<PAGE>

                                                                EXHIBIT 10.01(u)
                                  May 7, 1999

Meridian National Corporation
Ottawa River Steel Co.
National Metal Processing, Inc.
Interstate Metal Processing, Inc.
Precise Pac, Inc.
Meridian Environmental Services, Inc.
EEC Technologies, Inc.
Environmental Purification Industries Company

c/o Meridian National Corporation
805 Chicago Street
Toledo, 01-1 43611
Attn:  William D. Feniqer, President

Gentlemen:

     Reference is made to that certain Loan and Security Agreement, dated as of
December 6, 1989, by and among National Bank of Canada, a Canadian chartered
bank (the "Bank") on the one hand, and, on the other hand, 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 collectively with MNC, ORS, NMP, IMP, and PPI, the "Revolving
Borrowers"), as amended by Amendment No. 1 to the Loan and Security Agreement
dated March, 1990 through Amendment No. 14 to the Loan and Security Agreement
dated as of May 12, 1997 (collectively, the "Loan Agreement").  Reference also
is made to the "EPI Term Notes" as such term is defined in the Loan Agreement.
Initial capitalized terms used herein, unless otherwise defined, shall have the
meaning ascribed to such terms in the Loan Agreement.

     As you know, events have occurred, each of which either constitutes an
Event of Default, or with passage of time after notice or demand would, unless
cured, constitute an Event of Default (the "Current Defaults") - The Current
Defaults include, among other things, the failure of the makers of the EDT Term
Notes to make payment of sums due and owing thereunder, and the failure of the
Revolving Borrowers to perform, keep or observe the terms and covenants set
forth at. Sections 2.3(A) (Revolving Loan shall not exceed Revolving Loan
Borrowing Base), 7.1(I) (required financial information), 7.1 (N) (Tangible Net
Worth) , 7.1 (0) (Debt to Tangible Net
<PAGE>

Worth Ratio), 7.1(P) (Working Capital) and 7.1(Q) (Cash Flow Ratio) of the Loan
Agreement. Neither the Revolving Borrowers nor the makers of the EPT Term Notes
(collectively, the "Borrowers") are able to cure any of the Current Defaults
within the applicable cure periods, if any. The Bank presently has the right to
accelerate the Obligations and demand immediate payment thereof, and the right
to foreclose upon, take possession of, and liquidate all Collateral. The Bank
has applied all Cash Collateral to reduction of the "Overadvance" (as defined
hereinbelow) . The Borrowers and Bank have discussed possible restructuring of
the Obligations. The Bank is investigating under what terms and conditions, if
any, it may be willing to continue to provide financing to the Borrowers.
Notwithstanding the foregoing, subject to the terms of this letter agreement,
the Bank continues to have the unfettered right to accelerate the Obligations
and enforce all of its rights and remedies.

     Borrowers have requested that the Bank forbear in the exercise and
enforcement of the Bank's rights, powers and remedies under the Loan Agreement,
the other Credit Documents or otherwise existing under applicable law. Borrowers
also have requested that the Bank agree to permit the balance of the Revolving
Loan to exceed the Revolving Loan Borrowing Base by an amount not to exceed the
"Maximum Overadvance" (as such term is defined hereinbelow).  Borrowers also
have requested that the Bank suspend effectiveness of Section 3 of the Loan
Agreement (the "Default Interest Provision") and of Sections 7.1(N), (0), (P)
and (Q) of the Loan Agreement (collectively, the "Financial Covenants") . The
Bank is willing to (i) forbear for the time period expressly set forth herein in
the exercise and enforcement of such rights, powers and remedies, (ii) permit
the balance of the Revolving Loan to exceed the Revolving Loan Borrowing Ease by
an amount not to exceed the Maximum Overadvance, and (iii) suspend for the time
period expressly set forth herein the effectiveness of the Default Interest
Provision and the Financial Covenants, but only upon full and complete
compliance and fulfillment by Borrowers of the following terms and conditions:

