Document:

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                                                                EXHIBIT 10.01(a)

               AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

     THIS AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (the "Agreement") is
made and entered into by and among MERIDIAN NATIONAL CORPORATION, a Delaware
corporation ("MNC"), OTTAWA RIVER STEEL CO., an Ohio corporation ("ORS"), EPI
TECHNOLOGIES, INC., a Delaware corporation ("EPI") and ENVIRONMENTAL
PURIFICATION INDUSTRIES COMPANY, an Ohio general partnership ("EPIC"; and
together with MNC, ORS and EPI sometimes shall be referred to collectively as
"Borrowers" and individually as a "Borrower") and NATIONAL BANK OF CANADA
("Bank").

                                   RECITALS
                                   --------

     A.  MNC, ORS, Interstate Metal Processing, Inc., National Metal Processing,
Inc., Precise Pac, Inc. and Meridian Environmental Services, Inc. (the "Original
Borrowers") and Bank (successor to National Canada Finance Corp., as successor
to the Bank of New England, N.A.) are parties to a certain Loan and Security
Agreement dated as of December 6, 1989 (the "Original Agreement") pursuant to
which Bank agreed to make certain credit accommodations available to the
Original Borrowers.

     B. The Original Agreement has been amended pursuant to the terms of a
certain Amendment No. 1 to Loan and Security Agreement dated March, 1990
("Amendment No. 1"), Amendment No. 2 to the Loan and Security Agreement dated
September 14, 1990 ("Amendment No. 2"), Amendment No. 3 to the Loan and Security
Agreement effective as of May 31, 1991 ("Amendment No. 3"), Amendment No. 4 to
the Loan and Security Agreement effective as of June 22, 1992 ("Amendment No.
4"), Amendment No. 5 to the Loan and Security Agreement dated May 11, 1993
("Amendment No. 5"), a letter amendment dated June 9, 1993 (the "Letter
Amendment"), Amendment No. 6 to the Loan and Security Agreement dated October
20, 1993 ("Amendment No. 6"), Amendment No. 7 to the Loan and Security Agreement
dated January 31, 1994 ("Amendment No. 7"), Amendment No. 8 to the Loan and
Security Agreement effective as of November 30, 1994 ("Amendment No. 8"),
Amendment No. 9 to the Loan and Security Agreement effective as of February 14,
1995 ("Amendment No. 9"), Amendment No. 10 to the Loan and Security Agreement
effective as of May 25, 1995 ("Amendment No. 10"), Amendment No. 11 to the Loan
and Security Agreement effective as of February 29, 1996 ("Amendment No. 11"),
Amendment No. 12 to the Loan and Security Agreement effective as of July 25,
1996 ("Amendment No. 12"), Amendment No. 13 to the Loan and Security Agreement
effective as of November 4, 1996 ("Amendment No. 13") and Amendment No. 14 to
the Loan and Security Agreement effective as of May 12, 1997 ("Amendment No.
14"). The Original Agreement, as amended by Amendment No. 1, Amendment No. 2,
Amendment No. 3, Amendment No. 4, Amendment No. 5, 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, or as otherwise
previously amended or modified by the parties, is hereinafter referred to as the
"Loan Agreement".
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     C.  EPI and MNC have executed and delivered to Bank the EPI First Term Note
and the EPI Second Term Note (each as defined in the Loan Agreement) and EPI,
EPIC and MNC have executed and delivered the EPI Third Term Note.  EPI and Bank
are also parties to a Security Agreement dated November 4, 1996 (the "EPI
Security Agreement") pursuant to which EPI and EPIC have granted to Bank a
security interest in certain Property described therein.

     D. Borrowers are currently in default with respect to the Loan Agreement,
and have requested that Bank (1) restructure the credit facilities under the
Loan Agreement and (2) consent to the purchase by certain individuals affiliated
with MNP Corporation of a controlling interest in MNC and its Subsidiaries
pursuant to a Stock Purchase Agreement (the "Stock Purchase Agreement") dated
June 25, 1999 among MNP Corporation, certain individual buyers listed in the
Stock Purchase Agreement (the "Buyers") and MNC.

     E. Subject to the conditions set forth in this Agreement, Bank has agreed
to restructure the credit facilities and consent to the purchase of stock by
certain individuals affiliated with MNP Corporation pursuant to the Stock
Purchase Agreement on the further condition that Borrowers and Bank amend and
restate the terms and conditions of the credit accommodations in their entirety
pursuant to the terms of this Agreement.

                                  PROVISIONS
                                  ----------

     NOW, THEREFORE, in consideration of the foregoing and the provisions set
forth in this Agreement, it is agreed that the Loan Agreement is hereby amended
and restated in its entirety as follows:

1.   GENERAL
     -------

     1.1  Defined Terms.  When used herein, the following terms shall have the
          -------------
following meanings:

          Account Debtor - Any Person who is or may become obligated to a
          --------------
     Borrower under, with respect to or on account of an Account.

          Accounts - As to each Borrower, all of such Borrower's accounts,
          --------
     contracts, contract rights, notes, bills, drafts, acceptances, general
     intangibles, choses in action, and all other debts, obligations and
     liabilities in whatever form, owing to such Borrower from any Person,
     whether now existing or hereafter arising, now or hereafter received by or
     belonging or owing to such Borrower, for goods sold or leased or for
     services rendered, whether or not earned by performance and whether or not
     evidenced by contracts, instruments or documents, or however otherwise the
     same may have been established or created, all guarantees and security
     therefor, all right, title and interest of such Borrower in the merchandise
     or services which gave rise thereto including, without limitation, the
     rights of reclamation and stoppage in transit, and all rights of an unpaid
     seller of merchandise or services.

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          Affiliate - With respect to each Borrower, each other Borrower, any
          ---------
     Subsidiary or executive officer or director of any Borrower or any other
     Person:

              (A) Which, directly or indirectly, through one or more
          intermediaries controls, or is controlled by, or is under common
          control with, any Borrower;

              (B) Which owns or controls, on an aggregate basis, including all
          beneficial ownership and ownership or control as a trustee, guardian
          or other fiduciary, at least ten percent (10%) or more of any class of
          the Voting Stock of any Borrower; or

              (C) Ten percent (10%) or more of the Voting Stock (or in the case
          of a Person which is not a corporation, ten percent (10%) or more of
          the equity interest) of which is beneficially owned or held by any
          Borrower.

     The term "control" means the possession, directly or indirectly, of the
     power to direct or cause the direction of the management and policies of a
     Person, whether through the ownership of Voting Stock, by contract, or
     otherwise.

          Bankruptcy Laws - All applicable statutes, rules, regulations and
          ---------------
     other forms of law, federal, state or otherwise including, without
     limitation, the provisions of Title 11 of the United States Code, in each
     instance as in effect from time to time, relating to the bankruptcy,
     insolvency, liquidation or reorganization of Persons or the modification or
     alteration of the rights of creditors.

          Bank's Account - As defined in Section 5.5(B) of this Agreement.
          --------------

          Base Rate - The prime rate for commercial loans, as announced publicly
          ---------
     by Bank from time to time as its United States prime rate or its corporate
     base rate or other designation which may replace its prime rate, which rate
     may not be the lowest or best rate offered by Bank.

          Capital Expenditures - As to each Borrower, amounts expended or which
          --------------------
     such Borrower becomes obligated to expend, without regard to the manner in
     which such amounts or the instrument pursuant to which they are made are
     characterized by any Person, (A) for the acquisition, construction or
     installation of properties that are to be included as fixed assets on such
     Borrower's books, (B) for the lease of any property that would be
     capitalized under GAAP, (C) for the incurring of any other capitalized cost
     or (D) for any additions to or replacements of any of the foregoing.

          Code - The Uniform Commercial Code as adopted and in force in the
          ----
     State of Ohio as from time to time in effect.

          Collateral - The Fixed Collateral, Revolving Collateral, and all other
          ----------
     Property of Borrowers now or at any time or times hereafter subject to a
     Lien in favor of Bank.

          Collateral Location - As to each Borrower, such Borrower's principal
          -------------------
     business location, and all states and counties where any Collateral with an
     aggregate value of

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     $10,000 or more is located as of the date hereof, including, without
     limitation, the locations identified on Exhibit A-1 attached to this
                                             -----------
     Agreement.

          Contract Rate - With respect to the Revolving Loan, the Revolving Loan
          -------------
     Contract Rate and with respect to the Term Loan, the Term Loan Contract
     Rate.

          Controlled Group - For each Borrower, each Person required to be
          ----------------
     aggregated with such Borrower under IRC Sections 414(b), (c), (m) or (o).

          Credit Documents - This Agreement, the Notes and all other agreements,
          ----------------
     instruments and documents (including, without limitation, all assignments,
     security agreements, lien waivers, subordinations, guarantees, powers of
     attorney, and consents) heretofore, now, or hereafter executed by any
     Borrower and/or delivered to Bank with respect to the transactions
     contemplated by this Agreement, in each instance as the foregoing may be
     amended from time to time.

          Credit Note - The Amended and Restated Credit Note to be executed by
          -----------
     Borrowers in the form attached as Exhibit B-1 to this Agreement (with such
                                       -----------
     changes or modifications, if any, to which Bank may agree) evidencing the
     Revolving Loan made by Bank pursuant to Section 2.3 of this Agreement,
     together with all amendments thereto and all notes issued in substitution
     therefor or replacement thereof.

          Debt Instruments - As to each Borrower, any contract, agreement,
          ----------------
     instrument, or other document or arrangement under which such Borrower has
     (A) any indebtedness, obligation, or liability (including, without
     limitation, any contingent liability under any guaranty) for borrowed money
     or for the deferred portion of the purchase price of any capital asset or
     for other capital financing, or (B) the right or obligation to incur any
     such indebtedness, obligation or liability.

          Default Rate - A fluctuating rate of interest equal to two (2)
          ------------
     percentage points above the applicable Contract Rate.

          Depository Account - As defined in Section 5.5(A) of this Agreement.
          ------------------

          Depository Agreement - As defined in Section 5.5(A) of this Agreement.
          --------------------

          Depository Bank - As defined in Section 5.5(A) of this Agreement.
          ---------------

          Distribution - As to each Borrower, in respect of such Borrower means:
          ------------

               (i)    The payment of any dividends or other distributions,
          whether in cash, by transfer of property or otherwise, on capital
          stock of such Borrower (except distributions of such stock); and

               (ii)   The redemption or acquisition of any Securities of such
          Borrower.

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          Eligible Accounts - Accounts arising out of the completed bona-fide
          -----------------
     sale or lease of goods or rendition of services by a Borrower in the
     ordinary course of such Borrower's business and in accordance with the
     terms and conditions of all purchase orders, contracts or other documents
     relating thereto, which are subject to Bank's perfected security interest
     and no other Lien (other than Permitted Liens), and for a liquidated amount
     maturing as stated in an invoice or other documentary evidence relating
     thereto which has been provided, and is in form satisfactory, to Bank;
     provided, however, that, unless Bank otherwise agrees, no such Account
     shall be an Eligible Account if:

               (A)  The Account arises out of a sale made by a Borrower to an
          Affiliate of such Borrower or to a Person controlled by an Affiliate
          of such Borrower;

               (B)  The Account is due or unpaid more than ninety (90) days
          after the invoice date thereof unless covered by credit insurance
          acceptable and approved in advance by Bank;

               (C)  The Account Debtor claims any right of credit, allowance or
          adjustment with respect to such Account, except a discount allowed for
          prompt payment, or such Account is otherwise disputed or contingent in
          any respect, but only to the extent the Account Debtor claims any such
          right of credit, allowance, or adjustment;

               (D)  The Account Debtor has returned any of the goods from the
          sale of which the Account arose, but only to the extent of the amount
          of the returned goods of such Account Debtor;

               (E)  There exists any facts, events or circumstances which Bank
          determines in its reasonable discretion may be or would be reasonably
          expected to impair the validity, collectibility or enforcement of such
          Account or would reasonably be expected to reduce the amount payable
          thereunder from the face value of the invoice related thereto, but
          only to the extent of the amount by which the amount payable
          thereunder is expected to be reduced;

               (F)  To the extent that the Account Debtor also is a creditor of
          any Borrower or to the extent that the Account otherwise is or would
          be reasonably expected to become subject to any right of setoff or
          offset by the Account Debtor, then the amount of the Account subject
          to the right of such setoff or offset shall not be an Eligible
          Account;

               (G)  The Account Debtor has commenced a voluntary case under any
          Bankruptcy Laws, or made an assignment for the benefit of creditors,
          or a decree or order for relief has been entered by a court having
          jurisdiction in the premises in respect of the Account Debtor in an
          involuntary case under any Bankruptcy Laws or any other petition or
          other application for relief under any Bankruptcy Laws has been filed
          against the Account Debtor, or the Account Debtor has failed,
          suspended business, ceased to be solvent, or consented to or suffered
          a receiver, trustee,

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          liquidator, or custodian to be appointed for it or for all or a
          significant portion of its assets or affairs;

               (H)  The Account arises out of a sale to an Account Debtor
          outside the United States unless the sale is made to an Account Debtor
          located in Canada, is covered by credit insurance acceptable to and
          approved by Bank in advance, or is made pursuant to a letter of
          credit, guaranty, or acceptance terms, in each case acceptable to Bank
          in its reasonable discretion;

               (I)  The Account arises out of a sale to an Account Debtor on a
          bill-and-hold, guaranteed sale, sale-and-return, sale on approval,
          consignment or any other repurchase or return basis or is evidenced by
          chattel paper;

               (J)  The Account Debtor is the United States of America or any
          department, agency or instrumentality thereof, unless the right to
          payment of such Account is assigned to Bank, pursuant to the
          Assignment of Claims Act of 1940, as amended;

               (K)  The goods giving rise to such Account have not been shipped
          and delivered to and accepted by the Account Debtor or the services
          giving rise to such Account have not been fully performed by Borrower
          and accepted by the Account Debtor or the Account otherwise does not
          represent a final sale; or

               (L)  The Account, when added to the aggregate balance of all
          other Accounts of the Account Debtor, exceeds a credit limit
          determined by Bank, in its reasonable discretion, to the extent such
          Account exceeds such limit.

          Eligible Inventory - Inventory that is subject to Bank's perfected
          ------------------
     security interest and no other Lien (other than Permitted Liens),
     consisting of raw materials and finished goods owned by a Borrower and
     located at one of the Collateral Locations listed on Exhibit A-2, which, in
                                                          -----------
     Bank's good faith credit judgment, is in good and salable condition and not
     obsolete, unmerchantable, lost or not accountable by Borrowers and which
     Bank reasonably determines to be Eligible Inventory based on such credit
     and collateral considerations as Bank may deem appropriate. Borrowers may
     amend Exhibit A-2 from time to time by giving Bank written notice of such
     amendment, and such amendment shall be effective five (5) days following
     delivery of such notice to Bank. Inventory shall not be Eligible Inventory
     to the extent it consists of work-in-process, spare parts, property used in
     packaging or shipping of Inventory, or Inventory of a like use or character
     to the foregoing or otherwise to the extent such Inventory does not conform
     to all standards imposed by any governmental agency, division or department
     thereof which has regulatory authority over such goods or the use or sale
     thereof.

          ERISA - The Employee Retirement Income Security Act of 1974, as
          -----
     amended from time to time, and all rules and regulations from time to time
     promulgated thereunder.

          Event of Default - As defined in Section 10.1 of this Agreement.
          ----------------

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          Existing Security Interests - The security interests of the Bank in
          ---------------------------
     the Fixed Collateral, Revolving Collateral and other Property of the
     Borrowers subject to a lien in favor of the Bank, as arising under, and
     evidenced by, the Original Credit Documents including the EPI Security
     Agreement.

          Financial Statements - The consolidated balance sheets of MNC for the
          --------------------
     fiscal years ending February 28, 1998 and February 28, 1999, and the
     related statements of income, changes in stockholder equity, and changes in
     financial position for the fiscal periods then ended, copies of which are
     attached hereto as Exhibit C.
                        ----------

          Fixed Collateral - Borrowers' fixed assets (other than real property)
          ----------------
     including, without limitation, all machinery, equipment, furniture,
     furnishings, fixtures, tools, dies, molds, parts, material handling
     equipment, supplies and motor vehicles (titled and untitled) of every kind
     and description, now or hereafter owned by Borrowers, or in which Borrowers
     may have or may hereafter acquire any interest, wheresoever located,
     including, without limitation, the items of Fixed Collateral described in
     Exhibit D-1 attached to this Agreement, but specifically excluding the
     -----------
     equipment described in Exhibit D-2.
                            -----------

          GAAP - Generally accepted accounting principles, consistently applied,
          ----
     which are in effect from time to time.

          Guaranty - All obligations of any Person (the "guarantor") which
          --------
     guarantee or assure the payment of, or performance with respect to, any
     indebtedness, liability, or other obligation of any other Person (the
     "primary obligor") in any manner, whether directly or indirectly including,
     without limitation, obligations incurred by such guarantor through an
     agreement, contingent or otherwise:

               (A)  To purchase such indebtedness, liability or obligation or
          any Property or assets constituting security therefor;

               (B) To advance or supply funds (a) for the purchase or payment of
          such indebtedness, liability or obligation, or (b) to maintain working
          capital or other balance sheet condition or otherwise to advance or
          make available funds for the purchase or payment of such indebtedness,
          liability or obligations;

               (C) To lease Property or to purchase any Security or other
          Property or services primarily for the purpose of assuring the owner
          of such indebtedness, liability or obligation of the ability of the
          primary obligor to make payment of the indebtedness, liability or
          obligations; or

               (D) Otherwise to assure the owner of the indebtedness, liability
          or obligation of the primary obligor against loss in respect thereof.

          Indebtedness - As to each Borrower, such Borrower's present and future
          ------------
     obligations, liabilities, debts, claims and indebtedness, contingent, fixed
     or otherwise, however evidenced, created, incurred, acquired, owing or
     arising (whether under written or oral agreement, by operation of law or
     otherwise) including, without limitation, (A) any

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     obligations or liabilities of any Person which are secured by any Lien
     (other than Permitted Liens) upon Property of such Borrower, even though
     such Borrower has not assumed or otherwise become liable for the payment
     thereof, (B) any obligations or liabilities created or arising under any
     lease (including capitalized leases) or under any conditional sales
     contract or other title retention agreement with respect to Property used
     or acquired by such Borrower, even though the rights and remedies of the
     lessor, seller or lender are limited to repossession, (C) any obligations
     or liabilities arising under any lease or other contractual arrangement
     relating to security deposits, advance payments or other prepaid funds in
     the hands of or held by such Borrower subject to return or refund to any
     Person, (D) all unfunded pension fund obligations and liabilities, and (E)
     deferred taxes of any nature.

          Inventory - As to each Borrower, all inventory now owned or leased or
          ---------
     hereafter acquired or leased by such Borrower including, without
     limitation, all goods, merchandise, work-in-process, raw materials,
     finished goods and all other materials, supplies, and tangible personal
     property of any kind, nature or description held for sale or lease or for
     display or demonstration, or furnished or to be furnished under contracts
     of service or which are or which might be used or consumed in connection
     with the manufacturing, packing, shipping, advertising, selling, leasing,
     or furnishing of such goods, merchandise or other personal property and all
     documents of title or other documents pertaining thereto.

          Lien - Any interest in Property securing an obligation owed to, or a
          ----
     claim by, a Person other than the owner of the Property, whether such
     interest is based on the common law, statute or contract including, without
     limitation, the security interest or lien arising from a security
     agreement, mortgage, encumbrance, pledge, conditional sale, trust receipt
     or assignment, lease, consignment, or bailment for security purposes.

          Lockbox - As defined in Section 5.5(B) of this Agreement.
          -------

          Material Adverse Effect - As to any events, occurrences, or
          -----------------------
     conditions, if the result thereof, either singly or in the aggregate, would
     have a material and adverse effect on (1) the Property, business,
     operations, prospects, profitability or condition (financial or otherwise)
     of any Borrower, (2) any Borrower's ability to repay the Obligations or (3)
     Bank's Lien on any Collateral or the priority thereof.

