Document:

EX-10.1

Agreement for Purchase of Assets by and among

Annaco, Inc., 943 Hazel LLC, Ocanna Plant II LLC,

Metalico Akron, Inc., and Metalico Akron Realty, Inc.

Table of Contents

Page

	 	 	 
	Article 1 Purchase of Assets

Section 1.1

Section 1.2

Section 1.3

Section 1.4

Section 1.5

Article 2 Purchase Price

Section 2.1

Section 2.2

Section 2.3

	 	

Assets Description

Contracts

Excluded Property

Conveyance of Title

Liabilities

Amount and Payment

Inventory Adjustment

Allocation

	 	 	 
	Article 3 Sellers’ Representations and Warranties

	Section 3.1

Section 3.2

Section 3.3

Section 3.4

Section 3.5

Section 3.6

Section 3.7

Section 3.8

Section 3.9

Section 3.10

Section 3.11

Section 3.12

Section 3.13

Section 3.14

Section 3.15

Section 3.16

Section 3.17

Section 3.18

Section 3.19

Section 3.20

	 	Corporate Status

Authority

Ownership of Shares

No Conflicts

Financial Statements

Absence of Certain Changes

Liabilities

Tax Matters

Title to Property

Intellectual Property

Property Schedules

Real Property

Contracts

Insurance

Employment Matters

Employee Benefit Plans

Labor Relations

Proceedings and Orders

Compliance with Legal Requirements; Governmental Authorizations

Inventory

	 	 	 
	Article 4 Buyer Parties’ Representations and Warranties

	Section 4.1

Section 4.2

Section 4.3

Section 4.4

Section 4.5

	 	Corporate Status

Authorization

Consent of Third Parties

Proceedings and Orders

Buyer’s Net Worth

	 	 	 
	Article 5 Covenants of Sellers

	Section 5.1

Section 5.2

Section 5.3

Section 5.4

Section 5.5

Section 5.6

Section 5.7

Section 5.8

Section 5.9

	 	Sellers’ Closing Certificate

Conduct of Business

Forbearance by Sellers

Location of Property

Access

Name Change

Covenant Against Competition

Real Property Title Insurance

Reasonable Best Efforts

	 	 	 
	Article 6 Conditions Precedent to Obligations of Buyer Parties

	Section 6.1

Section 6.2

Section 6.3

Section 6.4

Section 6.5

Article 7 Covenants of Buyer

Section 7.1

Section 7.2

Section 7.3

Section 7.4

	 	Representations and Warranties True and Accurate as of Closing

Title

Performance of Obligations of Seller

Legal and Insolvency Proceedings

Termination of Employment Agreements

Buyer’s Closing Certificate

Reasonable Best Efforts

Buyer’s Operation of the Business

Administrative Assistance

	 	 	 
	Article 8 Conditions Precedent to Obligations of Sellers

	Section 8.1

Section 8.2

Section 8.3

Section 8.4

Article 9 Closing

Section 9.1

Section 9.2

Section 9.3

Section 9.4

Section 9.5

Section 9.6

Section 9.7

Article 10 Indemnification

Section 10.1

Section 10.2

Section 10.3

Section 10.4

Section 10.5

Section 10.6

Section 10.7

Section 10.8

Article 11 Termination

Section 11.1

Section 11.2

	 	Representations and Warranties True and Accurate as of Closing

Payment of Purchase Price

Performance of Obligations of Buyer

Legal and Insolvency Proceedings

Time and Place

Deliveries by Sellers

Deliveries by Buyer Parties

Prorations

Additional Actions

Sellers’ Closing Costs

Buyer Parties’ Closing Costs

Indemnification by Sellers

Indemnification by Buyer

Time Limitations

Limitations on Sellers’ Indemnification Obligations

Procedure for Indemnification – Third Party Claims

Procedure for Indemnification – Other Claims

Annaco’s Net Worth

Limitation on Buyer Parties’ Indemnification Obligations

Termination Events

Effect of Termination

	 	 	 
	Article 12 Miscellaneous Provisions

	Section 12.1

Section 12.2

Section 12.3

Section 12.4

Section 12.5

Section 12.6

Section 12.7

Section 12.8

Section 12.9

Section 12.10

Section 12.11

Section 12.12

Section 12.13

Section 12.14

Section 12.15

Section 12.16

Section 12.17

Section 12.18

Section 12.19

Section 12.20

Section 12.21

Section 12.22

	 	Construction

Survival of Representations and Warranties

Notices

Successors and Assigns

No Third Party Beneficiaries

Damage or Destruction of Assets; Eminent Domain

Governing Law

Counterparts and Facsimiles

Waivers

Books and Records

Time of Essence

Public Announcement

Integration and Amendment

Joint Preparation

Non-foreign Status

Confidentiality

Disclosure Exhibits

Severability

Disclaimer

Expenses

Joint and Several Liability

Tax-Deferred Exchange

	 	 	 
	Article 13 Employees and Employee Benefits

	Section 13.1

Section 13.2

Section 13.3

Section 13.4

	 	Employment of Annaco’s Employees by Buyer

Salaries and Benefits

Workers’ and Unemployment Compensation

Successor Employer

	 	 	 
	Article 14 Environmental Matters

	Section 14.1

Section 14.2

Section 14.3

Section 14.4

	 	OEPA Claims

Mound Removal

Buyer’s Environmental Obligations

Environmental Authorizations

1

Exhibits

	 	 	 
	Exhibit A

Exhibit B

Exhibit C

Exhibit 1.1(b)

Exhibit 1.1(c)

Exhibit 1.1(f)

Exhibit 1.2(a)

Exhibit 1.3(a)

Exhibit 1.3(b)

Exhibit 1.4(a)

Exhibit 1.5(a)(2)

Exhibit 2.1(e)-(1)

Exhibit 2.1(e)-(2)

Exhibit 3.1

Exhibit 3.3

Exhibit 3.4

Exhibit 3.5(a)

Exhibit 3.5(b)

Exhibit 3.5(c)

Exhibit 3.5(d)

Exhibit 3.9

Exhibit 3.11(a)

Exhibit 3.11(c)

Exhibit 3.11(d)

Exhibit 3.12

Exhibit 3.13

Exhibit 3.14

Exhibit 3.15

Exhibit 3.16

Exhibit 3.17

Exhibit 3.18

Exhibit 3.19

Exhibit 3.20

Exhibit 5.8

Exhibit 14.1

Exhibit 14.2

	 	Description of 943 Real Property

Description of Ocanna Real Property

Membership Interest Purchase Agreement

Equipment

Intellectual Property

Prepaid Expenses

Contracts to be Assigned

Excluded Property

Excluded Contracts

Form of Bill of Sale, Assignment and Assumption

Accrued Vacation

Metalico Corporate Charges

Excluded Expenses

Annaco’s Foreign Qualification

Ownership of Equity Interests

Required Consents of Governmental Bodies

Annaco November 30, 2004 Financial Statements

Annaco November 30, 2005 Financial Statements

Annaco November 30, 2006 Financial Statements

Annaco May 31, 2007 Financial Statements

Encumbrances

Leased Equipment

Licensed Intellectual Property

Tangible Personal Property not Owned or Leased

Real Property Disputes

Contracts

Insurance

Employment Matters

Benefit Plans

Labor Relations

Proceedings and Orders

Governmental Authorizations and Legal Requirements

Consigned Inventory

Permitted Encumbrances

Description of Current OEPA Claims

Escrow Agreement

2

Assets Purchase Agreement

This agreement (“Agreement”) is entered as of June 29, 2007, by and among Metalico Akron,
Inc., an Ohio corporation (“Buyer”), Metalico Akron Realty, Inc., an Ohio corporation (“Akron
Realty”) (Buyer and Akron Realty being sometimes collectively referred to herein as the “Buyer
Parties”) and Annaco, Inc., an Ohio corporation with its principal place of business located at 943
Hazel Street, Akron, Ohio (“Annaco”), 943 Hazel LLC, an Ohio limited liability company (“943”) and
Ocanna Plant II LLC, an Ohio limited liability company (“Ocanna”); (943 and Ocanna are sometimes
collectively referred to herein as the “LLC Affiliates;” Annaco and the LLC Affiliates are
sometimes collectively referred to herein as “Sellers”). The references to Annaco in this
Agreement include the corporation formerly known as Annaco whose name is changed pursuant to
Section 5.6 of this Agreement.

Recitals

A. Annaco owns and operates a business of procuring ferrous and nonferrous scrap metal,
including engine blocks, from various sources and processing it into a reusable form for its
customers (“Business”); and

B. 943 and Ocanna, respectively, own parcels of real estate located at 943 Hazel Street,
Akron, Ohio, a legal description of which is attached hereto as Exhibit A (the “943 Real
Property”), and 888 Hazel Street, Akron, Ohio, a legal description of which is attached hereto as
Exhibit B (the “Ocanna Real Property”) (the 943 Real Property and the Ocanna Real Property
are collectively referred to herein as the “Real Property”) which they lease to Annaco, and on
which Annaco operates the Business; and

C. Annaco desires to sell to Buyer, and Buyer desires to purchase from Annaco, substantially
all of Annaco’s assets used in the Business; and

D. 943 desires (i) immediately prior to Closing, to transfer the 943 Real Property to a newly
formed, wholly owned subsidiary of 943 (“943 Sub”) and (ii) at Closing, to sell to Akron
Realty, an Affiliate of Buyer, all of the issued and outstanding membership interest in 943 Sub
(the “943 Sub Membership Interest”), and Akron Realty desires to purchase the 943 Sub
Membership Interest pursuant to a Membership Interest Purchase Agreement in substantially the form
attached hereto as Exhibit C; and

E. Ocanna desires (i) immediately prior to Closing, to transfer the Ocanna Real Property to a
newly formed, wholly owned subsidiary of Ocanna (“Ocanna Sub”) and (ii) at Closing, to sell
to Akron Realty all of the issued and outstanding membership interest in Ocanna Sub (the
“Ocanna Sub Membership Interest” and, together with the 943 Sub Membership Interest, the
“Membership Interests”), and Akron Realty desires to purchase the Ocanna Sub Membership
Interest pursuant to a Membership Interest Purchase Agreement in substantially the form attached
hereto as Exhibit C; and

F. The parties to this Agreement hereby acknowledge and agree that (i) the purchase of the
Membership Interests by Akron Realty is a condition to the closing of the transactions contemplated
under this Agreement and (ii) the closing of the transactions contemplated under this Agreement is
a condition to the purchase of the Membership Interests by Akron Realty; and

G. Capitalized terms not otherwise defined in this Agreement have the meanings ascribed to
them in the Appendix attached hereto.

NOW, THEREFORE, in consideration of the foregoing and of the representations, warranties,
covenants, and mutual promises contained herein, the parties hereto agree as follows:

Article 1

Purchase of Assets

Section 1.1 Assets Description. Upon the terms and subject to the
conditions set forth in this Agreement, except for the Excluded Property (defined in
Section 1.3 hereof), on the Closing Date and effective as of the Effective Time (i) the LLC
Affiliates must sell to Akron Realty, and Akron Realty must buy from the LLC Affiliates, the
Membership Interests, and (ii) Annaco must sell to Buyer, and Buyer must purchase from Annaco, all
of Annaco’s right, title, and interest in and to the assets Annaco uses to conduct the Business,
wherever located, including, without limitation, the following (the “Property”):

	 	(a)	 	all inventory of ferrous and nonferrous scrap, raw materials, work in process,
and finished goods on hand as of the Effective Time (“Inventory”);

	 	(b)	 	all tangible personal property other than the Inventory including the
equipment, machinery, fixtures, furniture, automobiles, trucks, tractors, trailers and
containers, office equipment, computer hardware, and tools listed on Exhibit
1.1(b) (“Equipment”) and all packaging materials and supplies, and other materials
and supplies, used by Annaco in the production of finished goods, on hand as of the
Effective Time;

	 	(c)	 	all of Annaco’s rights, title and interest in and to Annaco’s Intellectual
Property, including the Marks and Net Names included on Exhibit 1.1(c);

	 	(d)	 	all Governmental Authorizations held by Annaco and all pending applications
therefor or renewals thereof, in each case to the extent transferable to Buyer;

	 	(e)	 	all customer lists and records, sales and purchase order files, engineering,
research and development reports and records, production reports and records, service
and warranty records, equipment logs, operating guides and manuals, creative materials,
advertising materials, promotional materials, service awards and honors, studies,
reports, correspondence and other similar documents and records and all personnel
records (“Records”);

	 	(f)	 	the prepaid expenses as of the Effective Time listed on Exhibit 1.1(f)
attached (“Prepaids”) to be prorated in accordance with Section 9.4;

	 	(g)	 	all goodwill; and

	 	(h)	 	the contract rights as described in Section 1.2 below and all
documents relating thereto.

Section 1.2 Contracts. Except for the Excluded Property, Annaco must assign
to Buyer on the Closing Date all of Annaco’s right, title, and interest in and to:

	 	(a)	 	all contracts, leases and license agreements to which Annaco is a party,
including, without limitation, those identified on Exhibit 1.2(a), together
with any other contracts, leases or license agreements entered into by Annaco in the
ordinary course of business or approved by Buyer in writing after the date of this
Agreement and prior to the Effective Time;

	 	(b)	 	all of Annaco’s unfilled sales commitments as of the Effective Time;

	 	(c)	 	all of Annaco’s unfilled purchase orders as of the Effective Time; and

	 	(d)	 	Annaco’s collective bargaining agreement with UNITE HERE 463 effective June
26, 2005 through June 25, 2008 (the “Union Contract”).

(The contracts, leases and license agreements to be assigned to Buyer hereunder are collectively
referred to as the “Contracts”.) At Closing, Buyer must accept such assignment and assume as of
the Effective Time all obligations of Annaco under the Contracts pursuant to the Bill of Sale
(defined in Section 1.4).

Section 1.3 Excluded Property. Buyer will not be purchasing those assets of
Annaco listed on Exhibit 1.3(a)  attached and all of Annaco’s cash (which includes checks
received by or in transit to Annaco prior to the Effective Time), bank deposits, money market
accounts, securities in publicly traded companies, claims for Tax refunds and other refunds
pertaining to payments of expenses made by Annaco prior to the Effective Time, Tax Returns, Tax and
other deposits, and Tax records, accounts and other receivables (which include all purchase orders
for inventory filled by Annaco prior to the Effective Time), Annaco’s corporate and share record
books, all insurance policies and rights thereunder (including, without limitation, premium refunds
resulting from cancellations at or after Closing), the rights of Annaco under this Agreement and
any documents executed in connection herewith, any consulting or employment agreements to which
Annaco is a party and the other contracts, leases or license agreements listed on Exhibit
1.3(b), if any, and Annaco’s issued and outstanding common shares and any shares held in
treasury (herein collectively referred to as “Excluded Property”).

Section 1.4 Conveyance of Title. Annaco will convey to Buyer title to the
Property by executing and delivering a bill of sale, assignment and assumption (“Bill of Sale”)
substantially in the form of Exhibit 1.4(a) attached. Immediately prior to Closing, (a)
Ocanna will transfer the Ocanna Real Property to Ocanna Sub and (b) 943 will transfer the 943 Real
Property to 943 Sub, in each case pursuant to an Ohio statutory form limited warranty deed (the
“Deeds”). At Closing, the LLC Affiliates will assign, transfer and sell the Membership
Interests to Akron Realty on the terms and conditions set forth herein and in the Membership
Interest Purchase Agreements (as defined in Section 9.2(e)). Buyer may obtain, at Buyer’s
sole option and expense, an ALTA/ACSM Land Title Survey of either Real Property (a
“Survey”), and the perimeter legal descriptions of the land prepared and certified by the
surveyor shall, if required by Buyer, be used in the Deeds. If Buyer does not obtain a Survey, the
legal descriptions attached to the Title Commitment referred to in Section 5.8 as they may
be modified by GBC Design, Inc. will be used in the Deeds.

Section 1.5 Liabilities.

	 	(a)	 	On the Closing Date, but effective as of the Effective Time, Buyer will assume
by the execution and delivery of the Bill of Sale referenced above:

	 	(1)	 	All obligations pertaining to the operation of the Business and
Real Property first arising or accruing on or after the Effective Time;

	 	(2)	 	Annaco’s accrued obligations as of the Effective Time to
provide the accrued vacation to the Transferred Employees (as defined in
Section 13.1(a)) set forth on Exhibit 1.5(a)(2);

	 	(3)	 	Annaco’s liability for breach of warranty to its customers to
the extent the liability thereunder does not require Buyer to take any action
other than provide replacement material to its customers; and

	 	(4)	 	Annaco’s duties and obligations under the Contracts to the
extent they first arise from and after the Effective Time.

