Exhibit 10(a)(5)

International Truck & Engine Corporation
4201 Winfield Road
Warrenville, IL 60555
(630) 753-5000

December 29, 2003

Core Molding Technologies, Inc.
800 Manor Park Drive
Columbus, Ohio 43228
Attention: Herman F. Dick, Jr.

RE: PAYOFF OF THAT CERTAIN SECURED PROMISSORY NOTE DATED AS OF DECEMBER

31, 1996, AS THEREBY AMENDED FROM TIME TO TIME (COLLECTIVELY REFERRED TO AS THE "SECURED NOTE"), IN THE ORIGINAL PRINCIPAL AMOUNT OF $25,504,000, ISSUED BY CORE MOLDING TECHNOLOGIES, INC. (F/K/A CORE MATERIALS CORPORATION), A DELAWARE CORPORATION ("CORE") TO INTERNATIONAL TRUCK & ENGINE CORPORATION (F/K/A NAVISTAR INTERNATIONAL TRANSPORTATION CORP.), A DELAWARE CORPORATION ("INTERNATIONAL")

Ladies and Gentlemen:

This Letter Agreement acknowledges your request for a payoff amount for all of Core's obligations to International as of December 29, 2003 (the "Payoff Date"), pursuant to the Secured Note and all other related documents executed in connection therewith and, in each case, as amended from time to time, for the purpose of repaying in full all of the obligations and liabilities of Core to International pursuant to the Secured Note. Capitalized terms used but not otherwise defined herein shall have the corresponding meanings set forth in the Secured Note.

As of the Payoff Date, the amount of Core's outstanding obligations
(including, without limitation, all accrued and unpaid principal and interest)
under the Secured Note is $18,789,685.87 (the "Payoff Amount").

The Payoff amount will be comprised of $18,589,685.87 in cash and a $200,000 unsecurred note executed and delivered on December 29, 2003.

The cash Payoff Amount should be sent by wire transfer to International pursuant to the instructions set forth below by 3:00 p.m. EST on the Payoff Date:

ABA No.:          0710-0003-9
Account No.:      8188002125
Account Name:     International Truck & Engine Corp.
Bank:             Bank of America, Illinois

If the Payoff Amount is not received in immediately available funds by 3:00 p.m. EST on the Payoff Date, the amounts necessary to repay all of such indebtedness and other obligations shall be increased by $4,013.18 per day.

Upon receipt by International of the Payoff Amount, International hereby acknowledges and agrees that:

(a) All Indebtedness or other obligations of Core to International pursuant to the Secured Note will be satisfied and paid in full;

(b) International will immediately release all Liens relating to all real or personal property of Core;

(c) International will promptly prepare, execute and deliver to Core releases, satisfaction of mortgages and UCC-3 termination statements terminating all Liens against Core's property held by International;

(d) International will promptly deliver to Core the original Secured Note marked "paid in full" or "cancelled;" and

(e) International will promptly execute and deliver such other documents or instruments, in form and substance reasonably satisfactory to Core, and to take any other actions reasonably requested by Core for the purpose of effectuating the intent of this Payoff Letter.

This Letter Agreement shall be deemed to be a contract made under and for all purposes shall be governed by and construed in accordance with the laws of the State of Ohio, without regard to the principles of conflicts of law.

This Letter Agreement may be executed by the parties hereto individually or in any combination, in one or more counterparts, each of which shall be deemed to be one and the same agreement.

[Signature page follows]

IN WITNESS WHEREOF, the undersigned has executed this Letter Agreement as of the date first set forth above.

INTERNATIONAL TRUCK &
ENGINE CORPORATION, a Delaware
corporation (f/k/a Navistar
International Transportation Corp.)

By:  /s/ T. M. Endsley
     ---------------------------
Name:  Terry M. Endsley
Title:  Vice President & Treasurer

ACCEPTED AND AGREED TO THIS 29TH DAY
OF DECEMBER, 2003

CORE MOLDING TECHNOLOGIES, INC.,
a Delaware corporation (f/k/a Core Materials Corporation)

By:  /s/ Herman F. Dick Jr.
     ----------------------
      Herman F. Dick, Jr.
      Chief Financial Officer

EXHIBIT 10(a)(6)

CORE MOLDING TECHNOLOGIES, INC

$200,000.00 December 29, 2003

FOR VALUE RECEIVED, Core Molding Technologies, Inc. (f/n/a Core Materials Corporation), a Delaware corporation (hereinafter referred to as the "Company"), hereby promises to pay to the order of International Truck & Engine Corporation (f/n/a Navistar International Transportation Corporation), a Delaware corporation (hereinafter referred to "International," which term shall include any subsequent holder hereof), the principal amount of Two Hundred Thousand and 00/100 Dollars ($200,000.00), together with interest thereon calculated from the date hereof in accordance with the provisions of this Unsecured Promissory Note (this "Note").

This Note is being issued in connection with the payoff of that certain secured promissory note executed by the Company and delivered to International on December 31, 1996, as thereby amended from time to time.

1. PAYMENTS OF PRINCIPAL AND INTEREST.

(A) PRINCIPAL PAYMENT. The Company shall pay the entire principal balance of this Note on December 31, 2004.

(B) INTEREST. Except as otherwise expressly provided herein, interest shall accrue at the rate of eight percent (8.0%) per annum, (computed on the basis of a 360-day year and the actual number of days elapsed in any year) on the unpaid principal amount of this Note outstanding from time to time from and including the date hereof until the date paid, or (if less) at the highest rate then permitted under applicable law. The Company shall pay to International all accrued interest on this Note on December 31, 2004.

2. PREPAYMENTS.

The Company may, without premium or penalty, at any time and from time to time, prepay all or any portion of the outstanding principal amount of this Note, provided that the Company has first paid all accrued interest on this Note.

3. MISCELLANEOUS

Payments of any amount required hereunder shall be made in lawful money of the United States or, as Noteholder, in his sole and absolute discretion, may accept. All payments of any amount required hereunder shall be credited first against collection of costs, if any, thereafter against accrued but unpaid late charges, if any, thereafter against accrued but unpaid interest, if any, and thereafter against the unpaid balance of the principal amount.

The Company agrees to pay Noteholder all costs and expenses, including reasonable attorneys' fees, paid or incurred by Noteholder in connection with the collection or enforcement of this Note.
This Note shall be governed by, interpreted under and construed and enforced in accordance with the laws of the State of Illinois. Any action to enforce payment of this note shall be filed and heard solely in Dupage County, Illinois.

IN WITNESS WHEREOF, this instrument is executed as of the day and year first above written.

CORE MOLDING TECHNOLOGIES, INC

By: /s/Herman F. Dick, Jr.
    ----------------------
    Herman F. Dick, Jr.
    Treasurer and Chief Financial Officer

Accepted and agreed to
this 29th day of December, 2003

INTERNATIONAL TRUCK & ENGINE CORPORATION

By: /s/ T. M. Endsley
    -----------------
     Name:  Terry M. Endsley
            ----------------
     Title:  Vice President & Treasurer
             --------------------------

EXHIBIT 10(a)(7)

AMENDMENT NO. 1 TO

UNSECURED PROMISSORY NOTE

THIS AMENDMENT NO. 1 TO UNSECURED PROMISSORY NOTE (this "Amendment") entered into as of this 30th day of January 2004, by and between International Truck & Engine Corporation, a Delaware corporation ("International"), and Core Molding Technologies, Inc., a Delaware corporation (the "Company").

WITNESSETH:

WHEREAS, the Company previously executed and delivered to International that certain Unsecured Promissory Note dated as of December 29, 2003, in the original principal amount of Two Hundred Thousand and 00/100 Dollars ($200,000.00) (the "Note");

NOW, THEREFORE, for good and valuable consideration, the receipt of which is hereby acknowledged, International and the Company desire to amend the Note and hereby agree as follows:

1. Each reference to "Noteholder" in Section 3. MISCELLANEOUS of the Note shall be stricken and replaced with "International" and any reference to "his" in such Section 3 shall be stricken and replaced with "it. "

2. A new Section 4. PERFORMANCE OF OBLIGATIONS shall be added to the Note and shall read as follows:

4. PERFORMANCE OF OBLIGATIONS.

The outstanding principal and interest of this Note will be forgiven by International, provided the Company achieves earnings before interest and taxes of $3,981,000.00 for the period January 1, 2004 to December 31, 2004.

3. The Company hereby ratifies and confirms the Note, as amended hereby, in all respects, and, as amended hereby, the terms thereof shall remain in full force and effect. This Amendment may be attached to and shall form a part of the Note for all purposes. This Amendment may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument

IN WITNESS WHEREOF, this instrument is executed as of the day and year first above written.

Core Molding Technologies, Inc.

By: /s/ Herman F. Dick Jr.
    ----------------------
    Herman F. Dick, Jr.
    Treasurer and CFO

International Truck & Engine Corp.

By: /s/ T.M. Endsley
    -----------------------
    Terry Endsley
    Vice President and Treasurer

EXHIBIT 10(b)

It is intent of the parties to strengthen the business relationship through a long-term Supply Agreement. The following activities are being documented to facilitate the implementation of the economic benefits to International Truck and Engine Corp., and confirm the commitment to award business to Core Molding Technologies.

The following year-over-year piece price reductions will apply to all parts on contracts AC170A, AC171C, AC168A, and AC169C (or as they may be hereafter modified) with the exception of "service only" parts. These reductions are to be funded by process improvements, manufacturing efficiencies, quality improvements, scrap reduction, waste elimination, and effective Tier II management. International agrees to review cost transparencies on the QSP90 hood, fender extensions, and splash panels (9 parts) to determine disposition.

11/1/2002 11/1/2003 11/1/2004 11/1/2005

1% 1.50% 1.50% 1.50%

The following business will be awarded to Core Molding Technologies/Core Composites Corporation:

Hand Spray Up Package

Pricing accepted as quoted; parts that have not been formally quoted are to be priced at the target cost provided by International. Purchasing will work in good faith with the Parts Organization to eliminate the 48 part numbers with annual volumes below 10 pieces per year. Actual move will be implemented with the approval of the "Chatham to Escobedo Transition Team."

On this package, International will receive a rebate of .5% for each $2M of transferred business (prorated once the initial threshold is met) to be paid on a quarterly basis, for 4 quarters only. The rebate amount will be calculated on all existing business at the Matamoros plant. The rebate will begin after the first full quarter of production, based on paid invoices. Rebates to be funded by contribution margin improvements.

SMC Package

Pricing accepted as quoted on latest revision dated March 19, 2003 for the fender extensions and sunvisor bracket.

International will work in good faith to secure additional SMC, HSU, HLU, and Cold Molding business for Core Molding/Core Composites provided they are competitive in cost, quality, and delivery. Future business award rebates will be negotiated in good faith, individually, for each package using the contribution margin concept.

/s/ James W. Nix                            /s/ Jim Hubbard
----------------------------------------    ------------------------------------
James W. Nix, Supply Manager                Jim Hubbard, Account Manager
International Truck & Engine Corporation    Core Molding Technologies

/s/ Deborah Sullens                         /s/ J. L. Simonton
----------------------------------------    ------------------------------------
Deborah Sullens, Purchasing Manager         J. L. Simonton, President & CEO
International Truck & Engine Corporation    Core Molding Technologies

EXHIBIT 10(e)(3)

LOAN AGREEMENT

FOR

A $7,500,000 REVOLVING LINE OF CREDIT

AND

A $9,000,000 TERM LOAN

MADE BY AND BETWEEN

CORE MOLDING TECHNOLOGIES, INC.

AND

SECTION 1.           DEFINITIONS.................................................       1
   1.1      Certain Definitions..................................................       1
   1.2      Accounting Terms.....................................................       1
   1.3      Rules of Interpretation..............................................       1
SECTION 2.           TERMINATION OF EXISTING REVOLVING CREDIT LOAN...............       2
SECTION 3.           LOANS.......................................................       2
   3.1      Revolving Credit Loan................................................       2
   3.2      Term Loan............................................................       3
   3.3      Rates of Interest; Terms of Payment; and Late Charges................       3
   3.4      Prepayments..........................................................       3
   3.5      Maturity of the Revolving Credit Loan and the $9,000,000 Term Loan...       3
   3.6      Interest Rate Agreements.............................................       3
SECTION 4.           FEES; PAYMENTS; EXPENSES....................................       3
   4.1      Revolving Credit Loan Fee............................................       3
   4.2      $9,000,000 Term Loan Fee.............................................       3
   4.3      Unused Line of Credit Fee............................................       3
   4.4      Revolving Credit Loan Renewal Fee....................................       4
   4.5      Costs and Expenses...................................................       4
SECTION 5.           SECURITY....................................................       4
   5.1      Security Agreement...................................................       4
   5.2      Mortgage on Columbus, Ohio Property..................................       4
   5.3      Mortgage on Gaffney, South Carolina Property.........................       4
SECTION 6.           CONDITIONS TO CLOSING AND ALL LOAN ADVANCES.................       4
   6.1      Conditions to Closing and all Loan Advances..........................       4
SECTION 7.           REPRESENTATIONS AND WARRANTIES..............................       6
   7.1      Organization and Standing............................................       7
   7.2      No Violation.........................................................       7
   7.3      Power and Authority..................................................       7
   7.4      Enforceability.......................................................       7
   7.5      Consents or Approvals................................................       7
   7.6      Litigation...........................................................       7
   7.7      Compliance with Other Instruments; Compliance with Law...............       7
   7.8      Subsidiaries.........................................................       8
   7.9      Title to Property....................................................       8
   7.10     ERISA................................................................       8
   7.11     Taxes................................................................       8
   7.12     Environmental Matters................................................       8
   7.13     Disclosure...........................................................       9
SECTION 8.           AFFIRMATIVE COVENANTS.......................................       9
   8.1      Use of Proceeds......................................................       9
   8.2      Conduct of Business; Maintenance of Existence........................       9
   8.3      Compliance with Laws.................................................       9
   8.4      Insurance............................................................       9
   8.5      Financial Statements, Etc............................................      10
   8.6      Notice of Default....................................................      10
   8.7      Environmental Matters................................................      10
   8.8      Taxes and Other Liens................................................      10
   8.9      Inspection...........................................................      11

   8.10     Depository Requirements..............................................      11
   8.11     Further Assurances...................................................      11
SECTION 9.           NEGATIVE COVENANTS..........................................      11
   9.1      Consolidation, Merger or Acquisition.................................      11
   9.2      Disposition of Assets................................................      11
   9.3      Indebtedness.........................................................      11
   9.4      Liens................................................................      12
   9.5      Guaranties...........................................................      12
   9.6      Loans and Investments................................................      12
   9.7      Lines of Business....................................................      12
   9.8      Subsidiaries.........................................................      12
SECTION 10.          FINANCIAL COVENANTS.........................................      12
   10.1     Total Funded Obligations to EBITDAL Ratio............................      13
   10.2     Minimum Fixed Charge Coverage Ratio..................................      13
   10.3     Definition of Certain Terms..........................................      13
SECTION 11.          EVENTS OF DEFAULT...........................................      14
   11.1     Events of Default....................................................      14
   11.2     Remedies Upon an Event of Default....................................      15
SECTION 12.          GENERAL.....................................................      15
   12.1     Amendments, etc......................................................      15
   12.2     Notices, etc.........................................................      15
   12.3     No Waiver; Remedies..................................................      16
   12.4     Right of Set-off.....................................................      16
   12.5     Indemnification......................................................      16
   12.6     Successors and Assigns...............................................      17
   12.7     Severability.........................................................      17
   12.8     Governing Law........................................................      17
   12.9     Reproduction of Documents............................................      17
   12.10    Survival.............................................................      17
   12.11    Counterparts.........................................................      17
   12.12    Time is of the Essence...............................................      17
   12.13    Captions.............................................................      18
   12.14    No Third Party Benefit...............................................      18
   12.15    Complete Agreement...................................................      18
   12.16    Consent to Jurisdiction and Waiver of Objection to Venue.............      18
   12.17    WAIVER OF JURY TRIAL.................................................      18

APPENDIX A -- DEFINITIONS

EXHIBIT A -- $7,500,000 REVOLVING CREDIT NOTE
EXHIBIT B -- $9,000,000 TERM NOTE
EXHIBIT C -- FORM OF SECURITY AGREEMENT
EXHIBIT D -- FORM OF OHIO MORTGAGE
EXHIBIT E -- FORM OF SOUTH CAROLINA MORTGAGE EXHIBIT F -- FORM OF COVENANT COMPLIANCE CERTIFICATE EXHIBIT G -- FORM OF BORROWER'S COUNSEL LEGAL OPINION EXHIBIT H -- FORM OF GUARANTY

LOAN AGREEMENT

This Loan Agreement (the "AGREEMENT") is made and entered into in Columbus, Ohio, effective as of December 29, 2003, by and between KeyBank National Association, a national banking association (the "BANK"), and Core Molding Technologies, Inc., a Delaware corporation (the "BORROWER" and sometimes referred to hereinafter as "CORE MOLDING"), as follows:

WHEREAS, the Borrower has previously entered into various financing arrangements with the Bank in the form of: (i) a $12,000,000 sale / leaseback equipment financing facility and a $5,000,000 equipment lease facility, as evidenced by that certain Master Equipment Lease Agreement dated December 2, 1997, as thereby amended, between the Borrower and an affiliate of the Bank;
(ii) a standby letter of credit (the "LETTER OF CREDIT") in the approximate amount of $7,500,000, issued by the Bank on behalf of the Borrower to support the issuance of Industrial Revenue Bonds by the Borrower, with the Borrower's obligations relating to the issuance of the Letter of Credit by the Bank evidenced by that certain Reimbursement Agreement dated March 29, 2001, as thereby amended; and (iii) a $7,500,000 revolving loan evidenced by that certain Loan Agreement dated December 3, 1997, as thereby amended (the "EXISTING REVOLVING LOAN AGREEMENT"), between the Borrower and the Bank and secured by a first priority security interest in all business assets of the Borrower (the "EXISTING REVOLVING CREDIT LOAN");

WHEREAS, the Borrower and the Bank are entering into this Agreement to set forth the terms and conditions pursuant to which the Bank will (i) replace the Existing Revolving Credit Loan in its entirety with a new revolving line of credit not to exceed the aggregate principal amount of $7, 500,000 (the "REVOLVING CREDIT LOAN"), and (ii) provide a term loan to the Borrower in the principal amount of $9,000,000 (the "$9,000,000 TERM LOAN," together with the Revolving Credit Loan, collectively referred to herein as the "LOANS") in order to pay off the International Secured Note; and

WHEREAS, the Borrower and the Bank desire to establish the security for and the conditions under which each of the above-described $9,000,000 Term Loan and Revolving Credit Loan will be established, with all existing first priority security interests of the Bank remaining in effect and evidenced by the Security Documents.

NOW, THEREFORE, in consideration of the mutual agreements contained herein, the Borrower and the Bank hereto agree as follows:

SECTION 1. DEFINITIONS.

1.1 Certain Definitions. Certain terms used in this Agreement shall have the meanings set forth in Appendix A and Section 10.3.

1.2 Accounting Terms. Unless otherwise specified herein, all accounting terms used herein shall be interpreted, all determinations with respect to accounting matters hereunder shall be made, and all financial statements and certificates and reports as to financial matters required to be delivered hereunder shall be prepared, in accordance with GAAP.

1.3 Rules of Interpretation.

(a) A reference to any document or agreement shall include such document or agreement as amended, modified or supplemented and in effect from time to time in accordance with its terms and the terms of this Agreement.

(b) The singular includes the plural and the plural includes the singular.

(c) A reference to any Person includes its permitted successors and permitted assigns.

(d) The words "include," "includes" and "including" are not limiting.

(e) The words "herein," "hereof," "hereunder" and words of like import shall refer to this Agreement as a whole and not to any particular section or subsection of this Agreement.

