Document:

ex10-14.htm

    Exhibit
10.14

     

    WILLIAMSON & RUSNAK

    ATTORNEYS
AT LAW

    
      	
               

              *JIMMY WILLIAMSON,
      P.C.

                   A
      PROFESSIONAL CORPORATION

                CYNDI MOSS
      RUSNAK

               

               

              *CERTIFIED
      PERSONAL INJURY TRIAL LAW

                TEXAS
      BOARD OF LEGAL SPECIALIZATION

            	
               

                4310
      YOAKUM BOULEVARD

              HOUSTON,
      TEXAS 77006-5818

               

              www.jimmywilliamson.com

              _____________

               

              AREA
      CODE 713

              TELEPHONE
      223-3330

              FAX
      223-0001

               

            

    

    April 23,
2008

     

    Via
Email

    David
Loev

    The Loev
Law Firm

    6300 West
Loop South, Suite 280

    Bellaire,
Texas 77401

     

    Re:   
Cause No.
2004-63048 - Drago Daic, et al
v. Calypso Wireless, Inc., et al - In the 151st
Judicial District Court of Harris County, Texas

    

    Dear Mr.
Loev:

    

    This will
confirm that we have agreed that the following promissory notes attached to the
Settlement Agreement with Calypso Wireless, Inc. will be due upon the following
dates:

    

    Exhibit A-1:    
$900,000 Promissory Note due on May 15, 2008

    

    Exhibit A-2:    
$350,000 Promissory Note due on June 14, 2008

    

    Exhibit A-3:    
$1,000,000 Promissory Note due on April 15, 2009

    

    We
understand that these due dates are more than the 30 days, 60 days, and one
year, from the date the notes were signed and so there will be no confusion, we
have agreed to give Calypso extra time provided these notes are paid pursuant to
the above schedule.

    

    Please
sign this letter to acknowledge our agreement.

    
      	 
      	 
      	 
      
	 
      	
            	
              Sincerely,

            
	 
      	 
      	 
      
	 	 	/s/
      Cyndi M. Rusnak
	 
      	
            	
              Cyndi
      M. Rusnak

            
	 
      	 
      	 
      
	
              AGREED:

            	 
      	 
      
	 	 	 
	
              _______________________

            	 
      	
              /s/
      Richard Pattin

            
	
              David
      Loev

            	 
      	
              Richard
      Pattin

            
	
              Attorney
      for Calypso Wireless, Inc.

            	 
      	
              President
      of Calypso Wireless, Inc.

            
	 	 	 
	
              ___________

            	 
      	
              April
      22, 2008

            
	
              Date

            	 
      	
              Date

            

    

     

    
      	
              cc:

            	
              Brian
      Zimmerman

            	
              Via
      Facsimile

            
	 
      	
              Drago
      Daic

            	
              Via
      Regular MailEX-10.1

Exhibit 10.1

SECURITIES PURCHASE AGREEMENT

SECURITIES PURCHASE AGREEMENT (the “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 (individually, a “Buyer” and collectively, the “Buyers”).

WHEREAS:

A. The Company and each Buyer is executing and delivering this Agreement in reliance
upon the exemption from securities registration afforded by Section 4(2) of the Securities Act of
1933, as amended (the “1933 Act”), and Rule 506 of Regulation D (“Regulation D”) as promulgated by
the United States Securities and Exchange Commission (the “SEC”) under the 1933 Act.

B. The Company has authorized a new series of senior unsecured convertible notes of
the Company, in the form attached hereto as Exhibit A (the “Notes”), which Notes shall be
convertible into the Company’s common stock, par value $0.001 per share (the ”Common Stock”) (as
converted, the “Conversion Shares”), in accordance with the terms of the Notes.

C. Each Buyer wishes to purchase, and the Company wishes to sell, upon the terms and
conditions stated in this Agreement (i) that aggregate principal amount of the Notes set forth
opposite such Buyer’s name in column (3) on the Schedule of Buyers attached hereto (which aggregate
amount for all Buyers shall be $100,000,000 and (ii) warrants, in substantially the form attached
hereto as Exhibit B (the “Warrants”), to acquire up to that number of additional shares of Common
Stock set forth opposite such Buyer’s name in column (3) of the Schedule of Buyers attached hereto
(which aggregate amount for all Buyers shall be 250,000 and shall be collectively referred to
herein, as exercised, the “Warrant Shares”).

D. Contemporaneously with the execution and delivery of this Agreement, the parties
hereto are executing and delivering a Registration Rights Agreement, substantially in the form
attached hereto as Exhibit C (the “Registration Rights Agreement”), pursuant to which the
Company will agree to provide certain registration rights with respect to the Registrable
Securities (as defined in the Registration Rights Agreement) under the 1933 Act and the rules and
regulations promulgated thereunder, and applicable state securities laws.

E. The Notes, Conversion Shares, Warrants and Warrant Shares collectively are
referred to herein as the “Securities”.

F. The Company has engaged Morgan Joseph & Co. Inc. as its placement agent (the
“Placement Agent”) for the offering of the Securities on a “best efforts” basis.

NOW, THEREFORE, the Company and each Buyer hereby agree as follows:

1. PURCHASE AND SALE OF NOTES AND WARRANTS.

(a) Purchase of Notes and Warrants. Subject to the satisfaction (or waiver)
of the conditions set forth in Sections 6 and 7 below, the Company shall issue and sell to each
Buyer, and each Buyer severally, but not jointly, agrees to purchase from the Company on the
Closing Date (as defined below), (A) a principal amount of Notes as is set forth opposite such
Buyer’s name in column (3) on the Schedule of Buyers and (B) Warrants to acquire up to that number
of Warrant Shares as is set forth opposite such Buyer’s name in column (3) on the Schedule of
Buyers (the “Closing”).

(b) Purchase Price. The aggregate purchase price for the Notes and Warrants
to be purchased by each such Buyer at the Closing (the “Purchase Price”) shall be the amount set
forth opposite each Buyer’s name in column (4) of the Schedule of Buyers (less, in the case of
Portside Growth and Opportunity Fund (“Portside”), the amounts withheld pursuant to Section 4(g)).
Each Buyer shall pay $1,000 for each $1,000 of principal amount of Notes to be purchased by such
Buyer at the Closing.

(c) Closing Date. The Closing (the “Closing Date”) shall take place at the
offices of Olshan Grundman Frome Rosenzweig & Wolosky LLP, Park Avenue Tower, 65 East
55th Street, New York, New York 10022 at 10:00 a.m., New York City Time, on April 30,
2008, subject to notification of the satisfaction (or waiver) of the conditions to Closing set
forth in Sections 6 and 7 below (or such other date, time and place as is mutually agreed to by the
Company and each Buyer).

(d) Form of Payment. On the Closing Date, (i) each Buyer shall pay its
respective Purchase Price to the Company for the Notes and Warrants to be issued and sold to such
Buyer at the Closing by wire transfer of immediately available funds in accordance with the
Company’s written wire instructions and (ii) the Company shall deliver to each Buyer (A) the Notes
(allocated in the principal amounts as such Buyer shall request) which such Buyer is then
purchasing hereunder and (B) a Warrant pursuant to which such Buyer shall have the right to acquire
such number of Warrant Shares as is set forth opposite such Buyer’s name in column (3) of the
Schedule of Buyers, in all cases duly executed on behalf of the Company and registered in the name
of such Buyer.

2. BUYER’S REPRESENTATIONS AND WARRANTIES.

Each Buyer, severally and not jointly, represents and warrants with respect to only itself, as
of the date hereof and as of the Closing Date, that:

(a) No Public Sale or Distribution. Such Buyer is (i) acquiring the Notes
and Warrants and (ii) upon conversion of the Notes and exercise of the Warrants will acquire the
Conversion Shares and Warrant Shares, respectively, issuable upon conversion thereof, in the
ordinary course of business for its own account and not with a view towards, or for resale in
connection with, the public sale or distribution thereof, except pursuant to sales registered or
exempted under the 1933 Act and such Buyer does not have a present arrangement to effect any
distribution of the Securities to or through any person or entity; provided,
however, that by making the representations herein, such Buyer does not agree to hold any
of the Securities for any minimum or other specific term and reserves the right to dispose of the
Securities at any time in accordance with or pursuant to a registration statement or an exemption
under the 1933 Act. Such Buyer is acquiring the Securities hereunder in the ordinary course of its
business. Such Buyer does not presently have any agreement or understanding, directly or
indirectly, with any Person to distribute any of the Securities.

(b) Accredited Investor Status. Such Buyer is an “accredited investor” as
that term is defined in Rule 501(a) of Regulation D.

(c) Reliance on Exemptions. Such Buyer understands that the Securities are
being offered and sold to it in reliance on specific exemptions from the registration requirements
of United States federal and state securities laws and that the Company is relying in part upon the
truth and accuracy of, and such Buyer’s compliance with, the representations, warranties,
agreements, acknowledgments and understandings of such Buyer set forth herein in order to determine
the availability of such exemptions and the eligibility of such Buyer to acquire the Securities.

(d) Information. Such Buyer and its advisors, if any, have been furnished
with all materials relating to the business, finances and operations of the Company and materials
relating to the offer and sale of the Securities which have been requested by such Buyer. Such
Buyer and its advisors, if any, have been afforded the opportunity to ask questions of the Company.
Neither such inquiries nor any other due diligence investigations conducted by such Buyer or its
advisors, if any, or its representatives shall modify, amend or affect such Buyer’s right to rely
on the Company’s representations and warranties contained herein. Such Buyer understands that its
investment in the Securities involves a high degree of risk and is able to afford a complete loss
of such investment. Such Buyer has independently evaluated the merits of its decision to purchase
the Securities pursuant to the Transaction Documents, and such Purchaser confirms that it has not
relied on the advice of any other Buyer’s business and/or legal counsel in making such decision.
Such Buyer understands that nothing in this Agreement or any other materials presented by or on
behalf of the Company to the Buyer in connection with the purchase of the Securities constitutes
legal, tax or investment advice. Such Buyer has sought such accounting, legal and tax advice as it
has considered necessary to make an informed investment decision with respect to its acquisition of
the Securities. Such Buyer understands that the Placement Agent has acted solely as the agent of
the Company in this placement of the Securities and such Buyer has not relied on the business or
legal advice of the Placement Agent or any of its agents, counsel or Affiliates in making its
investment decision hereunder, and confirms that none of such Persons has made any representations
or warranties to such Buyer in connection with the transactions contemplated by the Transaction
Documents.

(e) No Governmental Review. Such Buyer understands that no United States
federal or state agency or any other government or governmental agency has passed on or made any
recommendation or endorsement of the Securities or the fairness or suitability of the investment in
the Securities nor have such authorities passed upon or endorsed the merits of the offering of the
Securities.

(f) Transfer or Resale. Such Buyer understands that except as provided in
the Registration Rights Agreement: (i) the Securities have not been and are not being registered
under the 1933 Act or any state securities laws, and may not be offered for sale, sold, assigned or
transferred unless (A) subsequently registered thereunder, (B) such Buyer shall have delivered to
the Company an opinion of counsel, in a generally acceptable form, to the effect that such
Securities to be sold, assigned or transferred may be sold, assigned or transferred pursuant to an
exemption from such registration, or (C) such Buyer provides the Company with reasonable assurance
that such Securities can be sold, assigned or transferred pursuant to Rule 144 or Rule 144A
promulgated under the 1933 Act, as amended, (or a successor rule thereto) (collectively, “Rule
144”); (ii) any sale of the Securities made in reliance on Rule 144 may be made only in accordance
with the terms of Rule 144 and further, if Rule 144 is not applicable, any resale of the Securities
under circumstances in which the seller (or the Person (as defined in Section 3(s)) through whom
the sale is made) may be deemed to be an underwriter (as that term is defined in the 1933 Act) may
require compliance with some other exemption under the 1933 Act or the rules and regulations of the
SEC thereunder; and (iii) neither the Company nor any other Person is under any obligation to
register the Securities under the 1933 Act or any state securities laws or to comply with the terms
and conditions of any exemption thereunder. Notwithstanding the foregoing, the Securities may be
pledged in connection with a bona fide margin account or other loan secured by the Securities and
such pledge of Securities shall not be deemed to be a transfer, sale or assignment of the
Securities hereunder, and no Buyer effecting a pledge of Securities shall be required to provide
the Company with any notice thereof or otherwise make any delivery to the Company pursuant to this
Agreement or any other Transaction Document (as defined below), including, without limitation, this
Section 2(f); provided, that in order to make any sale, transfer or assignment of Securities, such
Buyer and its pledgee makes such disposition in accordance with or pursuant to a registration
statement or an exemption under the 1933 Act.