The liabilities to be assumed by Buyer under this Section 1.5(a) are
referred to in this Agreement as the “Assumed Liabilities”. All liabilities of the
Sellers other than the Assumed Liabilities are referred to herein as the “Retained
Liabilities”. For the avoidance of doubt, except as provided in Section
1.5(a), Buyer does not assume and will not become responsible for any
obligation, duty, commitment, claim or liability of Annaco arising out of the
employment relationship between Annaco and any of its employees or former employees
accruing prior to the Effective Time, and all such liabilities shall be deemed
Retained Liabilities.

	 	(b)	 	Buyer will not assume any of the LLC Affiliates’ liabilities and will not
assume any of Annaco’s liabilities other than the Assumed Liabilities.

Section 1.6 Third Party Consents. To the extent that Annaco’s rights under any
Contract or any other portion of the Property may not be assigned without the Consent of another
person, this Agreement and the other Transaction Documents shall not constitute an agreement to
assign the same if an attempted assignment would constitute a breach thereof or be unlawful. If
any such Consent shall not be obtained or if any attempted assignment would be ineffective or would
impair Buyer’s rights under the Contract or other Property in question so that Buyer would not
acquire the benefit of all such rights, Annaco shall for a period of 12 months after Closing at no
out-of-pocket cost to Annaco, use its Reasonable Best Efforts to act after the Closing to provide
to Buyer the benefit of all such rights thereunder and shall cooperate with Buyer in any mutually
agreeable arrangements to provide the benefit of all such rights to Buyer.

Article 2

Purchase Price

Section 2.1 Amount and Payment.

	 	(a)	 	In consideration for the sale of the Membership Interests by the LLC
Affiliates to Akron Realty, Akron Realty will pay the LLC Affiliates the aggregate sum
of $2,200,000 pursuant to the Membership Interest Purchase Agreements. In
consideration for the sale of the Property by Annaco to Buyer, Buyer will pay Sellers
the sum of $29,627,000 (the “Tentative Purchase Price”) plus or minus the Inventory
Adjustment Amount as determined in accordance with Section 2.2 below. The
Tentative Purchase Price plus or minus the Inventory Adjustment Amount is referred to
herein as the “Purchase Price” and the sum of the Purchase Price and the Assumed
Liabilities is referred to as the Purchase Consideration. A portion of the Purchase
Price will be paid into escrow if required by Section 14.2 hereof. Subject to
Section 2.2(d), at Closing, the Buyer will pay the Purchase Price to the
Sellers as provided for in Section 2.1(g).

	 	(b)	 	Subject to Section 2.1(c), as additional consideration for the sale of
the Property, for the fiscal years ending November 30, 2007, December 31, 2008 and
December 31, 2009, respectively, Buyer will make an annual payment to Annaco (“Annual
Earnout”), based on the performance of the Business during such fiscal years. If
EBITDA generated by the Business for any such fiscal year exceeds $7,500,000 (or the
reduced amount provided for in Section 2.1(c)) (the “EBITDA Floor”), Buyer will
pay Annaco the product of (i) $75,000 multiplied by (ii) the whole number determined by
dividing the Excess EBITDA for the applicable period by $100,000 and rounding up to the
next highest whole number.

	 	(c)	 	The Annual Earnout for the fiscal year ending November 30, 2007 will be
computed so that only the EBITDA earned for the period beginning on the Closing Date
and ending November 30, 2007 (the “Post-Closing 2007 EBITDA”) will be used in
the computation of the Annual Earnout and the EBITDA Floor will be proportionately
reduced by multiplying $7,500,000 by a fraction, the numerator of which is the number
of days from and after the Closing Date to and including the last day of fiscal 2007,
and the denominator of which is 365. As an example, if the EBITDA for the remainder of
fiscal 2007 after the Closing Date is $5,000,000 and assuming there were 183 days
during such period, then the Earnout for the remainder of fiscal 2007 would be $75,000
x 13 = $975,000, where the whole number 13 is calculated as follows: ($5,000,000 –
(183/365 x 7,500,000))/$100,000. If EBITDA from December 1, 2006 until (but not
including) the Closing Date (“Pre-Closing 2007 EBITDA”) is less than the
Pre-Closing EBITDA Target, for purposes of calculating the Annual Earnout for the
fiscal year ending November 30, 2007, Post-Closing 2007 EBITDA shall be decreased by
one-half (1/2) of the amount equal to the Pre-Closing EBITDA Target minus the
Pre-Closing 2007 EBITDA. For purposes hereof, the “Pre-Closing EBITDA Target”
means an amount equal to $7,500,000 multiplied by a fraction, the numerator of which
equals the number of days elapsed from December 1, 2006 to (but not including) the
Closing Date, and the denominator of which equals 365.

	 	(d)	 	The parties agree to reasonably cooperate with each other in connection with
the determination of each Annual Earnout. The Annual Earnout calculation in each case
will be based upon a compilation by Buyer’s auditors of internally prepared financial
statements, and will be subject to review by Annaco’s accountants. Buyer shall deliver
to Annaco its calculation of the Annual Earnout (“Buyer’s Earnout Calculation”)
within 90 days following the expiration of the applicable fiscal year or, if no Annual
Earnout payment will be made in respect of any fiscal year, Buyer shall within such 90
day period notify Annaco that no such payment will be made and provide Annaco with a
calculation of EBITDA demonstrating that no such payment is due. Unless Annaco
delivers a Notice of Disagreement in accordance with Section 2.1(f), Buyer’s
Earnout Calculation for the applicable year shall be binding on the parties and Buyer
shall pay to Annaco the Annual Earnout, if any, reflected in Buyer’s Earnout
Calculation within 15 days following expiration of the Initial Review Period (as
defined in Section 2.1(f)). Buyer must provide along with such calculations
the work papers that relate thereto.

	 	(e)	 	For purposes of the Annual Earnout calculation, “EBITDA” is defined as
earnings from operation of the Business determined in accordance with GAAP (except that
the Buyer’s beginning inventory for purposes of determining EBITDA will be the
Inventory Amount determined in accordance with Section 2.2) disregarding
interest, income taxes, depreciation, amortization, charges for discontinued
operations, losses which are the subject of indemnification under Section 10.1
to the extent a Buyer Indemnified Party receives payments in respect thereof,
extraordinary or unusual items, and any corporate charges assessed against the Business
by affiliates of Buyer, provided that EBITDA shall be reduced by (i) for the fiscal
year ending November 30, 2007 an amount equal to $75,000 and (ii) for each of the
fiscal years ending December 31, 2008 and December 31, 2009, an amount equal to
$300,000, in each case to represent corporate charges allocated by Metalico, Inc. to
the Business and Buyer. Buyer shall not be required to present any evidence of such
charges. Included among the corporate charges of Buyer’s affiliates that will not be
charged against earnings in determining EBITDA are the items listed on Exhibit
2.1(e)-(1) attached hereto. The items set forth on Exhibit 2.1(e)-(2)
shall not be taken into account as an expense in the calculation of Pre-Closing 2007
EBITDA. If a Buyer Indemnified Party receives insurance proceeds after December 31,
2009 that relate to a loss that was taken into account as a subtraction from earnings
in the calculation of EBITDA for purposes of determining the Annual Earnout, the
parties will equitably adjust the Annual Earnout for the fiscal year during which the
loss giving rise to such insurance recovery was charged as if the amount of such
insurance proceeds was received during such fiscal year, and the Buyer will make an
appropriate payment to Annaco within 60 days of the receipt of such insurance proceeds.

	 	(f)	 	In the event of any dispute between the parties regarding the Annual Earnout
calculation, the matter will be resolved as follows:

	 	(1)	 	In the event that Annaco disagrees with Buyer’s determination
of the Annual Earnout for any fiscal year or portion thereof, or Buyer’s
determination that there is no Annual Earnout, Annaco shall deliver to Buyer a
written notice of objection (the “Notice of Disagreement”) within 30 days (the
“Initial Review Period”) of the receipt of Buyer’s calculation of EBITDA, the
Annual Earnout (if applicable), and the work papers as provided for in
Section 2.1(b), which notice shall state the adjustments proposed by
Annaco and shall include Annaco’s calculation thereof (“Annaco’s Adjustment
Amount”). (The 30-day period referred to in the previous sentence will not
begin to run until Annaco has been granted access under Section 12.10
to any information it deems relevant to the determination of the Annual Earnout
and EBITDA.) Buyer shall have 15 days from receipt of a Notice of Disagreement
to accept or reject Annaco’s Adjustment Amount. If Buyer rejects Annaco’s
Adjustment Amount, within 10 days thereafter, the dispute shall be submitted
for determination by a third party certified public accounting firm reasonably
acceptable to Buyer and Annaco and not then providing services to Buyer or
Annaco or any of their respective Affiliates (the “Independent Accountants”),
with instructions that such determination shall be made accurately in
accordance with the provisions hereof, as consistently applied, within 30 days
after submission to the Independent Accountants; and the Independent
Accountants’ determination shall be final, conclusive and binding on Annaco and
Buyer (the amount determined by the Independent Accountants being hereinafter
called the “Adjusted Earnout Amount”). In the event Buyer and Annaco fail to
select the Independent Accountants within 10 days after Buyer’s rejection of
Annaco’s Adjustment Amount, the Independent Accountants will be selected
through a lottery drawing at random from the list of the 100 largest public
accounting firms not then providing services to Buyer or Annaco or any of their
respective Affiliates. Buyer and Annaco agree to share equally the cost and
expenses of the Independent Accountants, but each party shall bear its own
legal and other expenses, if any.

	 	(2)	 	Following either Buyer’s acceptance of Annaco’s Adjustment
Amount, or the determination of an Adjusted Earnout Amount by the Independent
Accountants, as applicable, payment shall be made by Buyer to Annaco of the
Earnout Amount, as adjusted if applicable, by wire transfer within 15 days
after the last to occur of (i) Buyer’s acceptance of Annaco’s Adjustment Amount
or failure to reject Annaco’s Adjustment Amount within 15 days of receipt of a
Notice of Disagreement; or (ii) notice to Annaco and Buyer of the determination
of the Adjusted Earnout Amount by the Independent Accountants.

	 	(g)	 	All payments under this Section 2.1 and under Section 2.2 will
be made by wire transfer to one or more accounts specified by Annaco in writing prior
to the applicable payment date.

Section 2.2 Inventory Adjustment.

	 	(a)	 	To the extent that the Inventory Amount (as defined below) as of the Closing
Date, exceeds $1,700,000, the Tentative Purchase Price shall be increased by the amount
of such excess, and to the extent that the Inventory Amount is less than $1,700,000,
the Tentative Purchase Price shall be decreased by the amount of such deficiency (such
positive or negative amount hereinafter referred to as the “Inventory Adjustment
Amount”). For purposes hereof, “Inventory Amount” means (i) the cost of the inventory
as of the Closing Date, as determined in accordance with the provisions of this
Section 2.2 below and consistent with the methodology used in preparing the
November 30, 2006 Financial Statements (as defined in Section 3.5), which the
parties acknowledge and agree includes certain allocated charges above just the
purchase cost, except that no adjustment will be made to reflect any market pricing of
the Inventory, multiplied by (ii) 0.9.

	 	(b)	 	A physical inventory shall be conducted in good faith by the parties as of the
Closing Date (which the parties will begin on June 29) for purposes of determining the
Inventory Amount. The Inventory Amount shall be determined based on such physical
inventory using the aggregate cost of Annaco’s Inventory as of the Effective Time
calculated in the manner described in this Section 2.2, and the Inventory
Adjustment Amount, as so determined, shall be added to or deducted from the Tentative
Purchase Price, as the case may be, based on such calculation.

	 	(c)	 	Annaco and Buyer will attempt in good faith to agree on the Inventory Amount
and the Inventory Adjustment Amount as of the Effective Time before the Closing Date.
If the parties cannot agree on the Inventory Amount and the Inventory Adjustment Amount
before the Closing Date, each of Annaco and Buyer will (i) for a period of thirty (30)
days following the Closing Date, cooperate in good faith to mutually agree upon the
Inventory Amount and the Inventory Adjustment Amount and (ii) if the parties cannot
reach an agreement during such thirty (30) day period, submit its determination of the
Inventory Amount to a mutually agreed upon referee (the “Referee”) and the Referee
shall make the final determination thereof. Such determination shall be made in
accordance with the provisions hereof within 30 days after submission to the Referee;
and the Referee’s determination shall be final, conclusive and binding on Annaco and
Buyer. Buyer and Annaco agree to share equally the cost and expenses of the Referee,
but each party shall bear its own legal and other expenses, if any.

	 	(d)	 	If Annaco and Buyer do not agree upon the Inventory Amount on the Closing
Date, Buyer will pay Sellers an amount at Closing based on an estimated Inventory
Adjustment Amount equal to $2,350,000 (which assumes an Inventory Amount equal to
$4,500,000 x 0.9 = $4,050,000) (the “Estimated Inventory Adjustment Amount”).
Following the determination of the Inventory Amount by the parties or the Referee, as
the case may be, after Closing, payment of the difference between the actual Inventory
Adjustment Amount and the Estimated Inventory Adjustment Amount paid at Closing shall
be made by Buyer to Annaco or Annaco to Buyer by wire transfer within 15 days after the
final determination of the Inventory Amount by the parties or the Referee, as the case
may be.

Section 2.3 Allocation. Sellers and Buyer acknowledge and agree that: (a)
$25,000 of the Purchase Consideration constitutes consideration for the noncompetition covenant
contained in Section 5.7; (b) the amount of the Purchase Price allocated to Inventory will
be the Inventory Amount; and (c) after the Closing, each party shall make all filings, declarations
and reports required by the IRS in respect of the Contemplated Transactions, including IRS Form
8594 and the filings, declarations and reports required to be filed under Section 1060 of the IRC
and all regulations and rulings related thereto. All payments of the Annual Earnout will be
allocated to goodwill. After the Closing, Buyer will grant an appraiser appointed by Annaco with
access to the Property during business hours upon reasonable advance notice so that the appraiser
can determine the value thereof.

Article 3

Sellers’ Representations and Warranties

Sellers represent and warrant to Buyer as follows:

Section 3.1 Corporate Status. Annaco is a corporation and the LLC
Affiliates are limited liability companies, duly organized, validly existing, and in good standing
under the laws of the state of Ohio and each has the corporate or limited liability company power
and authority, as applicable, to own its properties and to conduct its business as now being
conducted, and to perform all its obligations under any contracts to which it is a party. On
Exhibit 3.1 is set forth a list of those states in which Annaco is qualified to do
business. Neither Annaco nor either of the LLC Affiliates has any subsidiaries or owns any shares
or other equity interests in any other corporations, partnerships, limited liability companies,
joint ventures, or other entities (except for equity interests in publicly traded companies, which
are part of the Excluded Assets).

Section 3.2 Authority. All necessary corporate or limited liability company
action has been taken by each Seller with respect to the execution, delivery and performance by
such Seller of this Agreement and the documents and agreements executed pursuant to this Agreement
(the “Transaction Documents”) and the consummation of the Contemplated Transactions. This
Agreement is legally binding upon each Seller, and each Seller has all requisite corporate or
limited liability company power, authority, and capacity, as applicable, to execute and deliver
this Agreement and the other Transaction Documents, and to perform all of its obligations
hereunder.

Section 3.3 Ownership of Shares. The shareholders of Annaco and B.H.B. Land
Company (which is the sole member of the LLC Affiliates), respectively, are listed on Exhibit
3.3.

Section 3.4 No Conflicts. The execution, delivery and performance by the
Sellers of this Agreement and the other Transaction Documents and the consummation by the Sellers
of the Contemplated Transactions in accordance with the terms hereof do not and will not (a) to the
Sellers’ Knowledge, require the Consent of any Governmental Body except as described on Exhibit
3.4 or (b) violate or conflict with or result in a breach of the terms, conditions or
provisions of the articles of incorporation, code of regulations, operating agreement or other
governing instrument of any Seller.

Section 3.5 Financial Statements. To Sellers’ Knowledge, the balance
sheets, income statements and related schedules and footnotes for Annaco’s fiscal periods ended
November 30, 2004, November 30, 2005, November 30, 2006 and for the interim period ended May 31,
2007 (“Financial Statements”) attached as Exhibits 3.5(a)-(d) were prepared in accordance
with GAAP and fairly reflect the financial condition of Annaco as of the dates indicated thereon,
and the results of the operations of Annaco for the respective fiscal periods then ended, subject,
in the case of interim financial statements, to normal recurring year-end adjustments and the
absence of notes.

Section 3.6 Absence of Certain Changes. Since the date of the last
Financial Statement, except as contemplated by this Agreement, (a) Annaco has operated its Business
in the ordinary course consistent with past practice, (b) to the Sellers’ Knowledge there has been
no material adverse change in the Property, the Real Property or in the operation, performance, or
financial condition of the Business (disregarding changes in the economy generally and the scrap
markets or industry in particular), (c) Annaco has not increased the compensation or benefits of
any employees other than increases in the ordinary course of the Business, (d) Annaco has not sold,
transferred, licensed or otherwise disposed of, or agreed to sell, transfer, license or otherwise
dispose of, any of Annaco’s assets except sales of Inventory in the ordinary course of the Business
consistent with past practice, (e) Annaco has not changed any of the accounting methods used in the
Business, and (f) Annaco has not agreed or committed to do any of the foregoing.