SECTION 2. TERMINATION OF EXISTING REVOLVING CREDIT LOAN.

In connection with the Revolving Credit Loan being made pursuant to this Agreement, the Existing Revolving Credit Loan shall be terminated effective as of the date first set forth above. This Agreement shall be deemed an amendment to and replacement of the Existing Revolving Loan Agreement in its entirety, which shall have no further force and effect. Notwithstanding the termination of the Existing Revolving Credit Loan, the Bank's first priority security interest in all of the Borrower's business assets shall remain perfected and in full force and effect and the Security Agreement shall be deemed an amendment to and replacement of any existing security agreement between the Borrower and the Bank. The Borrower and the Bank's existing mortgages on the Borrower's real property located in Columbus, Ohio and Gaffney, South Carolina, shall also remain in full force and effect. The Bank shall have no further obligation to make any advances or other payments to the Borrower or any other Person pursuant to the Existing Revolving Credit Loan and all future advances in accordance with the Revolving Credit Loan shall be made pursuant to this Agreement.

SECTION 3. LOANS.

3.1 Revolving Credit Loan.

(a) General. Upon the terms and subject to the conditions set forth in this Agreement, and in reliance upon the representations, warranties and covenants of the Borrower contained herein, the Bank agrees to provide to the Borrower a revolving line of credit not to exceed the aggregate principal amount of $7,500,000.00 (the "REVOLVING CREDIT LOAN"). The Revolving Credit Loan shall be evidenced by a promissory note, in the form of the attached Exhibit A, executed by the Borrower (the "REVOLVING CREDIT NOTE"). Within the foregoing limits and subject to the terms and conditions of this Agreement and the Revolving Credit Note, the Borrower may borrow, repay and reborrow under the Revolving Credit Loan at any time and from time to time.

(b) Procedure for Borrowing under the Revolving Credit Loan. The Borrower may borrow under the Revolving Credit Loan on any Banking Day provided that Borrower gives the Bank either an oral or written notice specifying (i) the requested date of borrowing and (ii) the aggregate amount of the requested borrowing (the "BORROWING NOTICE"), which Borrowing Notice must be received by the Bank no later than 3:00 p.m. Columbus, Ohio time on the requested date of borrowing. Upon receipt of each Borrowing Notice from Borrower, the Bank shall, upon satisfaction of the conditions set forth in
Section 6 and, provided that the sum of the requested Advance pursuant to a Borrowing Notice and the outstanding principal balance under the Revolving Credit Note at that time does not exceed $7,500,000, Advance an amount equal to the requested borrowing under the Revolving Credit Note and deposit such amount into the Borrower's account maintained at the Bank. The Bank may, but need not, require that all oral requests be confirmed in writing. All communications, instructions, or directions by telephone or otherwise to the Bank are to be directed to the Bank's office identified in Section 12.2. Any Responsible Officer is authorized to request Advances and authorize payments until the Bank receives from the Borrower

written notice of revocation of his or her authority. The Borrower agrees to be liable for all sums either: (i) Advanced in accordance with the instructions of any Responsible Officer or (ii) credited to any of the Borrower's accounts with the Bank.

3.2 Term Loan. Upon the terms and subject to the conditions set forth in this Agreement, and in reliance upon the representations, warranties and covenants of the Borrower contained herein, the Bank agrees to provide to the Borrower a term loan in the principal amount of $9,000,000 (the "$9,000,000 TERM LOAN"). The $9,000,000 Term Loan shall be evidenced by a promissory note, in the form of the attached Exhibit B, executed by the Borrower (the "$9,000,000 TERM NOTE").

3.3 Rates of Interest; Terms of Payment; and Late Charges. The rates of interest, terms of payment, and late charges for the Revolving Credit Loan and the $9,000,000 Term Loan shall be as set forth respectively in the Revolving Credit Note and the $9,000,000 Term Note.

3.4 Prepayments. Borrower shall have the right to prepay the Loans in whole or in part without premium or penalty at any time and from time to time; provided that if Borrower shall repay any LIBOR Advance (defined in the Notes) or LIBOR Loan (defined in the Notes) made under either of the Notes, then Borrower shall reimburse the Bank for any resulting loss or expense incurred by the Bank as a result of such prepayment. The amount of such loss or expense shall be determined in the manner set forth in the respective Notes. All partial prepayments shall be applied in the manner provided in the Notes.

3.5 Maturity of the Revolving Credit Loan and the $9,000,000 Term Loan. The Revolving Credit Loan and the $9,000,000 Term Loan will mature and the total unpaid principal and interest amounts thereunder shall be due and payable on the Maturity Dates of each respective Loan as set forth in the respective Notes.

3.6 Interest Rate Agreements. If Borrower purchases an interest rate protection product from the Bank, Borrower shall enter into the Bank's customary form of agreement ("INTEREST RATE AGREEMENT") relating to such interest rate protection product. Any Indebtedness incurred pursuant to an Interest Rate Agreement entered into by Borrower and the Bank shall constitute an Obligation evidenced by the Notes and secured by the Security Agreement, the Mortgages, and the other Loan Documents to the same extent and effect as if the terms and provisions of such Interest Rate Agreement were set forth herein, whether or not the aggregate of such Obligations, together with the disbursements made by the Bank of the proceeds of the Loans, shall exceed the face amount of the Notes. Borrower hereby collaterally assigns to the Bank any and all interest rate protection products purchased or to be purchased by Borrower in connection with the Loans, as additional security for the Loans, and agrees to provide the Bank with any additional documentation requested by the Bank in order to confirm or perfect such security interest during the term of the Loans.

SECTION 4. FEES; PAYMENTS; EXPENSES.

4.1 Revolving Credit Loan Fee. At closing, the Borrower shall pay to the Bank a fee of $1,000 in consideration for the Bank making the Revolving Credit Loan to the Borrower.

4.2 $9,000,000 Term Loan Fee. At closing, the Borrower shall pay to the Bank a fee of $5,000 in consideration for the Bank making the $9,000,000 Term Loan to the Borrower.

4.3 Unused Line of Credit Fee. The Borrower shall pay to the Bank an unused line of credit fee equal to one eighth of one percent (.125%) per annum on the amount of the Revolving Credit Loan not used for cash borrowings. Such fee shall be payable quarterly in arrears on the first Business Day of

each calendar quarter during the term of this Agreement. Such fee shall be calculated based on the average cash borrowings of Borrower under the Revolving Credit Loan for each calendar quarter.

4.4 Revolving Credit Loan Renewal Fee. In the event that the Bank agrees to extend the Maturity Date of the Revolving Credit Loan, the Borrower agrees to pay the Bank an annual renewal fee of $1,000 for each year that such Maturity Date is extended. Any extension of such Maturity Date shall be subject to the Bank's review and approval of any such extension. The Bank shall have no obligation to extend the Maturity Date and any extension shall be considered by the Bank in its sole discretion on a case-by-case basis.

4.5 Costs and Expenses. The Borrower shall pay or reimburse the Bank, as applicable, for all reasonable costs and expenses relating to or incidental with, the making of the Loans. Such costs and expenses shall include, but not be limited to, reasonable fees and expenses of the Bank's counsel, recording and filing fees, UCC search fees, title insurance premiums and related costs and expenses, appraiser's fees, inspection fees, all costs and expenses of the Bank relating to the administration of the Loans.

SECTION 5. SECURITY.

5.1 Security Agreement. In order to secure payment and performance of the Borrower's Obligations to the Bank, the Borrower hereby acknowledges that the Bank shall continue to maintain a first priority security interest in, and a lien on, all right, title and interest of the Borrower in and to substantially all of the business assets of the Borrower, including, but not limited to, inventory, chattel paper, accounts, deposit accounts, investment property, equipment and general intangibles and that on the Closing Date the Borrower and Core Composites shall enter into a security agreement in favor of the Bank substantially in the form of Exhibit C attached hereto (the "SECURITY AGREEMENT") and any UCC-1 financing statements necessary to further evidence the Bank's existing security interest in the items described in the Security Agreement.

5.2 Mortgage on Columbus, Ohio Property. In order to secure payment and performance of the Borrower's Obligations to the Bank, the Borrower hereby acknowledges that the Bank shall continue to maintain a first priority lien and mortgage on the Borrower's fee interest in the real property located at 800 Manor Park Drive, Columbus, Ohio 43228 and that on the Closing Date the Borrower shall enter into a Mortgage, Assignment of Leases and Rents, and Fixture Filing in favor of the Bank substantially in the form of Exhibit D attached hereto (the "OHIO MORTGAGE") to further evidence the Bank's existing lien and mortgage in such real property.

5.3 Mortgage on Gaffney, South Carolina Property. In order to secure payment and performance of the Borrower's Obligations to the Bank, the Borrower hereby acknowledges that the Bank shall continue to maintain a second priority lien and mortgage on the Borrower's fee interest in the real property located at 24 Commerce Drive, Gaffney, South Carolina 29340 and that on the Closing Date the Borrower shall enter into a Mortgage, Assignment of Leases and Rents, and Fixture Filing in favor of the Bank substantially in the form of Exhibit E attached hereto (the "SOUTH CAROLINA MORTGAGE") to further evidence the Bank's existing lien and mortgage in such real property.

SECTION 6. CONDITIONS TO CLOSING AND ALL LOAN ADVANCES.

6.1 Conditions to Closing and all Loan Advances. The Bank shall not be obligated to make any of the Loans (or any Advances thereunder) to the Borrower until the following conditions have been and continue to be satisfied to the satisfaction of the Bank in its sole discretion:

(a) Loan Documents. This Agreement, the borrowings hereunder, the Notes, the Security Agreement, the Mortgages, the Guaranty and all transactions contemplated by this Agreement shall have been duly authorized by the Borrower. The Borrower shall have duly executed and delivered to the Bank this Agreement, the Notes and the Security Agreement, and the Mortgages. Core Composites shall have duly executed and delivered to the Bank the Security Agreement and the Guaranty.

(b) No Default or Event of Default. On the Closing Date and on the date of the making of each Advance under the Revolving Credit Note, no Default or Event of Default shall have occurred and be continuing.

(c) Correctness of Representations. On the Closing Date and on the date of each Advance under the Revolving Credit Note, all representations and warranties made by the Borrower and Core Composites in
Section 7 below or otherwise set forth in writing in connection herewith shall be true and correct in all material respects with the same effect as though such representations and warranties had been made on the date of such Advance, except that representations and warranties expressly limited to a certain date shall be true and correct in all material respects as of that date.

(d) Approvals. On the Closing Date and on the date of each Advance under the Revolving Credit Note, all necessary consents, approvals, licenses, permissions, registrations or validations of any Governmental Authority or any other Person required for the execution, delivery, performance or carrying out of the provisions of this Agreement or any of the other Loan Documents shall have been obtained and shall be in full force and effect and copies thereof certified by a duly authorized officer of the Borrower to such effect shall have been delivered to the Bank.

(e) Filing of Financing Statements, etc. On or before the Closing Date, UCC-1 Financing Statements or other appropriate documentation relating to the security interests and rights granted pursuant to the Security Agreement shall have been duly recorded or filed in such manner and in such places as is required by law to establish, preserve, protect, and perfect such security interests and rights; and all taxes, fees and other charges in connection with the execution, delivery and filing of this Agreement and such financing statements and other appropriate documentation shall have been duly paid.

(f) Recording of Mortgages. On or before the Closing Date, the Mortgages shall have been duly recorded in such manner and in such places as required by law to further evidence and establish the Bank's lien and mortgage on both the Columbus, Ohio real property and the Gaffney, South Carolina real property as described in Sections 5.2 and 5.3 above.

(g) Opinion of Counsel for Borrower. The Bank shall have received an opinion of counsel for the Borrower addressed to the Bank in form and substance reasonably satisfactory to the Bank and its counsel as set forth on Exhibit G attached hereto.

(h) Certificates of Insurance. On or before the Closing Date, the Borrower shall have delivered to the Bank evidence that the Borrower has in effect insurance of the character and amount described in Section 8.4 below.

(i) Supporting Documents. On or before the Closing Date, the Borrower shall have delivered to the Bank the following supporting documents:

(i) A good standing certificate for the Borrower dated as of a recent date issued by the Delaware Secretary of State.

(ii) certificates dated as of a recent date with respect to the due qualification of the Borrower to do business in each jurisdiction where the failure to be so qualified would have a Material Adverse Effect, issued by the Secretary of State of each such jurisdiction;

(iii) copy of the certificate of incorporation of the Borrower, and all amendments thereto, certified by the Delaware Secretary of State, as in effect on the date hereof;

(iv) a certificate of the Secretary or Assistant Secretary of the Borrower certifying as to (a) the certificate of incorporation of Borrower, as in effect on the date thereof, (b) the by-laws of Borrower, as in effect on the date thereof; (c) the incumbency and signatures of the officers of the Borrower who have executed any documents in connection with the transactions contemplated by this Agreement; and (d) the resolutions of the Borrower authorizing the execution, delivery and performance of this Agreement and the making of the Loans hereunder, and the execution and delivery of the Loan Documents to be executed and delivered by the Borrower; and

(j) all other information and documents which the Bank or its counsel may reasonably request in connection with the transactions contemplated by this Agreement.

(k) Payoff Letter for International Indebtedness. On or prior to the Closing Date, the Borrower shall have delivered to the Bank and the Bank shall have reviewed and approved to its reasonable satisfaction a payoff letter from International Truck & Engine Corporation ("INTERNATIONAL") setting forth, among other things, (i) the payoff amount for the International Secured Note, (ii) the release and termination of any and all security interests, liens, and other encumbrances of International in and to the Collateral or any other property or assets or the Borrower, and (iii) and the release and satisfaction in full of the Indebtedness evidenced by the International Secured Note and all other indebtedness, liabilities, and other obligations owing by the Borrower to International (the "INTERNATIONAL PAYOFF LETTER") ; provided, however, that the Borrower may maintain approximately $200,000 in outstanding indebtedness to International after the payment of the proceeds from the $9,000,000 Term Loan to International, with such remaining indebtedness reflected by an unsecured promissory note delivered to International by the Borrower (the "UNSECURED INTERNATIONAL NOTE") as of the Closing Date.

(l) Litigation. On the Closing Date and on the date of making each Advance under the Revolving Credit Note, no litigation, arbitration, proceeding or investigation shall be pending or, to the knowledge of the Borrower, threatened against the Borrower which, in the reasonable judgment of the Bank, might have a Material Adverse Effect.

(m) Adverse Change. There shall have been no adverse change in the financial condition or business of the Borrower between the date of the then most recent financial statements furnished to the Bank and the date of each Advance under the Revolving Credit Note which, in the reasonable judgment of the Bank, might have a Material Adverse Effect.

(n) Fees and Expenses. On or before the Closing Date, the Borrower shall have paid to the Bank all amounts payable under Section 4 identified by the Bank on or before the Closing Date.

(o) Legal Matters. All documents and legal matters incident to the transactions contemplated by this Agreement shall be reasonably satisfactory to Thompson Hine LLP, legal counsel for the Bank.

SECTION 7. REPRESENTATIONS AND WARRANTIES.

In order to induce the Bank to enter into this Agreement and to make the contemplated Loans, the Borrower represents and warrants as follows (with respect to itself and Core Composites) and the following representations and warranties shall survive the execution and delivery of this Agreement. For purposes of this Section, each reference to "Borrower" shall also include and be deemed to be a reference to Core Composites.

7.1 Organization and Standing. Borrower is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware and is duly qualified or licensed as a foreign corporation in good standing in each jurisdiction in which the failure to do so would have a Material Adverse Effect.

7.2 No Violation. Neither the execution, delivery or performance of this Agreement or any other Loan Document to which the Borrower is a party, nor consummation of the transactions contemplated herein or thereby will (a) contravene any law, statute, rule or regulation to which Borrower is subject or any judgment, decree, franchise, order or permit applicable to Borrower where such contravention has or could reasonably be anticipated to have a Material Adverse Effect, or (b) conflict or be inconsistent with or will result in any breach of, or constitute a default under, any Contractual Obligation of Borrower, or (c) violate any provision of the certificate of incorporation or by-laws or other organizational documents of Borrower.

7.3 Power and Authority. The execution, delivery and performance of this Agreement and the other Loan Documents to which it is a party are within the corporate powers of the Borrower and have been duly authorized by all necessary corporate action.

7.4 Enforceability. This Agreement and each other Loan Document to which the Borrower is a party constitute valid and binding obligations of the Borrower enforceable against the Borrower in accordance with their terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting the enforcement of creditors' rights generally and subject to general principles of equity, whether applied in a court of equity or at law.

7.5 Consents or Approvals. No order, permission, consent, approval, license, authorization, registration or validation of, or filing with, or exemption by, any Governmental Authority or any other Person is required to authorize, or is required in connection with, the execution, delivery, or performance of this Agreement or any other Loan Document by the Borrower, or the taking of any action contemplated hereby or thereby, which would otherwise result in a Material Adverse Effect, except for the (a) filing of UCC-1 financing statements in the appropriate filing offices as provided in Section 6.1(e) herein, (b) recording of the Mortgages in the appropriate recording offices as provided in Section 6(f), and (c) delivery of the International Payoff Letter to the Borrower and such additional documents and instruments related thereto.

7.6 Litigation. There are no actions, suits or proceedings pending or threatened against or affecting the Borrower which in any one case or in the aggregate, if determined adversely to the interests of the Borrower, could reasonably be anticipated to have a Material Adverse Effect.

7.7 Compliance with Other Instruments; Compliance with Law. Borrower is not in default under any Contractual Obligation (including any Contractual Obligation relating to any Indebtedness of Borrower), where such default has or could reasonably be anticipated to have a Material Adverse Effect. Borrower is not in default or in violation of any applicable statute, rule, writ, injunction, decree, order or regulation of any Governmental Authority having jurisdiction over the Borrower, where such default or violation has or could reasonably be anticipated to have a Material Adverse Effect.

7.8 Subsidiaries. As of the Closing Date, Borrower's Subsidiaries include Core Composites, and Composites Services de Mexico, S. de R.L. de C.V. and Corecomposites de Mexico, S. de R.L. de C.V. (collectively, the "MEXICAN SUBSIDIARIES"). The fair value of any assets currently owned by the Mexican Subsidiaries less their liabilities is less than $100,000.

7.9 Title to Property. Borrower has good and marketable title to all of its properties and assets, except such as have been disposed of in the ordinary course of business, and none of such properties or assets is subject to any Lien, except for any Permitted Liens. Borrower enjoys peaceful and undisturbed possession under all leases necessary in any material respect for the operation of its properties and assets and no material default exists under such leases (after taking into account applicable cure periods under said leases). All such leases are valid and subsisting and are in full force and effect.

7.10 ERISA. The Borrower has fulfilled its obligations under the minimum funding standards of ERISA and the Code with respect to pension plans maintained by The Borrower or any member of any Funding Standard Controlled Group or to which the Borrower or any member of any Funding Standard Controlled Group is obligated to contribute. The Borrower is in compliance in all material respects with the presently applicable provisions of ERISA and the Code, and has not incurred any liability to the PBGC or a Plan under Title IV or ERISA (other than to make contributions or premium payments in the ordinary course).

7.11 Taxes. All tax returns of the Borrower required to be filed have been timely filed (after giving effect to any permitted extensions), and all material taxes, fees and other governmental charges (other than those being contested in good faith by appropriate proceedings diligently conducted and with respect to which adequate accruals have been established and, in the case of ad valorem taxes or betterment assessments, no proceedings to foreclose any lien with respect thereto have been commenced and, in all other cases, no notice of lien has been filed or other action taken to perfect or enforce such lien) shown thereon which are payable have been paid. The charges and reserves on the books of the Borrower for all income and other taxes are adequate, and the Borrower knows of no additional assessment or any basis therefor. The Federal income tax returns of the Borrower have not been audited within the last five years, all prior audits have been closed, and there are no unpaid assessments, penalties or other charges arising from such prior audits.

