Document:

EX-10.2

Exhibit 10.2

REGISTRATION RIGHTS AGREEMENT

REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of April 23, 2008, by and among
Metalico, Inc., a Delaware corporation, with headquarters located at 186 North Avenue East,
Cranford, New Jersey 07016 (the “Company”), and the investors listed on the Schedule of Buyers
attached hereto (each, a “Buyer” and collectively, the “Buyers”).

WHEREAS:

A. In connection with the Securities Purchase Agreement by and among the parties hereto of
even date herewith (the “Securities Purchase Agreement”), the Company has agreed, upon the terms
and subject to the conditions of the Securities Purchase Agreement, to issue and sell to each Buyer
(i) senior unsecured convertible notes (the “Notes”) which will, among other things, be convertible
into shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”) (as
converted, collectively, the “Conversion Shares”), and (ii) warrants (the “Warrants”) which will be
exercisable into shares of the Company’s Common Stock (as exercised, collectively, the “Warrant
Shares”).

B. On the Closing Date, Carlos Aguero will enter into a Share Lending Agreement, pursuant to
which he will agree to lend 2.5 million shares of Common Stock held of record and/or beneficially
by him (the “Aguero Shares”) to the Investors for a certain fee, as specified in the Share Lending
Agreement.

C. In accordance with the terms of the Securities Purchase Agreement, the Company has agreed
to provide certain registration rights under the Securities Act of 1933, as amended, and the rules
and regulations thereunder, or any similar successor statute (collectively, the “1933 Act”), and
applicable state securities laws.

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and each of the Buyers hereby agree as follows:

1. Definitions.

Capitalized terms used herein and not otherwise defined herein shall have the respective
meanings set forth in the Securities Purchase Agreement. As used in this Agreement, the following
terms shall have the following meanings:

(a) “Additional Effective Date” means the date the Additional Registration Statement is
declared effective by the SEC.

(b) “Additional Effectiveness Deadline” means the date which is forty-five (45) calendar days
after the earlier of the Additional Filing Date and the Additional Filing Deadline.

(c) “Additional Filing Date” means the date on which the Additional Registration Statement is
filed with the SEC.

(d) “Additional Filing Deadline” means if Cutback Shares are required to be included in the
Additional Registration Statement, the later of (i) the date sixty (60) days after the date
substantially all of the Registrable Securities registered under the immediately preceding
Registration Statement are sold and (ii) the date six (6) months from the Initial Effective Date or
the last Additional Effective Date, as applicable.

(e) “Additional Registrable Securities” means, (i) any Cutback Shares not previously included
on a Registration Statement and (ii) any capital stock of the Company issued or issuable with
respect to the Notes, the Conversion Shares, the Warrants, the Warrant Shares or Cutback Shares, as
applicable, as a result of any stock split, stock dividend, recapitalization, exchange or similar
event or otherwise, without regard to any limitations on conversion of the Notes or exercise of the
Warrants, not previously included on a registration statement.

(f) “Additional Registration Statement” means a registration statement or registration
statements of the Company filed under the 1933 Act covering any Additional Registrable Securities.

(g) “Additional Required Registration Amount” means (I) any Cutback Shares not previously
included on a Registration Statement, all subject to adjustment as provided in Section 2(f),
without regard to any limitations on conversion of the Notes or the exercise of Warrants, or (II)
such other amount as may be required by the staff of the SEC pursuant to Rule 415.

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

(i) “Closing Date” shall have the meaning set forth in the Securities Purchase Agreement.

(j) “Cutback Shares” means any of the Initial Required Registration Amount or the Additional
Required Registration Amount (without regard to clause (II) in the definition thereof) of
Registrable Securities not included in all Registration Statements previously declared effective
hereunder as a result of a limitation on the maximum number of shares of Common Stock of the
Company permitted to be registered by the staff of the SEC pursuant to Rule 415 or otherwise
required by the SEC. The number of Cutback Shares shall be allocated first, pro rata among the
Investors with each Investor entitled to elect the portion of its Conversion Shares and/or Warrant
Shares that are to be considered Cutback Shares, and to the extent Cutback Shares remain to be
allocated, then to the Aguero Shares (it being understood that the Aguero Shares will be cut back
prior to the PIPE I Registrable Securities).

(k) “Effective Date” means the Initial Effective Date and the Additional Effective Date, as
applicable.

(l) “Effectiveness Deadline” means the Initial Effectiveness Deadline and the Additional
Effectiveness Deadline, as applicable.

(m) “Filing Deadline” means the Initial Filing Deadline and the Additional Filing Deadline, as
applicable.

(n) “Initial Effective Date” means the date that the Initial Registration Statement has been
declared effective by the SEC.

(o) “Initial Effectiveness Deadline” means the date which is forty-five (45) calendar days
after the Initial Filing Deadline (or seventy-five (75) calendar days if the SEC reviews the
Initial Registration Statement.)

(p) “Initial Filing Deadline” means the date which is forty five (45) calendar days after the
effective date of the PIPE I Registration Statement.

(q) “Initial Registrable Securities” means (i) the Aguero Shares, (ii) 130% of the maximum
number of the Conversion Shares and Warrant Shares, and (iii) any capital stock of the Company
issued or issuable, with respect to the Notes, the Conversion Shares, the Warrants or the Warrant
Shares as a result of any stock split, stock dividend, recapitalization, exchange or similar event
or otherwise, without regard to any limitations on conversion of the Notes or the exercise of the
Warrants. Notwithstanding any reference to 130% in this definition, in the definition of Initial
Required Registration Amount or elsewhere in this Agreement, if Stockholder Approval (as defined in
the Stock Purchase Agreement) has not yet been obtained, 115% shall be substituted for 130%.

(r) “Initial Registration Statement” means a registration statement or registration statements
of the Company filed under the 1933 Act covering the Initial Registrable Securities.

(s) “Initial Required Registration Amount” means (I) the sum of (i) the Aguero Shares, (ii)
130% of the maximum number of Conversion Shares issued and issuable pursuant to the Notes at the
then applicable Conversion Price as of the Trading Day (as defined in the Notes) immediately
preceding the applicable date of determination, subject to adjustment as provided in Section 2(f),
without regard to any limitations on conversion of the Notes, and (iii) 130% of the maximum number
of Warrant Shares issued and issuable pursuant to the Warrants as of the Trading Day (as defined in
the Warrants) immediately preceding the applicable date of determination, subject to adjustment as
provided in Section 2(f) without regard to any limitations on exercise of the Warrants, or (II)
such other or lesser amount as may be required by the staff of the SEC pursuant to Rule 415.

(t) “Investor” means a Buyer, any transferee or assignee thereof to whom a Buyer assigns its
rights under this Agreement and who agrees to become bound by the provisions of this Agreement in
accordance with Section 9 and any transferee or assignee thereof to whom a transferee or assignee
assigns its rights under this Agreement and who agrees to become bound by the provisions of this
Agreement in accordance with Section 9.

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

(v) "PIPE I Registrable Securities” means the shares of capital stock of the Company
registrable pursuant to the Pipe I Registration Rights Agreement.

(w) "PIPE I Registration Rights Agreement” means the Registration Rights Agreement dated March
27, 2008 among the Company, Hudson Bay Fund LP, Hudson Bay Overseas Fund Ltd. and certain other
investors.

(x) "PIPE I Registration Statement” means the registration statement required to be filed
pursuant to the PIPE I Registration Rights Agreement.

(y) “register,” “registered,” and “registration” refer to a registration effected by preparing
and filing one or more Registration Statements (as defined below) in compliance with the 1933 Act
and pursuant to Rule 415, and the declaration or ordering of effectiveness of such Registration
Statement(s) by the SEC.

(z) “Registrable Securities” means the Initial Registrable Securities and the Additional
Registrable Securities.

(aa) “Registration Statement” means the Initial Registration Statement and the Additional
Registration Statement, as applicable.

(bb) “Required Holders” means the holders of at least a majority of the Registrable
Securities.

(cc) “Required Registration Amount” means either the Initial Required Registration Amount or
the Additional Required Registration Amount, as applicable.

(dd) “Rule 415” means Rule 415 under the 1933 Act or any successor rule providing for offering
securities on a continuous or delayed basis.

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

(ff) “Trading Day” means any day on which the Common Stock is traded on the Principal Market,
or, if the Principal Market (as defined in the Securities Purchase Agreement) 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 p.m., New York Time).

2. Registration.

(a) Initial Mandatory Registration. The Company shall prepare, and, as soon as
practicable but in no event later than the Initial Filing Deadline, file with the SEC the Initial
Registration Statement on Form S-3 covering the resale of all of the Initial Registrable
Securities. In the event that Form S-3 is unavailable for such a registration, the Company shall
use Form S-1 or such other form as is available for such a registration on another appropriate form
reasonably acceptable to the Required Holders, subject to the provisions of Section 2(e). The
Initial Registration Statement prepared pursuant hereto shall register for resale at least the
number of shares of Common Stock equal to the Initial Required Registration Amount determined as of
the date the Initial Registration Statement is initially filed with the SEC, subject to adjustment
as provided in Section 2(f). The Initial Registration Statement shall contain (except if otherwise
directed by the Required Holders or the SEC) the “Selling Stockholders” and “Plan of
Distribution” sections in substantially the form attached hereto as Exhibit B. The
Company shall use its commercially reasonable efforts to have the Initial Registration Statement
declared effective by the SEC as soon as practicable, but in no event later than the Initial
Effectiveness Deadline. By 9:30 a.m. New York time on the Business Day following the Initial
Effective Date, the Company shall file with the SEC in accordance with Rule 424 under the 1933 Act
the final prospectus to be used in connection with sales pursuant to such Initial Registration
Statement.

(b) Additional Mandatory Registrations. The Company shall prepare, and, as soon as
practicable but in no event later than the Additional Filing Deadline, file with the SEC an
Additional Registration Statement on Form S-3 covering the resale of all of the Additional
Registrable Securities not previously registered on an Additional Registration Statement hereunder.
To the extent the staff of the SEC does not permit the Additional Required Registration Amount to
be registered on an Additional Registration Statement, the Company shall file Additional
Registration Statements successively trying to register on each such Additional Registration
Statement the maximum number of remaining Additional Registrable Securities permitted by the SEC
until the Additional Required Registration Amount has been registered with the SEC. In the event
that Form S-3 is unavailable for such a registration, the Company shall use Form S-1 or such other
form as is available for such a registration on another appropriate form reasonably acceptable to
the Required Holders, subject to the provisions of Section 2(e). Each Additional Registration
Statement prepared pursuant hereto shall register for resale at least that number of shares of
Common Stock equal to the Additional Required Registration Amount determined as of the date such
Additional Registration Statement is initially filed with the SEC. Each Additional Registration
Statement shall contain (except if otherwise directed by the Required Holders or the SEC) the
“Selling Stockholders” and “Plan of Distribution” sections in substantially the
form attached hereto as Exhibit B. The Company shall use its commercially reasonable
efforts to have each Additional Registration Statement declared effective by the SEC as soon as
practicable, but in no event later than the Additional Effectiveness Deadline. By 9:30 a.m. New
York time on the Business Day following the Additional Effective Date, the Company shall file with
the SEC in accordance with Rule 424 under the 1933 Act the final prospectus to be used in
connection with sales pursuant to such Additional Registration Statement.

(c) Joint Registration Statement: Allocation of Registrable Securities. (i) If the
Company obtains the written consent of the requisite percentage of holders of PIPE I Registrable
Securities, then it may file one registration statement including the PIPE I Registrable Securities
and the Initial Registrable Securities. If the Company cannot obtain such consent, then the
Investors understand that the PIPE I Registration Statement must be declared effective by the SEC
at least forty-five (45) days prior to the time of any filing of the Initial Registration
Statement.

(ii) If there is a joint registration statement as contemplated by paragraph (i) above, and if
there needs to be any cutback in the number of shares registered by reason of Rule 415 or otherwise
required by the SEC, the initial number of Registrable Securities included in any Registration
Statement and any increase or decrease in the number of Registrable Securities included therein
shall be allocated first to PIPE I Registrable Securities. At such time as all of the PIPE I
Registrable Securities have been included in a Registration Statement, then the number of
Registrable Securities included in any Registration Statement and any increase or decrease in the
number of Registrable Securities included therein shall be allocated to the Aguero Shares. At such
time as all of the Aguero Shares have been included in a Registration Statement, then the number of
Registrable Securities included in any Registration Statement and any increase or decrease in the
number of Registrable Securities included therein shall be allocated pro rata among the Investors
based on the number of Registrable Securities held by each Investor at the time the Registration
Statement covering such Registrable Securities or increase or decrease thereof is declared
effective by the SEC. In the event that an Investor sells or otherwise transfers any of such
Investor’s Registrable Securities in a transfer involving the transfer of all or a part of the
Investor’s rights hereunder, each transferee shall be allocated a pro rata portion of the then
remaining number of Registrable Securities included in such Registration Statement for such
transferor. Any shares of Common Stock included in a Registration Statement and which remain
allocated to any Person which ceases to hold any Registrable Securities covered by such
Registration Statement shall be allocated to the remaining Investors, pro rata based on the number
of Registrable Securities then held by such Investors which are covered by such Registration
Statement. In no event shall the Company include any securities other than PIPE I Registrable
Securities or Registrable Securities on any Registration Statement without the prior written
consent of the Required Holders. Notwithstanding anything contained herein to the contrary, the
Aguero Shares and the Registrable Securities shall not be included in a Registration Statement
until the PIPE I Registrable Securities have been included in a registration statement, and no
Registrable Securities shall be allocated to any of the Investors until such time as all of the
Aguero Shares have been included in a Registration Statement.

