<PAGE>   1
                                                                    EXHIBIT 10.1


                                LOCKUP AGREEMENT

         This Lockup Agreement ("Agreement"), dated as of November 15, 2000, is
entered into by and among Metal Management, Inc., a Delaware corporation
("Metal"), each and every one of Metal's subsidiaries (the "Subsidiaries," and
together with Metal, the "Company"), and the undersigned holders ("Consenting
Holders") of the Company's 10% Senior Subordinated Notes Due 2008 (the
"Subordinated Notes") and the Company's 12 3/4% Senior Secured Notes Due 2004
(the "Secured Notes").

                                    RECITALS

         WHEREAS, pursuant to an Indenture dated May 13, 1998 (the "Subordinated
Indenture"), and related agreements (together with the Subordinated Indenture,
the "Subordinated Existing Agreements"), the Company has previously issued the
Subordinated Notes;

         WHEREAS, pursuant to an Indenture dated May 7, 1999 (the "Secured
Secured Existing Indenture"), and related agreements (together with the Secured
Indenture, the Agreements") the Company has previously issued the Secured Notes;

         WHEREAS, hereinafter the Subordinated Indenture and Secured Indenture
may be referred to together as the Indentures, the Subordinated Existing
Agreements and Secured Existing Agreements may be referred to together as the
Existing Agreements, and the Subordinated Notes and Secured Notes may be
referred to together as the Notes;

         WHEREAS, certain of the Consenting Holders have formed an ad hoc
committee for the purpose of negotiating with the Company (the "Noteholders
Committee"), and have engaged Milbank, Tweed, Hadley & McCloy LLP ("Milbank") as
legal counsel and CIBC World Markets ("CIBC") as financial advisors;

         WHEREAS, the Company and the Consenting Holders have engaged in good
faith negotiations with the objective of reaching an agreement with regard to a
financial reorganization of the Company;

         WHEREAS, the Company and the Consenting Holders now desire to implement
a financial restructuring of the Company on the terms set forth in this
Agreement and in the Term Sheet ("Term Sheet") attached hereto as Schedule 1
(the "Financial Restructuring");

         WHEREAS, in order to implement the Financial Restructuring the Company
has determined (i) to commence cases (collectively, the "Chapter 11 Case")
under chapter 11 of the, United States Bankruptcy Code (the "Bankruptcy Code")
for the Company and certain of its subsidiaries in the United States Bankruptcy
Court for the District of Delaware (the "Bankruptcy Court"), (ii) to prepare
and file in the Chapter 11 Case a plan of reorganization (the "Plan") and
accompanying disclosure statement (the "Disclosure Statement") for the purpose
of implementing the Financial Restructuring in accordance with this Agreement
and the Term


<PAGE>   2




Sheet, and (iii) to have the Disclosure Statement approved and Plan confirmed by
the Bankruptcy Court in accordance with the timetable provided herein; and

         WHEREAS, each of the Consenting Holders is prepared to commit to vote
its claims (as defined in the Bankruptcy Code) in the principal amount of Notes
held by such Consenting Holder (for each such Consenting Holder, in the
principal amount set forth below its name on its signature page to this
Agreement, the "Subject Claims") to accept the Plan, subject to the terms and
conditions of this Agreement and the Term Sheet;

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Company and the Consenting Holders agree as follows:

      1. Forbearance. During the period commencing on the date hereof and ending
on the earlier of November 30, 2000, and the date that the Chapter 11 Case is
filed (the "Commencement Date"), and so long as no "Agreement Termination Event"
(as defined in Paragraph 8 of this Agreement) has occurred, each Consenting
Holder agrees: (A) to forbear from the exercise of any rights or remedies it may
have under the Consenting Holder's Notes, the Existing Agreements, or applicable
law with respect to any default in existence or arising under the Consenting
Holder's Notes or the Existing Agreements; and (B) that in the event of any
action by an Indenture Trustee to enforce rights and remedies triggered by a
Default or an Event of Default under the Indenture, to direct the Trustee to
forbear from exercising such rights and remedies, but only if and to the extent
(i) such action by the Consenting Holder is authorized and permissible under the
Indenture, the Notes and the Existing Agreements, and (ii) no indemnity is
required by the Indenture Trustee arising from or in connection with such
directions.

      2. Restriction on Transfer. Each Consenting Holder agrees that, so long as
this Agreement has not been terminated in accordance with Paragraph 8 hereof, it
shall not sell, transfer or assign any of the Subject Claims or any option
thereon or any right or interest (voting or otherwise and including any
participation interest) therein, unless the transferee thereof agrees in writing
to be bound by all the terms of this Agreement by executing a counterpart
signature page of this Agreement, and the transferor provides the Company with a
copy thereof, in which event the Company shall be deemed to have acknowledged
that its obligations to Consenting Holders under this Agreement shall be deemed
to constitute obligations in favor of such transferee, and the Company shall
confirm that acknowledgment in writing upon the request of such transferee.

      3. Preparation of Restructuring Documents. The Company shall instruct its
counsel promptly to deliver to the Consenting Holders for their review and
approval the Plan, the Disclosure Statement, the DIP Facility (as defined in the
Term Sheet), the Bankruptcy Court orders to be prepared in connection therewith,
and all other documents or agreements to be executed or implemented in
connection therewith, or otherwise contemplated by the Financial Restructuring,
each of which documents and agreements shall be consistent in all material
respects with this Agreement and the Term Sheet (collectively, the
"Restructuring Documents"). The Company shall coordinate with the Consenting
Holders in preparing the Restructuring



                                       2
<PAGE>   3
Documents and shall afford counsel to the Noteholders Committee a reasonable
opportunity to review and comment upon the Restructuring Documents prior to
their filing.

      4. Company Covenants Regarding Timetable. The Company agrees that it
shall: (i) use its best efforts to deliver a draft of the Plan, the Disclosure
Statement and the DIP Facility documents to Milbank prior to commencement of the
Chapter 11 Case; (ii) commence the Chapter 11 Case on or prior to November 20,
2000; (iii) use its best efforts to obtain an order of the Bankruptcy Court
approving the DIP Facility on a preliminary basis within five court days after
the Commencement Date: (iv) use its best efforts to obtain an order of the
Bankruptcy Court approving the DIP Facility on a final basis within thirty
calendar days after entry of the order approving the DIP Facility on a
preliminary basis; (v) deliver a draft of all Restructuring Documents other than
those contemplated in subparagraph (i) above to each Consenting Holder at least
5 business days prior to the Bankruptcy Court hearing on approval of the
Disclosure Statement: (vi) obtain an order of the Bankruptcy Court approving the
Disclosure Statement on or prior to January 31, 2001; and (vii) obtain an order
of the Bankruptcy Court confirming the Plan on or prior to March 30, 2001. The
Company further agrees that the effective date of the plan shall be on or prior
to June 29, 2001.