     1.  ACKNOWLEDGMENTS.  Each of Borrowers hereby acknowledges and agrees
that: (a) pursuant to that certain Assignment dated as of June 1, 1998, between
National Canada Finance Corp., as Assignor, and Bank, as Assignee, Bank is the
successor-in-interest, assignee and owner of all right, title and interest of
Bank of New England, N.A. and National Canada Finance Corp. in and to the Loan
Agreement, the Obligations, the Collateral and the other Credit Documents; (b)
the Current Defaults have occurred and are continuing and Borrowers are unable
to cure any of such Current Defaults which have a cure period; (c) Bank has not
heretofore expressly or impliedly waived any of the Current Defaults; (d) absent
the effectiveness of this letter agreement, the Default Interest Provision and
the Financial Covenants would be in full force and effect; (e) Bank has the
right to accelerate and immediately enforce payment of all Obligations and, in
connection therewith, to immediately enforce its security interests in, and
liens on, the Collateral and exercise all other rights, powers and remedies
provided to Bank under the Credit Documents and applicable law; (f) it has no
grounds for disputing the validity or enforceability of the Credit Documents or
any of its obligations thereunder, or the validity, priority, enforceability or
extent of
<PAGE>

Bank's security interests in or liens against any item of Collateral;
(g) the principal and interest portion of the Obligations comprises the
following:



                                Principal     Accrued Unpaid
                                as of         Interest
                                3/19/99       Thru 3/19/99     Total
                                ---------     --------------   -----
i.     Revolving Loan        $ 11,376,369.40  $60,882.75       $11,437,252.15
ii.    EPI First Term Loan        300,000.00    1,618.75           301,618.75
iii    EPI Second Term Loan       350,000.00    1,888.54           351,888.54
iv.    EPI Third Term Loan      1,112,000.00    6,000.17         1,118,000.17
                             ---------------  ----------       --------------
       Total at 3/19/99       $13 138,369.40   70,390.21       $13,208,759.61
                                               ---------


and (h) the balance of the Revolving Loan exceeds the Revolving Loan Borrowing
Base in violation of Section 2.3(A) of the Loan Agreement. The portion of the
balance of the Revolving Loan in excess of the Revolving Loan Borrowing Base is
referred to herein as the "Overadvance."

     2.  LIMITED FORBEARANCE. (a) During the Forbearance Period (defined
hereinbelow) , so long as no Forbearance Event of Default shall have occurred
and be continuing and subject to compliance by Borrowers with the terms and
conditions of this letter agreement and the other Credit Documents, Bank hereby
agrees that it shall (i) forbear in the exercise of its rights, powers and
remedies afforded under the Credit Documents or applicable law, (ii) permit the
balance of the Revolving Loan to exceed the Revolving Loan Borrowing Base by an
amount not to exceed the Maximum Overadvance, and (iii) suspend the
effectiveness of the Default Interest Provision and the Financial Covenants
during the Forbearance Period. The "Forbearance Period" means the period
commencing on the date this letter agreement becomes effective and ending on the
earliest to occur of (i) the date of termination of the Forbearance Period
pursuant to Section 5 of this letter agreement or otherwise, (ii) the date on
which all of the Obligations have been paid in full and the Loan Agreement has
been terminated, (iii) the date, if any, on which the Loan Agreement is further
amended to extend the Forbearance period or otherwise modify the Bank's existing
right to accelerate and immediately enforce payment of all Obligations, and in
connection therewith, to immediately enforce its security interests in and liens
on the Collateral and exercise all other rights, powers and remedies under the
Credit Documents and applicable law, or (iv) June 30, 1999.

     (b) The Bank's forbearance is further expressly subject to and conditioned
upon Borrowers' strict compliance with each and every term and provision of this
letter agreement, and, except with respect to the Default Interest Provision and
the Financial Covenants, Borrowers' strict compliance with each and every term
and provision of the Credit Documents.
<PAGE>

     3.  CONDITIONS TO EFFECTIVENESS OF LETTER AGREEMENT.  The effectiveness of
this letter agreement and the Bank's forbearance herein shall be subject to and
conditioned upon delivery of the following documents to Bank in form and
substance satisfactory to Bank, and the fulfillment and satisfaction of the
following terms and conditions:

     (a) Letter Agreement. Bank shall have received four (4) executed copies of
this letter agreement executed by each Borrower;

     (b) Extension Fee. Borrowers shall have paid to Bank a fee (the "Extension
Fee") in the amount of thirty thousand dollars ($30,000.00) in consideration of
Bank's forbearance and other financial accommodations provided herein and under
the Loan Agreement including, without limitation, the Overadvance, and also to
reimburse Bank for Costs and Expenses incurred in connection with this
Agreement, including legal fees and expenses;

     (c) Reaffirmation of Current. Bank shall have received an executed copy of
a Reaffirmation of Guaranty in form and substance acceptable to Bank executed by
William D. Feniger in respect of that certain Guaranty, dated November 4, 1990,
executed by William D. Feniger in favor of the Bank; and

     (d) Other Documents. Bank shall have received from Borrowers such other
documents and agreements as Bank may reasonably request.

