTHILL, INC.,
AS FIRST LIEN AGENT, ABLECO FINANCE LLC, AS SECOND LIEN AGENT, AND THE JUNIOR
LENDERS (AS THAT TERM IS DEFINED THEREIN); IT BEING UNDERSTOOD AND AGREED THAT
TPG SPECIALTY LENDING, INC. IS THE EXISTING FIRST LIEN AGENT AS OF THE DATE
HEREOF.  IN THE EVENT OF ANY CONFLICT BETWEEN THE TERMS OF THE SUBORDINATION
AGREEMENT AND THIS NOTE, THE TERMS OF THE SUBORDINATION AGREEMENT SHALL GOVERN
AND CONTROL.

Metalico, Inc.
Series C Convertible Note

     
Issuance Date: October 21, 2014
  Original Principal Amount: U.S. $[?]

FOR VALUE RECEIVED, METALICO, INC., a Delaware corporation (the “Company”),
hereby promises to pay to [?] or registered assigns (the “Holder”) the amount
set out above as the Original Principal Amount (as reduced pursuant to the terms
hereof pursuant to redemption, conversion or otherwise, the “Principal”) when
due, whether upon the Maturity Date (as defined below), acceleration, redemption
or otherwise (in each case in accordance with the terms hereof) and to pay
interest (“Interest”) on any outstanding Principal at a rate per annum equal to
the Interest Rate (as defined below) from the date set out above as the Issuance
Date (the “Issuance Date”) until the same becomes due and payable, whether upon
an Interest Date (as defined below), the Maturity Date, acceleration,
conversion, redemption or otherwise (in each case in accordance with the terms
hereof). This Series C Convertible Note (including all Series C Convertible
Notes issued in exchange, transfer or replacement hereof, this “Note”) is one of
an issue of Series A Convertible Notes, Series B Convertible Notes and Series C
Convertible Notes issued pursuant to the Exchange Agreement on the Closing Date
(collectively, the “Notes” and such other Series A Convertible Notes, Series B
Convertible Notes and Series C Convertible Notes, the “Other Notes”). Certain
capitalized terms used herein but not otherwise defined herein or in Section 29
hereof shall have the meanings ascribed to such terms in the Exchange Agreement.

(1) MATURITY. On the Maturity Date, the Company shall pay to the Holder an
amount in cash representing all outstanding Principal, and accrued and unpaid
Interest and accrued and unpaid Late Charges, if any, on such Principal and
Interest. The “Maturity Date” shall be July 1, 2024, as may be extended at the
option of the Holder.

(2) INTEREST; INTEREST RATE. (a) Interest on this Note shall commence accruing
on the Issuance Date and shall be computed on the basis of a 360-day year and
twelve 30-day months and shall be payable in arrears for each three-month period
following the Issuance Date on January 31, April 30, July 31 and October 31 of
each year and on the Maturity Date (each, an “Interest Date”) with the first
Interest Date being October 31, 2014. Interest shall be payable on each Interest
Date in kind, which shall accrete as additional Principal and be payable or
convertible in accordance with the terms of this Note, including the provisions
of Section 3(d), to the record holder of this Note on each January 15, April 15,
July 15 and October 15 immediately preceding the applicable Interest Date and on
the Maturity Date, with respect to the Interest to be paid on such date.

(b) Prior to the payment of Interest on an Interest Date, Interest on this Note
shall accrue at the Interest Rate. From and after the occurrence and during the
continuance of an Event of Default, the Interest Rate shall be increased to
16.50% per annum, payable in kind, which shall accrete as additional Principal
and be payable or convertible in accordance with the terms of this Note,
including the provisions of Section 3(d). In the event that such Event of
Default is subsequently cured, the adjustment referred to in the preceding
sentence shall cease to be effective as of the date of such cure; provided that
the Interest as calculated and unpaid at such increased rate during the
continuance of such Event of Default shall continue to apply to the extent
relating to the days after the occurrence of such Event of Default through and
including the date of cure of such Event of Default.

(3) CONVERSION OF NOTES. The Principal of this Note and any accrued and unpaid
Interest shall be convertible into shares of the Company’s common stock, par
value $0.001 per share (the “Common Stock”), on the terms and conditions set
forth in this Section 3.

(a) Conversion Right. Subject to the provisions of Section 3(d), at any time or
times on or after the six (6) month anniversary of the Issuance Date, the Holder
shall be entitled to convert any portion of the Principal and any accrued and
unpaid Interest into fully paid and nonassessable shares of Common Stock in
accordance with Section 3(c), at the Conversion Rate (as defined below);
provided that if the Stockholder Approval (as defined in the Exchange Agreement)
is received prior to such six (6) month anniversary, the Holder shall have the
right to convert this Note at any time following such Stockholder Approval.
Notwithstanding the foregoing, the Holder shall only be permitted to effect a
voluntary conversion of this Note pursuant to Section 3(e) hereof prior to the
Measuring Date (as defined below). The Company shall not issue any fraction of a
share of Common Stock upon any conversion. If the issuance would result in the
issuance of a fraction of a share of Common Stock, the Holder shall be entitled,
at the Holder’s option, to receive either (x) a cash payment equal to the excess
of the amount of the Principal and any accrued and unpaid Interest to be
converted for such fractional share or (y) a whole share if the Holder converts
an additional portion of its Principal and any accrued and unpaid Interest so as
to acquire one whole share. The Company shall pay any and all transfer, stamp,
and similar taxes that may be payable with respect to the issuance and delivery
of Common Stock upon conversion of any Principal and any accrued and unpaid
Interest.

(b) Conversion Rate. The number of shares of Common Stock issuable upon
conversion of the amount of Principal and any accrued and unpaid Interest to be
converted pursuant to Section 3(a) shall be equal to the quotient obtained by
dividing (x) such Principal amount and any accrued and unpaid Interest thereon
by (y) the Conversion Price (the “Conversion Rate”). The “Conversion Price”
means, as of any Conversion Date (as defined below), 110% of the arithmetic
average of the Weighted Average Prices of the Common Stock on each of the thirty
(30) consecutive Trading Days including the fifteen (15) consecutive Trading
Days prior to April 30, 2015 and the fifteen (15) consecutive Trading Days
commencing on and including April 30, 2015. For purposes of this Note, the
“Measuring Date” shall mean the final Trading Day of the period consisting of
each of the fifteen (15) consecutive Trading Days commencing on, and including
April 30, 2015.

(c) Mechanics of Conversion.

(i) Optional Conversion. To convert any or all of the Principal and any accrued
and unpaid Interest into shares of Common Stock on any date (a “Conversion
Date”), the Holder shall (A) transmit by facsimile (or otherwise deliver), for
receipt on or prior to 11:59 p.m., New York time, on such date, a copy of an
executed notice of conversion in the form attached hereto as Exhibit I (the
“Conversion Notice”) to the Company and (B) if required by Section 3(c)(iii),
surrender this Note to a common carrier for delivery to the Company as soon as
practicable on or following such date (or an indemnification undertaking with
respect to this Note in the case of its loss, theft or destruction).

(ii) On or before the first (1st) Trading Day following the date of receipt of a
Conversion Notice, the Company shall transmit by facsimile a confirmation of
receipt of such Conversion Notice to the Holder and the Company’s transfer agent
(the “Transfer Agent”). On or before the first (1st) Trading Day following the
Measuring Date, the Company shall transmit by facsimile notice to the Holder of
the initial Conversion Price pursuant to Section 3(b), setting forth in
reasonable detail and certifying the calculation of such Conversion Price. 
Within three (3) Trading Days of the later of (i) the Conversion Date or the
Measuring Date (the “Share Delivery Date”), the Company shall (x) provided that
the Transfer Agent is participating in the Depository Trust Company’s (“DTC”)
Fast Automated Securities Transfer Program, credit such aggregate number of
shares of Common Stock to which the Holder shall be entitled to the Holder’s or
its designee’s balance account with DTC through its Deposit/Withdrawal at
Custodian system or (y) if the Transfer Agent is not participating in the DTC
Fast Automated Securities Transfer Program, issue and deliver to the address as
specified in the Conversion Notice, a certificate, registered in the name of the
Holder or its designee, for the number of shares of Common Stock to which the
Holder shall be entitled. If this Note is physically surrendered for conversion
as required by Section 3(c)(iii) and less than all of the Principal of this Note
is being converted, then the Company shall as soon as practicable and in no
event later than three (3) Trading Days after receipt of this Note and at its
own expense, issue and deliver to the holder a new Note (in accordance with
Section 17(d)) representing the outstanding Principal not converted. The Person
or Persons entitled to receive the shares of Common Stock issuable upon a
conversion of this Note shall be treated for all purposes as the record holder
or holders of such shares of Common Stock on the Conversion Date.

(iii) Company’s Failure to Timely Convert. If the Company shall fail to issue a
certificate to the Holder or credit the Holder’s balance account with DTC, as
applicable, for the number of shares of Common Stock to which the Holder is
entitled upon conversion of any Principal and any accrued and unpaid Interest on
or prior to the date which is three (3) Trading Days after the Conversion Date
(a “Conversion Failure”), then (A) the Company shall pay damages to the Holder
for each Trading Day of such Conversion Failure in an amount equal to 1.5% of
the product of (1) the sum of the number of shares of Common Stock not issued to
the Holder on or prior to the Share Delivery Date and to which the Holder is
entitled, and (2) the Closing Sale Price of the Common Stock on the Share
Delivery Date and (B) the Holder, upon written notice to the Company, may void
its Conversion Notice with respect to, and retain or have returned, as the case
may be, any portion of this Note that has not been converted pursuant to such
Conversion Notice; provided that the voiding of a Conversion Notice shall not
affect the Company’s obligations to make any payments which have accrued prior
to the date of such notice pursuant to this Section 3(c)(iii) or otherwise. In
addition to the foregoing, if within three (3) Trading Days after the Company’s
receipt of the facsimile copy of a Conversion Notice the Company shall fail to
issue and deliver a certificate to the Holder or credit the Holder’s balance
account with DTC for the number of shares of Common Stock to which the Holder is
entitled upon such holder’s conversion of any Principal and any accrued and
unpaid Interest so elected for conversion or on any date of the Company’s
obligation to deliver shares of Common Stock as contemplated pursuant to clause
(y) below, and if on or after such Trading Day the Holder purchases (in an open
market transaction or otherwise) Common Stock to deliver in satisfaction of a
sale by the Holder of Common Stock issuable upon such conversion that the Holder
anticipated receiving from the Company (a “Buy-In”), then the Company shall,
within three (3) Trading Days after the Holder’s request and in the Holder’s
discretion, either (x) pay cash to the Holder in an amount equal to the Holder’s
total purchase price (including brokerage commissions and other out of pocket
expenses, if any) for the shares of Common Stock so purchased (the “Buy-In
Price”), at which point the Company’s obligation to deliver such certificate
(and to issue such Common Stock) shall terminate, or (y) promptly honor its
obligation to deliver to the Holder a certificate or certificates representing
such Common Stock and pay cash to the Holder in an amount equal to the excess
(if any) of the Buy-In Price over the product of (I) such number of shares of
Common Stock, times (II) the Closing Bid Price on the Conversion Date.

(iv) Registration; Book-Entry. The Company shall cause its transfer agent to
maintain a register (the “Register”) for the recordation of the names and
addresses of the holders of each Note and the principal amount of the Notes held
by such holders (the “Registered Notes”). The entries in the Register shall be
conclusive and binding for all purposes absent manifest error. The Company and
the holders of the Notes shall treat each Person whose name is recorded in the
Register as the owner of a Note for all purposes, including, without limitation,
the right to receive payments of Principal and Interest hereunder,
notwithstanding notice to the contrary. A Registered Note may be assigned or
sold in whole or in part only by registration of such assignment or sale on the
Register. Upon its receipt of a request to assign or sell all or part of any
Registered Note by a Holder, the Company shall record the information contained
therein in the Register and issue one or more new Registered Notes in the same
aggregate principal amount as the principal amount of the surrendered Registered
Note to the designated assignee or transferee pursuant to Section 17.
Notwithstanding anything to the contrary set forth herein, upon conversion of
any portion of this Note in accordance with the terms hereof, the Holder shall
not be required to physically surrender this Note to the Company unless (A) the
full Principal amount represented by this Note is being converted or (B) the
Holder has provided the Company with prior written notice (which notice may be
included in a Conversion Notice) requesting reissuance of this Note upon
physical surrender of this Note. The Holder and the Company shall maintain
records showing the Principal, Interest, and Late Charges, if any, converted and
the dates of such conversions or shall use such other method, reasonably
satisfactory to the Holder and the Company, so as not to require physical
surrender of this Note upon conversion.

(v) Pro Rata Conversion; Disputes. In the event that the Company receives a
Conversion Notice from more than one holder of Notes for the same Conversion
Date and the Company can convert some, but not all, of such portions of the
Notes submitted for conversion, the Company, subject to Section 3(d), shall
convert from each holder of Notes electing to have Notes converted on such date
a pro rata amount of such holder’s portion of its Notes submitted for conversion
based on the principal amount of Notes submitted for conversion on such date by
such holder relative to the aggregate principal amount of all Notes submitted
for conversion on such date; provided, the Company shall also comply with the
provisions of Section 3(a) in respect of fractional shares that would otherwise
be issued. In the event of a dispute as to the number of shares of Common Stock
issuable to the Holder in connection with a conversion of this Note, the Company
shall issue to the Holder the number of shares of Common Stock not in dispute
and resolve such dispute in accordance with Section 22.

(d) Limitations on Conversions.

