MERIDIAN NATIONAL CORP, 10-K, 1997-06-24

MERIDIAN NATIONAL CORP
10-K, 1997-06-24
METALS SERVICE CENTERS & OFFICES

Previous: AMERICAN EXPLORATION CO, 11-K/A, 1997-06-24

Next: FOXMOOR INDUSTRIES LTD, 3, 1997-06-24

<PAGE>

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended FEBRUARY 28, 1997

OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number 0-14203

MERIDIAN NATIONAL CORPORATION
(Exact name of Registrant as specified in its charter)

Delaware 34-1470518
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)

805 Chicago Street, Toledo, Ohio 43611
(Address of principal executive offices) (Zip Code)

(419) 729-3918
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12 (b) of the Act:

None

Securities registered pursuant to Section 12 (g) of the Act:

Common Stock, $.01 par value
Series B Convertible Voting Preferred Stock, $.001 par value
Common Stock Purchase Warrants expiring 1999
Common Stock Purchase Warrants expiring 1998
(Title of each class)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--- ---

Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. [ ]

As of May 30, 1997, 3,488,278 shares of Meridian National Corporation
common stock were outstanding, and the aggregate market value of voting stock
(based upon the closing price on the Automated Quotation System of the National
Association of Securities Dealers, Inc.) held by non-affiliates was
approximately $1,591,000 for common stock and $310,000 for Series B convertible
voting preferred stock.

Documents Incorporated by Reference

Portions of the registrant's definitive proxy statement for its 1997
Annual Meeting of Stockholders to be held on August 8, 1997 (the "1997 Proxy
Statement"), which the registrant intends to file within 120 days after the
close of its fiscal year ended February 28, 1997, are incorporated by
reference into Part III.

<PAGE>

PART I

ITEM 1. DESCRIPTION OF BUSINESS

Meridian National Corporation ("Meridian National" or the
"Company", which, unless otherwise indicated, refers to Meridian National and
its subsidiaries) is engaged in the steel distribution and processing
business and in the waste management business.

GENERAL DEVELOPMENT OF BUSINESS

Meridian National was incorporated as a Delaware corporation
in 1985. Shortly thereafter, the Company acquired from certain present and
former members of management, who were also principal stockholders of the
Company, all of the outstanding capital stock of Ottawa River Steel Co.
("Ottawa River Steel"), National Metal Processing, Inc. ("National Metal")
and two other companies whose operations were combined later with Ottawa
River Steel and National Metal. The Company continued the operations of these
acquired companies as the foundation of its steel distribution and processing
business. National Metal was in the business of pickling steel sheets used in
the automotive and truck industry (bumper stock). In March 1995, National
Metal shut down its bumper stock pickling operations due to the loss of a
major customer and subsequently converted its operations to the pickling of
bar coil. It was unable to secure sufficient bar coil pickling business to
operate profitably and closed this operation in March 1996. National Metal
leased the steel pickling facility to another party in September 1996. A
building adjacent to the steel pickling facility has been leased to the same
party since June 1995.

In January 1994, the Company acquired real property and
equipment previously operated as a steel service center located in Detroit,
Michigan, to expand its steel processing services to the end-user market.
Shortly thereafter, the Company reopened the facility, using many of the
personnel formerly employed by the seller at the facility.

In November 1995, the Company acquired the business and
assets of a steel service center located in Gary, Indiana. The operations at
this facility are being continued using many of the personnel previously
employed by the seller. This facility supplies steel products to primarily
non-automotive markets, providing additional diversification of the Company's
customer base and increasing its presence in the midwest marketplace

The Company entered the waste management industry in 1985.
Through a newly-formed subsidiary, Meridian Environmental Services, Inc.
("Meridian Environmental"), the Company began to recycle and re-market spent
acids generated by its own steel processing operations and by other spent
acid generators in the Detroit, Michigan and the Toledo, Ohio areas. In July
1996 all the property and equipment of Meridian Environmental were sold and
the Company no longer is involved in the recycling and re-marketing of spent
acids.

In 1989 the Company formed National Purification, Inc.
("National Purification") as a wholly-owned subsidiary to enter into a
general partnership with Haden Purification, Inc. ("Haden Purification").
The partnership, Environmental Purification Industries Company ("EPI"), was
formed to own and operate one or more facilities for the recycling of paint
waste using a proprietary paint waste drying system (DryPure-TM-) developed by
Haden Environmental Corporation ("Haden Environmental"), an affiliate of
Haden Purification, and for the marketing of the reclaimed solids. EPI's
first paint waste recycling facility started commercial operations in March
1991. National Purification and Haden Purification were equal partners in
EPI and were otherwise unaffiliated. In 1992 Haden Purification terminated
and abandoned its interest in EPI, and EPI became wholly-owned by the Company
through its subsidiaries National Purification and MEPI Corp. ("MEPI"), which
was formed in 1992. In September 1995, EPI entered into a license agreement
with Aster, Inc. ("Aster") which developed a new paint waste recycling
process known as the Polymeric Recovery System (the "PRS system"). The
Company completed a building and equipment expansion of its Toledo, Ohio
facility in April 1997 which will utilize the PRS system when it starts
commercial operations in July 1997.

In February 1996, Meridian National formed EPI Technologies,
Inc., ("EPI Technologies"), as a wholly-owned subsidiary. In November 1996,
the Company transferred all of its shares in National Purification and MEPI
to EPI Technologies. After the transfer, EPI Technologies effectively owned
100% of EPI, the general partnership which operates Meridian National's paint
waste recycling facility.

2
<PAGE>

Concurrent with the transfers, EPI Technologies issued shares of its common
stock representing a 20% ownership interest, equally to three investors, for
$600,000, effectively reducing the Company's ownership interest in its paint
waste recycling operation to 80%.

The Company's principal executive offices are located at 805
Chicago Street, Toledo, Ohio 43611 and its telephone number is (419) 729-3918.

3
<PAGE>

FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS

The Company's operations are classified within two separate
industry segments. The steel distribution and processing segment handles
flat-rolled steel products primarily for the automotive, truck and appliance
industries. The waste management segment recycles paint wastes for companies
in the automotive and waste management industries, as well as arranging for
disposal of paint wastes at third-party disposal sites. Prior to July 1996,
the waste management segment provided similar services for the recycling and
disposal of spent acids.

For financial information about the Company's industry
segments, see Note 13 to the consolidated financial statements of the Company
which are included elsewhere in this report as listed in PART IV, ITEM 14.

NARRATIVE DESCRIPTION OF BUSINESS

STEEL DISTRIBUTION AND PROCESSING SEGMENT

Steel service centers and steel distributors represent a major
market for primary steel producers ("steel mills"), serving as a source of
supply for smaller manufacturers whose product requirements make purchasing
directly from the steel mills unfeasible or for companies whose production
processes require steel to be pre-processed before being placed into
production. Companies operating in this industry generally are classified as
steel service centers when they operate facilities that process steel
products. Companies that acquire steel products for warehousing and/or
direct redistribution to other steel consumers are generally classified as
distributors. Steel service centers and distributors acquire steel products
from steel mills and from other distributors. It is not uncommon for steel
products to pass through the hands of one or more steel distributors and/or
steel service centers before reaching an end user. Steel service centers and
distributors normally specialize in particular grades of steel products. The
majority of the companies operating in this industry are small to medium in
size with no single company or group of companies exercising control over the
industry. The products handled by the Company's steel distribution and
processing business are carbon steel coils, sheets and bars.

STEEL DISTRIBUTION During fiscal years ended February 28,
1997, February 29, 1996 and February 28, 1995, 38%, 49% and 63%,
respectively, of the Company's net sales were generated through its steel
distribution operations. The Company's steel distribution operations involve
purchasing, storing and reselling steel products in their original form. The
Company acquires steel from steel mills under various steel purchase programs
and some of these programs involve the purchase of steel which did not meet
order specifications of customers of the steel mills for whom the steel was
originally intended. The Company also acquires steel products from steel
mills under excess steel purchase programs. In times of low steel
consumption, steel mills will make offerings of steel to distributors to
maintain higher production rates at the steel mills. Ottawa River Steel is
among the oldest companies operating as a steel distributor and has attained
a good reputation and name identification in its industry. Historically,
Ottawa River Steel has maintained strong relationships with a number of steel
mills. These relationships and a broad base of steel suppliers have allowed
Ottawa River Steel access to steel supplies when steel availability within
the industry has been limited due to high demand.

STEEL PROCESSING During fiscal years ended February 28, 1997,
February 29, 1996 and February 28, 1995, 57%, 42% and 26%, respectively, of
the Company's net sales were generated by processed steel products and
processing services. The Company provides slitting, cut-to-length, and batch
pickling for steel products. These services are provided to customers as a
value-added process to the Company's inventory for sale to end-user customers
or to customers for customer-owned material (toll processing). As a result
of the establishment and development of steel service centers in Detroit,
Michigan and Gary, Indiana over the last several years, value-added steel
sales have increased dramatically.

* SLITTING AND CUT-TO-LENGTH Flat rolled steel products
are generally manufactured by the steel mills in wide coil form. Consumers
of these flat rolled products may require the steel to be cut into several
coils of narrower widths. The steel slitting process involves the passing of
the coil through roller knives which cut the steel into the desired widths.
Additionally, others may require coils to be cut-to-length into sheets prior
to taking delivery.

4
<PAGE>

* PICKLING When steel is produced at the steel mills, it
is rolled at high temperatures which creates a scaly surface on the steel.
This scale must be removed for surface sensitive steel applications which
require polishing, plating or other finished surfaces. The pickling process
removes this scale by the immersion of the steel in acid. This process can
be performed while the steel is in coil form through a continuous pickling
process or when the steel is in either the coil or sheet form through a batch
pickling process. Generally, hydrochloric acid is used in the continuous
pickling process and sulfuric acid is used in the batch pickling process.
After pickling, the steel is rinsed in baths of neutralizer and water and
then is coated with oil to prevent rust.

CUSTOMERS The Company's steel distribution and processing
services are marketed to the automotive, truck, building, appliance,
furniture and agriculture industries and to companies servicing these
industries in the upper midwest, as well as other areas east of the
Mississippi River. The majority of North American car and truck final
assembly plants and primary metal industries are located within a 500-mile
radius of the Company's facilities. Sales to Production Stamping, Inc.
accounted for 14% and 12% of the Company's net sales in fiscal 1997 and 1996,
respectively and sales are continuing at approximately the same levels.

COMPETITION In the steel distribution and processing
business, competitive factors include quality of service, timeliness and
cost. The Company's success in this business depends on its ability to
continue to provide quality products and services on a timely basis at a
competitive cost.

The Company faces substantial competition in the steel
distribution and processing business from other independent steel
distributors and processors as well as from steel mills that perform these
functions internally. Among the Company's competitors and potential
competitors are numerous companies that have substantially greater financial
and other resources than the Company.

RAW MATERIALS The raw materials required for the Company's
steel processing operations are acids, oils and banding supplies. All
materials are readily available from a number of suppliers.

WASTE MANAGEMENT SEGMENT

In early 1989, the Company became aware of the magnitude of
the disposal problems facing generators of paint wastes and learned of a
unique process for the handling of these wastes. The process, known as
DryPure-TM- and patented by Haden Environmental, heats the paint wastes,
driving off liquids and volatile organic compounds, resulting in a dry inert
powder that represents a reduction in volume of paint waste by up to 90%.
Originally DryPure-TM- systems were sold directly to automobile manufacturers
which disposed of the resultant dry powder from the process in landfills. The
Company recognized that small and mid-size paint waste generators presented a
market for the DryPure-TM- system. In addition, the Company began exploring the
possibility of marketing the resultant dry powder, EPI-PURE-TM- and was
successful in finding commercial applications for it. In 1989, as a result of
the Company's success in finding uses and markets for EPI-PURE-TM-, Haden
Purification and the Company formed EPI as a general partnership for the
purpose of constructing and operating commercial facilities to recycle paint
wastes. EPI commenced commercial operations at its newly-constructed paint
waste recycling facility in Toledo, Ohio in March 1991. In 1992, Haden
Purification terminated its 50% partnership interest in EPI and National
Purification and MEPI, wholly-owned subsidiaries of the Company, became sole
general partners of EPI. In September 1995, EPI entered into a license
agreement with Aster which developed the PRS system. EPI completed a
building and equipment expansion of its Toledo, Ohio facility in April 1997
to commercialize the PRS system.

PAINT WASTE RECYCLING 5% of the Company's net sales in fiscal
year ended February 28, 1997 and 6% in each of fiscal years ended February
29, 1996 and February 28, 1995 was generated by paint waste recycling.

Paint wastes, because of their stickiness and leaching
characteristics, are one of the most difficult wastes to legally dispose of
and therefore pose a significant disposal problem for their generators.
Approximately 40% to 60% of the paint used in industrial spray painting
processes becomes waste that requires disposal or recycling. Currently, the
only legal disposal methods available for paint wastes are landfill and
incineration. While the short-term costs associated with landfilling
(currently the most widely-used disposal method) are less than the short-term
costs of incineration, generators using this method of

5
<PAGE>

paint waste disposal could be "potentially responsible parties" for
liabilities associated with remediation of landfills where their paint waste
has been disposed. Additionally, there continues to be a trend in the
regulatory environment toward greater restrictions and liabilities associated
with landfilling, including the disposal of paint wastes. As a result, many
generators are electing to use incineration which is a more expensive
disposal process than direct disposal into landfills. Incineration involves
either (i) fuel blending, which is the commingling of various waste streams
into a fuel supplement for use as an alternative fuel in the manufacture of
cement, reducing, in the process, but not eliminating the generator's
liability, or (ii) direct thermal destruction of waste streams which results
in the generation of an ash residue which may contain heavy metals or other
hazardous constituents. Ash residue containing hazardous constituents must be
disposed in a fully permitted hazardous waste landfill thereby continuing
the generator's potential long-term liability connected with the disposal of
hazardous wastes.

Recycling of waste materials is considered by the U.S. EPA to
be a desirable means of reducing waste. According to the U.S. EPA's
definition, recycle is a broad term that includes "to use, reuse, or
reclaim." A material is reclaimed if it is processed to recover a useful
product or if it is regenerated. When customers send paint waste to the
Company's facility, the Company reclaims the paint waste by processing it to
recover a useful product. The U.S. EPA encourages this type of waste
management because it preserves limited landfill space. Avoiding the need to
place hazardous paint waste in landfills also allows generators to
significantly reduce the threat of incurring liability under the
Comprehensive Environmental Response, Compensation, and Liability Act
("CERCLA"), also known as Superfund liability.

The DryPure-TM- process heats the paint wastes, driving off
liquids and volatile organic compounds, resulting in a dry, inert powder that
represents a reduction in the volume of paint waste by up to 90%. Originally
DryPure-TM- systems were sold directly to automobile manufacturers which
disposed of the resultant dry powder from the process in landfills. In the
PRS system, patented technology is used to process paint waste in a reaction
vessel under low heat to drive off the volatile organic compounds and
moisture. The resin, pigment and fillers that remain are not cured but are
further compounded with proprietary additives producing a putty-like material
trademarked as EPI-MER-TM-, a recycled product that can be formulated as an
additive, plasticizer, resin extender or filler in vinyl or butyl adhesive
and sealant applications. The formulated material has substantially the same
performance characteristics as virgin materials but has a substantially lower
formulation cost. Although, the Company has not yet sold any EPI-MER-TM-,
theproduct is currently being tested by several sealant and adhesive
manufacturers for automotive industry applications. Trials for other uses of
any EPI-MER-TM- are also in process for non-automotive applications.

ACID WASTE RECYCLING AND DISPOSAL In July 1996 the Company
exited the business of recycling and disposal of spent acids when the
property and equipment used in this business was sold. During the last three
years this business generated 5% or less of the Company's net sales and was
in a decline as its was substantially dependent on one customer which ceased
operations in March 1996.

CUSTOMERS The Company markets its paint waste recycling
services to businesses that have spray painting operations. The Company's
marketing activities are concentrated in the midwest region of the United
States where over 80% of its revenues are generated, with the majority of
annual revenues derived from customers in the automotive assembly business.
The Company's customers generally are environmentally conscientious and
demand that the Company maintain stringent quality controls. The Company has
built its reputation in the industry through consistent customer service by
addressing these customer needs. Since one of the primary benefits of using
the Company's services is the elimination of the potential long-term
liability associated with landfill disposal of paint waste, many customers
conduct thorough reviews and audits of the Company's operations, including
the Company's compliance with environmental laws and regulations.

COMPETITION Presently, approximately 99% of paint waste
nationally is disposed of through landfills or by incineration, and
approximately 1% is processed and recycled by methods utilized by the Company
and its other competitors. The Company is aware of only three other
companies that compete directly with the Company by providing processing and
recycling services to generators of paint waste. These competitors utilize
similar methods of thermal drying to those of the Company; however, over the
years the Company believes it has developed the capability to process a
broader range of paint waste than its competitors.

6
<PAGE>

Competitive factors in paint waste processing or disposal
include price, service and the elimination of the potential long-term
liability associated with paint waste generation and disposal. While paint
wastes generally can be landfilled or incinerated at a lower initial cost
than recycling, these disposal methods expose the generators to potential
long-term liability under stringent federal and state regulations. On the
other hand, although the costs of the Company initially are greater than
landfill or incineration, the Company's recycling process substantially
eliminates continuing generator liability. Landfill and incineration are
provided by national, regional and local companies, many of which have
substantially greater resources than the Company. In addition, the Company's
direct recycling competitors have substantially greater financial, marketing
and other resources than the Company. There can be no assurance that one of
the Company's competitors or a new company will not develop a method of
recycling paint waste which is more efficient and less costly than the
methods currently employed by the Company. Additionally, there can be no
assurance that large industrial customers or other waste management companies
will not attempt to develop their own methods of recycling or otherwise
minimizing, treating or disposing of wastes.

RAW MATERIALS In the DryPure-TM- system, trap rock (a small,
inexpensive stone) is used to facilitate heat transfer, to keep paint waste
from adhering to the equipment and to reduce the size of the EPI-PURE-TM-
particles. Trap rock is readily available at reasonable prices. In the PRS
system, potassium hydroxide is added to the paint waste as part of the
re-manufacturing process to produce EPI-MER-TM-. In addition, plasticizers,
carbon black, clay, asphalt, and naphtenic or paraffinic compounds may be
added, in any combination, depending on the EPI-MER-TM- formulation required
by the customer. Each of these additives is readily available at reasonable
prices.

BACKLOG

The Company's paint waste recycling operation typically
processes shipments within a relatively short time of receipt. Accordingly,
no large volume of paint waste is stored at the Company's Toledo, Ohio
facility at any time. Because the generators and the Company need to
carefully control the shipment and processing of paint waste, upon execution
of a sales contract, the Company establishes a long-term schedule for
delivery and processing of the customer's paint waste at the Company's
facility. Accordingly, the Company normally has its maximum processing
capacity scheduled for one to three months in advance.

SEASONALITY

The Company primarily provides products and services to the
automotive, truck and appliance industries. Therefore, the Company's results
are affected by cycles in such industries. Traditionally, many automotive
plants operate at reduced levels during June and July due to holiday and
vacation schedules and are closed during the last part of December which
adversely affects the Company's revenues for those periods. The operations of
EPI are generally unaffected by seasonality factors since it has been
operating at near capacity for several years.

EMPLOYEES

As of May 30, 1997, the Company had 142 employees, of whom 104
were employed in steel distribution and processing (includes 33 leased
employees), 28 were employed in waste management, with the remainder serving
in executive and administrative capacities. The Company believes that its
relations with its own employees and with the leased employees presently
employed at its facilities are good.

ITEM 2. PROPERTIES

The Company's corporate offices are located in Toledo, Ohio
and occupy approximately one-half of an 8,500 square foot building pursuant
to a lease with Greenbelt Associates which expired in February 1997 and is
now leased on a month-to-month pending renewal of the lease. Greenbelt is a
general partnership owned by William D. Feniger, Yale M. Feniger and Real P.
Remillard, who are current or former officers and/or stockholders in the
Company. The Company leases the remainder of the building for the offices of
its steel distribution and steel processing operations under identical terms
and conditions. The monthly rent on each such lease is $3,672 at February
28, 1997.

On a site adjacent to its corporate offices, the Company
maintains office space and its active steel pickling operation in a 23,000
square foot building. Also on the site the Company utilizes an additional

7
<PAGE>

40,000 square feet in a building for steel warehousing and a steel slitting
operation. The facilities at this site, including an additional 60,000
square feet of outside storage space, is leased pursuant to a lease with
Chicago Investors expiring in February 1998, with three additional one-year
options. Chicago Investors is a general partnership which is owned, in turn,
by two other partnerships. One of these partnerships is Champlain Investors,
a general partnership, which is owned by William D. Feniger, and Yale M.
Feniger. The other partnership is unrelated to the Company. The lease
provides for a monthly rent of $14,255 for these facilities, including
certain equipment, subject to annual increases based on increases in the
Consumer Price Index. Effective for the period commencing December 1996 and
ending February 1998, the monthly rent was reduced to $12,255, after which
the monthly rent reverts back to the original provisions of the lease. The
Company also sub-leases another 22,000 square feet of warehouse space used
for steel storage at this site from an affiliate of the unrelated partnership.

The Company's steel service center in Detroit, Michigan is
housed in two adjacent buildings situated on approximately two acres of land.
The main building consists of 58,500 square feet, including 8,500 square
feet of office space. The second building consists of 8,000 square feet and
is being used for steel storage. This property is subject to a mortgage
having an outstanding balance of $506,000 at February 28, 1997.

In November 1995, the Company acquired the business and assets
of a steel service center located in Gary, Indiana. The Company's steel
service center in Gary, Indiana operates in a 60,000 square foot facility in
a common building in an industrial park pursuant to a lease expiring in
November 2001 with one renewal option of three years. Monthly rental
payments presently are $15,027 and are increased annually by the lesser of 3%
or the percentage increase in the Consumer Price Index.

In March 1996 the Company shut down its steel pickling
operation in Detroit, Michigan. The Company leases the majority of this
facility, encompassing 220,000 square feet, to a company whose majority owner
is a director of Meridian National. This facility is subject to a lease
purchase obligation covering industrial revenue bonds with an outstanding
balance of $491,000 at February 28, 1997.

The Company conducts its paint waste recycling operations in
an 19,500 square foot building in Toledo, Ohio, which includes a 2,500 square
foot addition completed in April 1997. This property, along with certain
recycling equipment, is owned by EPI and is subject to a mortgage of which
50% of the obligation has been assumed by the former partner of EPI. EPI's
obligation with respect to this mortgage was $1,354,000 at February 28, 1997.

In addition, an adjacent 14,000 square foot building is leased
by EPI from Chicago Investors where the recycled powder from the DryPure-TM-
process is screened, packaged and warehoused prior to shipment. The lease
expires February 28, 1998 with three renewal options of one year each. Lease
payments are $1,175 per month through February 1998 at which time the rent is
increased to $1,550 per month, subject to annual increases.

The Company believes that its existing facilities and
properties are adequate for its current operations.

ITEM 3. LEGAL PROCEEDINGS

There are no material legal proceedings pending against the Company.

ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS

There were no matters submitted to a vote of security holders
during the last quarter of the Company's fiscal year ended
February 28, 1997.

EXECUTIVE OFFICERS

Set forth below is certain information regarding the executive
officers of the Company. Officers, who are elected annually by the
Board of Directors of the Company, serve at the pleasure of the
Board of Directors.

8
<PAGE>

William D. Feniger 50 Chief Executive Officer and President
James L. Rosino 42 Chief Financial Officer , Vice President-
Finance, Secretary and Treasurer

William D. Feniger has served as Chairman of the Board of
Directors and Chief Executive Officer of the Company since August 1985. On
March 21, 1991, Mr. Feniger was named President of the Company.

James L. Rosino has been Chief Financial Officer and
Vice-President - Finance of the Company since February 1996. On May 31,
1996, Mr. Rosino was named Secretary and Treasurer of the Company. Mr.
Rosino served as Corporate Controller from May 1988 through February 1996.

PART II

ITEM 5. MARKET FOR COMMON STOCK AND RELATED STOCKHOLDER MATTERS

The Common Stock of the Company is traded on the NASDAQ SmallCap
Stock Market under the symbol "MRCO". The following table sets forth, for
the quarterly periods indicated, the high and low sales price for the Common
Stock as reported by NASDAQ.

Year Ended February 28, 1997 High Low
- ---------------------------- ---- ---

First Quarter $1.00 $.625
Second Quarter 1.188 .688
Third Quarter .844 .438
Fourth Quarter .938 .297

Year Ended February 29, 1996
- ----------------------------

First Quarter $2.688 $1.625
Second Quarter 2.313 1.688
Third Quarter 1.875 1.25
Fourth Quarter 1.625 1.125

As of May 30, 1997 there were approximately 500 stockholders of
record of the Company's Common Stock.

To date, the Company has not paid any dividends on its Common
Stock. The payment by the Company of dividends, if any, in the future rests
within the discretion of its Board of Directors and will depend, among other
things, on the Company's earnings, its capital requirements and its financial
condition, as well as other relevant factors. The Board does not presently
intend to pay any dividends on its Common Stock in the immediate future, but
it intends to retain all earnings for use in its business operations.
Pursuant to a current credit agreement with a bank, the Company cannot pay
dividends on its Common Stock.

In May 1997, William D. Feniger, an officer and stockholder
received 600,000 newly-issued shares of common stock in exchange for a
$300,000 reduction of a convertible note payable to him. The Company has
relied on the exemption contained in Section 4. (2) of the Securities Act of
1933, as amended, from the registration requirements of the Act.

9
<PAGE>

ITEM 6. SELECTED FINANCIAL DATA

The selected financial data of the Company set forth below should
be read in conjunction with the audited consolidated financial statements,
the notes thereto and other financial information included elsewhere in this
report and in "Management's Discussion and Analysis of Financial Condition
and Results of Operations" included elsewhere herein.

Year Ended February 28 or 29
--------------------------------------------------------------------------------
OPERATIONS STATEMENT DATA:
1997 1996 1995 1994 1993
------------ ------------ ---------------- -------------- -----------
<S> <C> <C> <C> <C> <C>
Net sales $66,511,224 $54,672,987 $50,638,763 $41,420,289 $29,327,272
Gross margin 7,988,913 5,659,971 7,453,251 6,353,082 3,084,018
Income (loss) from continuing
operations before extraordinary gain (619,465) (1,728,196) (1,563,880) (4) 682,528 (1,674,056)
Net income (loss) 4,392 (1,349,608) (1,126,366) (4) 1,114,235 (1,311,886)
Net income (loss) applicable
to common stock (1) (131,967) (1,479,370) (1,262,744) (4) 592,952 (1,853,545)
Earnings (loss) per common share -
Primary and fully diluted (2)(3):
Income (loss) from continuing
operations before extraordinary gain $ ( .23) $ ( .71) $ ( .70) (4) $ .11 $ ( 2.02)
Net income (loss) ( .04) ( .56) ( .52) (4) .41 ( 1.69)
Weighted average common
shares and dilutive common
equivalent shares (2)(3):
Primary 3,241,349 2,638,126 2,423,864 1,430,930 1,094,122
Fully diluted 3,241,349 2,638,126 2,423,864 1,432,409 1,094,122

BALANCE SHEET DATA:

Working capital
(deficiency) $ (1,866,090) $ (1,443,113) $ 1,254,643 $ 377,576 $ (912,575)
Total assets 33,700,810 26,546,797 26,627,261 21,055,088 19,926,381
Long-term debt 6,586,293 6,847,416 6,602,417 7,790,384 7,342,975
Stockholders' equity 1,198,162 546,581 1,767,098 2,811,365 1,694,661

</TABLE>

___________
(1) Represents net income (loss) reduced by dividends paid on preferred stock
in cash and in shares of common stock. To date, the Company has not paid
any dividends on its common stock.

(2) All share and per share amounts presented have been retroactively restated
to reflect a one-for-ten reverse stock split of common shares effective
August 18, 1993.

(3) Common shares issued in the July 1994 exchange of Series B preferred stock
are included in weighted average shares outstanding in the computation of
earnings per share as if the exchange had occurred at the beginning of
fiscal 1995.

(4) Includes a $2,285,548 charge or 94 cents per share, net of income tax, from
write-down of noncurrent assets.

(5) The Company has restated its consolidated financial statements to adjust
the amortization period of a capital lease. The leased asset was being
amortized over a thirty year period as opposed to the lease term of ten
years. The restatement had the effect of decreasing stockholders' equity
as of February 28, 1993 by approximately $358,000 from the amount
previously reported. The effect on operations was not material.

10
<PAGE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

YEAR ENDED FEBRUARY 28, 1997 COMPARED TO YEAR ENDED FEBRUARY 29, 1996

Fiscal 1997 sales of $66.5 million represented the highest sales volume
in the Company's twelve year history. The sales increase of 22% over fiscal
1996 was a result of the growth of the Company's steel processing operations.

As discussed further in Note 6 to the Consolidated Financial Statements,
in July 1996 the Company sold all of the property and equipment of its waste
acid recycling and disposal business. Accordingly, operating results for the
Company have been restated for all periods presented to separately report the
operating results of this discontinued operation. This business had been
shrinking and was primarily dependent on one major customer, which had shut
down its operations in March 1996. Discussions of results of operations
which follow pertain only to continuing operations.

Fiscal 1997 results generally reflect significant improvement in the
operating results for the Company's steel operations. However, results for
the waste management operations were affected by increased costs associated
with preparations for the expansion of its paint waste recycling facility.
Additionally, fiscal 1997 results include a write off of costs associated
with a indefinitely delayed proposed public offering of the paint waste
recycling operation.

STEEL DISTRIBUTION AND PROCESSING SEGMENT The Company's steel distribution
and processing operations reported net sales of $63.1 million for fiscal
1997, an increase of $11.9 million or 23% over the prior year. The sales
increase resulted primarily from the growth of the Company's steel processing
operations in the Chicago market. Net sales for the Company's steel service
center located in Gary, Indiana, which was acquired in November 1995,
amounted to $14.3 million in fiscal 1997 compared to $2.1 million for the
four months of operations at this site in fiscal 1996.

Operating profits for this segment amounted to $2,487,000 for fiscal
1997, an increase of $1,842,000 over the prior year. Gross margin (net sales
less cost of sales) as a percentage of net sales was 11.1% in fiscal 1997
compared to 9.1% in the prior year. This gross margin increase and resulting
increase in operating profits is attributable to the increased emphasis on
providing value-added processing of steel products sold to end-user
customers, which generally generates higher gross margins than the steel
distribution business. Additionally, the market for steel products remained
strong during fiscal 1997 as demand for steel products continued at high
levels.

WASTE MANAGEMENT SEGMENT This segment reflects the results of the
operations of the Company's paint waste recycling operation and excludes the
discontinued operations of the waste acid recycling and disposal operation.
Net sales for paint waste recycling decreased slightly to $3,417,000 in
fiscal 1997 from $3,534,000 in the prior year. The sales decline resulted
mainly from several unscheduled shutdowns of the processing equipment for
repairs. For the past several years, this operation has operated at or near
its processing capacity.

This segment reported a $629,000 operating loss for fiscal 1997, compared
to an operating profit of $127,000 for the prior year. The fiscal 1997
operating loss includes $276,000 of costs written off relating to a proposed
public offering of approximately 50% of this segment. The proposed offering
has been indefinitely delayed due to weakness in the public market for the
offering. The loss also results from additional costs incurred during fiscal
1997 as the paint waste recycling operation prepares for the implementation
of additional process capacity through expansion of its facilities in Toledo,
Ohio.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES The $1,077,000 increase in
selling, general and administrative expenses is primarily attributable to the
development of the Company's steel service center business in Gary, Indiana
and increased administrative expenses associated with the paint waste
recycling operations.

11
<PAGE>

INTEREST EXPENSE Interest expense increased $155,000 or 11% in fiscal 1997.
The Company's average outstanding borrowings rose as a result of the increase
in working capital requirements mainly associated with the expansion of the
steel processing business.

YEAR ENDED FEBRUARY 29, 1996 COMPARED TO YEAR ENDED FEBRUARY 28, 1995

In fiscal 1996, sales volume increased 8% over the prior year. The
Company's expansion of its steel service center business through acquisition
of facilities in Detroit, Michigan (January 1994) and Gary, Indiana (November
1995) is principally responsible for the overall sales increase, offsetting
sales decreases in certain other of the Company's operations.

The Company reported a net loss of $1,350,000 in fiscal 1996. The loss
is principally attributable to 1) reduced margins on sales of steel products,
primarily due to excess supplies, 2) costs and unprofitable operating results
($647,000) from the unsuccessful attempt to convert a bumper stock pickling
operation to a bar coil pickling operation and subsequent shutdown of this
operation and 3) costs amounting to $296,000 associated with new technology
to be utilized in EPI's paint waste recycling operation.

In fiscal 1995, the Company reported a $1,126,000 net loss principally
because the Company substantially reduced its batch pickling operation due to
the loss of a major customer and recorded a $2,286,000 pre-tax charge for the
write-down of assets related to the pickling operation. See Note 12 to the
Consolidated Financial Statements for further description of this write-down.

STEEL DISTRIBUTION AND PROCESSING SEGMENT A $3.9 million (8%) sales gain was
recorded by the segment in fiscal 1996. The addition of the steel service
centers previously described are responsible for the increase, despite a
slight softening of demand during fiscal 1996. The increased emphasis on
providing value-added processing of steel products sold to end-user customers
make the segment's revenue base less subject to fluctuations in market
conditions than in its steel distribution business. Also, the recently
acquired Gary, Indiana steel service center provides a presence in the
Chicago market and has a greater diversity of customers who are in industries
other than automotive.

In March 1995 the Company shut down its bumper stock pickling business.
The Company made certain changes to its pickling facility in order to be able
to handle bar coil pickling. The Company was unable to secure sufficient bar
coil pickling business to operate profitably during fiscal 1996 and the
business was discontinued in March 1996. Sales for this facility decreased
to $556,000 in fiscal 1996 from $1,886,000 in fiscal 1995. An operating loss
from this operation of $647,000 was recorded in fiscal 1996. No additional
write offs related to this facility were required as the majority of this
facility has been leased.

Excluding the effects of the shutdown of the bumper stock and bar coil
pickling business, gross margin (net sales less costs of sales) as a
percentage of net sales was 9.1% in fiscal 1996 compared to 11.2% in fiscal
1995. The decrease is due to somewhat softer demand in the market and
industry-wide reductions of excess inventories

WASTE MANAGEMENT SEGMENT The segment's paint waste recycling operation
reported net sales of $3.5 million in fiscal 1996, paralleling net sales
reported in the prior year. This operation has operated at near its
processing capacity during fiscal 1996 and 1995.

This segment reported a $127,000 operating profit for fiscal 1996
representing a $213,000 decrease compared to last year. The operating profit
decrease principally resulted from expenses of $296,000 incurred in fiscal
1996 in connection with new technologies to be implemented at the paint waste
recycling facility. These expenses amounted to $63,000 in fiscal 1995.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES The $466,000 (8%) increase in
selling, general and administrative expenses is primarily attributable to the
development of the Company's steel service center business previously
described. Accelerated goodwill amortization in fiscal 1995 related to the
pickling operations assets, which were ultimately written down as previously
described, amounted to $369,000. Additional increases related to payroll
costs and bad debt write-offs.

12
<PAGE>

INTEREST EXPENSE Interest expense increased $383,000 (36%) in fiscal 1996.
The Company's average outstanding borrowing base rose as a result of the
increase in working capital requirements associated with the expansion and
growth of the business in fiscal 1995.

LIQUIDITY AND CAPITAL RESOURCES

The Company had a $1,866,000 working capital deficit at February 28,
1997, reflecting a $423,000 decrease in working capital from February 29,
1996. This decrease is primarily a result of borrowings to pay costs incurred
in conjunction with the indefinitely delayed initial public offering of
securities of EPI Technologies and additional costs associated with the
development and implementation of the PRS technology incorporated into the
expansion of process capacity at the EPI's paint waste recycling facility.
Certain components of working capital, including accounts receivable,
inventories, notes payable and accounts payable, historically may fluctuate
significantly based upon market conditions, sales volume and steel purchasing
strategies of the Company's steel operations.

The Company's primary sources of liquidity are its cash balances and a
$12 million revolving credit line with a bank. Borrowing availability under
the revolving credit line is determined using a formula based upon eligible
accounts receivable and inventories. As of February 28, 1997, the
outstanding balance of the revolving credit line amounted to $11,138,000 and
unused availability amounted to $862,000. The revolving credit line was
increased in May 1997 to $13.5 million.

The revolving credit line agreement prohibits the payment of cash
dividends on the Company's common stock and allows the payment of cash
dividends on the Company's preferred stock issues only if the Company is not
in default of any provisions in the loan agreement and payment of such
dividend would not result in any defaults.

As a result of federal environmental regulations issued in 1991,
Environmental Purification Industries Company ("EPI"), the Company's paint
waste recycling operation is required to and has submitted to the U.S. EPA an
operating permit application under the Resources Conservation Recovery Act of
1980. The final approval for such a permit may take several years and
require additional outlays of funds. During the application and review
process, EPI's operations continue on interim status and are unaffected. EPI
may be required to make modifications to its operating procedures or
equipment in the future, although EPI's management believes its operations
meet the requirements without modification.

In September 1995, EPI entered into a license agreement with Aster, Inc.
whereby Aster has granted the Company the exclusive worldwide rights, except
in Mexico, to use certain patented processes and technology for recycling
paint waste, the PRS system. EPI has agreed to pay Aster royalties and other
fees for ongoing work performed by Aster to commercialize and to continue to
refine the process, formulae and technology. Minimum monthly payments
required under the agreement are $20,000. EPI has completed a $2.3 million
expansion of its paint waste recycling facility which will utilize the PRS
system. Commercial operations are scheduled to commence in July 1997. The
expansion has been financed through borrowings from the bank. Monthly
payments of $21,000 plus interest are required during fiscal 1998, an
additional payment of $150,000 is required on September 30, 1997 and a
balloon payment of $1,906,000 is due in March 1998. The Company is
investigating various opportunities to provide long-term funding for this
project.

The cost of EPI's expansion was to have been provided for through a
combination of (i) proceeds from a planned initial public offering of an
approximate 50% interest in EPI Technologies and (ii) debt financing. Due to
weakness in the public market for the offering and other matters, the planned
offering has been indefinitely delayed. In conjunction with the offering,
the Company incurred legal, accounting and other costs of $276,000 which were
expensed in the fourth quarter of fiscal 1997.

In May 1996, William D. Feniger, an officer and stockholder received
600,000 newly-issued shares of common stock in exchange for a $300,000
reduction of a convertible note payable to him.

In November 1996, 25 shares of newly-issued common stock (a 20% interest)
of EPI Technologies were sold to outside investors for $581,046 in cash, net
of related costs. Proceeds of the sale were credited to minority interest,
based on the carrying value of the subsidiary, with the remainder credited to
stockholders' equity.

13
<PAGE>

In February 1997, the Company entered into an agreement for a license to
use computer software and for purchase of computer equipment for an aggregate
price of $265,000. The computer system is to be utilized in the Company's
steel operations and will be implemented later in fiscal 1998. Financing for
this and other anticipated implementation costs is provided through leasing
arrangements with both the software and hardware vendors. Otherwise, the
Company does not have any material capital expenditure commitments at this
time. Capital expenditures are limited under its loan agreement with the
bank.

The Company has a working capital deficiency, has sustained losses in
recent years and has been unable to meet certain loan covenants. The loan
covenant violations have been waived by the bank and covenants for future
periods have been modified such that the Company believes it will be in
compliance with the modified covenants for future periods. Management has
taken various steps during the last year to improve the Company's operating
performance and liquidity. The benefit of these actions described below has
had a positive effect on fiscal 1997 results and management expects to
realize the full benefit during the upcoming fiscal year.

* Management focus on its core steel processing and distribution
business.
* Geographic and capacity expansion of the steel processing
operations.
* Expansion of the paint waste recycling facility incorporating the
PRS system, expected to be in commercial operation in July 1997.
Closing or sale of operations which were unprofitable or did not
fit into the Company's strategic plans.
* Reduction of certain operating costs.

