<PAGE>   1
                                                                  EXHIBIT 2.10

                                                                  EXECUTION COPY

________________________________________________________________________________


                        AGREEMENT AND PLAN OF MERGER

                             DATED MAY 16, 1997

                                    AMONG

                COZZI IRON & METAL, INC. AND ITS SHAREHOLDERS

                           METAL MANAGEMENT, INC.

                                     AND

                            CIM ACQUISITION, CO.





________________________________________________________________________________





<PAGE>   2


                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                      PAGE
     <S>                                                                                                             <C>
     ARTICLE I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1
              THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1
              1.1     Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1
              1.2     Filing and Effective Time  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   2
              1.3     Effects of the Merger  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   2
              1.4     Conversion Formula . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   2
              1.5     Conversion of Merger Sub Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   2
              1.6     Exchange of Certificates; Payment of Merger Consideration  . . . . . . . . . . . . . . . . . . .   3
              1.7     The Closing  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   3
              1.8     Estate of James H. Cozzi Adjustment  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   3
                                                                                                                       
     ARTICLE II 
              REPRESENTATIONS AND WARRANTIESOF MTLM  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   3
              2.1     Corporate Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   4
              2.2     Corporate Power and Authority  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   4
              2.3     Enforceability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   4
              2.4     No Commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   4
              2.5     Records  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   4
              2.6     Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   5
              2.7     No Violation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   5
              2.8     MTLM Subsidiaries  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   6
              2.9     Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   6
              2.10    Liabilities  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   6
              2.11    Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   7
              2.12    Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   7
              2.13    Permits  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8
              2.14    Contracts  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8
              2.15    Good Title to and Condition of Assets  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8
              2.16    Labor and Employment Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8
              2.17    Tax Matters  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9
              2.18    Receivables  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10
              2.19    SEC Filings; Accuracy of Information Furnished by MTLM . . . . . . . . . . . . . . . . . . . . .  10
              2.20    Inventory  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  11
              2.21    Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  11
              2.22    Full Disclosure  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  11
              2.23    No Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  11
              2.24    Environmental Matters  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  11
              2.25    Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  15
</TABLE>    
            
            



                                      i
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<TABLE>
     <S>                                                                                                             <C>
              2.26    Insurance  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  16
              2.27    Real Estate  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  17
              2.28    Conduct of Business Since March 31, 1997.  . . . . . . . . . . . . . . . . . . . . . . . . . . .  17
                                                                                                                        
     ARTICLE III                                                                                                        
              REPRESENTATIONS AND WARRANTIES OF MERGECO  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  18
              3.1     Corporate Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  18
              3.2     Corporate Power and Authority  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  18
              3.3     Enforceability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  18
              3.4     No Violation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  18
              3.5     No Commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  19
              3.6     Mergeco Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  19
              3.7     Business Activity  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  19
                                                                                                                        
     ARTICLE IV                                                                                                         
              REPRESENTATIONS AND WARRANTIES OFTHE SHAREHOLDERS AND THE COMPANY  . . . . . . . . . . . . . . . . . . .  19
              4.1     Corporate Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  19
              4.2     Power and Authority  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  20
              4.3     Enforceability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  20
              4.4     Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  20
              4.5     Shareholders of the Company  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  21
              4.6     No Violation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  21
              4.7     Records  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  21
              4.8     Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  22
              4.9     Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  22
              4.10    Changes Since the Current Balance Sheet Date . . . . . . . . . . . . . . . . . . . . . . . . . .  22
              4.11    Liabilities  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  23
              4.12    Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  23
              4.13    Environmental Matters  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  24
              4.14    Real Estate  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  26
              4.15    Good Title to and Condition of Assets  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  29
              4.16    Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  29
              4.17    Labor and Employment Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  30
              4.18    Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  31
              4.19    Tax Matters  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  33
              4.20    Insurance  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  34
              4.21    Receivables  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  35
              4.22    Permits  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  35
              4.23    Adequacy of the Assets; Relationships with Customers and Suppliers;                               
                      Affiliated Transactions  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  35
              4.24    Intellectual Property  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  35
</TABLE>                                                                      
                                                                              
                                                                              



                                      ii
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<TABLE>
             <S>      <C>                                                                                              <C>
              4.25    Contracts  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  36
              4.26    Customer Lists and Recurring Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  36
              4.27    Accuracy of Information Furnished by the Shareholders  . . . . . . . . . . . . . . . . . . . . .  37
              4.28    Investment Intent; Accredited Investor Status; Securities Documents  . . . . . . . . . . . . . .  37
              4.29    Business Locations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  37
              4.30    Names; Prior Acquisitions  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  37
              4.31    No Commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  38
              4.32    Inventory  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  38
              4.33    Identification, Acquisition and Disposition of Material Assets.  . . . . . . . . . . . . . . . .  38
              4.34    Restrictions.      . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  38
              4.35    Full Disclosure  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  38
                                                                                                                        
     ARTICLE V                                                                                                          
              CONDUCT OF BUSINESS PENDING THE CLOSING  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  38
              5.1     Conduct of Business of the Company Pending the Closing . . . . . . . . . . . . . . . . . . . . .  38
              5.2     Conduct of Business of MTLM Pending the Closing  . . . . . . . . . . . . . . . . . . . . . . . .  40
                                                                                                                        
     ARTICLE VI                                                                                                         
              ADDITIONAL AGREEMENTS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  42
              6.1     Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  42
              6.2     Compliance with Covenants  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  42
              6.3     Cooperation  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  42
              6.4     Access to Information  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  42
              6.5     Notification of Certain Matters  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  42
              6.6     Tax Treatment  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  42
              6.7     Confidentiality; Publicity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  42
              6.8     No Other Discussions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  43
              6.9     Restrictive Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  43
              6.10    Environmental Assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  44
              6.11    Trading in MTLM's Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  44
              6.12    Other Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  45
              6.13    HSR Act Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  46
              6.14    Corporate Authority. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  46
              6.15    Certification of Tax Status  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  46
              6.16    Purchase of Joint Venture Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  46
              6.17    Meeting of Shareholders  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  46
              6.18    Pre-Clear Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  47
              6.19    Financing  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  47
              6.20    Conduct of MTLM's Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  47
              6.21    Disclosure Supplements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  48
                                                                                                                       
     ARTICLE VII
              CONDITIONS TO THE OBLIGATIONS OF MTLM AND MERGECO  . . . . . . . . . . . . . . . . . . . . . . . . . . .  48
</TABLE>





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<TABLE>
     <S>                                                                                                            <C>
              7.1     Accuracy of Representations and Warranties and Compliance with
                      Obligations  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  48
              7.2     Financing  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  49
              7.3     Corporate Certificate  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  49
              7.4     Opinions of Counsel  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  49
              7.5     Governmental Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  50
              7.6     No Adverse Litigation  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  50
              7.7     MTLM's Approvals.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  50
              7.8     Fairness Opinion.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  50
              7.9     Other Closing Deliveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  50
              7.10    Dissenting Shareholders  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  51
              7.11    Cozzi Building Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  51
              7.12    Estate of James H. Cozzi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  51
              7.13    No Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  51
              7.14    MetricMetal  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  51
              7.15    East Chicago Indiana Revenue Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  51
                                                                                                                       
     ARTICLE VIII                                                                                                      
              CONDITIONS TO THE OBLIGATIONS OF THE COMPANY AND THE SHAREHOLDERS  . . . . . . . . . . . . . . . . . . .  51
              8.1     Accuracy of Representations and Warranties and Compliance with Obligations . . . . . . . . . . .  51
              8.2     Merger Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  52
              8.3     No Adverse Litigation  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  52
              8.4     Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  52
              8.5     Tax Opinion  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  53
              8.6     Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  53
              8.7     Other Closing Deliveries.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  53
              8.8     No Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  53
                                                                                                                       
     ARTICLE IX                                                                                                        
              INDEMNIFICATION  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  53
              9.1     Agreement by the Shareholders to Indemnify . . . . . . . . . . . . . . . . . . . . . . . . . . .  53
              9.2     Agreement by MTLM to Indemnify . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  54
              9.3     Conditions of Indemnification  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  55
              9.4     Security for the Shareholders's Indemnification Obligation . . . . . . . . . . . . . . . . . . .  56
              9.5     The James H. Cozzi Estate Special Indemnification  . . . . . . . . . . . . . . . . . . . . . . .  56
                                                                                                                       
     ARTICLE X                                                                                                         
              SECURITIES LAW MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  57
              10.1    Disposition of MTLM Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  57
              10.2    Legend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  57
</TABLE>                                                                      
                                                                              




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<TABLE>

     ARTICLE XI
     <S>                                                                                                            <C>
              DEFINITIONS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  58
              11.1    Defined Terms  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  58
              11.2    Other Definitional Provisions  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  63
                                                                                                                       
     ARTICLE XII                                                                                                       
              TERMINATION, AMENDMENT AND WAIVER  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  64
              12.1    Termination  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  64
              12.2    Effect of Termination  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  65
                                                                                                                       
     ARTICLE XIII                                                                                                      
              GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  65
              13.1    Notices  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  65
              13.2    Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  66
              13.3    Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  66
              13.4    Amendment; Waiver  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  66
              13.5    Binding Effect; Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  66
              13.6    Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  67
              13.7    Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  67
              13.8    Governing Law; Interpretation  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  67
              13.9    Arm's Length Negotiations  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  67
</TABLE>                                                                      
                                                                              




                                      v
<PAGE>   7


                              INDEX OF SCHEDULES

<TABLE>
     <S>                       <C>
     Schedule 2.1                      Jurisdictions in which Qualified to do Business
     Schedule 2.6                      Capitalization of the Companies
     Schedule 2.7                      Violations; Conflicts; etc.
     Schedule 2.8                      Subsidiaries
     Schedule 2.9                      Financial Statements
     Schedule 2.10             Liabilities
     Schedule 2.11             Litigation
     Schedule 2.12             Compliance with Laws
     Schedule 2.14             Contracts
     Schedule 2.15             Title to and Condition of Assets
     Schedule 2.16             Labor and Employment Matters
     Schedule 2.17             Tax Matters
     Schedule 2.18             Receivables
     Schedule 2.19             SEC Filings
     Schedule 2.21             Restrictions
     Schedule 2.24             Environmental Matters
     Schedule 2.25             Employee Benefit Plans
     Schedule 2.27(a) and (b)          Real Estate
     Schedule 2.28             Conduct of Business
     Schedule 4.1                      Jurisdictions in which Qualified to do Business
     Schedule 4.4                      Capitalization of the Companies
     Schedule 4.5                      Shareholders
     Schedule 4.6                      Violations; Conflicts; etc.
     Schedule 4.8                      Subsidiaries
     Schedule 4.9                      Financial Statements
     Schedule 4.10             Changes since the Current Balance Sheet Date
     Schedule 4.11             Liabilities
     Schedule 4.12             Litigation
     Schedule 4.13             Environmental Matters
     Schedule 4.14(a)                  Owned Real Estate
     Schedule 4.14(b)                  Leases
     Schedule 4.15             Title to and Condition of Assets
     Schedule 4.16             Compliance with Laws
     Schedule 4.17             Labor and Employment Matters
     Schedule 4.18             Employee Benefit Plans
     Schedule 4.19             Tax Matters
     Schedule 4.20             Insurance
     Schedule 4.21             Receivables
     Schedule 4.22             Permits
     Schedule 4.23             Relationships with Customers and Suppliers
     Schedule 4.25             Contracts
</TABLE>





                                      vi
<PAGE>   8


     Schedule 4.30        Names
     Schedule 4.31        Commissions
     Schedule 4.33(a)             Asset Update Schedule
     Schedule 4.33(b)             Liability Update Schedule
     Schedule 4.34        Restrictions
     Schedule 5.1                 Conduct of Business Pending Closing
     Schedule 5.2                 Conduct of MTLM Business Pending Closing
     Schedule 11.1        List of SEC Filings
                        

                                        INDEX OF EXHIBITS

     Exhibit A                    Form of Escrow Agreement
     Exhibit B                    Form of Stockholders Agreement
     Exhibit C                    Form of Warrant
     Exhibit D                    Form of Registration Rights Agreement
                                  




                                     vii
<PAGE>   9


                          AGREEMENT AND PLAN OF MERGER


              This Agreement and Plan of Merger (this "AGREEMENT") is entered
     into effective as of May 16, 1997, by and among Metal Management, Inc., a
     Delaware corporation ("MTLM"); CIM Acquisition, Co., an Illinois
     corporation, and a wholly owned subsidiary of MTLM ("MERGECO"); Cozzi Iron
     & Metal, Inc., an Illinois corporation ("COZZI" or "COMPANY"); Albert A.
     Cozzi, Frank J. Cozzi and Gregory P. Cozzi, being the sole shareholders of
     the Company (collectively the "SHAREHOLDERS," and individually, a
     "SHAREHOLDER").  Certain other capitalized terms used herein are defined
     in Article XI or elsewhere throughout this Agreement.


                                    RECITALS

              A.      The Shareholders own, and until the Closing (as defined
     herein) will own, all of the issued and outstanding equity securities of
     the Company (the "COZZI SHARES");

              B.      MTLM desires to acquire all of the Cozzi Shares in
     exchange for shares of common stock, $.01 par value per share, of MTLM
     (the "MTLM SHARES") and a cash payment, upon the terms and subject to the
     conditions set forth herein;

              C.      MTLM and the Company have agreed to accomplish this
     transaction through a reverse triangular merger whereby Mergeco will merge
     with and into Cozzi, and Cozzi will be the surviving corporation (the
     "MERGER");

              D.      Each of the Boards of Directors of MTLM, the Company and
     Mergeco have approved this Agreement, the Shareholders of the Company have
     approved this Agreement and the Board of Directors of MTLM have directed
     that this Agreement be submitted to its shareholders for approval; and

              E.      It is intended that the Merger qualify as a
     reorganization within the meaning of the appropriate subsection of Section
     368 of the Internal Revenue Code of 1986, as amended.


                               TERMS OF AGREEMENT

              In consideration of the mutual representations, warranties,
     covenants and agreements contained herein, the parties hereto agree as
     follows:





<PAGE>   10


                                   ARTICLE I

                                  THE MERGER

              1.1     MERGER.  Upon and subject to the terms and conditions set
     forth in this Agreement and in accordance with the Illinois Business
     Corporation Act of 1983, as amended (the "BCA"), Mergeco shall be merged
     with and into Cozzi.  Following the Merger, Cozzi shall continue to exist
     as the surviving corporation (sometimes referred to as the "SURVIVING
     CORPORATION") and the separate corporate existence of Mergeco shall cease.

              1.2     FILING AND EFFECTIVE TIME.  At the Closing, Mergeco and
     Cozzi shall file with the Secretary of State of the State of Illinois the
     Articles of Merger, appropriately completed and executed in accordance
     with Section 11.25 of the BCA.  The Merger shall become effective upon
     filing and the issuance of the certificate of merger, in accordance with
     Section 11.40 of the BCA (the "EFFECTIVE TIME," and the date thereof
     hereinafter referred to as the "EFFECTIVE DATE").

              1.3     EFFECTS OF THE MERGER.  The Merger shall have the effects
     set forth in Section 11.50 of the BCA.  In addition:

                      (a)      The Articles of Incorporation of Cozzi as in
              effect at the Effective Time shall be and constitute the Articles
              of Incorporation of the Surviving Corporation until amended or
              changed in accordance with applicable law;

                      (b)      The bylaws of Cozzi as in effect at the
              Effective Time shall be and constitute the bylaws of the
              Surviving Corporation until amended or changed in accordance with
              applicable law; and

                      (c)      The officers and directors of the Surviving
              Corporation shall be as follows:

                               Directors:       T. Benjamin Jennings
                                                Frank J. Cozzi
                                                Gerard M. Jacobs
                                                Albert A. Cozzi

                               Officers:        Frank J. Cozzi - President

              1.4     CONVERSION FORMULA.  At the Effective Time, each Cozzi
     Share, issued and outstanding at and as of the Effective Time, by virtue
     of the Merger and without any further action on the part of the holder
     thereof, shall be converted into 105,747 shares of MTLM Shares, and a
     right to receive $55,172.41 per share payable upon the shareholder's
     surrender of his stock certificate(s), subject to adjustment as provided
     for in Section 1.8.  None of the equity securities of the Company held in
     the Company's treasury at the Effective Time shall be converted into MTLM
     Shares and the





                                      2
<PAGE>   11


     right to receive a cash payment.  At the Effective Time of the Merger,
     all of such equity securities of the Company shall be canceled.

              1.5     CONVERSION OF MERGER SUB SHARES.  At and as of the
     Effective Time, by virtue of the Merger and without any further action on
     the part of MTLM, each share of no par value common stock of Mergeco
     issued and outstanding to MTLM immediately prior to the Effective Time
     shall by virtue of the Merger be converted into one share of common stock
     of the Surviving Corporation.

              1.6     EXCHANGE OF CERTIFICATES; PAYMENT OF MERGER
     CONSIDERATION.  At the closing, the Shareholders shall surrender to MTLM
     their stock certificates representing their Cozzi Shares.  Upon receipt of
     the stock certificates, MTLM shall cancel such stock certificates and MTLM
     shall promptly pay the cash portion of the Merger consideration and issue
     a certificate representing the MTLM Shares into which such Cozzi Shares
     previously represented by the surrendered certificate shall have been
     converted at the Effective Time; provided, however, MTLM shall withhold
     from each Shareholder his pro-rata portion of 1,150,000 MTLM Shares
     (collectively, the "ESCROW SHARES") and shall deliver a certificate
     representing the Escrow Shares to an escrow agent acceptable to MTLM and
     the Shareholders (the "ESCROW AGENT").  The Escrow Agent shall hold the
     Escrow Shares in escrow pursuant to an escrow agreement in the form
     attached hereto as Exhibit A (the "ESCROW AGREEMENT").  Until so
     surrendered, the certificates representing the Cozzi Shares shall, at and
     after the Effective Time, be deemed for all purposes to represent and
     evidence only the right to receive the per share consideration set forth
     in Section 1.4, for each share represented by such certificates, and no
     interest shall be paid or accrued on such amount and the holders of such
     Cozzi stock certificates shall cease to have any rights as common
     shareholders of the Company.

              1.7     THE CLOSING.  The Closing of the Merger (the "CLOSING")
     shall take place as promptly as practicable (and in any event within five
     business days) after satisfaction or waiver of the conditions set forth in
     Articles VII and VIII (the "CLOSING DATE"), at the offices of MTLM's
     counsel in Chicago, Illinois, or such other place as the parties may
     otherwise agree.

              1.8     ESTATE OF JAMES H. COZZI ADJUSTMENT.  The consideration
     set forth in Section 1.4 shall be decreased for any payments made by the
     Company between the date hereof and the Closing Date or required to be
     made by the Company or MTLM after the Closing Date of (i) "Additional
     Consideration" due under that certain Sales Agreement dated June 25, 1996
     by and between Irene Cozzi, as executor of the estate of James H. Cozzi,
     and the Company (the "JAMES H. COZZI SALES AGREEMENT"), or (ii) any other
     amounts payable pursuant to the James H. Cozzi Sales Agreement or any
     other documents or instruments executed in connection therewith in excess
     of the amount reflected on the Company's Current Balance Sheet.  The
     parties hereto shall make such appropriate adjustments to the cash and
     non- cash portion of the Merger consideration that reasonably reflect the
     amount and type of settlement paid to the estate of James H.  Cozzi, as
     mutually agreed to by the parties hereto.





                                      3
<PAGE>   12


                                   ARTICLE II

                         REPRESENTATIONS AND WARRANTIES
                                    OF MTLM

              As a material inducement to the Company and the Shareholders to
     enter into this Agreement and to consummate the transactions contemplated
     hereby, MTLM makes the following representations and warranties to the
     Company and the Shareholders:

              2.1     CORPORATE STATUS. MTLM is a corporation duly organized,
     validly existing and in good standing under the laws of the State of
     Delaware.  MTLM has the requisite power and authority to own or lease its
     property and to carry on its business as now being conducted. MTLM is
     legally qualified to transact business as a foreign corporation in all
     jurisdictions where the nature of its property and the conduct of its
     business requires such qualification and is in good standing in each of
     the jurisdictions in which it is so qualified, except where the failure to
     so qualify would not have a Material Adverse Effect on MTLM. There is no
     pending or threatened proceeding for the dissolution, liquidation,
     insolvency or rehabilitation of MTLM.  Each entity listed as a subsidiary
     of MTLM on Schedule 2.8 hereto (each a "MTLM SUBSIDIARY" and collectively
     the "MTLM SUBSIDIARIES") is a corporation duly organized, validly existing
     and in good standing under the laws of its state of incorporation.  Each
     MTLM Subsidiary has the requisite power and authority to own or lease its
     property and to carry on its business as now being conducted.  Each MTLM
     Subsidiary is legally qualified to transact business as a foreign
     corporation in all jurisdictions where the nature of its property and the
     conduct of its business requires such qualification (all of which
     jurisdictions are listed on Schedule 2.1) and is in good standing in each
     of the jurisdictions in which it is so qualified.  There is no pending or
     threatened proceeding for the dissolution, liquidation, insolvency or
     rehabilitation of any MTLM Subsidiary.  MTLM owns all of the issued and
     outstanding capital stock of each MTLM Subsidiary.

              2.2     CORPORATE POWER AND AUTHORITY.  MTLM has the corporate
     power and authority to execute and deliver this Agreement and to perform
     its obligations hereunder and will have, at the time of Closing, the
     corporate power and authority to consummate the transactions contemplated
     hereby. MTLM has taken all action necessary by its board of directors to
     authorize its execution and delivery of this Agreement and the performance
     of its obligations hereunder and will have, at the time of Closing, taken
     all actions necessary (including stockholder approval) to authorize the
     consummation of the transactions contemplated hereby.

              2.3     ENFORCEABILITY.  This Agreement has been duly executed
     and delivered by MTLM and constitutes a legal, valid and binding
     obligation of MTLM, enforceable against MTLM in accordance with its terms,
     except as the same may be limited by applicable bankruptcy, insolvency,
     reorganization, moratorium or similar laws affecting the enforcement of
     creditors' rights generally and general equitable principles regardless of
     whether such enforceability is considered in a proceeding at law or in
     equity.





                                       4
<PAGE>   13


              2.4     NO COMMISSIONS.  Neither MTLM nor any MTLM Subsidiary has
     incurred any obligation for any finder's or broker's or agent's fees or
     commissions or similar compensation in connection with the transactions
     contemplated hereby.

              2.5     RECORDS.  The copies of the respective articles of
     incorporation and bylaws of MTLM which were provided to the Shareholders
     are true, accurate and complete and reflect all amendments made through
     the date of this Agreement.  The minute books for MTLM provided to the
     Shareholders for review were correct and complete as of the date of such
     review, no further entries have been made through the date of this
     Agreement, such minute books contain the true signatures of the persons
     purporting to have signed them, and such minute books contain an accurate
     record of all corporate actions of the shareholders and directors (and any
     committees thereof) of MTLM taken by written consent or at a meeting since
     incorporation.  All material corporate actions taken by MTLM have been
     duly authorized or ratified.  All accounts, books, ledgers and official
     and other records of MTLM have been fully, properly and accurately kept
     and completed in all material respects, and there are no material
     inaccuracies or discrepancies of any kind contained therein.  The stock
     ledgers of MTLM, as previously provided to the Shareholders, or as
     reflected in Schedule 2.6, contain accurate and complete records of all
     issuances, transfers and cancellations of shares of the capital stock of
     MTLM.

              2.6     CAPITALIZATION.  Schedule 2.6 sets forth, with respect to
     MTLM, (i) the number of authorized shares of each class of its capital
     stock, (ii) the number of issued and outstanding shares of each class of
     its capital stock, and (iii) the number of shares of each class of its
     capital stock which are held in treasury.  All of the issued and
     outstanding shares of capital stock of MTLM and each MTLM Subsidiary  (i)
     have been duly authorized and validly issued and are fully paid and
     non-assessable, (ii) were issued in compliance with all applicable state
     and federal securities laws, and (iii) were not issued in violation of any
     preemptive rights or rights of first refusal.  No preemptive rights or
     rights of first refusal exist with respect to the shares of capital stock
     of MTLM or any MTLM Subsidiary, and no such rights arise by virtue of or
     in connection with the transactions contemplated hereby.  Except as set
     forth on Schedule 2.6, there are no outstanding or authorized rights,
     options, warrants, convertible securities, subscription rights, conversion
     rights, exchange rights or other agreements or commitments of any kind
     that could require MTLM or any MTLM Subsidiary to issue or sell any shares
     of its capital stock (or securities convertible into or exchangeable for
     shares of its capital stock).  There are no outstanding stock
     appreciation, phantom stock, profit participation or other similar rights
     with respect to MTLM or any MTLM Subsidiary.  Except as set forth on
     Schedule 2.6, there are no proxies, voting rights or other agreements or
     understandings with respect to the voting or transfer of the capital stock
     of MTLM or any MTLM Subsidiary.  Neither MTLM nor any MTLM Subsidiary is
     obligated to redeem or otherwise acquire any of its outstanding shares of
     capital stock.