(g) Legends. Such Buyer understands that the certificates or other
instruments representing the Conversion Shares and Warrant Shares and, until such time as the
resale of the Conversion Shares and Warrant Shares have been registered under the 1933 Act as
contemplated by the Registration Rights Agreement, the stock certificates representing the
Conversion Shares and Warrant Shares, except as set forth below, shall bear any legend as required
by the “blue sky” laws of any state and a restrictive legend in substantially the following form
(and a stop-transfer order may be placed against transfer of such stock certificates):

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE
ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL IN A GENERALLY
ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS
SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE
FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

The legend set forth above shall be removed and the Company shall issue a certificate without such
legend to the holder of the Securities upon which it is stamped or issue to such holder by
electronic delivery at the applicable balance account at The Depository Trust Company (“DTC”), if,
unless otherwise required by state securities laws, (i) such Securities are registered for resale
under the 1933 Act, (ii) in connection with a sale, assignment or other transfer, such holder
provides the Company with an opinion of counsel reasonably satisfactory to the Company, in a
generally acceptable form, to the effect that such sale, assignment or transfer of the Securities
may be made without registration under the applicable requirements of the 1933 Act and that such
legend is no longer required, or (iii) such holder provides the Company with reasonable assurance
that the Securities can be sold, assigned or transferred pursuant to Rule 144 or Rule 144A. The
Company shall be responsible for the fees of its transfer agent and all DTC fees associated with
such issuance.

(h) Validity; Enforcement. This Agreement and the Registration Rights
Agreement have been duly and validly authorized, executed and delivered on behalf of such Buyer and
shall constitute the legal, valid and binding obligations of such Buyer enforceable against such
Buyer in accordance with their respective terms, except as such enforceability may be limited by
general principles of equity or to applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation and other similar laws relating to, or affecting generally, the enforcement of
applicable creditors’ rights and remedies.

(i) No Conflicts. The execution, delivery and performance by such Buyer of
this Agreement and the Registration Rights Agreement and the consummation by such Buyer of the
transactions contemplated hereby and thereby will not (i) result in a violation of the
organizational documents of such Buyer or (ii) conflict with, or constitute a default (or an event
which with notice or lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or
instrument to which such Buyer is a party, or (iii) result in a violation of any law, rule,
regulation, order, judgment or decree (including federal and state securities laws) applicable to
such Buyer, except in the case of clauses (ii) and (iii) above, for such conflicts, defaults,
rights or violations which would not, individually or in the aggregate, reasonably be expected to
have a material adverse effect on the ability of such Buyer to perform its obligations hereunder.

(j) Residency. Such Buyer is a resident of that jurisdiction specified
below its address on the Schedule of Buyers.

(k) Certain Trading Activities. Other than signing this Agreement, since
the time that such Buyer was first contacted by the Company, the Placement Agent or any other
Person regarding the transactions contemplated hereby, neither the Buyer nor any “affiliate” (as
defined in the 1933 Act) of such Buyer which (x) had knowledge of the transactions contemplated
hereby, (y) has or shares discretion relating to such Buyer’s investments or trading or information
concerning such Buyer’s investments, including in respect of the Securities, and (z) is subject to
such Purchaser’s review or input concerning such affiliate’s investments or trading (collectively,
“Trading Affiliates”) has directly or indirectly, nor has any Person acting on behalf of or
pursuant to any understanding with such Buyer or Trading Affiliate, effected or agreed to effect
any sales or purchases of the securities of the Company (including, without limitation, any Short
Sales (as defined below) involving the Company’s securities, but not including the location and/or
reservation of borrowable shares of Common Stock). Notwithstanding the foregoing, in the case of a
Buyer and/or Trading Affiliate that is, individually or collectively, a multi-managed investment
vehicle whereby separate portfolio managers manage separate portions of such Buyer’s or Trading
Affiliate’s assets and the portfolio managers have no direct knowledge of the investment decisions
made by the portfolio managers managing other portions of such Buyer’s or Trading Affiliate’s
assets, the representation set forth above shall apply only with respect to the portion of assets
managed by the portfolio managers that have knowledge about the financing transaction contemplated
by this Agreement. Notwithstanding the foregoing, no Buyer makes any representation, warranty or
covenant hereby that it will not engage in Short Sales in the securities of the Company after the
time that the transactions contemplated by this Agreement are first publicly announced as described
in Section 4(i). For purposes of this clause (k), “Short Sales” include, without limitation, (i)
all “short sales” as defined in Rule 200 promulgated under Regulation SHO under the Securities
Exchange Act of 1934, as amended (the “1934 Act”), whether or not against the box, and all types of
direct and indirect stock pledges, forward sale contracts, options, puts, calls, short sales,
swaps, “put equivalent positions” (as defined in Rule 16a-1(h) under the 1934 Act) and similar
arrangements (including on a total return basis), and (ii) sales and other transactions through
non-U.S. broker dealers or foreign regulated brokers, but, with respect to clause (i) and (ii)
above, not including the location and/or reservation of borrowable shares of Common Stock.

(l) General Solicitation. Such Buyer is not purchasing the Securities as a
result of any advertisement, article, notice or other communication regarding the Securities
published in any newspaper, magazine or similar media or broadcast over television or radio or
presented at any seminar or any other general advertisement.

3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

The Company represents and warrants to each of the Buyers that, as of the date hereof and as
of the Closing Date:

(a) Organization and Qualification. Each of the Company and its
“Subsidiaries” (which for purposes of this Agreement means any entity in which the Company,
directly or indirectly, owns capital stock or holds an equity or similar interest) are corporations
duly organized and validly existing in good standing under the laws of the jurisdiction in which
they are incorporated, and have the requisite corporate power and authorization to own their
properties and to carry on their business as now being conducted. Each of the Company and its
Subsidiaries is duly qualified as a foreign corporation to do business and is in good standing in
every jurisdiction in which its ownership of property or the nature of the business conducted by it
makes such qualification necessary, except to the extent that the failure to be so qualified or be
in good standing would not have a Material Adverse Effect. As used in this Agreement, “Material
Adverse Effect” means any material adverse effect on the business, properties, assets, operations,
results of operations, condition (financial or otherwise) or prospects of the Company and its
Subsidiaries, taken as a whole, or on the transactions contemplated hereby and the other
Transaction Documents or by the agreements and instruments to be entered into in connection
herewith or therewith, or on the authority or ability of the Company to perform its obligations
under the Transaction Documents (as defined below). The Company has no Subsidiaries except as set
forth on Schedule 3(a).

(b) Authorization; Enforcement; Validity. Subject to approval by the
Company’s Board of Directors with respect to the issuance of the Warrants, the Company has the
requisite corporate power and authority to enter into and perform its obligations under this
Agreement, the Irrevocable Transfer Agent Instructions (as defined in Section 5), the Registration
Rights Agreement, the Notes, the Warrants and each of the other agreements entered into by the
parties hereto in connection with the transactions contemplated by this Agreement (collectively,
the “Transaction Documents”) and to issue the Securities in accordance with the terms hereof and
thereof. The execution and delivery of the Transaction Documents by the Company and the
consummation by the Company of the transactions contemplated hereby and thereby, including, without
limitation, the issuance of the Notes and the Warrants, the reservation for issuance and the
issuance of the Conversion Shares issuable upon conversion of the Note and the reservation for
issuance and the issuance of the Warrant Shares issuable upon exercise of the Warrants have been
duly authorized by the Company’s Board of Directors and, except for the Stockholder Approval (as
defined in Section 4(r) below), no further consent or authorization is required by the Company, its
Board of Directors or its stockholders. This Agreement and the other Transaction Documents have
been duly executed and delivered by the Company, and constitute the legal, valid and binding
obligations of the Company, enforceable against the Company in accordance with their respective
terms, except as such enforceability may be limited by general principles of equity or applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally, the enforcement of applicable creditors’ rights and remedies.

(c) Issuance of Securities. Subject to approval by the Company’s Board of
Directors with respect to the issuance of the Warrants, the issuance of the Notes and Warrants are
duly authorized and upon issuance in accordance with the terms of the Transaction Documents shall
be free from all taxes, liens and charges with respect to the issue thereof. As of the Closing, a
number of shares of Common Stock shall have been duly authorized and reserved for issuance which
equals or exceeds 115% of the aggregate of the maximum number of shares of Common Stock initially
issuable upon conversion of the Notes and exercise of the Warrants. Upon conversion in accordance
with the Notes, and exercise in accordance with the Warrants, the Conversion Shares and Warrant
Shares will be validly issued, fully paid and nonassessable and free from all preemptive or similar
rights, taxes, liens and charges with respect to the issue thereof, with the holders being entitled
to all rights accorded to a holder of Common Stock. Assuming the accuracy of the representations
and warranties of the Buyers contained herein and compliance with the covenants set forth herein,
the offer and issuance by the Company of the Securities is exempt from registration under the 1933
Act.

(d) No Conflicts. Subject to approval by the Company’s Board of Directors
with respect to the issuance of the Warrants, the execution, delivery and performance of the
Transaction Documents by the Company and the consummation by the Company of the transactions
contemplated hereby and thereby (including, without limitation, the issuance of the Notes and
Warrants as well as the reservation for issuance and issuance of the Conversion Shares and Warrant
Shares) will not (i) result in a violation of the Company’s Certificate of Incorporation (as
defined below) or Bylaws (as defined below) or (ii) result in a violation of any certificate of
incorporation, certificate of formation, certificate of designation, bylaw or other constituent
document of any of the Company’s Subsidiaries (iii) conflict with, or constitute a default (or an
event which with notice or lapse of time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of, any material agreement,
indenture or instrument to which the Company or any of its Subsidiaries is a party, or (iv) result
in a violation of any law, rule, regulation, order, judgment or decree (including federal and state
securities laws and regulations and the rules and regulations of The American Stock Exchange (the
“Principal Market”) applicable to the Company or any of its Subsidiaries or by which any property
or asset of the Company or any of its Subsidiaries is bound or affected, except in the case of
clause (iv) above, as could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect and subject to the receipt of listing approval by the Principal Market.

(e) Consents. The Company is not required to obtain any consent,
authorization or order of, or make any filing or registration with, any court, governmental agency
or any regulatory or self-regulatory agency or any other Person in order for it to execute, deliver
or perform any of its obligations under or contemplated by the Transaction Documents, in each case
in accordance with the terms hereof or thereof, other than (i) filings required by applicable state
securities laws, (ii) the filing with the SEC of one or more Registration Statements in accordance
with the requirements of the Registration Rights Agreement (which is not required to be filed or
obtained before the Closing), (iii) the filing of any requisite notices and/or application(s) to
the Principal Market for the issuance and sale of the Common Stock and the listing of the Common
Stock for trading or quotation, as the case may be, thereon in the time and manner required
thereby, (iv) the filings required in accordance with Section 4(i) of this Agreement and (v) those
that have been made or obtained prior to the date of this Agreement. All consents, authorizations,
orders, filings and registrations which the Company is required to obtain pursuant to the preceding
sentence have been obtained or effected on or prior to the Closing Date, except as could not,
individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The
Company and its Subsidiaries are unaware of any facts or circumstances that could reasonably be
expected to prevent the Company from obtaining or effecting any of the registration, application or
filings pursuant to the preceding sentence.

