THIRD EXTENSION AND MODIFICATION TO POST-PETITION
                           LOAN AND SECURITY AGREEMENT

      THIRD EXTENSION AND MODIFICATION TO POST-PETITION LOAN AND SECURITY
AGREEMENT (the "Modification") dated June 26, 1998, by and between CONSOLIDATED
STAINLESS, INC. (the "Borrower"), RONALD J. ADAMS and HARVEY B. ADAMS
(collectively, the "Guarantors" and each, a "Guarantor"), and MELLON BANK, N.A.
(the "Bank"). Borrower and Guarantors are sometimes collectively referred to
herein as the "Obligors".

                                   BACKGROUND

      A. Pursuant to a certain Post-Petition Loan and Security Agreement dated
December 12, 1997 by and between Borrower and Bank as modified on February 24,
1998, on March 4, 1998, on March 9, 1998, April 13, 1998 and April 16, 1998, and
as extended and modified by the Extension and Modification to Post-Petition Loan
and Security Agreement dated May 29, 1998 and the Second Extension and
Modification to Post-Petition Loan and Security Agreement dated June 12, 1998
(collectively, the "Loan Agreement"), Bank agreed, subject to the terms and
conditions stated therein, to extend to Borrower a line of credit up to the
maximum amount as defined therein (the "Line").

      B. By that certain Surety Agreement dated December 12, 1997, Guarantors
agreed to guarantee and become sureties for certain obligations of Borrower to
Bank, including those arising under the Loan Documents.

      C. Borrower has requested that Bank consent to the extension of the term
and modification of certain provisions of the Loan Agreement, which Bank is
willing to do upon and subject to the terms and conditions of this Modification.

      D. All capitalized terms not defined herein shall have the meanings set
forth therefor in the Loan Agreement.

      NOW, THEREFORE, intending to be legally bound hereby, the parties hereto
agree as follows:

1.    ACKNOWLEDGMENT OF DEFAULTS. Borrower hereby confirms and acknowledges that
      it is in default of its respective obligations under the Loan Documents as
      a result, inter alia, of (a) Borrower's prior failure to achieve projected
      monthly sales as required in Article 13.1(c) of the Loan Agreement, (b)
      Borrower exceeding the Inventory Sublimit, WIP Sublimit and Permitted
      Out-of-Formula Advances as scheduled under the Loan Agreement, and (c) the
      existence of Out-of-Formula Advances from time to time. Borrower further
      acknowledges and agrees that the Bank has certain rights and remedies
      available to it as a result of the occurrence of the defaults, including
      the right to confess judgment against the Borrower and each Guarantor.
      BORROWER AND GUARANTORS EXPRESSLY AGREE THAT NOTHING CONTAINED HEREIN
      SHALL BE DEEMED TO CONSTITUTE A WAIVER OR RELEASE OF ANY EXISTING EVENTS
      OF DEFAULT OR OF ANY RIGHTS AND REMEDIES AVAILABLE TO BANK AS A RESULT
      THEREOF.
<PAGE>

2.    MODIFICATIONS.

      The Loan Agreement shall be modified, effective as of June 29, 1998, as
follows:

      a.    Schedule 1.57 shall be modified by substituting the following
            Schedule 1.57:

                        PERMITTED OUT-OF-FORMULA ADVANCES

    Time Period                               Permitted Out-of-Formula Advances
    -----------                               ---------------------------------

From June 29, 1998 to and including           $2,275,000.00 less the Additional 
July 3, 1998                                  Reduction if any.

From July 4, 1998 to and including            $2,175,000.00 less the Additional
if July 10, 1998                              Reduction if any.

From July 11, 1998 to and including           $2,150,000.00 less the Additional
July 17, 1998                                 Reduction if any.

From July 18, 1998 to and including           $2,000,000.00 less the Additional
July 24, 1998                                 Reduction if any.

From July 25, 1998 to and including           $1,950,000.00 less the Additional
July 31, 1998                                 Reduction if any.

From August 1, 1998 and at all times          $1,925,000.00 less the Additional
thereafter                                    Reduction if any.