     4.  ADDITIONAL  COVENANTS  OF  BORROWERS.  Borrowers
acknowledge, covenant and agree that:

     (a) Delivery of Financial Statements. Borrowers will furnish to Bank within
30 days after the end of each month, commencing with March 1999, in addition to
the financial statements required at Section 7.1(I) (2) of the Loan Agreement,
unaudited interim cash flow statements prepared in accordance with Generally
Accepted Accounting Principles (excepting footnotes and subject to normal year-
end adjustments) for such month, for each of Borrowers and their respective
related affiliates, each certified by its chief financial officer that, to the
best of his or her knowledge, such statements fairly present the results of
operations of such Borrower for the period covered thereby.

     (b) Perfection Certificate. Bank shall have received from Borrowers on or
before May 10, 1999, a Perfection Certificate in form and substance satisfactory
to Bank certifying the identity and locations of each of the Borrowers and all
locations of the Collateral;

     (c) Delivery of Other Financial Information. Borrowers will furnish to
Bank, in addition to the information Borrowers already are obligated to deliver
to Bank under the Loan Agreement, (i) a weekly report setting forth the amount
of the Revolving Loan Borrowing Base, including the amount of Eligible Accounts
(less the maximum discounts, credits and allowances
<PAGE>

which may be taken by or granted to Account Debtors in connection therewith) ,
the amount of Eligible Inventory (stated at lower of cost or market value) , and
such other information as may be necessary for calculation of the Revolving Loan
Borrowing Base, and (ii) a weekly report, to be delivered to Bank no later than
2:00 p.m. EST the Wednesday following each week during the Forbearance Period,
detailing the Inventory, including the location of all Inventory, and indicating
the lower of cost or market value of all Inventory.

     (d) Revolving Loan Payments.  The Current Defaults include the existence of
the Overadvance. Borrowers shall reduce the amount of the Overadvance of this
letter agreement) by paying on or prior to June 15, 1999, the sum of $50,000.00.
The amount of the Maximum Overadvance shall be correspondingly reduced by
$50,000.00 on June 15, 1999.

     (e)  Inventory  Audit/Equipment  Appraisal.  Bank has informed Borrowers
that during the Forbearance Period, Bank intends to exercise its rights under
Section 4.5 of the Loan Agreement to inspect the Inventory and the Fixed
Collateral.  Borrowers acknowledge the Bank's right of inspection under Section
4.5 of the Loan Agreement. Borrowers further covenant and agree to instruct
appropriate personnel to provide Bank (including without limitation, any third
party auditors or appraisers retained by Bank or its counsel) access to all
Inventory and Fixed Collateral locations and otherwise assist Bank and such
other Persons with such physical inspection, including without limitation,
identifying for Dank and such other Persons any personal property at any
location of Borrowers that is not owned by Borrowers or that otherwise does not
constitute Collateral. Borrowers further acknowledge, covenant and agree that
all fees, costs and expenses Bank incurs in connection with such inspection and
any audit report or appraisal prepared in connection with such inspection shall
constitute Costs and Expenses. Bank shall make a copy of the last written report
of any such audit or appraisal of the Collateral available for inspection by
Borrowers.

     (f) Material Changes. Borrowers shall promptly provide Bank with written
notice of all material changes in the business, properties, prospects,
operations or condition (financial or otherwise) of any Borrower including,
without limitation, information related to the sale or proposed sale of the
capital stock or assets of any Borrower.

     (g) Continued Compliance. During the Forbearance Period, except as
otherwise provided herein, Borrowers shall continue to perform and comply with
each term, condition and provision of this letter agreement, the Loan Agreement
and the other Credit Documents (including, without limitation, the monthly
obligation to pay interest on the unpaid principal balance of the Revolving
Loan) and no Event of Default or Forbearance Event of Default shall occur under
this letter agreement, the Loan Agreement or any other Credit Document.

     (h) Automatic Acceleration. Subject to Bank's rights under Section 5 of
this letter agreement and Section 10 of the Loan Agreement, all outstanding
obligations shall be due and payable in immediately available funds on June 30,
1999 and in the event that Bank does not receive
<PAGE>

such payment on June 30, 1999, Bank shall have the undisputed and absolute right
to exercise and enforce all other rights, powers and remedies which may exist
pursuant to the Credit Documents or under applicable law, all without further
demand or notice or legal process of any kind, all of which are hereby waived by
Borrowers.