(i) Beneficial Ownership. The Company shall not effect any conversion of this
Note or otherwise issue shares of Common Stock hereunder, and the Holder of this
Note shall not have the right to convert any portion of this Note or otherwise
receive shares of Common Stock hereunder pursuant to Section 3(a), to the extent
that after giving effect to such conversion or issuance, as applicable, the
Holder (together with the Holder’s affiliates) would beneficially own in excess
of 9.99% (the “Maximum Percentage”) of the number of shares of Common Stock
outstanding immediately after giving effect to such conversion. For purposes of
the foregoing sentence, the number of shares of Common Stock beneficially owned
by the Holder and its affiliates shall include the number of shares of Common
Stock issuable upon conversion of this Note with respect to which the
determination of such sentence is being made, but shall exclude the number of
shares of Common Stock which would be issuable upon (A) conversion of the
remaining, unconverted portion of this Note beneficially owned by the Holder or
any of its affiliates and (B) exercise or conversion of the unexercised or
unconverted portion of any other securities of the Company (including, without
limitation, any Other Notes) subject to a limitation on conversion or exercise
analogous to the limitation contained herein beneficially owned by the Holder or
any of its affiliates. Except as set forth in the preceding sentence, for
purposes of this Section 3(d)(i), beneficial ownership shall be calculated in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”). For purposes of this Section 3(d)(i), in determining the
number of outstanding shares of Common Stock, the Holder may rely on the number
of outstanding shares of Common Stock as reflected in (1) the Company’s most
recent Form 10-K, Form 10-Q, Form 8-K or other public filing with the SEC, as
the case may be, (2) a more recent public announcement by the Company or (3) any
other notice by the Company or the Transfer Agent setting forth the number of
shares of Common Stock outstanding. For any reason at any time, upon the written
or oral request of the Holder, the Company shall, within one (1) Business Day of
the receipt of such request, confirm orally and in writing to the Holder the
number of shares of Common Stock then outstanding. In any case, the number of
outstanding shares of Common Stock shall be determined after giving effect to
the conversion or exercise of securities of the Company, including this Note, by
the Holder or its affiliates and any Other Notes since the date as of which such
number of outstanding shares of Common Stock was reported. The provisions of
this paragraph shall be construed and implemented in a manner otherwise than in
strict conformity with the terms of this Section 3(d)(i) to correct this
paragraph (or any portion hereof) which may be defective or inconsistent with
the intended beneficial ownership limitation herein contained or to make changes
or supplements necessary or desirable to properly give effect to such
limitation. To the extent the Company is prohibited from issuing shares of
Common Stock to the Holder pursuant to this Section 3(d)(i), in lieu of issuing
such shares of Common Stock, the Holder shall be entitled to receive rights to
such shares pursuant to Section 4 of the Exchange Agreement.

(ii) Market Regulation. Unless and until the Stockholder Approval (as defined in
the Exchange Agreement) has been obtained, the Company shall not be obligated to
issue any shares of Common Stock upon conversion of this Note or otherwise
pursuant to the terms of this Note if the issuance of such shares of Common
Stock combined with the issuance of shares of Common Stock pursuant to the other
Securities (as defined in the Exchange Agreement) and shares of Common Stock
underlying warrants issued to TPG Specialty Lending, Inc. or an affiliate
thereof on or about the Closing Date (the “Warrants”), together with such shares
of Common Stock issued or issuable pursuant to the Other Agreements (as defined
in the Exchange Agreement) would, in the aggregate, exceed 9,645,043 shares of
Common Stock (as adjusted for any stock dividend, stock split, stock
combination, reclassification or similar transaction) (which is less than 20% of
48,225,219 shares of Common Stock outstanding on the date hereof) (the “Exchange
Cap”).  Until such Stockholder Approval is obtained, (x) at any time during the
Additional Common Shares Measurement Period (as defined in the Exchange
Agreement), the Company shall not be obligated to issue any shares of Common
Stock upon conversion of this Note or otherwise pursuant to the terms of this
Note, and (y) at any time after the Additional Common Shares Measurement Period,
no holder of the Notes shall be issued in the aggregate, upon conversion of
Notes, shares of Common Stock in an amount greater than the product of (A) 80%
of the Remaining Exchange Cap (as defined in the Exchange Agreement), multiplied
by (B) such Holder’s Pro Rata Portion (with respect to each such holder of the
Notes, the “Exchange Cap Allocation”).  In the event that any holder of the
Notes shall sell or otherwise transfer any of such holder’s Notes, the
transferee shall be allocated a pro rata portion of such holder’s Exchange Cap
Allocation, and the restrictions of the prior sentence shall apply to such
transferee with respect to the portion of the Exchange Cap Allocation allocated
to such transferee.  In the event that any holder of Notes shall convert all of
such holder’s Notes into a number of shares of Common Stock which, in the
aggregate, is less than such holder’s Exchange Cap Allocation, then the
difference between such holder’s Exchange Cap Allocation and the number of
shares of Common Stock actually issued to such holder shall be allocated to the
respective Exchange Cap Allocations of the remaining holders of Notes on a pro
rata basis in proportion to the aggregate principal amount of the Notes then
held by each such holder.  This Exchange  Cap  limitation  shall  in  no  way 
limit  the  application  of  the  Conversion  Price Adjustment provisions of
Section 7 of the Notes other than in respect of the number of shares of Common
Stock which may be issued by the Company as a result of a conversion thereunder.
 For the purpose of this Note, “Pro Rata Portion” shall mean the quotient
obtained by dividing (x) the aggregate principal amount of the Holder’s Original
Series Notes outstanding immediately prior to the consummation of the
transactions contemplated by the Exchange Agreement and the Other Agreements by
(y) the aggregate principal balance of the Original Series Notes held by all
Investors outstanding immediately prior to the consummation of the transactions
contemplated by the Exchange Agreement and the Other Agreements.

(e) Right of Alternate Conversion.

(i) General. At any time after the occurrence of and during the continuance of
an Event of Default the Holder may, at the Holder’s option, convert (each, an
“Alternate Conversion”, and the date of such Alternate Conversion, each, an
“Alternate Conversion Date”) all, or any part of, the Principal, accrued and
unpaid Interest and any other amounts (including any premiums on such Principal
and/or Interest) then outstanding hereunder or required to be paid to the Holder
hereunder (whether payable in cash or shares of Common Stock) (the “Conversion
Amount”) (such portion of the Conversion Amount subject to such Alternate
Conversion, the “Alternate Conversion Amount”) into shares of Common Stock at
the Alternate Conversion Price.

(ii) Alternate Conversion. On any Alternate Conversion Date, the Holder may
voluntarily convert any Alternate Conversion Amount pursuant to Section 3(c)
(with “Alternate Conversion Price” replacing “Conversion Price” for all purposes
hereunder with respect to such Alternate Conversion) by designating in the
Conversion Notice delivered pursuant to this Section 3(e) of this Note that the
Holder is electing to use the Alternate Conversion Price for such conversion. 
Notwithstanding anything to the contrary in this Section 3(e), but subject to
Section 3(d), until the Company delivers shares of Common Stock representing the
applicable Alternate Conversion Amount to the Holder, such Alternate Conversion
Amount may be converted by the Holder into shares of Common Stock pursuant to
Section 3(c) without regard to this Section 3(e).

(4) EVENTS OF DEFAULT AND NOTICE THEREOF.

(a) Events of Default. Each of the following events shall constitute an “Event
of Default”:

(i) the suspension from trading or failure of the Common Stock to be listed on
an Eligible Market for a period of five (5) consecutive Trading Days or for more
than an aggregate of ten (10) Trading Days in any 365-day period;

(ii) the Company’s (A) failure to cure a Conversion Failure by delivery of the
required number of shares of Common Stock within ten (10) Trading Days after the
applicable Conversion Date, Company Redemption Date or redemption pursuant to a
Change of Control, as the case may be, or (B) notice, written or oral, to any
holder of the Notes, including by way of public announcement or through any of
its agents, at any time, of its intention not to comply with a proper request
for conversion of any Notes into shares of Common Stock that is tendered in
accordance with the provisions of the Notes, other than pursuant to
Section 3(d);

(iii) at any time following the tenth (10th) Business Day that the Holder’s
Authorized Share Allocation is less than the number of shares of Common Stock
that the Holder would be entitled to receive upon a conversion of the full
amount of Principal and any accrued and unpaid Interest of this Note (without
regard to any limitations on conversion set forth in Section 3(d) or otherwise);

(iv) the Company’s failure to pay to the Holder any amount of Principal,
Interest, Late Charges, or other amounts when and as due under this Note
(including, without limitation, the Company’s failure to pay any redemption
amounts due hereunder) or any other Transaction Document (as defined in the
Exchange Agreement) or any other agreement, document, certificate or other
instrument delivered in connection with the transactions contemplated hereby and
thereby to which the Holder is a party, except, in the case of a failure to pay
Interest and/or Late Charges when and as due, in which case only if such failure
continues for a period of at least five (5) Business Days;

(v) any default under or acceleration prior to maturity of any Indebtedness of
the Company or any of its Subsidiaries (as defined in Section 3(a) of the
Exchange Agreement) in the principal amount of at least $10,000,000 in respect
of any default (other than in respect of a default under the TPG Agreement,
which shall not result in an Event of Default) or at least $5,000,000 in respect
of any acceleration prior to maturity other than with respect to any Other Notes
but expressly including any acceleration under the TPG Agreement;

(vi) the Company or any of its Subsidiaries, pursuant to or within the meaning
of Title 11, U.S. Code, or any similar Federal, foreign or state law for the
relief of debtors (collectively, “Bankruptcy Law”), (A) commences a voluntary
case, (B) consents to the entry of an order for relief against it in an
involuntary case, (C) consents to the appointment of a receiver, trustee,
assignee, liquidator or similar official (a “Custodian”), (D) makes a general
assignment for the benefit of its creditors or (E) admits in writing that it is
generally unable to pay its debts as they become due;

(vii) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that (A) is for relief against the Company or any of its material
Subsidiaries in an involuntary case, (B) appoints a Custodian of the Company or
any of its material Subsidiaries or (C) orders the liquidation of the Company or
any of its material Subsidiaries;

(viii) a final judgment or judgments for the payment of money aggregating in
excess of $10,000,000 are rendered against the Company or any of its
Subsidiaries and which judgments are not, within sixty (60) days after the entry
thereof, bonded, discharged or stayed pending appeal, or are not discharged
within sixty (60) days after the expiration of such stay; provided, however,
that any judgment which is covered by insurance or an indemnity from a credit
worthy party shall not be included in calculating the $10,000,000 amount set
forth above so long as the Company provides the Holder a written statement from
such insurer or indemnity provider (which written statement shall be reasonably
satisfactory to the Holder) to the effect that such judgment is covered by
insurance or an indemnity and the Company will receive the proceeds of such
insurance or indemnity within thirty (30) days of the issuance of such judgment;

(ix) other than as specifically set forth in another clause of this Section
4(a), the Company breaches (subject to the materiality thresholds, if any,
applicable in the related Transaction Document in the provisions thereof
relating to events of default, termination rights of any Buyer or the right to
any damages to be paid by the Company under such Transaction) any express
representation, warranty, covenant or other term or condition of any Transaction
Document, except, in the case of a breach of a covenant or other term or
condition of any material Transaction Document which is curable, only if such
breach continues for a period of at least ten (10) consecutive Business Days;

(x) any breach or failure in any respect to comply with Section 8 or Section 13
of this Note; or

(xi) any Event of Default (as defined in the Other Notes) occurs and is
continuing with respect to any Other Notes.

(b) Redemption Right.

(i) Upon the occurrence of an Event of Default with respect to this Note or any
Other Note, the Company shall within two (2) Business Days deliver written
notice thereof via facsimile or email and overnight courier (an “Event of
Default Notice”) to the Holder. At any time after the earlier of the Holder’s
receipt of an Event of Default Notice and the Holder becoming aware of an Event
of Default, the Holder may require the Company to redeem all or any portion of
this Note by delivering written notice thereof (the “Event of Default Redemption
Notice”) to the Company, which Event of Default Redemption Notice shall indicate
the amount of Principal of this Note the Holder is electing to require the
Company to redeem and the date on which the Event of Default redemption shall
occur (the “Event of Default Redemption Date”) which date shall not be less than
five (5) Business Days nor more than ten (10) Business Days after the date of
the Event of Default Redemption Notice. Each portion of this Note subject to
redemption by the Company pursuant to this Section 4(b) shall be redeemed by the
Company at a price (the “Event of Default Redemption Price”) equal to the
product of (A) the amount of Principal plus any accrued and unpaid Interest to
be redeemed and (B) the Event of Default Redemption Premium, and shall be paid
in accordance with the Cash and Stock Payment Mechanic (as defined in
Section 8(b)) (it being understood that references therein to the Company
Redemption Date shall be deemed references to the Event of Default Redemption
Date).

(ii) Redemptions required by this Section 4(b) shall be made in accordance with
the provisions of Section 9. To the extent redemptions required by this Section
4(b) are deemed or determined by a court of competent jurisdiction to be
prepayments of the Note by the Company, such redemptions shall be deemed to be
voluntary prepayments. If a Change of Control transaction is publicly announced
at a time when an Event of Default has occurred and is continuing but prior to
redemption pursuant to an Event of Default Redemption Notice, the Holder may
elect to receive the Change of Control Redemption Price instead of the Event of
Default Redemption Price. If a Change of Control transaction is publicly
announced within thirty (30) days following a redemption pursuant to an Event of
Default Redemption Notice, the Holder shall be entitled to an additional payment
equal to the additional amount the Holder would have been entitled to receive
had the Change of Control been publicly announced pursuant to this Section 4(b).
The parties hereto agree that in the event of the Company’s redemption of any
portion of the Note or other payment payable under this Section 4(b), the
Holder’s damages would be uncertain and difficult to estimate because of the
parties’ inability to predict future interest rates and the uncertainty of the
availability of a suitable substitute investment opportunity for the Holder.
Accordingly, any Event of Default Redemption Premium due under this Section 4(b)
is intended by the parties to be, and shall be deemed, a reasonable estimate of
the Holder’s actual loss of its investment opportunity and not as a penalty.