(iii) If there is no joint registration statement as contemplated by paragraph (i) and the
PIPE I Registrable Securities have already been included in a registration statement, then the
initial number of Registrable Securities included in any Registration Statement and any increase or
decrease in the number of Registrable Securities included therein shall be allocated first to the
Aguero Shares. At such time as all of the Aguero Shares have been included in a Registration
Statement, then the number of Registrable Securities included in any Registration Statement and any
increase or decrease in the number of Registrable Securities included therein shall be allocated
pro rata among the Investors based on the number of Registrable Securities held by each Investor at
the time the Registration Statement covering such Registrable Securities or increase or decrease
thereof is declared effective by the SEC. In the event that an Investor sells or otherwise
transfers any of such Investor’s Registrable Securities in a transfer involving the transfer of all
or a part of the Investor’s rights hereunder, each transferee shall be allocated a pro rata portion
of the then remaining number of Registrable Securities included in such Registration Statement for
such transferor. Any shares of Common Stock included in a Registration Statement and which remain
allocated to any Person which ceases to hold any Registrable Securities covered by such
Registration Statement shall be allocated to the remaining Investors, pro rata based on the number
of Registrable Securities then held by such Investors which are covered by such Registration
Statement. In no event shall the Company include any securities other than Registrable Securities
on any Registration Statement without the prior written consent of the Required Holders.
Notwithstanding anything contained herein to the contrary, no Registrable Securities shall be
allocated to any of the Investors until such time as all of the Aguero Shares have been included in
a Registration Statement.

(d) Legal Counsel. Subject to Section 5 hereof, the Required Holders shall have the
right to select one legal counsel to review and oversee any registration pursuant to this Section 2
(“Legal Counsel”), which shall be Olshan Grundman Frome Rosenzweig & Wolosky LLP or such other
counsel as thereafter designated by the Required Holders. The Company and Legal Counsel shall
reasonably cooperate with each other in performing the Company’s obligations under this Agreement.

(e) Ineligibility for Form S-3. In the event that Form S-3 is not available for the
registration of the resale of Registrable Securities hereunder, the Company shall (i) register the
resale of the Registrable Securities on Form S-1 or another appropriate form reasonably acceptable
to the Required Holders and (ii) undertake to register the Registrable Securities on Form S-3 as
soon as such form is available, provided that the Company shall maintain the effectiveness of the
Registration Statement then in effect until such time as a Registration Statement on Form S-3
covering the Registrable Securities has been declared effective by the SEC.

(f) Sufficient Number of Shares Registered. In the event the number of shares
available under a Registration Statement filed pursuant to Section 2(a), Section 2(b) or Section
2(c)(i) is insufficient to cover all of the Registrable Securities required to be covered by such
Registration Statement or Mr. Aguero’s or an Investor’s allocated portion of the Registrable
Securities pursuant to Section 2(c), the Company shall amend the applicable Registration Statement,
or file a new Registration Statement (on the short form available therefor, if applicable), or
both, so as to cover at least the Required Registration Amount as of the Trading Day immediately
preceding the date of the filing of such amendment or new Registration Statement, in each case, or
such lesser amount as the staff of the SEC may require pursuant to Rule 415, as soon as
practicable, but in any event not later than fifteen (15) days after the necessity therefor arises.
The Company shall use its best efforts to cause such amendment and/or new Registration Statement
to become effective as soon as practicable following the filing thereof. For purposes of the
foregoing provision, the number of shares available under a Registration Statement shall be deemed
“insufficient to cover all of the Registrable Securities” if at any time the number of shares of
Common Stock available for resale under the Registration Statement is less than the product
determined by multiplying (i) the Required Registration Amount as of such time by (ii) 0.90. The
calculation set forth in the foregoing sentence shall be made without regard to any limitations on
the conversion of the Notes or the exercise of the Warrants and such calculation shall assume that
the Notes are then convertible for shares of Common Stock at the then prevailing Conversion Price
(as defined in the Notes) and the Warrants are then exercisable for shares of Common Stock at the
then prevailing Exercise Price (as defined in the Warrants).

(g) Effect of Failure to Obtain Effectiveness of Registration Statement. A
Registration Statement covering the applicable Required Registration Amount shall be (A) filed with
the SEC on or before the respective Filing Deadline and (B) declared effective by the SEC on or
before thirty (30) calendar days after the respective Effectiveness Deadline, (a failure for a
Registration Statement to be declared effective by such date shall be an “Effectiveness Failure”).
Upon (i) an Effectiveness Failure or (ii) on any day after the respective Effective Date sales of
all of the Registrable Securities required to be included on such Registration Statement cannot be
made (other than during an Allowable Grace Period (as defined in Section 3(r)) pursuant to such
Registration Statement or because of the suspension of trading or any other limitation imposed by
an Eligible Market, a failure to keep such Registration Statement effective, a failure to disclose
such information as is necessary for sales to be made pursuant to such Registration Statement, a
failure to register a sufficient number of shares of Common Stock or a failure to maintain the
listing of the Common Stock) (a “Maintenance Failure”) then, as the sole monetary remedy for the
damages to any holder by reason of any such delay in or reduction of its ability to sell the
underlying shares of Common Stock (which remedy shall not be exclusive of any other remedies
available in equity, including, without limitation, specific performance), (A) the Company shall
pay to each holder of Registrable Securities, other than Mr. Aguero, relating to such Registration
Statement an amount in cash equal to one percent (1.0%) of the aggregate Purchase Price (as such
term is defined in the Securities Purchase Agreement) of such Investor’s Registrable Securities
included in such Registration Statement on each of the following dates: (i) the day of an
Effectiveness Failure; and (ii) the initial day of a Maintenance Failure; and (B) the Company shall
pay to each holder of Registrable Securities, other than Mr. Aguero, relating to such Registration
Statement an amount in cash equal to one percent (1.0%) of the aggregate Purchase Price of such
Investor’s Registrable Securities included in such Registration Statement on each of the following
dates: (i) on the thirtieth day after the date of an Effectiveness Failure and every thirtieth day
thereafter (pro rated for periods totaling less than thirty days) until such Effectiveness Failure
is cured; and (ii) on the thirtieth day after the date of a Maintenance Failure and every thirtieth
day thereafter (pro rated for periods totaling less than thirty days) until such Maintenance
Failure is cured provided, however, that (i) the Company shall not be liable for Registration Delay
Payments to any Investor or to Mr. Aguero under this Agreement with respect to any Cutback Shares
that the SEC requires the Company to exclude from a Registration Statement pursuant to Rule 415 or
otherwise required by the SEC and (ii) the Company shall not be liable for Registration Delay
Payments or liquidated damages to any Investor or to Mr. Aguero under this Agreement with respect
to any Registrable Securities (including shares underlying the Warrant if such shares may be
acquired pursuant to a cashless exercise) that may be sold without restriction or limitation
pursuant to Rule 144 and without the requirement to be in compliance with Rule 144(c)(1). The
payments to which a holder shall be entitled pursuant to this Section 2(g) are referred to herein
as “Registration Delay Payments.” Registration Delay Payments shall be paid on the earlier of (I)
the dates set forth above and (II) the third Business Day after the event or failure giving rise to
the Registration Delay Payments is cured. In the event the Company fails to make Registration Delay
Payments in a timely manner, such Registration Delay Payments shall bear interest at the rate of
one and one-half percent (1.5%) per month (prorated for partial months) until paid in full. In no
event shall the Company incur Registration Delay Payments if it is simultaneously incurring Public
Information Failure Payments (as defined in the Securities Purchase Agreement).

3. Related Obligations.

At such time as the Company is obligated to file a Registration Statement with the SEC
pursuant to Section 2(a), 2(b), 2(e) or 2(f), the Company will use its commercially reasonable
efforts to effect the registration of the Registrable Securities in accordance with the intended
method of disposition thereof and, pursuant thereto, the Company shall have the following
obligations:

(a) The Company shall promptly prepare and file with the SEC a Registration Statement with
respect to the Registrable Securities and use its commercially reasonable efforts to cause such
Registration Statement relating to the Registrable Securities to become effective as soon as
practicable after such filing (but in no event later than the Effectiveness Deadline). The Company
shall keep each Registration Statement effective pursuant to Rule 415 at all times until the
earlier of (i) the date as of which the Investors may sell all of the Registrable Securities
covered by such Registration Statement without restriction pursuant to Rule 144 and without the
requirement to be in compliance with Rule 144(c)(1) (or any successor thereto) promulgated under
the 1933 Act or (ii) the date on which the Investors shall have sold all of the Registrable
Securities covered by such Registration Statement (the “Registration Period”). The Company shall
ensure that each Registration Statement (including any amendments or supplements thereto and
prospectuses contained therein) shall not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein, or necessary to make the statements therein
(in the case of prospectuses, in the light of the circumstances in which they were made) not
misleading. The term “commercially reasonable efforts” shall mean, among other things, that the
Company shall submit to the SEC, within five (5) Business Days after the later of the date that (i)
the Company learns that no review of a particular Registration Statement will be made by the staff
of the SEC or that the staff has no further comments on a particular Registration Statement, as the
case may be, and (ii) the approval of Legal Counsel pursuant to Section 3(c) (which approval is
immediately sought), a request for acceleration of effectiveness of such Registration Statement to
a time and date not later than two (2) Business Days after the submission of such request.

(b) The Company shall prepare and file with the SEC such amendments (including post-effective
amendments) and supplements to a Registration Statement and the prospectus used in connection with
such Registration Statement, which prospectus is to be filed pursuant to Rule 424 promulgated under
the 1933 Act, as may be necessary to keep such Registration Statement effective at all times during
the Registration Period, and, during such period, comply with the provisions of the 1933 Act with
respect to the disposition of all Registrable Securities of the Company covered by such
Registration Statement until such time as all of such Registrable Securities shall have been
disposed of in accordance with the intended methods of disposition by the seller or sellers thereof
as set forth in such Registration Statement. In the case of amendments and supplements to a
Registration Statement which are required to be filed pursuant to this Agreement (including
pursuant to this Section 3(b)) by reason of the Company filing a report on Form 10-K, Form 10-KSB,
Form 10-Q, Form 10-QSB or Form 8-K or any analogous report under the Securities Exchange Act of
1934, as amended (the “1934 Act”), the Company shall have incorporated such report by reference
into such Registration Statement, if applicable, or shall file such amendments or supplements with
the SEC on the same day on which the 1934 Act report is filed which created the requirement for the
Company to amend or supplement such Registration Statement.

(c) The Company shall (A) permit Legal Counsel to review and comment upon (i) a Registration
Statement at least five (5) Business Days prior to its filing with the SEC and (ii) all amendments
and supplements to all Registration Statements (except for Annual Reports on Form 10-K or Form
10-KSB, Quarterly Reports on Form 10-Q or Form 10-QSB, Current Reports on Form 8-K and any similar
or successor reports) within a reasonable number of days prior to their filing with the SEC, and
(B) not file any Registration Statement or amendment or supplement thereto in a form to which Legal
Counsel reasonably objects. The Company shall not submit a request for acceleration of the
effectiveness of a Registration Statement or any amendment or supplement thereto without the prior
approval of Legal Counsel, which consent shall not be unreasonably withheld, delayed or
conditioned. The Company shall furnish to Legal Counsel, without charge, (i) copies of any
correspondence from the SEC or the staff of the SEC to the Company or its representatives relating
to any Registration Statement, (ii) promptly after the same is prepared and filed with the SEC, one
copy of any Registration Statement and any amendment(s) thereto, including financial statements and
schedules, all documents incorporated therein by reference, if requested by an Investor, and all
exhibits and (iii) upon the effectiveness of any Registration Statement, one copy of the prospectus
included in such Registration Statement and all amendments and supplements thereto. The Company
shall reasonably cooperate with Legal Counsel in performing the Company’s obligations pursuant to
this Section 3.

(d) The Company shall furnish to each Investor whose Registrable Securities are included in
any Registration Statement, without charge, (i) promptly after the same is prepared and filed with
the SEC, at least one copy of such Registration Statement and any amendment(s) thereto, including
financial statements and schedules, all documents incorporated therein by reference, if requested
by an Investor, all exhibits and each preliminary prospectus, (ii) upon the effectiveness of any
Registration Statement, one (1) copy of the prospectus included in such Registration Statement and
all amendments and supplements thereto (or such other number of copies as such Investor may
reasonably request) and (iii) such other documents, including copies of any preliminary or final
prospectus, as such Investor may reasonably request from time to time in order to facilitate the
disposition of the Registrable Securities owned by such Investor.

(e) The Company shall use its reasonable best efforts to (i) register and qualify, unless an
exemption from registration and qualification applies, the resale by Investors of the Registrable
Securities covered by a Registration Statement under such other securities or “blue sky” laws of
all applicable jurisdictions in the United States, (ii) prepare and file in those jurisdictions
such amendments (including post-effective amendments) and supplements to such registrations and
qualifications as may be necessary to maintain the effectiveness thereof during the Registration
Period, (iii) take such other actions as may be reasonably necessary to maintain such registrations
and qualifications in effect at all times during the Registration Period, and (iv) take all other
actions reasonably necessary or advisable to qualify the Registrable Securities for sale in such
jurisdictions; provided, however, that the Company shall not be required in connection therewith or
as a condition thereto to (x) qualify to do business in any jurisdiction where it would not
otherwise be required to qualify but for this Section 3(e), (y) subject itself to general taxation
in any such jurisdiction, or (z) file a general consent to service of process in any such
jurisdiction. The Company shall promptly notify Legal Counsel and each Investor who holds
Registrable Securities of the receipt by the Company of any notification with respect to the
suspension of the registration or qualification of any of the Registrable Securities for sale under
the securities or “blue sky” laws of any jurisdiction in the United States or its receipt of actual
notice of the initiation or threatening of any proceeding for such purpose.