          Material Agreements - Those contracts, agreements, documents, or other
          -------------------
     arrangements required to be disclosed under the provisions of Section
     6.1(C) of this Agreement.

          Multiemployer Plan - A Pension Plan that is subject to the
          ------------------
     requirements of Subtitle E of Title IV of ERISA.

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

          Obligations - All debts, liabilities, and obligations of Borrowers to
          -----------
     Bank under this Agreement and also any and all other debts, liabilities,
     and obligations of Borrowers to Bank of every kind and description, direct
     or indirect, absolute or contingent, due or to

                                       8
<PAGE>

     become due, now existing or hereafter arising including, without limiting
     the generality of the foregoing, any debt, liability, or obligation of
     Borrowers to Bank under any guaranty or to any other Person which Bank may
     have obtained by assignment or otherwise and all interest, fees, charges,
     and expenses which at any time may be payable by Borrowers to Bank pursuant
     to any of the Credit Documents or otherwise, and all costs and expenses
     actually incurred including reasonable attorney fees arising from or
     relating to claims or causes of action made or filed against Bank by third
     parties as a result of Borrowers' actions or inactions.

          Original Credit Documents - The Loan Agreement, the EPI Security
          -------------------------
     Agreement and each of the other "Credit Documents" as defined in the
     Original Agreement, executed in connection therewith or relating thereto.

          Pension Plan - Any pension plan, retirement payment plan, profit-
          ------------
     sharing plan, defined benefit or contribution plan, or "employee pension
     benefit plan" as defined in Section 3(2) of ERISA.

          Permitted Indebtedness - As defined in Section 7.2(C) of this
          ----------------------
     Agreement.

          Permitted Liens - As defined in Section 7.2(G) of this Agreement.
          ---------------

          Person - An individual, partnership, joint venture, corporation,
          ------
     trust, or unincorporated organization, or a government or agency or
     political subdivision thereof.

          Principal Business Location - As to (1) MNC and ORS: 805 Chicago
          ---------------------------
     Street, Toledo, Ohio; and (2) EPI and EPIC: 2111 Champlain, Toledo Ohio.

          Property - Any kind of property or asset, whether real, personal, or
          --------
     mixed, or tangible or intangible, or any interest including, without
     limitation, any leasehold interest held in any such properties or assets.

          Restricted Investment - As defined in Section 7.2(Q) of this
          ---------------------
     Agreement.

          Revolving Collateral - All of Borrowers'
          --------------------

               (1)  Inventory;

               (2)  Contract rights and general intangibles including, without
          limitation, goodwill, trademarks, trademark applications, trade
          styles, trade names, patents, patent applications, and deposit
          accounts whether now owned or hereafter created or acquired;

               (3) Accounts and other receivables, together with all customer
          lists, original books and records, ledger and account cards, computer
          tapes, discs, printouts and records, whether now in existence or
          hereafter created; and

                                       9
<PAGE>

               (4) Documents, warehouse receipts, instruments, and chattel
          paper, whether now owned or hereafter created.

          Revolving Loan - As defined in Section 2.3(A) of this Agreement.
          --------------

          Revolving Loan Contract Rate - A fluctuating rate equal to three
          ----------------------------
     quarters of one (3/4) percentage point above the Base Rate; provided that
     in the event no convenant default or other Event of Default under this
     Agreement has occurred and is continuing on August 31, 2000, the Revolving
     Loan Contract Rate shall be reduced on that date to one half (1/2) of one
     percentage point above the Base Rate..

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

               (1)  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) and fifty percent (50%) of the lower of cost
          (determined on a first-in, first-out basis) or market value of
          Eligible Inventory, provided, however, that the Borrowing Base On
          Eligible Inventory shall in no event exceed $4,500,000; or

               (2)  the Revolving Loan Credit Limit.

          Revolving Loan Credit Limit - An amount equal to Ten Million Dollars
          ---------------------------
     ($10,000,000).

          Security - As defined in Section 2(1) of the Securities Act of 1933,
          --------
     as amended.

          Subordinated Debt - Indebtedness of any Borrowers to MNP Corporation
          -----------------
     and such other indebtedness which is subordinated and junior in right of
     payment to the Obligations to the extent, in such manner and pursuant to an
     instrument evidencing such subordination, acceptable to Bank.

          Subordinated Debt Documents - (i) The Loan Agreement among MNC, ORS,
          ---------------------------
     EPIC and MNP Corporation dated as of June 30, 1999, (ii) the Security
     Agreement among MNC, ORS, EPIC and MNP Corporation dated as of June 30,
     1999, (iii) the Initial Demand Promissory Note of MNC, ORS and EPIC dated
     June 30, 1999 in the principal amount of $1,500,000 payable to MNP
     Corporation, (iv) the Additional Demand Promissory Note of MNC, ORS and
     EPIC dated June 30, 1999 in the principal amount of $1,500,000 payable to
     MNP Corporation, and (v) the Second Mortgage from ORS in favor of MNP
     Corporation dated as of June 30, 1999.

          Subsidiary - As to a Borrower, any corporation of which 50% or more of
          ----------
     the Voting Stock is at any time, directly or indirectly, owned by such
     Borrower and/or one or more of its Subsidiaries.

          Term Loan - As defined in Section 2.1 of this Agreement.
          ----------

                                       10
<PAGE>

          Term Note - The Amended and Restated Term Note to be executed by
          ---------
     Borrowers in the form attached as Exhibit B-2 to this Agreement (with such
                                       -----------
     changes or modifications, if any, to which Bank may agree) evidencing the
     term loan made by Bank pursuant to Section 2.1 of this Agreement, together
     with all amendments thereto and all notes issued in substitution or
     replacement thereof.

          Term Loan Contract Rate - A fluctuating rate equal to one (1)
          -----------------------
     percentage point above the Base Rate; provided that in the event no
     covenant defaults or other Events of Default under this Agreement occur and
     are continuing on August 31, 2000, the Term Loan Contract Rate shall be
     reduced on that date to a fluctuating rate equal to three quarters (3/4) of
     one percentage point above the Base Rate.

          Unused Line Fee - As defined in Section 2.4 hereof.
          ---------------

          Voting Stock - Securities of any class or classes of a corporation
          ------------
     which, at the time of reference thereto, entitles the holders to elect a
     majority of the corporate directors.

     1.2  Accounting Terms. Any accounting terms used in this Agreement which
          ----------------
are not otherwise specifically defined shall have the meanings customarily given
them in accordance with GAAP.

     1.3  Other Terms.  Unless the context indicates to the contrary, all other
          -----------
terms contained in this Agreement shall have the meanings provided for by the
Code to the extent the same are used or defined therein.

     1.4  Use of Plural Form. All definitions shall be equally applicable to
          ------------------
both the singular and plural forms of the defined terms.

2.   LOANS AND ADVANCES
     ------------------

     Subject to the provisions of this Agreement and each of the other Credit
Documents including, without limitation, those pertaining to the advances by
Bank relating to the Revolving Loan and otherwise, provided that no loan
advances need be made by Bank if, at the date of request for loan advances
hereunder by Borrowers, an Event of Default, or event or condition which, with
notice, lapse of time or both, would constitute an Event of Default, then
exists, Bank will provide the credit facility described in this Section 2 for
the account of Borrowers.

     2.1  Term Loan. Bank will make a term loan (the "Term Loan") to Borrowers
          ---------
in the amount of One Million Six Hundred Fifty Thousand Dollars ($1,650,000).
The Term Loan shall be subject to repayment in accordance with, and bear
interest as provided in, Section 2.2 of this Agreement and shall otherwise be
evidenced by, and repayable in accordance with, the Term Note.

     2.2  Payment Terms of Term Loan.
          ---------------------------

          (A)  Interest. The Term Loan shall bear interest on the unpaid
               --------
     principal balance until the date paid at a rate per annum equal to the Term
     Loan Contract Rate in effect from

                                       11
<PAGE>

     time to time, such interest being payable monthly on the first day of each
     month commencing October 1, 1999. 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.

          (B)  Fixed Principal Installments.  Subject otherwise to the terms and
               -----------------------------
     provisions of the Term Note, the principal balance of the Term Loan shall
     be payable in forty-eight monthly installments as follows:  (a) forty-seven
     (47) equal monthly installments of Thirty-Five Thousand Dollars ($35,000)
     each, commencing April 1, 2000, and continuing on the last day of each
     month thereafter, and (b) a final payment of Five Thousand Dollars ($5,000)
     due and payable on March 1, 2004.

     2.3  Revolving Loan
          --------------

          (A)  Establishment of Revolving Loan. Subject to the provisions of
               -------------------------------
     this Agreement, and subject at all times to Bank's right in the exercise of
     its reasonable credit judgment to the creation of reserves for accrued but
     unpaid interest and otherwise as Bank deems necessary or appropriate from
     time to time, Bank shall make such loans to Borrowers (the "Revolving
     Loan") consisting of advances made by Bank against the value of Eligible
     Inventory and Eligible Accounts in such amounts as Borrowers shall request;
     provided, however, that the aggregate unpaid principal of the Revolving
     Loan outstanding at any one time shall not at any time exceed the Revolving
     Loan Borrowing Base.

          (B)  Changes in Revolving Loan Borrowing Base. Bank shall not have the
               ----------------------------------------
     right to change the advance rates set forth in the Revolving Loan Borrowing
     Base or change any other components of the Revolving Loan Borrowing Base
     except upon the occurrence and during the continuance of an Event of
     Default. Each such change shall become effective immediately for the
     purpose of calculating the amounts borrowed by Borrowers under the
     Revolving Loan.

          (C)  Payment. The Revolving Loan shall be payable in full upon the
               -------
     earlier of an Event of Default or March 1, 2002, shall bear interest as
     provided in Section 2.3(D) of this Agreement, and shall be evidenced by,
     and repayable in accordance with, the Revolving Note, but in the absence of
     the Revolving Note shall be evidenced by Bank's record of disbursements and
     repayments, which record shall be subject to Section 2.6 hereof.

          (D)  Interest on Revolving Loan. The Revolving Loan shall bear
               --------------------------
     interest on the unpaid principal balance from time to time outstanding
     until the date paid at a rate per annum equal to the Revolving Loan
     Contract Rate, such interest being payable monthly commencing September 30,
     1999 and continuing thereafter on the last day of each month so long as any
     principal balance remains outstanding. 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.

     2.4  Unused Line Fee. Until such time as the Revolving Loan is terminated
          ---------------
as provided herein and the Revolving Loan is paid in full, Borrowers shall pay
to Bank an amount (the "Unused

                                       12
<PAGE>

Line Fee") equal to one-quarter of one percent (1/4%) of the difference between
the maximum face amount of the Revolving Loan of $10,000,000 (as of the date of
this Agreement) and the average outstanding principal balance of the Revolving
Loan during such monthly period. The Unused Line Fee shall be determined in
arrears for each month commencing on September 30, 1999 and continuing on the
last day of each month thereafter. The Unused Loan Fee shall be due and payable
commencing October 1, 1999 and continuing on the 1st day of each subsequent
month thereafter.

     2.5  Optional Charge Against Revolving Loan. To the extent Borrowers do not
          --------------------------------------
remit, when due, any payments of interest or, in the case of loans other than
the Revolving Loan, any payment of principal or any other payment required to be
made by Borrowers to Bank pursuant to the terms of any of the Credit Documents,
Bank may make such payment in the exercise of its reasonable discretion by
increasing the outstanding principal balance of the Revolving Loan to prevent
any such amount from becoming past due, but it is expressly acknowledged and
agreed by Borrowers that Bank shall be under no obligation to do so.

     2.6  Accountings.  Any accounting rendered by Bank to Borrowers shall be
          -----------
deemed correct and conclusively binding upon Borrowers unless Borrowers notify
Bank by certified mail, return receipt requested, within thirty (30) calendar
days after the date when each such accounting is received by MNC.

     2.7  All Advances to Constitute One Loan. The Revolving Loan, the Term Loan
          -----------------------------------
and all other amounts owed by Borrowers to Bank under this Agreement, whether or
not evidenced by a promissory note, shall constitute one obligation of
Borrowers, secured by Bank's lien on and security interest in all of the
Collateral. Each Borrower shall be jointly and severally liable to Bank for all
of the Obligations, regardless of whether such Obligations arise as a result of
advances made directly to Borrowers, it being stipulated and agreed that all
monies advanced by Bank hereunder inure to the benefit of Borrowers, and that
Bank is relying on the joint and several liability of Borrowers in extending
credit and otherwise making advances hereunder.

     2.8  Excess Interest.  In no contingency or event whatsoever shall the
          ---------------
interest rate charged pursuant to the terms of this Agreement exceed the highest
rate permissible under any law which a court of competent jurisdiction shall, in
a final determination, deem applicable hereto.  In the event that such a court
determines that Bank has received interest under this Agreement in excess of the
highest applicable rate, such excess interest shall be first applied to any
unpaid principal balance owed by Borrowers, and if the then remaining excess
interest is greater than the unpaid principal balance, Bank shall promptly
refund such excess interest to Borrowers.

     2.9  Revival. To the extent that Borrowers make a payment or payments to
          -------
Bank or to the extent Bank receives any payment or proceeds of the Collateral
for Borrowers' benefit, which payment or proceeds or any part thereof is
subsequently invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to a trustee, receiver, or any other party under
any bankruptcy act, state or federal law, common law or equitable cause, then,
to the extent of such payment or proceeds received, the Obligations or part
thereof intended to be satisfied shall be revived and shall continue in full
force and effect, as if such payment or proceeds had not been received by Bank.

                                       13
<PAGE>

     2.10  Manner of Payments.  On or before the date they become due, Borrowers
           ------------------
shall make payments to Bank in immediately available funds, even if Borrowers
contest any statements rendered by Bank; provided, however, that if any
statement is subsequently proved to be incorrect, Bank, at the option of
Borrowers, promptly shall (A) refund any overpaid amount to Borrowers, or (B)
grant a credit against amounts due for the following period in the appropriate
amount.  As to Obligations which become due and payable other than on a fixed
date by their terms or as a result of demand for payment and/or acceleration on
account of an Event of Default, Borrowers immediately shall pay to Bank such
Obligations in immediately available funds.  Whenever any payment to be made
under this Agreement including, but not limited to, any payment to be made on
any of the Notes, is stated to be due on a day which is not a banking day, such
payment may be made on the next succeeding banking day and such extension of
time in each such case shall be included in the computation of the interest
payable on such Note or such other Obligation.  Unless otherwise provided in
this Agreement, all payments or prepayments made or due under this Agreement
(including, but not limited to, payments with respect to any of the Notes) shall
be made in immediately available funds to Bank prior to 2:00 p.m., Cleveland,
Ohio, time, on the date when due.  Payments received by Bank after 2:00 p.m.,
Cleveland, Ohio, time, shall be deemed to have been made on the next following
banking day.

3.   DEFAULT INTEREST
     ----------------

     Upon and after the occurrence of an Event of Default, and during the
continuation thereof, the Obligations shall bear interest at the Default Rate,
calculated daily on a 360-day year basis, based upon the actual number of days
elapsed.

4.   COLLATERAL; GENERAL TERMS
     -------------------------

     4.1  Grant of Security Interest. To secure the prompt payment and
          --------------------------
performance of the Obligations, and in addition to any other Collateral or Lien
securing the Obligations, each of the Borrowers hereby reaffirms and confirms
the Existing Security Interests and otherwise grants to Bank a continuing
security interest in and to all of the following Property of Borrowers, whether
now owned or existing or hereafter acquired or arising and wheresoever located:

          (A) Fixed Collateral.  All Fixed Collateral.
              ----------------

          (B) Revolving Collateral.  All Revolving Collateral.
              --------------------

          (C) Deposits; Accounts. Any and all deposits or other sums at any
              ------------------
     time credited by or due from Bank to Borrowers, whether in a Depository
     Account or other account, together with any and all instruments, documents,
     policies and certificates of insurance, securities, goods, Accounts,
     chooses in action, general intangibles, chattel paper, cash or other
     Property, and the proceeds of each of the foregoing, to the extent owned by
     Borrowers or in which Borrowers have an interest and which now or hereafter
     are at any time in the possession or control of Bank or in transit by mail
     or carrier to or from Bank or in the possession of any Person acting in
     Bank's behalf, without regard to whether Bank received the same in pledge,
     for safekeeping, as agent for collection or transmission or otherwise or
     whether Bank had conditionally released the same, and any and all balances,
     sums, proceeds and credits of Borrowers with, and any claims of Borrowers
     against, Bank.

                                       14
<PAGE>

          (D) Accessions, Products, and Proceeds. All accessions to,
              ----------------------------------
     substitutions for, and all replacements, products, and proceeds of the
     Property described in Subsections (A), (B) and (C) above including, without
     limitation, proceeds of insurance policies insuring such Property.

          (E) Books and Records. All books, records, and other property
              -----------------
     (including, without limitation, credit files, programs, printouts, and
     other materials and records) of Borrowers pertaining to any of the Property
     described in Subsections (A), (B), (C) or (D) above.

     4.2  Perfection of Bank's Security Interest in Collateral.  Borrowers shall
          ----------------------------------------------------
execute such financing statements provided for by applicable law, and otherwise
take such other action and execute such assignments or other instruments or
documents, in each case as Bank may request, to evidence, perfect, or record
Bank's security interest in the Collateral.  Borrowers hereby authorize Bank to
execute and file any such financing statement or continuation statement on
Borrowers' behalf.  The parties acknowledge that a carbon, photographic, or
other reproduction of this Agreement shall be sufficient as a financing
statement to the extent permitted by law, and in such event, if this Agreement
is filed, loan amounts and other confidential provisions will be redacted.

     4.3  Insurance.  Borrowers shall maintain and pay for insurance including,
          ---------
without limitation, insurance upon all tangible Collateral wherever located, in
storage or in transit in vehicles including goods evidenced by documents,
covering casualty, hazards, public liability, and such other risks in such
amounts and with such insurance companies as shall in each instance be
reasonably satisfactory to Bank.  Borrowers shall deliver certified copies of
such policies or insurance binders thereof to Bank with satisfactory
endorsements naming Bank as an additional insured and loss payee as its interest
may appear.  In the event Borrowers deliver insurance binders to Bank, then
Borrowers, if requested by Bank, shall deliver the insurance policies relating
thereto to Bank within sixty (60) days of the date of this Agreement.  Each
policy of insurance or endorsement shall contain a provision requiring at least
ten (10) days advance written notice to Bank in the event of cancellation of the
policy for non-payment of premiums and thirty (30) days advance notice to Bank
in the event of cancellation for any other reason or any modification changing
the limits, risks insured against, or deductibles thereto and a clause that the
interest of Bank shall not be impaired or invalidated by any act or neglect of
Borrower or other owner of the Property nor by the occupation of the premises
for purposes more hazardous than are permitted by such policy.  Borrowers shall
promptly deliver to Bank upon request true copies of all reports made to
insurance companies.  Prior to the occurrence of an Event of Default, Borrowers
shall have the right and authority to make and adjust claims under such policies
of insurance.  Upon the occurrence and continuance of an Event of Default,
Borrowers hereby irrevocably make, constitute, and appoint Bank (and all
officers, employees, or agents designated by Bank) as Borrowers' true and lawful
attorney-in-fact and agent, with full power of substitution, such that Bank
shall have the right and authority to make, and adjust claims under such
policies of insurance (provided, however, that Bank shall consult with Borrowers
prior to finally making, settling, or adjusting claims under such policies of
insurance), receive, and endorse the name of Borrowers on, any check, draft,
instrument or other item of payment for the proceeds of such policies of
insurance and make all determinations and decisions with respect to such
policies of insurance or to pay any premium in whole or in part relating
thereto.  Without waiving or releasing any obligation or default by

                                       15
<PAGE>

Borrowers hereunder, Bank may (but shall be under no obligation to do so) at any
time or times thereafter maintain such action with respect thereto which Bank
deems advisable. All sums disbursed by Bank in connection therewith including,
without limitation, reasonable attorneys' fees, court costs, expenses and other
charges relating thereto, shall be payable, on demand, and until paid by
Borrowers to Bank, with interest thereon at the Contract Rate, shall be
additional Obligations hereunder secured by the Collateral.