Section 3.7 Liabilities. To the Sellers’ Knowledge, as of the date of the
last Financial Statement, Annaco did not have any liabilities which were required to be disclosed
thereon and which were not so disclosed, with the possible exception of the OEPA Claim, as
described in Section 14.1 below. Since the date of the last Financial Statement, to the
Sellers’ Knowledge, Annaco has not incurred any material liabilities not in the ordinary course of
the Business that will be binding on Buyer after Closing.

Section 3.8 Tax Matters. Sellers have duly and timely filed all Tax Returns
required to be filed by them and have paid all Taxes due or claimed to be due by any Governmental
Body. All Taxes that Sellers are required to withhold or collect have been withheld and, to the
extent required, paid to the appropriate Governmental Body. There are no pending Tax examinations
of, or Tax claims asserted against, Annaco or its Affiliates. Annaco has not granted any extension
of any limitation period applicable to Tax claims which extension is still in effect. The LLC
Affiliates are disregarded entities for federal and state of Ohio income tax purposes who are not
required to file any income Tax Returns or pay any federal or state income Taxes and their sole
member has timely filed all Tax Returns required to be filed by it and has paid all Taxes due or
claimed to be due by any Governmental Body with respect to the income generated by the Real
Property.

Section 3.9 Title to Property. Except as disclosed on Exhibit 3.9,
(i) Annaco has title to all of its Inventory, Equipment, Records, and goodwill free and clear of
all liens and encumbrances except liens for Taxes and assessments not yet due and payable, and (ii)
Annaco has not granted any rights in, or liens or encumbrances upon, any of its other Property.

Section 3.10 Intellectual Property. To the Sellers’ Knowledge, no person is
infringing any of Annaco’s Intellectual Property rights, and Annaco is not infringing the
intellectual property rights of any other person. No person has notified Annaco in writing of a
claim that Annaco’s use of any of Annaco’s Intellectual Property infringes the rights of any other
person, which claim remains unresolved.

Section 3.11 Property Schedules.

	 	(a)	 	Exhibit 3.11(a) is a list of all machinery, motor vehicles, equipment,
furniture, office equipment, computer hardware and other tangible personal property
leased to Annaco, including information as to the location of that property, as well as
an identification of the lessor thereof, and a cross-reference to the lease agreements
therefor listed on Exhibit 1.2(a).

	 	(b)	 	Exhibit 1.1(c) is a list of all of Annaco’s registered Marks and Net
Names, including a description of any registrations or applications concerning the
foregoing. Annaco has no issued Patents or pending Patent applications or registered
copyrights or pending applications therefor.

	 	(c)	 	Exhibit 3.11(c) is a description of all Intellectual Property, if any,
licensed by Annaco as licensee, an identification of the licensor, and a cross
reference to the license agreements relating thereto on Exhibit 1.2(a).

	 	(d)	 	Exhibit 3.11(d) is a list of all tangible personal property, if any,
used by Annaco in the operation of its Business which is not owned or leased by Annaco
and identifies the location of that property, the owner thereof, and a cross reference
to any agreements relating to that property to which Annaco is a party that are listed
on Exhibit 1.2(a).

Section 3.12 Real Property.

	 	(a)	 	Annaco owns no real property. Annaco does not lease any real property other
than the Real Property, which Annaco leases from the LLC Affiliates.

	 	(b)	 	Except as disclosed on Exhibit 3.12, there are no disputes pending or,
to Sellers’ Knowledge, threatened between Annaco and any contractor over payment for
services, material or work supplied to the Real Property. Except as disclosed on
Exhibit 3.12, all bills of all contractors, subcontractors or materialmen
relating to services, material or work supplied to the Real Property have been fully
paid or will be fully paid when due.

	 	(c)	 	The LLC Affiliates have not been notified in writing of future improvements by
any public authority, any part of the cost of which would be assessed against the Real
Property.

Section 3.13 Contracts. Except for the contracts listed on Exhibits
1.2(a), 1.3, 3.13, 3.14, 3.15 and 3.16., no Seller is a
party to any of the following types of contracts that will survive the Effective Time and be
binding on Buyer:

	 	(a)	 	management, employment, or consulting contract;

	 	(b)	 	agreements or commitments with any present or former owner, employee, director
or Affiliate of Annaco or the Business;

	 	(c)	 	collective bargaining or other labor agreement;

	 	(d)	 	real property lease, bailment agreement or material personal property lease;

	 	(e)	 	agreement involving the sharing of profits or losses;

	 	(f)	 	noncompetition or confidentiality agreement;

	 	(g)	 	guarantee of the obligation of another or indemnity agreement (excluding
guaranty or indemnification provisions of sales commitments or purchase orders);

	 	(h)	 	distributorship, manufacturer’s representative, or other type of agency
agreement;

	 	(i)	 	license (other than a license for off the shelf software available upon the
same terms to all customers), or know-how or technology transfer agreement; or

	 	(j)	 	any other agreement, contract or commitment relating to the Business that (i)
continues for more than 6 months from the date hereof, (ii) involves payments in excess
of $50,000 in the aggregate (excluding contracts for the purchase or sale of inventory
entered into in the ordinary course of the conduct of the Business) or (iii) is
otherwise material to the Business or Annaco.

The Contracts to be assigned to and assumed by Buyer are in full force and effect and Annaco and,
to the Sellers’ Knowledge, the other parties thereto are not in default thereof in any material
respect. The only contracts to which the LLC Affiliates are parties are the leases of the Real
Property to Annaco (“Real Property Leases”) which will be terminated as of the Effective Time.

Section 3.14 Insurance. Exhibit 3.14 contains a list of all of
Annaco’s, and the LLC Affiliates’ insurance policies and all claims that have been made thereunder
since January 1, 2006, together with an explanation of whether the claims have been resolved and,
if so, how they were resolved. All listed insurance policies are in full force and effect and all
premiums due thereunder have been paid on a timely basis. Neither Annaco nor either of the LLC
Affiliates have been notified by any representative of any insurer of the existence of any ground
for cancellation of the policies or for the reduction of coverages provided thereby.

Section 3.15 Employment Matters. Exhibit 3.15 contains a complete
and accurate list of the names, position, service date, classification (full-time, part-time,
leased or temporary), status (active, leave of absence or other status) and annual compensation
rate, bonus, commission and other incentive compensation related to the fiscal year ending November
30, 2006 for each employee of Annaco. There has not been any general increase made or promised in
the level or rate of salaries or other compensation of any of Annaco’s employees from those set
forth on Exhibit 3.15. Exhibit 3.15 contains a list of all written employment
contracts between Annaco and any employee thereof. The LLC Affiliates have no employees, and have
never had any employees and do not and have never sponsored, maintained, contributed to or been
required to contribute to any Benefit Plans.

Section 3.16 Employee Benefit Plans.

	 	(a)	 	Exhibit 3.16 lists all of Annaco’s Benefit Plans. Annaco has delivered
to Buyer true and complete copies of all plan documents, amendments thereto, insurance
contracts and trust agreements related to Annaco’s Benefit Plans, current summary plan
descriptions, and annual reports with respect to Annaco’s Benefit Plans or summary
descriptions of any such Benefit Plans not in writing. Neither Annaco nor any ERISA
Affiliate has any commitment to create any additional Benefit Plan or to modify or
change any existing Benefit Plan that would affect any current or former employee of
Annaco, except as may be required by applicable law.

	 	(b)	 	To the Sellers’ Knowledge, there are no Proceedings or claims (other than for
routine benefits under the relevant provisions of a Benefit Plan), pending or, to
Sellers’ Knowledge, threatened against any of the Benefit Plans or their assets.

	 	(c)	 	All contributions that were required to be made by Annaco to the Benefit Plans
have been made as of the date hereof, and Annaco has performed as of the date hereof
all material obligations required to be performed by it under the Benefit Plans. To
the Sellers’ Knowledge, all of the Benefit Plans have been operated in compliance in
all material respects with their respective terms and all laws.

	 	(d)	 	With respect to each Benefit Plan, to the Sellers’ Knowledge, no transaction
prohibited under Section 406 of ERISA and no “prohibited transaction” under IRC
§ 4975(c) has occurred.

	 	(e)	 	No Benefit Plan is subject to IRC § 412.

	 	(f)	 	Except as listed on Exhibit 3.16, no Benefit Plan is subject to Title
IV of ERISA, nor has Annaco or any ERISA Affiliate of Annaco ever been a sponsor of, or
been obligated to make contributions to, any such Benefit Plan. Neither Annaco nor any
ERISA Affiliates has in the most recent six-year period, with respect to any
Multiemployer Plan, suffered or otherwise caused a “complete withdrawal” or
“partial withdrawal,” as those terms are respectively defined in Sections 4203
and 5205 of ERISA.

	 	(g)	 	All of Annaco’s “group welfare benefit plans,” as defined in Section
3(1) of ERISA, have been operated in all material respects in compliance with their
provisions and the group continuation coverage requirements of IRC § 4980B to the
extent such requirements are applicable. Except to the extent required by IRC § 4980B,
Annaco does not provide health or welfare benefits, through the purchase of insurance
or otherwise to any retired or former employees.

	 	(h)	 	To the Sellers’ Knowledge, each Benefit Plan intended to be “qualified” within
the meaning of IRC § 401(a) is so qualified and the trusts thereunder are exempt from
taxation under IRC § 501(a).

	 	(i)	 	To the Sellers’ Knowledge, Annaco does not have any accrued liability with
respect to any Benefit Plan, other than for contributions, payments or benefits due in
the ordinary course under the Benefit Plans, none of which are overdue. No event has
occurred and no condition exists that would subject Buyer or the assets to be purchased
hereunder, either directly or by reason of Annaco’s affiliation with any Affiliate, to
any tax, fine, lien, penalty or other liability imposed by ERISA, the IRC or other
applicable laws with respect to any Benefit Plan.

	 	(j)	 	Exhibit 3.16 contains a complete and accurate list of all former
Annaco employees who have elected (or who are eligible to elect) to continue their
coverage under Annaco’s medical, dental or other group health plan in accordance with
the continuation coverage requirements of IRC § 4980B.

Section 3.17 Labor Relations. To the Sellers’ Knowledge, Annaco is in
compliance in all material respects with all Legal Requirements relating to the employment of labor
and there are no strikes, lockouts, work stoppages, picketing or slow downs, charges of unfair
labor practices, pending or threatened against Annaco. Except for the Union Contract, Annaco is
not a party to any collective bargaining agreement, no collective bargaining agreement is currently
being negotiated by Annaco and, except for UNITE HERE 436, no union or collective bargaining unit
represents any of Annaco’s employees. Except as disclosed on Exhibit 3.17, within the
three year period preceding the date of this Agreement:

	 	(a)	 	Annaco has not received any written complaints from any of its current or
former employees that any of Annaco’s current or former employees engaged in unlawful
harassment of the complaining employee; and

	 	(b)	 	Annaco has not received any written complaints made by any of its current or
former employees regarding alleged unlawful discrimination in their employment by
Annaco.

Section 3.18 Proceedings and Orders. Except as disclosed on Exhibit
3.18, there are no Proceedings pending or threatened against any Seller, and no Seller is in
default of any Order. There is set forth on Exhibit 3.18 a list of all Orders that have
been imposed and remain outstanding against any Seller.

Section 3.19 Compliance with Legal Requirements; Governmental
Authorizations. Except as disclosed on Exhibit 3.19 and as provided in Article
14, to the Sellers’ Knowledge, Sellers have acquired all Governmental Authorizations required
for the operation of the Business, a list of which is set forth on Exhibit 3.19. Except as
disclosed on Exhibit 3.19, no Seller has received a notice asserting a violation by it, or
of its liability under, any Legal Requirement or Governmental Authorization which has not been
resolved, or of a potential revocation, withdrawal, suspension, cancellation, or modification of
any Governmental Authorization, and to the Sellers’ Knowledge, there are not pending any
investigations involving possible violations thereof. Except as provided for in Article 14
of this Agreement, to Sellers’ Knowledge, the Business has been conducted in all respects in
compliance with, and no Seller has violated, any Legal Requirements to which it is subject.

Section 3.20 Inventory. Except as otherwise disclosed on Exhibit
3.20, no items of Inventory reflected on the latest Financial Statement were held by Annaco on
consignment from others.

Article 4

Buyer Parties’ Representations and Warranties

The Buyer Parties represent and warrant to Sellers as follows:

Section 4.1 Corporate Status. Each Buyer Party is a corporation duly
organized, validly existing and in good standing under the laws of the state of Ohio.

Section 4.2 Authorization. All necessary corporate action has been taken by
each Buyer Party with respect to the execution, delivery and performance by such Buyer Party of
this Agreement and the other Transaction Documents and the consummation of the Contemplated
Transactions. This Agreement is legally binding upon each Buyer Party, and each Buyer Party has
all requisite corporate power, authority, and capacity to execute and deliver the Agreement and the
other Transaction Documents and to perform all of its obligations hereunder.

Section 4.3 Consent of Third Parties. The execution and delivery of this
Agreement and the other Transaction Documents by the Buyer Parties and consummation of the
Contemplated Transactions by the Buyer Parties do not require the Consent of any third party and
will not result in a violation of, or default under, any contract, Legal Requirement, or Order by
which any Buyer Party is bound.

Section 4.4 Proceedings and Orders. There are no Proceedings pending or
threatened against any Buyer Party that challenge its ability to consummate the Contemplated
Transactions, and no Buyer Party is in default of any Order.

Section 4.5 Buyer’s Net Worth. In order to secure Buyer’s obligations
pursuant to this Agreement prior to Closing, Buyer must maintain a total net worth of not less than
$2,500,000 from the date hereof until the Closing Date.

Article 5

Covenants of Sellers

Unless the Buyer Parties otherwise agree in writing, Sellers covenant as follows:

Section 5.1 Sellers’ Closing Certificate. Sellers will execute and deliver
at the Closing a certificate which will state that:

	 	(a)	 	each Seller has performed and/or complied in all material respects with all of
its covenants and other obligations required by this Agreement and the Membership
Interest Purchase Agreements to be performed or complied with by it as of the Closing;

	 	(b)	 	except as otherwise specifically provided therein, all of the representations
and warranties made by any Seller in this Agreement and the Membership Interest
Purchase Agreements (other than any representations or warranties that are made as of a
date other than the date of this Agreement) are true and accurate in all material
respects as of the Closing with the same force and effect as though made at such time;

	 	(c)	 	there are attached to the certificate true and complete copies of the
resolutions, duly and validly adopted, respectively, by the shareholders and board of
directors of Annaco and the managing member of the LLC Affiliates, authorizing the
execution and delivery of this Agreement and the other Transaction Documents and the
consummation of the Contemplated Transactions.

Section 5.2 Conduct of Business. Subject to Section 5.3 hereof or
as otherwise contemplated by this Agreement, from the date hereof until the Closing, Annaco must:

	 	(a)	 	conduct the Business in the ordinary course consistent with past practice in
all material respects;

	 	(b)	 	continue to cause to be insured its Business, the Real Property and the
Property in the manner and to the extent such items were insured on the date hereof;
and

	 	(c)	 	maintain and service, or cause to be maintained and serviced, the physical
assets used in the conduct of the Business consistent with past practice.

Subject to Section 5.3 hereof or as otherwise contemplated by this Agreement, from the
date hereof until the Closing, Sellers must (i) perform their respective obligations under all of
their contracts in all material respects; and (ii) send Buyer copies of any notices any Seller may
hereafter receive relating to violations of law, insurance claims, litigation, condemnation or
title matters promptly following such Seller’s receipt of same.

Section 5.3 Forbearance by Sellers. Except as set forth in Article 14,
from the date hereof until the Closing, Sellers shall not, without the written consent of Buyer
(which consent shall not be unreasonably withheld or delayed):

	 	(a)	 	incur any material liability other than, in the case of Annaco, in the
ordinary course of the Business;

	 	(b)	 	mortgage, pledge, or otherwise encumber any of their assets;

	 	(c)	 	sell or transfer any of their material assets other than sales of inventory in
the ordinary course of the Business;

	 	(d)	 	cancel, release, or assign any obligations owed to Sellers or any claims held
by them except in the ordinary course of the Business consistent with past practice;

	 	(e)	 	hire or terminate any management employee;

	 	(f)	 	adopt any new method of accounting;

	 	(g)	 	increase in any manner the compensation of any of Annaco’s employees
(including an increase in employee benefits or the provision of employee benefits to
employees not previously entitled thereto) other than in the ordinary course of
business or pay or agree to pay any pension or retirement allowance not required by any
existing plan or agreement to any employees, or enter into any new pension, retirement,
or profit sharing plan or agreement or employment agreement; or

	 	(h)	 	agree to do any of the foregoing.