7.12 Environmental Matters.

(a) Borrower has obtained all Governmental Approvals that are required for the operation of its business under any Environmental Law, except where the failure to so obtain a Governmental Approval would not have a Material Adverse Effect.

(b) Borrower is in compliance with all terms and conditions of all required Governmental Approvals and is also in compliance with all terms and conditions of all applicable Environmental Laws, except where the failure to do so would not have a Material Adverse Effect.

(c) There is no civil, criminal or administrative action, suit, demand, claim, hearing, notice of violation, investigation, proceeding, notice or demand letter pending or, to the best knowledge of Borrower threatened against Borrower relating in any way to the Environmental Laws which could have a Material Adverse Effect, and there is no Lien of any private entity or Governmental Authority against any Property, which Lien could have a Material Adverse Effect, except for Permitted Liens.

(d) There has been no claim, complaint, notice, or request for information received by Borrower with respect to any site listed on the National Priority List promulgated pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA") 42 USC
Section 9601

et seq. or any state list of sites requiring investigation or cleanup with respect to contamination by Hazardous Substances, which claim, complaint, notice or request for information could have a Material Adverse Effect.

(e) To the best of the Borrower's knowledge, there has been no release or threat of release of any Hazardous Substance at any real property owned or leased by Borrower which would likely result in liability being imposed upon Borrower which liability would have a Material Adverse Effect.

7.13 Disclosure. None of the representations or warranties made by Borrower in this Agreement, or in any other document furnished to the Bank by or on behalf of Borrower in connection herewith contains any untrue statement of a material fact or omits to state any material fact necessary to make the statements herein or therein, in light of the circumstances under which they are made, not misleading. There is no fact known to Borrower on the date of this Agreement which has any reasonable likelihood of having a Material Adverse Effect which has not been set forth in or referred to in this Agreement.

SECTION 8. AFFIRMATIVE COVENANTS.

Except as otherwise permitted by the Bank, the Borrower and Core Composites covenant and agree that for so long as this Agreement is in effect and until the Notes, together with all interest thereon, and all other Obligations of Borrower to the Bank, are paid or satisfied in full (for purposes of this Section, each reference to "Borrower" shall also include and be deemed to be a reference to Core Composites, such that all of the covenants set forth in this Section shall be applicable to Borrower and to Core Composites):

8.1 Use of Proceeds. Core Molding shall use the proceeds of the $9,000,000 Term Loan to repay the International Secured Note as provided in
Section 6(k). Core Molding may use proceeds from the Revolving Credit Loan for general working capital purposes. Without limiting the foregoing, no part of the proceeds from the Loans will be used for the purpose of purchasing or carrying any "margin security" as such term is defined in Regulation U of the Board of Governors of the Federal Reserve System.

8.2 Conduct of Business; Maintenance of Existence. The Borrower will continue to: (a) engage in the business in which it is currently engaged; and (b) maintain its existence and remain duly qualified as a corporation, licensed and in good standing in each jurisdiction where such qualification or licensing is required by the nature of its business, the character and location of its property, business, or ownership or leasing of its property, except where such noncompliance or failure to so qualify would not have a Material Adverse Effect.

8.3 Compliance with Laws. The Borrower shall comply in all material respects with all applicable laws, ordinances, rules, regulations and requirements of Governmental Authorities and will obtain all Governmental Approvals, except where the failure to do so would not have a Material Adverse Effect.

8.4 Insurance.

(a) The Borrower will maintain insurance with financially sound and reputable insurance companies in such amounts and with such deductibles and against such risks as is customary and usually carried by owners of similar businesses, properties and assets in the same general areas in which the Borrower operates, provided that in any event the Borrower shall maintain or cause to be maintained (a) insurance against casualty, loss or damage covering all property and improvements of the Borrower in amounts and in respect of perils usually carried by owners of similar businesses and

properties in the same general areas in which the Borrower operates; (b) comprehensive general liability insurance against claims for bodily injury, death or property damages; and (c) workers' compensation insurance to the extent required by applicable law. In the case of policies referenced in clauses (a) and (b) above, all such insurance shall (i) name the Borrower and the Bank as loss payees and additional insureds as their interests may appear; (ii) provide that no termination, cancellation or material reduction in the amount of or material modification to the extent of coverage shall be effective until at least 30 days after receipt by the Bank of notice thereof, and (iii) be reasonably satisfactory in all other respects to the Bank.

(b) As long as no Default or Event of Default shall have occurred and be continuing, the Bank shall return to the Borrower any insurance proceeds it receives in payment of a claim filed by the Borrower.

8.5 Financial Statements, Etc. The Borrower will furnish to the Bank:

(a) Within ninety-five (95) days after the last day of each fiscal year, audited financial statements of Borrower, including a balance sheet, statement of income, and statement of cash flows as of and for the year then ended, prepared in accordance with GAAP consistently applied by the Company's independent public accountants, together with copies of any management letters provided by such accountants.

(b) Within fifty (50) days after the end of each fiscal quarter and within ninety-five (95) days after the end of each fiscal year, a Covenant Compliance Certificate signed by a Responsible Officer of Borrower.

(c) Within fifty (50) days after the end of each calendar month, management prepared financial statements for the Borrower, including balance sheets, statements of income, and statements of cash flow as of and for the period then ended, prepared in accordance with GAAP consistently applied, but with footnotes omitted.

(d) Promptly upon becoming aware of any litigation or other proceeding against the Borrower that could reasonably be expected to have a Material Adverse Effect, notice thereof.

(e) Promptly following the request of the Bank, such further information concerning the business, affairs and financial condition or operations of the Borrower as the Bank may reasonably request.

8.6 Notice of Default. As soon as practicable, and in any event, within three (3) Banking Days of becoming aware of the existence of any condition or event which constitutes a Default, the Borrower will provide the Bank with written notice specifying the nature and period of existence thereof and what action the Borrower is taking or proposes to take with respect thereto.

8.7 Environmental Matters. The Borrower shall comply with all terms and conditions of all applicable Governmental Approvals and all applicable Environmental Laws, except where failure to comply would not have a Material Adverse Effect, and shall promptly notify the Bank of any violations thereof.

8.8 Taxes and Other Liens. The Borrower will pay when due all taxes, assessments, governmental charges or levies, or claims for labor, supplies, rent and other obligations made against it which, if unpaid, might become a Lien against the Borrower or on any of its property, except liabilities being contested in good faith and by proper proceedings, as to which adequate accruals are maintained on

the books of Borrower in accordance with GAAP and except where failure to make such payments when due would not have a Material Adverse Effect.

8.9 Inspection. The Borrower will permit a representative of the Bank (including any field examiner or auditor retained by the Bank) to inspect and make copies of the Borrower's books and records, and to discuss its affairs, finances and accounts with its officers and accountants, at such reasonable times and places and as often as the Bank may reasonably request.

8.10 Depository Requirements. The Borrower will open and maintain all of its primary operating accounts, including cash management services, with the Bank in form and substance reasonably acceptable to the Bank.

8.11 Further Assurances. The Borrower will execute and deliver to the Bank any writings and do all things necessary, effectual or reasonably requested by the Bank to carry into effect the provisions and intent of this Agreement or any other Loan Documents.

SECTION 9. NEGATIVE COVENANTS.

Except as otherwise permitted by the Bank, the Borrower and Core Composites covenant and agree that for so long as this Agreement is in effect and until the Notes, together with all interest thereon, and all other Obligations of Borrower to the Bank, are paid or satisfied in full (for purposes of this Section, each reference to "Borrower" shall also include and be deemed to be a reference to Core Composites, such that all of the covenants set forth in this Section shall be applicable to Borrower and to Core Composites):

9.1 Consolidation, Merger or Acquisition. The Borrower shall not merge or consolidate with or into any other Person, or make any acquisition of the business or assets of any other Person, without first obtaining the Bank's consent, which consent shall not be unreasonably withheld.

9.2 Disposition of Assets. The Borrower shall not convey, sell, lease, transfer or otherwise dispose of any of its property, business or assets (including, without limitation, accounts receivable and leasehold assets), whether now owned or hereafter acquired, except (a) for equipment or other assets sold, leased, assigned or otherwise disposed of in the ordinary course of business, (b) for the sale of inventory in the ordinary course of business, or
(c) after first obtaining the Bank's consent, which consent shall not be unreasonably withheld. It being understood that such consent shall be necessary prior to the transfer of any Collateral or other assets to either of the Mexican Subsidiaries; provided that periodic transfers of cash to the Mexican Subsidiaries to cover payroll and other costs and expenses, including payroll, shall not require the Bank's consent.

9.3 Indebtedness. The Borrower shall not create, incur, assume, or suffer to exist after the Closing Date any Indebtedness, except the following:

(a) Indebtedness owed by the Borrower to the Bank;

(b) Indebtedness of the Borrower and Core Composites secured by purchase money Liens permitted by Section 9.4(f) or treated as a capitalized lease in accordance with GAAP, in an amount not to exceed $250,000 in any fiscal year;

(c) Indebtedness of the Borrower to International, as reflected by the Unsecured International Note; and

(d) Indebtedness of Core Composites to Borrower as permitted by Section 9.6(b).

9.4 Liens. Borrower shall not create, incur, assume or suffer to exist any Lien on any of its properties or assets, except the following (collectively, "PERMITTED LIENS"):

(a) Liens for taxes, fees, assessments and other governmental charges not delinquent or being contested in good faith and by proper proceedings as to which adequate accruals are maintained on the books of Borrower in accordance with GAAP.

(b) Carrier's, warehousemen's, mechanics', materialmen's, landlord's or similar liens imposed by law or incurred in the ordinary course of business in respect of obligations not overdue, or being contested in good faith and by proper proceedings and as to which adequate accruals with respect thereto are maintained on the books of Borrower in accordance with GAAP.

(c) Pledges or deposits in connection with workers' compensation, unemployment insurance and other types of social security legislation.

(d) Security deposits made to secure the performance of leases, licenses and statutory obligations incurred in the ordinary course of business.

(e) Liens in favor of the Bank, of any Affiliate of the Bank.

(f) Liens securing purchase money debt that does not extend to any other property and is given at the time of acquisition of such property.

9.5 Guaranties. Except for the Guaranty, the Borrower shall not guarantee or otherwise be or become directly or contingently responsible or otherwise liable for the Indebtedness or other obligations of any other Person.

9.6 Loans and Investments. The Borrower shall not make any loan or advance to any Person or purchase or otherwise acquire any capital stock or other ownership interest, assets, obligations or other securities of, make any capital contribution to, or otherwise invest in, or acquire any interest in, any Person, except the following:

(a) Loans or advances to Borrower's employees in the ordinary course of business; and

(b) Additional loans or advances to Core Composites not to exceed an aggregate principal balance outstanding at any point in time of $1,500,000 .

9.7 Lines of Business. Borrower shall not alter the nature of the Borrower's, and each of its Subsidiaries', business as operated on the date of this Agreement in any material respect.

9.8 Subsidiaries. Except for Borrower's existing Subsidiaries identified in Section 7.8, Borrower shall not create any Subsidiaries without first obtaining the Bank's consent, which consent shall not be unreasonably withheld.

SECTION 10. FINANCIAL COVENANTS.

The Borrower and Core Composites covenant and agree that so long as this Agreement is in effect and until the Notes, together with all interest thereon, and all other Obligations of Borrower to the

Bank, are paid or satisfied in full (the financial ratios set forth in this
Section shall be determined on a consolidated basis):

10.1 Total Funded Obligations to EBITDAL Ratio. The Borrower shall maintain a Total Funded Obligations to EBITDAL Ratio equal to or less than the ratios set forth below as of the end of each applicable fiscal quarter set forth below, to be tested on a rolling four quarters basis.

   Ratio                             Fiscal Quarter(s)
   -----                             -----------------
3.50 to 1.00                      12/31/03 through 6/30/04
3.25 to 1.00                      9/30/04
3.00 to 1.00                      12/31/04 through 9/30/05
2.75 to 1.00                      12/31/05 through 9/30/06
2.50 to 1.00                      12/31/06 and thereafter

10.2 Minimum Fixed Charge Coverage Ratio. The Borrower shall maintain a Minimum Fixed Charge Coverage Ratio of not less than 1.15 to 1.00 as of December 31, 2003, and at the end of each fiscal quarter thereafter, to be tested on a rolling four quarters basis.

10.3 Definition of Certain Terms. The terms set forth below shall have the corresponding meanings set forth below:

TOTAL FUNDED OBLIGATIONS TO EBITDAL RATIO IS DEFINED AS:

Funded Debt + Discounted Present Value of the Future Lease Payment Stream

EBITDAL (Net Income + Interest Expense* + Tax Charges
+ Depreciation/Amortization +/- Extraordinary Losses/Gains - Interest Income) + Rent/Lease Expenses

MINIMUM FIXED CHARGE COVERAGE RATIO IS DEFINED AS:

EBITDAL

Interest Expense* + PPLTD + Rent/Lease Expenses + Maintenance Capital Expenditures + Taxes Paid in Cash

*Interest Expense excludes any accrued but unpaid interest on Subordinated Debt

"PPLTD" is defined as actual principal payments on Subordinated Debt, Funded Debt and any other permitted Indebtedness; but excluding any principal payments on the Revolving Credit Loan and also excluding all principal payments made by Borrower on the International Secured Note.

"FUNDED DEBT" is defined as any Indebtedness of the Borrower for borrowed money, including without limitation the Loans and any and all bonds, capital leases, notes payable and drafts accepted representing extensions of credit, all obligations evidenced by bonds, debentures, notes or other similar instruments, and all obligation upon which interest charges are customarily paid, having a scheduled maturity date beyond the expiration of Borrower's then current fiscal year, excluding Subordinated Debt.

"MAINTENANCE CAPITAL EXPENDITURES" is defined as amounts expended for maintenance, repair or replacement of equipment, machinery, fixed assets, real property or improvements, and for purposes of

calculating the Minimum Fixed Charge Coverage Ratio is assumed to be $1,000,000 for any rolling four quarter period.

"FUTURE LEASE PAYMENT STREAM" is defined as the sum of all payments due under all operating leases of Borrower (excluding operating leases for the "occupancy" of leased premises) over the period(s) remaining to the maturity of those leases.

"DISCOUNTED PRESENT VALUE" is defined as the Future Lease Payment Stream discounted at the rate of 7.5% per annum.

"SUBORDINATED DEBT" shall mean Indebtedness and other liabilities of Borrower which have been subordinated by written agreement to Indebtedness owed by Borrower to Bank in form and substance acceptable to Bank.

SECTION 11. EVENTS OF DEFAULT

11.1 Events of Default. The occurrence of any of the following events shall be an "EVENT OF DEFAULT" hereunder:

(a) The Borrower shall default in the due and punctual payment of principal of any of the Loans or in the payment of interest on any of the Loans or in the payment of any other amount due under any Loan Document, which shall not be paid or otherwise cured within ten (10) days thereof; or

(b) Any representation, warranty or statement made herein or in any other Loan Document, or in any certificate or statement furnished pursuant to or in connection herewith or therewith, shall prove to be incorrect, misleading or incomplete in any material respect on the date as of which made or deemed made; or

(c) The Borrower or any of its subsidiaries shall default in the performance or observance of any term, covenant or agreement on its part to be performed or observed pursuant to Sections 8, 9 and 10 hereof, provided, however, with respect to a default under Sections 8 or 9, the Borrower and its Subsidiaries shall have ten (10) days from receipt of notice of default from Bank to cure such default; or

(d) The Borrower or Core Composites shall default in the performance or observance of any term, covenant or agreement on its part to be performed or observed pursuant to any of the provisions of this Agreement or any other Loan Document (other than those referred to in paragraphs (a) through (c) above) and such default shall continue unremedied for a period of thirty (30) days after the occurrence of such default; or (e) Any obligation of the Borrower or Core Composites in respect of any Indebtedness (other than the Notes and any other Indebtedness owing to the Bank), which involves an aggregate amount in excess of $100,000 shall be declared to be or shall become due and payable and shall not be paid or otherwise cured within ten (10) days thereof; or

(f) Any obligation of the Borrower or Core Composites in respect of any Indebtedness (other than the Notes) owing to the Bank shall be or shall become due and payable and shall not be paid within ten (10) days thereof or otherwise cured; or

(g) The Borrower or Core Composites shall (i) apply for or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator of itself or of all

or a substantial part of its property, (ii) make a general assignment for the benefit of its creditors, (iii) commence a voluntary case under the Bankruptcy Code, (iv) file a petition seeking to take advantage of any other law relating to bankruptcy, insolvency, reorganization, winding-up, or composition or readjustment of debts, (v) fail to controvert in a timely and appropriate manner, or acquiesce in writing to, any petition filed against it in an involuntary case under the Bankruptcy Code, or (vi) take any action for the purpose of effecting any of the foregoing; or

(h) A proceeding or case shall be commenced, without the application or consent of the Borrower in any court of competent jurisdiction, seeking (i) its liquidation, reorganization, dissolution or winding up, or the composition or readjustment of its debts, (ii) the appointment of a trustee, receiver, custodian, liquidator or the like of Borrower or of all or any substantial part of its assets, or (iii) similar relief in respect of the Borrower under any law relating to bankruptcy, insolvency, reorganization, winding-up, or composition or adjustment of debts, and such proceeding or case shall continue undismissed, or an order, judgment or decree approving or ordering any of the foregoing shall be entered and continue unstayed and in effect, for a period of 60 days; or an order for relief against the Borrower shall be entered in an involuntary case under the Bankruptcy Code; or

(i) A judgment or judgments for the payment of money in excess of $100,000 (net of insurance proceeds) in the aggregate shall be rendered against the Borrower or Core Composites and any such judgment or judgments shall not have been vacated, discharged, stayed or bonded pending appeal within thirty (30) days from the entry thereof.

11.2 Remedies Upon an Event of Default. If any Event of Default shall have occurred and be continuing the Bank may by notice (a) terminate its commitment to make further Advances under the Loans and/or (b) declare the principal amount then outstanding of, and the accrued interest on, the Loans and commitment fees and all other amounts payable hereunder and under the Notes to be forthwith due and payable, whereupon such amounts shall be and become immediately due and payable, without further notice (including, without limitation, notice of intent to accelerate), presentment, demand, protest or other formalities of any kind, all of which are hereby expressly waived by the Borrower; provided that in the case of the occurrence of an Event of Default as referred to in clauses (g) and (h) of Section 11.1, the commitment to make further advances under the Loans shall be automatically terminated and the principal amount then outstanding of, and the accrued interest on, the Loans and commitment fees and all other amounts payable hereunder and under the Notes shall be and become automatically and immediately due and payable, without notice (including, without limitation, notice of intent to accelerate), presentment, demand, protest or other formalities of any kind, all of which are hereby expressly waived by Borrower.

SECTION 12. GENERAL.

12.1 Amendments, etc. No amendment or waiver of any provision of this Agreement or the other Loan Documents, nor consent to any departure by the Borrower therefrom, shall in any event be effective unless the same shall be in writing and signed by the Bank and the Borrower, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

12.2 Notices, etc. Unless otherwise specified herein, all notices hereunder to any party hereto shall be in writing and shall be deemed to have been given when delivered by hand, or when sent by electronic facsimile transmission or by telex, answer back received, or on the first Banking Day after delivery to any overnight delivery service, freight pre-paid, or the date of the execution of the return receipt if sent by pre-paid certified or registered mail, and addressed to such party at its address indicated below; or at any other address specified by such party in writing.

