BROAD AND CASSEL
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PO BOX 4961 (32802-4961)                            ROY S. KOBERT, P.A.
   TEL: (407) 839-4200                           DIRECT FAX: (407) 650-0927
   FAX: (407) 425-8377                      INTERNET: rkobert@broadandcassel.com



                                  June 10, 1998

VIA FACSIMILE
Scott K. Rutsky, Esquire                   Jeffrey C. Hampton, Esquire
Counsel for Official Unsecured             Saul, Ewing, Remick & Saul, LLP
Creditors Committee                        Counsel to the Debtor
Proskauer Rose LLP                         1500 Market Street 38th Floor
1585 Broadway                              Philadelphia, Pennsylvania 19102-2186
New York, New York  10036

Re:   Consolidated Stainless, Inc., United States Bankruptcy Court, Delaware,
      Case No. 97-2593(JJF)

Gentlemen:

      Over the last several days, we have engaged in fruitful discussion
regarding the future affiliation of Mr. Harvey B. Adams ("HBA") with the company
he founded, Consolidated Stainless, Inc. (the "Debtor"). Last night, HBA agreed
to accept the terms proposed by the Official Unsecured Creditors Committee and
recommended by the Board of Directors of Consolidated Stainless, Inc. Based on
the consensus of the Board of Directors, the Creditors Committee as well as
joinder by Mellon Bank, that in order to assist the Debtor in its reorganization
efforts, HBA should resign.

      HBA has agreed to resign as the Chairman of the Board, Chief Executive
Officer and employee of Consolidated Stainless, Inc. under the following terms:

      1. HBA is resigning in his capacity as an officer, director and employee
of the Debtor. It has been represented by the recipients of this letter that the
Official Unsecured Creditors Committee, the Board of Directors of the Debtor,
and Mellon Bank do not oppose severance terms contained herein and the Debtor
will forthwith seek to obtain the necessary Bankrutpcy Court approval of the
letter with his resignation effective as of June 5, 1998 ("Resignation Date").

      2. HBA shall receive severance, from the Resignation Date, in the form of
2 (two) months pay in the reduced amounts established during the Chapter 11,
existing insurance and related benefits including COBRA benefits that the law
allows, to be paid in accordance with the Debtor's current payroll and benefit
practices. HBA shall not be compensated and waives
<PAGE>

Scott K. Rutsky, Esquire
Jeffrey C. Hampton, Esquire
August 11, 1998
Page 2

any claim for any post-petition vacation earned. Any unpaid severance pursuant
to this agreement shall be an allowed administrative expense pursuant to 11
U.S.C. ss. 503(b)(1)(A) and paid as an administrative priority pursuant to 11
U.S.C. ss. 507(a)(1).

      3. HBA shall make himself reasonably available to the corporate officers
and any retained turnaround specialists for the next 60 days after the
Resignation Date for any related corporate issues, at no additional compensation
to HBA.

      4. HBA represents and warrants that he has returned any proprietary
information belonging to the Debtor from his home office on June 8, 1998. HBA
represents that neither he nor any corporation, partnership, joint venture or
other entity in which HBA has a direct or indirect ownership or management
interest is currently in possession of any proprietary information of the
Debtor.

      5. In consideration of the agreements and payments set forth herein, HBA
(both in his individual capacity, or through any corporation, partnership, joint
venture or other entity in which HBA has a direct or indirect ownership or
management interest) shall not, at any time during the earlier of (i)
non-payment under paragraph 2; (ii) conversion of the Debtor's Chapter 11 case
to a case under Chapter 7 of the Bankruptcy Code; or (iii) 60 days from the
Resignation Date, directly or indirectly, at any place within the United States,
solicit, call upon or service any of the Debtor's customers or otherwise in any
manner compete with the Debtor with respect to any business, identical or
similar in nature to any business now or then being conducted by the Debtor or
in any other manner divert or take away or attempt to divert or take away from
the Debtor any of the business of the Debtor or any customer of the Debtor. For
this purpose, the term "customer" includes anyone who was a customer of the
Debtor at any time during the two years preceding the date hereof.

      6. In consideration of the agreements and payments set forth herein, HBA
(both in his capacity, or through any corporation, partnership, joint venture or
any entity in which HBA has a direct or indirect ownership or management
interest) shall not, at any time from the date hereof through and including the
earlier of the date of (a) confirmation of a Chapter 11 Plan regarding the
Debtor; (b) conversion of the Debtor's Chapter 11 case to a case under Chapter 7
of the Bankruptcy Code; (c) the dismissal of the Debtor's Chapter 11 case; (d)
120 days from the Resignation Date; or (e) non-payment under paragraph 2, shall
not employ, retain, or solicit the employment or retention of, any person who
was or is an employee of the Debtor at any time during the two years preceding
the date hereof without having first obtained the Debtor's written consent to
any such action. This paragraph shall not apply to any person who is laid off,
terminated, fired, or otherwise involuntarily disengaged by the Debtor.

      7. HBA acknowledges that the provisions of paragraphs 5 and 6 above are
necessary for the Debtor's protection and are reasonable. If, however, any
provision of

                                BROAD AND CASSEL
<PAGE>

Scott K. Rutsky, Esquire
Jeffrey C. Hampton, Esquire
August 11, 1998
Page 3

paragraph 5 and 6 is held to be unenforceable because of the duration,
geographical area or scope of the restriction, the Court making that
determination shall modify that provision to the extent necessary to make it
valid.

      8. Since a breach by HBA of any of the provisions of paragraphs 5 and 6
would injure the Debtor in a way that could not be adequately compensated for by
damages, in addition to any other remedies available to the Debtor, it may
obtain an injunction restraining any such breach, without the necessity of
showing actual damage, after posting a bond if so required by a court of
competent jurisdiction.

      9. Nothing in terms of this severance letter agreement shall waive any
claim(s) or release any cause(s) of action that any party could raise against
the other, whether or not a cause of action currently exists or could arise in
the future.

      I am authorized to tender this letter offer on behalf of HBA and request
the Debtor to (i) seek board approval of these terms herein and (ii) serve me
with a copy of the motion to approve the terms, set forth herein. Please signify
your agreement to these resignation terms by your signature below and return an
executed copy to me. If there are any questions, please do not hesitate to
contact me.

                                        Very truly yours,

                                        Roy S. Kobert, P.A.


                                        By: /s/ Roy S. Kobert
                                           -------------------------------------
                                           Roy S. Kobert, Esquire
                                           rkobert@broadandcassel.com
RSK/dsr

Official Committee of Unsecured                  Consolidated Stainless, Inc.
Creditors of Consolidated Stainless, Inc.        By its Counsel:
By its Counsel:                                  Saul, Ewing, Remick & Saul, LLP
Proskauer Rose LLP


By: /s/ Scott K. Rutsky                 By:
   ----------------------------------      -------------------------------------
   Scott K. Rutsky, Esquire                Jeffrey C. Hampton, Esquire

c:    Harvey B. Adams
      Marvin Krasney, Esquire

                                BROAD AND CASSEL