          (i) Additional Deliveries. On or prior to May 10, 1999:

                     (i) any guarantor of the Obligations shall deliver to Bank
    personal financial statements showing his or her financial condition as of
    December 31, 1998, or a later date, as attested to by such guarantor;

                    (ii) Borrowers shall deliver to Bank a complete listing of
    all real property owned or occupied by any of Borrowers, and the respective
    Affiliates of any of them, which listing shall include or have attached to
    it the common address of each parcel of real property, a legal description
    of such real property, identity of the owner of such real property, identity
    of the occupant(s) of such real property, a copy of any lease(s) for such
    real property, a copy of any mortgages or other agreements, instruments or
    documents conveying or otherwise establishing a lien against such real
    property, and the identity of any Person known to hold a lien against such
    real property; and

                    (iii) Borrowers, Bank and the Depository Bank shall amend
    the existing Depository Agreement or enter into a new Depository Agreement
    to effect the purposes of Sections 5.1(A) and 5.1(C) of the Loan Agreement.

On or prior to May 10, 1999, Borrowers shall deliver to Bank cash flow
projections that include elimination of the Overadvance and payoff of the DPI
Term Notes. On or prior to Monday, May 10, 1999, Bank shall have received copies
of the corporate resolution of each of Borrowers affirming and ratifying the
execution and delivery of, and the consummation of the transactions contemplated
by, this letter agreement and all other documents or instruments to be executed
and delivered in conjunction herewith, certified by the Secretary of each
Borrower as of the date of Borrowers' execution of this letter agreement as
being in full force and effect without modification or amendment.


     (j) Insider Compensation. Borrowers shall not increase any salaries,
benefits or other compensation payable to directors, officers or other salaried
employees who are shareholders of any of Borrowers, creditors of any of
Borrowers, or both (collectively, "Insiders") . Borrowers shall not pay any
bonus or other discretionary compensation to Insiders. Borrowers shall pay only
market rents with respect to any real estate in which Insiders have an ownership
or other interest and that is leased to any of Borrowers.
<PAGE>

     (k) Cooperation. Borrowers shall execute, deliver to and otherwise
cooperate with Bank concerning any other agreements, instruments or other
documents as may be required or as Dank may reasonably request to establish,
acknowledge and perfect the Obligations and the liens and security interests of
Bank in the Collateral.

     5.  FORBEARANCE EVENTS OF DEFAULT. A Forbearance Event of Default shall
mean the occurrence of any one or more of the following events:

     (a) Any of Borrowers shall fail to pay any of the Obligations when due
under this letter agreement, the Loan Agreement (as amended hereby) or any of
the other Credit Documents;

     (b) Borrowers shall flail to observe or perform any term, covenant or
agreement binding on it contained in this letter agreement, or any agreement,
instrument or document executed in connection herewith, subject to the same
notice and ten (10) day cure period for non-monetary defaults as is set forth in
Section 10.1(C) of the Loan Agreement;

     (c) A material adverse change in the business, properties, prospects,
condition (financial or otherwise), assets or results of operation of any of
Borrowers shall have occurred after the date of Borrowers' execution of this
letter agreement;

     (d) An Event of Default, other than the Current Defaults, shall have
occurred and be continuing; or

     (e) Any instrument, document, report, schedule, agreement, representation
or warranty, oral or written, made or delivered to Bank by any of Borrowers in
connection with this letter agreement is untrue or incorrect in any material
respect when made or delivered.

     Upon the occurrence of any Forbearance Event of Default, the Bank may
immediately terminate the Forbearance Period; provided, however, that upon the
occurrence of any Forbearance Event of Default described in Section 5(d) with
respect to an Event of Default under subsections 10.1(H), (I) or (J) of the Loan
Agreement, the Forbearance Period shall automatically terminate and all
Obligations shall automatically become immediately due and payable, without
notice or demand of any kind. Upon the termination or expiration of the
Forbearance Period, Bank shall be entitled to exercise all of its rights, powers
and remedies under the Credit Documents and applicable law, including, without
limitation, the right to declare all of the Obligations to be immediately due
and payable (if such Obligations are not otherwise automatically immediately due
and payable as provided herein or in the Credit Documents) and to enforce its
liens on, and security interests in, the Collateral. The occurrence of any
Forbearance Event of Default shall constitute an Event of Default under the Loan
Agreement.