(5) RIGHTS UPON FUNDAMENTAL TRANSACTION AND CHANGE OF CONTROL.

(a) Assumption. The Company shall not enter into or be party to a Fundamental
Transaction unless (i) such Fundamental Transaction is pursuant to an
assumption, exchange, or other such agreement or document in form and substance
reasonably satisfactory to the Required Holders and approved by the Required
Holders, and (ii) the Successor Entity assumes in writing all of the obligations
of the Company under this Note and the other Transaction Documents in accordance
with the provisions of this Section 5(a). Upon the occurrence of any Fundamental
Transaction, the Successor Entity shall succeed to, and be substituted for (so
that from and after the date of such Fundamental Transaction, the provisions of
this Note referring to the “Company” shall refer instead to the Successor
Entity), and may exercise every right and power of the Company and shall assume
all of the obligations of the Company under this Note with the same effect as if
such Successor Entity had been named as the Company herein. Upon consummation of
the Fundamental Transaction, the Successor Entity shall deliver to the Holder
confirmation that there shall be issued upon conversion or redemption of this
Note at any time after the consummation of the Fundamental Transaction, in lieu
of the shares of the Company’s Common Stock (or other securities, cash, assets
or other property) issuable upon the conversion or redemption of the Notes prior
to such Fundamental Transaction, such shares of the common stock (or their
equivalent) of the Successor Entity, as adjusted in accordance with the
provisions of this Note. The provisions of this Section shall apply similarly
and equally to successive Fundamental Transactions and shall be applied without
regard to any limitations on the conversion or redemption of this Note.

(b) Redemption Right.

(i) No sooner than sixty (60) days nor later than ten (10) days prior to the
consummation of a Change of Control, but not prior to the public announcement of
such Change of Control, the Company shall deliver written notice thereof via
facsimile or email and overnight courier to the Holder (a “Change of Control
Notice”). At any time during the period beginning after the earlier of Holder’s
receipt of a Change of Control Notice or public announcement of a Change of
Control and ending twenty (20) Trading Days after the date of the consummation
of such Change of Control, the Holder may require the Company to redeem all or
any portion of this Note by delivering written notice thereof (“Change of
Control Redemption Notice”) to the Company, which Change of Control Redemption
Notice shall indicate the amount of Principal the Holder is electing to require
the Company to redeem and the date on which the Change of Control redemption
shall occur (the “Change of Control Redemption Date”), which date shall not be
less than five (5) Business Days nor more than ten (10) Business Days after the
date of the Change of Control Redemption Notice. The portion of this Note
subject to redemption pursuant to this Section 5(b) shall be redeemed by the
Company at a price (the “Change of Control Redemption Price”) equal to the
amount of the Company Redemption Price (as defined in Section 8(b)), and shall
be paid in accordance with the Cash and Stock Payment Mechanic (as defined in
Section 8(b)) (it being understood that references therein to the Company
Redemption Date shall be deemed references to the Change of Control Redemption
Date).

(ii) Redemptions required by this Section 5 shall be made in accordance with the
provisions of Section 9 and shall have priority to payments to stockholders in
connection with a Change of Control as such redemption obligation shall
constitute a debt obligation of the Company. To the extent redemptions required
by this Section 5(b) are deemed or determined by a court of competent
jurisdiction to be prepayments of the Note by the Company, such redemptions
shall be deemed to be voluntary prepayments. Notwithstanding anything to the
contrary in this Section 5, but subject to Section 3(d), until the Change of
Control Redemption Price (together with any interest thereon) is paid in full,
the amount of Principal to be redeemed under this Section 5(b) (together with
any interest thereon) may be converted, in whole or in part, by the Holder into
Common Stock pursuant to Section 3 (including, without limitation, the right to
receive the amounts set forth in Section 3(f)). The Change of Control Redemption
Price will be payable regardless of whether the amount of Principal to be
redeemed is redeemed for cash or converted to shares of Common Stock pursuant to
Section 3(f). The parties hereto agree that in the event of the Company’s
redemption of any portion of the Note under this Section 5(b), the Holder’s
damages would be uncertain and difficult to estimate because of the parties’
inability to predict future interest rates and the uncertainty of the
availability of a suitable substitute investment opportunity for the Holder.
Accordingly, any Change of Control redemption premium due under this
Section 5(b) is intended by the parties to be, and shall be deemed, a reasonable
estimate of the Holder’s actual loss of its investment opportunity and not as a
penalty.

(6) RIGHTS UPON ISSUANCE OF PURCHASE RIGHTS AND OTHER CORPORATE EVENTS.

(a) Purchase Rights. If at any time the Company grants, issues or sells any
Options, Convertible Securities or rights to purchase stock, warrants,
securities or other property pro rata to the record holders of any class of
Common Stock (the “Purchase Rights”), then the Holder will be entitled to
acquire, upon the terms applicable to such Purchase Rights, the aggregate
Purchase Rights which the Holder could have acquired if the Holder had held the
number of shares of Common Stock acquirable upon complete conversion of this
Note (without taking into account any limitations or restrictions on the
convertibility of this Note) immediately before the date on which a record is
taken for the grant, issuance or sale of such Purchase Rights, or, if no such
record is taken, the date as of which the record holders of Common Stock are to
be determined for the grant, issue or sale of such Purchase Rights. The
provisions of this Section shall apply similarly and equally to successive
Purchase Rights. The provisions of Section 7(a) shall not apply with respect to
any Purchase Rights, if the Holder elects to exercise such Purchase Rights
(provided, however, to the extent that the Holder’s right to participate in any
such dividend or distribution would result in the Holder exceeding the Maximum
Percentage, then the Holder shall not be entitled to participate in such
dividend or distribution to such extent (or the beneficial ownership of any such
shares of Common Stock as a result of such dividend or distribution to such
extent) and such dividend or distribution to such extent shall be held in
abeyance for the benefit of the Holder until such time, if ever, as its right
thereto would not result in the Holder exceeding the Maximum Percentage).

(b) Other Corporate Events. In addition to and not in substitution for any other
rights hereunder, prior to the consummation of any Fundamental Transaction
pursuant to which holders of shares of Common Stock are entitled to receive
securities or other assets with respect to or in exchange for shares of Common
Stock (a “Corporate Event”), the Company shall make appropriate provision to
insure that the Holder will thereafter have the right to receive upon a
conversion of this Note, at the Holder’s option, (i) in addition to the shares
of Common Stock receivable upon such conversion, such securities or other assets
to which the Holder would have been entitled with respect to such shares of
Common Stock had such shares of Common Stock been held by the Holder upon the
consummation of such Corporate Event (without taking into account any
limitations or restrictions on the convertibility of this Note) or (ii) in lieu
of the shares of Common Stock otherwise receivable upon such conversion, such
securities or other assets received by the holders of shares of Common Stock in
connection with the consummation of such Corporate Event in such amounts as the
Holder would have been entitled to receive had this Note initially been issued
with conversion rights for the form of such consideration (as opposed to shares
of Common Stock) at a conversion rate for such consideration commensurate with
the Conversion Rate. Provision made pursuant to the preceding sentence shall be
in a form and substance satisfactory to the Required Holders. The provisions of
this Section shall apply similarly and equally to successive Corporate Events
and shall be applied without regard to any limitations on the conversion or
redemption of this Note.

(7) RIGHTS UPON ISSUANCE OF OTHER SECURITIES.

(a) Adjustment of Conversion Price upon Issuance of Common Stock. Subject to the
provisions of Section 6(a), if and whenever on or after the Subscription Date,
the Company issues or sells, or in accordance with this Section 7(a) is deemed
to have issued or sold, any shares of Common Stock (including the issuance or
sale of shares of Common Stock owned or held by or for the account of the
Company, but excluding shares of Common Stock deemed to have been issued or sold
by the Company in connection with any Excluded Security) for a consideration per
share less than a price (the “Applicable Price”) equal to the Conversion Price
in effect immediately prior to such issue or sale (the foregoing a “Dilutive
Issuance”), then immediately after such Dilutive Issuance the Conversion Price
then in effect shall be reduced to an amount equal to the product of (x) the
Applicable Price and (y) the quotient determined by dividing (A) the sum of
(I) the product derived by multiplying the Conversion Price in effect
immediately prior to such Dilutive Issuance and the number of shares of Common
Stock Deemed Outstanding immediately prior to such Dilutive Issuance plus
(II) the consideration, if any, received by the Company upon such Dilutive
Issuance, by (B) the product derived by multiplying (I) the Applicable Price by
(II) the number of shares of Common Stock Deemed Outstanding immediately after
such Dilutive Issuance. For purposes of determining the adjusted Conversion
Price under this Section 7(a), the following shall be applicable (except in
connection with the issuance of Excluded Securities):

(i) Issuance of Options. If the Company in any manner grants or sells any
Options and the lowest price per share for which one share of Common Stock is
issuable upon the exercise of any such Option or upon conversion or exchange or
exercise of any Convertible Securities issuable upon exercise of such Option is
less than the Applicable Price, then such share of Common Stock shall be deemed
to be outstanding and to have been issued and sold by the Company at the time of
the granting or sale of such Option for such price per share. For purposes of
this Section 7(a)(i), the “lowest price per share for which one share of Common
Stock is issuable upon the exercise of any such Option or upon conversion or
exchange or exercise of any Convertible Securities issuable upon exercise of
such Option” shall be equal to the sum of the lowest amounts of consideration
(if any) received or receivable by the Company with respect to any one share of
Common Stock upon granting or sale of the Option, upon exercise of the Option
and upon conversion or exchange or exercise of any Convertible Security issuable
upon exercise of such Option. No further adjustment of the Conversion Price
shall be made upon the actual issuance of such share of Common Stock or of such
Convertible Securities upon the exercise of such Options or upon the actual
issuance of such Common Stock upon conversion or exchange or exercise of such
Convertible Securities.

(ii) Issuance of Convertible Securities. If the Company in any manner issues or
sells any Convertible Securities and the lowest price per share for which one
share of Common Stock is issuable upon such conversion or exchange or exercise
thereof is less than the Applicable Price, then such share of Common Stock shall
be deemed to be outstanding and to have been issued and sold by the Company at
the time of the issuance or sale of such Convertible Securities for such price
per share. For the purposes of this Section 7(a)(ii), the “lowest price per
share for which one share of Common Stock is issuable upon such conversion or
exchange or exercise” shall be equal to the sum of the lowest amounts of
consideration (if any) received or receivable by the Company with respect to any
one share of Common Stock upon the issuance or sale of the Convertible Security
and upon the conversion or exchange or exercise of such Convertible Security. No
further adjustment of the Conversion Price shall be made upon the actual
issuance of such share of Common Stock upon conversion or exchange or exercise
of such Convertible Securities, and if any such issue or sale of such
Convertible Securities is made upon exercise of any Options for which adjustment
of the Conversion Price had been or are to be made pursuant to other provisions
of this Section 7(a), no further adjustment of the Conversion Price shall be
made by reason of such issue or sale.

(iii) Change in Option Price or Rate of Conversion. If the purchase price
provided for in any Options, the additional consideration, if any, payable upon
the issue, conversion, exchange or exercise of any Convertible Securities, or
the rate at which any Convertible Securities are convertible into or
exchangeable or exercisable for Common Stock changes at any time, the Conversion
Price in effect at the time of such change shall be adjusted to the Conversion
Price which would have been in effect at such time had such Options or
Convertible Securities provided for such changed purchase price, additional
consideration or changed conversion rate, as the case may be, at the time
initially granted, issued or sold. For purposes of this Section 7(a)(iii), if
the terms of any Option or Convertible Security that was outstanding as of the
Subscription Date are changed in the manner described in the immediately
preceding sentence, then such Option or Convertible Security and the Common
Stock deemed issuable upon exercise, conversion or exchange thereof shall be
deemed to have been issued as of the date of such change. No adjustment shall be
made if such adjustment would result in an increase of the Conversion Price then
in effect.

(iv) Calculation of Consideration Received. In case any Option is issued in
connection with the issue or sale of other securities of the Company, together
comprising one integrated transaction in which no specific consideration is
allocated to such Options by the parties thereto, (x) the Options will be deemed
to have been issued for a value determined by use of the Black-Scholes Option
Pricing Model (the “Option Value”) and (y) the other securities issued or sold
in such integrated transaction shall be deemed to have been issued for the
difference of (I) the aggregate consideration received by the Company, less
(II) the Option Value. If any Common Stock, Options or Convertible Securities
are issued or sold or deemed to have been issued or sold for cash, the
consideration received therefor will be deemed to be the gross amount received
by the Company therefor. If any Common Stock, Options or Convertible Securities
are issued or sold for a consideration other than cash, the amount of the
consideration other than cash received by the Company will be the fair value of
such consideration, except where such consideration consists of securities, in
which case the amount of consideration received by the Company will be the
Closing Sale Price of such securities on the date of receipt. If any Common
Stock, Options or Convertible Securities are issued to the owners of the
non-surviving entity in connection with any merger in which the Company is the
surviving entity, the amount of consideration therefor will be deemed to be the
fair value of such portion of the net assets and business of the non-surviving
entity as is attributable to such Common Stock, Options or Convertible
Securities, as the case may be. The fair value of any consideration other than
cash or securities will be determined jointly by the Company and the Required
Holders. If such parties are unable to reach agreement within ten (10) days
after the occurrence of an event requiring valuation (the “Valuation Event”),
the fair value of such consideration will be determined within five (5) Business
Days after the tenth (10th) day following the Valuation Event by an independent,
reputable appraiser jointly selected by the Company and the Required Holders.
The determination of such appraiser shall be deemed binding upon all parties
absent manifest error and the fees and expenses of such appraiser shall be borne
by the Company.