      5. Certain Other Company Covenants. The Company agrees that it shall take
all reasonable steps necessary and desirable to obtain any and all required
regulatory and/or third party approvals for the Financial Restructuring.

      6. Voting. Subject to the condition that, and so long as, no Agreement
Termination Event has occurred, including without limitation (i) the Disclosure
Statement has been approved by the Bankruptcy Court by January 31, 2001, (ii)
the Disclosure Statement as so approved contains information in respect of the
Company's business and operations that is not inconsistent with the information
heretofore provided by the Company to the Consenting Holders, and (iii) the
terms of the Plan and all Restructuring Documents are consistent in all material
respects with the terms set forth in and contemplated by this Agreement and the
Term Sheet, then each Consenting Holder agrees that it shall timely vote (or
shall cause or instruct any custodial agent to so vote) the Subject Claims to
accept the Plan and shall not revoke or withdraw such vote.

      7. Support of the Financial Restructuring, Additional Covenants. As long
as this Agreement has not been terminated in accordance with Paragraph 8 hereof,
the Company will take all necessary and appropriate actions to achieve
confirmation of the Plan, including, upon approval of the Disclosure Statement
by the Bankruptcy Court, recommending to the holders of claims and interests
impaired under the Plan that they vote to approve the Plan. As long as this
Agreement has not been terminated in accordance with Paragraph 8 hereof, neither
the Company nor any Consenting Holder will (i) object to confirmation of the
Plan or otherwise commence any proceeding to oppose or alter the Plan or any of
the Restructuring Documents, (ii) vote for, consent to, support or participate
in the formulation of any plan of reorganization or liquidation other than the
Plan proposed or filed or to be proposed or filed in any chapter 11 case or
chapter 7 case commenced in respect of the Company or any of its subsidiaries,
(iii) directly or indirectly seek, solicit, support or encourage any plan other
than the Plan, or any sale, proposal or offer of dissolution, winding up,
liquidation, reorganization, merger or restructuring of the Company or any of
its subsidiaries that reasonably could be expected to prevent, delay or impede
the successful implementation of the Financial Restructuring as contemplated by
the Plan and the



                                       3
<PAGE>   4


Restructuring Documents, (iv) object to the Disclosure Statement or the
solicitation of consents to the Plan, or (v) take any other action that is
inconsistent with, or that would delay confirmation of, the Plan.
Notwithstanding the foregoing or anything else in this Agreement to the
contrary, no Consenting Holder shall be barred from objecting to (x) approval of
the Disclosure Statement if such Disclosure Statement contains a material
misstatement or omission or fails to contain adequate information, or (y)
confirmation of the Plan, or approval, execution or implementation of any
Restructuring Document, if such Plan or Restructuring Document contains terms
that are inconsistent with this Agreement or the Term Sheet. In addition,
except as expressly provided herein, nothing herein is intended to, or does, in
any manner, waive, limit, impair, or restrict the ability of any CONSENTING
HOLDER to protect and preserve a of its rights, remedies, and interests,
including, without limitation, with respect to its Subject Claims or any other
claims against the Company, or with respect to such Consenting Holder's full
participation in the Chapter 11 Case.

      8. Termination of Agreement. This Agreement shall terminate automatically
upon the occurrence of any "Agreement Termination Event" (as hereinafter
defined), unless the occurrence of such Agreement Termination Event is waived in
writing by Consenting Holders holding not less than sixty seven percent (67%) of
the aggregate principal amount of Subordinated Notes that constitute Subject
Claims and by Consenting Holders holding not less than sixty seven percent (67%)
of the aggregate principal amount of Senior Notes that constitute Subject
Claims. If any Agreement Termination Event occurs (and has not been so waived)
at the time when permission of the Bankruptcy Court shall be required for the
Consenting Holders to change or withdraw (or cause to be changed or withdrawn )
their votes to accept the Plan, the Company shall not oppose any attempt by any
of the Consenting Holders to change or withdraw (or cause to be changed or
withdrawn) such votes at such time. Upon the occurrence of an Agreement
Termination Event, each Consenting Holder shall have all rights that are
available to it under the Existing Agreements, applicable law or otherwise,
including, without limitation, the right to take action on account of any then
existing default under the Existing Agreements.

      An "Agreement Termination Event" shall mean any of the following:

      (a) The Chapter 11 Case to implement the Financial Restructuring is not
commenced by November 20, 2000;

      (b) The Bankruptcy Court fails to enter an order in the Chapter 11 Case
approving the Disclosure Statement with respect to the Plan by January 31, 2001;

      (c) The Plan or any of the Restructuring Documents as filed by the Company
or approved in the Chapter 11 Case contains any term that is materially
inconsistent in any respect with the Financial Restructuring contemplated by and
provided for in this Agreement and the Term Sheet, or has been modified, amended
or replaced in any respect that makes it inconsistent in any material respect
with this Agreement and the Term Sheet;

      (d) The Bankruptcy Court fails to enter an order in the Chapter 11 Case
confirming the Plan by March 30, 2001;



                                       4
<PAGE>   5

      (e) The Plan is not effective by its terms and substantially consummated
by June 29, 2001;

      (f) The Company breaches any other material provision of this Agreement,
including, without limitation, ceasing to use its reasonable best efforts to
obtain approval of the Disclosure Statement and/or confirmation of the Plan;

      (g) The Chapter 11 Case of the Company is converted to a case under
chapter 7 of the Bankruptcy Code;

      (h) A chapter 11 trustee is appointed in the Chapter 11 Case;

      (i) The Company defaults under the DIP Facility and, except as provided in
subparagraph 8(1) below, such default has not been waived or cured in accordance
with the terms of the DIP Facility,

      (j) The Company fails to comply with any covenants contained in this
Agreement or the Term Sheet;

      (k) Any representation or warranty made or deemed made by the Company or
its agents or representatives to the Noteholders Committee, the Consenting
Holder, or in connection with this Agreement or the Term Sheet (including
without limitation representations relating to the Company's environmental
liabilities) is false or misleading in any material respect when made or deemed
made;

      (1) The Company fails to meet the financial covenants contained in the DIP
Facility or fails to meet or comply with any other provision of the DIP Facility
that is material to the Company's financial performance, business operations or
ability to confirm and consummate the Plan in a timeframe consistent with the
provisions of Paragraph 4 above;

      (m) A material adverse change occurs in the assets, liabilities (including
without limitation the Company's environmental liabilities), business operations
or financial condition of the Company after the date of this Agreement,
including, but not limited to, a change in circumstances rendering the liquidity
provided in the Exit Facility as contemplated in Section I of the Term Sheet
(attached hereto as Schedule 1) inadequate in the judgment of the Noteholders
Committee, but not including, however, any material adverse change that occurs
solely by reason of the filing of the Chapter 11 Case; and

      (n) The due diligence review being conducted by the financial advisors and
legal counsel to the Noteholders Committee reveals any materially adverse matter
not previously known to the Consenting Holders, Milbank or CIBC.