              2.7     NO VIOLATION.  Except as set forth on Schedule 2.7 and
     any applicable requirements of the Hart-Scott-Rodino Antitrust
     Improvements Act of 1976 and the rules and regulations promulgated
     thereunder (the "HSR ACT"), the execution and delivery of this Agreement
     by MTLM, the performance by it of its obligations hereunder and the
     consummation of the transactions





                                       5
<PAGE>   14


     contemplated by this Agreement will not (i) contravene any provision of
     the certificate of incorporation or bylaws of MTLM, (ii) violate or
     conflict with any law, statute, ordinance, rule, regulation, decree, writ,
     injunction, judgment or order of any Governmental Authority or of any
     arbitration award which is either applicable to, binding upon or
     enforceable against MTLM; (iii) conflict with, result in any breach of, or
     constitute a default (or an event which would, with the passage of time or
     the giving of notice or both, constitute a default) under, or give rise to
     a right to terminate, amend, modify, abandon or accelerate, any Contract
     which is applicable to, binding upon or enforceable against MTLM, (iv)
     result in or require the creation or imposition of any Lien upon or with
     respect to any of the property or assets of MTLM, or (v) require the
     consent, approval, authorization or permit of, or filing with or
     notification to, any Governmental Authority, any court or tribunal or any
     other Person, except the SEC or other filings required to be made by MTLM.

              2.8     MTLM SUBSIDIARIES.  Except as set forth on Schedule 2.8,
     MTLM does not own, directly or indirectly, more than fifty percent (50%)
     of any outstanding voting securities of or other interests in, or control,
     any other corporation, partnership, joint venture or other business
     entity.  In addition, Schedule 2.8 lists every other business entity in
     which MTLM or its MTLM Subsidiaries has any ownership interest.  Except as
     set forth on Schedule 2.8, MTLM does not have any liabilities or
     obligations, whether accrued, absolute, contingent or otherwise, arising
     from its interest in the entities set forth on such schedule.

              2.9     FINANCIAL STATEMENTS.  MTLM has delivered to the
     Shareholders (i) the consolidated financial statements of MTLM as of
     October 31, 1995 and 1994, including the notes thereto, audited by Price
     Waterhouse L.L.P. and (ii) the March 31, 1997 unaudited consolidated
     financial statements of MTLM (collectively, the "MTLM FINANCIAL
     STATEMENTS"), copies of which are attached as Schedule 2.9 hereto.  The
     balance sheet dated as of March 31, 1997 included in the MTLM Financial
     Statements is referred to herein as the "MTLM CURRENT BALANCE SHEET".  The
     MTLM Financial Statements fairly present the combined and consolidated
     financial position of MTLM and the MTLM Subsidiaries at each of the
     balance sheet dates and the results of operations for the periods covered
     thereby, and have been prepared in accordance with GAAP consistently
     applied throughout the periods indicated.  The books and records of MTLM
     and each MTLM Subsidiary fully and fairly reflect the transactions,
     properties, assets and liabilities of MTLM and each MTLM Subsidiary.
     Unless noted therein, there are no material special or non-recurring items
     of income or expense during the periods covered by the MTLM Financial
     Statements, and the balance sheets included in the MTLM Financial
     Statements do not reflect any writeup or revaluation increasing the book
     value of any assets, except as specifically disclosed in the notes thereto
     or otherwise in accordance with GAAP.  The MTLM Financial Statements
     reflect all adjustments necessary for a fair presentation of the financial
     information contained therein.

              2.10    LIABILITIES.  Except as set forth in the SEC Filings or
     on Schedule 2.10, neither MTLM nor any MTLM Subsidiary has any liabilities
     or obligations, whether accrued, absolute, contingent or otherwise, except
     (i) to the extent reflected or taken into account in the MTLM Current
     Balance Sheet (and the notes thereto) and not heretofore paid or
     discharged, (ii) to the extent specifically set forth in or incorporated
     by express reference in any of the Schedules attached hereto,





                                       6
<PAGE>   15


     (iii) liabilities incurred in the ordinary course of business consistent
     with past practice since the date of the MTLM Current Balance Sheet (none
     of which relates to breach of contract, breach of warranty, tort,
     infringement or violation of law, or which arose out of any action, suit,
     claim, governmental investigation or arbitration proceeding), (iv) normal
     accruals, reclassifications, and audit adjustments which would be
     reflected on an audited financial statement and which would not be
     material in the aggregate, and (v) liabilities incurred in the ordinary
     course of business prior to the date of the MTLM Current Balance Sheet
     which, in accordance with GAAP consistently applied, were not recorded
     thereon.  For purposes of this Agreement, the phrase "IN THE ORDINARY
     COURSE OF BUSINESS" (or words having similar meaning) used in reference to
     MTLM's business, shall be deemed to include all of MTLM's activities
     relating to acquiring businesses in the scrap metal industry, and all
     related financing or borrowing activities, including issuing additional
     MTLM Shares, notes, debentures or other securities.

              2.11    LITIGATION.  Except as set forth on Schedule 2.11, there
     is no action, suit, or other legal or administrative proceeding or
     governmental investigation, pending or, to the best of MTLM's knowledge,
     threatened, anticipated or contemplated against, by or affecting MTLM or
     any MTLM Subsidiary or any of their properties or assets, or which
     question the validity or enforceability of this Agreement or the
     transactions contemplated hereby, and there is no basis for any of the
     foregoing.  There are no outstanding orders, decrees or stipulations
     issued by any Governmental Authority in any proceeding to which MTLM or
     any MTLM Subsidiary is or was a party which have not been complied with in
     full or which continue to impose any material obligations on MTLM or any
     MTLM Subsidiary.

              2.12    COMPLIANCE WITH LAWS.

                      (a)      Except as set forth in the SEC Filings, MTLM and
     each MTLM Subsidiary is in material compliance with all laws, regulations
     and orders applicable to it, its respective business and operations (as
     currently conducted) and its properties and assets (in each case currently
     owned or used by it).  Except as set forth in the SEC Filings or on
     Schedule 2.12, neither MTLM nor any MTLM Subsidiary has been cited, fined
     or otherwise notified of any present material failure to comply with any
     material laws, regulations or orders and no proceeding with respect to any
     such material violation is pending or, to the best of MTLM's knowledge,
     threatened.

                      (b)      Neither MTLM nor any MTLM Subsidiary has made
     any payment of funds in connection with its business which is prohibited
     by law, and no funds have been set aside to be used in connection with its
     business for any payment prohibited by law.

                      (c)      MTLM and each MTLM Subsidiary is in material
     compliance with the terms and provisions of the Immigration Reform and
     Control Act of 1986, as amended (the "IMMIGRATION ACT").  With respect to
     each Employee (as defined in 8 C.F.R. 274a.1(f)) of MTLM for whom
     compliance with the Immigration Act as employer is required, to the best
     of MTLM's knowledge, MTLM and each MTLM Subsidiary has on file a true,
     accurate and complete copy of (i) each Employee's Form I-9 (Employment
     Eligibility Verification Form) and (ii) all other records,documents





                                       7
<PAGE>   16


     or other papers prepared, procured and/or retained by MTLM and each MTLM
     Subsidiary pursuant to the Immigration Act.  Neither MTLM nor any MTLM
     Subsidiary has been cited, fined, served with a Notice of Intent to Fine
     or with a Cease and Desist Order, nor has any action or administrative
     proceeding been initiated or threatened against it, by the Immigration and
     Naturalization Service by reason of any actual or alleged failure to
     comply with the Immigration Act.

                      (d)      Except as fully described in the SEC Filings or
     on Schedule 2.12, neither MTLM nor any MTLM Subsidiary is subject to any
     Contract, decree or injunction which restricts the continued operation of
     any business or the expansion thereof to other geographical areas,
     customers and suppliers or lines of business.

              2.13    PERMITS.  MTLM and each MTLM Subsidiary possess all
     material licenses and required governmental or official approvals, permits
     or authorizations (collectively, the "PERMITS") for its business and
     operations, including the operation of its properties (whether owned or
     leased).  All such Permits are valid and in full force and effect, MTLM
     and each MTLM Subsidiary is in material compliance with the requirements
     thereof, and no proceeding is pending or threatened to revoke or amend any
     of them.  None of such Permits is or will be impaired or in any way
     affected by the execution and delivery of this Agreement or the
     consummation of the transactions contemplated hereby.

              2.14    CONTRACTS.  The SEC Filings set forth a list of each
     Contract which is required to be disclosed pursuant to Item 601(b)(10) of
     Regulation S-K (the "DISCLOSED CONTRACTS"), true and correct copies of
     which have been provided to the Company.  Except as set forth in the SEC
     Filings or on Schedule 2.14 no event has occurred which constitutes, or
     after notice or the passage of time, or both, would constitute, a material
     default by MTLM or any MTLM Subsidiary under any Disclosed Contract, and
     no such event has occurred which constitutes or would constitute a
     material default by any other party.  Neither MTLM nor any MTLM Subsidiary
     is subject to any material liability or payment resulting from
     renegotiation of amounts paid it under any Disclosed Contract.

              2.15    GOOD TITLE TO AND CONDITION OF ASSETS.

                      (a)      Except as set forth on Schedule 2.15, MTLM and
     each MTLM Subsidiary has good and marketable title to all of its
     respective MTLM Assets (as hereinafter defined), free and clear of any
     Liens or restrictions on use.  For purposes of this Agreement, the term
     "MTLM ASSETS" means all of the properties and assets of MTLM and its MTLM
     Subsidiaries, other than owned real property and leased real property,
     whether personal or mixed, tangible or intangible, wherever located.

                      (b)      To the best of MTLM's knowledge, the MTLM Fixed
     Assets (as hereinafter defined) currently in use or necessary for the
     business and operations of MTLM and its MTLM Subsidiaries are in good
     operating condition, normal wear and tear excepted, and have been
     maintained in accordance with sound industry practices.  For purposes of
     this Agreement, the term "MTLM FIXED ASSETS" means all vehicles,
     machinery, equipment, tools, supplies, leasehold





                                       8
<PAGE>   17


     improvements, furniture and fixtures used by or located on the premises of
     MTLM or any MTLM Subsidiary or set forth on the MTLM Current Balance Sheet
     or acquired by MTLM or any MTLM Subsidiary since the date of the MTLM
     Current Balance Sheet.

              2.16    LABOR AND EMPLOYMENT MATTERS.  Except as set forth on
     Schedule 2.16, neither MTLM nor any MTLM Subsidiary is a party to or bound
     by any collective bargaining agreement or any other agreement with a labor
     union, and there have been no efforts by any labor union during the 24
     months prior to the date hereof to organize any employees of MTLM or any
     MTLM Subsidiary into one or more collective bargaining units.  There is no
     pending, or to the best of MTLM's knowledge, threatened labor dispute,
     strike or work stoppage which affects or which may affect the business of
     MTLM or any MTLM Subsidiary which may interfere with its continued
     operations.  Neither MTLM nor any MTLM Subsidiary has within the last 24
     months committed any unfair labor practice as defined in the National
     Labor Relations Act, as amended, and there is no pending or, to the best
     of MTLM's knowledge, threatened charge or complaint against MTLM or any
     MTLM Subsidiary by or with the National Labor Relations Board or any
     representative thereof.  There has been no strike, walkout or work
     stoppage involving any of the employees of MTLM or any MTLM Subsidiary
     during the 24 months prior to the date hereof.  MTLM is not aware that any
     executive or key employee or group of employees has any plans to terminate
     his, her or their employment with MTLM or any MTLM Subsidiary as a result
     of this Agreement or otherwise; provided, that there may be transitioning
     of responsibilities as a result of Albert A. Cozzi assuming the position
     of Chief Operating Officer of MTLM.  MTLM and each MTLM Subsidiary has
     complied in all material respects with applicable laws, rules and
     regulations relating to employment, civil rights and equal employment
     opportunities, including but not limited to, the Civil Rights Act of 1964,
     the Fair Labor Standards Act and the Worker Adjustment and Retraining
     Notification Act of 1988.

              2.17    TAX MATTERS.  Except as set forth in Schedule 2.17
     hereto, all Tax Returns required to be filed prior to the date hereof with
     respect to MTLM, the MTLM Subsidiaries or any of their income, properties,
     franchises or operations have been filed, each such Tax Return has been
     prepared in compliance with all applicable laws and regulations, and all
     such Tax Returns are true, complete and accurate in all material respects.
     All Taxes due and payable by or with respect to MTLM and the MTLM
     Subsidiaries have been paid or accrued on the MTLM Current Balance Sheet
     or will be accrued on its books and records as of the Closing.  Except as
     set forth in Schedule 2.17 hereto:  (i) with respect to each taxable
     period of MTLM and each MTLM Subsidiary after January 1, 1992, no taxable
     period has been audited by the relevant taxing authority; (ii) no
     deficiency or proposed adjustment which has not been settled or otherwise
     resolved for any amount of Taxes has been asserted or assessed by any
     taxing authority; (iii) neither MTLM nor any MTLM Subsidiary has consented
     to extend the time in which any Taxes may be assessed or collected by any
     taxing authority; (iv) neither MTLM nor any MTLM Subsidiary has requested
     or been granted an extension of the time for filing any Tax Return to a
     date later than the Closing Date; (v) there is no action, suit, taxing
     authority proceeding, or audit or claim for refund now in progress,
     pending or threatened against or with respect to MTLM or any MTLM
     Subsidiary regarding Taxes; (vi) neither MTLM nor any MTLM Subsidiary has
     made an election or filed a consent under Section 341(f) of the Internal
     Revenue Code of 1986, as amended (the "CODE") (or any corresponding
     provision of state, local or





                                      9
<PAGE>   18


     foreign law) on or prior to the Closing Date; (vii) there are no Liens for
     Taxes (other than for current Taxes not yet due and payable) upon the
     assets of MTLM or any MTLM Subsidiary; (viii) neither MTLM nor any MTLM
     Subsidiary will be required (A) as a result of a change in method of
     accounting for a taxable period ending on or prior to the Closing Date, to
     include any adjustment under Section 481(c) of the Code (or any
     corresponding provision of state, local or foreign law) in taxable income
     for any taxable period (or portion thereof) beginning after the Closing
     Date or (B) as a result of any "CLOSING AGREEMENT," as described in
     Section 7121 of the Code (or any corresponding provision of state, local
     or foreign law), to include any item of income or exclude any item of
     deduction from any taxable period (or portion thereof) beginning after the
     Closing Date; (ix) neither MTLM nor any MTLM Subsidiary is a party to or
     bound by any tax allocation or tax sharing agreement or has any current or
     potential contractual obligation to indemnify any other Person with
     respect to Taxes; (x) there is no basis for any assessment, deficiency
     notice, 30-day letter or similar notice with respect to any Tax to be
     issued to MTLM or any MTLM Subsidiary with respect to any period on or
     before the Closing Date; (xi) neither MTLM nor any MTLM Subsidiary has
     made any payments, and is or will not become obligated (under any contract
     entered into on or before the Closing Date) to make any payments, that
     will be non-deductible under Section 280G of the Code (or any
     corresponding provision of state, local or foreign law); (xii) neither
     MTLM nor any MTLM Subsidiary has been a United States real property
     holding corporation within the meaning of Section 897(c)(2) of the Code
     (or any corresponding provision of state, local or foreign law) during the
     applicable period specified in Section 897(c)(1)(a)(ii) of the Code (or
     any corresponding provision of state, local or foreign law); (xiii) no
     claim has ever been made by a taxing authority in a jurisdiction where
     MTLM or a MTLM Subsidiary, as the case may be, does not file Tax Returns
     that is or may be subject to Taxes assessed by such jurisdiction; (xiv)
     MTLM and the MTLM Subsidiaries do not have any permanent establishment in
     any foreign country, as defined in the relevant tax treaty between the
     United States of America and such foreign country; (xv) true, correct and
     complete copies of all income and sales Tax Returns filed by or with
     respect to MTLM and the MTLM Subsidiaries for the past two years have been
     furnished or made available to the Shareholders; and (xvi) MTLM and the
     MTLM Subsidiaries will not be subject to any Taxes pursuant to Section
     1374 or Section 1375 of the Code (or any corresponding provision of state,
     local or foreign law) for the period ending at the Closing Date for any
     period for which a Tax Return has not been filed.

              2.18    RECEIVABLES.  All of the MTLM Receivables (as hereinafter
     defined) are valid and legally binding, represent bona fide transactions
     and arose in the ordinary course of business of MTLM and the MTLM
     Subsidiaries.  Except as set forth on Schedule 2.18, all of the MTLM
     Receivables are good and collectible receivables, and will be collected in
     full in accordance with the terms of such receivables (and in any event
     within six months following the Closing), without set off or
     counterclaims, subject to the allowance for doubtful accounts, if any, set
     forth on the MTLM Current Balance Sheet as reasonably adjusted since the
     date of the MTLM Current Balance Sheet in the ordinary course of business
     consistent with past practice.  For purposes of this Agreement, the term
     "MTLM RECEIVABLES" means all receivables of MTLM and the MTLM
     Subsidiaries, including all trade account receivables arising from the
     provision of services or sale of inventory but excluding notes receivable,
     and insurance proceeds receivable.





                                     10
<PAGE>   19



              2.19    SEC FILINGS; ACCURACY OF INFORMATION FURNISHED BY MTLM.
     Except as set forth on Schedule 2.19, MTLM has made all filings required
     to be made by it with the SEC.  No representation, statement or
     information made or furnished by MTLM to the Shareholders or any of the
     Shareholders' representatives, including those contained in this
     Agreement, and the various Schedules attached hereto and the other
     information and statements referred to herein and previously furnished by
     MTLM and the MTLM Subsidiaries or made in the SEC Filings, contains or
     shall contain any untrue statement of a material fact or omits or shall
     omit any material fact necessary to make the information contained therein
     not misleading in light of the circumstances in which they were made.
     MTLM has provided the Shareholders with true, accurate and complete copies
     of all documents listed or described in the SEC Filings or on the various
     Schedules attached hereto.

              2.20    INVENTORY.  All MTLM Assets that consist of inventory
     (including raw materials and work-in-progress): (i) were acquired in the
     ordinary course of business consistent with past practice; (ii) are, in
     the aggregate, of a quality, quantity, and condition useable or saleable
     in the ordinary course of business within MTLM and the MTLM Subsidiaries'
     normal inventory turnover experience; and (iii) are valued at the lower of
     cost or net realizable market value.  Neither MTLM nor any MTLM Subsidiary
     has any material liability with respect to the return or repurchase of any
     goods in the possession of any customer.

              2.21    RESTRICTIONS.    Schedule 2.21 sets forth a list of all
     non-competition, non-solicitation, confidentiality and other restrictive
     covenants to which MTLM and/or any MTLM Subsidiary is a party or otherwise
     bound.  Except as set forth on Schedule 2.21, there are no contracts or
     other conditions, circumstances, events or agreements which would in any
     way limit or restrict the rights of MTLM, MTLM's Affiliates, or the MTLM
     Subsidiaries from engaging in any business anywhere in the world.

              2.22    FULL DISCLOSURE.  No statement by MTLM contained in this
     Article II, the SEC Filings and the Schedules hereto or any written
     statement or certificate furnished to the Shareholders as of its
     respective date contains any untrue statement of a material fact or omits
     to state a material fact necessary in order to make the statements
     contained herein or therein not materially and adversely misleading in
     light of the circumstances under which they were made.

              2.23    NO MATERIAL ADVERSE CHANGE.  Since March 31, 1997, there
     has been no Material Adverse Change in the assets, liabilities, business
     or financial condition of MTLM or a Material Adverse Effect on the ability
     of MTLM to consummate the transactions contemplated hereby.  For purposes
     of this Section 2.23 and Section 8.8, a "MATERIAL ADVERSE CHANGE" or a
     "MATERIAL ADVERSE EFFECT" shall not include (i) the acquisition of or
     agreement to acquire any companies or the assets of any companies; (ii)
     the termination of any agreement to acquire or the unwind or sale of any
     companies or the assets of any companies; (iii) the employment of any
     executive officers; (iv) the placement of, or entering into or termination
     of any agreement to place, any debt or equity securities of MTLM; (v) any
     change in the trading price of the MTLM Shares; or (vi) any change in the
     Board of Directors of MTLM.





                                     11
<PAGE>   20



              2.24    ENVIRONMENTAL MATTERS.  Except as set forth on Schedule
     2.24:

                      (a)      To the best of MTLM's knowledge, MTLM and each
     MTLM Subsidiary is in material compliance with all Environmental, Health
     and Safety Laws (as defined herein) governing its business, operations,
     properties and assets.  Neither MTLM nor any MTLM Subsidiary is currently
     liable for any penalties, fines or forfeitures for failure to comply with
     any Environmental, Health and Safety Laws.

                      (b)      MTLM and each MTLM Subsidiary has obtained, or
     caused to be obtained, and to the best of the MTLM's knowledge, is in
     material compliance with, all applicable and material licenses,
     certificates, permits, approvals and registrations required by the
     Environmental, Health and Safety Laws  (collectively "LICENSES").  Copies
     of such Licenses have been made available to the Shareholders. There are
     no administrative or judicial investigations, notices, claims or other
     proceedings pending or threatened by any Governmental Authority or third
     parties against MTLM or any MTLM Subsidiary, their respective businesses,
     operations, properties, or assets, which question the validity or
     entitlement of MTLM or any MTLM Subsidiary to any License wherein an
     unfavorable decision, ruling or finding could have a Material Adverse
     Effect on MTLM or any MTLM Subsidiary.

                      (c)       Neither MTLM nor any MTLM Subsidiary has
     received or is aware of any non-compliance order, warning letter,
     investigation, notice of violation, claim, suit, action, judgment, or
     administrative or judicial proceeding pending or threatened against or
     involving MTLM or any MTLM Subsidiary, issued by any Governmental
     Authority or third party with respect to any Environmental, Health and
     Safety Laws, which has not been resolved to the satisfaction of the
     issuing Governmental Authority or third party and which could have a
     Material Adverse Effect on MTLM or any MTLM Subsidiary.

                      (d)      To the best of the MTLM's knowledge, neither
     MTLM nor any MTLM Subsidiary has generated, manufactured, used,
     transported, transferred, stored, handled, treated, Discharged, Released
     or disposed of, nor has it allowed or arranged for any third parties to
     generate, manufacture, use, transport, transfer, store, handle, treat,
     Discharge, Release or dispose of, Hazardous Substances or other Waste (as
     defined herein) to or at any location other than a site lawfully permitted
     to receive such Hazardous Substances or other waste for such purposes, nor
     has it performed, arranged for or allowed by any method or procedure such
     generation, manufacture, use, transportation, transfer, storage,
     treatment, spillage, leakage, dumping, Discharge, Release or disposal in
     material contravention of any Environmental, Health and Safety Laws.  To
     the best of the MTLM's knowledge, neither MTLM nor any MTLM Subsidiary has
     generated, manufactured, used, stored, handled, treated, Discharged,
     Released or disposed of, or allowed or arranged for any third parties to
     generate, manufacture, use, store, handle, treat, spill, leak, dump,
     discharge, release or dispose of, any material quantities of Hazardous
     Substances or other waste upon property currently or previously owned or
     leased by it, except as permitted by law.  For purposes of this Agreement,
     the term "HAZARDOUS SUBSTANCES" means any toxic or hazardous substance,
     material, or waste, and any other contaminant, pollutant or constituent
     thereof, whether liquid, solid, semi-solid, sludge and/or gaseous,





                                     12
<PAGE>   21


     including without limitation, chemicals, compounds, metals, by-products,
     pesticides, asbestos containing materials, petroleum or petroleum
     products, and polychlorinated biphenyls, the presence of which requires
     investigation or remediation under any Environmental, Health and Safety
     Laws or which are or become regulated, listed or controlled by, under or
     pursuant to any Environmental Health and Safety Laws.  For purposes of
     this Agreement, the term "WASTE" means agricultural wastes, biomedical
     wastes, biological wastes, bulky wastes, construction and demolition
     debris, garbage, household wastes, industrial solid wastes, liquid wastes,
     recyclable materials, sludge, solid wastes, special wastes, used oils,
     white goods, and yard trash.