(v) Record Date. If the Company takes a record of the holders of Common Stock
for the purpose of entitling them (A) to receive a dividend or other
distribution payable in Common Stock, Options or in Convertible Securities or
(B) to subscribe for or purchase Common Stock, Options or Convertible
Securities, then such record date will be deemed to be the date of the issue or
sale of the Common Stock deemed to have been issued or sold upon the declaration
of such dividend or the making of such other distribution or the date of the
granting of such right of subscription or purchase, as the case may be.

(b) Adjustment of Conversion Price upon Subdivision or Combination of Common
Stock. If the Company at any time on or after the Subscription Date subdivides
(by any stock dividend, stock split, recapitalization or otherwise) one or more
classes of its outstanding shares of Common Stock into a greater number of
shares, the Conversion Price in effect immediately prior to such subdivision
will be proportionately reduced. If the Company at any time on or after the
Subscription Date combines (by combination, reverse stock split or otherwise)
one or more classes of its outstanding shares of Common Stock into a smaller
number of shares, the Conversion Price in effect immediately prior to such
combination will be proportionately increased.

(c) Other Events. If any event occurs of the type contemplated by the provisions
of this Section 7 but not expressly provided for by such provisions (including,
without limitation, the granting of stock appreciation rights, phantom stock
rights or other rights with equity features but excluding the issuance of
Excluded Securities), then the Company’s Board of Directors will make an
appropriate adjustment in the Conversion Price so as to protect the rights of
the Holder under this Note; provided that no such adjustment will increase the
Conversion Price as otherwise determined pursuant to this Section 7.

(d) Voluntary Decrease. The Company may at any time during the term of this Note
reduce the then current Conversion Price to any amount and for any period of
time deemed appropriate by the Board of Directors.

(8) MANDATORY REDEMPTION AND OPTIONAL REDEMPTION.

(a) Holder’s Right of Mandatory Redemption.

(i) General. On the Holder Mandatory Redemption Date, the Holder shall have the
right, in its sole discretion, to require that the Company redeem all or any
portion of this Note (a “Holder Mandatory Redemption”) by delivering written
notice thereof to the Company (a “Holder Mandatory Redemption Notice”) at any
time on or prior to such Holder Mandatory Redemption Date. The Holder Mandatory
Redemption Notice shall indicate the amount of Principal the Holder is electing
to have redeemed (the “Holder Mandatory Redemption Amount”) on the Holder
Mandatory Redemption Date. The portion of this Note subject to redemption
pursuant to this Section 8 shall be redeemed by the Company in cash at a price
equal to the amount of Principal and any accrued and unpaid Interest thereon
being redeemed (the “Holder Mandatory Redemption Price”). Redemptions required
by this Section 8 shall be made in accordance with the provisions of this
Section 8 and Section 9. Notwithstanding anything to the contrary in this
Section 8, but subject to Section 3(d), until the Holder receives the Holder
Mandatory Redemption Price, the Holder Mandatory Redemption Amount may be
converted, in whole or in part, by the Holder into Common Stock pursuant to
Section 3, and any such conversion shall reduce the Holder Mandatory Redemption
Amount. The Company shall deliver written notice (the “Company Notice”) to the
Holder no earlier than twenty (20) Business Days and no later than five
(5) Business Days prior to the Holder Mandatory Redemption Date stating the
Holder’s right of redemption under this Section 8 for the Holder Mandatory
Redemption Date.

(ii) Mechanics of Holder Mandatory Redemption. If the Holder elects a Holder
Mandatory Redemption in accordance with Section 8(a)(i), then the Holder
Mandatory Redemption Amount which is to be paid to the Holder on the applicable
Holder Mandatory Redemption Date shall be redeemed by the Company, and the
Company shall pay to the Holder on the later of (A) the applicable Holder
Mandatory Redemption Date and (B) the second (2nd) Business Day following
receipt by the Company of the Holder Mandatory Redemption Notice (the “Holder
Mandatory Redemption Payment Date”), by wire transfer of immediately available
funds, the Holder Mandatory Redemption Price. If the Company fails to redeem the
Holder Mandatory Redemption Amount on the Holder Mandatory Redemption Payment
Date by payment of the Holder Mandatory Redemption Price on such date, then at
the option of the Holder designated in writing to the Company (any such
designation shall be deemed a “Conversion Notice” pursuant to Section 3(c) for
purposes of this Note), the Holder may require the Company to convert all or any
part of the Holder Mandatory Redemption Amount at 75% of the Optional Interest
Price. Conversions made pursuant to this Section 8(a) shall be made in
accordance with the provisions of Section 3(c).

(b) Company’s Right of Optional Redemption; Mandatory Redemption from Net
Proceeds of Specified Asset Sales.

(i) Optional Redemption.

(A) At any time and from time to time on or after the Issuance Date and prior to
April 30, 2015, the Company shall have the right, in its sole discretion,
subject to any required consent of the Company’s senior secured lenders, to
redeem all or any portion of this Note (a “Company Redemption”) in integral
multiples of $100,000 at par plus accrued and unpaid interest.

(B) At any time and from time to time on or after April 30, 2015, the Company
shall have the right, in its sole discretion, subject to any required consent of
the Company’s senior secured lenders, to effect a Company Redemption in integral
multiples of $100,000. The portion of this Note subject to redemption pursuant
to this Section 8(b)(i)(B) shall be redeemed by the Company at a price (the
“Company Redemption Price”) equal to the greater of (A) 130% of the sum of
(x) the Principal being redeemed, and (y) accrued and unpaid Interest, if any,
with respect to such Principal (such unpaid Interest amount together with the
related Principal being redeemed, the “Principal Amount”), and (B) the product
obtained by multiplying (x) the quotient obtained by dividing the Principal and
accrued and unpaid Interest, if any, with respect to such Principal, being
redeemed by the Conversion Price, and (y) the arithmetic average of the Weighted
Average Prices of the Common Stock on each of the five last Trading Days ending
on the Trading Day immediately prior to the applicable Company Redemption Notice
Date (as defined below) (the “Prepayment Formula Amount”); provided, that, 100%
of the face value of the Principal Amount shall be paid for in cash on a
dollar-for-dollar basis (the “Cash Payment”), and any amounts due in excess of
such Principal Amount shall be paid in such number of freely tradable Common
Stock equal to the quotient obtained by dividing (x) the excess of (i) the
Prepayment Formula Amount determined as of the Company Redemption Date (as
defined below) over (ii) the Cash Payment, and (y) 85% of the arithmetic average
of the Weighted Average Prices of the Common Stock on (i) each of the fifteen
(15) consecutive Trading Days ending on the Trading Day immediately prior to the
date of the Company Redemption Date and (ii) each of the fifteen
(15) consecutive Trading Days commencing on the date of the Company Redemption
Date (the final Trading Day of such fifteen (15) Trading Day period, the
“Company Redemption Stock Pricing Date”) (the foregoing proviso herein referred
to as the “Cash and Stock Payment Mechanic”); and provided further that in the
event of an Equity Conditions Failure or the failure to receive Stockholder
Approval during the period beginning on the Company Redemption Notice Date and
ending on and including the Company Redemption Date, the foregoing Cash and
Stock Payment Mechanic shall not apply to redemptions made pursuant to this
Section 8(b)(i)(B), which such redemptions shall be made in cash only, in an
amount equal to the Prepayment Formula Amount.

(ii) Mandatory Redemption from Net Proceeds of Specified Asset Sales.

(A) Notwithstanding the foregoing, any portion of this Note redeemed by the
Company pursuant to this Section 8(b) from the Net Proceeds (as defined in the
TPG Agreement) of any Specified Asset Sales shall be redeemed for cash to be
applied to the Principal and accrued and unpaid Interest and accrued and unpaid
Late Charges being redeemed at par if such redemption occurs prior to April 30,
2015, or at a price in accordance with Section 8(b)(i)(B) hereof if such
redemption occurs on or after April 30, 2015.

(B) Notwithstanding anything to the contrary herein, the Company shall apply all
Net Proceeds of Specified Asset Sales towards the retirement of certain of the
Company’s outstanding Indebtedness in the following manner:

(1) First, any Net Proceeds of Revolver Priority Collateral (as defined in the
TPG Agreement) sold in such Specified Asset Sales shall be applied to pay the
principal of the Revolving Loans (as defined in the TPG Agreement) until paid in
full;

(2) Second, subject to the right of the Term Loan Lenders (as defined in the TPG
Agreement to waive such prepayment, the next $13,000,000 of Net Proceeds of
Specified Asset Sales shall be applied to prepay the principal of the Term Loans
(as defined in the TPG Agreement) in the inverse order of maturity;

(3) Third, the next $4,489,671 of Net Proceeds of Specified Asset Sales shall be
applied first to redeem the Senior C Convertible Notes at a purchase price not
to exceed par, if such redemption occurs prior to April 30, 2015, or at a
purchase price determined in accordance with Section 8(b)(i)(B) hereof if such
redemption occurs on or after April 30, 2015, and second, to the extent any Net
Proceeds of Specified Asset Sales remain from such $4,489,671 after the
discharge in full of the outstanding principal amount of the Series C
Convertible Notes, to redeem the Series B Convertible Notes at a purchase price
not to exceed par if such redemption occurs prior to December 31, 2014, or at a
purchase price determined in accordance with Section 8(b)(i)(B) of the Series B
Convertible Notes if such redemption occurs on or after December 31, 2014; and

(4) Fourth, the remaining Net Proceeds of Specified Asset Sales shall be applied
(x) 35% (or 0% once (i) $13,469,013 of the Notes have been redeemed or (ii) the
Series B Convertible Notes and Series C Convertible Notes have been redeemed)
first to redeem the Senior C Convertible Notes at a purchase price not to exceed
par if such redemption occurs prior to April 30, 2015, or at a price in
accordance with Section 8(b)(i)(B) hereof if such redemption occurs on or after
April 30, 2015, and second to the extent any Net Proceeds of Specified Asset
Sales remain from such 35% after the discharge in full of the outstanding
principal amount of the Series C Convertible Notes, to redeem the Series B
Convertible Notes at a purchase price not to exceed par if such redemption
occurs prior to December 31, 2014, or at a purchase price determined in
accordance with Section 8(b)(i)(B) of the Series B Convertible Notes if such
redemption occurs on or after December 31, 2014 and (y) subject to the right of
the Term Loan Lenders to waive such prepayment, 65% (or 100% once (i)
$13,469,013 of the Notes have been redeemed or (ii) the Series B Convertible
Notes and Series C Convertible Notes have been redeemed) to prepay the principal
of the Term Loans in the inverse order of maturity; provided, that, no payments
shall be made pursuant to clauses (2) through (4) above in this section until
the aggregate amount of Net Proceeds of Specified Asset Sales equals $17,500,000
or greater; provided further, that until an aggregate amount of Net Proceeds of
Specified Asset Sales of at least $17,500,000 is received, the aggregate amount
of Net Proceeds of Specified Asset Sales not applied pursuant to clause
(1) above in this section shall be held in a deposit account subject to the sole
dominion and control of the Agent (as defined in the TPG Agreement (the “Reserve
Account”); provided, that if any amounts remain in the Reserve Account on or
after December 31, 2014, then all such amounts on deposit therein at any time
shall be applied to prepay the principal of the Term Loans in the inverse order
of maturity.

(iii) Mechanics. The Company may exercise its redemption right under
Section 8(b)(i), or shall effect a redemption pursuant to Section 8(b)(ii)(B)(3)
or Section 8(b)(ii)(B)(4), as applicable, by delivering a written notice thereof
by facsimile or email and overnight courier to the Holder (the “Company
Redemption Notice” and the date such notice is delivered to the Holder is
referred to as the “Company Redemption Notice Date”). A Company Redemption
Notice shall be irrevocable. Each Company Redemption Notice shall state the
aggregate Principal of this Note subject to such Company Redemption pursuant to
this Section 8(b) on the Company Redemption Date plus accrued and unpaid Late
Charges (the “Company Redemption Amount”). Upon receipt of a Company Redemption
Notice, if the Holder elects to convert any or all of the Principal to be so
redeemed hereby, the Holder shall deliver to the Company written notice of such
election, and the Principal and any accrued and unpaid Interest thereon to be
converted shall be so converted in accordance with Section 3(c) no later than
the date on which the Company Redemption shall occur (the “Company Redemption
Date”) which date (A) shall be set forth in the Company Redemption Notice and
(B) shall not be less than five (5) Business Days nor more than ten
(10) Business Days after the Company Redemption Notice Date.