(f) The Company shall notify Legal Counsel and each Investor in writing of the happening of
any event, as promptly as reasonably practicable after becoming aware of such event, as a result of
which the prospectus included in a Registration Statement, as then in effect, includes an untrue
statement of a material fact or omission to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances under which they were
made, not misleading (provided that in no event shall such notice contain any material, nonpublic
information), and, subject to Section 3(r), promptly prepare a supplement or amendment to such
Registration Statement to correct such untrue statement or omission, and deliver ten (10) copies of
such supplement or amendment to Legal Counsel and each Investor (or such other number of copies as
Legal Counsel or such Investor may reasonably request). The Company shall also promptly notify
Legal Counsel and each Investor in writing (i) when a prospectus or any prospectus supplement or
post-effective amendment has been filed, and when a Registration Statement or any post-effective
amendment has become effective (notification of such effectiveness shall be delivered to Legal
Counsel and each Investor by facsimile on the same day of such effectiveness and by overnight
mail), (ii) of any request by the SEC for amendments or supplements to a Registration Statement or
related prospectus or related information, and (iii) of the Company’s reasonable determination that
a post-effective amendment to a Registration Statement would be appropriate. By 9:30 a.m. New York
City time on the date following the date any post-effective amendment has become effective, the
Company shall file with the SEC in accordance with Rule 424 under the 1933 Act the final prospectus
to be used in connection with sales pursuant to such Registration Statement.

(g) The Company shall use its reasonable best efforts to prevent the issuance of any stop
order or other suspension of effectiveness of a Registration Statement, or the suspension of the
qualification of any of the Registrable Securities for sale in any jurisdiction and, if such an
order or suspension is issued, to obtain the withdrawal of such order or suspension at the earliest
possible moment and to notify Legal Counsel and each Investor who holds Registrable Securities
being sold of the issuance of such order and the resolution thereof or its receipt of actual notice
of the initiation or threat of any proceeding for such purpose.

(h) If any Investor is required under applicable securities laws to be described in the
Registration Statement as an underwriter of Registrable Securities, at the reasonable request of
such Investor, the Company shall furnish to such Investor, on the date of the effectiveness of the
Registration Statement and thereafter from time to time on such dates as an Investor may reasonably
request (i) a letter, dated such date, from the Company’s independent certified public accountants
in form and substance as is customarily given by independent certified public accountants to
underwriters in an underwritten public offering, addressed to the Investors, and (ii) an opinion,
dated as of such date, of counsel representing the Company for purposes of such Registration
Statement, in form, scope and substance as is customarily given in an underwritten public offering,
addressed to the Investors.

(i) If any Investor is required under applicable securities laws to be described in the
Registration Statement as an underwriter of Registrable Securities, the Company shall make
available for inspection by (i) such Investor, (ii) Legal Counsel and (iii) one firm of accountants
or other agents retained by the Investors (collectively, the “Inspectors”), all pertinent financial
and other records, and pertinent corporate documents and properties of the Company (collectively,
the “Records”), as shall be reasonably deemed necessary by each Inspector, and cause the Company’s
officers, directors and employees to supply all information which any Inspector may reasonably
request; provided, however, that each Inspector shall agree to hold in strict confidence and shall
not make any disclosure (except to an Investor) or use of any Record or other information which the
Company determines in good faith to be confidential, and of which determination the Inspectors are
so notified, unless (a) the disclosure of such Records is necessary to avoid or correct a
misstatement or omission in any Registration Statement or is otherwise required under the 1933 Act,
(b) the release of such Records is ordered pursuant to a final, non-appealable subpoena or order
from a court or government body of competent jurisdiction, or (c) the information in such Records
has been made generally available to the public other than by disclosure in violation of this
Agreement. Each Investor agrees that it shall, upon learning that disclosure of such Records is
sought in or by a court or governmental body of competent jurisdiction or through other means, give
prompt notice to the Company and allow the Company, at its expense, to undertake appropriate action
to prevent disclosure of, or to obtain a protective order for, the Records deemed confidential.
Nothing herein (or in any other confidentiality agreement between the Company and any Investor)
shall be deemed to limit the Investors’ ability to sell Registrable Securities in a manner which is
otherwise consistent with applicable laws and regulations.

(j) The Company shall hold in confidence and not make any disclosure of information concerning
an Investor provided to the Company unless (i) disclosure of such information is necessary to
comply with federal or state securities laws, (ii) the disclosure of such information is necessary
to avoid or correct a misstatement or omission in any Registration Statement, (iii) the release of
such information is ordered pursuant to a subpoena or other final, non-appealable order from a
court or governmental body of competent jurisdiction, or (iv) such information has been made
generally available to the public other than by disclosure in violation of this Agreement or any
other agreement. The Company agrees that it shall, upon learning that disclosure of such
information concerning an Investor is sought in or by a court or governmental body of competent
jurisdiction or through other means, give prompt written notice to such Investor and allow such
Investor, at the Investor’s expense, to undertake appropriate action to prevent disclosure of, or
to obtain a protective order for, such information.

(k) [Reserved]

(l) The Company shall reasonably cooperate with the Investors who hold Registrable Securities
being offered and, to the extent applicable, facilitate the timely preparation and delivery of
certificates (not bearing any restrictive legend) representing the Registrable Securities to be
offered pursuant to a Registration Statement and enable such certificates to be in such
denominations or amounts, as the case may be, as the Investors may reasonably request and
registered in such names as the Investors may request.

(m) If reasonably requested by an Investor, the Company shall as soon as reasonably
practicable (i) incorporate in a prospectus supplement or post-effective amendment such information
as an Investor reasonably requests to be included therein relating to the sale and distribution of
Registrable Securities, including, without limitation, information with respect to the number of
Registrable Securities being offered or sold, the purchase price being paid therefor and any other
terms of the offering of the Registrable Securities to be sold in such offering; (ii) make all
required filings of such prospectus supplement or post-effective amendment after being notified of
the matters to be incorporated in such prospectus supplement or post-effective amendment; and (iii)
supplement or make amendments to any Registration Statement if reasonably requested by an Investor
holding any Registrable Securities.

(n) The Company shall use its commercially reasonable efforts to cause the Registrable
Securities covered by a Registration Statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to consummate the disposition of such
Registrable Securities, other than approvals that are required solely because of actions of
Investors after the date hereof, that are not reasonably anticipated as of the date hereof.

(o) The Company shall make generally available to its security holders as soon as practical
but not later than ninety (90) days after the close of the period covered thereby, an earnings
statement (in form complying with, and in the manner provided by, the provisions of Rule 158 under
the 1933 Act) covering a twelve-month period beginning not later than the first day of the
Company’s fiscal quarter next following the applicable Effective Date of a Registration Statement.

(p) The Company shall otherwise use its commercially reasonable efforts to comply with all
applicable rules and regulations of the SEC in connection with any registration hereunder.

(q) Within two (2) Business Days after a Registration Statement which covers Registrable
Securities is ordered effective by the SEC, the Company shall deliver, and shall cause legal
counsel for the Company to deliver, to the transfer agent for such Registrable Securities (with
copies to the Investors whose Registrable Securities are included in such Registration Statement)
confirmation that such Registration Statement has been declared effective by the SEC in the form
attached hereto as Exhibit A.

(r) Notwithstanding anything to the contrary herein, at any time after the Effective Date, the
Company may delay the disclosure of material, non-public information concerning the Company the
disclosure of which at the time is not, in the good faith opinion of the Board of Directors of the
Company and its counsel, in the best interest of the Company and, in the opinion of counsel to the
Company, otherwise required (a “Grace Period”); provided, that the Company shall promptly (i)
notify the Investors in writing of the existence of material, non-public information giving rise to
a Grace Period (provided that in each notice the Company will not disclose the content of such
material, non-public information to the Investors) and the date on which the Grace Period will
begin, and (ii) notify the Investors in writing of the date on which the Grace Period ends; and,
provided further, that no Grace Period shall exceed ten (10) consecutive days and during any three
hundred sixty five (365) day period such Grace Periods shall not exceed an aggregate of thirty (30)
days and the first day of any Grace Period must be at least five (5) Trading Days after the last
day of any prior Grace Period (each, an “Allowable Grace Period”). For purposes of determining the
length of a Grace Period above, the Grace Period shall begin on and include the date the Investors
receive the notice referred to in clause (i) and shall end on and include the later of the date the
Investors receive the notice referred to in clause (ii) and the date referred to in such notice.
The provisions of Section 3(g) hereof shall not be applicable during the period of any Allowable
Grace Period. Upon expiration of the Grace Period, the Company shall again be bound by the first
sentence of Section 3(f) with respect to the information giving rise thereto unless such material,
non-public information is no longer applicable. Notwithstanding anything to the contrary, the
Company shall cause its transfer agent to deliver unlegended shares of Common Stock to a transferee
of an Investor in accordance with the terms of the Securities Purchase Agreement in connection with
any sale of Registrable Securities with respect to which an Investor has entered into a contract
for sale, prior to the Investor’s receipt of the notice of a Grace Period and for which the
Investor has not yet settled.

(s) Neither the Company nor any Subsidiary or affiliate thereof shall identify any Investor as
an underwriter in any public disclosure or filing with the SEC or any Principal Market (as defined
in the Securities Purchase Agreement) or Eligible Market and any Buyer being deemed an underwriter
by the SEC shall not relieve the Company of any obligations it has under this Agreement (other than
the obligation to pay liquidated damages pursuant to Section 2(g) in the event such Investor elects
not to be included in such Registration Statement and named as an underwriter) or any other
Transaction Document (as defined in the Securities Purchase Agreement); provided,
however, that the foregoing shall not prohibit the Company from including the disclosure
found in the “Plan of Distribution” section attached hereto as Exhibit B in the
Registration Statement.

4. Obligations of the Investors.

(a) At least five (5) Business Days prior to the first anticipated filing date of a
Registration Statement, each Investor shall provide the Company with a completed Selling
Stockholder Questionnaire in the form attached hereto as Exhibit C. It shall be a
condition precedent to the obligations of the Company to complete any registration pursuant to this
Agreement with respect to the Registrable Securities of a particular Investor that such Investor
shall furnish to the Company such information regarding itself, the Registrable Securities held by
it and the intended method of disposition of the Registrable Securities held by it as shall be
reasonably required to effect and maintain the effectiveness of the registration of such
Registrable Securities and shall execute such documents in connection with such registration as the
Company may reasonably request.

(b) Each Investor, by such Investor’s acceptance of the Registrable Securities, agrees to
cooperate with the Company as reasonably requested by the Company in connection with the
preparation and filing of any Registration Statement hereunder, unless such Investor has notified
the Company in writing of such Investor’s election to exclude all of such Investor’s Registrable
Securities from such Registration Statement.

(c) Each Investor agrees that, upon receipt of any notice from the Company of the happening of
any event of the kind described in Section 3(g) or the first sentence of 3(f), such Investor will
immediately discontinue disposition of Registrable Securities pursuant to any Registration
Statement(s) covering such Registrable Securities until such Investor’s receipt of copies of the
supplemented or amended prospectus as contemplated by Section 3(g) or the first sentence of 3(f) or
receipt of notice that no supplement or amendment is required. Notwithstanding anything to the
contrary, the Company shall cause its transfer agent to deliver unlegended shares of Common Stock
to a transferee of an Investor in accordance with the terms of the Securities Purchase Agreement in
connection with any sale of Registrable Securities with respect to which an Investor has entered
into a contract for sale prior to the Investor’s receipt of a notice from the Company of the
happening of any event of the kind described in Section 3(g) or the first sentence of 3(f) and for
which the Investor has not yet settled.

(d) Each Investor covenants and agrees that it will comply with the prospectus delivery
requirements of the 1933 Act as applicable to it or an exemption therefrom in connection with sales
of Registrable Securities pursuant to the Registration Statement.

5. Expenses of Registration.

All reasonable expenses, other than underwriting discounts and commissions, incurred in
connection with registrations, filings or qualifications pursuant to Sections 2 and 3, including,
without limitation, all registration, listing and qualifications fees, printers and accounting
fees, and fees and disbursements of counsel for the Company shall be paid by the Company. The
Company shall also reimburse the Investors for the fees and disbursements of Legal Counsel in
connection with registration, filing or qualification pursuant to Sections 2 and 3 of this
Agreement which amount shall be limited to $15,000 for each such registration, filing or
qualification.