(a)      If to Bank:          KeyBank National Association
                              88 East Broad Street, 2nd Floor
                              Columbus, Ohio 43215
                              Attention:  Roger D. Campbell, Senior
                              Vice President
                              Facsimile No.: (614) 460-3469

         With a copy to:      Thompson Hine LLP
                              10 West Broad Street, 7th Floor
                              Columbus, Ohio 43215
                              Attention:  Boyd Moehring, Esq.
                              Facsimile No.: (614) 469-3361

         If to the Borrower:  Core Molding Technologies, Inc.
                              800 Manor Park Drive
                              Columbus, Ohio 43228
                              Attention: Herman F. Dick, Jr.
                              Facsimile No.: (614) 870-5051

         With a copy to:      Squire, Sanders & Dempsey L.L.P.
                              1300 Huntington Center
                              41 South High Street
                              Columbus, Ohio  43215
                              Attention:  Kim L. Swanson, Esq.
                              Facsimile No.: (614) 365-2499

12.3 No Waiver; Remedies. No failure on the part of the Bank to exercise, and no delay in exercising, any right hereunder, under the Notes or under any of the other Loan Documents shall operate as a waiver thereof, nor shall any single or partial exercise of any right hereunder, under the Notes or under any of the other Loan Documents preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law.

12.4 Right of Set-off.

(a) Upon the occurrence and during the continuance of any Event of Default, the Bank is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by the Bank to or for the credit or the account of the Borrower or Core Composites against any and all of the obligations of the Borrower now or hereafter existing under this Agreement and the Notes, irrespective of whether or not the Bank shall have made any demand hereunder.

(b) The Bank agrees promptly to notify the Borrower after any such set-off and application; provided that the failure to give such notice shall not affect the validity of such set-off and application. The rights of the Bank under this Section 12.4 are in addition to other rights and remedies.

12.5 Indemnification. The Borrower and Core Composites agree to indemnify the Bank and its respective officers and directors and hold the Bank and its respective officers and directors harmless from and against any and all liabilities, losses, damages, reasonable costs and expenses of any kind

(including, without limitation, the reasonable fees and disbursements of counsel for the Bank in connection with any investigative, administrative or judicial proceeding initiated by a third party, whether or not the Bank shall be designated a party thereto) which may be incurred by the Bank, relating to or arising out of this Agreement or, any other Loan Document, or the existence of any Hazardous Substance on, in, or under any of Borrower's, or any of Core Composites', properties, or any violation of any applicable Environmental Laws for which the Borrower or Core Composites has any liability or which occurs upon any of Borrower's, or any of Core Composites', properties, or the imposition of any Lien under any Environmental Laws, provided that the Bank shall not have the right to be indemnified hereunder for its own bad faith, gross negligence or willful misconduct as finally determined by a court of competent jurisdiction. The agreements and this Section 12.5 shall survive the repayment of the Notes and all other amounts payable under this Agreement and the other Loan Documents and for a period of two (2) years after the Loans have been repaid in full.

12.6 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns except that the Borrower may not assign its rights or obligations hereunder or under the Notes without the prior written consent of the Bank, which consent shall not be unreasonably withheld or delayed.

12.7 Severability. Any provision of this Agreement which is prohibited, unenforceable or not authorized in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition, unenforceability or non-authorization without invalidating the remaining provisions hereof or affecting the validity, enforceability or legality of such provision in any other jurisdiction.

12.8 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Ohio.

12.9 Reproduction of Documents. This Agreement and all documents relating hereto, including, without limitation, (a) consents, waivers and modifications which may hereafter be executed, (b) documents received by the Bank at the closing or otherwise, and (c) financial statements, certificates and other information previously or hereafter furnished to the Bank, may be reproduced by the Bank by any photographic, photostatic, microfilm, micro-card, miniature photographic or other similar process and the Bank may destroy any original document so reproduced. Borrower agrees and stipulates that any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding (whether or not the original is in existence and whether or not such reproduction was made by the Bank in the regular course of business) and that any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence.

12.10 Survival. All warranties, representations, and covenants made by the Borrower and its Subsidiaries herein or on any certificate or other instrument delivered by it or on its behalf under this Agreement shall be considered to have been relied upon by the Bank and shall survive the closing of the Loans regardless of any investigation made by the Bank or on its behalf. All statements in any such certificate or other instrument shall constitute warranties and representations by the Borrower.

12.11 Counterparts. This Agreement may be signed in one or more counterparts, each of which shall constitute an original and all of which taken together shall constitute one and the same instrument.

12.12 Time is of the Essence. Time is of the essence relating to this Agreement and with respect to all obligations to be performed under this Agreement, but delay in the exercise by the Bank of its rights hereunder shall not be deemed a waiver of such right by the Bank.

12.13 Captions. The captions at the beginning of the sections and subsections of this Agreement are not part of the context of this Agreement, but are only labels to assist in locating those sections and subsections, and shall be ignored in construing this Agreement.

12.14 No Third Party Benefit. This Agreement is intended for the exclusive benefit of the parties and their respective heirs, successors and assigns. Nothing contained in this Agreement shall be construed as creating any rights or benefits in or to any third party.

12.15 Complete Agreement. This Agreement, along with the Loan Documents, contains the entire agreement among the parties and supersedes any prior discussions, negotiations, representations, or agreements among them respecting the subject matter.

12.16 Consent to Jurisdiction and Waiver of Objection to Venue. The Borrower agrees that any legal action or proceeding with respect to this Agreement or the Notes or the other Loan Documents or the transactions contemplated hereby may be brought in the Court of Common Pleas of Franklin County, Ohio, or in the United States District Court for the Southern District of Ohio, Eastern Division, and the Borrower hereby irrevocably submits to and accepts generally and unconditionally the jurisdiction of those courts with respect to their person, property and revenues and irrevocably consent to service of process in any such action or proceeding by the mailing thereof by U.S. mail to the Borrower at the Borrower's address set forth in Section 12.2 hereof.

The Borrower hereby irrevocably waives any objection to the laying of venue of any such suit or proceeding in the above described courts, and unconditionally waives and agrees not to plead or claim that any such suit or proceeding brought in any such court has been brought in an inconvenient forum, provided, that this provision shall not preclude Borrower from seeking to consolidate actions brought against it. Nothing in this paragraph shall affect the right of the Bank to serve process in any other manner permitted by law or limit the right of the Bank to bring any such action or proceeding against the Borrower or to obtain execution on any judgment in any other jurisdiction or in any other manner permitted by law.

12.17 WAIVER OF JURY TRIAL. THE PARTIES ACKNOWLEDGE THAT, AS TO ANY AND ALL DISPUTES THAT MAY ARISE BETWEEN THE PARTIES, THE COMMERCIAL NATURE OF THE TRANSACTION OUT OF WHICH THIS AGREEMENT ARISES WOULD MAKE ANY SUCH DISPUTE UNSUITABLE FOR TRIAL BY JURY. ACCORDINGLY, EACH OF THE PARTIES TO THIS AGREEMENT HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY AS TO ANY AND ALL DISPUTES THAT MAY ARISE RELATING TO THIS AGREEMENT OR TO ANY OF THE OTHER INSTRUMENTS OR DOCUMENTS EXECUTED IN CONNECTION HEREWITH.

[Signatures on Following Page]

The parties hereto have caused this Agreement to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first above written.

KEYBANK NATIONAL ASSOCIATION

By: /s/ Roger D. Campbell
   ------------------------------------
Roger D. Campbell, Senior Vice President

CORE MOLDING TECHNOLGIES, INC.

By: /s/ Herman F. Dick, Jr.
   ------------------------------------
Herman F. Dick, Jr., Chief Financial Officer

[Loan Agreement Signature Page]

APPENDIX A

DEFINITIONS

"ADVANCE" shall mean any loan, advance of funds, or extension of credit under either of the Notes.

"AFFILIATE" of any Person shall mean any other Person directly or indirectly controlling, controlled by or under common control with, such Person. For purposes of this definition, the term "control" (including the correlative meanings of the terms "controlling," "controlled by" and "under common control with"), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management policies of such Person, whether through the ownership of voting securities or by contract or otherwise, provided (but without limiting the foregoing) that no right to exercise voting rights with respect thereto shall by itself be deemed to constitute control over such Person.

"BANKING DAY" shall mean any day, excluding Saturday and Sunday and excluding any other day which in the State of Ohio is a legal holiday or a day on which banking institutions are authorized by law to close.

"BORROWING NOTICE" shall have the meaning set forth in
Section 3.1(b).

"CLOSING DATE" shall mean the first date on which the conditions set forth in Section 6 have been satisfied and the Loans are to be made hereunder.

"CODE" shall mean the Internal Revenue Code of 1986, as amended, or any successor statute.

"COLLATERAL" shall have the meaning given that term in the Security Agreement.

"CONTRACTUAL OBLIGATION" shall mean, as to any Person, any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.

"COVENANT COMPLIANCE CERTIFICATE" shall mean a certificate in the form attached as Exhibit F, executed by a Responsible Officer.

"CORE COMPOSITES" shall mean Core Composites Corporation, a Delaware corporation and wholly owned Subsidiary of Borrower.

"DEFAULT" shall mean any condition or event that constitutes an Event of Default or that with the giving of notice or lapse of time or both would, unless cured or waived, become an Event of Default.

"ENVIRONMENTAL LAWS" shall mean all federal, state, local and foreign laws, and all regulations, notices or demand letters issued, promulgated or entered thereunder, relating to pollution or protection of the environment and to occupational health and safety, including, without limitation, laws relating to emissions, discharges, releases or threatened releases of pollutants, contaminants, chemicals, or Hazardous Substances into the environment (including, without limitation, ambient air, surface water, ground water, land surface or subsurface strata) or otherwise relating to the manufacture processing, distribution, use, treatment, storage, disposal, transport or handling of pollutants, contaminants, chemicals or Hazardous Substances.

"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended, or any successor statutes.

"EVENT OF DEFAULT" shall have the meaning set forth in Section 11.

"EXISTING REVOLVING CREDIT LOAN" shall have the meaning set forth in the first whereas clause.

"EXISTING REVOLVING LOAN AGREEMENT" shall have the meaning set forth in the first whereas clause.

"GAAP" shall mean generally accepted accounting principals, consistently applied.

"GOVERNMENTAL APPROVAL" shall mean all authorizations, consents, approvals, licenses, and exemptions from, registrations and filings, with, and reports to, all Governmental Authorities.

"GOVERNMENTAL AUTHORITY" shall mean the government of the United States or any state or political subdivision thereof and any entity, body, or authority exercising executive, legislative, judicial, regulatory, or administrative functions of or pertaining to government.

"GUARANTY" shall mean the Guaranty from Core Composites to the Bank in the form of Exhibit H attached hereto.

"HAZARDOUS SUBSTANCES" shall mean all hazardous and toxic substances, wastes or materials, hydrocarbons (including naturally occurring or man-made petroleum and hydrocarbons), flammable explosives, urea formaldehyde insulation, radioactive materials, biological substances, PCBs, pesticides, herbicides and any other kind and/or type of pollutants, or contaminates and/or any other similar substances or materials which, because of toxic, flammable, explosive, corrosive, reactive, radioactive or other properties that may be hazardous to human health or the environment, are included under or regulated by any Environmental Laws.

"INDEBTEDNESS" of any Person at any date shall mean (a) all indebtedness of such Person for borrowed money (excluding current trade liabilities incurred in the ordinary course of business and payable in accordance with customary practices), or which is evidenced by a note, bond, debenture or similar instrument, (b) all obligations of such Person under leases that are treated as capitalized leases in accordance with GAAP, (c) all obligations of such Person in respect of bankers acceptances issued or created for the account of such Person, and all reimbursement obligations (contingent or otherwise) of such Person in respect of any letters of credit issued for the account of such Person to the extent not secured by cash and without duplication of any underlying Indebtedness, (d) all liabilities secured by any Lien on any property owned by such Person even though such Person has not assumed or otherwise become liable for the payment thereof, (e) without duplication, all guarantees of any Indebtedness and (f) all obligations of such Person in respect of any balance deferred and unpaid of the purchase price of any property (excluding any such balance that constitutes a current trade liability incurred in the ordinary course of business and payable in accordance with customary practices) if and to the extent the balance would appear as a liability upon a balance sheet of such Person prepared in accordance with GAAP.

"INTEREST RATE AGREEMENT" shall have the meaning set forth in
Section 3.8.

"INTERNATIONAL" shall mean International Truck & Engine Corporation (f/k/a Navistar Corporation).

"INTERNATIONAL SECURED NOTE" shall mean that certain Secured Promissory Note dated December 31, 1996, as amended to date, from Borrower as "payee" to International as "maker."

"LETTER OF CREDIT" shall have the meaning set forth in the first whereas clause.

"LIEN" shall mean any mortgage, pledge, hypothecation, assignment, deposit, arrangement, encumbrance, lien (statutory or other), or preference, priority or other security agreement of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement, any lease that is capitalized in accordance with GAAP, and the filing of a financing statement under the UCC or comparable law of any jurisdiction), together with any renewal or extension thereof.

"LOAN DOCUMENTS" shall mean, collectively, this Agreement, the Revolving Credit Note, the $9,000,000 Term Note, the Security Agreement, the Mortgages, the Guaranty, UCC-1 Financing Statements and all other agreements and instruments that are from time to time executed in connection with this Agreement, as each of such agreements and instruments may be amended, modified or supplemented from time to time.

"LOANS" shall mean, collectively, the Revolving Credit Loan and the $9,000,000 Term Loan.

"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on (a) the business, operations, property, condition (financial or otherwise) or prospects of Borrower, or any Affiliate of any Borrower taken as a whole, (b) the ability of Borrower to perform its obligations under this Agreement, the Notes or any of the other Loan Documents or (c) the validity or enforceability of this Agreement, the Notes or any of the other Loan Documents hereunder or thereunder.

"MATURITY DATES" shall have the meaning set forth in the Revolving Credit Note and the $9,000,000 Term Note, respectively.

"MEXICAN SUBSIDIARIES" shall have the meaning set forth in
Section 7.8.

"MORTGAGES" shall mean, collectively, the Ohio Mortgage and the South Carolina Mortgage.

"NOTES" shall mean, collectively, the Revolving Credit Note and the $9,000,000 Term Note.

"OBLIGATIONS" shall mean all obligations of Borrower to the Bank of every kind and nature whether such obligations are now existing or hereafter incurred or created, joint or several, direct or indirect, absolute or contingent, due or to become due, matured or unmatured, liquidated or unliquidated, arising by contract, operation of law or otherwise, including, without limitation (a) all principal of and interest on any Advance to Borrower under the Notes; (b) all other amounts (including, without limitation, any fees or expenses) payable by Borrower under the Loan Documents; and (c) any renewals, refinancings or extensions of any of the foregoing.

"OHIO MORTGAGE" shall have the meaning set forth in Section 5.2.

"PBGC" shall mean the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA.

"PERMITTED LIENS" shall have the meaning set forth in Section 9.4.

"PERSON" shall mean and include any individual, partnership, corporation, business trust, firm, trust, limited liability company, unincorporated association or organization, joint venture or other enterprise or any governmental or political subdivision, agency, development or instrumentality thereof.

"PLAN" means any employee pension benefit plan which is covered by Title IV of ERISA or subject to the minimum funding standards under
Section 412 of the Code and is either (a) maintained by Borrower for employees of Borrower or (b) maintained pursuant to a collective bargaining agreement or any other arrangement under which more than one employer makes contributions and to which Borrower is then making or accruing an obligation to make contributions or has within the preceding five plan years made contributions.

"RESPONSIBLE OFFICER" shall mean Herman J. Dick, Jr.

"REVOLVING CREDIT LOAN" shall have the meaning set forth in
Section 3.1(a).

"REVOLVING CREDIT NOTE" shall have the meaning set forth in
Section 3.1(a).

"SECURITY AGREEMENT" shall have the meaning set forth in
Section 5.1.

"SECURITY DOCUMENTS" shall mean the Security Agreement, the Mortgages and any related UCC financing statements.

"SOUTH CAROLINA MORTGAGE" shall have the meaning set forth in
Section 5.3.

"SUBSIDIARY" shall mean, with respect to any Person, any corporation or other entity of which securities or other ownership interests having ordinary voting power to elect a majority of the board of directors or other Persons performing similar functions are at the time directly or indirectly owned by such Persons.

"UCC" shall mean the Uniform Commercial Code as in effect on the date hereof in the State of Ohio; provided that if by reason of mandatory provisions of law, the perfection or the effect of perfection or non-perfection of the security interests in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of Ohio, "UCC" shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection, or effect of perfection or non-perfection.

"$9,000,000 TERM LOAN" shall have the meaning set forth in Section 3.2(a).

"$9,000,000 TERM NOTE" shall have the meaning set forth in Section 3.2(a).

EXHIBIT 10(g)

LOAN AGREEMENT

BETWEEN

SOUTH CAROLINA JOBS-ECONOMIC DEVELOPMENT AUTHORITY

AND

CORE MATERIALS CORPORATION

$7,500,000 SOUTH CAROLINA JOBS-ECONOMIC DEVELOPMENT AUTHORITY
MULTI-MODE VARIABLE RATE INDUSTRIAL
DEVELOPMENT REVENUE BONDS, SERIES 1998
(CORE MATERIALS CORPORATION PROJECT)

DATED

AS OF

APRIL 1, 1998

Recitals..................................................................................................       1

ARTICLE I.................................................................................................       3
         DEFINITIONS......................................................................................       3
                  Section 1.1.      Use of Defined Terms..................................................       3
                  Section 1.2.      Definitions...........................................................       3
                  Section 1.3.      Interpretation........................................................       9
                  Section 1.4.      Captions and Headings.................................................      10

ARTICLE II................................................................................................      11
         REPRESENTATIONS..................................................................................      11
                  Section 2.1.      Representations of the Issuer.........................................      11
                  Section 2.2.      Representations and Covenants of the Borrower.........................      11
                  Section 2.3.      Actions under Section 144(a)(4) of the Code...........................      15

ARTICLE III...............................................................................................      17
         COMPLETION OF THE PROJECT; ISSUANCE OF THE BONDS.................................................      17
                  Section 3.1.      Acquisition, Construction, Installation, Equipment and
                                    Improvement...........................................................      17
                  Section 3.2.      Plans and Specifications..............................................      17
                  Section 3.3.      Issuance of the Bonds; Application of Proceeds........................      17
                  Section 3.4.      Disbursements from the Project Fund...................................      18
                  Section 3.5.      Borrower Required to Pay Costs in Event Project Fund
                                    Insufficient..........................................................      19
                  Section 3.6.      Completion Date.......................................................      20
                  Section 3.7.      Investment of Fund Moneys.............................................      20
                  Section 3.8.      Rebate Fund...........................................................      23

ARTICLE IV................................................................................................      24
         LOAN BY ISSUER; REPAYMENT OF THE LOAN; LOAN PAYMENTS
                  AND ADDITIONAL PAYMENTS.................................................................      24
                  Section 4.1.      Loan Repayment; Delivery of Note and Credit Facility..................      24
                  Section 4.2.      Additional Payments...................................................      25
                  Section 4.3.      Place of Payments.....................................................      25
                  Section 4.4.      Obligations Unconditional.............................................      26
                  Section 4.5.      Assignment of Agreement and Revenues..................................      26
                  Section 4.6.      Credit Facility.......................................................      26

ARTICLE V.................................................................................................      27
         ADDITIONAL AGREEMENTS AND COVENANTS..............................................................      27
                  Section 5.1.      Right of Inspection...................................................      27
                  Section 5.2.      Lease, Sale or Grant of Use by Borrower...............................      27
                  Section 5.3.      Indemnification.......................................................      27

                  Section 5.4.      Borrower Not to Adversely Affect Exclusion from Gross
                                    Income of Interest on Bonds...........................................      28
                  Section 5.5.      Borrower to Maintain Their Existence..................................      28
                  Section 5.6.      Undertaking to Provide Continuing Disclosure..........................      28