(iv) Pro Rata Redemption Requirement. If the Company elects to cause a Company
Redemption pursuant to Section 8(b), then it must simultaneously take the same
action with respect to the Other Notes. If the Company elects to cause a Company
Redemption pursuant to this Section 8(b) (or similar provisions under the Other
Notes) with respect to less than all of the principal amount of the Notes then
outstanding, then the Company shall require redemption of a Principal amount
from the Holder and each holder of the Other Notes equal to the product of
(A) the aggregate principal amount of Notes which the Company has elected to
cause to be redeemed pursuant to Section 8(b), multiplied by (B) the fraction,
the numerator of which is the sum of the initial principal amount of Notes
purchased by such holder and the denominator of which is the initial principal
amounts of Notes purchased by all holders holding outstanding Notes (such
fraction with respect to each holder is referred to as its “Redemption
Allocation Percentage”, and such amount with respect to each holder is referred
to as its “Pro Rata Redemption Amount”); provided that in the event that the
initial holder of any Notes has sold or otherwise transferred any of such
holder’s Notes, the transferee shall be allocated a pro rata portion of such
holder’s Redemption Allocation Percentage and Pro Rata Redemption Amount.

(c) True Up.

(i) On the True Up Date (as defined below), subject to Section 3(d), the Company
shall deliver to the Holder, provided the formula set forth below yields a
number greater than zero, an additional number of shares of Common Stock (the
“True Up Common Shares”) equal to (A) the quotient obtained by dividing (x) the
excess of (i) the Prepayment Formula Amount determined as of the Company
Redemption Date over (ii) the Cash Payment, by (y) 85% of the arithmetic average
of the Weighted Average Prices of the Common Stock on each of the twenty (20)
consecutive Trading Days beginning on, and including, the Trading Day
immediately following the Company Redemption Stock Pricing Date, less (B) the
number of Common Shares previously delivered to the Holder on the Company
Redemption Stock Pricing Date pursuant to Section 8(b) hereof. For purposes of
this Note, the “True Up Date” shall mean the twenty-first (21st) Trading Day
immediately following the Company Redemption Date, provided that such Company
Redemption Date occurs on or after April 30, 2015. The “True Up Period” shall
mean the period consisting of each of the twenty (20) consecutive Trading Days
beginning on, and including, the Trading Day immediately following the Company
Redemption Date, provided that such Company Redemption Date occurs on or after
April 30, 2015.

(d) Redemptions Generally. Any redemptions made pursuant to this Section 8 shall
be made in accordance with Section 9. No later than one (1) Trading Day
following the Holder Mandatory Redemption Date or any Company Redemption Date,
the Company shall file a Current Report on Form 8-K, describing the terms of
such Holder Mandatory Redemption or Company Redemption, as the case may be. To
the extent redemptions required by this Section 8 are deemed or determined by a
court of competent jurisdiction to be prepayments of the Note by the Company,
such redemptions shall be deemed to be voluntary prepayments. The parties hereto
agree that in the event of the Company’s redemption of any portion of the Note
under this Section 8, the Holder’s damages would be uncertain and difficult to
estimate because of the parties’ inability to predict future interest rates and
the uncertainty of the availability of a suitable substitute investment
opportunity for the Holder. Accordingly, any redemption premium due under this
Section 8 is intended by the parties to be, and shall be deemed, a reasonable
estimate of the Holder’s actual loss of its investment opportunity and not as a
penalty.

(9) REDEMPTION MECHANICS.

(a) Redemption by the Holder. The Company shall deliver the applicable Event of
Default Redemption Price to the Holder within five (5) Business Days after the
Company’s receipt of the Holder’s Event of Default Redemption Notice. If the
Holder has submitted a Change of Control Redemption Notice in accordance with
Section 5(b), the Company shall deliver the applicable Change of Control
Redemption Price to the Holder (i) concurrently with the consummation of such
Change of Control if such notice is received prior to the consummation of such
Change of Control and (ii) within five (5) Business Days after the Company’s
receipt of such notice otherwise. The Company shall deliver the applicable
Holder Mandatory Redemption Price on the applicable Holder Mandatory Redemption
Payment Date. Any Cash Payment payable in respect of the applicable Company
Redemption Price shall be delivered by the Company on the applicable Company
Redemption Date, and any issuance of shares of Common Stock shall be delivered
to the Holder, in the same manner as set forth in Section 3(c)(ii) hereof,
within three (3) Trading Days of the Company Redemption Stock Pricing Date. In
the event of a redemption or conversion of less than all of the Principal of
this Note, the Company shall promptly cause to be issued and delivered to the
Holder a new Note (in accordance with Section 17(d)) representing the
outstanding Principal which has not been redeemed. If the Company does not pay
the applicable Redemption Price to the Holder within the time period required,
at any time thereafter and until the Company pays such unpaid Redemption Price
in full, the Holder shall have the option, in lieu of redemption or conversion,
to require the Company to promptly return to the Holder all or any portion of
this Note representing the amount of Principal that was submitted for or subject
to redemption and for which the applicable Redemption Price (together with any
Late Charges thereon) has not been paid or shares of Common Stock have not been
issued therefore, or any combination thereof. Upon the Company’s receipt of such
cancellation notice, (x) the applicable Redemption Notice shall be null and void
with respect to such amount of Principal that was not redeemed or converted, and
(y) the Company shall immediately return this Note, or issue a new Note (in
accordance with Section 17(d)) to the Holder representing such amount of
Principal to be redeemed. The Holder’s delivery of a notice voiding a Redemption
Notice and exercise of its rights following such notice shall not affect the
Company’s obligations to make any payments of Late Charges which have accrued
prior to the date of such notice with respect to the amount of Principal subject
to such notice.

(b) Redemption by Other Holders. Upon the Company’s receipt of notice from any
of the holders of the Other Notes for redemption or repayment as a result of an
event or occurrence substantially similar to the events or occurrences described
in Section 4(b), or Section 5 (each, an “Other Redemption Notice”), the Company
shall immediately, but no later than two (2) Business Days of its receipt
thereof, forward to the Holder by facsimile a copy of such notice. If the
Company receives a Redemption Notice and one or more Other Redemption Notices,
during the seven (7) Business Day period beginning on and including the date
which is three (3) Business Days prior to the Company’s receipt of the Holder’s
Redemption Notice and ending on and including the date which is three
(3) Business Days after the Company’s receipt of the Holder’s Redemption Notice
and the Company is unable to redeem all principal, interest and other amounts
designated in such Redemption Notice and such Other Redemption Notices received
during such seven (7) Business Day period, then the Company shall redeem a pro
rata amount from each holder of the Notes (including the Holder) based on the
principal amount of the Notes submitted for redemption pursuant to such
Redemption Notice and such Other Redemption Notices received by the Company
during such seven Business Day period.

(10) NONCIRCUMVENTION. The Company hereby covenants and agrees that the Company
will not, by amendment of its Certificate of Incorporation, Bylaws or through
any reorganization, transfer of assets, consolidation, merger, scheme of
arrangement, dissolution, issue or sale of securities, or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the terms
of this Note, and will at all times in good faith carry out all of the
provisions of this Note and take all action as may be required to protect the
rights of the Holder of this Note. Notwithstanding anything herein to the
contrary, if after the six (6) month anniversary of the Issuance Date, the
Holder is not permitted to convert this Note in full for any reason (other than
pursuant to restrictions set forth in Section 3(d)(i) hereof), the Company shall
use its best efforts to promptly remedy such failure, including, without
limitation, obtaining such consents or approvals as necessary to effect such
conversion into shares of Common Stock.

(11) RESERVATION OF AUTHORIZED SHARES.

(a) Reservation. The Company shall initially reserve out of its authorized and
unissued Common Stock a number of shares of Common Stock for each of the Notes
equal to or exceeding the maximum number of shares of Common Stock initially
issuable upon conversion of the Notes. So long as any of the Notes are
outstanding, the Company shall take all action necessary to reserve and keep
available out of its authorized and unissued Common Stock, solely for the
purpose of effecting the conversion of the Notes, the number of shares of Common
Stock as shall from time to time be necessary to effect the conversion of all of
the Notes then outstanding; provided that at no time shall the number of shares
of Common Stock so reserved be less than the number of shares required to be
reserved by the previous sentence (without regard to any limitations on
conversions) (the “Required Reserve Amount”). The initial number of shares of
Common Stock reserved for conversions of the Notes and each increase in the
number of shares so reserved shall be allocated pro rata among the holders of
the Notes based on the principal amount of the Notes held by each holder at the
Closing (as defined in the Exchange Agreement) or increase in the number of
reserved shares, as the case may be (the “Authorized Share Allocation”). In the
event that a holder shall sell or otherwise transfer any of such holder’s Notes,
each transferee shall be allocated a pro rata portion of such holder’s
Authorized Share Allocation. Any shares of Common Stock reserved and allocated
to any Person which ceases to hold any Notes shall be allocated to the remaining
holders of Notes, pro rata based on the principal amount of the Notes then held
by such holders.

(b) Insufficient Authorized Shares. If at any time while any of the Notes remain
outstanding the Company does not have a sufficient number of authorized and
unreserved shares of Common Stock to satisfy its obligation to reserve for
issuance upon conversion of the Notes at least a number of shares of Common
Stock equal to the Required Reserve Amount (an “Authorized Share Failure”), then
the Company shall immediately take all action necessary to increase the
Company’s authorized shares of Common Stock to an amount sufficient to allow the
Company to reserve the Required Reserve Amount for the Notes then outstanding.
Without limiting the generality of the foregoing sentence, as soon as
practicable after the date of the occurrence of an Authorized Share Failure, but
in no event later than sixty (60) days after the occurrence of such Authorized
Share Failure, the Company shall hold a meeting of its stockholders for the
approval of an increase in the number of authorized shares of Common Stock. In
connection with such meeting, the Company shall provide each stockholder with a
proxy statement and shall use its best efforts to solicit its stockholders’
approval of such increase in authorized shares of Common Stock and to cause its
board of directors to recommend to the stockholders that they approve such
proposal.

(12) VOTING RIGHTS. The Holder shall have no voting rights as the holder of this
Note, except as required by law, including, but not limited to, the General
Corporation Law of the State of Delaware, and as expressly provided in this
Note.

(13) COVENANTS.

(a) Rank. All payments due under this Note (a) shall rank pari passu with all
Other Notes and, subject to the terms and conditions of the Subordination
Agreement, shall be unsubordinated obligations of the Company and (b) shall be
senior to all other Indebtedness of the Company permitted to be incurred
pursuant to clause (iv) of the definition of “Permitted Indebtedness.” The
Holder hereby acknowledges and agrees that this Note and all Indebtedness and
other obligations related to this Notes are subject to the terms of the
Subordination Agreement, which Subordination Agreement is binding, enforceable
and in full force and effect against the Holder.

(b) Incurrence of Indebtedness.

(i) So long as this Note is outstanding, the Company shall not, and the Company
shall not permit any of its Subsidiaries to, directly or indirectly, incur or
guarantee or assume any Indebtedness other than (x) Permitted Indebtedness and
(y) any additional Indebtedness (other than Indebtedness described in clause
(iv) of the definition of “Permitted Indebtedness”) that (1) either (A) does not
contain any issuances of any equity securities of the Company or any of its
Subsidiaries (other than the Warrants) in the event that, as of the applicable
time of determination, the Company shall have not yet obtained the Stockholder
Approval (as defined in the Exchange Agreement), or (B) does not contain any
material equity component in the event that, as of the applicable time of
determination, the Company shall have, on or prior to such time, obtained the
Stockholder Approval, and (2) the ratio of Consolidated Funded Indebtedness of
the Company and its Subsidiaries to TTM EBITDA of the Company and its
Subsidiaries for the twelve month period most recently ended (as measured as of
the end of the most recently completed fiscal quarter) does not exceed 3.50 to
1.00 (both immediately prior to the incurrence, guarantee or assumption of such
additional Indebtedness and immediately after giving effect thereto). For the
avoidance of doubt, this Note and the Other Notes shall not be included in the
incurred indebtedness calculation of clause Section 13(b)(i)(y) above.

(ii) For purposes of this Section 13(b), “Consolidated Funded Indebtedness” and
“TTM EBITDA” shall have the meanings set forth in Section 29 hereof.

(iii) The Company shall provide a written report to the Holders of the results
of the ratio analysis set forth in Section 13(b)(i) no later than the date the
Company first announces its financial results for a fiscal quarter or fiscal
year. If the Company is not in compliance with such ratio as of the applicable
measurement date, the Company shall publicly disclose such results concurrently
with its disclosure to the Holders.

(c) Restriction on Redemption and Cash Dividends. Until all of the Notes have
been converted, redeemed or otherwise satisfied in accordance with their terms,
the Company shall not, directly or indirectly, redeem, repurchase or declare or
pay any cash dividend or distribution on its capital stock without the prior
express written consent of the Required Holders; provided, however, the
provisions of this Section 13(c) shall not apply if the Closing Sale Price or
Closing Bid Price, as applicable, of the Common Stock is greater than 125% of
the Conversion Price in effect for the ten (10) Trading Day period ending on the
date immediately prior to the date the Company’s board of directors approves a
record date for a cash dividend, the public announcement of which shall be made
no later than the next Business Day.

(14) PARTICIPATION. The Holder, as the holder of this Note, shall be entitled to
receive such dividends paid and distributions made to the holders of Common
Stock to the same extent as if the Holder had converted this Note into Common
Stock (without regard to any limitations on conversion herein or elsewhere) and
had held such shares of Common Stock on the record date for such dividends and
distributions. Payments under the preceding sentence shall be made concurrently
with the dividend or distribution to the holders of Common Stock (provided,
however, to the extent that the Holder’s right to participate in any such
dividend or distribution would result in the Holder exceeding the Maximum
Percentage, then the Holder shall not be entitled to participate in such
dividend or distribution to such extent (or the beneficial ownership of any such
shares of Common Stock as a result of such dividend or distribution to such
extent) and such dividend or distribution to such extent shall be held in
abeyance for the benefit of the Holder until such time, if ever, as its right
thereto would not result in the Holder exceeding the Maximum Percentage).