"Additional Reduction" means the sum of (i) fifty percent (50%) of the proceeds
of Borrower's "Pre-Petition Delinquent Accounts" (defined as Borrower's
pre-petition date accounts receivable that are ninety days or more past invoice
date as of April 10, 1998), plus (ii) sixty-five percent (65%) of the amount by
which the Value of Borrower's ineligible inventory is less than $1,000,000.00.
Notwithstanding anything in the Loan Agreement, fifty percent (50%) of the
proceeds of the collection of Pre-Petition Delinquent Accounts shall be applied
to the reduction of the Permitted Out-of-Formula Advance at the Bank's
discretion. The Additional Reduction shall apply upon the occurrence of either:
(a) July 30, 1998, or (b) the aggregate collection by Borrower of Borrower's
Pre-Petition Delinquent Accounts in excess of $60,000.00 during the period June
29, 1998 through July 31, 1998. Any additional availability under the Line in
excess of that set forth in the Budget may not be used by the Borrower for any
cash disbursements other than the cash disbursements as set forth in the Budget,
until the Bank and Borrower have agreed to a further reduction in the Permitted
Out-of-Formula Advances beyond those set forth above.
<PAGE>

      b.    Schedule 3.1(b) shall be modified by substituting the following
            Schedule 3.1(b):

                     SUBLIMITS ON INVENTORY AND WIP ADVANCES

A.    Inventory Sublimit

    Time Period                                       Inventory Sublimit
    -----------                                       ------------------

From June 29, 1998 to and including                   $7,100,000.00
July 3, 1998

From July 4, 1998 to and including                    $7,000,000.00
July 10, 1998

From July 11, 1998 to and including                   $6,800,000.00
July 17, 1998

From July 18, 1998 to and including                   $6,500,000.00
July 24, 1998

From July 25, 1998 to and including                   $6,300,000.00
July 31, 1998

From August 1, 1998 and at all times                  $6,000,000.00
thereafter

B.    WIP Sublimit

    Time Period                                       WIP Sublimit
    -----------                                       ------------

From June 29, 1998                                    $175,000.00
to and including July 31, 1998

From August 1, 1998 and at all                        $150,000.00
times thereafter

      c.    Schedule 1.46 shall be modified by substituting the following
            Schedule 1.46:

                                 MAXIMUM AMOUNT

    Time Period                                       Maximum Amount
    -----------                                       --------------

From June 29, 1998 to and including                   $11,600,000.00
July 3, 1998
<PAGE>

From July 4, 1998 to and including                    $11,500,000.00
July 10, 1998

From July 11, 1998 to and including                   $11,350,000.00
July 17, 1998

From July 18, 1998 to and including                   $11,250,000.00
July 24, 1998

From July 25, 1998 to and including                   $11,150,000.00
July 31, 1998

From August 1, 1998 and at all times                  $11,000,000.00
thereafter

      d.    Paragraph 3.1(a) shall be modified by substituting the following
            Paragraph 3.1(a):

            3.1(a) Establishment of Line. Bank will establish for Borrower for
            and during the period from June 29, 1998 until July 31, 1998 (as
            such period may be extended hereunder, the "Contract Period"),
            subject to the terms and conditions hereof, a revolving line of
            credit (the "Line") pursuant to which Bank will from time to time
            make loans or other extensions of credit to Borrower in an aggregate
            amount not exceeding at any time the lesser of: the (i) Borrowing
            Base, or (ii) Adjusted Maximum Amount and only for cash
            disbursements as set forth in the Budget. Within the limitations set
            forth in this Section 3.1, Borrower may borrow, repay and reborrow
            under the Line. The Line shall be subject to all terms and
            conditions set forth in all of the Loan Documents which terms and
            conditions are incorporated herein. Borrower's obligation to repay
            the loans and extensions of credit under the Line shall be evidenced
            by Borrower's promissory note (the "Line Note") in the maximum face
            amount of Nineteen Million Dollars ($19,000,000.00), dated December
            12, 1997.

      e.    Paragraph 3.1 (d) shall be modified by substituting the following
            Paragraph 3.1(d):