(f) Acknowledgment Regarding Buyer’s Purchase of Securities. The Company
acknowledges and agrees that each Buyer is acting individually and solely in the capacity of an
arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated
hereby and thereby and that no Buyer is (i) an officer or director of the Company, (ii) an
“affiliate” of the Company or any of its Subsidiaries (as defined in Rule 144) or (iii) to the
knowledge of the Company, a “beneficial owner” of more than 10% of the shares of Common Stock (as
defined for purposes of Rule 13d-3 of the Securities Exchange Act of 1934, as amended (the “1934
Act”)). The Company further acknowledges that no Buyer is acting as a financial advisor or
fiduciary of the Company or any of its Subsidiaries (or in any similar capacity) with respect to
the Transaction Documents and the transactions contemplated hereby and thereby, and any advice
given by a Buyer or any of its representatives or agents in connection with the Transaction
Documents and the transactions contemplated hereby and thereby is merely incidental to such Buyer’s
purchase of the Securities. The Company further represents to each Buyer that the Company’s
decision to enter into the Transaction Documents has been based solely on the independent
evaluation by the Company and its representatives.

(g) No General Solicitation; Placement Agent’s Fees. Neither the Company,
nor any of its affiliates, nor any Person acting on its or their behalf, has engaged in any form of
general solicitation or general advertising (within the meaning of Regulation D) in connection with
the offer or sale of the Securities. The Company shall be responsible for the payment of any
placement agent’s fees, financial advisory fees, or brokers’ commissions (other than for persons
engaged by any Buyer or its investment advisor) relating to or arising out of the transactions
contemplated hereby. The Company shall pay, and hold each Buyer harmless against, any liability,
loss or expense (including, without limitation, attorney’s fees and out-of-pocket expenses) arising
in connection with any such claim. The Company acknowledges that it has engaged the Placement
Agent in connection with the sale of the Securities. Other than the Placement Agent, the Company
has not engaged any placement agent or other agent in connection with the sale of the Securities.

(h) No Integrated Offering. None of the Company, its Subsidiaries, any of
their affiliates, and any Person acting on their behalf has, directly or indirectly, made any
offers or sales of any security or solicited any offers to buy any security, under circumstances
that would require registration of any of the Securities under the 1933 Act or cause this offering
of the Securities to be integrated with prior offerings by the Company for purposes of the 1933 Act
or any applicable stockholder approval provisions, including, without limitation, under the rules
and regulations of any exchange or automated quotation system on which any of the securities of the
Company are listed or designated. None of the Company, its Subsidiaries, their affiliates and any
Person acting on their behalf will take any action or steps referred to in the preceding sentence
that would (i) require registration of any of the Securities under the 1933 Act, (ii) cause the
offering of the Securities to be integrated with other offerings in violation of the 1933 Act or
(iii) cause the sale and issuance of the Securities to be subject to any stockholder approval
requirement, including, without limitation, under the rules and regulations of any exchange or
automated quotation system on which any of the securities of the Company are listed or designated.

(i) Dilutive Effect. The Company understands and acknowledges that the
number of Conversion Shares and Warrant Shares issuable upon conversion of the Notes and exercise
of the Warrants will increase in certain circumstances. The Company further acknowledges that its
obligation to issue the Conversion Shares upon conversion of the Notes and Warrant Shares upon
exercise of the Warrants in accordance with this Agreement, the Notes and the Warrants in each
case, is absolute and unconditional regardless of the dilutive effect that such issuance may have
on the ownership interests of other stockholders of the Company.

(j) Application of Takeover Protections; Rights Agreement. The Company and
its Board of Directors have taken all necessary action, if any, in order to render inapplicable any
control share acquisition, business combination, poison pill (including any distribution under a
rights agreement) or other similar anti-takeover provision under the Certificate of Incorporation
or the laws of the State of Delaware which is or could become applicable to any Buyer as a result
of the transactions contemplated by this Agreement, including, without limitation, the Company’s
issuance of the Securities and any Buyer’s ownership of the Securities. The Company has not
adopted a stockholder rights plan or similar arrangement relating to accumulations of beneficial
ownership of Common Stock or a change in control of the Company.

(k) SEC Documents; Financial Statements. During the two (2) years prior to
the date hereof, the Company has timely filed all reports, schedules, forms, statements and other
documents required to be filed by it with the SEC pursuant to the reporting requirements of the
1934 Act (all of the foregoing filed prior to the date hereof or prior to the date of the Closing,
and all exhibits included therein and financial statements and schedules thereto and documents
incorporated by reference therein being hereinafter referred to as the “SEC Documents”). The
Company has delivered to the Buyers or their respective representatives true, correct and complete
copies of the SEC Documents not available on the EDGAR system, if any. As of their respective
dates, the SEC Documents complied in all material respects with the requirements of the 1934 Act
and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents,
and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue
statement of a material fact or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the circumstances under which
they were made, not misleading. As of their respective dates, the financial statements of the
Company included in the SEC Documents complied as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC with respect thereto.
Such financial statements have been prepared in accordance with generally accepted accounting
principles, consistently applied, during the periods involved (except (i) as may be otherwise
indicated in such financial statements or the notes thereto, or (ii) in the case of unaudited
interim statements, to the extent they may exclude footnotes or may be condensed or summary
statements) and fairly present in all material respects the financial position of the Company as of
the dates thereof and the results of its operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit adjustments).

(l) Absence of Certain Changes. Except as disclosed in Schedule
3(l), since December 31, 2007, there has been no material adverse change in the business,
properties, operations, condition (financial or otherwise), results of operations or prospects of
the Company or its Subsidiaries. Except as disclosed in Schedule 3(l), since December 31,
2007, the Company has not (i) declared or paid any dividends, (ii) sold any assets, individually or
in the aggregate, in excess of $100,000 outside of the ordinary course of business or (iii) had
capital expenditures, individually or in the aggregate, in excess of $3,000,000. The Company has
not taken any steps to seek protection pursuant to any bankruptcy law nor does the Company have any
knowledge or reasonable basis to believe that its creditors intend to initiate involuntary
bankruptcy proceedings or any actual knowledge of any fact which would reasonably lead a creditor
to do so. The Company is not as of the date hereof, and after giving effect to the transactions
contemplated hereby to occur at the Closing, will not be Insolvent (as defined below). For
purposes of this Section 3(l), “Insolvent” means, with respect to any Person (as defined in Section
3(s)) (i) the present fair saleable value of such Person’s assets is less than the amount required
to pay such Person’s total Indebtedness (as defined in Section 3(s)), (ii) such Person is unable to
pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities
become absolute and matured in the ordinary course, (iii) such Person intends to incur or believes
that it will incur debts that would be beyond its ability to pay as such debts mature in the
ordinary course or (iv) such Person has unreasonably small capital with which to conduct the
business in which it is engaged, as such business is now conducted, or in which it is about to be
engaged.

(m) No Undisclosed Events, Liabilities, Developments or Circumstances.
Except for the transactions contemplated hereby, which will be disclosed in the 8-K filing pursuant
to Section 4(i), no event, liability, development or circumstance has occurred or exists, or is
contemplated to occur, with respect to the Company or its Subsidiaries or their respective
business, properties, prospects, operations or financial condition, that would be required to be
disclosed by the Company under applicable securities laws on a registration statement on Form S-1
filed with the SEC relating to an issuance and sale by the Company of its Common Stock and which
has not been publicly announced.

(n) Conduct of Business; Regulatory Permits. Neither the Company nor any of
its Subsidiaries is in violation of any judgment, decree or order or any statute, ordinance, rule
or regulation applicable to the Company or its Subsidiaries, and neither the Company nor any of its
Subsidiaries will conduct its business in violation of any of the foregoing, except for violations
which would not, individually or in the aggregate, have a Material Adverse Effect. Without
limiting the generality of the foregoing, the Company is not in violation of any of the rules,
regulations or requirements of the Principal Market and has no knowledge of any facts that could
reasonably be expected to lead to delisting or suspension of the Common Stock in the foreseeable
future. During the two (2) years prior to the date hereof, (i) the Common Stock has been
designated for quotation or listed on the Principal Market, (ii) trading in the Common Stock has
not been suspended by the SEC or the Principal Market and (iii) the Company has received no
communication, written or oral, from the SEC or the Principal Market regarding the suspension or
delisting of the Common Stock from the Principal Market. The Company and its Subsidiaries possess
all certificates, authorizations and permits issued by the appropriate federal, state or foreign
regulatory authorities necessary to conduct their respective businesses, except where the failure
to possess such certificates, authorizations or permits would not have, individually or in the
aggregate, a Material Adverse Effect, and neither the Company nor any such Subsidiary has received
any notice of proceedings relating to the revocation or modification of any such certificate,
authorization or permit.

(o) Foreign Corrupt Practices. Neither the Company nor any of its
Subsidiaries nor any director, officer, agent, employee or other Person acting on behalf of the
Company or any of its Subsidiaries has, in the course of its actions for, or on behalf of, the
Company or any of its Subsidiaries (i) used any corporate funds for any unlawful contribution,
gift, entertainment or other unlawful expenses relating to political activity; (ii) made any direct
or indirect unlawful payment to any foreign or domestic government official or employee from
corporate funds; (iii) violated or is in violation of any provision of the U.S. Foreign Corrupt
Practices Act of 1977, as amended; or (iv) made any unlawful bribe, rebate, payoff, influence
payment, kickback or other unlawful payment to any foreign or domestic government official or
employee.

(p) Sarbanes-Oxley Act. The Company is in material compliance with any and
all applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date
hereof, and any and all applicable rules and regulations promulgated by the SEC thereunder that are
effective as of the date hereof.

(q) Transactions With Affiliates. None of the officers, directors or
employees of the Company is presently a party to any transaction with the Company or any of its
Subsidiaries (other than for ordinary course services as employees, officers or directors),
including any contract, agreement or other arrangement providing for the furnishing of services to
or by, providing for rental of real or personal property to or from, or otherwise requiring
payments to or from any such officer, director or employee or, to the knowledge of the Company, any
corporation, partnership, trust or other entity in which any such officer, director, or employee
has a substantial interest or is an officer, director, trustee or partner.

(r) Equity Capitalization. As of the date hereof, the authorized capital
stock of the Company consists of (y) 50,000,000 shares of Common Stock, of which as of the date
hereof, 35,378,942 shares are issued and outstanding, 4,707,125 shares are reserved for issuance
pursuant to the Company’s employee incentive plan and other options and warrants outstanding and no
shares are reserved for issuance pursuant to securities (other than the Notes and the Warrants)
exercisable or exchangeable for, or convertible into, shares of Common Stock and (z) 139,342 shares
of preferred stock, par value $0.001 per share, of which as of the date hereof, no shares are
issued and outstanding. All of such outstanding shares have been, or upon issuance will be,
validly issued and are fully paid and nonassessable. Except as set forth on Schedule 3(r):
(i) no shares of the Company’s capital stock are subject to preemptive rights or any other similar
rights or any liens or encumbrances suffered or permitted by the Company; (ii) there are no
outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable
for, any shares of capital stock of the Company or any of its Subsidiaries, or contracts,
commitments, understandings or arrangements by which the Company or any of its Subsidiaries is or
may become bound to issue additional shares of capital stock of the Company or any of its
Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into, or exercisable or
exchangeable for, any shares of capital stock of the Company or any of its Subsidiaries; (iii)
there are no outstanding debt securities, notes, credit agreements, credit facilities or other
agreements, documents or instruments evidencing Indebtedness (as defined in Section 3(s)) of the
Company or any of its Subsidiaries or by which the Company or any of its Subsidiaries is or may
become bound; (iv) there are no financing statements securing obligations in any material amounts,
either singly or in the aggregate, filed in connection with the Company or any of its Subsidiaries;
(v) there are no agreements or arrangements under which the Company or any of its Subsidiaries is
obligated to register the sale of any of their securities under the 1933 Act (except pursuant to
the Registration Rights Agreement); (vi) there are no outstanding securities or instruments of the
Company or any of its Subsidiaries which contain any redemption or similar provisions, and there
are no contracts, commitments, understandings or arrangements by which the Company or any of its
Subsidiaries is or may become bound to redeem a security of the Company or any of its Subsidiaries;
(vii) there are no securities or instruments containing anti-dilution or similar provisions that
will be triggered by the issuance of the Securities; (viii) the Company does not have any stock
appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement; and
(ix) the Company and its Subsidiaries have no liabilities or obligations required to be disclosed
in the SEC Documents (as defined herein) but not so disclosed in the SEC Documents, other than
those incurred in the ordinary course of the Company’s or any Subsidiary’s respective businesses
and which, individually or in the aggregate, do not or would not have a Material Adverse Effect.
The Company has furnished or made available to the Buyer upon such Buyer’s request, true, correct
and complete copies of the Company’s Certificate of Incorporation, as amended and as in effect on
the date hereof (the “Certificate of Incorporation”), and the Company’s Bylaws, as amended and as
in effect on the date hereof (the “Bylaws”), and the terms of all securities convertible into, or
exercisable or exchangeable for, shares of Common Stock and the material rights of the holders
thereof in respect thereto.