     4.4  Protection of Collateral; Reimbursement. All insurance expenses and
          ---------------------------------------
all expenses of protecting, storing, warehousing, insuring, handling,
maintaining, and shipping any Collateral, any and all excise, property, sales,
use or other taxes imposed by any state, federal or local authority on any of
the Collateral, or in respect of the sale thereof, or otherwise in respect of
Borrowers' business operations which, if unpaid, could result in the imposition
of any Lien upon the Collateral, shall be borne and paid by Borrowers. If
Borrowers fail to promptly pay any portion thereof when due, except as may
otherwise be permitted hereunder or under any of the other Credit Documents,
Bank may, at its option, but shall not be required to, pay the same. All sums so
paid or incurred by Bank for any of the foregoing and any and all other sums for
which Borrowers may become liable hereunder and all costs and expenses
(including reasonable attorneys' fees, legal expenses, and court costs) which
Bank may incur in enforcing or protecting its Lien on or rights and interest in
the Collateral or any of its rights or remedies under this or any other
agreement between the parties hereto or in respect of any of the transactions to
be had hereunder shall be repayable within ten (10) days after demand and, until
paid by Borrowers to Bank with interest thereon at the Contract Rate, shall be
additional Obligations hereunder secured by the Collateral. Bank shall not be
liable or responsible in any way for the safekeeping of any of the Collateral or
for any loss or damage thereto or for any diminution in the value thereof, or
for any act or default of any warehouseman, carrier, forwarding agency, or other
Person whomsoever.

     4.5  Inspection. Bank upon reasonable advance notice (by any of its
          ----------
officers, employees, agents or representatives) shall have the right to inspect
the Collateral, all books, records, journals, orders, receipts or other
correspondence related thereto (and to make extracts or copies thereof as Bank
may desire) and the premises upon which any of the Collateral is located for the
purpose of verifying the amount, quality, quantity, value and condition of, or
any other matter relating to, the Collateral.

5.   REPORTING; COLLECTION OF ACCOUNTS
     ---------------------------------

     5.1  Verification of Accounts. Any of Bank's officers, employees, or agents
          ------------------------
shall have the right, at any time or times hereafter, in the name of Bank, any
designee of Bank or in the name of Borrowers, to verify the validity, amount or
any other matter relating to any Accounts by mail, telephone, telegraph, or
otherwise.

     5.2  Assignments, Records and Schedules of Accounts. On or before the
          ----------------------------------------------
twenty-fifth (25th) calendar day of each month from and after the date hereof,
Borrowers shall deliver to Bank, in form and substance acceptable to Bank, a
summary aged trial balance dated as of the last day of the preceding accounting
period (and upon Bank's request, a detailed aged trial balance, of all then
existing Accounts specifying the names, face value and dates of invoices for
each Account Debtor obligated on an Account so listed). In addition, upon Bank's
reasonable request, Borrowers shall furnish Bank with copies of proof of
delivery and the original copy, if available of all documents

                                       16
<PAGE>

relating to the Accounts including, without limitation, repayment histories and
present status reports, relating to the Accounts and such other matters and
information relating to the status of then existing Accounts as Bank shall
reasonably request. If an Event of Default has occurred and is continuing,
Borrowers shall execute and deliver to Bank, on forms supplied by Bank and at
such intervals as Bank may from time to time require, written assignments of all
of its Accounts after shipment of the subject goods, together with copies of
invoices and/or invoice registers related thereto as Bank may from time to time
request.

     5.3  Returned Inventory.  Borrowers shall execute and deliver to Bank, on
          ------------------
forms supplied by Bank and at such intervals as Bank may from time to time
require a report of all returns of any Inventory and, as requested by Bank,
Borrowers shall provide to Bank copies of any credit memorandums to the Account
Debtor issued in respect thereof.  In all cases, Bank shall be promptly notified
of all returns of Inventory in excess of $50,000, the reason for such return,
and the location of such returned Inventory.

     5.4  Other Reports. Borrowers shall furnish Bank with (a) a "Borrowing Base
          -------------
Certificate" in the form attached to this Agreement as Exhibit G-1 each time
                                                       -----------
Borrowers request Bank to advance funds under the Revolving Loan, (b) a
"Borrowing Base Certificate" in the form attached to this Agreement as
Exhibit G-2 on or within seven (7) business days after the end of each month
-----------
from and after the date hereof, and (c) such other reports regarding Inventory
as Bank from time to time reasonably may request. Such reports shall be on forms
requested or provided by Bank and shall contain such detailed information as is
satisfactory to Bank. Borrowers shall conduct a physical count of its Inventory
at such reasonable intervals as Bank may request (but in no event less than once
during each fiscal year) during the term of this Agreement and shall supply Bank
with a copy of such physical count accompanied by a report of the value (at the
lower of cost, calculated on a first-in, first-out basis, or market value
thereof).

                                       17
<PAGE>

     5.5  Collection of Accounts.
          -----------------------

          (A) Proceeds. Except for minor petty cash required in the ordinary
              --------
     course of business of Borrowers, all checks, drafts, cash and other
     proceeds realized from the sale of any Inventory or otherwise from the sale
     or other disposition of any of the other Collateral including, but not
     limited to, all proceeds realized from the collection of the Accounts or
     otherwise pursuant to any contract right, note, bill, draft, acceptance,
     chose in action and other like forms of general intangibles, and all
     remittances received by Borrowers with respect to the foregoing, shall,
     upon receipt by Borrowers, be held by Borrowers as trustee of an express
     trust for Bank's sole benefit and subject to immediate deposit (in their
     original form duly endorsed in blank) in a special account over which Bank
     has the sole right and power of withdrawal, maintained at National City
     Bank or such other financial institution acceptable to Bank (such financial
     institution and account being herein referred to as the "Depository Bank"
     and "Depository Account" respectively). The Depository Account shall be
     subject to the written agreement of the Depository Bank to waive any right
     of setoff it might otherwise claim to have against any funds in the
     Depository Account and to otherwise charge any costs relative to the
     Depository Account to Borrowers or such other account(s) as Borrowers may
     maintain with the Depository Bank, such agreement (the "Depository
     Agreement") to be in form and substance acceptable to Bank. Bank assumes no
     responsibility for any claims of accord and satisfaction or release with
     respect to funds which have been deposited in the Depository Account.

          (B) Lockbox. If at any time requested by Bank, Borrowers shall
              -------
     instruct all Account Debtors to mail their payments directly to a
     designated post office lockbox (a "Lockbox") maintained at Borrowers'
     expense, with respect to which only Bank or, should Bank so agree, a
     designated financial institution shall have the right of access and all
     payments so received shall be subject to immediate deposit into the
     Depository Account.

          (C)  Bank's Account. All funds held in the Depository Account shall be
               --------------
     subject to transfer to an account designated by the Bank (the "Bank's
     Account") as set forth in the Depository Agreement or as otherwise
     designated by Bank and the application of any such funds to the payment of
     the Obligations shall not occur until Bank's receipt of such funds in
     cleared federal funds in Bank's Account. The order and method of
     application of such payment to the Obligations shall be in the sole
     discretion of Bank. Upon receipt of notice from Borrowers regarding the
     amount of funds to be transferred from the Depository Account to the Bank's
     Account, Bank shall cause such amount of funds to be transferred to the
     Bank's Account.

          (D)  Notification of Account Debtors. Bank shall have the right upon
               -------------------------------
     an Event of Default to notify Account Debtors and other Persons indebted to
     Borrowers of Bank's interest in any such amounts payable to Borrowers and
     to instruct such Account Debtors and other Persons to remit the same
     directly to Bank. Upon the collection and deposit in Bank's Account of all
     funds arising therefrom (less any costs of collection and other charges or
     expenses incurred in connection therewith as hereinafter provided) in
     cleared federal funds, the same shall be applied to the Obligations.

6.   REPRESENTATIONS AND WARRANTIES
     ------------------------------

                                       18
<PAGE>

     6.1  General Representations and Warranties. As an inducement to Bank to
          --------------------------------------
make advances under this Agreement, Borrowers warrant and represent to Bank each
of the following:

          (A)  Existence; Foreign Qualification. Each Borrower (other than EPIC)
               --------------------------------
     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
     its business activities makes such qualification necessary, except where
     the failure to so qualify will not cause or result in a Material Adverse
     Effect. EPIC is a general partnership validly existing under the laws of
     the State of Ohio.

          (B)  Authority. Each Borrower has the right and power and is duly
               ---------
     authorized and empowered to enter into, execute, deliver and perform this
     Agreement and each of the other Credit Documents to which it is a party.
     This Agreement and each of the other Credit Documents to which a Borrower
     is a party have each been duly authorized and approved by the Board of
     Directors of such Borrower (or, in the case of EPIC, by its partners), and
     are the valid and binding obligations of such Borrower, enforceable against
     such Borrower in accordance with their respective terms. The execution,
     delivery and performance of this Agreement and each of the other Credit
     Documents to which a Borrower is a party will not conflict with nor result
     in any breach in any of the provisions of, or constitute a default under,
     or result in the creation of any Lien (other than Permitted Liens) upon any
     Property of such Borrower under the provisions of, a Borrower's applicable
     Certificate of Incorporation, Articles of Incorporation, Partnership
     Agreement, Regulations, Bylaws, or any Material Agreement.

          (C)  Material Agreements. Except as disclosed on Exhibit H attached to
               -------------------                         ---------
     this Agreement, no Borrower is a party to any (1) Debt Instrument, (2)
     security agreement, mortgage, deed of trust, pledge, assignment, or other
     document or arrangement whereby any Lien upon any of Borrowers' Property
     exists in favor of any Person other than Bank, (3) lease (capital,
     operating or otherwise), whether as lessee or lessor thereunder, (4)
     contract, commitment, agreement, or other arrangement involving the
     purchase or sale of any Inventory by such Borrower except in the ordinary
     course of business, or the license of any right to or by such Borrower, (5)
     contract, commitment, agreement, or other arrangement with any Affiliate of
     such Borrower, (6) management or employment contract or contract for
     personal services with any Affiliate of such Borrower, which is not
     otherwise terminable at will or on less than ninety (90) days notice
     without liability, (7) collective bargaining agreement, (8) Pension Plan,
     or (9) other contract, agreement, understanding or arrangement which, if
     individually or in the aggregate as to Sub-paragraphs (1) through (8) above
     is violated, breached, or terminated for any reason, would have or would be
     reasonably expected to have a Material Adverse Effect.

          (D)  Other Affiliates. Except as disclosed on Exhibit I attached to
               ----------------                         ---------
     this Agreement, no Borrower (1) has any Subsidiaries, (2) has been the
     survivor of any merger or consolidation during the preceding five (5)
     years, or (3) has been known as or operated under or otherwise used any
     other business or fictitious name, trade name, or trade style during the
     preceding five (5) years.

                                       19
<PAGE>

          (E)  Compliance With Laws. Each Borrower (1) holds all permits,
               --------------------
     certificates, licenses, orders, registrations, franchises, authorizations,
     and other approvals from all Federal, state, local, and foreign
     governmental and regulatory bodies necessary for the conduct of its
     business in full compliance with applicable law, (2) is in full compliance
     with all Federal, state, local, or foreign applicable statutes, rules,
     regulations, and orders including, without limitation, those relating to
     environmental protection, occupational safety and health, and equal
     employment practices, (3) is not in violation of or in default under any
     Material Agreement, and (4) has not received any notice to the effect that
     it is not in full compliance with any of the requirements of ERISA which,
     if individually or in the aggregate as to Sub-paragraphs (1) through (4)
     above is violated, breached, or terminated for any reason, would have a
     Material Adverse Effect.

          (F)  Litigation and Administrative Proceedings. Except as disclosed on
               -----------------------------------------
     Exhibit J attached to this Agreement, there are (1) no lawsuits, actions,
     ---------
     investigations, or other proceedings pending or, to the best of Borrowers'
     knowledge, threatened against any Borrower, or in respect of which any
     Borrower may have any liability, in any court or before any governmental
     authority, arbitration board, or other tribunal, (2) no material
     grievances, disputes, or controversies outstanding with any union or other
     organization of the employees of any Borrower, or threats of work stoppage,
     strike, or pending demands for collective bargaining. Except as disclosed
     on Exhibit J attached to this Agreement, there are no orders, writs,
        ---------
     injunctions, judgments, or decrees of any court or government agency or
     instrumentality to which any Borrower is a party or by which any Borrower's
     Property is bound.

          G)  Use of Proceeds. Borrowers' uses of the proceeds of any advances
              ---------------
     made by Bank to Borrowers pursuant to this Agreement are, and will continue
     to be, legal and proper business uses, duly authorized by each Borrower,
     and such uses are and will continue to be consistent with all applicable
     laws and statutes in all material respects, as in effect from time to time.
     No Borrower is engaged in the business of extending credit for the purpose
     of purchasing or carrying margin stock (within the meaning of any
     regulation of the Board of Governors of the Federal Reserve System), and no
     part of the proceeds of any loans to Borrowers will be used to purchase or
     carry (or refinance any borrowing, the proceeds of which were used to
     purchase or carry) any margin stock, or to extend credit to others for the
     purpose of purchasing or carrying margin stock.

          (H)  Intellectual Property. Each Borrower owns, possesses, or has the
               ---------------------
     right to use all the patents, patent applications, trademarks, service
     marks, copyrights, licenses, and rights with respect to the foregoing
     necessary for the conduct of its business without any known conflict with
     the rights of others. All such patents, patent applications, trademarks,
     service marks, trade names, copyrights, licenses and other similar rights
     are listed on Exhibit K attached to this Agreement.
                   ---------

          (I)  Location of Collateral. All of the Collateral is located at a
               ----------------------
     Collateral Location.

                                       20
<PAGE>

          (J) Title to Assets. Borrowers have good title to and ownership of
              ---------------
     all Property they purport to own, which, in the case of the Collateral, is
     free and clear of all Liens, except those in favor of Bank and any
     Permitted Liens .

          (K) Financial Statements. The Financial Statements have been prepared
              --------------------
     in accordance with GAAP and in conformity with Borrowers' normal accounting
     practices, policies, and principles which have been consistently applied
     and which fairly present the financial position of Borrowers at such date
     and the results of operations of Borrowers for such period. Except for the
     sale of stock to the Buyers pursuant to the Stock Purchase Agreement and
     the loan from MNP Corporation consisting of Subordinated Debt, there has
     not been any change in the condition, financial or otherwise, of Borrowers
     as shown on Borrowers' most recent interim Financial Statements, and no
     change in the aggregate value of machinery and equipment reflected on
     Borrowers' most recent Financial Statements, except changes in the ordinary
     course of business, none of which individually or in the aggregate will
     have a Material Adverse Effect.

          (L) Accurate and Complete Statements. Neither this Agreement nor any
              --------------------------------
     written statement made by Borrowers in connection with this Agreement
     contains any untrue statement of a material fact or omits a material fact
     necessary to make the statements contained therein or in this Agreement not
     misleading. After due inquiry by Borrowers, there is no known fact which
     Borrowers have not disclosed to Bank which has, or will have, a Material
     Adverse Effect.

          (M) Tax Returns. All Federal, state and local tax returns and other
              -----------
     reports required by law to be filed in respect of the income, business,
     properties and employees of each Borrower have been filed, and all taxes,
     assessments, fees and other governmental charges which are due and payable
     have been paid, except as otherwise permitted herein or the failure to do
     so does not and will not cause or result in a Material Adverse Effect. The
     provision for taxes on the books of each Borrower is adequate for all years
     not closed by applicable statutes and for the current fiscal year.

          (N) Securities Laws. Borrowers' execution and delivery of this
              ---------------
     Agreement and each of the other Credit Documents to which they are a party
     will not directly or indirectly violate or result in a violation of Section
     7 of the Securities Exchange Act of 1934, as amended, or any regulations
     issued pursuant thereto.

          (O) Environmental Laws. Except as disclosed on Exhibit L attached to
              ------------------
     this Agreement, (1) the Collateral Locations and all other real property
     owned or leased by Borrowers, and all improvements, equipment or other
     Property located thereon or used therein and all business operations or the
     operations conducted thereupon, have been operated or maintained, and are
     in compliance in all material respects with, (a) the provisions, as
     amended, of the Federal Occupational Safety and Health Act, the National
     Environmental Protection Act, the Resource Conservation and Recovery Act,
     the Clean Air Act, the Clean Water Act, and all rules and regulations
     thereunder and all similar Federal, state and local laws, rules,
     regulations and government orders, and (b) all applicable Federal, state,
     and local laws, rules, regulations and government orders relating to air
     emissions, water discharge, noise emissions, solid or liquid disposal,
     hazardous waste or

                                       21
<PAGE>

     materials handling, storage or disposal, or other environmental, health or
     safety matters, and (2) to Borrower's knowledge, all real property owned or
     leased by Borrowers, and all improvements, equipment or other property
     located thereon or used therein are subject to no material contingent
     liability due to the presence of any hazardous substance, pollutant or
     contaminant (as the terms hazardous substance, pollutant or contaminant are
     defined by the Comprehensive Environmental Response, Compensation and
     Liability Act of 1980, as amended, 42 U.S.C. (S) 9601 et seq. hereinafter
                                                           ------
     "CERCLA"), (3) there are no outstanding citations, notices, or orders of
     non-compliance issued to any Borrower, any present or past owner of the
     real property owned or leased by any Borrower, or any tenant, subtenant,
     occupant, prior tenant, prior subtenant or prior occupant or relating to
     the respective businesses, assets, property, leaseholds, or equipment of
     any Borrower under any such laws, rules, or regulations. Borrowers shall
     immediately notify Bank in the event that any Borrower receives any notice
     or claim from, or makes any notification to, any governmental entity,
     occupant, or private party with regard to any hazardous substances,
     contaminants or pollutants on, from or affecting the real property owned or
     leased by any Borrower, and all improvements, equipment or other property
     located thereon or used therein. Borrowers shall conduct and complete, at
     Borrowers' expense, all investigations, studies, sampling and testing, and
     all remedial, removal and other actions necessary to clean up and remove
     all hazardous substances, hazardous wastes, pollutants or contaminants, on,
     from or affecting the real property owned or leased by any Borrower, and
     all improvements, equipment or other property located thereon or used
     therein, to the extent required by all applicable federal, state or local
     laws, ordinances, rules, regulations, government orders and policies.
     Except as of result of negligent or wrongful actions taken by Bank's
     officers when reviewing, visiting or controlling the Principal Business
     Locations, Borrowers shall indemnify and hold Bank, its directors,
     officers, employees, agents, successors and assigns harmless from and
     against any liability, loss, damage, cost, expense, suit, threatened suit,
     action, threatened action, proceeding or threatened proceeding, directly or
     indirectly, arising out of or attributable to the use, generation, storage,
     release, threatened release, discharge, disposal, or presence (whether
     prior to or during the term of the loan secured by this Agreement) of solid
     or hazardous waste materials or hazardous substances, pollutants or
     contaminants as defined by CERCLA, or other waste-like toxic substances
     discovered at or relating to Borrower's business or other operations or the
     locations where any Borrower previously did, presently does, or in the
     future may, operate its business including, without limitation, claims of
     any Federal, state, or municipal government or quasi-governmental agency,
     or any third person, whether arising under CERCLA, the Resource
     Conservation and Recovery Act, or any other Federal, state or municipal law
     or regulation, or tort, contract or common law applicable at the time of
     closing, including but not limited to reasonable attorneys' and paralegals'
     fees and consultants' fees. Any costs or expenses incurred by Bank for
     which Borrowers are responsible or for which Borrowers have indemnified
     Bank shall be paid to Bank on demand, and failing prompt reimbursement,
     shall be added to the indebtedness secured by this Agreement and earn
     interest at the Default Rate, until paid in full.

          Any actions taken by Bank under this Section are to allow Bank to
     protect its security interest and are not intended to create any obligation
     upon Bank with respect to the operation or ownership of the real property
     owned or leased by any Borrower, or any improvements, equipment or other
     property located thereon or used therein.