(15) VOTE TO ISSUE, OR CHANGE THE TERMS OF, NOTES. The affirmative vote at a
meeting duly called for such purpose or the written consent without a meeting of
the Holders shall be required for any change or amendment to this Note or the
Other Notes. No consideration shall be offered or paid to any holder of Notes to
amend or consent to a waiver or modification of the Notes unless the same
consideration also is offered to all of the holders of Notes.

(16) TRANSFER. This Note and any shares of Common Stock issued upon conversion
of this Note may be offered, sold, assigned or transferred by the Holder without
the consent of the Company, subject only to the provisions of Section 2(i) of
the Exchange Agreement.

(17) REISSUANCE OF THIS NOTE.

(a) Transfer. If this Note is to be transferred, the Holder shall surrender this
Note to the Company, whereupon the Company will forthwith issue and deliver upon
the order of the Holder a new Note (in accordance with Section 17(d)),
registered as the Holder may request, representing the outstanding Principal
being transferred by the Holder and, if less than the entire outstanding
Principal is being transferred, a new Note (in accordance with Section 17(d)) to
the Holder representing the outstanding Principal not being transferred. The
Holder and any assignee, by acceptance of this Note, acknowledge and agree that,
by reason of the provisions of Section 3(c)(iii) following conversion or
redemption of any portion of this Note, the outstanding Principal represented by
this Note may be less than the Principal stated on the face of this Note.

(b) Lost, Stolen or Mutilated Note. Upon receipt by the Company of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of this Note, and, in the case of loss, theft or destruction, of any
indemnification undertaking by the Holder to the Company in customary form and,
in the case of mutilation, upon surrender and cancellation of this Note, the
Company shall execute and deliver to the Holder a new Note (in accordance with
Section 17(d)) representing the outstanding Principal.

(c) Note Exchangeable for Different Denominations. This Note is exchangeable,
upon the surrender hereof by the Holder at the principal office of the Company,
for a new Note or Notes (in accordance with Section 17(d) and in principal
amounts of at least $100,000) representing in the aggregate the outstanding
Principal of this Note, and each such new Note will represent such portion of
such outstanding Principal as is designated by the Holder at the time of such
surrender.

(d) Issuance of New Notes. Whenever the Company is required to issue a new Note
pursuant to the terms of this Note, such new Note (i) shall be of like tenor
with this Note, (ii) shall represent, as indicated on the face of such new Note,
the Principal remaining outstanding (or in the case of a new Note being issued
pursuant to Section 17(a) or Section 17(c), the Principal designated by the
Holder which, when added to the principal represented by the other new Notes
issued in connection with such issuance, does not exceed the Principal remaining
outstanding under this Note immediately prior to such issuance of new Notes),
(iii) shall have an issuance date, as indicated on the face of such new Note,
which is the same as the Issuance Date of this Note, (iv) shall have the same
rights and conditions as this Note, and (v) shall represent accrued and unpaid
Interest and Late Charges, if any, on the Principal and Interest of this Note,
from the Issuance Date.

(18) REMEDIES, CHARACTERIZATIONS, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE
RELIEF. The remedies provided in this Note shall be cumulative and in addition
to all other remedies available under this Note and any of the other Transaction
Documents at law or in equity (including a decree of specific performance and/or
other injunctive relief), and nothing herein shall limit the Holder’s right to
pursue actual and consequential damages for any failure by the Company to comply
with the terms of this Note. Amounts set forth or provided for herein with
respect to payments, conversion and the like (and the computation thereof) shall
be the amounts to be received by the Holder and shall not, except as expressly
provided herein, be subject to any other obligation of the Company (or the
performance thereof). The Company acknowledges that a breach by it of its
obligations hereunder will cause irreparable harm to the Holder and that the
remedy at law for any such breach may be inadequate. The Company therefore
agrees that, in the event of any such breach or threatened breach, the Holder
shall be entitled, in addition to all other available remedies, to an injunction
restraining any breach, without the necessity of showing economic loss and
without any bond or other security being required.

(19) PAYMENT OF COLLECTION, ENFORCEMENT AND OTHER COSTS. If (a) this Note is
placed in the hands of an attorney for collection or enforcement or is collected
or enforced through any legal proceeding or the Holder otherwise takes action to
collect amounts due under this Note or to enforce the provisions of this Note or
(b) there occurs any bankruptcy, reorganization, receivership of the Company or
other proceedings affecting Company creditors’ rights and involving a claim
under this Note, then the Company shall pay the reasonable and documented costs
incurred by the Holder for such collection, enforcement or action or in
connection with such bankruptcy, reorganization, receivership or other
proceeding, including, but not limited to, attorneys’ fees and disbursements.

(20) CONSTRUCTION; HEADINGS. This Note shall be deemed to be jointly drafted by
the Company and all the Purchasers and shall not be construed against any person
as the drafter hereof. The headings of this Note are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Note.

(21) FAILURE OR INDULGENCE NOT WAIVER. No failure or delay on the part of the
Holder in the exercise of any power, right or privilege hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise of any such power,
right or privilege preclude other or further exercise thereof or of any other
right, power or privilege.

(22) DISPUTE RESOLUTION. In the case of a dispute as to the determination of the
Closing Bid Price, the Closing Sale Price or the Weighted Average Price or the
arithmetic calculation of the Conversion Rate, the Conversion Price or any
Redemption Price, the Company shall submit the disputed determinations or
arithmetic calculations via facsimile within two (2) Business Day of receipt, or
deemed receipt, of the Conversion Notice or Redemption Notice or other event
giving rise to such dispute, as the case may be, to the Holder. If the Holder
and the Company are unable to agree upon such determination or calculation
within two (2) Business Day of such disputed determination or arithmetic
calculation being submitted to the Holder, then the Company shall, within two
(2) Business Days submit via facsimile (a) the disputed determination of the
Closing Bid Price, the Closing Sale Price or the Weighted Average Price to an
independent, reputable investment bank selected by the Company and approved by
the Holder or (b) the disputed arithmetic calculation of the Conversion Rate,
Conversion Price or any Redemption Price to the Company’s independent, outside
accountant. The Company, at the Company’s expense, shall cause the investment
bank or the accountant, as the case may be, to perform the determinations or
calculations and notify the Company and the Holder of the results no later than
five (5) Business Days from the time it receives the disputed determinations or
calculations. Such investment bank’s or accountant’s determination or
calculation, as the case may be, shall be binding upon all parties absent
demonstrable error.

(23) NOTICES; PAYMENTS.

(a) Notices. Whenever notice is required to be given under this Note, unless
otherwise provided herein, such notice shall be given in accordance with Section
8(k) of the Exchange Agreement. The Company shall provide the Holder with prompt
written notice of all actions taken pursuant to this Note, including in
reasonable detail a description of such action and the reason therefor. Without
limiting the generality of the foregoing, the Company will give written notice
to the Holder (i) immediately upon any adjustment of the Conversion Price,
setting forth in reasonable detail, and certifying, the calculation of such
adjustment and (ii) at least fifteen (15) days prior to the date on which the
Company closes its books or takes a record (A) with respect to any dividend or
distribution upon the Common Stock, (B) with respect to any grant, issuances, or
sales of any Options, Convertible Securities or rights to purchase stock,
warrants, securities or other property to holders of shares of Common Stock or
(C) for determining rights to vote with respect to any Fundamental Transaction,
dissolution or liquidation, provided in each case that such information shall be
made known to the public prior to or in conjunction with such notice being
provided to the Holder.

(b) Payments. Whenever any payment of cash is to be made by the Company to any
Person pursuant to this Note, such payment shall be made in lawful money of the
United States of America by a check drawn on the account of the Company and sent
via overnight courier service to such Person at such address as previously
provided to the Company in writing (which address, in the case of the Holder,
shall initially be as set forth on the Schedule of Investors attached to the
Exchange Agreement); provided that the Holder may elect to receive a payment of
cash via wire transfer of immediately available funds by providing the Company
with prior written notice setting out such request and the Holder’s wire
transfer instructions. Whenever any amount expressed to be due by the terms of
this Note is due on any day which is not a Business Day, the same shall instead
be due on the next succeeding day which is a Business Day and, in the case of
any Interest Date which is not the date on which this Note is paid in full, the
extension of the due date thereof shall not be taken into account for purposes
of determining the amount of Interest due on such date. Any amount of Principal
or other amounts due under this Note which is not paid when due shall result in
a late charge being incurred and payable by the Company in an amount equal to
interest on such amount at the rate that would have applied during the
incurrence and continuance of an Event of Default (“Late Charge”).

(24) CANCELLATION. After all Principal, accrued Interest and other amounts at
any time owed on this Note have been paid in full, this Note shall automatically
be deemed canceled, shall be surrendered to the Company for cancellation and
shall not be reissued.

(25) RELEASE OF CLAIMS AND PRESERVATION OF RIGHTS. Effective on the Closing Date
(as defined in the Exchange Agreement), the Company and its agents,
representatives, predecessors and successors in interest assigns hereby
(i) conclusively, absolutely, unconditionally, irrevocably and forever remise,
acquit, waive, releases and discharge the Holder and each of the Holder’s
agents, advisors, representatives, predecessors and successors in interest from
any and all claims, demands, obligations, liabilities and causes of action of
any kind or character, whether known or unknown, suspected or unsuspected,
asserted or unasserted, direct or indirect, at law or in equity, that the
Company may now have or that might subsequently accrue to him or it arising out
of or relating to the Original Series Notes (as defined in the Exchange
Agreement) (the “Released Claims”), and (ii) covenants and agrees never to
institute or cause to be instituted any suit, investigation or other form of
action or proceeding of any kind or nature whatsoever against any of the Holder
or the Holder’s agents, advisors, representatives, predecessors and successors
in interest based upon the Original Series Notes (as defined in the Exchange
Agreement) and the Released Claims.

(26) WAIVER OF NOTICE. To the extent permitted by law, the Company hereby waives
demand, notice, protest and all other demands and notices in connection with the
delivery, acceptance, performance, default or enforcement of this Note and the
Exchange Agreement.

(27) GOVERNING LAW; JURISDICTION; JURY. This Note shall be construed and
enforced in accordance with, and all questions concerning the construction,
validity, interpretation and performance of this Note shall be governed by, the
internal laws of the State of New York, without giving effect to any choice of
law or conflict of law provision or rule (whether of the State of New York or
any other jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of New York. Each of the Company and the
Holder hereby irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in The City of New York, Borough of Manhattan, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any manner
permitted by law. Each of the Company and the Holder hereby irrevocably waives
personal service of process and consents to process being served in any such
suit, action or proceeding by mailing a copy thereof to such party at the
address as provided in Section 23 hereof and agrees that such service shall
constitute good and sufficient service of process and notice thereof. Nothing
contained herein shall be deemed or operate to preclude the Holder from bringing
suit or taking other legal action against the Company in any other jurisdiction
to collect on the Company’s obligations to the Holder, to realize on any
collateral or any other security for such obligations, or to enforce a judgment
or other court ruling in favor of the Holder. THE COMPANY HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF
THIS NOTE OR ANY TRANSACTION CONTEMPLATED HEREBY.

(28) SEVERABILITY. If any provision of this Note is prohibited by law or
otherwise determined to be invalid or unenforceable by a court of competent
jurisdiction, the provision that would otherwise be prohibited, invalid or
unenforceable shall be deemed amended to apply to the broadest extent that it
would be valid and enforceable, and the invalidity or unenforceability of such
provision shall not affect the validity of the remaining provisions of this Note
so long as this Note as so modified continues to express, without material
change, the original intentions of the parties as to the subject matter hereof
and the prohibited nature, invalidity or unenforceability of the provision(s) in
question does not substantially impair the respective expectations or reciprocal
obligations of the parties or the practical realization of the benefits that
would otherwise be conferred upon the parties. The parties will endeavor in good
faith negotiations to replace the prohibited, invalid or unenforceable
provision(s) with a valid provision(s), the effect of which comes as close as
possible to that of the prohibited, invalid or unenforceable provision(s).

(29) CERTAIN DEFINITIONS. For purposes of this Note, the following terms shall
have the following meanings:

(a) “Affiliate” means, with respect to any Person, any other Person that
directly, or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, such Person. For purposes of
this definition, “control” of a Person means the power, directly or indirectly,
either to (i) vote 10% or more of the Capital Stock having ordinary voting power
for the election of directors of such Person or (ii) direct or cause the
direction of the management and policies of such Person whether by contract or
otherwise.

(b) “Alternate Conversion Price” means, with respect to any Alternate
Conversion, that price which shall be the lower of (i) the applicable Conversion
Price as in effect on the Trading Day immediately preceding the time of the
delivery or deemed delivery of the applicable Conversion Notice and (ii) 75% of
90% of the arithmetic average of the Weighted Average Price of the Common Stock
during the ten (10) consecutive Trading Day period ending and including the
Trading Day immediately preceding the delivery or deemed delivery of the
applicable Conversion Notice (such period, the “Alternate Conversion Notice
Measuring Period”). All such determinations to be appropriately adjusted for any
share dividend, share split, share combination, reclassification or similar
transaction that proportionately decreases or increases the Common Stock during
such Alternate Conversion Notice Measuring Period.

(c) “Approved Stock Plan” means any employee benefit plan which has been
approved by the Board of Directors of the Company, pursuant to which the
Company’s securities may be issued to any consultant, employee, officer or
director for services provided to the Company.

(d) “Bloomberg” means Bloomberg Financial Markets.