The foregoing does not preclude Annaco from paying its employees a bonus recognizing their years of
service or assistance in consummating the Contemplated Transactions.

Section 5.4 Location of Property. On the Closing Date, all of the Inventory
and Equipment and any tangible personal property leased by Annaco or any tangible personal property
to which Annaco has a right of possession must be located on the Real Property, or the property of
Annaco’s customers.

Section 5.5 Access. Subject to Section 12.16(a), from the date
hereof until the Closing, Sellers will give the Buyer Parties and their representatives and agents
reasonable access to the Real Property and to the assets, records and documents of Sellers in
accordance with and upon the terms specified in the Due Diligence Indemnity Agreement between
Metalico and Annaco dated April 20, 2007. In addition, if Buyer with Annaco’s consent meets with
any employees, suppliers or customers of Annaco, a representative of Annaco may be present during
such meetings, if such accompaniment is deemed necessary or appropriate by Annaco. Annaco shall
cooperate in good faith with Buyer and its representatives in conducting the reviews and other
activities described in this Section 5.5.

Section 5.6 Name Change. Annaco shall change its name within 10 days
following the Closing Date to one that does not include “Annaco” or any variation thereof
and deliver evidence of such name change to Buyer within 10 days of the Closing Date. Annaco
agrees and acknowledges that Annaco shall have no right to use the name “Annaco” or
variations thereof in the conduct of any business from and after the Closing Date.

Section 5.7 Covenant Against Competition. For a period of five years after
the Closing, Sellers may not, and shall not permit any of Sellers’ respective shareholders, members
or Affiliates to, directly or indirectly, engage in or assist or have an active interest in
(whether as proprietor, partner, investor, stockholder, officer, director or any type of principal
whatsoever), or enter the employment of, or act as an agent for, or advisor or consultant to, any
person, firm, partnership, association, corporation or business organization, entity or enterprise
which is or is about to become directly or indirectly engaged in any business which competes with
or is similar to the Business in any geographic area in the Territory. For purposes hereof, the
“Territory” means Ohio, Indiana, Michigan, Kentucky, Pennsylvania, West Virginia,
Wisconsin, New York and New Jersey. The foregoing does not prohibit Sellers or their shareholders,
members or Affiliates from owning 5% or less of the equity interests in any corporation whose stock
is publicly-traded. Sellers acknowledge that money damages would be an inadequate remedy for a
Breach of this covenant and that, in addition to such money damages, the Buyer Parties should be
entitled to injunctive relief. In the event that the provisions of this Section 5.7 should
ever be determined to exceed the limitation provided by applicable law, then the parties hereto
agree that such provisions shall be reformed to set forth the maximum limitations permitted.

Section 5.8 Real Property Title Insurance. Subject to Buyer’s payment of
its portion of the cost therefor as provided for in Section 9.6, each LLC Affiliate will
cause to be delivered to Akron Realty at the Closing a commitment in the form of Ticor Title
Insurance Company commitment number 070132 and in the amount of $2,200,000 (“Title Commitment”) to
issue an American Land Title Association (“ALTA”) title insurance policy (“Title Policy”) which
Title Commitment will be issued by Certified Title Agency, Inc. (“CTA”) on behalf of Ticor Title
Insurance Company (the “Title Insurer”), insuring that as of the Closing, 943 Sub or Ocanna Sub, as
the case may be, has obtained good and marketable fee title to the Real Property, free and clear of
all liens and encumbrances, except the Permitted Encumbrances, including the items listed on
Exhibit 5.8.

Section 5.9 Reasonable Best Efforts. Annaco will use its Reasonable Best
Efforts to obtain the satisfaction of the conditions to Closing specified in Article 6.

Article 6

Conditions Precedent to Obligations of Buyer Parties

The obligations of the Buyer Parties to consummate the Contemplated Transactions are subject
to the satisfaction (or waiver in writing by the Buyer Parties) on or before the Closing of each of
the following conditions:

Section 6.1 Representations and Warranties True and Accurate as of Closing.
The representations and warranties of Sellers contained herein are true and accurate in all
material respects (except for those that are qualified by reference to materiality or material
adverse effect, which shall be true and correct as so qualified) as of the Closing with the same
force and effect as though made at such time except to the extent that any representations or
warranties that are made as of a date other than the date of this Agreement will be true and
accurate as of that date. The phrase “in all material respects” or the word “material” as used in
Sections 6.1 and 6.3 shall mean that, as a result of any Seller’s Breach of a
representation, warranty or covenant, as the case may be, the Buyer Parties could reasonably be
expected to incur Damages in excess of $300,000 in the aggregate.

Section 6.2 Title.

	 	(a)	 	Annaco conveys title to all of the Property to Buyer free and clear of all
liens and encumbrances (except liens for property taxes that are not yet due and
payable, which shall be prorated in accordance with Section 9.4), the LLC Affiliates
transfer the Membership Interests to Akron Realty free and clear of all liens and
encumbrances, and the Real Property shall be free and clear of all liens and
encumbrances, except the Permitted Encumbrances;

	 	(b)	 	immediately prior to Closing, 943 shall have transferred the 943 Real Property
to 943 Sub and Ocanna shall have transferred the Ocanna Real Property to Ocanna Sub,
pursuant to the Deeds; and

	 	(c)	 	the Title Company shall be willing and able to issue the Title Policies in
favor of 943 Sub and Ocanna Sub.

Section 6.3 Performance of Obligations of Seller. Sellers perform in all
material respects all of their covenants and other obligations hereunder and under the Transaction
Documents to be performed on or before the Closing Date.

Section 6.4 Legal and Insolvency Proceedings. No Proceedings are commenced
or threatened against any Seller relating to this Agreement or the Contemplated Transactions
including any claim in which it is sought to restrain or prohibit the consummation of the
Contemplated Transactions and any claim that the purchase to be consummated hereunder constitutes a
fraudulent conveyance. No bankruptcy, assignment for the benefit of creditors, receivership or
other Proceeding for the relief of debtors is commenced by or against any Seller.

Section 6.5 Termination of Employment Agreements. Annaco will have
terminated or caused to be terminated the employment agreements described in clause (a) of
Section 3.13.

Article 7

Covenants of Buyer

Section 7.1 Buyer’s Closing Certificate. The Buyer Parties will execute and
deliver to Sellers at the Closing a certificate which will certify that, except as otherwise
specifically provided therein:

	 	(a)	 	all of the representations and warranties made by any Buyer Party in this
Agreement and the Membership Interest Purchase Agreements are true and accurate in all
material respects (the foregoing materiality qualification does not apply to a
representation or warranty which is qualified by materiality) as of the Closing with
the same force and effect as though made at such time;

	 	(b)	 	each Buyer Party has performed and/or complied in all material respects with
all of its covenants and other obligations required by this Agreement or the other
Transaction Documents to be performed or complied with by it as of the Closing; and

	 	(c)	 	there is attached to the certificate a true and complete copy of the
resolutions, duly and validly adopted by the boards of directors of the Buyer Parties,
authorizing the execution and delivery of this Agreement and the other Transaction
Documents and the consummation of the Contemplated Transactions.

Section 7.2 Reasonable Best Efforts. The Buyer Parties will use their
Reasonable Best Efforts to obtain the satisfaction of the conditions to Closing specified in
Article 8.

Section 7.3 Buyer’s Operation of the Business. Until December 31, 2009:

	 	(a)	 	Buyer will be maintained as a separate entity and will own and operate the
Business as a separate business unit;

	 	(b)	 	Buyer will not merge with, consolidate into or sell or otherwise dispose of
any of its material assets necessary to the operation of the Business unless a
replacement asset is acquired to replace that disposed of, it being understood that
Buyer may sell its inventory in the ordinary course of the conduct of its Business;

	 	(c)	 	Buyer will not acquire any assets not reasonably necessary to operate the
Business and will not acquire any other business;

	 	(d)	 	Buyer will not enter into any business transaction with Metalico or any of its
Affiliates other than on an arms-length basis;

	 	(e)	 	Buyer will maintain its books and accounting records in accordance with GAAP;

	 	(f)	 	Buyer will not enter into any line of business other than the Business;

	 	(g)	 	Buyer will not hire any employees who provide services not related to the
Business;

	 	(h)	 	Buyer will not engage any consultants who do not provide services directly
related to the operation of the Business;

	 	(i)	 	Buyer will not enter into any agreement whereby it agrees to share profits
with any other person;

	 	(j)	 	Buyer will not lease any real property or equipment not reasonably necessary
to the operation of the Business;

	 	(k)	 	Buyer shall keep and maintain its assets (except for the sale of inventory in
the ordinary course) in good operating condition (depreciation and normal wear and tear
excepted) and shall replace and add to its assets as deemed necessary by the Buyer’s
Board of Directors in accordance with sound business practices;

	 	(l)	 	Buyer shall conduct its affairs in the normal and ordinary course and shall
use its Reasonable Best Efforts to avoid any act which might have a material adverse
affect upon its assets or business;

	 	(m)	 	Buyer shall use its Reasonable Best Efforts to maintain and keep in force
those Contracts assumed pursuant to this Agreement and perform its obligations
thereunder in accordance with the terms and conditions thereof;

	 	(n)	 	Buyer shall cause to be maintained in effect property damage, liability and
other insurance as is standard in the industry;

	 	(o)	 	Buyer shall pay its debts and liabilities and perform its obligations as they
mature in accordance with their terms and payment schedules; and

	 	(p)	 	commencing January 1, 2008 and continuing until December 31, 2009, the Buyer
will adopt a fiscal year ending on December 31.

Section 7.4 Administrative Assistance. For a period of 90 days after the
Closing Date, Buyer will, at no out-of-pocket cost to Buyer, provide reasonable administrative
assistance to and cooperate with Annaco in the collection of all of Annaco’s accounts receivables
that are Excluded Assets (including, without limitation, billing on a monthly basis all unpaid
receivables on behalf of Annaco during such 90 day period) and the payment by Annaco of Annaco’s
accounts payable. In addition, Buyer will reasonably cooperate with Annaco to respond to requests
for information in Buyer’s possession submitted by Annaco in connection with the winding up of the
affairs of Annaco and the LLC Affiliates, and the termination of Annaco’s Benefit Plans other than
the Annaco Welfare Plans referred to in Section 13.2. Upon receipt by Buyer of payment in
respect of Annaco’s accounts receivables, Buyer will promptly forward such payment to Annaco in the
form received. For the avoidance of doubt, Buyer is not required by this Section 7.4 to
prepare any tax returns, reports or other filings required to be made by Annaco with any
Governmental Body. Nothing set forth in this Section 7.4 shall require Buyer to engage in
any activity harmful to its own interests or in which a prudent person or entity would not engage
and Buyer shall not be required to take or threaten any legal action in connection with performance
of its obligations under this Section 7.4. Notwithstanding anything to the contrary set
forth herein, Buyer shall have no liability for failure to comply with its obligations set forth in
this Section 7.4; provided that this sentence shall not excuse Buyer for liability relating
to losses suffered by Annaco in the event Buyer (a) fails to pay to Annaco any payments of accounts
receivable received by Buyer pursuant to this Section 7.4 or (b) intentionally fails to
cooperate with Annaco as contemplated by this Section 7.4.

Article 8

Conditions Precedent to Obligations of Sellers

The obligations of Sellers to consummate the Contemplated Transactions are subject to the
satisfaction (or waiver in writing by Sellers) on or before the Closing of each of the following
conditions:

Section 8.1 Representations and Warranties True and Accurate as of Closing.
The representations and warranties of the Buyer Parties contained herein are true and accurate in
all material respects as of the Closing with the same force and effect as though made at such time.

Section 8.2 Payment of Purchase Price. Buyer pays the Purchase Price in the
amount and manner specified herein and assumes the Assumed Liabilities pursuant to the Bill of
Sale.

Section 8.3 Performance of Obligations of Buyer. Buyer performs in all
material respects all of its covenants and other obligations hereunder and under the Transaction
Documents including the Membership Interest Purchase Agreements.

Section 8.4 Legal and Insolvency Proceedings. No Proceedings are commenced
or threatened against any Seller relating to this Agreement or the Contemplated Transactions
including any claim in which it is sought to restrain or prohibit the consummation of the
Contemplated Transactions and any claim that the purchase to be consummated hereunder constitutes a
fraudulent conveyance.

Article 9

Closing

Section 9.1 Time and Place. The closing (“Closing”) of the sale of the
Property and the Membership Interests and the consummation of the Contemplated Transactions will
take place at the offices of Buckingham, Doolittle & Burroughs, 3800 Embassy Parkway, Suite 300,
Akron, Ohio at 10:00 A.M. on July 2, 2007 or such earlier or later date as the parties may agree
(“Closing Date”). The Closing shall be effective as of the open of business on July 2, 2007 (the
“Effective Time”). The parties shall “pre-close” on June 29th and, assuming
satisfaction or waiver by the applicable party of all conditions to Closing by 12:00 noon on the
Closing Date, Buyer shall use its best efforts to cause delivery of the Purchase Price to Sellers
prior to 1:00 p.m. on the Closing Date.

Section 9.2 Deliveries by Sellers. At the Closing, Annaco and the LLC
Affiliates, as applicable, must deliver, or cause to be delivered, to Buyer the following duly
executed as appropriate:

	 	(a)	 	the Bill of Sale;

	 	(b)	 	the documents required to release any encumbrances on the Property other than
the Permitted Encumbrances;

	 	(c)	 	the Sellers’ Closing certificate required hereby;

	 	(d)	 	a Membership Interest Purchase Agreement executed by Ocanna relating to the
sale and purchase of the Membership Interest of Ocanna Sub (the “Ocanna MIPA”);

	 	(e)	 	a Membership Interest Purchase Agreement executed by 943 relating to the sale
and purchase of the Membership Interest of 943 Sub (the “943 MIPA” and,
together with the Ocanna MIPA, the “Membership Interest Purchase Agreements”);

	 	(f)	 	any documents or instruments required to be delivered by any Seller pursuant
to the terms of the Membership Interest Purchase Agreements;

	 	(g)	 	the Assignments (as defined in the Membership Interest Purchase Agreements);

	 	(h)	 	certificates of title for any titled vehicles included in the Property, duly
endorsed for transfer to Buyer;

	 	(i)	 	the Escrow Agreement, if required pursuant to Section 14.2;

	 	(j)	 	Assignments of the trademarks listed on Exhibit 1.1(c) (the “Trademark
Assignments”);

	 	(k)	 	a closing statement to be delivered to the Title Company that, among other
things, identifies the prorations required hereunder (the “Closing Statement”);
and

	 	(l)	 	all closing affidavits reasonably requested by the Title Company.

Section 9.3 Deliveries by Buyer Parties. At the Closing, the Buyer Parties
must deliver to Sellers each of the following duly executed by the Buyer Parties as appropriate:

	 	(a)	 	the payments specified in Section 2.1;

	 	(b)	 	the Membership Interest Purchase Agreements;

	 	(c)	 	the Buyer Parties’ Closing certificate required hereby;

	 	(d)	 	the Bill of Sale required hereby;

	 	(e)	 	any documents or instruments required to be delivered by any Buyer Party
pursuant to the terms of the Membership Interest Purchase Agreements;

	 	(f)	 	the Escrow Agreement, if required pursuant to Section 14.2;

	 	(g)	 	the Closing Statement; and

	 	(h)	 	the Trademark Assignments.

Section 9.4 Prorations. Sellers and the Buyer Parties will use their
Reasonable Best Efforts to arrange the transfer of all utility services used by Sellers as of the
Effective Time. Utility services that are not transferred as of the Effective Time, Real Property
Taxes and assessments on the Real Property, personal property Taxes, and Prepaids are to be
prorated as of the Effective Time. Real Property Taxes will be established in accordance with the
last available tax duplicate and such prorations shall be deemed final at Closing. The net
prorations of Taxes and Prepaids under this Section 9.4 is to adjust the amount of the
payment to be made on the Closing Date. The allocation of utility charges provided for in this
Section 9.4 will occur within five days of notice from Annaco to Buyer of the availability
of information sufficient to effect the proration.

Section 9.5 Additional Actions. Each of the parties individually and/or in
their corporate capacities must execute and deliver or cause to be executed and delivered all
additional documents and take all actions necessary to consummate any and all of the Contemplated
Transactions provided that such actions are at no additional cost or liability to the party
performing same. Seller shall deliver or cause to be delivered and the Buyer Parties shall be
entitled to obtain physical possession of all of the Property and the Real Property on the Closing
Date to the extent that the Sellers had physical possession thereof as of the Effective Time.

Section 9.6 Sellers’ Closing Costs. The Sellers will pay:

	 	(a)	 	the cost of the Commitment, title search and special tax search;

	 	(b)	 	one-half of the premiums related to the Title Policies other than the cost of
any endorsements requested by Buyer, the cost of which shall be paid entirely by Buyer;
and

	 	(c)	 	one-half of any escrow fees payable pursuant to the Escrow Agreement (as
defined in Section 14.2).