                      (e)      To the best of MTLM's knowledge, neither MTLM
     nor any MTLM Subsidiary has caused, nor allowed to be caused or permitted,
     either by action or inaction, a Release or Discharge, or threatened
     Release or Discharge, of any material quantity of Hazardous Substance on,
     into or beneath the surface of any parcel of the MTLM Owned Properties or
     the MTLM Leased Premises or to any properties adjacent thereto which would
     have a Material Adverse Effect on MTLM or the MTLM Subsidiaries.   To the
     best of MTLM's knowledge, there has not occurred, nor is there presently
     occurring, a Release or Discharge, or, threatened Release or Discharge, of
     any material quantity of Hazardous Substances on, into or beneath the
     surface of any parcel of the MTLM Owned Properties or the MTLM Leased
     Premises or to any properties adjacent thereto which would have a Material
     Adverse Effect on MTLM or the MTLM Subsidiaries.  For purposes of this
     Agreement, the terms "RELEASE" and "DISCHARGE" shall have the meanings
     given them in the Environmental, Health and Safety Laws.

                      (f)      To the best of MTLM's knowledge, neither MTLM
     nor any MTLM Subsidiary has generated, handled, manufactured, treated,
     stored, used, shipped, transported, transferred, or disposed of, nor has
     it allowed or arranged, by contract, agreement or otherwise, for any third
     parties to generate, handle, manufacture, treat, store, use, ship,
     transport, transfer or dispose of, any Hazardous Substances or other Waste
     to or at a site which, pursuant to CERCLA or any similar state law has
     been placed or been proposed for placement on the National Priorities List
     or its state equivalent.  Neither MTLM nor any MTLM Subsidiary has
     received notice, and neither MTLM nor any MTLM Subsidiary has knowledge of
     any facts which could give rise to any notice, that MTLM or any MTLM
     Subsidiary is a potentially responsible party for a federal or state
     environmental cleanup site or for corrective action under Environmental
     Health and Safety Laws.  Neither MTLM nor any MTLM Subsidiary has
     submitted or was required to submit any notice pursuant to Section 103(c)
     of CERCLA with respect to the MTLM Leased Premises or the MTLM Owned
     Properties.  Neither MTLM nor any MTLM Subsidiary has received any written
     request for information in connection with any federal or state
     environmental cleanup site, or in connection with any of the real property
     or premises where MTLM or any MTLM Subsidiary has transported, transferred
     or disposed of other Wastes.  Neither MTLM nor any MTLM Subsidiary has
     been required to or has undertaken any response or remedial actions or
     clean-up actions of any kind at the request of any Governmental
     Authorities or at the request of any other third party.  To the best of
     MTLM's knowledge, neither MTLM nor any MTLM Subsidiary has any material
     liability under any Environmental, Health and Safety Laws for personal
     injury, property damage, natural resource damage, or clean up obligations.





                                     13
<PAGE>   22



                      (g)      To the best of MTLM's knowledge, there are no
     Aboveground Storage Tanks or Underground Storage Tanks on the MTLM Owned
     Properties or the MTLM Leased Premises.  For purposes of this Agreement,
     the terms "ABOVEGROUND STORAGE TANKS" and "UNDERGROUND STORAGE TANKS"
     shall have the meanings given them in Section 6901 et seq., as amended, of
     RCRA, or any applicable state or local statute, law, ordinance, code,
     rule, regulation, order ruling, or decree governing Aboveground Storage
     Tanks or Underground Storage Tanks.

                      (h)      Schedule 2.24 identifies (i) all material
     environmental audits, assessments or occupational health studies, of which
     MTLM is aware, undertaken by MTLM, the MTLM Subsidiaries or their agents,
     or by any Governmental Authority, or by any third party, relating to or
     affecting MTLM, the MTLM Subsidiaries or any of the MTLM Leased Premises
     or the MTLM Owned Properties; and (ii) all material citations issued under
     OSHA, or similar state or local statutes, laws, ordinances, codes, rules,
     regulations, orders, rulings, or decrees, relating to or affecting MTLM or
     any MTLM Subsidiary or any of the MTLM Leased Premises or the MTLM Owned
     Properties.

                      (i)      Schedule 2.24 contains a list of the assets of
     MTLM and the MTLM Subsidiaries which have been confirmed to contain
     "ASBESTOS" or "ASBESTOS-CONTAINING MATERIAL" (as such terms are identified
     under the Environmental, Health and Safety Laws).  MTLM and each of the
     MTLM Subsidiaries has operated and continues to operate in material
     compliance with all Environmental, Health and Safety Laws governing the
     handling, use and exposure to and disposal of asbestos or
     asbestos-containing materials.  There are no claims, actions, suits,
     governmental investigations or proceedings before any Governmental
     Authority or third party pending, or threatened against or directly
     affecting MTLM, the MTLM Subsidiaries, or any of their respective assets
     or operations relating to the use, handling or exposure to and disposal of
     asbestos or asbestos-containing materials in connection with their assets
     and operations.

                      (j)      As used in this Agreement, "ENVIRONMENTAL,
     HEALTH AND SAFETY LAWS" means all federal, state, regional or local
     statutes, laws, rules, regulations, codes, orders, plans, injunctions,
     decrees, rulings, and changes or ordinances or judicial or administrative
     interpretations thereof, any of which govern (or purport to govern) or
     relate to pollution, protection of the environment, public health and
     safety, air emissions, water discharges, hazardous or toxic substances,
     solid or hazardous waste or occupational health and safety, as any of
     these terms are or may be defined in such statutes, laws, rules,
     regulations, codes, orders, plans, injunctions, decrees, rulings and
     changes or ordinances, or judicial or administrative interpretations
     thereof, including, without limitation, the United States Department of
     Transportation Table (49 CFR 172, 101) or by the Environmental Protection
     Agency as hazardous substances (40 CFR Part 302) and any amendments
     thereto; the Comprehensive Environmental Response, Compensation and
     Liability Act of 1980, as amended by the Superfund Amendment and
     Reauthorization Act of 1986, 42 U.S.C. Section 9601, et seq. (hereinafter
     collectively "CERCLA"); the Solid Waste Disposal Act, as amended by the
     Resource Conversation and Recovery Act of 1976 and subsequent Hazardous
     and Solid Waste Amendments of 1984, 42 U.S.C. Section 6901 et seq.
     (hereinafter, collectively "RCRA"); the Hazardous Materials Transportation
     Act, as amended, 49 U.S.C. Section 1801, et seq.; the Clean Water Act, as
     amended, 33 U.S.C. Section 1311, et seq.; the Clean Air Act, as amended
     (42 U.S.C. Section 7401-7642); Toxic Substances





                                     14
<PAGE>   23


     Control Act, as amended, 15 U.S.C. Section 2601 et seq.; the Federal
     Insecticide, Fungicide, and Rodenticide Act as amended, 7 U.S.C.  Section
     136-136y ("FIFRA"); the Emergency Planning and Community Right-to-Know Act
     of 1986 as amended, 42 U.S.C. Section 11001, et seq. (Title III of SARA)
     ("EPCRA"); the Occupational Safety and Health Act of 1970, as amended, 29
     U.S.C. Section 651, et seq.  ("OSHA"); any similar state statute, or
     regulations implementing such statutes, laws, ordinances, codes, rules,
     regulations, orders, rulings, or decrees, or which has been or shall be
     determined or interpreted at any time by any Governmental Authority to be
     a hazardous or toxic substance regulated under any other statute, law,
     regulation, order, code, rule, order, or decree.

                      (k)      Schedule 2.24 identifies the operations and
     activities, and locations thereof, which have been conducted and are being
     conducted by MTLM or any MTLM Subsidiary on any of the MTLM Owned
     Properties or the MTLM Leased Premises which have involved the generation,
     accumulation, storage, treatment, transportation, labeling, handling,
     manufacturing, use, spilling, leaking, dumping, discharging, release or
     disposal of any material quantities of Hazardous Substances.

                      (l)      To the best of MTLM's knowledge, none of the
     MTLM Owned Properties or MTLM Leased Premises presently includes, or has
     been constructed upon, any "WETLANDS" as defined under applicable
     Environmental, Health and Safety Laws.

                      (m)      As used in this Section 2.24, the term "MTLM"
     is deemed to refer to MTLM or any of the MTLM Subsidiaries.

                      (n)      As used in Section 2.24, the terms "MTLM OWNED
     PROPERTIES" and "MTLM LEASED PREMISES" are deemed to refer only to the
     properties currently owned or leased by MTLM.

              2.25    EMPLOYEE BENEFIT PLANS.

                      (a)      Compliance with Law.  With respect to each MTLM
     Employee Benefit Plan (as defined below) (i) each has been administered in
     all material respects in compliance with its terms and with all applicable
     laws, including, but not limited to, the Employee Retirement Income and
     Security Act of 1974, as amended ("ERISA") and the Code; (ii) no actions,
     suits, claims or disputes are pending or, to the best of MTLM's knowledge,
     threatened; (iii) no audits, inquiries, reviews, proceedings, claims, or
     demands are pending with any governmental or regulatory agency; (iv) there
     are no facts which could give rise to any material liability in the event
     of any such investigation, claim, action, suit, audit, review, or other
     proceeding; (v) all material reports, returns, and similar documents
     required to be filed with any governmental agency or distributed to any
     plan participant have been duly or timely filed or distributed; and (vi)
     no "PROHIBITED TRANSACTION" which could give rise to any material
     liability of MTLM or any MTLM Subsidiary  has occurred within the meaning
     of the applicable provisions of ERISA or the Code.  As used in this
     Section 2.25, MTLM Employee Benefit Plan means any employee benefit plan
     or arrangement of MTLM and each MTLM Subsidiary, including but not limited
     to employee pension benefit plans, as defined in Section 3(2) of ERISA,
     multiemployer plans, as defined in Section 3(37) of ERISA, employee
     welfare benefit plans, as defined in Section 3(1) of ERISA, deferred
     compensation plans, stock option plans, bonus plans,





                                     15
<PAGE>   24


     stock purchase plans, hospitalization, disability and other insurance
     plans, severance or termination pay plans and policies, whether or not
     described in Section 3(3) of ERISA, in which employees, their spouses or
     dependents, of MTLM or any MTLM Subsidiary participate.

                      (b)      Multiemployer Plans.  With respect to any
     multiemployer plan, as described in Section 4001(a)(3) of ERISA ("MPPA
     PLAN") (i) all contributions required to be made with respect to employees
     of MTLM or any MTLM Subsidiary have been timely paid; (ii) neither MTLM
     nor any MTLM Subsidiary has incurred or is expected to incur, directly or
     indirectly, any withdrawal liability under ERISA with respect to any such
     plan (whether by reason of the transactions contemplated by the Agreement
     or otherwise); (iii) Schedule 2.25 sets forth (A) the withdrawal liability
     under ERISA to each MPPA Plan, (B) the date as of which such amount was
     calculated, and (C) the method for determining the withdrawal liability;
     and (iv) no such plan is (or is expected to be) insolvent or in
     reorganization and no accumulated funding deficiency (as defined in
     Section 302 of ERISA and Section 412 of the Code), whether or not waived,
     exists or is expected to exist with respect to any such plan.

                      (c)      Welfare Plans.  Other than as disclosed in
     Schedule 2.25, (i) neither MTLM nor any MTLM Subsidiary is obligated under
     any employee welfare benefit plan as described in Section 3(1) of ERISA
     ("WELFARE PLAN"), whether or not disclosed in Schedule 2.25, to provide
     medical or death benefits with respect to any employee or former employee
     of MTLM, any MTLM Subsidiary or their predecessors after termination of
     employment, other than as required by Section 4980B of the Code; (ii) MTLM
     and each MTLM Subsidiary have complied in all material respects with the
     notice and continuation coverage requirements of Section 4980B of the Code
     and the regulations thereunder with respect to each Welfare Plan that is,
     or was during any taxable year for which the statute of limitations on the
     assessment of federal income taxes remains, open, by consent or otherwise,
     a group health plan within the meaning of Section 5000(b)(1) of the Code,
     and (iii) there are no reserves, assets, surplus or prepaid premiums under
     any Welfare Plan which is an Employee Benefit Plan.  The consummation of
     the transactions contemplated by this Agreement will not entitle any
     individual to severance pay, and, will not accelerate the time of payment
     or vesting, or increase the amount of compensation, due to any individual.

              2.26 INSURANCE. MTLM and each MTLM Subsidiary is covered by
     valid, outstanding and enforceable policies of insurance issued to it by
     reputable insurers covering its properties, assets and businesses against
     risks of the nature normally insured against by businesses in the same or
     similar lines of business and in coverage amounts typically and reasonably
     carried by such businesses (the "MTLM INSURANCE POLICIES"), provided,
     however, MTLM and the MTLM Subsidiaries generally do not insure their
     machinery and equipment except as MTLM or the MTLM Subsidiaries may be
     required to insure such assets by third party lenders or lessors.  Such
     MTLM Insurance Policies are in full force and effect, and all premiums due
     thereon have been paid. As of the Closing Date each of the MTLM Insurance
     Policies will be in full force and effect.  None of the MTLM Insurance
     Policies will lapse or terminate as a result of the transactions
     contemplated by this Agreement. MTLM and each MTLM Subsidiary has complied
     with the provisions of such MTLM Insurance Policies.  Schedule 2.26
     contains (i) a complete and correct list of all MTLM Insurance Policies
     and all





                                     16
<PAGE>   25


     amendments and riders thereto (copies of which have been provided to the
     Shareholders) and (ii) a detailed description of each pending claim under
     any of the MTLM Insurance Policies for an amount in excess of $50,000 that
     relates to loss or damage to the properties, assets or businesses of MTLM
     or any MTLM Subsidiary. Neither MTLM nor any MTLM Subsidiary has failed to
     give, in a timely manner, any notice required under any of the MTLM
     Insurance Policies to preserve its rights thereunder.

              2.27    REAL ESTATE.  Attached hereto as Schedule 2.27(a) are
     true and correct copies of all schedules listing each parcel of real
     property owned (the "MTLM OWNED PROPERTIES") or leased (the "MTLM LEASED
     PROPERTIES") by MTLM or the MTLM Subsidiaries that were given to MTLM in
     connection with MTLM's acquisition of (i) HouTex; (ii) MacLeod; (iii)
     Reserve; and (iv) EMCO, together with the corresponding representations
     and warranties contained in the respective purchase agreements.  Other
     than (i) the properties listed in such schedules, (ii) MTLM principal
     office located at 500 N. Dearborn Street, and (iii) the properties listed
     on Schedule 2.27(b), MTLM and the MTLM Subsidiaries do not own or lease
     any parcel of property.  To the best of MTLM's knowledge, nothing has
     occurred since the respective closing dates of the acquisitions of (i)
     HouTex (ii) MacLeod (iii) Reserve and (iv) EMCO to cause the
     representations and warranties contained in the respective purchase
     agreements to become inaccurate in any material respects.

              2.28    CONDUCT OF BUSINESS SINCE MARCH 31, 1997.  Except as set
     forth on Schedule 2.28, MTLM between March 31, 1997 and the date of this
     Agreement has conducted the businesses of MTLM and each MTLM Subsidiary
     only in the ordinary course of business, consistent with past practice.
     By way of amplification and not limitation, except as set forth on
     Schedule 2.28, the SEC Filings, or as otherwise contemplated by this
     Agreement neither MTLM nor any MTLM Subsidiary has directly or indirectly,
     done or agreed to do any of the following:

                      (a)      amended or otherwise changed its charter or
     bylaws;

                      (b)      issued, sold, pledged, disposed of, granted,
     encumbered, or authorized the issuance, sale, pledge, disposition, grant
     or encumbrance of (i) with respect to MTLM or any MTLM Subsidiary, any
     shares of its capital stock of any class, or any options, warrants,
     convertible securities or other rights of any kind to acquire any shares
     of such capital stock, or any other ownership interest, of it, or, (ii)
     any of their respective assets, tangible or intangible, except in the
     ordinary course of business consistent with past practice;

                      (c)      increased the compensation payable or to become
     payable to its respective officers or directors, or, except as presently
     bound to do, granted any severance or termination pay to, or entered into
     any employment or severance agreement with, any of its respective
     directors or officers, or established, adopted, entered into or amended or
     took any action to accelerate any rights or benefits under any collective
     bargaining, bonus, profit sharing, trust, compensation, stock option,
     restricted stock, pension, retirement, deferred compensation, employment,
     termination, severance or other plan, agreement, trust, fund, policy or
     arrangement for the benefit of any directors, officers or employees;





                                     17
<PAGE>   26



                      (d)      taken any action other than in the ordinary
     course of business and in a manner consistent with past practice with
     respect to accounting policies or procedures; or

                      (e)      (i) acquired (including, without limitation, for
     cash or shares of stock, by merger, consolidation, or acquisition of stock
     or assets) any interest in any corporation, partnership or other business
     organization or division thereof of any assets, or made any investment
     either by purchase of stock or securities, contributions of capital or
     property transfer, or, except in the ordinary course of business,
     consistent with past practice, purchase any property or assets of any
     other Person, (ii) incurred any indebtedness for borrowed money or issued
     any debt securities or assumed, guaranteed or endorsed or otherwise as an
     accommodation became responsible for, the obligations of any Person, or
     made any loans or advances, or (iii) entered into any Contract other than
     in the ordinary course of business, consistent with past practice.


                                 ARTICLE III

                        REPRESENTATIONS AND WARRANTIES
                                  OF MERGECO

              As a material inducement to the Company and the Shareholders to
     enter into this Agreement and to consummate the transactions contemplated
     hereby, MTLM and Mergeco jointly and severally make the following
     representations and warranties to the Company and the Shareholders:

              3.1     CORPORATE STATUS.  Mergeco is a corporation duly
     organized, validly existing and in good standing under the laws of the
     State of Illinois.

              3.2     CORPORATE POWER AND AUTHORITY.  Mergeco has the corporate
     power and authority to execute and deliver this Agreement and to perform
     its obligations hereunder and will have, at the time of Closing, the
     corporate power and authority to consummate the transactions contemplated
     hereby. Mergeco has taken all action necessary to authorize its execution
     and delivery of this Agreement and the performance of its obligations
     hereunder and will have, at the time of Closing, taken all actions
     necessary to authorize the consummation of the transactions contemplated
     hereby.

              3.3     ENFORCEABILITY.  This Agreement has been duly executed
     and delivered by Mergeco and constitutes a legal, valid and binding
     obligation of Mergeco, enforceable against Mergeco in accordance with its
     terms, except as the same may be limited by applicable bankruptcy,
     insolvency, reorganization, moratorium or similar laws affecting the
     enforcement of creditors' rights generally and general equitable
     principles regardless of whether such enforceability is considered in a
     proceeding at law or in equity.

              3.4     NO VIOLATION.  Except for any applicable requirements of
     the HSR Act, the execution and delivery of this Agreement by Mergeco, the
     performance by it of its obligations hereunder and





                                     18
<PAGE>   27


     the consummation by it of the transactions contemplated by this Agreement
     will not (i) contravene any provision of the articles of incorporation or
     bylaws of Mergeco, (ii) violate or conflict with any law, statute,
     ordinance, rule, regulation, decree, writ, injunction, judgment or order
     of any Governmental Authority or of any arbitration award which is either
     applicable to, binding upon or enforceable against Mergeco, (iii) conflict
     with, result in any breach of, or constitute a default (or an event which
     would, with the passage of time or the giving of notice or both,
     constitute a default) under, or give rise to a right to terminate, amend,
     modify, abandon or accelerate, any Contract which is applicable to,
     binding upon or enforceable against Mergeco,  (iv) result in or require
     the creation or imposition of any Lien upon or with respect to any of the
     property or assets of Mergeco, or (v) require the consent, approval,
     authorization or permit of, or filing with or notification to, any
     Governmental Authority, any court or tribunal or any other Person, except
     the Secretary of State of the State of Illinois, or the SEC or other
     filings required to be made by MTLM.

              3.5     NO COMMISSIONS.  Mergeco has incurred no obligation for
     any finder's or broker's or agent's fees or commissions or similar
     compensation in connection with the transactions contemplated hereby.

              3.6     MERGECO CAPITALIZATION.  Mergeco's authorized capital
     stock consists of one thousand (1000) shares of common stock, no par
     value, of which one hundred (100) shares are issued and outstanding all of
     which are validly issued, fully paid and non-assessable.  Except for this
     Agreement, there are no options, warrants, preemptive rights, conversion
     privileges or other contracts which give any Person the right to acquire
     any capital stock of Mergeco or any interest therein.  MTLM is the
     beneficial and record owner of all of the outstanding shares of common
     stock of Mergeco, free and clear of all Liens.

              3.7     BUSINESS ACTIVITY.  Mergeco has not engaged in any
     business activity of any nature prior to the date of this Agreement.


                                  ARTICLE IV

                       REPRESENTATIONS AND WARRANTIES OF
                        THE SHAREHOLDERS AND THE COMPANY

              As a material inducement to MTLM to enter into this Agreement and
     to consummate the transactions contemplated hereby, the Shareholders and
     the Company hereby jointly and severally make the following
     representations and warranties to MTLM:

              4.1     CORPORATE STATUS. The Company is a corporation duly
     organized, validly existing and in good standing under the laws of the
     State of Illinois.  The Company has the requisite power and authority to
     own or lease its property and to carry on its business as now being
     conducted. The Company is legally qualified to transact business as a
     foreign corporation in all jurisdictions where the nature of its property
     and the conduct of its business requires such qualification (all of which





                                     19
<PAGE>   28


     jurisdictions are listed on Schedule 4.1) and is in good standing in each
     of the jurisdictions in which it is so qualified, except where the failure
     to so qualify would not have a Material Adverse Effect on the Company.
     There is no pending or threatened proceeding for the dissolution,
     liquidation, insolvency or rehabilitation of the Company.  Each entity
     listed as a subsidiary of the Company on Schedule 4.8 hereto (each a
     "SUBSIDIARY" and collectively the "SUBSIDIARIES") is a corporation duly
     organized, validly existing and in good standing under the laws of its
     state of incorporation.  Each Subsidiary has the requisite power and
     authority to own or lease its property and to carry on its business as now
     being conducted.  Each Subsidiary is legally qualified to transact
     business as a foreign corporation in all jurisdictions where the nature of
     its property and the conduct of its business requires such qualification
     (all of which jurisdictions are listed on Schedule 4.1) and is in good
     standing in each of the jurisdictions in which it is so qualified.  There
     is no pending or threatened proceeding for the dissolution, liquidation,
     insolvency or rehabilitation of any Subsidiary.  Except as set forth on
     Schedule 4.8, the Company owns all of the issued and outstanding capital
     stock of each Subsidiary.

              4.2     POWER AND AUTHORITY.  The Company has the power and
     authority to execute and deliver this Agreement, to perform its
     obligations hereunder and to consummate the transactions contemplated
     hereby. The Company has taken all action necessary to authorize the
     execution and delivery of this Agreement, the performance of its
     respective obligations hereunder and the consummation of the transactions
     contemplated hereby.  Each of the Shareholders is a resident of the State
     of Illinois and has the requisite competence to execute and deliver this
     Agreement and to perform his obligations hereunder and to consummate the
     transactions contemplated hereby.

              4.3     ENFORCEABILITY.  This Agreement has been duly executed
     and delivered by the Company and each of the Shareholders and constitutes
     the legal, valid and binding obligation of each of them, enforceable
     against them in accordance with its terms, except as the same may be
     limited by applicable bankruptcy, insolvency, reorganization, moratorium
     or similar laws affecting the enforcement of creditors' rights generally
     and general equitable principles regardless of whether such enforceability
     is considered in a proceeding at law or in equity.

              4.4     CAPITALIZATION.  Schedule 4.4 sets forth, with respect to
     the Company and each Subsidiary, (i) the number of authorized shares of
     each class of its capital stock, (ii) the number of issued and outstanding
     shares of each class of its capital stock, and (iii) the number of shares
     of each class of its capital stock which are held in treasury.  All of the
     issued and outstanding shares of capital stock of the Company and each
     Subsidiary  (i) have been duly authorized and validly issued and are fully
     paid and non-assessable, (ii) were issued in compliance with all
     applicable state and federal securities laws, and (iii) were not issued in
     violation of any preemptive rights or rights of first refusal.  No
     preemptive rights or rights of first refusal exist with respect to the
     shares of capital stock of the Company or any Subsidiary, and no such
     rights arise by virtue of or in connection with the transactions
     contemplated hereby.  There are no outstanding or authorized rights,
     options, warrants, convertible securities, subscription rights, conversion
     rights, exchange rights or other agreements or commitments of any kind
     that could require the Company or any Subsidiary to issue or sell any
     shares of its capital stock (or securities convertible into or
     exchangeable for shares of its capital stock).