(e) “Business Day” means any day other than Saturday, Sunday or other day on
which commercial banks in The City of New York are authorized or required by law
to remain closed.

(f) “Capital Stock” means (i) with respect to any Person that is a corporation,
any and all shares, interests, participations or other equivalents (however
designated and whether or not voting) of corporate stock, and (ii) with respect
to any Person that is not a corporation, any and all partnership, membership or
other equity interests of such Person.

(g) “Capitalized Lease” means, with respect to any Person, any lease of real or
personal property by such Person as lessee which is (i) required under GAAP to
be capitalized on the balance sheet of such Person or (ii) a transaction of a
type commonly known as a “synthetic lease” (i.e. a lease transaction that is
treated as an operating lease for accounting purposes but with respect to which
payments of rent are intended to be treated as payments of principal and
interest on a loan for Federal income tax purposes).

(h) “Capitalized Lease Obligations” means, with respect to any Person,
obligations of such Person and its Subsidiaries under Capitalized Leases, and,
for purposes hereof, the amount of any such obligation shall be the capitalized
amount thereof determined in accordance with GAAP.

(i) “Change of Control” means any Fundamental Transaction other than (i) any
reorganization, recapitalization or reclassification of the Common Stock in
which holders of the Company’s voting power immediately prior to such
reorganization, recapitalization or reclassification continue after such
reorganization, recapitalization or reclassification to hold publicly traded
securities and, directly or indirectly, the voting power of the surviving entity
or entities necessary to elect a majority of the members of the board of
directors (or their equivalent if other than a corporation) of such entity or
entities, or (ii) pursuant to a migratory merger effected solely for the purpose
of changing the jurisdiction of incorporation of the Company.

(j) “Closing Bid Price” and “Closing Sale Price” means, for any security as of
any date, the last closing bid price and last closing trade price, respectively,
for such security on the Principal Market, as reported by Bloomberg, or, if the
Principal Market begins to operate on an extended hours basis and does not
designate the closing bid price or the closing trade price, as the case may be,
then the last bid price or last trade price, respectively, of such security
prior to 4:00:00 p.m., New York time, as reported by Bloomberg, or, if the
Principal Market is not the principal securities exchange or trading market for
such security, the last closing bid price or last trade price, respectively, of
such security on the principal securities exchange or trading market where such
security is listed or traded as reported by Bloomberg, or if the foregoing do
not apply, the last closing bid price or last trade price, respectively, of such
security in the over-the-counter market on the electronic bulletin board for
such security as reported by Bloomberg, or, if no closing bid price or last
trade price, respectively, is reported for such security by Bloomberg, the
average of the bid prices, or the ask prices, respectively, of any market makers
for such security as reported in the “pink sheets” by Pink Sheets LLC (formerly
the National Quotation Bureau, Inc.). If the Closing Bid Price or the Closing
Sale Price cannot be calculated for a security on a particular date on any of
the foregoing bases, the Closing Bid Price or the Closing Sale Price, as the
case may be, of such security on such date shall be the fair market value as
mutually determined by the Company and the Holder. If the Company and the Holder
are unable to agree upon the fair market value of such security, then such
dispute shall be resolved pursuant to Section 22. All such determinations are to
be appropriately adjusted for any stock dividend, stock split, stock
combination, reclassification or similar transaction during the applicable
calculation period.

(k) “Closing Date” shall have the meaning set forth in the Exchange Agreement.

(l) “Common Stock Deemed Outstanding” means, at any given time, the number of
shares of Common Stock outstanding at such time, plus the number of shares of
Common Stock deemed to be outstanding pursuant to Sections 7(a)(i) and 7(a)(ii)
hereof regardless of whether the Options or Convertible Securities are actually
exercisable at such time or exercised at any time, but excluding any Common
Stock owned or held by or for the account of the Company or issuable upon
conversion of the Notes.

(m) “Consolidated EBITDA” means, with respect to any Person for any period, the
Consolidated Net Income of such Person and its Subsidiaries for such period,
plus (i) without duplication, the sum of the following amounts of such Person
and its Subsidiaries for such period and to the extent deducted in determining
Consolidated Net Income of such Person and its Subsidiaries for such period:
(A) Consolidated Net Interest Expense, (B) net income tax expense,
(C) depreciation expense, (D) amortization expense, (E) non-cash compensation
charges; provided that, for the purposes of calculating Consolidated EBITDA, the
Consolidated EBITDA of any Person acquired by, or of a Person substantially all
of whose assets are being acquired by, the Company or one or more of its
Subsidiaries pursuant to an acquisition consented to in writing by the “Required
Lenders” under and as defined in the TPG Agreement during such period shall be
included on a pro forma basis for such period (as if the consummation of such
acquisition and the incurrence or assumption of any Indebtedness in connection
therewith occurred on the first day of such period).

(n) “Consolidated Funded Indebtedness” means, with respect to any Person at any
date, all Indebtedness for borrowed money or letters of credit of such Person,
determined on a consolidated basis in accordance with GAAP, which by its terms
matures more than one year after the date of calculation, and any such
Indebtedness maturing within one year from such date which is renewable or
extendable at the option of such Person to a date more than one year from such
date, including, in any event, but without duplication, with respect to the
Company and its Subsidiaries, the amount of their Capitalized Lease Obligations,
and the amount of the TPG Indebtedness, but excluding, in any event, the
Convertible Subordinated Debt to the extent permitted hereunder.

(o) “Consolidated Net Income” means, with respect to any Person for any period,
the net income (loss) of such Person and its Subsidiaries for such period,
determined on a consolidated basis and in accordance with GAAP, but excluding
from the determination of Consolidated Net Income (without duplication) (a) any
non-cash extraordinary or non-recurring gains or losses or non-cash gains or
losses from dispositions, (b) restructuring charges, (c) effects of discontinued
operations, (d) interest that is paid-in-kind, (e) interest income, and (f) any
tax refunds, net operating losses or other net tax benefits received during such
period on account of any prior period.

(p) “Consolidated Net Interest Expense” means, with respect to any Person for
any period, gross cash interest expense of such Person and its Subsidiaries for
such period determined on a consolidated basis and in accordance with GAAP
(including interest expense paid to Affiliates of such Person), less (i) the sum
of (A) interest income for such period and (B) gains for such period on Hedging
Agreements (to the extent not included in interest income above and to the
extent not deducted in the calculation of gross interest expense), plus (ii) the
sum of (A) losses for such period on Hedging Agreements (to the extent not
included in such gross interest expense) and (B) the upfront costs or fees for
such period associated with Hedging Agreements (to the extent not included in
such gross interest expense), in each case, determined on a consolidated basis
and in accordance with GAAP.

(q) “Contingent Obligation” means, as to any Person, any direct or indirect
liability, contingent or otherwise, of that Person with respect to any
Indebtedness, lease, dividend or other obligation of another Person if the
primary purpose or intent of the Person incurring such liability, or the primary
effect thereof, is to provide assurance to the obligee of such liability that
such liability will be paid or discharged, or that any agreements relating
thereto will be complied with, or that the holders of such liability will be
protected (in whole or in part) against loss with respect thereto.

(r) “Convertible Securities” means any stock, warrants, rights or other
securities (other than Options) directly or indirectly convertible into or
exercisable or exchangeable for Common Stock.

(s) “Eligible Market” means the Principal Market, The New York Stock Exchange,
Inc., The NASDAQ Global Market, The NASDAQ Capital Market, The NASDAQ Global
Select Market or the OTC Market.

(t) “Equity Conditions” means that each of the following conditions is
satisfied: (i) all shares of Common Stock issuable upon conversion of the Notes
or otherwise pursuant to this Note shall be eligible for sale without
restriction (other than restrictions created by the Holder, including
restrictions resulting from the Holder being an “affiliate” of the Company as
defined in Rule 144) pursuant to Rule 144 (and not subject to the provisions of
Rule 144(c)(i)) and without the need for registration under any applicable
federal or state securities laws; (ii) the Common Stock is designated for
quotation on the Principal Market or any other Eligible Market and shall not
have been suspended from trading on such exchange or market (other than
suspensions of not more than two (2) days and occurring prior to the applicable
date of determination due to business announcements by the Company) nor shall
delisting or suspension by such exchange or market been threatened or pending in
writing by such exchange or market; (iii) during the period beginning three
(3) months prior to the applicable date of determination and ending on and
including the applicable date of determination, the Company shall have delivered
shares of common Stock upon conversion of the Notes to the holders on a timely
basis as set forth in Section 3(c)(ii) hereof (and analogous provisions under
the Other Notes); (iv) any applicable shares of Common Stock to be issued in
connection with the event requiring determination may be issued in full without
violating Section 3(d) hereof and the rules or regulations of the Principal
Market or any applicable Eligible Market; (iii) the Company shall not have
failed to timely make any payments within five (5) Business Days of when such
payment is due pursuant to any Transaction Document; (iv) there shall not have
occurred either (A) the public announcement of a pending, proposed or intended
Fundamental Transaction which has not been abandoned, terminated or consummated,
or (B) an Event of Default or (C) an event that with the passage of time or
giving of notice would constitute an Event of Default; (v) the Company shall
have no knowledge of any fact that would cause any shares of Common Stock
issuable upon conversion of the Notes not to be eligible for sale without
restriction pursuant to Rule 144 (and not subject to the provisions of
Rule 144(c)(i)) and any applicable state securities laws; and (vi) the Company
otherwise shall have been in material compliance with and shall not have
breached any provision, covenant, representation or warranty of any material
Transaction Document.

(u) “Equity Conditions Failure” means that on any day during the period
commencing ten (10) Trading Days prior to the applicable the Company Redemption
Notice Date through the applicable Company Redemption Date, the Equity
Conditions have not been satisfied (or waived in writing by the Holder).

(v) “Event of Default Redemption Premium” means (i) in the case of the Events of
Default described in Section 4(a)(i) – (v) and (viii) – (xi), 130% or (ii) in
the case of the Events of Default described in Section 4(a)(vi) – (vii), 100%.

(w) “Exchange Agreement” means that certain Exchange Agreement, dated as of the
date hereof, by and between the Company and the Holder.

(x) “Excluded Security” means any Common Stock issued or issuable: (i) in
connection with acquisitions with one or more non-affiliated third parties on an
arm’s length basis, the primary purpose of which is not to raise additional
capital, which is less than $3,000,000; (ii) in connection with the grant of
options to purchase Common Stock, restricted stock awards or other stock-based
awards or sales, with, in the case of stock options or other stock-based awards
requiring payment therefor, exercise or purchase prices not less than the market
price of the Common Stock on the date of grant or issuance, which are issued,
granted or sold to employees, officers or directors of the Company for the
primary purpose of soliciting or retaining their employment or service pursuant
to an Approved Stock Plan, and the Common Stock issued upon the exercise
thereof; (iii) pursuant to one or more bona fide firm commitment underwritten
public offerings consummated following the date hereof with nationally
recognized underwriters, which generate gross proceeds to the Company, in the
aggregate, of not more than $15,000,000 (other than an “at-the-market offering”
as defined in Rule 415(a)(4) under the 1933 Act and “equity lines”); and
(iv) upon exercise of any Options or Convertible Securities which are
outstanding on the Subscription Date, provided that the terms of such Options or
Convertible Securities are not amended, modified or changed on or after the
Subscription Date to lower the exercise or conversion price, to increase the
number of shares of capital stock issuable upon conversion or exercise, to
extend the expiration or termination date or to change the antidilution
provisions.

(y) “Fundamental Transaction” means that the Company shall, directly or
indirectly, in one or more related transactions, (i) consolidate or merge with
or into (whether or not the Company is the surviving corporation) another Person
or Persons, or (ii) sell, assign, transfer, convey or otherwise dispose of all
or substantially all of the properties or assets of the Company to another
Person, or (iii) allow another Person to make a purchase, tender or exchange
offer that is accepted by the holders of more than 50% of the outstanding shares
of Voting Stock (not including any shares of Voting Stock held by the Person or
Persons making or party to, or associated or affiliated with the Persons making
or party to, such purchase, tender or exchange offer), or (iv) consummate a
stock purchase agreement or other business combination (including, without
limitation, a reorganization, recapitalization, spin-off or scheme of
arrangement) with another Person whereby such other Person acquires more than
the 50% of the outstanding shares of Voting Stock (not including any shares of
Voting Stock held by the other Person or other Persons making or party to, or
associated or affiliated with the other Persons making or party to, such stock
purchase agreement or other business combination), or (v) reorganize,
recapitalize or reclassify its Common Stock or (vi) any “person” or “group” (as
these terms are used for purposes of Sections 13(d) and 14(d) of the Exchange
Act) is or shall become the “beneficial owner” (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of 50% of the aggregate Voting Stock
of the Company.

(z) “GAAP” means generally accepted accounting principles in effect from time to
time in the United States, applied on a consistent basis in accordance with past
practice.

(aa) “Hedging Agreement” means any interest rate, foreign currency, commodity or
equity swap, collar, cap, floor or forward rate agreement, or other agreement or
arrangement designed to protect against fluctuations in interest rates or
currency, commodity or equity values (including any option with respect to any
of the foregoing and any combination of the foregoing agreements or
arrangements), and any confirmation executed in connection with any such
agreement or arrangement.

(bb) “Holder Mandatory Redemption Date” means the earlier of (a) May 31, 2020
and (ii) such date that the Company’s senior secured lenders no longer prohibit
such payment.