Section 9.7 Buyer Parties’ Closing Costs. The Buyer Parties will pay:

	 	(a)	 	one-half of the premiums related to the Title Policies and the cost of all
endorsements to the Title Policies;

	 	(b)	 	the cost of Buyer’s due diligence inspections;

	 	(c)	 	the cost of recording the Deeds;

	 	(d)	 	the cost of the Surveys; and

	 	(e)	 	one-half of any escrow fees payable pursuant to the Escrow Agreement.

Article 10

Indemnification

Section 10.1 Indemnification by Sellers. Subject to Sections 10.3
and 10.4, if the Closing occurs, Sellers must, jointly and severally, defend (to the extent
provided in Section 10.5), indemnify and hold the Buyer Parties and their respective
shareholders and Affiliates (the “Buyer Indemnified Parties”) harmless from any liabilities or
Damages resulting from:

	 	(a)	 	the Breach of any representations or warranties made by any Seller in this
Agreement or any other Transaction Document;

	 	(b)	 	their Breach of any of their covenants or other obligations in this Agreement
or any other Transaction Document;

	 	(c)	 	any brokerage or finders’ fees or commissions or similar payments based upon
any agreement made, or alleged to have been made, by any Seller in connection with any
of the Contemplated Transactions;

	 	(d)	 	any warranty claims assumed by Buyer pursuant to Section 1.5(a)(3).
(The amount of Sellers’ indemnification obligation under this Section 10.1(d)
will equal the excess of (i) the cost of any inventory load Buyer is required to send
to a customer to replace any load of inventory rejected by the customer because it does
not comply with Annaco’s warranty with respect thereto plus any costs and expenses
incurred by Buyer in connection with satisfying the warranty claims assumed by Buyer
pursuant to Section 1.5(a)(3) over (ii) the cost of the rejected inventory
load); or

	 	(e)	 	the claims identified as items 1 [automobile accident] and 2 [transformer
malfunction] on Exhibit 3.14 and the matter disclosed on Exhibit 3.12
[dispute with Lawrence].

Notwithstanding the foregoing, and without affecting other limitations on Sellers’ obligations and
liabilities set forth herein, Sellers will have no liability under Section 10.1 to the
extent that the Buyer failed to act reasonably to mitigate any Damages suffered by it. If an
insurer, indemnitor or other third party is responsible to pay any Damages incurred by a Buyer
Indemnified Party with respect to a claim which is the subject of indemnification hereunder (a
“Third Party Indemnitor”), the Buyer Indemnified Parties shall have no right to collect such
Damages from Sellers to the extent such Damages are actually collected from a Third Party
Indemnitor. Notwithstanding the foregoing, the Buyer Indemnified Parties shall have no obligation
to pursue claims against Third Party Indemnitors prior to pursuing such claims against Sellers,
provided that if a Third Party Indemnitor exists in connection with a particular claim and the
Buyer Indemnified Parties collect all Damages owed in respect of such claim from a Seller, (i) if
the Third Party Indemnitor is an insurer, the Buyer Indemnified Parties shall assign all of their
rights in respect of the claim against such Third Party Indemnitor to Sellers, unless prohibited by
law or the applicable insurance policy (provided that, if the applicable insurance policy does not
permit assignment of the claim to Sellers, Buyers shall, at no cost to Buyers, reasonably pursue
the insurance claim on Sellers’ behalf), and (ii) if the Third Party Indemnitor is not an insurer,
the Buyer Indemnified Parties shall assign their rights in respect of the claim against such Third
Party Indemnitor to Sellers, unless prohibited by law or by contract (provided that the Buyer
Indemnified Parties shall not waive their rights to assign such claims for the purpose of avoiding
an assignment of rights to Sellers pursuant to this clause (ii)) and unless such assignment would
be materially adverse to a Buyer Indemnified Party’s business or operations. In addition, Sellers’
maximum liability under Section 10.1(a) and Section 10.1(b) shall not exceed
$100,000 in the aggregate with respect to Breaches of which Buyer had actual knowledge at the time
of execution of this Agreement or at the time of Closing. The parties agree that the limitations
set forth in the preceding sentence shall not apply in circumstances in which Buyer had knowledge
of the facts and circumstances surrounding a Breach but did not have actual (and not implied or
constructive) knowledge of the Breach itself.

Section 10.2 Indemnification by Buyer. Subject to Sections 10.3 and
10.8, if the Closing occurs, the Buyer Parties must, jointly and severally, indemnify,
defend, and hold Sellers and their respective members, shareholders and Affiliates (the “Seller
Indemnified Parties”) harmless from any Damages suffered or incurred by any Seller Indemnified
Party resulting from:

	 	(a)	 	the Breach of any representations or warranties made herein by any Buyer
Party;

	 	(b)	 	the Breach by any Buyer Party of any of its covenants or other obligations
under the Membership Interest Purchase Agreements or this Agreement, including the
discharge of the Assumed Liabilities; or

	 	(c)	 	the operation of the Business or any other activities of a Buyer Party after
the Effective Time.

Section 10.3 Time Limitations. With the exception of Buyer’s obligations
under Sections 2.1 and 7.3, and to indemnify, defend, and hold Sellers harmless
with respect to the Contracts assumed by Buyer under Section 1.2, if the Closing occurs,
neither party will have any liability whatsoever under Section 10.1 or Section 10.2
of this Agreement (or otherwise) unless, within 12 months after the Closing Date, the party
requesting indemnification notifies the indemnifying party of the claim for indemnification
specifying the factual basis thereof in reasonable detail, in which case the indemnifying party
will have liability only for those matters expressly covered in such notice. Furthermore, any such
matters covered in such notice shall become null and void if and to the extent the party seeking
indemnification fails to file a lawsuit against the indemnifying party pertaining to such matters
within 180 days after the date on which the party seeking indemnification notified the indemnifying
party of such matters.

Section 10.4 Limitations on Sellers’ Indemnification Obligations. After the
Closing, Sellers sole liability for a Breach of any provision of this Agreement (or any of the
Transaction Documents) other than Sections 5.6, 5.7, 12.16,
13.1(e), 14.1, and 14.2 will be the indemnification provisions of
Section 10.1. Sellers will have no liability or obligation to make any payments under
Section 10.1(a) or (b) of this Agreement unless and until the total of all Damages
with respect to such matters exceeds $300,000 (the “Deductible Amount”), and then only for the
amount by which such Damages exceed the Deductible Amount. Sellers’ maximum aggregate liability
under Section 10.1(a) and (b) of this Agreement will be limited to $2,500,000 (the
“Sellers’ Cap”). The limitations on liability set forth in this Section 10.4 (including
both the Deductible Amount and the Sellers’ Cap) shall not apply to (a) any Breach of the
representations and warranties made in the first sentence Section 3.1, the first sentence
of Section 3.2, or Section 3.9 of this Agreement or Sections 3(a),
3(b) or 3(c) of the Membership Interests Purchase Agreements, (b) the covenants
made by the Sellers in Sections 5.6, 5.7, 12.20, 14.1, 14.2
and 14.5 or the last sentence of Section 13.1(c) of this Agreement, (c) the
indemnification under Section 10.1(c) and Section 10.1(d) and Section
10.1(e) and (d) Sellers obligation to pay any bonus or other amounts payable by Annaco to
William Lowery as a result of the consummation of the transactions contemplated hereby (other than
any amounts Buyer agrees to pay to William Lowery). The Buyer Indemnified Parties shall be
entitled, but not obligated, to setoff any amounts properly payable by any Seller pursuant to
Section 10.1 against any Annual Earnout payments payable by Buyer pursuant to Section
2.1(b) of this Agreement.

Section 10.5 Procedure for Indemnification – Third Party Claims.

	 	(a)	 	Promptly after receipt by an indemnified party under Sections 10.1 or
10.2 of notice of any claim (that is the subject of indemnification under this
Agreement) against the indemnified party by a third party (“Third Party Claim”) or the
commencement of any Proceeding against it with respect to a Third Party Claim, the
indemnified party must, if a claim is to be made against an indemnifying party with
respect thereto, give notice to the indemnifying party of such Third Party Claim and of
the commencement of any Proceeding with respect thereto.

	 	(b)	 	The indemnifying party will be entitled to participate in the defense of any
Third Party Claim Proceeding of which it is notified under Section 10.5(a) and,
to the extent that it wishes (unless the indemnifying party is also a party to such
Proceeding and the indemnified party’s counsel submits to the indemnifying party a
written opinion from the indemnified party’s counsel that joint representation would
violate the applicable rules of professional responsibility (a “Conflict”)) assume the
defense of such Proceeding with counsel chosen by the indemnifying party. After notice
from the indemnifying party to the indemnified party of its election to assume the
defense of a Proceeding:

	 	(1)	 	except in the case of a Conflict, the indemnifying party will
not be liable to the indemnified party for any fees of the indemnified party’s
counsel, or any other expenses of the indemnified party with respect to the
defense of such Proceeding;

	 	(2)	 	no compromise or settlement of such Third Party Claim may be
effected by the indemnified party without the indemnifying party’s consent;

	 	(3)	 	the indemnifying party may resolve the Third Party Claim
without the indemnified party’s consent so long as the sole relief sought by
the third party is monetary damages that are paid in full by the indemnifying
party.

	 	(c)	 	The foregoing notwithstanding, if a claim for indemnification by an
indemnified party results from a Third Party Claim and encompasses matters for which
the indemnified party is entitled to indemnification from an indemnifying party as well
as matters for which the indemnified party is not entitled to indemnification from the
indemnifying party (a “Hybrid Claim”), then the indemnifying party only will be
responsible for that portion of the costs of defending such Hybrid Claim as is
proportionate to that portion thereof for which indemnification is applicable, and the
indemnified party will be responsible for that portion of the defense costs
proportionate to that portion of the Hybrid Claim for which indemnification is not
applicable.

Section 10.6 Procedure for Indemnification – Other Claims. A claim for
indemnification for any matter not involving a Third Party Claim may be asserted by notice to the
party from whom indemnification is sought. Notwithstanding anything to the contrary set forth
herein, the prevailing party in any litigation between the parties concerning any claim for
indemnification for any matter not involving a Third Party Claim, shall be entitled to recover from
the non-prevailing party reasonable attorneys’ fees (including all levels of appeal), and all
reasonable costs and expenses incurred in such litigation.

Section 10.7 Annaco’s Net Worth. In order to secure Sellers’ obligations
under Section 10.1, Annaco must maintain a total net worth of not less than $2,500,000 for
at least 12 months following the Closing Date.

Section 10.8 Limitation on Buyer Parties’ Indemnification Obligations.
After the Closing, the Buyer Parties’ sole liability for a Breach of any provision of this
Agreement (or any of the Transaction Documents), other than Sections 12.16 and 13.1(e),
will be the indemnification provisions of Section 10.2. Buyer Parties will have no
liability or obligation to make any payments under Section 10.2(a) or (b) of this
Agreement unless and until the total of all Damages with respect to such matters exceeds the
Deductible Amount, and then only for the amount by which such Damages exceed the Deductible Amount.
Buyer Parties’ maximum aggregate liability under Section 10.2(a) and (b) of this
Agreement will be limited to $2,500,000 (the “Buyer Parties’ Cap”). The limitations on liability
set forth in this Section 10.8 (including both the Deductible Amount and the Buyer Parties’
Cap), shall not apply to (a) any Breach of the representations and warranties made in the first
sentence Section 4.1 or the first sentence of Section 4.2 of this Agreement and (b)
the covenants made by the Buyer Parties in Sections 2.1(b) through 2.1(g),
7.3, 12.20, 14.3 and 14.5 of this Agreement.

Article 11

Termination

Section 11.1 Termination Events. This Agreement may, by notice given prior
to or at the Closing, be terminated:

	 	(a)	 	by Buyer, if a material Breach of any provision of this Agreement is committed
by any of the Sellers, and such Breach is not waived or cured within 15 days after
notice thereof; provided, however, that such notice and cure right shall not be deemed
to allow Sellers’ to extend the Contemplated Transactions to a date after the scheduled
Closing Date;

	 	(b)	 	by Annaco, if a material Breach of any provision of this Agreement is
committed by any Buyer Party, and such Breach is not waived or cured within 15 days
after notice thereof; provided, however, that such notice and cure right shall not be
deemed to allow the Buyer Parties to extend the Contemplated Transactions to a date
after the scheduled Closing Date;

	 	(c)	 	by Buyer, if any of the conditions in Article 6 are not satisfied as
of the Closing Date, or if satisfaction of such a condition is or becomes impossible
(other than through the failure of Buyer to comply with its obligations under this
Agreement), and Buyer has not waived such condition on or before the Closing Date; or

	 	(d)	 	by Annaco if any of the conditions in Article 8 are not satisfied as
of the Closing Date, or if satisfaction of such a condition is or becomes impossible
(other than through the failure of any Seller to comply with its obligations under this
Agreement) and Annaco has not waived such condition on or before the Closing Date.

Section 11.2 Effect of Termination. If this Agreement is terminated
pursuant to Section 11.1, all further obligations of the parties under this Agreement will
terminate, and the parties will be relieved of all liability and obligations under this Agreement
and the Membership Interest Purchase Agreements, except that (i) the provisions of Sections
12.1, 12.3, 12.4, 12.5, 12.7, 12.8, 12.9,
12.12, 12.13, 12.14, 12.16, 12.17, 12.18,
12.19, 12.20 and 12.21 will survive; and (ii) if this Agreement is
terminated by a party because of an intentional Breach of a covenant or a representation or
warranty by any other party, the terminating party’s right to pursue all legal remedies will
survive such termination unimpaired.

Article 12

Miscellaneous Provisions

Section 12.1 Construction. All underlined references to “Section”
or “Sections” refer to the corresponding Section or Sections of this
Agreement and all references to “Exhibit” or “Exhibits” refer to the
Exhibits attached to this Agreement. All words used in this Agreement will be construed to
be of such gender or number as the circumstances require. Unless otherwise expressly provided, the
word “including” does not limit the preceding words or terms.

Section 12.2 Survival of Representations and Warranties. The
representations and warranties made herein will not survive the Closing, except that a party may
after the Closing make an indemnification claim for the Breach of a representation or warranty to
the extent provided in Article 10. After the Closing, a party’s sole remedy for a Breach
of a representation or warranty will be the indemnification provisions of Sections 10.1 or
10.2 as applicable.

Section 12.3 Notices. All notices and other communications under this
Agreement must be in writing and will be considered to be effective as to a party:

	 	(a)	 	on the date delivered to that party, at the address for that party set forth
below, regardless of the means of delivery;

	 	(b)	 	on the date sent by facsimile transmission (with electronic confirmation) to a
party for whom a facsimile number is set forth below; or

	 	(c)	 	three days after mailing by U. S. certified or registered mail (postage
prepaid and return receipt requested) at the address for that party set forth below.

A copy of the notice or other communication to a party under this Agreement must be sent to the
party’s counsel at the address set forth below. A delivery under this Agreement will be considered
to be effective when made even though a party refuses to receive the communication.

	 	 	 	 	 
	Sellers:
	 	Annaco, Inc.
	 
	 	c/o David Berzon
	 
	 	Levenfeld Pearlstein
	 
	 	2 North LaSalle St. – Suite 1300
	 
	 	Chicago, IL  60602
	 
	 	Facsimile:  312-346-8434
	Sellers’ Counsel:
	 	Buckingham, Doolittle & Burroughs, LLP
	 
	 	3800 Embassy Parkway – Suite 300
	 
	 	Akron, OH  44333
	 
	 	Facsimile:  330-258-6559
	 
	 	Attention:  Robert W. Malone, Esq.
	Buyer Parties:
	 	Metalico Akron, Inc.
	 
	 	c/o Metalico, Inc.
	 
	 	186 North Avenue East
	 
	 	Cranford, New Jersey 07016
	 
	 	Attention: Carlos E. Aguero
	 
	 	Facsimile: 908-497-1097
	Buyer Parties’ Counsel:
	 	Arnold S. Graber

Executive Vice President and General Counsel

Metalico, Inc.

186 North Avenue East

Cranford, New Jersey 07016

Facsimile: 908-497-1097

and

Matthew R. Goldman

Baker & Hostetler LLP

1900 East Ninth Street

Cleveland, OH 44114

Facsimile: 216-696-0740

A party or its counsel may change its facsimile number or address for communications under this
Agreement by giving the other parties and counsel notice of the change in the manner specified
above. If a party changes the party’s address or facsimile number and does not notify the other
parties in the manner specified above, a notice or other communication will be effective three days
after it is sent by U. S. regular mail, postage prepaid, to the party’s address or such other
address as to which the other parties have been notified in the manner specified above. Notice
provided to a party’s counsel does not constitute notice to the party.