                                       22
<PAGE>

          (P)  Continued Business. There exists no actual, pending, or, to the
               ------------------
     best of Borrowers' knowledge, any threatened termination, cancellation or
     limitation of, or any modification or change in the business relationship
     of any Borrower and any customer or supplier, or any group of customers or
     suppliers, whose purchases or supplies, individually or in the aggregate,
     are material to the business of any Borrower, and there exists no present
     condition or state of facts or circumstances which would materially affect
     adversely any Borrower in any respect or prevent any Borrower from
     conducting such business or the transactions contemplated by this Agreement
     in substantially the same manner which it was theretofore conducted.

          (Q)  Maintenance of Fixed Collateral. All Fixed Collateral necessary
               -------------------------------
     to conduct Borrowers' business is in operating condition and has been
     maintained in accordance with prevailing industry practices.

          (R)  Fraudulent Conveyance. The security interests and liens granted
               ---------------------
     by Borrowers and/or the utilization of the proceeds of the borrowings
     described in this Agreement are not, and will not be, in violation or
     contravention of the general corporate laws of Ohio, the Uniform Fraudulent
     Conveyance Act as adopted in Ohio, or any other law designed for the
     protection of the rights of creditors.

          (S)  ERISA Plans. No ERISA Plan is a Multiemployer Plan or any other
               -----------
     type of Pension Plan that is subject to Title IV of ERISA. All Controlled
     Group members have complied in all material respect with the applicable
     requirements of law (including the IRC and ERISA) that relates to each
     ERISA Plan. No material liability to the Internal Revenue Service or any
     ERISA Plan (other than contributions thereto) has been, or is expected to
     be, incurred by any member of the Controlled Group with respect to any
     ERISA Plan. No member of the Controlled Group has any liability or
     contingent liability with respect to any post-retirement benefit under any
     "welfare plan" (as defined in Section 3(1) of ERISA), other than liability
     for continuation coverage under Part 6 of Title I of ERISA.

          (T)  Consent or Approvals. No consent, approval or authorization of,
               --------------------
     or filing, registration or qualification with, any governmental authority
     or any other Person is required to be obtained or completed by the
     Borrowers in connection with the execution, delivery or performance of this
     Agreement or any of the Credit Documents, including without limitation, in
     connection with the granting of the Lien in favor of Bank on the
     Collateral, which has not already been obtained or completed, except for
     the filing of UCC financing statements.

          (U)  Location of Lockboxes. Attached to this Agreement as Exhibit M is
               ---------------------
     a true, correct and complete list of all of the lockboxes any of the
     Borrowers maintain in operating their business.

          (V)  Y2K Compliance. (i) All devices, systems, machinery, information
               --------------
     technology, computer software and hardware, and other date sensitive
     technology used by Borrowers (jointly and severally the "Systems") and
     necessary for Borrowers to carry on their businesses as presently conducted
     and as contemplated to be conducted in the future

                                       23
<PAGE>

     are Year 2000 Complaint or will be Year 2000 Complaint within a period of
     time calculated to result in no material disruption of any of Borrowers'
     business operations. For purposes of these provisions, "Year 2000
     Complaint" means that such Systems are designed to be used prior to, during
     and after the Gregorian calendar year 2000 A.D. and will operating during
     each such time period without material error relating to date data,
     specifically including any error relating to, or the product of, date data
     which represents or references different centuries or more than one
     century.

          (ii) Borrowers have:  (a) undertaken a detailed inventory, review, and
     assessment of all areas within their business and operations that would be
     adversely affected by the failure of Borrowers to be Year 2000 Compliant on
     a timely basis; (b) developed a detailed plan and time line for becoming
     Year 2000 Complaint on a timely basis, and (c) to date, implemented that
     plan in accordance with that timetable in all material respects.

     6.2 Reaffirmation. Each request for an advance made by Borrowers pursuant
         -------------
to this Agreement shall constitute, unless Bank is otherwise notified in writing
prior to the time of such advance, (A) an automatic representation and warranty
by Borrowers to Bank that there does not then exist an Event of Default or any
event or condition which, with notice, lapse of time and/or the making of such
advance, would constitute an Event of Default, and (B) a reaffirmation as of the
date of such request that all of the representations and warranties of Borrowers
contained in this Agreement or any of the other Credit Documents are true,
correct and complete in all material respects. With respect to the Exhibits
attached to this Agreement (the "Exhibits"), Borrowers shall provide to Bank (1)
upon the occurrence of events or conditions which have or would reasonably be
expected to have a Material Adverse Effect, information necessary to update the
Exhibits describing such events, occurrences or conditions, and (2) changes or
additions to the information on the Exhibits as otherwise required by this
Agreement.

7.   COVENANTS AND CONTINUING AGREEMENTS
     -----------------------------------

     7.1  Affirmative Covenants.  So long as any Obligations remain unsatisfied,
          ---------------------
each Borrower covenants that, unless otherwise consented to by Bank in writing,
it will undertake each of the following:

          (A)  Transaction Fees. Pay to Bank, on demand, any and all fees, costs
               ----------------
     or expenses which Bank pays to a bank or other similar institution arising
     out of or in connection with (1) the forwarding by Bank to Borrowers or any
     other Person on behalf of Borrowers of any proceeds of loans made by Bank
     pursuant to this Agreement, or (2) the depositing for collection, by Bank,
     of any check or item of payment received and/or delivered to Bank on
     account of the Obligations.

          (B)  Corporate Existence. Preserve and maintain its separate corporate
               -------------------
     existence and all rights, privileges, and franchises in connection
     therewith, and maintain its qualification and good standing in all states
     in which such qualification is necessary in order for Borrowers to conduct
     their business in such states except where the failure to so qualify would
     not have a Material Adverse Effect.

                                       24
<PAGE>

          (C)  Tax Returns and Payment of Taxes. File all Federal, state, and
               --------------------------------
     local tax returns and other reports such Borrower is required by law to
     file, maintain adequate reserves for the payment of all taxes, assessments,
     governmental charges, and levies imposed upon it, its income, or its
     profits, or upon any Property belonging to it and pay and discharge all
     such taxes, assessments, governmental charges and levies prior to the date
     on which penalties attach thereto, except where the same are being
     contested in good faith by appropriate proceedings and adequate book
     reserves have been established with respect to each such claim being
     contested.

          (D)  Maintenance of Property. Maintain the Property necessary to
               -----------------------
     conduct its business in good condition and make all necessary renewals,
     repairs, replacements, additions and improvements thereto so as to maintain
     the value and operating efficiency thereof, ordinary wear and tear and
     unavoidable casualty excepted.

          (E)  Compliance With Laws. Comply with all laws, ordinances,
               --------------------
     governmental rules and regulations to which it is subject and obtain all
     licenses, permits, franchises, or other governmental authorizations
     necessary to the ownership of its Properties or to the conduct of its
     business or which, if violated, might result in a Material Adverse Effect.

          (F)  ERISA Compliance. At all times make prompt payment of any and all
               ----------------
contributions required to meet the minimum funding standards set forth in
Sections 302 and 305 of ERISA with respect to each Pension Plan, if any,
maintained by Borrowers and otherwise in regard thereto (1) furnish Bank, upon
Bank's request therefor, with any annual report required to be filed pursuant to
Section 103 of ERISA in connection with each Pension Plan, (2) notify Bank as
soon as practicable of any "Reportable Event" (as defined under ERISA) other
than any event not required to be reported to the Pension Benefit Guaranty
Corporation ("PBGC") in accordance with applicable regulations and of any
additional act or condition arising in connection with any Pension Plan which
might constitute grounds for the termination thereof by the PBGC or for the
appointment by the appropriate United States District Court of a trustee to
administer the Pension Plan, and (3) furnish to Bank, promptly upon Bank's
request therefor, such additional information concerning any such Pension Plan
or any other such employee benefit plan as may be reasonably requested.

          (G)  Account Debtor Disclosure. Promptly upon, but in no event later
               -------------------------
     than ten (10) business days after learning thereof, (1) inform Bank, in
     writing, of the assertion of any claims, offsets or counterclaims in excess
     of $50,000 by any Account Debtor and of any allowances, credits and/or
     other monies granted by it to any Account Debtor in excess of $50,000 and
     not otherwise disclosed to Bank, and (2) furnish to and inform Bank of all
     material adverse information relating to the financial condition of any
     Account Debtor.

          (H)  Books and Records. Keep adequate records and books of account
               -----------------
     with respect to its business activities in which proper entries are made in
     accordance with GAAP reflecting all its financial transactions.

          (I)  Financial Information. Cause to be prepared and furnished to Bank
               ---------------------
     the following financial information (which in the case of any financial
     statements shall consist

                                       25
<PAGE>

     of a consolidated and consolidating balance sheet, income statement and
     cash flow statement kept and prepared in accordance with GAAP, unless
     Borrowers' independent certified public accountants concur in any changes
     therein and such changes are disclosed to Bank and are consistent with then
     generally accepted accounting principles):

               (1) As soon as possible, but not later than one hundred twenty
          (120) days after the close of each fiscal year of MNC, the audited
          annual consolidating and consolidated financial statements of MNC as
          of the end of such year prepared by a firm of independent certified
          public accountants of recognized standing acceptable to Bank, together
          with a management letter, if any, of such independent certified public
          accountants;

               (2) As soon as possible, but not later than thirty (30) days
          after the end of each calendar month hereafter, unaudited
          consolidating and consolidated interim financial statements of MNC and
          its Subsidiaries as of the end of such month and of the portion of
          Borrowers' fiscal year then elapsed certified by the principal
          financial officer of MNC as prepared in accordance with GAAP (without
          footnote disclosures and subject to normal year end adjustments) and
          fairly presenting the financial position and results of operations of
          Borrowers for such month and period;

               (3) As soon as possible, but not later than forty-five (45) days
          after the close of each fiscal year of Borrowers, the pro forma income
          statement and cash flow statement of Borrowers for their next fiscal
          year;

               (4) As soon as possible, but not later than forty-five (45)
          calendar days after the end of each fiscal quarter, (a) a copy of any
          Form 10-Q filed by MNC with the Securities and Exchange Commission,
          and (b) a financial covenant compliance worksheet, in form reasonably
          satisfactory to Bank, reflecting the computation of the financial
          covenants set forth in Sections 7.1 and 7.2 of this Agreement as of
          the end of the period covered by such financial statements;

               (5) Concurrently with the delivery of each of the financial
          statements described in Subparagraphs (1), (2) and (4) above, a
          certificate from the chief financial officer of MNC certifying to Bank
          that (a) to the best of his knowledge, Borrowers have kept, observed,
          performed and fulfilled each and every covenant, obligation and
          agreement binding upon Borrowers contained in this Agreement or the
          other Credit Documents, and that no Event of Default, or any event
          which with the giving of notice or lapse of time or both, would
          constitute an Event of Default, has occurred or specifying any such
          Event of Default, or (b) one or more Events of Default has occurred
          and is continuing, and setting forth Borrowers' proposed resolutions
          to remedy such Events of Default;

               (6) In addition to the Form 10-Q described above in Subparagraph
          (4) of this Section 7.1(I), copies of any definitive proxy statements,
          financial statements or reports which Borrowers have made available to
          its shareholders, and copies of any regular periodic or special
          reports, schedules, registration statements or other documents
          (including, without limitation, all Forms 8-K and 10-K) which

                                       26
<PAGE>

          Borrowers file with the Securities and Exchange Commission or any
          governmental authority which may be substituted therefor, or any
          national securities exchange or self-regulatory securities
          organization including the National Association of Securities Dealers,
          Inc.;

               (7) Such other data and information (financial and otherwise) as
          Bank, from time to time, may reasonably request, bearing upon or
          related to the Collateral or each Borrower's financial condition
          and/or results of operations.

          (J)  Notification of Certain Events. Notify Bank in writing of each of
     the following occurrences:

               (1) Promptly upon learning thereof, of the institution of any
          material suit, action, or administrative proceeding against a Borrower
          or relating to any of its Property, whether or not the claim is
          considered by such Borrower to be covered by insurance;

               (2) At least thirty (30) days prior thereto, of a Borrower's
          opening of any new office or place of business or closing of any
          existing office or place of business;

               (3) Promptly upon learning thereof, of any material labor dispute
          to which a Borrower may become a party, any strikes or walkouts
          relating to any of their plants or other facilities, and the
          expiration of any material labor contract to which such Borrower is a
          party or by which it is bound;

               (4) Within three (3) business days after obtaining knowledge of
          the occurrence of a Borrower's default under any Material Agreement;
          and

               (5) Promptly upon the occurrence thereof, of any default by any
          obligor under any note or other evidence of debt payable, other than
          Accounts, to a Borrower.

          (K)  Inventory Receipts. Provide Bank, upon the request of Bank, with
               ------------------
     all warehouse receipts respecting any Inventory and copies of all
     agreements between a Borrower and any bailee, warehousemen or similar party
     with whom Inventory may from time to time be stored.

          (L)  Government Accounts. If any of the Accounts arise out of a
               -------------------
     contract with the United States of America, or any department, agency,
     subdivision or instrumentality thereof, promptly notify Bank thereof in
     writing and execute any instruments and take any other action required or
     requested by Bank to perfect Bank's security interest in such Accounts
     under the provisions of the Assignment of Claims Act of 1940.

          (M)  Delivery of Evidence of Ownership. Deliver to Bank, at Bank's
               ---------------------------------
     reasonable request, within five (5) business days after Bank's request: (i)
     any and all evidence of ownership of Fixed Collateral, inclusive of any
     certificates of title or applications therefor, and (ii) accurate, itemized
     records, maintained to the best of Borrowers' ability, describing

                                       27
<PAGE>

     the kind, type, quantity and value of all Fixed Collateral, a summary of
     which shall be provided to Bank.

          (N)  Delivery of Account Instruments. In the event any Account is or
               -------------------------------
     becomes evidenced by any note, trade acceptance or other instrument,
     promptly notify Bank of such fact and, upon Bank's reasonable request,
     deliver the same to Bank, appropriately endorsed to Bank's order and,
     regardless of the form of such endorsement, Borrowers hereby waive
     presentment, demand, notice of dishonor, protest and notice of protest and
     all other notices with respect thereto.

          (O)  Subordinated Debt. Maintain at all times Subordinated Debt owed
               -----------------
     to MNP Corporation of not less than $1,500,000.

          (P)  Bank Fees; Audit Fees. Borrowers promptly shall reimburse Bank
               ---------
     for all legal fees, recording and filing fees, and related expenses
     incurred by Bank in connection with the transactions described in this
     Agreement. Borrowers shall pay Bank an audit fee and any other expenses
     actually incurred by Bank in connection with its periodic audit of the
     books and records of Borrowers. Borrowers hereby authorize Bank to pay such
     fees and expenses and charge the same to Borrowers' loan account with Bank.
     It is agreed that the current audit fee charged by Bank is $300 per man day
     plus any out-of-pocket expenses incurred by Bank in connection with the
     audit.

          (Q)  Fixed Charges Coverage Ratio. Commencing the first fiscal quarter
               ----------------------------
     ending November 30, 1999 and continuing at all times thereafter, maintain,
     on a consolidated basis, a "Fixed Charges Coverage Ratio" equal to or
     greater than 1.0 to 1.0.

     The "Fixed Charges Coverage" ratio for the fiscal quarter ending on
     November 30, 1999 shall be computed for that quarter alone. The "Fixed
     Charges Coverage" ratio for the fiscal quarter ending on February 29, 2000
     shall be computed for the six-month period ending on such date. The "Fixed
     Charges Coverage" ratio for the fiscal quarter ending on May 31, 2000 shall
     be computed for the nine-month period ending on such date. The "Fixed
     Charges Coverage" ratio for the fiscal quarter ending on August 31, 2000
     and each fiscal quarter thereafter shall be computed for the twelve-month
     period ending on the last day of such quarter. In addition, for purposes of
     Section 7.1(Q), for any period, the numerator of the "Fixed Charges
     Coverage" ratio shall be the sum of Borrowers' consolidated net income
     after taxes as determined in accordance with GAAP, plus allocable
     depreciation and amortization expenses, and the denominator shall be the
     sum of the allocable quarterly principal portion of the then current
     maturities of all of Borrowers' outstanding Debt Instruments; provided that
     the Debt Instruments described in Exhibit N-1 shall be excluded for
                                       -----------
     purposes of this calculation.

          (R)  Interest Coverage Ratio. Commencing with the fiscal quarter
               -----------------------
     ending February 29, 2000 and continuing at all times thereafter, maintain
     an "Interest Coverage" ratio equal to or greater than:

               (i)  1.0 to 1.0 for the fiscal quarter ending February 29, 2000;
                    and

                                       28
<PAGE>

               (ii) 1.2 to 1.0 for the fiscal quarter ending May 31, 2000 and at
                    all times thereafter.

     The "Interest Coverage" ratio for the fiscal quarter ending February 29,
     2000 shall be computed for that quarter alone.  The "Interest Coverage"
     ratio for the fiscal quarter ending on May 31, 2000 shall be computed for
     the six-month period ending on such date.  The "Interest Coverage" ratio
     for the fiscal quarter ending August 31, 2000 shall be computed for the
     nine-month period ending on such date.  The "Interest Coverage" ratio for
     the fiscal quarter ending on November 30, 2000 and each fiscal quarter
     thereafter shall be computed for the twelve-month period ending on the last
     day of such quarter.  For purposes of Section 7.1(R), for any period, the
     numerator of the "Interest Coverage" ratio shall be the consolidated net
     income of Borrowers before interest and taxes as determined in accordance
     with GAAP, and the denominator shall be total consolidated cumulative
     interest expenses of Borrowers for such period.

     7.2  Negative Covenants. So long as any Obligations remain unsatisfied,
each Borrower covenants that it will not cause to occur or undertake any of the
following:

          (A)  Mergers and Acquisitions. Merge, consolidate, or acquire all or
               ------------------------
     any substantial portion of the assets or capital stock of any Person except
     between or among any Borrowers.

          (B)  Loans and Advances. Except for the loans, advances of money, or
               ------------------
     extensions of credit set forth on Exhibit N-2 attached to this Agreement,
                                       -----------
     Borrowers shall not make any loans or other advances of money, or grant
     extensions of credit to any Person including, but not limited to, its
     officers, employees and shareholders, other than normal extensions of trade
     credit in the ordinary course of business and reasonable salary, travel or
     relocation advances, advances against commissions and other similar
     advances in the ordinary course of business which are not, in the
     aggregate, in excess of $25,000 at any time.

          (C)  Permitted Indebtedness. Create, incur, assume, or suffer to exist
               ----------------------
     any Indebtedness except (1) the Obligations and (2) the following (herein
     referred to as "Permitted Indebtedness"):

               (a)  Trade payables and other liabilities incurred in the
                    ordinary course of business; and

               (b)  The Subordinated Debt; and

               (c)  Capitalized leases, operating leases and purchase money
                    financing arrangements, provided that the aggregate amount
                    of all such capitalized leases, operating leases and
                    purchase money financing arrangements does not exceed
                    $250,000 at any time; and

               (d)  Such other Indebtedness as described on Exhibit O attached
                                                            ---------
                    to this Agreement or as approved by Bank in writing.

                                       29
<PAGE>

          (D)  Affiliated Transactions. Except for the Subordinated Debt owed to
               -----------------------
     MNP Corporation, and except as otherwise permitted by this Agreement, enter
     into, or be a party to, any transaction with any Affiliate of any Borrower,
     except in the ordinary course of, and pursuant to the reasonable
     requirements of, such Borrower's business and upon fair and reasonable
     terms which are fully disclosed to Bank and are no less favorable to such
     Borrower than it would obtain in a comparable arm's length transaction with
     a Person not an Affiliate of a Borrower.

          (E)  Modification of Accounts. Permit or agree to any material
               ------------------------
     extension or modification with respect to, or compromise or settle any
     Accounts, which singly or in the aggregate would or would be expected to
     result in a Material Adverse Effect, other than as reflected in the
     schedules of accounts submitted to Bank pursuant to Section 5.2.

          (F)  Guarantees. Become or be liable with respect to any Guaranty
               ----------
     except (i) the Guarantees set forth on Exhibit P attached to this Agreement
                                            ---------
     and (ii) by endorsement of instruments or items of payment in the ordinary
     course of business for deposit or collection.

