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                                                                   Exhibit 10.38


                             SUBORDINATION AGREEMENT

      THIS SUBORDINATION AGREEMENT (this "Agreement") is made as of March 10,
1997 by and among MELLON BANK, N. A. ("Senior Creditor") having an address of
1735 Market Street, Philadelphia, PA 19103 and SUNTRUST BANKS, INC., a Georgia
corporation ("Subordinated Creditor") and acknowledged by CONSOLIDATED
STAINLESS, INC., a Delaware corporation ("Borrower").

                                    RECITALS

      WHEREAS, the Borrower and the Senior Creditor are parties to the Senior
Credit Agreement (as such term is defined below);

      WHEREAS, pursuant to that certain Convertible Subordinated Note Purchase
Agreement dated October 18, 1996, by and between the Borrower and the
Subordinated Creditor (as hereafter amended, modified or supplemented, the
"Subordinated Credit Agreement"), the Subordinated Creditor agreed to purchase a
Subordinated Note of the Borrower in the original principal amount of $2,500,000
(as hereafter amended, modified or replaced, the "Subordinated Note");

      WHEREAS, the Senior Creditor and the Subordinated Creditor have agreed
that the Subordinated Creditor will expressly subordinate the obligations of the
Borrower with respect to the Subordinated Note to the prior payment in full of
the obligations of the Borrower to the Senior Creditor on the terms and
conditions set forth herein;

      NOW, THEREFORE, in consideration of the premises, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound, agree as
follows:

                                   ARTICLE 1.

                                  SUBORDINATION

      Section 1.1. Specific Definitions.

      As used in this Agreement, the term:

      "Bankruptcy Code" means The Bankruptcy Code of 1978", as amended from time
to time (11 U.S.C. Sections 101 et seq.), and any replacement or successor act
which has a substantially similar purpose.

      "Blockage Default" means a Senior Covenant Default or a Senior Payment
Default.

      "Blockage Notice" means a Notice signed by the Senior Creditor and
delivered to the Subordinated Creditor to the effect that a Blockage Default has
occurred and is continuing as of the date of such certificate.


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      "Blockage Period" shall mean any period during which the Subordinated
Creditor is in receipt of Notice that a Senior Bankruptcy Default exists and
also any period commencing from the date of receipt by the Subordinated Creditor
of a Blockage Notice and continuing until: (i) the Senior Indebtedness is paid
and satisfied in full (or until the default is sooner cured within any
applicable grace period or cured with the Senior Creditor's unconditional
permission), if such default is a Senior Payment Default; or (ii) in the case of
a Senior Covenant Default, the earliest of (a) 120 days after the Blockage
Notice minus the number of days in all other Blockage Periods during the 360 day
interval preceding the Blockage Notice (the "Maximum Blockage Period"), or (b)
the date on which the Subordinated Creditor receives Notice from the Senior
Creditor that the Blockage Period is terminated or (c) the date on which all
such defaults have been cured or waived with the Senior Creditor's unconditional
written permission; provided that the Senior Creditor shall not be entitled to
deliver more than four (4) Blockage Notices in any period of 360 consecutive
days, and further provided that if any Blockage Notice with respect to a Senior
Covenant Default is given (an "Initial Blockage Notice"), then no subsequent
Blockage Notice may be given with respect to a particular Senior Covenant
Default existing and known to the Senior Creditor at the time the Initial
Blockage Notice was given.

      "Borrower" shall have the meaning set forth in the initial paragraph of
this Agreement.

      "Default Notice" means Notice by the Senior Creditor to the Subordinated
Creditor of a default by the Borrower under the Senior Indebtedness.

      "Financing Documents" means the collective reference to each and every
note, instrument, security agreement, pledge agreement, guaranty agreement,
mortgage, deed of trust, loan agreement, hypothecation agreement, indemnity
agreement, letter of credit application, assignment or any other document
(whether similar or dissimilar to any of the foregoing) previously,
simultaneously or hereafter executed and delivered by the Borrower or any other
Person, singly or jointly with another Person or Persons, in connection with any
of the Senior Indebtedness.