ARTICLE VI................................................................................................      29
         REDEMPTION AND PURCHASE OF BONDS.................................................................      29
                  Section 6.1.      Optional Redemption...................................................      29
                  Section 6.2.      Extraordinary Optional Redemption.....................................      29
                  Section 6.3.      Mandatory Redemption in Event of Inclusion in Gross
                                    Income of Interest on Bonds...........................................      31
                  Section 6.4.      Mandatory Redemption..................................................      31
                  Section 6.5.      Actions by Issuer.....................................................      31

ARTICLE VII...............................................................................................      32
         EVENTS OF DEFAULT AND REMEDIES...................................................................      32
                  Section 7.1.      Events of Default.....................................................      32
                  Section 7.2.      Remedies on Default...................................................      33
                  Section 7.3.      No Remedy Exclusive...................................................      34
                  Section 7.4.      Agreement to Pay Attorneys' Fees and Expenses.........................      34
                  Section 7.5.      No Waiver.............................................................      34
                  Section 7.6.      Notice of Default.....................................................      35

ARTICLE VIII..............................................................................................      36
         MISCELLANEOUS....................................................................................      36
                  Section 8.1.      Term of Agreement.....................................................      36
                  Section 8.2.      Amounts Remaining in Funds............................................      36
                  Section 8.3.      Notices...............................................................      36
                  Section 8.4.      Extent of Covenants of the Issuer; No Personal Liability..............      37
                  Section 8.5.      Binding Effect........................................................      37
                  Section 8.6.      Amendments and Supplements............................................      37
                  Section 8.7.      Execution Counterparts................................................      37
                  Section 8.8.      Severability..........................................................      37
                  Section 8.9.      Governing Law.........................................................      37

EXHIBIT A - Form of Note
EXHIBIT B - Project Facilities
EXHIBIT C - Project Site
EXHIBIT D - Form of Disbursement Request

LOAN AGREEMENT

THIS LOAN AGREEMENT made and entered into as of April 1, 1998 between the South Carolina Jobs-Economic Development Authority, a public body corporate and politic and an agency of the State of South Carolina (the "Issuer"), and Core Materials Corporation, a Delaware Corporation (the "Borrower"), under the following circumstances summarized in the following recitals (the capitalized terms not defined in the recitals being used therein as defined in Article I hereof):

A. The Issuer is a public body corporate and politic and an agency of the State of South Carolina (the "State") created under the South Carolina Jobs-Economic Development Fund Act, as amended, Title 41, Chapter 43, Code of Laws of South Carolina, 1976 (the "Act"); and

B. The Issuer, acting by and through its Board of Directors, is authorized and empowered under and pursuant to the provisions of the Act to issue bonds in order to promote and develop the business and economic welfare of the State, and encourage and assist in the location of new business enterprises in the State and the expansion of existing business enterprises within the State and thus provide maximum opportunities for the creation and retention of jobs and improvement of the standard of living of the citizens of the State and in the promotion and the advancement of industrial development in the State; and

C. The Issuer is further authorized by Section 41-43-110 of the Act to issue revenue bonds, as defined in the Act to include notes, payable solely from revenues and receipts from any revenue producing project and secured by a pledge of said revenues and receipts; and

D. The Issuer has been duly organized pursuant to the Act; and

E. In order to further the purposes of the Act, the Issuer proposes to undertake the financing of the costs of acquiring by construction and purchase a facility for compression molding of sheet molding composites and related activities, all constituting a business enterprise as described in the Act (the "Project") located in Cherokee County, South Carolina, and to obtain the funds therefor by the issuance of its Bonds (as hereinafter defined) under a Trust Indenture securing such Bonds, between the Issuer and The Huntington National Bank, Columbus, Ohio, as trustee, dated as of the date hereof (the "Indenture"); and

F. The Issuer proposes to loan the proceeds from the sale of the Bonds to the Borrower to acquire, construct and equip the Project upon the terms and conditions hereinafter set forth; and

G. It has been determined that the financing of the acquisition, construction and equipping of the Project will require the issuance, sale and delivery by the Issuer of a series of bonds in the aggregate principal amount of Seven Million Five Hundred Thousand Dollars ($7,500,000) (the "Bonds"); and

NOW, THEREFORE, for and in consideration of the premises and the mutual covenants herein made, and subject to the conditions herein set forth, the parties hereto agree as follows: provided, that any obligation of the Issuer created by or arising out of this Agreement is a limited obligation of the Issuer and shall never constitute a general obligation or indebtedness of the Issuer or of the State or of any agency or political subdivision of the State within the meaning of any State constitutional provision or statutory limitation and does not and shall never constitute or give rise to a pecuniary liability of the Issuer or of the State or of any agency or political subdivision of the State or a charge against the general credit or taxing power of the Issuer, the State or of any political subdivision or agency of the State of South Carolina but shall be payable solely from the Revenues (as defined in the Indenture), anything herein contained to the contrary by implication or otherwise notwithstanding, and; provided further, that the Issuer only shall be obligated to fund the Loan from proceeds of the Bonds.

ARTICLE I

DEFINITIONS

Section 1.1. Use of Defined Terms. In addition to the words and terms defined elsewhere in this Agreement or by reference to another document, the words and terms set forth in Section 1.2 hereof shall have the meanings set forth therein unless the context or use clearly indicates another meaning or intent. Such definitions shall be equally applicable to both the singular and plural forms of any of the words and terms defined therein. Capitalized terms used and not defined in this Agreement shall have the meanings assigned to them in the Indenture.

Section 1.2. Definitions. As used herein:

"Act" means Title 41, Chapter 43 of the Code of Laws of South Carolina 1976, as amended.

"Additional Payments" means the amounts required to be paid by the Borrower pursuant to the provisions of Section 4.2 hereof.

"Agreement" means this Loan Agreement as amended or supplemented from time to time.

"Alternate Credit Facility" means any direct pay letter of credit or other credit enhancement or support facility that has terms which are the same in all material respects (except for the term and maximum interest rate but including coverage of accrued interest on the Bonds for 110 days if the Bonds bear interest at the Weekly Rate or for 195 days if the Bonds bear interest at the Semi-Annual Rate or the Long-Term Rate) as the then current Credit Facility and (i) shall have a term of not less than one year (except if the Long-Term Rate shall then be in effect, the term of such Alternate Credit Facility shall not expire prior to (a) the first par redemption date plus 15 days or (b) the first redemption date plus 15 days if the Alternate Credit Facility covers the redemption premium), (ii) shall be issued by a bank, a trust company or other financial institution or credit provider, and (iii) the Trustee shall have received the opinions required by Section 6.03 of the Indenture.

"Authenticating Agent" means the Authenticating Agent as defined in the Indenture.

"Bank" means, initially, KeyBank National Association, Cleveland, Ohio, and its successors and assigns in its capacity as issuer of the Credit Facility and, in the event an Alternate Credit Facility is outstanding, the issuer of the Alternate Credit Facility.

"Bond Fund" means the Bond Fund created in the Indenture.

"Bond Resolution" means the resolution providing for the issuance of the Bonds and approving this Agreement, the Indenture and related matters.

"Bond Pledge Agreement" means the Bond Pledge Agreement, dated as of even date herewith, between the Borrower, the Trustee and the Bank, as amended or supplemented from time to time.

"Bonds" means the $7,500,000 South Carolina Jobs-Economic Development Authority Multi-Mode Variable Rate Industrial Development Revenue Bonds, Series 1998 (Core Materials Corporation Project).

"Bond Service Charges" means, for any period or payable at any time, the principal of, premium, if any, and interest due on the Bonds for that period or payable at that time whether due at maturity or upon acceleration or redemption.

"Bond Year" means Bond Year, as defined in the Indenture.

"Borrower" means Core Materials Corporation, a Delaware corporation, and its lawful successors and assigns to the extent permitted by this Agreement.

"Business Day" means any day of the year other than (i) a Saturday or Sunday, (ii) any day on which banks located in either Cleveland, Ohio, or the principal corporate trust office of the Trustee is located are required or authorized by law to remain closed, or (iii) any day on which the New York Stock Exchange is closed.

"Code" means the Internal Revenue Code of 1986, as amended, including, when appropriate, the statutory predecessor of the Code, and all applicable regulations (whether proposed, temporary or final) under that Code and the statutory predecessor of the Code, and any official rulings and judicial determinations under the foregoing applicable to the Bonds.

"Completion Date" means the date of completion of the Project evidenced in accordance with the requirements of Section 3.6 hereof.

"Construction Period" means the period between the beginning of the acquisition, construction, installation, equipment or improvement of the Project or the date on which the Bonds are delivered to the Original Purchaser, whichever is earlier, and the Completion Date.

"Conversion" means (a) any conversion from time to time in accordance with the terms of the Indenture of the Bonds from one Interest Rate Mode to another Interest Rate Mode and (b) the end of any Long-Term Rate Period.

"Conversion Date" means the first date any Conversion becomes effective.

"Counsel" means Counsel as defined in the Indenture.

"Credit Facility" means the Credit Facility as defined in the Indenture.

"Credit Facility Account" means the Credit Facility Account created under Section 5.01 of the Indenture.

"Defeasance Account" means the Defeasance Account created under Section 5.01 of the Indenture.

"Designated Representative" means the person at the time designated to act on behalf of the Borrower by written certificate furnished to the Issuer, the Bank, and the Trustee, containing the specimen signature of that person and signed on behalf of the Borrower by a duly authorized officer. That certificate may designate an alternate or alternates. In the event that all persons so designated become unavailable or unable to act and the Borrower fail to designate a replacement within 10 days after such unavailability or inability to act, the Trustee may appoint an interim Designated Representative until such time as the Borrower designate that person.

"Eligible Investments" means Eligible Investments as defined in the Indenture.

"Engineer" means an individual or firm acceptable to the Trustee and qualified to practice the profession of engineering or architecture under the laws of the State.

"Event of Default" means any of the events described as an Event of Default in Section 7.1 hereof.

"Force Majeure" means any of the causes, circumstances or events described as constituting Force Majeure in Section 7.1. hereof.

"Holder" or "Holder of a Bond" means the Person in whose name a Bond is registered on the Register.

"Indenture" means the Trust Indenture, dated as of even date herewith, between the Issuer and the Trustee, as amended or supplemented from time to time.

"Issuer" means the South Carolina Jobs-Economic Development Authority, a public body politic and corporate and an agency of the State, and its successors and assigns.

"Interest Rate Mode" means the Weekly Rate, the Semi-Annual Rate or the Long- Term Rate.

"Loan" means the loan by the Issuer to the Borrower of the proceeds received from the sale of the Bonds.

"Loan Payment Date" means, (a) while the Bonds bear interest at the Weekly Rate, each Interest Payment Date, (b) while the Bonds bear interest at the Semi-Annual or Long-

Term Rate, the first day of each January, April, July and October, or (c) any other date on which any principal of or interest or any premium on the Bonds shall be due and payable, whether at maturity, upon acceleration, call for redemption or otherwise.

"Loan Payments" means the amounts required to be paid by the Borrower in repayment of the Loan pursuant to the provisions of the Note and of
Section 4.1 hereof.

"Long-Term Rate" means the Long-Term Rate on the Bonds established in accordance with Section 2.02(c)(iii) of the Indenture.

"Long-Term Rate Period" means the Long-Term Rate Period as defined in the Indenture.

"Note" means the non-negotiable promissory note of the Borrower, dated as of even date with the Bonds, in the form attached hereto as Exhibit A and in the principal amount of $7,500,000, evidencing the obligation of the Borrower to make Loan Payments (as defined in the Agreement).

"Notice Address" means:

(a)      As to the Issuer:         South Carolina Jobs-Economic Development
                                   Authority
                                   1201 Main Street, Suite 1750
                                   Columbia, South Carolina 29201
                                   Attention: Elliott Franks, III,
                                      Executive Director

(b)      As to the Borrower:       Core Materials Corporation
                                   800 Manor Park Drive
                                   Columbus, Ohio 43228-0183
                                   Attention: Kevin L. Barnett

(c)      As to the Trustee:
         and Tender Agent          The Huntington National Bank
                                   The Huntington Center, HC 1112
                                   41 South High Street
                                   Columbus, Ohio 43215
                                   Attention: Corporate Trust Department

         As to the Bank:           KeyBank National Association
                                   127 Public Square
                                   Cleveland, Ohio 44114-1306
                                   Attention: International Department

                                   with a copy to:
                                   KeyBank National Association
                                   88 East Broad Street, 2nd Floor
                                   Columbus, Ohio  43215
                                   Attention: Roger Campbell

(e)      As to the                 Key Capital Markets, Inc.
         Remarketing Agent:        127 Public Square
                                   Structured Capital Markets Group
                                   OH-01-27-0419
                                   Cleveland, Ohio  44114
                                   Attention: Trading and Underwriting

or such additional or different address, notice of which is given under Section 8.3 hereof.

"Original Purchaser" means the Person or Persons who purchase the Bonds upon their initial issuance and delivery.

"Paying Agent" means the Paying Agent as defined in the Indenture.

"Person" or words importing persons mean firms, associations, partnerships (including without limitation, general and limited partnerships), joint ventures, societies, estates, trusts, corporations, public or governmental bodies, other legal entities and natural persons.

"Placement Agent" means Key Capital Markets, Inc., Cleveland, Ohio.

"Plans and Specifications" means the Borrower's plans and specifications describing the Project Facilities as now prepared and as they may be changed as hereinafter provided.

"Private Placement Memorandum" means the Private Placement Memorandum dated as of May 7, 1998 and distributed by the Placement Agent in connection with the sale of the Bonds.

"Project" means, collectively, the Project Site and the Project Facilities, together constituting a "project" as defined in the Act.

"Project Costs" means the costs of the Project specified in
Section 3.4 hereof.

"Project Facilities" means the Project Facilities described in Exhibit B hereto, together with any additions, modifications and substitutions to those facilities.

"Project Fund" means the Project Fund created in the Indenture.

"Project Purposes" means the acquisition, construction, furnishing, equipping and improving of real and personal property comprising an industrial facility, for use by the Borrower or its designee or assignee for compression molding of sheet molding composites and any other use which may be permitted by the Act and this Agreement.

"Project Site" means the real estate described in Exhibit C hereto, and any additions thereto, less any removals therefrom.

"Rebate Fund" means the Rebate Fund created under Section 5.05 of the Indenture.

"Redemption Premium Account" means the Redemption Premium Account created in the Indenture.

"Register" means the books kept and maintained by the Registrar for the registration and transfer of Bonds pursuant to Section 2.04 of the Indenture.

"Registrar" means the Registrar as defined in the Indenture.

"Reimbursement Agreement" means the Reimbursement Agreement, dated as of April 1, 1998, between the Borrower and the Bank, as amended or supplemented from time to time.

"Remarketing Agent" means, initially, Key Capital Markets, Inc., Cleveland, Ohio and any Person meeting the qualifications of, and designated from time to time to act as Remarketing Agent under, Section 12.01 of the Indenture.

"Remarketing Agreement" means the Remarketing Agreement, dated as of April 1, 1998, among the Borrower, the Remarketing Agent and the Issuer in connection with the remarketing of the Bonds.

"Remarketing Proceeds Account" means the Remarketing Proceeds Account created in the Indenture.

"Revenues" means (a) the Loan Payments, (b) all amounts payable to the Trustee with respect to the principal or redemption price of, or interest on, the Bonds (i) by the Borrower as required hereunder, (ii) upon deposit in the Bond Fund from the proceeds of the

Bonds; and (iii) by the Credit Facility Issuer under a Credit Facility, and (c) investment income with respect to any moneys held by the Trustee in the Bond Fund. The term "Revenues" does not include any moneys or investments in the Rebate Fund.

"Semi-Annual Rate" means the semi-annual interest rate on the Bonds established in accordance with Section 2.02(c)(ii) of the Indenture.

"State" means the State of South Carolina.

"Tender Agent" means, initially, The Huntington National Bank, Columbus, Ohio and any successor Tender Agent as determined or designated under or pursuant to the Indenture.

"Trustee" means The Huntington National Bank, Columbus, Ohio, until a successor Trustee shall have become such pursuant to the applicable provisions of the Indenture, and thereafter "Trustee" shall mean the successor Trustee.

"Unassigned Issuer's Rights" means all of the rights of the Issuer to receive Additional Payments under Section 4.2 hereof, to be held harmless and indemnified under Section 5.3 hereof, to be reimbursed for attorneys' fees and expenses under Section 7.4 hereof, and to give or withhold consent to amendments, changes, modifications, alterations and termination of this Agreement under Section 8.6 hereof.

"Weekly Rate" means the weekly rate of interest on the Bonds established in accordance with Section 2.02(c)(i) of the Indenture.

Section 1.3. Interpretation. Any reference herein to the Issuer, to the Board of Directors of the Issuer or to any member or officer of either includes entities or officials succeeding to their respective functions, duties or responsibilities pursuant to or by operation of law or lawfully performing their functions.

Any reference to a section or provision of the Constitution of the State or the Act, or to a section, provision or chapter of the South Carolina Code of Laws 1976, as amended, or to any statute of the United States of America, includes that section, provision or chapter or statute as amended, modified, revised, supplemented or superseded from time to time; provided, that no amendment, modification, revision, supplement or superseding section, provision or chapter or statute shall be applicable solely by reason of this provision, if it constitutes in any way an impairment of the rights or obligations of the Issuer, the Holders, the Trustee, the Bank or the Borrower under this Agreement.

Unless the context indicates otherwise, words importing the singular number include the plural number, and vice versa; the terms "hereof", "hereby", "herein", "hereto", "hereunder" and similar terms refer to this Agreement; and the term "hereafter" means after, and the term "heretofore" means before, the date of delivery of the Bonds. Words of any gender include the correlative words of the other genders, unless the sense indicates otherwise.

Section 1.4. Captions and Headings. The captions and headings in this Agreement are solely for convenience of reference and in no way define, limit or describe the scope or intent of any Articles, Sections, subsections, paragraphs, subparagraphs or clauses hereof.

(End of Article I)

ARTICLE II

REPRESENTATIONS

Section 2.1. Representations of the Issuer. The Issuer represents that: (a) it is duly organized and validly existing under the laws of the State; (b) it has duly accomplished all conditions necessary to be accomplished by it prior to the issuance and delivery of the Bonds and the execution and delivery of this Agreement and the Indenture; (c) it is not in violation of or in conflict with any provisions of the laws of the State which would impair its ability to carry out its obligations contained in this Agreement or the Indenture; (d) it is empowered to enter into the transactions contemplated by this Agreement and the Indenture; (e) it has duly authorized the execution, delivery and performance of this Agreement and the Indenture; and (f) it will do all things in its power in order to maintain its existence or assure the assumption of its obligations under this Agreement and the Indenture by any successor public body.

The Issuer makes no representation or warranty concerning the suitability of the Project for the purpose for which it is being undertaken by the Borrower. The Issuer has not made any independent investigation as to the feasibility or creditworthiness of the Borrower. Any bond purchaser, assignee of the Loan Agreement or any other party with interest in this transaction, shall make its own independent investigation as to the creditworthiness and feasibility of the Project, independent of any representation or warranties of the Issuer.

Section 2.2. Representations and Covenants of the Borrower. The Borrower represents and covenants that:

(a) Borrower is a corporation organized and existing under the laws of the State of Delaware and is duly qualified to conduct business in the State of South Carolina.

(b) The Borrower has full power and authority to execute, deliver and perform this Agreement, the Reimbursement Agreement, the Remarketing Agreement, the Bond Pledge Agreement and the Note and to enter into and carry out the transactions contemplated by those documents; and that the execution, delivery and performance of those documents do not, and will not, violate any provision of law applicable to it, and do not, and will not, conflict with or result in a default under any agreement or instrument to which it is a party or by which it is bound, a violation of which would cause a material adverse effect to the Borrower. This Agreement, the Reimbursement Agreement, the Remarketing Agreement, the Bond Pledge Agreement and the Note have, by proper action, been duly authorized, executed and delivered by the Borrower and all steps necessary have been taken to constitute this Agreement, the Reimbursement Agreement, the Remarketing Agreement, the Bond Pledge Agreement, and the Note valid and binding obligations of the Borrower.