          (G)  Permitted Liens. Permit or suffer to exist any Lien in or upon
               ---------------
     any of the Collateral, except the following (herein referred to as
     "Permitted Liens"):

               (1)  Those security interests granted in favor of Bank pursuant
          to this Agreement and the other Credit Documents;

               (2)  Liens securing taxes, assessments, or governmental charges
          or levies, or the claims or demands of materialmen, mechanics,
          carriers, warehousemen, landlords and other like Persons, provided the
          payment thereof is not at the time required;

               (3)  Liens incurred or deposits made in the ordinary course of
          business, and provided any amounts secured thereby are not overdue or
          delinquent in any respect (a) in connection with workmen's
          compensation, unemployment insurance, social security and other like
          laws, or (b) to secure the performance of letters of credit, bids,
          tenders, sales contracts, leases, statutory obligations, surety,
          appeal and performance bonds and other similar obligations not
          incurred in connection with the borrowing of money, the obtaining of
          advances or the payment of the deferred purchase price of Property;

               (4)  Attachment, judgment, and other similar non-tax Liens
          arising in connection with court proceedings, provided the execution
          or other enforcement of such Liens is effectively stayed or bonded
          within thirty (30) days after issuance or filing and the claims
          secured thereby are being actively contested in good faith and by
          appropriate proceedings;

               (5)  Reservations, exceptions, encroachments, easements, rights
          of way, covenants, conditions, restrictions, leases and other similar
          title exceptions or

                                       30
<PAGE>

          encumbrances affecting real property, provided they do
          not in the aggregate materially detract from the value of such
          Properties or materially interfere with their use in the ordinary
          conduct of such Borrower's business;

               (6)  Such other Liens as described on Exhibit Q attached to this
                                                     ---------
          Agreement or as approved by Bank in writing; and

               (7)  Liens securing Permitted Indebtedness.

          (H)  Capital Distributions.  Make any Distributions except (i)
               ---------------------
     Distributions in accordance with the terms and conditions of MNC's
     preferred stock issued and outstanding as of the date of this Agreement and
     (ii) purchase of William Feniger's stock in the event of his death provided
     such purchase is made solely with the proceeds of insurance.
     Notwithstanding the foregoing provision, MNC shall not make any
     Distribution in cash (as opposed to a Distribution of stock of MNC)
     relating to such preferred stock if at the time the cash Distribution is to
     be made Borrowers are in default under the provisions of this Agreement or
     such a Distribution would cause an Event of Default.

          (I)  Divestitures.  Divest themselves of any material assets or
               ------------
     business theretofore conducted by transferring the same to any Affiliate or
     any partnership, joint venture, or similar arrangement or subcontract any
     operations to any Affiliate.

          (J)  Capital Expenditures.  Make Capital Expenditures which would
               --------------------
     cause the Capital Expenditures of Borrowers, determined in the aggregate on
     a consolidated basis, to exceed $250,000 during any fiscal year.

          (K)  Principal Business Location.  Transfer its executive offices,
               ---------------------------
     or maintain records with respect to Accounts, at any locations other than a
     Principal Business Location.

          (L)  Deposits and Withdrawals.  Except with respect to transactions
               ------------------------
     otherwise permitted hereunder, make deposits to or withdrawals from any of
     its deposit accounts for the benefit of any of their Affiliates.

          (M)  Disposition of Property.  Sell, lease, transfer or otherwise
               -----------------------
     dispose of any of its Property, other than Inventory sold in the ordinary
     course of business and sale of worn out or obsolete equipment no longer
     necessary for the operations of Borrowers.

          (N)  Names.  Use any business name (other than their own) or any
               -----
     fictitious name, trade name, trade style or "d/b/a" except for the names
     disclosed on Exhibit R attached to this Agreement and made a part hereof.
                  ---------

          (O)  Conditional Sales.  Make a sale to any customer on approval,
               -----------------
     consignment, bill-and-hold, guaranteed sale, sale and return or any other
     repurchase basis, unless such sale is specifically identified on the
     written assignments of Accounts delivered to Bank pursuant to Section 5.2
     of this Agreement.

                                       31
<PAGE>

          (P)  Margin Securities.  Own, purchase or acquire (or enter into any
               -----------------
     contract to purchase or acquire) any "margin security" as defined by any
     regulation of the Federal Reserve Board as now in effect or as the same may
     hereafter be in effect unless, prior to any such purchase or acquisition or
     entering into any such contract, Bank shall have received an opinion of
     counsel satisfactory to Bank to the effect that such purchase or
     acquisition will not cause this Agreement or the Promissory Note to violate
     Regulation G or any other regulation of the Federal Reserve Board then in
     effect.

          (Q)  Restricted Investments.  Make or have any Restricted Investment,
               ----------------------
     which for purposes of this Agreement shall mean any investment in cash or
     by delivery of Property to any Person, whether by acquisition of stock,
     indebtedness or other obligation, or Security, or by loan, advance or
     capital contribution, or otherwise, in any Property except the following:

               (1)  Property to be used in the ordinary course of business;

               (2)  Current assets arising from the sale of goods and services
          in the ordinary course of business of Borrowers;

               (3)  Investments in direct obligations of the United States of
          America, or any agency thereof or obligations guaranteed by the United
          States of America, provided that such obligations mature within one
          (1) year from the date of acquisition thereof;

               (4)  Investments in certificates of deposit maturing within one
          (1) year from the date of acquisition issued by a bank or trust
          company organized under the laws of the United States or any state
          thereof having capital surplus and undivided profits aggregating at
          least One Hundred Million Dollars ($100,000,000.00);

               (5)  Investments in commercial paper given the highest rating by
          a national credit rating agency and maturing not more than two hundred
          seventy (270) days from the date of creation thereof; and

               (6)  Existing investments in the capital stock of any Borrower or
          currently existing investments in Subsidiaries which are not
          Borrowers.

          (R)  Lease/Sale of Property.  Enter into any arrangement with any
               ----------------------
     Person providing for the leasing by such Borrower of Property which has
     been or is to be sold or transferred by any Borrower to such person if
     funds have been or are to be advanced by such Person on the security of
     such Property or rental obligations of such Borrower.

          (S)  Prepayment of Indebtedness.  Make any prepayment of principal
               --------------------------
     on any Indebtedness, except the Obligations.

          (T)  Payments on Affiliate Loans.  Make any payments of principal
               ----------------------------
     and/or interest to any Affiliate of any Borrower on any indebtedness, loan
     or advance to one or more Borrowers by any such Affiliate provided that as
     long as no Event of Default has occurred and is continuing, or will result
     from such payment, Borrowers may repay Subordinated Debt owed to MNP
     Corporation provided that such payment does not reduce

                                       32
<PAGE>

     the Subordinated Debt owed by Borrowers to MNP Corporation to an amount
     less than $1,500,000.

8.   SURVIVAL OF OBLIGATIONS UPON TERMINATION OF AGREEMENT
     -----------------------------------------------------

     Except as otherwise expressly provided for in this Agreement and in any of
the other Credit Documents, no termination or cancellation (regardless of cause
or procedure) of this Agreement or any of the other Credit Documents shall in
any way affect or impair the powers, obligations, duties, rights, and
liabilities of Borrowers or Bank in any way or respect relating to (1) any
transaction or event occurring prior to such termination or cancellation or (2)
any of the undertakings, agreements, covenants, warranties and representations
of Borrowers or Bank contained in this Agreement or the other Credit Documents.
Once all Obligations of Borrowers to Bank have been fully paid and satisfied and
this Agreement is terminated, then all such undertakings, agreements, covenants,
warranties and representations shall be terminated and cancelled and Bank shall
terminate its Lien on the Collateral and have no further rights and remedies.

9.   CONDITIONS PRECEDENT
     --------------------

     9.1  Conditions.  Notwithstanding any other provision of this Agreement or
          ----------
any of the other Credit Documents, and without affecting in any manner the
rights of Bank under the other Sections of this Agreement, it is understood and
agreed that Bank shall have no obligation to advance funds to Borrowers at any
time under Section 2 of this Agreement unless and until each of the following
conditions have been and continue to be satisfied, all in form and substance
satisfactory to Bank and its counsel:

          (A)  Absence of Legal Actions.  No legal action, proceeding,
               ------------------------
     investigation, regulation or legislation shall have been instituted,
     threatened or proposed before any court, governmental agency or legislative
     body to enjoin, restrain, or prohibit, or to obtain damages in respect of,
     this Agreement or any of the other Credit Documents or the consummation of
     the transactions contemplated hereby or thereby, or which, in Bank's
     reasonable opinion would make it inadvisable to consummate the transactions
     contemplated by this Agreement.

          (B)  Representations and Warranties.  The representations and
               ------------------------------
     warranties of Borrowers in this Agreement are true and correct in all
     material respects and no Event of Default or condition which, with notice,
     lapse of time or both would constitute an Event of Default then exists.

          (C)  Other Material Events.  No event, occurrence or condition shall
               ---------------------
     then exist which would have a Material Adverse Effect.

          (D)  Consummation of Stock Acquisition.  The acquisition of MNC
               ---------------------------------
     stock by the Buyers shall have been consummated in accordance with the
     terms of the Stock Purchase Agreement in the form previously submitted to
     Bank and without amendment or waiver of any material provisions thereof by
     any party thereto.

                                       33
<PAGE>

          (E)  Delivery of Documents.  Bank shall have received the following
               ---------------------
     documents, each to be in form and substance satisfactory to Bank and its
     counsel:

               (1)  The Credit Note duly executed by Borrowers;

               (2)  The Term Note duly executed by Borrowers;

               (3)  The Subordination Agreement in substantially the form
          attached to this Agreement as Exhibit S, with respect to all
                                        ---------
          Indebtedness owed by certain Borrowers to MNP Corporation duly
          executed by such Borrowers and MNP Corporation;

               (4)  A copy of the Stock Purchase Agreement, accompanied by a
          certificate of an officer of MNP Corporation as to the completeness
          thereof, and the accuracy of the representations and warranties
          contained in the Stock Purchase Agreement and the consummation of the
          transactions contemplated by the Stock Purchase Agreement in
          accordance with the terms thereof and without amendment or waiver of
          any material right under the Stock Purchase Agreement.

               (5)  A duly executed Blocked Account Agreement with National City
          Bank at which a Depository Account for Borrowers is to a established
          and, if required by Bank, such other agreements, in form and substance
          acceptable to Bank as to the collection and/or servicing of Accounts;

               (6)  The written opinion of counsel to Borrowers as to the
          transactions contemplated by this Agreement and the Stock Purchase
          Agreement, in form and substance satisfactory to Bank and its counsel;

               (7)  Copies of all filing receipts or acknowledgments or other
          oral or written evidence issued by any governmental authority to
          evidence any filing or recordation necessary to perfect or amend the
          Liens of Bank in the Collateral and evidence in a form acceptable to
          Bank that such Liens constitute valid and first priority perfected
          Liens, subject only to any Permitted Liens;

               (8)  A Certificate of the Secretary or an Assistant Secretary of
          each Borrower, dated as of the date of this Agreement, certifying (a)
          that attached thereto is a true and complete copy of the Articles (or
          Certificate) of Incorporation and Code of Regulations (or Bylaws) of
          such Borrower, as in effect on the date of such certification, (b)
          that attached thereto is a true and complete copy of resolutions, in
          form satisfactory to Bank, adopted by the Board of Directors of such
          Borrower, authorizing the execution, delivery and performance of this
          Agreement and each of the other Credit Documents to which it is a
          party and the consummation of the transactions contemplated hereby and
          thereby, and (c) as to the incumbency and genuineness of the signature
          of each officer of such Borrower executing this Agreement and the
          other Credit Documents to which such Borrower is a party;

                                       34
<PAGE>

               (9)  Good standing certificates for each Borrower issued by the
          Secretary of State of such Borrower's state of incorporation and the
          Secretary of State of each other jurisdiction in which such Borrower's
          qualification is required hereunder;

               (10) A certificate signed by the President or Chief Financial
          Officer of each Borrower and dated as of the date of this Agreement,
          stating that (a) the representations and warranties set forth in
          Section 6 hereof are true and correct on and as of such date, (b) such
          Borrower is on such date in compliance with all the terms and
          provisions set forth in this Agreement, and (c) on such date no event
          or condition has occurred or is continuing which with the giving of
          notice, the lapse of time, or both, would constitute an Event of
          Default;

               (11) Copies of the Subordinated Debt Documents, accompanied by a
          certificate of an officer of MNC as to the completeness thereof, and
          the accuracy of the representations and warranties contained in the
          Subordinated Debt Documents and the consummation of the transactions
          contemplated by the Subordinated Debt Documents in accordance with the
          terms thereof and without amendment or waiver of any materials right
          thereunder ;

               (12) A summary aged trial balance of Borrowers' Accounts as of
          August 20, 1999, a report listing Borrowers' inventory as of August
          20, 1999 and a period-end recapitulation regarding inventory and
          accounts receivable of Borrowers, in each case in form and substance
          acceptable to Bank;

               (13) Within 10 days following the date hereof, duly executed
          written lien waivers in favor of Bank from each bailee, warehouseman,
          mortgagee or similarly situated Person for whom Bank has requested
          such waiver and who may, with respect to any location at which any of
          the Collateral is to be located or stored, by operation of law or
          otherwise, have any Lien in or upon such Collateral; and

               (14) Such other agreements, instruments and documents including,
          without limitation, assignments, security agreements, mortgages, deeds
          of trust, pledges, guaranties and consents, which Bank may require to
          be executed in connection with this Agreement.

     9.2  Waiver of Conditions Precedent.  If Bank makes the initial loans
          ------------------------------
hereunder prior to the fulfillment of any of the conditions precedent set forth
in Section 9.1 hereof, the making of such initial loans shall constitute only an
extension of time for the fulfillment of such condition and not a waiver thereof
unless expressly stated, and Borrowers shall thereafter use their best efforts
to fulfill each such condition promptly.

10.  EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT
     -------------------------------------------------

     10.1 Events of Default.  The occurrence of any one or more of the following
          -----------------
events shall constitute an "Event of Default":

                                       35
<PAGE>

          (A)  Payment of Debt Service.  Failure by Borrowers to (1) make
               -----------------------
     payment of principal, interest on either of the Notes, (2) pay any other
     Obligation on the due date thereof, (3) remit Accounts or deposit funds as
     required by the terms of this Agreement; or (4) make payment of any other
     sum required to be paid by the terms of this Agreement within three days
     after notice that such other sum is required to be paid.

          (B)  Representations and Warranties.  Any warranty, representation,
               ------------------------------
     or other statement made or furnished to Bank by or on behalf of Borrowers,
     any guarantor of the Obligations in this Agreement or in any of the other
     Credit Documents or in any instrument furnished in compliance with or in
     reference to this Agreement proves to have been false or inaccurate in any
     material respect when made or furnished.

          (C)  Other Provisions.  Failure or neglect by Borrowers or any
               ----------------
     guarantor of the Obligations to perform, keep, or observe any other term,
     provision, condition, covenant, warranty or representation contained in
     this Agreement or in any of the other Credit Documents which is required to
     be performed, kept, or observed by Borrowers, any such guarantor and such
     failure continues for a period of thirty (30) days after Bank has given
     Borrowers written notice thereof in the manner set forth in Section 12.11
     of this Agreement.

          (D)  Cross-Default.  Upon the occurrence of any material default or
               -------------
     Event of Default (and the expiration of any applicable grace period
     relating thereto) by any Borrower under any Obligation, or the violation
     (and the expiration of any applicable grace period relating thereto) by any
     Borrower of the terms of any other agreement entered into among or between
     Bank and any Borrower.

          (E)  False or Misleading Reports.  The making or delivering to Bank by
               ---------------------------
     Borrowers, or any of its officers, employees, or agents, of any statement,
     report, financial statement, or certificate which is not true and correct
     in any material respect when made.

          (F)  Destruction of Collateral; Sale of Assets.  The loss, theft,
               -----------------------------------------
     substantial damage or destruction of any material portion of the Collateral
     to the extent not covered by insurance in an amount equal to at least its
     replacement value (as required by this Agreement and subject to such
     deductibles as Bank shall have agreed to in writing), or the sale, lease,
     encumbrance or other disposition of a material portion of the Collateral
     except in all cases as may be specifically permitted by other provisions of
     this Agreement.

          (G)  Value of Collateral; Financial Condition of Borrowers.  Any
               -----------------------------------------------------
     Material Adverse Effect on the value of the Collateral or the financial
     condition or operating results of any Borrower.

          (H)  Termination of Existence.  The dissolution, termination of
               ------------------------
     existence, insolvency (failure to pay its debts as they mature or where the
     fair salable value of its assets is not in excess of its liabilities) or
     business failure of any Borrower or any guarantor of the Obligations, or
     the appointment of a receiver, trustee, custodian or similar fiduciary for
     any Borrower or any guarantor of the Obligations or any of their respective
     assets, or the assignment for the benefit of the creditors of any Borrower
     or any such guarantor or the

                                       36
<PAGE>

     making by any Borrower or any such guarantor of any offer of settlement,
     extension or composition to its unsecured creditors generally.

          (I)  Bankruptcy.  The commencement of any proceedings under any
               ----------
     Bankruptcy Laws (i) by any Borrower to the extent such proceedings are not
     dismissed within thirty (30) days after the filing thereof, or (ii) against
     any Borrower to the extent such proceedings are not dismissed within ninety
     (90) days after the filing thereof, or the appointment of a receiver,
     trustee, custodian or similar fiduciary for any Borrower, or the assignment
     for the benefit of the creditors of any Borrower or the making by any
     Borrower of any offer of settlement, extension or composition to its
     unsecured creditors generally, to the extent such assignment, appointment
     or other such action continues for longer than thirty (30) days.

          (J)  Ceases to Conduct Business.  Any Borrower ceases to conduct all
               --------------------------
     or any material part of its business or are enjoined, restrained or in any
     way prevented by court, governmental or administrative order from
     conducting all or any material part of its business affairs.

          (K)  Judgment Entries.  The entry by a court of any judgment in
               ----------------
     excess of $50,000 requiring the payment of money against any Borrower,
     which judgment is not covered by insurance, discharged, bonded, stayed,
     vacated or set aside within thirty (30) days of its entry, or a notice of
     any Lien, levy, attachment or assessment is filed of record with respect to
     all or any of the Collateral by any Person including, without limitation,
     the United States, any department, agency or instrumentality thereof, or by
     any state, county, municipal or other governmental agency, or if any
     material taxes or assessments owing at any time or times hereafter becomes
     a Lien upon the Collateral or any other assets of any Borrower and, except
     Permitted Liens or as otherwise permitted by Bank, the same is not
     effectively stayed, bonded or released within thirty (30) days after the
     same becomes a Lien, or in the case of ad valorem taxes, prior to the last
     date when payment may be made without penalty.

          (L)  Insurance of Collateral.  Failure on the part of Borrowers to
               -----------------------
     keep the Collateral or any goods evidenced by chattel paper or documents
     insured against loss by fire or otherwise for insurable value in excess of
     $50,000 thereof in companies with coverages (including Lender's Loss
     Payable Endorsement) and in amounts acceptable to Bank and make the loss,
     if any, payable to and deposit the policies with Bank, all premiums on such
     policies to be paid by Borrowers.

     10.2 Acceleration of the Obligations.  Except upon the occurrence of an
          -------------------------------
Event of Default specified in Section 10.1(I) hereof which shall give Bank the
right to accelerate all obligations without notice by Bank to Borrowers, upon
and after an Event of Default (other than an Event of Default specified in
Section 10.1(I) hereof), and upon notice by Bank to Borrowers in the manner set
forth in Section 12.11 hereof, all of the Obligations due or to become due from
Borrowers to Bank, whether under this Agreement, the Notes or otherwise, shall,
at the option of Bank become at once due and payable, anything in the Notes or
other evidence of the Obligations or in any of the other Credit Documents to the
contrary notwithstanding.