      "Insolvency Proceeding" means any receivership, conservatorship, general
meeting of creditors, insolvency or bankruptcy proceeding, assignment for the
benefit of creditors, or any proceeding by or against the Borrower for any
relief under any bankruptcy or insolvency law or other laws relating to the
relief of debtors, readjustment of indebtedness, reorganizations, compositions
or extensions, including, without limitation, proceedings under the Bankruptcy
Code, or under any other federal, state or local statute, laws, rules and
regulations, all whether now or hereafter in effect.

      "Lien" means any mortgage, deed of trust, deed to secure debt, grant,
pledge, security interest, assignment, encumbrance, judgment, financing
statement, lien or charge of any kind, whether perfected or unperfected,
voidable or unavoidable, consensual or non-consensual including, without
limitation, any conditional sale or other title retention agreement, any lease
in the nature thereof, and the filing of or agreement to give any financing
statement under the Uniform Commercial Code of any jurisdiction.

      "Notice" means notice given in accordance with Section 5.5 hereof.


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      "Person" means an individual, a corporation, a partnership, a joint
venture, a trust, an unincorporated association, a government or political
subdivision or agency thereof or any other entity.

      "Security" means any security agreement, pledge, pledge agreement,
guaranty agreement, mortgage, deed of trust, deed to secure debt, trust deed,
land trust, indenture, indemnity deed of trust, indemnification agreement,
proceeding in rem, reimbursement agreement, financing statement, purchase
agreement, conditional sales contract, installment sales contract, collateral
agreement, financing lease, letter of credit, bond, loan agreement,
hypothecation agreement, deposit, financing statement or assignment, and also
means any agreement, document, security device or arrangement, documents,
statutory lien, lien arising by operation of law, judgment or other lien, right
of setoff, encumbrance, proceeding or other document or right, in whatever form
or however arising, whether similar or dissimilar to the foregoing which
directly or indirectly secures or enforces payment or performance of any Person
against, or otherwise encumbers or gives notice of an encumbrance upon, the real
property, personal property, rights or assets of any Person.

      "Senior Bankruptcy Default" means any event of default under or contained
in any agreement or instrument evidencing Senior Indebtedness or pursuant to
which Senior Indebtedness has been incurred arising out of an Insolvency
Proceeding.

      "Senior Covenant Default" means any event of default, other than a Senior
Bankruptcy Default or a Senior Payment Default, under or contained in the Senior
Credit Agreement, which event of default entitles the holder or holders of such
Senior Indebtedness (immediately or following the expiration of any applicable
grace periods, the giving of any required notices or the taking of any action by
such holder) to accelerate the maturity thereof.

      "Senior Credit Agreement" means that certain Loan and Security Agreement
between Senior Creditor and Borrower dated March 10, 1997, as hereafter amended,
increased in accordance with the terms hereof, modified or restated (but
increased only in accordance with the definition of Senior Indebtedness).

      "Senior Creditor" shall have the meaning set forth in the initial
paragraph to this Agreement.

      "Senior Indebtedness" means all indebtedness, liabilities and obligations
of the Borrower to the Senior Creditor of every kind and nature whatsoever,
whether now existing or hereafter created arising pursuant to the Senior Credit
Agreement or any Financing Document executed in connection therewith, including,
without limitation, such indebtedness, liabilities and obligations of the
Borrower to the Senior Creditor (i) which are direct, indirect, contingent,
primary, secondary, alone, jointly with others, acquired directly or by
assignment, due, to become due, unsecured, secured, future advances, incurred or
assumed, (ii) which relate to or arise from the issuance of letters of credit,
or guaranties, indemnifications or other similar agreements in favor of third
parties made by the Senior Creditor at the request or for the benefit of the
Borrower, (iii) which are claims of subrogation, indemnification, reimbursement
or contribution of the Senior Creditor against the Borrower or any other Person
relating in any manner to obligations of the Borrower or the Security, (iv)
which are claims of whatever nature and whenever arising on account of the
avoidance of payments or other transfers to or for the benefit of the Senior
Creditor in Insolvency Proceedings or otherwise, or (v) which are claims
(including, without limitation, claims arising or accruing after the
commencement of Insolvency Proceedings by or against the Borrower or its assets,
whether or