                                     20
<PAGE>   29


     Except as set forth on Schedule 4.4, there are no outstanding stock
     appreciation, phantom stock, profit participation or other similar rights
     with respect to the Company or any Subsidiary.  Other than pursuant to the
     James H. Cozzi Sales Agreement, there are no proxies, voting rights or
     other agreements or understandings with respect to the voting or transfer
     of the capital stock of the Company or any Subsidiary.  Neither the
     Company nor any Subsidiary is obligated to redeem or otherwise acquire any
     of its outstanding shares of capital stock.

              4.5     SHAREHOLDERS OF THE COMPANY.  Schedule 4.5 sets forth,
     with respect to the Company, (i) the name, address and federal taxpayer
     identification number of, and the number of outstanding shares of each
     class of its capital stock owned by, each shareholder of record as of the
     close of business on the date of this Agreement; and (ii) the name,
     address and federal taxpayer identification number of, and number of
     shares of each class of its capital stock beneficially owned by, each
     beneficial owner of outstanding shares of capital stock (to the extent
     that record and beneficial ownership of any such shares are different).
     The Shareholders are the holders of all issued and outstanding shares of
     capital stock of the Company, and the Shareholders own such shares as set
     forth on Schedule 4.5, free and clear of all Liens, restrictions and
     claims of any kind, except as set forth on Schedule 4.5.  Such shares are
     not subject to any voting trust agreement, proxy or other Contract.

              4.6     NO VIOLATION.  Except as set forth on Schedule 4.6 and
     any applicable requirements of the HSR Act, the execution and delivery of
     this Agreement by the Company and the Shareholders, the performance by
     each of them of their respective obligations hereunder and the
     consummation by them of the transactions contemplated by this Agreement
     will not (i) contravene any provision of the articles of incorporation or
     bylaws of the Company, (ii) violate or conflict with any law, statute,
     ordinance, rule, regulation, decree, writ, injunction, judgment or order
     of any Governmental Authority or of any arbitration award which is either
     applicable to, binding upon or enforceable against the Company or the
     Shareholders; (iii) conflict with, result in any breach of, or constitute
     a default (or an event which would, with the passage of time or the giving
     of notice or both, constitute a default) under, or give rise to a right to
     terminate, amend, modify, abandon or accelerate, any Contract which is
     applicable to, binding upon or enforceable against the Company or the
     Shareholders, (iv) result in or require the creation or imposition of any
     Lien upon or with respect to any of the property or assets of the Company,
     or (v) require the consent, approval, authorization or permit of, or
     filing with or notification to, any Governmental Authority, any court or
     tribunal or any other Person, except the Secretary of State of the State
     of Illinois.

              4.7     RECORDS.  The copies of the respective articles of
     incorporation and bylaws of the Company which were provided to MTLM are
     true, accurate and complete and reflect all amendments made through the
     date of this Agreement.  The minute books for the Company provided to MTLM
     for review were correct and complete as of the date of such review, no
     further entries have been made through the date of this Agreement, such
     minute books contain the true signatures of the persons purporting to have
     signed them, and such minute books contain an accurate record of all
     corporate actions of the shareholders and directors (and any committees
     thereof) of the Company taken by written consent or at a meeting since
     incorporation.  All material corporate actions taken by the





                                     21
<PAGE>   30


     Company have been duly authorized or ratified.  All accounts, books,
     ledgers and official and other records of the Company have been fully,
     properly and accurately kept and completed in all material respects, and
     there are no material inaccuracies or discrepancies of any kind contained
     therein.  The stock ledgers of the Company, as previously provided to
     MTLM, contain accurate and complete records of all issuances, transfers
     and cancellations of shares of the capital stock of the Company.

              4.8     SUBSIDIARIES.  Except as set forth on Schedule 4.8, the
     Company does not own, directly or indirectly, more than fifty percent
     (50%) of any outstanding voting securities of or other interests in, or
     control, any other corporation, partnership, joint venture or other
     business entity.  In addition, Schedule 4.8 lists every other business
     entity in which the Company or its Subsidiaries has any ownership
     interest.  Except as set forth on Schedule 4.8, the Company does not have
     any liabilities or obligations, whether accrued, absolute, contingent or
     otherwise, arising from its interest in the entities set forth on such
     schedule.

              4.9     FINANCIAL STATEMENTS.  The Shareholders have delivered to
     MTLM (i) the consolidated financial statements of the Company as of
     December 31, 1996 and 1995, including the notes thereto, audited by
     Deloitte & Touche LLP and (ii) the March 31, 1997 unaudited consolidated
     financial statements of the Company (collectively, the "FINANCIAL
     STATEMENTS"), copies of which are attached as Schedule 4.9 hereto.  The
     balance sheet dated as of March 31, 1997 included in the Financial
     Statements is referred to herein as the "CURRENT BALANCE SHEET".  The
     Financial Statements fairly present the combined and consolidated
     financial position of the Company and the Subsidiaries at each of the
     balance sheet dates and the results of operations for the periods covered
     thereby, and have been prepared in accordance with GAAP consistently
     applied throughout the periods indicated; provided, however, the parties
     hereto acknowledge that the March 31, 1997 consolidated financial
     statements omit footnotes.  The books and records of the Company and each
     Subsidiary fully and fairly reflect the transactions, properties, assets
     and liabilities of the Company and each Subsidiary.  Unless noted therein,
     there are no material special or non-recurring items of income or expense
     during the periods covered by the Financial Statements, and the balance
     sheets included in the Financial Statements do not reflect any writeup or
     revaluation increasing the book value of any assets, except as
     specifically disclosed in the notes thereto or otherwise in accordance
     with GAAP.  The Financial Statements reflect all adjustments necessary for
     a fair presentation of the financial information contained therein.

              4.10    CHANGES SINCE THE CURRENT BALANCE SHEET DATE.  Except as
     disclosed in Schedule 4.10, since the date of the Current Balance Sheet,
     neither the Company nor any Subsidiary has (i) issued any capital stock or
     other securities; (ii) made any distribution of or with respect to its
     capital stock or other securities or purchased or redeemed any of its
     securities; (iii) paid any bonus to or increased the rate of compensation
     of any of its officers or salaried employees or amended any other terms of
     employment of such persons; (iv) sold, leased or transferred any of its
     properties or assets other than in the ordinary course of business
     consistent with past practice; (v) made or obligated itself to make
     capital expenditures out of the ordinary course of business consistent
     with past practice; (vi) made any payment in respect of its liabilities
     other than in the ordinary course of business consistent with past
     practice; (vii) incurred any obligations or liabilities (including any
     indebtedness) or entered into any transaction or series of transactions
     involving in excess of $100,000 in the aggregate out of the ordinary
     course of business, except for this Agreement and the transactions
     contemplated hereby; (viii) suffered any theft, damage, destruction or
     casualty loss, not covered by insurance and for which a timely claim was
     filed, in excess of $100,000 in the aggregate; (ix) suffered any
     extraordinary losses (whether or not covered by insurance); (x) waived,
     canceled, compromised or released any rights having a value in excess of
     $100,000 in the aggregate; (xi) made or adopted any change in its
     accounting practice or policies; (xii) made any adjustment to its books
     and records other than in respect of the conduct of its business
     activities in the ordinary course consistent with past practice; (xiii)
     entered





                                     22
<PAGE>   31


     into any transaction with any Affiliate other than intercompany
     transactions in the ordinary course of business consistent with past
     practice; (xiv) entered into any employment agreement; (xv) terminated,
     amended or modified any agreement involving an amount in excess of
     $100,000; (xvi) imposed any security interest or other Lien on any of its
     assets other than in the ordinary course of business consistent with past
     practice; (xvii) delayed paying any account payable which is due and
     payable except to the extent being contested in good faith and except in
     the ordinary course of its business; (xviii) made or pledged any
     charitable contribution other than in the ordinary course of business
     consistent with past practice; (xix) entered into any other transaction or
     been subject to any event which has or may have a Material Adverse Effect
     on the Company or any Subsidiary; or (xx) agreed to do or authorized any
     of the foregoing.

              4.11    LIABILITIES.  Except as set forth on Schedule 4.11,
     neither the Company nor any Subsidiary has any liabilities or obligations,
     whether accrued, absolute, contingent or otherwise, except (i) to the
     extent reflected or taken into account in the Current Balance Sheet and
     not heretofore paid or discharged, (ii) to the extent specifically set
     forth in or incorporated by express reference in any of the Schedules
     attached hereto, (iii) liabilities incurred in the ordinary course of
     business consistent with past practice since the date of the Current
     Balance Sheet (none of which relates to breach of contract, breach of
     warranty, tort, infringement or violation of law, or which arose out of
     any action, suit, claim, governmental investigation or arbitration
     proceeding), (iv) normal accruals, reclassifications, and audit
     adjustments which would be reflected on an audited financial statement and
     which would not be material in the aggregate, and (v) liabilities incurred
     in the ordinary course of business prior to the date of the Current
     Balance Sheet which, in accordance with GAAP consistently applied, were
     not recorded thereon.  The consolidated net worth of the Company and its
     Subsidiaries will be no less than $7.5 million as of the Closing Date.

              4.12    LITIGATION.  Except as set forth on Schedule 4.12, there
     is no action, suit, or other legal or administrative proceeding or
     governmental investigation, pending or, to the best of the  Shareholders'
     knowledge, threatened, anticipated or contemplated against, by or
     affecting the Company or any Subsidiary or any of their properties or
     assets, or the Shareholders, or which question the validity or
     enforceability of this Agreement or the transactions contemplated hereby,
     and there is no basis for any of the foregoing.  There are no outstanding
     orders, decrees or stipulations issued by any Governmental Authority in
     any proceeding to which the Company or any Subsidiary is or was a party
     which have not been complied with in full or which continue to impose any
     material obligations on the Company or any Subsidiary.





                                     23
<PAGE>   32



              4.13    ENVIRONMENTAL MATTERS.  Except as set forth on Schedule
     4.13:

                      (a)      To the best of the Shareholders' knowledge, the
     Company and each Subsidiary is in material compliance with all
     Environmental, Health and Safety Laws (as defined herein) governing its
     business, operations, properties and assets.  Neither the Company nor any
     Subsidiary is currently liable for any penalties, fines or forfeitures for
     failure to comply with any Environmental, Health and Safety Laws.

                      (b)      The Company and each Subsidiary has obtained, or
     caused to be obtained, and to the best of the Shareholders' knowledge, is
     in material compliance with, all applicable and material Licenses.  Copies
     of such Licenses have been provided to MTLM.  There are no administrative
     or judicial investigations, notices, claims or other proceedings pending
     or threatened by any Governmental Authority or third parties against the
     Company or any Subsidiary, their respective businesses, operations,
     properties, or assets, which question the validity or entitlement of the
     Company or any Subsidiary to any License wherein an unfavorable decision,
     ruling or finding could have a Material Adverse Effect on the Company or
     any Subsidiary.

                      (c)       Neither the Company nor any Subsidiary has
     received or is aware of any non-compliance order, warning letter,
     investigation, notice of violation, claim, suit, action, judgment, or
     administrative or judicial proceeding pending or threatened against or
     involving the Company or any Subsidiary, issued by any Governmental
     Authority or third party with respect to any Environmental, Health and
     Safety Laws, which has not been resolved to the satisfaction of the
     issuing Governmental Authority or third party and which could have a
     Material Adverse Effect on the Company or any Subsidiary.

                      (d)      To the best of the Shareholders' knowledge,
     neither the Company nor any Subsidiary has generated, manufactured, used,
     transported, transferred, stored, handled, treated, Discharged, Released
     or disposed of, nor has it allowed or arranged for any third parties to
     generate, manufacture, use, transport, transfer, store, handle, treat,
     Discharge, Release or dispose of, Hazardous Substances or other Waste (as
     defined herein) to or at any location other than a site lawfully permitted
     to receive such Hazardous Substances or other waste for such purposes, nor
     has it performed, arranged for or allowed by any method or procedure such
     generation, manufacture, use, transportation, transfer, storage,
     treatment, spillage, leakage, dumping, Discharge, Release or disposal in
     material contravention of any Environmental, Health and Safety Laws.  To
     the best of the Shareholders' knowledge, neither the Company nor any
     Subsidiary has generated, manufactured, used, stored, handled, treated,
     Discharged, Released or disposed of, or allowed or arranged for any third
     parties to generate, manufacture, use, store, handle, treat, spill, leak,
     dump, discharge, release or dispose of, any material quantities of
     Hazardous Substances or other waste upon property currently or previously
     owned or leased by it, except as permitted by law.

                      (e)      To the best of the Shareholders' knowledge,
     neither the Company nor any Subsidiary has caused, nor allowed to be
     caused or permitted, either by action or inaction, a Release or Discharge,
     or threatened Release or Discharge, of any material quantity of Hazardous
     Substance





                                     24
<PAGE>   33


     on, into or beneath the surface of any parcel of the Owned Properties or
     the Leased Premises or to any properties adjacent thereto which would have
     a Material Adverse Effect on the Company and its Subsidiaries.  To the
     best of Shareholders' knowledge, there has not occurred, nor is there
     presently occurring, a Release or Discharge, or threatened Release or
     Discharge, of any material quantity of Hazardous Substances on, into or
     beneath the surface of any parcel of the Owned Properties or the Leased
     Premises or to any properties adjacent thereto which would have a Material
     Adverse Effect on the Company and its Subsidiaries.

                      (f)      To the best of the Shareholders' knowledge,
     neither the Company nor any Subsidiary has generated, handled,
     manufactured, treated, stored, used, shipped, transported, transferred, or
     disposed of, nor has it allowed or arranged, by contract, agreement or
     otherwise, for any third parties to generate, handle, manufacture, treat,
     store, use, ship, transport, transfer or dispose of, any Hazardous
     Substances or other Waste to or at a site which, pursuant to CERCLA or any
     similar state law has been placed or been proposed for placement on the
     National Priorities List or its state equivalent.  Neither the Company,
     any Subsidiary nor the Shareholders has received notice, and neither the
     Company, any Subsidiary nor the Shareholders has knowledge of any facts
     which could give rise to any notice, that the Company or any Subsidiary is
     a potentially responsible party for a federal or state environmental
     cleanup site or for corrective action under Environmental Health and
     Safety Laws.  Neither the Company nor any Subsidiary has submitted or was
     required to submit any notice pursuant to Section 103(c) of CERCLA with
     respect to the Leased Premises or the Owned Properties.  Neither the
     Company nor any Subsidiary has received any written request for
     information in connection with any federal or state environmental cleanup
     site, or in connection with any of the real property or premises where the
     Company or any Subsidiary has transported, transferred or disposed of
     other Wastes.  Neither the Company nor any Subsidiary has been required or
     has undertaken any response or remedial actions or clean-up actions of any
     kind at the request of any Governmental Authorities or at the request of
     any other third party.  To the best of the Shareholders' knowledge,
     neither the Company nor any Subsidiary has any material liability under
     any Environmental, Health and Safety Laws for personal injury, property
     damage, natural resource damage, or clean up obligations.

                      (g)      To the best of the Shareholders' knowledge,
     there are no Aboveground Storage Tanks or Underground Storage Tanks on the
     Owned Properties or the Leased Premises.

                      (h)      Schedule 4.13 identifies (i) all material
     environmental audits, assessments or occupational health studies, of which
     the Company or the Shareholders are aware, undertaken by the Company, the
     Subsidiaries or their agents, or by the Shareholders, or by any
     Governmental Authority, or by any third party, relating to or affecting
     the Company, the Subsidiaries or any of the Leased Premises or the Owned
     Properties; and (ii) all material citations issued under OSHA, or similar
     state or local statutes, laws, ordinances, codes, rules, regulations,
     orders, rulings, or decrees, relating to or affecting the Company or any
     Subsidiary or any of the Leased Premises or the Owned Properties.

                      (i)      Schedule 4.13 contains a list of the assets of
     the Company and the Subsidiaries which have been confirmed to contain
     "ASBESTOS" or "ASBESTOS-CONTAINING MATERIAL" (as such terms





                                     25
<PAGE>   34


     are identified under the Environmental, Health and Safety Laws).  The
     Company and each of the Subsidiaries has operated and continues to operate
     in material compliance with all Environmental, Health and Safety Laws
     governing the handling, use and exposure to and disposal of asbestos or
     asbestos-containing materials. There are no claims, actions, suits,
     governmental investigations or proceedings before any Governmental
     Authority or third party pending, or threatened against or directly
     affecting the Company, the Subsidiaries, or any of their respective assets
     or operations relating to the use, handling or exposure to and disposal of
     asbestos or asbestos-containing materials in connection with their assets
     and operations.

                      (j)      Schedule 4.13 identifies the operations and
     activities, and locations thereof, which have been conducted and are being
     conducted by the Company or any Subsidiary on any of the Owned Properties
     or the Leased Premises which have involved the generation, accumulation,
     storage, treatment, transportation, labeling, handling, manufacturing,
     use, spilling, leaking, dumping, discharging, release or disposal of any
     material quantities of Hazardous Substances.

                      (k)      To the best of Shareholders' knowledge, none of
     the Owned Properties or Leased Premises presently includes, or has been
     constructed upon, any "WETLANDS" as defined under applicable
     Environmental, Health and Safety Laws.

                      (l)      As used in this Section 4.13, the term "COMPANY"
     is deemed to refer to the Company or any of its Subsidiaries.

                      (m)      As used in Section 4.13, the terms "OWNED
     PROPERTIES" and "LEASED PREMISES" are deemed to refer to only the
     properties currently owned or leased by the Company.

              4.14    REAL ESTATE.

                      (a)      Neither the Company nor any Subsidiary owns any
     real property or any interest therein except as set forth on Schedule
     4.14(a) (the "OWNED PROPERTIES"), which Schedule sets forth the location
     and size of, and principal improvements and buildings on, the Owned
     Properties.  Except as set forth on Schedule 4.14(a), with respect to each
     such parcel of Owned Property:

                      (i)       the Company or a Subsidiary has good and
              marketable title to each parcel of its Owned Property, free and
              clear of any Lien other than (x) liens for real estate taxes not
              yet due and payable; (y) recorded easements, covenants, and other
              restrictions which do not materially impair the current use,
              occupancy or value of the property subject thereto, and (z)
              encumbrances and restrictions described in the title insurance
              policies therefor, all of which policies have been previously
              delivered to MTLM.

                      (ii)     there are no pending or, to the best of the
              Shareholders' knowledge, threatened condemnation proceedings,
              suits or administrative actions relating to the





                                     26
<PAGE>   35


              Owned Properties or other matters affecting adversely the current
              use, occupancy or value thereof;

                      (iii)    to the best of the Shareholders' knowledge, (w)
              the legal descriptions for the parcels of Owned Property
              contained in the deeds thereof describe such parcels fully and
              adequately; (x) the buildings and improvements are located within
              the boundary lines of the described parcels of land, are not in
              violation of applicable setback requirements, local comprehensive
              plan provisions, zoning laws and ordinances (and none of the
              properties or buildings or improvements thereon are subject to
              "PERMITTED NON-CONFORMING USE" or "PERMITTED NON-CONFORMING
              STRUCTURE" classifications), building code requirements, permits,
              licenses or other forms of approval by any Governmental
              Authority, and do not encroach on any easement which may burden
              the land; (y) the land does not serve any adjoining property for
              any purpose inconsistent with the use of the land; and (z) the
              Owned Properties are not located within any flood plain (such
              that a mortgagee would require a mortgagor to obtain flood
              insurance) or subject to any similar type restriction for which
              any permits or licenses necessary to the use thereof have not
              been obtained;

                      (iv)     to the best of the Shareholders' knowledge, all
              facilities have received all material approvals of Governmental
              Authorities (including licenses and permits) required in
              connection with the ownership or operation thereof and have been
              operated and maintained in material compliance with applicable
              laws, ordinances, rules and regulations;

                      (v)      there are no Contracts granting to any party or
              parties the right of use or occupancy of any portion of the
              parcels of Owned Property, except as set forth on Schedule
              4.14(b);

                      (vi)     there are no outstanding options or rights of
              first refusal to purchase the parcels of Owned Property, or any
              portion thereof or interest therein;

                      (vii)    there are no parties (other than the Company and
              its Subsidiaries) in possession of the parcels of Owned Property,
              other than tenants under any leases disclosed in Schedule 4.14(b)
              who are in possession of space to which   they are entitled;

                      (viii)   all facilities located on the parcels of Owned
              Property are supplied with utilities and other services necessary
              for the operation of such facilities, including gas, electricity,
              water, telephone, sanitary sewer and storm sewer, all of which
              services, to the best of the Shareholders' knowledge, are
              adequate in accordance with all applicable laws, ordinances,
              rules and regulations, and, to the best of the Shareholders'
              knowledge, are provided via public roads or via permanent,
              irrevocable, appurtenant easements benefitting the parcels of
              Owned Property;





                                     27
<PAGE>   36



                      (ix)     each parcel of Owned Property abuts on and has
              direct vehicular access to a public road, or has access to a
              public road via a permanent, irrevocable, appurtenant easement
              benefitting the parcel of Owned Property; access to the property
              is provided by paved public right-of-way; and there is no pending
              or, to the best of the Shareholders' knowledge, threatened
              termination of the foregoing access rights;

                      (x)      to the best of the Shareholders' knowledge, all
              improvements and buildings on the Owned Property are in good
              repair (normal wear and tear excepted) and are safe for occupancy
              and use, free from termites or other wood-destroying organisms;
              the roofs thereof are watertight; and the structural components
              and systems (including plumbing, electrical, air
              conditioning/heating, and sprinklers) are in good working order
              and adequate for the use of such Owned Property in the manner in
              which presently used; and

                      (xi)     there are no service contracts, management
              agreements or similar agreements which affect the parcels of
              Owned Property, except as set forth on Schedule 4.14(a).

                      (b)      Schedule 4.14(b) sets forth a list of all
     material leases, licenses or similar agreements ("LEASES") to which the
     Company or any Subsidiary is a party (copies of which have previously been
     furnished to MTLM), in each case, setting forth (A) the lessor and lessee
     thereof and the date and term of each of the Leases, (B) the legal
     description or street address of each property covered thereby, and (C) a
     brief description of the principal improvements and buildings thereon (the
     "LEASED PREMISES"), all of which are within the property set-back and
     building lines of the respective property. The Leases are in full force
     and effect and have not been amended except as set forth on Schedule
     4.14(b), and, to the best of the Shareholders' knowledge, no party thereto
     is in default or breach under any such Lease.  No event has occurred
     which, with the passage of time or the giving of notice or both, would
     cause a material breach of or default under any of such Leases.  To the
     best of the Shareholders' knowledge, there is no breach or anticipated
     breach by any other party to such Leases.  Except as set forth on Schedule
     4.14(b), with respect to each such Leased Premises:

                      (i)       the Company or the Subsidiary has valid
              leasehold interests in the Leased Premises leased by it, which
              leasehold interests are free and clear of any Liens;

                      (ii)      the portions of the buildings located on the
              Leased Premises that are used in the business of the Company or a
              Subsidiary are in good repair and condition, normal wear and tear
              excepted, and are in the aggregate sufficient to satisfy the
              Company or such Subsidiary's current and reasonably anticipated
              normal business activities as conducted thereat;

                      (iii)    each of the Leased Premises (a) has direct
              access to public roads or access to public roads by means of a
              perpetual access easement, such access being





                                     28
<PAGE>   37


              sufficient to satisfy the current and reasonably anticipated
              normal transportation requirements of the Company or such
              Subsidiary's respective business as presently conducted at such
              parcel; and (b) is served by all utilities in such quantity and
              quality as are sufficient to satisfy the current normal business
              activities as conducted at such parcel; and

                      (iv)     neither the Company nor any Subsidiary has
              received notice of (a) any condemnation proceeding with respect
              to any portion of the Leased Premises or any access thereto, and,
              to the best of Shareholders' knowledge, no such proceeding is
              contemplated by any Governmental Authority; or (b) any special
              assessment which may affect any of the Leased Premises and, to
              the best of the Shareholders' knowledge, no such special
              assessment is contemplated by any Governmental Authority.

              4.15    GOOD TITLE TO AND CONDITION OF ASSETS.

                      (a)      Except as set forth on Schedule 4.15, the
     Company and each Subsidiary has good and marketable title to all of its
     respective Assets (as hereinafter defined), free and clear of any Liens or
     restrictions on use.  For purposes of this Agreement, the term "ASSETS"
     means all of the properties and assets of the Company and its
     Subsidiaries, other than the Owned Properties and the Leased Premises,
     whether personal or mixed, tangible or intangible, wherever located.

