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                                                                    Exhibit 10.9

                        SEPARATION AND RELEASE AGREEMENT

         This Separation and Release Agreement ("Agreement") is entered into
between Metal Management, Inc., a Delaware corporation ("Company"), for and on
behalf of itself and any affiliated and related entities (hereinafter referred
to collectively as the "Company Affiliates" or, individually, as a "Company
Affiliate") and Albert A. Cozzi, an individual resident of the state of Illinois
("Executive"), this 18th day of January 2004. For purposes of this Agreement,
"affiliated and related entities" means, with respect to any entity or entities,
any other entity or entities directly or indirectly controlling, controlled by,
or under common control with, such entity or entities, as well as any joint
venture involving any such entity and, for purposes of this definition,
"control" means the power to direct or cause the direction of the management or
policies of the controlled entity.

         For and in consideration of the covenants and agreements set forth
herein, including the waiver and release by the parties of certain rights
thereof, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties agree as follows:

         1.       Resignation. Executive hereby resigns as an employee,
director, board member, and/or officer of Company and all Company Affiliates of
which he is an employee, director, board member, and/or officer, effective as of
4:30 p.m. (CST) on January 16, 2004 (the "Resignation Date"), and shall take
such action as may be required to document such resignation as may be reasonably
requested by the applicable Company or Company Affiliate. Executive shall have
no further official duties after the Resignation Date. Executive's resignation
shall be treated as a unilateral termination by Executive, without "Good
Reason," as such term is defined in that certain Employment Agreement, dated
December 1, 1997 (as amended by that certain letter agreement, dated as of June
7, 2001 and that certain letter agreement dated as of June 13, 2001, the
"Employment Agreement"), by and between Executive and Company.

         2.       Post-Employment Compensation and Benefits. Subject to
withholding for taxes and other amounts required by law to be withheld, and to
the terms of any applicable benefit plans, Executive shall receive the
compensation and benefits described in this paragraph, provided that Executive
does not revoke this Agreement pursuant to paragraph 3(e). Executive
acknowledges and agrees that the releases, promises and obligations of Company
and the Company Affiliates pursuant to this Agreement constitute good and
valuable consideration for Executive's entering into this Agreement.

                  (a)      Executive shall receive an amount equal to Two
Million, Thirty-Nine Thousand, Two Hundred Sixty-Five U.S. Dollars ($2,039,265)
("Severance"), of which (i) One Million Six Hundred Two Thousand Four Hundred
Seventy-Eight U.S. Dollars ($1,602,478) which shall be paid on January 30,
2004 and (ii) Four Hundred Thirty-Six Thousand Seven Hundred Eighty-Seven U.S.
Dollars ($436,787) shall be paid on July 18, 2005. The Severance is inclusive of
all severance benefits, salary, short-term and long-term bonuses, and in lieu of
any and all other compensation (if any) to which Executive may be entitled,
including, without limitation, any payments arising under the Employment
Agreement, from Company or any

                                                            Initials of Parties

                                                         Executive _____________

                                                         Company _______________

<PAGE>

Company Affiliate, except as otherwise expressly provided in this paragraph 2,
and including salary and other amounts Executive is entitled to through the
Resignation Date. Except for the portion of this payment attributable to accrued
unpaid salary, this payment shall not be considered earnings for purposes of the
retirement, savings, 401(k) or other employee benefit plans of Company or any
Company Affiliate.

                  (b)      Executive shall not be eligible for any awards under
an incentive compensation plan of Company or any Company Affiliate.

                  (c)      All warrants for the purchase of Company common stock
previously awarded or granted to Executive are fully vested as of the
Resignation Date and are exercisable (according to the terms of the respective
plan or scheme pursuant to which such warrants were issued) for the remainder of
their respective exercise terms.

                  (d)      All shares of Company common stock subject to
forfeiture awarded or granted to Executive shall become fully non-forfeitable as
of the Resignation Date.

                  (e)      Executive shall be eligible to continued group health
plan coverage under Company's medical and dental plan in accordance with the
terms of provisions of such plan for a period of 18 months from the Resignation
Date at no charge to Executive.

                  (f)      Company shall reimburse Executive for up to $24,900
of the cost of life insurance purchased after the Resignation Date upon
submission to Company of proof of payments by Executive.