Section 12.4 Successors and Assigns. None of the parties may assign their
rights or delegate their duties hereunder, except that (a) the Buyer Parties may collaterally
assign this Agreement and the other Transaction Documents to its lender(s), (b) the LLC Affiliates,
or either one of them may assign their rights (but not their obligations) to a qualified
intermediary in the event they elect to consummate the sale of the Membership Interests owned by
such LLC Affiliate through a 1031 Exchange in accordance with Section 12.22 below, and (c)
after Closing, any Seller may assign its rights and obligations in whole or in part hereunder to
one or more of their shareholders or other designated Affiliates, provided that no such assignment
shall relieve such Seller of its obligations hereunder. This Agreement will be binding upon and
inure to the benefit of the heirs, executors, administrators, successors, and permitted assigns of
the parties hereto.

Section 12.5 No Third Party Beneficiaries. Except as provided in
Section 12.4, this Agreement does not confer upon or give to any person other than the
parties any rights or benefits hereunder.

Section 12.6 Damage or Destruction of Assets; Eminent Domain.

	 	(a)	 	If at any time prior to the Closing Date any portion of the Property or the
Real Property shall be damaged or destroyed and the cost of repairing such damage does
not exceed $1,000,000 and such damage shall not have been repaired or reconstructed
prior to the Closing Date in a good and workmanlike manner to the reasonable
satisfaction of Buyer, Buyer shall receive the proceeds of the insurance payable in
connection therewith, together with a credit against the Purchase Price in the amount
of the deductible, if any, and thereupon remain obligated to perform this Agreement.
If at any time prior to the Closing Date any portion of the Property or the Real
Property shall be damaged or destroyed and the cost of repairing such damage exceeds
$1,000,000 (i) Sellers shall promptly give written notice thereof to the Buyer
generally describing the nature and extent of such damage, and (ii) Buyer shall have
the option, in its sole discretion, exercisable by written notice to Sellers within 30
days after the notice from Sellers described in clause (i), to (A) rescind this
Agreement, whereupon Sellers and the Buyer Parties shall be relieved of all further
liability hereunder, or (B) proceed with the performance of this Agreement. If Buyer
elects to proceed with the performance of this Agreement, the Buyer Parties shall be
entitled to a credit against the Purchase Price for all insurance proceeds payable to
the Sellers on account of the subject damage (if the amount of such proceeds has been
determined) or an assignment of all future proceeds (or claims), as the case may be,
plus a credit for the deductible amount, if any, under Sellers’ insurance policy or
policies. If Buyer has the right to rescind this Agreement under this Section
12.6(a) but Buyer does not elect to exercise such right, then Buyer may extend the
Closing Date until the 60th day after Buyer receives notice of the insurance
proceeds to be paid.

	 	(b)	 	If any portion of the Real Property is the subject of an eminent domain
Proceeding or access thereto is taken by such a Proceeding prior to the Closing Date,
or if an eminent domain Proceeding affecting the Real Property is initiated or
threatened prior to the Closing Date, Buyer may elect, in its sole discretion, either
(i) to terminate this Agreement, in which event the parties hereto shall thereafter be
released from any and all obligations under the terms of this Agreement, or (ii) to
proceed with the performance of this Agreement, in which event Buyer shall be entitled
to a credit against the Purchase Price for all awards payable to the Sellers (if the
amount of such award has been determined), or at Closing, Sellers shall assign to Buyer
all of Sellers’ right, title and interest with respect to such award and shall further
execute any and all other instruments requested by Buyer to assure that such award is
paid to Buyer. If Buyer does not terminate this Agreement, Buyer shall have the right
to contest the eminent domain Proceeding and the award resulting therefrom.

Section 12.7 Governing Law. The rights and obligations of the parties
hereunder and the interpretation of this Agreement are governed by the laws of the state of Ohio
(other than those relating to conflicts of laws). All disputes arising under this Agreement must
be resolved in the Summit County Court of Common Pleas, and the parties waive any objection to
venue laid therein. The parties consent to submit themselves to the jurisdiction of such court and
agree that service of process on them in any such dispute may be effected by the means by which
notices are to be given to them under this Agreement.

Section 12.8 Counterparts and Facsimiles. This Agreement may be executed in
separate counterparts with different parties signing different counterparts so long as each party
signs at least one counterpart. A party’s execution of this Agreement, or any other document
relating to the transactions to be consummated hereunder, may be evidenced by facsimile or other
method of electronic transmission. A party’s delivery of this Agreement, or any other document
relating to the transactions to be consummated under this Agreement, may be effected by facsimile
or other method of electronic transmission.

Section 12.9 Waivers. A party to this Agreement will not be bound by a
waiver of any right or remedy that inures to the party’s benefit hereunder unless the waiver is in
a writing signed by the party. A failure by a party to enforce any right or seek any remedy for a
Breach of this Agreement by another party does not constitute a waiver of the first party’s right
to enforce that right or seek that remedy with respect to that or any other Breach. The waiver by
a party of a Breach of any provision of this Agreement is not a waiver of any subsequent Breach.
Notwithstanding the foregoing, once Closing has occurred pursuant to this Agreement, all conditions
to be satisfied on or before the Closing Date shall be deemed waived.

Section 12.10 Books and Records. For a period of seven years after the
Closing, following delivery of reasonable written notice by Annaco’s representatives, Buyer will
during regular business hours provide Sellers’ representatives with access to any financial and
accounting books and records that Sellers have delivered to the Buyer Parties. Until all of the
Annual Earnout payments have been finally determined in accordance with Section 2.1, Buyer
will (i) supply Sellers with quarterly financial statements of Buyer prepared in accordance with
GAAP and (ii) during regular business hours upon reasonable notice from Annaco and in connection
with determining any Annual Earnout, also provide Annaco’s representatives with reasonable access
to the financial books and records of Buyer relating to the determination of EBITDA. For purposes
hereof, access to books and records includes the right to make copies thereof and to obtain answers
to inquiries to Buyer’s executive officers about such books and records.

Section 12.11 Time of Essence. With regard to all dates and time periods
set forth or referred to in this Agreement, time is of the essence.

Section 12.12 Public Announcement. Neither Sellers nor the Buyer Parties
nor any of their respective Affiliates shall make any public statement or release (including,
without limitation, any statements to Annaco’s non-executive employees, customers and suppliers)
concerning this Agreement or the Contemplated Transactions except for such written information as
shall have been approved in writing as to form and content by the other party hereto; provided,
however, that either Sellers or the Buyer Parties may make the minimum public disclosure it
believes in good faith is required by applicable law (in which case the discloser shall use its
Reasonable Best Efforts to advise the other prior to making the disclosure).

Section 12.13 Integration and Amendment. This Agreement supersedes all
prior discussions between the parties with respect to the subject matter of this Agreement. This
Agreement and the Exhibits and Schedules attached to this instrument constitute the entire
agreement of the parties with respect to the subject matter thereof, and may not be amended except
by a writing signed by the party against whom the amendment is to be enforced.

Section 12.14 Joint Preparation. This Agreement was prepared jointly by the
parties and any uncertainty or ambiguity existing herein may not be interpreted against any party.

Section 12.15 Non-foreign Status. Each party represents and warrants that
it is a United States person so that payments made to the party under this Agreement are not
subject to income Tax withholding under IRC §§ 1441, 1442, 1443, 1445 and 1446.

Section 12.16 Confidentiality.

	 	(a)	 	Between the date of this Agreement and the Closing Date, the Confidentiality
Letter Agreement executed by Metalico, Inc. May 8, 2006, will continue in effect as
modified by a letter agreement dated April 3, 2007, and such agreement, as modified is
incorporated herein by this reference thereto. The foregoing letter agreements will
terminate if the Contemplated Transactions are consummated. Thereafter, neither
Sellers nor the Buyer Parties, nor any of their respective Affiliates, shall disclose
to any person (other than such party’s representatives or advisors with a reason to
know) in any manner, directly or indirectly, any confidential or proprietary
information or data or trade secrets of the other party or any of its Affiliates
(“Confidential Information”), or use or assist any person (other than any
representative of the Buyer Parties, Sellers or an Affiliate thereof with a reason to
know), to use, in any manner, directly or indirectly, any Confidential Information. As
used in this Agreement, Confidential Information includes, but is not limited to, any
and all confidential, proprietary, and similar information of the Business. Nothing
set forth herein shall prohibit or restrict Sellers or the Buyer Parties from making
the minimum public disclosure it believes in good faith is required by applicable law.

The provisions of this Section 12.16 do not apply to:

	 	(i)	 	the disclosure of information to a third party who is already
aware of such information;

	 	(ii)	 	the disclosure or use of information that becomes publicly
available through no fault of Sellers;

	 	(iii)	 	the disclosure of information that is necessary or appropriate
to make any filing or obtain any Consent or approval required for the
consummation of the Contemplated Transactions; or

	 	(iv)	 	the furnishing of information as required by a Government Body
or Legal Requirement or as necessary or appropriate in connection with any
Proceeding.

	 	(b)	 	If the Contemplated Transactions are not consummated, Buyer will return or
destroy as much of the written information provided by Sellers or Sellers’
representatives as Sellers request and will not thereafter use such information
obtained from Sellers for any purpose, all as more fully provided in the
Confidentiality Letter Agreement described above.

	 	(c)	 	The parties acknowledge that money damages would be an inadequate remedy for a
Breach of this Section 12.16 and that, in addition to money damages, an
aggrieved party should be entitled to injunctive relief.

Section 12.17 Disclosure Exhibits. The disclosures in the Exhibits to this
Agreement relate to the representations and warranties in the Section of the Agreement to which
they expressly relate and to any other representation or warranty in this Agreement to which the
relevance of the disclosure is apparent.

Section 12.18 Severability. If any provision of this Agreement is held
invalid or unenforceable by any court of competent jurisdiction, the other provisions of this
Agreement will remain in full force and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and effect to the extent not held
invalid or unenforceable. The parties consent to the reformation of any invalid or unenforceable
provision so that it is enforceable to the maximum extent permitted by law.

Section 12.19 Disclaimer. EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES OF
SELLERS EXPRESSLY SET FORTH IN THIS AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS, THE BUYER
PARTIES ACKNOWLEDGE TO AND AGREE WITH SELLERS THAT THE BUYER PARTIES ARE DIRECTLY OR INDIRECTLY
ACQUIRING THE PROPERTY AND THE REAL PROPERTY (FOR PURPOSES HEREOF, COLLECTIVELY, THE “ASSETS”) “AS
IS” AND “WITH ALL FAULTS” AS OF THE CLOSING DATE AND SPECIFICALLY AND EXPRESSLY WITHOUT ANY
WARRANTIES, REPRESENTATIONS OR GUARANTEES, EITHER EXPRESS OR IMPLIED, AS TO ITS CONDITION, FITNESS
FOR ANY PARTICULAR PURPOSE, MERCHANTABILITY, OR ANY OTHER WARRANTY OF ANY KIND, NATURE, OR TYPE
WHATSOEVER FROM OR ON BEHALF OF SELLERS. EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES OF SELLERS
EXPRESSLY SET FORTH IN THIS AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS, SELLERS SPECIFICALLY
DISCLAIM ANY WARRANTY, GUARANTY OR REPRESENTATION, ORAL OR WRITTEN, PAST OR PRESENT, EXPRESS OR
IMPLIED, CONCERNING (A) THE VALUE, NATURE, QUALITY OR CONDITION OF THE ASSETS, INCLUDING, WITHOUT
LIMITATION, THE WATER, SOIL AND GEOLOGY, (B) THE INCOME TO BE DERIVED FROM THE ASSETS, (C) THE
SUITABILITY OF THE ASSETS FOR ANY AND ALL ACTIVITIES AND USES WHICH THE BUYER PARTIES MAY CONDUCT
THEREON, (D) THE COMPLIANCE OF OR BY THE ASSETS OR THEIR OPERATION WITH ANY LAWS, RULES,
ORDINANCES OR REGULATIONS OF ANY APPLICABLE GOVERNMENTAL AUTHORITY, (E) THE HABITABILITY,
MERCHANTABILITY, MARKETABILITY, PROFITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE ASSETS,
(F) THE MANNER OR QUALITY OF THE CONSTRUCTION OR MATERIALS, IF ANY, INCORPORATED INTO THE ASSETS,
(G) THE MANNER, QUALITY, STATE OF REPAIR OR LACK OF REPAIR OF THE ASSETS, (H) THE PRESENCE OR
ABSENCE OF HAZARDOUS MATERIALS AT, ON, UNDER, OR ADJACENT TO THE ASSETS OR ANY OTHER ENVIRONMENTAL
MATTER (INCLUDING ANY LIABILITY UNDER CERCLA) OR CONDITION OF THE ASSETS, OR (J) ANY OTHER MATTER
WITH RESPECT TO THE ASSETS. THE BUYER PARTIES ACKNOWLEDGE AND AGREE THAT, EXCEPT FOR THE
REPRESENTATIONS AND WARRANTIES OF SELLERS CONTAINED IN THIS AGREEMENT AND THE OTHER TRANSACTION
DOCUMENTS, ANY INFORMATION PROVIDED BY OR ON BEHALF OF SELLERS WITH RESPECT TO THE ASSETS WAS
OBTAINED FROM A VARIETY OF SOURCES AND THAT SELLERS HAVE NOT MADE ANY INDEPENDENT INVESTIGATION OR
VERIFICATION OF SUCH INFORMATION AND MAKE NO REPRESENTATIONS OR WARRANTIES AS TO THE ACCURACY OR
COMPLETENESS OF SUCH INFORMATION. SELLERS SHALL NOT BE LIABLE OR BOUND IN ANY MANNER BY ANY ORAL
OR WRITTEN STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO THE ASSETS, OR THE OPERATION
THEREOF, FURNISHED BY ANY INVESTMENT BANKER, AGENT, EMPLOYEE, SERVANT OR OTHER PERSON EXCEPT FOR
THE EXPRESS REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS AGREEMENT AND THE OTHER TRANSACTION
DOCUMENTS. THE BUYER PARTIES FURTHER ACKNOWLEDGE AND AGREE THAT THE BUYER PARTIES ARE
SOPHISTICATED AND EXPERIENCED BUYERS OF ASSETS SUCH AS THE ASSETS DESCRIBED HEREIN AND HAVE BEEN
DULY REPRESENTED BY COUNSEL IN CONNECTION WITH THE NEGOTIATION OF THIS AGREEMENT AND THE OTHER
TRANSACTION DOCUMENTS. SELLERS HAVE MADE NO AGREEMENT TO ALTER, REPAIR OR IMPROVE ANY OF THE
ASSETS OTHER THAN AS CONTEMPLATED BY SECTION 5.2.

Section 12.20 Expenses. Except as otherwise expressly provided in this
Agreement, each party to this Agreement will bear its respective expenses incurred in connection
with the preparation, execution and performance of this Agreement and the Contemplated
Transactions, including all fees and expenses of agents, representatives, counsel and accountants.
Sellers will pay all amounts payable to KeyBank Capital Markets in connection with this Agreement
and the Contemplated Transactions. In the event of termination of this Agreement, the obligation
of each party to pay its own expenses will be subject to any rights of such party arising from a
Breach of this Agreement by another party.

Section 12.21 Joint and Several Liability. The liability of the Buyer
Parties to Sellers under this Agreement is joint and several, and the liability of the Sellers to
the Buyer Parties is also joint and several.

Section 12.22 Tax-Deferred Exchange. The Buyer Parties acknowledge that the
LLC Affiliates may be entering into this transaction in connection with a tax-deferred exchange
with respect to the Membership Interests (the “Exchange”). If requested by the LLC Affiliates, or
either one of them, the Buyer Parties shall cooperate with the LLC Affiliates in effectuating such
Exchange, including executing any documents, instruments or agreements reasonably requested by the
LLC Affiliates, provided Buyer shall not be obligated to (i) expend any material costs in
connection with such Exchange or (ii) accept or assume any additional obligations or liabilities in
connection with such Exchange. The party effecting such exchange shall pay the costs and expenses,
including legal fees and costs, of the cooperating party incurred in connection with such
cooperation.

Article 13

Employees and Employee Benefits

Section 13.1 Employment of Annaco’s Employees by Buyer.

	 	(a)	 	Buyer intends to offer employment to all of Annaco’s employees other than
Morris Berzon who are actively employed or on an approved non-medical absence on the
Closing Date. Annaco’s employees who become employed by Buyer are referred to herein
as the “Transferred Employees” and Buyer will endeavor to continue the employment of
all such employees for a period of 60 days after the Closing Date. The employment by
Buyer of any Transferred Employee will commence at the Closing. Nothing in this
Agreement shall be deemed to require Buyer to retain any of the Transferred Employees
for any period of time longer than 60 days (or a shorter period if Buyer in its
reasonable discretion as an employer determines that an employee’s employment should be
terminated for cause) or, after such 60 day period, at any particular compensation rate
or in any particular position, or otherwise restrict Buyer’s right to amend, modify or
terminate any employee plan or program after such 60 day period. Annaco shall
terminate, effective as of the Closing Date, all employment arrangements or contracts
it has with any of the Transferred Employees.