                      (b)      To the best of the Shareholders' knowledge, the
     Fixed Assets (as hereinafter defined) currently in use or necessary for
     the business and operations of the Company and its Subsidiaries are in
     good operating condition, normal wear and tear excepted, and have been
     maintained in accordance with sound industry practices.  For purposes of
     this Agreement, the term "FIXED ASSETS" means all vehicles, machinery,
     equipment, tools, supplies, leasehold improvements, furniture and fixtures
     used by or located on the premises of the Company or set forth on the
     Current Balance Sheet or acquired by the Company or any Subsidiary since
     the date of the Current Balance Sheet.  Schedule 4.15 lists the vehicles
     owned, leased or used by the Company or any Subsidiary to transport,
     transfer, handle, dispose or haul Waste materials.

              4.16    COMPLIANCE WITH LAWS.

                      (a)      The Company and each Subsidiary is in material
     compliance with all laws, regulations and orders applicable to it, its
     respective business and operations (as currently conducted), the Assets,
     the Owned Properties and the Leased Premises and any other properties and
     assets (in each case currently owned or used by it).  Except as set forth
     on Schedule 4.16, neither the Company nor any Subsidiary has been cited,
     fined or otherwise notified of any present material failure to comply with
     any material laws, regulations or orders and no proceeding with respect to
     any such material violation is pending or, to the best of the
     Shareholders' knowledge, threatened.





                                     29
<PAGE>   38



                      (b)      Neither the Company nor any Subsidiary has made
     any payment of funds in connection with its business which is prohibited
     by law, and no funds have been set aside to be used in connection with its
     business for any payment prohibited by law.

                      (c)      The Company and each Subsidiary is in material
     compliance with the terms and provisions of the Immigration Act.  With
     respect to each Employee (as defined in 8 C.F.R. 274a.1(f)) of the Company
     for whom compliance with the Immigration Act as employer is required, to
     the best of the Shareholders' knowledge, the Company and each Subsidiary
     has on file a true, accurate and complete copy of (i) each Employee's Form
     I-9 (Employment Eligibility Verification Form) and (ii) all other records,
     documents or other papers prepared, procured and/or retained by the
     Company and each Subsidiary pursuant to the Immigration Act.  Neither the
     Company nor any Subsidiary has been cited, fined, served with a Notice of
     Intent to Fine or with a Cease and Desist Order, nor has any action or
     administrative proceeding been initiated or threatened against it, by the
     Immigration and Naturalization Service by reason of any actual or alleged
     failure to comply with the Immigration Act.

                      (d)      Except as fully described on Schedule 4.16,
     neither the Company nor any Subsidiary is subject to any Contract, decree
     or injunction which restricts the continued operation of any business or
     the expansion thereof to other geographical areas, customers and suppliers
     or lines of business.

              4.17    LABOR AND EMPLOYMENT MATTERS.  Except as set forth on
     Schedule 4.17(a), neither the Company nor any Subsidiary is a party to or
     bound by any collective bargaining agreement or any other agreement with a
     labor union, and there have been no efforts by any labor union during the
     24 months prior to the date hereof to organize any employees of the
     Company or any Subsidiary into one or more collective bargaining units.
     There is no pending or, to the best of the Shareholders' knowledge,
     threatened labor dispute, strike or work stoppage which affects or which
     may affect the business of the Company or any Subsidiary which may
     interfere with its continued operations.  Neither the Company nor any
     Subsidiary has within the last 24 months committed any unfair labor
     practice as defined in the National Labor Relations Act, as amended, and
     there is no pending or, to the best of the Shareholders' knowledge,
     threatened charge or complaint against the Company or any Subsidiary by or
     with the National Labor Relations Board or any representative thereof.
     There has been no strike, walkout or work stoppage involving any of the
     employees of the Company or any Subsidiary during the 24 months prior to
     the date hereof.  The Shareholders are not aware that any executive or key
     employee or group of employees has any plans to terminate his, her or
     their employment with the Company or any Subsidiary as a result of this
     Agreement or otherwise.  Schedule 4.17(b) contains detailed information
     about each contract, agreement or plan of the following nature, whether
     formal or informal, and whether or not in writing, to which the Company or
     any Subsidiary is a party or under which it has an obligation:  (i)
     employment agreements, (ii) employee handbooks, policy statements and
     similar plans, (iii) noncompetition agreements, and (iv) consulting
     agreements.  The Company and each Subsidiary has complied in all material
     respects with applicable laws, rules and regulations relating to
     employment, civil rights and equal employment opportunities, including but
     not limited to, the Civil Rights Act of 1964, the Fair Labor Standards Act
     and the Worker Adjustment and Retraining Notification Act of 1988.





                                     30
<PAGE>   39



              4.18    EMPLOYEE BENEFIT PLANS.

                      (a)      Employee Benefit Plans.  Schedule 4.18 contains
     a list setting forth each employee benefit plan or arrangement of the
     Company and each Subsidiary, including but not limited to employee pension
     benefit plans, as defined in Section 3(2) of ERISA, multiemployer plans,
     as defined in Section 3(37) of ERISA, employee welfare benefit plans, as
     defined in Section 3(1) of ERISA, deferred compensation plans, stock
     option plans, bonus plans, stock purchase plans, hospitalization,
     disability and other insurance plans, severance or termination pay plans
     and policies, whether or not described in Section 3(3) of ERISA, in which
     employees, their spouses or dependents, of the Company or any Subsidiary
     participate ("EMPLOYEE BENEFIT PLANS") (true and accurate copies of which,
     together with the most recent annual reports on Form 5500 and summary plan
     descriptions with respect thereto, were furnished to MTLM).

                      (b)      Compliance with Law.  With respect to each
     Employee Benefit Plan (i) each has been administered in all material
     respects in compliance with its terms and with all applicable laws,
     including, but not limited to, ERISA and the Internal Revenue Code of
     1986, as amended (the "CODE"); (ii) no actions, suits, claims or disputes
     are pending or, to the best of the Shareholders' knowledge, threatened;
     (iii) no audits, inquiries, reviews, proceedings, claims, or demands are
     pending with any governmental or regulatory agency; (iv) there are no
     facts which could give rise to any material liability in the event of any
     such investigation, claim, action, suit, audit, review, or other
     proceeding; (v) all material reports, returns, and similar documents
     required to be filed with any governmental agency or distributed to any
     plan participant have been duly or timely filed or distributed; and (vi)
     no "PROHIBITED TRANSACTION" which could give rise to any material
     liability of the Company or any Subsidiary has occurred within the meaning
     of the applicable provisions of ERISA or the Code.

                      (c)      Qualified Plans.  With respect to each Employee
     Benefit Plan intended to qualify under Code Section 401(a) or 403(a) (i)
     the Internal Revenue Service has issued a favorable determination letter,
     true and correct copies of which have been furnished to MTLM, that such
     plans are qualified and exempt from federal income taxes, or an
     application therefor has been filed with the Internal Revenue Service;
     (ii) no such determination letter has been revoked nor has revocation been
     threatened, nor has any amendment or other action or omission occurred
     with respect to any such plan since the date of its most recent
     determination letter or application therefor in any respect which would
     adversely affect its qualification or materially increase its costs; (iii)
     no such plan has been amended in a manner that would require security to
     be provided in accordance with Section 401(a)(29) of the Code; (iv) no
     reportable event (within the meaning of Section 4043 of ERISA) has
     occurred, other than one for which the 30-day notice requirement has been
     waived; and (v) as of the Effective Date except as disclosed on Schedule
     4.18, the present value of all liabilities that would be "BENEFIT
     LIABILITIES" under Section 4001(a)(16) of ERISA if benefits described in
     Code Section 411(d)(6)(B) were included will not exceed the then current
     fair market value of the assets of such plan (determined using the
     actuarial assumptions used for the most recent actuarial valuation for
     such plan); (vi) except as disclosed on Schedule 4.18, all contributions
     to, and payments from and with respect to such plans, which have been
     required to be made in accordance with such plans and, when





                                     31
<PAGE>   40


     applicable, Section 302 of ERISA or Section 412 of the Code, have been
     timely made; (vii) all such contributions to the plans, and all payments
     under the plans (except those to be made from a trust qualified under
     Section 401(a) of the Code) and all payments with respect to the plans
     (including, without limitation, PBGC and insurance premiums) for any
     period ending before the Closing Date that are not yet, but will be,
     required to be made are properly accrued and reflected on the Current
     Balance Sheet or are disclosed on Schedule 4.18.

                      (d)      Multiemployer Plans.  With respect to any MPPA
     Plan (i) all contributions required to be made with respect to employees
     of the Company or any Subsidiary have been timely paid; (ii) neither the
     Company nor any Subsidiary has incurred or is expected to incur, directly
     or indirectly, any withdrawal liability under ERISA with respect to any
     such plan (whether by reason of the transactions contemplated by the
     Agreement or otherwise); (iii) Schedule 4.18 sets forth (A) the withdrawal
     liability under ERISA to each MPPA Plan, (B) the date as of which such
     amount was calculated, and (C) the method for determining the withdrawal
     liability; and (iv) no such plan is (or is expected to be) insolvent or in
     reorganization and no accumulated funding deficiency (as defined in
     Section 302 of ERISA and Section 412 of the Code), whether or not waived,
     exists or is expected to exist with respect to any such plan.

                      (e)      Welfare Plans.  Other than as disclosed in
     Schedule 4.18, (i) neither the Company nor any Subsidiary is obligated
     under any Welfare Plan, whether or not disclosed in Schedule 4.18, to
     provide medical or death benefits with respect to any employee or former
     employee of the Company, any Subsidiary or their predecessors after
     termination of employment, other than as required by Section 4980B of the
     Code; (ii) the Company and each Subsidiary have complied in all material
     respects with the notice and continuation coverage requirements of Section
     4980B of the Code and the regulations thereunder with respect to each
     Welfare Plan that is, or was during any taxable year for which the statute
     of limitations on the assessment of federal income taxes remains, open, by
     consent or otherwise, a group health plan within the meaning of Section
     5000(b)(1) of the Code, and (iii) there are no reserves, assets, surplus
     or prepaid premiums under any Welfare Plan which is an Employee Benefit
     Plan.  The consummation of the transactions contemplated by this Agreement
     will not entitle any individual to severance pay, and, will not accelerate
     the time of payment or vesting, or increase the amount of compensation,
     due to any individual.

                      (f)      Controlled Group Liability.  Neither the
     Company, any Subsidiary nor any entity that would be aggregated with them
     under Code Section 414(b), (c), (m) or (o):  (i) has ever terminated or
     withdrawn from an employee benefit plan under circumstances resulting (or
     expected to result) in liability to the Pension Benefit Guaranty
     Corporation ("PBGC"), the fund by which the employee benefit plan is
     funded, or any employee or beneficiary for whose benefit the plan is or
     was maintained (other than routine claims for benefits); (ii) has any
     assets subject to (or expected to be subject to) a lien for unpaid
     contributions to any employee benefit plan; (iii) has failed to pay
     premiums to the PBGC when due; (iv) is subject to (or expected to be
     subject to) an excise tax under Code Section 4971; (v) has engaged in any
     transaction which would give rise to liability under Section 4069 or
     Section 4212(c) of ERISA; or (vi) has violated in any material respect
     Code Section 4980B or Section 601 through 608 of ERISA.





                                     32
<PAGE>   41



                      (g)      Other Liabilities.  Except as set forth on
     Schedule 4.18, (i) none of the Employee Benefit Plans obligates the
     Company or any Subsidiary to pay separation, severance, termination or
     similar benefits solely as a result of any transaction contemplated by
     this Agreement or solely as a result of a "CHANGE OF CONTROL" (as such
     term is defined in Section 280G of the Code), (ii) all required or
     discretionary (in accordance with historical practices) payments,
     premiums, contributions, reimbursements, or accruals for all periods
     ending prior to or as of the Effective Date shall have been made or
     properly accrued on the Current Balance Sheet or will be properly accrued
     on the books and records of the Company and the Subsidiaries as of the
     Effective Date, and (iii) none of the Employee Benefit Plans has any
     unfunded liabilities which are not reflected on the Current Balance Sheet
     or the books and records of the Company and the Subsidiaries.

              4.19    TAX MATTERS.  Except as set forth in Schedule 4.19
     hereto, all Tax Returns required to be filed prior to the date hereof with
     respect to the Company, its Subsidiaries or any of its income, properties,
     franchises or operations have been filed, each such Tax Return has been
     prepared in compliance with all applicable laws and regulations, and all
     such Tax Returns are true, complete and accurate in all material respects.
     All Taxes due and payable by or with respect to the Company and its
     subsidiaries have been paid or accrued on the Current Balance Sheet or
     will be accrued on its books and records as of the Closing.  Except as set
     forth in Schedule 4.19 hereto:  (i) with respect to each taxable period of
     the Company and each Subsidiary after January 1, 1992, no taxable period
     has been audited by the relevant taxing authority; (ii) no deficiency or
     proposed adjustment which has not been settled or otherwise resolved for
     any amount of Taxes has been asserted or assessed by any taxing authority;
     (iii) neither the Company nor any Subsidiary has consented to extend the
     time in which any Taxes may be assessed or collected by any taxing
     authority; (iv) neither the Company nor any Subsidiary has requested or
     been granted an extension of the time for filing any Tax Return to a date
     later than the Closing Date; (v) there is no action, suit, taxing
     authority proceeding, or audit or claim for refund now in progress,
     pending or threatened against or with respect to the Company or any
     Subsidiary regarding Taxes; (vi) neither the Company nor any Subsidiary
     has made an election or filed a consent under Section 341(f) of the Code
     (or any corresponding provision of state, local or foreign law) on or
     prior to the Closing Date; (vii) there are no Liens for Taxes (other than
     for current Taxes not yet due and payable) upon the assets of the Company
     or any Subsidiary; (viii) neither the Company nor any Subsidiary will be
     required (A) as a result of a change in method of accounting for a taxable
     period ending on or prior to the Closing Date, to include any adjustment
     under Section 481(c) of the Code (or any corresponding provision of state,
     local or foreign law) in taxable income for any taxable period (or portion
     thereof) beginning after the Closing Date or (B) as a result of any
     "CLOSING AGREEMENT," as described in Section 7121 of the Code (or any
     corresponding provision of state, local or foreign law), to include any
     item of income or exclude any item of deduction from any taxable period
     (or portion thereof) beginning after the Closing Date; (ix) neither the
     Company nor any Subsidiary is a party to or bound by any tax allocation or
     tax sharing agreement or has any current or potential contractual
     obligation to indemnify any other Person with respect to Taxes; (x) there
     is no basis for any assessment, deficiency notice, 30-day letter or
     similar notice with respect to any Tax to be issued to the Company or any
     Subsidiary with respect to any period on or before the Closing Date; (xi)
     neither the Company nor any Subsidiary has made any payments, and is or
     will not become obligated (under any contract entered into on or before
     the Closing Date) to





                                     33
<PAGE>   42


     make any payments, that will be non-deductible under Section 280G of the
     Code (or any corresponding provision of state, local or foreign law);
     (xii) neither the Company nor any Subsidiary has been a United States real
     property holding corporation within the meaning of Section 897(c)(2) of
     the Code (or any corresponding provision of state, local or foreign law)
     during the applicable period specified in Section 897(c)(1)(a)(ii) of the
     Code (or any corresponding provision of state, local or foreign law);
     (xiii) no claim has ever been made by a taxing authority in a jurisdiction
     where the Company or a Subsidiary, as the case may be, does not file Tax
     Returns that is or may be subject to Taxes assessed by such jurisdiction;
     (xiv) the Company and its Subsidiaries do not have any permanent
     establishment in any foreign country, as defined in the relevant tax
     treaty between the United States of America and such foreign country; (xv)
     true, correct and complete copies of all income and sales Tax Returns
     filed by or with respect to the Company and its Subsidiaries for the past
     two years has been furnished or made available to MTLM; and (xvi) the
     Company and its Subsidiaries will not be subject to any Taxes pursuant to
     Section 1374 or Section 1375 of the Code (or any corresponding provision
     of state, local or foreign law) for the period ending at the Closing Date
     for any period for which a Tax Return has not been filed.

              4.20    INSURANCE. The Company and each Subsidiary is covered by
     valid, outstanding and enforceable policies of insurance issued to it by
     reputable insurers covering its properties, assets and businesses against
     risks of the nature normally insured against by businesses in the same or
     similar lines of business and in coverage amounts typically and reasonably
     carried by such businesses (the "INSURANCE POLICIES"), provided, however,
     the Company and its Subsidiaries generally do not insure their machinery
     and equipment except as the Company or its Subsidiaries may be required to
     insure such assets by third party lenders or lessors.  Such Insurance
     Policies are in full force and effect, and all premiums due thereon have
     been paid. As of the Closing Date each of the Insurance Policies will be
     in full force and effect.  None of the Insurance Policies will lapse or
     terminate as a result of the transactions contemplated by this Agreement.
     The Company and each Subsidiary has complied with the provisions of such
     Insurance Policies.  Schedule 4.20 contains (i) a complete and correct
     list of all Insurance Policies and all amendments and riders thereto
     (copies of which have been provided to MTLM) and (ii) a detailed
     description of each pending claim under any of the Insurance Policies for
     an amount in excess of $50,000 that relates to loss or damage to the
     properties, assets or businesses of the Company or any Subsidiary. Neither
     the Company nor any Subsidiary has failed to give, in a timely manner, any
     notice required under any of the Insurance Policies to preserve its rights
     thereunder.

              4.21    RECEIVABLES.  All of the Receivables (as hereinafter
     defined) are valid and legally binding, represent bona fide transactions
     and arose in the ordinary course of business of the Company and its
     Subsidiaries.  Except as set forth on Schedule 4.21, all of the
     Receivables are good and collectible receivables, and will be collected in
     full in accordance with the terms of such receivables (and in any event
     within six months following the Closing), without set off or
     counterclaims, subject to the allowance for doubtful accounts, if any, set
     forth on the Current Balance Sheet as reasonably adjusted since the date
     of the Current Balance Sheet in the ordinary course of business consistent
     with past practice.  For purposes of this Agreement, the term
     "RECEIVABLES" means all receivables of the





                                     34
<PAGE>   43


     Company and the Subsidiaries, including all trade account receivables
     arising from the provision of services or sale of inventory, but excluding
     notes receivable, and insurance proceeds receivable.

              4.22    PERMITS.  Except as set forth on Schedule 4.22, the
     Company and each Subsidiary possess all material Permits for its business
     and operations, including the operation of the Owned Properties and Leased
     Premises. All such Permits are valid and in full force and effect, the
     Company and each Subsidiary is in material compliance with the
     requirements thereof, and no proceeding is pending or threatened to revoke
     or amend any of them.  None of such Permits is or will be impaired or in
     any way affected by the execution and delivery of this Agreement or the
     consummation of the transactions contemplated hereby.

              4.23    ADEQUACY OF THE ASSETS; RELATIONSHIPS WITH CUSTOMERS AND
     SUPPLIERS; AFFILIATED TRANSACTIONS.  The Assets, Owned Properties and
     Leased Premises constitute, in the aggregate, all of the assets and
     properties necessary for the conduct of the business of the Company and
     the Subsidiaries in the manner in which and to the extent to which such
     business is currently being conducted.  To the best knowledge of the
     Shareholders, no current supplier to the Company or any Subsidiary of
     items essential to the conduct of its business will or has threatened to
     terminate its respective business relationship with it for any reason.
     Except as set forth on Schedule 4.23, neither the Company nor any
     Subsidiary has any direct or indirect interest in any customer, supplier
     or competitor of the Company or any Subsidiary, or in any person from whom
     or to whom the Company or any Subsidiary leases real or personal property.
     Except as set forth on Schedule 4.23, no officer, director or shareholder
     of the Company or any Subsidiary, nor any person related by blood or
     marriage to any such person, nor any entity in which any such person owns
     any beneficial interest, is a party to any Contract or transaction with
     the Company or any Subsidiary or has any interest in any property used by
     the Company.

              4.24    INTELLECTUAL PROPERTY.  The Company and its Subsidiaries
     has full legal right, title and interest in and to all trademarks,
     servicemarks, tradenames, copyrights, know-how, patents, trade secrets,
     licenses (including licenses for the use of computer software programs),
     and other intellectual property used in the conduct of their respective
     businesses (the "INTELLECTUAL PROPERTY").  The conduct of the business of
     the Company and its Subsidiaries as presently conducted, and the
     unrestricted conduct and the unrestricted use and exploitation of the
     Intellectual Property, does not infringe or misappropriate any rights held
     or asserted by any Person, and to the best of the Shareholders' knowledge,
     no Person is infringing on the Intellectual Property.  No payments are
     required for the continued use of the Intellectual Property.  None of the
     Intellectual Property has ever been declared invalid or unenforceable, or
     is the subject of any pending or, to the best of the Shareholders'
     knowledge, threatened action for opposition, cancellation, declaration,
     infringement, or invalidity, unenforceability or misappropriation or like
     claim, action or proceeding.

              4.25    CONTRACTS.  Schedule 4.25 sets forth a list of each
     Contract to which the Company and its Subsidiaries is a party or by which
     its properties and assets are bound and which is material to its business,
     assets, properties or prospects (the "DESIGNATED CONTRACTS"), true and
     correct copies of which have been provided to MTLM.  The copy of each
     Designated Contract furnished to MTLM





                                     35
<PAGE>   44


     is a true and complete copy of the document it purports to represent and
     reflects all amendments thereto made through the date of this Agreement.
     Except as set forth on Schedule 4.25, neither the Company nor any
     Subsidiary has violated any of the material terms or conditions of any
     Designated Contract or any term or condition which would permit
     termination or material modification of any Designated Contract, and, to
     the best of the Shareholders' knowledge, all of the covenants to be
     performed by any other party thereto have been fully performed and there
     are no claims for breach or indemnification or notice of default or
     termination under any Designated Contract. Except as set forth on Schedule
     4.25, no event has occurred which constitutes, or after notice or the
     passage of time, or both, would constitute, a material default by the
     Company or any Subsidiary under any Designated Contract, and no such event
     has occurred which constitutes or would constitute a material default by
     any other party.  Neither the Company nor any Subsidiary is subject to any
     material liability or payment resulting from renegotiation of amounts paid
     it under any Designated Contract.  As used in this Section, Designated
     Contracts shall include, without limitation, (a) loan agreements,
     indentures, mortgages, pledges, hypothecations, deeds of trust,
     conditional sale or title retention agreements, security agreements,
     equipment financing obligations or guaranties, or other sources of
     contingent liability in respect of any indebtedness or obligations to any
     other Person, or letters of intent or commitment letters with respect to
     same; (b) contracts obligating the Company to purchase or sell products or
     services; (c) leases of real property, and leases of personal property not
     cancelable without penalty on notice of 60 days or less or calling for
     payment of an annual gross rental exceeding $50,000; (d) distribution,
     sales agency or franchise or similar agreements, or agreements providing
     for an independent contractor's services, or letters of intent with
     respect to same; (e) employment agreements, management service agreements,
     consulting agreements, confidentiality agreements, noncompetition
     agreements and any other agreements relating to any employee, officer or
     director of the Company or any Subsidiary; (f) licenses, assignments or
     transfers of trademarks, trade names, service marks, patents, copyrights,
     trade secrets or know how, or other agreements regarding proprietary
     rights or intellectual property; (g) any Contract relating to pending
     capital expenditures by the Company or any Subsidiary; and (h) other
     material Contracts or understandings, irrespective of subject matter and
     whether or not in writing, not entered into in the ordinary course of
     business by the Company or any Subsidiary and not otherwise disclosed on
     the Schedules.

              4.26    CUSTOMER LISTS AND RECURRING REVENUE.  The Company and
     the Shareholders have made available to MTLM for MTLM's review, a true,
     correct and complete list of each of the Company and each Subsidiary's 20
     largest customers ("MATERIAL CUSTOMERS") and suppliers together with the
     applicable percentage of total sales or purchases, as applicable.  True,
     correct and complete copies of any agreements with such customers or
     suppliers which are anticipated to endure beyond the Closing have been
     furnished by the Shareholders to MTLM.  Other than Material Customers, no
     customer of the Company or any Subsidiary as of the date of this Agreement
     accounts for more than 1% of its combined annual revenue.

              4.27    ACCURACY OF INFORMATION FURNISHED BY THE SHAREHOLDERS.
     No representation, statement or information made or furnished by the
     Shareholders to MTLM or any of MTLM's representatives, including those
     contained in this Agreement and the various Schedules attached hereto and
     the other information and statements referred to herein and previously
     furnished by the





                                     36
<PAGE>   45


     Company, the Subsidiaries and the Shareholders, contains or shall contain
     any untrue statement of a material fact or omits or shall omit any
     material fact necessary to make the information contained therein not
     misleading in light of the circumstances in which they were made.  The
     Shareholders have provided MTLM with true, accurate and complete copies of
     all documents listed or described in the various Schedules attached
     hereto.

