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                                                           EXHIBIT 10.3


                  THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT

    THIS THIRD AMENDMENT (the "AMENDMENT") is made effective as of the 5th day
of November, 1997, 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 Loan and Security Agreement dated March 10, 1997
by and between Borrower and Bank, as amended by a First Amendment dated as of
March 31, 1997, a Second Amendment dated August 11, 1997 and letter agreements
dated April 7, 1997, September 16, 1997 and October 28, 1997 (collectively, the
"LOAN AGREEMENT"), Bank agreed, subject to the terms and conditions stated
therein, to extend to Borrower a $25,000,000.00 line of credit (the "LINE").

    B.   By that certain Surety Agreement dated March 10, 1997, Guarantors
agreed to guarantee and become sureties for certain obligations of Borrower to
Bank, including those arising under the Loan Documents.

    C.   Pursuant to an Asset Purchase Agreement dated as of  November 5, 1997
(the "ASSET PURCHASE AGREEMENT"), Borrower has agreed to sell to Texas Metal
Works, Inc. certain assets (the "COMPONENTS ASSETS") of Borrower's Flow
Components division (the "COMPONENTS DIVISION"), subject to Bank's consent.  The
Asset Purchase Agreement shall be in the form delivered to Bank and executed by
Borrower.

    D.   Obligors have requested that Bank consent to the sale of the
Components Assets and  release its security interests in and liens on the
Components Assets, which Bank is willing to do upon and subject to the terms and
conditions of this Amendment.

    E.   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.   CONFIRMATION OF INDEBTEDNESS.  Obligors hereby confirm and 
acknowledge that as of November 3, 1997,  the principal balance outstanding 
under the Line is $22,972,846.21, which includes $2,530,119.00 outstanding 
under the Permitted Out-of-Formula Advance and $85,000.00 outstanding under 
the Temporary Overadvance.  Obligors hereby acknowledge and agree that all 
sums described in this SECTION 1 are validly and duly owing to Bank.

    2.   ACKNOWLEDGE OF DEFAULTS.  Obligors hereby confirm and acknowledge 
that they are in default of their respective obligations under the Loan 
Documents as a result, INTER ALIA, of  (a) Borrower's failure to meet certain 
financial covenants set forth in ARTICLE 8 of the Loan Agreement, and (b) the 
existence of defaults under documentation for the Subordinated Indebtedness.  
Obligors have also informed Bank that the Borrower's operational results for 
the month of September 1997 will create certain other defaults  under the 
Loan Agreement.  Obligors further acknowledge and agree that Bank has certain 
rights and remedies available to it as a result of the occurrence of such 
defaults, including the right to confess judgment against the Borrower and 
each Guarantor.  OBLIGORS EXPRESSLY AGREE THAT

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NOTHING CONTAINED HEREIN SHALL BE DEEMED TO CONSTITUTE A WAIVER OR RELEASE OF
ANY OF THE EXISTING EVENTS OF DEFAULTS OR OF ANY RIGHTS AND REMEDIES AVAILABLE
TO BANK AS A RESULT THEREOF.

    3.  CONSENT TO SALE.  

        (A)   CONDITIONS.  Bank consents to the sale of the Components Assets 
upon and subject to the following conditions, each of which must be satisfied:

              (i)   The sale of the Components Assets shall be consummated in 
accordance with the terms and conditions of the Asset Purchase Agreement;

              (ii)  A copy of the fully executed Asset Purchase Agreement and 
copies of all other documents executed and delivered in connection therewith 
shall be delivered to Bank;

              (iii) The Loan Agreement shall be amended, effective as of the 
date hereof,  as follows:

                   (1)  SECTION 1.36 shall be amended to read as follows:

    "1.36     "MAXIMUM AMOUNT" means Twenty-Two Million Dollars
    ($22,000,000.00)."

                   (2)  The last sentence of SECTION 2.1(A) shall be amended to
read as follows:

    "Notwithstanding the foregoing, the aggregate maximum amount of advances
    against the Value of that portion of Borrower's Eligible Inventory
    consisting of  work-in-process will at no time exceed Two Million Dollars
    ($2,000,000.00) and the maximum amount of advances against the Value of all
    of Borrower's Eligible Inventory (including, without limitation,
    work-in-process) will at no time exceed Fourteen Million Dollars
    ($14,000,000.00)."


                   (3)  SECTION 2.1(B) shall be deleted in its entirety and no
further advances under the Equipment Purchase Sublimit shall be permitted. 

