Exhibit 10.53

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION
OF COUNSEL SELECTED BY THE HOLDER AND REASONABLY SATISFACTORY TO THE COMPANY
(PROVIDED THAT SCHULTE ROTH & ZABEL LLP SHALL BE DEEMED REASONABLY SATISFACTORY
TO THE COMPANY), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT
REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A
UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING
ARRANGEMENT SECURED BY THE SECURITIES.

PURSUANT TO THE TERMS OF SECTION 1 OF THIS WARRANT, ALL OR A PORTION OF THIS
WARRANT MAY HAVE BEEN EXERCISED, AND THEREFORE THE ACTUAL NUMBER OF WARRANT
SHARES REPRESENTED BY THIS WARRANT MAY BE LESS THAN THE AMOUNT SET FORTH ON THE
FACE HEREOF.

PURSUANT TO THE TERMS OF SECTION 2(E) OF THIS WARRANT AND THE FEE LETTER
REFERENCED IN THE FINANCING AGREEMENT (AS DEFINED HEREIN), THE ACTUAL NUMBER OF
WARRANT SHARES REPRESENTED BY THIS WARRANT MAY BE REDUCED IN THE EVENT ALL OR
ANY PORTION OF THE ADDITIONAL FEE PAYABLE UNDER THE FEE LETTER HAS BEEN PAID AND
THEREFORE MAY BE LESS THAN THE AMOUNT SET FORTH ON THE FACE HEREOF.

METALICO, INC.
Warrant To Purchase Common Stock

Warrant No.: 2014-1
Number of Shares of Common Stock:      3,810,146_
Date of Issuance: October 21, 2014 (“Issuance Date”)

Metalico, Inc., a Delaware corporation (the “Company”), hereby certifies that,
for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, TPG SPECIALTY LENDING, INC., the registered holder hereof
or its permitted assigns (the “Holder”), is entitled, subject to the terms set
forth below, to purchase from the Company, at the Exercise Price (as defined
below) then in effect, at any time or times on or after the date that is the
earlier of (i) the Stockholder Approval Date (as defined in the Subscription
Agreement (as defined below)) and (ii) the date that is seventy-five (75) days
after the Subscription Date (as defined below) (the "Initial Exercisability
Date”), but not after 11:59 p.m., New York time, on the Expiration Date, (as
defined below), three million eight hundred ten thousand one hundred forty-six
(3,810,146) fully paid nonassessable shares of Common Stock, subject to
adjustment as provided herein (the "Warrant Shares”). Except as otherwise
defined herein, capitalized terms in this Warrant to Purchase Common Stock
(including any Warrants to Purchase Common Stock issued in exchange, transfer or
replacement hereof, this “Warrant”), shall have the meanings set forth in
Section 17. This Warrant is one of the Warrants to purchase Common Stock (the
“Warrants”) issued pursuant to Section 1 of that certain Subscription Agreement,
dated as of October 21, 2014 (the “Subscription Date”), by and among the Company
and the investors (the “Subscribers”) referred to therein (the "Subscription
Agreement”). Capitalized terms used herein and not otherwise defined shall have
the definitions ascribed to such terms in the Subscription Agreement.

1. EXERCISE OF WARRANT.

(a) Mechanics of Exercise. Subject to the terms and conditions hereof
(including, without limitation, the limitations set forth in Section 1(f)), this
Warrant may be exercised by the Holder at any time or times on or after the
Initial Exercisability Date, in whole or in part, by (i) delivery of a written
notice to the Company no later than 6:00 P.M., New York time, on any Trading
Day, in the form attached hereto as Exhibit A (the “Exercise Notice”), of the
Holder’s election to exercise this Warrant and (ii) (A) payment to the Company
of an amount equal to the applicable Exercise Price multiplied by the number of
Warrant Shares as to which this Warrant is being exercised (the “Aggregate
Exercise Price”) in cash by wire transfer of immediately available funds or
(B) by notifying the Company that this Warrant is being exercised pursuant to a
Cashless Exercise (as defined in Section 1(d)). The Holder shall not be required
to deliver the original Warrant in order to effect an exercise hereunder unless
after giving effect to such issuance, no additional Warrant Shares shall be
issuable hereunder. Notwithstanding the preceding sentence, in the event that
this Warrant has been exercised for less than all Warrant Shares available
hereunder and the original Warrant has not been delivered to the Company, the
Company’s records of Warrant exercises shall govern absent manifest error.
Execution and delivery of the Exercise Notice with respect to less than all of
the Warrant Shares shall have the same effect as cancellation of the original
Warrant and issuance of a new Warrant evidencing the right to purchase the
remaining number of Warrant Shares. No later than 5:00 P.M., New York time, on
the first (1st) Trading Day following the date on which the Company has received
the Exercise Notice, the Company shall transmit by facsimile an acknowledgment
of confirmation of receipt of the Exercise Notice to the Holder and the
Company’s transfer agent (the “Transfer Agent”). No later than 3:00 P.M., New
York time on the third (3rd) Trading Day following the date on which the Company
has received the Exercise Notice, so long as the Holder delivers the Aggregate
Exercise Price (or notice of a Cashless Exercise) on or prior to 6:00 P.M., New
York time the second (2nd) Trading Day following the date on which the Company
has received the Exercise Notice (the “Share Delivery Date”) (provided that if
the Aggregate Exercise Price has not been delivered by such time, the Share
Delivery Date shall be one (1) Trading Day after the Aggregate Exercise Price
(or notice of a Cashless Exercise) is delivered in accordance with the terms
hereof), the Company shall (X) provided that the Transfer Agent is participating
in The Depository Trust Company (“DTC”) Fast Automated Securities Transfer
Program and the Warrant Shares are subject to an effective resale registration
statement in favor of the Holder or, if exercised with Cashless Exercise, at a
time when Rule 144 would be available for immediate resale of the Warrant Shares
by the Holder, credit the aggregate number of Warrant Shares to which the Holder
is entitled pursuant to such exercise 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 or if the Warrant Shares are not subject to an effective resale
registration statement in favor of the Holder or, if exercised via Cashless
Exercise, at a time when Rule 144 would not be exercisable for immediate resale
of the Warrant Shares by the Holder, issue and dispatch by overnight courier to
the address as specified in the Exercise Notice, a certificate, registered in
the Company’s share register in the name of the Holder or its designee, for the
number of Warrant Shares to which the Holder is entitled pursuant to such
exercise. The Company shall be responsible for all fees and expenses of the
Transfer Agent and all fees and expenses with respect to the issuance of Warrant
Shares via DTC, if any. Upon delivery of the Exercise Notice and so long as the
Holder delivers the Aggregate Purchase Price, (unless exercised via Cashless
Exercise), the Holder shall be deemed for all corporate purposes to have become
the holder of record of the Warrant Shares with respect to which this Warrant
has been exercised, irrespective of the date such Warrant Shares are credited to
the Holder’s DTC account or the date of delivery of the certificates evidencing
such Warrant Shares, as the case may be. If this Warrant is submitted in
connection with any exercise pursuant to this Section 1(a) and the number of
Warrant Shares represented by this Warrant submitted for exercise is greater
than the number of Warrant Shares being acquired upon an exercise, then the
Company shall as soon as practicable and in no event later than three
(3) Trading Days after surrender by the Holder of this Warrant to the Company
and at its own expense, issue a new Warrant (in accordance with Section 7(d))
representing the right to purchase the number of Warrant Shares issuable
immediately prior to such exercise under this Warrant, less the number of
Warrant Shares with respect to which this Warrant is exercised. No fractional
Warrant Shares are to be issued upon the exercise of this Warrant, but rather
the number of Warrant Shares to be issued shall be rounded up to the nearest
whole number. The Company shall pay any and all taxes which may be payable with
respect to the issuance and delivery of Warrant Shares upon exercise of this
Warrant except for any transfer taxes payable in the event that the Warrant
Shares are issued to any Person other than the Holder or its nominee, which
taxes shall be the responsibility of the Holder. The Company’s obligations to
issue and deliver Warrant Shares in accordance with the terms and subject to the
conditions hereof are absolute and unconditional, irrespective of any action or
inaction by the Holder to enforce the same, any waiver or consent with respect
to any provision hereof, the recovery of any judgment against any Person or any
action to enforce the same, or any setoff, counterclaim, recoupment, limitation
or termination.