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not such claims are allowed) for principal, interest, cost or expense payments,
liquidation costs, and attorneys' fees and expenses, all of the foregoing
whether arising under contract, by tort, at law, in equity or otherwise;
provided, that, with respect to any amendment, modification, assignment or
supplement to the Senior Credit Agreement or any Financing Document entered into
after the date of this Agreement which increases the Senior Indebtedness by a
sum in excess of (i) $2,500,000.00 or (ii) any higher sum which is within the
Borrowing Base set forth in the Senior Credit Agreement; provided that the
formula and related definitions used in calculating the Borrowing Base do not
differ in any material respect from the provisions set forth in the Senior
Credit Agreement as in effect on the date hereof, the Company is in compliance
with Section 7.1(b) of the Subordinated Credit Agreement.

      "Senior Payment Default" means any event of default in respect of any
payment of principal (including but not limited to principal due by
acceleration) or interest or mandatory prepayment of principal with respect to
any Senior Indebtedness, which event of default entitles the holder or holders
of such Senior Indebtedness (immediately or following the expiration of any
applicable grace periods, the giving of any required notices or the taking of
any action by such holder) to accelerate the maturity thereof.

      "Subordinated Creditor" shall have the meanings set forth in the initial
paragraph to this Agreement.

      "Subordinated Indebtedness" means any and all existing and future
indebtedness, liabilities and obligations of the Borrower to the Subordinated
Creditor of every kind and nature whatsoever, which arise pursuant to the
Subordinated Credit Agreement and Subordinated Note including, without
limitation, such indebtedness, liabilities, and obligations of the Borrower to
the Subordinated Creditor (i) which are direct, indirect, contingent, primary,
secondary, alone, jointly with others, due, to become due, acquired directly or
by assignment, unsecured, secured, future advances, incurred or assumed, and all
guaranties, indemnifications and other undertakings of Persons other than the
Borrower with respect to the foregoing, (ii) which relate to or arise from
guaranties, indemnifications or other similar agreements in favor of third
parties made by the Subordinated Creditor at the request of or for the benefit
of the Borrower, (iii) which are claims of indemnification, reimbursement or
contribution of the Subordinated Creditor against the Borrower or any other
Person relating in any manner to obligations of the Borrower, (iv) which are
claims of whatever nature and whenever arising on account of the avoidance of
payments or other transfers to or for the benefit of the Subordinated Creditor
in Insolvency Proceedings or otherwise, or (v) which are claims (including,
without limitation, claims arising or accruing after the commencement of
Insolvency Proceedings by or against the Borrower or its assets, whether or not
such claims are allowed) for interest, expense payments, liquidation costs, and
attorneys' fees and expenses, all of the foregoing whether arising under
contract, by tort, at law, in equity or otherwise.

      Section 1.2. Other Definitional Provisions. Unless otherwise defined
herein, all terms used herein which are defined by the Pennsylvania Uniform
Commercial Code shall have the same meanings as assigned to them by the
Pennsylvania Uniform Commercial Code unless and to the extent varied by this
Agreement. The word "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and section, subsection,
schedule and exhibit references are references to sections or subsections of, or
schedules or exhibits to, as the case may be, this Agreement unless otherwise
specified. As used herein, singular number shall include the plural, the


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plural the singular and the use of the masculine, feminine or neuter gender
shall include all genders, as the context may require. Reference to any one or
more of the Financing Documents and any of the Financing Documents shall mean
the same as the foregoing may from time to time be amended, restated,
substituted, extended, renewed, supplemented or otherwise modified.

                                   ARTICLE 2.

                                  SUBORDINATION

      Section 2.1. Subordinated Indebtedness. The Senior Creditor consents to
the existence of the Subordinated Indebtedness. The Subordinated Creditor hereby
subordinates and postpones the payment of, and the time of payment of, and the
right to bring any action to collect all or any portion of the Subordinated
Indebtedness to and in favor of the payment of all of the Senior Indebtedness to
the extent and in the manner set forth herein. The parties hereby agree that:

            (a) Provided that no Blockage Period shall then be in effect,
Borrower may make and Subordinated Creditor may accept regularly scheduled, non
accelerated quarterly payments of non default interest (with the understanding
that interest pursuant to Section 2.3(d) does not constitute default interest)
on the Subordinated Indebtedness (including interest payments with respect to
the Deferred Interest Notes, as such term is defined in the Subordinated Credit
Agreement) which accrue after September 30, 1998, as well as non-accelerated
regularly scheduled payment of principal pursuant to the terms of the
Subordinated Credit Agreement or the Subordinated Note and Deferred Interest
Notes. Subordinated Creditor shall not accept any other payment of the
Subordinated Indebtedness unless Subordinated Creditor has complied with
subsections (b), (e) or (f) of this Section 2.1 and such payment is not
otherwise prohibited by the terms of this Agreement.