	 	(b)	 	The Buyer Parties will defend, indemnify and hold Annaco harmless from any
liability under the Workers’ Adjustment and Retraining Notification Act (“WARN”) or any
similar state Legal Requirement.

	 	(c)	 	Annaco shall pay the cost of any compensation, severance or other benefits
which it is obligated to pay to Annaco’s employees who (i) were terminated prior to the
Closing Date or (ii) are offered employment by Buyer in accordance with the terms
hereof but choose not to accept the Buyer’s offer of employment made under Section
13.1(a) (and provided the employee does not refuse such offer because of
unreasonable conditions imposed by Buyer), or (iii) are entitled to claim compensation,
severance or other benefits from Annaco in connection with the consummation of the
transactions contemplated by this Agreement. Annaco shall also be responsible for the
payment to William Lowery of the bonus which it has agreed or is otherwise obligated to
pay him as a result of the sale of the Property to the Buyer.

	 	(d)	 	Annaco will be responsible for any and all contributions and premium payments
required to be made with respect to any Benefit Plan or Multiemployer Plan on or prior
to the Effective Time. Buyer will be responsible for any and all contributions and
premium payments required to be made with respect to the Annaco Welfare Plans referred
to in Section 13.2 and the Multiemployer Plans provided for in the Union
Contract after the Effective Time.

	 	(e)	 	For a period of five years after the Closing Date, Sellers will not, and
Sellers will cause Annaco’s shareholders and Affiliates not to, solicit the employment
of a Transferred Employee (unless and until Buyer has terminated such employee’s
employment).

	 	(f)	 	Neither Sellers nor any of their Affiliates will maintain any group health
plan for the benefit of their employees after the Closing Date, therefore, Buyer must
satisfy all obligations under COBRA related to Annaco’s group health plan with respect
to each M&A Qualified Beneficiary as defined in Treasury Regulation Section 54.4980B-9,
Q&A-4.

Section 13.2 Salaries and Benefits. For a period of six months following
Closing, the wages and salaries, and the benefits, to be provided by Buyer to the Transferred
Employees other than William Lowery must be substantially similar in the aggregate to those
provided by Annaco to such employees (but specifically excluding bonuses paid by Annaco), provided
that Sellers acknowledge that the Transferred Employees will not be permitted to participate in
Buyer’s 401(k) plan until a Transferred Employee has been employed by Buyer for a period of six (6)
months, subject to Buyer’s good faith determination that a material adverse change in economic
conditions of the Business requires a change in compensation or benefit levels. Nothing in this
Agreement shall be construed to prevent Buyer from terminating any employee after the Closing.
Subject to the requirements of applicable law, Buyer will cause the Transferred Employees to be
given credit, under each of the Buyer’s employee benefit plans in which the Transferred Employees
are eligible to participate, for all service with Annaco for eligibility and vesting purposes to
the extent permitted under the Buyer’s employee benefit plan and except to the extent such credit
would result in a duplication of benefits. To the extent permitted by the group health plan
applicable to the Transferred Employees after Closing, Buyer will waive any exclusion or limitation
with respect to any pre-existing condition of a Transferred Employee or his or her beneficiaries
under any group health plan maintained by the Buyer for the benefit of a Transferred Employee.
Effective on the Closing Date, Buyer or an Affiliate will assume the sponsorship of (a) the Annaco,
Inc. Union Employee Benefit Health Plan – Kaiser Permanente, Group #7643, (b) the Annaco, Inc.
Employee Health Benefit Plan, Non-Union, Anthem Blue Cross & Blue Shield, (c) the Annaco, Inc.
Group Term Life Insurance and Short-Term Disability for Union Employees, American United Life
Insurance, Policy #G00603987-0000-000, (d) the Annaco, Inc. Group Term Life Insurance for Non-Union
Employees, Anthem Life, Policy # 0029773, (e) the Annaco, Inc. Section 125 Plan, (f) the Annaco,
Inc. Short-Term Disability Benefit Plan for Non-Union Employees and (g) the United Here
Supplemental Insurance and Benefit Plans (collectively, the “Annaco Welfare Plans”) subject to the
applicable insurance company’s approval of the assumption and the assignment of the underlying
insurance contracts to the Buyer. Annaco shall cause amendments to be prepared to change the
sponsorship and administration of the Annaco Welfare Plans from Annaco to Buyer as described in
this Section. After such amendment, such Annaco Welfare Plans shall continue in effect as follows:

	 	(a)	 	Annaco and its Affiliates shall cease to be participating employers and no
current or former employees of Annaco or its Affiliates other than the Transferred
Employees shall be eligible to participate in such plans;

	 	(b)	 	The benefit elections made by participants under such Annaco Welfare Plans
shall continue in effect for the remainder of the current plan year, subject to such
participants’ rights set forth in such plans to modify such elections;

	 	(c)	 	Annaco shall transfer to Buyer any employee contributions required for coverage
under such Annaco Welfare Plans to the extent such amounts have been or are withheld
from employees’ paychecks through Closing but have not been or are not applied to pay
premiums or provide benefits under such Annaco Welfare Plans;

	 	(d)	 	Annaco shall transfer to Buyer any information regarding such Annaco Welfare
Plans and each participant’s benefit elections under such Annaco Welfare Plans and
shall otherwise cooperate with Buyer regarding the transfer of such Annaco Welfare
Plans;

	 	(e)	 	The insurance policies Annaco used to provide benefits under such Annaco
Welfare Plans immediately prior to the Closing Date will be assigned to Buyer or its
Affiliate without any material modifications to the terms thereof;

	 	(f)	 	Buyer shall have the right to amend or terminate the Annaco Welfare Plans at
any time after Closing; and

	 	(g)	 	Annaco shall be solely responsible for all premiums required to be paid in
connection with the Annaco Welfare Plans through the Effective Time.

Section 13.3 Workers’ and Unemployment Compensation. Annaco will cooperate
with Buyer in enabling Buyer to investigate Annaco’s workers’ and unemployment compensation
experience ratings, and if Buyer requests, Annaco will cooperate with Buyer to enable Buyer to
succeed to such ratings.

Section 13.4 Successor Employer. Annaco and Buyer will (i) treat Buyer as a
successor employer and Annaco as a predecessor employer, within the meaning of IRC § 3121(a)(1) and
3306(b)(1), with respect to the Transferred Employees for purposes of the Taxes imposed under the
United States Unemployment Tax Act (“FUTA”) or the United States Federal Insurance Contributions
Act (“FICA”) and (ii) cooperate with each other to avoid, to the extent possible, the filing of
more than one IRS Form W-2 with respect to each such Transferred Employee for the calendar year
2007, provided that in no event will any Buyer Party be deemed to have assumed pursuant to this
Section 13.4 any liabilities of Annaco to pay payroll taxes arising or accrued prior to the
Effective Time under FUTA or FICA. With respect to any applicable Tax law relating to employment,
unemployment insurance, Social Security, disability, payroll, health care, or similar Tax, other
than Taxes imposed under FICA and FUTA, Annaco and Buyer will treat Buyer as a successor employer
and Annaco as a predecessor employer, within the meaning of the relevant provisions of such Tax law
with respect to the Transferred Employees and will cooperate with each other to avoid, to the
extent possible, the filing of more than one individual reporting form pursuant to each such Tax
law with respect to each Transferred Employee for calendar year 2007. Annaco and Buyer will report
on a predecessor-successor basis with respect to any of Annaco’s employees who are not hired by
Buyer regarding the filing of IRS forms W-2, W-3 and 941 after the Effective Time and Buyer will
assume the Annaco’s obligation to furnish W-2 forms to such employees for all of calendar year
2007. Buyer’s obligation under this Section 13.4 is contingent upon its receipt of all
necessary information from Annaco to fulfill its reporting responsibilities. Buyer has no
obligation to request additional data or verify the accuracy of data submitted by Annaco and is
entitled to rely on such data.

Article 14

Environmental Matters

Section 14.1 OEPA Claims. Annaco will have the exclusive right to
negotiate and shall continue to use Reasonable Best Efforts to settle with the Ohio Environmental
Protection Agency (“OEPA”) prior to and, if necessary, after the Closing Date the specific claims
made by the OEPA against Annaco and described on Exhibit 14.1 (the “OEPA Claims”),
provided, that, from and after the date hereof, Annaco will not without Buyer’s prior written
consent (not to be unreasonably withheld or delayed) enter into any settlement or other agreement
with OEPA in respect of the OEPA Claims that (a) requires Buyer to make any significant changes in
the operations of the Business or (b) significantly increases Buyer’s costs of operating the
Business. Annaco will remain liable for the civil penalties, if any, assessed by OEPA as a result
of the OEPA Claims and Annaco will not have any further responsibility for the OEPA Claims beyond
that provided for in the preceding provisions of this Section 14.1 and Section
14.2.

Section 14.2 Mound Removal. If not accomplished prior to Closing, Annaco
will after Closing remove the mound adjacent to the Little Cuyahoga River on the Real Property
currently owned by Ocanna in accordance with the OEPA settlement, including in any event, the
following: (1) removal of the mound down to the elevation of the adjacent “flat” property; (2)
covering of the mound “footprint” with compacted clean soil (approximately 6 inches) and adding an
additional layer of soil of not more than six (6) inches (or more if required by OEPA) to create a
berm between the Ocanna Real Property and the adjoining river where the mound was located; and (3)
seeding the cover soil (including the berm) with grasses or other vegetation (collectively, the
“Removal Requirements”). If the mound is not removed prior to Closing, Annaco will escrow with CTA
at Closing $350,000 which represents an amount equal to 100% — 200% of the estimated cost of the
Removal Requirements and may draw on those funds to pay for such costs as they are incurred. CTA
will hold the funds described in the previous sentence in escrow pursuant to the terms of an escrow
agreement reasonably satisfactory to Buyer and Annaco (“Escrow Agreement”). Annaco will remain
responsible for excess costs of the Removal Requirements over the escrowed amount, if any, and the
funds, if any, held in escrow after the completion of and payment for the Removal Requirements must
be paid to Annaco.

Section 14.3 Buyer’s Environmental Obligations. Following the Closing,
Buyer must comply with all Legal Requirements pertaining to the operation of the Business and the
Real Property, including :

	 	(a)	 	requirements for the storage of roto sort on the Real Property;

	 	(b)	 	Environmental Authorizations for the blockbreaker used oil burner and bag
house; and

	 	(c)	 	maintenance of the vegetation and surrounding area planted as part of the
Removal Requirements and to protect same against erosion.

Section 14.4 Environmental Authorizations. Notwithstanding the
representations and warranties contained in Section 3.19 of this Agreement, or any other
provision of this Agreement other than Sections 14.1, 14.2 and 14.5,
Sellers disclaim and will have no liability for indemnification or otherwise for any failure of
Sellers, or any one of them, to comply with any Environmental Requirements or to have any
Environmental Authorizations.

Section 14.5 Environmental Remediation If Buyer, in its reasonable discretion,
determines that any environmental contamination or damage caused by or resulting from the presence
of Hazardous Substances in groundwater on the Real Property has occurred, Buyer shall be permitted,
subject to the last 2 sentences of this Section 14.5,  to commence remediation of such
contamination or damage and Buyer shall (a) notify Sellers regarding such determination and (b)
provide to Sellers reasonable evidence supporting Buyer’s determination to perform such
remediation. Any costs and expenses incurred by Buyer in connection with performing such
remediation shall be allocated as follows: (i) the first $150,000 shall be paid solely by Buyer;
(ii) the next $700,000 shall be paid by Sellers, on the one hand, and Buyer, on the other hand, in
equal shares; and (iii) thereafter, all amounts shall be paid solely by Buyer. Buyer shall deliver
to Sellers reasonable evidence of Buyer’s costs and expenses incurred in connection with such
remediation. Sellers shall have no liability pursuant to this Section 14.5 for any claims
not initially made by Buyer prior to the third anniversary of the Closing Date.  Notwithstanding
the foregoing, prior to the commencement by Buyer of any remediation pursuant to this Section
14.5, Buyer and Sellers shall cooperate in good faith for a period of ninety (90) days to agree
upon a plan of remediation.  The parties failure to agree upon a plan of remediation shall not
affect the parties respective rights and obligations pursuant to this Section 14.5,
provided that Sellers shall not be liable for any costs or expenses resulting from remediation
performed by Buyer without Sellers consent to the extent such remediation results from Buyer’s
failure to be reasonable.   

 

3

To evidence their agreement to the foregoing, the parties hereto have executed this instrument
as of the 29th day of June, 2007.

Metalico Akron, Inc.

By:

Its:

Metalico Akron Realty, Inc.

By:

Its:

Annaco, Inc.

By:

Its:

943 Hazel LLC

By: B.H.B. Land Company, Its Sole Member

By:

Its:

Ocanna Plant II LLC

By: B.H.B. Land Company, Its Sole Member

By:

Its:

4

Appendix

The capitalized words appearing below have the definitions set forth below. The singular of a
plural defined term means one of the defined item; the plural of a singular defined term means more
than one or all of the defined items.

“Affiliate” means as to any person or entity, any other entity controlled by,
controlling, or under common control with the first person or entity. For purposes of this
definition, “control” (including “controlling”, “controlled by”, and “under common control with”)
means the possession, direct or indirect, of the power to direct or cause the direction of the
management and policies of a person, whether through the ownership of voting securities, by
contract or otherwise, and will be construed in the same manner as in the rules promulgated under
the federal securities laws. As to the Sellers, an Affiliate does not include any person or entity
other than the shareholders of Annaco and any entity controlled directly or indirectly by the
shareholders of Annaco.

“Benefit Plans” means Employee Benefit Plans with respect to which Annaco currently
is, or during the six (6) year period preceding the date hereof has been, the sponsor, a party or
obligated to make contributions or which Annaco has any liability with respect to any present or
former employee, officer of director of Annaco other than a Multiemployer Plan..

“Breach” means any inaccuracy in or breach of, or any failure to perform or comply
with, a representation, warranty, covenant, obligation, or other provision of this Agreement or the
Membership Interest Purchase Agreement.

“COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.

“Consent” means an approval, consent, ratification, waiver, or other authorization
(including a Governmental Authorization).

“Contemplated Transactions” means all of the transactions contemplated by this
Agreement and the other Transaction Documents, including:

	 	(a)	 	the sale of the Property by Annaco to Buyer;

	 	(b)	 	the sale of the Membership Interests by the LLC Affiliates to Akron Realty;
and

	 	(c)	 	the performance by the Buyer Parties and Sellers of their respective covenants
and obligations under this Agreement.

“Damages” means any losses, damages, assessments, costs and expenses, including,
without limitation, damages awarded by a court or arbitrator, fines imposed by a Governmental Body,
penalties, interest, amounts paid in settlement and reasonable attorneys’ fees incurred in
defending a Third Party Claim.

“Employee Benefit Plan” means any “employee benefit plan” (as defined in Section 3(3)
of ERISA), or any bonus, incentive compensation, profit sharing, retirement, pension, deferred
compensation, severance, change in control, termination, stock option or purchase plan, restricted
stock, phantom stock, hospitalization, disability, life or other insurance plan, or other employee
fringe benefit plan, program or arrangement.

“Environment” means soil, land surface or subsurface strata, surface waters (including
navigable waters and ocean waters), groundwaters, drinking water supply, stream sediments, ambient
air (including indoor air), plant and animal life and any other environmental medium or natural
resource.

“Environmental Authorization” means any approval, Consent, license, permit, waiver, or
other authorization issued, granted, given or otherwise made available pursuant to any
Environmental Requirement or under the authority of any Governmental Body charged with the
responsibility of protecting the Environment.

“Environmental Liabilities” means any cost, damages, expense, liability, obligation or
other responsibility arising from or under any Environmental Requirement, including those
consisting of or relating to:

	 	(d)	 	any health or safety matter or condition pertaining to the Environment
(including on-site or off-site contamination, occupational safety and health and
regulation of any chemical substance or product);

	 	(e)	 	any fine, penalty, judgment, award, settlement, legal or administrative
proceeding, damages, loss, claim, demand or response, remedial or inspection cost or
expense arising under any Environmental Requirement;

	 	(f)	 	financial responsibility under any Environmental Requirement for cleanup costs
or corrective action, including any cleanup, removal, containment or other remediation
or response actions (“Cleanup”) required by any Environmental Requirement (whether or
not such Cleanup has been required or requested by any Governmental Body or any other
person) and for any natural resource damages; or

	 	(g)	 	any other compliance, corrective or remedial measure required under any
Environmental Requirement.

The terms “removal,” “remedial” and “response action” include the types of activities covered by
the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended
(“CERCLA”).