              4.28    INVESTMENT INTENT; ACCREDITED INVESTOR STATUS; SECURITIES
     DOCUMENTS.  Each of the Shareholders is acquiring his interest in the MTLM
     Shares for his own account for investment and not with a view to, or for
     the sale in connection with, any distribution of his interest, except in
     compliance with applicable state and federal securities laws.  Each of the
     Shareholders has been provided, to his satisfaction, the opportunity to
     discuss the transactions contemplated hereby with MTLM and has had the
     opportunity to obtain such information pertaining to MTLM as has been
     requested, including but not limited to filings made by MTLM with the SEC
     under the Exchange Act.  Each of the Shareholders is an "ACCREDITED
     INVESTOR" within the meaning of Regulation D promulgated under the
     Securities Act.  Each of the Shareholders has such knowledge and
     experience in business and financial matters that he is capable of
     evaluating the merits and risks of an investment in MTLM Shares, and is
     capable of bearing the economic risks of such investment and is able to
     bear a complete loss of his investment in MTLM Shares.  Each of the
     Shareholders acknowledges that MTLM Shares have not been registered under
     the Securities Act and understands that MTLM Shares must be held
     indefinitely unless they are subsequently registered under the Securities
     Act or such sale is permitted pursuant to an available exemption from such
     registration requirement.

              4.29    BUSINESS LOCATIONS.  As of the date hereof, neither the
     Company nor any Subsidiary has any office or place of business other than
     as identified on Schedules 4.14(a) and 4.14(b) and the Company and each
     Subsidiary's  principal place of business and chief executive office (as
     such terms are used in subsection 9-401 of the Uniform Commercial Code as
     enacted in the State of Illinois as of the date hereof) are indicated on
     Schedule 4.14(a) or 4.14(b), and, all locations where the equipment,
     inventory, chattel paper and books and records of the Company and the
     Subsidiaries are located as of the date hereof are fully identified on
     Schedules 4.14(a) and 4.14(b).

              4.30    NAMES; PRIOR ACQUISITIONS.  All names under which the
     Company and each Subsidiary does business as of the date hereof are
     specified on Schedule 4.30.  Except as set forth on Schedule 4.30, neither
     the Company nor any Subsidiary has changed its name or used any assumed or
     fictitious name, or been the surviving entity in a merger, acquired any
     business or changed its principal place of business or chief executive
     office, within the past 10 years.

              4.31    NO COMMISSIONS.  Except as set forth on Schedule 4.31,
     neither the Company, any Subsidiary nor the Shareholders have incurred any
     obligation for any finder's or broker's or agent's fees or commissions or
     similar compensation in connection with the transactions contemplated
     hereby.

              4.32    INVENTORY.  All Assets that consist of inventory
     (including raw materials and work-in-progress): (i) were acquired in the
     ordinary course of business consistent with past practice; (ii) are,





                                     37
<PAGE>   46


     in the aggregate, of a quality, quantity, and condition useable or
     saleable in the ordinary course of business within the Company and the
     Subsidiary's  normal inventory turnover experience; and (iii) are valued
     at the lower of cost or net realizable market value.  Neither the Company
     nor any Subsidiary has any material liability with respect to the return
     or repurchase of any goods in the possession of any customer.

              4.33    IDENTIFICATION, ACQUISITION AND DISPOSITION OF MATERIAL
     ASSETS.  Schedule 4.33 sets forth a listing of all material Assets
     (including real, personal and mixed) acquired or disposed of by the
     Company or any Subsidiary since December 31, 1996.

              4.34    RESTRICTIONS.    Schedule 4.34 sets forth a list of all
     non-competition, non-solicitation, confidentiality and other restrictive
     covenants to which the Company, any Subsidiary and/or any Shareholder is a
     party or otherwise bound.  Except as set forth on Schedule 4.34, there are
     no contracts or other conditions, circumstances, events or agreements
     which would in any way limit or restrict the rights of MTLM, MTLM's
     Affiliates, the Company or its Subsidiaries from engaging in any business
     anywhere in the world.

              4.35    FULL DISCLOSURE.  No statement by the Company contained
     in this Article IV and the Schedules hereto or any written statement or
     certificate furnished to MTLM as of its respective date contains any
     untrue statement of a material fact or omits to state a material fact
     necessary in order to make the statements contained herein or therein not
     materially and adversely misleading in light of the circumstances under
     which they were made.

                                  ARTICLE V

                   CONDUCT OF BUSINESS PENDING THE CLOSING

              5.1     CONDUCT OF BUSINESS OF THE COMPANY PENDING THE CLOSING .
     Except as set forth on Schedule 5.1, the Company covenants and agrees
     that, between the date of this Agreement and the Closing Date, the
     business of the Company and each Subsidiary shall be conducted only in,
     and the Company and each Subsidiary shall not take any action except in,
     the ordinary course of business, consistent with past practice and in
     compliance with all rules, regulations and laws.  The Company and each
     Subsidiary shall use its best efforts to preserve intact its respective
     business organization, to keep available the services of its respective
     current officers, employees and consultants, and to preserve its
     respective present relationships with customers, suppliers and other
     persons with which it has significant business relations.  By way of
     amplification and not limitation, except as contemplated by this
     Agreement, neither the Company nor any Subsidiary shall, between the date
     of this Agreement and the Closing Date, directly or indirectly, do or
     propose or agree to do any of the following without the prior written
     consent of MTLM, which consent shall not be unreasonably withheld:

                      (a)      amend or otherwise change its articles of
     incorporation or bylaws;





                                     38
<PAGE>   47



                      (b)      issue, sell, pledge, dispose of, encumber, or,
     authorize the issuance, sale, pledge, disposition, grant or encumbrance of
     (i) with respect to the Company or any Subsidiary, any shares of its
     capital stock of any class, or any options, warrants, convertible
     securities or other rights of any kind to acquire any shares of such
     capital stock, or any other ownership interest, of it, or, (ii) any of
     their respective assets, tangible or intangible, except in the ordinary
     course of business consistent with past practice;

                      (c)      declare, set aside, make or pay any dividend or
     other distribution, payable in cash, stock, property or otherwise, with
     respect to any of its capital stock;

                      (d)      reclassify, combine, split, subdivide or redeem,
     purchase or otherwise acquire, directly or indirectly, any of its capital
     stock;

                      (e)      (i) acquire (including, without limitation, for
     cash or shares of stock, by merger, consolidation, or acquisition of stock
     or assets) any interest in any corporation, partnership or other business
     organization or division thereof or any assets, or make any investment
     either by purchase of stock or securities, contributions of capital or
     property transfer, or, except in the ordinary course of business,
     consistent with past practice, purchase any property or assets of any
     other Person, (ii) incur any indebtedness for borrowed money or issue any
     debt securities or assume, guarantee or endorse or otherwise as an
     accommodation become responsible for, the obligations of any Person, or
     make any loans or advances, or (iii) enter into any Contract other than in
     the ordinary course of business, consistent with past practice;

                      (f)      increase the compensation payable or to become
     payable to its respective officers or directors, or, except as presently
     bound to do, grant any severance or termination pay to, or enter into any
     employment or severance agreement with, any of its respective directors or
     officers, or establish, adopt, enter into or amend or take any action to
     accelerate any rights or benefits under any collective bargaining, bonus,
     profit sharing, trust, compensation, stock option, restricted stock,
     pension, retirement, deferred compensation, employment, termination,
     severance or other plan, agreement, trust, fund, policy or arrangement for
     the benefit of any directors, officers or employees;

                      (g)      take any action other than in the ordinary
     course of business and in a manner consistent with past practice with
     respect to accounting policies or procedures;

                      (h)      pay, discharge or satisfy any existing claims,
     liabilities or obligations (absolute, accrued, asserted or unasserted,
     contingent or otherwise), other than the payment, discharge or
     satisfaction in the ordinary course of business and consistent with past
     practice of due and payable liabilities reflected or reserved against in
     its financial statements, as appropriate, or liabilities incurred after
     the date hereof in the ordinary course of business and consistent with
     past practice and other than the payment of a pending claim by Employers
     Insurance of Wausau (as described on Schedule 4.12) in an amount not to
     exceed $1.4 million;





                                     39
<PAGE>   48



                      (i)      increase or decrease prices charged to its
     respective customers, except for previously announced price changes or
     except in the ordinary course of business, or take any other action which
     might reasonably result in any material increase in the loss of customers
     through non-renewal or termination of contracts or other causes; or

                      (j)      agree, in writing or otherwise, to take or
     authorize any of the foregoing actions or any action which would make any
     representation or warranty in Article IV untrue or incorrect.

              5.2     CONDUCT OF BUSINESS OF MTLM PENDING THE CLOSING.  Except
     as set forth on Schedules 2.28 and 5.2, MTLM covenants and agrees that,
     between the date of this Agreement and the Closing Date, the business of
     MTLM and each MTLM Subsidiary shall be conducted only in, and MTLM and
     each MTLM Subsidiary shall not take any action except in, the ordinary
     course of business, consistent with past practice and in material
     compliance with all rules, regulations and laws.  MTLM and each MTLM
     Subsidiary shall use its best efforts to preserve intact its respective
     business organization, to keep available the services of its respective
     current officers, employees and consultants, and to preserve its
     respective present relationships with customers, suppliers and other
     persons with which it has significant business relations.  By way of
     amplification and not limitation, except as contemplated by this
     Agreement, neither MTLM nor any MTLM Subsidiary shall, between the date of
     this Agreement and the Closing Date, directly or indirectly, do or propose
     or agree to do any of the following without the prior written consent of
     the Shareholders, which consent shall  not be unreasonably withheld:

                      (a)      amend or otherwise change its charter or bylaws;

                      (b)      except for the issuance of common stock in
     connection with any of the mergers, acquisitions or other transactions
     contemplated by Section 5.2(e) below, private placements of common stock
     not to exceed $15 million in the aggregate, the private placement of up to
     $10 million of securities convertible into or exchangeable for common
     stock of MTLM and/or the sale of non-convertible high yield debt of MTLM
     of up to $200 million, or the incurrence of a non-convertible bridge loan
     which will be repaid with the proceeds of the foregoing, issue, sell,
     pledge, dispose of, grant, encumber, or authorize the issuance, sale,
     pledge, disposition, grant or encumbrance of (i) with respect to MTLM or
     any MTLM Subsidiary, any shares of its capital stock of any class, or any
     options, warrants, convertible securities or other rights of any kind to
     acquire any shares of such capital stock, or any other ownership interest,
     of it, or, (ii) any of their respective assets, tangible or intangible,
     except in the ordinary course of business consistent with past practice;

                      (c)      increase the compensation payable or to become
     payable to its respective officers or directors, or, except as presently
     bound to do, grant any severance or termination pay to, or enter into any
     employment or severance agreement with, any of its respective directors or
     officers, or establish, adopt, enter into or amend or take any action to
     accelerate any rights or benefits under any collective bargaining, bonus,
     profit sharing, trust, compensation, stock option, restricted stock,
     pension, retirement, deferred compensation, employment, termination,
     severance or other plan, agreement, trust, fund, policy or arrangement for
     the benefit of any directors, officers or employees;





                                     40
<PAGE>   49



                      (d)      take any action other than in the ordinary
     course of business and in a manner consistent with past practice with
     respect to accounting policies or procedures; or

                      (e)      except for mergers or acquisitions by MTLM of
     The Isaac Corporation and its affiliates, Kankakee Scrap Corporation and
     its affiliates, Proler Southwest Inc. and Proler Steelworks L.L.C., and a
     joint venture or acquisition of a joint venture interest from Perlco,
     L.L.C. (each substantially on the terms and conditions set forth in the
     respective letters of intent relating thereto, true and complete copies of
     which have been given to the Shareholders) and any acquisitions involving
     consideration of less than $5 million, and any contracts, agreements and
     transactions related thereto, (i) acquire (including, without limitation,
     for cash or shares of stock, by merger, consolidation, or acquisition of
     stock or assets) any interest in any corporation, partnership or other
     business organization or division thereof or any assets, or make any
     investment either by purchase of stock or securities, contributions of
     capital or property transfer, or, except in the ordinary course of
     business of a MTLM Subsidiary, consistent with past practice, purchase any
     property or assets of any other Person, (ii) incur any indebtedness for
     borrowed money or issue any debt securities or assume, guarantee or
     endorse or otherwise as an accommodation become responsible for, the
     obligations of any Person, or make any loans or advances, or (iii) enter
     into any Contract other than in the ordinary course of business of a MTLM
     Subsidiary, consistent with past practice;

                      (f)      agree, in writing or otherwise, to take or
     authorize any of the foregoing actions or any action which would make any
     representation or warranty in Article II untrue or incorrect.


                                  ARTICLE VI

                            ADDITIONAL AGREEMENTS

              6.1     FURTHER ASSURANCES.  Each party shall execute and deliver
     such additional instruments and other documents and shall take such
     further actions as may be necessary or appropriate to effectuate, carry
     out and comply with all of the terms of this Agreement and the
     transactions contemplated hereby.

              6.2     COMPLIANCE WITH COVENANTS.  The Shareholders shall cause
     the Company to comply with all of the respective covenants of the Company
     under this Agreement.

              6.3     COOPERATION.  Each of the parties agrees to cooperate
     with the other in the preparation and filing of all forms, notifications,
     reports and information, if any, required or reasonably deemed advisable
     pursuant to any law, rule or regulation or the rules of any exchange on
     which the Common Stock is listed (the Nasdaq Stock Market) in connection
     with the transactions contemplated by this Agreement and to use their
     respective best efforts to agree jointly on a method to overcome any
     objections by any Governmental Authority to any such transactions.





                                     41
<PAGE>   50



              6.4     ACCESS TO INFORMATION.  From the date hereof to the
     Closing Date, the Company and MTLM shall (and shall cause its respective
     directors, officers, employees, auditors, counsel and agents to) afford
     each other and their officers, employees, auditors, counsel and agents
     reasonable access at all reasonable times to its properties, offices, and
     other facilities, to its officers and employees and to all books and
     records, and shall furnish such persons with all financial, operating and
     other data and information as may be requested.  No information provided
     to or obtained by any of the parties hereto shall affect any
     representation or warranty in this Agreement.

              6.5     NOTIFICATION OF CERTAIN MATTERS.  The Shareholders and
     MTLM shall give prompt notice to the other of the occurrence or
     non-occurrence of any event which would likely cause any representation or
     warranty contained herein to be untrue or inaccurate, or any covenant,
     condition, or agreement contained herein not to be complied with or
     satisfied.

              6.6     TAX TREATMENT.  Each party to this Agreement has sought
     and received its own advice as to the tax treatment of the transactions
     covered by this Agreement and is not relying on any opinions of the other
     parties or their respective advisers with respect thereto.  All parties
     hereto agree to fully and completely comply with the reporting
     requirements of the Internal Revenue Service.

              6.7     CONFIDENTIALITY; PUBLICITY.  Except as may be required by
     law or as otherwise permitted or expressly contemplated herein, no party
     hereto or their respective Affiliates, employees, agents and
     representatives shall disclose to any third party this Agreement or the
     subject matter or terms hereof without the prior consent of the other
     parties hereto.  No press release or other public announcement related to
     this Agreement or the transactions contemplated hereby shall be issued by
     any party hereto without the prior approval of the other parties, except
     that MTLM may make such public disclosure which MTLM believes in good
     faith is required by law or by the terms of any listing agreement with or
     requirements of a securities exchange.

              6.8     NO OTHER DISCUSSIONS. Neither the Company, nor the
     Shareholders, and their respective Affiliates, employees, agents or
     representatives shall (i) initiate or encourage the initiation by others
     of discussions or negotiations with third parties or respond to
     solicitations by third persons relating to any merger, sale or other
     disposition of any substantial part of the assets, business or properties
     of the Company (whether by merger, consolidation, sale of stock or
     otherwise) or (ii) enter into any agreement or commitment (whether or not
     binding) with respect to any of the foregoing transactions.  The
     Shareholders will immediately notify MTLM if any third party attempts to
     initiate any solicitation, discussion or negotiation with respect to any
     of the foregoing transactions.

              6.9     RESTRICTIVE COVENANTS.  In order to assure that MTLM will
     realize the benefits of this Agreement and in consideration of the
     transactions set forth in this Agreement, the Shareholders agree with MTLM
     that they shall not for a period of thirty-six (36) months from the later
     of the Closing Date or the date each such Shareholder ceases to be an
     employee, officer or director of MTLM or the Company (with regard to each
     Shareholder, a "TERMINATION DATE"):





                                     42
<PAGE>   51



                      (a)      directly or indirectly, alone or as a partner,
     joint venturer, officer, director, employee, consultant, agent,
     independent contractor or stockholder of any company or business, engage
     in any business activity in the Restricted Territory (as defined below),
     and which is directly or indirectly in competition with the business
     conducted by the Company at the Closing Date; provided, however, that, the
     beneficial ownership of less than 5% of the shares of stock of any
     corporation having a class of equity securities actively traded on a
     national securities exchange or over-the-counter market shall not be
     deemed, in and of itself, to violate the prohibitions of this Section.  As
     used in this Section 6.9, the term "RESTRICTED TERRITORY" means (i) with
     respect to Albert A. Cozzi, all states in which MTLM or any of its
     Subsidiaries operates a facility on the Termination Date, and (ii) with
     respect to Frank J. Cozzi and Gregory P. Cozzi, all states in which the
     Surviving Corporation or its Subsidiaries operates a facility on the
     Termination Date;

                      (b)      directly or indirectly (i) induce any Person
     which is a customer of the Company or any Subsidiary at the Closing Date
     to patronize any business directly or indirectly in competition with the
     business conducted by the Company and its Subsidiaries; (ii) canvass,
     solicit or accept from any Person which is a customer of the Company or
     any Subsidiary, any such competitive business, or (iii) request or advise
     any Person which is a customer of the Company or any Subsidiary at the
     Closing Date to withdraw, curtail or cancel any such customer's business
     with the Company or any Subsidiary;

                      (c)      directly or indirectly employ, or knowingly
     permit any company or business directly or indirectly controlled by him,
     to employ, any person who was employed by the Company or any Subsidiary at
     or within six months prior to the Closing Date, or in any manner seek to
     induce any such Person to leave his or her employment;

                      (d)      directly or indirectly, at any time following
     the Closing Date, in any way utilize, disclose, copy, reproduce or retain
     in his possession any of the Company or any Subsidiary's  proprietary
     rights or records, including, but not limited to, any of their customer
     lists.

     The Shareholders agree and acknowledge that the restrictions contained in
     this Section 6.9 are reasonable in scope and duration and are necessary to
     protect MTLM after the Closing Date.  If any provision of this Section as
     applied to any party or to any circumstance is adjudged by a court to be
     invalid or unenforceable, the same will in no way affect any other
     circumstance or the validity or enforceability of this Agreement.  If any
     such provision, or any part thereof, is held to be unenforceable because
     of the duration of such provision or the area covered thereby, the parties
     agree that the court making such determination shall have the power to
     reduce the duration and/or area of such provision, and/or to delete
     specific words or phrases, and in its reduced form, such provision shall
     then be enforceable and shall be enforced.  The parties agree and
     acknowledge that the breach of this Section will cause irreparable damage
     to MTLM and upon breach of any provision of this Section, MTLM shall be
     entitled to injunctive relief, specific performance or other equitable
     relief; provided, however, that this shall in no way limit any other
     remedies which MTLM may have (including, without limitation, the right to
     seek monetary damages).





                                     43
<PAGE>   52



              6.10    ENVIRONMENTAL ASSESSMENT.  MTLM shall be entitled to have
     conducted prior to Closing an environmental assessment and compliance
     review of the Owned Properties and Leased Premises (hereinafter referred
     to as the "ENVIRONMENTAL ASSESSMENT") and Cozzi's operations.  The
     Environmental Assessment may include a physical examination of the Owned
     Properties or Leased Premises, and any structures, facilities, or
     equipment located thereon, review of pertinent permits, reports and
     records, documents, and Licenses of the Company and its Subsidiaries.
     MTLM shall not be entitled to take any soil samples, ground and surface
     water samples, or storage tank testing unless MTLM obtains Cozzi's prior
     written consent.  The Shareholders shall provide MTLM or its designated
     agents or consultants with the access to such property and all permits,
     records and reports which MTLM, their respective agents or consultants
     require to conduct the Environmental Assessment.  If the Environmental
     Assessment identifies any conditions or environmental contamination which
     requires remediation or further evaluation under the Environmental,
     Health, and Safety Laws or if the results of the Environmental Assessment
     are otherwise not satisfactory to MTLM in its sole discretion, and if the
     Company elects not to remediate or otherwise satisfy MTLM (in the sole
     discretion of MTLM), then MTLM may elect not to close the transactions
     contemplated by this Agreement as provided in Section 12.1.

              6.11    TRADING IN MTLM'S COMMON STOCK.  Except as otherwise
     expressly consented to by MTLM, from the date of this Agreement until the
     Closing Date, neither the Company, nor the Shareholders (nor any
     Affiliates thereof) will directly or indirectly purchase or sell
     (including short sales) any shares of the Common Stock in any transactions
     effected on the Nasdaq Stock Market or otherwise.

              6.12    OTHER AGREEMENTS.  Upon the Closing, each party shall
     cause their respective affiliates to execute and deliver the following
     agreements (collectively, the "COLLATERAL AGREEMENTS"):

                      (a)      an employment agreement for each of (i) Albert
              A. Cozzi, (ii) Frank J. Cozzi, (iii) Gerard M. Jacobs, (iv) T.
              Benjamin Jennings, and (v) Gregory P. Cozzi in a form reasonably
              acceptable to the parties hereto, which form shall be agreed upon
              on or prior to May 30, 1997 and attached to this Agreement as an
              exhibit.  The parties agree that the employment agreements will
              contain non-competition covenants and that such covenants are an
              integral part of this Agreement;

                      (b)      the Stockholders' Agreement in the form attached
              hereto as Exhibit B (the "STOCKHOLDERS AGREEMENT");

                      (c)      the Escrow Agreement;

                      (d)      warrants in the form of Exhibit C to be issued
              to each of the Shareholders pursuant to their employment
              agreements as follows:





                                     44
<PAGE>   53



                               (i)     Albert A. Cozzi shall receive warrants
                      exercisable for 755,172 MTLM Shares for a period of five
                      (5) years, half of which will have an exercise price of
                      $5.91 per share and half of which will have an exercise
                      price per share equal to seventy-five percent (75%) of
                      the last sales price of a MTLM Share on the day before
                      the Closing Date;

                               (ii)    Frank J. Cozzi shall receive warrants
                      exercisable for 582,759 MTLM Shares for a period of five
                      (5) years, half of which will have an exercise price of
                      $5.91 per share and half of which will have an exercise
                      price per share equal to seventy-five percent (75%) of
                      the last sales price of a MTLM Share on the day before
                      the Closing Date; and

                               (iii)   Gregory P. Cozzi shall receive warrants
                      exercisable for 162,069 MTLM Shares for a period of five
                      (5) years, half of which will have an exercise price of
                      $5.91 per share and half of which will have an exercise
                      price per share equal to seventy-five percent (75%) of
                      the last sales price of a MTLM Share on the day before
                      the Closing Date.

                      (e)      the Registration Rights Agreement in the form 
              attached hereto as Exhibit D.

              6.13    HSR ACT COMPLIANCE. The Company, the Shareholders and
     MTLM will as promptly as practicable, but in no event later than 10
     business days following the execution and delivery of this Agreement, file
     or cause to be filed with the United States Federal Trade Commission (the
     "FTC") and the United State Department of Justice (the "DOJ") the
     notification and report form required for the transactions contemplated
     hereby and any supplemental information requested in connection therewith
     pursuant to the HSR Act.  Any such notification and report form and
     supplemental information will be in substantial compliance with the
     requirements of the HSR Act.  Each of MTLM, the Company and the
     Shareholders will furnish to the others such necessary information and
     reasonable assistance as the others may request in connection with the
     preparation of any filing or submission which is necessary under the HSR
     Act.  Each of the Company, the Shareholders and MTLM will keep each other
     apprised of the status of any communications with, and inquiries or
     requests for additional information addressed to the entity that filed a
     notification and report form as an acquired or acquiring person from, the
     FTC or the DOJ and shall comply or cause its respective filing person to
     comply promptly with any such inquiry or request.  Each of the Company,
     the Shareholders and MTLM will use commercially reasonable efforts to
     obtain any clearance required under the HSR Act for the purchase and sale
     of the Cozzi Shares.