                  (g)      Except as otherwise expressly provided in this
paragraph 2, nothing in this Agreement shall limit or reduce any benefits or
rights Executive may have under any retirement, savings, deferred compensation,
401(k), or any other employee benefit plan of Company or any Company Affiliate,
or pursuant to any personal life insurance, health or annuity contract that
Executive may have with Company or any Company Affiliate; provided, further,
that, notwithstanding the provisions of this Section 2(f), neither Company nor
any Company Affiliate shall be liable to Executive for any non-vested matching
funds or other non-vested benefits under any retirement, savings, deferred
compensation, 401(k), or any other employee benefit plan of Company or any
Company Affiliate.

                  (h)      Attached hereto as Schedule "A" is a listing of all
of Executive's common stock subject to forfeiture described in this Section 2
that are outstanding as of this Agreement, along with the relevant grant dates.
This common stock shall become vested on the Resignation Date in accordance with
2(d) above.

         3. Release of Claims.

                  (a)      General. Executive acknowledges and agrees that this
Agreement includes a complete, final, and binding settlement, release and
covenant not to sue with respect to any claims he may have against the Releasees
(as defined below), including, but not limited to,

                                                            Initials of Parties

                                                         Executive _____________

                                                         Company _______________

                                     - 2 -
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all claims arising from or in any way related to Executive's employment with
Company or any of the Company Affiliates or the termination thereof, as well as
claims arising from any contracts, agreements, or employment relationships,
currently in force or contemplated, between Executive and Company and the
Company Affiliates.

                  (b)      Release. Executive hereby releases, discharges, and
covenants not to sue Company and the Company Affiliates, or any of them, and/or
their respective predecessors, successors, parents, subsidiaries, affiliates,
divisions, assigns, current or former employees, officers, directors,
shareholders, representatives, attorneys, and agents (collectively referred to
herein as "Releasees"), collectively, separately, and severally, from any and
all claims, causes of action, liabilities, and judgments of every type and
description whatsoever, known and unknown, arising under any state (including
the employment laws of State of Illinois), local, federal, administrative or
foreign (for purposes of this Agreement, "foreign" means the legal jurisdiction
of any sovereign state or country other than the United States of America) law
(including, but not limited to, claims arising under the Civil Rights Act of
1964, as amended; 42 U.S.C. Section 1981; the Rehabilitation Act of 1973, as
amended; the Employee Retirement Income Security Act of 1974, as amended; the
Fair Labor Standards Act of 1938, as amended; the Americans with Disabilities
Act; the Securities Act of 1933; the Securities Exchange Act of 1934; the Family
and Medical Leave Act; or claims for declaratory judgment, equitable relief, or
attorney's fees) which he, his heirs, administrators, executors, personal
representatives, beneficiaries, and assigns may have or claim to have against
Releasees for any reason whatsoever, which arise from events occurring prior to
the date of this Agreement, other than a claim to pay the benefits described in
Paragraph 2 hereof. Executive understands and agrees that the payments made to
him pursuant to this Agreement and this release include and encompass therein
any and all claims with respect to attorneys' fees, costs, and expenses for or
by any and all attorneys who have represented him or with whom he has consulted
or who have done anything in connection with the subject matter of this
Agreement or any and all claims released herein. Notwithstanding anything
contained herein to the contrary, nothing in this subparagraph shall prevent
Executive from bringing a claim or claims to enforce the terms of this
Agreement.

                  (c)      Release of Claims under the Age Discrimination in
Employment Act of 1967, as Amended. In addition to the foregoing, Executive
hereby knowingly and voluntarily releases, discharges and covenants not to sue
or move for arbitration in any court or other tribunal, Releasees, collectively,
separately and severally, from or for any and all liability, claims,
allegations, and causes of action arising under the Age Discrimination in
Employment Act of 1967, as amended ("ADEA"), which Executive, Executive's heirs,
administrators, executors, personal representatives, beneficiaries, and assigns
may have or claim to have against Releasees.

                  (d)      Opportunity to Consider/Consideration. Executive
hereby acknowledges and represents that Executive (i) has been advised in
writing to consult with an attorney prior to executing this Agreement, (ii) has
been given the opportunity to consider for a period of at least 21 days the
terms of this Agreement and (iii) has received valuable and good consideration
to which Executive is otherwise not entitled in exchange for Executive's
execution of this Agreement.