      9. Specific Performance. It is understood and agreed by each of the
parties hereto that money damages would not be a sufficient remedy for any
breach of this Agreement by any party and each non-breaching party shall be
entitled to the sole and exclusive remedy of specific


                                       5
<PAGE>   6

performance and injunctive or other equitable relief as a remedy for any such
breach, without the necessity of securing or posting a bond or other security in
connection with such remedy.

      10. Good Faith Negotiation of Restructuring Documents. The Company and
each Consenting Holder covenants and agrees to negotiate in good faith the
Restructuring Documents, which the Company covenants will be, in all respects,
materially consistent with this Agreement and the Term Sheet.

      11. Representations and Warranties. The Company, on the one hand, and each
of the Consenting Holders, on the other, represents and warrants to the other
that the following statements are true, correct and complete as of the date
hereof:

          (a) Corporate Power and Authority. It has all requisite power and
authority to enter into this Agreement and to carry out the transactions
contemplated by, and perform its respective obligations under, this Agreement,
including, as to each Consenting Holder, that as of the date hereof, it is the
beneficial owner of, and/or the investment adviser or manager for the beneficial
owners of (with the power to vote and dispose of), the Subject Claims;

          (b) Authorization. The execution and delivery of this Agreement and
the performance of its obligations hereunder have been duly authorized by all
necessary action on its part, and the Company further represents that the
Financial Restructuring, this Agreement and the attached Term Sheet have been
approved in writing by the Boards of Directors and similar governing bodies of
the Company and the Subsidiaries, including any still existing Executive
Committees;

          (c) No Conflicts. The execution, delivery and performance by it of
this Agreement do not and shall not (i) violate any provision of law, rule or
regulation applicable to it or any of its subsidiaries or its certificate of
incorporation or by-laws or those of any of its subsidiaries or (ii) conflict
with, result in a breach of or constitute (with due notice or lapse of time or
both) a default under any material contractual obligation to which it or any of
its subsidiaries is a party or under its certificate of incorporation or
by-laws;

          (d) Governmental Consents. The execution, delivery and performance by
it of this Agreement do not and shall not require any registration or filing
with, consent or approval of, or notice to, or other action to, with or by, any
Federal, state or other governmental authority or regulatory body, except such
filings as may be necessary and/or required for disclosure by the Securities and
Exchange Commission and in connection with the commencement of the Chapter 11
Case, the approval of the Disclosure Statement and confirmation of the Plan; and

          (e) Binding Obligation. This Agreement is the legally valid and
binding obligation of it, enforceable against it in accordance with its terms,
except as enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or limiting creditors' rights
generally or by equitable principles relating to enforceability.

      12. No Transfers to Company Insiders. Except as disclosed on attached
Schedule 2. the Company represents and warrants that it has made no transfer of
property of the Company, including without limitation the making of loans, to
any officer, director, shareholder, employee or any insider of the Company
within the year ending upon the date hereof, other than



                                       6
<PAGE>   7
compensation paid in the ordinary course of the Company's business operations,
and the Company further covenants and agrees that it shall not make any such
transfer at any time in the future.

      13. Employment Consulting and Other Contracts. The Company will not assume
(as that term is used in Section 365 of the Bankruptcy Code) any employment,
consulting or similar contracts without the prior agreement of the Noteholders
Committee.

      14. Further Acquisition of Securities. This Agreement shall in no way be
construed to preclude any of the Consenting Holders from acquiring additional
Notes. However, any and all rights and claims obtained by a Consenting Holder
with respect to, on account of or pursuant to any subsequently acquired Notes
shall automatically be deemed to be Subject Claims and to be subject to the
terms of, and the obligations of such Consenting Holder under, this Agreement
and the Term Sheet.

      15. Effectiveness, Amendments. This Agreement shall not become effective
and binding on the parties hereto unless and until counterpart signature pages
to this Agreement have been executed and delivered by the Company and Consenting
Holders that hold in the aggregate at least fifty five percent (55%) of the
aggregate of issued and outstanding Subordinated Notes and at least sixty seven
(67%) of the aggregate of issued and outstanding Secured Notes. Once effective,
this Agreement may not be modified, amended or supplemented except in writing
signed by the Company, Consenting Holders holding not less than sixty seven
percent (67%) of the aggregate of Subordinated Notes that constitute Subject
Claims and Consenting Holders holding not less than sixty seven percent (67%) of
the aggregate of Senior Notes that constitute Subject Claims.

      16. Disclosure of Individual Holdings. Unless required by applicable law
or regulation, the Company shall not disclose the holdings of Subject Claims of
any of the Consenting Holders without the prior written consent of such
Consenting Holder; and if announcement or disclosure is so required by law or
regulation, the Company shall afford the Consenting Holders a reasonable
opportunity to review and comment upon any such announcement or disclosure prior
to the Company making such announcement or disclosure. The foregoing shall not
prohibit the Company from disclosing the approximate aggregate holdings of Notes
of all Consenting Holders.

      17. Accredited Investors. Each Consenting Holder represents that (i) it is
a sophisticated investor with respect to the transactions described herein with
sufficient knowledge and experience in owning and investing in securities
similar to the Notes held by such Consenting Holder to evaluate properly the
transactions contemplated by this Agreement and it has made its own analysis and
decision to enter in this Agreement; and (ii) it is an "accredited investor"
within the meaning of Section 2(15) of the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.

      18. Impact of Appointment to Creditors Committee. Notwithstanding anything
herein to the contrary, in the event that any Consenting Holder is appointed to
and serves on a committee of creditors in the Company's Chapter 11 Case, the
terms of this Agreement shall not be construed so as to limit such Consenting
Holder's exercise, in its sole discretion, of its



                                       7
<PAGE>   8
fiduciary duties to any person or entity arising from its service on such
committee, and any such exercise of such fiduciary duties shall not be deemed to
constitute a breach of the terms of this Agreement; provided, however, that the
fact of such service on such committee (i) shall I not otherwise affect the
continuing validity or enforceability of this Agreement and (ii) shall not
modify or limit the obligations of such individual Consenting Holder to vote its
Subject Claims to accept the provided that no Agreement Termination Event has
occurred and this Agreement remains in effect.