(b) Exercise Price. For purposes of this Warrant, “Exercise Price” means
$0.9186, subject to adjustment as provided herein.

(c) Company’s Failure to Timely Deliver Securities. If the Company shall fail
for any reason or for no reason to comply with the delivery requirements of
Section 1(a), then, in addition to all other remedies available to the Holder,
(X) the Company shall pay in cash to the Holder on each day after the Share
Delivery Date and until delivery of such shares an amount equal to 1.5% of the
product of (A) 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 (B) the Closing Sale Price of the Common Stock on the Trading Day
immediately preceding the last possible date on which the Company could have
issued such shares of Common stock to the Holder without violating Section 1(a),
and (Y) the Holder, upon written notice to the Company, may void its Exercise
Notice with respect to, and retain or have returned, as the case may be, any
portion of this Warrant that has not been exercised pursuant to such Exercise
Notice; provided that the Company shall have no obligation to make any payment
set forth this Section 1(c) with respect to such voided Exercise Notice. In
addition to the foregoing, if on or after such failure the Holder purchases (in
an open market transaction or otherwise) shares of Common Stock to deliver in
satisfaction of a sale by the Holder of shares of Common Stock issuable upon
such exercise 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 which shall be made no later than 6:00 P.M., New York time, on
the date on which the Buy-In occurs and in the Holder’s discretion, either
(i) pay cash to the Holder in an amount equal to the Holder’s total purchase
price (including brokerage commissions and other reasonable 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 shares of Common Stock) or credit such Holder’s balance
account with DTC for such shares of Common Stock shall terminate, or
(ii) promptly honor its obligation to deliver to the Holder a certificate or
certificates representing such shares of Common Stock or credit such Holder’s
balance account with DTC, as applicable, and pay cash to the Holder in an amount
equal to the excess (if any) of the Buy-In Price over the product of (A) such
number of shares of Common Stock, times (B) the Closing Bid Price of the Common
Stock on the date of exercise. Nothing shall limit the Holder’s right to pursue
any equitable remedies available to it hereunder, including, without limitation,
a decree of specific performance and/or injunctive relief with respect to the
Company’s failure to timely deliver certificates representing shares of Common
Stock (or to electronically deliver such shares of Common Stock) upon the
exercise of this Warrant as required pursuant to the terms hereof.

(d) Cashless Exercise. Notwithstanding anything contained herein to the
contrary, the Holder may, in its sole discretion, exercise this Warrant in whole
or in part and, in lieu of making the cash payment otherwise contemplated to be
made to the Company upon such exercise in payment of the Aggregate Exercise
Price, elect instead to receive upon such exercise the “Net Number” of shares of
Common Stock determined according to the following formula (a “Cashless
Exercise”):

Net Number = (A x B) — (A x C) B

For purposes of the foregoing formula:

      A= the total number of shares with respect to which this Warrant is then
being exercised.  

      B= the arithmetic average of the Closing Sale Prices of the Common Stock
for the five (5) consecutive Trading Days ending on the date immediately
preceding the date on which the Exercise Notice is deemed to be given hereunder.
 

      C= the Exercise Price then in effect for the applicable Warrant Shares at
the time of such exercise.  

For purposes of Rule 144(d) promulgated under the 1933 Act, as in effect on the
date hereof, it is intended that the Warrant Shares issued in a Cashless
Exercise shall be deemed to have been acquired by the Holder, and the holding
period for the Warrant Shares shall be deemed to have commenced, on the date
this Warrant was originally issued to the Holder pursuant to the Subscription
Agreement.

(e) Disputes. In the case of a dispute as to the determination of the Exercise
Price or the arithmetic calculation of the Warrant Shares, the Company shall
promptly issue to the Holder the number of Warrant Shares that are not disputed
and resolve such dispute in accordance with Section 12.

(f) Limitations on Exercise.

(i) Beneficial Ownership. Notwithstanding anything to the contrary contained
herein, the Company shall not effect the exercise of any portion of this
Warrant, and the Holder shall not have the right to exercise any portion of this
Warrant, pursuant to the terms and conditions of this Warrant and any such
exercise shall be null and void and treated as if never made, to the extent that
after giving effect to such exercise, the Holder together with the other
Attribution Parties collectively 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 exercise. For purposes of the foregoing
sentence, the aggregate number of shares of Common Stock beneficially owned by
the Holder and the other Attribution Parties shall include the number of shares
of Common Stock held by the Holder and all other Attribution Parties plus the
number of shares of Common Stock issuable upon exercise of this Warrant 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) exercise of the remaining, unexercised portion of this Warrant beneficially
owned by the Holder or any of the other Attribution Parties and (B) exercise or
conversion of the unexercised or unconverted portion of any other securities of
the Company (including, without limitation, any convertible notes or convertible
preferred stock or warrants, including the other Warrants) beneficially owned by
the Holder or any other Attribution Party subject to a limitation on conversion
or exercise analogous to the limitation contained in this Section 1(f)(i). For
purposes of this Section 1(f)(i), beneficial ownership shall be calculated in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended
(the “1934 Act”). For purposes of this Warrant, in determining the number of
outstanding shares of Common Stock the Holder may acquire upon the exercise of
this Warrant without exceeding the Maximum Percentage, the Holder may rely on
the number of outstanding shares of Common Stock as reflected in (x) the
Company’s most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q,
Current Report on Form 8-K or other public filing with the Securities and
Exchange Commission (the “SEC”), as the case may be, (y) a more recent public
announcement by the Company or (z) any other written notice by the Company or
the Transfer Agent setting forth the number of shares of Common Stock
outstanding (as determined pursuant to either clause (x), (y) or (z), the
“Reported Outstanding Share Number”). If the Company receives an Exercise Notice
from the Holder at a time when the actual number of outstanding shares of Common
Stock is less than the Reported Outstanding Share Number, the Company shall
(i) notify the Holder in writing of the number of shares of Common Stock then
outstanding and, to the extent that such Exercise Notice would otherwise cause
the Holder’s beneficial ownership, as determined pursuant to this
Section 1(f)(i), to exceed the Maximum Percentage, the Holder must notify the
Company of a reduced number of Warrant Shares to be purchased pursuant to such
Exercise Notice (the number of shares by which such purchase is reduced, the
“Reduction Shares”) and (ii) as soon as reasonably practicable, the Company
shall return to the Holder any exercise price paid by the Holder for the
Reduction Shares. For any reason at any time, upon the written or oral request
of the Holder given on or prior to 6:00 P.M., New York time, the Company shall
within one (1) Business Day thereafter confirm orally and in writing or by
electronic mail 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 Warrant, by the Holder and any other Attribution
Party since the date as of which the Reported Outstanding Share Number was
reported. In the event that the issuance of shares of Common Stock to the Holder
upon exercise of this Warrant results in the Holder and the other Attribution
Parties being deemed to beneficially own, in the aggregate, more than the
Maximum Percentage of the number of outstanding shares of Common Stock (as
determined under Section 13(d) of the 1934 Act), the number of shares so issued
by which the Holder’s and the other Attribution Parties’ aggregate beneficial
ownership exceeds the Maximum Percentage (the “Excess Shares”) shall be deemed
null and void and shall be cancelled ab initio, and the Holder shall not have
the power to vote or to transfer the Excess Shares. As soon as reasonably
practicable after the issuance of the Excess Shares has been deemed null and
void, the Company shall return to the Holder the exercise price paid by the
Holder for the Excess Shares. Upon delivery of a written notice to the Company,
the Holder may from time to time increase (with such increase not effective
until the sixty-first (61st) day after delivery of such notice) or decrease the
Maximum Percentage to any other percentage not in excess of 9.99% as specified
in such notice; provided that (i) any such increase in the Maximum Percentage
will not be effective until the sixty-first (61st) day after such notice is
delivered to the Company and (ii) any such increase or decrease will apply only
to the Holder and the other Attribution Parties and not to any other holder of
Warrants that is not an Attribution Party of the Holder. For purposes of
clarity, the Company and the Holder intend that the purpose of this Section 1(f)
is that the shares of Common Stock issuable pursuant to the terms of this
Warrant in excess of the Maximum Percentage shall not be deemed to be
beneficially owned by the Holder for any purpose including for purposes of
Section 13(d) or Rule 16a-1(a)(1) of the 1934 Act. No prior inability to
exercise this Warrant pursuant to this paragraph shall have any effect on the
applicability of the provisions of this paragraph with respect to any subsequent
determination of exercisability. The provisions of this paragraph shall be
construed and implemented in a manner otherwise than in strict conformity with
the terms of this Section 1(f)(i) to the extent necessary to correct this
paragraph or any portion of this paragraph which may be defective or
inconsistent with the intended beneficial ownership limitation contained in this
Section 1(f)(i) or to make changes or supplements necessary or desirable to
properly give effect to such limitation. The limitation contained in this
paragraph may not be waived and shall apply to a successor holder of this
Warrant.