(s) Indebtedness and Other Contracts. Except as disclosed in Schedule
3(s), neither the Company nor any of its Subsidiaries (i) has any outstanding Indebtedness (as
defined below), (ii) is a party to any contract, agreement or instrument, the violation of which,
or default under which, by the other party(ies) to such contract, agreement or instrument would
result in a Material Adverse Effect, (iii) is in violation of any term of or in default under any
contract, agreement or instrument relating to any Indebtedness, except where such violations and
defaults would not result, individually or in the aggregate, in a Material Adverse Effect, or (iv)
is a party to any contract, agreement or instrument relating to any Indebtedness, the performance
of which, in the judgment of the Company’s officers, has or is expected to have a Material Adverse
Effect. For purposes of this Agreement: (x) “Indebtedness” of any Person means, without
duplication (A) all indebtedness for borrowed money, (B) all obligations issued, undertaken or
assumed as the deferred purchase price of property or services (including, without limitation,
“capital leases” in accordance with generally accepted accounting principles) (other than trade
payables entered into in the ordinary course of business), (C) all reimbursement or payment
obligations with respect to letters of credit, surety bonds and other similar instruments, (D) 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, (E) 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), (F) all
monetary obligations under any leasing or similar arrangement which, in connection with generally
accepted accounting principles, consistently applied for the periods covered thereby, is classified
as a capital lease, (G) all indebtedness referred to in clauses (A) through (F) 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 (H) all Contingent Obligations in respect of indebtedness or obligations of
others of the kinds referred to in clauses (A) through (G) above; (y) “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; and (z)
“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.

(t) Absence of Litigation. Except as set forth on Schedule 3(t),
there is no action, suit, proceeding, inquiry or investigation before or by the Principal Market,
any court, public board, government agency, self-regulatory organization or body pending or, to the
knowledge of the Company, threatened against or affecting the Company, the Common Stock or any of
its Subsidiaries or any of the Company’s or the Company’s Subsidiaries’ officers or directors,
whether of a civil or criminal nature or otherwise. Unless specifically indicated in Schedule
3(t), no matter set forth on Schedule 3(t) could reasonably be expected, individually
or in the aggregate, to have a Material Adverse Effect.

(u) Insurance. The Company and each of its Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks and in such amounts
as management of the Company believes to be prudent and customary in the businesses in which the
Company and its Subsidiaries are engaged. Except as set forth on Schedule 3(u), neither
the Company nor any Subsidiary has been refused any insurance coverage sought or applied for.
Neither the Company nor any Subsidiary has any reason to believe that it will not be able to renew
its existing insurance coverage as and when such coverage expires or to obtain similar coverage
from similar insurers as may be necessary to continue its business at a cost that would not have a
Material Adverse Effect.

(v) Employee Relations. Except as set forth on Schedule 3(v),
neither the Company nor any of its Subsidiaries is a party to any collective bargaining agreement
or employs any member of a union. The Company and its Subsidiaries believe that their relations
with their employees are good. No executive officer of the Company or any of its Subsidiaries (as
defined in Rule 501(f) of the 1933 Act) has notified the Company or any such Subsidiary that such
officer intends to leave the Company or any such Subsidiary or otherwise terminate such officer’s
employment with the Company or any such Subsidiary. No executive officer of the Company, to the
knowledge of the Company or any of its Subsidiaries, is, or is now expected to be, in violation of
any material term of any employment contract, confidentiality, disclosure or proprietary
information agreement, non-competition agreement, or any other contract or agreement or any
restrictive covenant, and the continued employment of each such executive officer does not subject
the Company or any of its Subsidiaries to any liability with respect to any of the foregoing
matters that could reasonably be expected to, individually or in the aggregate, have a Material
Adverse Effect.

(i) The Company and its Subsidiaries are in compliance with all federal, state, local and
foreign laws and regulations respecting labor, employment and employment practices and benefits,
terms and conditions of employment and wages and hours, except where failure to be in compliance
would not, either individually or in the aggregate, reasonably be expected to result in a Material
Adverse Effect.

(w) Title. The Company and its Subsidiaries have good and marketable title
in fee simple to all real property and good and marketable title to all personal property owned by
them which is material to the business of the Company and its Subsidiaries, in each case free and
clear of all liens, encumbrances and defects except such as do not materially affect the value of
such property and do not interfere with the use made and proposed to be made of such property by
the Company and any of its Subsidiaries. Any real property and facilities held under lease by the
Company and any of its Subsidiaries are held by them under valid, subsisting and enforceable leases
with such exceptions as do not materially interfere with the use made and proposed to be made of
such property and buildings by the Company and its Subsidiaries.

(x) Intellectual Property Rights. The Company and its Subsidiaries own or
possess adequate rights or licenses to use all trademarks, trade names, service marks, service mark
registrations, service names, patents, patent rights, copyrights, inventions, licenses, approvals,
governmental authorizations, trade secrets and other intellectual property rights (“Intellectual
Property Rights”) necessary to conduct their respective businesses as now conducted, except where
the failure thereof could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. The Company does not have any knowledge of any infringement by the
Company or its Subsidiaries of Intellectual Property Rights of others. There is no claim, action
or proceeding being made or brought, or to the knowledge of the Company, being threatened, against
the Company or any of its Subsidiaries regarding its Intellectual Property Rights. The Company its
unaware of any facts or circumstances which could reasonably be expected to give rise to any of the
foregoing infringements or claims, actions or proceedings. The Company and its Subsidiaries have
taken reasonable security measures to protect the secrecy, confidentiality and value of all of
their Intellectual Property Rights.

(y) Environmental Laws. Except as set forth on Schedule 3(y), the
Company and its Subsidiaries (i) are in compliance with any and all Environmental Laws (as
hereinafter defined), (ii) have received all permits, licenses or other approvals required of them
under applicable Environmental Laws to conduct their respective businesses and (iii) are in
compliance with all terms and conditions of any such permit, license or approval where, in each of
the foregoing clauses (i), (ii) and (iii), the failure to so comply could be reasonably expected to
have, individually or in the aggregate, a Material Adverse Effect. The term “Environmental Laws”
means all federal, state, local or foreign laws relating to pollution or protection of human health
or the environment (including, without limitation, ambient air, surface water, groundwater, land
surface or subsurface strata), including, without limitation, laws relating to emissions,
discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or
hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or
otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees,
demands or demand letters, injunctions, judgments, licenses, notices or notice letters, orders,
permits, plans or regulations issued, entered, promulgated or approved thereunder.

(z) Subsidiary Rights. The Company or one of its Subsidiaries has the
unrestricted right to vote, and (subject to limitations imposed by applicable law) to receive
dividends and distributions on, all capital securities of its Subsidiaries as owned by the Company
or such Subsidiary.

(aa) Tax Status. The Company and each of its Subsidiaries (i) has made or
filed all federal, foreign and state income and all other tax returns, reports and declarations
required by any jurisdiction to which it is subject which are now due and for which filing
extensions have not been obtained, (ii) has paid all taxes and other governmental assessments and
charges that are material in amount, shown or determined to be due on such returns, reports and
declarations, except those being contested in good faith and (iii) has set aside on its books
provision reasonably adequate for the payment of all taxes for periods subsequent to the periods to
which such returns, reports or declarations apply. There are no unpaid taxes in any material
amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the
Company know of no basis for any such claim.

(bb) Internal Accounting and Disclosure Controls. The Company and each of
its Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with management’s general or specific
authorizations, (ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to maintain asset and
liability accountability, (iii) access to assets or incurrence of liabilities is permitted only in
accordance with management’s general or specific authorization and (iv) the recorded accountability
for assets and liabilities is compared with the existing assets and liabilities at reasonable
intervals and appropriate action is taken with respect to any difference. The Company maintains
disclosure controls and procedures (as such term is defined in Rule 13a-15 under the 1934 Act) that
are effective in ensuring that information required to be disclosed by the Company in the reports
that it files or submits under the 1934 Act is recorded, processed, summarized and reported, within
the time periods specified in the rules and forms of the SEC, including, without limitation,
controls and procedures designed in to ensure that information required to be disclosed by the
Company in the reports that it files or submits under the 1934 Act is accumulated and communicated
to the Company’s management, including its principal executive officer or officers and its
principal financial officer or officers, as appropriate, to allow timely decisions regarding
required disclosure. During the twelve months prior to the date hereof neither the Company nor any
of its Subsidiaries have received any notice or correspondence from any accountant relating to any
potential material weakness in any part of the system of internal accounting controls of the
Company or any of its Subsidiaries.

(cc) Ranking of Notes. Except as set forth on Schedule 3(cc), no
Indebtedness of the Company is senior to or ranks pari passu with the Notes in right of payment,
whether with respect of payment of redemptions, interest, damages or upon liquidation or
dissolution or otherwise.

(dd) Off Balance Sheet Arrangements. There is no transaction, arrangement,
or other relationship between the Company and an unconsolidated or other off balance sheet entity
that is required to be disclosed by the Company in its Exchange Act filings and is not so disclosed
or that otherwise would be reasonably likely to have a Material Adverse Effect.

(ee) Form S-3 Eligibility. The Company is eligible to register the
Conversion Shares for resale by the Buyers using Form S-3 promulgated under the 1933 Act.

(ff) Manipulation of Price. The Company has not, and to its knowledge no
one acting on its behalf has, (i) taken, directly or indirectly, any action designed to cause or to
result in the stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of any of the Securities, (ii) other than the Placement Agent, sold,
bid for, purchased, or paid any compensation for soliciting purchases of, any of the Securities, or
(iii) other than the Placement Agent, sold paid or agreed to pay to any person any compensation for
soliciting another to purchase any other securities of the Company.

(gg) Transfer Taxes. On the Closing Date, all stock transfer or other taxes
(other than income or similar taxes) which are required to be paid in connection with the sale and
transfer of the Securities to be sold to each Buyer hereunder will be, or will have been, fully
paid or provided for by the Company, and all laws imposing such taxes will be or will have been
complied with.

(hh) Investment Company Status. The Company is not, and upon consummation
of the sale of the Securities will not be, an “investment company,” a company controlled by an
“investment company” or an “affiliated person” of, or “promoter” or “principal underwriter” for, an
“investment company” as such terms are defined in the Investment Company Act of 1940, as amended.

(ii) Acknowledgement Regarding Buyers’ Trading Activity. Except as set
forth in Section 2(k), the Company understands and acknowledges (i) that none of the Buyers have
been asked by the Company or its Subsidiaries to agree, nor has any Buyer agreed with the Company
or its Subsidiaries, to desist from purchasing or selling, long and/or short, securities of the
Company, or “derivative” securities based on securities issued by the Company or to hold the
Securities for any specified term; (ii) that any Buyer, and counterparties in “derivative”
transactions to which any such Buyer is a party, directly or indirectly, presently may have a
“short” position in the Common Stock, and (iii) that each Buyer shall not be deemed to have any
affiliation with or control over any arm’s length counterparty in any “derivative” transaction.
The Company further understands and acknowledges that (a) one or more Buyers may engage in hedging
and/or trading activities at various times during the period that the Securities are outstanding
and (b) such hedging and/or trading activities, if any, can reduce the value of the existing
stockholders’ equity interest in the Company both at and after the time the hedging and/or trading
activities are being conducted. The Company acknowledges that such aforementioned hedging and/or
trading activities do not constitute a breach of this Agreement or any of the documents executed in
connection herewith. The Company is not aware of any of the aforementioned hedging and/or trading
activities of any of the Buyers. The Company may not be informed of, and will not monitor, any
such aforementioned hedging and/or trading activities by one or more Buyers in the future.