     6.  AMENDMENT TO CREDIT DOCUMENTS. Each of the parties hereto recognizes,
acknowledges and agrees that this letter agreement shall constitute an amendment
to the
<PAGE>

Loan Agreement and a Credit Document, and shall be deemed to be a part of
the Loan Agreement as if it were part of the same document. In addition to all
other provisions of this letter agreement, the Loan Agreement is further
specifically amended as follows:

     (a) The definition of the `Revolving Loan Borrowing Base" in Section 1.1 of
the Loan Agreement is amended and restated in its entirety to read as follows:

     Revolving Loan Borrowing Base - Subject to the provisions of Section 2.2(2)
     hereof an amount equal to 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, such fifty percent of Eligible Inventory not to exceed
     the amount of $6,000,000.00; minus (c) the face amount of all Letters of
     Credit issued by Bank on behalf of any Borrower or Borrowers.

     (b) Section 2.3(A) of the Loan Agreement is amended by deleting the last
line of such Section and inserting in lieu thereof the following:

     lesser of:

     (1) the Revolving Loan Borrowing Base plus the amount of the Maximum
     Overadvance, or

     (2)  $13,500,000.00

     The Maximum Overadvance shall be $1,552,918.69 through June 15, 1999, and
     $1,502,918.69 from June 15 through June 30, 1999.

     (c) Section 11 of the Loan Agreement is amended to add the following at the
end of such Section:

     The relationship of Bank and Borrowers shall at all times be that of
     creditor and debtor and not as joint ventures or partners. Nothing
     contained herein or in any instrument, document or agreement delivered in
     connection herewith, the Loan Agreement or any of the other Credit
     Documents shall be deemed or construed to create a fiduciary relationship
     between or among the parties, provided that nothing contained in any of the
     foregoing shall constitute a waiver or release of the implied obligation of
     good faith and fair dealing, if any.

(d)  Section 12.2 of the Loan Agreement is amended to: (i)  insert the phrase
     "and whether prior or subsequent to the commencement of a case concerning
     any of Borrowers under title 11, United
<PAGE>

States Code, 11 U.S.C. (S)(S) 101 et seq., and" between the comma and the word
"regardless" in the second line of such Section and (ii) add the following
sentence at the end of such Section:

     In addition to reasonable attorneys' fees, costs and expenses payable as
     set forth above, Borrowers shall pay or, if paid by Bank, reimburse Bank
     for all reasonable out-of-pocket fees, costs and expenses incurred by Bank
     arising out of or in any way related to the Obligations, the Collateral,
     the Credit Documents or the relationship between any of Borrowers and the
     Bank, whether or not Bank incurs such fees, costs and expenses before or
     after the commencement of a case concerning any of Borrowers under title
     11, United States Code, 11 U.S.C. (S)(S) 101 et seq. ,including, without
     limitation, reasonable attorneys' fees, costs and expenses paid or incurred
     by Bank as set forth above, and, whether or not Bank employs counsel, any
     reasonable environmental consultant fees, costs and expenses paid or
     incurred by Bank in connection with evaluation of the Collateral and any
     other reasonable professional fees, costs and expenses paid or incurred by
     Bank in connection with auditing, appraising, evaluating or otherwise
     monitoring the Collateral or other credit support for the Obligations (all
     such fees, costs and expenses, hereinafter referred to as "Costs and
     Expenses") . All Costs and Expenses shall be due and payable immediately
     upon Borrowers' receipt of invoices from Bank reflecting the Costs and
     Expenses and Bank may (but shall not be required to) satisfy Borrowers
     obligation for such Costs and Expenses pursuant to Section 2.6 of the Loan
     Agreement.

     (e) Section 12.3 of the Loan Agreement is amended to add the following
sentence at the end of such Section:

     Any obligation of Bank to forbear from exercise or enforcement of Bank's
     rights, powers and remedies under the Credit Documents or applicable law
     shall be set forth in a writing duly executed by Bank and Borrowers and
     shall be limited precisely as written and, except as expressly set forth in
     such writing, neither the fact of Bank's forbearance nor any other term or
     provision in such writing shall, or shall be deemed or construed to, (I) be
     a consent to any forbearance, waiver, amendment or modification of any
     term, provision or condition of any Credit Documents, (ii) affect, impair,
     operate as a waiver of, or prejudice any right, power or remedy which Bank
     may then or thereafter have pursuant to any Credit Documents or any other
     document, agreement, security agreement or instrument executed by any
     Person in connection with or related to the Credit Documents, or at law or
     in equity or by statute including, without limitation, with regard to any
     then existing or thereafter arising Event of Default, (iii) impose upon
     Bank any obligation, express or implied, to consent to any amendment or
     further modification of any Credit Documents, or (iv) be a consent to any
     waiver of any then existing Event of Default. Any such obligation of Bank
     to forbear shall remain subject to Bank's reservation of all rights,
<PAGE>

     powers and remedies specifically given to it under the Credit Documents or
     applicable law.