(c) The acquisition and construction of the Project were not commenced (within the meaning of Section 144(a) of the Code) prior to the date that is 60 days prior to the date of adoption of statements of "official intent" to issue the Bonds by the Issuer toward issuance of the Bonds.

(d) The provision of financial assistance to be made available to it under this Agreement from the proceeds of the Bonds and the commitments therefor made by the Issuer have induced the Borrower to expand within the boundaries of the Issuer that business of the Borrower to be conducted by use of the Project and such business has and will preserve and create additional jobs and employment opportunities within the boundaries of the Issuer.

(e) The Project will be completed in accordance with the Plans and Specifications and the Project will be operated and maintained in such manner as to conform with all applicable zoning, planning, building, environmental and other applicable governmental regulations and as to be consistent with the Act.

(f) The Borrower shall not use or operate the Project in any way which would affect the qualification of the Project under the Act or impair the exclusion from gross income for federal income tax purposes of the interest on the Bonds.

(g) The Borrower intends to use or operate the Project in a manner consistent with the Project Purposes until the date on which the Bonds have been fully paid and know of no reason why the Project will not be so used or operated. If, in the future, there is a cessation of that use or operation, it will use its best efforts to resume that use or operation or accomplish an alternate use or operation by the Borrower or others which will be consistent with the Act and this Agreement. If the Borrower voluntarily moves all or substantially all of the equipment which is included in the Project from within the boundaries of the Issuer, the Borrower will promptly prepay the Loan and cause the Bonds to be redeemed.

(h) Ninety-five percent (95%) or more of the net proceeds of the Bonds (as defined in Section 150 of the Code) will be used to provide manufacturing facilities (within the meaning of Section 144(a)(12)(C) of the Code).

The Borrower will not request or authorize any disbursement pursuant to Section 3.4 hereof, which, if paid, would result in less than 95% of the net proceeds of the Bonds not being used as described in the preceding paragraph. The amount of the proceeds of the Bonds used to finance issuance costs of the Bonds will not exceed 2% of the proceeds of the Bonds (within the meaning of Section 147(g) of the Code) and the Borrower will not request or authorize any disbursement pursuant to Section 3.4 hereof, which, if paid, would result in more

than 2% of the proceeds of the Bonds being used to finance issuance costs of the Bonds. None of the proceeds of the Bonds will be used to provide working capital.

(i) The Project will be located entirely within Cherokee County, South Carolina.

(j) There are no outstanding bonds with respect to "facilities", as defined in Section 144(a)(4)(B) of the Code,
(i) which are to be or have been used by the Borrower or any other "principal user" of the Project or any "related person" to the Borrower or such other "principal user", as those terms are used and defined in Sections 144(a)(2) and 144(a)(3) of the Code, respectively, and which are located within Cherokee County, South Carolina, and (ii) which bonds would have to be taken into account in determining the aggregate face amount of the Bonds as provided in Section 144(a)(4)(A)(ii) of the Code.

(k) For each "test-period beneficiary" (as defined in
Section 144(a)(10)(D) of the Code) of the Project, the sum of
(i) the aggregate authorized face amount of the Bonds allocated in accordance with Section 144(a)(10)(C) of the Code to such beneficiary and (ii) the aggregate outstanding principal amount of any other tax-exempt obligation described in Section 144(a)(10)(B)(ii) of the Code, wherever and whenever issued, allocated to such beneficiary in accordance with Section 144(a)(10)(C) of the Code, does not and will not exceed $40,000,000.

(l) In accordance with Section 147(b) of the Code, the weighted average maturity of the Bonds does not exceed 120% of the weighted average reasonably expected economic life of the Project on the date of issuance of the Bonds.

(m) None of the proceeds of the Bonds will be used to provide any private or commercial golf course, country club, massage parlor, tennis club, skating facilities (including roller skating, skateboard and ice skating), racquet sports facility (including handball or racquetball court), hot tub facility, suntan facility, racetrack, airplane, skybox or other private luxury box, or health club facility; any facility primarily used for gambling; or any store the principal business of which is the sale of alcoholic beverages for consumption off premises.

(n) None of the proceeds of the Bonds will be used to provide facilities for retail food and beverage services (except grocery stores), automobile sales or service, or the provision of recreation or entertainment.

(o) Not more than 25% of the net proceeds of the Bonds will be used, directly or indirectly to acquire land or any interest therein, and any such land will not be used for farming purposes.

(p) None of the proceeds of the Bonds will be used, to acquire existing property or any interest therein unless the first use of such property was or is pursuant to such acquisition or unless such acquisition met or meets the requirements of Section 147(d)(2) of the Code.

(q) The information furnished by the Borrower and used by the Issuer in preparing the certification pursuant to
Section 148 of the Code and information statement pursuant to
Section 149(e) of the Code, both referred to in the Bond Resolution, as well as the federal tax election referred to in the Bond Resolution, is accurate and complete as of the date of the issuance of the Bonds.

(r) In connection with any lease or grant by the Borrower of the use of the Project, the Borrower shall require that the lessee or user of any portion of the Project shall not (i) violate the covenant set forth in subsection (j) above and (ii) use that portion of the Project in any manner which would violate the covenants set forth in subsections (m) and
(n) above.

(s) The Bonds are not being issued to finance facilities which are within or part of "a single building, an enclosed shopping mall, or a strip of offices, stores or warehouses using substantial common facilities" (within the meaning of Section 144(a)(9) of the Code) which have heretofore been financed with obligations issued and still outstanding under Section 144(a) of the Code or the corresponding provision of prior law.

(t) After the expiration of any applicable temporary period under Section 148(d)(3) of the Code, at no time during any Bond Year will the aggregate amount of gross proceeds of the Bonds invested in nonpurpose investments with a yield higher than the yield on the Bonds exceed 150 percent of the debt service on the Bonds for such Bond Year and the aggregate amount of gross proceeds of the Bonds invested in nonpurpose investments with a yield higher than the yield on the Bonds, if any, will be promptly and appropriately reduced as the amount of outstanding Bonds are reduced, provided however that the foregoing shall not require the sale or disposition of any investments in nonpurpose investments if such sale or disposition would result in a loss which exceeds the amount which would be paid to the United States pursuant to Section 5.05 of the Indenture (but for such sale or disposition) at the time of such sale or disposition if a payment under
Section 5.05 of the Indenture were due at such time.

At no time will any funds constituting gross proceeds of the Bonds be used in a manner as to constitute a prohibited payment under the applicable Regulations pertaining to, or in any other fashion as would constitute failure of compliance with, Section 148 of the Code.

The terms "bond year", "proceeds", "gross proceeds", "nonpurpose investments", "yield", "higher yielding investments" and "debt service" have the meanings assigned to them for purposes of Section 148 of the Code.

(u) In no event will the Borrower provide collateral to the Bank which bears a yield higher than the yield on the Bonds within the meaning of Section 148 of the Code and any lawful regulations promulgated thereunder, except upon receipt by the Borrower of an opinion of nationally recognized bond counsel to the effect that the pledge of such collateral shall not cause the interest on the Bonds to be included in gross income for federal income tax purposes; provided, however, that no such yield restriction or opinion is required with respect to the pledge of any collateral that consists of "tax-exempt bonds" within the meaning of Section 150(a)(6) of the Code.

(v) No litigation at law or in equity nor any proceeding before any governmental agency or other tribunal involving the Borrower is pending or, to the knowledge of the Borrower threatened, in which any liability of the Borrower is not adequately covered by insurance and in which any judgment or order would have a material and adverse effect upon the business or assets of the Borrower or would materially and adversely affect the Project, the validity of this Agreement, the Bond Pledge Agreement, the Reimbursement Agreement, the Remarketing Agreement and the Note or the performance of the Borrower's obligations thereunder or the transactions contemplated hereby.

Section 2.3. Actions under Section 144(a)(4) of the Code. The Issuer is issuing the Bonds pursuant to an election made by it, at the Borrower's request, under Section 144(a)(4) of the Code. In connection with that election, the Borrower represents and covenants that:

(a) The sum of (i) the principal amount of the Bonds,
(ii) the outstanding face amount of prior issues, if any, described in Section 144(a)(2) of the Code and (iii) the amount of capital expenditures with respect to "facilities" as defined in Section 144(a)(4)(B) of the Code, other than those financed or to be financed out of proceeds of the Bonds or any such prior issues or those mentioned in Section 144(a)(4)(C) of the Code ("Capital Expenditures"), made during the three-year period preceding the date of delivery of the Bonds to the Placement Agent (the "Issue Date"), did not exceed $10,000,000.

(b) During the three-year period following the Issue Date, the Borrower does not intend to make or cause or permit to be made any Capital Expenditures in an amount which would cause the interest on the Bonds to be included in the gross income of the Holders for federal income tax purposes.

(c) It will maintain adequate records regarding the dates and amounts of all Capital Expenditures made from the Issue Date through and including the

third anniversary of the Issue Date and will furnish those records to the Trustee upon request.

(d) In the event, on account of a lease, sublease, management contract or other agreement relating to the Project, or any portion thereof, permitted by the terms hereof, any person other than the Borrower becomes a "principal user" of the Project (as referred to in Section 2.2(j) hereof), the Borrower shall promptly advise the Trustee of the identity of such person and furnish to the Trustee a copy of such lease, sublease, management contract or other agreement. In connection with any such lease, sublease, management contract or other agreement, the Borrower will require by covenant that any lessee, sublessee, manager or user who is a "principal user" of the Project and any "related person" thereto also shall comply with the covenants set forth in subsection (b) of this Section as if those covenants were made herein by such lessee, sublessee, manager, user or "related person" thereto.

(End of Article II)

ARTICLE III

COMPLETION OF THE PROJECT;
ISSUANCE OF THE BONDS

Section 3.1. Acquisition, Construction, Installation, Equipment and Improvement. The Borrower shall acquire, construct, furnish, equip and improve the Project Facilities on the Project Site with all reasonable dispatch and in accordance with the Plans and Specifications, (b) shall pay when due all fees, costs and expenses incurred in connection with that acquisition, construction, installation, equipment and improvement from funds made available therefor in accordance with this Agreement or otherwise, and (c) shall ask, demand, sue for, levy, recover and receive all those sums of money, debts and other demands whatsoever which may be due, owing and payable under the terms of any contract, order, receipt, writing and instruction in connection with the acquisition, construction, furnishing, equipment and improvement of the Project, and shall enforce the provisions of any contract, agreement, obligation, bond or other performance security with respect thereto. It is understood that the Project is that of the Borrower and any contracts made by the Borrower with respect thereto, whether construction contracts or otherwise, or any work to be done by the Borrower on the Project are made or done by the Borrower in its own behalf and not as agent or contractor for the Issuer.

Section 3.2. Plans and Specifications. The Borrower may revise the Plans and Specifications from time to time, provided that no revision shall be made which would change the Project Purposes, without the approval of the Issuer, and no revision shall be made which would change the Project Purposes to other than purposes permitted by the Act and the Code.

Section 3.3. Issuance of the Bonds; Application of Proceeds. To provide funds to make the Loan for the purposes of paying the Project Costs, the Issuer shall issue, sell and deliver the Bonds to the Original Purchaser. The Bonds will be issued pursuant to the Indenture in the aggregate principal amount, will bear interest, will mature and will be subject to redemption as set forth therein. The Borrower hereby approves the terms and conditions of the Indenture and the Bonds, and of the terms and conditions under which the Bonds will be issued, sold and delivered.

The proceeds from the sale of the Bonds shall be loaned to the Borrower and paid as follows: (a) a sum equal to any accrued interest, if any, paid by the Original Purchaser shall be deposited with the Trustee and deposited in the Bond Fund, and (b) the balance of the proceeds from the sale of the Bonds shall be deposited in Project Fund. Pending disbursement pursuant to Section 3.4 hereof, the proceeds deposited in the Project Fund, together with any investment earnings thereon, shall constitute a part of the Revenues assigned by the Issuer to the payment of Bond Service Charges as provided in the Indenture.

Neither the Issuer nor the Borrower have or shall have any interest in the Credit Facility, the Credit Facility Account, the Defeasance Account, the Redemption Premium

Account or the Remarketing Proceeds Account created under Section 5.01 of the Indenture or the proceeds of the remarketing of the Bonds from whatever source and wherever deposited.

Section 3.4. Disbursements from the Project Fund. Subject to the provisions below, disbursements from the Project Fund shall be made only to reimburse or pay the Borrower, or any person designated by the Borrower, for the following Project Costs:

(a) Costs incurred directly or indirectly for or in connection with the acquisition, construction, furnishing, equipment or improvement of the Project, including costs incurred in respect of the Project for preliminary planning and studies; architectural, legal, engineering, accounting, consulting, supervisory and other services; labor, services and materials; and recording of documents and title work.

(b) Premiums attributable to any surety bonds and insurance required to be taken out and maintained during the Construction Period with respect to the Project Site and the Project Facilities.

(c) Taxes, assessments and other governmental charges in respect of the Project that may become due and payable during the Construction Period.

(d) Costs incurred directly or indirectly in seeking to enforce any remedy against any contractor or subcontractor in respect of any actual or claimed default under any contract relating to the Project Facilities.

(e) Financial, legal, accounting, printing and engraving fees, charges and expenses, and all other such fees, charges and expenses incurred in connection with the authorization, sale, issuance and delivery of the Bonds, including, without limitation, the fees and expenses of the Trustee and any paying agent properly incurred under the Indenture that may become due and payable during the Construction Period; provided that the amount of the proceeds of the Bonds used to finance issuance costs shall not exceed 2% of the aggregate face amount of the Bonds within the meaning of Section 147(g) of the Code.

(f) Any other costs, expenses, fees and charges properly chargeable to the cost of construction, furnishing, equipment or improvement of the Project.

(g) Payment of interest on the Bonds or fees for credit enhancement devices applicable to the Bonds, to the extent such fees constitute a reasonable charge for the transfer of credit risk, during the Construction Period.

(h) Payments made to the Rebate Fund.

Any disbursements from the Project Fund for the payment of the Project Costs shall be made by the Trustee only upon the written order of the Designated Representative with

written approval of the Bank. Each such written order shall be in substantially the form of the disbursement request attached hereto as Exhibit D and shall be consecutively numbered and accompanied by certification by the Borrower that the payments or reimbursements as requested are authorized by this Agreement and the Reimbursement Agreement. Any disbursement for any item not described in, or the cost for which item is other than as described in, the information statement filed by the Issuer in connection with the issuance of the Bonds as required by
Section 149(e) of the Code and referred to in Section 2.2 hereof, shall be accompanied by evidence satisfactory to the Trustee that the average reasonably expected economic life of the facilities being financed by the Bonds is not less than 5/6ths of the average maturity of the Bonds or, if such evidence is not presented with the disbursement or at the request of the Trustee, by an opinion of nationally recognized bond counsel to the effect that such disbursement will not result in the interest on the Bonds becoming included in the gross income of the Holders for federal income tax purposes. In case any contract provides for the retention by the Borrower of a portion of the contract price, there shall be paid from the Project Fund only the net amount remaining after deduction of any such portion, and only when that retained amount is due and payable, may it be paid from the Project Fund.

Any moneys in the Project Fund remaining after the Completion Date and payment, or provision for payment, in full of the Project Costs, at the direction of the Designated Representative, promptly shall be

(i) used for the purchase of Bonds in the open market for the purpose of cancellation at prices not exceeding the full market value thereof plus accrued interest thereon to the date of payment therefor;

(ii) paid into the Bond Fund to be applied to the redemption of the Bonds; or

(iii) used for a combination of the foregoing as is provided in that direction.

In all such cases, any payments made pursuant to the immediately preceding paragraph shall be made only to the extent that such use or application will not, in the opinion of nationally recognized bond counsel or under ruling of the Internal Revenue Service, result in the interest on the Bonds becoming included in the gross income of the Holders for federal income tax purposes.

Notwithstanding the foregoing, upon the occurrence and continuance of an "Event of Default" as defined in Section 10.01 of the Indenture because of which acceleration of the principal amount of the Bonds has been declared pursuant to Section 10.02 of the Indenture, any moneys remaining in the Project Fund shall be promptly transferred by the Trustee to the Bond Fund.

Section 3.5. Borrower Required to Pay Costs in Event Project Fund Insufficient. If moneys in the Project Fund are not sufficient to pay all Project Costs, the Borrower

nonetheless will complete the Project in accordance with the Plans and Specifications and shall pay all such additional Project Costs from their own funds. The Borrower shall not be entitled to any reimbursement for any such additional Project Costs from the Issuer, the Trustee, the Bank or any Holder; nor shall they be entitled to any abatement, diminution or postponement of the Loan Payments. This Section shall not be operative if and to the extent that compliance with it would, or reasonably might be anticipated by the Borrower to, involve a violation of any provision of the Agreement including, without limitation, Sections 2.2 and 5.4 of the Agreement.

Section 3.6. Completion Date. The Borrower shall notify the Issuer, the Trustee and the Bank of the Completion Date by a certificate signed by the Designated Representative stating:

(a) the date on which the Project Facilities were substantially completed,

(b) that all other facilities necessary in connection with the Project have been acquired, constructed, furnished, equipped and improved,

(c) that the acquisition, construction, furnishing, equipment and improvement of the Project Facilities and those other facilities have been accomplished in such a manner as to conform with all applicable zoning, planning, building, environmental and other similar governmental regulations,

(d) that except as provided in subsection (e) of this Section, all costs of that acquisition, construction, furnishing, equipment and improvement then or theretofore due and payable have been paid, and

(e) the amounts which the Trustee shall retain in the Project Fund for the payment of Project Costs not yet due or for liabilities which the Borrower is contesting or which otherwise should be retained and the reasons such amounts should be retained.

That certificate may state that it is given without prejudice to any rights against third parties which then exist or subsequently may come into being. The Designated Representative shall include with that certificate a statement specifically describing all items of personal property comprising a part of the Project Facilities. The certificate shall be delivered as promptly as practicable after the occurrence of the events and conditions referred to in subsections (a) through (d) of this Section.

Section 3.7. Investment of Fund Moneys. At the oral (promptly confirmed in writing) or written request of the Designated Representative, any moneys held as part of the Bond Fund (except moneys in the Credit Facility Account, Defeasance Account, Remarketing Proceeds Account, but including the Redemption Premium Account created under Section 5.01 of the Indenture), the Project Fund or the Rebate Fund shall be invested or reinvested by the

Trustee in Eligible Investments. The Issuer and the Borrower each hereby covenant that they will restrict that investment and reinvestment and the use of the proceeds of the Bonds in such manner and to such extent, if any, as may be necessary, after taking into account reasonable expectations at the time of delivery of and payment for the Bonds, so that the Bonds will not constitute arbitrage bonds under Section 148 of the Code.

Any officer of the Issuer having responsibility for issuing the Bonds is authorized and directed, alone or in conjunction with any of the foregoing or with any other officer, employee or agent of or consultant to the Issuer, or with the Borrower or any officer, employee or agent of or consultant to the Borrower, to give an appropriate certificate of the Issuer pursuant to said Section 148, for inclusion in the transcript of proceedings for the Bonds, setting forth the reasonable expectations of the Issuer regarding the amount and use of the proceeds of the Bonds and the facts, estimates and circumstances on which those expectations are based, that certificate to be premised on the reasonable expectations and the facts, estimates and circumstances on which those expectations are based, as provided by the Borrower, all as of the date of delivery of and payment for the Bonds. The Borrower shall provide the Issuer with, and the Issuer's certificate may be based on, a certificate of an appropriate officer, employee or agent of or consultant to the Borrower setting forth the reasonable expectations of the Borrower on the date of delivery of and payment for the Bonds regarding the amount and use of the proceeds of the Bonds and the facts, estimates and circumstances on which they are based.