(jj) U.S. Real Property Holding Corporation. The Company is not, has never
been, and so long as any Securities remain outstanding, shall not become, a U.S. real property
holding corporation within the meaning of Section 897 of the Internal Revenue Code of 1986, as
amended, and the Company shall so certify upon Buyer’s request.

(kk) Bank Holding Company Act. Neither the Company nor any of its
Subsidiaries or affiliates is subject to the Bank Holding Company Act of 1956, as amended (the
“BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the “Federal
Reserve”). Neither the Company nor any of its Subsidiaries or affiliates owns or controls,
directly or indirectly, five percent (5%) or more of the outstanding shares of any class of voting
securities or twenty-five percent or more of the total equity of a bank or any entity that is
subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any of its
Subsidiaries or affiliates exercises a controlling influence over the management or policies of a
bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve.

(ll) No Additional Agreements. The Company does not have any agreement or
understanding with any Buyer with respect to the transactions contemplated by the Transaction
Documents other than as specified in the Transaction Documents.

(mm) Disclosure. The Company confirms that neither it nor any other Person
acting on its behalf has provided any of the Buyers or their respective agents or counsel with any
information that constitutes or could reasonably be expected to constitute material, nonpublic
information, other than the terms of the transactions contemplated hereby, which shall be publicly
disclosed pursuant to Section 4(i). The Company understands and confirms that each of the Buyers
will rely on the foregoing representations in effecting transactions in securities of the Company.
All disclosure provided to the Buyers regarding the Company or any of its Subsidiaries, their
business and the transactions contemplated hereby, including the Schedules to this Agreement,
furnished by or on behalf of the Company is true and correct and does not contain any untrue
statement of a material fact or omit to state any material fact necessary in order to make the
statements made therein, in the light of the circumstances under which they were made, not
misleading. Each press release issued by the Company or any of its Subsidiaries during the twelve
(12) months preceding the date of this Agreement did not at the time of release contain any untrue
statement of a material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the circumstances under which
they were made, not misleading. The Company acknowledges and agrees that no Buyer makes or has
made any representations or warranties with respect to the transactions contemplated hereby other
than those specifically set forth in Section 2.

(nn) Prior Trading. The Company has not and, to its knowledge, none of its
officers, directors or affiliates have effected any sales or purchases of the securities of the
Company (including, without limitation, any Short Sales involving the Company’s securities, but not
including the location and/or reservation of borrowable shares of Common Stock).

4. COVENANTS.

(a) Best Efforts. Each party shall use its best efforts timely to satisfy
each of the covenants and the conditions to be satisfied by it as provided in Sections 5, 6 and 7
of this Agreement.

(b) Form D and Blue Sky. The Company agrees to file a Form D with respect
to the Securities as required under Regulation D and to provide a copy thereof to each Buyer
promptly after such filing. The Company, on or before the Closing Date, shall take such action as
the Company shall reasonably determine is necessary in order to obtain an exemption for or to
qualify the Securities for sale to the Buyers at the Closing pursuant to this Agreement under
applicable securities or “Blue Sky” laws of the states of the United States (or to obtain an
exemption from such qualification), and shall provide evidence of any such action so taken to the
Buyers on or prior to the Closing Date. The Company shall make all filings and reports relating to
the offer and sale of the Securities required under applicable securities or “Blue Sky” laws of the
states of the United States following the Closing Date.

(c) Reporting Status. Until the earlier of (i) the date on which the
Investors (as defined in the Registration Rights Agreement) shall have sold all the Conversion
Shares and Warrant Shares and none of the Notes and Warrants are outstanding and (ii) the date on
which the Buyers may sell all of the Conversion Shares and Warrant Shares 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 (the “Reporting Period”), the Company shall
timely file all reports required to be filed with the SEC pursuant to the 1934 Act, and the Company
shall not terminate its status as an issuer required to file reports under the 1934 Act even if the
1934 Act or the rules and regulations thereunder would no longer require or otherwise permit such
termination, and the Company shall take all actions necessary to maintain its eligibility to
register the Conversion Shares and Warrant Shares for resale by the Buyers on Form S-3.

(d) Use of Proceeds. The Company will use the proceeds from the sale of the
Securities for the acquisition of certain assets of Grand Avenue Incorporated, a Pennsylvania
Corporation, Assad Iron & Metals, Inc., a Pennsylvania corporation, Heidelberg Metals, Inc., a
Pennsylvania corporation, trading and doing business as Neville Metals, Neville Recycling LLC, a
Pennsylvania limited liability company and Platt Properties LLC, a Pennsylvania limited liability
company, pursuant to that certain Asset Purchase Agreement attached hereto as Exhibit D
(the “Asset Purchase Agreement”), and for future acquisitions and working capital to support such
acquisition or prior or future acquisitions.

(e) Financial Information. The Company agrees to send the following to each
Investor during the Reporting Period (i) unless the following are filed with the SEC through EDGAR
and are available to the public through the EDGAR system, within three (3) Business Days after the
filing thereof with the SEC, a copy of its Annual Reports on Form 10-K, its Quarterly Reports on
Form 10-Q, any Current Reports on Form 8-K and any registration statements (other than on Form S-8)
or amendments filed pursuant to the 1933 Act, (ii) on the same day as the release thereof,
facsimile copies or email copies of all press releases issued by the Company or any of its
Subsidiaries, and (iii) copies of any notices and other information made available or given to the
stockholders of the Company generally, contemporaneously with the making available or giving
thereof to the stockholders. As used herein, “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) Listing. The Company shall, promptly following the Closing, secure the
listing of all of the Registrable Securities (as defined in the Registration Rights Agreement) upon
each national securities exchange and automated quotation system, if any, upon which the Common
Stock is then listed (subject to official notice of issuance) and shall maintain such listing of
all Registrable Securities from time to time issuable under the terms of the Transaction Documents.
The Company shall maintain the Common Stock’s authorization for listing on the Principal Market or
any Eligible Market (as defined in the Notes). Neither the Company nor any of its Subsidiaries
shall take any action which would be reasonably expected to result in the delisting or suspension
of the Common Stock on the Principal Market. The Company shall pay all fees and expenses in
connection with satisfying its obligations under this Section 4(f).

(g) Fees. The Company shall reimburse Portside (a Buyer) or its designee(s)
(in addition to any other expense amounts paid to any Buyer prior to the date of this Agreement)
for all reasonable costs and expenses, incurred in connection with the transactions contemplated by
the Transaction Documents (including all reasonable legal fees and disbursements in connection
therewith, documentation and implementation of the transactions contemplated by the Transaction
Documents and due diligence in connection therewith) up to a maximum reimbursement of $100,000,
including the $50,000 payment previously made to Portside in accordance with the term sheet with
respect to the Transaction Documents, which amount may be withheld by such Buyer from its Purchase
Price at the Closing. The Company shall be responsible for the payment of any placement agent’s
fees, financial advisory fees, or broker’s commissions (other than for Persons engaged by any
Buyer) relating to or arising out of the transactions contemplated hereby, including, without
limitation, any fees or commissions payable to the Placement Agent. The Company shall pay, and
hold each Buyer harmless against, any liability, loss or expense (including, without limitation,
reasonable attorney’s fees and out-of-pocket expenses) arising in connection with any claim
relating to any such payment.

(h) Pledge of Securities. The Company acknowledges and agrees that the
Securities may be pledged by an Investor in connection with a bona fide margin agreement or other
loan or financing arrangement that is secured by the Securities. The pledge of Securities shall
not be deemed to be a transfer, sale or assignment of the Securities hereunder, and no Investor
effecting a pledge of Securities shall be required to provide the Company with any notice thereof
or otherwise make any delivery to the Company pursuant to this Agreement or any other Transaction
Document, including, without limitation, Section 2(f) of this Agreement; provided that an Investor
and its pledgee shall be required to comply with the provisions of Section 2(f) of this Agreement
in order to effect a sale, transfer or assignment of Securities to such pledgee. The Company
hereby agrees to execute and deliver such documentation as a pledgee of the Securities may
reasonably request in connection with a pledge of the Securities to such pledgee by an Investor.

(i) Disclosure of Transactions and Other Material Information. The Company
shall, on or before 8:30 a.m., New York City time, on the first Business Day after the date of this
Agreement, (A) issue a press release (the “Press Release”) reasonably acceptable to the counsel to
Portside disclosing all material terms of the transactions contemplated hereby and (B) file a
Current Report on Form 8-K describing the terms of the transactions contemplated by the Transaction
Documents in the form required by the 1934 Act, and attaching the material Transaction Documents
(including, without limitation, this Agreement (and all schedules to this Agreement), the form of
Registration Rights Agreement, form of Note and form of Warrant) as exhibits to such filing
(including all attachments, the “8-K Filing”). From and after the issuance of the 8-K Filing, no
Buyer shall be in possession of any material, nonpublic information received from the Company, any
of its Subsidiaries or any of its respective officers, directors, employees or agents, that is not
disclosed in the 8-K Filing. The Company shall not, and shall cause each of its Subsidiaries and
each of their respective officers, directors, employees and agents, not to provide any Buyer with
any material, nonpublic information regarding the Company or any of its Subsidiaries from and after
the date hereof except with the prior written consent of such Buyer (including a written consent
pursuant to Section 4(s)). If a Buyer has, or believes it has, received any such material,
nonpublic information regarding the Company or any of its Subsidiaries from the Company, any of its
Subsidiaries or any of the respective officers, directors, or agents after the date hereof, unless
it has requested such information in writing (including a written request pursuant to Section 4(s)
hereof) or has received such information in accordance with a written confidentiality agreement
with the Company signed by such Buyer, it may provide the Company with written notice thereof. The
Company shall, within five (5) Trading Days of receipt of such notice, make public disclosure of
such material, nonpublic information. Subject to the foregoing, neither the Company, its
Subsidiaries nor any Buyer shall issue any press releases or any other public statements with
respect to the transactions contemplated hereby; provided, however, that the
Company shall be entitled, without the prior approval of counsel to Portside, to make any press
release or other public disclosure with respect to such transactions (i) in substantial conformity
with the 8-K Filing and contemporaneously therewith and (ii) as is required by applicable law and
regulations, including the applicable rules and regulations of the Principal Market (provided that
in the case of clause (i) counsel to Portside shall be consulted by the Company in connection with
any such press release or other public disclosure prior to its release). Without the prior written
consent of any applicable Buyer, neither the Company nor any of its Subsidiaries or affiliates
shall disclose the name of such Buyer in any filing, announcement, release or otherwise, unless
such disclosure is required by law, regulation.

(j) Additional Registration Statements. Except as set forth on Schedule
4(j), until the date that is forty-five days after the Effective Date upon which all
Registrable Securities have been registered (as such terms are defined in the Registration Rights
Agreement), the Company will not file a registration statement under the 1933 Act relating to
securities that are not the Securities, other than a registration statement on Form S-8 or a
registration statement on Form S-4 in connection with a strategic acquisition.

(k) Restriction on Redemption and Cash Dividends. So long as any Notes are
outstanding, the Company shall not, directly or indirectly, redeem, or declare or pay any cash
dividend or distribution on, the Common Stock without the prior express written consent of the
holders of Notes representing not less than a majority of the aggregate principal amount of the
then outstanding Notes.

(l) Additional Notes; Variable Securities; Dilutive Issuances. So long as
any Buyer beneficially owns any Securities, the Company will not issue any Notes (other than to the
Buyers as contemplated hereby) and the Company shall not issue any other securities that would
cause a breach or default under the Notes. For so long as any Notes remain outstanding, the
Company shall not, in any manner, issue or sell any rights, warrants or options to subscribe for or
purchase Common Stock or directly or indirectly convertible into or exchangeable or exercisable for
Common Stock at a price which varies or may vary with the market price of the Common Stock,
including by way of one or more reset(s) to any fixed price unless the conversion, exchange or
exercise price of any such security cannot be less than the then applicable Conversion Price (as
defined in the Notes) with respect to the Common Stock into which any Note is convertible. This
provision shall not prohibit the Company from issuing or selling any securities that contain
customary anti-dilutive provisions.

(m) Corporate Existence. So long as any Buyer beneficially owns any
Securities, the Company shall not be party to any Fundamental Transaction (as defined in the Notes)
unless the Company is in compliance with the applicable provisions governing Fundamental
Transactions set forth in the Notes.