            (b) During any Blockage Period, unless and until all of the Senior
Indebtedness has been fully paid and any commitment pursuant to the Senior
Credit Agreement is terminated, or each Blockage Default shall have been
remedied or waived or shall have ceased to exist (as evidenced by a Notice from
the Senior Creditor to the Subordinated Creditor to that effect), the
Subordinated Creditor shall not, without the prior written consent of the Senior
Creditor, ask, demand, accelerate, sue for, set off, accept or receive any
direct or indirect payment (in cash, property or security) of all or any part of
the Subordinated Indebtedness. Upon termination of any Blockage Period, the
Borrower may pay and the Subordinated Creditor may receive any payments on
account of the Subordinated Indebtedness which are otherwise due and payable
(including any payments accruing before or during such Blockage Period). Nothing
set forth herein shall restrict the Subordinated Creditor from declaring a
default under the Subordinated Indebtedness but the Subordinated Creditor shall
not take any action to demand for or accelerate the Subordinated Indebtedness
prior to giving any notice required pursuant to subsection (e) below provided
that, subject to Section 3.1 below, nothing shall prohibit the Subordinated
Creditor from accelerating or taking any other action upon the occurrence of an
Insolvency Proceeding.

            (c) The Subordinated Creditor represents and warrants to the Senior
Creditor that it is the lawful owner of the Subordinated Indebtedness and no
part thereof has been assigned to or subordinated or subjected to any other
security interest in favor of anyone other than the Senior Creditor.


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            (d) The Subordinated Creditor and the Borrower agree and warrant
that any instrument, agreement, security or other writing now or hereafter
evidencing all or any portion of the Subordinated Indebtedness shall bear on its
face a clear and conspicuous legend that it is subject to the terms of this
Agreement. Until all Senior Indebtedness has been paid in full, the Borrower
shall not issue any instrument, security or other writing evidencing any part of
the Subordinated Debt (other than the Subordinated Note and the Subordinated
Credit Agreement and the Deferred Interest Notes) or amend or modify in any
respect any such instrument, security or other writing except at the request of
and in the manner requested by the Senior Creditor if the effect thereof is to
(i) increase the amount of indebtedness or interest rate thereunder or (ii)
accelerate the schedule of repayment (including without limitation, the addition
of any required prepayments of the Subordinated Debt).

            (e) The Subordinated Creditor hereby agrees that, upon the
occurrence of an event of default pursuant to the Subordinated Credit Agreement
(other than an event of default arising out of the bankruptcy of the Borrower),
it will not, without the consent of the Senior Creditor, take any action to
accelerate, demand, set-off or accept any payment (other than a payment of past
due interest which cures such default) with respect to the Subordinated
Indebtedness until ten (10) days after notice of such action has been received
by the Senior Creditor (which notice may be sent during a Blockage Period to
expire upon the later of (i) ten (10) days after the sending of such notice and
(ii) the termination of such Blockage Period). Such notice may not be sent in
the event of a default under the Subordinated Indebtedness which is caused
solely by a non payment default under the Senior Indebtedness, which non payment
default has not resulted in an acceleration of the Senior Indebtedness.

            (f) In addition to the restrictions set forth above, the
Subordinated Creditor shall not, without the prior written consent of the Senior
Creditor, accept any voluntary prepayment of the Subordinated Indebtedness
except in connection with a public offering by the Company as described in
section 2.4(b) of the Subordinated Credit Agreement as in effect on the date
hereof.