      19. Official Unsecured Creditors Committee. In conjunction with the
Chapter 11 Case and pursuant to either Sections 1102(a)(1) or (a)(2) of the
Bankruptcy Code, the Company shall support the appointment of an official
committee comprised of Consenting Holders and such other holders of unsecured
claims as may be appointed by the Office of United States Trustee (the "Official
Committee"). The Official Committee shall, subject to compliance with the
applicable provisions of the Bankruptcy Code, be entitled to retain Milbank and
CIBC to represent the Official Committee and assist in the prosecution of the
Plan and related matters. In the event that the Official Committee in the
Chapter 11 Case does not retain Milbank or CIBC, the Company shall actively
support the approval, under Section 503(b) of the Bankruptcy Code, of the
payment of the reasonable costs and fees incurred by Milbank and CIBC on behalf
of the Noteholders Committee.

      20. Governing Law; Jurisdiction. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York, without
regard to any conflicts of law provision that would require the application of
the law of any other jurisdiction. By its execution and delivery of this
Agreement, each of the parties hereto hereby irrevocably and unconditionally
agrees for itself that any legal action, suit or proceeding against it with
respect to any matter under or arising out of or in connection with this
Agreement or for recognition or enforcement of any judgment rendered in any such
action, suit or proceeding, may be brought in the U. S. District Court for the
Southern District of New York. By execution and delivery of this Agreement, each
of the parties hereto hereby irrevocably accepts and submits itself to the
nonexclusive jurisdiction of such court, generally and unconditionally, with
respect to any such action, suit or proceeding. Notwithstanding the foregoing
consent to jurisdiction, upon the commencement of the Company's Chapter 11 Case,
each of the parties hereto hereby agrees that the Bankruptcy Court shall have
exclusive jurisdiction of all matters arising out of or in connection with this
Agreement.

      21. Fees and Expenses. The Company shall perform and shall not terminate
its fee agreements with Milbank and CIBC except as otherwise provided in the
applicable engagement agreements. Five (5) business days prior to the
Commencement Date, the Company shall pay in full any outstanding bills, plus an
estimate of unbilled fees and costs up to the filing of the voluntary chapter 11
petition, of Milbank and CIBC, plus any applicable success fees of CIBC. If any
party brings an action against any other party based upon a breach by such other
party of its obligations under this paragraph, the prevailing party shall be
entitled to all reasonable expenses incurred, including reasonable attorneys,
accountants' and financial advisors' fees in connection with such action.

      22. Notices. All notices and consents hereunder shall be in writing and
shall be deemed to have been duly given if personally delivered by courier
service, messenger, or


                                       8
<PAGE>   9

telecopy, or initially deposited in the mails, by certified or registered mail,
postage prepaid return receipt requested, to the following addresses, or such
other addresses as may be furnished hereafter by notice in writing, to the
following parties:


          (a)      if to the Company to
                   ---------------------

                   Metal Management, Inc.
                   500 North Dearborn Street, Suite 405
                   Chicago, Illinois 60610
                   Fax: 312/645-0932
                   Attention: David Carpenter, Esq.

                   With a copy to:
                   ---------------

                   Mayer, Brown & Platt
                   190 South LaSalle Street
                   Chicago, Illinois 60603-3441
                   Fax: 312/701-7711
                   Attention: David S. Curry, Esq.
                   Attention: Craig E. Reimer, Esq.


          (b) if to any Consenting Holder, to such Consenting Holder at the
address shown for such holder on the applicable signature page hereto, to the
attention of the person who has signed this Agreement on behalf of such holder,

                   With a copy to:
                   ---------------

                   Milbank, Tweed, Hadley & McCloy LLP
                   601 S. Figueroa St., 30th Floor
                   Los Angeles, CA 90017
                   Fax: (213) 629-5063
                   Attention: Robert Jay Moore, Esq.
                   Attention: Paul Aronzon, Esq.

          23. Survival. Notwithstanding the sale of its Subject Claims in
accordance with Paragraph 2 hereof or the termination of the Consenting Holders'
obligations hereunder in accordance with Paragraph 8 hereof, the Company's
obligations and agreements set forth in Paragraphs 16, 19 and 21 (with respect
to expenses incurred through the date of such termination) hereof shall survive
such termination and shall continue in full force and effect for the benefit of
the Consenting Holders in accordance with the terms hereof.

          24. Reservation of Rights. This Agreement and the Term Sheet are part
of a proposed settlement of a dispute among the parties hereto. Except as
expressly provided in this Agreement: (A) nothing herein is intended to, or
does, in any manner waive, limit, impair or restrict the ability of the Company,
each Consenting Holder and any trustee under the Existing Documents to protect
and preserve its rights, remedies and interests, including without limitation,
its claims against the other; (B) nothing herein shall be deemed an admission of
any kind and (C) nothing contained herein effects a modification of the rights
of the Company and the Consenting Holders or any trustee under the Existing
Documents, unless and until the Plan is


                                        9


<PAGE>   10
confirmed and the Financial Restructuring becomes effective. If the transactions
contemplated herein are not consummated, or if this Agreement is terminated for
any reason, the parties hereto fully reserve any and all of their rights.
Pursuant to Federal Rule of Evidence 408 and any applicable state rules of
evidence, this Agreement and all negotiations relating thereto shall not be
admissible into evidence in any proceeding other than a proceeding to enforce
its terms.

          25. Representation by Counsel. Each party hereto acknowledges that it
has been represented by counsel in connection with this Agreement and the
transactions contemplated by this Agreement. Accordingly, any rule of law or any
legal decision that would provide any party hereto with a defense to the
enforcement of the terms of this Agreement against such party based upon lack of
legal counsel, shall have no application and is expressly waived.

          26. Consideration. It is hereby acknowledged by the parties hereto
that, other than the Company's agreements, covenants, representations and
warranties, as more particularly set forth herein and in the Term Sheet, no
consideration shall be due or paid to the Consenting Holders for their agreement
to vote the Subject Claims to accept the Plan in accordance with the terms and
conditions of this Agreement.

          27. Acknowledgment. This Agreement is not and shall not be deemed to
be a solicitation for the tender or exchange of the Subordinated Notes or the
Senior Notes, a solicitation for waivers to the Existing Agreements, or a
solicitation for consents to the Plan. The acceptance of the Consenting Holders
will not be solicited until such Parties have received the Disclosure Statement
and related ballots, as approved by the Bankruptcy Court.

          28. Heading. The headings of the paragraphs and subparagraphs of this
Agreement are inserted for convenience only and shall not affect the
interpretation hereof.