                                       37
<PAGE>

     10.3 Remedies.  Upon and after the occurrence and continuance of an Event
          --------
of Default, Bank shall have, to the extent permitted by applicable law, and in
addition to any other right or remedy provided for in this Agreement, each of
the following rights and remedies:

          (A)  General Rights and Remedies.  All of the rights and remedies of
               ---------------------------
     a secured party under the Code or under other applicable law, and all other
     legal and equitable rights to which Bank may be entitled, all of which
     rights and remedies shall be cumulative, and none of which shall be
     exclusive, to the extent permitted by law, in addition to any other rights
     or remedies contained in this Agreement or in any of the other Credit
     Documents.

          (B)  Possession of Collateral. The right to take immediate
               ------------------------
     possession of the Collateral, and (1) require Borrowers to assemble the
     Collateral, at Borrowers' expense, and make it available to Bank at a place
     to be designated by Borrower which is reasonably convenient to both
     parties, and (2) enter any of the premises of Borrowers or wherever any
     Collateral shall be located and to keep and store the same on such premises
     until sold. If the premises on which the Collateral is located is owned or
     leased by Borrowers, then Borrowers shall not charge Bank for storage of
     such Collateral on such premises for a period of at least ninety (90) days
     after sale or disposition of the Collateral. Bank is hereby granted a non-
     exclusive license or other right to use, without charge, Borrowers' labels,
     patents, copyrights, rights of use of any name, trade secrets, trade a
     similar nature, as it pertains to the Collateral, in advertising for sale
     and selling any Collateral and Borrowers' rights under all licenses and all
     franchise agreements shall inure to Bank's benefit.

          (C)  Foreclose Liens.  The right to foreclose the Liens created
               ---------------
     under this Agreement and each of the other Credit Documents or under any
     other agreement relating to the Collateral.

          (D)  Disposition of Collateral.  The right to sell or to otherwise
               -------------------------
     dispose of all or any Collateral in its then condition, or after any
     further manufacturing or processing thereof, at public or private sale or
     sales, wholesale dispositions, or sales pursuant to one or more contracts,
     with such notice as may be required by law, in lots or in bulk, for cash or
     on credit, all as Bank, in its reasonable discretion, may deem advisable.
     Borrowers acknowledge and agree that ten (10) days written notice to
     Borrowers of any public or private sale or other disposition of Collateral
     shall be reasonable notice thereof, and such sale shall be at Borrowers'
     premises or at such other locations where the Collateral then is located,
     or as otherwise determined by Bank. Bank shall have the right to conduct
     such sales on Borrowers' premises, without charge therefor, and such sales
     may be adjourned from time to time in accordance with applicable law
     without further requirement of notice to Borrowers. Bank shall have the
     right to bid or credit bid at any such sale on its own behalf.

          (E)  Set-off.  The right to sell, lease or otherwise dispose of the
               -------
     Collateral, or any part thereof, for cash, credit or any combination
     thereof, and, to the extent permitted by applicable law, Bank may purchase
     all or any part of the Collateral at public or private sale and, in lieu of
     actual payment of such purchase price, may set off the amount of such price
     against the Obligations. Subject to the rights of the holders of any
     Permitted Lien having priority over the Liens of Bank, if any, the proceeds
     realized from the sale of any Collateral

                                       38
<PAGE>

     shall be applied first to the reasonable costs, expenses and attorneys'
     fees and expenses incurred by Bank for collection and for acquisition,
     completion, protection, removal, storage, sale and delivery of the
     Collateral; second, to interest due upon any of the Obligations; and third,
     to the principal of the Obligations. If any deficiency shall arise,
     Borrowers shall remain liable to Bank therefor.

          (F)  Proceeds.  Upon the occurrence and continuance of an Event of
               --------
     Default all checks, drafts, cash and other proceeds realized from the sale
     of any Inventory or otherwise from the sale or other disposition of any of
     the other Collateral including, without limitation, all proceeds realized
     from the collection of the Accounts or otherwise pursuant to any contract
     right, note, bill, draft, acceptance, chose in action and other like forms
     of general intangibles, and all remittances received by any Borrower with
     respect to the foregoing, shall be held by such Borrower as trustee of an
     express trust for Bank's sole benefit and subject to immediate deposit (in
     their original form duly endorsed in blank) in the Depository Account.

          (G)  Bank's Account.  Upon the occurrence of an Event of Default
               --------------
     which is continuing, all funds held in the Depository Account shall be
     subject to transfer to the Banks Account and the application of any such
     funds to the payment of the Obligations shall not occur until Bank's
     receipt of such funds in cleared federal funds in Bank's account.

          (H)  Notification of Account Debtors.  Bank shall have the right to
               -------------------------------
     notify Account Debtors and other Persons indebted to Borrowers of Bank's
     interest in any such amounts payable to any Borrower and to instruct such
     Account Debtors and other Persons to remit such amounts directly to Bank,
     and, upon collection of the same and deposit into an account for the
     benefit of Bank all funds arising therefrom (less any costs of collection
     and other charges or expenses incurred in connection therewith as
     hereinafter provided) in cleared Federal funds, the same being subject to
     application to the Obligations.

     10.4 Application of Collateral; Termination of Financing.  Upon the
          ---------------------------------------------------
occurrence and continuance of any Event of Default, Bank may also, with or
without proceeding with sale or foreclosure or demanding payment of the
Obligations, without notice, terminate Bank's further performance under this
Agreement or any other agreement or agreements between Bank and Borrowers,
without further liability or obligation by Bank, and may also, at any time,
appropriate and apply on any Obligations any and all Collateral in the
possession of Bank.  No such termination shall absolve, release or otherwise
affect the liability of Borrowers in respect of transactions had prior to such
termination, nor affect any of the Liens, rights, powers, and remedies of Bank,
but they shall, in all events, continue until all Obligations of Borrowers to
Bank are satisfied.

     10.5 Remedies Cumulative.  All covenants, conditions, provisions,
          -------------------
warranties, guaranties, indemnities, and other undertakings of Borrowers
contained in this Agreement, each of the other Credit Documents or in any
document referred to herein or therein or contained in any agreement
supplementary hereto or thereto or in any schedule or report given to Bank, or
contained in any other agreement between Bank and Borrowers, heretofore,
concurrently, or hereafter entered into or delivered, shall be deemed cumulative
to and not in derogation or substitution of any of the terms, covenants,
conditions, or agreements of Borrowers herein contained.

                                       39
<PAGE>

     10.6 Cross-Collateral and Cross-Default.  Each of the security interests
          ----------------------------------
and liens granted to Bank by Borrowers pursuant to the Credit Documents or
otherwise shall secure any and all of Borrowers' liabilities and obligations to
Bank under the Credit Documents including, but not limited to, Borrowers'
obligations under the Term Note and the Credit Note. It is further understood
and agreed that a default under either of the Credit Note or the Term Note, or
any of the Credit Documents shall constitute a default under each of the other
Notes and under each or the other Credit Documents. References in any of the
other Credit Documents to events or conditions constituting a default shall in
no way impair Bank's absolute and unconditional right to demand immediate
repayment of the unpaid balance of the Credit Note, notwithstanding the fact
that at the time of such demand there may not exist any event or condition
constituting a default.

     10.7 Successors and Assigns.  This Agreement shall be binding upon and
          ----------------------
inure to the benefit of Borrowers and Bank and their respective successors and
assigns; provided, however, that Borrowers shall not assign any of their rights
under the Credit Documents in whole or in part without the prior written consent
of Bank.

     10.8 Relationship of Borrowers.  The liability of each of the Borrowers
          -------------------------
under this Agreement is joint and several, and absolute and unconditional,
without regard to the liability of any other person, and shall not in any manner
be affected by reason of the partial or complete unenforceability or invalidity
of any obligations under this Agreement or other security or guaranty for any of
the loans and may be enforced without requiring Bank to first resort to any
other right, remedy or security that Bank may have, and that no Borrowers shall
have any right of subrogation, reimbursement or indemnity whatsoever, nor any
right of recourse to security for the debts and obligations of the Borrowers to
Bank unless and until all of such debts and obligations have been paid in full.
No delay in making demand on any one of Borrowers for satisfaction of its
liability hereunder shall prejudice Bank's right to enforce such satisfaction.
Bank in its reasonable discretion may, without any prejudice to its rights under
this Agreement, at any time or times (a) grant any one or more of Borrowers
whatever financial accommodations that Bank may from time to time deem
advisable, even if such Borrower might be in default in any respect under this
Agreement, (b) release any obligor or Collateral or assent to any exchange of
Collateral, if any, irrespective of the consideration, if any, received
therefor, (c) grant any waiver or consent or forbear from exercising any right,
power or privilege that Bank may have to acquire against any one or more of
Borrowers, (d) grant any other indulgence to any obligor, and (e) accept any
Collateral for, or other obligors upon, the obligations described herein.

11.  APPOINTMENT OF BANK AS BORROWERS' LAWFUL ATTORNEY;   BANK'S
     ---------------------------------------------------  ------
     INDEMNIFICATION
     ---------------

     Each Borrower hereby irrevocably designates, makes, constitutes and
appoints Bank (and all persons designated by Bank) as such Borrower's true and
lawful attorney (and agent-in-fact) for the purposes designated in Sub-
paragraphs (A) through (P) of this Section 11, and, upon the occurrence and
continuance of an Event of Default, Bank, or Bank's agent, in each Borrower's or
Bank's name, may: (A) demand payment of the Accounts, (B) enforce payment of the
Accounts, by legal proceedings or otherwise, (C) exercise all of each Borrower's
rights and remedies with respect to the collection of the Accounts and any other
Collateral, (D) settle, adjust, compromise, extend or renew the Accounts, (E)
settle, adjust or compromise any legal proceedings brought to collect the

                                       40
<PAGE>

Accounts, (F) if permitted by applicable law, sell or assign the Accounts and
other Collateral upon such terms, for such amounts and at such time or times as
Bank deems advisable, (G) discharge and release the Accounts and any other
Collateral, (H) take control, in any manner, of any item of payment or proceeds
relating to any Collateral, (I) prepare, file and sign such Borrower's name on a
proof of claim in bankruptcy or similar document against any Account Debtor, (J)
prepare, file and sign such Borrower's name on any notice of Lien, assignment or
satisfaction of Lien or similar document in connection with the Accounts, (K) do
all acts and things necessary, in Bank's reasonable discretion, to fulfill such
Borrower's obligations under this Agreement, (L) endorse the name of such
Borrower upon any of the items of payment or proceeds relating to any Collateral
and deposit the same to the account of Bank on account of the Obligations, (M)
endorse the name of such Borrower upon any chattel paper document, instrument,
invoice, freight bill, bill of lading or similar document or agreement relating
to the Accounts, Inventory and any other Collateral, (N) use such Borrower's
stationery and sign the name of such Borrower to verifications of the Accounts
and notices thereof to Account Debtors, (O) use the information recorded on or
contained in any data processing equipment and computer hardware and software
relating to the Accounts, Inventory and any other Collateral to which such
Borrower has access, and (P) notify post office authorities to change the
address for delivery of such Borrower's mail to an address designated by Bank,
receive and open all mail addressed to such Borrower, and, after removing all
remittances and other proceeds of Collateral, forward the mail to such Borrower.

12.  MISCELLANEOUS
     -------------

     12.1  Modification of Agreement; Sale of Interest. This Agreement, the
           -------------------------------------------
Notes and each of the other Credit Documents may not be modified, altered or
amended, except by an agreement in writing signed by each Borrower and Bank.
Borrowers may not sell, assign or transfer this Agreement, or any of the other
Credit Documents or any portion thereof including, without limitation,
Borrowers' rights, title, interests, remedies, powers, and/or duties hereunder
or thereunder. Borrowers hereby consent, except as otherwise provided in this
Agreement, to Bank's participation, sale, assignment, transfer or other
disposition, at any time or times hereafter, of this Agreement, or any of the
other Credit Documents, or of any portion hereof or thereof including, without
limitation, Bank's rights, title, interests, remedies, powers, and/or duties
hereunder or thereunder.

     12.2  Attorneys' Fees and Expenses. If, at any time or times, whether prior
           ----------------------------
or subsequent to the date hereof, regardless of the existence of an Event of
Default, Bank employs counsel for advice or other representation or incurs legal
and/or other costs and expenses in connection with each of the following:

           (A)  Loan Documents. The preparation of this Agreement and all of the
                --------------
     other Credit Documents or any amendment of or modification of this
     Agreement or any of the other Credit Documents.

           (B)  Loan Administration. The administration of this Agreement and
                -------------------
     each of the other Credit Documents and the transactions contemplated hereby
     and thereby.

          (C)  Litigation. Any litigation, contest, dispute, suit, proceeding or
               ----------
     action (whether instituted by Bank, Borrowers or any other Person) in any
     way relating to the

                                       41
<PAGE>

     Collateral, this Agreement, any of the other Credit Documents or Borrowers'
     affairs, but excluding any litigation between Borrowers and Bank as adverse
     parties unless otherwise permitted by law in connection with any judgment
     awarded in favor of the prevailing party.

          (D)  Enforcement of Bank's Rights. Any attempt to enforce any rights
               ----------------------------
     of Bank against any Person, other than Borrowers, which may be obligated to
     Bank by virtue of this Agreement or any of the other Credit Documents
     including, without limitation, any guarantor of the Obligations and any
     Account Debtors.

          (E)  Protection of Collateral. Any attempt to inspect, verify,
               ------------------------
     protect, collect, sell, liquidate or otherwise dispose of the Collateral.

          (F)  Filings. The filing and recording of all documents required by
               -------
     Bank to perfect Bank's Liens in the Collateral including without
     limitation, any documentary stamp tax or any other taxes incurred because
     of such filing or recording.

In any such event, the reasonable attorneys' fees actually incurred arising from
such services and all reasonably incurred expenses, costs, charges and other
fees of such counsel or of Bank or relating to any of the events or actions
described in this Section 12.2 shall be payable, on demand, by Borrowers to Bank
and shall be additional Obligations hereunder secured by the Collateral.
Without limiting the generality of the foregoing, such expenses, costs, charges
and fees may include accountants' fees, costs and expenses; court costs and
expenses; photocopying and duplicating expenses; court reporter fees, costs and
expenses; long distance telephone charges; air express charges; secretarial
overtime charges; and expenses for travel, lodging and food paid or incurred in
connection with the performance of such legal services.  Additionally, if any
taxes (other than Federal or state income taxes payable by Bank) shall be
payable on account of the execution or delivery of this Agreement, or the
execution, delivery, issuance or recording of any of the other Credit Documents,
or the creation of any of the Obligations hereunder, by reason of any existing
or hereafter enacted federal or state statute, Borrowers shall pay all such
taxes including, without limitation, any interest and/or penalty thereon, and
shall indemnify and hold Bank harmless from and against liability in connection
therewith.  Notwithstanding the foregoing, Borrower's obligation to pay
attorney's fees shall only be to the extent permitted by law.

     12.3  [Intentionally omitted]

     12.4  Waiver by Bank.  Bank's failure, at any time or times hereafter, to
           --------------
require strict performance by Borrowers of any provision of this Agreement or
any of the other Credit Documents shall not waive, affect or diminish any right
of Bank thereafter to demand strict compliance and performance therewith.  Any
suspension or waiver by Bank of an Event of Default by Borrowers under this
Agreement or any of the other Credit Documents shall not suspend, waive or
affect any other Event of Default by Borrowers under this Agreement or any of
the other Credit Documents, whether the same is prior or subsequent thereto and
whether of the same or of a different type.  None of the undertakings,
agreements, warranties, covenants and representations of Borrowers contained in
this Agreement or any of the other Credit Documents and no Event of Default by
Borrowers under this Agreement or any of the other Credit Documents shall be
deemed to have been suspended or waived by Bank, unless such suspension or
waiver is by an instrument in

                                       42
<PAGE>

writing specifying such suspension or waiver and is signed by a duly authorized
representative of Bank and directed to Borrowers.

     12.5  Severability. Wherever possible, each provision of this Agreement
           ------------
shall be interpreted in such 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 provision 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.

     12.6  Parties. This Agreement and the other Credit Documents shall be
           -------
binding upon and inure to the benefit of the successors and assigns of Borrowers
and Bank. This provision, however, shall not be deemed to modify Section 12.1
hereof.

     12.7  Conflict of Terms. The provisions of each of the other Credit
           -----------------
Documents and any exhibit or schedule hereto are incorporated in this Agreement
by this reference thereto. Except as otherwise provided in this Agreement and
except as otherwise provided in any of the other Credit Documents by specific
reference to the applicable provision of this Agreement, if any provision
contained in this Agreement is in conflict with, or inconsistent with, any
provision in any of the other Credit Documents, the provision contained in this
Agreement shall govern and control.

     12.8  Waivers by Borrowers.  Except as otherwise provided for in this
           --------------------
Agreement or as required by applicable law, Borrowers waive (A) presentment,
demand and protest and notice of presentment, protest, default, nonpayment,
maturity, release, compromise, settlement, extension or renewal of any or all
commercial paper, accounts, contract rights, documents, instruments, chattel
paper and guaranties at any time held by Bank on which Borrowers may in any way
be liable, (B) notice prior to taking possession or control of the Collateral
which might be required by any court prior to allowing Bank to exercise any of
Bank's remedies, and (C) AS A SPECIFICALLY BARGAINED INDUCEMENT FOR BANK TO
ENTER INTO THIS AGREEMENT AND EXTEND CREDIT TO BORROWERS, BORROWERS AND BANK
EACH WAIVES TRIAL BY JURY WITH RESPECT TO ANY ACTION, CLAIM, SUIT, OR PROCEEDING
IN RESPECT OF OR ARISING OUT OF THIS AGREEMENT AND/OR THE CONDUCT OF THE
RELATIONSHIP BETWEEN BANK AND BORROWERS.

     12.9  Authorization. Bank is authorized to make loans under the terms of
           -------------
this Agreement upon the request, either written or oral, in the name of
Borrowers of the President or Chief Financial Officer of MNC or such other
persons, from time to time, holding the offices or positions with Borrowers as
designated in any separate borrowing or banking resolutions delivered by
Borrowers to Bank and all loans made by Bank to Borrowers or for its account
under this Agreement shall be conclusively deemed to have been authorized by
Borrowers and to have been made pursuant to duly authorized requests therefor.

     12.10 Governing Law.  THIS AGREEMENT HAS BEEN ACCEPTED BY BANK AT AND SHALL
           -------------
BE DEEMED TO HAVE BEEN MADE AT CLEVELAND, OHIO.  THE LOANS PROVIDED FOR HEREIN
ARE TO BE FUNDED AND REPAID TO BANK AT 125 WEST 55 STREET, NEW YORK, NEW YORK
10019 (OR SUCH OTHER PLACE AS DESIGNATED TO BORROWERS), BUT THIS AGREEMENT SHALL
BE INTERPRETED, AND THE RIGHTS AND LIABILITIES OF THE PARTIES HERETO DETERMINED,
IN ACCORDANCE WITH

                                       43
<PAGE>

THE LAWS OF THE STATE OF OHIO. AS PART OF THE CONSIDERATION FOR NEW VALUE
RECEIVED, BORROWERS HEREBY CONSENT TO THE JURISDICTION OF ANY STATE OR FEDERAL
COURT LOCATED WITHIN THE STATE OF OHIO AND CONSENTS THAT ALL SUCH SERVICE OF
PROCESS BE MADE BY REGISTERED OR CERTIFIED MAIL DIRECTED TO BORROWERS AT THE
ADDRESS STATED IN SECTION 12.10(B) BELOW AND SERVICE SO MADE SHALL BE DEEMED TO
BE COMPLETED UPON ACTUAL RECEIPT THEREOF. BORROWERS WAIVE ANY OBJECTION TO
JURISDICTION AND VENUE OF ANY ACTION INSTITUTED HEREUNDER AND AGREE NOT TO
ASSERT ANY DEFENSE BASED ON LACK OF JURISDICTION OR VENUE IN ANY JURISDICTION
WHERE COLLATERAL IS LOCATED. NOTHING CONTAINED HEREIN SHALL AFFECT THE RIGHT OF
BANK TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT THE
RIGHT OF BANK TO BRING ANY ACTION OR PROCEEDING AGAINST BORROWERS OR THEIR
PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION.

