ASSET PURCHASE AGREEMENT

By and Between

METALICO CATCON, INC.
(?Buyer?)

and

AMERICAN CATCON HOLDINGS, LLC
(?Seller?)

1

January 2, 2008
ASSET PURCHASE AGREEMENT

This Agreement entered into as of January 2, 2008, by and between METALICO CATCON, INC., a Texas corporation (?Buyer?) and AMERICAN CATCON HOLDINGS, LLC, a Texas limited liability company (?Seller?). Buyer and Seller are referred to collectively herein as the ?Parties? and each individually as a ?Party.?

RECITALS

This Agreement contemplates a transaction in which Buyer shall purchase all of those operating assets of Seller defined below as ?Acquired Assets? in return for cash and other consideration set forth herein. Contemporaneously with the execution of this Agreement, Buyer is executing the Mississippi Purchase Agreement (as hereinafter defined). It is the intent of the parties to this Agreement that the execution and delivery of the Mississippi Purchase Agreement be a condition to the closing and consummation of the transactions contemplated hereunder.

STATEMENT OF AGREEMENT

Now, therefore, in consideration of the premises and the mutual promises herein made, and in consideration of the representations, warranties, and covenants herein contained, the Parties agree as follows.

ARTICLE 1. DEFINITIONS

?Accounts Receivable? has the meaning set forth in ?3.10 below.

?Acquired Assets? means all right, title, and interest in and to all of the assets owned and used in the Business, including without limitation, all assets set forth in Schedule A attached hereto and all tangible and intangible personal property of Seller (such as, without limitation, Business Equipment, Inventory, inventories of materials and supplies, computers, leaseholds, manufactured furniture, automobiles, trucks, tractors, trailers, containers, wagons, spare parts, leases, subleases and rights thereunder, Marks and other intellectual property owned or licensed by or on behalf of Seller, agreements, contracts and contract rights, securities, equity interests, accounts receivable, notes, and other receivables, claims, vendor advances, deposits (but not deposits at financial institutions), prepayments, causes of action, rights of recovery, rights of set off and rights of recoupment, Governmental Authorizations, variances and similar rights obtained from Governmental Bodies, customer lists, customer accounts, books, records, ledgers, files, documents, correspondence and lists).

?Affiliate? means a Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the Person specified.

?After-Tax Profit Share? means an amount equal to thirty percent (30%) of Seller?s after-tax profits for the months of November and December 2007, as determined prior to Closing to the mutual satisfaction of the Parties from financial statements prepared by Seller and reviewed by Buyer.

?Annual Earnout? has the meaning set forth in ?2.2(d) below.

?Annual Lot? has the meaning set forth in ?2.4(c)(i) below.

?Arbitration Referral Period? has the meaning set forth in ?10.8 below.

?Assumed Debt? means, collectively, the sum of: (i) the amount of the liabilities included in the determination of Net Working Capital under ?2.2(b), (ii) the first $1,900,000 outstanding under the Bank Line as of the Closing Date, and (iii) the outstanding balance of the Equipment Debt as of the Closing Date.

?Balance Sheet? means the balance sheet of Seller as at October 31, 2007 provided to Buyer pursuant to ?3.4.

?Bank Line? means a secured working capital line of credit provided to Seller by either (but not both) Bank of America or Merrill Lynch Business Financial Services, Inc. on the date of determination.

?Basis? means any past or present fact, situation, circumstance, status, condition, activity, practice, plan, occurrence, event, incident, action, failure to act, or transaction that forms or could form the basis for any specified consequence.

?Benchmark EBITDA? has the meaning set forth in ?2.2(d).

?Bill of Sale? means a bill of sale for all of the Acquired Assets that are tangible personal property in the form of Exhibit 5.1(c) attached hereto.

?Buda Landlord? means Hickman Property Holdings, LLC, a Texas limited liability company.
 

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