            3.1(d) Extension of Contract Period. Bank may extend the Contract
            Period beyond July 31, 1998 on terms and conditions acceptable to
            Bank and at Bank's sole discretion upon payment of an additional
            Loan Fee and approval by the Court.

      f.    Paragraph 8.28 shall be modified by substituting the following
            Paragraph 8.28:

            8.28 Permanent Financing Order. Borrower will use its best efforts
            to cause the Permanent Financing Order to be entered by the
            Bankruptcy Court
<PAGE>

            on or before twenty (20) days after the date of entry of the Interim
            Financing Order.

      g.    The following paragraph 8.37 shall be added to the Loan Agreement:

            8.37 Financing of Manufacturing Facilities. As of July 15, 1998,
            Bank shall have no obligation to advance any sums to Borrower for
            any operational costs or other costs associated with the Lakeland
            and Auburndale manufacturing facilities including, but not limited
            to, payroll, payroll taxes and employee benefits, unless Bank agrees
            otherwise in writing prior to July 15, 1998.

      h.    Paragraph 14.1 shall be modified by substituting the following
            Paragraph 14.1:

            14.1 Communications and Notices. All notices, requests and other
            communications made or given in connection with the Loan Documents
            shall be in writing and, unless receipt is stated herein to be
            required, shall be deemed to have been validly given if delivered
            personally to the individual or division or department to whose
            attention notices to a party are to be addressed, or by private
            carrier, or registered or certified mail, return receipt requested,
            or by telecopy with the original forwarded by first-class mail, in
            all cases, with charges prepaid, addressed as follows, until some
            other address (or individual or division or department for
            attention) shall have been designated by notice given by one party
            to the other:

            To Borrower:              Consolidated Stainless, Inc.
                                      1601 East Amelia Street
                                      Orlando, FL 32803
                                      Attention:  Ronald J. Adams, President
                                      Telecopier No.: (407) 895-5441

            with a copy to:           Saul, Ewing, Remick & Saul LLP
                                      Centre Square West
                                      1500 Market Street, 38th Floor
                                      Philadelphia, PA 19102
                                      Attention: Alan R. Gordon, Esquire
                                      Telecopier No.: (215) 972-7725
<PAGE>

            with a copy to:           Greenberg, Traurig, Hoffman, Lipoff, 
                                      Rosen & Quentel
                                      Citicorp Center
                                      153 E. 53rd Street
                                      New York, NY 10022
                                      Attention: Richard Tilton, Esquire
                                      Telecopier No.: (212) 223-7161

            To Bank:                  Mellon Bank, N.A.
                                      1735 Market Street, 6th Floor
                                      Philadelphia, PA 19101
                                      Attention: Ronald Comito, Vice President
                                      Telecopier No.: (215) 553-0201

            with a copy to:           Klehr, Harrison, Harvey, Branzburg
                                      & Ellers LLP
                                      1401 Walnut Street
                                      Philadelphia, PA 19102
                                      Attention: Domenic E. Pacitti, Esquire
                                      Telecopier No.: (215) 568-6603

            with a copy to:           Wolf, Block, Schorr & Solis-Cohen LLP
                                      111 South 15th Street
                                      Philadelphia, PA 19102
                                      Attention: Marvin Krasny, Esquire
                                      Telecopier No.: (215)977-2334


      i.    Paragraph 8.16 shall be modified by substituting the following
            Paragraph 8.16:

            8.16 Maintenance of Management. Borrower shall cause its business to
            be continuously managed by its present management consisting of
            Ronald J. Adams as President and Co-CEO and Vincent Colistra of
            Phoenix Management Services, Inc. as Co-CEO on terms and conditions
            and with responsibilities acceptable to Bank.

      j.    Paragraph 1.14 shall be modified by substituting the following
            Paragraph 1.14:

            1.14 "Budget" means that certain Budget and Cash Flow Projections
            dated June 26, 1998, prepared by Borrower for the period June 29,
            1998 through July 31, 1998 and attached hereto as Exhibit "A", as
            the same may be updated from time to time. The Budget includes,
            without limitation, statements of receipts and disbursements and
            availability reports prepared on a weekly cash basis for the
            Contract Period, and balance sheets, profit and loss statements and
            cash flow statements prepared on a monthly accrual basis for the
            Contract Period.
<PAGE>

      k.    Paragraph 13.1 shall be modified by adding the following
            subparagraph 13.1(y):