(ii) Principal Market Regulation. The Company shall not be obligated to issue
any shares of Common Stock upon exercise of this Warrant and the Holder shall
not have the right to receive upon exercise of this Warrant any shares of Common
Stock if the issuance of such shares of Common Stock combined with the issuance
of such shares of Common Stock issuable pursuant to the Exchange Agreement dated
as of the date hereof by and among the Company and the investors named therein
(the “Exchange Agreement”) and the New Series Notes (as defined in the Exchange
Agreement and together with the shares issuable under the Exchange Agreement,
the “Other Securities”) would exceed 9,645,043 shares of Common Stock (which is
less than 20% of 48,225,219 shares of Common Stock outstanding on the date
hereof) (the “Exchange Cap”), except that such limitation shall not apply in the
event that the Company obtains the approval of its stockholders as required by
the applicable rules of the Eligible Market for issuances of shares of Common
Stock in excess of such amount. Until such 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 exercise of this Warrant and the Holder shall not have the
right to receive upon exercise of this Warrant any shares of Commons Stock and
(y) at any time after the Additional Common Shares Measurement Period, no Holder
shall be issued in the aggregate, upon exercise of any Warrants, shares of
Common Stock in an amount greater than the product of (A) 20% of the Remaining
Exchange Cap (as defined in the Exchange Agreement) multiplied by (B) a
fraction, the numerator of which is the total number of shares of Common Stock
underlying the Warrants issued to such Holder pursuant to the Subscription
Agreement on the Issuance Date and the denominator of which is the aggregate
number of shares of Common Stock underlying the Warrants issued to the
Subscribers pursuant to the Subscription Agreement on the Issuance Date, taking
into account, for purposes of recalculating such pro rata portion, all other
shares of Common Stock issuable pursuant to the Other Securities (with respect
to each Holder, the “Exchange Cap Allocation”). In the event that any Holder
shall sell or otherwise transfer any of such Holder’s Warrants, 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 Warrants shall exercise all of such
holder’s Warrants 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 Warrants on a
pro rata basis in proportion to the             shares of Common Stock
underlying the Warrants then held by each such holder. In the event that the
Company is prohibited on or after the Shareholder Meeting Deadline (as defined
in the Subscription Agreement) from issuing any Warrant Shares for which an
Exercise Notice has been received as a result of the operation of this
Section 1(f)(ii), then unless the Holder elects to void such exercise, the
Holder may require the Company to pay to the Holder within three (3) Trading
Days of the applicable attempted exercise, cash in an amount equal to the
product of (i) the quotient determined by dividing (x) the number of Warrant
Shares that the Company is unable to deliver pursuant to this Section 1(f)(ii),
by (y) the total number of Warrant Shares issuable upon exercise of this Warrant
(without regard to any limitations or restrictions on exercise of this Warrant)
and (ii) the Black Scholes Value; provided, that (x) references to “the day
immediately following the public announcement of the applicable Fundamental
Transaction” in the definition of “Black Scholes Value” shall instead refer to
“the date the Holder exercises this Warrant and the Company cannot deliver the
required number of Warrant Shares because of the Exchange Cap” and (y) clause
(iii) of the definition of “Black Scholes Value” shall instead refer to “the
underlying price per share used in such calculation shall be the highest
Weighted Average Price during the period beginning on the date of the applicable
date of the exercise and the date that the Company makes the applicable cash
payment.”

(g) Insufficient Authorized Shares. If at any time while this Warrant remains
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 exercise of this Warrant at least a number of shares of Common
Stock equal to 110% of the number of shares of Common Stock as shall from time
to time be necessary to effect the exercise of all of this Warrant then
outstanding (the “Required Reserve Amount” and the failure to have such
sufficient number of authorized and unreserved shares of Common Stock, an
“Authorized Share Failure”), then the Company shall immediately use its
reasonable best efforts 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 this Warrant 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
seventy five (75) 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 reasonable 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.
Notwithstanding the foregoing, if any such time of an Authorized Share Failure,
the Company is authorized to and is able to obtain the written consent of a
majority of the shares of its issued and outstanding Common Stock to approve the
increase in the number of authorized shares of Common Stock, the Company may
satisfy this obligation by obtaining such consent and submitting for filing with
the SEC an Information Statement on Schedule 14C. In the event that upon any
exercise of this Warrant, the Company does not have sufficient authorized shares
to deliver in satisfaction of such exercise, then unless the Holder elects to
void such attempted exercise, in lieu of such issuances and in full satisfaction
of its obligations to issue Common Stock upon such exercise, the Holder may
require the Company to pay to the Holder within three (3) Trading Days of the
applicable attempted exercise, cash in an amount equal to the product of (i) the
quotient determined by dividing (x) the number of Warrant Shares that the
Company is unable to deliver pursuant to this Section 1(g), by (y) the total
number of Warrant Shares issuable upon exercise of this Warrant (without regard
to any limitations or restrictions on exercise of this Warrant) and (ii) the
Black Scholes Value; provided, that (x) references to “the day immediately
following the public announcement of the applicable Fundamental Transaction” in
the definition of “Black Scholes Value” shall instead refer to “the date the
Holder exercises this Warrant and the Company cannot deliver the required number
of Warrant Shares because of an Authorized Share Failure” and (y) clause
(iii) of the definition of “Black Scholes Value” shall instead refer to “the
underlying price per share used in such calculation shall be the highest
Weighted Average Price during the period beginning on the date of the applicable
date of exercise and the date that the Company makes the applicable cash
payment.”

2. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The Exercise Price
and the number of Warrant Shares shall be adjusted from time to time as follows:

(a) Adjustment Upon Issuance of Shares of Common Stock. If and whenever on or
after the Subscription Date, the Company issues or sells, or in accordance with
this Section 2 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
Securities) for a consideration per share (the “New Issuance Price”) less than a
price (the "Applicable Price”) equal to either:

(I) $1.00 (as adjusted for any stock dividend, stock split, stock consolidation,
reclassification or similar transaction occurring after the Subscription Date);
or

(II) the price at which Common Stock is issued or sold or deemed sold or issued
if such issuance or sale or deemed issuance or sale is not an arms’ length
transaction, including any issuance or sale or deemed issuance or sale to any
officer, director or Affiliate of the Company (each of the foregoing, a
“Dilutive Issuance”),

then immediately after such Dilutive Issuance, the Exercise Price then in effect
shall be reduced (but in no event increased) to an amount equal to the product
of (A) the Exercise Price and (B) a fraction, (1) the numerator of which shall
be the sum of (x) the number of shares of Common Stock outstanding immediately
prior to such issuance or sale or deemed issuance or sale and (y) the number of
shares of Common Stock which the aggregate consideration received by the Company
for the total number of such shares of Common Stock so issued or sold or deemed
issued or sold would purchase at the greatest of (i) the Exercise Price, (ii)
$1.00 (as adjusted for any stock dividend, stock split, stock consolidation,
reclassification or similar transaction occurring after the Subscription Date)
or (iii) the arithmetic average of the Weighted Average Price of the Common
Stock for the five (5) consecutive Trading Days immediately preceding the
applicable Dilutive Issuance (the “Market Price”) and (2) the denominator of
which shall be the number of shares of Common Stock outstanding immediately
after such issuance or sale or deemed issuance or sale, provided that, for the
purposes of this Section 2(a), (x) immediately after such issuance or sale or
deemed issuance or sale, such shares of Common Stock shall be deemed to be
outstanding, and (y) treasury shares shall not be deemed to be outstanding.

Upon each such adjustment of the Exercise Price hereunder, the number of Warrant
Shares issuable immediately prior to the applicable Dilutive Issuance shall be
adjusted to the number of shares of Common Stock determined by multiplying the
Exercise Price then in effect immediately prior to such adjustment by the number
of Warrant Shares issuable upon exercise of this Warrant immediately prior to
such adjustment and dividing the product thereof by the Exercise Price resulting
from such adjustment. For purposes of determining the adjusted Exercise Price
under this Section 2(a), the following shall be applicable:

(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, exercise or
exchange of any Convertible Securities issuable upon exercise of any 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 2(a)(i), the “lowest price per share for which one
share of Common Stock is issuable upon the exercise of any such Options or upon
conversion, exercise or exchange of any Convertible Securities issuable upon
exercise of any 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 the granting or sale of the Option, upon exercise
of the Option and upon conversion, exercise or exchange of any Convertible
Security issuable upon exercise of such Option less any consideration paid or
payable by the Company with respect to such one share of Common Stock upon the
granting or sale of such Option, upon exercise of such Option and upon
conversion exercise or exchange of any Convertible Security issuable upon
exercise of such Option. No further adjustment of the Exercise Price or number
of Warrant Shares shall be made upon the actual issuance of such shares of
Common Stock or of such Convertible Securities upon the exercise of such Options
or upon the actual issuance of such shares of Common Stock upon conversion,
exercise or exchange of such Convertible Securities.

(ii) Issuance of Convertible Securities. If the Company in any manner issues or
sells any Convertible Securities other than an issuance or sale covered in
clause (i) above and the lowest price per share for which one share of Common
Stock is issuable upon the conversion, exercise or exchange 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 2(a)(ii), the “lowest price per share for which one
share of Common Stock is issuable upon the conversion, exercise or exchange
thereof” 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
conversion, exercise or exchange of such Convertible Security less any
consideration paid or payable by the Company with respect to such one share of
Common Stock upon the issuance or sale of such Convertible Security and upon
conversion, exercise or exchange of such Convertible Security. No further
adjustment of the Exercise Price or number of Warrant Shares shall be made upon
the actual issuance of such shares of Common Stock upon conversion, exercise or
exchange 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 this Warrant has been or is to be made pursuant to other provisions of this
Section 2(a), no further adjustment of the Exercise Price or number of Warrant
Shares 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, exercise or exchange of any Convertible Securities, or
the rate at which any Convertible Securities are convertible into or exercisable
or exchangeable for shares of Common Stock increases or decreases at any time,
the Exercise Price and the number of Warrant Shares in effect at the time of
such increase or decrease shall be adjusted to the Exercise Price and the number
of Warrant Shares, which would have been in effect at such time had such Options
or Convertible Securities provided for such increased or decreased purchase
price, additional consideration or increased or decreased conversion rate, as
the case may be, at the time initially granted, issued or sold. For purposes of
this Section 2(a)(iii), if the price of any Option or Convertible Security that
was outstanding as of the Subscription Date are increased or decreased in the
manner described in the immediately preceding sentence (other than as a result
of stock splits, reverse stock splits, stock dividends , then such Option or
Convertible Security and the shares of Common Stock deemed issuable upon
exercise, conversion or exchange thereof shall be deemed to have been issued as
of the date of such increase or decrease. No adjustment pursuant to this Section
2(a) shall be made if such adjustment would result in an increase of the
Exercise Price then in effect or a decrease in the number of Warrant Shares.

(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, (x) the Options will be deemed to have
been issued for the Option Value of such Options and (y) the other securities
issued or sold in such integrated transaction shall be deemed to have been
issued or sold for the difference of (I) the aggregate consideration received by
the Company (before discounts, commissions and offering expenses) less any
consideration paid or payable by the Company pursuant to the terms of such other
securities of the Company, less (II) the Option Value. If any shares of Common
Stock, Options or Convertible Securities are issued or sold or deemed to have
been issued or sold for cash, the consideration other than cash received
therefor will be deemed to be the net amount received by the Company therefor
(before discounts, commissions and offering expenses). If any shares of Common
Stock, Options or Convertible Securities are issued or sold for a consideration
other than cash, the amount of such consideration received by the Company will
be the fair value of such consideration (as determined in good faith by the
Board of Directors of the Company), except where such consideration consists of
publicly traded securities, in which case the amount of consideration received
by the Company will be the Closing Sale Price of such publicly traded securities
on the date of receipt by the Company. If any shares of 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 shares of Common Stock, Options or Convertible Securities,
as the case may be. The fair value of any consideration other than cash or
publicly traded securities will be determined in good faith 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 final and
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 shares of
Common Stock for the purpose of entitling them (A) to receive a dividend or
other distribution payable in shares of Common Stock, Options or in Convertible
Securities or (B) to subscribe for or purchase shares of Common Stock, Options
or Convertible Securities, then such record date will be deemed to be the date
of the issue or sale of the shares of 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, provided such dividends or distributions are
actually paid or such grant is actually made.