            The Senior Creditor hereby acknowledges and agrees that nothing set
forth in this Agreement or the Senior Credit Agreement or any document executed
in connection therewith shall be deemed to limit or abridge the rights of the
Subordinated Creditor to exercise its conversion rights pursuant to the
Subordinated Credit Agreement and to exercise all rights granted to it
thereunder and under any document executed in connection therewith as an equity
holder including, without limitation, all rights to convert, require public
offerings, receive payments thereof and receive payment of the Make Whole
Premium (as defined in Section 9.3 of the Subordinated Credit Agreement)
pursuant to Article IX of the Subordinated Credit Agreement, all rights to
receive dividends pursuant to Section 9.10 of the Subordinated Credit Agreement
(the "Special Dividends") provided that the dividends paid by the Company which
triggered payment of the Special Dividends were permitted by the Senior Credit
Agreement and all rights to indemnification under Section 7(a) of the
Registration Rights Agreement.

            The Senior Creditor further agrees that it shall not amend any
existing agreement or enter into any new agreement with the Borrower which would
(x) restrict the adoption of the Charter Amendment (as such term is defined in
the Subordinated Credit Agreement), or (y) prohibit the Borrower from complying
with any exercise of the Subordinated Creditor's rights pursuant to Article 9 of
the Subordinated Credit Agreement or the Registration Rights Agreement.


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      Section 2.2.      Security.

            (a) The Subordinated Creditor and the Borrower represent and warrant
that the Subordinated Indebtedness is not and shall not be secured in any way
directly or indirectly by any Security, except as provided in Section 6.13 of
the Subordinated Credit Agreement regarding Key Man Life Insurance, unless
otherwise agreed by the Senior Creditor.

            (b) The Subordinated Creditor hereby subordinates the lien and the
priority of the Subordinated Creditor's existing and future Liens and other
interests, if any, in and to the Security to the Senior Lenders' existing and
future interest in the Security notwithstanding the time of attachment of the
interests of the Senior Creditor or the Subordinated Creditor or the time the
Senior Indebtedness or the Subordinated Indebtedness is incurred.
Notwithstanding anything to the contrary contained in this Agreement, under
applicable law or otherwise, in the event that the Liens of the Senior Creditor
are at any time unperfected with respect to any or all of the Security, the lack
of perfection by the Senior Creditor as to any such Security shall not affect
the validity, enforceability or priority of any Lien on the Security in favor of
the Subordinated Creditor. In any such event, the Liens of the Subordinated
Creditor shall have priority over any and all other Liens in favor of any third
party with respect to the Security (including, but not limited to any trustee
under the Bankruptcy Code), the Subordinated Creditor shall be, and is hereby
constituted, as the Senior Creditor's agent and bailee for purposes of
perfection of the Liens of the Senior Creditor in the Security such that the
Lien in favor of the Subordinated Creditor shall be held by the Subordinated
Creditor for the benefit of the Senior Creditor and the proceeds of any
disposition of the Security shall be and are in all respects subject to the
priority of right to payment and satisfaction of first, the Senior Indebtedness
and then, the Subordinated Indebtedness. The lien priorities provided in this
Section shall not be altered or otherwise affected by any amendment,
modification, supplement, extension, renewal, restatement or refinancing of
either the Senior Indebtedness or the Subordinated Indebtedness, nor by any
action or inaction which either the Senior Creditor or the Subordinated Creditor
may take or fail to take in respect of the Security, except as otherwise
provided above in this subsection.

            (c) Until the Senior Indebtedness has been fully paid and there
exists no commitment pursuant to the Senior Credit Agreement, Subordinated
Creditor shall not, without the prior written consent of the Senior Creditor,
sue for, liquidate, sell, foreclose, set off, collect, accept or surrender,
receive any proceeds, petition, commence or otherwise initiate any action (or
join any other Person in so doing) against the Borrower to realize or seek to
realize upon all or any part of the Security. In the event the Senior Creditor
may from time to time execute releases, partial releases, terminations,
reconveyances, subordinations or other documents releasing or otherwise limiting
the Senior Creditor's interests in the Security, the Subordinated Creditor
agrees to execute and deliver at such time such further documents as the Senior
Creditor may require to effect a corresponding change to the Subordinated
Creditor's position in the same Security, but only to the extent such Security
is sold or otherwise disposed of by the Borrower with the consent of the Senior
Creditor or in a commercially reasonable manner by the Senior Creditor or its
agents.