          29. Successors and Assigns. This Agreement is intended to bind and
inure to the benefit of the parties and their respective successors, assigns,
heirs, executors, administrators and representatives.

          30. Several, Not Joint, Obligations. The agreements, representations
and obligations of the Consenting Holders under this Agreement and the Term
Sheet are, in all respects, several and not joint.

          31. Prior Negotiations. This Agreement supersedes all prior
negotiations with respect to the subject matter hereof.

          32. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which shall
constitute one and the same Agreement.

          33. No Third-Party Beneficiaries. Unless expressly stated herein, this
Agreement shall be solely for the benefit of the parties hereto, and no other
person or entity shall be a third party beneficiary hereof.



                                       10
<PAGE>   11

          IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed and delivered by its duly authorized officer as of the
date first above written.



                                            METAL MANAGEMENT, INC.


                                            By:   /s/ DAVID A. CARPENTER
                                               ---------------------------------
                                               Name:  David A. Carpenter
                                               Title: Executive Vice President


                                            500 North Dearborn Street,
                                            Suite 405
                                            Chicago, Illinois 60610
                                            Fax: 312/645-0570




                                       11
<PAGE>   12

                                            METAL MANAGEMENT, INC. SUBSIDIARIES


                                            Name of Subsidiary:

                                            ALL CONSOLIDATED SUBSIDIARIES
                                            -----------------------------------


                                            By:   /s/ DAVID A. CARPENTER
                                               ---------------------------------
                                               Name:  David A. Carpenter
                                               Title: Vice President
                                               500 North Dearborn Street,
                                               Suite 405
                                               Chicago, Illinois 60610
                                               Fax: 312/645-0570



                                       12
<PAGE>   13
                                            CONSENTING HOLDERS:

                                            Name of Consenting Holder:


                                            Alliance Capital Management L.P.,
                                            as investment advisor

                                            By: Alliance Capital Management
                                                Corporation

                                            /s/ MICHAEL E. SOHR
                                            ------------------------------------
                                            Name: Michael E. Sohr
                                                 -------------------------------
                                            Title:   Vice President
                                            Address: 1345 Avenue of the Americas
                                                     N.Y. N.Y. 10105
                                            Fax: 212 969-6820

<PAGE>   14
                                            CONSENTING HOLDERS:

                                            Name of Consenting Holder:

                                            GOLDMAN, SACHS & CO.
                                            ------------------------------------

                                            By: /s/ JON SAVITZ
                                               ---------------------------------
                                            Name: Jon Savitz
                                                 -------------------------------
                                            Title: Managing Director
                                                  ------------------------------
                                            Address: 85 Broad Street
                                                    ----------------------------
                                                     29th Floor
                                                    ----------------------------
                                                     N.Y., N.Y. 10004
                                                    ----------------------------
                                            FAX: 212-346-3976
                                                --------------------------------

<PAGE>   15
                                            CONSENTING HOLDERS:

                                            Name of Consenting Holder:

                                            GRANDVIEW CAPITAL MANAGEMENT LLC
                                            ------------------------------------

                                            By: /s/ ROBERT E. SYDOW
                                               ---------------------------------
                                            Name: Robert E. Sydow
                                                 -------------------------------
                                            Title: President
                                                  ------------------------------
                                            Address: 820 Manhattan Ave #200
                                                    ----------------------------
                                                     Manhattan Beach, CA 90266
                                                    ----------------------------

                                                    ----------------------------
                                            FAX: 310-376-1274
                                                --------------------------------


<PAGE>   16
                                            CONSENTING HOLDERS:
                                            Name of Consenting Holder:
                                            KEMPER STRATEGIC INCOME FUND(1)
                                            [See applicable note below]

                                            By: /s/ J. PATRICK BEIMFORD
                                               ---------------------------------
                                            Name: J. Patrick Beimford
                                                 -------------------------------
                                            Title: Vice President
                                                  ------------------------------
                                            Address: 222 S. Riverside Plaza
                                                    ----------------------------
                                                     Chicago, IL 60606
                                                    ----------------------------

                                                    ----------------------------
                                            FAX: 312-537-8335
                                                --------------------------------




---------------
(1)  A copy of the Agreement and/or Declaration of Trust of the referenced trust
or fund (the "Fund") is on file with the Secretary of State of The Commonwealth
of Massachusetts, and notice is hereby given, and by your acceptance hereof you
acknowledge, that this instrument is executed on behalf of the Fund and that the
obligations of or arising out of this instrument are not binding upon any of the
trustees, officers or shareholders individually but are binding only upon the
assets and property of the Fund. If this instrument is executed by a Series of
the Fund, you also acknowledge that the obligations of or arising out of this
instrument are not binding upon the assets and property of any Series of a fund
other than the Series executing this instrument.


<PAGE>   17

                                            CONSENTING HOLDERS:
                                            Name of Consenting Holder:
                                            KEMPER MULTI-MARKET INCOME TRUST(1)
                                            [See applicable note below]

                                            By: /s/ J. PATRICK BEIMFORD
                                               ---------------------------------
                                            Name: J. Patrick Beimford
                                                 -------------------------------
                                            Title: Vice President
                                                  ------------------------------

                                            Address: 222 S. Riverside Plaza
                                                    ----------------------------
                                                     Chicago, IL 60606
                                                    ----------------------------

                                                    ----------------------------
                                            FAX: 312-537-8335
                                                --------------------------------



---------------
(1)  A copy of the Agreement and/or Declaration of Trust of the referenced trust
or fund (the "Fund") is on file with the Secretary of State of The Commonwealth
of Massachusetts, and notice is hereby given, and by your acceptance hereof you
acknowledge, that this instrument is executed on behalf of the Fund and that the
obligations of or arising out of this instrument are not binding upon any of the
trustees, officers or shareholders individually but are binding only upon the
assets and property of the Fund. If this instrument is executed by a Series of
the Fund, you also acknowledge that the obligations of or arising out of this
instrument are not binding upon the assets and property of any Series of a fund
other than the Series executing this instrument.


<PAGE>   18
                                            CONSENTING HOLDERS:
                                            Name of Consenting Holder:
                                            KEMPER HIGH YIELD SERIES -
                                            KEMPER HIGH YIELD FUND(1)
                                            [See applicable note below]

                                            By: /s/ HARRY E. RESIS, JR.
                                               ---------------------------------
                                            Name:  Harry E. Resis, Jr.
                                                 -------------------------------
                                            Title: Vice President
                                                  ------------------------------
                                            Address: 222 S. Riverside Plaza
                                                    ----------------------------
                                                     Chicago, IL 60606
                                                    ----------------------------

                                                    ----------------------------
                                            FAX: 312-537-8335
                                                --------------------------------



---------------
(1)  A copy of the Agreement and/or Declaration of Trust of the referenced trust
or fund (the "Fund") is on file with the Secretary of State of The Commonwealth
of Massachusetts, and notice is hereby given, and by your acceptance hereof you
acknowledge, that this instrument is executed on behalf of the Fund and that the
obligations of or arising out of this instrument are not binding upon any of the
trustees, officers or shareholders individually but are binding only upon the
assets and property of the Fund. If this instrument is executed by a Series of
the Fund, you also acknowledge that the obligations of or arising out of this
instrument are not binding upon the assets and property of any Series of a fund
other than the Series executing this instrument.