                                                            Initials of Parties

                                                         Executive _____________

                                                         Company _______________

                                     - 3 -
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                  (e)      Revocation Period. The parties hereby acknowledge
that Executive may revoke the release by Executive set forth in subparagraphs
3(b) and 3(c) (the "General Release") at any time prior to 5:00 p.m. on the
seventh day after this Agreement is executed by Executive (the "Effective Date")
and that the General Release and agreements of Company set forth in Section 2
and this Section 3 shall not be effective or enforceable prior to the Effective
Date unless Executive shall not have revoked the General Release in accordance
with the terms hereof on or prior to the Effective Date. In the event Executive
chooses to exercise Executive's option to revoke the General Release, Executive
shall notify Company in writing to Company's agent designated below for this
purpose, and return all monies paid pursuant to this Agreement (if any) no later
than 5:00 p.m. on the Effective Date. Such notice shall be delivered by
registered or certified mail, return receipt requested and addressed as follows:

         Metal Management, Inc.
         500 N. Dearborn Street
         Suite 600
         Chicago, Illinois  60610
         Attn: Daniel Dienst

         with a copy to:

         King & Spalding LLP
         1185 Avenue of the Americas
         New York, New York  10036
         Attn: E. William Bates, II, Esq.
               Lawrence A. Larose, Esq.

                  (f)      Full Settlement and Agreement. Executive agrees that
this Agreement resolves any and all claims which have been or might be filed by
Executive or on Executive's behalf against any Releasees with any State of
Illinois administrative agency, the Equal Employment Opportunity Commission (the
"EEOC") and any other federal, state, or local court, tribunal agency or
commission of the United States, or of any other sovereign state or country as
of the Effective Date and as specified in subparagraphs 3(b) or 3(c) above.
Executive agrees that this Agreement constitutes a full resolution of any and
all such claims, and if any action should be taken to pursue any such charge,
any or all Releasees shall be entitled to a protective order against or summary
judgment dismissing any such action, and neither he nor anyone on Executive's
behalf shall file or cause to be filed any charge, claim, or complaint in any
forum against any of the Releasees.

                  (g)      Release and Indemnification by Company. Company and
Company Affiliates hereby release, discharge, and covenant not to sue Executive
from any and all claims, causes of action, liabilities, and judgments of every
type and description whatsoever, arising under any state, local, federal,
administrative or foreign law (including, but not limited to claims for
declaratory judgment, equitable relief, or attorney's fees) which they may have
or claim to have against Executive for any reason whatsoever, excluding theft or
fraud. Further, Company and Company Affiliates, jointly and severally, agree to
indemnify and hold Executive harmless

                                                            Initials of Parties

                                                         Executive _____________

                                                         Company _______________

                                     - 4 -
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from any and all claims, causes of action, liabilities, and judgments of every
type and description whatsoever, known and unknown, excluding theft or fraud,
arising under any state, local, federal, administrative or foreign law
(including, but not limited to claims for declaratory judgment, equitable
relief, or attorney's fees) brought against him by or on behalf of any other
Company Affiliate, including, without limitation, the Releasees (or other
association for which Executive served as an officer or in a similar business
capacity on behalf of or in his capacity as an officer of Company or any Company
Affiliate), which arise from events occurring prior to the Effective Date.
Notwithstanding anything contained herein to the contrary, nothing in this
subparagraph shall prevent Company or any Company Affiliate from bringing a
claim or claims for theft or fraud or to enforce the terms of this Agreement.

         4.       Non-Assignment. Executive, Company and Company Affiliates each
represent, warrant and agree that they have not assigned, transferred, sold or
hypothecated any of the claims released by this Agreement. The parties covenant
and agree that if there is any claim arising from the assignment, sale or
hypothecation of any claim released hereunder, the party who assigned, sold or
hypothecated such claim shall indemnify and hold the other party harmless from
any liability, including costs and expenses (as well as reasonable attorneys'
fees) incurred as a result of any such claim.

         5.       Indemnification for Loss of Consortium. Executive covenants
and agrees that if there is any claim for loss of consortium against Releasees,
or any other similar claim, arising out of or related to Executive's
relationship or transactions with Company or any Company Affiliate (including
not limited to his employment or separation of employment with Company and any
Company Affiliate), Executive agrees to indemnify and hold Company and any
Company Affiliate harmless from any liability, including costs and expenses (as
well as reasonable attorneys' fees) incurred by Company or any Company Affiliate
as a result of any such claim.