            (d) The Senior Creditor shall have the exclusive right to exercise
and enforce all privileges and rights with respect to the Security according to
the Senior Creditor's discretion and the exercise of its business judgment,
including, without limitation, the exclusive right to take or retake control or
possession of such Security and to hold, prepare for sale, process, sell, lease,
dispose of, or liquidate such Security.


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            (e) Only the Senior Creditor shall have the right to restrict or
permit, or approve or disapprove, the sale, transfer or other disposition of
Security. In the event the Senior Creditor releases its Liens on all or any part
of the Security, the Subordinated Creditor will, immediately upon the request of
the Senior Creditor, release it Liens upon the same Security, but only to the
extent such Security is sold or otherwise disposed of by the Borrower with the
consent of the Senior Creditor or in a commercially reasonable manner by the
Senior Creditor or its agents. The Subordinated Creditor will immediately
deliver such releases, acknowledgments and other documents as the Senior
Creditor may require in connection therewith.

      Section 2.3. Further Representations and Warranties. The Subordinated
Creditor represents and warrants to the Senior Creditor that:

            (a) the Subordinated Creditor is the exclusive legal and beneficial
owner of all of the Subordinated Indebtedness and of all interests of the
secured party, mortgagee, assignee, indemnitee, or the like in any Security
relating to the Subordinated Indebtedness, if any;

            (b) neither the Subordinated Indebtedness, nor the interests of the
secured party, mortgagee, assignee, indemnitee, or the like in any Security
relating to the Subordinated Indebtedness, is subject to any lien, security
interest, financing statements, subordination, assignment or other claim;

            (c) true, correct and complete copies of all documents relating to
the Subordinated Indebtedness in effect as of the date hereof have been
furnished to the Senior Creditor; and

            (d) the execution, deliver and performance of this Agreement is
within the corporate powers of the Subordinated Creditor, has been duly
authorized by all necessary corporate action of he Subordinated Creditor, and
does not contravene any statute, regulation, rule, order or judgment, any
charter, by-law or preference stock provision of the Subordinated Creditor, or
any provision of any mortgage, indenture, contract or other agreement binding on
the Subordinated Creditor or affecting it properties, which would prohibit, or
cause a default under or in any way prevent the execution, delivery, or carrying
out of the terms of this Agreement.

      Section 2.4. Further Documents. The Subordinated Creditor and the Borrower
agree they shall promptly execute such further documents and acknowledgments
(including, without limitation, amendments to and releases of financing
statements and other documents of record) as the Senior Creditor may require to
confirm or evidence their respective obligations and the Senior Creditor's
rights under this Agreement.

                                   ARTICLE 3.

                           DISTRIBUTIONS AND RECEIPTS

      Section 3.1. Distributions, etc. In the event of any distribution,
division or application, partial or complete, voluntary or involuntary, by
operation of law or otherwise, of all or any part of the assets of the Borrower
or the proceeds thereof to creditors of the Borrower or to any indebtedness,
liabilities and obligations of the Borrower, by reason of the liquidation,
dissolution or other winding up of the Borrower or Borrower's business, or in
the event of any sale or Insolvency Proceedings with respect to the Borrower or
Borrower's business, or in the event of any sale or


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Insolvency Proceedings with respect to the Borrower or its assets, in any such
event, any payment, distribution or benefit of any kind whatsoever or character,
either in cash, securities or other property, whether or not on account of the
Security, which shall be payable, deliverable or receivable upon or with respect
to all or any part of the Subordinated Indebtedness shall be paid or delivered
directly to the Senior Creditor for application to the Senior Indebtedness
(whether due or not due and in such order and manner as the Senior Creditor may
elect; and including, without limitation any interest accruing subsequent to the
commencement of any such event or Insolvency Proceedings) until the Senior
Indebtedness shall have been fully paid and satisfied.

      In connection with any Insolvency Proceedings, the Subordinated Creditor
hereby irrevocably authorizes and empowers the Senior Creditor (but places no
duty upon the Senior Creditor to take any such action), and irrevocably appoints
the Senior Creditor as the Subordinated Creditor's attorney-in-fact to file
proofs of claim on account of the Subordinated Indebtedness in the event that
the Subordinated Creditor fails to do so within fifteen (15) days of the bar
date pertaining thereto; provided, however, that Senior Creditor shall not be
permitted to vote such claim, all voting rights being retained by the
Subordinated Creditor.