(n) Reservation of Shares. The Company shall take all action necessary to,
at all times, have authorized, and reserved for the purpose of issuance (i) before Stockholder
Approval 115% and (ii) after Stockholder Approval 130%, in each case, of the number of shares of
Common Stock issuable upon conversion of the Notes (without taking into account any limitations on
the Conversion of the Notes set forth in the Notes) and exercise of the Warrants issued at Closing.
The Company shall submit a proposal for an increase in the number of authorized shares of Common
Stock at its Stockholder Meeting and, upon such increase, shall reserve for issuance such
additional shares of Common Stock necessary to reserve not less than 130% of the aggregate of the
maximum number of shares of Common Stock initially issuable upon conversion of the Notes (without
taking into account any limitations on the Conversion of the Notes set forth in the Notes) and
exercise of the Warrants issued at the Closing.

(o) Conduct of Business. The business of the Company and its Subsidiaries
shall not be conducted in violation of any law, ordinance or regulation of any governmental entity,
except where such violations would not result, either individually or in the aggregate, in a
Material Adverse Effect.

(p) Additional Issuances of Securities.

(i) For purposes of this Section 4(p), the following definitions shall apply.

(1) “Convertible Securities” means any stock or securities (other than
Options) convertible into or exercisable or exchangeable for shares of Common Stock.

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

(3) “Common Stock Equivalents” means, collectively, Options and Convertible
Securities.

(ii) Except as set forth on Schedule 4(j), from the date hereof until the date that is
thirty (30) Trading Days (as defined in the Notes) following the Effective Date (as defined in the
Registration Rights Agreement) (the “Trigger Date”), the Company will not, directly or indirectly,
file any registration statement with the SEC other than the Registration Statement (as defined in
the Registration Rights Agreement). From the date hereof until the Trigger Date, the Company will
not, directly or indirectly, offer, sell, grant any option to purchase, or otherwise dispose of (or
announce any offer, sale, grant or any option to purchase or other disposition of) any of its or
its Subsidiaries’ equity or equity equivalent securities, including without limitation any debt,
preferred stock or other instrument or security that is, at any time during its life and under any
circumstances, convertible into or exchangeable or exercisable for shares of Common Stock or Common
Stock Equivalents (any such offer, sale, grant, disposition or announcement being referred to as a
“Subsequent Placement”).

(iii) From the Trigger Date until the later of (x) the second anniversary of the Closing Date
and (y) the date no more than 50% of the principal amount of the Notes issued on the Closing Date
remains outstanding, the Company will not, directly or indirectly, effect any Subsequent Placement
unless the Company shall have first complied with this Section 4(p)(iii).

(1) The Company shall deliver to each Buyer an irrevocable written notice
(the ”Offer Notice”) of any proposed or intended issuance or sale or exchange (the ”Offer”)
of the securities being offered (the “Offered Securities”) in a Subsequent Placement, which
Offer Notice shall (w) identify and describe the Offered Securities, (x) describe the price
and other terms upon which they are to be issued, sold or exchanged, and the number or
amount of the Offered Securities to be issued, sold or exchanged, (y) identify the persons
or entities (if known) to which or with which the Offered Securities are to be offered,
issued, sold or exchanged and (z) offer to issue and sell to or exchange with such Buyers at
least thirty-five percent (35%) of the Offered Securities, allocated among such Buyers (a)
based on such Buyer’s pro rata portion of the aggregate principal amount of Notes purchased
hereunder (the “Basic Amount”), and (b) with respect to each Buyer that elects to purchase
its Basic Amount, any additional portion of the Offered Securities attributable to the Basic
Amounts of other Buyers as such Buyer shall indicate it will purchase or acquire should the
other Buyers subscribe for less than their Basic Amounts (the “Undersubscription Amount”),
which process shall be repeated until the Buyers shall have an opportunity to subscribe for
any remaining Undersubscription Amount.

(2) To accept an Offer, in whole or in part, such Buyer must deliver a
written notice to the Company prior to the end of the tenth (10th) Business Day
after such Buyer’s receipt of the Offer Notice (the “Offer Period”), setting forth the
portion of such Buyer’s Basic Amount that such Buyer elects to purchase and, if such Buyer
shall elect to purchase all of its Basic Amount, the Undersubscription Amount, if any, that
such Buyer elects to purchase (in either case, the “Notice of Acceptance”). If the Basic
Amounts subscribed for by all Buyers are less than the total of all of the Basic Amounts,
then each Buyer who has set forth an Undersubscription Amount in its Notice of Acceptance
shall be entitled to purchase, in addition to the Basic Amounts subscribed for, the
Undersubscription Amount it has subscribed for; provided, however, that if
the Undersubscription Amounts subscribed for exceed the difference between the total of all
the Basic Amounts and the Basic Amounts subscribed for (the “Available Undersubscription
Amount”), each Buyer who has subscribed for any Undersubscription Amount shall be entitled
to purchase only that portion of the Available Undersubscription Amount as the Basic Amount
of such Buyer bears to the total Basic Amounts of all Buyers that have subscribed for
Undersubscription Amounts, subject to rounding by the Company to the extent its deems
reasonably necessary. Notwithstanding the foregoing, if the Company desires to modify or
amend the terms and conditions of the Offer prior to the expiration of the Offer Period, the
Company may deliver to the Buyers a new Offer Notice and the Offer Period shall expire on
the third (3rd) Business Day after such Buyer’s receipt of such new Offer Notice.

(3) The Company shall have fifteen (15) Business Days from the expiration of
the Offer Period above (i) to offer, issue, sell or exchange all or any part of such Offered
Securities as to which a Notice of Acceptance has not been given by the Buyers (the “Refused
Securities”) pursuant to a definitive agreement(s) (the “Subsequent Placement Agreement”),
but only to the offerees described in the Offer Notice (if so described therein) and only
upon terms and conditions (including, without limitation, unit prices and interest rates)
that are not more favorable to the acquiring person or persons or less favorable to the
Company than those set forth in the Offer Notice and (ii) to publicly announce (a) the
execution of such Subsequent Placement Agreement, and (b) either (x) the consummation of the
transactions contemplated by such Subsequent Placement Agreement or (y) the termination of
such Subsequent Placement Agreement, which shall be filed with the SEC on a Current Report
on Form 8-K with such Subsequent Placement Agreement and any documents contemplated therein
filed as exhibits thereto.

(4) In the event the Company shall propose to sell less than all the Refused
Securities (any such sale to be in the manner and on the terms specified in Section
4(p)(iii)(3) above), then each Buyer may, at its sole option and in its sole discretion,
reduce the number or amount of the Offered Securities specified in its Notice of Acceptance
to an amount that shall be not less than the number or amount of the Offered Securities that
such Buyer elected to purchase pursuant to Section 4(p)(iii)(2) above multiplied by a
fraction, (i) the numerator of which shall be the number or amount of Offered Securities the
Company actually proposes to issue, sell or exchange (including Offered Securities to be
issued or sold to Buyers pursuant to Section 4(p)(iii)(3) above prior to such reduction) and
(ii) the denominator of which shall be the original amount of the Offered Securities. In
the event that any Buyer so elects to reduce the number or amount of Offered Securities
specified in its Notice of Acceptance, the Company may not issue, sell or exchange more than
the reduced number or amount of the Offered Securities unless and until such securities have
again been offered to the Buyers in accordance with Section 4(p)(iii)(1) above.

(5) Upon the closing of the issuance, sale or exchange of all or less than
all of the Refused Securities, the Buyers shall acquire from the Company, and the Company
shall issue to the Buyers, the number or amount of Offered Securities specified in the
Notices of Acceptance, as reduced pursuant to Section 4(p)(iii)(4) above if the Buyers have
so elected, upon the terms and conditions specified in the Offer. Notwithstanding anything
to the contrary contained in this Agreement, if the Company does not consummate the closing
of the issuance, sale or exchange of all or less than all of the Refused Securities, within
fifteen (15) Business Days of the expiration of the Offer Period, the Company shall issue to
the Buyers, the number or amount of Offered Securities specified in the Notices of
Acceptance, as reduced pursuant to Section 4(p)(iii)(4) above if the Buyers have so elected,
upon the terms and conditions specified in the Offer. The purchase by the Buyers of any
Offered Securities is subject in all cases to the preparation, execution and delivery by the
Company and the Buyers of a purchase agreement relating to such Offered Securities
reasonably satisfactory in form and substance to the Buyers and their respective counsel.

(6) Any Offered Securities not acquired by the Buyers or other persons in
accordance with Section 4(p)(iii)(3) above may not be issued, sold or exchanged until they
are again offered to the Buyers under the procedures specified in this Agreement.

(7) The Company and the Buyers agree that if any Buyer elects to participate
in the Offer, (x) neither the Subsequent Placement Agreement with respect to such Offer nor
any other transaction documents related thereto (collectively, the “Subsequent Placement
Documents”) shall include any term or provisions whereby any Buyer shall be required to
agree to any restrictions in trading as to any securities of the Company owned by such Buyer
prior to such Subsequent Placement, and (y) any registration rights set forth in such
Subsequent Placement Documents shall be similar in all material respects to the registration
rights contained in the Registration Rights Agreement.

(8) Notwithstanding anything to the contrary in this Section 4(p) and unless
otherwise agreed to by the Buyers, the Company shall either confirm in writing to the Buyers
that the transaction with respect to the Subsequent Placement has been abandoned or shall
publicly disclose its intention to issue the Offered Securities, in either case in such a
manner such that the Buyers will not be in possession of material non-public information, by
the fifteen (15th) Business Day following delivery of the Offer Notice. If by
the fifteen (15th) following delivery of the Offer Notice no public disclosure
regarding a transaction with respect to the Offered Securities has been made, and no notice
regarding the abandonment of such transaction has been received by the Buyers, such
transaction shall be deemed to have been abandoned and the Buyers shall not be deemed to be
in possession of any material, non-public information with respect to the Company. Should
the Company decide to pursue such transaction with respect to the Offered Securities, the
Company shall provide each Buyer with another Offer Notice and each Buyer will again have
the right of participation set forth in this Section 4(p)(iii). The Company shall not be
permitted to deliver more than one such Offer Notice to the Buyers in any sixty (60) day
period.

(9) The restrictions contained in subsections (ii) and (iii) of this Section
4(p) shall not apply in connection with the issuance of any Excluded Securities (as defined
in the Notes).

(q) Public Information. At any time during the period commencing from the
six (6) month anniversary of the Closing Date and ending at such time that all of the Securities
can be sold either pursuant to a registration statement, or if a registration statement is not
available for the resale of all of the Securities, may be sold without the requirement for the
Company to be in compliance with Rule 144(c)(1) and otherwise without restriction or limitation
pursuant to Rule 144, if the Company shall fail for any reason to satisfy the current public
information requirement under Rule 144(c) (a “Public Information Failure”) then, as the sole
economic remedy for the damages to any holder of Securities by reason of any such delay in or
reduction of its ability to sell the Securities (which remedy shall not be exclusive of any other
remedies available in equity, including, without limitation, specific performance), the Company
shall pay to each such holder an amount in cash equal to one and one-half percent (1.5%) of the
aggregate Purchase Price of such holder’s Securities on the day of a Public Information Failure and
on every thirtieth day (pro rated for periods totaling less than thirty days) thereafter until the
earlier of (i) the date such Public Information Failure is cured and (ii) such time that such
public information is no longer required pursuant to Rule 144. The payments to which a holder
shall be entitled pursuant to this Section 4(p) are referred to herein as “Public Information
Failure Payments.” Public Information Failure Payments shall be paid on the earlier of (I) the
last day of the calendar month during which such Public Information Failure Payments are incurred
and (II) the third Business Day after the event or failure giving rise to the Public Information
Failure Payments is cured. In the event the Company fails to make Public Information Failure
Payments in a timely manner, such Public Information Failure Payments shall bear interest at the
rate of 1.5% per month (prorated for partial months) until paid in full.