Historically, the Company's operations have been funded with cash
generated from operations and bank financing. The Company has also raised
funds through sale of equity securities and has used the proceeds to fund its
investments in EPI, among other items. The Company is investigating various
opportunities to obtain long-term funding for the expansion of its paint
waste recycling facility. As previously discussed, management has taken
measures to improve operating results and liquidity of the Company.
Management believes its existing resources, including available cash, cash
provided by operating activities and the Company's credit facilities will be
sufficient to satisfy its working capital and other capital requirements for
fiscal 1998.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Consolidated financial statements of the Company are included elsewhere
in this report as listed in Part IV, ITEM 14.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

None.

14
<PAGE>

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information required by this Item, except for certain information
relating to Executive Officers set forth at the end of Part I, is omitted
inasmuch as the Company intends to file its definitive 1997 Proxy Statement
containing such information with the Securities and Exchange Commission
within 120 days after the close of its fiscal year ended February 28, 1997,
and such information is incorporated herein by reference.

ITEM 11. EXECUTIVE COMPENSATION

The information required by this Item is incorporated by reference from
the 1997 Proxy Statement.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information required by this Item is incorporated by reference from
the 1997 Proxy Statement.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required by this Item is incorporated by reference from
the 1997 Proxy Statement.

15
<PAGE>

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a) Documents filed as part of this report:

1.The following consolidated financial statements of the Company are
submitted pursuant to the requirements of ITEM 8:
<TABLE>
<CAPTION>
<S> <C> <C>
Report of Independent Auditors F-1

Consolidated Balance Sheets at February 28, 1997 and February 29,1996 F-2

Consolidated Statements of Operations for each of the three
years in the period ended February 28, 1997 F-4

Consolidated Statements of Stockholders' Equity for each of the three years
in the period ended February 28, 1997 F-5

Consolidated Statements of Cash Flows for each of the three years in the period
ended February 28, 1997 F-6

Notes to Consolidated Financial Statements F-7

</TABLE>

2. All schedules required pursuant to the requirements of ITEM 14 (d)
are omitted because they are not applicable, not material, not
required or the required information is included in the applicable
financial statements or notes thereto.

3. EXHIBITS

3.1(a)* Certificate of Incorporation of the Company (incorporated
herein by reference from the Company's Registration
Statement on Form 8-A, dated January 31, 1986).

3.1(b)* Amendment to the Certificate of Incorporation of the
Company, effective September 30, 1986 (incorporated herein
by reference from the Company's Report on Form 10-K for
fiscal year ended February 28, 1987).

3.1(c)* Amendment to the Certificate of Incorporation of
the Company, effective August 1, 1988 (incorporated herein
by reference from the Company's Registration Statement on
Form S-1, filed April 15, 1989, File No. 33-27955).

3.1(d)* Amendment to the Certificate of Incorporation of the
Company, effective August 18, 1993 (incorporated herein by
reference from the Company's Report on Form 10-Q for the
quarterly period ended August 31, 1993).

3.2(a)* Certificate of Designation, Preferences and Rights of the
Company (incorporated herein by reference from the Company's
Registration Statement on Form S-1, filed September 16,
1989, File No. 33-27955).

3.2(b)* Amendment to the Certificate of Designation, Preferences and
Rights of the Company, effective August 25, 1993
(incorporated herein by reference from the Company's Report
on Form 10-Q for the quarterly period ended August 31,
1993).

3.3(a)* By-Laws of the Company (incorporated herein by reference
from the Company's Registration Statement on Form 8-A, dated
January 31, 1986).

16
<PAGE>

3.3(b)* Certificate of Amendment of By-Laws of the Company
(incorporated herein by reference from the Company's Report
on Form 10-K for fiscal year ended February 28, 1990).

4.1* Specimen Stock Certificate (incorporated herein by reference
from the Company's Registration Statement on Form 8-A, dated
January 31, 1986).

4.2* Registration Statement on Form 8-A, dated January 31, 1986
(incorporated herein by reference to File No. 0-14203).

4.3* Form of Series B Preferred Stock (incorporated herein by
reference from the Company's Registration on Form S-1, filed
June 4, 1989, File No. 33-27955).

4.4* Warrant Agreement dated as of December 9, 1992 between the
Company and Whale Securities Co., L.P.("Whale")
(incorporated herein by reference from the Company's
Registration Statement on Form S-3, filed January 17,1995,
File No. 33-83590).

4.5* Warrant Agreement dated as of July 22, 1994 among the
Company, Continental and Whale (incorporated herein by
reference from the Company's registration Statement on Form
S-3, filed January 17, 1995, File No. 33-83590).

4.6* Form of Warrant Agreement among the Company, Continental
and Whale (incorporated herein by reference from the
Company's Registration Statement on Form S-3, filed January
17, 1995, File No. 33-83590).

10.01(a)* Loan and Security Agreement, dated December 6, 1989, among
the Company, certain of its subsidiaries and Bank of New
England, N.A. (incorporated herein by reference from the
Company's Report on Form 10-K for fiscal year ended February
28, 1990).

10.01(b)* Demand Note for $7,000,000 dated December 6, 1989, of the
Company to Bank of New England, N.A. (incorporated herein by
reference from the Company's Report on Form 10-K for fiscal
year ended February 28, 1990).

10.01(c)* Amendment No. 1 to Loan and Security Agreement, dated March
27, 1990, among the Company, certain of its subsidiaries and
Bank of New England, N.A. (incorporated herein by reference
from the Company's Report on Form 10-K for fiscal year ended
February 28, 1990).

10.01(d)* Amendment No. 2 to the Loan and Security Agreement, dated
September 14, 1990, among the Company, certain of its
subsidiaries and National Canada Finance Corp.
(incorporated herein by reference from the Company's Report
on Form 10-K for fiscal year ended February 28, 1991).

10.01(e)* Amendment No. 3 to the Loan and Security Agreement, dated
May 31, 1991, among the Company, certain of its subsidiaries
and National Canada Finance Corp. (incorporated herein by
reference from the Company's Report on Form 10-K for fiscal
year ended February 28, 1991).

10.01(f)* Amendment No. 4 to the Loan and Security Agreement, dated
June 22, 1992, among the Company, certain of its
subsidiaries and National Canada Finance Corp. (incorporated
herein by reference from the Company's Report on Form 10-K
for fiscal year ended February 28, 1993).

10.01(g)* Amendment No. 5 to the Loan and Security Agreement, dated
May 11, 1993, among the Company, certain of its subsidiaries
and National Canada Finance Corp. (incorporated herein by
reference from the Company's Report on Form 10-K for fiscal
year ended February 28, 1993).

17
<PAGE>

10.01(h)* Amendment No. 6 to the Loan and Security Agreement, dated
October 20, 1993, among the Company, certain of its
subsidiaries and National Canada Finance Corp.
(incorporated herein by reference from the Company's Report
on Form 10-K for fiscal year ended February 28, 1994).

10.01(i)* Amendment No. 7 to the Loan and Security Agreement, dated
January 31, 1994, among the Company, certain of its
subsidiaries and National Canada Finance Corp. (incorporated
herein by reference from the Company's Report on Form 10-K
for fiscal year ended February 28, 1994).

10.01(j)* Term Note for $300,000, dated January 31, 1994, of the
Company to National Canada Finance Corp. (incorporated
herein by reference from the Company's Report on Form 10-K
for fiscal year ended February 28, 1994).

10.01(k)* Amendment No. 8 to the Loan and Security Agreement, dated
November 30, 1994 among the Company, certain of its
subsidiaries and National Canada Finance Corp.
(incorporated herein by reference from the Company's Report
on Form 10-K for fiscal year ended February 28, 1995).

10.01(l)* Amendment No. 9 to the Loan and Security Agreement, dated
February 14, 1995 among the Company, certain of its
subsidiaries and National Canada Finance Corp.
(incorporated herein by reference from the Company's Report
on Form 10-K for fiscal year ended February 28, 1995).

10.01(m)* Amendment No. 10 to the Loan and Security Agreement, dated
May 25, 1995, among the Company, certain of its subsidiaries
and National Canada Finance Corp (incorporated herein by
reference from the Company's Report on Form 10-K for fiscal
year ended February 29, 1996).

10.01(n)* Amendment No. 11 to the Loan and Security Agreement, dated
February 29, 1996, among the Company, certain of its
subsidiaries and National Canada Finance Corp (incorporated
herein by reference from the Company's Report on Form 10-K
for fiscal year ended February 29, 1996).

10.01(o)* Term Note for $300,000, dated February 29, 1996, of the
Company and Environmental Purification Industries, Inc. to
National Canada Finance Corp (incorporated herein by
reference from the Company's Report on Form 10-K for fiscal
year ended February 29, 1996).

10.01(p) Amendment No. 12 to the Loan and Security Agreement, dated
July 25, 1996, among the Company, certain of its
subsidiaries and National Canada Finance Corp.

10.01(q) Term Note for $350,000, dated July 25, 1996, of the Company
and Environmental Purification Industries, Inc. to National
Canada Finance Corp.

10.01(r) Amendment No. 13 to the Loan and Security Agreement, dated
November 4, 1996, among the Company, certain of its
subsidiaries and National Canada Finance Corp.

10.01(s) Term Note for $1,700,000, dated November 4, 1996, of the
Company and Environmental Purification Industries, Inc. to
National Canada Finance Corp.

10.01(t) Amendment No. 14 to the Loan and Security Agreement, dated
May 12, 1996, among the Company, certain of its subsidiaries
and National Canada Finance Corp.

10.02(a)* Form of Amended and Restated Non-negotiable Promissory Note
for $596,822.79 issued to William D. Feniger (incorporated
herein by reference

18
<PAGE>

from the Company's Registration Statement on Form S-1, filed
June 9, 1989, File No. 33-27955).

10.02(b)* Escrow Agreement, dated January 4, 1990, by and among Yale
M. Feniger, William D. Feniger, Melvin G. DeGrazia, Ted R.
Meyers and David A. Katz (incorporated herein by reference
from the Company's Report on Form 10-K for fiscal year ended
February 28, 1990).

10.02(c)* Amendment to Non-negotiable Promissory Note, dated
November 1, 1992, between the Company and William D. Feniger
(incorporated herein by reference from the Company's Report
on Form 10-K for fiscal year ended February 28, 1993).

10.02(d) Agreement to Defer Principal Payments on Promissory Note,
dated April 22, 1997, between the Company and William D.
Feniger.

10.02(e)* Subscription Agreement, dated May 31, 1996, between the
Company and William D. Feniger. (incorporated herein by
reference from the Company's Report on Form 10-K for fiscal
year ended February 29, 1996).

10.03(a)* Lease between the Company and Greenbelt Associates, dated
February 14, 1992 (incorporated herein by reference from the
Company's Report on Form 10-K for fiscal year ended February
29, 1992).

10.03(b)* Lease between Ottawa River Steel and Greenbelt Associates,
dated February 14, 1992 (incorporated herein by reference
from the Company's Report on form 10-K for fiscal year ended
February 29, 1992).

10.04(a)* Lease between Ottawa River Steel Co. and Chicago Investors,
dated March 1, 1996 (incorporated herein by reference from
the Company's Report on Form 10-K for fiscal year ended
February 29, 1996).

10.04(b)* Lease between Environmental Purification Industries Company
and Chicago Investors, dated March 1, 1996 (incorporated
herein by reference from the Company's Report on Form 10-K
for fiscal year ended February 29, 1996).

10.05(a)* Lease Purchase Agreement, dated June 30, 1986,between The
Economic Development Corporation of the City of Detroit and
National Metal (incorporated herein by reference from the
Company's Report on Form 10-K for fiscal year ended February
28, 1987).

10.05(b)* Form of Bond No. R-1 (Roney & Co.) and Bond No R-2
(SeaGate Corporation), dated June 30, 1986, (incorporated
herein by reference from the Registrant's Report on Form
10-K for fiscal year ended February 28, 1987).

10.05(c)* Guaranty Agreement, dated June 30, 1986, between National
Metal and The Toledo Trust Company (incorporated herein by
reference from the Company's Report on Form 10-K for fiscal
year ended February 28, 1987).

10.06(a)* Meridian National Corporation 1990 Non-Qualified and
Incentive Stock Option Plan, dated August 20, 1990
(incorporated herein by reference from the Company's Report
on Form 10-K for fiscal year ended February 28, 1991).

10.06(b)* Amendment No. 1 to the Meridian National Corporation 1990
Non-Qualified and Incentive Stock Option Plan, effective May
12, 1994 (incorporated herein by reference from the
Company's Report on Form 10-K for fiscal year ended February
29, 1996).

19
<PAGE>

10.06(c)* Amendment No. 2 to the Meridian National Corporation 1990
Non-Qualified and Incentive Stock Option Plan, effective
June 6, 1995 (incorporated herein by reference from the
Company's Report on Form 10-K for fiscal year ended February
29, 1996).

10.07(a)* Amended and Restated 1987 Non-Employee Directors' Stock
Option Plan of Meridian National Corporation, dated August
20, 1990 (incorporated herein by reference from the
Company's Report on Form 10-K for fiscal year ended
February 28, 1991).

10.07(b)* Amendment No. 1 to the Amended and Restated 1987 Non-
Employee Directors' Stock Option Plan of Meridian National
Corporation, effective May 27, 1993 (incorporated herein by
reference from the Company's Report on Form 10-K for fiscal
year ended February 28, 1994).

10.07(c)* Amendment No. 2 to the Amended and Restated 1987 Non-
Employee Directors' Stock Option Plan of Meridian
National Corporation, effective May 12, 1994 (incorporated
herein by reference from the Company's Report on Form 10-K
for fiscal year ended February 29, 1996).

10.07(d)* Amendment No. 3 to the Amended and Restated 1987
Non-Employee Directors' Stock Option Plan of Meridian
National Corporation, effective June 6, 1995 (incorporated
herein by reference from the Company's Report on Form 10-K
for fiscal year ended February 29, 1996).

10.08* Meridian National Corporation Tax Deferred Retirement and
Savings Plan, as amended and restated (incorporated herein
by reference from the Company's Report on Form 10-K for
fiscal year ended February 28, 1995).

10.09(a)* Employment Agreement of William D. Feniger, dated June 23,
1989 (incorporated herein by reference from the Company's
Registration Statement on Form S-1, filed July 17, 1989,
File No. 33-27955).

10.09(b)* Amendment of Employment Agreement of William D. Feniger,
dated April 23, 1992 (incorporated herein by reference from
the Company's Report on Form 10-K for fiscal year ended
February 29, 1992).

10.09(c)* Employment Agreement of Joseph Klobuchar, Jr., dated
January 16, 1995 (incorporated herein by reference from
the Company's Report on Form 10-K for fiscal year ended
February 28, 1995).

10.10(a)* Bond Purchase Agreement, dated February 12, 1990, between
the Company, EPI, Haden MacLellan Holdings, plc, Miller &
Schroeder Financial, Inc. and The Toledo-Lucas County Port
Authority (incorporated herein by reference from the
Company's Report on Form 10-K for fiscal year ended February
28, 1990).

10.10(b)* Guaranty Agreement, dated as of December 15, 1989, between
the Company and Society Bank & Trust, Trustee (incorporated
herein by reference from the Company's Report on Form 10-K
for fiscal year ended February 28, 1990).

10.10(c)* Loan Agreement, dated as of December 15, 1989 (including
the Note as an Exhibit thereto) between Toledo-Lucas County
Port Authority and EPI (incorporated herein by reference from
the Company's Report on Form 10-K for fiscal year ended
February 28, 1990).

10.10(d)* Open-End Mortgage and Security Agreement, dated as of
December 15, 1989, between EPI and Society Bank & Trust,
Trustee (incorporated herein by reference from the
Company's Report on Form 10-K for fiscal year ended
February 28, 1990).

20
<PAGE>

10.11* Amended and Restated Partnership Agreement of
Environmental Purification Industries Company
(incorporated herein by reference from the Company's
Report on Form 10-K for fiscal year ended February 28, 1994.

10.12(a)* Memorandum of Understanding, dated November 1, 1991,
between the Company and Yale M. Feniger (incorporated herein
by reference from the Company's Report on Form 10-K for
fiscal year ended February 29, 1992).

10.12(b)* Amendment to Memorandum of Understanding, dated June 2,
1994, between the Company and Yale M. Feniger (incorporated
herein by reference from the Company's Report on Form 10-K
for fiscal year ended February 28, 1994).

10.13(a)* Termination Agreement, dated July 1, 1992, among the
Company, National Purification, MEPI Corp., EPI, Haden
MacLelan Holdings, plc, Haden, Inc., Haden Environmental
Corporation and Haden Purification, Inc. (incorporated
herein by reference from the Company's Report on Form 10-K
for fiscal year ended February 28, 1993).

10.13(b)* Guaranty and Security Agreement, dated July 1, 1992, among
National Purification, MEPI Corp. and Haden Purification,
Inc. (incorporated herein by reference from the Company's
Report on Form 10-K for fiscal year ended February 28,
1993).

10.13(c)* First Amendment to Termination Agreement, dated as of June
1993, among the Company, National Purification, MEPI Corp.,
EPI, Haden MacLellan Holdings, plc, Haden, Inc., Haden
Environmental Corporation and Haden Purification, Inc.
(incorporated herein by reference from the Company's Report
on Form 10-K for fiscal year ended February 28, 1993).

10.13(d)* Promissory Note, dated as of June 1993, between EPI and
Haden Purification, Inc. (incorporated herein by reference
from the Company's Report on Form 10-K for fiscal year
ended February 28, 1993).

10.13(e)* Security Agreement, dated as of June 1993, between EPI and
Haden Purification, Inc. (incorporated herein by reference
from the Company's Report on Form 10-K for fiscal year ended
February 28, 1993).

10.13(f)* Second Amendment to Termination Agreement, dated as of April
28, 1994, among the Company, National Purification, MEPI
Corp., EPI, Haden MacLellan Holdings, plc, Haden, Inc.,
Haden Environmental Corporation and Haden Purification,
Inc. (incorporated herein by reference from the Company's
Report on Form 10-K for fiscal year ended February 28,
1994).

10.13(g)* Guaranty and Security Agreement, dated as of April 28, 1994
among the Company, National Purification, MEPI Corp. and
Haden Purification, Inc. (incorporated herein by reference
from the Company's Report on Form 10-K for fiscal year ended
February 28, 1994).

10.13(h) Compromise Agreement, dated as of June 28, 1996, among the
Company, National Purification, MEPI Corp., EPI,
Environmental Purification Industries, Inc., Haden MacLellan
Holdings, plc, Haden, Inc., Haden Environmental
Corporation and Haden Purification, Inc.

10.14(a)* Real Estate Sale and Purchase Agreement, dated January 26,
1994, between Ottawa River Steel and Klockner Namasco
Corporation (incorporated herein by reference from the
Company's Report on Form 10-K for fiscal year ended February
28, 1994).

21
<PAGE>

10.14(b)* Mortgage Note and Promissory Note and related agreements,
dated January 26, 1994,between Ottawa River Steel and
Klockner Namasco Corporation (incorporated herein by
reference from the Company's Report on Form 10-K for fiscal
year ended February 28, 1994).

10.15* Agreement dated April 20, 1995 between Company and The Wall
Street Group, Inc. (incorporated herein by reference from
the Company's Report on Form 10-K for fiscal year ended
February 28, 1995).

10.16* Lease between National Metal Processing, Inc. and MNP
Corporation, dated June 1, 1995 (incorporated herein
by reference from the Company's Report on Form10-K for
fiscal year ended February 29, 1996).

10.17(a)* Asset Purchase Agreement, dated November 17, 1995, by and
among Ottawa River Steel Co., Doolan Industries, Inc.,
Timothy Stein and Juergen H. Weberbauer (incorporated herein
by reference from the Company's Current Report on Form 8-K,
dated November 17, 1995).

10.17(b)* Loan and Security Agreement, dated November 17, 1995,
between Ottawa River Steel Co. and FINOVA Capital
Corporation (incorporated herein by reference from the
Company's Report on Form10-K for fiscal year ended
February 29, 1996)
.

10.17(c)* Lease Agreement, dated October 31, 1995, between Ottawa
River Steel Company and USL Capital Corporation
(incorporated herein by reference from the Company's Report
on Form 10-K for fiscal year ended February 29, 1996).

10.17(d)* Industrial Building Lease, dated November 10, 1995, between
Ottawa River Steel Co. and Centerpoint Properties
Corporation (incorporated herein by reference from the
Company's Report on Form 10-K for fiscal year ended February
29, 1996).

10.18* License Agreement, dated September 7, 1995, between
Environmental Purification Industries Company and
Aster, Inc. (incorporated herein by reference from
the Company's Report on Form10-K for fiscal year ended
February 29, 1996).

10.19 Purchase Agreement, dated July 3, 1996, among Meridian
Environmental Services, Inc., Meridian International, Inc.
and Gerald M. Groves.

10.20(a) Stock Purchase Agreement, dated November 19, 1996, among
Environmental Purification Industries, Inc., Spencer Browne,
MNP Corporation and Elliot Smith.

10.20(b) Registration Rights Agreement, dated November 19, 1996,
among Environmental Purification Industries, Inc., Spencer
Browne, MNP Corporation and Elliot Smith.

10.20 (c) Stockholders Agreement, dated November 19, 1996, among
Environmental Purification Industries, Inc., Spencer Browne,
MNP Corporation and Elliot Smith.

11 Statement of Computation of Earnings per Share

21 List of Subsidiaries of Registrant

23 Consent of Independent Auditors

27 Financial Data Schedule

22
<PAGE>

(b) Reports filed on Form 8-K.

There were no reports filed on Form 8-K during the fourth quarter of the
Company's 1997 fiscal year.

__________________________

* Indicates an exhibit previously filed with the Securities and Exchange
Commission and incorporated herein by reference.

<PAGE>

Report of Independent Auditors

The Board of Directors and Stockholders
Meridian National Corporation

We have audited the accompanying consolidated balance sheets of Meridian
National Corporation as of February 28, 1997 and February 29, 1996, and the
related consolidated statements of operations, stockholders' equity, and cash
flows for each of the three years in the period ended February 28, 1997. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Meridian National
Corporation at February 28, 1997 and February 29, 1996, and the consolidated
results of its operations and its cash flows for each of the three years in the
period ended February 28, 1997, in conformity with generally accepted accounting
principles.

As discussed in Note 1 to the consolidated financial statements, the Company has
restated the accompanying consolidated financial statements for February 29,
1996 and prior periods to adjust the amortization period of a capital lease.

ERNST & YOUNG LLP

Toledo, Ohio
June 20, 1997

F-1
<PAGE>
Meridian National Corporation

Consolidated Balance Sheets

FEBRUARY 28, FEBRUARY 29,
1997 1996
-----------------------------------
(RESTATED)
<S> <C> <C>
ASSETS
Current assets:
Cash $ 16,778 $ 176,667
Accounts receivable, net of allowance of
$152,500 ($249,700 in 1996) for doubtful accounts 11,174,851 8,221,356
Inventories 12,083,532 8,860,574
Other current assets 678,504 451,090
-----------------------------------
Total current assets 23,953,665 17,709,687

Property and equipment, at cost:
Buildings, building improvements and leasehold improvements 2,755,487 3,316,377
Machinery and equipment 5,919,949 7,191,179
Office furniture and equipment 641,614 709,753
Land and land improvements 179,085 224,419
Construction in progress 2,467,104 301,822
-----------------------------------
11,963,239 11,743,550
Less accumulated depreciation and amortization 4,151,923 5,209,518
-----------------------------------
Net property and equipment 7,811,316 6,534,032

Other assets 1,935,829 2,303,078

-----------------------------------
$33,700,810 $26,546,797
-----------------------------------
-----------------------------------

F-2

<PAGE>

FEBRUARY 28, FEBRUARY 29,
1997 1996
-----------------------------------
(RESTATED)
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $11,138,254 $ 9,006,182
Accounts payable and accrued liabilities 13,132,857 8,904,892
Long-term debt due within one year:
Related parties - 149,206
Other 1,548,644 1,092,520
-----------------------------------
Total current liabilities 25,819,755 19,152,800

Long-term debt due after one year:
Related parties 275,232 596,822
Other 6,311,061 6,250,594

Commitments and contingencies

Minority interests 96,600 -

Stockholders' equity:
Preferred stock, par value $.001; 5,000,000 shares authorized:
$100 Series A, 5,000 shares authorized, 4,000 shares
issued and outstanding 400,000 400,000
$3.75 Series B, 1,375,000 shares authorized, 206,752 shares
issued and outstanding 775,320 775,320
Common stock, par value $.01; 20,000,000 shares authorized,
3,488,246 shares issued and outstanding (2,755,145 in 1996) 34,882 27,551
Capital in excess of stated value 10,818,545 10,042,327
Deficit (10,830,585) (10,698,617)
-----------------------------------
Total stockholders' equity 1,198,162 546,581
-----------------------------------
$33,700,810 $26,546,797
-----------------------------------
-----------------------------------
</TABLE>

SEE ACCOMPANYING NOTES.

F-3
<PAGE>

Meridian National Corporation

Consolidated Statements of Operations

YEAR ENDED
----------------------------------------------------------
FEBRUARY 28, FEBRUARY 29, FEBRUARY 28,
1997 1996 1995
----------------------------------------------------------

<S> <C> <C> <C>
Net sales $66,511,224 $54,672,987 $50,638,763
Costs of sales 58,522,311 49,013,016 43,185,512
----------------------------------------------------------
Gross margin 7,988,913 5,659,971 7,453,251

Other costs and expenses (income):
Selling, general and administrative 7,160,131 6,083,321 5,617,741
Interest expense 1,594,788 1,439,843 1,056,587
Cost of discontinued registration 275,908 - -
Minority interests (101,189) - -
Write-down of noncurrent assets - - 2,285,548
Miscellaneous - net (321,260) (134,997) 36,255
----------------------------------------------------------
8,608,378 7,388,167 8,996,131
----------------------------------------------------------
Loss from continuing operations before income
taxes and extraordinary gain (619,465) (1,728,196) (1,542,880)
Provision for federal income taxes - current - - 21,000
----------------------------------------------------------
Loss from continuing operations before
extraordinary gain (619,465) (1,728,196) (1,563,880)

Discontinued operations:
Income from operations, net of federal income
tax of $4,000 in 1995 90,924 229,382 211,238
Gain from disposal 203,654 - -
----------------------------------------------------------
Loss before extraordinary gain (324,887) (1,498,814) (1,352,642)

Extraordinary gain - extinguishment of debt,
net of federal income tax of $5,000 in 1995 329,279 149,206 226,276
----------------------------------------------------------
Net income (loss) $ 4,392 $(1,349,608) $(1,126,366)
----------------------------------------------------------
----------------------------------------------------------

Loss applicable to common stock $ (131,967) $(1,479,370) $(1,262,744)
----------------------------------------------------------

Earnings (loss) per common share -
primary and fully diluted:
Income (loss) before extraordinary gain:
Continuing operations $(0.23) $(0.71) $(0.70)
Discontinued operations 0.09 0.09 0.09
Extraordinary gain 0.10 0.06 0.09
----------------------------------------------------------
Net loss $(0.04) $(0.56) $(0.52)
----------------------------------------------------------
----------------------------------------------------------
</TABLE>

SEE ACCOMPANYING NOTES.

F-4
<PAGE>
Meridian National Corporation

Consolidated Statements of Stockholders' Equity

Years ended February 28, 1997 and February 29, 1996 and February 28, 1995
<TABLE>
<CAPTION>

$100 $3.75 Capital in
Series A Series B excess of
preferred preferred Common stated
stock stock stock value Deficit Total
---------------------------------------------------------------------------------------

<S> <C> <C> <C> <C> <C> <C>
Balance at February 28, 1994, as
previously reported $400,000 $4,680,004 $14,752 $ 5,675,359 $ (7,600,406) $3,169,709
Adjustment of the amortization period
of a capital lease (358,344) (358,344)
---------------------------------------------------------------------------------------
Balance at March 1, 1994, as restated 400,000 4,680,004 14,752 5,675,359 (7,958,750) 2,811,365
Net loss for 1995 (1,126,366) (1,126,366)
Dividends:
Cash dividends on Series A preferred stock (27,900) (27,900)
Cash dividends on Series B preferred stock (128) (128)
39,267 shares of common stock issued to
holders of Series B preferred stock 392 105,709 (106,101) -
Exchange of 1,041,249 shares of Series B
preferred stock for 10,403 units, each
consisting of 90 shares of common stock
and 100 warrants to purchase common stock (3,904,684) 9,362 3,804,346 (90,976)
Exchange of 84,000 warrants to purchase
common stock for 84,000 units, each
consisting of one share of common stock
and one warrant to purchase common stock 840 200,263 201,103
---------------------------------------------------------------------------------------
Balance at February 28, 1995 400,000 775,320 25,346 9,785,677 (9,219,245) 1,767,098
Net loss for 1996 (1,349,608) (1,349,608)
Dividends:
Cash dividends on Series A preferred
stock (36,000) (36,000)
Cash dividends on Series B preferred
stock (65) (65)
64,091 shares of common stock issued
to holders of Series B preferred stock 641 93,058 (93,699) -
Exchange of 156,415 warrants to purchase
common stock for 156,415 units, each
consisting of one share of common stock
and one warrant to purchase common stock 1,564 163,592 165,156
---------------------------------------------------------------------------------------
Balance at February 29, 1996 400,000 775,320 27,551 10,042,327 (10,698,617) 546,581
Net income for 1997 4,392 4,392
Dividends:
Cash dividends on Series A preferred stock (36,000) (36,000)
Cash dividends on Series B preferred stock (68) (68)
133,101 shares of common stock issued to
holders of Series B preferred stock 1,331 98,961 (100,292) -
600,000 shares of common stock issued in
exchange for a $300,000 reduction in a
convertible note payable 6,000 294,000 300,000
Issuance of common stock of subsidiary 383,257 383,257
---------------------------------------------------------------------------------------
Balance at February 28, 1997 $400,000 $ 775,320 $34,882 $10,818,545 $(10,830,585) $1,198,162
---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
</TABLE>

SEE ACCOMPANYING NOTES.

F-5
<PAGE>
Meridian National Corporation

Consolidated Statements of Cash Flows

YEAR ENDED
---------------------------------------------------------
FEBRUARY 28, FEBRUARY 29, FEBRUARY 28,
1997 1996 1995
---------------------------------------------------------

<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income (loss) $ 4,392 $(1,349,608) $(1,126,366)
Adjustments to reconcile net income (loss)
to net cash provided by (used in) continuing
operating activities:
Depreciation and amortization 804,251 647,379 597,392
Extraordinary gain (329,279) (149,206) (226,276)
Minority interest (101,189) - -
Discontinued operations (294,578) (229,382) (215,238)
Amortization of intangible assets 6,146 6,148 481,357
Write-down of noncurrent assets - - 2,285,548
Gain (loss) related to property and
equipment (5,161) - 48,041
Changes in operating assets and
liabilities:
Accounts receivable (2,975,085) 657,548 (2,988,240)
Inventories (3,222,958) 1,247,117 (5,341,061)
Other current assets (8,789) 34,036 16,123
Accounts payable and accrued
liabilities 3,931,939 1,314,416 3,391,147
---------------------------------------------------------
Net cash provided by (used in) continuing
operations (2,190,311) 2,178,448 (3,077,573)
Net cash provided by discontinued
operations 117,049 530,879 291,487
---------------------------------------------------------
Net cash provided by (used in) operating
activities (2,073,262) 2,709,327 (2,786,086)

INVESTING ACTIVITIES
Additions to property and equipment (2,288,008) (1,078,474) (372,942)
Proceeds from disposals 558,143 69,992 -
Changes in other assets (8,894) (178,413) (150,782)
Cash paid for acquired business - (2,499,000) -
---------------------------------------------------------
Net cash used in investing activities (1,738,759) (3,685,895) (523,724)

FINANCING ACTIVITIES
Change in notes payable 2,132,072 (519,159) 4,753,221
Payments on long-term debt (1,374,918) (951,048) (1,049,152)
Issuance of common stock of subsidiary 581,046 - -
Cash dividends paid (36,068) (36,065) (28,028)
Proceeds from long-term borrowings 2,350,000 1,700,000 -
Net proceeds from exchange of warrants - 304,134 201,103
Costs related to warrant exchange - - (128,062)
Costs of exchange of Series B preferred shares - - (90,976)
---------------------------------------------------------
Net cash provided by financing activities 3,652,132 497,862 3,658,106
---------------------------------------------------------

Increase (decrease) in cash (159,889) (478,706) 348,296
Cash at beginning of year 176,667 655,373 307,077
---------------------------------------------------------
Cash at end of year $ 16,778 $ 176,667 $ 655,373
---------------------------------------------------------

Supplemental cash flow information:
Cash paid for interest, net of amount
capitalized $1,489,843 $ 1,475,254 $ 1,105,592
---------------------------------------------------------
---------------------------------------------------------
</TABLE>

Significant noncash investing and financing activities:
In fiscal 1995, the Company acquired certain property and equipment, in part,
by issuance of $1,045,000 of long-term debt.

SEE ACCOMPANYING NOTES.

F-6
<PAGE>

Meridian National Corporation

Notes to Consolidated Financial Statements

February 28, 1997

1. OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES

OPERATIONS

The Company has a working capital deficiency, has sustained losses in recent
years and has been unable to meet certain bank loan covenants. The loan covenant
violations have been waived by the bank and covenants for future periods have
been modified such that the Company believes it will be in compliance with the
modified covenants for future periods.

Management has taken various steps during the last year to improve the Company's
operating performance and liquidity. The benefits of these actions described
below has had a positive effect on fiscal 1997 results and management expects to
realize the full benefit during the upcoming fiscal year.

- Management focus on its core steel processing and distribution
business.

- Geographic and capacity expansion of the Company's steel processing
operation.

- Expansion of the Company's paint waste recycling facility, expected to
be in commercial operation in July 1997.

- Closing or sale of operations which were unprofitable or did not fit
in the Company's strategic plans.

- Reduction of certain operating costs.

The Company is investigating various opportunities to obtain long-term financing
for the $2.3 million expansion of its paint waste recycling operation. Currently
the Company has financing for the project, which has a balance due of $1,906,000
in March 1998.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of the Company and
all subsidiaries in which it has in excess of a 50% interest. All material
intercompany items have been eliminated.

F-7
<PAGE>

Meridian National Corporation

Notes to Consolidated Financial Statements (continued)

1. OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

USE OF ESTIMATES

The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosures of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results may differ from these estimates.

RESTATEMENT

The Company has restated the accompanying consolidated financial statements to
adjust the amortization period of a capital lease. The leased asset was being
amortized over a thirty year period as opposed to the lease term of ten years.
The restatement had the effect of increasing the deficit as of February 28, 1994
by approximately $358,000 from the amount previously reported. The effect on
operations was not material.

INVENTORY VALUATION

Inventories are carried at the lower of cost, using the specific identification
method, or market.

CAPITALIZED INTEREST

Interest costs of approximately $56,000 in 1997 have been capitalized as a cost
of the expansion of the paint waste recycling facility.

PROPERTY AND EQUIPMENT

Depreciation and amortization are provided, principally by means of accelerated
methods, except for the paint waste recycling subsidiary for which all assets
are depreciated using the straight-line method, based on the following estimated
useful lives:

Land improvements 15 - 20 years
Buildings, building improvements and
leasehold improvements 31.5 - 40 years
Machinery and equipment 5 - 12 years
Office furniture and equipment 5 - 10 years

F-8
<PAGE>

Meridian National Corporation

Notes to Consolidated Financial Statements (continued)

1. OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

INTANGIBLE ASSETS

The Company evaluates the recoverability of long-lived assets based on
undiscounted projected cash flows, excluding interest and taxes, when factors
indicate that an impairment may exist. As more fully described in Note 12, the
Company wrote off in fiscal 1995 all of the goodwill associated with one of its
steel pickling operations and all of the costs of noncompete and related
agreements.

FAIR VALUE OF FINANCIAL INSTRUMENTS

Based on the Company's financial condition, the collateral securing outstanding
debt and the frequently redetermined interest rates associated with the majority
of the Company's debt instruments, the Company believes that the aggregate fair
values of short-term notes payable and long-term debt approximate the carrying
values.

EARNINGS (LOSS) PER COMMON SHARE

Earnings (loss) per common share is computed based upon the weighted average
number of common shares and, when material in the aggregate, dilutive common
equivalent shares outstanding during each period. Common shares issued for
dividends on preferred stock are included in weighted average shares outstanding
beginning on the date issued. In July 1994 the Company completed an exchange
offer for a significant portion of its Series B preferred stock. Common shares
issued in the exchange are included in weighted average shares outstanding as if
the exchange had occurred at the beginning of fiscal 1995. The effects of
convertible securities, options and warrants are excluded from earnings per
share calculations when the effect would be anti-dilutive. Fully diluted
earnings per common share exclude the effects of convertible securities as such
effects are anti-dilutive in all periods. The weighted average number of common
and common equivalent shares used to compute earnings per share for each period
is:

1997 1996 1995
----------------------------------------------

Primary and fully diluted 3,241,349 2,638,126 2,423,864

Cash dividends on preferred stock and the value of common shares issued as
dividends on Series B preferred stock ($136,360 in 1997, $129,764 in 1996 and
$136,378 in 1995) are deducted in arriving at earnings (loss) applicable to
common shares.

F-9
<PAGE>

Meridian National Corporation

Notes to Consolidated Financial Statements (continued)

1. OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

In March 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 128 "Earnings Per Share," which is effective
for periods after December 15, 1997. Statement No. 128 simplifies the
computation of earnings (loss) per share. The Company does not expect the effect
of this new standard to be significant.

STOCK OPTIONS

All options have been granted at prices not less than the market price on the
date granted. Accordingly, the Company recognizes no compensation expense
related to these options in accordance with Accounting Principles Board Opinion
No. 25, "Accounting for Stock Issued to Employees" (APB No. 25).

RECLASSIFICATIONS

Certain reclassifications have been made to the fiscal 1996 and 1995 financial
statements to conform with the 1997 presentation.

2. CONCENTRATION OF CREDIT RISK

The Company and its subsidiaries are engaged in the trading and processing of
steel products for the automotive, truck, and appliance industries and the
recycling or disposal of paint and acid wastes for generators of such wastes in
the automotive and steel industries located primarily in the Midwestern United
States. Substantially all of the Company's accounts receivable as of February
28, 1997 and February 29, 1996 are due from companies which operate in these
industries. The Company extends credit based on an evaluation of credit reports,
payment practices and, in most cases, financial condition. Generally, collateral
or letters of credit are not required. Credit losses are provided for in the
financial statements and consistently have been within management's
expectations.

3. SHORT-TERM NOTES PAYABLE

The Company has a $12,000,000 revolving demand line of credit with a bank under
a Loan and Security Agreement with interest at 1% above the bank's prime rate.
The agreement allows borrowings under a lending formula based upon eligible
accounts receivable and inventories less outstanding letters of credit issued
under the agreement.

F-10
<PAGE>

Meridian National Corporation

Notes to Consolidated Financial Statements (continued)

3. SHORT-TERM NOTES PAYABLE (CONTINUED)

At February 28, 1997, approximately $862,000 was available under the revolving
demand loan. The agreement provides for a commitment fee equal to 1/4% of the
excess of $12,000,000 over average daily borrowings and is secured by
substantially all of the Company's personal property not otherwise pledged.

The agreement contains covenants which require the maintenance of certain
financial ratios, restrict the payment of dividends, restrict the incurrence of
indebtedness and limit certain activities and transactions. Subsequent to
February 28, 1997, the bank increased the line of credit to $13,500,000. In
connection with the increase, violations of certain covenants during 1997 have
been waived by the bank and certain covenants have been amended for future
periods.

Weighted average interest rates at year end were 9.33% in 1997, 9.25% in 1996
and 10% in 1995.