<PAGE>   19
                                            CONSENTING HOLDERS:
                                            Name of Consenting Holder:
                                            KEMPER VARIABLE SERIES -
                                            KEMPER HIGH YIELD PORTFOLIO(1)
                                            [See applicable note below]

                                            By: /s/ HARRY E. RESIS, JR.
                                               ---------------------------------
                                            Name:  Harry E. Resis, Jr.
                                                 -------------------------------
                                            Title: Vice President
                                                  ------------------------------

                                            Address: 222 S. Riverside Plaza
                                                    ----------------------------
                                                     Chicago, IL 60606
                                                    ----------------------------

                                                    ----------------------------

                                            FAX: 312-537-8335
                                                --------------------------------



---------------
(1)  A copy of the Agreement and/or Declaration of Trust of the referenced trust
or fund (the "Fund") is on file with the Secretary of State of The Commonwealth
of Massachusetts, and notice is hereby given, and by your acceptance hereof you
acknowledge, that this instrument is executed on behalf of the Fund and that the
obligations of or arising out of this instrument are not binding upon any of the
trustees, officers or shareholders individually but are binding only upon the
assets and property of the Fund. If this instrument is executed by a Series of
the Fund, you also acknowledge that the obligations of or arising out of this
instrument are not binding upon the assets and property of any Series of a fund
other than the Series executing this instrument.

<PAGE>   20
                                            CONSENTING HOLDERS:
                                            Name of Consenting Holder:
                                            KEMPER INCOME TRUST -
                                            KEMPER HIGH YIELD FUND II(1)
                                            [See applicable note below]

                                            By: /s/ HARRY E. RESIS, JR.
                                               ---------------------------------
                                            Name:  Harry E. Resis, Jr.
                                                 -------------------------------
                                            Title: Vice President
                                                  ------------------------------

                                            Address: 222 S. Riverside Plaza
                                                    ----------------------------
                                                     Chicago, IL 60606
                                                    ----------------------------

                                                    ----------------------------

                                            FAX: 312-537-8335
                                                --------------------------------



---------------
(1)  A copy of the Agreement and/or Declaration of Trust of the referenced trust
or fund (the "Fund") is on file with the Secretary of State of The Commonwealth
of Massachusetts, and notice is hereby given, and by your acceptance hereof you
acknowledge, that this instrument is executed on behalf of the Fund and that the
obligations of or arising out of this instrument are not binding upon any of the
trustees, officers or shareholders individually but are binding only upon the
assets and property of the Fund. If this instrument is executed by a Series of
the Fund, you also acknowledge that the obligations of or arising out of this
instrument are not binding upon the assets and property of any Series of a fund
other than the Series executing this instrument.




<PAGE>   21
                                           CONSENTING HOLDERS:
                                           Name of Consenting Holder:
                                           KEMPER HIGH YIELD SERIES -
                                           KEMPER HIGH YIELD OPPORTUNITY FUND(1)
                                           [See applicable note below]

                                           By: /s/ HARRY E. RESIS, JR.
                                              ---------------------------------
                                           Name:  Harry E. Resis, Jr.
                                                -------------------------------
                                           Title: Vice President
                                                 ------------------------------
                                           Address: 222 S. Riverside Plaza
                                                   ----------------------------
                                                    Chicago, IL 60606
                                                   ----------------------------

                                                   ----------------------------
                                           FAX: 312-537-8335
                                               --------------------------------



---------------
(1)  A copy of the Agreement and/or Declaration of Trust of the referenced trust
or fund (the "Fund") is on file with the Secretary of State of The Commonwealth
of Massachusetts, and notice is hereby given, and by your acceptance hereof you
acknowledge, that this instrument is executed on behalf of the Fund and that the
obligations of or arising out of this instrument are not binding upon any of the
trustees, officers or shareholders individually but are binding only upon the
assets and property of the Fund. If this instrument is executed by a Series of
the Fund, you also acknowledge that the obligations of or arising out of this
instrument are not binding upon the assets and property of any Series of a fund
other than the Series executing this instrument.

<PAGE>   22

                                            CONSENTING HOLDERS:
                                            Name of Consenting Holder:
                                            KEMPER HIGH INCOME TRUST(1)
                                            [See applicable note below]

                                            By: /s/ HARRY E. RESIS, JR.
                                               ---------------------------------
                                            Name:  Harry E. Resis, Jr.
                                                 -------------------------------
                                            Title: Vice President
                                                  ------------------------------

                                            Address: 222 S. Riverside Plaza
                                                    ----------------------------
                                                     Chicago, IL 60606
                                                    ----------------------------

                                                    ----------------------------

                                            FAX: 312-537-8335
                                                --------------------------------



---------------
(1)  A copy of the Agreement and/or Declaration of Trust of the referenced trust
or fund (the "Fund") is on file with the Secretary of State of The Commonwealth
of Massachusetts, and notice is hereby given, and by your acceptance hereof you
acknowledge, that this instrument is executed on behalf of the Fund and that the
obligations of or arising out of this instrument are not binding upon any of the
trustees, officers or shareholders individually but are binding only upon the
assets and property of the Fund. If this instrument is executed by a Series of
the Fund, you also acknowledge that the obligations of or arising out of this
instrument are not binding upon the assets and property of any Series of a fund
other than the Series executing this instrument.




<PAGE>   23
                                            CONSENTING HOLDERS:

                                            Name of Consenting Holder:

                                            SUNAMERICA ASSET MANAGEMENT
                                            ------------------------------------

                                            By: /s/ JOHN W. RISNER
                                               ---------------------------------
                                            Name: John W. Risner
                                                 -------------------------------
                                            Title: Senior Vice President
                                                  ------------------------------

                                            Address: 733 Third Avenue
                                                    ----------------------------
                                                     Third Floor
                                                    ----------------------------
                                                     N.Y., N.Y. 10017
                                                    ----------------------------

                                            FAX: 212-551-5935
                                                --------------------------------



<PAGE>   24

TCW SHARED OPPORTUNITY FUND III, L.P.