(vi) Readjustments. In the event the Exercise Price has been adjusted pursuant
to this Section 2(a) and the Dilutive Issuance that triggered such adjustment
does not occur, is not consummated, is unwound or is cancelled after the facts
for any reason whatsoever, the Exercise Price shall be readjusted to the
Exercise Price that would have been in effect if such Dilutive Issuance had not
occurred or been consummated.

(b) Adjustment Upon Subdivision or Combination of Shares of Common Stock. If the
Company at any time on or after the Subscription Date subdivides (by any stock
split, stock dividend, recapitalization or otherwise) one or more classes of its
outstanding shares of Common Stock into a greater number of shares, the Exercise
Price in effect immediately prior to such subdivision will be proportionately
reduced and the number of Warrant Shares will be proportionately increased. If
the Company at any time on or after the Subscription Date combines (by
combination, reclassification, recapitalization, reverse stock split or
otherwise) one or more classes of its outstanding shares of Common Stock into a
smaller number of shares, the Exercise Price in effect immediately prior to such
combination or other event will be proportionately increased and the number of
Warrant Shares will be proportionately decreased. Any adjustment under this
Section 2(b) shall become effective at the close of business on the date the
subdivision or combination becomes effective.

(c) Other Events. If any event occurs of the type contemplated by the provisions
of this Section 2 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), then the Company’s Board of
Directors will make an appropriate adjustment in the Exercise Price and the
number of Warrant Shares, as mutually determined by the Company’s Board of
Directors and the Required Holders, so as to protect the rights of the Holder;
provided that no such adjustment pursuant to this Section 2(c) will increase the
Exercise Price or decrease the number of Warrant Shares as otherwise determined
pursuant to this Section 2.

(d) Voluntary Adjustment By Company. The Company may at any time during the term
of this Warrant, with the prior written consent of the Required Holders, reduce
the then current Exercise Price to any amount and for any period of time deemed
appropriate by the Board of Directors of the Company.

(e) Adjustment for Payment of Additional Fee. If at any time the Company pays in
cash any portion of the Additional Fee to the Holder (or its Affiliate) pursuant
to the Fee Letter (as defined in the Financing Agreement), then the number of
Warrant Shares shall automatically as of the date of such payment be reduced
(but not below zero) by a number of shares equal to the quotient determined by
dividing the (i) amount of the Additional Fee paid by the Company in cash, by
(ii) the initial Exercise Price.

3. RIGHTS UPON DISTRIBUTION OF ASSETS. If the Company shall declare or make any
dividend or other distribution of its assets (or rights to acquire its assets)
to holders of shares of Common Stock, by way of return of capital or otherwise
(including, without limitation, any distribution of cash, stock or other
securities, property, options, evidence of indebtedness or any other assets by
way of a dividend, spin off, reclassification, corporate rearrangement, scheme
of arrangement or other similar transaction) (a “Distribution”), at any time
after the issuance of this Warrant, then, in each such case, the Holder shall be
entitled to participate in such Distribution to the same extent that the Holder
would have participated therein if the Holder had held the number of shares of
Common Stock acquirable upon complete exercise of this Warrant (without regard
to any limitations or restrictions on exercise of this Warrant, including
without limitation, the Maximum Percentage) immediately before the date of which
a record is taken for such Distribution, or, if no such record is taken, the
date as of which the record holders of shares of Common Stock are to be
determined for the participation in such Distribution (provided, however, that
to the extent that the Holder’s right to participate in any such Distribution
would result in the Holder and the other Attribution Parties exceeding the
Maximum Percentage, then the Holder shall not be entitled to participate in such
Distribution to such extent (and shall not be entitled to beneficial ownership
of such shares of Common Stock as a result of such Distribution (and beneficial
ownership) to such extent) and the portion of such Distribution shall be held in
abeyance for the benefit of the Holder until such time or times as its right
thereto would not result in the Holder and the other Attribution Parties
exceeding the Maximum Percentage, at which time or times the Holder shall be
granted such Distribution (and any Distributions declared or made on such
initial Distribution or on any subsequent Distribution held similarly in
abeyance) to the same extent as if there had been no such limitation).

4. PURCHASE RIGHTS; FUNDAMENTAL TRANSACTIONS.

(a) Purchase Rights. In addition to any adjustments pursuant to Section 2 above,
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 exercise of this Warrant (without regard to any
limitations or restrictions on exercise of this Warrant, including without
limitation, the Maximum Percentage) 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 shares of
Common Stock are to be determined for the grant, issue or sale of such Purchase
Rights (provided, however, that to the extent that the Holder’s right to
participate in any such Purchase Right would result in the Holder and the other
Attribution Parties exceeding the Maximum Percentage, then the Holder shall not
be entitled to participate in such Purchase Right to such extent (and shall not
be entitled to beneficial ownership of such shares of Common Stock as a result
of such Purchase Right (and beneficial ownership) to such extent) and such
Purchase Right to such extent shall be held in abeyance for the benefit of the
Holder until the earlier of (i) the expiration of such Purchase Rights and
(ii) such time or times as its right thereto would not result in the Holder and
the other Attribution Parties exceeding the Maximum Percentage, at which time or
times the Holder shall be granted such right (and any Purchase Right granted,
issued or sold on such initial Purchase Right or on any subsequent Purchase
Right held similarly in abeyance) to the same extent as if there had been no
such limitation).

(b) Fundamental Transactions. The Company shall not enter into or be party to a
Fundamental Transaction unless the Successor Entity assumes in writing all of
the obligations of the Company under this Warrant and, in the event of a
Fundamental Transaction is one in which the Successor Entity is a publicly
traded corporation whose stock is quoted or listed on an Eligible Market such
that the Warrant shall be exercisable for the publicly traded stock of such
Successor Entity, the other Transaction Documents in accordance with the
provisions of this Section 4(b) pursuant to written agreements in form and
substance reasonably satisfactory to the Required Holders and agrees to issue to
each holder of the Warrants in exchange for such Warrants a security of the
Successor Entity evidenced by a written instrument substantially similar in form
and substance to this Warrant, including, without limitation, an adjusted
exercise price equal to the value for the shares of Common Stock reflected by
the terms of such Fundamental Transaction, and exercisable for a corresponding
number of shares of capital stock equivalent to the shares of Common Stock
acquirable and receivable upon exercise of this Warrant (without regard to any
limitations on the exercise of this Warrant) prior to such Fundamental
Transaction, and with an exercise price which applies the exercise price
hereunder to such shares of capital stock (but taking into account the relative
value of the shares of Common Stock pursuant to such Fundamental Transaction and
the value of such shares of capital stock, such adjustments to the number of
shares of capital stock and such exercise price being for the purpose of
protecting the economic value of this Warrant immediately prior to the
occurrence or consummation of such Fundamental Transaction). Any security
issuable or potentially issuable to the Holder pursuant to the terms of this
Warrant on the consummation of a Fundamental Transaction shall be registered and
freely tradable by the Holder without any restriction or limitation or the
requirement to be subject to any holding period pursuant to any applicable
securities laws if any securities issued to any other equity holder of the
Company are registered on Form S-4 or any successor form. In addition to and not
in substitution for any other rights hereunder, prior to the occurrence or
consummation of any Fundamental Transaction pursuant to which holders of shares
of Common Stock are entitled to receive securities, cash, assets or other
property with respect to or in exchange for shares of Common Stock (a “Corporate
Event”), the Company shall make appropriate provision to insure that, and any
applicable Successor Entity or Successor Entities shall ensure that, and it
shall be a required condition to the occurrence or consummation of such
Corporate Event that, the Holder will thereafter have the right to receive upon
exercise of this Warrant at any time after the occurrence or consummation of the
Corporate Event, shares of Common Stock or Successor Capital Stock or, if so
elected by the Holder, in lieu of the shares of Common Stock (or other
securities, cash, assets or other property) purchasable upon the exercise of
this Warrant prior to such Corporate Event (but not in lieu of such items still
issuable under Sections 3 and 4(a), which shall continue to be receivable on the
Common Stock or on the such shares of stock, securities, cash, assets or any
other property otherwise receivable with respect to or in exchange for shares of
Common Stock), such shares of stock, securities, cash, assets or any other
property whatsoever (including warrants or other purchase or subscription rights
and any shares of Common Stock) which the Holder would have been entitled to
receive upon the occurrence or consummation of such Corporate Event or the
record, eligibility or other determination date for the event resulting in such
Corporate Event, had this Warrant been exercised immediately prior to such
Corporate Event or the record, eligibility or other determination date for the
event resulting in such Corporate Event (without regard to any limitations on
exercise of this Warrant). Provision made pursuant to the preceding sentence
shall be in a form and substance reasonably satisfactory to the Holder. The
provisions of this Section 4(b) shall apply similarly and equally to successive
Fundamental Transactions and Corporate Events.