(cc) “Indebtedness” of any Person means, without duplication (i) all
indebtedness for borrowed money, (ii) all obligations issued, undertaken or
assumed as the deferred purchase price of property or services, including
(without limitation) “capital leases” in accordance with GAAP (other than trade
payables entered into in the ordinary course of business), (iii) all
reimbursement or payment obligations with respect to letters of credit, surety
bonds and other similar instruments, (iv) all obligations evidenced by notes,
bonds, debentures or similar instruments, including obligations so evidenced
incurred in connection with the acquisition of property, assets or businesses,
(v) all indebtedness created or arising under any conditional sale or other
title retention agreement, or incurred as financing, in either case with respect
to any property or assets acquired with the proceeds of such indebtedness (even
though the rights and remedies of the seller or bank under such agreement in the
event of default are limited to repossession or sale of such property), (vi) all
monetary obligations under any leasing or similar arrangement which, in
accordance with GAAP, consistently applied for the periods covered thereby, is
classified as a capital lease, (vii) all indebtedness referred to in clauses
(i) through (vi) above secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any mortgage,
lien, pledge, charge, security interest or other encumbrance upon or in any
property or assets (including accounts and contract rights) owned by any Person,
even though the Person which owns such assets or property has not assumed or
become liable for the payment of such indebtedness, and (viii) all Contingent
Obligations in respect of indebtedness or obligations of others of the kinds
referred to in clauses (i) through (vii) above. For the avoidance of doubt,
“Indebtedness” shall not include unsecured indebtedness to trade creditors
incurred in the ordinary course of business.

(dd) “Interest Rate” means 13.50% per annum, payable in kind, which shall
accrete as additional Principal and be payable or convertible in accordance with
the terms of this Note, including the provisions of Section 3(d), subject to
adjustment as set forth in Section 2.

(ee) “Lien” means any mortgage, lien, pledge, charge, security interest or other
encumbrance upon or in any property or assets (including accounts and contract
rights) owned by the Company or any of its Subsidiaries.

(ff) “Optional Interest Price” means, the lower of (i) the applicable Conversion
Price and (ii) that price which shall be computed as 90% of the arithmetic
average of the Weighted Average Price of the Common Stock on each five
(5) consecutive Trading Days immediately preceding the applicable Conversion
Date (each such period, an “Optional Interest Measuring Period”). All such
determinations to be appropriately adjusted for any stock dividend, stock split,
stock combination, reclassification or similar transaction that proportionately
decreases or increases the Common Stock during the applicable such Optional
Interest Measuring Period.

(gg) “Options” means any rights, warrants or options to subscribe for or
purchase shares of Common Stock or Convertible Securities.

(hh) “Permitted Indebtedness” means (i) Indebtedness under the TPG Agreement in
an aggregate principal amount not to exceed $112,000,000 at any time,
(ii) Indebtedness other than described in clause (i) of this definition
outstanding on the Subscription Date, pursuant to SEC filings or Schedule A
attached hereto, (iii) the Indebtedness evidenced by this Note and the Other
Notes, (iv) unsecured Indebtedness incurred by the Company that is made
expressly subordinate in right of payment to the Indebtedness evidenced by this
Note, as reflected in a written agreement reasonably acceptable to the Holder,
and which Indebtedness does not provide at any time for (1) the payment,
prepayment, repayment, repurchase or defeasance, directly or indirectly, of any
principal or premium, if any, thereon until ninety-one (91) days after the
Maturity Date or later and (2) total interest and fees at a rate in excess of
fifteen and one half percent (15.50%) per annum, (v) Indebtedness secured by
Permitted Liens, (vi) intercompany Indebtedness between (1) the Company and any
Subsidiary of the Company or (2) any Subsidiaries of the Company,
(vii) guaranties of Permitted Indebtedness of the Company or any Subsidiary of
the Company secured by Permitted Liens, and (viii) extensions, refinancings and
renewals of any items of Permitted Indebtedness and any Indebtedness that was
permitted to be incurred pursuant to Section 13(b) hereof, provided that the
principal amount (or in the case of revolving credit facilities, the maximum
amount of revolving commitments thereunder) is not increased (other than to
account for costs, expenses and fees relating to such extensions, refinancings
or renewals) or the terms modified to impose materially more burdensome terms
upon the Company or its Subsidiaries, as the case may be, other than with
respect to an increase in the interest rate applicable to such Indebtedness so
long as the interest rate applicable thereto is on terms consistent with then
prevailing market terms and, either (x) if as of the applicable time of
determination the Company shall have not yet obtained the Stockholder Approval
(as defined in the Exchange Agreement), no issuance of any equity securities of
the Company or any of its Subsidiaries (other than the Warrants) is contained in
such extensions, refinancings or renewals or (y) if as of the applicable time of
determination the Company shall have, on or prior to such time, obtained the
Stockholder Approval, no material equity component is contained in such
extensions, refinancings or renewals.

(ii) “Permitted Liens” means (i) Liens securing Indebtedness under the TPG
Agreement, (ii) any Lien for taxes not yet due or delinquent or being contested
in good faith by appropriate proceedings for which adequate reserves have been
established in accordance with GAAP, (iii) any statutory Lien arising in the
ordinary course of business by operation of law with respect to a liability that
is not yet due or delinquent, (iv) any Lien created by operation of law, such as
materialmen’s liens, mechanics’ liens and other similar liens, arising in the
ordinary course of business with respect to a liability that is not yet due or
delinquent or that are being contested in good faith by appropriate proceedings,
(v) Liens (A) upon or in any equipment acquired or held by the Company or any of
its Subsidiaries to secure the purchase price of such equipment or Indebtedness
incurred solely for the purpose of financing the acquisition or lease of such
equipment, or (B) existing on such equipment at the time of its acquisition,
provided that the Lien is confined solely to the property so acquired and
improvements thereon, and the proceeds of such equipment, (vi) Liens incurred in
connection with the extension, renewal or refinancing of the Indebtedness
secured by Liens of the type described in clauses (i) and (v) above, provided
that any extension, renewal or replacement Lien shall be limited to the property
encumbered by the existing Lien and the principal amount of the Indebtedness
being extended, renewed or refinanced does not increase, (vii) leases or
subleases and licenses and sublicenses granted to others in the ordinary course
of the Company’s business, not interfering in any material respect with the
business of the Company and its Subsidiaries taken as a whole, (viii) Liens in
favor of customs and revenue authorities arising as a matter of law to secure
payments of custom duties in connection with the importation of goods and
(ix) Liens arising from judgments, decrees or attachments in circumstances not
constituting an Event of Default under Section 4(a)(viii).

(jj) “Person” means an individual, a limited liability company, a partnership, a
joint venture, a corporation, a trust, an unincorporated organization, any other
entity and a government or any department or agency thereof.

(kk) “Principal Market” means the NYSE MKT.

(ll) “Redemption Notices” means, collectively, the Event of Default Redemption
Notices, the Change of Control Redemption Notices, the Company Redemption Notice
and the Holder Mandatory Redemption Notice, each of the foregoing, individually,
a Redemption Notice.

(mm) “Redemption Prices” means, collectively, the Event of Default Redemption
Price, the Change of Control Redemption Price, the Company Redemption Price and
the Holder Mandatory Redemption Price (each of the foregoing, individually, a
“Redemption Price”).

(nn) “Required Holders” means the holders of Notes representing at least a
majority of the aggregate principal amount of the Notes then outstanding.

(oo) “SEC” means the United States Securities and Exchange Commission.

(pp) “Specified Asset Sales” shall have the meaning specified in the TPG
Agreement.

(qq) “Subscription Date” shall mean October 21, 2014.

(rr) “Subsidiary” means any entity in which the Company, directly or indirectly,
owns a controlling interest of the capital stock or holds a controlling equity
or similar interest.

(ss) “Successor Entity” means the Person, which may be the Company, formed by,
resulting from or surviving any Fundamental Transaction or the Person with which
such Fundamental Transaction shall have been made, provided that if such Person
is not a publicly traded entity whose common stock or equivalent equity security
is quoted or listed for trading on an Eligible Market, Successor Entity shall
mean such Person’s Parent Entity.

(tt) “TPG Agreement” means that certain Financing Agreement, dated as of
November 21, 2013 by and among the Company, each subsidiary of the Company
listed as a Borrower” on the signature pages thereto, each subsidiary of the
Company listed as a “Guarantor” on the signature pages thereto, the lenders from
time to time party thereto, TPG Specialty Lending, Inc. as agent for the lenders
and lead arranger, and the person party thereto from time to time as service
agent for the lenders, as the same has been and may be amended, restated,
supplemented, extended, renewed, or otherwise modified from time to time,
together with any refinancings thereof from time to time and any amendments,
restatements, supplements, extensions, renewals and modifications of any of such
refinancing.

(uu) “TPG Indebtedness” means Indebtedness of the Company and its Subsidiaries
owing under the TPG Agreement.

(vv) “Trading Day” means any day on which the Common Stock is traded on the
Principal Market, or, if the Principal Market is not the principal trading
market for the Common Stock, then on the principal securities exchange or
securities market on which the Common Stock is then traded; provided that
“Trading Day” shall not include any day on which the Common Stock is scheduled
to trade on such exchange or market for less than 4.5 hours or any day that the
Common Stock is suspended from trading during the final hour of trading on such
exchange or market (or if such exchange or market does not designate in advance
the closing time of trading on such exchange or market, then during the hour
ending at 4:00:00 p.m., New York Time).

(ww) “TTM EBITDA” means, as of any date of determination and with respect to a
Person, the Consolidated EBITDA of such Person and its Subsidiaries for the
period of 12 consecutive months most recently ended.

(xx) “Voting Stock” of a Person means capital stock of such Person of the class
or classes pursuant to which the holders thereof have the general voting power
to elect, or the general power to appoint, at least a majority of the board of
directors, managers or trustees of such Person (irrespective of whether or not
at the time capital stock of any other class or classes shall have or might have
voting power by reason of the happening of any contingency).

(yy) “Weighted Average Price” means, for any security as of any date, the dollar
volume-weighted average price for such security on the Principal Market during
the period beginning at 9:30:01 a.m., New York time (or such other time as the
Principal Market publicly announces is the official open of trading), and ending
at 4:00:00 p.m., New York time (or such other time as the Principal Market
publicly announces is the official close of trading) as reported by Bloomberg
through its “Volume at Price” functions, or, if the foregoing does not apply,
the dollar volume-weighted average price of such security in the
over-the-counter market on the electronic bulletin board for such security
during the period beginning at 9:30:01 a.m., New York time (or such other time
as such market publicly announces is the official open of trading), and ending
at 4:00:00 p.m., New York time (or such other time as such market publicly
announces is the official close of trading) as reported by Bloomberg, or, if no
dollar volume-weighted average price is reported for such security by Bloomberg
for such hours, the average of the highest closing bid price and the lowest
closing ask price of any of the market makers for such security as reported in
the “pink sheets” by Pink Sheets LLC (formerly the National Quotation Bureau,
Inc.). If the Weighted Average Price cannot be calculated for a security on a
particular date on any of the foregoing bases, the Weighted Average Price of
such security on such date shall be the fair market value as mutually determined
by the Company and the Holder. If the Company and the Holder are unable to agree
upon the fair market value of such security, then such dispute shall be resolved
pursuant to Section 22. All such determinations to be appropriately adjusted for
any stock dividend, stock split, stock combination, reclassification or similar
transaction during the applicable calculation period.

(30) DISCLOSURE. Upon receipt or delivery by the Company of any notice in
accordance with the terms of this Note, unless the Company has in good faith
determined that the matters relating to such notice do not constitute material,
nonpublic information relating to the Company or its Subsidiaries, the Company
shall within one (1) Business Day after any such receipt or delivery publicly
disclose such material, nonpublic information on a Current Report on Form 8-K or
otherwise. In the event that the Company believes that a notice contains
material, nonpublic information relating to the Company or its Subsidiaries, the
Company so shall indicate to such Holder contemporaneously with delivery of such
notice, and in the absence of any such indication, the Holder shall be allowed
to presume that all matters relating to such notice do not constitute material,
nonpublic information relating to the Company or its Subsidiaries.

[Signature Page Follows]

IN WITNESS WHEREOF, the Company has caused this Note to be duly executed as of
the Issuance Date set out above.

          Metalico, Inc. By:  

 
   
Name:
  Carlos E. Agüero    
Title:
  President

EXHIBIT I

METALICO, INC.
CONVERSION NOTICE

Reference is made to the Series C Convertible Note (the “Note”) issued to the
undersigned by Metalico, Inc. (the “Company”). In accordance with and pursuant
to the Note, the undersigned hereby elects to convert the amount of Principal
(as defined in the Note) of the Note indicated below into shares of Common Stock
par value $0.001 per share (the “Common Stock”) of the Company, as of the date
specified below.

 
Date of Conversion:
Aggregate amount of Principal to be converted:
Please confirm the following information:
Conversion Price:
Number of shares of Common Stock to be issued:
? If this Conversion Notice is being delivered on any Alternate Conversion
Date, check here if Holder is electing to use the following Alternate
Conversion Price:     
Please issue the Common Stock into which the Note is being converted in the
following name and to the following address:
Issue to:
Facsimile Number:
Authorization:
By:
Title:
Dated:
Account Number:
  (if electronic book entry transfer)
Transaction Code Number:
  (if electronic book entry transfer)

ACKNOWLEDGMENT

The Company hereby acknowledges this Conversion Notice and hereby directs
Corporate Stock Transfer, Inc. to issue the above indicated number of shares of
Common Stock in accordance with the Transfer Agent Instructions dated [?], 2014
from the Company and acknowledged and agreed to by Corporate Stock Transfer,
Inc.

          Metalico, Inc. By:  

 
   
Name:
  Carlos E. Agüero    
Title:
  President