4. LONG-TERM DEBT

Long-term debt consists of the following:

FEBRUARY 28, FEBRUARY 29,
1997 1996
----------------------------

8 1/2% mortgage note payable to trustee bank, due
in monthly installments, including interest, of
approximately $73,000 until final maturity in
November 2000 $2,707,500 $3,303,750

Notes payable to bank, due in monthly
installments of $21,000, plus interest (9.75% at
February 28, 1997) at 1.5% above prime, with a
payment of $150,000 due September 1997 and a
final payment of $1,906,000 due March 1998 2,287,000 -

Mortgage and other notes payable, due in monthly
installments of approximately $12,700,
including interest (9.5% at February 28, 1997) at
2% above prime rate (maximum rate of 9.5%),
with final payment of $605,000 due January
1999 778,122 852,909

F-11
<PAGE>

Meridian National Corporation

Notes to Consolidated Financial Statements (continued)

4. LONG-TERM DEBT (CONTINUED)

FEBRUARY 28, FEBRUARY 29,
1997 1996
----------------------------

Note payable, due in monthly installments of
$17,675 including interest at 11.7% through
December 1, 2000 641,333 770,087

Convertible note payable to an officer and
stockholder, interest payable quarterly at 9%,
secured by a pledge of common stock of certain
subsidiaries. The note is subordinate to bank
borrowings and is convertible into shares of
common stock at a conversion price of $15.60
per share 275,232 596,822

Note payable to bank under the Loan and Security
Agreement, due in monthly installments of
$5,000 through December 1998, plus interest
(9.75% at February 28, 1997) at 1.5% above the
bank's base rate 115,000 170,000

Note payable to Haden Purification, Inc. - 700,722

Note payable to a stockholder - 149,206

Obligations under long-term capital leases:
Lease purchase obligation payable in monthly
installments of $14,904 plus interest at 9.92%
through October 30, 2002 772,881 869,772

Lease purchase obligation covering industrial
revenue bonds, payable in monthly
installments of $9,444 plus interest (7.56% at
February 28, 1997) at 92% of prime through
July 1, 2001 491,112 613,889

Other 66,757 61,985
----------------------------
8,134,937 8,089,142
Less amounts due within one year 1,548,644 1,241,726
----------------------------
$6,586,293 $6,847,416
----------------------------
----------------------------

F-12
<PAGE>

Meridian National Corporation

Notes to Consolidated Financial Statements (continued)

4. LONG-TERM DEBT (CONTINUED)

During fiscal 1997 the Company arranged financing totalling $2,350,000 with its
bank. The proceeds have been primarily used to finance an expansion of the
Company's paint waste recycling operation, expected to commence operations in
the second quarter of fiscal 1998, and repay existing obligations. Monthly
payments required amount to $21,000 plus interest at prime plus 1.5%. The notes
originally required final principal payments of $650,000 and $1,469,000 on
September 30, 1997 and October 31, 1997, respectively. The bank has agreed to
extend the notes until March 1998, requiring the continuation of the monthly
principal payments of $21,000 and an additional payment due of $150,000 in
September 1997. A final payment of $1,906,000 is due March 1998. These
borrowings are guaranteed by a corporation which is a stockholder in the Company
and one of its subsidiaries. One of the Company's directors has a majority
ownership position in the guarantor. Additionally, an officer and stockholder of
the Company has personally guaranteed the Company's entire borrowings from the
bank, aggregating $13,540,000 at February 28, 1997. The Company is investigating
various opportunities to obtain long-term financing for the project.

In fiscal 1995, the Company negotiated agreements with a former common
stockholder and officer and a former employee, whereby the Company settled notes
with unpaid balances aggregating $666,013 which were scheduled to mature in
September 1995. Under the agreements the Company made payments on the notes in
June 1994 of approximately $346,000, plus accrued interest. One of the
agreements calls for additional payments aggregating $100,000, including
interest, over a period of two years. The early retirement of these obligations
resulted in the recording in fiscal 1995 of an extraordinary gain of $226,276,
net of federal income tax of $5,000.

In fiscal 1996, the Company negotiated an agreement with a stockholder whereby a
convertible note payable in an amount of $596,822 was settled, subject to
certain conditions, for approximately $448,000 payable in 18 monthly payments
commencing in March 1995, without interest. The settlement resulted in the
recording of an extraordinary gain of $149,206.

An officer and stockholder of the Company has agreed to defer payment of a
convertible note payable of $275,232 until after February 28, 1998. The note was
scheduled to mature in September 1995. Accordingly, the note payment has been
excluded from long-term debt due within one year in the accompanying balance
sheets. In May 1996 the Board of Directors authorized the issuance of 600,000
shares of the Company's common stock to the officer and stockholder in exchange
for a reduction of $300,000 to the convertible note payable to the officer and
stockholder.

F-13
<PAGE>

Meridian National Corporation

Notes to Consolidated Financial Statements (continued)

4. LONG-TERM DEBT (CONTINUED)

Effective July 1, 1992, Environmental Purification Industries Company ("EPI")
became a wholly-owned subsidiary of the Company when, pursuant to a Termination
Agreement, Haden Purification, Inc. ("Haden Purification") terminated and
abandoned its 50% partnership interest in EPI. Under the Termination Agreement,
Haden Purification assumed liability for one-half of the remaining principal,
interest and fee payments due under the Company's 8.5% mortgage note payable and
was assigned 50% of the amount held in trust to meet future debt service
requirements. Haden Purification makes principal, interest and fee payments
directly to the trustee bank. As such, these payments are excluded from the
statement of cash flows. Interest expense in the accompanying consolidated
statements of operations excludes interest and fee payments made by Haden
Purification amounting to $140,407 in 1997, $163,678 in 1996 and $184,264 in
1995.

In June 1996, the Company executed an agreement (the "Compromise Agreement") to
repay a note payable to Haden Purification. The terms of the Compromise
Agreement included, among other things, settlement of the note payable for a
payment of $350,000 made in July 1996. The Company is required to continue to
pay, through July 1, 1998, Haden Environmental Corporation, an affiliate of
Haden Purification, a throughput charge of $10 per cubic yard of paint waste
processed through EPI's current recycling system. Prior to execution of the
Compromise Agreement, payments of the throughput charge were credited towards
amounts due under the note payable to Haden Purification. The gain of $329,279
on early extinguishment of debt is reflected as an extraordinary gain. The
throughput charges will be reported as operating expenses as incurred through
July 1, 1998. Future throughput charges are estimated to aggregate $114,000.

Maturities of long-term debt in each of the five fiscal years subsequent to
February 28, 1997, including the principal portion of minimum payments under
long-term lease obligations, are approximately as follows:

1998 $1,549,000
1999 3,439,000
2000 1,812,000
2001 1,022,000
2002 198,000

These amounts include principal payments to be made by Haden Purification as
follows: 1998 - $322,000; 1999 - $350,000; 2000 - $380,000 and 2001 - $302,000.

F-14
<PAGE>

Meridian National Corporation

Notes to Consolidated Financial Statements (continued)

5. LEASE COMMITMENTS

CAPITALIZED LEASES

The Company leases certain property and equipment under long-term agreements
classified as capital leases. Certain facilities and related equipment were
financed through proceeds from the issuance of industrial revenue bonds; the
leases provide for annual rentals sufficient to amortize principal and interest
on the bonds. The property and equipment can be purchased at the expiration of
the lease for nominal amounts.

The cost and accumulated amortization of property leased under capital leases
are as follows:

FEBRUARY 28, FEBRUARY 29,
1997 1996
---------------------------

Buildings $ 634,383 $ 643,407
Machinery and equipment 1,011,306 991,599
----------------------------
1,645,689 1,635,006
Less accumulated amortization 594,314 469,628
----------------------------
$1,051,375 $1,165,378
----------------------------
----------------------------

Future minimum payments and their present value under these leases at February
28, 1997 are approximately as follows:

1998 $ 352,000
1999 343,000
2000 334,000
2001 305,000
2002 229,000
Thereafter 119,000
---------------
Total minimum lease payments 1,682,000
Less amount representing interest 351,000
---------------
Present value of minimum lease payments
included in long-term debt $1,331,000
---------------
---------------

The Company has subleased a facility which is leased by the Company under a
capital lease. Minimum aggregate sublease payments to be received subsequent to
February 28, 1997 amounted to $286,893. One of the Company's directors has a
majority ownership position in the sublessee.

F-15
<PAGE>

Meridian National Corporation

Notes to Consolidated Financial Statements (continued)

5. LEASE COMMITMENTS (CONTINUED)

OPERATING LEASES

The Company leases certain property and equipment under agreements classified as
operating leases. Total rent expense charged to operations for 1997, 1996 and
1995 approximated $610,000, $373,000 and $257,000, respectively, which included
$290,000, $252,000 and $250,000, respectively to related parties. Minimum future
rental commitments under noncancellable operating leases at February 28, 1997,
including aggregate payments of $224,000 to an affiliate of an officer and
certain stockholders, are $434,000 in 1998; $211,000 in 1999; $27,000 in 2000
and $22,000 in 2001.

6. DISCONTINUED OPERATIONS

On July 5, 1996, the Company sold all of the property and equipment of Meridian
Environmental Services, Inc. ("MES"), a wholly-owned subsidiary which operated
the Company's waste acid recycling and disposal business. The assets were sold
for $700,000 to a new company formed by MES management. Of the $700,000 sales
price, $200,000 is represented by notes due from the purchaser, payable in
varying installments over a period of five years. Of the $395,000 gain on the
sale of the assets, $195,000 was recognized in July 1996, and the remainder will
be recognized as the notes are collected.

The accompanying consolidated financial statements have been restated to
separately report the operating results of this discontinued operation. Net
sales of the discontinued operation were approximately $458,000 through the
disposal date in fiscal 1997 and $1,934,000, and $2,600,000 for 1996 and 1995,
respectively.

7. SUBSIDIARY STOCK

During fiscal 1997 25 shares of common stock (a 20% interest) of EPI
Technologies, Inc., were issued to outside investors for $581,046 in cash, net
of related costs. Proceeds of the sale were credited to minority interest, based
on the carrying value of the subsidiary, with the remainder credited to capital
in excess of stated value. EPI Technologies, previously a wholly-owned
subsidiary, holds the Company's interest in EPI, the Company's paint waste
recycling operation.

F-16
<PAGE>

Meridian National Corporation

Notes to Consolidated Financial Statements (continued)

8. COMMITMENTS AND CONTINGENCIES

EPI has entered into a license agreement with Aster, Inc. whereby Aster has
granted the Company the exclusive right, except in Mexico, to use certain
patented processes and technology in its paint recycling process. EPI has agreed
to pay Aster royalties and other fees for ongoing work performed by Aster to
commercialize and to continue to refine the processes, formulae and technology.
Minimum monthly payments required under the agreement are $20,000. EPI is
nearing completion of a $2.3 million expansion to its facilities which will
utilize the licensed process and technology.

The Company is involved in certain litigation and claims incidental to its
business. In one such claim, the Company is involved in a labor relations matter
in which the NLRB has instituted a claim against companies which leased
employees to the Company. The amount of the claim is $1.2 million. The ultimate
outcome with respect to such proceedings currently cannot be predicted. However,
the Company believes, based on its examination and review of such matters and
consultation with outside legal counsel, that there are meritorious defenses
available to the Company.

9. CAPITAL STOCK

The Series B preferred stock has a mandatory dividend payable semiannually at an
annual rate of $.375 per share, if paid in cash, or, at the Company's option,
$.4875 per share if paid in shares of common stock based on the average market
value of the common stock for the 20 days prior to the record date. Holders of
the Series B preferred stock are entitled to one-tenth vote for each share held
and, subject to certain conditions, vote together with the holders of common
stock as a single class. Each share of the Series B preferred stock is
convertible, at the option of the holder into .25 shares of common stock,
subject to adjustment under certain circumstances. The Series B preferred stock
may be redeemed by the Company, in whole or in part, at a redemption price of
$4.875 per share if the average of the closing prices of the common stock has
been at least $22.50 per share during twenty consecutive trading days.

During the period from June 22 to July 26, 1994, the Company extended a special
offer to holders of its Series B preferred stock to exchange for each 100 shares
of Series B preferred stock, one unit, consisting of 90 newly issued shares of
common stock and 100 warrants (the "1999 warrants") to purchase 1.2 shares of
common stock each at an exchange price of $2.35 per share, as adjusted, subject
to further adjustment in certain circumstances. The 1999 Warrants are
exercisable through June 1999. A total of

F-17
<PAGE>

Meridian National Corporation

Notes to Consolidated Financial Statements (continued)

9. CAPITAL STOCK (CONTINUED)

1,041,249 shares, or 83% of the Series B preferred shares outstanding, were
validly tendered for exchange. The number of 1999 Warrants outstanding at
February 28, 1997 was 1,040,300.

The Company issued 1,265,000 common stock purchase warrants in 1989 (the
"Original Warrants"). The terms of the Original Warrants were modified by the
Company during a special exercise period which extended through July 31, 1995,
at which time the Original Warrants expired. During this period holders of the
Original Warrants could purchase, at a purchase price of $2.75, a unit
consisting of one share of common stock and one common stock purchase warrant
("1998 Warrant"). The 1998 Warrants entitle the holder to purchase 1.2 shares of
common stock through May 31, 1998, at a per share exercise price of $2.35, as
adjusted. Through July 31, 1995, 240,415 Original Warrants were exercised. All
1998 Warrants remain outstanding at February 28, 1997.

Holders of the Series A preferred stock are entitled to receive quarterly,
cumulative dividends of $2.25 per share. The Series A preferred stock does not
have voting rights and is redeemable at the Company's discretion for $100 plus
accrued and unpaid dividends.

Common shares reserved for future issuance at February 28, 1997 aggregated
2,391,080 and related to the following:

Common stock purchase warrants 1,589,529
Stock options 732,220
Convertible debt 17,643
Convertible preferred stock 51,688

10. STOCK OPTIONS

The Company has elected to follow APB No. 25, "Accounting for Stock Issued to
Employees," in accounting for its employee and non-employee director stock
options. The alternative fair value accounting provided for under Statement of
Financial Accounting Standards No. 123 "Accounting for Stock-Based Compensation"
(SFAS No. 123), requires use of option valuation models that were not developed
for use in valuing employee stock options. Under APB No. 25 no compensation
expense is recognized because the exercise price of the Company's employee stock
options equals or exceeds the market price of the underlying stock at the date
of the grant.

F-18
<PAGE>

Meridian National Corporation

Notes to Consolidated Financial Statements (continued)

10. STOCK OPTIONS (CONTINUED)

In the opinion of management, the existing fair value models do not provide a
reliable measure of the fair value of employee stock options. The Black-Scholes
option valuation model was developed for use in estimating the fair value of
traded options which have no vesting restrictions and are fully transferable.
The Company's employee and non-employee director stock options have
characteristics significantly different from those of traded options. In
addition, option valuation models require highly subjective assumptions. Changes
in these assumptions can materially affect the fair value estimate.

SFAS No. 123 requires, if APB No. 25 is followed, disclosure of pro forma
information regarding net income and earnings per share determined as if the
Company accounted for its stock options under the fair value method. The fair
value for these options was estimated at the date of grant using a Black-Scholes
option pricing model with the following weighted-average assumptions for 1997
and 1996, respectively: risk-free interest rates of 6.5% and 6.3%; a dividend
yield of 0%; expected volatility of the Company's common stock .484 and .439;
and a weighted-average expected life of the options of 7 years.

The weighted-average fair value of options granted in 1997 and 1996 was $0.47
and $1.21, respectively. For purposes of pro forma disclosures, the estimated
fair value of options is amortized to expense over the option's vesting period.
For 1996, only grants awarded during the year are amortized. For 1997,
amortization attributable to grants awarded in both 1996 and 1997 impact the pro
forma results. The Company's reported and pro forma information follows:

1997 1996
------------------------------

Net income (loss):
Reported $ 4,392 $(1,349,608)
Pro forma (83,018) (1,408,181)
Loss per Share:
Reported $ (0.04) $ (0.56)
Pro forma (0.07) (0.58)

The Company has a nonqualified and incentive stock option plan for its officers
and key employees under which 600,000 shares of common stock may be issued.
Incentive stock options issued to stockholders possessing more than ten percent
of the combined voting rights of the Company may be granted at an exercise price
of not less than 110 percent of the fair market value of the common stock at the
date of the grant and are exercisable for

F-19
<PAGE>

Meridian National Corporation

Notes to Consolidated Financial Statements (continued)

10. STOCK OPTIONS (CONTINUED)

a period not exceeding five years from the date of the grant. All other options
under the plan may be granted at amounts not less than the market value of the
common stock at the date of the grant and are exercisable for a period not
exceeding ten years from the date of the grant.

The Company has also established a nonemployee directors' stock option plan
under which 150,000 shares of common stock may be issued. Under this plan,
eligible directors who have served twelve consecutive months are annually
granted options to purchase 2,500 shares. Under the plan, options may be granted
at an exercise price equal to the market value on the date of grant and are
exercisable for a period not exceeding ten years from the date of grant.

Summary information on stock options is as follows:

Shares Under Weighted-average
Option Exercise Price
----------------------------------

Outstanding at February 28, 1995 135,300 $2.32
Granted 106,000 $2.13
Cancelled (11,500) $1.86
--------------
Outstanding at February 29, 1996 229,800 $2.25
Granted 315,000 $1.00
Cancelled (41,500) $2.07
--------------
Outstanding at February 28, 1997 503,300 $1.48
--------------
--------------
Exercisable at February 28, 1997 133,450 $1.99
--------------
--------------

The weighted average remaining contractual life of options outstanding at
February 28, 1997 is 8.4 years. Exercise prices for outstanding options at
February 28, 1997 range from $0.88 to $4.00 per share.

11. INCOME TAXES

The Company has net operating loss, alternative minimum tax credit and business
credit carryforwards for federal tax purposes of approximately $5,532,000,
$9,000 and $18,000, respectively, available for the reduction of future federal
income tax. Net operating loss carryforwards begin expiring in fiscal 2005.

F-20
<PAGE>

Meridian National Corporation

Notes to Consolidated Financial Statements (continued)

11. INCOME TAXES (CONTINUED)

The effective income tax rate, excluding extraordinary gains and discontinued
operations for 1997, 1996 and 1995 differs from the U. S. federal income tax
rate due to the following:

1997 1996 1995
------------------------------

Tax (benefit) based on statutory U. S.
federal income tax rate (34.0%) (34.0)% (34.0)%
Change in valuation allowance 28.2 36.7 11.0
Meals and entertainment 6.4 1.9 1.4
State and local tax effects (4.2) (5.5) (1.4)
Amortization of goodwill 0.3 0.1 8.1
Writedown of goodwill - - 15.5
Other 3.3 0.8 0.8
------------------------------
Effective rate -% -% 1.4%
------------------------------
------------------------------

Deferred income taxes are measured based on temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and
the amounts used for income tax purposes. Significant components of the
Company's deferred tax assets and liabilities are as follows:

FEBRUARY 28, FEBRUARY 29,
1997 1996
-------------------------------

Deferred tax assets:
Net operating loss carryforwards $2,210,000 $2,104,000
Inventory 257,000 161,000
Property and equipment - 78,000
Other 239,000 161,000
-------------------------------
Total deferred tax assets 2,706,000 2,504,000

Valuation allowance (2,449,000) (2,480,000)
-------------------------------
Net deferred tax assets 257,000 24,000

Deferred tax liabilities:
Property and equipment (252,000) -
Other (5,000) (24,000)
-------------------------------
Total deferred tax liabilities (257,000) (24,000)
-------------------------------
Net deferred tax assets and liabilities $ - $ -
-------------------------------
-------------------------------

Change in the valuation allowance equals the change in net deferred tax assets.

F-21
<PAGE>

Meridian National Corporation

Notes to Consolidated Financial Statements (continued)

12. WRITE-DOWN OF NONCURRENT ASSETS

In December 1994 the Company received written notice from the principal customer
for one of its steel pickling operations that the customer would not require any
more services from the Company as of March 15, 1995. Based on this loss of
business and based on a reevaluation of the potential uses of facilities at the
location of this operation, the Company recorded a pretax charge of $2,286,000
in the fourth quarter of fiscal 1995 to write down noncurrent assets. The charge
is comprised of (i) a write-down of $1,199,000 of property and equipment at this
location to its net realizable value, (ii) a write-off of goodwill of $703,000
related to this operation and (iii) a write-off of the unamortized costs of
noncompete and related agreements of $384,000, which were being amortized on an
eight year life.

13. INDUSTRY SEGMENT INFORMATION

The Company has two operating segments which are in separate industries. The
steel distribution and processing segment handles flat-rolled steel products for
the automotive, truck and appliance industries. The waste management segment
recycles paint wastes for companies in the automotive industry. The Company's
discontinued spent acid recycling operation, previously included in the waste
management segment, has been excluded from that segment in the information
presented herein.

Net sales by segment includes sales to unaffiliated customers and intersegment
sales at prices which the Company believes approximate market. Intersegment
sales represent services provided by the waste management segment for the steel
distribution and processing segment. Corporate charges incurred on behalf of the
segments are allocated based on the percentage of time devoted to segment
business by corporate personnel. Operating profit (loss) by segment excludes
unallocated general corporate expenses and net interest expense. Corporate
assets consist primarily of cash and other short term assets.

Net sales of the steel distribution and processing segment include $9,176,000 in
1997 and $6,718,000 in 1996 for slitting of coil steel for a steel stamping
customer. No customer accounted for 10% or more of consolidated net sales in
1995. The accounts receivable balance from this customer at February 28, 1997
and February 29, 1996 was approximately $2,075,000 and $1,473,000, respectively.

F-22
<PAGE>

Meridian National Corporation

Notes to Consolidated Financial Statements (continued)

13. INDUSTRY SEGMENT INFORMATION (CONTINUED)

The following summarizes the Company's operations and identifiable assets:

<TABLE>
<CAPTION>
1997 1996 1995
------------------------------------------------------

<S> <C> <C> <C>
Net sales:
Steel distribution and processing $63,103,554 $51,198,434 $47,343,329
Waste management 3,417,070 3,533,514 3,459,107
Eliminations (9,400) (58,961) (163,673)
------------------------------------------------------
Total net sales $66,511,224 $54,672,987 $50,638,763
------------------------------------------------------
------------------------------------------------------

Operating profit:
Steel distribution and processing $ 2,487,412 $ 645,356 $ 108,002 (b)
Waste management (629,107)(a) 127,131 340,615
------------------------------------------------------
Total operating profit 1,858,305 (a) 772,487 448,617 (b)
General corporate expenses (938,624) (1,105,743) (983,038)
Interest expense - net (1,539,146) (1,394,940) (1,008,459)
------------------------------------------------------
Loss from continuing operations
before income taxes
and extraordinary gain $ (619,465)(a) $(1,728,196) $ (1,542,880)(b)
------------------------------------------------------
------------------------------------------------------
Identifiable assets:
Steel distribution and processing $27,003,764 $21,370,967 $20,657,480
Waste management 6,130,291 4,547,430 4,875,188
Corporate and discontinued
operations 647,263 695,293 1,195,342
Eliminations (80,508) (66,893) (100,749)
------------------------------------------------------
Total assets $33,700,810 $26,546,797 $26,627,261
------------------------------------------------------
------------------------------------------------------

</TABLE>

F-23
<PAGE>

Meridian National Corporation

Notes to Consolidated Financial Statements (continued)

13. INDUSTRY SEGMENT INFORMATION (CONTINUED)

1997 1996 1995
------------------------------------------

Depreciation and amortization:
Steel distribution and processing $ 436,435 $ 375,474 $ 798,302
Waste management 338,690 248,062 257,295
Corporate assets 37,116 29,991 23,152
------------------------------------------
Total depreciation and amortization $ 812,241 $ 653,527 $ 1,078,749
------------------------------------------
------------------------------------------

Capital expenditures:
Steel distribution and processing $ 135,336 $ 2,528,038 $ 229,311
Waste management 2,193,270 133,770 63,508
Corporate assets and discontinued
operations 5,135 135,466 80,123
------------------------------------------
Total capital expenditures $2,333,741 $ 2,797,274 $ 372,942
------------------------------------------
------------------------------------------

(a) Includes $275,908 cost of discontinued registration.
(b) Includes $2,285,548 write-down of noncurrent assets.

14. BUSINESS COMBINATIONS

On November 17, 1995 the Company acquired the business and assets of a steel
processing operation located in Gary, Indiana (the "Gary Facility"). The assets
acquired included inventory, supplies and equipment. The purchase price was
$2,499,000. The acquisition of assets was funded through an $800,000 equipment
loan and a $900,000 sale and leaseback arrangement for certain other equipment
included in the acquisition. The remainder of the purchase price was funded
through the Company's existing revolving credit facility. The acquisition was
accounted for as a purchase. Operations of the Gary Facility are included in the
consolidated financial statements beginning November 17, 1995.

The following unaudited pro forma financial information gives effect to the
acquisition of the Gary Facility by the Company assuming the transaction was
consummated as of March 1, 1994. The pro forma financial information is not
necessarily indicative of the actual results that would have occurred had the
transaction been consummated March 1, 1994 or of the future results of
operations which will be obtained by the Company as a result of the acquisition.

F-24
<PAGE>

Meridian National Corporation

Notes to Consolidated Financial Statements (continued)

14. BUSINESS COMBINATIONS (CONTINUED)

1996 1995
-------------------------------

Net sales from continuing operations $64,692,860 $62,160,574
Loss before discontinued operations and
extraordinary gain (1,590,196) (1,563,880)
Net loss (1,211,592) (1,126,366)

Earnings (loss) per common share:
Loss before extraordinary gain:
Continuing operations $ (0.66) $ (0.70)
Discontinued operations 0.09 0.09
Extraordinary gain 0.06 0.09
-------------------------------
Net loss $ (0.51) $ (0.52)
-------------------------------
-------------------------------

In fiscal 1986, the Company acquired all of the common stock of certain
subsidiaries for $4,600,000 (exclusive of acquisition costs of $215,200), made
up of $2,000,000 in cash and $2,600,000 in promissory notes. The controlling
interests in the subsidiaries were purchased from certain present and former
members of management who were also principal stockholders of the Company. The
acquisitions have been accounted for as purchases. The SEC staff questioned the
Company's accounting for the acquisitions and indicated that the accounting
differs from the staff's position on accounting for similar transactions. Under
the staff position, the transfer of assets and liabilities to the Company would
have been accounted for at historical cost, i.e., at the carryover basis of the
acquired companies. If the Company had applied such accounting, the accompanying
consolidated statements of operations would reflect reductions of costs of sales
and other costs and expenses aggregating $6,000, $6,000 and $1,263,000 in 1997,
1996 and 1995, respectively. These reductions reflect the elimination of charges
to write off and/or amortize the goodwill and increased bases in other assets
which would not have been recorded under the staff position. As a result, there
would have been net income of $68,000 in 1997 and $136,000 in 1995 and the net
loss would decrease to $1,343,000 in 1996.

F-25
<PAGE>

Meridian National Corporation

Notes to Consolidated Financial Statements (continued)

15. COST OF DISCONTINUED REGISTRATION

During 1997 the Company incurred expenses in conjunction with a proposed initial
public offering of approximately 50% of a subsidiary which includes the
Company's paint waste recycling operation. Due to weakness in the public market
for the offering and to other matters, the planned offering has been
indefinitely delayed. The Company expensed in the fourth quarter of fiscal 1997
approximately $276,000 of legal, accounting and other costs related to the
uncompleted offering.

F-26

<PAGE>

SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) of the Securities
Exchange Act of 1934, the Company has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized on the 24th day of
June, 1997.

MERIDIAN NATIONAL CORPORATION

By: /s/ William D. Feniger
-------------------------------------
William D. Feniger
Chairman of the Board of Directors,
President and Chief Executive Officer
(Principal Executive Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed by the following persons on behalf of the Company and in
the capacities and on the dates indicated.

Signature Title Date
--------- ----- ----

/s/ William D. Feniger Chairman of the Board June 24, 1997
- ------------------------
William D. Feniger of Directors, President
and Chief Executive Officer
(Principal Executive Officer)

/s/ James L. Rosino Vice President - Finance June 24, 1997
- ------------------------
James L. Rosino (Principal Financial and
Accounting Officer)

/s/ Wayne Gardenswartz Director June 24, 1997
- ------------------------
Wayne Gardenswartz

/s/ Jeffrey A. Slade Director June 24, 1997
- ------------------------
Jeffrey A. Slade

/s/ Larry Berman Director June 24, 1997
- -------------------------
Larry Berman

24
<PAGE>

MERIDIAN NATIONAL CORPORATION
FORM 10-K

INDEX TO EXHIBITS

10.01(p) Amendment No. 12 to the Loan and Security Agreement, dated July
25, 1996, among the Company, certain of its subsidiaries and
National Canada Finance Corp.

10.01(q) Term Note for $350,000, dated July 25, 1996, of the Company and
Environmental Purification Industries, Inc. to National Canada
Finance Corp.

10.01(r) Amendment No. 13 to the Loan and Security Agreement, dated
November 4, 1996, among the Company, certain of its subsidiaries
and National Canada Finance Corp.

10.01(s) Term Note for $1,700,000, dated November 4, 1996, of the Company
and Environmental Purification Industries, Inc. to National
Canada Finance Corp.

10.01(t) Amendment No. 14 to the Loan and Security Agreement, dated May
12, 1996, among the Company, certain of its subsidiaries and
National Canada Finance Corp.

10.02(d) Agreement to Defer Principal Payments on Promissory Note,
dated April 22, 1997, between the Company and William D.
Feniger.

10.13(h) Compromise Agreement, dated as of June 28, 1996, among the
Company, National Purification, MEPI Corp., EPI, Environmental
Purification Industries, Inc., Haden MacLellan Holdings, plc,
Haden, Inc., Haden Environmental Corporation and Haden
Purification, Inc.

10.19 Purchase Agreement, dated July 3, 1996, among Meridian
Environmental Services, Inc., Meridian International, Inc. and
Gerald M. Groves.

10.20(a) Stock Purchase Agreement, dated November 19, 1996, among
Environmental Purification Industries, Inc., Spencer Browne, MNP
Corporation and Elliot Smith.

10.20(b) Registration Rights Agreement, dated November 19, 1996, among
Environmental Purification Industries, Inc., Spencer Browne, MNP
Corporation and Elliot Smith.

10.20(c) Stockholders Agreement, dated November 19, 1996, among
Environmental Purification Industries, Inc., Spencer Browne, MNP
Corporation and Elliot Smith.

11 Statement of Computation of Earnings per Share

21 List of Subsidiaries of Registrant

23 Consent of Independent Auditors

27 Financial Data Schedule

<PAGE>

EXHIBIT 10.01(p)

AMENDMENT NO. 12 TO THE
LOAN AND SECURITY AGREEMENT

THIS AMENDMENT NO. 12 TO THE LOAN AND SECURITY AGREEMENT ("Amendment No.
12") is made and entered into by and among MERIDIAN NATIONAL CORPORATION, a
Delaware corporation ("MNC"), OTTAWA RIVER STEEL CO., an Ohio corporation
("ORS"), NATIONAL METAL PROCESSING, INC., a Michigan corporation ("NMP"),
INTERSTATE METAL PROCESSING, INC., an Ohio corporation ("IMP"), PRECISE PAC,
INC. (f/k/a National Metal Shearing Corp.), a Michigan corporation ("PPI"), and
MERIDIAN ENVIRONMENTAL SERVICES, INC., a Michigan corporation ("MES"; and
together with MNC, ORS, NMP, IMP and PPI sometimes shall be referred to
collectively as "Borrowers" and individually as a "Borrower"), and NATIONAL
CANADA FINANCE CORP. ("Bank")

RECITALS

A. On December 6, 1989, Borrowers and the Bank of New England, N.A.
("BNE") entered into a certain Loan And Security Agreement (the "Loan
Agreement," all terms defined therein being used in this Amendment No. 12 with
the same meaning unless otherwise stated) under the terms of which BNE loaned to
Borrowers $1,000,000 on a term loan basis, and $7,000,000 on a revolving loan
basis, pursuant to the provisions set forth in the Loan Agreement.

B. In March 1990, Borrowers and BNE entered into Amendment No. 1 to Loan
And Security Agreement ("Amendment No. 1") to provide for (1) an increase in the
amount of funds Borrowers could borrower under the Revolving Loan Borrowing Base
in the form of an over-advance of not more than Five Hundred Thousand Dollars
($500,000), and (2) such other items as are set forth in Amendment No. 1.

C. On September 14, 1990, Borrowers and Bank (as the
successor-in-interest to BNE and BNE's rights, duties, and remedies under the
Loan Agreement) entered into Amendment No. 2 To The Loan And Security Agreement
("Amendment No. 2") to (1) decrease the Revolving Loan Borrowing Base on
Eligible Inventory from $4,000,000 to $3,000,000, (2) decrease the amount of
the Revolving Loan Borrowing Base by the face amount of the Letters of Credit
issued by Bank to Borrowers, (3) modify the definition of "Revolving Loan
Borrowing Base", and (4) establish a compensating balance of $1,000,000 in
Borrowers' Collateral.

D. Effective as of May 31, 1991, each Borrowers and Bank entered into
Amendment No. 3 To The Loan And Security Agreement ("Amendment No. 3") to (1)
decrease the maximum amount of the Revolving Loan from $7,000,000 to $5,300,000,
(2) reduce the outstanding principal balance of the Term Loan to $400,000, and
(3) reduce the compensating balance to $700,000.

E. Effective as of June 22, 1992, Borrowers and Bank entered into
Amendment No. 4 To The Loan And Security Agreement ("Amendment No. 4") to
modify certain covenants set forth in the Loan Agreement.

F. On or about February 1, 1993, ORS and Canterbury Steel Corporation
(kna CSX, Inc.), a Michigan corporation ("Canterbury"), entered into that
certain Partnership Agreement of Canterbury

<PAGE>

Steel Company ("CSC") to engage in, among other things, the steel service center
business. ORS and Canterbury acquired a 50.1% and a 49.9% general partnership
interest, respectively, in CSC.

G. On May 11, 1993, Borrowers, CSC and Bank entered into Amendment No.
5 To The Loan And Security Agreement ("Amendment No. 5") to (1) add CSC as a
co-obligor for the repayment of all loans to Borrowers and CSC by Bank, (2)
provide for certain representations, warranties and covenants of CSC, and (3)
provide for such other amendments and modifications as are set forth in
Amendment No. 5.

H. In a letter from Borrowers and CSC to Bank dated June 9, 1993 (the
"Letter Amendment"), Borrowers, CSC and Bank amended the Loan Agreement, as
amended, to modify certain financial covenants of Borrowers and CSC.

I. On October 20, 1993, Borrowers, CSC and Bank entered into Amendment
No. 6 To The Loan And Security Agreement ("Amendment No. 6") to (1) increase the
maximum amount of funds Borrowers and CSC may borrow under the Revolving Loan
from $5,300,000 to $6,000,000, (2) modify certain financial covenants of
Borrowers and CSC, and (3) provide for such other modifications as are set forth
in the provisions of Amendment No. 6.

J. In or about January of 1994, CSC was dissolved and liquidated by ORS
and Canterbury.

K. On January 31, 1994, Borrowers and Bank entered into Amendment No. 7
To The Loan And Security Agreement ("Amendment No. 7") to (1) increase the
maximum amount of funds Borrowers may borrow under the Revolving Loan from
$6,000,000 to $7,200,000, (2) provide Borrowers with a $300,000 Term Loan
facility, (3) modify certain financial covenants of Borrowers, and (4) provide
for such other amendments and modifications as are set forth in Amendment No. 7.

L. Effective as of November 30, 1994, Borrowers and Bank entered into
amendment No. 8 To The Loan And Security Agreement ("Amendment No. 8") to (1)
increase the maximum amount of funds Borrowers may borrow under the Revolving
Loan from $7,200,000 to $9,000,000, (2) increase the Revolving Loan Borrowing
Base on Eligible Inventory to $4,500,000, (3) decrease the Contract Rate on the
Revolving Loan to one (1) percentage point above the Base Rate, (4) modify
certain financial covenants of Borrowers, and (5) provide for such other
amendments and modifications as are set forth in Amendment No. 8.

M. Effective as of February 14, 1995, Borrowers and Bank entered into
Amendment No. 9 To The Loan And Security Agreement ("Amendment No. 9") to (1)
increase the maximum amount of funds Borrowers may borrow under the Revolving
Loan from $9,000,000 to $10,000,000, (2) increase the Revolving Loan Borrowing
Base on Eligible Inventory from $4,500,000 to $5,000,000, and (3) provide for
such other amendments and modifications as are set forth in Amendment No. 9.

N. Effective as of May 25, 1995, Borrowers and Bank entered into
Amendment No. 10 To The Loan And Security Agreement ("Amendment No. 10")
to (1) increase the maximum amount of funds Borrowers may borrow under the
Revolving Loan from $10,000,000 to $12,000,000, (2) increase the Revolving
Loan Borrowing Base on Eligible Inventory from $5,000,000 to $5,500,000, (3)
modify certain covenants of Borrowers, and (4) provide for such other amendments
and modifications as are set forth in Amendment No. 10.

<PAGE>

O. Effective as of February 29, 1996, Borrowers and Bank entered into
Amendment No. 11 To The Loan And Security Agreement ("Amendment No. 11") to
(1) provide a $300,000 Term Loan facility to Environmental Purification
Industries, Inc. ("EPI"), a subsidiary of MNC, and (2) provide for such other
amendments and modifications as are set forth in Amendment No. 11.

P. Borrowers and Bank now desire to amend the Loan Agreement, as
amended, to (1) provide a $350,000 Term Loan facility to EPI, and (2) provide
for such other amendments and modifications as are set forth in this
Amendment No. 12.

Q. Due to the affiliation and financial interdependence of Borrowers,
Bank and Borrowers have determined that it would be in their respective best
interests for each Borrower to be a joint and several obligor of each other
Borrower's obligations to Bank in accordance with the provisions set forth in
the Loan Agreement, as amended by Amendment No. 1, Amendment No. 2, Amendment
No. 3, Amendment No. 4, Amendment No. 5, the Letter Amendment, Amendment No. 6,
Amendment No. 7, Amendment No. 8, Amendment No. 9, Amendment No. 10, Amendment
No. 11 and this Amendment No. 12.

PROVISIONS

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and provisions set forth in this Amendment No. 12, the parties agree as follows:

I. AMENDMENTS TO LOAN AGREEMENT.

The Loan Agreement is amended as follows:

A. On and after the effective date of this Amendment No. 12, each
reference in the Loan Agreement, Amendment No. 1, Amendment No. 2, Amendment No.
3, Amendment No. 4, Amendment No. 5, the Letter Amendment, Amendment No. 6,
Amendment No. 7, Amendment No. 8, Amendment No. 9, Amendment No. 10 and
Amendment No. 11 to "this Agreement," "hereunder," and "hereof," or words of
like import referring to the Loan Agreement shall mean and refer to the Loan
Agreement as amended by Amendment No. 1, Amendment No. 2, Amendment No. 3,
Amendment No. 4, Amendment No. 5, the Letter Amendment, Amendment No. 6,
Amendment No. 7, Amendment No. 8, Amendment No. 9, Amendment No. 10, Amendment
No. 11 and Amendment No. 12. The Loan Agreement, as amended by Amendment No.
1, Amendment No. 2, Amendment No. 3, Amendment No. 4, Amendment No. 5, the
Letter Amendment, Amendment No. 6, Amendment No. 7, Amendment No. 8, Amendment
No. 9, Amendment No. 10, Amendment No. 11 and Amendment No. 12 is, and shall
continue to be, in full force and effect and hereby is ratified and confirmed in
all respects.

B. A new definition of "EPI First Term Note" is added to Section 1.1 of
the Loan Agreement, as amended, as follows:

EPI FIRST TERM NOTE - The term note to be executed by Environmental
Purification Industries, Inc. and MNC in the form attached to
Amendment No. 11 as EXHIBIT 1 (with such changes or modifications,
if any, to which Bank may agree) evidencing the EPI First Term Loan
made by Bank pursuant to Section 2.1(B) of this Agreement, together
with all amendments, and all notes issued in substitution or
replacement of, such term note.

<PAGE>

C. A new definition of "EPI Second Term Note" is added to Section 1.1 of
the Loan Agreement as amended, as follows:

EPI SECOND TERM NOTE The term note to be executed by Environmental
Purification Industries, Inc. and MNC in the form attached to
Amendment No. 12 as EXHIBIT 1 (with such changes or modifications,
if any, to which Bank may agree) evidencing the EPI Second Term Loan
made by Bank pursuant to Section 2.1(C) of this Agreement, together
with all amendments, and all notes issued in substitution or
replacement of, such term note.