            (y) The failure by the Borrower to file a Chapter 11 Plan of
            Reorganization on or before July 31, 1998 that is acceptable in all
            respects to Bank in Bank's sole discretion.

      l.    The following paragraph 8.38 shall be added to the Loan Agreement:

            8.38 Access to Investment Bankers. Borrower shall make available to
            Bank, and Bank may contact directly, the investment bankers retained
            by the Borrower. Such investment bankers shall discuss with and
            disclose to Bank any and all information regarding the potential
            sale of any of the Borrower's assets and any information requested
            by Bank. Bank agrees to attempt to notify Borrower prior to
            contacting the investment bankers, but Bank will notify Borrower
            when Bank has had contact with the investment bankers.

      m.    The following paragraph 8.39 shall be added to the Loan Agreement:

            8.39 Phoenix Management Services, Inc. Borrower shall retain Phoenix
            Management Services, Inc. and Vincent Colistra of Phoenix Management
            Services, Inc. as Co-CEO of the Borrower on terms and conditions and
            with responsibilities acceptable to Bank. At times convenient to
            Bank and Borrower, Vince Colistra and Phoenix Management Services,
            Inc. shall be available to Bank to apprise Bank of any issues and/or
            status with respect to the Borrower's operations, financing, asset
            disposition or reorganization. The compensation of Vincent Colistra
            and Phoenix Management Services, Inc. may be paid by Bank either
            debiting Borrower's account or advancing funds under the Line
            consistent with the Loan Agreement and this Modification.

      n.    The following paragraph 13.2 (d) shall be added to the Loan
            Agreement:

            13.2 (d) Borrower's Exclusivity Period. If Borrower fails to file a
            Chapter 11 Plan of Reorganization on or before July 31, 1998 or if
            any Plan of Reorganization that is filed by Borrower is not
            acceptable to Bank, in Bank's sole discretion, then Borrower agrees
            that any existing exclusive period in which to file or solicit
            acceptances to Borrower's Plan of Reorganization shall be dissolved
            as to Bank and Bank shall be permitted to file and solicit
            acceptances to its own Chapter 11 Plan, should Bank so chose.

3.    OTHER REFERENCES. All references in the Loan Agreement and all the Loan
      Documents to the term "Loan Documents" shall mean the Loan Documents as
      defined therein, and this
<PAGE>

      Modification, and any and all other documents executed and delivered by
      Borrower pursuant to and in connection herewith.

4.    FURTHER AGREEMENTS AND REPRESENTATIONS. Obligors hereby:

      a.    Ratify, confirm and acknowledge that the Loan Agreement, as amended
            hereby, and the other Loan Documents continue to be valid, binding
            and in full force and effect;

      b.    Covenant and agree to perform all of their respective obligations
            under the Loan Agreement, as amended hereby, and the Loan Documents;

      c.    Acknowledge and agree that as of the date hereof, no Obligor has any
            defense, set-off, counterclaim or challenge against the payment of
            any sums constituting Bank Indebtedness or the enforcement of any of
            the terms of the Loan Agreement, as amended hereby, or any of the
            other Loan Documents;

      d.    Ratify and confirm that all representations and warranties of the
            Obligors, contained in the Loan Agreement and/or the other Loan
            Documents, are true and complete on and as of the date hereof, as if
            made on and as of the date hereof;

      e.    Acknowledge and agree that nothing contained herein shall be deemed
            to impair, reduce or release in any manner whatsoever any of the
            Obligations of Guarantors under the Surety Agreement;

      f.    Represent and warrant that the execution and delivery of this
            Amendment by Obligors and all documents and agreements to be
            executed and delivered pursuant to the terms hereof;

            i.    have been duly authorized by all requisite corporate action by
                  Borrower;