6. Indemnification.

In the event any Registrable Securities are included in a Registration Statement under this
Agreement:

(a) To the fullest extent permitted by law, the Company will, and hereby does, indemnify, hold
harmless and defend each Investor, the directors, officers, partners, members, employees, agents,
representatives of, and each Person, if any, who controls any Investor within the meaning of the
1933 Act or the 1934 Act (each, an “Indemnified Person”), against any losses, claims, damages,
liabilities, judgments, fines, penalties, charges, costs, reasonable attorneys’ fees, amounts paid
in settlement or expenses, joint or several (collectively, “Claims”), incurred in investigating,
preparing or defending any action, claim, suit, inquiry, proceeding, investigation or appeal taken
from the foregoing by or before any court or governmental, administrative or other regulatory
agency, body or the SEC, whether pending or threatened, whether or not an indemnified party is or
may be a party thereto (“Indemnified Damages”), to which any of them may become subject insofar as
such Claims (or actions or proceedings, whether commenced or threatened, in respect thereof) arise
out of or are based upon: (i) any untrue statement or alleged untrue statement of a material fact
in a Registration Statement or any post-effective amendment thereto or in any filing made in
connection with the qualification of the offering under the securities or other “blue sky” laws of
any jurisdiction in which Registrable Securities are offered (“Blue Sky Filing”), or the omission
or alleged omission to state a material fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus if used prior to the effective date of such
Registration Statement, or contained in the final prospectus (as amended or supplemented, if the
Company files any amendment thereof or supplement thereto with the SEC) or the omission or alleged
omission to state therein any material fact necessary to make the statements made therein, in light
of the circumstances under which the statements therein were made, not misleading, (iii) any
violation or alleged violation by the Company of the 1933 Act, the 1934 Act, any other law,
including, without limitation, any state securities law, or any rule or regulation thereunder
relating to the offer or sale of the Registrable Securities pursuant to a Registration Statement or
(iv) any violation of this Agreement (the matters in the foregoing clauses (i) through (iv) being,
collectively, “Violations”). Subject to Section 6(c), the Company shall reimburse the Indemnified
Persons, promptly as such expenses are incurred and are due and payable, for any legal fees or
other reasonable expenses incurred by them in connection with investigating or defending any such
Claim. Notwithstanding anything to the contrary contained herein, the indemnification agreement
contained in this Section 6(a): (i) shall not apply to a Claim by an Indemnified Person arising
out of or based upon a Violation which occurs in reliance upon and in conformity with information
furnished in writing to the Company by such Indemnified Person for such Indemnified Person
expressly for use in connection with the preparation of the Registration Statement or any such
amendment thereof or supplement thereto, if such prospectus was timely made available by the
Company pursuant to Section 3(d); and (ii) shall not apply to amounts paid in settlement of any
Claim if such settlement is effected without the prior written consent of the Company, which
consent shall not be unreasonably withheld or delayed. Such indemnity shall remain in full force
and effect regardless of any investigation made by or on behalf of the Indemnified Person and shall
survive the transfer of the Registrable Securities by the Investors pursuant to Section 9.

(b) In connection with any Registration Statement in which an Investor is participating, each
such Investor agrees to severally and not jointly indemnify, hold harmless and defend, to the same
extent and in the same manner as is set forth in Section 6(a), the Company, each of its directors,
each of its officers who signs the Registration Statement and each Person, if any, who controls the
Company within the meaning of the 1933 Act or the 1934 Act (each, an “Indemnified Party”), against
any Claim or Indemnified Damages to which any of them may become subject, under the 1933 Act, the
1934 Act or otherwise, insofar as such Claim or Indemnified Damages arise out of or are based upon
any Violation, in each case to the extent, and only to the extent, that such Violation occurs in
reliance upon and in conformity with written information furnished to the Company by such Investor
expressly for use in connection with such Registration Statement; and, subject to Section 6(c),
such Investor will reimburse any legal or other expenses reasonably incurred by an Indemnified
Party in connection with investigating or defending any such Claim; provided, however, that the
indemnity agreement contained in this Section 6(b) and the agreement with respect to contribution
contained in Section 7 shall not apply to amounts paid in settlement of any Claim if such
settlement is effected without the prior written consent of such Investor, which consent shall not
be unreasonably withheld or delayed; provided, further, however, that the Investor shall be liable
under this Section 6(b) for only that amount of a Claim or Indemnified Damages as does not exceed
the net proceeds to such Investor as a result of the sale of Registrable Securities pursuant to
such Registration Statement. Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of such Indemnified Party and shall survive the transfer of
the Registrable Securities by the Investors pursuant to Section 9.

(c) Promptly after receipt by an Indemnified Person or Indemnified Party under this Section 6
of notice of the commencement of any action or proceeding (including any governmental action or
proceeding) involving a Claim, such Indemnified Person or Indemnified Party shall, if a Claim in
respect thereof is to be made against any indemnifying party under this Section 6, deliver to the
indemnifying party a written notice of the commencement thereof, and the indemnifying party shall
have the right to participate in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to assume control of the defense thereof with
counsel mutually satisfactory to the indemnifying party and the Indemnified Person or the
Indemnified Party, as the case may be; provided, however, that an Indemnified Person or Indemnified
Party shall have the right to retain its own counsel with the fees and expenses of not more than
one counsel for all such Indemnified Person or Indemnified Party to be paid by the indemnifying
party, if, in the reasonable opinion of counsel retained by the indemnifying party, the
representation by such counsel of the Indemnified Person or Indemnified Party and the indemnifying
party would be inappropriate due to actual or potential differing interests between such
Indemnified Person or Indemnified Party and any other party represented by such counsel in such
proceeding. In the case of an Indemnified Person, legal counsel referred to in the immediately
preceding sentence shall be selected by the Investors holding at least a majority in interest of
the Registrable Securities included in the Registration Statement to which the Claim relates. The
Indemnified Party or Indemnified Person shall cooperate reasonably with the indemnifying party in
connection with any negotiation or defense of any such action or Claim by the indemnifying party
and shall furnish to the indemnifying party all information reasonably available to the Indemnified
Party or Indemnified Person which relates to such action or Claim. The indemnifying party shall
keep the Indemnified Party or Indemnified Person fully apprised at all times as to the status of
the defense or any settlement negotiations with respect thereto. No indemnifying party shall be
liable for any settlement of any action, claim or proceeding effected without its prior written
consent, provided, however, that the indemnifying party shall not unreasonably withhold, delay or
condition its consent. No indemnifying party shall, without the prior written consent of the
Indemnified Party or Indemnified Person, consent to entry of any judgment or enter into any
settlement or other compromise which does not include as an unconditional term thereof the giving
by the claimant or plaintiff to such Indemnified Party or Indemnified Person of a release from all
liability in respect to such Claim or litigation and such settlement shall not include any
admission as to fault on the part of the Indemnified Party. Following indemnification as provided
for hereunder, the indemnifying party shall be subrogated to all rights of the Indemnified Party or
Indemnified Person with respect to all third parties, firms or corporations relating to the matter
for which indemnification has been made. The failure to deliver written notice to the indemnifying
party within a reasonable time of the commencement of any such action shall not relieve such
indemnifying party of any liability to the Indemnified Person or Indemnified Party under this
Section 6, except to the extent that the indemnifying party is prejudiced in its ability to defend
such action.

(d) The indemnification required by this Section 6 shall be made by periodic payments of the
amount thereof during the course of the investigation or defense, as and when bills are received or
Indemnified Damages are incurred.

(e) The indemnity agreements contained herein shall be in addition to (i) any cause of action
or similar right of the Indemnified Party or Indemnified Person against the indemnifying party or
others, and (ii) any liabilities the indemnifying party may be subject to pursuant to the law.

7. Contribution.

To the extent any indemnification by an indemnifying party is prohibited or limited by law,
the indemnifying party agrees to make the maximum contribution with respect to any amounts for
which it would otherwise be liable under Section 6 to the fullest extent permitted by law;
provided, however, that: (i) no Person involved in the sale of Registrable Securities which Person
is guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) in
connection with such sale shall be entitled to contribution from any Person involved in such sale
of Registrable Securities who was not guilty of fraudulent misrepresentation; and (ii) contribution
by any seller of Registrable Securities shall be limited in amount to the amount of net proceeds
received by such seller from the sale of such Registrable Securities pursuant to such Registration
Statement.

8. Reports Under the 1934 Act.

With a view to making available to the Investors the benefits of Rule 144 promulgated under
the 1933 Act or any other similar rule or regulation of the SEC that may at any time permit the
Investors to sell securities of the Company to the public without registration (“Rule 144”), the
Company agrees to:

(a) make and keep public information available, as those terms are understood and defined in
Rule 144;

(b) file with the SEC in a timely manner all reports and other documents required of the
Company under the 1933 Act and the 1934 Act so long as the Company remains subject to such
requirements and the filing of such reports and other documents is required for the applicable
provisions of Rule 144; and

(c) furnish to each Investor so long as such Investor owns Registrable Securities, promptly
upon request, (i) a written statement by the Company, if true, that it has complied with the
reporting requirements of Rule 144, the 1933 Act and the 1934 Act, (ii) a copy of the most recent
annual or quarterly report of the Company and such other reports and documents so filed by the
Company, and (iii) such other information as may be reasonably requested to permit the Investors to
sell such securities pursuant to Rule 144 without registration.

9. Assignment of Registration Rights.

The rights under this Agreement shall be automatically assignable by the Investors to any
transferee of all or any portion of such Investor’s Registrable Securities if: (i) the Investor
agrees in writing with the transferee or assignee to assign such rights, and a copy of such
agreement is furnished to the Company within a reasonable time after such assignment; (ii) the
Company is, within a reasonable time after such transfer or assignment, furnished with written
notice of (a) the name and address of such transferee or assignee, and (b) the securities with
respect to which such registration rights are being transferred or assigned; (iii) immediately
following such transfer or assignment the further disposition of such securities by the transferee
or assignee is restricted under the 1933 Act or applicable state securities laws; (iv) at or before
the time the Company receives the written notice contemplated by clause (ii) of this sentence the
transferee or assignee agrees in writing with the Company to be bound by all of the provisions
contained herein; and (v) such transfer shall have been made in accordance with the applicable
requirements of the Securities Purchase Agreement.

10. Amendment of Registration Rights.

Provisions of this Agreement may be amended and the observance thereof may be waived (either
generally or in a particular instance and either retroactively or prospectively), only with the
written consent of the Company and the Required Holders. Any amendment or waiver effected in
accordance with this Section 10 shall be binding upon each Investor, Mr. Aguero and the Company.
No such amendment shall be effective to the extent that it applies to less than all of the holders
of the Registrable Securities. No consideration shall be offered or paid to any Person to amend or
consent to a waiver or modification of any provision of this Agreement unless the same
consideration also is offered to all of the parties to this Agreement.

11. Miscellaneous.

(a) A Person is deemed to be a holder of Registrable Securities whenever such Person owns or
is deemed to own of record such Registrable Securities. If the Company receives conflicting
instructions, notices or elections from two or more Persons with respect to the same Registrable
Securities, the Company shall act upon the basis of instructions, notice or election received from
such record owner of such Registrable Securities.

(b) Any notices, consents, waivers or other communications required or permitted to be given
under the terms of this Agreement must be in writing and will be deemed to have been delivered:
(i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and kept on file by the
sending party); or (iii) one Business Day after deposit with a nationally recognized overnight
delivery service, in each case properly addressed to the party to receive the same. The addresses
and facsimile numbers for such communications shall be:

If to the Company:

	 	 	 
	Metalico, Inc.

	 	

	186 North Avenue East

	Cranford, NJ 07016

	Telephone:

Facsimile:

Attention:

Email:

	 	(908) 497-9610

(908) 497-1097

Arnold S. Graber

Executive Vice President and General Counsel

asgraber@metalico.com

With a copy (for informational purposes only) to:

	 	 	 
	Lowenstein Sandler PC

	65 Livingston Avenue

	Roseland, New Jersey 07068

	Telephone:

Facsimile:

Attention:

Email:

	 	(973) 597-2476

(973) 597-2477

Steven Skolnick, Esq.

sskolnick@lowenstein.com

If to the Transfer Agent:

Corporate Stock Transfer, Inc.

3200 Cherry Creek Dr. South, Suite 430

Denver, CO 80209

Telephone:      (303) 282-4800

Facsimile:       (303) 777-3094

Attention:       Karen Naughton

	 	 	 	 	 
	If to Legal Counsel:
	 	 	 	 
	Olshan Grundman Frome Rosenzweig & Wolosky LLP

	Park Avenue Tower
	 	 	 	 
	65 East 55th Street

	New York, New York 10022
Telephone:
	 	 	(212) 451-2300	 
	Facsimile:
	 	 	(212) 451-2222	 
	Attention:
	 	Steve Wolosky, Esq.

If to a Buyer, to its address and facsimile number set forth on the Schedule of Buyers attached
hereto, with copies to such Buyer’s representatives as set forth on the Schedule of Buyers, or to
such other address and/or facsimile number and/or to the attention of such other Person as the
recipient party has specified by written notice given to each other party five (5) days prior to
the effectiveness of such change. Written confirmation of receipt (A) given by the recipient of
such notice, consent, waiver or other communication, (B) mechanically or electronically generated
by the sender’s facsimile machine containing the time, date, recipient facsimile number and an
image of the first page of such transmission or (C) provided by a courier or overnight courier
service shall be rebuttable evidence of personal service, receipt by facsimile or receipt from a
nationally recognized overnight delivery service in accordance with clause (i), (ii) or (iii)
above, respectively.

(c) Failure of any party to exercise any right or remedy under this Agreement or otherwise, or
delay by a party in exercising such right or remedy, shall not operate as a waiver thereof.

(d) All questions concerning the construction, validity, enforcement and interpretation of
this Agreement 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 party 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 party 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 for such notices to it under this
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 PARTY 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 HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

(e) If any provision of this Agreement 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 Agreement so long as this
Agreement 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).

(f) This Agreement, the other Transaction Documents (as defined in the Securities Purchase
Agreement) and the instruments referenced herein and therein constitute the entire agreement among
the parties hereto with respect to the subject matter hereof and thereof. There are no
restrictions, promises, warranties or undertakings, other than those set forth or referred to
herein and therein. This Agreement, the other Transaction Documents and the instruments referenced
herein and therein supersede all prior agreements and understandings among the parties hereto with
respect to the subject matter hereof and thereof.

(g) Subject to the requirements of Section 9, this Agreement shall inure to the benefit of and
be binding upon the permitted successors and assigns of each of the parties hereto.

(h) The headings in this Agreement are for convenience of reference only and shall not limit
or otherwise affect the meaning hereof.