         6.       Confidentiality.

                  (a)      Except as otherwise specifically provided in Section
6(b) of this Agreement, Executive represents, agrees and covenants that he has
maintained and shall continue to maintain the confidentiality of, and not to
disclose, reveal, publish, disseminate, or discuss, directly or indirectly, to
or with any other person or entity the terms of this Agreement (including
whether or not any amount was paid, the amount paid, or information he may have
with respect to this Agreement).

                  (b)      The following disclosures, which are specific
exceptions to Section 6(a) above, are permitted in the following limited
circumstances:

                           (i)      Executive may make such disclosures as are
                                    reasonably necessary for tax reporting
                                    purposes;

                           (ii)     Executive may disclose the terms and amount
                                    paid under this Agreement as reasonably
                                    necessary to obtain legal, tax, or
                                    accounting advice or services;

                                                            Initials of Parties

                                                         Executive _____________

                                                         Company _______________

                                     - 5 -
<PAGE>

                           (iii).   Executive is permitted to disclose the terms
                                    of this Agreement to the extent required in
                                    any legal proceeding involving the
                                    enforcement of this Agreement, but, as to
                                    any other legal proceedings, Executive is
                                    permitted to disclose the terms of this
                                    Agreement only to the extent (1)
                                    specifically requested and consented to in
                                    writing by an officer or other authorized
                                    representative of Company or the Company
                                    Affiliates, or (2) compelled pursuant to a
                                    subpoena or other court order, provided,
                                    however, that before disclosing this
                                    Agreement pursuant to a subpoena or court
                                    order, Executive shall provide notice to
                                    Company that Executive has been served with
                                    such subpoena or court order, including by
                                    providing Company with a copy thereof, and
                                    shall not disclose this Agreement before
                                    Company or another Company Affiliate (if
                                    relevant to the matter at hand) has had the
                                    opportunity to object to such disclosure
                                    within the time allowed by law or otherwise
                                    to act to protect such information from
                                    disclosure.

                           (iv).    Executive is permitted to disclose the terms
                                    of this Agreement to his spouse, provided
                                    that his spouse has been advised of and
                                    agrees to abide by the requirements of this
                                    Section 6.

                           (v).     Notwithstanding anything contained herein to
                                    the contrary, Executive's communications
                                    regarding this Agreement to members of the
                                    board of directors of Company on or prior to
                                    the date of this Agreement shall not be
                                    considered a violation of this Section 6.

         7.       Nondisclosure.

                  (a)      Introduction. Executive acknowledges and agrees that
he has been employed as the Chief Executive Officer of Company, serves as
director, board member and/or officer of several other Company Affiliates, and
in his senior executive role has been privy to other confidential and
proprietary information relating to Company and the Company Affiliates. In light
of the foregoing, Executive agrees to hold in a fiduciary capacity and keep
confidential certain information relating to Company and the Company Affiliates,
as set forth in this paragraph 7.

                  (b)      Nondisclosure of Attorney-Client Communications and
Work Product. Executive acknowledges and agrees that during the term of his
employment, Executive has been exposed to or has had access to the confidential
attorney-client communications of Company and the Company Affiliates and
attorney work product relating to Company and the Company Affiliates. Executive
hereby agrees that he shall not directly or indirectly use or disclose any
information or document conveyed to him in the course of his employment that is
a confidential attorney client communication or is attorney work product except
to the attorneys of the applicable Company or Company Affiliates or as required
by a validly issued court order.

                                                            Initials of Parties

                                                         Executive _____________

                                                         Company _______________

                                     - 6 -
<PAGE>

                  (c)      Acknowledgement of Access to Trade Secrets and
Confidential Information. Executive acknowledges and agrees during his
employment as the Chief Executive Officer of Company and in his capacity as an
officer, director, and/or board member of other Company Affiliates, Executive
was intimately involved in developing business strategy and planning for Company
and the Company Affiliates, and was provided or had access to Trade Secrets and
Confidential Information of Company and the Company Affiliates, including but
not limited to present and future operations of Company and the Company
Affiliates, their customers, distributors, and suppliers, marketing, pricing and
bidding strategies, and the methods used by Company and the Company Affiliates
and their respective employees. Executive acknowledges and agrees that such
information has been developed or obtained by Company and the Company Affiliates
by the investment of significant time, effort and expense, and that such
information is a valuable, special and unique asset of Company and the Company
Affiliates which provides them with a significant competitive advantage.
Executive further understands and acknowledges that such information is
proprietary to Company and the Company Affiliates and that, if exploited by
Executive in contravention of this Agreement, would seriously, adversely and
irreparably affect the business of Company and the Company Affiliates.