     12.11 Notices.  Except as otherwise provided herein, any notice required
           -------
hereunder shall be in writing, and shall be deemed to have been validly served,
given or delivered upon personal delivery, delivery by a nationally recognized
overnight courier, or by facsimile, and addressed to the party to be notified as
follows:

     (A)   If to Bank, at:      National Bank of Canada
                                One Cleveland Center, Suite 2430
                                1375 East 9th Street
                                Cleveland, Ohio  44114
                                ATTN:  Jack Jankovic
                                Fax: (216) 574-9236

           With a copy to:      Arter & Hadden LLP
                                1100 Huntington Bank Building
                                Cleveland, Ohio  44115
                                ATTN:  Eugene M. Killeen
                                Fax:  (216) 696-2645

     (B)   If to Borrowers,     Meridian National Corporation
                                805 Chicago Street
                                Toledo, Ohio  43611
                                ATTN:  Jim Rosino
                                Fax:  (419) 729-1217

           With a copy to:      Shumaker, Loop & Kendrick, LLP
                                1000 Jackson Street
                                Toledo, Ohio 43624
                                ATTN:  John W. Hilbert II
                                (419) 241-6894

           And to:              Jacob & Weingarten
                                2301 W. Big Beaver Road, Suite 777

                                       44
<PAGE>

                                Troy, Michigan 48084
                                ATTN:  Steve Schubiner
                                Fax:  (248) 649-2920

or to such other address as each party may designate for itself by like notice
given in accordance with this Section 12.10.

     12.12   Section Titles. The section titles and table of contents contained
             --------------
in this Agreement are and shall be without substantive meaning and content of
any kind whatsoever and are not a part of the agreement between the parties
hereto.

     12.13   Effectiveness of Agreement. This Agreement shall be effective only
             --------------------------
upon Bank's acceptance hereof.

     12.14.  No Novation.  Neither the execution of this Agreement, the Creditor
             ------------
Note, the Term Note or any other of the consummation of the transactions
contemplated hereby shall be or be deemed to be a novation of the obligations of
Borrowers under the Original Agreement (as heretofore amended) or the Original
Credit Documents (as amended) executed in connection therewith.  Instead, this
Agreement is merely a restatement of the obligations thereunder after giving
effect to certain agreed upon amendments by and between the parties.

     12.15.  Consent to Stock Purchase Agreement.  Bank hereby consents to the
             -----------------------------------
purchase by the Buyers of a controlling interest in the MNC pursuant to the
Stock Purchase Agreement.

                                       45
<PAGE>

  IN WITNESS WHEREOF, the duly authorized officers of the parties to this
Agreement have executed this Agreement this 3rd day of September, 1999.

MERIDIAN NATIONAL CORPORATION           OTTAWA RIVER STEEL CO.

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

EPI TECHNOLOGIES, INC.                  ENVIRONMENTAL PURIFICATION
                                        INDUSTRIES COMPANY, an Ohio General
By:  /s/ James L. Rosino                Partnership
     ---------------------------
Its: Vice President - Finance
     ---------------------------
                                        By:  National Purification, Inc.,
                                             General Partner

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

                                        AND

                                        By:  MEPI Corp.,
                                             General Partner

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

NATIONAL BANK OF CANADA

By:  /s/ Jack Jankovic
     ---------------------------
Its: Vice President
     ---------------------------

                                       46<PAGE>

                                                                EXHIBIT 10.01(b)

                            SUBORDINATION AGREEMENT
                            -----------------------

     THIS SUBORDINATION AGREEMENT is made this 3rd day of September, 1999, by
MNP CORPORATION, a Michigan corporation ("Subordinated Creditor"), MERIDIAN
NATIONAL CORPORATION, a Delaware corporation ("MNC"), OTTAWA RIVER STEEL CO., an
Ohio corporation ("ORS"), ENVIRONMENTAL PURIFICATION INDUSTRIES COMPANY, an Ohio
general partnership ("EPIC", and together with MNC and ORS, the "Borrowers") and
NATIONAL BANK OF CANADA ("Lender").

                                   RECITALS
                                   --------

     A.  Borrowers, along with certain other subsidiaries of MNC (the "Other
Subsidiaries") have borrowed and will borrow monies from Lender, as evidenced by
a certain Amended and Restated Loan and Security Agreement, of even date
herewith, by and among Borrowers, the Other Subsidiaries and the Lender (the
"Credit Agreement").

     B.  Borrowers have entered into a Loan Agreement with Subordinated Creditor
dated  as of June 30, 1999 (the "MNP Loan Agreement") pursuant to which
Borrowers have issued two promissory notes payable to Subordinated Creditor,
each in the principal amount of One Million Five Hundred Thousand Dollars
($1,500,000) (collectively, the "Subordinated Notes").

     C.  In order to induce the Lender, its successors, assigns or transferees,
to extend the credits under the Credit Agreement (the "Loans"), and to grant
renewals, or extensions, modifications, or amendments to the Loans, as the
Lender may deem advisable, Subordinated Creditor desires to subordinate the
indebtedness evidenced by the Subordinated Notes to any and all indebtedness,
obligations and liabilities now or hereafter owing by Borrowers to the Lender in
accordance with the provisions of the Credit Agreement.

                                  AGREEMENTS
                                  ----------

     NOW, THEREFORE, in consideration of the foregoing and to induce the Lender
from time to time to make, extend or continue loans, credits or other financial
accommodations to Borrowers, Subordinated Creditor, Borrowers and Lender agree
as follows:

                                   ARTICLE 1

                                  DEFINITIONS

     SECTION 1.1  Specific Definitions.
                  --------------------

     As used in this Agreement, the term:

     "Bankruptcy Code" means The Bankruptcy Code of 1978, as amended from time
to time (11 U.S.C. Sections 101 et seq.), and any replacement or successor act
which has a substantially similar purpose.
<PAGE>

     "Borrowers" has the meaning set forth in the initial paragraph to this
Agreement.

     "Business Day" means any day other than a Saturday, Sunday or other day on
which commercial banks in the State are authorized or required to close.

     "Collateral" means all property and interests in property now owned or
hereafter acquired by Borrowers in or upon which a security interest, lien or
mortgage is granted to Lender or Subordinated Creditor under the Credit
Documents (as defined in the Credit Agreement) or the Subordinated Security
Documents, respectively, including without limitation all property of Borrowers
defined as Collateral in the Credit Agreement and the Security Agreement dated
as of June 30, 1999 given by Borrowers to Subordinated Creditor, all proceeds
and products thereof, but specifically excluding the Intervale Property, the EPI
Property,  and all proceeds or insurance proceeds thereto or thereof.

     "Credit Agreement" shall have the meaning set forth in the Recitals to this
Agreement.

     "Enforcement Action" means, collectively or individually for one or both of
Lender and/or Subordinated Creditor, to make demand for payment or accelerate
the obligations of Borrowers, or any of them, repossess any of the Collateral,
the Intervale Property or the EPI Property or commence the judicial enforcement
of any of the rights and remedies under the Credit Documents, the Subordinated
Security Documents or applicable law.

     "Enforcement Notice" means a written notice delivered by either
Subordinated Creditor or Lender stating that an Event of Default has occurred
and is continuing and that an Enforcement Action will be taken by the party
providing such notice.

     "EPI Property" means the real property described on Exhibit "D", together
with all buildings and other real property and interests in real property, and
all proceeds or insurance proceeds thereto or thereof.

     "Financing Documents" means the collective reference to each and every
note, instrument, security agreement, pledge agreement, guaranty agreement,
mortgage, deed of trust, indemnity deed of trust, loan agreement, hypothecation
agreement, indemnity agreement, letter of credit application, assignment, or any
other document (whether similar or dissimilar to any of the foregoing)
previously, simultaneously or hereafter executed and delivered by Borrowers or
any other Person, singly or jointly with another Person or Persons, in
connection with any of the Senior Indebtedness, including, without limitation,
the "Credit Documents" as defined in the Credit Agreement, all as amended,
modified, restated, substituted, extended and renewed at any time and from time
to time.

     "Insolvency Proceeding" means any receivership, conservatorship, general
meeting of creditors, insolvency or bankruptcy proceeding, assignment for the
benefit of creditors, or any proceeding or action by or against a Borrower for
any relief of debtors, readjustment of indebtedness, reorganization,
dissolution, liquidation, compositions or extensions, or the appointment of any
receiver, intervenor or conservator of, or trustee, or similar officer for
Borrower or any substantial part of its properties or assets, including, without
limitation,

                                      -2-
<PAGE>

proceedings under the Bankruptcy Code, or under other federal, state
or local statute, laws, rules and regulations, all whether now or hereafter in
effect.

     "Intervale Mortgage" means the Second Mortgage from ORS to Subordinated
Creditor dated as of June 30, 1999, pursuant to which ORS has granted
Subordinated Creditor a mortgage and security interest in the Intervale
Property.

     "Intervale Property" means (a) the real property described on Exhibit "B",
together with all buildings, fixtures and other property and interests in
property defined as the "Premises" in the Intervale Mortgage and (b) the
machinery and equipment located on the Intervale Property as described in
Exhibit C.

     "Lender" has the meaning set forth in the initial paragraph to the
Agreement.

     "Lien" means any mortgage, deed of trust, deed to secure debt, grant,
pledge, security interest, assignment, encumbrance, judgment, financing
statement, lien or charge of any kind, whether perfected or unperfected,
avoidable or unavoidable, consensual or non-consensual including, without
limitation, any conditional sale or other title retention agreement, any lease
in the nature thereof, and the filing of or agreement to give any financing
statement under the Uniform Commercial Code of any jurisdiction.

     "Person" means an individual, a corporation, a partnership, a joint
venture, a trust, an unincorporated association, a government or political
subdivision or agency thereof or any other entity.

     "Security" means any security agreement, pledge, pledge agreement, guaranty
agreement, mortgage, deed of trust, deed to secure debt, trust deed, land trust,
indenture, indemnity deed of trust, indemnification agreement, proceeding in
                                                                          --
rem, reimbursement agreement, financing statement, purchase agreement,
---
conditional sales contract, installment sales contract, collateral agreement,
financing lease, letter of credit, bond, loan agreement, hypothecation
agreement, deposit, financing statement or assignment, and also means any
agreement, document, security device or arrangement, document, statutory lien,
lien arising by operation of law, judgment or other lien, right of setoff,
encumbrance, proceeding or other document or right, in whatever form or however
arising, whether similar or dissimilar to the foregoing which directly or
indirectly secures or enforces payment or performance of any Person against, or
otherwise encumbers or gives notice of an encumbrance upon, the real property,
personal property, rights or assets of any Person.

     "Senior Indebtedness" means all indebtedness, liabilities and obligations
of Borrowers or any of them to the Lender of every kind and nature whatsoever,
whether now existing or hereafter arising or created at any time including,
without limitation, the "Obligations" as defined in the Credit Agreement and,
further including, without limitation, such indebtedness, liabilities and
obligations of Borrowers to the Lender (and to any Person which replaces
financing provided by the Lender) (i) which are direct, indirect, contingent,
primary, secondary alone, jointly with others, acquired directly or by
assignment, due, to become due, unsecured, secured, future advances, incurred or
assumed, (ii) which relate to or arise from the issuance of letters of credit,

                                      -3-
<PAGE>

or guaranties, indemnifications or other similar agreements in favor of third
parties made by the Lender at the request or for the benefit of any Borrower,
(iii) which are claims of subrogation, indemnification, reimbursement or
contribution of the Lender against any Borrower or any other Person relating in
any manner to obligations of any such Borrower or the Security, (iv) which are
claims of whatever nature and whenever arising on account of the avoidance of
payments or other transfers to or for the benefit of the Lender in Insolvency
Proceedings or otherwise, or (v) which are claims (including, without
limitation, claims arising or accruing after the commencement of Insolvency
Proceedings by or against any Borrower or any assets of any Borrower, whether or
not such claims are allowed) for principal, interest, expense payments,
liquidation costs, and attorneys' fees and expenses, all of the foregoing
whether arising under contract, by tort, at law, in equity or otherwise.

     "State" means the State of Ohio.

     "Subordinated Creditor" shall have the meaning set forth in the initial
paragraph to this Agreement.

     "Subordinated Indebtedness" means any and all existing and future
indebtedness, liabilities and obligations of Borrowers to Subordinated Creditor
of every kind and nature whatsoever, with respect to the indebtedness evidenced
by the Subordinated Notes or secured by the Subordinated Security Documents.

     "Subordinated Notes" means Borrowers' promissory notes described in EXHIBIT
A to this Agreement.

     "Subordinated Security Documents"  means the MNP Loan Agreement, the
Security Agreement among Borrowers and Subordinated Creditor dated as of June
30, 1999, the Subordinated Notes in favor of Subordinated Creditor, the Second
Mortgage dated June 30, 1999 from ORS to Subordinated Creditor, all as described
in EXHIBIT A to this Agreement and related documents and financing statements.

     SECTION 1.2  Other Definitional Provisions.  Unless otherwise defined
                  -----------------------------
herein, all terms used herein which are defined by the Ohio Commercial Code
shall have the meanings as assigned to them by this Agreement.  The words
"hereof," "herein" and "hereunder" and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement, and section, subsection, schedule and exhibit
references are references to sections or subsections of, or schedules or
exhibits to, as the case may be, this Agreement unless otherwise specified.  As
used herein, the singular number shall include the plural, the plural the
singular and the use of the masculine, feminine or neuter gender shall include
all genders, as the context may require.  Reference to any one or more of the
Financing Documents and any of the Financing Documents shall mean the same as
the foregoing may from time to time be amended, restated, substituted, extended,
renewed, supplemented or otherwise modified.

                                      -4-
<PAGE>

                                   ARTICLE 2

                                 SUBORDINATION

     SECTION 2.1  Subordinated Indebtedness.
                  -------------------------

     2.1.1    Except as set forth in Section 2.1.2, Subordinated Creditor hereby
subordinates and postpones the payment and the time of payment of all of the
Subordinated Indebtedness to and in favor of the indefeasible and full payment
in cash and the time of payment of all of the Senior Indebtedness. Subordinated
Creditor and Borrowers represent and warrant to the Lender that all existing
Subordinated Indebtedness is described in EXHIBIT A attached hereto and made a
part hereof.

     2.1.2    Until all of the Senior Indebtedness has been fully and
indefeasibly paid in cash and there is no agreement between Borrowers and the
Lender under which the Lender is required to or may make loans or provide other
financial accommodations, Subordinated Creditor shall not, without the prior
written consent of the Lender, ask, demand, accelerate (unless the Lender has
accelerated the Senior Indebtedness), declare a default under, sue for, set off,
accept or receive any payment of all or any part of the Subordinated
Indebtedness; provided, however, that unless (i) there is an Event of Default
under any of the Credit Documents (as defined in the Credit Agreement), (ii) any
Borrower or its assets is the subject of Insolvency Proceedings, or (iii) such
payment would reduce the Borrowers' Subordinated Indebtedness to Subordinated
Creditor to an amount less than $1,500,000, Subordinated Creditor may receive
and retain payments made by Borrowers pursuant to the Subordinated Notes; and
provided further than upon an "Event of Default" as defined in the Intervale
Mortgage, Subordinated Creditor may exercise or otherwise enforce its rights
with respect to the Intervale Property and the EPI Property under the Intervale
Mortgage and any mortgage related to the EPI Property and may receive and retain
any proceeds from the sale, distribution or other application of the Intervale
Property or the EPI Property in accordance with Section 3.3 hereof.

     2.1.3    Subordinated Creditor and Borrowers agree and warrant that any
instrument, agreement, security or other writing now or hereafter evidencing all
or any portion of the Subordinated Indebtedness shall bear on its face a clear
and conspicuous legend that it is subject to the terms of this Agreement.  Until
all Senior Indebtedness has been indefeasibly paid in full in cash, Borrowers
shall not issue any instrument, security or other writing (other than those, if
any, described in EXHIBIT A) evidencing any part of the Subordinated
Indebtedness or amend or modify in any respect any such instrument, security or
other writing without the prior written consent of Lender.

     SECTION 2.2  Security.
                  --------

     2.2.1    Subordinated Creditor and Borrowers agree, represent and warrant
that the Subordinated Indebtedness is not, and shall not be secured in any way
directly or indirectly by any Security, except the Subordinated Debt Documents
and any mortgage in favor of Subordinated Creditor with respect to the EPI
Property.

                                      -5-
<PAGE>

     2.2.2     Subordinated Creditor hereby subordinates the lien and priority
of Subordinated Creditor's existing and future Liens and other interests, if
any, in and to the Collateral to the Lender's existing and future interest in
the Collateral notwithstanding the time of attachment of the interests of the
Lender or Subordinated Creditor or the time the Senior Indebtedness or the
Subordinated Indebtedness is incurred.  Notwithstanding anything to the contrary
contained in this Agreement, under applicable law or otherwise, in the event
that the  Liens of the Lender are at any time unperfected with respect to any or
all of the Collateral, the lack of perfection by the Lender as to any such
Collateral shall not affect the validity, enforceability or priority of any Lien
on the Collateral in favor of Subordinated Creditor.  In any event, the Liens of
Subordinated Creditor shall have priority over any and all other Liens in favor
of any third party with respect to the Collateral (including, but not limited to
any trustee under the Bankruptcy Code), and the Lender hereby appoints and
constitutes Subordinated Creditor as the Lender's agent and bailee for purposes
of perfection of the Liens of the Lender in the Collateral such that the Lien in
favor of Subordinated Creditor shall be held by Subordinated Creditor for the
benefit of the Lender and the proceeds of any disposition of the Collateral
shall be and are in all respects subject to the priority of right to payment and
satisfaction of first the Senior Indebtedness and then the Subordinated
Indebtedness.  The lien priorities provided in this Section shall not be altered
or otherwise affected by any amendment, modification, supplement, extension,
renewal, restatement or refinancing of either the Senior Indebtedness or the
Subordinated Indebtedness, nor by any action or inaction which the Lender or
Subordinated Creditor may take or fail to take in respect of the Collateral,
except as otherwise provided above in this subsection.

     2.2.3     Except as expressly permitted under the terms of Section 2.1.2
or 3.3 of this Agreement, until the Senior Indebtedness has been fully and
indefeasibly paid in cash and there exists no agreement between Borrowers and
the Lender under which the Lender is required to or may make loans or provide
other financial accommodations, Subordinated Creditor shall not, without the
prior written consent of the Lender, ask, demand, assign, declare a default
under, sue for, liquidate, sell, foreclose, set off, collect, accept a
surrender, receive any proceeds, petition, commence or otherwise initiate any
Insolvency Proceedings (or join any other Person in so doing) against any
Borrower or its assets or otherwise realize or seek to realize upon all or any
part of the Collateral.

     2.2.4     In the event the Lender may from time to time execute releases,
partial releases, terminations, reconveyances, subordinations or other documents
releasing or otherwise limiting the Lender's interests in the Collateral,
Subordinated Creditor agrees to execute and deliver at the same time such
further documents as the Lender may require to effect a corresponding change to
Subordinated Creditor's position in the same Collateral, but only in the
following circumstances:

               (a) Borrowers are disposing of the Collateral in the ordinary
     course of its business;

               (b) Borrowers are disposing of the Collateral outside of the
     ordinary course of business for reasonably equivalent value which shall be
     applied (i) to the Senior Indebtedness, or (ii) to the acquisition of
     Collateral which shall secure both the Senior Indebtedness and the
     Subordinated Indebtedness; and

                                      -6-
<PAGE>

               (c) the Lender is disposing of the Collateral pursuant to the
     Uniform Commercial Code or other applicable laws and the proceeds are
     applied to the Senior Indebtedness.

     SECTION 2.3  Further Representations and Warranties. Subordinated Creditor
                  --------------------------------------
represents and warrants to the Lender that:

               (a) Subordinated Creditor is the exclusive legal and beneficial
     owner of the Subordinated Indebtedness and no part thereof has been
     assigned to or subordinated or subjected to any other security interest in
     favor of anyone other than the Lender;

               (b) true, correct and complete copies of all documents relating
     to the Subordinated Indebtedness in effect as of the date hereof have been
     furnished to the Lender;

               (c) the execution, delivery and performance of this Agreement is
     within the corporate powers of Subordinated Creditor, has been duly
     authorized by all necessary corporate action of Subordinated Creditor, and
     does not contravene any law, any provision of the certificate of
     incorporation or the by-laws of Subordinated Creditor or any agreement to,
     or any law, rule, order or regulation, which Subordinated Creditor is a
     party or by which it or its properties are bound; and

               (d) this Agreement has been properly executed and delivered and
     constitutes the valid and legally binding obligations of Subordinated
     Creditor and is fully enforceable against Subordinated Creditor in
     accordance with its terms.