              6.14    CORPORATE AUTHORITY.  MTLM, the Company and the
     Shareholders agree to use their individual best efforts to obtain the
     authorizations required for each to execute and deliver this Agreement and
     to perform each of their respective obligations hereunder and to
     consummate the transactions contemplated hereby.





                                     45
<PAGE>   54



              6.15    CERTIFICATION OF TAX STATUS.  The Shareholders shall
     deliver to MTLM either:  (i) a Certificate of Nonforeign Status under
     Treasury Regulation Section 1.1445-2(b)(1), or (ii) a Certificate meeting
     the requirements of Treasury Regulation Sections 1.987-2(g) and
     1.897-2(h)(2) that the Cozzi Shares do not constitute a U.S. real property
     interest.

              6.16    PURCHASE OF JOINT VENTURE INTEREST.  The Company will use
     its best efforts to negotiate and enter into agreements for the
     acquisition by the Surviving Corporation of all interests held by the
     Company's joint venture partners in both of (i) Perlco, L.L.C. and (ii)
     Salt River Recycling, L.L.C.  The agreements shall provide that the
     closings will occur as promptly as possible after the Effective Time of
     the Merger.  Prior to the Closing Date, the Company shall obtain releases
     and/or waivers of any restrictive covenants, which would, following the
     Merger, bind MTLM, the Surviving Corporation or any of their Affiliates,
     other than a covenant not to compete in favor of MetricMetal, L.L.C. and a
     covenant not to compete in favor of Fulton Street Trading Company.  The
     Company shall obtain MTLM's prior written approval of the price, terms and
     conditions of any acquisition of such interests and releases or waivers of
     any restrictive covenants.

              6.17    MEETING OF SHAREHOLDERS.  MTLM shall take all actions
     necessary, in accordance with General Corporation Law of Delaware, its
     Certificate of Incorporation and its By-laws, to duly call, give notice
     of, convene and hold a meeting of its shareholders as promptly as
     practicable (or have executed a written consent of its shareholders in
     lieu thereof), to adopt and approve the Agreement and the Merger
     contemplated hereby, any amendments to the Articles of Incorporation or
     By-laws of MTLM as required by this Agreement, and the other transactions
     contemplated by the Agreement to the extent such approval is required.

              6.18    PRE-CLEAR MERGER.  MTLM, Mergeco and the Company shall
     take all necessary steps to pre-clear the Merger with the Secretary of
     State of the State of Illinois, in order that on the Closing Date, the
     Articles of Merger may be filed with the Secretary of State of the State
     of Illinois and become effective upon filing.

              6.19    FINANCING.  MTLM will use reasonable efforts to raise at
     least $50.0 million of additional financing by offering convertible
     debentures, high-yield debt, equity or some combination of the foregoing
     (a "FINANCING").  MTLM shall use the funds from such Financing to retire
     existing indebtedness, provide for working capital and finance
     acquisitions by MTLM.  If MTLM has not received a firm commitment for the
     placement of such Financing or closed such Financing on or prior to June
     30, 1997, the Company shall have the right to terminate this Agreement.

              6.20    CONDUCT OF MTLM'S BUSINESS.  From and after the Effective
     Time of the Merger and for so long as the Stockholders Agreement shall
     remain in effect:

              (a)     the Shareholders, acting as a group, shall have the right
     to nominate that number of persons constituting one-half of the total
     number of directors of MTLM; provided that one of such nominees shall be
     an independent director reasonably acceptable to T. Benjamin Jennings and
     Gerard M. Jacobs all as further provided in the Stockholders Agreement;





                                     46
<PAGE>   55




              (b)     T. Benjamin Jennings and Gerard M. Jacobs, acting as a
     group, shall have the right to nominate that number of persons
     constituting one-half of the total number of directors of MTLM; provided
     that one of such nominees, shall be an independent director reasonably
     acceptable to the Shareholders, all as further provided in the
     Stockholders Agreement;

              (c)     the directors of MTLM shall appoint the following persons
     to the offices set forth opposite their names, all as further provided in
     the Stockholders Agreement:


<TABLE>
                 <S>            <C>                   <C>
                      (i)       Albert A. Cozzi:        President, Chief Operating Officer
                      (ii)      Gerard M. Jacobs:       Chief Executive Officer
                      (iii)     T. Benjamin Jennings:   Chairman and Chief Development Officer
                      (iv)      Frank J. Cozzi:         Vice President and President of the Surviving
                                                        Corporation
</TABLE>

              (d)     the Board of Directors of MTLM will create an Executive
     Committee of the Board of Directors, including Albert A.  Cozzi, Gerard M.
     Jacobs and T. Benjamin Jennings, which committee shall be delegated all
     the powers and authority of the Board of Directors relating to the
     management of the business and affairs of MTLM as permitted under Section
     141 (c) (l) of the General Corporation Law of the State of Delaware;
     provided, that, in the event of the death or disability of Albert A.
     Cozzi, Frank J. Cozzi shall assume Albert A. Cozzi's position on such
     Executive Committee; provided, further, that any action to be taken by the
     Executive Committee shall require the unanimous consent of Albert A. Cozzi
     (or in the event of his death or disability, Frank J. Cozzi), Gerard M.
     Jacobs and T. Benjamin Jennings; and

              (e)     Albert A. Cozzi shall periodically convene a meeting of
     all members of the Office of the President, which members shall consist of
     at least one executive officer of each principal subsidiary of MTLM, and
     he shall lead discussions regarding the strategic direction of MTLM and
     key operating issues affecting MTLM at such time.

              6.21    DISCLOSURE SUPPLEMENTS.  From time to time prior to the
     Closing, the Company and the Shareholders, on one hand, and MTLM and
     Mergeco, on the other hand, shall supplement or amend the Schedules hereto
     with respect to any matter hereafter arising which, if existing or
     occurring at or prior ro the date of this Agreement, would have been
     required to be set forth or described in any such Schedule or which is
     necessary to complete or correct any information in any such Schedule or
     in any representation or warranty of the Company and the Shareholders, on
     one hand, or MTLM and Mergeco, on the other hand, which has been rendered
     inaccurate thereby.  For purposes of determining the satisfaction of the
     conditions set forth in Sections 7.1 and 8.1 hereof, no such supplement or
     amendment shall be given effect unless expressly agreed so by each of the
     parties hereto.





                                     47
<PAGE>   56




                                 ARTICLE VII

              CONDITIONS TO THE OBLIGATIONS OF MTLM AND MERGECO

              The obligations of MTLM and Mergeco to effect the Transaction
     shall be subject to the fulfillment at or prior to the Closing Date of the
     following conditions, any or all of which may be waived in whole or in
     part by MTLM:

              7.1     ACCURACY OF REPRESENTATIONS AND WARRANTIES AND COMPLIANCE
     WITH OBLIGATIONS.  The representations and warranties of the Shareholders
     contained in this Agreement shall be true and correct at and as of the
     Closing Date with the same force and effect as though made at and as of
     that time except (i) for changes specifically permitted by or disclosed
     pursuant to this Agreement, and (ii) that those representations and
     warranties which address matters only as of a particular date shall remain
     true and correct as of such date.  The Company and the Shareholders shall
     have performed and complied with all of their respective obligations
     required by this Agreement to be performed or complied with at or prior to
     the Closing Date.  The Company and the Shareholders shall have delivered
     to MTLM a certificate, dated as of the Closing Date, duly signed (in the
     case of the Company by its respective chief executive officer and chief
     financial officer), stating that such representations and warranties are
     true and correct and that all such obligations have been performed and
     complied with.

              7.2     FINANCING.  MTLM shall have received the written consent
     of Bank of America, Illinois to the transactions contemplated hereby on
     terms and conditions reasonably satisfactory to MTLM.

              7.3     CORPORATE CERTIFICATE.  The Shareholders shall have
     delivered to MTLM (i) copies of the articles of incorporation and bylaws
     of the Company as in effect immediately prior to the Closing Date, (ii)
     copies of resolutions adopted by the Board of Directors of the Company and
     the Shareholders authorizing the transactions contemplated by this
     Agreement, and (iii) certificates of good standing of the Company issued
     by the State of Illinois and each other state in which each of them is
     qualified to do business as of a date not more than thirty days prior to
     the Closing Date, certified in each case as of the Closing Date by the
     Secretary as being true, correct and complete.

              7.4     OPINIONS OF COUNSEL.  MTLM shall have received opinions
     dated as of the Closing Date from counsels for the Company and the
     Shareholders, in form and substance acceptable to MTLM, to the aggregate
     effect that:

                               (i)     the Company and each Subsidiary is a
              corporation duly organized and existing and in good standing
              under the laws of its state of incorporation, and each of them is
              authorized to carry on the business now conducted by it and to
              own or lease the properties now owned or leased by it;





                                     48
<PAGE>   57



                               (ii)    the Company has obtained all necessary
              authorizations and consents of its governing board to effect the
              transactions contemplated in this Agreement;

                               (iii)   all issued and outstanding shares of
              capital stock of the Company and each Subsidiary are owned as set
              forth on Schedule 4.5 hereto;

                               (iv)     except as set forth in Schedule 4.12,
              counsel has no actual knowledge (without any independent
              investigation of any sort) of any litigation, proceeding or
              investigation pending or threatened which might result in any
              material adverse change in the properties, business or prospects
              or in the condition of the Company or the Subsidiaries, or which
              questions the validity of this Agreement;

                               (v)     counsel has no actual knowledge (without
              any independent investigation of any sort) that any event has
              occurred or state of facts exist which would constitute a breach
              of any of the representations and warranties made by the
              Shareholders pursuant to Article IV of this Agreement; and

                               (vi)    this Agreement is a valid and binding
              obligation of the Company and the Shareholders, as the case may
              be, and enforceable against each of them in accordance with its
              terms, except as enforcement may be limited by bankruptcy,
              insolvency, reorganization, moratorium or other laws affecting
              the enforcement of creditors' rights generally and general
              equitable principles regardless of whether such enforceability is
              considered in a proceeding at law or in equity.

              7.5      GOVERNMENTAL APPROVALS.  All consents, authorizations 
     and approvals from, and all declarations, filings  and registrations with
     any governmental authority required to consummate the transactions
     contemplated by this Agreement, including those set forth on Schedule 4.6,
     shall have been obtained or made without the imposition of any material
     conditions, and all applicable waiting periods under the HSR Act shall have
     expired or terminated.

              7.6      NO ADVERSE LITIGATION.  There shall not be pending or 
     threatened any action or proceeding by or before any court or other 
     governmental body which shall seek to restrain, prohibit, invalidate or 
     collect damages arising out of the Agreement or any other transaction
     contemplated hereby, and which, in the judgment of MTLM, makes it
     inadvisable to proceed with the Agreement and other transactions
     contemplated hereby.

              7.7     MTLM'S APPROVALS.  The shareholders of MTLM shall have
     authorized and approved this Agreement and the transactions contemplated
     hereby.

              7.8     FAIRNESS OPINION.   MTLM shall have received a fairness
     opinion, in form and content acceptable to MTLM in its sole discretion, as
     to the fairness of the transactions contemplated





                                     49
<PAGE>   58


     by this Agreement to MTLM and its shareholders and such opinion shall not
     have been withdrawn prior to Closing.

              7.9     OTHER CLOSING DELIVERIES.  At Closing, MTLM shall have
     received:

              (a)     a current commitment for title insurance insuring title
     to the real property owned by the Company and the Subsidiaries as set
     forth on Schedule 4.14 (a) which shows no Liens other than current real
     estate/general taxes and Liens disclosed on such Schedule 4.14(a);

              (b)     each Collateral Agreement executed by the Company, the
     Shareholders and/or their Affiliates, as the case may be, who is a party
     thereto;

              (c)     resignations effective as of the Closing Date from such
     officers and directors of the Company and the Subsidiaries as MTLM shall
     have requested in writing;

              (d)     the stock books, stock ledgers, minute books, and other
     books and records of the Company; and

              (e)     all other previously undelivered agreements,
     certificates, documents, instruments or writings required to be delivered
     by the Company and/or the Shareholders at or prior to the Closing pursuant
     to this Agreement or otherwise in connection herewith, duly executed by
     the Company and/or the Shareholders, as the case may be, who is a party
     thereto.

              7.10    DISSENTING SHAREHOLDERS.  No shareholders of the Company
     shall have elected to exercise any appraisal rights with respect to the
     Merger as provided for under Section 11.65 of the BCA.

              7.11    COZZI BUILDING CORPORATION.  The Company shall own all of
     the issued and outstanding shares of Cozzi Building Corporation.

              7.12    ESTATE OF JAMES H. COZZI.  The Company shall have
     obtained a general release from the Estate of James H. Cozzi and Irene
     Cozzi releasing the Company, MTLM and their respective affiliates from all
     claims, obligations, liabilities, promises, agreements, suits, demands or
     debts, other than the amount reflected in the Company's Current Balance
     Sheet, that they may have against such entities and persons, in a form and
     substance satisfactory to MTLM, in its sole discretion.

              7.13    NO MATERIAL ADVERSE CHANGE.  Between the date hereof and
     the Closing Date, there has been no Material Adverse Change to the
     Company.

              7.14    METRICMETAL.  The Company shall have taken all action
     necessary to cause the dissolution of MetricMetal, L.L.C.





                                     50
<PAGE>   59



              7.15    EAST CHICAGO INDIANA REVENUE BONDS.  The Company shall
     have received the written consent of G.E. Capital Public Finance, Inc. to
     the transactions contemplated hereby under that certain Loan Agreement
     dated July 1, 1996 among G.E. Capital Public Finance, Inc., the City of
     East Chicago, Indiana, and American Scrap Processing, Inc.


                                 ARTICLE VIII

                       CONDITIONS TO THE OBLIGATIONS OF
                       THE COMPANY AND THE SHAREHOLDERS

              The obligations of the Company and each of the Shareholders to
     effect the Transaction shall be subject to the fulfillment at or prior to
     the Closing Date of the following conditions, any or all of which may be
     waived in whole or in part by the Company and the Shareholders:

              8.1     ACCURACY OF REPRESENTATIONS AND WARRANTIES AND COMPLIANCE
     WITH OBLIGATIONS.  The representations and warranties of MTLM and Mergeco
     contained in this Agreement shall be true and correct at and as of the
     Closing Date with the same force and effect as though made at and as of
     that time except (i) for changes specifically permitted by or disclosed
     pursuant to this Agreement, and (ii) that those representations and
     warranties which address matters only as of a particular date shall remain
     true and correct as of such date.  Each of MTLM and Mergeco shall have
     performed and complied with all of their obligations required by this
     Agreement to be performed or complied with at or prior to the Closing
     Date.  Each of  MTLM and Mergeco shall have delivered to the Shareholders
     a certificate, dated as of the Closing Date, and signed by an executive
     officer (in the case of MTLM by its respective chairman and chief
     financial officer), certifying that such representations and warranties
     are true and correct and that all such obligations have been performed and
     complied with.

              8.2     MERGER CONSIDERATION.  At the Closing, MTLM shall have
     delivered to the Shareholders the merger consideration provided for in
     Section 1.4.

              8.3     NO ADVERSE LITIGATION.  There shall not be pending or
     threatened any action or proceeding by or before any court or other
     governmental body which shall seek to restrain, prohibit, invalidate or
     collect damages arising out of the Agreement or any of the transactions
     contemplated hereby, and which in the judgment of the Shareholders makes
     it inadvisable to proceed with the Agreement or any other transaction
     contemplated hereby.

              8.4     OPINION OF COUNSEL.  The Shareholders shall have received
     an opinion dated as of the Closing Date from counsel for MTLM, in form and
     substance acceptable to the Shareholders, to the effect that:

                               (i)      MTLM is a corporation duly organized
              and existing and in good standing under the laws of the State of
              Delaware and is authorized to carry on





                                     51
<PAGE>   60


              the business now conducted by it and to own or lease the
              properties now owned or leased by it;

                               (ii)    Mergeco is a corporation duly organized
              and existing and in good standing under the laws of the State of
              Illinois, and is authorized to carry on the business now
              conducted by it and to own or lease the properties now owned or
              leased by it;

                               (iii)    Each of MTLM and Mergeco has obtained
              all necessary authorizations and consents of its Board of
              Directors and Shareholders to effect the transactions
              contemplated in this Agreement;

                               (iv)    such counsel has no actual knowledge
              (without any independent investigation of any sort) of any
              litigation, proceeding or investigation pending or threatened
              which might result in any material adverse change in the
              properties, business or prospects or in the condition of MTLM, or
              which questions the validity of this Agreement;

                               (v)     such counsel has no actual knowledge
              (without any independent investigation of any sort) that any
              event has occurred or state of facts exists which would
              constitute a breach of any of the representations and warranties
              made by MTLM or Mergeco pursuant to Article II and III of this
              Agreement; and

                               (vi)    this Agreement is a valid and binding
              obligation of each of MTLM and Mergeco, and enforceable against 
              it in accordance with its terms, except as enforcement may be 
              limited by bankruptcy, insolvency, reorganization, moratorium or
              other laws affecting the enforcement of creditors' rights 
              generally and general equitable principles regardless of whether
              such enforceability is considered in a proceeding at law or in 
              equity.

              8.5     TAX OPINION.  The Shareholders shall have received an
     opinion from its counsel to the effect that the merger will be treated for
     federal income tax purposes as a reorganization within the meaning of
     Section 368(a) of the Code.

              8.6     CONSENTS.  The Company shall have received the written
     consent of Bank of America Illinois to the transactions contemplated
     hereby, on the terms and conditions reasonably satisfactory to MTLM,
     including, the Company shall not be required to pay any fees or other
     costs in exchange for such consent and the Shareholders shall not be
     required to personally guaranty any indebtedness owed by the Company to
     Bank of America Illinois.
              8.7     OTHER CLOSING DELIVERIES.  At Closing, the Companies and
     the Shareholders shall have received each Collateral Agreement to which
     MTLM and/or its Affiliates are a party, duly executed by MTLM and/or its
     Affiliates, as the case may be.





                                     52
<PAGE>   61



              8.8     NO MATERIAL ADVERSE CHANGE.  Between the date hereof and
     the Closing Date, there has been no Material Adverse Change (as defined in
     Section 2.23) to MTLM.


                                  ARTICLE IX

                               INDEMNIFICATION

              9.1     AGREEMENT BY THE SHAREHOLDERS TO INDEMNIFY.  The
     Shareholders agree, jointly and severally, to indemnify, defend and hold
     MTLM harmless from and against the aggregate of all Indemnifiable Damages
     (as defined below) if and when such Indemnifiable Damages exceed $500,000
     in the aggregate, and then only to the extent of such excess.

                      (a)      For purposes of this Agreement, "INDEMNIFIABLE
     DAMAGES" means, without duplication, the aggregate of all expenses,
     losses, costs, deficiencies, liabilities and damages (including, without
     limitation, related counsel and paralegal fees and expenses) incurred or
     suffered by MTLM, on a pre-tax consolidated basis, to the extent (i)
     resulting from any breach of a representation or warranty made by the
     Company or the Shareholders in or pursuant to this Agreement, (ii)
     resulting from any breach of the covenants or agreements made by the
     Company or the Shareholders pursuant to this Agreement, or (iii) resulting
     from any inaccuracy in any certificate or environmental report delivered
     by the Company or any Shareholders pursuant to this Agreement.

                      (b)      Without limiting the generality of the
     foregoing, with respect to the measurement of Indemnifiable Damages, MTLM
     shall have the right to be put in the same pre-tax consolidated financial
     position as MTLM would have been in had each of the representations and
     warranties of the Shareholders hereunder been true and correct and had the
     covenants and agreements of the Company and the Shareholders hereunder
     been performed in full.

                      (c)      Each of the representations and warranties made
     by the Shareholders in this Agreement or pursuant hereto shall survive for
     a period of twelve (12) months after the Closing Date except as follows:
     (i) the representations and warranties of the Shareholders contained in
     Section 4.19 (Tax Matters) and Section 4.18 (ERISA), and to the extent
     relating to tax attributes or liabilities with respect to Taxes of the
     Company, shall expire at the time the period of limitations (including any
     extensions thereof pursuant to the delivery of waivers of the applicable
     period of limitations) expires for the assessment by the taxing authority
     of additional Taxes with respect to which the representations and
     warranties relate; and (ii) the representations and warranties of the
     Shareholders contained in Sections 4.1, 4.2, 4.3, 4.4, and 4.5 shall not
     expire, but shall continue indefinitely.  No claim for the recovery of
     Indemnifiable Damages may be asserted by MTLM against the Shareholders
     after such representations and warranties shall thus expire, provided,
     however, that claims for Indemnifiable Damages first asserted within the
     applicable period shall not thereafter be barred.  Notwithstanding any
     knowledge of facts determined or determinable by any party by
     investigation, each party shall have the right to fully rely on the
     representations, warranties, covenants and





                                     53
<PAGE>   62


     agreements of the other parties contained in this Agreement or in any
     other documents or papers delivered in connection herewith.  Each
     representation, warranty, covenant and agreement of the parties contained
     in this Agreement is independent of each other representation, warranty,
     covenant and agreement.

                      (d)      In the event that MTLM believes it is entitled
     to a claim for any Indemnifiable Damages hereunder, MTLM shall promptly
     give written notice to the Shareholders of such claim and the amount or
     the estimated amount of such claim, and the basis for such claim.  If the
     Shareholders do not pay the amount of the claim for Indemnifiable Damages
     to MTLM within ten (10) days, then MTLM may exercise its respective rights
     under Section 9.4 and/or take any action or exercise any remedy available
     to them by appropriate legal proceedings to collect the Indemnifiable
     Damages.

              9.2     AGREEMENT BY MTLM TO INDEMNIFY.  MTLM agrees to
     indemnify, defend and hold the Shareholders harmless from and against the
     Shareholders Indemnifiable Damages (as defined below) if and when such
     Shareholders Indemnifiable Damages exceed $500,000 in the aggregate and
     then only to the extent of such excess.

                      (a)      For purposes of this Agreement, "SHAREHOLDERS
     INDEMNIFIABLE DAMAGES" means, without duplication, the aggregate of all
     expenses, losses, costs, deficiencies, liabilities and damages (including,
     without limitation, related counsel and paralegal fees and expenses)
     incurred or suffered by the Shareholders, on a pre-tax consolidated basis,
     to the extent (i) resulting from any breach of a representation or
     warranty made by MTLM or Mergeco in or pursuant to this Agreement, (ii)
     resulting from any breach of the covenants or agreements made by MTLM or
     Mergeco in or pursuant to this Agreement, or (iii) resulting from any
     inaccuracy in any certificate delivered by MTLM or Mergeco pursuant to
     this Agreement.

                      (b)      Without limiting the generality of the
     foregoing, with respect to the measurement of Shareholders Indemnifiable
     Damages, the Shareholders have the right to be put in the same pre-tax
     consolidated financial position as he would have been in had each of the
     representations and warranties of MTLM hereunder been true and correct and
     had the covenants and agreements of MTLM hereunder been performed in full.

                      (c)      Each of the representations and warranties made
     by MTLM and Mergeco in this Agreement or pursuant hereto shall survive for
     a period of twelve (12) months after the Closing Date, notwithstanding any
     investigation at any time made by or on behalf of the Shareholders, and
     upon expiration of such twelve (12) month period, such representations and
     warranties shall expire, except as follows:  (i) the representations and
     warranties of MTLM contained in Section 2.17 (Tax Matters) and Section
     2.25 (ERISA), and to the extent relating to tax attributes or liabilities
     with respect to Taxes of MTLM, shall expire at the time the period of
     limitations (including any extensions thereof pursuant to the delivery of
     waivers of the applicable period of limitations) expires for the
     assessment by the taxing authority of additional Taxes with respect to
     which the representation and warranties relate; and (ii) the
     representations contained in Sections 2.1, 2.2, 2.3 and 2.6 and Article
     III shall survive and continue indefinitely.  No claim for the recovery of
     Shareholders





                                     54
<PAGE>   63


     Indemnifiable Damages may be asserted by the Shareholders against MTLM
     after such representations and warranties shall thus expire, provided,
     however, that claims for Indemnifiable Damages first asserted within the
     applicable period shall not thereafter be barred.  Notwithstanding any
     knowledge of facts determined or determinable by any party by
     investigation, each party shall have the right to fully rely on the
     representations, warranties, covenants and agreements of the other parties
     contained in this Agreement or in any other documents or papers delivered
     in connection herewith.  Each representation, warranty, covenant and
     agreement of the parties contained in this Agreement is independent of
     each other representation, warranty, covenant and agreement.