                  (d)      Nondisclosure of Trade Secrets. Executive hereby
agrees that he shall not directly or indirectly use or disclose any Trade Secret
of Company or the Company Affiliates for so long as such information remains a
Trade Secret. As used herein, a Trade Secret includes, but is not limited to,
any technical or non-technical data, a formula, a pattern, a compilation, a
program, a device, a method, a technique, a drawing, a process, financial data,
financial plans, product plans, or a list of actual or potential customers or
suppliers which: (i) derives economic value, actual or potential from not being
generally known to, and not being readily ascertainable by proper means by,
other persons who can obtain economic value from its disclosure or use; (ii) is
the subject of reasonable efforts by Company or any Company Affiliate to
maintain its secrecy; and (iii) is not otherwise in the public domain.

                  (e)      Nondisclosure of Confidential Information. In
addition to the foregoing, and not in limitation thereof, Executive agrees that
for a period of 18 months after the Resignation Date, Executive shall hold in a
fiduciary capacity for the benefit of Company and each of the Company Affiliates
and shall not directly or indirectly use or disclose any Confidential
Information, as defined herein, that Executive may have acquired (whether or not
developed or compiled by Executive and whether or not Executive was authorized
to have access to such information) during the term of, in the course of or as a
result of Executive's employment by or in the performance of Executive's duties
for Company or any Company Affiliate. The term "Confidential Information" as
used in this Agreement means any secret, confidential or proprietary information
of Company or any Company Affiliate not otherwise included in the definition of
"Trade Secrets" above. The term "Confidential Information" does not include
information that has become generally available to the public (unless Executive
is aware that the information has been made public in contravention of a
contractual, statutory or fiduciary duty).

                  (f)      Remedies Not Exclusive. Executive hereby acknowledges
and agrees that the prohibitions against disclosure of Confidential Data or
Trade Secrets recited herein are in

                                                            Initials of Parties

                                                         Executive _____________

                                                         Company _______________

                                     - 7 -
<PAGE>

addition to, and not in lieu of, any rights or remedies that Company or any
Company Affiliate may have available pursuant to the laws of any jurisdiction or
common law or judicial precedent, to prevent the disclosure of trade secrets or
proprietary information, and the enforcement by Company or any Company Affiliate
of their rights and remedies pursuant to this Agreement shall not be construed
as a waiver of any other rights or available remedies that they may possess in
law or equity absent this Agreement.

         8.       Return of Property.

                  (a)      Company Property. Executive shall, promptly after the
date of this Agreement, make available to Company and the Company Affiliates, or
its representative, (a) all memoranda, notes, records, manuals or other
documents (including, but not limited to, written instruments, voice or data
recordings, or computer tapes, disks or files of any nature), including all
copies of such materials and all documentation prepared or produced in
connection therewith, pertaining to the performance of Executive's services for
Company and the Company Affiliates or the business of Company and the Company
Affiliates whether compiled by Executive or furnished to Executive by virtue of
his employment with Company or any Company Affiliate, and (b) all equipment,
automobiles, computers, credit cards, telephones, office equipment, software,
and other property that Company or any Company Affiliate furnished to Executive
by virtue of his employment with such Company or Company Affiliate.
Notwithstanding the foregoing, the parties agree that Executive may retain
copies of documents relating to his own employment, compensation, benefits, and
retirement benefits.

                  (b)      Executive Property. Company shall, promptly after the
date of this Agreement and in cooperation with Executive, identify all of
Executive's personal property located on Company's premises and deliver to
Executive's home address all such property.