D. The definition of "EPI Term Note" is set forth in Section 1.1 of the
Loan Agreement, as amended, is amended and restated in its entirety as follows:

EPI TERM NOTES - The EPI First Term Note and the EPI Second Term Note.

E. The definition of "Notes" set forth in Section 1.1 of the Loan
Agreement, as amended, is amended and restated in its entirety as follows:

NOTES - The Credit Note, Term Note, EPI Term Notes and other notes
or other instruments evidencing Borrowers' obligation to repay any
Obligations.

F. Section 2.1 of the Loan Agreement, as amended, is amended and restated
in its entirety as follows:

2.1 TERM LOAN AND EPI TERM LOANS.

(A) TERM LOAN. Bank shall make a term loan (the "Term Loan")
to Borrowers in the original principal amount of Three Hundred
Thousand Dollars ($300,000). The Term Loan shall be subject to
repayment in accordance with, and bear interest as provided in,
Section 2.2(A) of this Agreement and shall otherwise be evidenced by,
and repayable in accordance with, the Term Note.

(B) EPI FIRST TERM LOAN. Bank shall make a term loan (the
"EPI First Term Loan") to Environmental Purification Industries,
Inc., a subsidiary of MNC, in the original principal amount of Three
Hundred Thousand Dollars ($300,000). The EPI First Term Loan shall be
co-signed by MNC and shall be subject to repayment in accordance with,
and bear interest as provided in, Section 2.2(B) of this Agreement and
shall otherwise be evidenced by, and repayable in accordance with, the
EPI First Term Note.

(C) EPI SECOND TERM LOAN. Bank shall make a term loan (the
"EPI Second Term Loan") to Environmental Purification Industries,
Inc., a subsidiary of MNC, in the original principal amount of Three
Hundred Fifty Thousand Dollars ($350,000). The EPI Second Term Loan
shall be co-signed by MNC and shall be subject to repayment in
accordance with, and bear interest as provided in, Section 2.2(C) of
this Agreement and shall otherwise be evidenced by, and repayable in
accordance with, the EPI Second Term Note.

<PAGE>

F. Section 2.2 of the Loan Agreement, as amended, is amended and restated
in its entirety as follows:

2.2 PAYMENT TERMS OF TERM LOAN AND EPI TERM LOANS.

(A) TERM LOAN.

(1) INTEREST. The Term Loan shall bear interest on the unpaid
principal balance until the date paid in full at a rate per
annum equal to the Contract Rate in effect from time to
time, such interest being payable monthly on the last day of
each month commencing January 31, 1994. Any increase or
decrease in the interest rate resulting from a change in
the Base Rate shall become effective on the date of such
change. Interest shall be computed on a 360-day year basis
based upon the actual number of days elapsed.

(2) FIXED PRINCIPAL INSTALLMENTS. Subject otherwise to
the provisions of the Term Note, the principal balance of
the Term Loan shall be payable in sixty (60) equal monthly
installments of Five Thousand Dollars ($5,000) each,
commencing on January 31, 1994, and continuing on the last
day of each successive month thereafter until paid in full.

(B) EPI FIRST TERM LOAN.

(1) INTEREST. The EPI First Term Loan shall bear interest on
the unpaid principal balance until the date paid in full at
a rate per annum equal to the Contract Rate in effect from
time to time, such interest being payable monthly on the
last day of each month commencing March 31, 1996. Any
increase or decrease in the interest rate resulting from a
change in the Base Rate shall become effective on the date
of such change. Interest shall be computed on a 360 day
year basis based upon the actual number of days elapsed.

(2) PRINCIPAL. Subject otherwise to the provisions of
the EPI First Term Note, the principal amount of the EPI
First Term Loan shall be payable in full on July 31, 1996
(pursuant to letter agreement dated June 4, 1996).

(1) INTEREST. The EPI Second Term Loan shall bear interest on
the unpaid principal balance until the date paid in full at
a rate per annum equal to the Contract Rate in effect from
time to time, such interest being payable monthly on the
last day of each month commencing July 31, 1996. Any
increase or decrease in the interest rate resulting from a
change in the Base Rate shall become effective on the date
of such change. Interest shall be computed on a 360 day
year basis based upon the actual number of days elapsed.

<PAGE>

(2) PRINCIPAL. Subject otherwise to the provisions of the EPI
Second Term Note, the principal amount of the EPI Second
Term Loan and any unpaid interest shall be payable in full
on August 15, 1996.

II. REPRESENTATIONS, WARRANTIES AND COVENANTS OF BORROWERS.

A. Each Borrower represents, warrants and covenants that it has good and
marketable title to the Collateral free and clear of all liens, claims,
mortgages, security interests, pledges, charges or encumbrances whatsoever,
except as have been granted to Bank.

B. To the extent such representations, warranties and covenants pertain
to or are to be performed by Borrowers, all representations, warranties and
covenants in the Loan Agreement, as amended, shall continue and be binding on
Borrowers under this Amendment No. 12.

III. CONDITIONS PRECEDENT.

Each Borrower acknowledges that the effectiveness of this Amendment No. 12
is subject to the following:

A. The receipt by Bank on the date of this Amendment No. 12 in form and
substance and satisfactory to Bank and its counsel of the following:

1. A certified copy of resolutions of Members of the Board of Directors
of each Borrower approving this Amendment No. 12 and all of the matters
described in this Amendment No. 12, and every other document or instrument
required to be delivered pursuant to this Amendment No. 12.

2. A Certificate signed by a duly authorized officer of each Borrower to
the effect that:

(a) As of the date hereof, except for Events of Default which have
been disclosed to Bank concerning Borrower's compliance with certain
financial covenants, no Event of Default has occurred and is continuing,
and no event has occurred which, with the giving of notice or passage of
time or both, would constitute an Event of Default.

(b) Except as otherwise disclosed, the representations and warranties
of Borrowers set forth in Section 6 of the Loan Agreement are true and
correct on the date of this Amendment No. 12 with the same force and effect
as if made on this date.

3. A Certificate of an officer of each Borrower certifying (a) to the
incumbency and signatures of the officers of such Borrower signing this
Amendment No. 12 and every other document and instrument to be delivered
pursuant to this Amendment No. 12, and (b) to the effect that such Borrower's
Articles (or Certificate) of Incorporation and Code of Regulations (or By-laws)
have not been amended since the execution of the Loan Agreement except for (i)
the name change by PPI from "National Metal Shearing Corp." to Precise Pac, Inc.
on or about April, 1992, and (ii) the reverse stock split by MNC in August of
1993.

4. A Certificate signed by a duly authorized officer of EPI certifying:

<PAGE>

(a) to the incumbency and signatures of the officers of EPI signing
the EPI Second Term Note;

(b) to the effect that EPI is a corporation duly organized, validly
existing and in good standing under the laws of its state of
incorporation and is duly qualified and authorized to do business
and is in good standing as a foreign corporation in each other
state or jurisdiction where the character of its property or the
nature of its activities makes such qualification necessary; and

(c) to the effect that EPI has the right and power and is duly
authorized and empowered to enter into, execute, deliver and
perform its obligations under the EPI Second Term Note and that
the EPI Second Term Note has been duly authorized and approved by
the Board of Directors of EPI and is the legal, valid and binding
obligation of EPI enforceable against EPI in accordance with its
terms.

5. A certified copy of resolutions of Members of the Board of
Directors of EPI approving the EPI Second Term Note and every other
document or instrument required to be delivered by EPI pursuant to
this Amendment No. 12.

6. The EPI Second Term Note, in substantially the form of
EXHIBIT 1 attached to this Amendment No. 12, duly executed by EPI and
MNC.

7. Such other documents and instruments as Bank may reasonably
request to implement this Amendment No. 12 and the transactions
described in this Amendment No. 12.

B. The receipt by Bank from Borrowers of an amendment fee in the
amount of $6,000.

IV. APPLICABLE LAW.

This Amendment No. 12 shall be deemed to be a contract under the laws of
the State of Ohio and for all purposes shall be construed in accordance with the
laws of such State.

V. COUNTERPARTS.

This Amendment No. 12 may be executed in any number of counterparts, all of
which taken together shall constitute one and the same instrument, and any one
of the parties to this Amendment No. 12 may execute this Amendment No. 12 by
signing any such counterpart.

<PAGE>

IN WITNESS WHEREOF, the parties have executed this Amendment No. 12 by
their duly authorized officers this 25TH day of July 1996.

NATIONAL CANADA FINANCE CORP. MERIDIAN NATIONAL CORPORATION

By: /s/ Jack Jankovic By: /s/ James L. Rosino
------------------ --------------------
Title: Vice President Title: Vice President - Finance

PRECISE PAC, INC. (f/k/a)
NATIONAL METAL PROCESSING, INC. National Metal Shearing
By: /s/ James L. Rosino By: /s/ James L. Rosino
-------------------- --------------------
Title: Vice President - Finance Title: Vice President - Finance

OTTAWA RIVER STEEL CO. MERIDIAN ENVIRONMENTAL SERVICES,
INC.
By: /s/ James L. Rosino By: /s/ James L. Rosino
-------------------- --------------------
Title: Vice President - Finance Title: Vice President - Finance

INTERSTATE METAL PROCESSING, INC.
By: /s/ James L. Rosino
--------------------
Title: Vice President - Finance

<PAGE>

EXHIBIT 10.01(q)
TERM NOTE
$350,000 Cleveland, Ohio

July 25, 1996

FOR VALUE RECEIVED, the undersigned, jointly and severally, promise to pay
to the order of NATIONAL CANADA FINANCE CORP. ("Bank") the principal amount of
THREE HUNDRED FIFTY THOUSAND DOLLARS ($350,000) as hereinafter provided, with
interest on the unpaid principal balance from time to time outstanding at a rate
per annum equal to one and one-half (1 1/2) percentage points above Bank's Base
Rate (as defined in the Loan Agreement, as described below). Interest shall be
payable monthly commencing on July 31, 1996, and continuing on the last day of
each month thereafter until the entire principal amount has been repaid in full.
Any increase or decrease in the interest rate resulting from a change in Bank's
Base Rate shall become effective on the date of such change. Interest shall be
computed on a 360-day year basis based on the actual number of days elapsed.

The undersigned agree to pay the principal of and any unpaid interest on
this Term Note (the "Note") in full on August 15, 1996.

Payment of the principal of and interest on this Note shall be made in
lawful money of the United States of America to Bank at 125 West 55th Street,
New York, New York, or at such other place as the holder shall have designated
to the undersigned in writing.

This Note is issued pursuant to the Loan And Security Agreement, entered
into by and among Meridian National Corporation, Ottawa River Steel Co.,
National Metal Processing, Inc., Interstate Metal Processing, Inc., Precise
Pac, Inc., Meridian Environmental Services, Inc. (collectively "Borrowers")
and Bank of New England, N.A., dated December 9, 1989, as amended (the "Loan
Agreement"), to which reference is hereby made for a statement of the rights
and obligations of Bank and the duties and obligations of the Borrowers in
relation thereto, but neither this reference to the Loan Agreement nor any
provision thereof shall affect or impair the absolute and unconditional
obligation of the undersigned to pay the principal of, and interest on, this
Note when due.

This Note is secured by, among other things, the security interests and
liens described in the Loan Agreement.

The undersigned may prepay all or any portion of this Note at any time and
in any amount without penalty.

<PAGE>

all amounts outstanding under this Note at a rate per annum (the "Default Rate")
of two (2) percentage points plus the rate otherwise applicable to all amounts
outstanding under this Note from the date when due or the date such Event of
Default has occurred, as applicable, until all amounts due herein are paid in
full or such Event of Default has been waived by Bank; provided, however, that
the Default Rate shall not exceed the maximum rate permitted by applicable law.

Upon the nonpayment or partial payment of any payment of principal or
interest or any other obligation due and owing to Bank, all or any portion of
the principal and interest due or to become due under this Note shall become at
once due and payable at the option of the holder of this Note without notice,
demand, presentment, or dishonor, which the undersigned hereby waive.

The undersigned agree to pay upon default the costs of collection including
reasonable fees of attorneys.

No delay or omission on the part of the holder in exercising any right
under this Note shall operate as a waiver of such right or of any other right
of such holder, nor shall any delay, omission or waiver on any one occasion
be deemed a bar to or waiver of the same or any other right on any future
occasion. The undersigned and every endorser of this Note regardless of the
time, order or place of signing waive presentment, demand, protest and
notices of every kind and assent to any one or more extensions or
postponements of the time of payment or any other indulgences, and to any
substitutions, exchanges, or releases of any other parties or persons
primarily or secondarily liable.

The undersigned authorize any attorney-at-law to appear before any court of
record, state or Federal, in the county of the State of Ohio in which this Note
was executed or in any other State of the United States of America after the
unpaid principal of this Note becomes due, waive the issuance and service of
process, admit the maturity of this Note, confess judgment against the
undersigned in favor of Bank for the amount then appearing due, together with
interest thereon and costs of suit, and thereupon to release all errors and
waive all rights of appeal and stay of execution. The foregoing warrant of
attorney shall survive any judgment, it being understood that should any
judgment be vacated for any reason, the foregoing warrant of attorney
nevertheless may thereafter be used for obtaining an additional judgment or
judgments.

<PAGE>

This Note is being executed and delivered in Cleveland, Ohio.

WARNING - - BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE
AND COURT TRIAL. IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE
TAKEN AGAINST YOU WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A
COURT CAN BE USED TO COLLECT FROM YOU REGARDLESS OF ANY CLAIMS YOU
MAY HAVE AGAINST THE CREDITOR WHETHER FOR RETURNED GOODS, FAULTY
GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT, OR ANY
OTHER CAUSE

ENVIRONMENTAL PURIFICATION MERIDIAN NATIONAL CORPORATION
INDUSTRIES

By:/s/ Real P. Remillard By:/s/ James L. Rosino
------------------------- --------------------------

Title: Chief Financial Officer Title: Vice President - Finance
------------------------ -------------------------

Page 3 of 3

<PAGE>

EXHIBIT 10.01(r)

AMENDMENT NO. 13 TO THE
LOAN AND SECURITY AGREEMENT

THIS AMENDMENT NO. 13 TO THE LOAN AND SECURITY AGREEMENT ("Amendment No.
13") is made and entered into by and among MERIDIAN NATIONAL CORPORATION, a
Delaware corporation ("MNC"), OTTAWA RIVER STEEL CO., an Ohio corporation
("ORS"), NATIONAL METAL PROCESSING, INC., a Michigan corporation ("NMP"),
INTERSTATE METAL PROCESSING, INC., an Ohio corporation ("IMP"), PRECISE PAC,
INC. (k/n/a National Metal Shearing Corp.), a Michigan corporation ("PPI"), and
MERIDIAN ENVIRONMENTAL SERVICES, INC., a Michigan corporation ("MES"; and
together with MNC, ORS, NMP, IMP and PPI sometimes shall be referred to
collectively as "Borrowers" and individually as a "Borrower"), and NATIONAL
CANADA FINANCE CORP. ("Bank").

RECITALS

A. On December 6, 1989, Borrowers and the Bank of New England, N.A.
("BNE") entered into a certain Loan And Security Agreement (the "Loan
Agreement," all terms defined therein being used in this Amendment No. 13 with
the same meaning unless otherwise stated) under the terms of which BNE loaned to
Borrowers $1,000,000 on a term loan basis, and $7,000,000 on a revolving loan
basis, pursuant to the provisions set forth in the Loan Agreement.

C. On September 14, 1990, Borrowers and Bank (as the successor-in-
interest to BNE and BNE's rights, duties, and remedies under the Loan Agreement)
entered into Amendment No. 2 To The Loan And Security Agreement ("Amendment No.
2") to (1) decrease the Revolving Loan Borrowing Base on Eligible Inventory from
$4,000,000 to $3,000,000, (2) decrease the amount of the Revolving Loan
Borrowing Base by the face amount of the Letters of Credit issued by Bank to
Borrowers, (3) modify the definition of "Revolving Loan Borrowing Base", and (4)
establish a compensating balance of $1,000,000 in Borrowers' Collateral.

D. Effective as of May 31, 1991, Borrowers and Bank entered into
Amendment No. 3 To The Loan And Security Agreement ("Amendment No. 3") to (1)
decrease the maximum amount of the Revolving Loan from $7,000,000 to $5,300,000,
(2) reduce the outstanding principal balance of the Term Loan to $400,000, and
(3) reduce the compensating balance to $700,000.

E. Effective as of June 22, 1992, Borrowers and Bank entered into
Amendment No. 4 To The Loan And Security Agreement ("Amendment No. 4") to modify
certain covenants set forth in the Loan Agreement.

<PAGE>

F. On or about February 1, 1993, ORS and Canterbury Steel Corporation
(kna CSX, Inc.), a Michigan corporation ("Canterbury"), entered into that
certain Partnership Agreement of Canterbury Steel Company ("CSC") to engage in,
among other things, the steel service center business. ORS and Canterbury
acquired a 50.1% and a 49.9% general partnership interest, respectively, in CSC.

G. On May 11, 1993, Borrowers, CSC and Bank entered into Amendment No. 5
To The Loan And Security Agreement ("Amendment No. 5") to (1) add CSC as a co-
obligor for the repayment of all loans to Borrowers and CSC by Bank, (2) provide
for certain representations, warranties and covenants of CSC, and (3) provide
for such other amendments and modifications as are set forth in Amendment No. 5.

J. In or about January of 1994, CSC was dissolved and liquidated by ORS
and Canterbury.

L. Effective as of November 30, 1994, Borrowers and Bank entered into
amendment No. 8 To The Loan And Security Agreement ("Amendment No. 8") to (1)
increase the maximum amount of funds Borrowers may borrow under the Revolving
Loan from $7,200,000 to $9,000,000, (2) increase the Revolving Loan Borrowing
Base on Eligible Inventory to $4,500,000, (3) decrease the Contract Rate on the
Revolving Loan to one (1) percentage point above the Base Rate, 4) modify
certain financial covenants of Borrowers, and (5) provide for such other
amendments and modifications as are set forth in Amendment No. 8.

N. Effective as of May 25, 1995, Borrowers and Bank entered into
Amendment No. 10 To The Loan And Security Agreement ("Amendment No. 10") to (1)
increase the maximum amount of funds

<PAGE>

Borrowers may borrow under the Revolving Loan from $10,000,000 to $12,000,000,
(2) increase the Revolving Loan Borrowing Base on Eligible Inventory from
$5,000,000 to $5,500,000, (3) modify certain covenants of Borrowers, and (4)
provide for such other amendments and modifications as are set forth in
Amendment No. 10.

0. Effective as of February 29, 1996, Borrowers and Bank entered into
Amendment No. 11 To The Loan And Security Agreement ("Amendment No. 11") to (1)
provide a $300,000 Term Loan facility to Environmental Purification Industries,
Inc. ("EPI"), a Delaware corporation and a subsidiary of MNC, and (2) provide
for such other amendments and modifications as are set forth in Amendment No.
11.

P. Effective as of July 25, 1996, Borrowers and Bank entered into
Amendment No. 12 To the Loan and Security Agreement ("Amendment No. 12") to (1)
provide a $350,000 Term Loan facility to EPI, and (2) provide for such other
amendments and modifications as are set forth in Amendment No. 12.

Q. Borrowers and Bank now desire to amend the Loan Agreement, as amended,
to (1) increase the maximum amount of funds Borrowers may borrow under the
Revolving Loan from $12,000,000 to $12,400,000 for the period commencing on the
effective date of this Amendment No. 13 through and including December 31, 1996,
(2) modify the payment terms of the EPI Term Loans, (3) provide an additional
$1,700,000 Term Loan facility to EPI and Environmental Purification Industries
Company, an indirect wholly owned partnership of MNC ("EPIC"), (4) provide for a
limited guaranty by MNP Corporation ("MNP") of the obligations of EPI and EPIC
under the EPI Third Term Loan (as defined in this Amendment No. 13) (the "MNP
Guaranty"), (5) provide for an unlimited guaranty by William D. Feniger of
Borrowers' obligations under the Loan Agreement, as amended (the "Feniger
Guaranty"), (6) modify certain covenants of Borrowers, and (7) provide for such
other amendments and modifications as are set forth in this Amendment No. 13.

R. Due to the affiliation and financial interdependence of Borrowers,
Bank and Borrowers have determined that it would be in their respective best
interests for each Borrower to be a joint and several obligor of each other
Borrower's obligations to Bank in accordance with the provisions set forth in
the Loan Agreement, as amended by Amendment No. 1, Amendment No. 2, Amendment
No. 3, Amendment No. 4, Amendment No. 5, the Letter Amendment, Amendment No. 6,
Amendment No. 7, Amendment No. 8, Amendment No. 9, Amendment No. 10, Amendment
No. 11, Amendment No. 12 and this Amendment No. 13.

PROVISIONS

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and provisions set forth in this Amendment No. 13, the parties agree as follows:

I. AMENDMENTS TO LOAN AGREEMENT.

The Loan Agreement is amended as follows:

A. On and after the effective date of this Amendment No. 13, each
reference in the Loan Agreement, Amendment No. 1, Amendment No. 2, Amendment No.
3, Amendment No. 4, Amendment

<PAGE>

No. 5, the Letter Amendment, Amendment No. 6, Amendment No. 7, Amendment No. 8,
Amendment No. 9, Amendment No. 10, Amendment No. 11 and Amendment No. 12 to
"this Agreement," "hereunder," and "hereof," or words of like import referring
to the Loan Agreement shall mean and refer to the Loan Agreement as amended by
Amendment No. 1, Amendment No. 2, Amendment No. 3, Amendment No. 4, Amendment
No. 5, the Letter Amendment, Amendment No. 6, Amendment No. 7, Amendment No. 8,
Amendment No. 9, Amendment No. 10, Amendment No. 11, Amendment No. 12 and
Amendment No. 13. The Loan
Agreement, as amended by Amendment No. 1, Amendment No. 2, Amendment No. 3,
Amendment No. 4, Amendment No. 5, the Letter Amendment, Amendment No. 6,
Amendment No. 7, Amendment No. 8, Amendment No. 9, Amendment No. 10, Amendment
No. 11, Amendment No. 12 and Amendment No. 13 is, and shall continue to be, in
full force and effect and hereby is ratified and confirmed in all respects.

B. The definition of "Revolving Loan Borrowing Base" set forth in Section
1.1 of the Loan Agreement, as amended, is amended and restated in its entirety
as follows:

Revolving Loan Borrowing Base - Subject to the provisions of Section
2.3(13) of this Agreement, an amount equal to the lesser of the following
amounts:

(i) the sum of (a) eighty percent (80%) of the unpaid face amount
of Eligible Accounts (less the maximum discounts, credits and
allowances which may be taken by or granted to Account Debtors in
connection therewith) plus (b) fifty percent (50%) of the lesser of
the cost (determined on a first-in, first-out basis) or market value
of Eligible Inventory; provided, however, that the Revolving Loan
Borrowing Base on Eligible Inventory shall in no event exceed
$5,500,000, minus (c) the face amount of all Letters of Credit issued
by Bank on behalf of any Borrower or Borrowers; or

(ii) (a) $12,400,000 for the period commencing on the effective
date of Amendment No. 13 through and including December 31, 1996 or
(b) $12,000,000 for any period after December 31, 1996.

C. The definition of "Credit Note" set forth in Section 1.1 of the Loan
Agreement, as amended, is amended and restated in its entirety as follows:

Credit Note - The demand note executed by Borrowers and delivered to
Bank, dated December 6, 1989, evidencing the revolving credit loan made by
Bank pursuant to Section 2.3 of this Agreement, together with (a) Amendment
No. I To Demand Note, executed by Borrowers and delivered to Bank, dated as
of May 31, 1991, (b)Amendment No. 2 To Demand Note, executed by Borrowers
and CSC and delivered to Bank, dated May 11, 1993, (c) Amendment No. 3 To
Demand Note, executed by Borrowers and CSC and delivered to Bank, dated as
of October 20, 1993, (d) Amendment No. 4 To Demand Note, executed by
Borrowers and delivered to Bank, dated January 31, 1994, (e) Amendment No.
5 To Demand Note, executed by Borrowers and delivered to Bank, dated as of
November 30, 1994, (f) Amendment No. 6 To Demand Note, executed by
Borrowers and delivered to Bank, dated as of February 14, 1995, (g)
Amendment No. 7 To Demand Note executed by Borrowers and delivered to Bank,
dated as of May 25, 1995, and (h) Amendment No. 8 To Demand Note, a copy of
which is attached to Amendment No. 13 as EXHIBIT 1, and all other
amendments to, and all notes issued in substitution for or replacement of;
such demand note.

<PAGE>

D. The definition of "Contract Rate" set forth in Section 1.1 of the Loan
Agreement, as amended, is amended and restated in its entirety as follows:

CONTRACT RATE - A fluctuating rate equal to (i) with respect to the
Revolving Loan, one (1) percentage point above the Base Rate, and (ii) with
respect to the Term Loan and the EPI Term Loans, are one and one-half
(1-1/2) percentage points above the Base Rate.

E. New definitions of "EPI First Term Loan", "EPI Second Term Loan", "EPI
Third Term Loan" and "EPI Term Loans" are added to Section 1.1 of the Loan
Agreement, as amended, as follows:

EPI FIRST TERM LOAN - As defined in Section 2.1 of this Agreement, as
amended.

EPI SECOND TERM LOAN - As defined in Section 2.1 of this Agreement, as
amended.

EPI THIRD TERM LOAN - As defined in Section 2.1 of this Agreement, as
amended.

EPI TERM LOANS - The First EPI Term Loan, the Second EPI Term Loan and
the Third EPI Term Loan.

F. A new definition of "EPI Third Term Note" is added to Section 1.1 of
the Loan Agreement, as amended, as follows:

EPI THIRD TERM NOTE - The term note to be executed by Environmental
Purification Industries, Inc., Environmental Purification
Industries Company and MNC in the form attached to Amendment No. 13 as
EXHIBIT 2 (with such changes or modifications, if any, to which Bank
may agree) evidencing the EPI Third Term Loan made by Bank pursuant to
Section 2.1(D) of this Agreement, together with all amendments, and
all notes issued in substitution or replacement of, such term note.

G. The definition of "EPI Term Notes" set forth in Section 1.1 of the
Loan Agreement, as amended, is amended and restated in its entirety as follows:

EPI TERM NOTES - The EPI First Term Note, the EPI Second Term Note and
the EPI Third Term Note.

H. Section 2.1 of the Loan Agreement, as amended, is amended and restated
in its entirety as follows:

2.1 TERM LOAN AND EPI TERM LOANS.

<PAGE>

provided in, Section 2.2(A) of this Agreement and shall otherwise be
evidenced by, and repayable in accordance with, the Term Note.

(B) EPI FIRST TERM LOAN. Bank shall make a term loan (the "EPI
First Term Loan") to Environmental Purification Industries, Inc., a
subsidiary of MNC, in the original principal amount of Three Hundred
Thousand Dollars ($300,000). The EPI First Term Loan shall be co-
signed by MNC and shall be subject to repayment in accordance with,
and bear interest as provided in, Section 2.2(B) of this Agreement and
shall otherwise be evidenced by, and repayable in accordance with, the
EPI First Term Note.

(C) EPI SECOND TERM LOAN. Bank shall make a term loan (the "EPI
Second Term Loan") to Environmental Purification Industries, Inc., a
subsidiary of MNC, in the original principal amount of Three Hundred
Fifty Thousand Dollars ($350,000). The EPI Second Term Loan shall be
co-signed by MNC and shall be subject to repayment in accordance with,
and bear interest as provided in, Section 2.2(C) of this Agreement and
shall otherwise be evidenced by, and repayable in accordance with, the
EPI Second Term Note.

(D) EPI THIRD TERM LOAN. Bank shall make a term loan (the "EPI
Third Term Loan") to Environmental Purification Industries, Inc., a
subsidiary of MNC, and Environmental Purification Industries Company,
an Ohio general partnership and an indirect wholly owned partnership
of MNC, in the original principal amount of One Million Seven Hundred
Thousand Dollars ($1,700,000). The EPI Third Term Loan shall be co-
signed by MNC and shall be subject to repayment in accordance with,
and bear interest as provided in, Section 2.2(D) of this Agreement and
shall otherwise be evidenced by, and repayable in accordance with, the
EPI Third Term Note.

I. Section 2.2 of the Loan Agreement, as amended, is amended and restated
in its entirety as follows:

2.2 PAYMENT TERMS OF TERM LOAN AND EPI TERM LOANS.

(A) TERM LOAN.

(1) Interest. The Term Loan shall bear interest on the unpaid
principal balance until the date paid in full at a rate per
annum equal to the Contract Rate in effect from time to
time, such interest being payable monthly on the last day of
each month commencing January 31, 1994. Any increase or
decrease in the interest rate resulting from a change in the
Base Rate shall become effective on the date of such change.
Interest shall be computed on a 360-day year basis based
upon the actual number of days elapsed.

(2) FIXED PRINCIPAL INSTALLMENTS. Subject otherwise to the
provisions of the Term Note, the principal balance of the
Term Loan shall be payable in

<PAGE>

sixty (60) equal monthly installments of Five Thousand
Dollars ($5,000) each, commencing on January 31, 1994, and
continuing on the last day of each successive month
thereafter until paid in full.

(B) EPI FIRST TERM LOAN.

(1) INTEREST. The EPI First Term Loan shall bear interest on the
unpaid principal balance until the date paid in full at a
rate per annum equal to the Contract Rate in effect from
time to time, such interest being payable monthly on the
last day of each month commencing March 31, 1996. Any
increase or decrease in the interest rate resulting from a
change in the Base Rate shall become effective on the date
of such change. Interest shall be computed on a 360 day year
basis based upon the actual number of days elapsed.

(2) PRINCIPAL. Subject otherwise to the provisions of the EPI
First Term Note, the principal amount of the EPI First Term
Loan shall be payable in full on the earlier of (a)
September 30, 1997 or (1)) the closing date of any public
offering of EPI stock pursuant to which EPI or any
stockholder of EPI receives cash (after any underwriter's
discount and commissions) of $1,000,000 or more.

(1) INTEREST. The EPI Second Term Loan shall bear interest onthe
unpaid principal balance until the date paid in full at a
rate per annum equal to the Contract Rate in effect from
time to time, such interest being payable monthly on the
last day of each month commencing July 31, 1996. Any
increase or decrease in the interest rate resulting from a
change in the Base Rate shall become effective on the date
of such change. Interest shall be computed on a 360 day year
basis based upon the annual number of days elapsed.

(2) PRINCIPAL. Subject otherwise to the provisions of the EPI
Second Term Note, the principal amount of the EPI Second
Term Loan and any unpaid interest shall be payable in full
on the earlier of (a) September 30, 1997 or (b) the closing
date of any public offering of EPI stock pursuant to which
EPI or any stockholder of EPI receives cash (after any
underwriter's discount and commissions) of $1,000,000 or
more.

(D) EPI Third Term Loan.

(1) INTEREST. The EPI Third Term Loan shall bear interest on the
unpaid principal balance until the date paid in full at a
rate per annum equal to the Contract Rate in effect from
time to time, such interest being

<PAGE>

payable monthly on the last day of each month commencing
November 30, 1996. Any increase or decrease in the interest
rate resulting from a change in the Base Rate shall become
effective on the date of such change. Interest shall be
computed on a 360 day year basis based upon the actual
number of days elapsed.

(2) PRINCIPAL. Subject otherwise to the provisions of the EPI
Third Term Note, the principal amount of the EPI Third Term
Loan and any unpaid interest shall be payable in twelve
monthly installments consisting of (a) eleven (11) equal
monthly installments of Twenty-One Thousand Dollars
($21,000) each, commencing November 30, 1996 and continuing
on the last day of each successive calendar month thereafter
and (b) a final payment on October 31, 1997 in the amount of
One Million Four Hundred Sixty-Nine Thousand Dollars
($1,469,000), or such other amount of principal and accrued
but unpaid interest remaining unpaid on October 31, 1997;
PROVIDED THAT, if prior to October 31, 1997 EPI completes
any public offering of its stock pursuant to which EPI or
any stockholder of EPI receives cash (after any
underwriter's discount and commissions) of $1,000,000 or
more, the entire amount of unpaid principal and accrued but
unpaid interest shall be payable in full on the closing date
of such public offering.

J. The first sentence of Section 7.l(N) of the Loan Agreement, as
amended, is hereby amended in its entirety as follows:

(N) TANGIBLE NET WORTH. Commencing on November 30, 1996, and
continuing on the last day of each fiscal quarter of Borrowers
thereafter, Borrowers shall maintain, on a consolidated basis, a
Tangible Net Worth which is equal to or greater than the
following amounts on the following dates:
Date Tangible Net Worth
---- ------------------
November 30, 1996 $2,000,000
February 28, 1997 $2,200,000
August 31, 1997 $2,700,000
February 28, 1998, and thereafter $3,500,000

K. The first sentence of Section 7.1(0) of the Loan Agreement, as
amended, is hereby amended in its entirety as follows:

(O) DEBT/TANGIBLE NET WORTH RATIO. Commencing on November 30,
1996, and continuing on the last day of each fiscal quarter of
Borrowers thereafter, Borrowers shall maintain, on a consolidated
basis, a Debt to Tangible Net Worth ratio which is equal to or
less than the following ratios on the following dates:
Debt To Tangible
Date Net Worth Ratio
---- ---------------
November 30, 1996 14.0 to 1
February 28, 1997 12.0 to 1

<PAGE>

August 31, 1997 100 to 1
February 28, 1998 and thereafter 8.0 to 1

L. Paragraphs (V) and (W) are hereby added to Section 7.1 of the Loan
Agreement, as amended, as follows:

(V) ADDITIONAL CAPITAL. On or before November 15, 1996,
Borrowers shall deliver to Bank evidence satisfactory to Bank
that additional capital, either in the form of subordinated debt
or equity, has been paid into either MNC or EPI.

(W) PORT AUTHORITY TRUSTEE ACTION. On or before November 30,
1996, Borrowers shall deliver to Bank evidence satisfactory to
Bank that the Equipment listed on Exhibit B to the EPI/EPIC
Security Agreement (as defined in Section III A. 10. of this
Agreement) does not constitute part of the "Series 1989D Project
Facilities" as that term is defined in the Open-End Mortgage and
Security Agreement from EPIC to Society Bank & Trust dated as of
December 15, 1989, entered into by EPIC in connection with the
issuance by the Toledo-Lucas County Port Authority of its
$5,745,000 Development Revenue Bonds, Northwest Ohio Bond Fund)
Series I 989D and that the Trustee has no security interest in
such Equipment.

M. Section 7.2(J) of the Loan Agreement, as amended, is hereby amended in
its entirety as follows:

(J) CAPITAL EXPENDITURES. Except for the capital expenditure
described below in Subparagraph K of this Section 7.2, Borrowers
shall not make capital expenditures which, determined in the
aggregate on a consolidated basis, exceed (a) Three Million
Dollars ($3,000,000) during the fiscal year of Borrowers ending
February 28, 1997, or (b) Five Hundred Thousand Dollars
($500,000) during any subsequent fiscal year of Borrowers.

II. REPRESENTATIONS, WARRANTIES AND COVENANTS OF BORROWERS.

B. To the extent such representations, warranties and covenants pertain to or
are to be performed by Borrowers, all representations, warranties and covenants
in the Loan Agreement, as amended, shall continue and be binding on Borrowers
under this Amendment No. 13.

III. CONDITIONS PRECEDENT.

Each Borrower acknowledges that the effectiveness of this Amendment No. 13 is
subject to the following:

<PAGE>

A. The receipt by Bank on the date of this Amendment No. 13 in form and
substance and satisfactory to Bank and its counsel of the following:

1. A certified copy of resolutions of Members of the Board of Directors
of each Borrower approving this Amendment No. 13 and all of the matters
described in this Amendment No. 13, and every other document or instrument
required to be delivered pursuant to this Amendment No. 13.

2. A Certificate signed by a duly authorized officer of each Borrower to
the effect that:

(b) Except as otherwise disclosed, the representations and warranties
of Borrowers set forth in Section 6 of the Loan Agreement are true and
correct on the date of this Amendment No. 13 with the same force and effect
as if made on this date.

3. A Certificate of an officer of each Borrower certifying (a) to the
incumbency and signatures of the officers of such Borrower signing this
Amendment No. 13 and every other document and instrument to be delivered
pursuant to this Amendment No. 13, and (b) to the effect that such Borrower's
Articles (or Certificate) of Incorporation and Code of Regulations (or By-laws)
have not been amended since the execution of the Loan Agreement except for (i)
the name change by PPI from "National Metal Shearing Corp." to Precise PAC, Inc.
on or about April, 1992, and (ii) the reverse stock split by MNC in August of
1993.

4. Amendment No. 8 To Demand Note, in substantially the form of Exhibit 1
attached to this Amendment No. 13, duly executed by each Borrower.

5. A Certificate signed by a duly authorized officer of EPI certifying:

(a) to the incumbency and signatures of the officers of EPI
signing the EPI Third Term Note and the EPI/EPIC Security Agreement
(defined below);

(b) to the effect that EPI is a corporation duly organized,
validly existing and in good standing under the laws of its state of
incorporation and is duly qualified and authorized to do business and
is in good standing as a foreign corporation in each other state or
jurisdiction where the character of its property or the nature of its
activities makes such qualification necessary; and

(c) to the effect that EPI has the right and power and is duly
authorized and empowered to enter into, execute, deliver and perform
its obligations under the EPI Third Term Note and the EPI/EPIC
Security Agreement and that the EPI Third Term Note and the EPI/EPIC
Security Agreement have each been duly authorized and approved by the
Board of Directors of EPI and each is the legal, valid and binding
obligation of EPI enforceable against EPI in accordance with its
terms.

<PAGE>

6. A certified copy of resolutions of Members of the Board of Directors
of EPI approving the EPI Third Term Note and the EPI/EPIC Security Agreement and
every other document or instrument required to be delivered by EPI pursuant to
this Amendment No. 13.

7. A certificate of National Purification, Inc. ("NPI") and MEPI Corp.
("MEPI"), each in its capacity as a general partner of EPIC, certifying:

(a) to the effect that each such corporation is a corporation duly
organized, validly existing and in good standing under the laws of its
state of incorporation and is duly qualified and authorized to do
business and is in good standing as a foreign corporation in each
other state or jurisdiction where the character of its property or the
name of its activities makes such qualification necessary; and

(b) to the effect that EPIC has the right and power and is duly
authorized by its general partners to enter into, execute, deliver and
perform its obligations under the EPI Third Term Note and the EPI/EPIC
Security Agreement and that the EPI Third Term Note and the EPI/EPIC
Security Agreement have each been duly authorized by the Board of
Directors of NPI and MEPI and each is the legal, valid and binding
obligation of EPIC enforceable against EPIC in accordance with its
terms.

8. Certified copies of resolutions of Members of the Board of Directors
of NPI and MEPI approving the EPI Third Term Note and the EPI/EPIC Security
Agreement and every other document or instrument required to be delivered by
EPIC pursuant to this Amendment No. 13.

9. The EPI Third Term Note, in substantially the form of Exhibit 2
attached to this Amendment No. 13, duly executed by EPI, EPIC and MNC.

10. Security Agreement by and among EPI, EPIC and Bank (the "EPI/EPIC
Security Agreement") in substantially the form of Exhibit 3 attached to this
Amendment No. 13, duly executed by EPI and EPIC.

11. Amendment No. 1 To Term Note (EPI First Term Note) in substantially
the form of Exhibit 4 attached to this Amendment No. 13, duly executed by MNC
and EPI.

12. Amendment No. 1 To Term Note (EPI Second Term Note) in substantially
the form Exhibit 5 attached to this Amendment No. 13, duly executed by MNC and
EPI.

13. UCC-1 Financing Statements duly executed by EPI and EPIC to be filed
with the Ohio Secretary of State and with the Lucas County, Ohio Recorder's
Office.