           (f) Section 12.10 of the Loan Agreement is amended to designate the
following address for any future notices:

     (A)  If to Bank, at:

          National Bank of Canada
          Suite 1100
          225 West Washington Street
          Chicago, IL 60606
          Attn:  Allen C. Balk

     with a copy to:

          Winston & Strawn
          35 West Wacker Drive
          Chicago, IL 60601
          Attn:  John B. Griffith, Esq.

     (B)  If to Borrowers, at:

          Meridan National Corporation
          805 Chicago Street
          Toledo, OH 43611
          Attn:  William B. Feniger

     with a copy to:

          John W. Hilbert, II, Esq.
          Shumaker, Loop & Kendrick
          1000 Jackson Street
          Toledo, OH 43624

Notwithstanding Section 12.6 of the Loan Agreement, to the extent that any
provisions of this letter agreement conflict with provisions of the Loan
Agreement or other Credit Documents, the provisions of this letter agreement
shall govern. Except as specifically set forth in this letter agreement, the
Loan Agreement and all other Credit Documents shall remain unaltered and in full
force and effect and the respective terms, conditions, representations and
warranties, covenants and continuing agreements and miscellaneous provisions
thereof are hereby in all respects ratified, confirmed and made applicable to
this letter agreement.
<PAGE>

     7.  REPRESENTATIONS AND WARRANTIES  Borrowers expressly reaffirm that each
of the representations and warranties set forth in Section 6 of the Loan
Agreement (except for any representation or warranty limited by its terms to a
specific date or pertaining to a material adverse change) continues to be
accurate and complete in all material respects, and hereby remakes and
incorporates herein by reference each such representation and warranty as though
made on the date of this letter agreement. In addition, each of Borrowers
represents and warrants that, except for the Current Defaults, no Event of
Default has occurred and is continuing. All of Borrowers' representations and
warranties in this letter agreement shall survive the execution, delivery and
acceptance of this letter agreement by the parties hereto.

     8.  RELEASE. Each of Borrowers for itself and any other Person who may
claim an interest through such Borrower, hereby releases and discharges, with
prejudice, Bank, its directors, officers, employees, agents, attorneys and
representatives from any and every claim, right, cause, action, cause of action,
damage, liability and other matter or proceeding arising from, relating to or in
connection with any acts or omissions of Bank, its directors, officers,
employees, agents, attorneys and representatives prior to the date of execution
of this letter agreement. This provision shall survive and continue in full
force and effect whether or not (i) each of Borrowers shall satisfy all other
provisions of this letter agreement or the other Credit Documents, including
payment in full by Borrowers of all Obligations, (ii) this letter agreement
otherwise is terminated, or (iii) Bank's forbearance ceases or is terminated
pursuant to Section 5 of this letter agreement.

     9.  COUNTERPARTS. This letter agreement may be executed in any number of
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.

     10.  INTEGRATION. This letter agreement embodies the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior oral or written negotiations, agreements and
understandings of the parties with respect to the subject matter hereof, except
the agreements embodied in the Credit Documents (as modified herein)

     If the foregoing is acceptable to Borrowers, please have each of Borrowers
execute in the places indicated below and deliver to Bank flour execution copies
as provided in Section 3(a) above.

                                                       NATIONAL CANADA



                                                       By:  /s/ Allen C. Balk
                                                            -----------------
                                                       Title:  Vice President
                                                               and Manager
<PAGE>

Acknowledged and Agreed this
10th day of May, 1999 by
the undersigned:


MERIDIAN NATIONAL CORPORATION                OTTAWA RIVER STEEL COMPANY



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

NATIONAL METAL PROCESSING, INC.              INTERSTATE METAL PROCESSING, INC.


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

PRECISE PAC, INC.                            MERIDIAN ENVIRONMENTAL
                                             SERVICES INC.


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

EPI TECHNOLOGIES, INC.                       ENVIRONMENTAL PURIFICATION
                                             INDUSTRIES COMPANY


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