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Separation And Release Agreement

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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 _______________


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,


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Executive _____________


Company _______________


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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.


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Executive _____________


Company _______________


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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


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Executive _____________


Company _______________


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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
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