            ii.   will not conflict with or result in the breach of or
                  constitute a default (upon the passage of time, delivery of
                  notice or both) under Borrower's Certificate of Incorporation
                  or By-Laws or any applicable statute, law, rule, regulation or
                  ordinance or any indenture, mortgage, loan or other document
                  or agreement to which any Obligor is a party or by which any
                  of them is bound or affected; and

            iii.  will not result in the creation or imposition of any lien,
                  charge or encumbrance of any nature whatsoever upon any of the
                  property or assets of any Obligor, except liens in favor of
                  the Bank or as permitted hereunder or under the Loan
                  Documents;

      g.    Represent and warrant that all of the information described in the
            foregoing Background is accurate; and
<PAGE>

      h.    Acknowledge and agree that Obligors' failure to comply with or
            perform any of their respective covenants, agreements or obligations
            contained in this Amendment or any other documents executed and
            delivered by any of them in connection herewith will, subject to
            applicable notice, grace and cure periods, constitute an Event of
            Default under the Loan Agreement and each of the Loan Documents.

5.    NO NOVATION. Nothing contained herein and no actions taken pursuant to the
      terms hereof are intended to constitute a novation of the Loan Agreement
      or any of the Loan Documents and shall not constitute a release,
      termination or waiver of any of the liens, security interests, rights or
      remedies granted to Bank in the Loan Documents.

6.    NO FURTHER AMENDMENTS. Nothing contained herein constitutes an agreement
      or obligation by Bank to grant any further amendments or modifications to
      any of the Loan Documents.

7.    INCONSISTENCIES. To the extent of any inconsistency between the terms and
      conditions of this Modification and the terms and conditions of the Loan
      Agreement or the Loan Documents as previously modified, the terms and
      conditions of this Modification shall prevail. All terms and conditions of
      the Loan Agreement and the Loan Documents as previously modified and not
      inconsistent herewith shall remain in full force and effect, and are
      hereby ratified and confirmed by Borrower and Guarantors.

8.    CONSTRUCTION. All references to the Loan Agreement therein or in any of
      the other Loan Documents shall be deemed to be a reference to the Loan
      Agreement, as modified hereby.

9.    BINDING EFFECT. This Modification shall be binding upon and inure to the
      benefit of the parties hereto and their respective successors and assigns.

10.   GOVERNING LAW. This Modification shall be governed by and construed in
      accordance with the laws of the Commonwealth of Pennsylvania.

11.   HEADINGS. The headings of the sections of this Modification are inserted
      for convenience only and shall not be deemed to constitute a part of this
      Modification.

12.   COUNTERPARTS. This Modification may be executed in any number of
      counterparts, all of which taken together shall constitute one and the
      same instrument, and any party hereto may execute this Modification by
      signing any such counterpart.

                      [THIS SPACE INTENTIONALLY LEFT BLANK]
<PAGE>

      IN WITNESS WHEREOF, the parties have caused this Modification to be
executed effective as of the day and year first above written.

                                             CONSOLIDATED STAINLESS, INC.


                                              By: /s/ Ronald Adams PRES.
                                                  -------------------------
                                              Ronald Adams, President
{CORPORATE SEAL}


                                              /s/ Ronald Adams       (SEAL)
                                              -----------------------------
                                              RONALD J. ADAMS

                                                Florida Driver License
                                                A352-730-49-019-0

                                              MELLON BANK, N.A.


                                              By:
                                                 -------------------------
                                              Name/Title:
                                                         -----------------
<PAGE>

STATE OF FLORIDA :
                 : SS
COUNTY OF Orange :

      On this, the 26th day of June, 1998, before me, a notary public,
personally appeared RONALD J. ADAMS, known to me (or satisfactorily proven) to
be the person whose name is subscribed to the within instrument, and
acknowledged that he executed the same for the purposes therein contained.


                                 /s/ Winifred G. Bennett
                                 -----------------------
                                 Notary Public

                                 My Commission Expires:

                                ------------------------------------------------
                                             Winifred G. Bennett
                                    [SEAL]   Notary Public, State of Florida
                                             Commission No. CC 602158
                                             My Commission Exp. 01/13/2001

                                Bonded Through Fla. Notary Service & Bonding Co.
                                ------------------------------------------------