         9.       Restrictive Covenants.

                  (a)      Introduction. Executive acknowledges and agrees that
he has been employed as the Chief Executive Officer of Company, serves as
director, board member and/or officer of several other Company Affiliates, and
in his senior executive role has been privy to other confidential and
proprietary information relating to Company and the Company Affiliates, each
individually and as a whole. Executive acknowledges and agrees that the use or
disclosure of Company's and the Company Affiliates' Trade Secrets and
Confidential Information in competition with Company and each of the Company
Affiliates, or any of them, could cause serious harm to Company and the Company
Affiliates. The parties recognize that an important part of Executive's duties
was to develop business strategies, supervise employees performing a variety of
services, and to develop goodwill for Company and the Company Affiliates through
Executive's personal contact with customers, agents and others having business
relationships with Company and the Company Affiliates. There is therefore a
danger that this goodwill, a proprietary asset of Company and each Company
Affiliate, may follow Executive when his relationship with Company and the
Company Affiliates is terminated. The parties further recognize that such
knowledge of Company's, and the Company Affiliates' business strategies,
employees, Trade Secrets and Confidential Information would enable Executive to
compete

                                                            Initials of Parties

                                                         Executive _____________

                                                         Company _______________

                                     - 8 -
<PAGE>

unfairly with Company and the Company Affiliates. In light of the foregoing,
Executive acknowledges and reaffirms his obligation and agreement to abide by
the terms of the restrictive covenants as set forth below.

                  (b)      Noncompetition. In addition to any other obligation
of Executive under any other agreement with Company or any Company Affiliate, in
order to assure that Company shall realize the benefits of this Agreement,
Executive agrees that, for a period of 18 months following the Resignation Date,
he shall not directly or indirectly, alone or as a partner, joint venturer,
member, officer, director, employee, consultant, agent, independent contractor,
stockholder, creditor or in any other capacity, engage in any activity in any
state that is directly or indirectly in competition in any respect with Company,
any Company Affiliate or the Business; 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 Agreement, "Business" means the
businesses of collecting, delivering, processing, tolling, supplying, brokering
and/or recycling ferrous and/or non-ferrous metals, including, without
limitation, (i) collecting, delivering processing, tolling, supplying, brokering
and/or recycling industrial scrap metal and/or obsolete scrap metal, (ii)
producing shredded, sheared, torched, cold briquetted and/or bundled scrap
metal, turnings, cast and broken furnace iron, and/or (iii) collecting,
delivering, processing, tolling, supplying, brokering and/or recycling aluminum,
stainless steel, copper, brass, titanium and high-temperature alloys, each of
which Executive agrees is the business in which he provided services and/or
oversight to Company and each Company Affiliate as of the Resignation Date.

                  (c)      Nonsolicitation of Employees. Executive covenants and
agrees that, for a period of 18 months following the Resignation Date, Executive
shall not solicit, or take away, or attempt to solicit or take away, any person
who either is an employee of Company or any Company Affiliate as of the
Resignation Date or who was an employee of Company or any Company Affiliate at
any time during the six-month period immediately preceding the Resignation Date,
either on Executive's behalf or on behalf of any other individual or entity.

                  (d)      Nonsolicitation of Suppliers, Customers and Business
Partners. Executive covenants and agrees that, for a period of 18 months
following the Resignation Date, Executive shall not solicit, call upon, divert
or take away, or attempt to solicit, call upon, divert or take away, for the
purpose of competing with Company, any Company Affiliate or the Business, any
supplier or customer of Company, any Company Affiliate or the Business.
Executive further covenants and agrees that, for a period of 18 months following
the Resignation Date, Executive shall not solicit or call upon, or attempt to
solicit or call upon, any agent or agency, broker, broker-dealer, financial
planner, registered principal or representative, supplier or service provider of
any entity or person, if the purpose of such solicitation is either (i) to
compete with Company, any Company Affiliate or the Business or (ii) to encourage
that person or entity to terminate, diminish or alter the business relationship
between Company or any Company Affiliate and that person or entity.