(i) This Agreement may be executed in identical counterparts, each of which shall be deemed an
original but all of which shall constitute one and the same agreement. This Agreement, once
executed by a party, may be delivered to the other party hereto by facsimile transmission of a copy
of this Agreement bearing the signature of the party so delivering this Agreement.

(j) Each party shall do and perform, or cause to be done and performed, all such further acts
and things, and shall execute and deliver all such other agreements, certificates, instruments and
documents, as any other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the transactions contemplated
hereby.

(k) All consents and other determinations required to be made by the Investors pursuant to
this Agreement shall be made, unless otherwise specified in this Agreement, by the Required
Holders, determined as if all of the Notes held by Investors then outstanding have been converted
into Registrable Securities and all of the Warrants held by Investors then outstanding have been
exercised for Registrable Securities without regard to any limitations on conversion of the Notes
or the exercise of the Warrants.

(l) The language used in this Agreement will be deemed to be the language chosen by the
parties to express their mutual intent and no rules of strict construction will be applied against
any party.

(m) This Agreement is intended for the benefit of the parties hereto and their respective
permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be
enforced by, any other Person.

1

(n) The obligations of each Investor hereunder are several and not joint with the obligations
of any other Investor, and no provision of this Agreement is intended to confer any obligations on
any Investor vis-à-vis any other Investor. Nothing contained herein, and no action taken by any
Investor pursuant hereto, shall be deemed to constitute the Investors as a partnership, an
association, a joint venture or any other kind of entity, or create a presumption that the
Investors are in any way acting in concert or as a group with respect to such obligations or the
transactions contemplated herein.

* * * * * *

[Signature Page Follows]

2

IN WITNESS WHEREOF, each of the parties hereto have caused
their respective signature page to this Registration Rights Agreement to be duly executed as of the
date first written above.

	 
	COMPANY:

	METALICO, INC.

By:

	 

	Name: Title:

3

IN WITNESS WHEREOF, each of the parties hereto have caused their respective signature page to
this Registration Rights Agreement to be duly executed as of the date first written above.

	 	 	 
	BUYER:

	 	

	By:

	 	

	 

	 	

	Name:

	 	

	
 
	 	Title:

4

IN WITNESS WHEREOF, each of the parties hereto have caused their respective signature page to
this Registration Rights Agreement to be duly executed as of the date first written above.

	 
	CARLOS AGUERO

5

EXHIBIT A

FORM OF NOTICE OF EFFECTIVENESS

OF REGISTRATION STATEMENT

	 	 	 
	Corporate Stock Transfer, Inc.

	3200 Cherry Creek Dr. South, Suite 430

	Denver, CO 80209

Attention:

	 	

	Re:

	 	Metalico, Inc.
	
 
	 	 

Ladies and Gentlemen:

[We are][I am] counsel to Metalico, Inc., a Delaware corporation (the “Company”), and have
represented the Company in connection with that certain Securities Purchase Agreement, dated as of
April 23, 2008 (the “Securities Purchase Agreement”), entered into by and among the Company and the
buyers named therein (collectively, the “Holders”) pursuant to which the Company issued to the
Holders senior unsecured convertible notes (the “Notes”) convertible into shares of the Company’s
common stock, par value $0.001 per share (the “Common Stock”) and warrants exercisable for shares
of Common Stock (the “Warrants”). Pursuant to the Securities Purchase Agreement, the Company also
has entered into a Registration Rights Agreement with the Holders and Carlos Aguero (the
“Registration Rights Agreement”) pursuant to which the Company agreed, among other things, to
register the resale of the Registrable Securities (as defined in the Registration Rights Agreement)
under the Securities Act of 1933, as amended (the “1933 Act”), including the shares of Common Stock
issuable to the Holders pursuant to the Share Lending Agreement to be entered into by and among the
Holders and Carlos Aguero, among others, the shares of Common Stock issuable upon conversion of the
Notes and the shares of Common Stock issuable upon exercise of the Warrants.

In connection with the Company’s obligations under the Registration Rights Agreement, on
     , 2008, the Company filed a Registration Statement on Form S-3 (File No.
333-     ) (the “Registration Statement”) with the Securities and Exchange Commission (the
“SEC”) relating to the Registrable Securities which names each of the Holders as a selling
stockholder thereunder.

In connection with the foregoing, [we][I] advise you that a member of the SEC’s staff has
advised [us][me] by telephone that the SEC has entered an order declaring the Registration
Statement effective under the 1933 Act at [ENTER TIME OF EFFECTIVENESS] on [ENTER DATE OF
EFFECTIVENESS] and we have no knowledge, after telephonic inquiry of a member of the SEC’s staff,
that any stop order suspending its effectiveness has been issued or that any proceedings for that
purpose are pending before, or threatened by, the SEC and the Registrable Securities are available
for resale under the 1933 Act pursuant to the Registration Statement.

6

This letter shall serve as our standing instruction to you that the shares of Common Stock are
freely transferable by the Holders pursuant to the Registration Statement. You need not require
further letters from us to effect any future legend-free issuance or reissuance of shares of Common
Stock to the Holders as contemplated by the Company’s Irrevocable Transfer Agent Instructions dated
April      , 2008.

	 	 	 	 	 
	CC:

	 	[LIST NAMES OF HOLDERS]
	 	Very truly yours,

[ISSUER’S COUNSEL]

By:     

7

EXHIBIT B

SELLING STOCKHOLDERS

The shares of common stock being offered by the selling stockholders are issuable upon
conversion of the convertible notes, exercise of the warrants, and pursuant to the Share Lending
Agreement to be entered into by and among the selling stockholders and Carlos Aguero. For
additional information regarding the notes and the warrants, see “Private Placement of Convertible
Notes and Warrants” above. We are registering the shares of common stock in order to permit the
selling stockholders to offer the shares for resale from time to time. Except for the ownership of
the convertible notes and the warrants issued pursuant to the Securities Purchase Agreement, the
selling stockholders have not had any material relationship with us within the past three years.

The table below lists the selling stockholders and other information regarding the beneficial
ownership of the shares of common stock by each of the selling stockholders. The second column
lists the number of shares of common stock beneficially owned by each selling stockholder, based on
its ownership of the convertible notes and the warrants as of      , 2008, as well as the shares
of common stock held by Mr. Aguero and to be made available for borrowing by the selling
stockholders pursuant to the Share Lending Agreement, assuming conversion of all convertible notes
and exercise of all of the warrants held by the selling stockholders on that date, without regard
to any limitations on conversion or exercise, as applicable, and assuming that the selling
stockholders have borrowed all of the shares available for borrowing pursuant to the Share Lending
Agreement.

The third column lists the shares of common stock being offered by this prospectus by the
selling stockholders.

In accordance with the terms of a registration rights agreements with the holders of the
convertible notes and the warrants and Mr. Aguero, this prospectus generally covers the resale of
at least the sum of (i) the 2.5 million shares of common stock held of record and/or beneficially
by Mr. Aguero, and (ii) 130% of the maximum number of shares of common stock issued or issuable
upon conversion of the convertible notes and exercise of the warrants as of the trading day
immediately preceding the date this registration statement is initially filed with the SEC. The
fourth column assumes the sale of all of the shares offered by the selling stockholders pursuant to
this prospectus.

Under the terms of the convertible notes, a selling stockholder may not convert the
convertible notes and under the terms of the warrants, a selling stockholder may not exercise the
warrants, to the extent such conversion or exercise would cause such selling stockholder, together
with its affiliates, to beneficially own a number of shares of common stock which would exceed
4.99% of our then outstanding shares of common stock following such conversion or exercise,
excluding for purposes of such determination shares of common stock issuable upon conversion of the
convertible notes which have not been converted and shares of common stock issuable upon exercise
of the warrants which have not been exercised. Each selling stockholder may increase the 4.99%
limit to 9.99%, subject to certain conditions. The number of shares in the second column does not
reflect this limitation. The selling stockholders may sell all, some or none of their shares in
this offering. See “Plan of Distribution.”

8

9

	 	 	 	 	 	 	 	 	 
	 	 	 	 	Maximum Number of	 	 
	 	 	 	 	Shares of Common	 	 
	 	 	Number of Shares of	 	Stock to be Sold	 	Number of Shares of
	 	 	Common Stock Owned	 	Pursuant to this	 	Common Stock Owned
	Name of Selling Stockholder	 	Prior to Offering	 	Prospectus	 	After Offering
	[Buyers]

	 	 	 	 	 	 	0	 
	
 
	 	 	 	 	 	 	0	 

10

PLAN OF DISTRIBUTION

We are registering the shares of common stock issuable upon conversion of convertible notes,
the shares of common stock issuable upon exercise of the warrants and the shares of common stock
issuable pursuant to the Share Lending Agreement to be entered into by and among the holders of the
convertible notes and the warrants and Carlos Aguero, among others, to permit the resale of these
shares of common stock by the holders of the convertible notes and the warrants from time to time
after the date of this prospectus. We will not receive any of the proceeds from the sale by the
selling stockholders of the shares of common stock. We will bear all fees and expenses incident to
our obligation to register the shares of common stock.

The selling stockholders may sell all or a portion of the shares of common stock beneficially
owned by them and offered hereby from time to time directly or through one or more underwriters,
broker-dealers or agents. If the shares of common stock are sold through underwriters or
broker-dealers, the selling stockholders will be responsible for underwriting discounts or
commissions or agent’s commissions. The shares of common stock may be sold in one or more
transactions at fixed prices, at prevailing market prices at the time of the sale, at varying
prices determined at the time of sale, or at negotiated prices. These sales may be effected in
transactions, which may involve crosses or block transactions,

	 	•	 	on any national securities exchange or quotation service on which the securities may
be listed or quoted at the time of sale;

	 	•	 	in the over-the-counter market;

	 	•	 	in transactions otherwise than on these exchanges or systems or in the
over-the-counter market;

	 	•	 	through the writing of options, whether such options are listed on an options
exchange or otherwise;

	 	•	 	ordinary brokerage transactions and transactions in which the broker-dealer solicits
purchasers;

	 	•	 	block trades in which the broker-dealer will attempt to sell the shares as agent but
may position and resell a portion of the block as principal to facilitate the
transaction;

	 	•	 	purchases by a broker-dealer as principal and resale by the broker-dealer for its
account;

	 	•	 	an exchange distribution in accordance with the rules of the applicable exchange;

	 	•	 	privately negotiated transactions;

	 	•	 	short sales;

	 	•	 	sales pursuant to Rule 144;

	 	•	 	broker-dealers may agree with the selling securityholders to sell a specified number
of such shares at a stipulated price per share;

	 	•	 	a combination of any such methods of sale; and

	 	•	 	any other method permitted pursuant to applicable law.

If the selling stockholders effect such transactions by selling shares of common stock to or
through underwriters, broker-dealers or agents, such underwriters, broker-dealers or agents may
receive commissions in the form of discounts, concessions or commissions from the selling
stockholders or commissions from purchasers of the shares of common stock for whom they may act as
agent or to whom they may sell as principal (which discounts, concessions or commissions as to
particular underwriters, broker-dealers or agents may be in excess of those customary in the types
of transactions involved). In connection with sales of the shares of common stock or otherwise,
the selling stockholders may enter into hedging transactions with broker-dealers, which may in turn
engage in short sales of the shares of common stock in the course of hedging in positions they
assume. The selling stockholders may also sell shares of common stock short and deliver shares of
common stock covered by this prospectus to close out short positions and to return borrowed shares
in connection with such short sales. The selling stockholders may also loan or pledge shares of
common stock to broker-dealers that in turn may sell such shares.

The selling stockholders may pledge or grant a security interest in some or all of the shares
of common stock issuable upon conversion of the convertible notes and the shares of common stock
issuable upon exercise of the warrants owned by them and, if they default in the performance of
their secured obligations, the pledgees or secured parties may offer and sell the shares of common
stock from time to time pursuant to this prospectus or any amendment to this prospectus under Rule
424(b)(3) or other applicable provision of the Securities Act of 1933, as amended, amending, if
necessary, the list of selling stockholders to include the pledgee, transferee or other successors
in interest as selling stockholders under this prospectus. The selling stockholders also may
transfer and donate the shares of common stock in other circumstances in which case the
transferees, donees, pledgees or other successors in interest will be the selling beneficial owners
for purposes of this prospectus.

The selling stockholders and any broker-dealer participating in the distribution of the shares
of common stock may be deemed to be “underwriters” within the meaning of the Securities Act, and
any commission paid, or any discounts or concessions allowed to, any such broker-dealer may be
deemed to be underwriting commissions or discounts under the Securities Act. At the time a
particular offering of the shares of common stock is made, a prospectus supplement, if required,
will be distributed which will set forth the aggregate amount of shares of common stock being
offered and the terms of the offering, including the name or names of any broker-dealers or agents,
any discounts, commissions and other terms constituting compensation from the selling stockholders
and any discounts, commissions or concessions allowed or reallowed or paid to broker-dealers.

Under the securities laws of some states, the shares of common stock may be sold in such
states only through registered or licensed brokers or dealers. In addition, in some states the
shares of common stock may not be sold unless such shares have been registered or qualified for
sale in such state or an exemption from registration or qualification is available and is complied
with.

There can be no assurance that any selling stockholder will sell any or all of the shares of
common stock registered pursuant to the shelf registration statement, of which this prospectus
forms a part.