                   (4)  SECTION 9.7 shall be amended to read as follows:

    "9.7  INVENTORY BORROWING BASE INFORMATION AND RELATED DOCUMENTS.  At least
once every calendar week and, if required by Bank, as a condition of each
advance under the Line, and otherwise as requested by Bank, an inventory
certification in the form of EXHIBIT "C" attached hereto, together with such
additional information and details as may be requested by Bank, including
without limitation identification of all Eligible Inventory, all certified as to
accuracy by (a) the chief financial officer or corporate controller of Borrower
with respect to those delivered monthly or as otherwise specifically requested
by Bank, and (b) any Person identified in writing by Borrower to Bank as being
authorized to do so with respect to all other such reports."

                   (5)  The Temporary Overadvance is terminated and no further
advances shall be permitted thereunder.

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                   (6)  The maximum amount of the Permitted Out-of-Formula
Advance is permanently reduced to an amount equal to the current outstanding
principal balance thereof less the sum of all amounts paid to Bank pursuant to
SECTION 3(A)(IV) below and required to be used thereby to permanently reduce the
Permitted Out-of-Formula Overadvance.

             (iv)  As consideration for Bank's consent to the sale, 
Borrower shall deliver, or cause to be delivered to Bank, in immediately 
available U.S. Dollars, the greater of  (1) the sum of  (A) an amount 
sufficient to pay down all advances made under the Line against inventory of 
the Components Division; plus (B) an amount sufficient to permanently reduce 
the outstanding principal balance of the Permitted Out-of-Formula Advance to 
One Million Four Hundred Thousand Dollars ($1,400,000.00); plus (C) an amount 
sufficient to permanently reduce the Temporary Overadvance to zero (0); plus 
(D) all outstanding fees and costs due to Bank (collectively, the "REQUIRED 
PAYMENT"), OR (2) the proceeds remaining from the sale of the Components 
Assets after payment by Borrower of all transaction and release payments as 
approved by Bank. 

    If the amount paid to the Bank pursuant to this provision exceeds the
Required Payment, the excess shall be applied as follows: (x) first, an amount
not to exceed Two Hundred Fifty Thousand Dollars ($250,000.00) shall be applied
to reduce the then outstanding principal balance of the Line, and (y) then, any
remaining sums shall be used to permanently reduce the Permitted Out-of-Formula
Advance.
    
    Notwithstanding the payments to be made hereunder to permanently reduce the
outstanding principal balance of the Permitted Out-of-Formula Advance, Borrower
shall continue to reduce the outstanding principal balance of the  Permitted
Out-of-Formula Advance by an amount equal to One Hundred Seventy-Five Thousand
Dollars ($175,000.00) per month, which amount is due and payable on the tenth
day of each calendar month commencing on December 10, 1997 and continuing until
the Permitted Out-of-Formula Advance is permanently reduced to zero (0).

            (b)  RELEASE OF LIENS.  Upon satisfaction of the foregoing 
conditions, as determined by Bank in its sole discretion, Bank shall deliver 
to Borrower, in recordable form, UCC-3 Partial Release Statements releasing 
Bank's liens encumbering the Components Assets.

   4. PROJECTIONS.  Within fifteen (15) days after the closing of the sale of 
the Components Assets, Borrower shall deliver to Bank revised projections 
giving effect to such sale prepared in cooperation with Borrower's 
consultant, Executive Sounding Board Associates, Inc., and in accordance with 
the provisions of SECTION 9.2 of the Loan Agreement.  Upon its receipt and 
review of the revised projections, Bank may, in its sole discretion, require 
revisions to the financial covenants set forth in ARTICLE 8 of the Loan 
Agreement to give effect to the sale of the Components Assets.  Nothing 
contained herein shall obligate Bank to waive Borrower's compliance with, or  
make any modifications to, such financial covenants.

   5. CLOSING CONDITIONS.  The effectiveness of this Amendment and the Bank's 
obligations hereunder are expressly conditioned upon the execution and 
delivery to Bank and compliance with each the following by Obligors:

         (a) Corporate resolutions of the directors of the Borrower 
authorizing the execution and delivery by Obligors of the Asset Purchase 
Agreement, this Amendment and all documents required to be delivered by 
Obligors thereunder and hereunder.

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         (b)   For the purpose of perfecting Bank's security interest in the 
purchase money note received by Borrower as part of the consideration given 
for the purchase of the Components Assets,  Borrower shall deliver to Bank 
physical possession of such note, together an assignment of note and the 
consent of Texas Metals Works, Inc., as payor under such note, all in form 
and content acceptable to Bank.

         (b)   A landlord's waiver for the new lease executed by Borrower for 
its Texas location, which shall be delivered to the Bank within forty-five 
(45) following the date hereof.