                      (d)      In the event that the Shareholders believe they
     are entitled to a claim for any Shareholder Indemnifiable Damages
     hereunder, the Shareholders shall promptly give written notice to MTLM of
     such claim and the amount or the estimated amount of such claim, and the
     basis for such claim.  If MTLM does not pay the amount of the claim for
     Shareholder Indemnifiable Damages to the Shareholders within ten (10)
     days, then the Shareholders may take any actions or exercise any remedy
     available to them by appropriate legal proceeding to collect the
     Shareholder Indemnifiable Damages.

              9.3     CONDITIONS OF INDEMNIFICATION.  The obligations and
     liabilities of the Shareholders and MTLM hereunder with respect to their
     respective indemnities pursuant to this Article IX resulting from any
     claim or other assertion of liabilities by third parties (hereinafter
     called collectively "CLAIMS"), shall be subject to the following terms and
     conditions:

                      (a)      the party seeking indemnification (the
     "INDEMNIFIED PARTY") must give the other party or parties, as the case may
     be (the "INDEMNIFYING PARTY"), notice of any such Claim twenty (20) days
     after the Indemnified Party receives notice thereof;

                      (b)      the Indemnifying Party shall have the right to
     undertake, by counsel or other representatives of its own choosing, the
     defense of such Claim; provided, however, if a Claim is made against MTLM
     which exceeds the value of the Escrow Shares at such time, MTLM shall have
     the right to control the defense of the Claim;

                      (c)      in the event that the Indemnifying Party shall
     elect not to undertake such defense, or within a reasonable time after
     notice of any such Claim from the Indemnified Party shall fail to defend,
     the Indemnified Party (upon further written notice to the Indemnifying
     Party) shall have the right to undertake the defense, compromise or
     settlement of such Claim, by counsel or other representatives of its own
     choosing, on behalf of and for the account and risk of the Indemnifying
     Party (subject to the right of the Indemnifying Party to assume defense of
     such Claim at any time prior to settlement, compromise or final
     determination thereof);

                      (d)      anything in this Section 9.3 to the contrary
     notwithstanding, (A) the Indemnified Party shall have the right, at its
     own cost and expense, to have its own counsel to protect its own interests
     and participate in the defense, compromise or settlement of the Claim, (B)
     the Indemnifying Party shall not, without the Indemnified Party's written
     consent, settle or compromise





                                     55
<PAGE>   64


     any Claim or consent to entry of any judgement which does not include as
     an unconditional term thereof the giving by the claimant or the plaintiff
     to the Indemnified Party, its officers, directors and agents of a release
     from all liability in respect of such Claim, and (C) the Indemnified
     Party, by counsel or other representatives of its own choosing and at its
     sole cost and expense, shall have the right to consult with the
     Indemnifying Party and its counsel or other representatives concerning
     such Claim, and the Indemnifying Party and the Indemnified Party and their
     respective counsel shall cooperate with respect to such Claim.

              9.4     SECURITY FOR THE SHAREHOLDERS'S INDEMNIFICATION
     OBLIGATION.  As security for the agreement by the Shareholders to
     indemnify and hold MTLM harmless as described in Section 9.1, MTLM shall
     have the right to offset any Indemnifiable Damages against the Escrow
     Shares.  Notwithstanding anything contained herein to the contrary, the
     aggregate Indemnifiable Damages which the Shareholders are obligated to
     indemnify and hold harmless MTLM against pursuant to Section 9.1 shall be
     limited to the Escrow Shares.

              9.5     THE JAMES H. COZZI ESTATE SPECIAL INDEMNIFICATION.  In
     addition to the agreement of the Shareholders set forth in Section 9.1 and
     without regard to any limitations thereon contained in Section 9.1 or
     Section 9.4, if MTLM waives its condition set forth in Section 7.12, the
     Shareholders jointly and severally agree to indemnify, defend and hold
     MTLM, the Company and their respective Affiliates harmless from and
     against all expenses, losses, costs, deficiencies, liabilities and damages
     (including, without limitation, related counsel and paralegal fees and
     expenses) incurred or suffered by any of them arising out of or resulting
     from (i) any payment required to be made by MTLM or the Company of
     Additional Consideration (as that term is defined in the James H.  Cozzi
     Sales Agreement which is not reflected in the adjustment pursuant to
     Section 1.8 hereof, or (ii) any breach or alleged breach by the Company or
     MTLM of any agreement, covenant, or obligation in favor of the Estate of
     James H. Cozzi, or any beneficiary thereof; provided, however, that the
     Shareholders shall have no obligation to indemnify MTLM, the Company or
     their Affiliates for any amount reflected on the Company's Current Balance
     Sheet.  Albert A. Cozzi, for and on behalf of MTLM and the Company, shall
     have the exclusive power and authority to defend, conduct, control,
     compromise and settle all matters, claims and controversies relating to
     the James H. Cozzi Sales Agreement, including the power and authority to
     cause MTLM and the Company to pay any obligations relating thereto.  Any
     amounts paid or otherwise validly demanded to be paid by MTLM or the
     Company for which MTLM, the Company or their Affiliates are entitled to
     indemnification pursuant to this Section 9.5, shall be immediately paid by
     the Shareholders to MTLM or the Company as the case may be, upon written
     demand therefor, without deduction or setoff.





                                     56
<PAGE>   65



                                  ARTICLE X

                            SECURITIES LAW MATTERS

              The parties agree as follows with respect to the sale or other
     disposition after the Closing Date of MTLM Shares:
  
              10.1    DISPOSITION OF MTLM SHARES.  Each of the Shareholders
     represents and warrants that each of the MTLM Shares being acquired by him
     hereunder is being acquired and will be acquired for his own account and
     will not be sold or otherwise disposed of, except pursuant to (i) an
     exemption from the registration requirements under the Securities Act,
     which does not require the filing by MTLM with the SEC of any registration
     statement, offering circular or other document, in which case the
     Shareholders shall first supply to MTLM an opinion of counsel (which
     counsel and opinions shall be satisfactory to MTLM) that such exception is
     available, or (ii) an effective registration statement filed by MTLM with
     the SEC under the Securities Act.

              10.2    LEGEND.  Each of MTLM Shares shall bear the following
     legend:

              THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE MAY
              NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF BY THE HOLDER
              EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT FILED
              UNDER THE SECURITIES ACT OF 1933, AS AMENDED, WITH RESPECT
              THERETO OR IN ACCORDANCE WITH AN OPINION OF COUNSEL IN FORM AND
              SUBSTANCE SATISFACTORY TO THE ISSUER THAT AN EXEMPTION FROM SUCH
              REGISTRATION IS AVAILABLE.

     MTLM may, unless a registration statement is in effect covering MTLM
     Shares, place stop transfer orders with its transfer agents with respect
     to such certificates in accordance with federal securities laws.


                                  ARTICLE XI

                                 DEFINITIONS

              11.1    DEFINED TERMS.  As used herein, the following terms shall
     have the following meanings:

                      "Aboveground Storage Tanks" defined in Section 2.24 (g).

                      "Affiliate" shall have the meaning ascribed to it in Rule
              12b-2 of the General Rules and Regulations under the Exchange 
              Act, as in effect on the date hereof.





                                     57
<PAGE>   66



                      "Agreement" defined in the introductory paragraph of
                      this Agreement.

                      "Asbestos" or "Asbestos-containing material" defined in
                      Section 2.24 (i).

                      "Assets" defined in Section 4.15 (a).

                      "BCA" defined in Section 1.1.

                      "CERCLA" defined in Section 2.24 (j).

                      "Claims" defined in Section 9.3.

                      "Closing" defined in Section 1.7.

                      "Closing Date" defined in Section 1.7.

                      "Code" defined in Section 2.17.

                      "Common Stock" means the common stock, par value of $.01
                      per share, of MTLM.

                      "Collateral Agreements" defined in Section 6.12.

                      "Company" defined in the introductory paragraph and for
                      purposes of Section 4.13, more particularly defined in
                      Section 4.13 (l).

                      "Contract" means any indenture, lease, sublease, license,
              loan agreement, mortgage, note, restriction, will, trust,
              commitment, obligation or other contract, agreement or
              instrument, whether written or oral.

                      "Cozzi" defined in the introductory paragraph of this
                      Agreement.

                      "Cozzi Shares" defined in the Recitals hereto.

                      "Current Balance Sheet" defined in Section 4.9.

                      "Designated Contracts" defined in Section 4.25.

                      "Discharge" defined in Section 2.24 (e).

                      "Disclosed Contracts" defined in Section 2.14.

                      "DOJ" defined in Section 6.13.





                                     58
<PAGE>   67



                      "Effective Date" defined in Section 1.2.

                      "Effective Time" defined in Section 1.2.

                      "EMCO" means EMCO Recycling Corp.

                      "Employee Benefit Plans" defined in Section 4.18 (a).

                      "Environmental Assessment" defined in Section 6.10.

                      "Environmental, Health and Safety Laws" defined in
                      Section 2.24 (j).

                      "EPCRA" defined in Section 2.24 (j).

                      "ERISA" defined in Section 2.25 (a).

                      "Escrow Agreement" defined in Section 1.6.

                      "Escrow Agent" defined in Section 1.6.

                      "Escrow Shares" defined in Section 1.6.

                      "Exchange Act" means the Securities Exchange Act of
                      1934, as amended.

                      "FIFRA" defined in Section 2.24 (j).

                      "FTC" defined in Section 6.13.

                      "Financial Statements" defined in Section 4.9.

                      "Financing" defined in Section 6.19.

                      "Fixed Assets" defined in Section 4.15 (b).

                      "GAAP" means generally accepted accounting principles in
              effect in the United States of America from time to time.

                      "Governmental Authority" means any nation or government,
              any state, regional, local or other political subdivision
              thereof, and any entity or official exercising executive,
              legislative, judicial, regulatory or administrative functions of
              or pertaining to government.

                      "Hazardous Substances" defined in Section 2.24 (d).





                                     59
<PAGE>   68



                      "HSR Act" defined in Section 2.7.

                      "HouTex" means HouTex Metals Company, Inc.

                      "Immigration Act" defined in Section 2.12(c).

                      "Indemnifiable Damages" defined in Section 9.1 (a).

                      "Indemnified Party" defined in Section 9.3 (a).

                      "Indemnifying Party" defined in Section 9.3 (a).

                      "Insurance Policies" defined in Section 4.20.

                      "Intellectual Property" defined in Section 4.24.

                      "In the ordinary course of business" as used in reference
                      to MTLM's business, is defined in Section 2.9.

                      "James H. Cozzi Sales Agreement" defined in Section 1.8.

                      "Leased Premises" defined in Section 4.14 (b) and for
                      purposes of Section 4.13, more particularly defined in
                      Section 4.13 (m).

                      "Leases" defined in Section 4.14 (b).

                      "Licenses" defined in Section 2.24 (b).

                      "Lien" means any mortgage, pledge, security interest,
              encumbrance, lien or charge of any kind (including, but not
              limited to, any conditional sale or other title retention
              agreement, any lease in the nature thereof, and the filing of or
              agreement to give any financing statement under the Uniform 
              Commercial Code or comparable law of any jurisdiction in 
              connection with such mortgage, pledge, security interest, 
              encumbrance, lien or charge).

                      "Material Adverse Change (or Effect)" means a change (or
              effect), in the condition (financial or otherwise), properties,
              assets, liabilities, rights, obligations, operations, business or
              prospects which change (or effect) individually or in the
              aggregate, is materially adverse to such condition, properties,
              assets, liabilities, rights, obligations, operations, business or
              prospects.

                      "Material Customers" defined in Section 4.26.





                                     60
<PAGE>   69



                      "MacLeod" means MacLeod Metals Company.

                      "Mergeco" defined in the introductory paragraph of this
                      Agreement.

                      "Merger" defined in the Recitals.

                      "MPPA Plan" defined in Section 2.25(b).

                      "MTLM" defined in the introductory paragraph of this
     Agreement and for purposes of Section 2.24, more particularly defined in
     Section 2.24 (m).

                      "MTLM Assets" defined in Section 2.15.

                      "MTLM Current Balance Sheet" defined in Section 2.9.

                      "MTLM Financial Statements" defined in Section 2.9.

                      "MTLM Fixed Assets" defined in Section 2.15.

                      "MTLM Insurance Policy" defined in Section 2.26.

                      "MTLM Leased Premises" defined in Section 2.27 and for
     purposes of Section 2.24, more particularly defined in Section 2.24(n).

                      "MTLM Owned Properties" defined in Section 2.27 and for
     purposes of Section 2.24, more particularly defined in Section 2.24(n).

                      "MTLM Receivables" defined in Section 2.18.

                      "MTLM Shares" defined in the Recitals.

                      "MTLM Subsidiary" defined in Section 2.1.

                      "OSHA" defined in Section 2.24(j).

                      "Owned Properties" defined in Section 4.14(a) and for
              purposes of Section 4.13, more particularly defined in Section
              4.13(m).

                      "Permits" defined in Section 2.13.

                      "Person" means an individual, partnership, corporation,
              business trust, joint stock company, estate, trust,
              unincorporated association, joint venture, limited liability
              company, Governmental Authority or other entity, of whatever
              nature.





                                     61
<PAGE>   70



                      "PBGC" defined in Section 4.18 (f).

                      "RCRA" defined in Section 2.24(j).

                      "Receivables" defined in Section 4.21.

                      "Release" defined in Section 2.24(e).

                      "Reserve" means Reserve Iron & Metals L.P.

                      "Restricted Territory" defined in Section 6.9(a).

                      "SEC" means the Securities and Exchange Commission.

                      "SEC Filings" means the documents listed on Schedule
              11.1.

                      "Securities Act" means the Securities Act of 1933, as
                      amended.

                      "Shareholders" defined in the introductory paragraph of
                      this Agreement

                      "Stockholders Agreement" defined in Section 6.12 (b).

                      "Shareholders Indemnifiable Damages" defined in Section
                       9.2 (a).

                      "Subsidiary" is defined in Section 4.1.

                      "Surviving Corporation" defined in Section 1.1.

                      "Tax Return" means any tax return, filing or information
              statement required to be filed in connection with or with respect
              to any Taxes; and

                      "Taxes" means all taxes, fees or other assessments,
              including, but not limited to, income, excise, property, sales,
              franchise, intangible, withholding, social security and
              unemployment taxes imposed by any federal, state, local or
              foreign governmental agency, and any interest or penalties
              related thereto.

                      "Termination Date" defined in Section 6.9.

                      "Underground Storage Tanks" defined in Section 2.24 (g).

                      "Waste" defined in Section 2.24 (d).

                      "Welfare Plan" defined in Section 2.25 (c).





                                     62
<PAGE>   71



              11.2    OTHER DEFINITIONAL PROVISIONS.

                      (a)      All terms defined in this Agreement shall have
     the defined meanings when used in any certificates, reports or other
     documents made or delivered pursuant hereto or thereto, unless the context
     otherwise requires.

                      (b)     Terms defined in the singular shall have a
     comparable meaning when used in the plural, and vice versa.

                      (c)      All matters of an accounting nature in
     connection with this Agreement and the transactions contemplated hereby
     shall be determined in accordance with GAAP applied on a basis consistent
     with prior periods, where applicable.

                      (d)      As used herein, the neuter gender shall also
     denote the masculine and feminine, and the masculine gender shall also
     denote the neuter and feminine, where the context so permits.

                      (e)      As used herein, the term "to the best knowledge
     of MTLM" or any similar term relating to the knowledge of MTLM means the
     actual knowledge, after reasonably inquiry, of any of the officers of MTLM
     or the MTLM Subsidiaries.  "Reasonable inquiry" shall mean communication
     by any of the officers of MTLM or the MTLM Subsidiaries with the other
     officers of MTLM or the relevant MTLM Subsidiary with responsibility for
     the matter in question and to counsel with respect to matters involving
     questions or law, requesting such individual to review specified
     provisions of this Agreement and to advise such person of any matter
     relevant to the specified representation, warranty or provision.

                      (f)      As used herein, the term "to the best of the
     Shareholders' knowledge" or any similar term relating to the knowledge of
     the Shareholders means the actual knowledge, after reasonable inquiry, of
     any of the officers of the Company and the Subsidiaries.  "Reasonable
     inquiry" shall mean communication by any of the officers of the Company or
     the Subsidiaries with the other officers of the Company or relevant
     Subsidiary with responsibility for the matter in question and to counsel
     with respect to matters involving questions or law, requesting such
     individual to review specified provisions of this Agreement and to advise
     such person of any matter relevant to the specified representation,
     warranty or provision.


                                 ARTICLE XII

                      TERMINATION, AMENDMENT AND WAIVER

              12.1    TERMINATION.  This Agreement may be terminated:

                      (a)      at any time prior to the Closing Date, by mutual
     written consent of all of the parties hereto at any time prior to the
     Closing;





                                     63
<PAGE>   72



                      (b)      at any time prior to the Closing Date, by MTLM
     in the event of a material breach by the Company or the Shareholders of
     any provision of this Agreement;

                      (c)      at any time prior to the Closing Date, by the
     Shareholders in the event of a material breach by MTLM or Mergeco of any
     provision of this Agreement;

                      (d)      at any time prior to the Closing Date, by MTLM
     in the event (i) MTLM is not satisfied, in its sole discretion, with the
     results of the Environmental Assessment; (ii) MTLM does not receive
     authorization and approval of this Agreement and the transactions
     contemplated hereby by its shareholders at the meeting referred to in
     Section 6.17; (iii) MTLM has not received from its investment advisor a
     written opinion satisfactory to MTLM in its sole discretion, that this
     Agreement and the transactions set forth herein are fair to MTLM and its
     shareholders;

                      (e)      at any time prior to the Closing Date, by the
     Shareholders if the Shareholders have not received from their tax counsel
     an opinion to the effect that the Merger will be treated for federal
     income tax purposes as a reorganization within the meaning of Section
     368(a) of the Code;

                      (f)      at any time prior to the Closing Date, by any of
     MTLM or the Shareholders if the Closing shall not have occurred by
     September 30, 1997; provided, however, that neither MTLM, nor the
     Shareholders shall be entitled to terminate this Agreement pursuant to
     this Section 12.1(f), if such party's knowing or willful breach of this
     Agreement has prevented the consummation of the transactions contemplated
     hereby; or

                      (g)      by the Company, as provided in Section 6.19.

              12.2    EFFECT OF TERMINATION.  Except as provided in Article VI,
     in the event of termination of this Agreement pursuant to Section 12.1,
     this Agreement shall forthwith become void; provided, however, that
     nothing herein shall relieve any party from liability for the willful
     breach of any of its representations, warranties, covenants or agreements
     set forth in this Agreement.


                                  ARTICLE XIII

                               GENERAL PROVISIONS

              13.1    NOTICES.  All notices, requests, demands, claims, and
     other communications hereunder shall be in writing and shall be delivered
     by certified or registered mail (first class postage prepaid), guaranteed
     overnight delivery, or facsimile transmission if such transmission is
     confirmed by delivery by certified or registered mail (first class postage
     pre-paid) or guaranteed overnight delivery, to the following addresses and
     telecopy numbers (or to such other addresses or telecopy numbers which
     such party shall designate in writing to the other party):





                                     64
<PAGE>   73



                      (a)      IF TO MTLM TO:

                               Metal Management, Inc.
                               500 N. Dearborn Street
                               Suite 405
                               Chicago, IL  60610
                               Attn: Chief Executive Officer
                               Telecopy No.:  (312) 645-0714

                               WITH A COPY TO:

                               Shefsky & Froelich Ltd.
                               444 N. Michigan Avenue
                               Suite 2400
                               Chicago, IL  60611
                               Attn:  Erhard R. Chorle
                               Telecopy No.:  (312) 527-5921

                      (b)      IF TO THE COMPANY OR THE SHAREHOLDERS TO:

                               Albert A. Cozzi
                               Cozzi Iron & Metal, Inc.
                               2232 South Blue Island Avenue
                               Chicago, IL  60608
                               Telecopy No.:  (773) 254-8201

                               WITH A COPY TO:

                               Winston & Strawn
                               35 West Wacker Drive
                               Chicago, IL  60601
                               Attn:  M. Finley Maxson
                               Telecopy No.:  (312) 558-5700

              13.2    ENTIRE AGREEMENT.  This Agreement (including the Exhibits
     and Schedules attached hereto) and other documents delivered at the
     Closing pursuant hereto, contains the entire understanding of the parties
     in respect of its subject matter and supersedes all prior agreements and
     understandings (oral or written) between or among the parties with respect
     to such subject matter; provided, however, that, notwithstanding the
     foregoing, the provisions of that certain Exchange of Information and
     Nondisclosure Agreement dated as of October 23, 1996 by and between MTLM
     and the Company shall remain in full force and effect.  The Exhibits and
     Schedules constitute a part hereof as though set forth in full above.





                                     65
<PAGE>   74



              13.3    EXPENSES.  Except as otherwise provided herein, MTLM,
     Mergeco and the Company shall pay their own fees and expenses, including
     their own counsel fees, incurred in connection with this Agreement or any
     transaction contemplated hereby; provided, however, the Company shall not
     pay any fees and expenses relating to the Shareholders' estate planning
     activities.

              13.4    AMENDMENT; WAIVER.  This Agreement may not be modified,
     amended, supplemented, canceled or discharged, except by written
     instrument executed by all parties.  No failure to exercise, and no delay
     in exercising, any right, power or privilege under this Agreement shall
     operate as a waiver, nor shall any single or partial exercise of any
     right, power or privilege hereunder preclude the exercise of any other
     right, power or privilege.  No waiver of any breach of any provision shall
     be deemed to be a waiver of any preceding or succeeding breach of the same
     or any other provision, nor shall any waiver be implied from any course of
     dealing between the parties.  No extension of time for performance of any
     obligations or other acts hereunder or under any other agreement shall be
     deemed to be an extension of the time for performance of any other
     obligations or any other acts.  The rights and remedies of the parties
     under this Agreement are in addition to all other rights and remedies, at
     law or equity, that they may have against each other.

              13.5    BINDING EFFECT; ASSIGNMENT.  The rights and obligations
     of this Agreement shall bind and inure to the benefit of the parties and
     their respective successors and assigns.  Nothing expressed or implied
     herein shall be construed to give any other person any legal or equitable
     rights hereunder.  Except as expressly provided herein, the rights and
     obligations of this Agreement may not be assigned by any of the
     Shareholders without the prior written consent of MTLM.

              13.6    COUNTERPARTS.  This Agreement may be executed in any
     number of counterparts, each of which shall be an original but all of
     which together shall constitute one and the same instrument.

              13.7    INTERPRETATION.  When a reference is made in this
     Agreement to an article, section, paragraph, clause, schedule or exhibit,
     such reference shall be deemed to be to this Agreement unless otherwise
     indicated.  The headings contained herein and on the schedules are for
     reference purposes only and shall not affect in any way the meaning or
     interpretation of this Agreement or the schedules.  Whenever the words
     "include," "includes" or "including" are used in this Agreement, they
     shall be deemed to be followed by the words "without limitation."  Time
     shall be of the essence in this Agreement.

              13.8    GOVERNING LAW; INTERPRETATION.  This Agreement shall be
     construed in accordance with and governed for all purposes by the laws of
     the State of Illinois applicable to contracts executed and to be wholly
     performed within such State.

              13.9    ARM'S LENGTH NEGOTIATIONS.  Each party herein expressly
     represents and warrants to all other parties hereto that (a) before
     executing this Agreement, said party has fully informed itself of the
     terms, contents, conditions and effects of this Agreement; (b) said party
     has relied solely and completely upon its own judgment in executing this
     Agreement; (c) said party has had the opportunity to seek and has obtained
     the advice of counsel before executing this Agreement; (d) said party has





                                     66
<PAGE>   75


     acted voluntarily and of its own free will in executing this Agreement;
     (e) said party is not acting under duress, whether economic or physical,
     in executing this Agreement; and (f) this Agreement is the result of arm's
     length negotiations conducted by and among the parties and their
     respective counsel.





                                     67
<PAGE>   76


              IN WITNESS WHEREOF, the parties hereto have caused this Agreement
     to be duly executed and delivered as of the day and year first above
     written.

                                             METAL MANAGEMENT, INC., A
                                             DELAWARE CORPORATION



     Date:______________________             By:_____________________________
                                             Name:___________________________
                                             Title:__________________________


                                             CIM ACQUISITION, CO.,
                                             AN ILLINOIS CORPORATION


     Date:______________________             By:_____________________________
                                             Name:___________________________
                                             Title:__________________________



                                             COZZI IRON & METAL, INC.,
                                             AN ILLINOIS CORPORATION


     Date:______________________             By:_____________________________
                                             Name:___________________________
                                             Title:__________________________




     Date:______________________             ___________________________________
                                             ALBERT A. COZZI

     Date:______________________             ___________________________________
                                             FRANK J. COZZI

     Date:______________________             ___________________________________
                                             GREGORY P. COZZI





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