The selling stockholders and any other person participating in such distribution will be
subject to applicable provisions of the Securities Exchange Act of 1934, as amended, and the rules
and regulations thereunder, including, without limitation, Regulation M of the Exchange Act, which
may limit the timing of purchases and sales of any of the shares of common stock by the selling
stockholders and any other participating person. Regulation M may also restrict the ability of any
person engaged in the distribution of the shares of common stock to engage in market-making
activities with respect to the shares of common stock. All of the foregoing may affect the
marketability of the shares of common stock and the ability of any person or entity to engage in
market-making activities with respect to the shares of common stock.

We will pay all expenses of the registration of the shares of common stock pursuant to the
registration rights agreement, estimated to be $[     ] in total, including, without limitation,
Securities and Exchange Commission filing fees and expenses of compliance with state securities or
“blue sky” laws; provided, however, that a selling stockholder will pay all underwriting discounts
and selling commissions, if any. We will indemnify the selling stockholders against liabilities,
including some liabilities under the Securities Act, in accordance with the registration rights
agreements, or the selling stockholders will be entitled to contribution. We may be indemnified by
the selling stockholders against civil liabilities, including liabilities under the Securities Act,
that may arise from any written information furnished to us by the selling stockholder specifically
for use in this prospectus, in accordance with the related registration rights agreement, or we may
be entitled to contribution.

Once sold under the shelf registration statement, of which this prospectus forms a part, the
shares of common stock will be freely tradable in the hands of persons other than our affiliates.

11

EXHIBIT C

METALICO, INC.

SELLING SHAREHOLDER NOTICE AND QUESTIONNAIRE

The undersigned holder of shares of common stock, par value $0.001 per share, of Metalico, Inc., a
Delaware corporation (the “Company”) issued pursuant to a certain Securities Purchase Agreement by
and among the Company and the Buyers named therein, dated as of April 23, 2008 (the “Agreement”),
understands that the Company intends to file with the Securities and Exchange Commission a
registration statement on Form S-3 (the “Resale Registration Statement”) for the registration and
the resale under Rule 415 of the Securities Act of 1933, as amended (the “Securities Act”), of the
Registrable Securities in accordance with the terms of the Agreement. All capitalized terms not
otherwise defined herein shall have the meanings ascribed thereto in the Agreement.

In order to sell or otherwise dispose of any Registrable Securities pursuant to the Resale
Registration Statement, a holder of Registrable Securities generally will be required to be named
as a selling stockholder in the related prospectus or a supplement thereto (as so supplemented, the
“Prospectus”), deliver the Prospectus to purchasers of Registrable Securities and be bound by the
provisions of the Agreement (including certain indemnification provisions, described in the Plan of
Distribution attached to the Registration Rights Agreement). Holders must complete and deliver
this Notice and Questionnaire in order to be named as selling stockholders in the Prospectus.
Holders of Registrable Securities who do not complete, execute and return this Notice and
Questionnaire at least five (5) Business Days prior to the first anticipated filing date of a
Registration Statement (1) will not be named as selling stockholders in the Resale Registration
Statement or the Prospectus and (2) may not use the Prospectus for resales of Registrable
Securities. Certain legal consequences arise from being named as a selling stockholder in the
Resale Registration Statement and the Prospectus. Holders of Registrable Securities are advised to
consult their own securities law counsel regarding the consequences of being named or not named as
a selling stockholder in the Resale Registration Statement and the Prospectus.

NOTICE

The undersigned holder (the “Selling Stockholder”) of Registrable Securities hereby gives notice to
the Company of its intention to sell or otherwise dispose of Registrable Securities owned by it and
listed below in Item (3), unless otherwise specified in Item (3), pursuant to the Resale
Registration Statement. The undersigned, by signing and returning this Notice and Questionnaire,
understands and agrees that it will be bound by the terms and conditions of this Notice and
Questionnaire and the Agreement.

The undersigned hereby provides the following information to the Company and represents and
warrants that such information is materially accurate and complete:

12

QUESTIONNAIRE

1. Name.

(a) Full Legal Name of Selling Stockholder:

(b) Full Legal Name of Registered Holder (if not the same as (a) above) through which
Registrable Securities listed in Item 3 below are held:

(c) Full Legal Name of Natural Control Person (which means a natural person who directly or
indirectly alone or with others has power to vote or dispose of the securities covered by the
questionnaire):

2. Address for Notices to Selling Stockholder:

	 
	Telephone:

	Fax:

	Contact Person:

	E-mail address of Contact Person:

3. Beneficial Ownership of Registrable Securities Issuable Pursuant to the Purchase Agreement:

(a) Type and Number of Registrable Securities beneficially owned and issued pursuant to the
Agreement:

(b) Number of shares of Common Stock to be registered pursuant to this Notice for resale:

4. Broker-Dealer Status:

(a) Are you a broker-dealer?

Yes ? No ?

(b) If “yes” to Section 4(a), did you receive your Registrable Securities as compensation for
investment banking services to the Company?

Yes ? No ?

Note: If no, the Commission’s staff has indicated that you should be identified as an
underwriter in the Registration Statement.

(c) Are you an affiliate of a broker-dealer?

	 	 	 
	Note:

	 	Yes ? No ?

If yes, provide a narrative explanation below:

(c) If you are an affiliate of a broker-dealer, do you certify that you bought the Registrable
Securities in the ordinary course of business, and at the time of the purchase of the Registrable
Securities to be resold, you had no agreements or understandings, directly or indirectly, with any
person to distribute the Registrable Securities?

Yes ? No ?

Note: If no, the Commission’s staff has indicated that you should be identified as an
underwriter in the Registration Statement.

5. Beneficial Ownership of Other Securities of the Company Owned by the Selling Shareholder.

Except as set forth below in this Item 5, the undersigned is not the beneficial or registered owner
of any securities of the Company other than the Registrable Securities listed above in Item 3.

(a) Type and Amount of other securities beneficially owned:

6. Relationships with the Company:

Except as set forth below, neither the undersigned nor any of its affiliates, officers, directors
or principal equity holders (owners of 5% of more of the equity securities of the undersigned) has
held any position or office or has had any other material relationship with the Company (or its
predecessors or affiliates) during the past three years.

State any exceptions here:

7. Plan of Distribution:

The undersigned has reviewed the form of Plan of Distribution attached as Annex A to the
Registration Rights Agreement, and hereby confirms that, except as set forth below, the information
contained therein regarding the undersigned and its plan of distribution is correct and complete.

State any exceptions here:

***********

The undersigned agrees to promptly notify the Company of any material inaccuracies or changes
in the information provided herein that may occur subsequent to the date hereof and prior to the
effective date of any applicable Resale Registration Statement. All notices hereunder and pursuant
to the Agreement shall be made in writing, by hand delivery, confirmed or facsimile transmission,
first-class mail or air courier guaranteeing overnight delivery at the address set forth below. In
the absence of any such notification, the Company shall be entitled to continue to rely on the
material accuracy of the information in this Notice and Questionnaire.

By signing below, the undersigned consents to the disclosure of the information contained
herein in its answers to Items (1) through (7) above and the inclusion of such information in the
Resale Registration Statement and the Prospectus. The undersigned understands that such
information will be relied upon by the Company in connection with the preparation or amendment of
any such Registration Statement and the related prospectus.

The undersigned also acknowledges that it understands that the answers to this Questionnaire
are furnished for use in connection with the Registration Statement filed pursuant to the
Registration Rights Agreement and any amendments or supplements thereto filed with the Commission
pursuant to the Securities Act.

By returning this Questionnaire, the undersigned will be deemed to be aware of the foregoing
interpretation.

IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this Questionnaire to
be executed and delivered either in person or by its duly authorized agent.

	 	 	 
	Dated:

	 	Beneficial Owner:
	
 
	 	By:
	
 
	 	Name:
	
 
	 	Title:

13

PLEASE FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN THE ORIGINAL
BY OVERNIGHT MAIL, TO:

Alan Streiter

Morgan Joseph & Co. Inc.

600 Fifth Avenue

New York, NY 10020

Facsimile: 212-218-3719

14EX-10.3

Exhibit 10.3

[FORM OF SENIOR CONVERTIBLE NOTE]

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES
INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “1933 ACT”), 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 1933 ACT, OR (B) AN OPINION OF COUNSEL, IN A GENERALLY
ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT (II) UNLESS SOLD OR TRANSFERRED
TO A “QUALIFIED INSTITUTIONAL BUYER” WITHIN THE MEANING OF RULE 144A UNDER THE 1933 ACT OR TO AN
“ACCREDITED INVESTOR” AS THAT TERM IS DEFINED IN RULE 501(A) OF REGULATION D UNDER SAID ACT OR
(III) 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. ANY TRANSFEREE OF THIS NOTE SHOULD CAREFULLY
REVIEW THE TERMS OF THIS NOTE, INCLUDING SECTIONS 3(c)(iii) AND 17(a) HEREOF. THE PRINCIPAL AMOUNT
REPRESENTED BY THIS NOTE AND, ACCORDINGLY, THE SECURITIES ISSUABLE UPON CONVERSION HEREOF MAY BE
LESS THAN THE AMOUNTS SET FORTH ON THE FACE HEREOF PURSUANT TO SECTION 3(c)(iii) OF THIS NOTE.

Metalico, Inc.

Senior Convertible Note

	 	 	 
	Issuance Date: [?], 2008

	 	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 Senior Convertible Note (including all Senior Convertible Notes issued in exchange,
transfer or replacement hereof, this “Note”) is one of an issue of Senior Convertible Notes issued
pursuant to the Securities Purchase Agreement on the Closing Date (collectively, the “Notes” and
such other Senior Convertible Notes, the “Other Notes”). Certain capitalized terms used herein are
defined in Section 28.

(1) MATURITY. On the Maturity Date, the Company shall pay to the Holder an
amount in cash representing all outstanding Principal, accrued and unpaid Interest and accrued and
unpaid Late Charges, if any, on such Principal and Interest. The “Maturity Date” shall be [?],
20281, as may be extended at the option of the Holder (i) in the event that, and for so
long as, an Event of Default (as defined in Section 4(a)) shall have occurred and be continuing on
the Maturity Date (as may be extended pursuant to this Section 1) or any event shall have occurred
and be continuing on the Maturity Date (as may be extended pursuant to this Section 1) that with
the passage of time and the failure to cure would result in an Event of Default, and (ii) through
the date that is ten (10) Business Days after the consummation of a Change of Control in the event
that a Change of Control is publicly announced or a Change of Control Notice (as defined in Section
5(b)) is delivered prior to the Maturity Date.

(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 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 July 31, 2008. Interest shall be
payable on each Interest Date in cash 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 twelve percent (12.0%). 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. This Principal of this Note 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 Issuance Date, the Holder shall be entitled to convert any portion of
the Principal into fully paid and nonassessable shares of Common Stock in accordance with Section
3(c), at the Conversion Rate (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 to be
converted for such fractional share or (y) a whole share if the Holder converts an additional
portion of its Principal 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.

(b) Conversion Rate. The number of shares of Common Stock issuable upon
conversion of the amount of Principal to be converted pursuant to Section 3(a) shall be determined
by dividing (x) such Principal amount by (y) the Conversion Price (the “Conversion Rate”). The
“Conversion Price” means, as of any Conversion Date (as defined below) or other date of
determination, $ [?]2, subject to adjustment as provided herein.

(c) Mechanics of Conversion.

(i) Optional Conversion. To convert any or all of the Principal 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). 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 second (2nd) Trading Day following the date of receipt of a Conversion Notice
(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 Agent Commission
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.

(ii) 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 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)(ii) 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 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.

(iii) Registration; Book-Entry. The Company shall 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.

(iv) 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, and the Holder of this Note shall not have the right to convert any portion of this Note
pursuant to Section 3(a), to the extent that after giving effect to such conversion, the Holder
(together with the Holder’s affiliates) would beneficially own in excess of 4.99% (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 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. By written notice to the
Company, the Holder may increase or decrease the Maximum Percentage to any other percentage not in
excess of 9.99% specified in such notice; provided that (x) any such increase will not be effective
until the sixty-first (61st) day after such notice is delivered to the Company, and (y)
any such increase or decrease will apply only to the Holder and not to any holder of Other Notes.
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.

(ii) Market Regulation. Unless and until the Stockholder Approval (as
defined in the Securities Purchase Agreement) has been obtained, the Company shall not be obligated
to issue any shares of Common Stock upon conversion of this Note if the issuance of such shares of
Common Stock would exceed the aggregate number of shares of Common Stock which the Company may
issue upon conversion of the Notes without breaching the Company’s obligations under the rules or
regulations of the Principal Market (the “Exchange Cap”), except that such limitation shall not
apply in the event that the Company obtains a written opinion from outside counsel to the Company
that such approval is not required, which opinion shall be reasonably satisfactory to the Required
Holders and the Principal Market (or such other Eligible Market on which the Common Stock may then
be listed). Until such Stockholder Approval or written opinion is obtained, no purchaser of the
Notes pursuant to the Securities Purchase Agreement (the “Purchasers”) shall be issued in the
aggregate, upon conversion of Notes, shares of Common Stock in an amount greater than the product
of the Exchange Cap multiplied by a fraction, the numerator of which is the principal amount of
Notes issued to a Purchaser pursuant to the Securities Purchase Agreement on the Closing Date and
the denominator of which is the aggregate principal amount of all Notes issued to the Purchasers
pursuant to the Securities Purchase Agreement on the Closing Date (with respect to each Purchaser,
the “Exchange Cap Allocation”). Unless and until the Stockholder Approval has been obtained, the
Holder shall not convert any portion of this Note at a Conversion Price that is less than the
Conversion Price in effect on the Issuance Date. In the event that any Purchaser shall sell or
otherwise transfer any of such Purchaser’s Notes, the transferee shall be allocated a pro rata
portion of such Purchaser’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 thereof.

(e) Additional Interest Amount.