      Section 3.2. Receipts by Subordinated Creditor. Should any payment or
distribution not permitted by the provisions of this Agreement or property or
proceeds thereof be received by the Subordinated Creditor upon or with respect
to all or any part of the Subordinated Indebtedness and/or the Security prior to
the full payment and satisfaction of the Senior Indebtedness, the Subordinated
Creditor will deliver the same to the Senior Creditor in the form received
(except for the endorsement or assignment of the Subordinated Creditor when the
Senior Creditor deems appropriate), for application to the Senior Indebtedness
(whether due or not due and in such order and manner as the Senior Creditor may
elect in accordance with the Financing Documents) and, until so delivered, the
same shall be held in trust by the Subordinated Creditor as property of the
Senior Creditor. In the event of the failure of the Subordinated Creditor to
make any such endorsement or assignment, the Senior Creditor, or any of its
officers or employees on behalf of the Senior Creditor, is hereby irrevocably
authorized in its own name or in the name of the Subordinated Creditor to make
the same, and is hereby appointed the Subordinated Creditor's attorney-in-fact
for those purposes, that appointment being coupled with an interest and
irrevocable.

                                   ARTICLE 4.

                             ADDITIONAL AGREEMENTS.

      Section 4.1. Consents; Waivers; etc. The Subordinated Creditor hereby
consents that at any time and from time to time and with or without
consideration, the Senior Creditor may, without further consent of or notice to
the Subordinated Creditor and without in any manner affecting, impairing,
lessening or releasing any of the provisions of this Agreement, renew, extend,
change the manner, time, place and terms of payment of, sell, exchange, release,
substitute, surrender, realize upon, modify, waive, grant indulgences with
respect to and otherwise deal with in any manner: (a) all or any part of the
Senior Indebtedness; (b) all or any of the Financing Documents; (c) all or any
part of any property at any time included within the Security; and (d) any
Person at any time primarily or secondarily liable for all or any part of the
Senior Indebtedness and/or any collateral and security therefor, all as if this
Subordination Agreement and any interest which the Subordinated Creditor has in
the Security did not exist. The Subordinated Creditor hereby waives demand,
presentment for payment, protest, notice of dishonor and of protest with respect
to the Senior


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Indebtedness, the Subordinated Indebtedness and/or the Security, notice of
acceptance of this Agreement, notice of the making of any of the Senior
Indebtedness and notice of default under any of the Financing Documents.

      Section 4.2. Continuing Agreement. This is a continuing Subordination
Agreement until all of the Senior Indebtedness has been fully paid, until all of
the Senior Indebtedness and all of the Subordinated Creditor's obligations to
the Senior Creditor have been performed and satisfied, and until the Senior
Creditor has no obligation or agreement to allow further Senior Indebtedness.

      Section 4.3. No Third Party Beneficiaries. The provisions of this
Agreement are solely for the benefit of the Senior Creditor, its successors and
assigns and there are no other parties or Persons whatsoever (including, without
limitation, the Borrower, its successors and assigns) who are intended to be
benefitted in any manner whatsoever by this Agreement.

      Section 4.4. Transfer or Assignment by Subordinated Creditor. The
Subordinated Creditor agrees not to subordinate, assign or transfer all or any
part of the Subordinated Indebtedness or the Security to any Person other than
the Senior Creditor without the prior written consent of the Senior Creditor,
which consent shall not be unreasonably withheld or delayed.

      Section 4.5. Subordination of Senior Indebtedness. The Senior Creditor
hereby agrees not to subordinate all or any part of the Senior Indebtedness or
its rights pursuant to the Senior Credit Agreement without the prior written
consent of the Subordinated Creditor.

      Section 4.6. Statement of Debt. The Subordinated Creditor and the Borrower
will, at any time or times upon the request of the Senior Creditor, promptly
furnish to the Senior Creditor a true, correct and complete statement of the
outstanding Subordinated Indebtedness.