14. A Certificate signed by a duly authorized officer of MNP Corporation
certifying:

(a) to the incumbency and signatures of the officers of MNP
Corporation signing the MNP Guaranty;

<PAGE>

(b) to the effect that MNP Corporation is a corporation
duly organized, validly existing and in good standing under the
laws of its state of incorporation and is duly qualified and
authorized to do business and is in good standing as a foreign
corporation in each other state or jurisdiction where the
character of its property or the nature of its activities makes
such qualification necessary; and

(c) to the effect that MNP Corporation has the right and
power and is duly authorized and empowered to enter into, execute
and perform its obligations under the MNP Guaranty and that the
MNP Guaranty has been duly authorized and approved by the Board
of Directors of MNP Corporation and is the legal, valid and
binding obligations of MNP Corporation enforceable against MNP
Corporation in accordance with its terms.

15. Certified resolutions of the Members of the Board of Directors of
MNP Corporation approving the MNP Guaranty and every other document or
instrument required to be delivered by MNP Corporation pursuant to this
Amendment No. 13.

16. The MNP Guaranty, in substantially the form of Exhibit 6 attached
to this Amendment No. 13, duly executed by MNP Corporation.

17. The Feniger Guaranty, m substantially the form Exhibit 7 attached
to this Amendment No. 13, duly executed by William D. Feniger.

18. The written opinion of Benesch, Friedlander, Coplan & Aronoff
P.L.L., counsel to Borrowers, EPI and EPIC, in form and substance satisfactory
to Bank.

19. Such other documents and instruments as Bank may reasonably
request to implement this Amendment No. 13 and the transactions described in
this

B. The receipt by Bank from Borrowers of the first installment as of the
Closing Fee described in Part IV of this Amendment No. 13.

IV. CLOSING FEE.

Borrower shall pay BANK an amount (the "Closing Fee") equal to Two Hundred
Thousand Dollars ($200,000) payable as follows: (a) Twenty-Five Thousand Dollars
($25,000) on the effective date of this Amendment No. 13 and (b) One Hundred
Seventy-Five Thousand Dollars ($175,000) on the earlier of (1) October 31, 1997
or (ii) the closing date of any public offering of EPI stock pursuant to which
EPI or any stockholder of EPI receives cash (after any underwriter's discount
and commissions) of $ 1,000,000 or more. Borrowers hereby authorize Bank to
charge the unpaid balance of the Closing Fee to the Revolving Loan on October
31, 1997 if such Closing Fee is not sooner paid by Borrowers.

V. APPLICABLE LAW.

<PAGE>

This Amendment No. 13 shall be deemed to be a contract under the laws of
the State of Ohio, and for all purposes shall be construed in accordance with
the laws of such State.

VI. COUNTERPARTS.

This Amendment No. 13 may be executed in any number of counterparts, all of
which taken together shall constitute one and the same instrument, and any one
of the parties to this Amendment No. 13 may execute this Amendment No. 13 by
signing any such counterpart.

<PAGE>

IN WITNESS WHEREOF, the parties have executed this Amendment No. 13 by their
duly authorized officers this 4th day of November, 1996.

NATIONAL CANADA FINANCE CORP. MERIDIAN NATIONAL CORPORATION
By: /s/ Jack Jankovic By: /s/ William D. Feniger
----------------- ----------------------
Title: Vice President Title: CEO

PRECISE PAC, INC. (f/k/a
NATIONAL METAL PROCESSING, INC. National Metal Shearing Corp.)
By: James L. Rosino By: James L. Rosino
--------------- ---------------
Title: Vice President - Finance Title: Vice President - Finance

OTTAWA RIVER STEEL CO. MERIDIAN ENVIRONMENTAL SERVICES, INC.
By: James L. Rosino By: James L. Rosino
--------------- ---------------
Title: Vice President - Finance Title: Vice President - Finance

INTERSTATE METAL PROCESSING, INC.
By: James L. Rosino
---------------
Title: Vice President - Finance

<PAGE>

EXHIBIT 10.01(s)
TERM NOTE
$1,700,000 Cleveland, Ohio
November 4, 1996

FOR VALUE RECEIVED, the undersigned, jointly and severally, promise to pay
to the order of NATIONAL CANADA FINANCE CORP. ("Bank") the principal amount of
ONE MILLION SEVEN HUNDRED THOUSAND DOLLARS ($1,700,000) as hereinafter provided,
with interest on the unpaid principal balance from time to time outstanding at a
rate per annum equal to one and one-half (1 1/2) percentage points above Bank's
Base Rate (as defined in the Loan Agreement, as described below). Interest shall
be payable monthly commencing on November 30, 1996, and continuing on the last
day of each month thereafter until the entire principal amount has been repaid
in full. Any increase or decrease in the interest rate resulting from a change
in Bank's Base Rate shall become effective on the date of such change. Interest
shall be computed on a 360-day year basis based on the actual number of days
elapsed.

The undersigned agree to pay the principal of and any unpaid interest on
this Term Note (the "Note") in full in twelve monthly installments consisting of
(a) eleven (11) equal monthly installments of Twenty-One Thousand Dollars
($21,000) each, commencing November 30, 1996 and continuing on the last day of
each successive calendar month thereafter and (b) a final payment on October 31,
1997 in the amount of One Million Four Hundred Sixty-Nine Thousand Dollars
($1,469,000), or such other amount of principal and accrued but unpaid interest
remaining unpaid on October 31, 1997; provided that if at any time prior to
October 31, 1997 Environmental Purification Industries, Inc. ("EPI") completes
any public offering of its stock pursuant to which EPI or any stockholder of EPI
receives cash (after any underwriter's discovery and commissions) of $1,000,000
or more, the undersigned agree to pay the entire amount of principal and accrued
but unpaid interest on this Term Note in full on the closing date of such public
offering.

This Note is issued pursuant to (a) the Loan And Security Agreement,
entered into by and among Meridian National Corporation,

<PAGE>

Ottawa River Steel Co., National Metal Processing, Inc., Interstate Metal
Processing, Inc., Precise Pac, Inc., Meridian Environmental Services, Inc.
(collectively "Borrowers") and Bank of New England, N.A., dated December 9,
1989, as amended (the "Loan Agreement"), and (b) the Security Agreement entered
into by and among EPI, Environmental Purification Industries Company ("EPIC")
and Bank dated of even date herewith (the "Security Agreement") to both of which
reference is hereby made for a statement of the rights and obligations of Bank
and the duties and obligations of the Borrowers undersigned in relation thereto,
but neither this reference to the Loan Agreement and the Security Agreement, nor
any provision thereof shall affect or impair the absolute and unconditional
obligation of the undersigned to pay the principal of, and interest on, this
Note when due.

This Note is secured by, among other things, the security interests and
liens described in the Loan Agreement and the Security Agreement.

The undersigned may prepay all or any portion of this Note at any time and
in any amount without penalty.

In the event the undersigned fail to pay, when due, any principal or
interest owed under this Note, or upon the occurrence of an Event of Default (as
defined in the Loan Agreement) which has not been waived in writing by Bank, the
undersigned shall pay Bank interest on the daily average balance of all amounts
outstanding under this Note at a rate per annum (the "Default Rate") of two (2)
percentage points plus the rate otherwise applicable to all amounts outstanding
under this Note from the date when due or the date such Event of Default has
occurred, as applicable, until all amounts due herein are paid in full or such
Event of Default has been waived by Bank; provided, however, that the Default
Rate shall not exceed the maximum rate permitted by applicable law.

The undersigned agree to pay upon default the costs of collection including
reasonable fees of attorneys.

No delay or omission on the part of the holder in exercising any right
under this Note shall operate as a waiver of such right or of

<PAGE>

any other right of such holder, nor shall any delay, omission or waiver on any
one occasion be deemed a bar to or waiver of the same or any other right on any
future occasion. The undersigned and every endorser of this Note regardless of
the time, order or place of signing waive presentment, demand, protest and
notices of every kind and assent to any one or more extensions or postponements
of the time of payment or any other indulgences, and to any substitutions,
exchanges, or releases of any other parties or persons primarily or secondarily
liable.

The foregoing warrant of attorney shall survive any judgment, it being
understood that should any judgment be vacated for any reason, the foregoing
warrant of attorney nevertheless may thereafter be used for obtaining an
additional judgment or judgments.

<PAGE>

This Note is being executed and delivered in Cleveland, Ohio.

WARNING - BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT
TRIAL. IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU
WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT
FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR
RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT,
OR ANY OTHER CAUSE.

ENVIRONMENTAL PURIFICATION MERIDIAN NATIONAL CORPORATION
INDUSTRIES, INC.

By: /s/Bruce Maison By: /s/William D. Feniger
--------------- ---------------------

Title: President Title: CEO
--------- ---

ENVIRONMENTAL PURIFICATION
INDUSTRIES COMPANY

By National Purification, Inc.
General Partner

/s/James L. Rosino, Treasurer
- -----------------------------

and

By MEPI Corp., General Partner

/s/James L. Rosino, Treasurer
- -----------------------------

<PAGE>

EXHIBIT 10.01(t)

AMENDMENT NO. 14 TO THE
LOAN AND SECURITY AGREEMENT

THIS AMENDMENT NO. 14 TO THE LOAN AND SECURITY AGREEMENT ("Amendment No.
14") is made and entered into by and among MERIDIAN NATIONAL CORPORATION, a
Delaware corporation ("MNC"), OTTAWA RIVER STEEL CO., an Ohio corporation
("ORS"), NATIONAL METAL PROCESSING, INC., a Michigan corporation ("NMP"),
INTERSTATE METAL PROCESSING, INC., an Ohio corporation ("IMP"), PRECISE PAC,
INC. (f/k/a National Metal Shearing Corp.), a Michigan corporation ("PPI"), and
MERIDIAN ENVIRONMENTAL SERVICES, INC., a Michigan corporation ("MES"); and
together with MNC, ORS, NMP, IMP and PPI sometimes shall be referred to
collectively as "Borrowers" and individually as a "Borrower"), and NATIONAL
CANADA FINANCE CORP. ("Bank").

RECITALS

A. On December 6, 1989, Borrowers and the Bank of New England, N.A.
("BNE") entered into a certain Loan And Security Agreement (the "Loan
Agreement," all terms defined therein being used in this Amendment No. 13 with
the same meaning unless otherwise stated) under the terms of which BNE loaned to
Borrowers $1,000,000 on a term loan basis, and $7,000,000 on a revolving loan
basis, pursuant to the provisions set forth in the Loan Agreement.

C. On September 14, 1990, Borrowers and Bank (as the
successor-in-interest to BNE and BNE's rights, duties, and remedies under the
Loan Agreement) entered into Amendment No. 2 To The Loan And Security Agreement
("Amendment No. 2") to (1) decrease the Revolving Loan Borrowing Base on
Eligible Inventory from $4,000,000 to $3,000,000, (2) decrease the amount of the
Revolving Loan Borrowing Base by the face amount of the Letters of Credit issued
by Bank to Borrowers, (3) modify the definition of "Revolving Loan Borrowing
Base", and (4) establish a compensating balance of $1,000,000 in Borrowers'
Collateral.

E. Effective as of June 22, 1992, Borrowers and Bank entered into
Amendment No. 4 To The Loan And Security Agreement ("Amendment No. 4") to modify
certain covenants set forth in the Loan Agreement.

<PAGE>

G. On May 11, 1993, Borrowers, CSC and Bank entered into Amendment No.5
To The Loan And Security Agreement ("Amendment No.5") to (1) add CSC as a
co-obligor for the repayment of all loans to Borrowers and CSC by Bank, (2)
provide for certain representations, warranties and covenants of CSC, and (3)
provide for such other amendments and modifications as are set forth in
Amendment No.5.

I. On October 20, 1993, Borrowers, CSC and Bank entered into Amendment
No.6 To The Loan And Security Agreement ("Amendment No.6") to (1) increase the
maximum amount of fluids Borrowers and CSC may borrow under the Revolving Loan
from $5,300,000 to $6,000,000, (2) modify certain financial covenants of
Borrowers and CSC, and (3) provide for such other modifications as are set forth
in the provisions of Amendment No.6.

J. In or about January of 1994, CSC was dissolved and liquidated by ORS
and Canterbury.

K. On January 31, 1994, Borrowers and Bank entered into Amendment No. 7
To The Loan And Security Agreement ("Amendment No. 7") to (1) increase the
maximum amount of fluids Borrowers may borrow under the Revolving Loan from
$6,000,000 to $7,200,000, (2) provide Borrowers with a $300,000 Term Loan
facility, (3) modify certain financial covenants of Borrowers, and (4) provide
for such other amendments and modifications as are set forth in Amendment No. 7.

<PAGE>

$4,500,000 to $5,000,000, and (3) provide for such other amendments and
modifications as are set forth in Amendment No. 9.

N. Effective as of May 25, 1995, Borrowers and Bank entered into
Amendment No. 10 To The Loan And Security Agreement ("Amendment No. 10") to
(1) increase the maximum amount of funds Borrowers may borrow under the
Revolving Loan from $10,000,000 to $12,000,000, (2) increase the Revolving
Loan Borrowing Base on Eligible Inventory from $5,000,000 to $5,500,000, (3)
modify certain covenants of Borrowers, and (4) provide for such other
amendments and modifications as are set forth in Amendment No. 10.

0. Effective as of February 29, 1996, Borrowers and Bank entered into
Amendment No. 11 To The Loan And Security Agreement ("Amendment No. 11") to
(1) provide a $300,000 Term Loan facility to Environmental Purification
Industries, Inc. ("EPI"), a Delaware corporation and a subsidiary of MNC, and
(2) provide for such other amendments and modifications as are set forth in
Amendment No. 11.

P. Effective as of July 25, 1996, Borrowers and Bank entered into
Amendment No. 12 To the Loan and Security Agreement ("Amendment No. 12") to
(1) provide a $350,000 Term Loan facility to EPI, and (2) provide for such
other amendments and modifications as are set forth in Amendment No. 12.

Q. Effective as of November 4, 1996, Borrowers and Bank entered into
Amendment No. 13 To The Loan And Security Agreement ("Amendment No. 13") to (1)
increase the maximum amount of funds Borrowers may borrow under the Revolving
Loan from $12,000,000 to $12,400,000 for the period commencing on the effective
date of Amendment No. 13 through and including December 31, 1996, (2) modify the
payment terms of the PI Term Loans, (3) provide an additional $1,700,000 Term
Loan facility to EPI and Environmental Purification Industries Company, an
indirect wholly owned partnership of MNC ("EPIC"), (4) provide for a limited
guaranty by MNP Corporation ("MNP") of the obligations of EPI and EPIC under the
EPI Third Term Loan (as defined in Amendment No. 13) (the "MNP Guaranty"), (5),
provide for an unlimited guaranty by William D. Feniger of Borrowers'
obligations under the Loan Agreement, as amended (the "Feniger Guaranty"), (6)
modify certain covenants of Borrowers, and (7) provide for such other amendments
and modifications as are set forth in Amendment No. 13.

R. Borrowers and Bank now desire to amend the Loan Agreement, as
amended, to (1) increase the maximum amount of funds Borrower may borrow
under the Revolving Loan from $12,000,000 to $13,500,000, (2) increase the
Revolving Loan Borrowing Base on Eligible Inventory from $5,500,000 to
$6,000,000, (3) modify certain covenants of Borrowers, and (4) provide for
such other amendments and modifications as are set forth in this Amendment
No. 14.

S. Due to the affiliation and financial interdependence of Borrowers,
Bank and Borrowers have determined that it would be in their respective best
interests for each Borrower to be a joint and several obligor of each other
Borrower's obligations to Bank in accordance with the provisions set forth in
the Loan Agreement, as amended by Amendment No. 1, Amendment No. 2, Amendment
No. 3, Amendment No. 4, Amendment No.5, the Letter Amendment,

<PAGE>

Amendment No.6, Amendment No. 7, Amendment No. 8, Amendment No. 9, Amendment No.
10, Amendment No. 11, Amendment No. 12, Amendment No. 13 and this Amendment No.
14.

PROVISIONS

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and provisions set forth in this Amendment No. 14, the parties agree as follows:

I. AMENDMENTS TO LOAN AGREEMENT.

The Loan Agreement is amended as follows:

A. On and after the effective date of this Amendment No. 14, each
reference in the Loan Agreement, Amendment No. 1, Amendment No. 2, Amendment No.
3, Amendment No. 4, Amendment No. 5, the Letter Amendment, Amendment No.6,
Amendment No. 7, Amendment No. 8, Amendment No. 9, Amendment No. 10, Amendment
No. 11, Amendment No. 12 and Amendment No. 13 to "this Agreement," "hereunder,"
and "hereof", or words of like import referring to the Loan Agreement shall mean
and refer to the Loan Agreement as amended by Amendment No. 1, Amendment No. 2,
Amendment No. 3, Amendment No. 4, Amendment No.5, the Letter Amendment,
Amendment No.6, Amendment No. 7, Amendment No. 8, Amendment No. 9, Amendment No.
10, Amendment No. 11, Amendment No. 12, Amendment No. 13 and Amendment No. 14.
The Loan Agreement, as amended by Amendment No. 1, Amendment No. 2, Amendment
No. 3, Amendment No. 4, Amendment No.5, the Letter Amendment, Amendment No.6,
Amendment No. 7, Amendment No. 8, Amendment No. 9, Amendment No. 10, Amendment
No. 11, Amendment No. 12, Amendment No. 13 and Amendment No. 14 is, and shall
continue to be, in full force and effect and hereby is ratified and confirmed in
all respects.

B. The definition of "Revolving Loan Borrowing Base" set forth in Section
1.1 of the Loan Agreement, as amended, is amended and restated in its entirety
as follows:

REVOLVING LOAN BORROWING BASE - Subject to the provisions of Section 2.3(B)
of this Agreement, an amount equal to the lesser of the following amounts:

(i) the sum of (a) eighty percent (80%) of the unpaid face amount
of Eligible Accounts (less the maximum discounts, credits and
allowances which may be taken by or granted to Account Debtors in
connection therewith) plus (b) fifty percent (50%) of the lesser of
the cost (determined on a first-in, first-out basis) or market value
of Eligible Inventory; provided, however, that the Revolving Loan
Borrowing Base on Eligible Inventory shall in no event exceed
$6,000,000, minus (c) the face amount of all Letters of Credit issued
by Bank on behalf of any Borrower or Borrowers; or

(ii) $13,500,000.

C. The definition of "Credit Note" set forth in Section 1.1 of the Loan
Agreement, as amended, is amended and restated in its entirety as follows:

<PAGE>

CREDIT NOTE - The demand note executed by Borrowers and delivered to
Bank, dated December 6, 1989, evidencing the revolving credit loan made by
Bank pursuant to Section 2.3 of this Agreement, together with (a) Amendment
No. 1 To Demand Note, executed by Borrowers and delivered to Bank, dated as
of May 31, 1991, (b,) Amendment No. 2 To Demand Note, executed by Borrowers
and CSC and delivered to Bank, dated May 11, 1993, (c) Amendment No. 3 To
Demand Note, executed by Borrowers and CSC and delivered to Bank, dated as
of October 20, 1993, (d) Amendment No. 4 To Demand Note, executed by
Borrowers and delivered to Bank, dated January 31, 1994, (e) Amendment No.
5 To Demand Note, executed by Borrowers and delivered to Bank, dated as of
November 30, 1994, (f) Amendment No.6 To Demand Note, executed by Borrowers
and delivered to Bank, dated as of February 14, 1995, (g) Amendment No. 7
To Demand Note executed by Borrowers and delivered to Bank, dated as of May
25, 1995, (h) Amendment No. 8 To Demand Note executed by Borrowers and
delivered to Bank, dated as of November 4, 1996, and (i) Amendment No. 9 To
Demand Note, a copy of which is attached to Amendment No. 14 as EXHIBIT 1,
and all other amendments to, and all notes issued in substitution for or
replacement of, such demand note.

D. The first sentence of Section 7.1(N) of the Loan Agreement, as
amended, is hereby amended in its entirety as follows:

(N) TANGIBLE NET WORTH. Commencing on May 31, 1997, and
continuing on the last day of each 3-month period thereafter,
Borrowers shall maintain, on a consolidated basis, a Tangible Net
Worth which is equal to or greater than the following amounts on the
following dates:

Date Tangible Net Worth
---- ------------------

May 31, 1997 $1,700,000
August 31, 1997 $1,900,000
November 30, 1997 $2,100,000
February 28, 1998 $2,200,000
May 31, 1998 $2,400,000
August 31, 1998 $2,600,000
November 30, 1998 $2,800,000
February 28, 1999 and thereafter $2,900,000

E. The first sentence of Section 7.1(0) of the Loan Agreement, as
amended, is hereby amended in its entirety as follows:

(O) DEBT/TANGIBLE NET WORTH RATIO. Commencing on August 31,
1997, and continuing on the last day of each 3-month period
thereafter, Borrowers shall maintain, on a consolidated basis, a Debt
to Tangible Net Worth ratio which is equal to or less than the
following ratios on the following dates:

<PAGE>

Debt To Tangible
Date Net Worth Ratio
---- ----------------

August 31, 1997 16.0 to 1
November 30, 1997 14.5 to 1
February 28, 1998 13.5 to 1
May 31, 1998 12.5 to 1
August 31, 1998 11.5 to 1
November 30, 1998 10.5 to 1
February 28, 1999 and thereafter 10.0 to 1

F. The first sentence of Section 7.1 (Q) of the Loan Agreement, as
amended, is hereby amended in its entirety as follows:

(Q) CASH FLOW RATIO. Commencing May 31, 1997, and continuing on
the last day of each 3-month period thereafter, Borrower's annualized
Cash Flow shall be greater than the following ratios on the following
dates:

Date Cash Flow Ratio
---- ---------------

May 31, 1997 1.2 to 1
August 31, 1997 1.0 to 1
November 30, 1997 1.2 to 1
February 28,1998 1.0 to 1
May 31, 1998 and thereafter 1.2 to 1

II. BANK'S WAIVER OF CERTAIN DEFAULTS.

For the sole purpose of completing the transactions described in this
Amendment No. 14, Bank hereby acknowledges the covenant defaults committed by
Borrowers and referred to in the letter to Bank from MNC attached hereto as
EXHIBIT 2 and waives, solely as to the specific defaults referred to in such
letter, the rights of Bank to pursue remedies under the Loan Agreement, as
amended, with respect to such defaults.

III. REPRESENTATIONS. WARRANTIES AND COVENANTS OF BORROWERS.

B. To the extent such representations, warranties and covenants pertain
to or are to be performed by Borrowers, all representations, warranties and
covenants in the Loan

<PAGE>

Agreement, as amended, shall continue and be binding on Borrowers under this
Amendment No. 14.

IV. CONDITIONS PRECEDENT.

Each Borrower acknowledges that the effectiveness of this Amendment No. 14
is subject to the following:

A. The receipt by Bank on the date of this Amendment No. 14 in form and
substance and satisfactory to Bank and its counsel of the following:

1. A certified copy of resolutions of Members of the Board of
Directors of each Borrower approving this Amendment No. 14 and all of the
matters described in this Amendment No. 14, and every other document or
instrument required to be delivered pursuant to this Amendment No. 14.

2. A Certificate signed by a duly authorized officer of each
Borrower to the effect that:

(a) As of the date hereof, except for Events of Default which
have been disclosed to Bank concerning Borrowers' compliance with
certain financial covenants, no Event of Default has occurred and is
continuing, and no event has occurred which, with the giving of notice
or passage of time or both, would constitute an Event of Default.

(1,) Except as otherwise disclosed, the representations and
warranties of Borrowers set forth in Section 6 of the Loan Agreement
are true and correct on the date of this Amendment No. 14 with the
same force and effect as if made on this date.

3. A Certificate of an officer of each Borrower certifying (a) to
the incumbency and signatures of the officers of such Borrower signing this
Amendment No. 14 and every other document and instrument to be delivered
pursuant to this Amendment No. 14, and (b) to the effect that such
Borrower's Articles (or Certificate) of Incorporation and Code of
Regulations (or By-laws) have not been amended since the execution of the
Loan Agreement except for (i) the name change by PPI from "National Metal
Shearing Corp." to Precise PAC, Inc. on or about April, 1992, and (ii) the
reverse stock split by MNC in August of 1993.

4. Amendment No. 9 To Demand Note, in substantially the form of
EXHIBIT I attached to this Amendment No. 14, duly executed by each
Borrower.

5. Such other documents and instruments as Bank may reasonably
request to implement this Amendment No. 14 and the transactions
described in this Amendment No. 14.

<PAGE>

B. The payment by Borrowers to Bank of an amendment fee in the amount of
$5,000.

V. APPLICABLE LAW.

This Amendment No. 14 shall be deemed to be a contract under the laws of
the State of Ohio, and for all purposes shall be construed in accordance with
the laws of such State.

VI. COUNTERPARTS.

This Amendment No. 14 may be executed in any number of counterparts, all of
which taken together shall constitute one and the same instrument, and any one
of the parties to this Amendment No. 14 may execute this Amendment No. 14 by
signing any such counterpart.

IN WITNESS WHEREOF, the parties have executed this Amendment No. 14 by
their duly authorized officers effective as of the 12th day of May, 1997.

NATIONAL CANADA FINANCE CORP. MERIDIAN NATIONAL CORPORATION
By: /s/ Jack Jankovic By: /s/ William D. Feniger
----------------- ----------------------

Title: Vice President Title: CEO
-------------- ---

OTTAWA RIVER STEEL CO. MERIDIAN ENVIRONMENTAL SERVICES, INC.
By: James L. Rosino By: James L. Rosino
--------------- ---------------

Title: Vice President - Finance Title: Vice President - Finance
------------------------ ------------------------

INTERSTATE METAL PROCESSING, INC.
By: James L. Rosino
---------------
Title: Vice President - Finance
------------------------

<PAGE>

EXHIBIT 10.02(d)

AGREEMENT TO DEFER PRINCIPAL PAYMENTS ON PROMISSORY NOTE

WHEREAS, the Undersigned is the Payee of an Amended and Restated
Non-Negotiable Promissory Note dated July 28,1989 in an original amount of
$596,821.79 issued by Meridian National Corporation; and

WHEREAS, the entire principal balance of said Note became due and payable
on September 15,1995; and

WHEREAS, pursuant to said Note, its Payee may convert the Note, in whole or
in part, into shares of Common Stock of Meridian National Corporation; and

WHEREAS, pursuant to a Subscription Agreement dated May 31,1996, Payee
received 600,000 shares of Common Stock in exchange for a $300,000 reduction in
the principal amount of said Note; and

WHEREAS, Payee agreed to a reduction in the principal amount of said note
of $21,589.53 as payment of principal and interest owed by Payee on certain
Promissory Notes in April and May 1996.

NOW THEREFORE, the undersigned agrees, for due consideration, the receipt
of which is hereby acknowledged, that Payee will not seek payment from Meridian
National Corporation of the principal payments stipulated in the Note prior to
March 1,1995.

Dated April 22, 1997, at Toledo, Ohio

By: \s\ William D. Feniger
-------------------------------------
William D. Feniger

Acknowledged By:
MERIDIAN NATIONAL CORPORATION

By: \s\ James L. Rosino
---------------------------
Vice President - Finance

<PAGE>

EXHIBIT 10.13(h)

COMPROMISE AGREEMENT

THIS COMPROMISE AGREEMENT ("Agreement") is made as of the 28th day of June,
1996, by and among HADEN MACLELLAN HOLDINGS, PLC. ("HMH"), HADEN, INC. ("HI"),
HADEN ENVIRONMENTAL CORPORATION ("HEC"), HADEN PURIFICATION, INC. ("HPI"),
MERIDIAN NATIONAL CORPORATION ("MNC"), NATIONAL PURIFICATION, INC. ("NPI") MEPI
CORP. ("MEPI"), ENVIRONMENTAL PURIFICATION INDUSTRIES COMPANY (EPI") and
ENVIRONMENTAL PURIFICATION INDUSTRIES, INC. ("Newco"). HMH, HI, HEC and HPI and
their respective affiliates are collectively referred to below as the "Haden
Parties." MNC, NPI, MEPI, EPI and Newco and their respective affiliates are
collectively referred to below as the "'Meridian Parties."

RECITALS:

A. The parties hereto (other than Newco) entered into a Termination
Agreement dated as of July 1, 1992, as amended June 11, 1993, and April 28,
1994 (said Termination Agreement and said amendments thereto are collectively
referred to below as the "'Termination Agreement"), providing for, among other
things, the termination and abandonment of HPI's interest in EPI and certain
continued funding of EPI.

B. Pursuant to the Termination Agreement, HPI advanced to EPI funds which
advances are evidenced by that certain Promissory Note of EPI dated as of July
1, 1992 (the "$650,000 Note").

<PAGE>

C. Pursuant to the Termination Agreement, NPI and MEPI, jointly and
severally, guaranteed repayment of the $650,000 Note and granted a security
interest in all of their interests in EPI (the "Partnership Interests") to HPI
under the terms of that certain Guaranty and Security Agreement dated as of July
1, 1992 (the "Guaranty and Security Agreement").

D. As of the date of this Agreement, the outstanding balance under the
$650,000 Note is approximately $701,000 of which EPI has delivered funds to HPI
in the amount of $48,769.

E. Pursuant to a certain Loan Agreement, dated as of December 15, 1989,
between Toledo-Lucas County Port Authority and EPI (the "IRB Loan Agreement"),
EPI is the borrower of an original principal amount of $5,745.000. The IRB Loan
Agreement and all of the documents related to and referenced in the IRB Loan
Agreement are collectively referred to below as the "IRB Loan Documents." The
loan transaction described in the IRB Loan Documents is referred to as the IRB
Loan.

F. Pursuant to the Termination Agreement, HPI assumed and agreed to pay
50% of the Financing Payments (as defined in the IRB Documents) due from EPI to
the Trustee (as defined in the IRB Documents).

G. HPI has agreed to accept $350,000 as payment in full of all
obligations under the $650,000 Note and to terminate the Guaranty and Security
Agreement and the Termination Agreement (except to the extent provided below)
all upon the terms and subject to the conditions set forth in this Agreement.

<PAGE>

AGREEMENTS

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and provisions set forth in this Agreement, and in reliance thereon, the parties
agree as follows:

1. PREPAYMENT AND COMPROMISE OF $650,000 NOTE. Concurrently with the
delivery of counterpart executed copies of this Agreement, Newco, on behalf of
EPI, will prepay, or cause to be prepaid, by wire transfer or official bank
check, the sum of $350,000 (the "Compromise Payment") to HPI in full and
complete compromise, settlement, and payment of all principal and interest and
any other obligations under the $650,000 Note. HPI (a) hereby accepts the
Compromise Payment as payment in full of all principal and interest and any
other obligations under the $650,000 Note and (b) will promptly surrender to EPI
the original $650,000 Note marked "fully paid and canceled." The Haden Parties
hereby withdraw the notice of default issued to EPI on behalf of HPI by Jaffe,
Raitt, Heuer & Weiss dated June 13, 1996 and acknowledge that EPI is not in
default under the $650,000 Note.

2. TERMINATION OF GUARANTY AND SECURITY AGREEMENT; RELEASE OF SECURITY
INTEREST. Except to the extent provided in Section 4 below, the Guaranty and
Security Agreement, the Termination Agreement and any other existing agreements
between any of the Haden Parties and any of the Meridian Parties are hereby
terminated and will be of no further force and effect. Each of the Meridian
Parties acknowledges and agrees with the Haden Parties that neither HPI nor any
other Haden Party is a partner of, or has any ownership interest in, EPI and
nothing contained in this Agreement shall be construed otherwise.

HPI will take all necessary steps to evidence its release of its security
interest in the Partnership Interests, including, without limitation, the
execution and delivery of termination statements to

<PAGE>

EPI for filing in each office in which a financing statement has been filed by
HPI or as may be necessary or required to release any security interest it has
in the Partnership Interests.

3. REPRESENTATION AND WARRANTY OF HPI. HPI represents and warrants that
it has not assigned, transferred, encumbered, or pledged to any party, or
otherwise alienated, the $650,000 Note, or any portion thereof.

4. CONTINUING AGREEMENTS. Except as provided below, any and all
restrictions, rights, obligations or liabilities of the parties to this
Agreement contained in the Termination Agreement are hereby dissolved and will
be of no further force and effect. Notwithstanding the foregoing, the parties to
this Agreement agree as follows:

(a) From and after the date of this Agreement through July 1,
1998, none of the Haden Parties will, directly or indirectly, own, manage,
control or participate in the ownership, management, or control of, or be
engaged or otherwise affiliated or associated as a consultant, independent
contractor or otherwise with, any person, corporation, limited liability
company, partnership, proprietorship, firm, associate or other business
entity, or otherwise engage in any business, that competes with EPI or any
of its affiliates as a "third party paint sludge processor" (as defined
below) within a circular, geographical area having a two hundred (200) mile
radius with its center located at EPI's Toledo, Ohio location (the "Toledo
200 Miles Area").

(b)(i) HPI hereby assumes and agrees to pay 50% of the Financing
Payments (as defined in the IRB Loan Documents) due from EPI to the
Trustee, for Financing Payments due on or after July 1, 1992, net of the
Bond Reserve Deposit (as defined in the IRB Loan Documents). The Trustee
has been advised of this assumption by HPI, and the Trustee is entitled

<PAGE>

to enforce this assumption, directly against HPI. This assumption is
intended to constitute a contribution of money by HPI to EPI, within the
scope of Section 752(a) of the Internal Revenue Code of 1986, as amended.

(ii) HMH hereby guaranties to EPI and MNC the prompt and full
satisfaction of HPI's obligations under this Agreement.

(iii) EPI hereby assigns to HPI 50% of EPI's residual interest
in the Bond Reserve Deposit.

(iv) HPI will satisfy its obligations under subsection (b)(i)
above by making payments directly to the Trustee, for credit to the
IRB Loan, in amounts equal to 50% of the Financing Payments, as
Financing Payments are due under the IRB Loan Documents, for Financing
Payments due on or after July 1, 1992. HPI will provide evidence to
EPI of each payment made by HPI to the Trustee, at the time of such
payment. To the extent that any portion of the obligation of EPI under
the IRB Loan Documents is prepaid, at any time in the future, HPI
shall have the option to prepay its liability under this paragraph on
the same basis. The obligation of HPI to make payments to the Trustee,
in the amount of 50% of the Financing Payments is fixed and
unconditional, and HPI waives all rights of subrogation against EPI
and all rights of contribution against NPI, with respect to such
payments. At such time as the Bond Reserve Deposit being held by the
Trustee under the IRB Loan Documents, including any accrued and unpaid
interest thereon, is applied by the Trustee to periodic Financing
Payments due from EPI or to a prepayment of the IRB Loan, 50% of such
funds shall be applied to the obligations of HPI under this paragraph.
In the event that the Trustee refunds any or all of the Bond Reserve
Deposit, including accrued and unpaid interest thereon, 50% of such
refund shall be refunded to

<PAGE>

HPI. The intent of this provision is that HPI shall satisfy 50% of
EPI's remaining obligations under the IRB Loan, net of the Bond
Reserve Deposit.

(c) HEC is the owner of certain patent and other proprietary rights
related to the fabrication and use of the DryPure-TM- processing system
(the "DryPure-TM- Rights"). HEC hereby reaffirms and acknowledges its grant
of a nonexclusive perpetual license of the DryPure-TM- Rights, to EPI for
the processing of paint sludge using the DryPure-TM- processing system.
Such license will be personal to EPI but may be assigned in connection with
any sale of the DryPure-TM- processing system.

(d) From and after the date of this Agreement through July 1, 1998,
HEC will not grant a license of DryPure-TM- Rights to any third party paint
sludge processor, to use a DryPure-TM- system within the Toledo 200 Mile
Area. Furthermore, from and after the date of the Agreement through July 1,
1998, HEC will not grant a license of DryPure-TM- Rights outside of the
Toledo 200 Mile Area to any third party paint sludge processor, without
offering a right of first refusal, on the location, but not pertaining
to the price, effective for a 30 day period, to EPI for those areas. It is
understood and agreed by the parties that the term license includes,
without limitation, the sale, lease or other financing arrangement of a
DryPure-TM- processing system.

(e) For the purposes of this Agreement, the term "third party paint
sludge processor" means any business which uses a DryPure-TM- system to
process paint sludge which it did not generate (EG., EPI), as opposed to
the parties who use a DryPure-TM- sludge drying system to process paint
sludge or other waste streams which they generate (E.G., Chrysler, Ford,
Toyota, Caterpillar).

(f) From and after the date of this Agreement through July 1, 1998,
EPI will pay a throughput charge to HEC in an amount equal to $10.00 per
cubic yard of paint sludge processed

<PAGE>

through EPI's DryPure-TM- systems. All throughput charges will be paid on
the last day of each month with respect to number of cubic yards of paint
sludge processed during the preceding month.

(g) Nothing contained in this Agreement shall be deemed to prohibit
EPI from soliciting business from automobile and truck manufacturers. From
and after the date of this Agreement through July 1, 1998, HEC will assist
in the promotion of EPI, on a reasonable efforts but no guaranteed results
basis, for business by EPI from automobile and truck manufacturers. HEC is
in the business of selling, leasing and operating DryPure-TM- systems to
automobile and truck manufacturers. The assistance to be given by HEC to
EPI, referenced above, will be that HEC will refer automobile and truck
manufacturers to EPI in instances where the sales call by HEC results in an
interest by the customer in the DryPure-TM- technology, but not of a sale
or lease basis. HEC will then refer the customer to EPI.

(h) To the extent that EPI is unable to meet its obligations to the
Trustee, after application of the payments being made to the Trustee
pursuant to subsection (b)(iv) above (i.e. 50% of the Financing Payments
due), MNC hereby assures HMH that MNC will promptly satisfy its obligations
under the Guaranty Agreement dated as of December 15, 1989 between MNC and
the Trustee so that HMH's interest in the Bond Reserve Deposit is in no way
diminished. MNC and EPI will provide evidence to HPI of each payment by EPI
or MNC to the Trustee, at the time of such payment.

5. RELEASE. Each of MNC, NPI, MEPI, EPI and Newco hereby release the
Haden Parties and their respective officers, directors, shareholders, employees,
agents, successors and assigns (collectively, the "Haden Group") from and
against any and all claims, demands, causes

<PAGE>

of action, obligations and liabilities (collectively, "Claims") of every kind
and nature which they have, had or could have had against the Haden Group or any
of them from the beginning of time through the date of execution and delivery of
this Agreement, whether such Claims are known or unknown, accrued or unaccrued.
Each of HMH, HI, HEC and HPI hereby release the Meridian Parties, and their
respective officers, directors, shareholders, employees, agents, successors and
assigns (collectively, the "Meridian Group") from and against any and all Claims
of every kind and nature which they have, had or could have had against the
Meridian Group or any of them from the beginning of time through the date of
execution and delivery of this Agreement, whether such Claims are known or
unknown, accrued or unaccrued.

6. ARBITRATION. Any disputes arising between any of the Haden Parties,
on the one hand, and any of the Meridian Parties, on the other hand, of any
nature whatsoever, shall be submitted to binding arbitration pursuant to the
rules of the American Arbitration Association, then in effect, in Toledo, Ohio.

7. BINDING EFFECT. The rights and obligations of the parties under this
Agreement will inure to the benefit of; and will be binding upon, the parties
and their respective successors and assigns. Any assignment of this Agreement or
any of the rights, interests or obligations of any party to this Agreement will
not relieve any party from its obligations under this Agreement.

8. GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the laws of the State of Ohio without giving effect to the
principles of conflicts of law thereof.

9. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement of
the parties and supersedes all other understandings or agreements, written or
oral, if any, with respect to the subject matter of this Agreement.

<PAGE>

10. MULTIPLE COUNTERPARTS. This Agreement may be executed in two or more
counterparts, all of which will be considered one and the same agreement.

IN WITNESS WHEREOF, the parties have executed this Compromise Agreement as
of the date first above written. Each person signing below warranties his or her
authority to do so.

HADEN MACLELLAN HOLDINGS, PLC. HADEN, INC.

By: /s/ John S. Doychic By: /s/ John S. Doychic
-------------------------------- ---------------------------
Name: John s. Doychic Name: John Ss. Doychic
Title: Secretary/Treasurer Title: Secretary/Treasurer

HADEN ENVIRONMENTAL HADEN PURIFICATION, INC.
CORPORATION

MERIDIAN NATIONAL CORPORATION NATIONAL PURIFICATION, INC.