(r) Stockholder Approval. The parties recognize that certain aspects of the
transactions contemplated hereby (the “AMEX Provisions”), including the weighted average
anti-dilution provisions of the Notes and the provision allowing the Company in certain
circumstances to use stock for redemption of the Notes require approval by the stockholders of the
Company for such provisions to be effective. The Company shall provide each stockholder entitled
to vote at either (x) the next annual meeting of stockholders of the Company or (y) a special
meeting of stockholder of the Company (the “Stockholder Meeting”), which shall be promptly called
and held not later than 75 days following the Closing (the “Stockholder Meeting Deadline”), a proxy
statement, substantially in the form which has been previously reviewed by counsel to Portside, at
the expense of the Company not to exceed $15,000, soliciting each such stockholder’s affirmative
vote at the Stockholder Meeting for approval of resolutions (“Stockholder Resolutions”) providing
for (i) approval of the AMEX Provisions as described in the Transaction Documents and (ii) an
increase in the authorized number of shares of Common Stock so that 130% of the aggregate maximum
number of shares of Common Stock initially issuable upon conversion of the Notes and exercise of
the Warrants can be reserved for issuance, in both cases, in accordance with applicable law and the
rules and regulations of the Principal Market (such affirmative approval being referred to herein
as the “Stockholder Approval”), and the Company shall use its commercially reasonable efforts to
solicit its stockholders’ approval of such resolutions (including the hiring of a nationally
recognized proxy solicitation firm) and to cause the Board of Directors of the Company to recommend
to the stockholders that they approve such resolutions. The Company shall be obligated to seek to
obtain the Stockholder Approval by the Stockholder Meeting Deadline. If, despite the Company’s
commercially reasonable efforts the Stockholder Approval is not obtained on or prior to the
Stockholder Meeting Deadline, the Company shall cause up to two additional Stockholder Meetings to
be held, one in each of the two calendar quarters thereafter (and the Company shall hire a
nationally recognized proxy solicitation firm for each such Stockholder Meeting), to obtain such
Stockholder Approval.

(s) Lock-Up. The Company shall not amend or waive the lock-up provision
contained in the Voting Agreement in the form attached hereto as Exhibit J, except to
extend the term of the lock-up period.

(t) Borrow Facility. The Company shall use commercially reasonable efforts
to cause Mr. Carlos Aguero to enter into a Stock Loan Agreement to enable Mr. Aguero to lend
2,500,000 of his shares of Common Stock to the Buyers for a fee equal to 50 basis points of the
market value of such shares (the “Borrow Facility”). Under Borrow Facility, the Company will be
required to use its best efforts to file a registration statement covering the number of shares of
Common Stock made available by Mr. Aguero as soon as practicable after Closing, but in no event
later than forty-five (45) calendar days after the Closing Date except as otherwise provided in the
Registration Rights Agreement, and use its best efforts to cause such registration statement to
become effective as soon as possible, but in any event with ninety (90) calendar days (or one
hundred twenty (120) calendar days in the case of a full review by the SEC) from the date the
registration statement is filed.

(u) Additional Notes. The Company shall not issue any additional Notes
without first obtaining the consent of holders of the Buyers acquiring more than 50% of the
aggregate principal amount of the Notes.

(v) Stockholder Waiver. The Company hereby covenants and agrees that it
shall use its best efforts to obtain from the “Required Holders” under the Securities Purchase
Agreement, dated as of March 27, 2008, by and among the Company and the investors thereto, a
written waiver of the right of participation notice periods in respect of the Securities to be
issued and sold pursuant hereto, an amendment to such Securities Purchase Agreement to permit the
proceeds from the issuance of the notes and warrants to be used for working capital purposes for
prior, current and future acquisitions, in addition to financing strategic acquisitions, and the
written consent to include in the registration statements to be filed in connection with such
private placement the Securities that the Company would otherwise be obligated to register pursuant
to the Registration Rights Agreement.

(w) Closing Documents. On or prior to thirty (30) calendar days after the
Closing Date, the Company agrees to deliver, or cause to be delivered, to each Buyer and Olshan
Grundman Frome Rosenzweig & Wolosky LLP a complete closing set of the Transaction Documents,
Securities and any other document required to be delivered to any party pursuant to Section 7
hereof or otherwise.

5. REGISTER; TRANSFER AGENT INSTRUCTIONS.

(a) Register. The Company shall maintain at its principal executive offices
(or such other office or agency of the Company as it may designate by notice to each holder of
Securities), a register for the Notes and Warrants in which the Company shall record the name and
address of the Person in whose name the Notes and Warrants have been issued (including the name and
address of each transferee), the principal amount of Notes and Warrants held by such Person, the
number of Conversion Shares issuable upon conversion of the Notes held by such Person and the
number of Warrant Shares issuable upon exercise of the Warrant held by such Person. The Company
shall keep the register open and available at all times during business hours for inspection of any
Buyer or its legal representatives.

(b) Transfer Agent Instructions. The Company shall issue irrevocable
instructions to its transfer agent, and any subsequent transfer agent, to issue certificates or
credit shares to the applicable balance accounts at DTC, registered in the name of each Buyer or
its respective nominee(s), for the Conversion Shares and Warrant Shares issued at the Closing or
upon conversion of the Notes or exercise of the Warrants in such amounts as specified from time to
time by each Buyer to the Company upon conversion of the Notes or exercise of the Warrants in the
form of Exhibit E attached hereto (the “Irrevocable Transfer Agent Instructions”). The
Company warrants that no instruction other than the Irrevocable Transfer Agent Instructions
referred to in this Section 5(b), and stop transfer instructions to give effect to Section 2(f)
hereof, will be given by the Company to its transfer agent, and that the Securities shall otherwise
be freely transferable on the books and records of the Company as and to the extent provided in
this Agreement and the other Transaction Documents. If a Buyer effects a sale, assignment or
transfer of the Securities in accordance with Section 2(f), the Company shall permit the transfer
and shall promptly instruct its transfer agent to issue one or more certificates or credit shares
to the applicable balance accounts at DTC in such name and in such denominations as specified by
such Buyer to effect such sale, transfer or assignment. In the event that such sale, assignment or
transfer involves Conversion Shares or Warrant Shares sold, assigned or transferred pursuant to an
effective registration statement or pursuant to Rule 144, the transfer agent shall issue such
Securities to the Buyer, assignee or transferee, as the case may be, without any restrictive
legend. The Company acknowledges that a breach by it of its obligations hereunder will cause
irreparable harm to a Buyer. Accordingly, the Company acknowledges that the remedy at law for a
breach of its obligations under this Section 5(b) will be inadequate and agrees, in the event of a
breach or threatened breach by the Company of the provisions of this Section 5(b), that a Buyer
shall be entitled, in addition to all other available remedies, to an order and/or injunction
restraining any breach and requiring immediate issuance and transfer, without the necessity of
showing economic loss and without any bond or other security being required.

6. CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL.

(a) The obligation of the Company hereunder to issue and sell the Notes and Warrants
to each Buyer at the Closing is subject to the satisfaction, at or before the Closing Date, of each
of the following conditions, provided that these conditions are for the Company’s sole benefit and
may be waived by the Company at any time in its sole discretion by providing each Buyer with prior
written notice thereof:

(i) Such Buyer shall have executed each of the Transaction Documents to which it is a party
and delivered the same to the Company.

(ii) Such Buyer and each other Buyer shall have delivered to the Company the Purchase Price
(less, in the case of Portside, the amounts withheld pursuant to Section 4(g)) for the Notes and
Warrants being purchased by such Buyer at the Closing by wire transfer of immediately available
funds pursuant to the wire instructions provided by the Company.

(iii) The representations and warranties of such Buyer shall be true and correct in all
material respects as of the date when made and as of the Closing Date as though made at that time
(except for representations and warranties that speak as of a specific date which shall be true and
correct as of such specified date), and such Buyer shall have performed, satisfied and complied in
all material respects with the covenants, agreements and conditions required by this Agreement to
be performed, satisfied or complied with by such Buyer at or prior to the Closing Date.

(iv) The Company shall have obtained all governmental, regulatory (including the approval of
the Principal Market) third party consents and approvals, if any, necessary for the sale of the
Notes and the Warrants.

(v) The Common Stock including the Conversion Shares and Warrant Shares (I) shall be
designated for quotation or listed on the Principal Market and (II) shall not have been suspended,
as of the Closing Date, by the SEC or the Principal Market from trading on the Principal Market nor
shall suspension by the SEC or the Principal Market have been threatened, as of the Closing Date,
either (A) in writing by the SEC or the Principal Market or (B) by falling below the minimum
listing maintenance requirements of the Principal Market.

(vi) The sale of the Warrants has been approved by the Company’s Board of Directors.

(vii) The Buyers and the Company shall agree to and the Buyers shall deliver to the Company
the Make-Whole Premium Table under the Notes.

7. CONDITIONS TO EACH BUYER’S OBLIGATION TO PURCHASE.

The obligation of each Buyer hereunder to purchase the Notes and Warrant at the Closing is
subject to the satisfaction, at or before the Closing Date, of each of the following conditions,
provided that these conditions are for each Buyer’s sole benefit and may be waived by such Buyer at
any time in its sole discretion by providing the Company with prior written notice thereof:

(a) The Company shall have duly executed and delivered to such Buyer each of the
Transaction Documents, including the Notes (allocated in such principal amounts as such Buyer shall
request) and the Warrants (in such amounts as such Buyer shall request) being purchased by such
Buyer at the Closing pursuant to this Agreement.

(i) Such Buyer shall have received the opinion of Lowenstein Sandler PC the Company’s outside
counsel, dated as of the Closing Date, in substantially the form of Exhibit F attached
hereto.

(ii) Such Buyer shall have received the opinion of the general counsel to the Company, dated
as of the Closing Date, in substantially the form of Exhibit G attached hereto.

(iii) The Company shall have delivered to such Buyer a copy of the Irrevocable Transfer Agent
Instructions, in the form of Exhibit E attached hereto, which instructions shall have been
delivered to and acknowledged in writing by the Company’s transfer agent.

(iv) The Company shall have delivered to such Buyer a certificate evidencing the incorporation
and good standing of the Company and each of its operating Subsidiaries in such corporation’s state
of incorporation issued by the Secretary of State of such state of incorporation as of a date
within 10 days of the Closing Date.

(v) The Company shall have delivered to such Buyer a certificate evidencing the Company’s
qualification as a foreign corporation and good standing issued by the Secretary of State (or
comparable office) of each jurisdiction in which the Company conducts business and is required to
so qualify, as of a date within 10 days of the Closing Date.

(vi) The Common Stock including the Conversion Shares and Warrant Shares (I) shall be
designated for quotation or listed on the Principal Market and (II) shall not have been suspended,
as of the Closing Date, by the SEC or the Principal Market from trading on the Principal Market nor
shall suspension by the SEC or the Principal Market have been threatened, as of the Closing Date,
either (A) in writing by the SEC or the Principal Market or (B) by falling below the minimum
listing maintenance requirements of the Principal Market.

(vii) The Company shall have delivered to such Buyer a certified copy of the Certificate of
Incorporation as certified by the Secretary of State of the State of Delaware within 10 days of the
Closing Date.

(viii) The Company shall have delivered to such Buyer a certificate, executed by the Secretary
of the Company and dated as of the Closing Date, as to (i) the resolutions consistent with Section
4(r) as adopted by the Company’s Board of Directors in a form reasonably acceptable to such Buyer,
(ii) the Certificate of Incorporation and (iii) the Bylaws, each as in effect at the Closing, in
the form attached hereto as Exhibit H.

(ix) The representations and warranties of the Company shall be true and correct in all
material respects (except for any representations or warranties already qualified by materiality or
Material Adverse Effect, in which case such representations and warranties shall be true and
correct in all respects) as of the date when made and as of the Closing Date as though made at that
time (except for representations and warranties that speak as of a specific date which shall be
true and correct as of such specified date) and the Company shall have performed, satisfied and
complied in all material respects with the covenants, agreements and conditions required by the
Transaction Documents to be performed, satisfied or complied with by the Company at or prior to the
Closing Date. Such Buyer shall have received a certificate, executed by the Chief Executive
Officer of the Company, dated as of the Closing Date, to the foregoing effect and as to such other
matters as may be reasonably requested by such Buyer in the form attached hereto as Exhibit
I.

(x) The Company shall have delivered to such Buyer a letter from the Company’s transfer agent
certifying the number of shares of Common Stock outstanding as of a date within five days of the
Closing Date.