         (c)   Any other agreements, instruments, and/or documents Bank may 
reasonably request.

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

   7. 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)   Except for liens expressly released by Bank in connection with 
the sale of the Components Assets, renew, confirm and continues all liens, 
security interests, rights and remedies granted to the Bank in the Loan 
Documents, which liens, security interests, rights and remedies shall also 
secure the performance by Obligors of their respective obligations hereunder 
and under the Loan Documents;

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

         (d)   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;

         (e)   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;

         (f)   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;

         (g)   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

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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;

        (h)  Represent and warrant that all of the information described in 
the foregoing Background is accurate; and

        (i)  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.

   8. RELEASE.  Each Obligor acknowledges and agrees that it has no claims, 
suits or causes of action against Bank and hereby remises, releases and 
forever discharges Bank, its officers, directors, shareholders, employees, 
agents, successors and assigns, and any of them (collectively, the "RELEASED 
PARTIES"), from any claims, suits or causes of action whatsoever, in law or 
at equity, which such Obligor has or may have against any of the Released 
Parties arising from any act, omission or otherwise, at any time up to and 
including the date of this Amendment.

   9. COSTS AND EXPENSES.  Borrower agrees to pay all of Bank's out-of-pocket 
expenses in connection with the review, preparation, negotiation, 
documentation and consummation of the transactions contemplated under this 
Amendment including, without limitation, all reasonable attorney's fees.

   10.   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.

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

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

   13.   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 amended hereby.

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

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

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

   17.   COUNTERPARTS.  This amendment 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 Amendment by signing any 
such counterpart.

   18.   ACKNOWLEDGMENT OF CONFESSION OF JUDGMENT PROVISIONS.  OBLIGORS 
ACKNOWLEDGE AND AGREE THAT THE NOTE AND THE LOAN DOCUMENTS CONTAIN PROVISIONS 
WHEREBY BANK MAY ENTER JUDGMENT BY CONFESSION AGAINST OBLIGORS.  BEING FULLY 
AWARE OF THEIR RIGHTS TO PRIOR NOTICE AND HEARING ON THE QUESTION OF THE 
VALIDITY OF ANY CLAIMS THAT MAY BE ASSERTED AGAINST THEM BY BANK UNDER THE 
NOTE AND LOAN DOCUMENTS, BEFORE JUDGMENT CAN BE ENTERED, BORROWER HEREBY 
WAIVES THESE RIGHTS AND AGREES AND CONSENTS TO BANK ENTERING JUDGMENT AGAINST 
THEM BY CONFESSION AFTER THE OCCURRENCE AND DURING THE CONTINUANCE OF AN 
EVENT OF DEFAULT. 

   19.   WAIVER OF RIGHT TO TRIAL BY JURY.  OBLIGORS AND BANK WAIVE ANY RIGHT 
TO TRIAL BY JURY ON ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (A) ARISING 
UNDER ANY OF THE LOAN DOCUMENTS OR (B) IN ANY WAY CONNECTED WITH OR RELATED 
OR INCIDENTAL TO THE DEALINGS OF OBLIGORS OR BANK WITH RESPECT TO ANY OF THE 
LOAN DOCUMENTS OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE 
WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE.  OBLIGORS AND BANK AGREE 
AND CONSENT THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE 
DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY OBLIGOR OR BANK MAY FILE 
AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN 
EVIDENCE OF THE CONSENT OF OBLIGORS AND BANK TO THE WAIVER OF THEIR RIGHT TO 
TRIAL BY JURY.  OBLIGORS ACKNOWLEDGE THAT THEY HAVE HAD THE OPPORTUNITY TO 
CONSULT WITH COUNSEL REGARDING THIS SECTION, THAT THEY FULLY UNDERSTAND ITS 
TERMS, CONTENT AND EFFECT, AND THAT THEY VOLUNTARILY AND KNOWINGLY AGREE TO 
THE TERMS OF THIS SECTION.

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

                             CONSOLIDATED STAINLESS, INC.

                             By:  /s/ ILLEGIBLE SIGNATORY
                                 ------------------------------
                             Name/Title: [ILLEGIBLE]
                             

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


                       [SIGNATURES CONTINUED ON THE NEXT PAGE]


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                    [SIGNATURES CONTINUED FROM THE PREVIOUS PAGE]

                                           
                             /S/ Harvey B. Adams
                             -----------------------------------------(SEAL)
                             HARVEY B. ADAMS


                             MELLON BANK, N.A.


                             By: /s/ John M. Defledge
                                -----------------------------------------
                             Name/Title: John M. Defledge, Vice President




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