                  (e)      Equitable Relief. Executive acknowledges that the
services rendered by

                                                            Initials of Parties

                                                         Executive _____________

                                                         Company _______________

                                     - 9 -
<PAGE>

Executive to Company and the Company Affiliates have been of a special, unique,
unusual and extraordinary character, which gives them a peculiar value, the loss
of which cannot reasonably or adequately be compensated in damages in an action
at law, and that a breach by Executive of any of the provisions contained in
this Agreement shall cause Company and the Company Affiliates irreparable injury
and damage. Executive further acknowledges that Executive possesses confidential
and proprietary information regarding Company and the Company Affiliates and
that any material breach of the provisions of this Agreement would be extremely
detrimental to Company and the Company Affiliates. By reason thereof, Executive
agrees that Company and the Company Affiliates shall be entitled, in addition to
any other remedies they may have under this Agreement or otherwise, to
injunctive and other equitable relief to prevent or curtail any breach of this
Agreement by Executive; provided, however, that no recital in this Agreement of
a specific legal or equitable remedy shall be construed as a waiver or
prohibition against the pursuing of other legal or equitable remedies in the
event of a breach.

         10.      Agreements to Cooperate.

                  (a)      By Executive. Executive covenants and agrees that
following the Resignation Date, Executive shall cooperate with Company and the
Company Affiliates in any pending or future inquiry, audit, litigation,
investigation or other dispute, in which Executive, by virtue of Executive's
prior relationship with Company or any Company Affiliate, has relevant knowledge
or information. Executive further agrees and covenants that, in any such matter
he shall, without the necessity for subpoena, in any jurisdiction, provide
truthful testimony or information relevant to said matter. The parties
acknowledge and agree that Executive, as a former officer and director of
Company and certain Company Affiliates, is entitled to indemnification to the
same extent and upon the same conditions as active officers or directors of such
entities, in actions, suits or proceedings of whatever nature brought against
Executive by reason of the fact that he was an officer or director of Company
and certain Company Affiliates. Executive shall be reimbursed for the reasonable
cost of travel, lodging, meals and automobile rental and reasonable attorneys'
fees and expenses incurred by Executive in complying with this paragraph. In
addition, after the date which is 18 months after the Resignation Date,
Executive shall receive reasonable per diem compensation for each day that
Executive shall be required by Company to perform services pursuant to the
requirements of this Section 10. Any request for cooperation shall be limited to
the minimum amount of Executive's time as is reasonably necessary to accomplish
the business purpose.

                  (b)      By Company. Company shall use reasonable efforts to
effect the timely issuance of common stock issuable in respect of Executive's
warrants promptly following Executive's notice of exercise of such warrants and
will provide reasonable assurances to any brokerage firm utilized by Executive
that the shares of common stock issued upon the exercise of such warrants and
the shares of restricted stock held by Executive have been duly registered under
the Securities Act of 1933, as amended.

                                                            Initials of Parties

                                                         Executive _____________

                                                         Company _______________

                                     - 10 -
<PAGE>

         11.      Non-Disparagement.

                  (a)      By Executive. Except as otherwise required by law,
Executive hereby agrees and covenants that he shall not make any statement,
written or verbal, in any forum or media, or take any other action, in
disparagement of Company or any Company Affiliate. Without limiting the
foregoing, the statements prohibited by this section include negative references
to Company's or any Company Affiliates' products, services, corporate policy,
officers and/or directors.

                  (b)      By Company. Except as otherwise required by law,
Company hereby agrees and covenants that it shall cause all officers and
directors of Company (including, but not limited to, members of Company's Board
of Directors, President and bChief Financial Officer) to refrain from making any
statement, written or verbal, in any forum or media, or taking any other action,
either directly or indirectly through the officers or employees of Company or
any Company Affiliate, in disparagement of Executive. Without limiting the
foregoing, the statements prohibited by this section include negative references
to Executive's service as an employee, officer, director or board member of
Company or the Company Affiliates but do not include statements regarding any
claims not released in subsection 3(e) above.

         12.      Applicable Law. This Agreement has been entered into in and
shall be governed by and construed under the laws of the State of New York
without reference to the choice of law principles thereof.

         13.      Successors. This Agreement shall be binding on the parties
hereto and their respective heirs, successors and assigns.