(i) Upon a Company Redemption pursuant to Section 8(b) of this Note at any time
during the period beginning on [?], 20113 and ending on [?], 20144, the
Company shall deliver, in addition to the Company Optional Redemption Price to be paid pursuant to
the terms of Section 8(b)(i)(A), an amount in cash by wire transfer of immediately available funds
equal to the Additional Interest Amount on the applicable Company Optional Redemption Date;
provided, that the Company may elect to pay all or a portion of such Additional Interest
Amount in shares of registered and unrestricted Common Stock (“Additional Interest Shares” and any
portion of the Additional Interest Amount to be paid in cash, the “Cash Portion”) so long as (i)
Stockholder Approval has been obtained, (ii) such Common Stock shall be eligible for resale without
restriction and without the need for further registration under any applicable federal or state
securities laws, (iii) the Common Stock is at the time of issuance 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 (collectively, the “Additional Interest Shares Equity Conditions”), and
(iv) there shall not have been an Equity Conditions Failure. If any portion of the Additional
Interest Amount shall be paid in Additional Interest Shares, then the Company shall issue to the
Holder, subject to Section 3(d), a number of shares of Common Stock, equal to (x) the Additional
Interest Amount less the Cash Portion payable on the applicable Company Optional Redemption Date
divided by (y) the Optional Interest Price. Any Additional Interest Shares shall be paid in a
number of fully paid and nonassessable shares of Common Stock (rounded down to the nearest whole
share, with any remaining Additional Interest Amount paid in cash).

(ii) When any Additional Interest Shares are to be paid on a Company Optional
Redemption Date, the Company shall (i) (A) provided that the Company’s transfer agent (the
“Transfer Agent”) is participating in the Depository Trust Company (“DTC”) Fast Automated
Securities Transfer Program and such action is not prohibited by applicable law or regulation or
any applicable policy of DTC, credit such aggregate number of Additional Interest Shares to which
the Holder shall be entitled to the Holder’s or its designee’s balance account with DTC through its
Deposit Withdrawal Agent Commission system, or (B) if the foregoing shall not apply, issue and
deliver on the applicable Company Optional Redemption Date, to the address set forth in the
register maintained by the Company for such purpose pursuant to the Securities Purchase Agreement
or to such address as specified by the Holder in writing to the Company at least two (2) Trading
Days prior to the applicable Company Optional Redemption Date, a certificate, registered in the
name of the Holder or its designee, for the number of Additional Interest Shares to which the
Holder shall be entitled and (ii) with respect to each Company Optional Redemption Date, pay to the
Holder, in cash by wire transfer of immediately available funds, the amount of any Cash Portion.
Notwithstanding the foregoing, the Company shall not be entitled to pay the Additional Interest
Amount in Additional Interest Shares and shall be required to pay such Additional Interest Amount
in cash on the applicable Company Optional Redemption Date if, unless waived in writing by the
Holder, the Additional Interest Shares Equity Conditions have not been satisfied. If an Event of
Default occurs or the Additional Interest Shares Equity Conditions are no longer satisfied during
the Measuring Period, then on the Company Optional Redemption Date, at the Holder’s option, the
Holder may require the Company to pay all or any specified portion of the Additional Interest
Amount due on the applicable Company Optional Redemption Date in cash.

(f) Conversion Upon Fundamental Change. The conversion by the Holder at any
time following the earlier of (a) public announcement of a Change of Control or (b) its receipt of
a Change of Control Notice during the Change of Control Conversion/Redemption Period shall be a
“Change of Control Conversion”. In connection with a Change of Control Conversion, the Company
shall deliver, in addition to the delivery of shares of Common Stock issuable pursuant to the terms
of this Section 3, an amount in cash by wire transfer of immediately available funds equal to the
greater of (i) fifty percent (50%) of the Additional Interest Amount and (ii) the Make-Whole
Premium, with respect to any amount of Principal converted in accordance with Section 3(c);
provided, that the Company may pay all or a portion of such Additional Interest Amount or
Make-Whole Premium, as the case may be, in shares of registered and unrestricted Common Stock so
long the Additional Interest Shares Equity Conditions have been satisfied and so long as such
shares of Common Stock are convertible or exchangeable into the form of consideration paid to
holders of Common Stock in connection with such Change of Control. If any portion of the
Additional Interest Amount or Make-Whole Premium, as the case may be, shall be paid in shares of
Common Stock, then the Company shall pay to the Holder, subject to Section 3(d), a number of shares
of Common Stock equal to (x) the Additional Interest Amount or Make-Whole Premium, as the case may
be, less the Cash Portion payable on the applicable Conversion Date divided by (y) the Optional
Interest Price. Any shares of Common Stock shall be paid in a number of fully paid and
nonassessable shares of Common Stock (rounded down to the nearest whole share, with any remaining
amount to be paid in cash).

(g) Concurrent Conversions. Notwithstanding the foregoing, if the
provisions of both Sections 3(e) and 3(f) could be applicable (e.g., during the time period set
forth in Section 3(e)(i) above a Change of Control Notice is delivered to the Holder by the Company
or the Company publicly announces a Change of Control), the Holder shall be entitled to receive the
greater of the amounts to which it may be entitled under Sections 3(e) and 3(f).

(4) RIGHTS UPON EVENT OF DEFAULT.

(a) Event 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, Additional Interest Shares or Make-Whole Amount within
ten (10) Trading Days after the applicable Conversion Date or Change of Control Settlement Date, 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) consecutive 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 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 Securities Purchase 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 Securities Purchase
Agreement) in the principal amount of at least $10,000,000 in respect of any default or $5,000,000
in respect of any acceleration prior to maturity other than with respect to any Other Notes;

(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
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 (including, without limitation, the Securities Purchase Agreement, the Registration Rights
Agreement and the voting agreements, the common stock purchase warrants and the share borrow
agreement of Carlos Aguero, all of which are being executed in connection with the sale and
issuance of the Notes) 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 either of Sections 8 or 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. Upon the occurrence of an Event of Default with
respect to this Note or any Other Note, the Company shall within one (1) Business Day deliver
written notice thereof via facsimile 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. 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 greater of (i) the
product of (A) the amount of Principal to be redeemed and (B) the Redemption Premium and (ii) the
product of (A) the Conversion Rate with respect to such amount of Principal in effect at such time
as the Holder delivers an Event of Default Redemption Notice and (B) the greater of (1) the Closing
Sale Price of the Common Stock on the date immediately preceding such Event of Default, (2) the
Closing Sale Price of the Common Stock on the date immediately after such Event of Default and (3)
the Closing Sale Price of the Common Stock on the date the Holder delivers the Event of Default
Redemption Notice. 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 an Event of Default occurs as a result
of the Company’s failure to timely pay the amounts payable pursuant to Section 5(b), the Event of
Default Redemption Price shall be the amount that was otherwise payable under Section 8(b) plus the
greater of (a) fifty percent (50%) of the Additional Interest Amount and (b) the Make-Whole
Premium. If an Event of Default occurs as a result of the Company’s failure to timely pay the
amounts payable pursuant to Section 8(b), the Event of Default Redemption Price shall be the amount
that was otherwise payable under Section 8(b) plus the Additional Interest Amount. 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 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) 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) pursuant to written agreements in form and substance reasonably
satisfactory to the Required Holders and approved by the Required Holders prior to such Fundamental
Transaction. 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. 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 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. The portion of this Note subject to
redemption pursuant to this Section 5(b) shall be redeemed by the Company in cash at a price (the
“Change of Control Redemption Price”) equal to the sum of (i) the amount of Principal being
redeemed plus accrued unpaid Interest thereon to but not including the redemption date plus (ii) an
amount in cash equal to the greater of (a) fifty percent (50%) of the Additional Interest Amount
and (b) the Make-Whole Premium. 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.

(c) Make-Whole Premium.

(i) (A) The Make-Whole Premium shall equal an amount calculated in accordance with
this Section 5(c). The Make-Whole Premium will be in addition to, and not in substitution for, any
cash, securities or other assets otherwise due to the Holder upon conversion as described in this
Convertible Note.

(B) The applicable “Make-Whole Premium” shall be determined by reference to the
table attached hereto as Annex I (the “Make-Whole Premium Table”), shall be payable per
each $1,000 principal amount and is based on the Effective Date and the Stock Price.

(C) The exact Stock Price and Effective Date may not be set forth on the Make-Whole
Premium Table, in which case, if the Stock Price is between two Stock Prices on the Make-Whole
Premium Table or the Effective Date is between two Effective Dates on the Make-Whole Premium Table,
the Make-Whole Premium shall be determined by straight-line interpolation between Make-Whole
Premium amounts set forth for the higher and lower Stock Prices and the two Effective Dates, as
applicable, based on a 365-day year (or a 366-day year if the Effective Date occurs in a leap
year). The Stock Prices set forth in the column headers are subject to adjustment pursuant to
Section 5(c)(iii).

(1) If the Stock Price is less than or equal to $[?] (subject to adjustment
pursuant to Section 5(c)(iii), the “Stock Price Threshold”), the Make-Whole Premium shall be
equal to zero.

(2) If the Stock Price is equal to or greater than $[?] (subject to
adjustment pursuant to Section 5(c)(iii), the “Stock Price Cap”), the Make-Whole Premium
shall be equal to zero.

(3) “Stock Price” means the price paid per share of Common Stock in the
transaction constituting the Change of Control, determined as follows: (i) if holders of
Common Stock receive only cash in the transaction constituting the Change of Control, the
Stock Price shall equal the cash amount paid per share of Common Stock; and (ii) in all
other cases, the Stock Price shall equal the arithmetic average of the Closing Sale Price of
a share of Common Stock over the five Trading Day period ending on the Trading Day
immediately preceding the Effective Date; and “Effective Date” means the date that a Change
of Control becomes effective.

(ii) At the Holder’s election, the Company shall pay the Make-Whole Premium in cash
or if the conditions set forth in Section 3(f) have been satisfied in shares of Common Stock (other
than cash paid in lieu of fractional shares) and so long as such shares of Common Stock are
convertible or exchangeable into the form of consideration paid to holders of Common Tock in
connection with the Make-Whole Premium shall be calculated in the manner set forth in Section 3(f).

(iii) Whenever the Conversion Price shall be adjusted from time to time by the
Company pursuant to Section 7, the Stock Price Threshold and the Stock Price Cap shall be adjusted
and each of the Stock Prices set forth in the Make-Whole Premium Table shall be adjusted. The
adjusted Stock Price Threshold, Stock Price Cap and Stock Prices set forth in the Make-Whole
Premium Table shall equal the Stock Price Threshold, the Stock Price Cap and such Stock Prices, as
the case may be, immediately prior to such adjustment multiplied by a fraction, the numerator of
which is the Conversion Price as so adjusted and the denominator of which is the Conversion Price
immediately prior to the adjustment giving rise to such adjustment. Each of the share amounts set
forth in the body of the Make-Whole Premium Table shall also be adjusted in the same manner and at
the same time. The Company shall distribute to the Holder and the holders of the Other Notes a
copy of the adjusted Make-Whole Premium Table in accordance with Section 23(a)(i).

(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.

(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), unless holders of the
Notes representing more than 50% of the aggregate outstanding principal amount of the Notes waive,
prospectively or retroactively, the provisions of this Section 7 for such Dilutive Issuance, in
which case no adjustment to the Conversion Price shall be made, or if waived retroactively, any
such adjustment shall be reversed, in such instance:

(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 each 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 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 each Holder Mandatory Redemption Date stating that the Holder’s right of
redemption under this Section 8 for the applicable 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 required by this Section 8(c) shall be made in accordance
with the provisions of Section 3(c).

(b) Company’s Right of Optional Redemption.

(i) General.

(A) At any time and from time to time on or after and from and after [?],
20115 (the “Company Optional Redemption Triggering Date”) and prior to [?],
20146, so long as there shall not have been an Equity Conditions Failure, the Company
shall have the right, in its sole discretion, to redeem all or any portion of this Note (a “Company
Redemption”). The portion of this Note subject to redemption pursuant to this Section 8(b) shall
be redeemed by the Company in cash at a price (the “Company Optional Redemption Price”) equal to
(i) the product of the Principal being redeemed and 150% plus (ii) the sum of (x) accrued and
unpaid Interest, if any, with respect to such Principal, and (y) accrued and unpaid Late Charges,
if any, with respect to such Principal and Interest. The Additional Interest Amount, if any, for
such Principal to be redeemed shall also be payable to the Holder in cash, or, at the election of
the Company, in shares of Common Stock as described in Section 3(e)(i) upon a Company Redemption
that occurs at any time from the Company Optional Redemption Triggering Date through but not
including [?], 20147; provided, however, if the amount that the Holder
could receive under Section 3(f) is greater (as well as the holders of the Other Notes under the
analogous provision thereof), the Holder and the holders of the Other Notes shall receive such
greater amount. For the avoidance of doubt, the amount that would otherwise be payable to the
Holder pursuant to the immediately preceding sentence upon a Company Redemption shall be payable to
the Holder if the Holder exercises its conversion right herein following the Company’s issuance of
a Company Optional Redemption Notice (as defined below) but prior to the corresponding Company
Redemption.

(B) At any time and from time to time on or after [?], 20148, so long as
there shall not have been an Equity Conditions Failure, the Company shall have the right, in its
sole discretion, to initiate a Company Redemption for any or all of the Principal of this Note.
The portion of this Note subject to redemption pursuant to this Section 8(b) shall be redeemed by
the Company in cash at a Company Optional Redemption Price equal to (i) 100% of the Principal being
redeemed plus (ii) the sum of (x) accrued and unpaid Interest, if any, with respect to such
Principal, and (y) accrued and unpaid Late Charges, if any, with respect to such Principal and
Interest.