In particular, the Issuer and the Borrower represent that their present expectations are as follows:

(a) substantial binding obligations have been, or within six (6) months of the date hereof will be, entered into requiring payment of an amount equal to not less than $100,000 or 2-1/2% of that portion of the costs of the Project to be financed by the Bonds, whichever is less, which substantial binding obligations are comprised of contracts for the acquisition, construction, furnishing, improvement and equipping of the Project;

(b) thereafter, acquisition, construction, furnishing, improvement and equipping of the Project will proceed with due diligence to completion;

(c) moneys received as accrued interest, if any, upon the sale of the Bonds will be credited to the Bond Fund and used in their entirety for the first payment of interest on the Bonds;

(d) an amount equal to not less than 85% of the spendable proceeds of the Bonds will be expended on the Project within 3 years of the date of issuance of the Bonds;

(e) any income derived from the investment of any proceeds of the Bonds and from investment of such investment income (except to the extent any such income constitutes Excess Earnings, as defined in the Indenture) will, at the direction of the Designated Representative, be, to the extent allowed by State law, (i) used to acquire, construct, install, equip and improve additional real and personal property in connection with the Project, (ii) used to purchase Bonds in the open market, (iii) paid into the Bond Fund, or (iv) paid or used in any combination of the foregoing, within 3 years from the date of issuance of the Bonds, or within one year after receipt of such investment income, whichever is later;

(f) all moneys paid as Loan Payments pursuant to this Agreement will be deposited in the Bond Fund and used to pay principal of, premium, if any, and interest on the Bonds and there will be no debt service fund other than the Bond Fund that will be so used; any additional amounts paid pursuant to this Agreement as reimbursement for costs or expenses of the Issuer or the Trustee will be applied upon receipt of those costs and expenses requiring such amounts to be so paid; any money deposited in the Bond Fund will be spent within a 13 month period beginning on the date of deposit, and any amount received from investment of money held in the Bond Fund will be spent within a one year period beginning on the date of receipt;

(g) neither the Project nor any part thereof will not be sold or otherwise disposed of prior to the maturity date of the Bonds, other than as a result of normal obsolescence and wear and tear;

(h) the original proceeds of the Bonds will not exceed by more than 5% the amount necessary for the purpose of the issuance of the Bonds;

(i) no artifice or device will be used to exploit the difference between tax-exempt and taxable interest rates in order to gain any material financial advantage and no artifice or device will be used to increase the burden on the market for tax-exempt obligations, including increasing such burden by selling obligations that would not otherwise be sold, by selling more obligations that would otherwise be necessary or by issuing obligations sooner or allowing obligations to remain outstanding longer than would otherwise be necessary.

Section 3.8. Rebate Fund. The Borrower agrees to make such payments to the Trustee as are required of it under Section 5.05 of the Indenture and to pay the costs and expenses of the independent certified public accounting firm or firm of attorneys engaged in accordance with Section 5.05 of the Indenture. The obligation of the Borrower to make such payments shall remain in effect and be binding upon the Borrower notwithstanding the release and discharge of the Indenture.

(End of Article III)

ARTICLE IV

LOAN BY ISSUER; REPAYMENT OF THE LOAN;
LOAN PAYMENTS AND ADDITIONAL PAYMENTS

Section 4.1. Loan Repayment; Delivery of Note and Credit Facility. Upon the terms and conditions of this Agreement, the Issuer will make the Loan to the Borrower. In consideration of and in repayment of the Loan, the Borrower shall make, as Loan Payments, payments sufficient in amount to pay when due the Bond Service Charges payable on the Bonds. All such Loan Payments shall be paid to the Trustee in accordance with the terms of the Note for the account of the Issuer on the Loan Payment Dates and shall be held and disbursed in accordance with the provisions of the Indenture and this Agreement for application to the payment of Bond Service Charges. Notwithstanding the foregoing, while the Credit Facility is in effect, the Borrower shall deposit all such Loan Payments directly with the Credit Facility Issuer to reimburse the Credit Facility Issuer for draws on the Credit Facility, and the Credit Facility Issuer shall apply such amounts to the reimbursement obligation of the Borrower. The obligations of the Borrower to make any payment referred to in this Section 4.1 shall be deemed satisfied and discharged to the extent of the corresponding payment made by the Credit Facility Issuer to the Trustee under the Credit Facility. It is understood, however, that such payment by the Credit Facility Issuer shall not relieve the Borrower of any of its obligations under the Reimbursement Agreement, including the obligation to reimburse the Credit Facility Issuer for any draw on the Credit Facility.

The Borrower shall be entitled to a credit against the Loan Payments next required to be made to the extent that the balance of the Bond Fund (other than any balance in the Credit Facility Account, Defeasance Account, Redemption Premium Account or Remarketing Proceeds Account) is then in excess of amounts required (a) for payment of Bonds theretofore matured or theretofore called for redemption, (b) for payment of interest for which checks or drafts have been drawn and mailed by the Trustee, and (c) for deposit in the Bond Fund for use other than for the payment of Bond Service Charges on the Interest Payment Date next following the applicable Loan Payment Date. In any event, however, if on any Interest Payment Date, the balance in the Bond Fund is insufficient to make required payments of Bond Service Charges, the Borrower forthwith will pay to the Trustee, for the account of the Issuer and for deposit into the Bond Fund, any deficiency.

To secure the Borrower's performance of their obligation under this Agreement, the Borrower shall execute and deliver to the Trustee, concurrently with the issuance and delivery of the Bonds, the Note.

The Note shall secure equally and ratably all outstanding Bonds.

Upon payment in full, in accordance with the Indenture, of the Bond Service Charges on any or all Bonds, whether at maturity or by redemption or otherwise, or upon provision for the payment thereof having been made in accordance with the provisions of the

Indenture, an appropriate notation shall be endorsed thereon evidencing the date and amount of the principal payment or prepayment equal to the Bonds so paid, or with respect to which provision for payment has been made, and that Note shall be surrendered by the Trustee to the Borrower for cancellation if all Bonds shall have been paid (or provision made therefor) and cancelled as aforesaid. Unless the Borrower is entitled to a credit under express terms of this Agreement or the Note, all payments on the Note shall be in the full amount required thereunder.

Except for such interest of the Borrower as may hereafter arise pursuant to Section 8.2 hereof or Section 5.06 of the Indenture, the Borrower and the Issuer each acknowledge that neither the Borrower nor the Issuer have any interest in the Credit Facility Account, the Redemption Premium Account, the Remarketing Proceeds Account and the Defeasance Account of the Bond Fund and any moneys deposited therein shall be in the custody of and held by the Trustee in trust for the benefit of the Holders and, to the extent of draws under the Credit Facility, the Bank.

Section 4.2. Additional Payments. The Borrower shall pay to the Issuer, as Additional Payments hereunder, within five (5) days after request therefor made in writing, any and all costs and expenses, including fees of Issuer's Counsel, incurred or to be paid by the Issuer in connection with the issuance and delivery of the Bonds, the remarketing of the Bonds and the Conversion of the Bonds or otherwise related to actions taken by the Issuer under this Agreement or the Indenture.

The Borrower shall pay to the Trustee, the Registrar and any Paying Agent or Authenticating Agent, their reasonable fees, charges and expenses for acting as such under the Indenture.

The Borrower shall pay the Remarketing Agent and Tender Agent, as Additional Payments hereunder, the fees and expenses of the Remarketing Agent and Tender Agent under the Indenture for services rendered in connection with the Bonds.

The Borrower shall pay to the Tender Agent in federal or other immediately available funds not later than 3:00 p.m., Cleveland, Ohio time, an amount equal to the amount the Tender Agent requires in order to purchase on behalf of the Borrower Bonds pursuant to Article III of the Indenture on the date payment is to be made; provided, however, that the amount required to be paid under this paragraph shall be reduced by an amount equal to the sum of the amounts made available to the Tender Agent for such purpose from the proceeds of the remarketing of such Bonds by the Remarketing Agent or proceeds of a draw under the Credit Facility. The Borrower hereby authorizes the Trustee to draw such moneys under the Credit Facility, as are necessary for the purchase of Bonds pursuant to said Article III.

Section 4.3. Place of Payments. Except as provided in Section 4.1, the Borrower shall make all Loan Payments directly to the Trustee at its corporate trust office. Additional Payments shall be made directly to the person or entity to whom or to which they are due.

Section 4.4. Obligations Unconditional. The obligations of the Borrower to make Loan Payments, Additional Payments and any payments required of the Borrower under Section 5.05 of the Indenture shall be absolute and unconditional, and the Borrower shall make such payments without abatement, diminution or deduction regardless of any cause or circumstances whatsoever including, without limitation, any defense, set-off, recoupment or counterclaim which the Borrower may have or assert against the Issuer, the Trustee, the Remarketing Agent, the Tender Agent, the Bank or any other Person.

Section 4.5. Assignment of Agreement and Revenues. To secure, first, the payment of Bond Service Charges on, and the purchase of, the Bonds, and, second, the payment to the Bank and performance by the Borrower under the Reimbursement Agreement, the Issuer shall assign to the Trustee, by the Indenture, any of its rights, title and interest in this Agreement (except for the Unassigned Issuer's Rights), and the Credit Facility Account, Redemption Premium Account, Remarketing Proceeds Account and Defeasance Account of the Bond Fund and all moneys and investments therein (including without limitation the proceeds of the Credit Facility) and shall grant to the Trustee, by the Indenture, a security interest in its rights under and interest in (i) the Project Fund and all moneys and investments therein, and (ii) the Revenues (other than such accounts of the Bond Fund, all investments therein and the proceeds of the Credit Facility). The Borrower hereby agrees and consent to that assignment and grant.

Section 4.6. Credit Facility. Prior to the initial delivery of the Bonds to the Original Purchaser pursuant to Section 2.01 of the Indenture, the Borrower shall obtain and deliver, to the Trustee, the Credit Facility. The Credit Facility shall be issued initially by the Bank pursuant to the Reimbursement Agreement; shall be dated the date of delivery of the Bonds; shall obligate the Bank to pay (a) an amount equal to the principal amount of the Bonds (i) to pay the principal of the Bonds when due whether at stated maturity, upon redemption or acceleration or (ii) to enable the Tender Agent to pay the purchase price or portion of the purchase price equal to the principal amount of Bonds purchased pursuant to Section 3.01 of the Indenture to the extent remarketing proceeds are not available for such purpose, plus (b) an amount equal to 110 days' interest accrued on the Bonds at a rate of ten percent (10%) per annum (i) to pay interest on the Bonds when due or (ii) to enable the Tender Agent to pay the portion of the purchase price of the Bonds purchased pursuant to Section 3.01 of the Indenture equal to the interest accrued, if any, on such Bonds to the extent remarketing proceeds are not available for such purpose; and shall be in substantially the same form as the exhibit attached to the Reimbursement Agreement and made a part thereof.

The Borrower shall take whatever action may be reasonably necessary to maintain the Credit Facility in full force and effect during the period required by the Indenture, including the payment of any reasonable and documented transfer fees required by the Bank upon any transfer of the Credit Facility to any successor Trustee pursuant to Section 11.12 of the Indenture.

(End of Article IV)

ARTICLE V

ADDITIONAL AGREEMENTS AND COVENANTS

Section 5.1. Right of Inspection. Subject to reasonable security and safety regulations and upon reasonable notice, the Issuer and the Trustee, and their respective agents, shall have the right during normal business hours to inspect the Project.

Section 5.2. Lease, Sale or Grant of Use by Borrower. Subject to the provisions of the Reimbursement Agreement and with the written consent of the Bank, the Borrower may lease, sell or grant the right to occupy and use the Project, in whole or in part, to others, provided that no such grant, sale or lease shall relieve the Borrower from its obligations under this Agreement or the Note or adversely affect the exclusion from gross income of interest on the Bonds.

Section 5.3. Indemnification. The Borrower releases the Issuer from, agrees that the Issuer shall not be liable for, and indemnifies the Issuer against, all liabilities, claims, costs and expenses, including attorneys fees and expenses, imposed upon, incurred or asserted against the Issuer, on account of: (a) any loss or damage to property or injury to or death of or loss by any person that may be occasioned by any cause whatsoever pertaining to the construction, maintenance, operation and use of the Project; (b) any breach or default on the part of the Borrower in the performance of any covenant or agreement of the Borrower under this Agreement, the Reimbursement Agreement, the Note or any related document, or arising from any act or failure to act by the Borrower, or any of its agents, contractors, servants, employees or licensees;
(c) the authorization, issuance, sale, trading, redemption or servicing of the Bonds, and the provision of any information or certification furnished in connection therewith concerning, the Bonds, the Project, or the Borrower including, without limitation, the Private Placement Memorandum, any information furnished by the Borrower for, and included in, or used as a basis for preparation of, any certifications, information statements or reports furnished by the Issuer, and any other information or certification obtained from the Borrower to assure the exclusion of the interest on the Bonds from gross income for federal income tax purposes; (d) the Borrower's failure to comply with any requirement of this Agreement or the Code pertaining to such exclusion of that interest including the covenants in Section 5.4 hereof; and (e) any claim, action or proceeding brought with respect to the matters set forth in (a), (b),
(c), and (d) above.

The Borrower agrees to indemnify the Trustee and the Tender Agent for, and to hold them harmless against, all liabilities, claims, costs and expenses incurred without negligence or bad faith on the part of the Trustee and the Tender Agent on account of any action taken or omitted to be taken by the Trustee and the Tender Agent in accordance with the terms of this Agreement, the Bonds, the Reimbursement Agreement, the Credit Facility, the Note or the Indenture or any action taken at the request of or with the consent of the Borrower, including the reasonable and documented costs and expenses of the Trustee and the Tender Agent in defending themselves against any such claim, action or proceeding brought in connection with

the exercise or performance of any of their powers or duties under this Agreement, the Bonds, the Indenture, the Reimbursement Agreement, the Credit Facility or the Note.

In case any action or proceeding is brought against the Issuer, the Tender Agent or the Trustee in respect of which indemnity may be sought hereunder, the party seeking indemnity promptly shall give notice of that action or proceeding to the Borrower, and the Borrower upon receipt of that notice shall have the obligation and the right to assume the defense of the action or proceeding; provided, that failure of a party to give that notice shall not relieve the Borrower from any of their obligations under this Section unless that failure prejudices the defense of the action or proceeding by the Borrower. At its own expense, an indemnified party may employ separate counsel and participate in the defense. The Borrower shall not be liable for any settlement made without their consent.

The indemnification set forth above is intended to and shall include the indemnification of all affected officials, directors, officers and employees, including Counsel, of the Issuer, the Tender Agent and the Trustee, respectively. That indemnification is intended to and shall be enforceable by the Issuer, the Tender Agent and the Trustee, respectively, to the full extent permitted by law.

Section 5.4. Borrower Not to Adversely Affect Exclusion from Gross Income of Interest on Bonds. The Borrower hereby represents that it has taken and caused to be taken, and covenant that they will take and cause to be taken, all actions that may be required of them, alone or in conjunction with the Issuer, for the interest on the Bonds to be and remain excluded from gross income for federal income tax purposes, and represents that they have not taken or permitted to be taken on their behalf, and covenant that they will not take or permit to be taken on their behalf, any actions that would adversely affect such exclusion under the provisions of the Code.

Section 5.5. Borrower to Maintain Their Existence. The Borrower shall do all things necessary to preserve and keep in full force and effect their existence, rights and franchises, except as otherwise permitted by the Reimbursement Agreement and as would not adversely affect the exclusion from gross income of interest on the Bonds.

Section 5.6. Undertaking to Provide Continuing Disclosure. The Issuer, at the cost of the Borrower, covenants to comply with Section 11-1-85 of the Code of Laws of South Carolina 1976, as amended. The Borrower covenants to furnish all information in a timely fashion requested by the Issuer to comply with such Section. The Borrower further covenants to furnish a Continuing Disclosure Certificate, if required, for purposes of SEC Rule 15c2-12, as it may be amended or supplemented from time to time.

(End of Article V)

ARTICLE VI

REDEMPTION AND PURCHASE OF BONDS

Section 6.1. Optional Redemption. Provided no Event of Default shall have occurred and be subsisting, at any time and from time to time, the Borrower may deliver moneys to the Trustee in addition to Loan Payments or Additional Payments required to be made and direct the Trustee to use the moneys so delivered for the purpose of purchasing Bonds or of calling Bonds for optional redemption in accordance with the applicable provisions of the Bond Resolution and Indenture providing for optional redemption at the redemption price stated in the Indenture; provided, however, that any moneys so used for optional redemption shall be from the sources set forth in paragraphs (i) and
(ii) of Section 5.01(c) of the Indenture. Pending application for those purposes, any moneys so delivered shall be held by the Trustee in a special account in the Bond Fund and delivery of those moneys shall not operate to abate or postpone Loan Payments or Additional Payments otherwise becoming due or to alter or suspend any other obligations of the Borrower under this Agreement.

Section 6.2. Extraordinary Optional Redemption. The Borrower shall have, subject to the conditions hereinafter imposed, the option to direct the redemption of the entire unpaid principal balance of the Bonds in accordance with the applicable provisions of the Indenture upon the occurrence of any of the following events:

(a) The Project shall have been damaged or destroyed to such an extent that (1) they cannot reasonably be expected to be restored, within a period of 6 months, to the condition thereof immediately preceding such damage or destruction or
(2) their normal use and operation is reasonably expected to be prevented for a period of 6 consecutive months.

(b) Title to, or the temporary use of, all or a significant part of the Project shall have been taken under the exercise of the power of eminent domain (1) to such extent that the Project cannot reasonably be expected to be restored within a period of 6 months to a condition of usefulness comparable to that existing prior to the taking or (2) as a result of the taking, normal use and operation of the Project is reasonably expected to be prevented for a period of 6 consecutive months.

(c) As a result of any changes in the Constitution of the State, the Constitution of the United States of America, or state or federal laws or as a result of legislative or administrative action (whether state or federal) or by final decree, judgment or order of any court or administrative body (whether state or federal) entered after the contest thereof by the Issuer or the Borrower in good faith, this Agreement shall have become void or unenforceable or impossible of performance in accordance with the intent and purpose of the parties as expressed in this Agreement, or if unreasonable burdens or excessive liabilities shall have

been imposed with respect to the Project or the operation thereof, including, without limitation, federal, state or other ad valorem, property, income or other taxes not being imposed on the date of this Agreement other than ad valorem taxes presently levied upon privately owned property used for the same general purpose as the Project.

(d) Changes in the economic availability of raw materials, operating supplies, energy sources or supplies, or facilities (including, but not limited to, facilities in connection with the disposal of industrial wastes) necessary for the operation of the Project for the Project Purposes shall have occurred or technological or other changes shall have occurred which the Borrower cannot reasonably overcome or control and which in the Borrower's reasonable judgment render the Project uneconomic for the Project Purposes.

To exercise that option, the Borrower shall, within 90 days following the event authorizing the exercise of that option, or at any time during the continuation of the condition referred to in clause (d) above, give notice to the Issuer and to the Trustee specifying the date on which the Borrower will deliver the funds required for that redemption, which date shall be not more than 90 days from the date that notice is mailed and shall make arrangements satisfactory to the Trustee for the giving of the required notice of redemption.