     SECTION 2.4  Further Documents.  Subordinated Creditor and Borrowers agree
                  -----------------
they shall promptly execute such further documents and acknowledgments
(including, without limitation, amendments to and releases of financing
statements and other documents of record) as the Lender may reasonably require
to confirm or evidence their respective obligations and the Lender's rights
under this Agreement.

                                   ARTICLE 3

  DISTRIBUTIONS AND RECEIPTS; RIGHTS OF SUBORDINATED CREDITOR WITH RESPECT TO
                      INTERVALE PROPERTY AND EPI PROPERTY

     SECTION 3.1  Distributions, etc.
                  -------------------

     3.1.1     Except as otherwise expressly provided under the terms of
Section 3.3 of this Agreement, in the event of any distribution, division or
application, partial or complete, voluntary or involuntary, by operation of law
or otherwise, of all or any part of the assets of any Borrower or the proceeds
thereof to creditors of such Borrower or to any indebtedness, liabilities and
obligations of such Borrower, by reason of liquidation, dissolution or other
winding up of

                                      -7-
<PAGE>

such Borrower or such Borrower's business, or in the event of any sale or
Insolvency Proceedings with respect to such Borrower or its assets, then in any
                                                                    ----
such event, any payment, distribution or benefit or any kind whatsoever or
character, either in cash, securities or other property, whether or not on
account of the Collateral, which shall be payable, deliverable or receivable
upon or with respect to all or any part of the Subordinated Indebtedness shall
be paid or delivered directly to the Lender for application to the Senior
Indebtedness (whether due or not due and in such order and manner as the Lender
may elect; and including, without limitation any interest accruing subsequent to
the commencement of any such event or Insolvency Proceedings) until the Senior
Indebtedness shall have been fully and indefeasibly paid in cash and satisfied.

     3.1.2    In connection with any Insolvency Proceedings, Subordinated
Creditor agrees to take such steps as may be necessary to preserve Subordinated
Creditor's claim with respect to the Subordinated Indebtedness. Subordinated
Creditor hereby irrevocably authorizes and empowers the Lender, and irrevocably
appoints the Lender Subordinated Creditor's attorney-in-fact, in the event that
the Lender has reasonable cause to believe that Subordinated Creditor is not
acting diligently so to preserve its claim, to (i) demand, sue for, collect and
receive every such payment or distribution and give acquittance therefor, (ii)
enforce claims comprising Subordinated Indebtedness in the name of the Lender,
or the name of Subordinated Creditor, by proof of debt, proof of claim suit or
otherwise; (iii) collect any assets of any Borrower (other than the Intervale
Property or EPI Property or proceeds thereof) distributed, dividend applied by
way of dividend or payment, or any such securities issued, on or account of
Subordinated Indebtedness and apply the same, or proceeds of any realization
upon the same, to Senior Indebtedness (whether due or not due in such order and
manner as the Lender may elect) until all Senior Indebtedness shall have been
indefeasibly paid in full in cash; (iv) vote claims compromising Subordinated
Indebtedness to accept or reject any plan of partial or complete liquidation,
reorganization, arrangement, composition or extension; (v) take generally any
action which Subordinated Creditor might otherwise take; and (vi) take such
other actions in the Lender's own name or in the name of Subordinated Creditor
or otherwise, as the Lender may deem necessary or advisable to carry out the
provisions of this Agreement.

     3.1.3    Subordinated Creditor hereby agrees to execute and deliver to the
Lender such assignments, endorsements, releases, other documents or other
instruments onto as may be reasonably requested by the Lender in order to enable
the Lender to collect and receive any and all payments or distributions which
may be payable or deliverable at any time upon or with respect to the
Subordinated Indebtedness and/or the Collateral, except for those payments which
Subordinated Creditor is expressly permitted to receive and retain under the
terms of Section 2.1.2 or 3.3 of this Agreement.

     SECTION 3.2  Receipts by Subordinated Creditor.  Should any payment or
                  ---------------------------------
distribution not permitted by the provisions of this Agreement or property or
proceeds thereof be received by Subordinated Creditor upon or with respect to
all or any part of the Subordinated Indebtedness and/or the Collateral prior to
the full payment and satisfaction of the Senior Indebtedness, the Subordinated
Creditor will immediately deliver the same to the Lender in precisely the form
received (except for the endorsement or assignment of Subordinated Creditor when
the Lender deems appropriate), for application to the Senior Indebtedness
(whether due or not due and in such order and manner as the Lender may elect),
and, until so delivered, the same shall be held in

                                      -8-
<PAGE>

trust by Subordinated Creditor as property of the Lender. In the event of the
failure of Subordinated Creditor to make any such endorsement or assignment, the
Lender, or any of its officers or employees on behalf of the Lender, is hereby
irrevocably authorized in its own name or in the name of Subordinated Creditor
to make the same, and is hereby appointed Subordinated Creditor's attorney-in-
fact for those purposes, that appointment being coupled with an interest and
irrevocable.

     SECTION 3.3  Intervale Property; EPI Property.  Lender acknowledges and
                  --------------------------------
agrees that (a) Subordinated Creditor has a lien on the Intervale Property and
all proceeds thereof, including insurance proceeds relating thereto, (b)
Subordinated Creditor intends to put a lien on the EPI Property, and (c)
Subordinated Creditor may make all determinations and take or omit to take all
actions and exercise or refrain from exercising all rights and remedies
Subordinated Creditor is permitted to make or take under (i) the Intervale
Mortgage or by law with respect to the Intervale Property and (ii) any mortgage
on the EPI Property or by law with respect to the EPI Property, all without any
participation or joinder by Lender and without liability to Lender.
Notwithstanding the foregoing, Subordinated Creditor agrees that it will not
take an Enforcement Action with respect to the Intervale Property or the EPI
Property without giving Lender an Enforcement Notice at least 30 days prior to
the date such Enforcement Action is or will be taken.  Subordinated Creditor
further agrees that during the 180 day period after Lender gives Subordinated
Creditor an Enforcement Notice, Subordinated Creditor with allow the Lender to
utilize any part of the Intervale Property or EPI Property necessary to finish
work on any work-in -process or existing customer orders at such time to the
extent permitted by applicable law.  The Lender shall compensate Subordinated
Creditor for all utility, insurance and overhead costs and expenses directly
incident to such use which may have otherwise  been paid by Subordinated
Creditor.  Notwithstanding such use by Lender, Subordinated Creditor shall be
permitted access to the Intervale Property and the EPI Property being used by
the Lender at all reasonable times.  To the extent Subordinated Creditor is
otherwise in possession or control of any or all of the Intervale Property or
EPI Property following the occurrence of any Event of Default, whether  pursuant
to an exercise of its rights and remedies under the Intervale Mortgage, any
mortgage related to the EPI Property or otherwise, upon reasonable notice to
Subordinated Creditors, Subordinated Creditors shall permit the Lender to enter
upon the Intervale Property and the EPI Property to the extent permitted by
applicable law for purposes of removing any or all of the Collateral located
thereat.

     Notwithstanding anything in this Agreement to the contrary, Lender agrees
that Subordinated Creditor shall be entitled to receive all proceeds of the
Intervale Property and EPI Property derived through sale, liquidation,
foreclosure or otherwise and that any such proceeds received by Lender shall be
paid to Subordinated Creditor for application to the Subordinated Indebtedness
in accordance with the Intervale Mortgage and any mortgage relating to the EPI
Property.

                                   ARTICLE 4

                             ADDITIONAL AGREEMENTS

                                      -9-
<PAGE>

     SECTION 4.1  Consents, Waivers, etc.  Subordinated Creditor hereby consents
                  -----------------------
that at any time and from time to time and with or without consideration, the
Lender may, without further consent of or notice to Subordinated Creditor and
without in any manner affecting, impairing, lessening or releasing any of the
provisions of this Agreement, renew, extend, change the manner, time, place and
terms of payment of, sell, exchange, release, substitute, surrender, realize
upon, modify, waive, grant indulgences with respect to and otherwise deal with
in any manner: (a) all or any part of the Senior Indebtedness; (b) all or any of
the Financing Documents; (c) all or any part of any property at any time
included within the Collateral; and (d) any Person at any time primarily or
secondarily liable for all or any part of the Senior Indebtedness and/or any
collateral and security therefor, all as if this Subordination Agreement and any
interest which Subordinated Creditor has in the Collateral did not exist.
Except as expressly set forth in this Agreement and except as required under
Article 8 or Article 9 of the applicable Uniform Commercial Code, Subordinated
Creditor hereby waives demand, presentment for payment, protest, notice of
dishonor and of protest with respect to the Senior Indebtedness, the
Subordinated Indebtedness and/or the Collateral, notice of acceptance of this
Agreement, notice of making of any of the Senior Indebtedness and notice of
default under any of the Financing Documents.

     SECTION 4.2  Continuing Agreement.  This is a continuing Subordination
                  --------------------
Agreement until all of the Senior Indebtedness has been fully and indefeasibly
paid in cash, until all of the Senior Indebtedness and all of the Subordinated
Creditor's obligations to the Lender have been performed and satisfied, and
until the Lender has no obligation or agreement to allow further Senior
Indebtedness.  Without implying any limitation on the foregoing, if at any time
any payment, or portion thereof, made by, or for the account of, Borrower or any
other on account of any of the Senior Indebtedness is set aside by any court or
trustee having jurisdiction as a voidable preference or fraudulent conveyance or
must otherwise be restored or returned by the Lender to Borrower or any other
Person under any Insolvency Proceedings, Subordinated Creditor and Borrower
hereby agree that this Agreement shall continue and remain in full force and
effect or be reinstated, as the case may be, all as though any  such payment had
not been made and this Agreement had at all times remained in effect.
Notwithstanding the foregoing, in the event Subordinated Creditor has received
payment in full of the Subordinated Indebtedness and is entitled to retain such
payment under the terms of this Agreement, this Agreement shall terminate and
shall be of no further force or effect.

     SECTION 4.3  No Third Party Beneficiaries.  The provisions of this
                  ----------------------------
Agreement are solely for the benefit of the Lender, its successors and assigns,
and to any Person which, with the Senior Lenders' concurrence, or in accordance
with the terms of the Credit Agreement, replaces financing provided by any of
the Lender, and no other parties or Persons whatsoever (including, without
limitation, Borrowers and their respective successors and assigns) are intended
to be benefitted in any manner whatsoever by this Agreement.

     SECTION 4.4  Transfers by Subordinated Creditor.  Subordinated Creditor
                  ----------------------------------
agrees that it will not, without the prior written consent of the Lender,
subordinate, assign or transfer all or any part of the Subordinated Indebtedness
or the Collateral to any Person other than the Lender.

                                      -10-
<PAGE>

     SECTION 4.5  Transfer or Assignment of Senior Indebtedness.  If any of the
                  ---------------------------------------------
Senior Indebtedness should be transferred or assigned by the Lender, this
Agreement will inure to the benefit of the Lender's transferee or assignee to
the extent of such transfer or assignment, provided that the Lender shall
continue to have the unimpaired right to enforce this Agreement as to any of the
Senior Indebtedness not so transferred or assigned.

     SECTION 4.6  Actions Upon Breach.
                  -------------------

     4.6.1      If Subordinated Creditor, contrary to this Agreement, commences
or participates in any action or proceeding against any Borrower or the
Collateral, Borrowers may interpose as a defense or dilatory plea the making of
this Agreement, and Lender may intervene and interpose such defense or plea in
the Lender's name or in the name of such Borrowers.  Should Subordinated
Creditor, contrary to this Agreement, in any way attempt to enforce payment of
the Subordinated Indebtedness or any part thereof or to realize upon the
Collateral or any part thereof, either Lender (in its own name or in the name of
Borrowers), Borrowers themselves, or Lender and Borrowers, may restrain
Subordinated Creditor from so doing, it being understood and agreed by
Subordinated Creditor that (i) the Lender's and/or Borrower's damages from its
actions may at that time be difficult to ascertain and may be irreparable, and
(ii) Subordinated Creditor waives any defense that Borrowers and/or that the
Lender cannot demonstrate damage and/or can be made whole by the awarding of
damages.  Subordinated Creditor hereby irrevocably authorizes and empowers the
Lender, and irrevocably appoints the Lender Subordinated Creditor's attorney-in-
fact for the purpose of executing and delivering such assignments, endorsements,
releases, other instruments and other documents which  Subordinated Creditor is
or may be required to execute and deliver under the terms of this Agreement.

     4.6.2      If any one or more of Subordinated Creditor or Borrowers
contrary to this Agreement, makes, attempts to or threatens to make or receive
any payment, take any action with respect to the security or take any action
contrary to this Agreement, or fails to take any action required by this
Agreement, the Lender may obtain relief by injunction, specific performance
and/or other appropriate equitable relief, it being understood and agreed by
Subordinated Creditor and Borrowers that (i) the damages of the Lender from its
actions at the time may be difficult to ascertain and may be irreparable and
(ii) Subordinated Creditor and Borrowers waive any defense or claim that
Borrowers and/or the Lender cannot demonstrate damage and/or can be made whole
by the awarding of damages.

     SECTION 4.7  Statement of Debt.  Subordinated Creditor and Borrowers will,
                  -----------------
at any time or times upon the reasonable request of the Lender, promptly furnish
to the Lender a true, correct and complete statement of the outstanding
Subordinated Indebtedness.

     SECTION 4.8  Lender Agreements.
                  -----------------

     4.8.1      The Lender agrees to provide to Subordinated Creditor, promptly
after sending to Borrowers, copies of written notices advising Borrowers of
events of default under or acceleration of the Senior Indebtedness.

                                      -11-
<PAGE>

     4.8.2      In the event the Lender has in its possession any proceeds of
Collateral following the indefeasible repayment of the Senior Indebtedness, such
proceeds shall be remitted to Subordinated Creditor for application to the
Subordinated Indebtedness, unless the Lender is directed otherwise by court
order.

     SECTION 4.9   Subrogation.  The Subordinated Creditor shall not be
                   -----------
subrogated to, or be entitled to any assignment of any Senior Indebtedness or
evidence of any evidence of Senior Indebtedness or any Collateral until all
Senior Indebtedness is indefeasibly paid and satisfied in full.

     SECTION 4.10  Bankruptcy Financing.  If any Borrower shall become subject
                   --------------------
to a proceeding under the Bankruptcy Code and if the Lender desires to permit
the use of cash collateral and/or to provide financing to such Borrower under
either Section 363 or Section 364 of the Bankruptcy Code, Subordinated Creditor
agrees as follows: (a) adequate notice to the Subordinated Creditor shall be
deemed to have been given to Subordinated Creditor if Subordinated Creditor
receives actual notice two (2) business days prior to the entry of the order
approving such financing, and (b) no objection will be raised by Subordinated
Creditor to any such financing on the ground of a failure to provide "adequate
protection" for Subordinated Creditor's junior lien on the Collateral or any
other grounds, provided Subordinated Creditor retains a lien on and security
interest in the post-petition Collateral to the extent and with the same
priority as existed prior to the commencement of the proceeding under the
Bankruptcy Code.

                                   ARTICLE 5

                                 MISCELLANEOUS

     SECTION 5.1   Additional Senior Indebtedness.  Nothing herein contained
                   ------------------------------
shall obligate the Lender to grant credit to, or continue financing arrangements
with, any Borrower.

     SECTION 5.2   Delay in Enforcement, etc. No delay or failure on the part of
                   --------------------
the Lender to exercise any of its rights or remedies hereunder or now or
hereafter existing at law or in equity or by statute or otherwise, or any
partial or single exercise thereof, shall constitute a wavier thereof. All such
rights and remedies are cumulative and may be exercised singly or concurrently
and the exercise of any one or more of them will not be a waiver of any other.
No waiver of any of the Lender's rights and remedies under this Agreement, and
no modification or amendment of this Agreement shall be deemed to be made by the
Lender unless the same shall be in writing, duly signed on behalf of the Lender,
and each such waiver, if any, shall apply only with respect to the specific
instance involved and shall in no way impair the rights and remedies of the
Lender hereunder in any other respect at any other time.

     SECTION 5.3   Successors and Assigns.  This Agreement shall be binding upon
                   ----------------------
Subordinated Creditor and Borrowers and Subordinated Creditor's and Borrowers'
successors and assigns and shall inure to the benefit of Lender and its
successors and assigns, other holders or obligees under the Senior Indebtedness
and any Person which, with the Lender's concurrence,

                                      -12-
<PAGE>

or in accordance with the terms of the Credit Agreement, replaces financing
provided by the Lender.

     SECTION 5.4  Headings.  The paragraph headings of this Agreement are for
                  --------
convenience only, and shall not limit or otherwise affect any of the terms
hereof.

     SECTION 5.5  Applicable Law.  The parties to this Agreement acknowledge and
                  --------------
agree that this Agreement shall be governed by the laws of the State, as if this
Agreement had been executed, delivered, administered and performed solely within
the State even though for the convenience and at the request of the Subordinated
Creditor or Borrowers, this Agreement may be executed elsewhere.

     SECTION 5.6  Notices.  All notices, requests and demands to or upon the
                  -------
parties to this Agreement shall be in writing and shall be deemed to have been
given or made when delivered by hand on a Business Day, or five (5) days after
the date when deposited in the mail, postage prepaid by registered or certified
mail, return receipt requested, or when sent by overnight courier, on the
Business Day next following the day on which the notice is delivered to such
overnight courier, addressed as follows:

          Borrowers:          Meridian National Corporation
                              805 Chicago Street
                              Toledo, Ohio  43611
                              Attention:  Jim Rosino

          with a copy to:     Shumaker, Loop & Kendrick, LLP
                              1000 Jackson Street
                              Toledo, Ohio 43624
                              Attention:  John W. Hilbert II

          Lender:             National Bank of Canada
                              One Cleveland Center, Suite 2430
                              1375 East Ninth Street
                              Cleveland, Ohio  44114
                              Attention:  Jack Jankovic

          with a copy to:     Arter & Hadden LLP
                              1100 Huntington Building
                              925 Euclid Avenue
                              Cleveland, Ohio  44115
                              Attention:  Eugene M. Killeen, Esq.

          Subordinated
          Creditor:           MNP Corporation
                              44225 Utica Road
                              Utica, Michigan  48317
                              Attention:   Craig L. Stormer

                                      -13-
<PAGE>

          with a copy to:     Jacob & Weingarten
                              2301 W. Big Beaver Road, Suite 777
                              Troy, Michigan 48084
                              Attention:  Steve Schubiner

By written notice, each party to this Agreement may change the address to which
notice is given to that party, provided that such changed notice shall include a
street address to which notices may be delivered by overnight courier in the
ordinary course of any Business Day.

     IN WITNESS WHEREOF, the signatures and seals of Subordinated Creditor and
of Borrowers are subscribed to this Agreement as of the date first written
above.

                                        MNP CORPORATION,
                                        a Michigan corporation

                                        By:  /s/ Craig L. Stormer
                                             ---------------------------------
                                             Craig L. Stormer
                                             Its:  Vice President
<PAGE>

                                   MERIDIAN NATIONAL CORPORATION,
                                   a Delaware corporation

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

                                   OTTAWA RIVER STEEL CO.,
                                   an Ohio corporation

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

                                   ENVIRONMENTAL PURIFICATION INDUSTRIES
                                   COMPANY,
                                   an Ohio general partnership

                                   By:  National Purification, Inc.,
                                        General Partner

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

                                   AND

                                   By:  MEPI Corp.,
                                        General Partner

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

                                   NATIONAL BANK OF CANADA

                                   By:  /s/ Jack Jankovic
                                        ----------------------------------
                                        Jack Jankovic
                                        Its:  Vice President

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