By: /s/ William D. Feniger By: /s/ William D. Feniger
-------------------------------- ---------------------------
William D. Feniger William D. Feniger
President President

(Signatures continued on next page]

<PAGE>

MEPI CORP. ENVIRONMENTAL PURIFICATION
INDUSTRIES COMPANY

By: /s/ William D. Feniger By: /s/ William D. Feniger
-------------------------------- ---------------------------
William D. Feniger William D. Feniger
President President

and also

ENVIRONMENTAL PURIFICATION By: National Purification, Inc.,
INDUSTRIES, INC. its general partner

By: /s/ Bruce F. Maison By: /s/ William D. Feniger
-------------------------------- ---------------------------
Bruce F. Maison William D. Feniger
President President

<PAGE>

EXHIBIT 10.19
PURCHASE AGREEMENT

AGREEMENT, dated as of July 3 1996, among MERIDIAN ENVIRONMENTAL SERVICES,
INC., a Michigan corporation (the "Seller"), MERIDIAN INTERNATIONAL, INC., a
Michigan corporation (the "BUYER"), and GERALD M. GROVES, individually
("Groves".

WITHESSETH:

WHEREAS, Seller is engaged in the business of acid recycling, selling and
distributing industrial chemicals; and

WHEREAS, Seller desires to sell to Buyer, and Buyer desires to purchase
from Seller, certain of the assets and properties of Seller and the business of
Seller upon the terms and conditions herein set forth;

NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements herein set forth, the parties agree as follows:

ARTICLE I

PURCHASE AND SALE

1.1 PROPERTIES AND ASSETS TO BE SOLD AND PURCHASED. In reliance upon the
representations and warranties contained in this Agreement and in the
attachments hereto and upon the terms and subject to the conditions of this
Agreement, Seller agrees to sell and deliver to Buyer, free and clear of all
liabilities, claims, liens and encumbrances, except as hereinafter expressly
provided, and Buyer agrees to purchase from Seller all of the assets,
properties, goodwill and businesses of Seller as a going concern, of every kind
and description, real, personal and mixed, tangible and intangible, wheresoever
located and whether or not carried or reflected on the books of Seller, owned by
Seller on the Closing Date (as hereinafter defined), except the Excluded Assets
set forth in Section 1.2 hereof. Without limiting the generality of the
foregoing, such assets, properties, goodwill and business (the "Purchased
Assets") shall include all of the following:

(a) All inventories, including, without limitation, inventories in
transit paid for but not yet delivered, raw materials, supplies, work in
process, finished goods and finished parts (the "Inventory");

(b) All machinery and equipment (listed on Exhibit 1), and all parts,
accessories, tools and supplies pertaining thereto located at Seller's
facility at 312 West End Avenue, Detroit, Michigan (the "Machinery and
Equipment");

(d) All furniture, fixtures, shelving, office supplies, computers and
equipment and all parts, accessories, tools and supplies pertaining thereto
(the "Office Asset Items");

(e) The real property of Seller located at 312 West End Avenue,
Detroit, Michigan and more particularly described on Exhibit 2 attached
hereto (the "Real Property");

<PAGE>

(f) All rights of Seller to the logo presently used by it (but
excluding the name "Meridian Environmental Services"), provided that Seller
makes no representations or warranties with respect to such logo;

(g) All right, title and interest of Seller under the contracts
listed on Exhibit 3 (the "Subject Contracts");

(h) All warranties, guarantees and the like of manufacturers,
contractors, sellers or suppliers which pertain to the Purchased Assets,
to the extent the same are transferable without third party consents;

(i) All interest in and to the telephone numbers and telex numbers if
any, and all listings pertaining to the Seller in all telephone books and
directories; and

(j) The business of Seller as a going concern including its goodwill,
if any, and, subject to Section 1.2(b), all records, books, manuals,
customer lists, supplier lists, permits, franchises, brochures office
supplies, advertising and sales literature, credit information and any and
all other operating data of Seller; provided, however, that all such
records and books shall be available for inspection and copying by Seller
at the offices of Buyer in Detroit, Michigan at all reasonable times for a
proper purpose.

1.2 EXCLUDED ASSETS. Seller shall retain and not sell and deliver to
Buyer and Buyer shall not purchase from Seller only the following properties and
assets of Seller as of the Closing Date (the "Excluded Assets"):

(a) All monies to be received by Seller under this Agreement and all
other rights of Seller hereunder; and

(b) All stock records, corporate charters and seals, minute books,
accounting and financial records, and all returns and records relating to
state and federal income taxes; provided, however, that said documents and
records (solely to the extent they relate to the business of Seller) shall
be available for inspection and copying by Buyer upon the reasonable
request of Buyer;

(d) All cash and cash equivalents,

(e) All contracts, commitments and agreements not included within the
Subject Contracts;

(f) All claims for refunds of federal, state or local taxes; and

(g) All rights, causes of action and claims accruing, or arising out
of acts or omissions occurring or not occurring, prior to the Closing.

1.3 ASSUMED OBLIGATIONS. Except as set forth below, Buyer shall assume no
liabilities as of the Closing Date. Buyer shall assume and be liable for (a)
all environmental conditions or matters relating to the Purchased Assets or the
business and operations of Seller at the Real Property, including any violations

<PAGE>

of Environmental Laws: (i) that occur on or after the Closing Date; (ii) that
are disclosed in the Phase I and Phase II Environmental Assessments and the
Baseline Environmental Assessment prepared for Buyer and Seller by Swanson
Environmental Inc. dated May 22, 1996, May 29, 1996 and May 31, 1996,
respectively (the "Environmental Reports"); or (iii) of which Groves has actual
knowledge; (b) all obligations under the Subject Contracts to the extent such
obligations accrue from and after the Closing; and (c) all accounts payable
arising out of the purchases of any assets within 30 days prior to the Closing,
except to the extent that such purchases were approved by an officer of Seller
other than Gerald M. Groves (collectively the "Assumed Obligations"). Except as
set forth above, Buyer shall assume no liabilities as of the Closing Date.
Seller shall be responsible for all liabilities up through the date of Closing
included but not limited to the following:

(a) All liabilities, contingent or otherwise, which may arise out of
any guarantees or any other instruments or agreements to which Seller is a
party as an endorser, surety or guarantor; and

(b) All liabilities or claims for personal injury or damage to
property and all warranty claims based on or relating to any products sold
or manufactured by Seller prior to the Closing Date, including any and all
costs or attorneys' fees incurred in connection therewith; and

(c) Compliance with all Environmental Laws which in any way relate to
the operation of Seller's business, except as disclosed in the
Environmental Reports or of which Groves has actual knowledge.
"Environmental Laws" means all applicable Federal, state and local laws,
regulations and ordinances relative to air quality, water: quality, solid
waste management, hazardous waste management, hazardous or toxic substances
or the protection of human health or the environment, including, the
comprehensive Environmental Response Compensation, and Liability Act of
1980 (42 USC Sec. 9601, ET SEQ.) ("CERCLA"), the Hazardous Material
Transportation Act (49 USC Sec. 1801, ET SEQ.), the Federal Water Pollution
Control Act (33 USC Sec. 1251, ET SEQ.), the Resource Conservation and
Recovery Act of 1976 (42 USC Sec. 6901, ET SEQ.), the Clean Air Act (42 USC
Sec. 7401, ET SEQ.), the Toxic Substances Control Act (15 USC Sec. 2601 ET
SEQ.), the Federal Insecticide, Fungicide, and Rodenticide Act (7 USC Sec.
136, ET SEQ.), as each of these laws may have been amended through the date
of this Agreement, and any analogous state or local statutes and the
regulations promulgated pursuant thereto including, but not limited to, the
Michigan National Resources Protection Act, P.A. 451 of 1994, as amended.

1.4 RELEASE. Buyer hereby releases Seller and its subsidiaries affiliates
and other related entities and any of their respective stockholders,
predecessors, successors, assigns, officers, directors, employees and agents
from any and all liability under Environmental Laws or the environmental
condition of the Purchased Assets or the business of Seller, including but not
limited to, liability under CERCLA (i) that occurs on or after the Closing Date;
or (ii) that are disclosed in the Environmental Reports, arising from or
relating to:

(a) any future environmental contamination of the Real Property or
the Purchased Assets including, but not limited to, groundwater
contamination or any contamination which may emanate from the Real Property
or the Purchased Assets to adjacent properties or the surrounding
environment;

(b) any future generation, transport, storage, disposal, treatment
or other handling, or arrangement therefor, of any waste, materials,
contaminants, pollutants or other

<PAGE>

substances that might contaminate the Real Property or the Purchased
Assets, damage the environment or otherwise subject Buyer to liability; and

(c) any future activities at or operation of the Real Property or the
Purchased Assets that in any way might be alleged to fail to comply with
any requirements of any applicable Environmental Laws.

This release shall survive the closing of this transaction.

1.5 CLOSING. The purchase and sale provided for herein shall be
consummated and closed (the "Closing") at the offices of NBD Bank, N.A., 29700
Van Dyke, Warren, MI 48093, or at such other place as Seller and Buyer shall
mutually agree upon, on the date of this Agreement. The date of the Closing is
referred to herein as
the "Closing Date."

1.6 PURCHASE PRICE AND PAYMENT. The Purchase Price for the Purchased
Assets (the "Purchase-Price")shall be $700,000, payable as follows:

(a) $550,000 will be paid at Closing by wire transfer of immediately
available funds to an account designated by Seller;

(b) $150,000 will be paid by delivery of Buyer's promissory notes in
the amounts of $100,000 and $50,000 the form of Exhibit 4 attached hereto
(the "Notes"). The Notes will be personally guarantied by Gerald K. Groves
pursuant to a Guaranty in the form of Exhibit 5 attached hereto (the
"Guaranty") and will be secured by a security interest in all personal
property of Buyer pursuant to a Security Agreement in the form of Exhibit
6 attached hereto (the "Security Agreement"), and a second mortgage on the
Real Property in the form of Exhibit 7 attached hereto (the "Mortgage").

1.7 ALLOCATION OF PURCHASE PRICE. The parties agree that the Purchase
Price shall be allocated among the Purchased Assets in the manner set forth in
Exhibit 8 attached hereto as a part hereof.

1.8 TRANSFER TAXES. All applicable sales and transfer taxes, if any,
arising by reason of the transfer of the Purchased Assets under this Agreement,
will be borne by Seller.

1.9 PRORATIONS. The parties will prorate and apportion as of the Closing
Date general real estate taxes (including supplemental taxes, if any) based on
1995 city, school and county taxes paid by Seller as shown on the latest tax
bill. Prepaid rents, personal property taxes and other charges will be prorated
and apportioned as of the Closing Date. Seller will be charged with the cost of
discharging any monetary liens and they will be discharged as of the Closing
Date. All assessments, transfer taxes and conveyance fees will be charged to and
paid by Seller. Seller will use its best efforts to cause final water, gas,
sewer, electric and all other utility meter readings to be made as of or as
close to the Closing Date as Seller will promptly pay the final bills rendered
on the basis of the final readings and will deliver to Buyer evidence of their
payment.

ARTICLE 2

REPRESENTATIONS AND WARRANTIES
OF THE SELLER

<PAGE>

The Seller represents and warrants to Buyer that on the date hereof:

2.1 CORPORATE STATUS. The Seller is a corporation duly-organized, validly
existing and in good standing under the laws of the State of Michigan, with full
corporate power and authority to own its assets and conduct its businesses. The
Seller is qualified to transact business in each state or jurisdiction in which
the conduct of its business or ownership of its properties in that state or
jurisdiction requires qualification. Seller has delivered to Buyer complete and
correct copies of Seller's Articles of Incorporation and By-Laws, as amended and
as now in effect.

2.2 AUTHORITY. Seller has the full legal right, power and authority,
without the consent of any other person, to enter into this Agreement and the
other documents delivered in connection herewith and consummate the transactions
contemplated herein and therein, and the execution and delivery of this
Agreement and the other documents delivered in connection herewith and the
consummation of the transactions contemplated herein and therein do not and
shall not violate or conflict with any provision of law, any regulation, order,
decree or judgment of any court or governmental agency, or of the Articles of
Incorporation or By-Laws of the Seller, as amended, or result in the breach or
termination of any provision of or constitute a default under any indenture,
agreement or other instrument to which Seller is a party or by which its or
their properties may be bound.

2.3 CORPORATE AUTHORIZATION AND VALIDITY. Seller has taken all necessary
legal action to authorize and approve the execution, delivery and performance of
this Agreement and all the documents to be delivered in connection herewith and
all transactions contemplated herein and therein. This Agreement has been and
the documents delivered in connection herewith shall be duly executed by Seller
and shall constitute lawful, valid and binding obligations of Seller,
enforceable in accordance with their terms (except as enforcement may be limited
by applicable bankruptcy, insolvency, rearrangement, reorganization or similar
debtor relief legislation affecting the rights of creditors and except that
specific performance is a discretionary, equitable remedy).

2.4 TITLE TO PURCHASED ASSETS. Seller has, and will have, good and
unencumbered marketable title to the Purchased Assets, free and clear of all
liens (other than liens for taxes not yet due and payable) encumbrances or
claims whatsoever, except as set forth in the warranty deed for the Real
Property being delivered by Seller. Except for UCC-l financing statements of
National Canada Finance Corp., releases of which are being delivered by Seller
to Buyer concurrently herewith, no financing statement under the Uniform
Commercial Code has been filed on any of the Purchased Assets and Seller has not
signed any such financing statement or any security agreement, mortgage or other
instrument authorizing any secured party or mortgagee thereunder to file any
such financing statement. Seller is not a party to any consignment agreement
and is in possession of its tangible personal property, all of which is located
at its facilities in Detroit, Michigan..

ARTICLE 3

REPRESENTATION AND WARRANTIES OF BUYER

Buyer represents and warrants to the Seller that on the date hereof:

3.1 ORGANIZATION AND GOOD STANDING. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Michigan.

<PAGE>

3.2 AUTHORITY. Buyer has full legal right, power and authority, without
the consent of any other person, to enter into this Agreement and the other
documents delivered in connection herewith and to consummate the transactions
contemplated herein and therein, and the execution and delivery of this
Agreement and the other documents delivered in connection herewith and the
consummation of the transaction contemplated herein and therein do not and shall
not violate or conflict with any provision of law, any regulation, order,
decree, or trier of any court or governmental agency or the Articles of
Incorporation or By-laws of Buyer, as amended, or result in the breach or
termination of any provision or constitute a default under any indenture,
agreement or other instrument to which Buyer is a party or by which its
properties may be bound.

3.3 CORPORATE AUTHORIZATION AND VALIDITY. Buyer has taken all necessary
legal action to authorize and approve the execution, delivery and performance of
this Agreement and all the documents to be delivered in connection herewith and
all transactions contemplated herein and therein. This Agreement has been and
the documents delivered in connection herewith shall be duly executed by Buyer
and shall constitute lawful, valid and binding obligations of Buyer, enforceable
in accordance with their terms (except as enforcement may be limited by
applicable bankruptcy, insolvency, rearrangement, reorganization or similar
debtor relief legislation affecting the rights of creditors and except that
specific performance is a discretionary, equitable remedy).

3.4 Environmental. Buyer and Groves represent that to their knowledge
there are no (i) violations of Environmental Laws relating to the Real Property
or the Purchased Asses; and (ii) environmental liabilities not disclosed in the
Environmental Reports.

ARTICLE 4
BUYER'S ACKNOWLEDGMENT

Buyer acknowledges (a): that Gerald M. Groves, the principal shareholder
and chief executive officer of buyer, has been the President and chief operating
officer of Seller for more than ten years and, as a result, has a thorough
knowledge of all aspects of the assets, operations and business of Seller, (b)
that neither Seller nor any of its agents, representatives or attorneys have
made any representations or warranties of any type or nature whatsoever with
respect to any fact, matter or condition relating to any of the Purchased Assets
or the business of Seller, including, without limitation, the environmental
condition of the Purchased Assets or the business of Seller, other than as
specifically set forth in this Agreement, and (c) that Buyer has had an adequate
opportunity to inspect the Purchased Assets and all matters pertaining thereto,
including the Environmental Reports and has reviewed such reports with the
assistance of legal counsel and any other experts Buyer deemed appropriate. By
closing the purchase of the Purchased Assets, Buyer shall be deemed to have
purchased the Purchased Assets in an "AS IS AND WITH ALL FAULTS" condition in
each and every respect (including, without limitation, with respect to the
environmental condition of the Purchased Assets). In addition, notwithstanding
any other provisions of this Agreement, Seller shall have no liability for
breach of any warranty or representation or for indemnification of Buyer as a
result of any matter of which Groves has actual knowledge.

ARTICLES

THE SELLERS'S CONDITIONS PRECEDENT

All of the following shall be conditions precedent to the Seller's
obligations to consummate the transaction contemplated by this Agreement:

<PAGE>

5.1 TRUTH AND ACCURACY OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties made by Buyer herein shall be accurate and
correct in all material respects on and as of the date of Closing as if made on
and as of the date and the Seller shall have received a certificate dated at the
Closing signed by Buyer to the foregoing effect.

5.2 PERFORMANCE OF AGREEMENTS. Buyer shall have performed all its
covenants and agreements contained herein and required to be performed on or
before the Closing.

5.3 DOCUMENTS TO BE DELIVERED TO BUYER. On or before the Closing Buyer
shall execute and deliver or cause to be delivered all of the Buyer Closing
Documents (as defined herein).

5.4 NO LITIGATION. No suit, action or other proceeding shall be pending
or, to the best knowledge of the Buyer, threatened before any court or
governmental agency seeking to restrain, prohibit or to obtain damage or other
relief in connection with this Agreement or the consummation transaction
contemplated herein, there shall have been no investigation or inquiry made or
commenced by any governmental agency in connection with this Agreement or the
transactions contemplated herein.

ARTICLE 6

BUYER'S CONDITIONS PRECEDENT

All of the following shall be conditions precedent to Buyer's obligations
to consummate the transactions contemplated by this Agreement.

6.1 TRUTH AND ACCURACY OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties made by the Seller contained in this Agreement
shall be accurate and correct in all material respects on and as of the date of
Closing as if made on and as of that date. The Exhibits referred to herein and
the documents and schedules delivered pursuant hereto shall likewise be accurate
and correct in all material respects on and as of the date of Closing as if
prepared on and as of that date.

6.2 MATERIAL ADVERSE EVENTS. The business or property of Seller shall not
have been materially adversely affected as of the Closing in any way as a result
of any casualty or disaster, accident, labor dispute, exercise of the power of
eminent domain, or other governmental act, or any other Act of God or the public
enemy.

6.3 PERFORMANCE OF AGREEMENTS. The Seller shall have performed all its
covenants and agreements contained herein and required to be performed on or
before the Closing.

6.4 DOCUMENTS TO BE DELIVERED BY SELLER. On or before the Closing, Seller
shall execute and deliver or cause to be delivered all of Seller's Closing
Documents, respectively.

6.5 NO LITIGATION. No suit, action or other proceeding shall be pending
or, to the best knowledge of the Seller threatened before any court or
governmental agency seeking to restrain, prohibit or to obtain damages or other
relief in connection with this Agreement or the consummation of the transaction
contemplated herein, there shall have been no investigation or inquiry made or
commenced by any governmental agency in connection with this Agreement or the
transactions contemplated herein.

<PAGE>

ARTICLE 7

CLOSING DOCUMENTS AND FUNDS

7.1 SELLER'S CLOSING DOCUMENTS. Seller shall deliver to Buyer on the
Closing. Date the following..(the .1' Seller's Closing documents): ..-

(a) Good and sufficient bills of sale, deeds, assignments and other
instruments of transfer with covenants or warranties as shall be necessary
to assign and transfer to and vest in Buyer good and marketable title to
all the Purchased Assets, free and clear of any and all liabilities, liens,
claims and encumbrances except those specifically permitted by this
Agreement;

(b) All consents of third parties, if any, which are necessary to
effectively transfer the Purchased Assets in the manner provided for
herein, in form and substance satisfactory to counsel for Buyer;

(c) Certificate of the Seller dated the Closing Date certifying that
each of the representations and warranties of the Seller contained herein
are true in all respects as of the Closing Date, that the Seller has
performed all of the covenants and agreements contained herein and required
to be performed as of the Closing Date and that the conditions precedent
set forth in Sections 6.1 through 6.5 hereof have been fulfilled;

(d) Certificate of the Secretary or an Assistant Secretary of the
Seller dated the Closing Date with respect to the incumbency of corporate
officers and their signatures, corporate standing, corporate charter and
by-laws, and corporate director and shareholders resolutions authorizing
and approving this Agreement and the transactions contemplated hereby;

(e) Certificate of Incorporation and all amendments thereto of the
Seller certified by the Secretary of State of the jurisdiction in which the
Seller is incorporated dated not more than thirty (30) days prior to the
Closing Date;

(f) Certificates of good standing for the Seller issued by the
appropriate officials of the jurisdictions in which the Seller is
incorporated and qualified, dated not more than thirty (30) days prior to
the Closing Date;

(g) A legal opinion of Seller's counsel in the form attached hereto
as Exhibit 9; and

(h) Such documents and certificates as may be required by the title
insurance company for the purpose of issuing as of Closing Date its title
insurance policy in the name of Buyer.

7.2 Buyers Closing Documents. Buyers shall deliver to Seller on the
Closing Date the following:

(a) Certificate of the Buyer dated the Closing Date certifying that
each of the representations and warranties of the Buyer contained herein
are true in all respects as of the Closing Date, that the Buyer has
performed all of the covenants and agreements contained

<PAGE>

herein and required to be performed as of the Closing Date and that the
conditions precedent set forth in Sections 5.1, 5.2, 5.3 and 5.4 have been
fulfilled;

(b) Certificate of the Secretary or an Assistant Secretary of Buyer
dated the Closing Date with respect to the incumbency of corporate officers and
their signatures, corporate standing, corporate charter and by-laws, and
corporate director resolutions authorizing and approving this Agreement and the
transactions contemplated hereby;

(c) Certificate of Incorporation of Buyer certified by the Secretary
of State of Michigan, dated not more than thirty (30) days prior to the Closing
Date;

(d) Certificate of good standing for Buyer issued by the Secretary of
State of Michigan, dated not more than thirty (30) days prior to Closing
Date; and

(e) The wire transfer, Notes, Guaranty, Security Agreement, Mortgage
and UCC-1 Financing Statements delivered by Buyer pursuant to Section 1.6
hereof.

(f) A legal opinion of Buyer's counsel in the form attached hereto as
Exhibit 10.

ARTICLE 8
INDEMNIFICATION

8.1 IDENTIFICATION BY SELLER. The Seller shall indemnify, defend and hold
harmless Buyer, it successors and assigns, and its officers, directors and
employees from, against and with respect to any claim, liability, obligation,
loss, damage, assessment, judgment, cost or expense including, without
limitation, reasonable attorneys' fees and costs and expenses reasonably
incurred in investigating, preparing, defending against or prosecuting any
litigation or claim, action, suit, proceeding or demand, of any kind or
character, arising out of or in any manner incident, relating or attributable to
(a) any breach or failure of any representation or warranty of the Seller
contained in this Agreement or in any certificate, instrument or transfer of
other document or agreement executed by the Seller in connection with this
Agreement or otherwise made or given in connection with this Agreement, (b) any
failure by the Seller to perform or observer, or-to have performed or observed,
in full any covenant, agreement or condition to be performed or observed by any
of them under this Agreement or under any certificates or other documents or
agreements executed by any of them in connection with this Agreement, (c) any
agreements, contracts, negotiations or other dealings by Seller with any person
concerning the sale of the business of the Seller, (d) any liabilities, except
liabilities with respect to Environmental Matters, of Seller not specifically
assumed by Buyer pursuant to the provisions hereof including, without
limitation, all liabilities based on products liability or warranty claims
relating to products sold or manufactured by Seller prior to the Closing Date,
regardless of when such liability may arise prior to the Closing Date.

8.2 INDEMNIFICATION BY BUYER. Buyer shall indemnify Seller from, against
and with respect to any claim, liability, damage, judgment and expense
(including reasonable attorneys' fees) arising out of or relating to (a) any
breach or failure of any warranty or representation of Buyer or Groves contained
herein or made pursuant hereto, or (b) any failure by Buyer to perform in full
any covenant, agreement or condition to be performed by Buyer hereunder, or (C)
any failure of Buyer to fulfill, pay or discharge any obligations, debts or
liabilities assumed by Buyer pursuant to this Agreement (including, without

<PAGE>

limitation, liabilities with respect to the environmental condition of the
Purchased Assets or the operation of the business of Seller as described in
Section 1.3 ("Environmental Indemnity").

8.3 LIMIT ON INDEMNIFICATION. Seller shall be liable to the Buyer and the
Buyer shall be liable to the Seller for the full amount of any indemnification
provisions of this Article 9 apply; provided, however, that (i) a party shall
not be liable until the aggregate of all such claims asserted exceeds $25,000;
(ii) in no event will either party be liable to the other for claims of
indemnification in an aggregate amount in excess of $300,000 (except with
respect to Environmental Indemnity), for which there shall be no such
limitation, and (iii) in no event will either party be liable for any claim of
indemnification unless the party seeking indemnification gives written notice of
such claim to the party from whom indemnification is sought within one year
after the Closing Date (except with respect to Environmental Indemnity, as to
which there shall be no limitation); and (iv) the amount of any claim for
indemnification shall be net of any tax or insurance benefits realized by the
party seeking indemnification as a result of the loss.

8.4 DEFENSE OF CLAIM. In case a party (the "Indemnified Party") has
received- actual notice of any claim asserted or any action or administrative or
other proceeding commenced in respect of which claim, action or proceeding for
which indemnity properly may be sought against the other party (the
"Indemnifying Party") pursuant to this Agreement, the Indemnifying Party will
give notice in writing to the Indemnifying Party. Within 15 days after the
earlier of (i) receipt of such notice or (ii) receipt of actual notice by the
Indemnifying Party from sources other than the Indemnified Party, the
Indemnifying Party may give the Indemnified Party written notice of its election
to conduct the defense of such claim, action or proceeding at its own expense.
If the Indemnifying Party has given the Indemnified Party such notice of
election to conduct the defense, the Indemnifying Party may conduct the defense
at its expense, but the Indemnified Party will nevertheless have the right to
participate in the defense, but such participation will be solely at the expense
of the Indemnified Party, without a right of further reimbursement in respect of
such expenses. If the Indemnifying Party has not so notified the Indemnified
Party in writing (within the time above provided) of its election to conduct the
defense of such claim, action or proceeding, the Indemnified Party may (but need
not) conduct (at the Indemnifying Party's expense) the defense of such claim,
action or proceeding. The Indemnified Party may at any time notify the
Indemnifying Party of the Indemnified Party's intention to settle, compromise or
satisfy any such claim, action or proceeding (the defense of which the
Indemnifying Party has not previously elected to conduct) and may make such
settlement, compromise or satisfaction (at the Indemnifying Party's expense)
unless the Indemnifying Party notifies the Indemnified Party in writing (within
15 days after receipt of such notice of intention to settle, compromise or
satisfy) of its election to assume (at its sole expense) the defense of any such
claim, action or proceeding and promptly take appropriate action to implement
such defense. Any settlement, compromise or satisfaction made by the Indemnified
Party, or any such final judgment or decree entered in, any claim, action or
proceeding defended only by the Indemnified Party, regardless of the amount or
terms, will be deemed to have been consented to by, and will be binding on, the
Indemnifying Party as fully as though they alone had assumed the defense and a
final judgment or decree had been entered in such proceeding or action by a
court of competent jurisdiction in the amount of such settlement, compromise,
satisfaction, judgment or decree. If the Indemnifying Party has elected under
this Section 8.4 to conduct the defense of any claim, action or proceeding, then
the Indemnifying Party will be obligated to pay the amount of any adverse final
judgment or decree rendered with respect to such claim, action or proceeding. If
the Indemnifying Party elects to settle, compromise or satisfy any claim, action
or proceeding defended by it, the cost of any such settlement, compromise or
satisfaction will be borne entirely by the Indemnifying Party. The Indemnified
Party and the Indemnifying Party will use all reasonable efforts to cooperate
fully with respect to the defense of any claim, action or proceeding covered by
this Section 8.4

<PAGE>

8.5 This Article 8 sets forth the exclusive remedies of Buyer or Seller
for any claim relating to this Agreement or the transactions contemplated by
this Agreement, except in the event of fraud.

ARTICLE 9

9.1 ABSENCE OF BROKER. The Seller represents and warrants to Buyer that
the services of a broker or finder have not been used by Seller in connection
with any of the matters pertaining to this transaction and that no broker's or
finder's fee will become payable by Buyer by reason of the execution of this
Agreement or the consummation of the transaction contemplated herein and arising
out of the acts or omissions of Seller. Seller shall hold harmless and indemnify
Buyer and its officers, directors and employees from and against any claim for
broker's, finder's or financial advisor's fees, including any cost or expense
incurred in connection with the defense of any suit claiming such fees, or in
any other manner pertaining to claims for such fees, which may become payable by
reason of the acts or omissions of the Seller. Buyer shall hold harmless and
indemnify Seller from and against any claim for broker's, finder's or financial
advisor's fees, including any cost or expense incurred in connection with the
defense of any suit claiming such fees, or in any other manner pertaining to
claims for such fees, which may become payable by reason of the acts or
omissions of Buyer.

9.2 GOVERNING LAW. This Agreement shall be construed, interpreted and the
rights of the parties determined in accordance with the laws of the State of
Michigan.

9.3 EXPENSES. Except as set forth in a letter agreement dated March 8,
1996 between Gerald H. Groves and Meridian National Corporation (see Exhibit
11), each party to this Agreement shall bear its own legal, accounting and other
expenses related to the purchase and sale provided for herein.

9.4 ENTIRE AGREEMENT AND CONSTRUCTION. Except for the agreements
specifically referred to herein, this Agreement (including the Schedules and
Exhibits referred to herein) constitutes the entire agreement among the parties
pertaining to the subject matter hereof and supersedes all prior agreements,
understandings, negotiations and discussions, whether oral or written, of the
parties, and there are no warranties, representations or other agreements
between the parties in connection with the subject matter hereof except as set
forth specifically herein. Any representation or warranty made herein which is
based upon the "knowledge" of a party means actual knowledge without
investigation of any officer or director of a party, provided that the knowledge
of Gerald M. Groves will not be imputed to, or deemed actual knowledge of,
Seller. No amendment, supplement, modification, waiver or termination of this
Agreement shall be implied or be binding (including, without limitation, any
alleged waiver based on a party's knowledge of any inaccuracy in any
representation or warranty contained herein) unless executed in writing by the
party to be bound thereby. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provision hereof
(whether or not similar), nor shall such waiver constitute a continuing waiver
unless otherwise expressly therein provided.

9.5 BENEFIT. All of the terms and provisions of this Agreement by or for
the benefit of the parties shall be binding upon and inure to the benefit of
their successors and assigns. The rights and obligations provided by this
Agreement shall not be assignable by any party. Except as expressly provided
herein, nothing herein is intended to confer upon any person, other than the
parties and their successors as provided herein, any rights or remedies under or
by reason of this Agreement.

<PAGE>

9.6 FORM OF DOCUMENTS. All instruments or documents to be delivered by
any party to this Agreement shall be in a form and content reasonably
satisfactory to the counsel for the party receiving such instrument or document.
Each Exhibit shall be identified by a cover page and initialed on each page on
behalf of the Seller by an officer of or counsel for the Seller. Buyer's
authorized representative (for purposes of identification and to acknowledge
receipt only) shall likewise initial each page thereof. Each Exhibit shall be
deemed an integral part of this Agreement.

9.7 COUNTERPARTS. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same Agreement.

9.8 NOTICES. All notices, requests, demands and other communications under
this Agreement must be in writing and will be deemed duly given, unless
otherwise expressly indicated to the contrary in this Agreement, (i) when
personally delivered, (ii) upon receipt of a telephonic facsimile transmission
with a confirmed telephonic transmission answer back, (iii) three (3) days after
having been deposited in the United States mail, certified or registered, return
receipt requested, postage prepaid, or (iv) one business day after having been
dispatched by a nationally recognized overnight courier service, addressed to
the parties or their permitted assigns at the following addresses (or at such
other address or number as is given in writing by either party to the other) as
follows:

If to Buyer to: Mr. Gerald M. Groves
Meridian International, Inc.
312 West End Avenue
Detroit, MI 48209
Facsimile: (313) 841-7809

With a copy to: Robert D. Hicks, Esq.
3921 Amherst Road
Royal Oak, MI 48073
Facsimile: (810) 549-0448

If to Seller: Mr. James L. Rosino
Meridian Environmental Services, Inc.
805 Chicago Street
Toledo, OH 43611
Facsimile: (419) 729-1217

With a copy, in Michael J. Meaney, Esq.
the case of a Benesch, Friedlander, Coplan & Aronoff
notice to Seller 2300 BP America Building
to: Cleveland, OH 44114
Facsimile: (216) 363-4588

9.9 BULK SALES. Buyer hereby waives compliance with all applicable bulk
sale laws.

9.10 SURVIVAL OF REPRESENTATIONS. WARRANTIES AND COVENANTS. The
representations, warranties, covenants and agreements contained in this
Agreement and in any certificate or instrument provided for herein shall be
deemed to have been remade as of the Closing Date and survive thereafter and
continue in full force and effect after the consummation of the purchase and
sale of the Purchased Assets.

<PAGE>

9.11 PRESS RELEASES. Buyer will not issue or cause the publication of any
press release or other public announcement with respect to this Agreement or the
transactions contemplated under this Agreement without the prior consent of
Seller.

9.12 CERTAIN ADJUSTMENTS. If Buyer receives payment from a customer in
respect of goods shipped by Seller, Buyer promptly will remit such amount to
Seller. If Seller receives payment from a customer in respect of goods shipped
by Buyer, Seller promptly will remit such amount to Buyer.

[SIGNATURE PAGE FOLLOWS)

<PAGE>

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
and year first above written.

MERIDIAN ENVIRONMENTAL SERVICES, INC.

By: /s/ James L. Rosino
----------------------------------
Its Vice President - Finance

MERIDIAN INTERNATIONAL, INC.

By: /s/ Gerald M. Groves
----------------------------------
Its President

/s/ Gerald M. Groves
----------------------------------
GERALD M. GROVES, INDIVIDUALLY

<PAGE>

MERIDIAN ENVIRONMENTAL SERVICES, INC.
805 Chicago Street
Toledo, OH 43611

July 3, 1996

Meridian International, Inc.
312 West End Avenue
Detroit, MI 48209

Gentlemen:

The purpose of this side letter is to set forth certain amendments to tile
Purchase Agreement between us of this date.

Section 1.6 of the Purchase Agreement is hereby amended to provide that the
Purchase Price of $700,000 shall be payable $500,000 Closing and $200,000 by
delivery of Buyer's promissory note in the amounts of $100,000, $50,000 and
$50,000 (the "Notes"). All three of the Notes wig be personally guaranteed by
Gerald M. Groves pursuant to the Guaranty and will be secured pursuant to the
Security Agreement and the Mortgage.

Very truly yours,

MERIDIAN ENVIRONMENTAL
SERVICES, INC.

By: /s/ James L. Rosino
------------------------------
Its: Vice-President - Finance

ACCEPTED AND AGREED
MERIDIAN INTERNATIONAL, INC..

By: /s/ Gerald M, Groves - President
-----------------------------------
Gerald M. Groves, President

<PAGE>

EXHIBIT 10.20(a)

STOCK PURCHASE AGREEMENT

BY AND AMONG

EPI TECHNOLOGIES, INC.

and

Each of the undersigned Investors

<PAGE>

TABLE OF CONTENTS

Page
----
ARTICLE I DEFINED TERMS 1
ARTICLE II PURCHASE AND SALE TERMS 3
Section 2.1 Purchase and Sale 3
Section 2.2 Payment 3
Section 2.3 Transfer Legends and Restrictions 3
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY 4
Section 3.1 Corporate Existence 4
Section 3.2 Power and Authority 5
Section 3.3 Financial Condition 5
Section 3.3.1 Absence of Undisclosed Liabilities 5
Section 3.3.2 Taxes 6
Section 3.3.3 Subsidiaries 6
Section 3.3.4 Capitalization 6
Section 3.3.5 Conduct of Business 6
Section 3.4 No Material Adverse Change 6
Section 3.5 Litigation 6
Section 3.6 Licenses; Compliance with Laws, Other
Agreements,.. 6
Section 3.6.1 Government Approvals 7
Section 3.6.2 Investment Company Act 7
Section 3.7 Ownership and Status of Stock 7
Section 3.8 Brokers, etc. 7
Section 3.9 Registration Statement 7
Section 3.10 Relationship with Meridian 8
Section 3.11 Intellectual Property Rights 8
Section 3.12 No Misrepresentation 8
Section 3.13 Investigation 8
ARTICLE IV COVENANTS OF THE COMPANY 8
Section 4.1 Accounts and Reports 8
Section 4.2. Use of Proceeds 9
Section 4.3. Rule 144 9
Section 4.4. Taxes and Assessments 10
Section 4.5. Maintenance of Corporate Existence 10
Section 4.6. Governmental Consents 10
Section 4.7. Further Assurances 10
Section 4.8. Preemptive Rights 10
Section 4.9. Auditor 11
Section 4.10. Waiver 11
Section 4.11. Termination of Covenants 11
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE [INVESTORS 12
Section 5.1. Power and Authority 12
Section 5.2. Purchase for Investment 12
Section 5.3. Financial Matters 12
Section 5.4. Brokers, etc. 13
ARTICLE VI THE CLOSING AND CLOSING CONDITIONS 13

<PAGE>

Section 6.1. The Closing 13
Section 6.2. Issuance of Common Stock ....13
Section 6.3. Legal Opinion from Counsel for
the Company ....13
Section 6.4. Certificate of Officer of the Company ....13
Section 6.5. Execution of Related Documents 13
Section 6.6. Stockholders Agreement 14
Section 6.7. Representations and Warranties to be
True and Correct 14
Section 6.8. Contribution by Meridian 14
Section 6.9. Certificate of Incorporation and Bylaws 14
Section 6.10. Performance 14
Section 6.11. All Proceedings to Be Satisfactory 14
ARTICLE VII MISCELLANEOUS 14
Section 7.1. Expenses 14
Section 7.2. Remedies Cumulative 14
Section 7.3. Brokerage 14
Section 7.4. Severability 15
Section 7.5. Parties in Interest 15
Section 7.6. Notices 15
Section 7.7. No Waiver 15
Section 7.8. Amendments and Waivers 15
Section 7.9. Rights of Investors 15
Section 7.10. Survival of Agreements, etc. 15
Section 7.11. Construction 16
Section 7.12. Entire Understanding 16
Section 7.13. Counterparts 16
Section 7.14. Assignment; No Third-Party Beneficiaries 16
ARTICLE VIII ARBITRATION 16

EXHIBIT
Exhibit 2.1 List of Investors
Exhibit 3.3.1 Undisclosed Liabilities
Exhibit 3.3.4 Capitalization
Exhibit 3.4 Material Adverse Change
Exhibit 3.9 Exceptions to Registration Statement
Exhibit 6.3 Opinion of Company Counsel
Exhibit 6.5 Registration Rights Agreement
Exhibit 6.6 Stockholders Agreement

<PAGE>

STOCK PURCHASE AGREEMENT

AGREEMENT dated November 19, 1996, between EPI Technologies, Inc., a
Delaware corporation (formerly named "Environmental Purification Industries,
(Inc.") (the "Company") and each of the undersigned Investors (the "Investors").

PREAMBLE

The Company wishes to obtain equity financing. The Investors are willing,
on the terms contained in this Agreement, to purchase Common Stock, $.01 par
value, of the Company.

ARTICLE I

DEFINED TERMS

The following terms, when used in this Agreement, have the following
meanings, unless the context otherwise indicates:

"33 Act" means the Securities Act of 1933, as amended.

"34 ACT" means the Securities Exchange Act of 1934, AS amended.

"Affiliate" means, with respect to any specified Person, (1) any other
Person who, directly or indirectly, owns or controls, is under common ownership
or control with, or is owned or controlled by, such -fled Person, (2) any other
Person who is a director, officer or partner or is, directly or indirectly, the
beneficial owner of 10 percent or more of any class of equity securities, of the
specified Person or a Person described in clause (1) of this paragraph, (3)
another Person of whom the specified Person is a director, officer or partner or
is, directly or indirectly, the beneficial owner of 10 percent or more of any
class of equity securities, (4) another Person in whom the specified Person has
a substantial beneficial interest or as to whom the -fled Person serves as
trustee or in a similar capacity, or (5) any relative or spouse of the specified
Person or any of the foregoing Persons, any relative of such spouse or any
spouse of any such relative.