(c) Notwithstanding the foregoing, in the event of Fundamental Transaction,
other than one in which the Successor Entity is a publicly traded corporation
whose stock is quoted or listed on an Eligible Market assumes this Warrant such
that the Warrant shall be exercisable for the publicly traded stock of such
Successor Entity, at the request of the Holder delivered before the ninetieth
(90th) day after the occurrence or consummation of such Fundamental Transaction,
the Company (or the Successor Entity) shall purchase this Warrant from the
Holder by paying to the Holder, within five (5) Business Days after such request
(or, if later, on the effective date of the Fundamental Transaction), cash in an
amount equal to the Black Scholes Value of the remaining unexercised portion of
this Warrant on the date of such Fundamental Transaction.

5. NONCIRCUMVENTION. The Company hereby covenants and agrees that the Company
will not, by amendment of its Certificate of Incorporation or 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 Warrant, and will at all times in good faith carry out all of the
provisions of this Warrant. Without limiting the generality of the foregoing,
the Company (i) shall not increase the par value of any shares of Common Stock
receivable upon the exercise of this Warrant above the Exercise Price then in
effect, (ii) shall use its reasonable best efforts to assure that the Company
may validly and legally issue fully paid and nonassessable shares of Common
Stock upon the exercise of this Warrant, and (iii) shall, comply with the
requirements of Section 1(g).

6. WARRANT HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically
provided herein, the Holder, solely in such Person’s capacity as a holder of
this Warrant, shall not be entitled to vote or receive dividends or be deemed
the holder of share capital of the Company for any purpose, nor shall anything
contained in this Warrant be construed to confer upon the Holder, solely in such
Person’s capacity as the Holder of this Warrant, any of the rights of a
stockholder of the Company or any right to vote, give or withhold consent to any
corporate action (whether any reorganization, issue of stock, reclassification
of stock, consolidation, merger, conveyance or otherwise), receive notice of
meetings, receive dividends or subscription rights, or otherwise, prior to the
issuance to the Holder of the Warrant Shares which such Person is then entitled
to receive upon the due exercise of this Warrant. In addition, nothing contained
in this Warrant shall be construed as imposing any liabilities on the Holder to
purchase any securities (upon exercise of this Warrant or otherwise) or as a
stockholder of the Company, whether such liabilities are asserted by the Company
or by creditors of the Company. Notwithstanding this Section 6, to the extent
not available on the SEC’s EDGAR System contemporaneously with the information
give to the Company or stockholder, the Company shall provide the Holder with
copies of the same notices and other information given to the stockholders of
the Company generally, contemporaneously with the giving thereof to the
stockholders.

7. REISSUANCE OF WARRANTS.

(a) Transfer of Warrant. If this Warrant is to be transferred, the Holder shall
give written notice to the Company and surrender this Warrant and the payment of
any required transfer taxes to the Company, whereupon the Company will forthwith
issue and deliver upon the order of the Holder a new Warrant (in accordance with
Section 7(d)), registered as the Holder may request, representing the right to
purchase the number of Warrant Shares being transferred by the Holder and, if
less than the total number of Warrant Shares then underlying this Warrant is
being transferred, a new Warrant (in accordance with Section 7(d)) to the Holder
representing the right to purchase the number of Warrant Shares not being
transferred.

(b) Lost, Stolen or Mutilated Warrant. Upon receipt by the Company of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of this Warrant, 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 Warrant,
the Company shall execute and deliver to the Holder a new Warrant (in accordance
with Section 7(d)) representing the right to purchase the Warrant Shares then
issuable pursuant to this Warrant.

(c) Exchangeable for Multiple Warrants. This Warrant is exchangeable, upon the
surrender hereof by the Holder at the principal office of the Company, for a new
Warrant or Warrants (in accordance with Section 7(d)) representing in the
aggregate the right to purchase the number of Warrant Shares then issuable
pursuant to this Warrant, and each such new Warrant will represent the right to
purchase such portion of such Warrant Shares as is designated by the Holder at
the time of such surrender; provided, however, that no Warrants for fractional
Warrant Shares shall be given.

(d) Issuance of New Warrants. Whenever the Company is required to issue a new
Warrant pursuant to the terms of this Warrant, such new Warrant (i) shall be of
like tenor with this Warrant, (ii) shall represent, as indicated on the face of
such new Warrant, the right to purchase the Warrant Shares then issuable
pursuant to this Warrant (or in the case of a new Warrant being issued pursuant
to Section 7(a) or Section 7(c), the Warrant Shares designated by the Holder
which, when added to the number of shares of Common Stock issuable pursuant to
the other new Warrants issued in connection with such issuance, does not exceed
the number of Warrant Shares then underlying this Warrant), (iii) shall have an
issuance date, as indicated on the face of such new Warrant which is the same as
the Issuance Date, and (iv) shall have the same rights and conditions as this
Warrant.

8. NOTICES. Whenever notice is required to be given under this Warrant, unless
otherwise provided herein, such notice shall be given in accordance with
Section 6.3 of the Subscription Agreement. Without limiting the generality of
the foregoing, the Company will give written notice to the Holder
(i) immediately upon any adjustment of the Exercise 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 shares of Common Stock, (B) with respect to any grants, 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.

9. AMENDMENT AND WAIVER. Except as otherwise provided herein, the provisions of
this Warrant may be amended or waived and the Company may take any action herein
prohibited, or omit to perform any act herein required to be performed by it,
only if the Company has obtained the written consent of the Required Holders.

10. GOVERNING LAW; JURISDICTION; JURY TRIAL. This Warrant shall be governed by
and construed and enforced in accordance with, and all questions concerning the
construction, validity, interpretation and performance of this Warrant 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, by its acceptance of this Warrant, 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. Each of the Company and, by its acceptance of this Warrant, 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
the Company or the Holder at the address set forth in Section 6.3 of the
Subscription Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. 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, BY ITS ACCEPTANCE OF THIS WARRANT, THE HOLDER
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 WARRANT OR ANY TRANSACTION CONTEMPLATED HEREBY.

11. CONSTRUCTION; HEADINGS. This Warrant shall be deemed to be jointly drafted
by the Company and all the Subscribers and shall not be construed against any
Person as the drafter hereof. The headings of this Warrant are for convenience
of reference and shall not form part of, or affect the interpretation of, this
Warrant.