         14.      Arbitration. Subject to Company's and the Company Affiliates'
right to seek immediate injunctive or equitable relief as described in paragraph
9(d) above, any dispute, controversy, or claim arising out of or relating to
this Agreement, the breach, termination or invalidity thereof, or Executive's
employment, including claims of tortious interference or other tort or statutory
claims, and including without limitation any dispute concerning the scope of
this arbitration clause, shall be settled by arbitration administered by the
American Arbitration Association in accordance with the Employment Dispute
Resolution Rules then in effect. If a dispute arises between the parties, the
parties agree that their respective representatives shall meet and consult in
good faith and attempt to settle the dispute, within 30 days of written notice
thereof, as a condition precedent to the initiation of arbitration proceedings
hereunder. If the parties are unable to resolve their differences within that
30-day period, then within ten days thereafter, the parties shall select three
arbitrators from a list of potential arbitrators supplied by the American
Arbitration Association, in accordance with the arbitrator selection procedures
of the American Arbitration Association then in effect. Not later than 45 days
following the selection of the arbitrators, a hearing shall be convened by the
arbitrators in Chicago, Illinois. At such hearing, each party shall be entitled
to present arguments in favor of, and call witnesses in support of such party's
position with respect to the item in dispute; provided, however, that absent a
written agreement of the parties to the contrary, presentation and/or arguments
(including the direct testimony of any witnesses called by a party) of each side
of the dispute

                                                            Initials of Parties

                                                         Executive _____________

                                                         Company _______________


                                     - 11 -
<PAGE>

shall be limited to five hours. The judgment on the award rendered by the
arbitrator may be entered in any court having jurisdiction thereof.

         15.      Severability. If fulfillment of any provision of this
Agreement, at the time such fulfillment shall be due, shall transcend the limit
of validity prescribed by law, then the obligation to be fulfilled shall be
reduced or modified to the limit of such validity; and if any clause or
provision contained herein operates or would operate to invalidate this
Agreement in whole or in part, then such clause or provision only shall be held
ineffective as though not herein contained, and the remainder this Agreement
shall remain in full force and effect.

         16.      Understanding. Executive herewith covenants and agrees that he
has read and fully understands the contents and the effect of this Agreement.
Executive accepts each and all of the terms, provisions, and conditions of this
Agreement, and does so voluntarily and with full knowledge and understanding of
the contents, nature, and effect of this Agreement.

         17.      Attorneys' Fees, Costs and Expenses. Company shall reimburse
Executive for reasonable attorneys' fees and expenses incurred by Executive in
connection with the preparation and negotiation of this Agreement. In addition,
if any arbitration proceeding or action at law or in equity is necessary to
enforce or interpret the terms of this Agreement, the prevailing party shall be
entitled to reasonable attorneys' fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled.

         18.      Third Party Beneficiaries. The Company Affiliates shall be
third-party beneficiaries of this Agreement for the purposes enforcing
paragraphs 3 through 19 hereof. Except as expressly provided herein, there are
no third party beneficiaries of this Agreement and this Agreement shall inure
solely to the benefit of the parties hereto and the Company Affiliates.

         19.      Entire Agreement; Miscellaneous. Except as expressly provided
herein, the parties acknowledge and agree that they are not relying on any
representations, oral or written, other than those expressly contained in this
Agreement. Except as expressly provided herein, this Agreement supersedes all
prior agreements, proposals, negotiations, conversations, discussions and course
of dealing between the parties, including but not limited to any employment,
severance or benefits agreements between Company or any Company Affiliate and
Executive. Section headings are for convenience of reference only and are not
intended to create substantive rights or obligations. This Agreement may be
executed in counterparts, each of which shall be deemed an original, and
together shall constitute one and the same Agreement.

                                                            Initials of Parties

                                                         Executive _____________

                                                         Company _______________

                                     - 12 -
<PAGE>

         This Agreement was executed in duplicate with all pages preceding the
signature page having been initialed by all parties hereto. GIVEN under the hand
and seal of the parties or by their duly authorized agent, as of the date first
above written.

EXECUTIVE:

_______________________________________
Albert A. Cozzi

COMPANY:

METAL MANAGEMENT, INC.

By____________________________________
         Daniel Dienst
         Chief Executive Officer and
         Chairman of the Board

                                                            Initials of Parties

                                                         Executive _____________

                                                         Company _______________

                                     - 13 -
<PAGE>

                                   SCHEDULE A

<TABLE>
<CAPTION>
 WARRANT/OPTION              GRANT DATE              NUMBER
 --------------              ----------              ------
<S>                         <C>                      <C>
Restricted Stock            May 12, 2003             15,000
Restricted Stock            May 20, 2003              5,580
</TABLE>

                                                            Initials of Parties

                                                         Executive _____________

                                                         Company _______________

                                     - 14 -