"Best Knowledge" shall mean and include (a) actual knowledge of the Person,
including, the actual knowledge of any of the officers or directors of the
Company and (b) that knowledge which a prudent businessperson could have
obtained in the management of his business after making due inquiry, and after
exercising due diligence, with respect thereto.

"Bylaws" means the bylaws of the Company.

<PAGE>

"Certificate of Incorporation" means the certificate of incorporation of
the Company, as originally filed with the Delaware Secretary of State together
with all amendments thereto.

"Closing" and "Closing Date" mean the consummation of the Company's sale
and the Investors' purchase of the Common Stock, and the date on which the same
occurs or occurred.

"Commission" means the United States Securities and Exchange Commission.

"Common Stock" means the Common Stock of the Company.

"Financial Statements" shall mean all of the following:

(a) the audited financial statements of the Company contained in the
Registration Statement;

(b) the unaudited financial statements of NPI and MEPI contained in
the Registration Statement; and

(c) the unaudited financial statements of the Company and of NPI and
MEPI as of August 31, 1996 and for the six-month period then ended.

"Financial Statement Date" means the date of the most recent Financial
Statements of the Company.

"Holder" means an Investor (or its successors or assigns) who continues to
hold Common Stock.

"Independent Public Accountants" means that firm of independent certified
public accountants selected by the Company's Board of Directors.

<PAGE>

"Investor Board Member" means that individual who sits on the Company's
Board of Directors at the request of the Investors.

"MEPI" means MEPI Corp., an Ohio corporation.

"NPI' means National Purification, Inc., an Ohio Corporation.

"Public Offering" means both (i) the date of the effectiveness of any
registration statement relating to the underwritten distribution Company's
Common Stock which is filed by the Company under the '33 Act with proposed
maximum offering proceeds to the Company (calculated in accordance with Rule 457
under the '33 Act, as such rule may be amended from time to time) of $3,000,000
or more, and (ii) the process of distributing such common stock to the public.

"Qualified Holder" means an Investor or a transferee of an Investor or
another Qualified Holder (assuming all such transfers were made in accordance
with this Agreement), provided that a transferee of an Investor who, in the
reasonable judgment of Company, is affiliated with an actual or potential
competitor of the Company may be deemed by the Company not to be a Qualified
Holder.

"Registration Statement" means the draft dated September 6, 1996 of
Amendment No. 1 to Registration Statement on Form S-I of the Company, a copy of
which has been furnished to the Investors.

"Shares" means any shares of the Company's Common Stock.

"Subsidiary" or "Subsidiaries" of any Person means any corporation or other
entity of which securities or other ownership interests having ordinary voting
power to elect a majority of the board of directors or other Persons performing
similar functions are at the time directly or indirectly owned or controlled by
such Person or one or more Subsidiaries of such Person.

The masculine form of words includes the feminine and the neuter and vice
versa, and, unless the context otherwise requires, the singular form of words
includes the plural and vice versa. The words "herein," "hereof," "hereunder',"
and other words of similar import when used in this Agreement refer to this
Agreement as a whole, and not to any particular section or subsection.

ARTICLE II

PURCHASE AND SALE TERMS

<PAGE>

Section 2.1 PURCHASE AND SALE. Subject to the terms of this Agreement, the
Company shall issue and sell to the Investors and each Investor shall purchase
from the Company at the Closing the number of shares of Common Stock at the
aggregate purchase price set forth opposite its name in Exhibit 2.1. The
obligation of each Investor to purchase is several and not joint, but the
obligation of each Investor to purchase such shares is conditioned upon each
other Investor purchasing and paying for the shares to be purchased by it.

Section 2.2 PAYMENT. Each of the Investors shall pay the purchase price of
the Common Stock purchased by it in full at the Closing by a certified or
official bank check or by wire transfer to an account designated by the Company.

Section 2.3 TRANSFER LEGENDS AND RESTRICTIONS. The transfer of the Shares
will be restricted in accordance with the terms hereof Each certificate
evidencing the Shares, including any certificate issued to any transferee
thereof, shall be imprinted with legends in substantially the following form
(unless otherwise permitted under this Section or unless such Shares shall have
been effectively registered and sold under the '33 Act and the applicable state
securities laws):

"THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933. THESE SHARES MAY NOT BE SOLD OR TRANSFERRED IN
THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION
THEREFROM UNDER SAID ACT. TRANSFER OF THESE SHARES IS
FURTHER RESTRICTED AS PROVIDED IN A STOCK PURCHASE
AGREEMENT A REGISTRATION RIGHTS AGREEMENT AND A
STOCKHOLDERS AGREEMENT, ALL DATED NOVEMBER 19,1996, COPIES
OF WHICH ARE AVAILABLE AT THE COMPANY'S OFFICES."

So long as any legend described in this Section shall remain on the
certificates evidencing the Shares, prior to any transfer of any of the same
(except for a transfer effected pursuant to an effective registration statement
under the '33 Act) the Holder of any Shares shall give written notice, to the
Company of such Holder's intention to effect such transfer. Such notice shall
describe the proposed method of transfer of the Shares in question. Upon receipt
by the Company of such notice and if in the opinion of counsel to such Holder,
which counsel and opinion shall be reasonably satisfactory to the Company, the
proposed transfer may be effected without registration under the '33 Act in
compliance with Section 4(2) or Rules 144 or 144A thereunder and under
applicable state securities laws, then the proposed transfer may be effected;
provided, however, that in the case of any Holder which is a partnership, no
such opinion of COUNSEL shall be necessary for a transfer by such partnership to
a partner of such partnership, or a retired partner of such partnership who
retires after the date such partnership became a Holder, or the estate of any
such partner or retired partner, if the transferee agrees in writing to be
subject to the terms of this Section to the same extent as if such transferee
were originally a signatory to this Agreement. Upon receipt by the Company of
such opinion and of such agreement by the transferee to be bound by this
Section, the Holder of such Shares shall thereupon be entitled to transfer the
same in accordance with the terms of the notice delivered by such Holder to the
Company. Each certificate evidencing the Shares issued upon any such transfer
shall bear the

<PAGE>

legend set forth in this Section. Upon the written request of a Holder of the
Shares, the Company shall remove the foregoing legend from the certificates
evidencing such Shares and issue to such Holder new certificates therefor, free
of any transfer legend if; with such request, the Company shall have received an
opinion of counsel selected by the Holder, such counsel and opinion to be
reasonably satisfactory to the Company, to the effect that any transfers by said
Holder of such Shares may be made to the public without compliance with either
Section 5 of the '33 Act or Rule 144 thereunder and applicable state securities
laws.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to the Investors, at and as of the
Closing, that:

Section 3.1 CORPORATE EXISTENCE. The Company is a corporation duly
incorporated, validly existing and in good standing under Delaware law and has
unconditional power and authority to conduct its business and own its properties
as now conducted and owned and as proposed to be conducted and owned as set
forth in the Registration Statement. The Company is qualified as a foreign
corporation to do business in all jurisdictions in which the nature of its
properties and business requires such qualification and in which noncompliance
with such qualification would materially affect the Company's business. Without
limiting the preceding sentence, the Company is qualified as a foreign
corporation to do business in the State of Ohio.

Section 3.2 POWER AND AUTHORITY. The Company has unconditional power and
authority, and has taken all required corporate and other action necessary
(including stockholder approval, if necessary) to permit it to own and hold
properties to carry on its current business, to execute and deliver this
Agreement, to issue and sell the Common Stock as herein provided and otherwise
to carry out the terms of this Agreement and all other documents, instruments,
or transactions required by this Agreement, and none of such actions will
violate any provision of the Company's Bylaws or Certificate of Incorporation,
or result in the breach of or constitute a default under any agreement or
instrument to which the Company is a party or by which it is hound or result in
the creation or imposition of any material lien, claim or encumbrance on any
Company asset. This Agreement has been duly executed and delivered by the
Company and (assuming the due authorization, execution and delivery hereof by
the Investors) constitutes the valid and binding obligation of the Company
enforceable against the Company in accordance with its terms. No event has
occurred and no condition exists which would constitute a violation of this
Agreement. Neither this Agreement nor any other gives any person rights to
terminate any agreements with the Company or otherwise to exercise rights
against the Company.

Section 3.3 FINANCIAL CONDITION. The Company has previously furnished to
the Investors the Financial Statements, which, together with the footnotes
thereto, are complete and correct and fairly present the financial condition of
the Company as of the dates specified. The Financial Statements are in
accordance with the books and records of the Company, NPI or MEPI, as the case
may be, as of the dates and for the periods indicated, present fairly the
financial position, results of operations, shareholders' equity and changes in
financial position of such corporations

<PAGE>

as of the respective dates and for the respective periods indicated, and have
been prepared in accordance with generally accepted accounting principles
("GAAP") applied on a consistent basis (except (i) as described in such
statements, notes thereto and reports and (ii) in the case of interim Financial
Statements, for normal year-end adjustments and for the omission of footnote
disclosures). The Company has made no change in accounting principles since the
Financial Statement Date.

Section 3.3.1 ABSENCE OF UNDISCLOSED LIABILITIES. As of the Financial
Statement Date, the Company had (and on the date hereof the Company has) no
material liabilities (matured or unmatured,, fixed or contingent, which are not
fully reflected or provided for on the balance sheet of the Company as at the
Financial Statement Date), or any material loss contingency (as defined in
Statement of Financial Accounting Standards No.5) whether or not required by
GAAP to be shown on the Financial Statements, except (i) obligations to perform
under commitments incurred in the ordinary course of business after the
Financial Statement Date, and (ii) other liabilities as set forth in Exhibit
3.3.1.

Section 3.3.2 TAXES. For all periods ended on or prior to the
Financial Statement Date, the Company has filed or will file within the time
prescribed by law (including extensions of time approved by the appropriate
taxing authority) all federal and state income and franchise tax returns and
reports required to be filed by it with the Internal Revenue Service or state
taxing authority (and such returns and reports are true and correct in all
material respects), and has paid in full or made adequate provision in the
Financial Statements dated the Financial Statement Date for the payment of, all
taxes, interest, penalties, assessments or deficiencies shown to be due thereon,
except where the failure to file such tax return or pay such taxes would not
have a material adverse effect on the financial condition of the Company.

Section 3.3.3 SUBSIDIARIES. The Company has no subsidiaries and owns
no capital stock or other securities, or rights or obligations to acquire the
same, of any other entity, except that on the Closing Date the Company will own
all of the outstanding shares of NPI and MEPI.

Section 3.3.4 CAPITALIZATION. The table set forth on Exhibit 3.3.4
sets forth, as of August 31, 1996, (i) the actual capitalization of the Company
as derived from the Financial Statements and (ii) the capitalization of the
Company adjusted as set forth on such Exhibit.

Section 3.3.5 CONDUCT OF BUSINESS. Since the Financial Statement
Date, the Company has conducted its business in the regular and ordinary course,
except as set forth (I) in this Agreement and (ii) in the sections of the
Registration Statement referred to in Section 3.9.

Section 3.4 NO MATERIAL ADVERSE CHANGE. Since the Financial Statement
Date there has been no material adverse change in the financial or other
condition, properties or business operations of the Company, except as set forth
in Exhibit 3.4.

Section 3.5 LITIGATION. There are no suits, proceedings or
investigations pending or threatened against or affecting the Company or an
officer of the Company which could have a material adverse effect on the
business, assets, or financial condition of the Company or the

<PAGE>

ability of any officer to participate in the affairs of the Company, or which
concern in any material way the transactions contemplated by the Agreement.

Section 3.6 LICENSES: COMPLIANCE WITH LAWS. OTHER AGREEMENTS ETC. The
Company has all material franchises, permits, licenses, and other rights which
it currently deems necessary for the conduct of its business. The Company is not
in violation of any order or decree of any court, and neither this Agreement nor
the transactions contemplated hereby will result in any such violation. To its
best knowledge, the Company is not in violation of the provisions of any
contract or agreement to which it is a patty or by which it may be bound, or of
any law, order, or regulation of any governmental authority, and neither this
Agreement nor the transactions contemplated hereby will result in any such
violation.

Section 3.6.1 GOVERNMENT APPROVALS. Except as may be required by any
state "blue sky" laws, no authorization, consent, approval, license,
qualification or formal exemption from, nor any filing, declaration or
registration with, any court, governmental agency, regulatory authority or
political subdivision thereof, any securities exchange or any other Person
is required in connection with the execution, delivery or performance by
the Company of this Agreement in order to consummate the TRANSACTIONS
contemplated in this Agreement. All such authorizations, consents,
approvals, licenses, qualifications, exemptions, filings, declarations and
registrations have been obtained or made, as the case may be, and are in
full force and effect and are not the subject of any pending or, to the
knowledge of the Company, threatened attack by appeal or direct proceeding
or otherwise.

Section 3.6.2 INVESTMENT COMPANY ACT. The company is not, and
immediately after the Closing will not be, and "investment company" or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act.

Section 3.7 OWNERSHIP AND STATUS OF STOCK. The Company is currently
authorized to issue 3,000 shares of Common Stock, of which 100 shares are issued
and outstanding and owned by Meridian National Corporation. Upon issuance of and
payment for the shares of Common Stock to be issued hereunder in accordance with
the terms of this Agreement, all of the outstanding shares of the Common Stock
will be, validly issued, fully paid and nonassessable. All the outstanding
Common Stock has been issued in full compliance with applicable law. The Company
has outstanding no option, warrant or other commitment to issue or to acquire
any shares of its capital stock, or any securities or obligations convertible
into or exchangeable for its capital stock, nor, except as contemplated hereby,
has it given any person any right to acquire from the Company or sell to the
Company any shares of its capital stock. There is, and immediately upon
consummation of the transactions contemplated hereby there will be, no
Agreement, restriction or encumbrance with respect to the sale or voting of any
shares of capital stock of the Company (whether outstanding or issuable upon
conversion or exercise of outstanding securities) except for the offering and
sale of Common Stock pursuant to this Agreement. Except as set forth in this
Agreement, the Company has no obligation to register any of its presently
outstanding securities or any of its securities which may thereafter be issued
under the '33 Act.

<PAGE>

Section 3.8 BROKERS ETC. The Company has not dealt with any broker,
finder, or other similar person in connection with the offer or sale of the
shares of Common Stock to be issued hereunder and the transactions contemplated
by this Agreement, and the Company is not under any obligation to pay any
broker's fee, finder's fee or commission in connection with such transactions.

Section 3.9 REGISTRATION STATEMENT. The Company has furnished the
Investors with a copy of the Registration Statement. The sections of the
Registration Statement entitled Business, Management, Management's Discussions
and Analysis of Financial Condition and Results of Operations and Relationships
Between the Company and Meridian do not contain any untrue statement of a
material fact nor do they omit to state any material fact necessary to make the
statement therein not misleading, except as set forth on Exhibit 3.9. Investors
acknowledge that, notwithstanding the statements to the contrary set forth in
the Registration Statement, Meridian has not made any contributions to capital
in repayment of advances from Meridian to the Company; provided) however, that,
in the event of a Public Offering, Meridian agrees to make such contributions in
the amount of up to $1,400,000 to the extent required to effectuate such Public
Offering.

Section 3.10 RELATIONSHIP WITH MERIDIAN. The Company has no material
relationships with Meridian other than those described in the section of the
Registration Statement entitled "Relationships Between the Company and Meridian"
and in Exhibit 3.9.

Section 3.11 INTELLECTUAL PROPERTY RIGHTS. The section of the Registration
Statement entitled "Business Technology Licenses" contains an accurate
description of the technology licenses held by the Company. Such licenses
constitute all of the technology rights that are required to enable the Company
to conduct its business as now conducted and as proposed to be conducted as set
forth in the Registration Statement. No royalties, honorariums or fees are or
will be payable by the Company to other persons by reason of the use by the
Company of the technology described in such section of the Registration
Statement' except as set forth in such section of the Registration Statement. To
the best knowledge of the Company, the Company's operations infringe no rights
under patents, trademarks, service marks, trade names, trade secrets, copyrights
or licenses or any other proprietary rights of others.

Section 3.12 NO MISREPRESENTATIONS. No representation or warranty in this
Agreement, or in any exhibit hereto, contains or will contain any untrue
statement of a material fact or omits or will omit to state a material fact
necessary to make the statements contained therein not misleading.

Section 3.13 INVESTIGATION. It shall he no defense to an action for breach
of this Agreement that the Investors or their agents have (or have not) made
investigations into the affairs of the Company.

ARTICLE IV
COVENANTS OF THE COMPANY

<PAGE>

Section 4.1 ACCOUNTS AND REPORTS. Until a Public Offering occurs, the
Company shall furnish to each Qualified Holder copies of the following
certificates, filings and reports:

(a) ANNUAL REPORTS. As soon as available, and in any event within 90
days after the end of each fiscal year, annual financial statements of the
Company (including all schedules and notes thereto), consisting of the
balance sheet as of year end and the related statements of income and
expenses, retained earnings, changes in financial position and cash flows
for the 12-month period then ended, all prepared in accordance with GAAP
consistently applied and certified by the Company's independent public
accountants. Such statements shall be accompanied by the Company's
narrative discussion comparing the financial results to those of the prior
year.

(b) QUARTERLY REPORTS. As soon as available, and in any event within
45 days after the end of each of the first three quarters of each fiscal
year, an unaudited balance sheet and the unaudited statements of income and
cash flow for the year to date, all prepared in accordance with generally
accepted accounting principles consistently applied and accompanied by the
certificate of an officer of the Company.

(c) FORECASTS. As soon as available, but in no event later than one
month after the start of each fiscal year, financial forecasts by month
and, promptly after preparation, any revisions thereto, for the current
fiscal year, unless, in the opinion of counsel to the Company, providing
any such forecast will require inclusion of the same in a subsequent Public
Offering.

(d) OTHER INFORMATION. Upon the reasonable request of a Qualified
Holder, the Company will deliver to such Qualified Holder other information
and data, not proprietary in nature (in the good-faith judgment of the
Company), pertaining to its business, financial and corporate affairs to
the extent that such delivery will not violate any then applicable laws and
any contracts of the Company with third persons. The Company will permit
any person designated by a Qualified Holder in writing, at the expense of
such Qualified Holder, to visit and inspect any of the properties of the
Company, including its hooks of account, and to discuss its affairs,
finances, and accounts with the Company's officers or directors, all at
such reasonable times and as often as a Qualified Holder may reasonably
request, all in a manner consistent with the reasonable security and
confidentiality needs of the Company, provided that the Company shall be
under no such obligation (i) with respect to information deemed in good
faith by the Company to be proprietary or (ii) if the Company's board of
directors reasonably believes such visit, inspection, or discussion would
violate applicable laws or any contract with third persons.

(e) All information furnished under this Section is confidential and
each recipient shall (i) maintain the same in confidence and (ii) take all
reasonable measures to prevent any officer or agent of such recipient from
disclosing the same.

<PAGE>

Section 4.2. USE OF PROCEEDS. The Company shall use the proceeds of the
sale of the Common Stock as follows: (i) approximately $225,000, and any
additional amounts to cover any cost overruns, for completion of installation of
the Polymeric Recovery System at the Company's Toledo, Ohio facility; (ii)
$55,000 for repayment of a promissory note to William D. Feniger, and (iii) the
balance of the proceeds for working capital and general corporate purposes,
which may include, but is not limited to, the payment of expenses related to the
sale of Common Stock pursuant to this Agreement, and unpaid legal, accounting
and printing costs of approximately $400,000 previously incurred related to the
Company's previous attempt to complete a public offering.

Section 4.3. RULE 144. The Company covenants that (a) at all times after
the Company first becomes subject to the reporting requirements of Section 13 or
15(d) of the Exchange Act, the Company will comply with the current public
information requirements of Rule 144(c)(l) under the '33 Act; and (b), the
Company will furnish any Investor upon request with all information within the
possession of the Company required for the preparation and filing of Form 144.

Section 4.4. TAXES AND ASSESSMENTS. The Company will pay any taxes,
assessments and governmental charges, and any liabilities thereon, outstanding
as of the Closing Date. The Company will pay and discharge, before the same
become delinquent and before penalties accrue thereon, all taxes, assessments
and governmental charges upon or against the Company or any of its properties,
and all other material liabilities at any time existing, except to the extent
and so long as (a) the same are being contested in good faith and by appropriate
proceedings in such manner as not to cause any material adverse effect upon the
financial condition of the Company, or the loss of any right of redemption from
any sale thereunder and (b) the Company shall have set aside on its books
adequate reserves with respect thereto.

Section 4.5. MAINTENANCE OF CORPORATE EXISTENCE. Unless otherwise
determined by the Board of Directors of the Company, the Company will preserve,
renew and keep in full force and effect, its corporate existence, qualification
in requisite jurisdictions and rights and privileges necessary or desirable in
the normal conduct of its business.

Section 4.6. GOVERNMENTAL CONSENTS. The Company will obtain all consents,
approvals, licenses and permits required by federal, state, local and foreign
law to carry on its business.

Section 4.7. FURTHER ASSURANCES. The Company will cure promptly any
defects in the creation and issuance of the Shares, and in the execution and
delivery of this Agreement. The Company, at its expense, will promptly execute
and deliver promptly to each Investor upon request all such other and further
documents, agreements and instruments in compliance with or pursuant to its
covenants and agreements herein, and will make any recordings, file any notices,
and obtain any consents as may be necessary or appropriate in connection
therewith.

Section 4.8. PREEMPTIVE RIGHTS.

(a) The Company hereby grants to each Holder a right of first refusal to
purchase, on a pro rata basis, all or any part of New Securities (as defined
below) which the Company may,

<PAGE>

from time to time, propose to sell and issue subject to the terms and conditions
set forth below. A Holder's pro rata share, for purposes of this subsection 4.8,
shall equal a fraction, the numerator of which is the number of shares of Common
Stock then held by such Holder, and the denominator of which is the total number
of shares of Common Stock then outstanding plus the number of shares of Common
Stock issuable upon conversion or exercise of then outstanding convertible
securities, options, rights or warrants.

(b) "NEW SECURITIES" shall mean any capital stock of the Company whether
now authorized or not and rights, options or warrants to purchase capital stock,
and securities of any type whatsoever which are, or may become, convertible into
capital stock; PROVIDED, HOWEVER, that the term "New Securities" does not
include (I) the Shares issuable under this Agreement; (II) securities offered
to the public pursuant to a Public Offering; (iii) securities issued for the
acquisition of another corporation by the Company by merger, purchase of
substantially all the assets of such corporation or other reorganization
resulting in the ownership by the Company of not less than 51% of the voting
power of such corporation; or (iv) securities issued as a result of any stock
split, stock dividend or reclassification of Common Stock, distributable on a
pro rata basis to all holders of Common Stock.

(c) If the Company intends to issue New Securities, it shall give each
Holder written notice of such intention, describing the type of New Securities
to be issued, the price thereof and the terms upon which the Company proposes to
effect such issuance. Each Holder shall have twenty (20) days from the date of
any such notice to agree to purchase all or part of its or his pro rata share of
such New Securities for the price and upon the general terms and conditions
specified in the Company's notice by giving written notice to the Company
stating the quantity of New Securities to be so purchased. Each Holder shall
have a right of overallotment such that if any Holder fails to exercise his or
its right hereunder to purchase his or its total pro rata portion of New
Securities, the other Holders may purchase such portion on a pro rata basis, by
giving written notice to the Company within five days from the date that the
Company provides written notice to the other Holders of the amount of New
Securities with respect to which such nonpurchasing Holder has failed to
exercise its or his right hereunder. All Securities issued to Holders hereunder
shall, upon payment of the applicable purchase price therefor, be fully paid and
non-assessable, and the Company shall bear all of the costs and expenses of such
issuance.

(d) if any Holder or Holders fail to exercise the foregoing right of first
refusal with respect to any New Securities within such 20-day period (or the
additional five-day period provided for overallotments), the Company may within
60 days thereafter sell any or all of such New Securities not agreed to be
purchased by the Holders, at a price and upon general terms no more favorable to
the purchasers thereof than specified in the notice given to each Holder
pursuant to paragraph (c) above. In the event the Company has not sold such New
Securities within such 60-day period, the Company shall not thereafter issue or
sell any New Securities without first offering such New Securities to the
Holders in the manner provided above.

Section 4.9. AUDITOR The Company shall retain a firm of certified public
accountants of established reputation to audit its books and records at least
annually.

<PAGE>

Section 4.10 WAIVER. Any violation of an affirmative or negative covenant
of the Company may be waived prospectively or retrospectively in a given
instance by a vote of the Required Majority (as defined in Section 7.8) of
Holders, but such waiver shall operate only with respect to the particular
violation specified in the waiver.

Section 4.11 TERMINATION OF COVENANTS. The covenants of the Company
contained in this Section shall terminate, and be of no further force or effect,
upon the effective date of a Public Offering.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF THE INVESTORS

Each of the Investors severally represents and warrants to the Company, at
and as of the Closing that:

Section 5.1. POWER AND AUTHORITY. Such Investor has full power and
authority and, if not an individual Investor, has taken all required corporate
(or trust or partnership, as the case may be) and other action necessary to
permit it to execute and deliver this Agreement, and all other documents or
instruments required by this Agreement, and to carry out the terms of this
Agreement and of all such other documents or instruments.

Section 5.2. PURCHASE FOR INVESTMENT. Such Investor is purchasing the
Common Stock for investment, for its own account and not for the account of any
Employee Benefit Plan (or if such Common Stock is being acquired for the account
of any such Plan, such acquisition does not involve a nonexempt prohibited
transaction within the meaning of Section 406 of ERISA or Section 4975 of the
Code) and not with a view to distribution thereof, except for transfers
permitted hereunder. Such Investor understands that the Common Stock must be
held indefinitely unless it is registered under the '33 Act or an exemption from
such registration becomes available, and that the Common Stock may only be
transferred as provided in this Agreement.

Section 5.3. FINANCIAL MATTERS. Such Investor represents and warrants to
the Company that it understands that the purchase of the Shares involves
substantial risk and that its financial condition and investments are such that
it is in a financial position to hold the Shares for an indefinite period of
time and to bear the economic risk of; and withstand a complete loss of, such
Shares. In addition, by virtue of its expertise, the advice available to it and
previous investment experience, such Investor has extensive knowledge and
experience in financial and business matters, investments, securities and
private placements and the capability to evaluate the merits and risks of the
transactions contemplated by this Agreement. Such Investor represents that it is
an "accredited investor" as that term is defined in Regulation D promulgated
under the '33 Act.

During the negotiation of the transactions contemplated herein, the Investor and
its representatives have been afforded full and free access to corporate books,
financial statements, records, contracts, documents, and other information
concerning the Company and to its offices and facilities, have been afforded an
opportunity to ask such questions of the Company's officers

<PAGE>

and employees concerning the Company's business, operations, financial
condition, assets, liabilities and other relevant matters as they have deemed
necessary or desirable, and have been given all such information as has been
requested, in order to evaluate the merits and risks of the prospective
investment contemplated herein.

Section 5.4. BROKERS ETC. Such Investor has dealt with no broker, finder,
commission agent, or other similar person in connection with the offer or sale
of the Common Stock and the transactions contemplated by this Agreement, and is
under no obligation to pay any broker's fee, finder's fee, or commission in
connection with such transactions.

ARTICLE VI

THE CLOSING AND CLOSING CONDITIONS

Section 6.1. THE CLOSING. The purchase and sale of the Common Stock shall
take place at the Closing to be held at the offices of Benesch, Friedlander,
Coplan & Aronoff P.L.L., 2300 BP America Building 200 Public Square, Cleveland,
Ohio 441l4-2378. The Closing shall occur on the date of this Agreement.

The obligation of each Investor to purchase the Common Stock at the Closing
shall be subject to satisfaction of the following conditions at and as of the
Closing:

Section 6.2. ISSUANCE OF COMMON STOCK. The Company shall have duly issued
and delivered certificates to each of the Investors for the number shares of the
Common Stock purchased by such Investor as provided in Exhibit 2.1.

Section 6.3. 1- OPINION FROM COUNSEL FOR THE COMPANY. There shall be made
available to each of the Investors the written opinion of Benesch, Friedlander,
Coplan & Aronoff, counsel for the Company, in substantially the form attached as
Exhibit 6.3.

Section 6.4. CERTIFICATE OF OFFICER OF THE COMPANY. The Company shall have
delivered to the Investors a certificate of its chief executive and chief
financial officers, or alternatives therefor satisfactory to counsel for the
Investors, dated the date of the Closing, to the effect that the representations
and warranties of the Company are true at and as of the Closing as if made at
and as of the Closing, and that each of the conditions in this Article 6 has
been satisfied.

Section 6.5. EXECUTION OF RELATED DOCUMENTS. The Company and the Investors
shall have duly authorized and executed a Registration Rights Agreement in the
form set forth as Exhibit 6.5 hereof

Section 6.6. STOCKHOLDERS AGREEMENT. The Company and the Investors shall
have duly authorized and executed a Stockholders Agreement in the form set forth
as Exhibit 6.6 hereof

Section 6.7. REPRESENTATIONS AND WARRANTIES TO BE TRUE AND CORRECT. The
representations and warranties contained in Article III shall be true and
correct on and as of the Closing Date

<PAGE>

with the same effect as though such representations and warranties had been made
on and as of such date (except to the extent that any representations and
warranties of the Company specifically apply to conditions existing at a
particular date), and the Company shall have certified to such effect to the
Investors in writing.

Section 6.8. CONTRIBUTION BY MERIDIAN. Meridian shall have contributed to
the capital of the Company all of the issued and outstanding shares of NPI and
MEPI.

Section 6.9. CERTIFICATE OF INCORPORATION AND BYLAWS. The Company shall
have delivered to each Investor (i) a copy of the Company's Certificate of
Incorporation, certified by the Delaware Secretary of State and (ii) a copy of
the Company's Bylaws, certified by an officer of the Company.

Section 6.10. PERFORMANCE. The Company shall have performed and complied
with all agreements and conditions contained herein required to be performed or
complied with by it prior to or at the Closing Date, and the Company shall have
certified to such effect to the Investors in writing.

Section 6.11. ALL PROCEEDINGS TO BE SATISFACTORY. All corporate and other
proceedings to be taken by the Company in connection with the transactions
contemplated hereby and all documents incident thereto shall be satisfactory in
form and substance to the Investors and their special counsel, and the Investors
and said counsel shall have received all such counterpart originals or certified
or other copies of such documents as they may reasonably request.

ARTICLE VII

MISCELLANEOUS

Section 7.1. EXPENSES. The Company will bear the reasonable fees and
expenses of the Investors in connection with this Agreement.

Section 7.2. REMEDIES CUMULATIVE. Except as herein provided, the remedies
provided herein shall be cumulative and shall not preclude assertion by any
party hereto of any other rights or the seeking of any other remedies against
the other party hereto.

Section 7.3. BROKERAGE. Each party hereto will indemnify and hold harmless
the others against and in respect of any claim for brokerage or other commission
relative to this Agreement or to the transaction contemplated hereby, based in
any way on agreements, arrangements or understandings made or claimed to have
been made by such party with any third party.

Section 7.4. SEVERABILITY. whenever possible, each provision of this
Agreement shall be interpreted in such a manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be prohibited
by or invalid under applicable law, such

<PAGE>

provisions shall be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining provisions
of this Agreement.

Section 7.5. PARTIES IN INTEREST. All covenants and agreements contained
in this Agreement by or on behalf of any of the parties hereto shall bind and
inure to the benefit of the respective legal representatives, successors and
assigns of the parties hereto whether so expressed or not.

Section 7.6. NOTICES. All notices to be given to any party shall be in
writing and delivered by hand in person, or by express overnight courier
service, or by electronic facsimile transmission (with a copy sent by first-
class U.S. mail, postage prepaid), or by registered or certified mail, return
receipt requested, postage prepaid, addressed (a) if to an Investor, at such
Investor's address set forth on the books of the Company, or at such other
address as such Investor shall have furnished to the Company m writing, or b) if
to the Company, at the Company's current address (Attention: President) at or
at such other address as the Company shall have furnished to the Investors.

Section 7.7. NO WAIVER. No failure to exercise and no delay in exercising
any right, power or privilege granted under this Agreement shall operate as a
waiver of such right, power or privilege. No single or partial exercise of any
right, power or privilege granted under this Agreement shall preclude another or
further exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies provided in this Agreement are cumulative and are not
exclusive of any rights or remedies provided by law.

Section 7.8. AMENDMENTS AND WAIVERS. Except as herein provided, this
Agreement may be modified or amended only by a writing signed by the Company and
by the Holders of 75% of the Common Stock held by Holders (the "Required
Majority"). Each Investor acknowledges that by the operation of Section 7.8
hereof the Holders of 75% of the outstanding Common Stock held by all Holders
will have the right and power to diminish or eliminate all rights of such
Investor under this Agreement.

Section 7.9. RIGHTS OF INVESTORS. Each holder of Common Stock shall have
the absolute right to exercise or refrain from exercising any right or rights
that such holder may have by reason of this Agreement, including without
limitation the right to consent to the waiver of any obligation of the Company
under this Agreement and to enter into an agreement with the Company for the
purpose of modifying this Agreement or any agreement effecting any such
modification, and such holder shall not incur any liability to any other holder
or holders of Common Stock with respect to exercising or refraining from
exercising any such right or rights.

Section 7.10. SURVIVAL OF AGREEMENTS ETC. All agreements, representations
and warranties contained in this Agreement or made in writing by or on behalf of
the Company or the Investors in connection with the transactions contemplated by
this Agreement shall survive the execution and delivery of this Agreement, the
Closing, and any investigation at any time made by or on behalf of any Investor.
Notwithstanding the preceding sentence, however, all such representations (other
than intentional misrepresentations) and warranties, but no such agreements,
shall expire three years after the date of this Agreement.

<PAGE>

Section 7.11. CONSTRUCTION. The Company's principal place of business is in
Toledo, Ohio. This Agreement shall be governed by and construed in accordance
with the procedural and substantive laws of the State of Ohio without regard to
principles of conflicts of law.

Section 7.12. ENTIRE UNDERSTANDING. This Agreement expresses the entire
understanding of the parties and supersedes all prior and contemporaneous
agreements and undertakings of the parties with respect to the subject matter of
this Agreement.

Section 7.13. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
taken together shall constitute one agreement.

Section 7.14. ASSIGNMENT: NO THIRD-PARTY BENEFICIARIES.

(a) This Agreement and the rights hereunder shall not be
assignable or transferable by the Investors or the Company except in
the case of an Investor, in accordance with the restrictions on
transfer set out in this Agreement and the Stockholders Agreement or
in the case of the Company by operation of law in connection with a
merger, consolidation or sale of substantially all the assets of the
Company without the prior written consent of the other parties hereto.
Subject to the preceding sentence, this Agreement shall be binding
upon, inure to the benefit of and be enforceable by the parties hereto
and their respective successors and assigns. The assignment by any
Investor on a nonexclusive basis of any rights under this Agreement to
any such transferee shall not affect or diminish the rights or
obligations of such Investor under this Agreement and in no event
shall any assignment relieve any Investor of its obligations
hereunder.

(b) Except as provided in Section 7.14(a), this Agreement is for
the sole benefit of the parties hereto and their permitted assigns and
nothing herein expressed or implied shall give or be construed to give
to any Person, other than the parties hereto and such assigns, any
legal or equitable rights hereunder.

ARTICLE VIII

ARBITRATION

If at any time there shall be a dispute arising out of or relating to any
provision of this Agreement or any agreement contemplated hereby, such dispute
shall be submitted for binding and final determination by arbitration in
accordance with the regulations then obtaining of the American Arbitration
Association. Judgment upon the award rendered by the arbitrator(s) resulting
from such arbitration shall be in writing, and shall be final and binding upon
all involved parties. The site of any arbitration shall be within Toledo, Ohio.

<PAGE>

IN WITNESS WHEREOF, the parties hereto have executed this Agreement under
seal as of the date first above written.

EPI TECHNOLOGIES, INC.

By: /s/ Bruce Maison
---------------------------------------
President

INVESTORS:

/s/ Spencer Browne
--------------------------------------------
SPENCER BROWNE

MNP CORPORATION

By: /s/ Larry Berman
---------------------------------------
Larry Berman, President

/s/ Elliot Smith
--------------------------------------------
ELLIOT SMITH

<PAGE>

EXHIBIT 10.20(b)

REGISTRATION RIGHTS AGREEMENT

This Agreement is made as of November 19, 1996, by and among EPI
Technologies, Inc., j Delaware corporation (formerly named Environmental
Purification Industries, Inc.") (the "Company"), the persons named as Investors
in the Company's Common Stock pursuant to the Stock Purchase Agreement of even
date (the "Purchase Agreement") and Meridian National Corporation, a Delaware
corporation ("Meridian").

PREAMBLE

The Company desires to extend registration rights to the Investors in
the Company's Common Stock.

NOW, THEREFORE, in consideration of the premises and mutual agreements
set forth herein, the Company and the Holders agree as follows:

Section 1. DEFINITIONS. As used in this Agreement, the following
terms shall have the following meanings:

(a) "Commission" shall mean the Securities and Exchange
Commission, or any other federal agency at the time administering the Securities
Act.

(b) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, or any similar federal statute and the rules and regulations
thereunder, all as the same shall he in effect at the time.

(c) "Holder" shall mean any holder of outstanding Registrable
Securities or anyone who holds outstanding Registrable Securities to whom the
registration rights conferred by this Agreement have been transferred in
compliance with this Agreement.

(d) "Initiating Holders" shall mean any Holder or Holders of at
least fifty-one percent (51%) of the Registrable Securities then outstanding.

(e) "Register," "registered" and "registration" shall refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement, and compliance with applicable
state securities laws of such states in which Holders notify the Company of
their intention to offer Registrable Securities.

(f) "Registrable Securities" shall mean all of the following to
the extent the same have not been sold to the public (i) any and all shares of
Common[ Stock of the Company issued to Investors or to Meridian; or (ii) stock
issued in respect of stock referred to in (i) above in any reorganization; or
(iii) stock issued in respect of the stock referred to in (i) or (ii) as a
result of a stock

<PAGE>

split, stock dividend. recapitalization or combination. Notwithstanding the
foregoing, Registrable Securities shall not include otherwise Registrable
Securities (i) sold by a person in a transaction in which his rights under this
Agreement are not properly assigned; or (ii) (A) sold to or through a broker or
dealer or underwriter in a public distribution or a public securities
transaction, or (B) sold in a transaction exempt from the registration and
prospectus delivery requirements of the Securities Act under Section 4(1)
thereof so that all transfer restrictions, and restrictive legends with respect
thereto, if any, are removed upon the consummation of such sale or (C) the
registration rights associated with such securities have been terminated
pursuant to Section 16 of this Agreement.

(g) "Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar federal statute and the rules and regulations
thereunder, all as the same shall be in effect at the time.

Section 2. PIGGYBACK REGISTRATION.

(a) If at any time or from time to time, the Company shall
determine to register any of its securities, for its own account or the account
of any of its shareholders, other than a registration relating solely to
employee benefit plans, or a registration relating solely to an SEC Rule 145
transaction, a transaction relating solely to the sale of debt or convertible
debt instruments or a registration on any form (other than Form S-i, S-2 or S-3,
or their successor forms) which does not include substantially the same
information as would be required to be included in a registration statement
covering the sale of Registrable-able Securities, the Company will:

(i) give to each Holder written notice thereof as soon as
practicable prior to filing the registration statement; and

(ii) include in such registration and in any underwriting
involved therein, all the Registrable Securities specified in a
written request or requests, made within fifteen (15) days after
receipt of such written notice from the Company, by any Holder or
Holders, except as set forth in subsection (b) below.