12. DISPUTE RESOLUTION. In the case of a dispute as to the determination of the
Exercise Price or the arithmetic calculation of the Warrant Shares, the Company
shall submit the disputed determinations or arithmetic calculations via
facsimile within two (2) Business Days of receipt of the Exercise Notice 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 of the
Exercise Price or the Warrant Shares within three (3) Business Days 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 Exercise Price to an independent,
reputable investment bank selected by the Company and approved by the Holder or
(b) the disputed arithmetic calculation of the Warrant Shares to the Company’s
independent, outside accountant. The Company shall cause at its expense 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 ten (10) 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.

13. REMEDIES, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. To the extent
permitted by applicable law. the remedies provided in this Warrant shall be
cumulative and in addition to all other remedies available under this Warrant
and the other Transaction Documents, at law or in equity (including a decree of
specific performance and/or other injunctive relief), and nothing herein, except
as otherwise explicitly provided, shall limit the right of the Holder to pursue
actual damages for any failure by the Company to comply with the terms of this
Warrant. 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 of this Warrant shall
be entitled, in addition to all other available remedies, to seek an injunction
restraining any breach, without the necessity of showing economic loss and
without any bond or other security being required.

14. TRANSFER. This Warrant and the Warrant Shares may be offered for sale, sold,
transferred, pledged or assigned without the consent of the Company subject to
compliance with applicable securities laws.

15. SEVERABILITY. If any provision of this Warrant 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
Warrant so long as this Warrant 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).

16. DISCLOSURE. Upon receipt or delivery by the Company of any notice in
accordance with the terms of this Warrant, 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 (as defined in
the Subscription Agreement), the Company shall indicate to such Holder
contemporaneously with delivery of such notice whether such notice constitutes
material nonpublic information relating to the Company or its Subsidiaries, 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.

17. CERTAIN DEFINITIONS. For purposes of this Warrant, the following terms shall
have the following meanings:

(a) "1933 Act” means the Securities Act of 1933, as amended.

(b) "Affiliate” means, with respect to any Person, any other Person that
directly or indirectly controls, is controlled by, or is under common control
with, such Person, it being understood for purposes of this definition that
“control” of a Person means the power directly or indirectly either to vote 10%
or more of the stock having ordinary voting power for the election of directors
of such Person or direct or cause the direction of the management and policies
of such Person whether by contract or otherwise.

(c) "Attribution Parties” means, collectively, the following Persons and
entities: (i) any investment vehicle, including any funds, feeder funds or
managed accounts, currently, or from time to time after the Issuance Date,
directly or indirectly managed or advised by the Holder’s investment manager or
any of its Affiliates or principals, (ii) any direct or indirect Affiliates of
the Holder or any of the foregoing, (iii) any Person acting or who could be
deemed to be acting as a Group together with the Holder or any of the foregoing
and (iv) any other Persons whose beneficial ownership of the Company’s Common
Stock would or could be aggregated with the Holder’s and the other Attribution
Parties for purposes of Section 13(d) of the 1934 Act. For clarity, the purpose
of the foregoing is to subject collectively the Holder and all other Attribution
Parties to the Maximum Percentage.

(d) "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 employee, officer, director or
consultant for services provided to the Company; provided that issuances to
consultants shall be in an immaterial amount in the aggregate.

(e) "Black Scholes Value” means the value of this Warrant based on the
Black-Scholes Option Pricing Model obtained from the “OV” function on Bloomberg
determined as of the day immediately following the public announcement of the
applicable Fundamental Transaction, or, if the Fundamental Transaction is not
publicly announced, the date the Fundamental Transaction is consummated, for
pricing purposes and reflecting (i) a risk-free interest rate corresponding to
the U.S. Treasury rate for a period equal to the remaining term of this Warrant
as of such date of request, (ii) an expected volatility equal to the greater of
100% and the 100 day volatility obtained from the HVT function on Bloomberg as
of the day immediately following the public announcement of the applicable
Fundamental Transaction, or, if the Fundamental Transaction is not publicly
announced, the date the Fundamental Transaction is consummated, (iii) the
underlying price per share used in such calculation shall be the sum of the
price per share being offered in cash, if any, plus the value of any non-cash
consideration, if any, being offered in the Fundamental Transaction, (iv) a zero
cost of borrow and (v) a 360 day annualization factor.

(f) "Bloomberg” means Bloomberg Financial Markets.

(g) "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.

(h) "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 the 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 OTC Link or “pink sheets” by OTC Markets
Group Inc. (formerly Pink OTC Markets 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 12. All such determinations to be
appropriately adjusted for any stock dividend, stock split, stock combination,
reclassification or other similar transaction during the applicable calculation
period.

(i) "Common Stock” means (i) the Company’s shares of Common Stock, par value
$0.001 per share, and (ii) any share capital into which such Common Stock shall
have been changed or any share capital resulting from a reclassification of such
Common Stock.

(j) "Convertible Securities” means any stock or securities (other than Options)
directly or indirectly convertible into or exercisable or exchangeable for
shares of Common Stock.

(k) "Eligible Market” means the Principal Market, The New York Stock Exchange,
The NASDAQ Global Market, The NASDAQ Global Select Market or The NASDAQ Capital
Market.

(l) "Excluded Securities” means any Common Stock issued or issuable: (i) in
connection with any Approved Stock Plan, (ii) upon exercise of the Warrants,
(iii) in connection with the shares of Common Stock issued to the holders of the
Existing Convertible Notes (as defined in the Financing Agreement) on the
Subscription Date and (iv) upon exercise of any Options or Convertible
Securities which are outstanding as of the Subscription Date, including the
Convertible Notes issued to the Existing Convertible Holders on the Subscription
Date but excluding any Common Stock issuable in connection with an “Alternate
Conversion” under the Convertible Notes issued to the Existing Convertible
Noteholders; provided, that the terms of such Options or Convertible Securities
are not amended, modified or changed on or after the Subscription Date to
decrease the exercise, exchange or conversion price therefor or the number of
shares of Common Stock issuable upon exercise, conversion or exchange thereof or
to extend their respective terms.

(m) "Expiration Date” means the 10-year anniversary of the Issuance Date or, if
such date falls on a day other than a Business Day or on which trading does not
take place on the Principal Market (a “Holiday”), the next day that is not a
Holiday.