By: TCW Asset Management Company
Its Investment Adviser


By: /s/ DARRYL L. SCHALL
   ------------------------------
   Name:  Darryl L. Schall
   Title: Managing Director


By: /s/ MARK L. ATTANASIO
   ------------------------------
   Name:  Mark L. Attanasio
   Title: Group Managing Director





<PAGE>   25

TCW LEVERAGED INCOME TRUST IV, L.P.

By: TCW Asset Management Company
As its Investment Adviser


By: /s/ DARRYL L. SCHALL
   ------------------------------
   Name:  Darryl L. Schall
   Title: Managing Director


By: /s/ MARK L. ATTANASIO
   ------------------------------
   Name:  Mark L. Attanasio
   Title: Group Managing Director


By: TCW (LINC IV), L.L.C.
As General Partner

By: TCW Asset Management Company
As its Managing Member

By: /s/ DARRYL L. SCHALL
   ---------------------------------
   Name:  Darryl L. Schall
   Title: Managing Director


By: /s/ MARK L. ATTANASIO
   ---------------------------------
   Name:  Mark L. Attanasio
   Title: Group Managing Director





<PAGE>   26

CRESCENT/MACH I PARTNERS, L.P.

By: TCW Asset Management Company,
    its Investment Advisor


By: /s/ DARRYL L. SCHALL
   ---------------------------------
   Name:  Darryl L. Schall
   Title: Managing Director


By: /s/ MARK L. ATTANASIO
   ---------------------------------
   Name:  Mark L. Attanasio
   Title: Group Managing Director





<PAGE>   27




POWRs 1997-1
(Participating Obligations with Residuals 1997-1)


By:  TCW Asset Management Company,
     its Investment Advisor

By:  /s/ DARRYL L. SCHALL
     ---------------------------------
     Name:  Darryl L. Schall
     Title: Managing Director


POWRs 1997-2
(Participating Obligations with Residuals 1997-2)

By: TCW Asset Management Company,
    its Investment Advisor


By: /s/ MARK L. ATTANASIO
    ---------------------------------
    Name:  Mark L. Attanasio
    Title: Group Managing Director

<PAGE>   28
TCW LEVERAGED INCOME TRUST II, L.P.


By: TCW (LINC II), L.P.
as its General Partner

By: TCW Advisers (Bermuda) Ltd.
its General Partner


By: /s/ DARRYL L. SCHALL
   ---------------------------------
   Name:  Darryl L. Schall
   Title: Managing Director


By: TCW Investment Management Company
as Investment Adviser


By: /s/ MARK L. ATTANASIO
   ---------------------------------
   Name:  Mark L. Attanasio
   Title: Group Managing Director








<PAGE>   29
TCW LEVERAGED INCOME TRUST, L.P.


By: TCW Advisers (Bermuda), Ltd.
as its General Partner


By: /s/ DARRYL L. SCHALL
   ---------------------------------
   Name:  Darryl L. Schall
   Title: Managing Director



By: TCW Investment Management Company
as Investment Adviser


By: /s/ MARK L. ATTANASIO
   ---------------------------------
   Name:  Mark L. Attanasio
   Title: Group Managing Director




<PAGE>   30




                                   SCHEDULE 1

                    TERM SHEET TO LOCKUP AGREEMENT REGARDING
               CHAPTER 11 RESTRUCTURING OF METAL MANAGEMENT, INC.

The terms discussed herein are part of a proposed comprehensive compromise, each
element of which is consideration for the other elements and is an integral
component of the proposed reorganization. Capitalized terms used herein, if not
defined, are used as defined in the Lockup Agreement.

I.   CREDIT AGREEMENT

          -    DIP Facility and Exit Facility: The Company shall enter into a
               Debtor-in-Possession and a post-Chapter 11 Case working capital
               facility on terms substantially the same as those contained in
               the $250 million Credit Agreement, dated March 31, 1998, as
               amended, among the bank lenders and the Company and its
               subsidiaries (the "SCF"), including specifically, but without
               limitation, the same provisions relating to availability and
               advances, and with the following additional terms:

               -    At least $20 million of additional DIP Facility borrowing
                    base availability

               -    At least $15 million of additional Exit Facility borrowing
                    base availability; and

               -    Definitive documentation, including other covenants, terms
                    and conditions consistent with the Indicative Term Sheet
                    from BT dated November 9, 2000, and otherwise acceptable to
                    the Committee.

II.  12 3/4% NOTES

          -    Except as may otherwise be agreed by the holders of the 12 3/4%
               Notes prior to confirmation of the Plan, the principal amount of
               the Senior Secured Notes on the Effective Date shall be equal to
               the current principal amount plus all accrued prepetition and
               post-petition interest, at the contract rate. The interest rate
               per annum, interest payment dates, the maturity date, the
               collateral securing the 12 3/4% Notes, and all other terms of the
               original 12 3/4% Notes shall remain unchanged,

III. 10% NOTES

          -    The 10% Notes shall be extinguished in exchange for 99% of the
               5,000,000 shares of new common stock of the Reorganized Company
               (minus those shares of new common stock in the Reorganized
               Company if any, distributed on account of other general unsecured
               claims).


                                       1
<PAGE>   31

                                   SCHEDULE 1

                    TERM SHEET TO LOCKUP AGREEMENT REGARDING
               CHAPTER 11 RESTRUCTURING OF METAL MANAGEMENT, INC.

IV.  OTHER UNSECURED CREDITORS

          -    During the course of the Chapter 11 Case, the Company may pay the
               prepetition claims of unsecured creditors in accordance with the
               order to be entered by the Bankruptcy Court in form and substance
               consistent with the proposed form of order attached hereto. The
               unsecured creditors covered by such order as "Critical Vendors"
               shall be those creditors covered by the schedule of "Critical
               Trade Vendors" delivered by the Company to CIBC, dated November
               14, 2000 (the "Essential Trade Creditors").

          -    Plan classification and treatment of general unsecured creditors
               other than Essential Trade Creditors and holders of the 10% Notes
               shall be subject to the mutual agreement of the Company and the
               Committee.

V.   COMMON AND PREFERRED STOCK

          -    One percent (1%) of the shares of the Reorganized Company to be
               distributed on account of old common and preferred stock of the
               Company.

          -    Series A Warrants: Five year term; cash exercise price at an
               amount representing a market value equivalent to the full claim
               of (i) the holders of the 10% Notes plus (ii) all other creditors
               receiving shares of new common stock in the Reorganized Company;
               providing for a 7.5% equity stake in the Reorganized Company. The
               Series A Warrants: (i) shall contain customary anti-dilution
               provisions; (ii) shall contain additional customary protections
               found in warrants to the effect that in the event of any
               combination or subdivision of the outstanding shares (including
               but not limited to in reverse stock splits), the Series A Warrant
               shares and cash exercise price shall be adjusted proportionately;
               and (iii) shall not be subject to any future valuation or pricing
               premised upon the Black-Scholes formula or any other valuation
               methodology.