(xi) The Company’s executive officers, directors and other affiliates shall have entered into
a Voting Agreement substantially in the form attached hereto as Exhibit J.

(xii) The Company shall have obtained all governmental, regulatory (including the Principal
Market) and third party consents and approvals, if any, necessary for the sale of the Notes and
Warrants.

(xiii) Mr. Carlos Aguero shall have delivered a fully executed Borrow Facility in the form and
substance acceptable to a majority of the Buyers.

(xiv) All closing conditions shall have been satisfied in respect of the Asset Purchase
Agreement other than with respect to the financing condition.

(xv) The Company shall have delivered to such Buyer a Subordination Agreement between the
Buyers and the Company’s senior lenders reasonably acceptable to Buyers acquiring more than 50% of
the aggregate principal amount of the Notes.

(xvi) The Buyers and the Company shall agree to and the Buyers shall deliver to the Company
the Make-Whole Premium Table under the Notes.

(xvii) The Company shall have delivered to such Buyer such other documents relating to the
transactions contemplated by this Agreement as such Buyer or its counsel may reasonably request.

8. TERMINATION. In the event that the Closing shall not have occurred with
respect to a Buyer on or before five (5) Business Days from the date hereof due to the Company’s or
such Buyer’s failure to satisfy the conditions set forth in Sections 6 and 7 above (and the
nonbreaching party’s failure to waive such unsatisfied condition(s)), the nonbreaching party shall
have the option to terminate this Agreement with respect to such breaching party at the close of
business on such date without liability of any party to any other party; provided,
however, that if this Agreement is terminated pursuant to this Section 8, the Company shall
remain obligated to reimburse the non-breaching Buyers for the expenses described in Section 4(g)
above.

9. MISCELLANEOUS.

(a) Governing Law; Jurisdiction; Jury Trial. 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 WITH OR ARISING OUT OF THIS
AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

(b) Counterparts. This Agreement may be executed in two or more identical
counterparts, all of which shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the other party;
provided that a facsimile signature shall be considered due execution and shall be binding upon the
signatory thereto with the same force and effect as if the signature were an original, not a
facsimile signature.

(c) Headings. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this Agreement.

(d) Severability. 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).

(e) Entire Agreement; Amendments. This Agreement and the other Transaction
Documents supersede all other prior oral or written agreements between the Buyers, the Company,
their affiliates and Persons acting on their behalf with respect to the matters discussed herein,
and this Agreement, the other Transaction Documents and the instruments referenced herein and
therein contain the entire understanding of the parties with respect to the matters covered herein
and therein and, except as specifically set forth herein or therein, neither the Company nor any
Buyer makes any representation, warranty, covenant or undertaking with respect to such matters. No
provision of this Agreement may be amended other than by an instrument in writing signed by the
Company and the holders of at least a majority of the aggregate number of Registrable Securities
issued and issuable hereunder and under the Notes and the Warrants, and any amendment to this
Agreement made in conformity with the provisions of this Section 9(e) shall be binding on all
Buyers and holders of Securities as applicable. No provision hereof may be waived other than by an
instrument in writing signed by the party against whom enforcement is sought. No such amendment
shall be effective to the extent that it applies to less than all of the holders of the applicable
Securities then outstanding. No consideration shall be offered or paid to any Person to amend or
consent to a waiver or modification of any provision of any of the Transaction Documents unless the
same consideration also is offered to all of the parties to the Transaction Documents or the
holders of the Notes and Warrants, as the case may be. The Company has not, directly or
indirectly, made any agreements with any Buyers relating to the terms or conditions of the
transactions contemplated by the Transaction Documents except as set forth in the Transaction
Documents. Without limiting the foregoing, the Company confirms that, except as set forth in this
Agreement, no Buyer has made any commitment or promise or has any other obligation to provide any
financing to the Company or otherwise.

(f) Notices. 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 an
overnight courier 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:

	 	

(908) 497-9610

(908) 497-1097

Arnold S. Graber

Executive Vice President and General Counsel

	 	 	 
	With a copy to (for information purposes only):

	Lowenstein Sandler PC

65 Livingston Avenue

Roseland, New Jersey 07068

Telephone:

Facsimile:

Attention:

	 	

(973) 597-2476

(973) 597-2477

Steven M. Skolnick, Esq.

	 	 	 
	If to the Transfer Agent:

	 	

	Corporate Stock Transfer, Inc.

	3200 Cherry Creek Dr. South, Suite 430

	Denver, CO 80209

Telephone:

Facsimile:

Attention:

	 	

(303) 282-4800

(303) 777-3094

Karen Naughton

If to a Buyer, to its address and facsimile number set forth on the Schedule of Buyers, with copies
to such Buyer’s representatives as set forth on the Schedule of Buyers,

	 	 	 
	with a copy (for informational purposes only) to:

	Olshan Grundman Frome Rosenzweig & Wolosky LLP

	Park Avenue Tower

	 	

	65 East 55th Street

	New York, New York 10022

Telephone:

Facsimile:

Attention:

	 	

(212) 451-2333

(212) 451-2222

Steve Wolosky, Esq.

or to such other address, facsimile number and/or email address 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 an
overnight courier service shall be rebuttable evidence of personal service, receipt by facsimile or
receipt from an overnight courier service in accordance with clause (i), (ii) or (iii) above,
respectively.

(g) Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties and their respective successors and assigns, including any purchasers
of the Notes and Warrants. The Company shall not assign this Agreement or any rights or
obligations hereunder without the prior written consent of the holders of at least a majority of
the aggregate number of Registrable Securities issued and issuable hereunder and under the Notes
and Warrants, including by way of a Fundamental Transaction (unless the Company is in compliance
with the applicable provisions governing Fundamental Transactions set forth in the Notes and
Warrants). A Buyer may assign some or all of its rights hereunder without the consent of the
Company, in which event such assignee shall be deemed to be a Buyer hereunder with respect to such
assigned rights.

(h) No Third Party Beneficiaries. 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.

(i) Survival. Unless this Agreement is terminated under Section 8, the
representations and warranties of the Company and the Buyers contained in Sections 2 and 3, the
agreements and covenants set forth in Sections 4, 5 and 9 shall survive the Closing and the
delivery and conversion of Securities, as applicable. Each Buyer shall be responsible only for its
own representations, warranties, agreements and covenants hereunder.

(j) Further Assurances. 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) Indemnification. (l) In consideration of each Buyer’s
execution and delivery of the Transaction Documents and acquiring the Securities thereunder and in
addition to all of the Company’s other obligations under the Transaction Documents, the Company
shall defend, protect, indemnify and hold harmless each Buyer and each other holder of the
Securities and all of their stockholders, partners, members, officers, directors, employees and
direct or indirect investors and any of the foregoing Persons’ agents or other representatives
(including, without limitation, those retained in connection with the transactions contemplated by
this Agreement) (collectively, the “Indemnitees”) from and against any and all actions, causes of
action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and expenses in
connection therewith (irrespective of whether any such Indemnitee is a party to the action for
which indemnification hereunder is sought), and including reasonable attorneys’ fees and
disbursements (the “Indemnified Liabilities”), incurred by any Indemnitee as a result of, or
arising out of, or relating to (a) any misrepresentation or breach of any representation or
warranty made by the Company in the Transaction Documents or any other certificate, instrument or
document contemplated hereby or thereby, (b) any breach of any covenant, agreement or obligation of
the Company contained in the Transaction Documents or any other certificate, instrument or document
contemplated hereby or thereby or (c) any cause of action, suit or claim brought or made against
such Indemnitee by a third party (including for these purposes a derivative action brought on
behalf of the Company) and arising out of or resulting (i) from the execution, delivery,
performance or enforcement of the Transaction Documents or any other certificate, instrument or
document contemplated hereby or thereby, (ii) from any transaction financed or to be financed in
whole or in part, directly or indirectly, with the proceeds of the issuance of the Securities, or
(iii) solely from the status of such Buyer or holder of the Securities as an investor in the
Company. To the extent that the foregoing undertaking by the Company may be unenforceable for any
reason, the Company shall make the maximum contribution to the payment and satisfaction of each of
the Indemnified Liabilities which is permissible under applicable law. Except as otherwise set
forth herein, the mechanics and procedures with respect to the rights and obligations under this
Section 9(k) shall be the same as those set forth in Section 6 of the Registration Rights
Agreement.

(m) No Strict Construction. 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.

(n) Remedies. Each Buyer and each holder of the Securities shall have all
rights and remedies set forth in the Transaction Documents and all rights and remedies which such
holders have been granted at any time under any other agreement or contract and all of the rights
which such holders have under any law. Any Person having any rights under any provision of this
Agreement shall be entitled to enforce such rights specifically (without posting a bond or other
security), to recover damages by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law. Furthermore, the Company recognizes that in the event
that it fails to perform, observe, or discharge any or all of its obligations under the Transaction
Documents, any remedy at law may prove to be inadequate relief to the Buyers. The Company
therefore agrees that the Buyers shall be entitled to seek temporary and permanent injunctive
relief in any such case without the necessity of proving actual damages and without posting a bond
or other security.

(o) Rescission and Withdrawal Right. Notwithstanding anything to the
contrary contained in (and without limiting any similar provisions of) the Transaction Documents,
whenever any Buyer exercises a right, election, demand or option under a Transaction Document and
the Company does not timely perform its related obligations within the periods therein provided,
then such Buyer may rescind or withdraw, in its sole discretion from time to time upon written
notice to the Company, any relevant notice, demand or election in whole or in part without
prejudice to its future actions and rights

(p) Payment Set Aside. To the extent that the Company makes a payment or
payments to the Buyers hereunder or pursuant to any of the other Transaction Documents or the
Buyers enforce or exercise their rights hereunder or thereunder, and such payment or payments or
the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required
to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other
Person under any law (including, without limitation, any bankruptcy law, foreign, state or federal
law, common law or equitable cause of action), then to the extent of any such restoration the
obligation or part thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such enforcement or setoff had not
occurred.

(q) Independent Nature of Buyers’ Obligations and Rights. The obligations
of each Buyer under any Transaction Document are several and not joint with the obligations of any
other Buyer, and no Buyer shall be responsible in any way for the performance of the obligations of
any other Buyer under any Transaction Document. Nothing contained herein or in any other
Transaction Document, and no action taken by any Buyer pursuant hereto or thereto, shall be deemed
to constitute the Buyers as, and the Company acknowledges that the Buyers do not so constitute, a
partnership, an association, a joint venture or any other kind of entity, or create a presumption
that the Buyers are in any way acting in concert or as a group, and the Company will not assert any
such claim with respect to such obligations or the transactions contemplated by the Transaction
Documents and the Company acknowledges that the Buyers are not acting in concert or as a group with
respect to such obligations or the transactions contemplated by the Transaction Documents. The
Company acknowledges and each Buyer confirms that it has independently participated in the
negotiation of the transaction contemplated hereby with the advice of its own counsel and advisors.
Each Buyer shall be entitled to independently protect and enforce its rights, including, without
limitation, the rights arising out of this Agreement or out of any other Transaction Documents, and
it shall not be necessary for any other Buyer to be joined as an additional party in any proceeding
for such purpose.

(r) Stockholder Waiver. Each of the Buyers that was also a “Buyer” in the
Securities Purchase Agreement, dated as of March 27, 2008, by and among the Company and the
investors thereto, by its signature hereunder, waives the right of participation notice periods in
respect of the Securities to be issued and sold pursuant hereto, grants its consent to the use of a
portion of the proceeds of the Offering for working capital, and agrees to include in the
registration statements to be filed in connection with such private placement the Securities that
the Company would otherwise be obligated to register pursuant to the Registration Rights Agreement.

[Signature Page Follows]

1

IN WITNESS WHEREOF, each Buyer and the Company have caused their respective signature
page to this Securities Purchase Agreement to be duly executed as of the date first written above.

	 	 	 
	COMPANY:

	METALICO, INC.

	By:

	 	

	
 
	 	Name:
	
 
	 	Title:

2

IN WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to
this Securities Purchase Agreement to be duly executed as of the date first written above.

	 	 	 
	BUYER:

	By:

	 	

	
 
	 	Name:
	
 
	 	Title:

3

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