“Environmental Requirement” means any Legal Requirement that requires or relates to:

	 	(h)	 	advising appropriate authorities, employees, and the public of intended or
actual releases of Hazardous Substances, violations of discharge limits, or other
prohibitions and of the commencements of activities, such as resource extraction or
construction, that could have significant impact on the Environment;

	 	(i)	 	preventing or reducing to acceptable levels the release of Hazardous
Substances into the Environment;

	 	(j)	 	reducing the quantities, preventing the release, or minimizing the hazardous
characteristics of wastes that are generated;

	 	(k)	 	assuring that products are designed, formulated, packaged, and used so that
they do not present unreasonable risks to human health or the Environment when used or
disposed of;

	 	(l)	 	protecting resources, species, or ecological amenities;

	 	(m)	 	reducing to acceptable levels the risks inherent in the transportation of
Hazardous Substances;

	 	(n)	 	cleaning up Hazardous Substances that have been released, preventing the
threat of release, or paying the costs of such clean up or prevention;

	 	(o)	 	making responsible parties pay private parties, or groups of them, for damages
done to their health or the Environment, or permitting self-appointed representatives
of the public interest to recover for injuries done to public assets; or

	 	(p)	 	providing safe and healthful working conditions and reducing occupational
safety and health hazards.

Environmental Requirements include the CERCLA; the Resource Conservation and Recovery Act, as
amended (“RCRA”); the Toxic Substances Control Act, as amended (“TSCA”); the Clean Air Act, as
amended (“CAA”); the Federal Water Pollution Control Act, as amended (“FWPCA”); the Oil Pollution
Act of 1990, as amended (“OPA”); the Occupational Safety and Health Act, as amended (“OSHA”); and
the Safe Drinking Water Act, as amended (“SDWA”); and their state and local counterparts or
equivalents.

“ERISA” means the Employee Retirement Income Security Act of 1974 or any successor
law, and regulations and rules issued pursuant to that Act or any successor law.

“ERISA Affiliate” means, with respect to Annaco, any entity which is or has ever been
a member of a “controlled group of corporations” with, or under “common control” with, Annaco
(within the meaning of IRC §414(b) or (c)) or which is or has ever been a member of an “affiliated
service group” with Annaco (within the meaning of IRC §414(m) or any entity which is or has ever
been required to be aggregated with Annaco under Section 4001(b) of ERISA.

“Excess EBITDA” means the amount for each fiscal year (or for the remainder of fiscal
2007) that the EBITDA generated by the Business (as adjusted, if applicable, for the remainder of
fiscal 2007 in the manner provided for in Section 2.1(c)) exceeds the EBITDA Floor (as such
floor is to be proportionately reduced for the remainder of fiscal 2007 in accordance with
Section 2.1(b)).

“GAAP” means generally accepted United States accounting principles, applied on a
basis consistent with the basis on which the Financial Statements referred to in Section
3.5 were prepared.

“Governmental Authorization” means any approval, Consent, license, permit, waiver, or
other authorization issued, granted, given, or otherwise made available by or under the authority
of any Governmental Body or pursuant to any Legal Requirement.

“Governmental Body” means any federal, state, local, municipal, foreign, or other
government or any subdivision, agency, bureau, or department thereof.

“Hazardous Substance” means all substances, compounds, mixtures, pollutants and
contaminants regulated under CERCLA, RCRA, CAA, FWPCA, OPA, OSHA, SDWA and similar state statutes.

“Intellectual Property” means:

	 	(q)	 	assumed fictional business names, trade names, registered and unregistered
trademarks, service marks and applications for the foregoing (collectively, “Marks”);

	 	(r)	 	patents (“Patents”), patent applications and inventions and discoveries that
may be patentable;

	 	(s)	 	registered and unregistered copyrights in both published works and unpublished
works (collectively, “Copyrights”);

	 	(t)	 	rights in mask works and software;

	 	(u)	 	know-how, trade secrets, confidential or proprietary information, customer
lists, technical information, data, process technology, plans, drawings and blue prints
(collectively, “Trade Secrets”); and

	 	(v)	 	rights in internet web sites and internet domain names (collectively, “Net
Names”).

“IRC” means the Internal Revenue Code of 1986 or any successor law, and regulations
issued by the Treasury Department pursuant to the Internal Revenue Code or any successor law.

“IRS” means the United States Internal Revenue Service or any successor agency, and,
to the extent relevant, the United States Department of the Treasury.

“Legal Requirement” means any federal, state, local, municipal, foreign,
international, multinational, or other administrative Order, constitution, law, ordinance,
regulation, statute, or treaty.

“Multiemployer Plan” means any “multiemployer plan” within the meaning of Section
4001(a)(3) of ERISA.

“Order” means any award, decision, injunction, judgment, order, ruling, subpoena, or
verdict entered, issued, made, or rendered by any court, administrative agency, or other
Governmental Body or by any arbitrator.

“Permitted Encumbrances” means liens for property taxes and assessments not yet due
and payable and the other items listed on Exhibit 5.8, together with mortgage and related
liens securing financing to be repaid and released at the Closing.

“Proceeding” means an action, arbitration, audit, hearing, investigation, litigation,
or suit (whether civil, criminal or administrative) commenced, brought, conducted, or heard by or
before, any Governmental Body or arbitrator.

“Reasonable Best Efforts” means the efforts that a prudent person desirous of
achieving a result would use in similar circumstances to ensure that such result is achieved as
expeditiously as possible; provided, however, that an obligation to use Reasonable Best Efforts
under this Agreement does not require the person subject to that obligation to make any significant
out of pocket expenditures or take actions that would result in a materially adverse change in the
benefits to such person of this Agreement and the Contemplated Transactions.

“Seller’s Knowledge” or any other reference to the knowledge of Sellers means only (a)
the actual knowledge of (i) Morris Berzon, (ii) David Berzon, (iii) William Lowery or (iv) Jeff
Bauer, and not to any other persons or entities, and (b) the actual (and not implied or
constructive) knowledge of such individuals, without any duty on such individuals to conduct any
investigation or inquiry of any kind. Under no circumstances shall any of such individuals have
any personal obligations or liabilities under this Agreement for any knowledge they may have or
otherwise.

“Tax” means any tax, levy, assessment, tariff, duty, or other fee, and any related
charge or amount (including any fine, penalty, interest, or addition to tax), imposed, assessed, or
collected by or under the authority of any Governmental Body (including any income tax, sales or
use tax, property tax, or excise tax, workers’ compensation premiums, and unemployment compensation
contributions).

“Tax Return” means any return (including any information return), report, statement,
schedule, notice, form, or other document or information filed with or submitted to, or required to
be filed with or submitted to, any Governmental Body in connection with the determination,
assessment, collection, or payment of any Tax or in connection with the administration,
implementation, or enforcement of or compliance with any Legal Requirement relating to any Tax.

5EX-10.1

EXECUTION COPY

SECOND AMENDMENT TO THIRD AMENDED AND

RESTATED CREDIT AGREEMENT

THIS SECOND AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”) dated
as of June 28, 2007 by and among THE ST. JOE COMPANY (the “Borrower”), each of the Lenders party
hereto, and WACHOVIA BANK, NATIONAL ASSOCIATION, as Agent (the “Agent”).

WHEREAS, the Borrower, the Lenders, the Agent and certain other parties have entered into that
certain Third Amended and Restated Credit Agreement dated as of July 22, 2005 (as amended and in
effect immediately prior to the date hereof, the “Credit Agreement”) and the Borrower, the Lenders
and the Agent desire to amend certain provisions of the Credit Agreement on the terms and
conditions contained herein.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged by the parties hereto, the parties hereto hereby agree as follows:

Section 1. Specific Amendment to Credit Agreement. The parties hereto agree that the
Credit Agreement is amended by restating Section 9.1.(b) thereof in its entirety as follows:

(b) Minimum Fixed Charge Coverage Ratio. The ratio of (i) Adjusted
EBITDA for the period of four consecutive fiscal quarters of the Borrower most
recently ending to (ii) Fixed Charges for such period, to be less than 2.50 to 1.00
at any time.

Section 2. Conditions Precedent. The effectiveness of this Amendment is subject to
receipt by the Agent of each of the following, each in form and substance satisfactory to the
Agent:

(a) A counterpart of this Amendment duly executed by the Borrower and the Requisite Lenders;

(b) Evidence that Section 10.4 of each of the 2002 Note Agreements and of each of the Note
Purchase Agreements dated as of August 25, 2005 (as amended, restated, supplemented or otherwise
modified from time to time, the “2005 Note Agreements”) by and between the Borrower and the
purchasers of $65,000,000 of the Borrower’s 5.28% Senior Secured Notes, Series G, due August 25,
2015, $65,000,000 of the Borrower’s 5.38% Senior Secured Notes, Series H, due August 25, 2017 and
$20,000,000 of the Borrower’s 5.49% Senior Secured Notes, Series I, due August 25, 2020, has been
amended to change the period for calculating the financial ratio contained in such Section from two
fiscal quarters to four fiscal quarters; and

(c) Such other documents, instruments and agreements as the Agent may reasonably request.

The condition precedent contained in the immediately preceding subsection (b) shall apply only so
long as, and only to the extent, the 2002 Note Agreements and the 2005 Note Agreements, as
applicable, remain in effect.

Section 3. Representations. The Borrower represents and warrants to the Agent and
the Lenders that:

(a) Authorization. The Borrower has the right and power, and has taken all necessary
action to authorize, execute and deliver this Amendment and to perform its obligations hereunder
and under the Credit Agreement, as amended by this Amendment, in accordance with their respective
terms. This Amendment has been duly executed and delivered by a duly authorized officer of the
Borrower and each of this Amendment and the Credit Agreement, as amended by this Amendment, is a
legal, valid and binding obligation of the Borrower enforceable against the Borrower in accordance
with its respective terms, except as the same may be limited by bankruptcy, insolvency, and other
similar laws affecting the rights of creditors generally and the availability of equitable remedies
for the enforcement of certain obligations (other than the payment of principal) contained herein
or therein and as may be limited by equitable principles generally.

(b) Compliance with Laws, etc. The execution and delivery by the Borrower of this
Amendment and the performance by the Borrower of this Amendment and the Credit Agreement, as
amended by this Amendment, in accordance with their respective terms, do not and will not, by the
passage of time, the giving of notice or otherwise: (i) require any Government Approvals or
violate any Applicable Laws relating to the Borrower or any other Loan Party; (ii) conflict with,
result in a breach of or constitute a default under the organizational documents of the Borrower or
any other Loan Party, or any indenture, agreement or other instrument to which the Borrower or any
other Loan Party is a party or by which it or any of its respective properties may be bound; or
(iii) result in or require the creation or imposition of any Lien upon or with respect to any
property now owned or hereafter acquired by the Borrower or any other Loan Party.

(c) No Default. No Default or Event of Default has occurred and is continuing as of
the date hereof nor will exist immediately after giving effect to this Amendment.

(d) 2004 Notes. No Notes (as defined in the 2004 Note Agreements) are outstanding.

Section 4. Reaffirmation of Representations by Borrower. The Borrower hereby repeats
and reaffirms all representations and warranties made by the Borrower to the Agent and the Lenders
in the Credit Agreement and the other Loan Documents to which it is a party on and as of the date
hereof with the same force and effect as if such representations and warranties were set forth in
this Amendment in full, except for changes in factual circumstances not prohibited under the Credit
Documents.

Section 5. Certain References. Each reference to the Credit Agreement in any of the
Loan Documents shall be deemed to be a reference to the Credit Agreement as amended by this
Amendment.

Section 6. Expenses. The Borrower shall reimburse the Agent upon demand for all
costs and expenses (including reasonable attorneys’ fees) incurred by the Agent in connection with
the preparation, negotiation and execution of this Amendment and the other agreements and documents
executed and delivered in connection herewith.

Section 7. Benefits. This Amendment shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns.

Section 8. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF FLORIDA APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY
PERFORMED, IN SUCH STATE.

Section 9. Effect. Except as expressly herein amended, the terms and conditions of
the Credit Agreement and the other Loan Documents remain in full force and effect. The amendment
contained herein shall be deemed to have prospective application only, unless otherwise
specifically stated herein.

Section 10. Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be deemed to be an original and shall be binding upon all
parties, their successors and assigns.

Section 11. Definitions. All capitalized terms not otherwise defined herein are used
herein with the respective definitions given them in the Credit Agreement.

[SIGNATURES ON FOLLOWING PAGE]

1

IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to Third Amended
and Restated Credit Agreement to be executed as of the date first above written.

THE ST. JOE COMPANY

By: /s/ Stephen W. Solomon

Stephen W. Solomon

Senior Vice President — Treasurer

[SIGNATURES CONTINUED ON FOLLOWING PAGE]

2

[Signature Page to Second Amendment to Third Amended and

Restated Credit Agreement with The St. Joe Company]

	 	 	 	WACHOVIA BANK, NATIONAL ASSOCIATION, individually and
as Agent

By: /s/ Matthew Ricketts

Name: Matthew Ricketts

Title: Vice President

[SIGNATURES CONTINUED ON FOLLOWING PAGE]

3

[Signature Page to Second Amendment to Third Amended and

Restated Credit Agreement with The St. Joe Company]

	 	 	 	BANK OF AMERICA, N.A.

By: /s/ Steven H. Cohn

Name: Steven H. Cohn

Title: Senior Vice President

[SIGNATURES CONTINUED ON FOLLOWING PAGE]

4

[Signature Page to Second Amendment to Third Amended and

Restated Credit Agreement with The St. Joe Company]

	 	 	 	WELLS FARGO BANK, NATIONAL ASSOCIATION

By: Edwin S. Poole, III

Name: Edwin S. Poole, III

Title: Vice President

[SIGNATURES CONTINUED ON FOLLOWING PAGE]

5

[Signature Page to Second Amendment to Third Amended and

Restated Credit Agreement with The St. Joe Company]

	 	 	 	SUNTRUST BANK

By: /s/ William C. Barr, III

Name: William C. Barr, III

Title: Managing Director

[SIGNATURES CONTINUED ON FOLLOWING PAGE]

6

[Signature Page to Second Amendment to Third Amended and

Restated Credit Agreement with The St. Joe Company]

	 	 	 	PNC BANK, NATIONAL ASSOCIATION

By: /s/ Wayne Robertson

Name: Wayne Robertson

Title: Senior Vice President

[SIGNATURES CONTINUED ON FOLLOWING PAGE]

7

[Signature Page to Second Amendment to Third Amended and

Restated Credit Agreement with The St. Joe Company]

	 	 	 	REGIONS BANK

By: /s/ David L. Waller

Name: David L. Waller

Title: Senior Vice President

[SIGNATURES CONTINUED ON FOLLOWING PAGE]

8

[Signature Page to Second Amendment to Third Amended and

Restated Credit Agreement with The St. Joe Company]

	 	 	 	COMERICA BANK, a Michigan Banking Corporation

By: /s/ William Piana

Name: William Piana

Title: Vice President

[SIGNATURES CONTINUED ON FOLLOWING PAGE]

9

[Signature Page to Second Amendment to Third Amended and

Restated Credit Agreement with The St. Joe Company]

	 	 	 	BRANCH BANKING AND TRUST CO.

By: /s/ Carl T. McFarland

Name: Carl T. McFarland

Title: Senior Vice President

[SIGNATURES CONTINUED ON FOLLOWING PAGE]

10

[Signature Page to Second Amendment to Third Amended and

Restated Credit Agreement with The St. Joe Company]

	 	 	 	FIFTH THIRD BANK

By: /s/ John A. Marian

Name: John A. Marian

Title: Vice President

[SIGNATURES CONTINUED ON FOLLOWING PAGE]

11

[Signature Page to Second Amendment to Third Amended and

Restated Credit Agreement with The St. Joe Company]

	 	 	 	CAROLINA FIRST BANK

By: /s/ Charles D. Chamberlain

Name: Charles D. Chamberlain

Title: Executive Vice President

[SIGNATURES CONTINUED ON FOLLOWING PAGE]

12

[Signature Page to Second Amendment to Third Amended and

Restated Credit Agreement with The St. Joe Company]

	 	 	 	GREENSTONE FARM CREDIT SERVICES, ACA/FLCA

By: /s/ Alfred S. Compton, Jr.

Name: Alfred S. Compton, Jr.

Title: Vice President / Managing Director

[SIGNATURES CONTINUED ON FOLLOWING PAGE]

13

[Signature Page to Second Amendment to Third Amended and

Restated Credit Agreement with The St. Joe Company]

	 	 	 	NORTHWEST FARM CREDIT SERVICES, PCA

By: /s/ Casey J. Kinzer

Name: Casey J. Kinzer

Title: Account Manager

[SIGNATURES CONTINUED ON FOLLOWING PAGE]

14

[Signature Page to Second Amendment to Third Amended and

Restated Credit Agreement with The St. Joe Company]

	 	 	 	BMO CAPITAL MARKETS FINANCING, INC.

By: /s/ Scott W. Morris

Name: Scott W. Morris

Title: Vice President

15

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