          -    Shares of new common stock and Series A Warrants shall be
               allocated between old common stock and preferred stock pursuant
               to Company proposal, as follows:

               -    92.3% of the shares of new common stock and Series A
                    Warrants shall be allocated to the class of existing common
                    stock interests and distributed pro rata according to the
                    number of common shares.


                                        2



<PAGE>   32
                                   SCHEDULE 1

                    TERM SHEET TO LOCKUP AGREEMENT REGARDING
               CHAPTER 11 RESTRUCTURING OF METAL MANAGEMENT, INC.

               -    7.7% of the shares of new common stock and Series A Warrants
                    shall be allocated to the class of existing preferred stock
                    interests and distributed pro rata according to liquidation
                    preference.

               -    In the event that any class of preferred stock votes to
                    reject the Plan, then the allocation to such class of
                    preferred stock shall be allocated instead to the holders of
                    the 10% Notes.

               -    If the Bankruptcy Court determines that the allocation of
                    consideration provided herein to old common stock is
                    prohibited, then the allocation to old common stock shall be
                    allocated instead to holders of the 10% Notes.

          -    On the Effective Date of the Plan, all shares of old common and
               old preferred stock of the Company, and all options, warrants and
               other rights in respect of such common and preferred stock, shall
               be cancelled, extinguished and discharged.

VI. KEY MANAGEMENT EQUITY INCENTIVE PLAN

          -    Series B Warrants: Five year term, cash exercise price struck at
               a price per share equal to $65 million divided by number of
               shares issued and outstanding on the Effective Date; providing
               for 10% equity stake in the Reorganized Company. Series B
               Warrants shall be issued to, and allocated among, key management
               as determined by the existing Board of Directors of the Company,
               subject to Committee approval.

          -    Series C Warrants: Seven year term; cash exercise price struck at
               a price per share equal to $120 million divided by number of
               shares issued and outstanding on the Effective Date; providing
               for 5% equity stake in the Reorganized Company. Series C Warrants
               shall be issued to, and allocated among, key management as
               determined by the Board of Directors of the Reorganized Company.

          -    Series B Warrants and Series C Warrants to vest 1/3 on the
               Effective Date and 1/3 on each of the first two anniversaries
               immediately following the Effective Date.

          -    The Series B and Series C Warrants: (i) shall contain customary
               anti-dilution provisions, (ii) shall contain additional customary
               protections found in warrants to the effect that in the event of
               any combination or subdivision of the outstanding shares
               (including but not limited to in reverse stock splits), the



                                       3
<PAGE>   33
                                   SCHEDULE 1

                    TERM SHEET TO LOCKUP AGREEMENT REGARDING
               CHAPTER 11 RESTRUCTURING OF METAL MANAGEMENT, INC.

               Series B Warrant shares and Series C Warrant shares and
               respective cash exercise prices shall be adjusted
               proportionately; and (iii) shall not be subject to any future
               valuation or pricing premised upon the Black-Scholes formula or
               any other valuation methodology

          -    The Board of Directors of the Reorganized Company shall allocate
               the Series C Warrants within 90 days after the Effective Date.

          -    Any Series B Warrants and Series C Warrants that do not vest and
               are forfeited by the recipient may be re-allocated by the Board
               of Directors of the Reorganized Company to members of management.

VII.  BOARD COMPOSITION

          -    The Board of Directors of the Reorganized Company shall be
               comprised of five members. Four members shall be appointed by the
               holders of the 10% Notes, which members shall be identified five
               days prior to the hearing on confirmation of the Plan. The fifth
               member shall be the CEO of the Company. The Committee, subject to
               further review and in its sole discretion, may adjust the make-up
               of the Board in light of NASDAQ listing requirements, including
               the possibility of adding independent directors.

          -    The Company shall obtain Directors and Officers Liability
               Coverage acceptable to the Committee that covers risks associated
               with the Company's environmental liabilities, and shall put in
               place a risk management program and other measures that
               adequately protect the holders of the 10% Notes who become the
               new shareholders and their designated members of the Board of
               Directors of the Reorganized Company from any liability arising
               from any past, present or future activity of the Company
               including, but not limited to, any activity that may have
               violated or may violate municipal, state or federal environmental
               laws or regulations.

VIII. RELATED PROVISIONS

          -    Each member of management who receives Series B Warrants or
               Series C Warrants shall execute an enforceable agreement with the
               Reorganized Company containing non-compete provisions standard
               for the industry.

          -    The Plan shall provide that all causes of action of the Company
               on the date of this Term Sheet, and all causes of action created
               by the filing of the Chapter 11 Case, shall be preserved for the
               benefit of the Reorganized Company, provided, however, that the
               Plan may contain release and exculpatory



                                        4


<PAGE>   34




                                   SCHEDULE 1

                    TERM SHEET TO LOCKUP AGREEMENT REGARDING
               CHAPTER 11 RESTRUCTURING OF METAL MANAGEMENT, INC.

               provisions for the benefit of current and former officers and
               directors of the Company limited to acts and omissions in their
               capacity as officers and directors. However, any release and
               exculpation provisions of the Plan shall not be applicable to (i)
               avoidance actions listed in Bankruptcy Code Section 550(a), (ii)
               borrowed money, (ii) employment contracts, (iii) consulting
               contracts, (iv) the receipt of transfers from the Company, direct
               or indirect, in connection with acquisitions by the Company of
               subsidiaries, business enterprises or other material assets, and
               (v) any acts or omissions that constitute gross negligence,
               fraud, or willful misconduct.

          -    The Company represents that all material property of the Company
               is subject to a non-avoidable perfected security interest in
               favor of the lenders under the SCF.

          -    The Company will not assume or seek to assume (as that term is
               used in Section 365 of the Bankruptcy Code) any employment,
               consulting or similar contract, except pursuant to prior
               agreement with the Committee,

          -    The Company promptly shall deliver to the Committee copies of all
               notes, guaranties, consulting agreements, non-compete agreements
               and other documents relevant to the unsecured claims of David
               Lazarov, and any related guaranty claims. Plan classification and
               treatment of such claims are subject to Committee consent. To the
               extent such claims implicate key management, they will be
               evaluated in the context of a global resolution of the key
               management equity incentive plan.

IX.   LOCKUP AGREEMENT

          -    This Term Sheet is not enforceable unless and until it becomes a
               schedule to the executed Lockup Agreement.


                                        5