July 30, 1999

Mr. James C. Hull
3575 Byron Drive
Doylestown, PA  18901-6515

Dear Jim:

In connection with your  termination of employment with  Envirosource,  Inc. and
its subsidiaries ("Envirosource" or the "Company") effective August 1. 1999, the
following salary and benefits will be made available to you:

1.       Severance and Unused Vacation Pay. You  are  eligible  to  receive  the
         ---------------------------------
 following severance benefits:

        (a)      13 unused personal and vacation days; and
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        (b)       subject to your  agreeing  to the  provisions  of Section 5 of
                  this letter,  12 months severance pay, and the continuation of
                  medical and dental benefits  through the last day of the month
                  in which your severance pay ends.

         All such payments will be made to you in  semi-monthly  installments in
         the same  manner as you have been  receiving  your pay,  at your salary
         rate in  effect  as of July 31,  1999,  less all  applicable  taxes and
         appropriate deductions.  You may take your unused personal and vacation
         days in a lump sum, if you so choose.

         In addition,  subject to your agreeing to the  provisions of Section 5,
         the Company will retain you as a Consultant as set forth in Section 6.

2.       Group Medical and Dental Benefits. The Company will continue to pay for
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         your current group medical and dental benefits  through the last day of
         August  1999.  If you  agree to the  provisions  of  Section  5 of this
         letter, the Company will continue to pay for these benefits through the
         last day of the month in which  your  severance  pay  ends,  if this is
         later. The employee contribution, if applicable, toward the cost of the
         coverage will continue to be deducted from your pay during this period.

         You will be entitled to convert  your group health  insurance  coverage
         under the  provisions  of COBRA,  if you so desire,  for the  statutory
         period provided under COBRA. A COBRA letter and the  appropriate  forms
         will be sent to you from The Loomis Company.

<PAGE>

3.       Other  Employee  Benefits.  Except  as  specifically  set forth in this
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         letter, all other benefits provided to you by the Company will cease as
         of July 31, 1999.  Additional  information,  including  the notices and
         procedures  relating to your right to convert your group life insurance
         to an individual policy and the disposition of your 401(k) Savings Plan
         Account,  Profit  Sharing Plan or Retirement  Account and Stock Options
         (if applicable) will be forwarded in a separate letter.

4.       Return of Envirosource Property;  Envirosource  Information.  You shall
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         return any Company  property  and credit cards  immediately.  After the
         date hereof, without prior written consent of Envirosource, you may not
         use for your own  benefit,  or  disclose  to any person or entity,  any
         confidential information concerning the business, affairs, customers or
         clients  of   Envirosource   or  any  affiliate,   including,   without
         limitation,  any such  information  created or developed by you, unless
         such information has been previously published not in violation of this
         paragraph 4, or unless such  information  is  subpoenaed  by any lawful
         authority  and is required to be turned over to that lawful  authority.
         You may not take from  Envirosource  premises any written  documents or
         records that may be proprietary or  confidential to Envirosource or any
         affiliate,  including financial records and forecasts,  customer lists,
         or operating agreements or documents, without the prior written consent
         of the President of Envirosource.

5.       Release.  In consideration of the additional  benefits  provided to you
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         under  Sections  1(b)  and 2  hereof,  you and your  heirs,  executors,
         administrators,  successors  and assigns now and  forever,  release and
         discharge Envirosource and its parents,  subsidiaries,  affiliates, its
         and their officers, directors, shareholders,  employees and agents, and
         its and their respective  successors and assigns,  heirs and executors,
         and   administrators   (hereinafter   referred   to   collectively   as
         "Affiliates")  from any and all claims,  demands,  rights, or causes of
         action  of  whatever  kind or  nature  in law or in  equity,  direct or
         indirect,  known or unknown, matured or not matured, and whether or not
         related to your  employment  with  Envirosource,  that each of you ever
         had, now has, or hereafter can, shall, or may have against Envirosource
         or its  Affiliates,  arising out of any matter,  arrangement,  cause or
         thing  whatsoever  from  the  date of your  birth  to the  date of this
         agreement  and  particularly,  but without  limitation of the foregoing
         general  terms,  any and all claims arising from or relating in any way
         to  your   employment  at  Envirosource  or  the  termination  of  such
         employment.

         For   valuable   consideration,   you  and   your   heirs,   executors,
         administrators,  successors,  and assigns now and forever,  release and
         discharge Envirosource and its Affiliates specifically from any and all
         claims  arising  from or  relating  in any way to  your  employment  at
         Envirosource or the termination of such employment,  including, but not
         limited to, any rights or claims  arising under the Age  Discrimination
         in  Employment  Act,  Title VII of the  Civil  Rights  Act of 1964,  as
         amended,  the Pennsylvania Human Relations Act, up to and including the
         date of execution  of this  agreement,  and any and all other  federal,
         state, or local laws, excepting only those obligations and rights which
         you may have as set forth under the terms of this agreement.

                                       2

<PAGE>

         You acknowledge  that the terms of this Release are contractual and not
         merely a recital. You acknowledge that you have been advised to consult
         with counsel of your choice  concerning this Release and that you shall
         have  twenty-one  (21)  days  from  the  date of your  receipt  of this
         document  in  which to  consider  whether  to sign  this  Release.  You
         acknowledge  that  you  intend  this  Release  to be a full  and  final
         settlement  and  release of all  claims  against  Envirosource  and its
         Affiliates  and that you are  executing  this  letter,  including  this
         Release,  of your own  volition  and not  relying  upon any  promise or
         representation  made by Envirosource  other than the promises contained
         herein. You have also been advised that you are entitled to revoke this
         waiver and Release provision within seven (7) days after executing this
         agreement  and the waiver  would not become  effective  or  enforceable
         until this seven-day  revocation  period has expired.  The Company will
         reimburse you upon receipt of proper documentation,  for legal fees you
         may incur up to $200 in connection with a legal review of this letter.

         Anything in the foregoing to the contrary notwithstanding, this Release
         shall not  operate  to release  any  indemnification  and/or  liability
         insurance rights you may have as an officer or director of Envirosource
         or any of its  subsidiaries.  Further,  subject to your agreeing to the
         provisions  of this Section 5, the Company  releases you to the fullest
         extent  permitted  by law  from  any and  all  claims  arising  from or
         relating in any way to your employment at the Company.

6.       Consulting.  Unless  otherwise  agreed to on a project basis,  you have
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         agreed to consult with the Company on an as needed basis at the rate of
         $150.00 per hour.  Such  consulting is to be (1) mutually  agreed,  (2)
         upon reasonable  notice, (3) during normal business hours. If travel is
         involved,  travel time will be charged at one-half  the hourly rate and
         travel expenses will be reimbursed consistent with the Company's normal
         employee travel expense reimbursement policy.

Please let us know  immediately  if you  change  your  address.  If you have any
questions or require  additional  assistance,  please  contact me at the Horsham
office.


                                                Yours very truly,


                                                 /s/John P. Carroll
                                                 John P. Carroll
                                                 Vice President- Human Resources
Enclosures
Accepted and agreed:


By:      /s/James C. Hull
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Date:    July 30, 1999
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