(b) If the registration is for a registered public offering
involving an underwriting, the Company shall so advise the Holders as a part of
the written notice given pursuant to subsection 2(a)(i). In such event, the
right of any Holder to registration pursuant to Section 2 shall be conditioned
upon such Holder's participation in such underwriting and the inclusion of such
Holder's Registrable Securities in the underwriting to the extent provided
herein. All Holders proposing to distribute their securities through such
underwriting shall (together with the Company and the other holders distributing
their securities through such underwriting) enter into an underwriting agreement
in customary form with the underwriter or underwriters selected for such
underwriting by the Company. Notwithstanding any other provision of this Section
2, if the managing underwriter(s) determines that marketing factors require a
limitation of the number of shares to be underwritten, the managing
underwriter(s) may limit the number of Registrable Securities to be included in
the registration and underwriting, or may exclude Registrable Securities
entirely from such registration if the registration is the first registered
offering for the sale of the Company's securities to the general public
(provided that no shares held by officers and directors of the Company, other
than Registrable Securities that may be owned by officers and directors,

<PAGE>

are included in the registration and underwriting). The Company shall so advise
all Holders and the other holders distributing their securities through such
underwriting pursuant to piggyback registration rights similar to this Section
2, and the number of shares of Registrable Securities and other securities that
may be included in the registration and underwriting shall be allocated among
all Holders and other holders in proportion, as nearly as practicable, to the
respective amounts of Registrable Securities held by such Holders and other
securities held by other holders at the time of filing the registration
statement. If any Holder disapproves of the terms of any such underwriting, he
may elect to withdraw therefrom by written notice to the Company and the
managing underwriter. If, by the withdrawal of such Registrable Securities, a
greater number of Registrable Securities held by other Holders may he included
in such registration (up to the limit imposed by the underwriters), the Company
shall offer t(;all Holders who have included Registrable Securities in the
registration the right to include additional Registrable Securities on a
pro-rata basis. Any Registrable Securities excluded or withdrawn from such
underwriting shall be withdrawn from such registration.

Section 3. EXPENSES OF REGISTRATION. In addition to the fees and
expenses contemplated by Section 5 hereof, all expenses incurred in connection
with registrations pursuant to Section 2 hereof, including without limitation
all registration, filing and qualification fees, printing expenses, fees and
disbursements of counsel for the Company and expenses of any special audits of
the Company's financial statements incidental to or required by such
registration, shall be borne by the Company, except that the Company shall not
be required to pay underwriters' fees, discounts or commissions relating to
Registrable Securities or fees of a separate legal counsel of a Holder.

Section 4. REGISTRATION PROCEDURES. In the case of each
registration effected by the Company pursuant to this Agreement, the Company
will keep each Holder participating therein advised in writing as to the
initiation of each registration and as to the completion thereof. At its expense
the Company will:

(a) keep such registration continuously effective for a period
of ninety (90) days or such reasonable period necessary to permit the
Holder or Holders to complete the distribution described in the
registration statement relating thereto, whichever first occurs;

(b) promptly prepare and file with the Commission such
amendments and supplements to such registration statement and the
prospectus used in connection therewith as may be necessary to comply with
the provisions of the Securities Act, and to keep such registration
statement effective for that period of time specified in Section 4(a)
above;

(c) furnish such number of prospectuses and other documents
incident thereto as a Holder from time to time may reasonably request;

(d) use reasonable best efforts to obtain the withdrawal of any
order suspending the effectiveness of a registration statement, or the
lifting of any suspension of the qualification of any of the Registrable
Securities for sale in any jurisdiction, at the earliest possible moment;

(e) register or qualify such Registrable Securities for offer
and sale under the securities or Blue Sky laws of such jurisdictions as the
underwriter(s) reasonably requires, and keep such registration or
qualification effective during the period set forth in Section 4(a) above;

<PAGE>

(f) cause all Registrable Securities covered by such
registrations to be listed on each securities exchange, including NASDAQ,
on which similar securities issued by the Company are then listed or, if no
such listing exists, use reasonable best efforts to list all Registrable
Securities on one of the New York Stock Exchange, the American Stock
Exchange or NASDAQ; and

(g) use reasonable efforts to cause its accountants to issue to
the underwriter, if any, or the Holders, if there is no underwriter,
comfort letters and updates thereof, in customary form and covering matters
of the type customarily covered in such letters with respect to
underwritten offerings;

(h) enter into such customary agreements (including underwriting
agreements in customary form) and take all such other actions as the
Holders of a majority of the Registrable Securities being sold or the
underwriters, if any, reasonably, request in order to expedite or
facilitate the disposition of such Registrable Securities (including,
without limitation, effecting a stock split or a combination of shares);

(i) make available for inspection by any seller of Registrable
Securities, any underwriter participating in any disposition pursuant to
such registration statement, and any attorney, accountant or other agent
retained by any such seller or underwriter, all financial and other
records, pertinent corporate documents and properties of the Company, and
cause the Company's officers, directors, employees and independent
accountants to supply all information reasonably requested by any such
seller, underwriter, attorney, accountant or agent in connection with such
registration statement;

(j) if the offering is underwritten, at the request of any
Holder of Registrable Securities to use its reasonable efforts to furnish
on the date that Registrable Securities are delivered to the underwriters
for sale pursuant to such registration an opinion in the customary form of
counsel representing the Company for the purposes of such registration;

(k) notify each Holder, at any time a prospectus covered by such
registration statement is required to be delivered under the Securities
Act, of the happening of any event of which it has knowledge as a result of
which the prospectus included in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing.

Section 5. INDEMNIFICATION.

(a) In the event of a registration of any of the Registrable
Securities under the Securities Act pursuant to Section 2, the Company will
indemnify and hold harmless each Holder of such Registrable Securities
thereunder, each underwriter of such Registrable Securities thereunder and each
other person, if any, who controls such Holder or underwriter within the meaning
of the Securities Act, against any losses, claims, damages or liabilities, joint
or several, to which such holder, underwriter or controlling person may become
subject under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in any registration statement under which such Registrable Securities
were registered under the Securities Act, any preliminary prospectus or final
prospectus contained therein, or any amendment or supplement thereof, or arise
out of or are based

<PAGE>

upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
or any violation by the Company of any rule or regulation promulgated under the
Securities Act or any state securities law applicable to the Company and
relating to action or inaction required of the Company in connection with any
such registration, and will reimburse each such Holder, each of its officers,
directors and partners, and each person controlling such Holder, each such
underwriter and each person who controls any such underwriter, for any
reasonable legal and any other expenses incurred in connection with
investigating, defending or settling any such claim, loss, damage, liability or
action, provided that the Company will not be liable in any such case to the
extent that any such claim, loss, damage or liability arises out of or is based
on any untrue statement or omission based upon written information furnished to
the Company by an instrument duly executed by such Holder or underwriter
specifically for use therein.

(b) Each Holder will, if Registrable Securities held by or
issuable to such Holder are included in the securities as to which such
registration is being effected, indemnify and hold harmless the Company, each of
its directors and officers, each underwriter, if any, of the Company's
securities covered by such a registration statement, each person who controls
the Company and each underwriter within the meaning of the Securities Act, and
each other such Holder, each of its officers, directors and partners and each
person controlling such Holder, against all claims, losses, expenses, damages
and liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any such registration statement, prospectus, offering circular or other
document, or any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse the Company, such Holders, such directors,
officers, partners, persons or underwriters for any reasonable legal or any
other expenses incurred in connection with investigating, defending or settling
any such claim, loss, damage, liability or action, in each case to the extent,
but only to the extent, that such untrue statement (or alleged untrue statement)
or omission (or alleged omission) is made in such registration statement,
prospectus, offering circular or other document in reliance upon and in
conformity with written information furnished to the Company by an instrument
duly executed by such Holder specifically for use therein; provided, however,
the total amount for which any Holder, its officers, directors and partners, and
any person controlling such Holder, shall be liable under this Section 5(b)
shall not in any event exceed the aggregate proceeds received by such Holder
from the sale of Registrable Securities sold by such Holder in such
registration.

(c) Each party entitled to indemnification under this Section 5
(the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claims as to which indemnity may be sought, and
shall permit the Indemnifying Party to assume the defense of any such claim or
any litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not be unreasonably
withheld), and the Indemnified Party may participate in such defense at such
party's expense, and provided further that the failure of any Indemnified Party
to give notice as provided herein shall not relieve the Indemnifying Party of
its obligations hereunder, unless such failure resulted in actual detriment to
the Indemnifying Party. No Indemnifying Party, in the defense of any such claim
or litigation, shall, except with the consent of each Indemnified Party, consent
to entry of any judgment or enter into any settlement which does not include as
an unconditional term thereof

<PAGE>

the giving by the claimant or plaintiff to such Indemnified Party of a release
from all liability in respect of such claim or litigation.

(d) Notwithstanding the foregoing, to the extent that the
provisions on indemnification contained in the underwriting agreements entered
into among the selling Holders, the Company and the underwriters in connection
with the underwritten public offering are in conflict with the foregoing
provisions, the provisions in the underwriting agreement shall be controlling as
to the Registrable Securities included in the public offering; provided,
however, that if; as a result of this Section 5(d), any Holder, its officers,
directors, and partners and any person controlling such Holder is held liable
for an amount which exceeds the aggregate proceeds received by such Holder from
the sale of Registrable Securities included in a registration, as provided in
Section 5(b) above, pursuant to such underwriting agreement (the Excess
Liability"), the Company shall reimburse any such Holder for such Excess
Liability.

(e) If the indemnification provided for in this Section 5 is
held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any loss, liability, claim, damage or expense referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party thereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, claim, damage or expense
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the indemnified party on the other
hand in connection with the statements or omissions which resulted in such loss,
liability, claim, damage or expense as well as any other relevant equitable
considerations. The relevant fault of the indemnifying party and the indemnified
party shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission to state a
material fact relates to information supplied by the indemnifying party or by
the indemnified party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
Notwithstanding the foregoing, the amount any Holder shall be obligated to
contribute pursuant to this Section 5(e) shall be limited to an amount equal to
the proceeds to such Holder of the Registrable Securities sold pursuant to the
registration statement which gives rise to such obligation to contribute (less
the aggregate amount of any damages which the Holder has otherwise been required
to pay in respect of such loss, claim, damage, liability or action or any
substantially similar loss, claim, damage, liability or action arising from the
sale of such Registrable Securities).

(f) The indemnification provided by this Section 5 shall be a
continuing right to indemnification and shall survive the registration and sale
of any securities by any Person entitled to indemnification hereunder and the
expiration or termination of this Agreement.

Section 6. LOCKUP AGREEMENT. In consideration for the Company
agreeing to its obligations under this Agreement, each Holder agrees in
connection with any registration of the Company's securities (whether or not
such Holder is participating in such registration) upon the request of the
Company and the underwriters managing any underwritten offering of the Company's
securities, not to sell, make any short sale of, loan, grant any option for the
purchase of, or otherwise dispose of any Registrable Securities (other than
those included in the registration) without the prior written consent of the
Company or such underwriters, as the

<PAGE>

case may be, for such period of time (not to exceed 120 days in the case of the
Company's initial public offering) from the effective date of such registration
as the Company and the underwriters may specify, so long as all Holders or
stockholders holding more than one percent (1%) of the outstanding common stock
and all officers and directors of the Company are bound by a comparable
obligation provided, however, that nothing herein shall prevent any Holder that
is a partnership or corporation from making a distribution of Registrable
Securities to the partners or shareholders thereof that is otherwise in
compliance with applicable securities laws, so long as such distributees agree
to be so bound.

Section 7. INFORMATION BY HOLDER. The Holder or Holders of
Registrable Securities included in any registration shall promptly furnish to
the Company such information regarding such Holder or Holders and the
distribution proposed by such Holder or Holders as the Company may request in
writing and as shall be required in connection with any registration referred to
herein.

Section 8. TRANSFER OF REGISTRATION RIGHTS. The rights to cause the
Company to register Registrable Securities of a Holder and keep information
available granted to a Holder by the Company under Section 2 may be assigned by
a Holder to any partner or shareholder of such Holder, to any other Holder, or
to a transferee or assignee who receives at least five (5) shares of Registrable
Securities (as adjusted for stock splits and the like); provided, that the
Company is given written notice by the Holder at the time of or within a
reasonable time after said transfer, stating the name and address of said
transferee or assignee and identifying the securities with respect to which such
registration rights are being assigned.

Section 9. TERMINATION OF RIGHTS.

(a) The rights of any particular Holder to cause the Company to
register securities under Section 2 shall terminate with respect to such Holder
at such time, following a bona fide, firmly underwritten public offering of
shares of the Company's Common Stock registered under the Securities Act
(provided that the aggregate gross offering price equals or exceeds $3,000,000),
as such Holder is able to dispose of all of his Registrable Securities in one
three-month period pursuant to the provisions of Rule 144.

(b) Notwithstanding the provisions of paragraph (a) of this
Section 9, all rights of any particular Holder under this Agreement shall
terminate at 5:00 P.M. Eastern time on the date live (5) years after the closing
date of the Company's first firmly underwritten public offering.

Section 10. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company represents and warrants to the Holders as follows:

(a) The execution, delivery and performance of this Agreement by
the Company have been duly authorized by all requisite corporate action and will
not violate any provision of law, any order of any court or other agency of
government, the Certificate of Incorporation or Bylaws of the Company or any
provision of any indenture, agreement or other

<PAGE>

instrument to which it or any or its properties or assets is bound, conflict
with, result in a breach of or constitute (with due notice or lapse of time me
or both) a default under any such indenture, agreement or other instrument or
result in the creation or imposition of any lien, charge or encumbrance of any
nature whatsoever upon any of the properties or assets of the Company.

(b) This Agreement has been duly executed and delivered by the
Company and constitutes the legal, valid and binding obligation of the Company,
enforceable in accordance with its terms, subject to (I) applicable bankruptcy,
insolvency, reorganization, fraudulent conveyance and moratorium laws and other
laws of general application affecting enforcement of creditors' rights generally
and (ii) the availability of equitable remedies as such remedies may be limited
by equitable principles of general applicability (regardless of whether
enforcement is sought in a proceeding in equity or at law).

Section 11. MISCELLANEOUS.

(a) This Agreement may be amended only by a writing signed by
the Holders (other than Meridian) of at least seventy-five percent (75%) of
the Registrable Securities held by such Holders, as constituted from time
to time. The Holders hereby consent to future amendments to this Agreement
that permit future investors, other than employees, officers or directors
of the Company, to be made parties hereto and to become Holders of
Registrable Securities; PROVIDED, HOWEVER, that no such future amendment
may materially impair the rights of the Holders hereunder without obtaining
the requisite consent of the Holders, as set forth above. For purposes of
this Section, Registrable Securities held by the Company or beneficially
owned by any officer or employee of the Company shall be disregarded and
deemed not to be outstanding.

(b) This Agreement may be executed in any number of
counterparts, all of which shall constitute a single instrument.

(c) All notices to be given to any party shall be in writing and
delivered by hand in person, or by express overnight courier service, or by
electronic facsimile transmission (with a copy sent by first-class mail,
postage prepaid), or by registered or certified mail, return receipt
requested, postage prepaid, addressed (a) if to a Holder, at such Holder's
address set forth on the books of the Company, or at such other address as
such Holder shall have furnished to the Company in writing, or (b) if to
any other holder of any Registrable Securities, at such address as such
holder shall have furnished the Company in writing, or, until any such
holder so furnishes an address to the Company, then to and at the address
of the last holder of such securities who has so furnished an address to
the Company, or (c) if to the Company, at the Company's current address
(Attention: President) or at such other address as the Company shall have
furnished to the Holders.

(d) Any other provisions of this Agreement to the contrary
notwithstanding, the Company's obligation to file a registration statement,
or cause such registration statement to become and remain effective, shall be
suspended for a period not to exceed 30 days (and for periods not exceeding,
in the a('aggregate, 60 days in any 24 month period) if there exists at

<PAGE>

the time material nonpublic information relating to the Company which, in
the reasonable opinion of the Company, should not be disclosed.

(e) If any provision of this Agreement shall be held to be
illegal, invalid or unenforceable, such illegality, invalidity or
unenforceability shall attach only to such provision and shall not in any
manner affect or render illegal, invalid or unenforceable any other
provision of this Agreement, and this Agreement shall be carried out as if
any such illegal, invalid or unenforceable provision were not contained
herein.

(f) If, and as often as, there is any change in the Common Stock
by way of a stock split, stock dividend, combination or reclassification,
or through a merger, consolidation, reorganization or recapitalization, or
by any other means, appropriate adjustment shall be made in the provisions
hereof so that the rights and privileges granted hereby shall continue with
respect to the Common Stock as so changed.

(g) The Company's principal place of business is in Toledo,
Ohio. This Agreement shall be governed by and construed in accordance with
the procedural and substantive laws of the State of Ohio without regard to
principles of conflicts of law.

<PAGE>

IN WITNESS WHEREOF, the Company, the Investors and Meridian have executed
this Agreement in counterparts as of the date first above specified.

EPI TECHNOLOGIES, INC. INVESTORS:

By: /s/ Bruce M. Maison By: /s/ Spencer Browne
------------------------------- -----------------------------
SPENCER BROWNE
Its: President
----------------------------

MNP CORPORATION
By: /s/ Larry Berman
-----------------------------------
Larry Berman, President

MERIDIAN NATIONAL CORPORATION

By: /s/ William D. Feniger /s/ Elliot Smith
----------------------------- ----------------------------------------
ELLIOT SMITH
Its: Chief Executive Officer
----------------------------

<PAGE>

EXHIBIT 10.20(c)

STOCKHOLDERS AGREEMENT

STOCKHOLDERS AGREEMENT, dated as of November 19, 1996, by and among EPI
Technologies, Inc., a Delaware corporation (formerly named "Environmental
Purification Industries, Inc.") (the "COMPANY"), the undersigned investors
(collectively the "Investors" and individually an "Investor"), and Meridian
National Corporation, a Delaware corporation ("Meridian"), (the Investors and
Meridian sometimes hereinafter collectively referred to herein as the
"Stockholders" or individually as the "Stockholder").

PREAMBLE

The Investors are purchasing shares of the Company's Common Stock, $.01 par
value (the "Common Stock") pursuant to that certain Stock Purchase Agreement of
the same date herewith between the Company and the Investors (the "Stock
Purchase Agreement"). Meridian holds 100 shares of Common Stock of the Company.
One of the conditions to the Closing (as defined in the Stock Purchase
Agreement) is the execution of this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

ARTICLE I

ELECTION OF DIRECTORS

1.1 ELECTION OF DIRECTORS. At each annual meeting of the stockholders of
the Company, or at each special meeting of the stockholders of the Company
involving the election of directors of the Company, and at any other time at
which stockholders of the Company will have the right to or will vote for or
render consent in writing regarding the election of directors of the Company,
then and in each event, the Stockholders hereby covenant and agree to vote all
shares of capital stock of the Company presently owned or hereafter required by
them (whether owned of record or over which any person exercises voting control)
in favor of the following actions:

(a) to fix and maintain the number of directors at four (4);

(b) to cause and maintain the election to the Board of Directors of the
Company of (i) one (1) representative designated by the Investors, who shall be
either Spencer Browne, Elliot Smith or an officer of MNP Corporation, and who
shall initially be Spencer Browne (an "Investor Director") and (ii) three (3)
representatives designated by Meridian who shall initially be Bruce F. Maison,
William D. Feniger and James L. Rosino (individually a "Meridian Director" and
collectively the "Meridian Directors"). The Investor Director shall be selected
by holders of a majority of the outstanding stock owned by the Investors.

<PAGE>

1.2 REMOVAL. None of the parties entitled to designate directors hereunder
shall vote to remove any director designated by any other party or group of
Stockholders pursuant hereto, except for bad faith or willful misconduct. Each
of the parties hereto shall vote or cause to be voted all shares owned by them
or over which they have voting control (i) to remove from the Board of Directors
any director designated by any Stockholder or group of Stockholders pursuant
hereto at the request of such Stockholder or group of Stockholders, and (ii) to
fill any vacancy in the membership of the Board of Directors with a designee of
the party whose designee's resignation or removal from the Board caused such
vacancy.

1.3 RESIGNATION. Concurrently with the consummation of a sale of
substantially all the shares owned by either the Investors or Meridian an, the
sellers shall deliver the resignations of the member(s) of the Board of
Directors of the Company who are represented by such seller's interest.

1.4 NOTICES. The Company shall provide to each party entitled to designate
directors hereunder prior written notice of any intended mailing of notice to
stockholders for a meeting at which directors are to be elected, and any party
entitled to designate directors pursuant hereto shall notify the Company in
writing, prior to such mailing, of the person(s) designated by it or them as its
or their nominee(s) for election as director(s). If any party entitled to
designate directors hereunder fails to give notice to the Company as provided
above, it shall be deemed that the designee of such party then serving as
director shall be its designee for reelection.

1.5 MEETINGS. Meetings of the Board of Directors shall be held no less
frequently than quarterly.

1.6 COMMITTEES. Each party entitled to designate directors hereunder
hereby agrees that the Company shall not have any executive or similar committee
of the Board of Directors unless the Board of Directors unanimously consents to
the formation of such committee.

ARTICLE II

RIGHT OF CO-SALE

2.1 RIGHT OF CO-SALE. If Meridian proposes to sell any Shares ("Co-Sale
Shares") to a patty or affiliated group (the "transferee"), Meridian shall first
give reasonable notice in reasonable detail to each Investor in sufficient time
to allow each Investor to participate in the sale on the same terms and
conditions as Meridian; provided that if the sale involves a sale by Meridian of
fewer than 50% of its present share ownership, such Investor shall be entitled
to sell only that proportion of its Shares which is equal to the proportion of
Shares being sold by Meridian. To the extent any prospective purchaser or
purchasers refuses to purchase shares from an Investor exercising its rights of
co-sale hereunder, Meridian shall not sell to such prospective purchaser or
purchasers any Shares unless and until, simultaneously with such sale, Meridian
shall purchase the offered shares from the Investor.

Notwithstanding the foregoing, the provisions of Section 2 shall not apply
to (i) any pledge of Co-Sale Shares made pursuant to a bona tide loan
transaction that creates a mere security interest, provided that (A) Meridian
shall inform the Investors of such pledge prior to effecting it and (B) the

<PAGE>

pledgee shall furnish the Investors with a written agreement to be bound by and
comply with all provisions of Section 2, (ii) the sale of any Co-Sale Shares to
the public pursuant to a registration statement filed with, and declared
effective by, the Securities and Exchange Commission under the Securities Act of
1933, as amended (the "Securities Act"); or (iii) the sale of any Co-Sale Shares
to the Company.

2.2 DRAG-ALONG RIGHTS. If at any time any one or more of the Stockholders
(the "Seller(s)") shall propose to undertake a sale of fifty percent (50%) or
more of the Company's then issued and outstanding shares of capital stock to a
single person (other than an Affiliate of Meridian as defined in the Stock
Purchase Agreement) in a single transaction or series of related transactions (a
"Proposed Transaction"), then each Stockholder other than the Seller(s) (a
"Minority Stockholder") shall, if requested by such Seller(s), sell all of his
Shares in such transaction on the same terms and for the same consideration,
subject to the provisions of this Section. Such Seller(s) shall give each
Minority Stockholder written notice of any Proposed Transaction (the "Drag-Along
Notice') at least thirty (30) days prior to the date on which such transaction
shall be consummated, including the terms and conditions thereof, and each
Minority Stockholder shall have the obligation to sell his Shares on such same
terms and conditions in accordance with the instructions set forth in such
notice, provided that the consideration to he paid to each such Minority
Stockholder shall be an amount in cash not less than the Fair Market Value (as
defined below) of such Shares. In such event, each Minority Stockholder shall
deliver the Share certificate(s) (accompanied by duly executed stock powers or
other instrument of transfer duly endorsed in blank) representing the Shares to
the Company or to an agent designated by the Company, for the purpose of
effectuating the transfer of the Shares to the purchaser and the disbursement of
the proceeds of such transactions to the Minority Stockholder(s). The Company
may, at its option, deposit the consideration payable for the Shares with a
depository designated by it and thereafter each Share certificate shall
represent only the right to receive the consideration payable in the
transaction.

For purposes of this Section 2.2, "Fair Market Value" of a Minority
Stockholder's Shares shall be determined as set forth herein. A Minority
Stockholder may, within five (5) days of receiving the Drag-Along Notice,
deliver written notice to the Seller(s) (an "Objection Notice") stating that the
proposed price is lower than the fair market value of his Shares. If no
Objection Notice is delivered within such period, then the purchase price per
Share shall be the proposed price. If an Objection Notice is delivered within
such time period, then, within five (5) days of delivery of the Objection
Notice, the Seller(s) and the Minority Stockholder(s) shall each appoint a
recognized appraisal firm who shall agree on and appoint a third independent
recognized appraiser (the "Independent Appraiser"). The Independent Appraiser
shall, within twenty (20) days of its appointment, make a determination of the
fair market value of the Shares, irrespective of any accounting treatment or any
premium or discount for majority or minority ownership position or any discounts
for lack of marketability, lack of control, market blockage, security laws or
other restrictions on sale, or the like. The determination of Fair Market Value
in accordance with the foregoing procedures shall be final and binding upon the
Seller(s) and the Minority Stockholder(s).

<PAGE>

ARTICLE III

MISCUE MISCELLANEOUS

3.1 TRANSFER OF STOCK. Each Investor agrees not to Transfer any of his
shares of capital stock of the Company unless a majority of the members of the
Board of Directors of the Company determines, in advance, in the exercise of
their reasonable business judgment, that the holding of the shares by the
proposed transferee would not be "contrary to the reasonable best interests of
the Company". For purposes of this Section, "contrary to the reasonable best
interests of the Company" means that the proposed transfer would subject the
Company to substantial (I) competitive harm or (ii) regulatory risk to its
business or similar substantial adverse effects. In addition, the transferee
shall agree in writing to be bound by the terms and conditions of this
Agreement, execute a counterpart of this Agreement and comply with applicable
law in connection with such transfer. A determination by the Board of Directors
not to permit a requested transfer shall be in writing and shall set forth the
reasons for such determination. For purposes of this Agreement, "Transfer"
includes any sale, gift, assignment or other transfer or encumbrance, whether or
not for value, including involuntary transfers, of any shares of capital stock
of the Company.

3.2 WORKING CAPITAL: GUARANTIES. Meridian will continue to maintain its
current level of working capital support to the Company. Meridian will not
revoke any guaranties heretofore made by Meridian of any indebtedness or
obligations of the Company.

3.3 DURATION OF AGREEMENT. The rights and obligations of the Company and
each Stockholder under this Agreement shall terminate on the earliest to occur
of the following: (a) immediately prior to the consummation of the first
underwritten public offering by the Company pursuant to an effective
registration statement under the Securities Act of 1933 of any of its equity
securities for its own account in which the aggregate gross proceeds to the
Company equal or exceed $3,000,000, or when the Company first becomes subject to
the periodic reporting requirements of Section 12(g) or 15(d) of the 1934 Act,
whichever event shall first occur, (b) immediately prior to the consummation of
the sale of all, or substantially all, of the Company's assets or capital stock
or a merger, consolidation, reorganization or other business combination of the
Company which results in the transfer of more than 50% of the voting securities
of the Company, or (c) the fifth anniversary hereof.

3.4 LEGEND. Each certificate representing shares of Common Stock shall
bear the following legend, until such time as the shares of Common Stock
represented thereby are no longer subject to the provisions hereof:

"THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933. THESE SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF
SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT. TRANSFER
OF THESE SHARES IS FURTHER RESTRICTED AS PROVIDED IN A STOCK PURCHASE
AGREEMENT, A REGISTRATION RIGHTS AGREEMENT AND A STOCKHOLDERS
AGREEMENT, ALL DATED NOVEMBER 19, 1996, COPIES OF WHICH ARE AVAILABLE
AT THE COMPANY'S OFFICE."

3.5 SEVERABILITY: GOVERNING LAW. If any provisions of this Agreement
shall be determined to be illegal or unenforceable by any court of law, the
remaining provisions shall be severable and enforceable in accordance with their
terms. This Agreement shall be governed by, and construed in accordance with,
the internal laws of the State of Ohio.

<PAGE>

3.6 INJUNCTIVE RELIEF. It Is acknowledged that it will be impossible to
measure the damages that would be suffered by the nonbreaching party if any
party fails to comply with the provisions of this Agreement and that in the
event of any such failure, the nonbreaching parties will not have an adequate
remedy at law. The non-breaching parties shall, therefore, be entitled to obtain
specific performance of the breaching party's obligations hereunder and to
obtain immediate injunctive relief. the breaching party shall not urge, as a
defense to any proceeding for such specific performance or injunctive relief,
that the nonbreaching parties have an adequate remedy at law.

If any action at law or in equity is necessary to enforce or interpret the
terms of this Agreement, the prevailing party shall be entitled to reasonable
attorneys' fees, costs and necessary disbursements in addition to any other
relief to which such party may be entitled.

3.7 BINDING EFFECT. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective permitted successors and
assignees, legal representatives and heirs. Nothing in this Agreement, express
or implied, is intended to confer upon any party other than the parties hereto
or their respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement. The administrator, executor or legal representative of any
deceased, juvenile or incapacitated Stockholder shall have the right to execute
and deliver all documents and perform all acts necessary to exercise and perform
the rights and obligations of such Stockholder under the terms of this
Agreement.

3.8 MODIFICATION OR AMENDMENT. Neither this Agreement nor any provisions
hereof can be modified, amended, changed, discharged or terminated except by an
instrument in writing, signed by the Stockholders of at least a majority of the
shares of capital stock then subject to this Agreement held by Stockholders,
together with the consent of Investors holding at least 75% of the outstanding
shares of Common Stock held by all Investors.

3.9 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall he deemed to be an original. but all of which
taken together shall constitute one and the same instrument.

3.10 Notices. All notices to be given to any party shall he in writing and
delivered by hand in person, or by express overnight courier service, or by
electronic facsimile transmission (with a copy sent by first-class mail, postage
prepaid), or by registered or certified mail, return receipt requested, postage
prepaid, addressed (a) if to an Investor, at such Investor's address set forth
on the books of the Company, or at such other address as such Investor shall
have furnished to the Company in writing, or (b) if to the Company, at the
Company's current address (Attention: President) at or at such other address
as the Company shall have furnished to the Investors.

All such notices shall, when mailed or telegraphed, he effective when
received or when attempted delivery is refused.

3.11 NO OTHER AGREEMENTS. Each Stockholder represents that he has not
granted and is not a party to any proxy, voting trust or other agreement which
is inconsistent with or conflicts with the provisions of this Agreement, and no
holder of Shares shall grant any proxy or become party to any

<PAGE>

voting trust or other agreement which is inconsistent with or conflicts with the
provisions of this Agreement.

3.12 CERTIFICATE OF INCORPORATION AND BYLAWS. The certificate of
incorporation and bylaws of the Company may he amended in any manner permitted
thereunder, except that neither the certificate nor the bylaws shall be amended
in any manner that would conflict with, or be inconsistent with, the provisions
of this Agreement.

IN WITNESS WHEREOF, the Company, the Investors and Meridian have executed
this agreement in counterparts as of the date first above specified.

EPI TECHNOLOGIES, INC.

By: /s/ Bruce F. Maison
---------------------------------------
Its: President
---------------------------------------

INVESTORS:

/s/ Spencer Browne
-------------------------------------------
SPENCER BROWNE

MNP CORPORATION

By: /s/ Larry Berman
----------------------------------------
Larry Berman, President

Elliot Smith
----------------------------------------
ELLIOT SMITH

MERIDIAN NATIONAL CORPORATION

By: /s/ William D. Feniger
----------------------------------------
Its: Chief Executive Officer
---------------------------------------

<PAGE>

Exhibit 11
MERIDIAN NATIONAL CORPORATION
COMPUTATION OF EARNINGS PER SHARE

Year ended February 28 or 29
--------------------------------------------------------
1997 1996 1995
---- ---- ----
PRIMARY EARNINGS PER SHARE

COMPUTATION FOR STATEMENTS OF OPERATIONS

<S> <C> <C> <C>
EARNINGS
Earnings (loss) from continuing operations
before extraordinary gain ($619,465) ($1,728,196) ($1,563,880)
Deduct dividends on preferred stock 136,359 129,762 136,378
--------------------------------------------------------
Earnings (loss) applicable to common stock from continuing (755,824) (1,857,958) (1,700,258)
operations before extraordinary gain
Discontinued operations 294,578 229,382 211,238
Extraordinary gain, net 329,279 149,206 226,276
--------------------------------------------------------

Earnings (loss) applicable to common stock ($131,967) ($1,479,370) ($1,262,744)
--------------------------------------------------------
--------------------------------------------------------

SHARES
Weighted average common shares outstanding 3,241,349 2,638,126 2,423,864
Dilutive common stock equivalents -- -- --
--------------------------------------------------------

Weighted average common shares and dilutive
common stock equivalents outstanding 3,241,349 2,638,126 2,423,864
--------------------------------------------------------
--------------------------------------------------------

Earnings (loss) per common share:
Income (loss) before extraordinary gain:
Continuing operations ($0.23) ($0.71) ($0.70)
Discontinued operations 0.09 0.09 0.09
Extraordinary gain, net 0.10 0.06 0.09
--------------------------------------------------------

Primary earnings (loss) per common share ($0.04) ($0.56) ($0.52)
--------------------------------------------------------
--------------------------------------------------------

ADDITIONAL PRIMARY COMPUTATION
Earnings (loss) as computed above:
Earnings (loss) applicable to common stock from continuing
operations before extraordinary gain ($1,700,258)
Discontinued operations 211,238
Extraordinary gain, net 226,276

Earnings (loss) applicable to common stock ($1,262,744)
----------------

Additional adjustment to weighted average
common shares outstanding:
Weighted average common shares and dilutive
common stock equivalents outstanding, as
calculated above 2,423,864

Add anti-dilutive common stock equivalents
outstanding (treasury stock method) 125,839
----------------

Weighted average common shares and common
stock equivalents outstanding, as adjusted 2,549,703
----------------
----------------

Earnings (loss) per common share, as adjusted (a):
Income (loss) before extraordinary gain:
Continuing operations ($0.67)
Discontinued operations $0.08
Extraordinary gain, net 0.09
----------------

Primary earnings (loss) per common share ($0.50)
----------------
----------------
</TABLE>

<PAGE>

MERIDIAN NATIONAL CORPORATION
COMPUTATION OF EARNINGS PER SHARE (CONTINUED)

Year ended February 28 or 29
--------------------------------------------------------
1997 1996 1995
---- ---- ----

FULLY DILUTED EARNINGS PER SHARE

COMPUTATION FOR STATEMENTS OF OPERATIONS

Earnings (loss) applicable to common stock from continuing (755,824) (1,857,958) (1,700,258)
operations before extraordinary gain

Discontinued operations 294,578 229,382 211,238
Extraordinary gain, net 329,279 149,206 226,276
--------------------------------------------------------

Earnings (loss) applicable to common stock ($131,967) ($1,479,370) ($1,262,744)
--------------------------------------------------------
SHARES
Weighted average common shares outstanding 3,241,349 2,638,126 2,423,864
Dilutive common stock equivalents -- -- --
--------------------------------------------------------

Weighted average common shares and dilutive
common stock equivalents outstanding 3,241,349 2,638,126 2,423,864
--------------------------------------------------------

Fully diluted earnings (loss) per common share ($0.04) ($0.56) ($0.52)
--------------------------------------------------------
--------------------------------------------------------

ADDITIONAL FULLY DILUTED COMPUTATION
Earnings
Earnings (loss) from continuing operations before
extraordinary gain ($619,465) ($1,728,196) ($1,563,880)
Add interest on convertible note payable, net
of tax effect 38,000 54,000 42,000
--------------------------------------------------------
Earnings (loss) from continuing operations
operations before extraordinary gain, as adjusted (581,465) (1,674,196) (1,521,880)

Deduct dividends on Series A preferred stock 36,000 36,000 25,202
--------------------------------------------------------

Earnings (loss) applicable to common stock from
continuing before extraordinary gain (617,465) (1,710,196) (1,547,082)
Discontinued operations 294,578 229,382 211,238
Extraordinary gain, net 329,279 149,206 226,276
--------------------------------------------------------

Earnings (loss) applicable to common stock $6,392 ($1,331,608) ($1,109,568)
--------------------------------------------------------

Additional adjustment to weighted average
common shares outstanding:
Weighted average common shares and dilutive
common stock equivalents outstanding, as
calculated above 3,241,349 2,638,126 2,423,864

Add anti-dilutive common stock equivalents
outstanding (treasury stock method) -- -- 125,839
Add shares issued assuming conversion of Series B
preferred stock 51,688 51,688 51,688
Add shares issued assuming conversion of
convertible note payable 17,643 38,258 38,258
--------------------------------------------------------

Weighted average common shares and common
stock equivalents outstanding, as adjusted 3,310,680 2,728,072 2,639,649
--------------------------------------------------------

Earnings (loss) per common share, as adjusted (a):
Income (loss) before extraordinary gain:
Continuing operations ($0.19) ($0.62) ($0.59)
Discontinued operations 0.09 0.08 0.08
--------------------------------------------------------
Extraordinary gain, net 0.10 0.05 0.09
--------------------------------------------------------
FULLY DILUTED EARNINGS (LOSS) PER COMMON SHARE $0.00 ($0.49) ($0.42)
--------------------------------------------------------
--------------------------------------------------------
</TABLE>

<PAGE>

MERIDIAN NATIONAL CORPORATION
COMPUTATION OF EARNINGS PER SHARE (CONTINUED)

(a) This calculation is submitted in accordance with Regulation S-K item
601(b)(11) although it is contrary to paragraph 40 of APB Opinion
No. 15 because it produces an anti-dilutive result.

<PAGE>

Exhibit 21

MERIDIAN NATIONAL CORPORATION
LIST OF SUBSIDIARIES OF REGISTRANT

State of Incorporation
Subsidiary or Organization
---------- ---------------

Ottawa River Steel Company Ohio

National Metal Processing, Inc. Michigan

Meridian Environmental Services, Inc. Michigan

EPI Technologies, Inc. Delaware

SUBSIDIARIES OF EPI TECHNOLOGIES, INC.

National Purification, Inc. Ohio

MEPI Corp. Ohio

Environmental Purification Industries Company, Ohio
a general partnership 100% owned by
National Purification, Inc. and MEPI Corp.

<PAGE>
Exhibit 23

Consent of Independent Auditors

We consent to the incorporation by reference in the Registration Statement (Form
S-3 No. 33-83590) of Meridian National Corporation and in the related
prospectus, and in the Registration Statements (Form S-8 Nos. 33-72256 and 333-
961) pertaining to the 1990 Non-qualified and Incentive Stock Option Plan and to
the Amended and Restated 1987 Non-employee Directors' Stock Option Plan of
Meridian National Corporation of our report dated June 20, 1996, with respect to
the consolidated financial statements of Meridian National Corporation included
in this Annual Report (Form 10-K) for the year ended February 28, 1997.

ERNST & YOUNG LLP

Toledo, Ohio
June 24, 1997

<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE AUDITED
CONSOLIDATED BALANCE SHEET OF MERIDIAN NATIONAL CORPORATION AS OF FEBRUARY 28,
1997 AND RELATED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEAR THEN ENDED
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> FEB-28-1997
<PERIOD-START> MAR-01-1996
<PERIOD-END> FEB-28-1997
<CASH> 16,778
<SECURITIES> 0
<RECEIVABLES> 11,174,851
<ALLOWANCES> 152,500
<INVENTORY> 12,083,532
<CURRENT-ASSETS> 23,953,665
<PP&E> 11,963,239
<DEPRECIATION> 4,151,923
<TOTAL-ASSETS> 33,700,810
<CURRENT-LIABILITIES> 25,819,755
<BONDS> 6,586,293
0
1,175,320
<COMMON> 34,882
<OTHER-SE> (12,040)
<TOTAL-LIABILITY-AND-EQUITY> 33,700,810
<SALES> 66,511,224
<TOTAL-REVENUES> 66,511,224
<CGS> 58,522,311
<TOTAL-COSTS> 65,682,442
<OTHER-EXPENSES> (146,541)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,594,788
<INCOME-PRETAX> (619,465)
<INCOME-TAX> 0
<INCOME-CONTINUING> (619,465)
<DISCONTINUED> 294,578
<EXTRAORDINARY> 329,279
<CHANGES> 0
<NET-INCOME> 4,392
<EPS-PRIMARY> (0.04)
<EPS-DILUTED> (0.04)

</TABLE>