(n) "Fundamental Transaction” means (A) that the Company shall, directly or
indirectly, including through subsidiaries, Affiliates or otherwise, in one or
more related transactions, (i) consolidate or merge with or into (whether or not
the Company is the surviving corporation) another Subject Entity, or (ii) sell,
assign, transfer, convey or otherwise dispose of all or substantially all of the
properties or assets of the Company or any of its “significant subsidiaries” (as
defined in Rule 1-02 of Regulation S-X) to one or more Subject Entities, or
(iii) make, or allow one or more Subject Entities to make, or allow the Company
to be subject to or have its Common Stock be subject to or party to one or more
Subject Entities making, a purchase, tender or exchange offer that is accepted
by the holders of at least either (x) 50% of the outstanding shares of Common
Stock, (y) 50% of the outstanding shares of Common Stock calculated as if any
shares of Common Stock held by all Subject Entities making or party to, or
Affiliated with any Subject Entities making or party to, such purchase, tender
or exchange offer were not outstanding; or (z) such number of shares of Common
Stock such that all Subject Entities making or party to, or Affiliated with any
Subject Entity making or party to, such purchase, tender or exchange offer,
become collectively the beneficial owners (as defined in Rule 13d-3 under the
1934 Act) of at least 50% of the outstanding shares of Common Stock, or
(iv) consummate a stock purchase agreement or other business combination
(including, without limitation, a reorganization, recapitalization, spin-off or
scheme of arrangement) with one or more Subject Entities whereby all such
Subject Entities, individually or in the aggregate, acquire, either (x) at least
50% of the outstanding shares of Common Stock, (y) at least 50% of the
outstanding shares of Common Stock calculated as if any shares of Common Stock
held by all the Subject Entities making or party to, or Affiliated with any
Subject Entity making or party to, such stock purchase agreement or other
business combination were not outstanding; or (z) such number of shares of
Common Stock such that the Subject Entities become collectively the beneficial
owners (as defined in Rule 13d-3 under the 1934 Act) of at least 50% of the
outstanding shares of Common Stock, or (v) reorganize, recapitalize or
reclassify its Common Stock, (B) that the Company shall, directly or indirectly,
including through subsidiaries, Affiliates or otherwise, in one or more related
transactions, allow any Subject Entity individually or the Subject Entities in
the aggregate to be or become the “beneficial owner” (as defined in Rule 13d-3
under the 1934 Act), directly or indirectly, whether through acquisition,
purchase, assignment, conveyance, tender, tender offer, exchange, reduction in
outstanding shares of Common Stock, merger, consolidation, business combination,
reorganization, recapitalization, spin-off, scheme of arrangement,
reorganization, recapitalization or reclassification or otherwise in any manner
whatsoever, of either (x) at least 50% of the aggregate ordinary voting power
represented by issued and outstanding Common Stock, (y) at least 50% of the
aggregate ordinary voting power represented by issued and outstanding Common
Stock not held by all such Subject Entities as of the date of this Warrant
calculated as if any shares of Common Stock held by all such Subject Entities
were not outstanding, or (z) a percentage of the aggregate ordinary voting power
represented by issued and outstanding shares of Common Stock or other equity
securities of the Company sufficient to allow such Subject Entities to effect a
statutory short form merger or other transaction requiring other stockholders of
the Company to surrender their shares of Common Stock without approval of the
stockholders of the Company or (C) directly or indirectly, including through
subsidiaries, Affiliates or otherwise, in one or more related transactions, the
issuance of or the entering into any other instrument or transaction structured
in a manner to circumvent, or that circumvents, the intent of this definition in
which case this definition shall be construed and implemented in a manner
otherwise than in strict conformity with the terms of this definition to the
extent necessary to correct this definition or any portion of this definition
which may be defective or inconsistent with the intended treatment of such
instrument or transaction.

(o) "Group” means a “group” as that term is used in Section 13(d) of the 1934
Act and as defined in Rule 13d-5 thereunder.

(p) "Option Value” means the value of an Option based on the Black and Scholes
Option Pricing model obtained from the “OV” function on Bloomberg determined as
of (A) the Trading Day prior to the public announcement of the issuance of the
applicable Option, if the issuance of such Option is publicly announced or
(B) the Trading Day immediately following the issuance of the applicable Option
if the issuance of such Option is not publicly announced, for pricing purposes
and reflecting (i) a risk-free interest rate corresponding to the U.S. Treasury
rate for a period equal to the remaining term of the applicable Option as of the
applicable date of determination, (ii) an expected volatility equal to the
greater of 100% and the 100 day volatility obtained from the HVT function on
Bloomberg as of (A) the Trading Day immediately following the public
announcement of the applicable Option if the issuance of such Option is publicly
announced or (B) the Trading Day immediately following the issuance of the
applicable Option if the issuance of such Option is not publicly announced,
(iii) the underlying price per share used in such calculation shall be the
highest Weighted Average Price of the Common Stock during the period beginning
on the Trading Day prior to the execution of definitive documentation relating
to the issuance of the applicable Option and ending on (A) the Trading Day
immediately following the public announcement of such issuance, if the issuance
of such Option is publicly announced or (B) the Trading Day immediately
following the issuance of the applicable Option if the issuance of such Option
is not publicly announced, (iv) a zero cost of borrow and (v) a 360 day
annualization factor.

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

(r) "Parent Entity” of a Person means an entity that, directly or indirectly,
controls the applicable Person, including such entity whose common shares or
common stock or equivalent equity security is quoted or listed on an Eligible
Market (or, if so elected by the Required Holders, any other market, exchange or
quotation system), or, if there is more than one such Person or such entity, the
Person or such entity designated by the Required Holders or in the absence of
such designation, such Person or entity with the largest public market
capitalization as of the date of consummation of the Fundamental Transaction.

(s) "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.

(t) "Principal Market” means the NYSE MKT LLC.

(u) "Registration Rights Agreement” means that certain Registration Rights
Agreement dated as of the Subscription Date by and among the Company and the
Subscribers.

(v) "Required Holders” means the holders of the Warrants representing at least a
majority of the shares of Common Stock underlying the Warrants then outstanding.

(w) "Subject Entity” means any Person, Persons or Group or any Affiliate or
associate of any such Person, Persons or Group.

(x) "Successor Entity” means one or more Person or Persons (or, if so elected by
the Holder, the Company or Parent Entity) formed by, resulting from or surviving
any Fundamental Transaction or one or more Person or Persons (or, if so elected
by the Holder, the Company or the Parent Entity) with which such Fundamental
Transaction shall have been entered into.

(y) "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).

(z) "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” function 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 OTC
Link or “pink sheets” by OTC Markets Group Inc. (formerly Pink OTC Markets
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 12 with the term “Weighted Average Price” being substituted
for the term “Exercise Price.” All such determinations shall be appropriately
adjusted for any stock dividend, stock split, stock combination,
reclassification or other similar transaction during the applicable calculation
period.

[Signature Page Follows]

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

      METALICO, INC.

      By:      Carlos E. Aguero      
 

Name:
Title:
  Carlos E. Aguero
President

EXHIBIT A

EXERCISE NOTICE
TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS
WARRANT TO PURCHASE COMMON STOCK

METALICO, INC.

The undersigned holder hereby exercises the right to purchase        of the
shares of Common Stock (“Warrant Shares”) of Metalico, Inc., a Delaware
corporation (the “Company”), evidenced by the attached Warrant to Purchase
Common Stock (the “Warrant”). Capitalized terms used herein and not otherwise
defined shall have the respective meanings set forth in the Warrant.

1. Form of Exercise Price. The Holder intends that payment of the Exercise Price
shall be made as:

             
a “Cash Exercise” with respect to        Warrant Shares; and/or
   
 
       
a “Cashless Exercise” with respect to        Warrant Shares.
   
 

2. Payment of Exercise Price. In the event that the holder has elected a Cash
Exercise with respect to some or all of the Warrant Shares to be issued pursuant
hereto, the holder shall pay the Aggregate Exercise Price in the sum of $     
to the Company in accordance with the terms of the Warrant.

3. Delivery of Warrant Shares. The Company shall deliver to the holder       
Warrant Shares in accordance with the terms of the Warrant.

Date:              ,       

Name of Registered Holder

By:
Name:
Title:

1

ACKNOWLEDGMENT

The Company hereby acknowledges this Exercise Notice and hereby directs
Corporate Stock Transfer, Inc. to issue the above indicated number of shares of
Common Stock in accordance with the terms of the Warrant.

      METALICO, INC.

By:      
Name:
Title:

2