(ii) Mechanics. The Company may exercise its redemption right under this
Section 8(b) by delivering a written notice thereof by confirmed facsimile and overnight courier to
all, but not less than all, of the holders of the Notes (the “Company Optional Redemption Notice”
and the date such notice is delivered to all the holders is referred to as the “Company Optional
Redemption Notice Date”). A Company Optional Redemption Notice shall be irrevocable. Each Company
Optional Redemption Notice shall state the aggregate Principal of the Notes which the Company has
elected to be subject to such Company Optional Redemption from all of the holders of the Notes
pursuant to this Section 8(b) (and analogous provisions under the Other Notes) on the Company
Optional Redemption Date plus accrued and unpaid Late Charges with respect to such Principal and
Interest (the “Company Redemption Amount”), provided, however, that the aggregate principal amount
subject to the Company Redemption pursuant to Section 8(b)(i)(A) for all Notes in any calendar year
shall not exceed more than $[• ]9, including for purposes of this calculation, the
Principal converted pursuant to Section 3(e) equal to the Holder’s pro rata allocation of the
aggregate principal amount of the Notes that could be redeemed by the Company in that calendar year
(and analogous provisions under the Other Notes). Upon receipt of a Company Optional 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 to be
converted shall be so converted in accordance with Section 3(e) no later than three (3) Business
Days prior to the date on which the Company Optional Redemption shall occur (the “Company Optional
Redemption Date”) which date shall not be more than seventy-five (75) Business Days after the
Company Optional Redemption Notice Date.

(iii) Pro Rata Redemption Requirement. If the Company elects to cause a
Company Optional 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 Optional
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) 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 any Holder
Mandatory Redemption Date or Company Optional Redemption Date, the Company shall file a Current
Report on Form 8-K describing the terms of such Holder Mandatory Redemption or Company Optional
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) REDEMPTIONS.

(a) Mechanics. 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 and the applicable Company Optional Redemption Price on the applicable
Company Optional Redemption Date. The deadlines for payment set forth in the foregoing sentences
of this Section 9(a) shall apply to cash payments or issuances of shares of Common Stock issuable
upon conversion of the amount of Principal selected for redemption or redemption premiums in
accordance with the other provisions of this Note. 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, (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 and (z) the Conversion Price of
this Note or such new Notes shall be adjusted to the lesser of (A) the Conversion Price as in
effect on the date on which the applicable Redemption Notice is voided and (B) the lowest Closing
Bid Price of the Common Stock during the period beginning on and including the date on which the
applicable Redemption Notice is delivered to the Company and ending on and including the date on
which the applicable Redemption Notice is voided. 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), Section
5(b) or Section 8 (each, an “Other Redemption Notice”), the Company shall immediately, but no later
than one (1) Business Day 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.

(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 115% of
the Conversion Rate with respect to the Principal of each such Note as of the Issuance Date;
provided that within seventy-five (75) days after the Issuance Date, the Company shall have
reserved out of its authorized and unissued Common Stock a number of shares of Common Stock for
each of the Notes equal to 130% of the Conversion Rate with respect to the Principal of each such
Note as of such date. 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, initially 115%, and at all times
following the seventy-fifth (75th) day following the Issuance Date, 130%, of 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 Securities
Purchase 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 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.”

(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, assume or
suffer to exist any Indebtedness other than (x) Permitted Indebtedness and (y) any Indebtedness
(other than Indebtedness described in clause (iv) of the definition of “Permitted Indebtedness”)
that has no material equity component and, after giving effect to such incurrence, guarantee or
assumption of Indebtedness, results in the ratio of Consolidated Funded Indebtedness of the Company
and its Subsidiaries to TTM EBITDA of the Company and its Subsidiaries to be greater than 3.0 to
1.0, as measured as of the end of any fiscal quarter (the “Incurred Indebtedness Measurement
Date”). For the avoidance of doubt, this Note and the Other Notes shall not be included in the
incurred indebtedness calculation of this Section 13(b)(i).

(ii) For purposes of this Section 13(b)(ii), “Consolidated Funded Indebtedness” and
“TTM EBITDA” shall have the meanings given to them in the Financing Agreement by and among the
Company, each Subsidiary listed as “Guarantor” thereto, the lenders from time to time party
thereto, Ableco, as collateral agent for the lenders, and Ableco, as administrative agent for the
lenders, dated as of July 3, 2007, as amended, supplemented or otherwise modified through the
Issuance Date; provided, however, that the only amendment to such financing
agreement between the date of the Securities Purchase Agreement and the Issuance Date shall be to
remove “Subordinated Debt” (as defined therein) from the definition of “Consolidated Funded
Indebtedness”.

(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 end of a fiscal quarter, the Company shall publicly disclose
such results concurrently with its disclosure to the Holders. The Company shall be in breach of
the terms of this Note if at any Incurred Indebtedness Measurement Date, such ratio is greater than
3.0 to 1.0

(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 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.

(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 Required
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(f) of the Securities Purchase
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 then 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 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 one (1) 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 one (1) Business Day of such disputed
determination or arithmetic calculation being submitted to the Holder, then the Company shall,
within one (1) Business Day 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 9(f) of the
Securities Purchase 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 twenty (20) 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 pro
rata subscription offer to holders 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 each of the Purchasers, shall initially be as set forth on the Schedule of Buyers attached
to the Securities Purchase 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) 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 Securities Purchase Agreement.

(26) 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. The Company 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. The
Company 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.

(27) 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).

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

(a) “Ableco Loan Agreement” means the Financing Agreement by and among the Company,
each Subsidiary listed as a “Guarantor” thereto, the lenders from time to time party hereto, Ableco
Finance LLC (“Ableco”), as collateral agent for the lenders, and Ableco, as administrative agent
for the lenders dated as of July 3, 2007, as amended, restated, supplemented, extended, renewed,
refinanced or otherwise modified from time to time.

(b) “Additional Interest Amount” means an amount equal to the difference between (i)
an amount of Interest that, but for the applicable conversion or redemption, would have been paid
to the Holder on such amount of Principal subject to such conversion or redemption from the
Issuance Date through but not including the sixth (6th) anniversary of the Issuance Date discounted
to the present value of such interest using a discount rate equal to three and one-half percent
(3.50%) and (ii) the amount of Interest already paid to the Holder through the applicable
Conversion Date.

(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 employee, consultant, 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)  “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.

(g) “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 to be appropriately adjusted for any
stock dividend, stock split, stock combination, reclassification or similar transaction during the
applicable calculation period.

(h) “Closing Date” shall have the meaning set forth in the Securities Purchase
Agreement, which date is the date the Company initially issued Notes pursuant to the terms of the
Securities Purchase Agreement.

(i) “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.

(j) “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.

(k) “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.

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

(m) “Equity Conditions” means that each of the following conditions is satisfied:
(i) on each day during the period beginning six (6) month prior to the applicable date of
determination and ending on and including the applicable date of determination (the “Equity
Conditions Measuring Period”), either (x) the Registration Statement filed pursuant to the
Registration Rights Agreement shall be effective and available for the resale of all remaining
Registrable Securities in accordance with the terms of the Registration Rights Agreement and there
shall not have been any Grace Periods (as defined in the Registration Rights Agreement) or (y) all
shares of Common Stock issuable upon conversion of the Notes shall be eligible for sale without
restriction and without the need for registration under any applicable federal or state securities
laws; (ii) on each day during the Equity Conditions Measuring Period, 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 either (A) in writing by such exchange or market or (B) by falling below the then effective
minimum listing maintenance requirements of such exchange or market; (iii) during the Equity
Conditions Measuring Period, 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; (v) 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; (vi) during the Equity
Conditions Measuring Period, 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; (vii) the Company shall have no knowledge of any fact
that would cause (x) the Registration Statements required pursuant to the Registration Rights
Agreement not to be effective and available for the resale of all remaining Registrable Securities
in accordance with the terms of the Registration Rights Agreement or (y) 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 (viii) 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.

(n) “Equity Conditions Failure” means that on any day during the period commencing
ten (10) Trading Days prior to the applicable (i) Mandatory Conversion Notice Date through the
applicable Mandatory Conversion Date, (ii) the Company Optional Redemption Notice Date through the
applicable Company Optional Redemption Date or (iii) conversion date pursuant to a conversion event
set forth in Section 3(e)(i), the Equity Conditions have not been satisfied (or waived in writing
by the Holder).

(o) “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; (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) upon conversion or
redemption of this Note and the Other Notes; (iv) upon the exercise of the Warrants; (v) pursuant
to any bona fide firm commitment underwritten public offering with a nationally recognized
underwriter, which generates gross proceeds to the Company in excess of $25,000,000 (other than an
“at-the-market offering” as defined in Rule 415(a)(4) under the 1933 Act and “equity lines”); and
(vi) 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.

(p) “Foothill Loan Agreement” means the Amended and Restated Loan and Security
Agreement by and among the Company, and each of the Subsidiaries that are signatories thereto as
Borrowers, the lenders that are signatories thereto as the Lenders, and Wells Fargo Foothill, Inc.
as the Arranger and Administrative Agent dated as of July 3, 2007, as amended, restated,
supplemented, extended, renewed, refinanced or otherwise modified from time to time.

(q) “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.

(r) “GAAP” means United States generally accepted accounting principles,
consistently applied.

(s) “Holder Pro Rata Amount” means a fraction (i) the numerator of which is the
Principal amount of this Note on the Closing Date and (ii) the denominator of which is the
aggregate principal amount of all Notes issued to the initial purchasers pursuant to the Securities
Purchase Agreement on the Closing Date.

(t) “Holder Mandatory Redemption Date” means each of [?], 201410, [?],
201611, and [?], 202012.

(u) “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 connection 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.

(v) “Interest Rate” means 7.00% per annum, subject to adjustment as set forth in
Section 2.

(w) “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.

(x) “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.

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

(z) “Parent Entity” of a Person means an entity that, directly or indirectly,
controls the applicable Person and whose common stock or equivalent equity security is quoted or
listed on an Eligible Market, or, if there is more than one such Person or Parent Entity, the
Person or Parent Entity with the largest public market capitalization as of the date of
consummation of the Fundamental Transaction.

(aa) “Permitted Indebtedness” means (i) Indebtedness under the Foothill Loan
Agreement in an aggregate principal amount not to exceed  $100,000,000 at any time,
(ii) Indebtedness other than described clause (i) or (iv) of this definition outstanding on the
Subscription Date, (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 nine percent (9.00%) per annum, (v) Indebtedness secured
by Permitted Liens, (vi) Indebtedness under the Ableco Loan Agreement in an aggregate principal
amount not to exceed $ 67,150,000 at any time, 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 no material equity component is contained in such
extensions, refinancings or renewals and 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.

(bb) “Permitted Liens” means (i) 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, (ii) 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, (iii)
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, (iv)
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, (v) Liens incurred in connection with the
extension, renewal or refinancing of the indebtedness secured by Liens of the type described in
clauses (i) and (iv) 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, (vi) 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, (vii) 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 (viii) Liens
arising from judgments, decrees or attachments in circumstances not constituting an Event of
Default under Section 4(a)(ix).

(cc) “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.

(dd) “Principal Market” means The American Stock Exchange.

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

(ff) “Redemption Premium” means (i) in the case of the Events of Default described
in Section 4(a)(i) — (v) and (viii) — (xi), 125% or (ii) in the case of the Events of Default
described in Section 4(a)(vi) — (vii), 100%.

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

(hh) “Registration Rights Agreement” means that certain registration rights
agreement dated as of the Subscription Date by and among the Company and the initial holders of the
Notes relating to, among other things, the registration of the resale of the Common Stock issuable
upon conversion of the Notes.

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

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

(kk) “Securities Purchase Agreement” means that certain securities purchase
agreement dated as of the Subscription Date by and among the Company and the initial holders of the
Notes pursuant to which the Company issued the Notes.

(ll) “Subscription Date” means April [?], 2008.

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

(nn) “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.

(oo) “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).

(pp) “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).

(qq) “Warrants” means the common stock purchase warrants issued to the initial
Holders of the Notes pursuant to and as contemplated by the Securities Purchase Agreement.

(rr) “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.

(29) 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]

1

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:
	
 
	 	Title:

2

ANNEX I

MAKE-WHOLE TABLE

3

[see attached]

EXHIBIT I

METALICO, INC.

CONVERSION NOTICE

Reference is made to the Senior 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:

	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)

4

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 April [?], 2008 from the Company and acknowledged and agreed to
by Corporate Stock Transfer, Inc.

	 	 	 
	Metalico, Inc.

	By:

	 	

	
 
	 	Name:
	
 
	 	Title:

	1	 	Insert twenty (20) year anniversary of
Closing Date.

	2	 	Insert number equal to the greater of (i)
$14.00 and (ii) the Closing Bid Price of the Common Stock on the date of
signing of the Securities Purchase Agreement.

	3	 	Insert three (3) year anniversary of Issuance
Date.

	4	 	Insert the day before the six (6) year
anniversary of Issuance Date.

5Insert three (3) year anniversary of Issuance
Date.

6Insert six (6) year anniversary of Issuance
Date.

7Insert six (6) year anniversary of Issuance
Date.

8Insert six (6) year anniversary of Issuance
Date.

	9	 	Insert amount that is equal to 30% of
aggregate principal amount of Notes as of the Issuance Date.

	10	 	Insert date that is six (6) year anniversary
of Issuance Date.

	11	 	Insert date that is eight (8) year
anniversary of Issuance Date.

	12	 	Insert date that is twelve (12) year
anniversary of Issuance Date.

5

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