      Section 4.7. Subrogation; Marshalling. The Subordinated Creditor shall not
be subrogated to, or be entitled to any assignment of any Senior Indebtedness or
evidence of any Senior Indebtedness or any Security until all Senior
Indebtedness is paid in full. The Subordinated Creditor hereby waives any and
all rights to have any Security or any part thereof granted to the Senior
Creditor marshalled in any Insolvency Proceedings or upon any foreclosure or
other disposition of such Security by the Senior Creditor or otherwise.

      Section 4.8. Successor to Senior Creditor. Subordinated Creditor shall
execute and deliver to any Person who succeeds to the interest of Senior
Creditor with respect to the Senior Indebtedness or which refinances the Senior
Indebtedness a Subordination Agreement in the form hereof with conforming
changes as long as the indebtedness thereunder constitutes Senior Indebtedness.

                                   ARTICLE 5.

                                  MISCELLANEOUS

      Section 5.1. Delay in Enforcement, etc. No delay or failure on the part of
the Senior Creditor to exercise any of its rights or remedies hereunder or now
or hereafter existing at law or in equity or by statute or otherwise, or any
partial or single exercise thereof, shall constitute a waiver thereof. All such
rights and remedies are cumulative and may be exercised singly or concurrently


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<PAGE>

and the exercise of any one or more of them will not be a waiver of any other.
No waiver of any of its rights and remedies hereunder, and no modification or
amendment of this Agreement shall be deemed to be made by the Senior Creditor
unless the same shall be in writing, duly signed on behalf of the Senior
Creditor, and each such waiver, if any, shall apply only with respect to the
specific instance involved and shall in no way impair the rights and remedies of
the Senior Creditor hereunder in any other respect at any other time.

      Section 5.2. Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and the Senior Creditor and the
Borrower and their respective successors and assigns.

      Section 5.3. Headings. The titles and headings of Articles, sections or
other parts of this Agreement are for convenience only, and shall not limit or
otherwise affect any of the terms hereof.

      Section 5.4. Governing Law. This Agreement shall be governed and construed
in accordance with the laws of the Commonwealth of Pennsylvania, with the same
force and effect as if this Agreement had been executed, delivered, accepted and
performed solely in the Commonwealth of Pennsylvania.

      Section 5.5. Notices. All notices, requests and demands to or upon the
parties to this Agreement shall be deemed to have been given, made or received
when delivered by hand, or three (3) days after the date when deposited in the
mail, postage prepaid by registered or certified mail, return receipt requested,
or, in the case of telegraphic notice, when delivered to the telegraphic company
and when properly transmitted, or, when sent by overnight courier, on the first
business day after the day when delivered to such overnight courier. All such
notices shall be addressed to the Senior Creditor as set forth in the initial
paragraph to this Agreement, and, in the case of any

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notice pursuant to Section 2.1(d), to counsel for the Senior Creditor as set
forth below, and to the Borrower and the Subordinated Creditor as set forth
below the signature lines to this Agreement, or to such other address as may be
hereafter designed by notice by the Senior Creditor, the Borrower or the
Subordinated Creditor to one another. The address for counsel to the Senior
Creditor is Wolf, Block, Schorr and Solis-Cohen, 350 Sentry Parkway, Bldg 640,
P.O. Box 1115, Blue Bell, PA 19422-0757, Attention: Bruce R. Lesser, Esquire.

      IN WITNESS WHEREOF, the Senior Creditor and the Subordinated Creditor have
caused their duly authorized officers to execute this Agreement under seal as of
the date first written above.

                             SENIOR CREDITOR:

                             MELLON BANK, N. A.


                             By:_______________________________________________
                                   Name/Title
                                   1735 Market Street, 6th Fl.
                                   Philadelphia, PA 19103
                                   Attention:  John M. DePledge, Vice President

                             SUBORDINATED CREDITOR:

                             SUNTRUST BANKS, INC.


                             By:_______________________________________________
                                   Name/Title

                                   Address:
                                   25 Park Place, 5th Floor
                                   Atlanta, Georgia 30303
                                   Attention: Mr. Robert L. Dudiak

Acknowledged and Agreed as of the 
date first written above:

CONSOLIDATED STAINLESS, INC.


By:________________________________
      Name/Title

      Address:
      1601 E. Amelia Street
      Orlando, FL  32803


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