$75,000.00                                                        August 1, 1995


                                 PROMISSORY NOTE
                                 ---------------

         FOR VALUE  RECEIVED,  the  undersigned,  JOHN P.  CARROLL  (hereinafter
referred to as "Maker"),  hereby promises to pay in immediately available funds,
in  U.S.  Dollars,  to  the  order  of  INTERNATIONAL  MILL  SERVICE,   INC.,  a
Pennsylvania  corporation  with its  principal  office at 1155  Business  Center
Drive, Horsham,  Pennsylvania 19044 ("Holder"), or to its assigns, the principal
amount of U.S.  SEVENTY-FIVE THOUSAND DOLLARS (U.S.  $75,000.00)  (the"Loan") on
August 1, 2000.  As this is a relocation  note as described in Internal  Revenue
Service Reg. Sec. 1.7872-5T(c)(1)(i), the Loan bears no interest.

         On  August 1 of each of the  years  1996,  1997,  1998,  1999 and 2000,
Holder will forgive  $15,000 of the Loan,  provided that on each such date:  (i)
Maker shall still be employed by Holder or one of its affiliates; and (ii) Maker
shall  pay  Holder  an  amount  equal to  $15,000  multiplied  by the sum of the
employee's rate for FICA taxes (currently 7.65%) and the federal withholding tax
rate on extraordinary payments (currently 28%) (which amount shall be applied by
Holder to increase Maker's withholding account for federal income tax purposes).

         All payments  hereunder  shall be made to Holder at Holder's  principal
office  address.  Maker  hereby  authorizes  Holder to  offset  the  payment  of
principal hereunder against any compensation  payable by Holder to Maker. In the
event Maker's  employment with Holder  terminates for any reason,  all principal
sums hereunder shall become immediately due and payable;  provided however, that
in the event Maker's  employment  with Holder is  terminated  by Holder  without
cause, all principal sums hereunder then outstanding shall be forgiven.  Nothing
herein is intended to create an  employment  agreement  or to restrict  Holder's
right to terminate the employment of Maker at any time.

         Maker hereby  certifies to Holder that Maker  reasonably  expects to be
entitled to and will itemize  deductions for each year the Loan is  outstanding.
Maker's  obligations  hereunder  shall  be  secured  by a  mortgage  on  Maker's
residence in Horsham,  Pennsylvania,  which residence is being acquired with the
proceeds of the Loan.

         Failure of Holder to execute any right hereunder shall not constitute a
waiver of Holder's right to the later exercise thereof.  Maker hereby waives any
and all  demands,  presentments  for  payment,  protest,  notice of  dishonor or
nonpayment.  Maker agrees to pay all reasonable  costs and expenses  incurred by
Holder  in  connection  with  any  default  action  taken  hereunder,  including
reasonable attorney's fees and court costs.

         Holder  may, on notice to Maker,  convey its  interest in this note and
the security  arrangements  related thereto to any entity in which Holder has an
equity  interest,  in which case reference herein to "Holder" shall be deemed to
refer to such entity.  The benefits of this  arrangement are not transferable by
Maker.

<PAGE>

         IN WITNESS  WHEREOF,  Maker has executed this Promissory Note as of the
first date set forth above.



                                                          /s/ John P. Carroll
                                                          -------------------
                                                              JOHN P. CARROLL

Acknowledged and Agreed:

INTERNATIONAL MILL SERVICE, INC.

By: /s/ William L. Maloney
    ----------------------
    Senior Vice President
    Finance and Administration

                                        2

<PAGE>

October 9, 1998


To:      John Carroll

From:    Bradley W. Harris  /s/ Bradley W. Harris


Compensation  expense  totaling  $15,000 has been  recorded for you in 1998 as a
result of relocation loan forgiveness.  In addition we will make tax deposits on
your behalf  totaling  $4,988 (which will be reported as taxes  withheld on your
Form W-2) in  accordance  with the attached  schedule.  The tax deposits will be
recorded as additions to your  outstanding  loan balance  consistent  with prior
years.  If 1998  bonuses  are paid in early  1999,  in  addition  to routine tax
withholding  on the bonus  payment,  your bonus  payment  will be reduced by the
amount  of tax  deposits  made on your  behalf  and your  loan  balance  reduced
accordingly.  If 1998 bonuses are not paid,  the tax deposit made on your behalf
will remain in your loan  balance and will be forgiven in a year  subsequent  to
the  initial  loan term (loan  forgiveness will  continue at a rate of $15,000 a
year). If your employment with the company  terminates,  any unpaid loan balance
(including unfogiven tax deposits) will be due at that time.

Please sign a copy of this memo evidencing your  understanding and acceptance of
these terms and return a copy to me. The terms as outlined  above are consistent
with those of the prior year.

/s/ John P. Carroll
10/12/98