The amount payable by the Borrower in the event of their exercise of the option granted in this Section shall be the sum of the following:

(i) An amount of money which, when added to the moneys and investments held to the credit of the Bond Fund, will be sufficient pursuant to the provisions of the Indenture to pay, at par, and discharge all then outstanding Bonds on the earliest applicable redemption date, that amount to be paid to the Trustee, plus

(ii) An amount of money equal to the Additional Payments relating to the Bonds accrued and to accrue until actual final payment and redemption of the Bonds, that amount or applicable portions thereof to be paid to the Trustee or to the Persons to whom those Additional Payments are or will be due.

The requirement of (ii) above with respect to Additional Payments to accrue may be met if provisions satisfactory to the Trustee and the Issuer are made for paying those amounts as they accrue.

The Borrower also shall have the option, in the event that title to or the temporary use of a portion of the Project shall be taken under the exercise of the power of eminent domain, even if the taking is not of such nature as to permit the exercise of the redemption option upon an event specified in (b) above, to direct the redemption, at a redemption price of 100% of the principal amount thereof prepaid, plus accrued interest to the redemption date, of that part of the outstanding principal balance of the Bonds as may be payable from the proceeds received

by the Borrower (after the payment of costs and expenses incurred in the collection thereof) received in the eminent domain proceeding, provided, that, the Borrower shall furnish to the Issuer and the Trustee a certificate of an Engineer stating that (1) the property comprising the part of the Project taken is not essential to continued operations of the Project in the manner existing prior to that taking, (2) the Project has been restored to a condition substantially equivalent to that existing prior to the taking, or (3) other improvements have been acquired or made which are suitable for the continued operation of the Project.

The rights and options granted to the Borrower in this Section may be exercised whether or not the Borrower is in default hereunder; provided, that such default will not relieve the Borrower from performing those actions which are necessary to exercise any such right or option granted hereunder.

Section 6.3. Mandatory Redemption in Event of Inclusion in Gross Income of Interest on Bonds. If, as provided in the Bonds and the Indenture, the Bonds become subject to mandatory redemption because interest on any of the Bonds is determined to be included for federal income tax purposes in the gross income of the Holder of any Bonds (other than because a Holder is a "substantial user" of the Project or a "related person", as those terms are used in Section 147(a) of the Code), the Borrower shall deliver to the Trustee, upon the date requested by the Trustee, the moneys needed to pay in full the Bonds in accordance with the mandatory redemption provisions relating thereto set forth in the Bonds and the Indenture.

Section 6.4. Mandatory Redemption. The Borrower shall deliver to the Trustee the moneys needed to redeem the Bonds in accordance with any mandatory redemption provisions relating thereto as may be set forth in the Indenture.

Section 6.5. Actions by Issuer. At the request of the Borrower or the Trustee, the Issuer shall take all steps required of it under the applicable provisions of the Indenture or the Bonds to effect the redemption of all or a portion of the Bonds pursuant to this Article VI.

(End of Article VI)

ARTICLE VII

EVENTS OF DEFAULT AND REMEDIES

Section 7.1. Events of Default. Each of the following shall be an Event of Default:

(a) The Borrower shall fail to pay any Loan Payment on or prior to the Loan Payment Date on which that Loan Payment is due and payable;

(b) The Borrower shall fail to deliver to the Trustee, or cause to be delivered on their behalf, the moneys needed (i) to redeem any outstanding Bonds in the manner and upon the date requested in writing by the Trustee as provided in Section 6.1, 6.2, 6.3 or 6.4 of this Agreement or (ii) to purchase any Bonds in the manner and upon the date as provided in Section 4.2 of this Agreement;

(c) The Borrower shall fail to observe and perform any other agreement, term or condition contained in this Agreement (other than with respect to Section 5.4 hereof), and the continuation of such failure for a period of 30 days after notice thereof shall have been given to the Borrower by the Issuer or the Trustee, or for such longer period as the Issuer and the Trustee may agree to in writing; provided, that if the failure is other than the payment of money and is of such nature that it can be corrected but not within the applicable period, that failure shall not constitute an Event of Default so long as the Borrower institute curative action within the applicable period and diligently pursues that action to completion;

(d) The Borrower shall: (i) admit in writing its inability to pay its debts generally as they become due; (ii) have an order for relief entered in any case commenced by or against them under the federal bankruptcy laws, as now or hereafter in effect; (iii) commence a proceeding under any other federal or state bankruptcy, insolvency, reorganization or similar law, or have such a proceeding commenced against it and either have an order of insolvency or reorganization entered against it or have the proceeding remain undismissed and unstayed for ninety days; (iv) make an assignment for the benefit of creditors; or (v) have a receiver or trustee appointed for them or for the whole or any substantial part of their property;

(e) There shall occur an "Event of Default" as defined in Section 10.01 of the Indenture.

Notwithstanding the foregoing, if, by reason of Force Majeure, the Borrower is unable to perform or observe any agreement, term or condition hereof which would give rise to an Event of Default under subsection (c) hereof, the Borrower shall not be deemed in default

during the continuance of such inability. However, the Borrower shall promptly give notice to the Trustee and the Issuer of the existence of an event of Force Majeure and shall use their best efforts to remove the effects thereof; provided that the settlement of strikes or other industrial disturbances shall be entirely within their discretion.

The term Force Majeure shall mean, without limitation, the following:

(i) acts of God; strikes, lockouts or other industrial disturbances; acts of public enemies; orders or restraints of any kind of the government of the United States of America or of the State or any of their departments, agencies, political subdivisions or officials, or any civil or military authority; insurrections; civil disturbances; riots; epidemics; landslides; lightning; earthquakes; fires; hurricanes; tornadoes; storms; droughts; floods; arrests; restraint of government and people; explosions; breakage, malfunction or accident to facilities, machinery, transmission pipes or canals; partial or entire failure of utilities; shortages of labor, materials, supplies or transportation; or

(ii) any cause, circumstance or event not reasonably within the control of the Borrower.

The declaration of an Event of Default under subsection (d) above, and the exercise of remedies upon any such declaration, shall be subject to any applicable limitations of federal bankruptcy law affecting or precluding that declaration or exercise during the pendency of or immediately following any bankruptcy, liquidation or reorganization proceedings.

Section 7.2. Remedies on Default. Whenever an Event of Default shall have happened and be subsisting, any one or more of the following remedial steps may be taken:

(a) If acceleration of the principal amount of the Bonds has been declared pursuant to Section 10.02 of the Indenture, the Trustee shall declare all Loan Payments to be immediately due and payable, whereupon the same shall become immediately due and payable;

(b) The Issuer, the Bank or the Trustee may have access to, inspect, examine and make copies of the books, records, accounts and financial data of the Borrower pertaining to the Project; or

(c) The Issuer or the Trustee may pursue all remedies now or hereafter existing at law or in equity to collect all amounts then due and thereafter to become due under this Agreement, the Credit Facility or the Note or to enforce the performance and observance of any other obligation or agreement of the Borrower under those instruments.

Notwithstanding the foregoing, the Issuer shall not be obligated to take any step which in its opinion will or might cause it to expend time or money or otherwise incur liability unless and

until a satisfactory indemnity bond has been furnished to the Issuer at no cost or expense to the Issuer. Any amounts collected as Loan Payments or applicable to Loan Payments and any other amounts which would be applicable to the payment of Bond Service Charges collected pursuant to action taken under this Section shall be paid into the Bond Fund and applied in accordance with the provisions of the Indenture or, if the outstanding Bonds have been paid and discharged in accordance with the provisions of the Indenture, shall be paid as provided in
Section 5.06 of the Indenture for transfers of remaining amounts in the Bond Fund.

The provisions of this Section are subject to the further limitation that the rescission by the Trustee of its declaration that all of the Bonds are immediately due and payable also shall constitute an annulment of any corresponding declaration made pursuant to paragraph (a) of this Section and a waiver and rescission of the consequences of that declaration and of the Event of Default with respect to which that declaration has been made, provided that no such waiver or rescission shall extend to or affect any subsequent or other default or impair any right consequent thereon.

Section 7.3. No Remedy Exclusive. No remedy conferred upon or reserved to the Issuer or the Trustee by this Agreement is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement, the Credit Facility or the Note, or now or hereafter existing at law, in equity or by statute. No delay or omission to exercise any right or power accruing upon any default shall impair that right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the Issuer or the Trustee to exercise any remedy reserved to it in this Article, it shall not be necessary to give any notice, other than any notice required by law or for which express provision is made herein.

Section 7.4. Agreement to Pay Attorneys' Fees and Expenses. If an Event of Default should occur and the Issuer or the Trustee should incur expenses, including attorneys' fees, in connection with the enforcement of this Agreement, the Credit Facility or the Note or the collection of sums due thereunder, the Borrower shall reimburse the Issuer and the Trustee, as applicable, for the reasonable expenses so incurred upon demand.

Section 7.5. No Waiver. No failure by the Issuer or the Trustee to insist upon the strict performance by the Borrower of any provision hereof shall constitute a waiver of their right to strict performance and no express waiver shall be deemed to apply to any other existing or subsequent right to remedy the failure by the Borrower to observe or comply with any provision hereof.

The Issuer and the Trustee may waive any Event of Default hereunder only with the prior written consent of the Bank.

Section 7.6. Notice of Default. The Borrower or the Issuer shall notify the Trustee and the Bank immediately if they become aware of the occurrence of any Event of Default hereunder or of any fact, condition or event which, with the giving of notice or passage of time or both, would become an Event of Default.

(End of Article VII)

ARTICLE VIII

MISCELLANEOUS

Section 8.1. Term of Agreement. This Agreement shall be and remain in full force and effect from the date of delivery of the Bonds to the Placement Agent until such time as all of the Bonds shall have been fully paid (or provision made for such payment) pursuant to the Indenture and all other sums payable by the Borrower under this Agreement and the Note shall have been paid, except for obligations of the Borrower under Sections 4.2 and 5.3 hereof, which shall survive any termination of this Agreement.

Section 8.2. Amounts Remaining in Funds. Any amounts in the Bond Fund remaining unclaimed by the Holders of Bonds for 2 years after the due date thereof (whether at stated maturity, by redemption or pursuant to any mandatory sinking fund requirements or otherwise), shall be paid to the Borrower; provided that if the Trustee shall have drawn on the Credit Facility, and the Bank has not been reimbursed by the Borrower pursuant to the Reimbursement Agreement, such amounts remaining in the Bond Fund shall belong and be paid first to the Bank to the extent it has not been so reimbursed. With respect to that principal of and any premium and interest on the Bonds to be paid from moneys paid to the Borrower or the Bank pursuant to the preceding sentence, the Holders of the Bonds entitled to those moneys shall look solely to the Borrower for the payment of those moneys.

Further, any other amounts remaining in the Bond Fund (other than in the Credit Facility Account, the Remarketing Proceeds Account, the Redemption Premium Account and the Defeasance Account) and any amounts remaining in any other special funds or accounts (other than the Project Fund and the Rebate Fund) created under this Agreement or the Indenture after all of the outstanding Bonds shall be deemed to have been paid and discharged under the provisions of the Indenture and all other amounts required to be paid under this Agreement, the Note and the Indenture have been paid, shall be paid to the Borrower to the extent that those moneys are in excess of the amounts necessary to effect the payment and discharge of the outstanding Bonds; provided that if the Trustee shall have drawn on the Credit Facility, and the Bank has not been reimbursed by the Borrower pursuant to the Reimbursement Agreement, such amounts shall belong and be paid first to the Bank to the extent it has not been so reimbursed.

Section 8.3. Notices. All notices, certificates, requests or other communications hereunder shall be in writing and shall be deemed to be sufficiently given when mailed by registered or certified mail, postage prepaid, and addressed to the appropriate Notice Address. A duplicate copy of each notice, certificate, request or other communication given hereunder to the Issuer, the Borrower, the Bank, the Remarketing Agent, the Tender Agent or the Trustee shall also be given to the others. The Borrower, the Issuer, the Bank, the Remarketing Agent, the Tender Agent and the Trustee, by notice given hereunder, may designate any further or different addresses to which subsequent notices, certificates, requests or other communications shall be sent.

Section 8.4. Extent of Covenants of the Issuer; No Personal Liability. All covenants, obligations and agreements of the Issuer contained in this Agreement or the Indenture shall be effective to the extent authorized and permitted by applicable law. No such covenant, obligation or agreement shall be deemed to be a covenant, obligation or agreement of any present or future member, officer, agent or employee of the Issuer, and neither the members of the Board of Directors of the Issuer nor any official executing the Bonds shall be liable personally on the Bonds or be subject to any personal liability or accountability by reason of the issuance thereof or by reason of the covenants, obligations or agreements of the Issuer contained in this Agreement or in the Indenture.

Section 8.5. Binding Effect. This Agreement shall inure to the benefit of and shall be binding in accordance with its terms upon the Issuer, the Borrower and their respective permitted successors and assigns provided that this Agreement may not be assigned by the Borrower (except in connection with a lease, sale or grant of use pursuant to Section 5.2 hereof or sale or transfer of assets pursuant to the Reimbursement Agreement) and may not be assigned by the Issuer except to the Trustee pursuant to the Indenture or as otherwise may be necessary to enforce or secure payment of Bond Service Charges. This Agreement may be enforced only by the parties, their assignees and others who may, by law, stand in their respective places.

Section 8.6. Amendments and Supplements. Except as otherwise expressly provided in this Agreement or the Indenture, subsequent to the issuance of the Bonds and prior to all conditions provided for in the Indenture for release of the Indenture having been met, this Agreement may not be effectively amended, changed, modified, altered or terminated except in accordance with the provisions of Article XIV of the Indenture, as applicable.

Section 8.7. Execution Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be regarded as an original and all of which shall constitute but one and the same instrument.

Section 8.8. Severability. If any provision of this Agreement, or any covenant, obligation or agreement contained herein is determined by a court to be invalid or unenforceable, that determination shall not affect any other provision, covenant, obligation or agreement, each of which shall be construed and enforced as if the invalid or unenforceable portion were not contained herein. That invalidity or unenforceability shall not affect any valid and enforceable application thereof, and each such provision, covenant, obligation or agreement shall be deemed to be effective, operative, made, entered into or taken in the manner and to the full extent permitted by law.

Section 8.9. Governing Law. This Agreement shall be deemed to be a contract made under the laws of the State and for all purposes shall be governed by and construed in accordance with the laws of the State.

(End of Article VIII)

IN WITNESS WHEREOF, the Issuer and the Borrower have caused this Agreement to be executed in their respective corporate names and their respective corporate seals to be hereunto affixed and attested by their duly authorized officers, all as of the date first above written.

(SEAL)                               SOUTH CAROLINA JOBS-ECONOMIC
                                              DEVELOPMENT AUTHORITY

Attest:                              By:
                                         -----------------------------
                                          Title: Vice Chairman, Board of
                                                 Directors

By: /s/ ELLIOTT FRANKS, III
    --------------------------
   Title: Executive Director

(SEAL)                               CORE MATERIALS CORPORATION

Attest:                              By: /s/ KEVIN L. BARNETT
                                         ------------------------------
                                          Title: Vice President, Treasurer & CFO

EXHIBIT A

NOTE

Core Materials Corporation, a Delaware corporation (the "Borrower"), for value received, promises to pay to The Huntington National Bank, as Trustee (the "Trustee") under the Indenture hereinafter referred to, the principal sum of

SEVEN MILLION FIVE HUNDRED THOUSAND DOLLARS
($7,500,000)

and to pay interest on the unpaid balance of such principal sum from and after May 7, 1998 (the date of delivery of this Note) at the Applicable Rate until the payment of such principal sum has been made or provided for. As used herein, "Applicable Rate" means the interest rates specified in Appendix I to this Note.

This Note has been executed and delivered by the Borrower to the Trustee pursuant to a certain Loan Agreement (the "Agreement"), dated as of April 1, 1998, between the South Carolina Jobs-Economic Development Authority (the "Issuer") and the Borrower. Under the Agreement, the Issuer has loaned the Borrower the principal proceeds received from the sale of the Issuer's $7,500,000 aggregate principal amount of South Carolina Jobs-Economic Development Authority Multi-Mode Variable Rate Industrial Development Revenue Bonds, Series 1998 (Core Materials Corporation Project), dated the date of their initial delivery to the original purchasers thereof (the "Bonds"), to assist in the financing of the Project (as defined in the Agreement), and the Borrower have agreed to repay such loan by making payments (the "Loan Payments") at the times and in the amounts set forth in this Note for application to the payment of the principal of and redemption premium, if any, and interest on the Bonds as and when due. The Bonds have been issued, concurrently with the execution and delivery of this Note, pursuant to, and are secured by, the Trust Indenture (the "Indenture"), dated as of April 1, 1998, between the Issuer and the Trustee. The Bonds also bear interest from their date at the Applicable Rate payable as specified below and in Appendix I to this Note and mature on April 1, 2013.

To provide funds to pay the principal of and redemption premium, if any, and interest on the Bonds (the "Bond Service Charges") as and when due as above-specified, the Borrower hereby agrees to and shall make Loan Payments on each Loan Payment Date as follows: (i) while the Bonds bear interest at the Weekly Rate, the total interest due on the Bonds on such Loan Payment Date and (b) on the Loan Payment Date on April 1, 2013 (i.e. the maturity date of the Bonds) all principal of the Bonds then outstanding, and (ii) while the Bonds bear interest at the Semi-Annual Rate or Long-Term Rate, in an amount equal to (a) prior to the first Interest Payment Date in such Interest Rate Mode, that portion of the total interest due on the Bonds on such first Interest Payment Date multiplied by a fraction, the numerator of which shall be one and the denominator of which shall be the number of Loan Payment Dates prior to

such Interest Payment Date, (b) from and after the first Interest Payment Date in such Interest Rate Mode, 1/2 of the total interest due on the Bonds on the next succeeding Interest Payment Date, and (c) on the Loan Payment Date on April 1, 2013 (i.e., the maturity date of the Bonds) all principal of the Bonds then outstanding. In addition, to provide funds sufficient to pay the principal of and premium, if any, and interest on the Bonds as and when due at any other time, whether by redemption or acceleration or otherwise, the Borrower hereby agrees to and shall make Loan Payments in an amount sufficient to pay such principal of and premium, if any, and interest when due and payable.

If payment or provision for payment in accordance with the Indenture is made in respect of the principal of, and redemption premium, if any, and interest on the Bonds from moneys other than Loan Payments, this Note shall be deemed paid to the extent such payments or provision for payment of Bonds has been made. To provide for payment of the Bond Service Charges, the Borrower has arranged to deliver to the Trustee the Credit Facility. Drawings on the Credit Facility shall not reduce in any manner Loan Payments due hereunder. However, the Trustee shall apply such Loan Payments to the reimbursement obligation of the Borrower to the Bank in accordance with Section 5.01 of the Indenture. Subject to the foregoing, all Loan Payments shall be in the full amount required hereunder.

All Loan Payments shall be payable in lawful money of the United States of America and shall be made to the Trustee at its corporate trust office for the account of the Issuer and deposited in the Bond Fund created by the Indenture. Except as otherwise provided in the Indenture, such Loan Payments shall be used by the Trustee to pay the principal of, redemption premium, if any, and interest on the Bonds as and when due.

The obligation of the Borrower to make the payments required hereunder shall be absolute and unconditional and the Borrower shall make such payments without abatement, diminution or deduction regardless of any cause or circumstances whatsoever including, without limitation, any defense, set-off, recoupment or counterclaim which the Borrower may have or assert against the Issuer, the Trustee, the Remarketing Agent (as defined in Appendix I) and the Bank (as defined in Appendix I) or any other person.

This Note is subject to optional, extraordinary optional and mandatory prepayment in whole or in part, at the prepayment price, in the amounts and upon the conditions that the Bonds are subject to, respectively, optional and extraordinary optional redemption. The Borrower will deliver or cause to be delivered to the Trustee, for the account of the Issuer, such moneys as are required to effect such prepayment under the applicable terms of the Bonds.

Whenever an Event of Default under Section 10.01 of the Indenture shall have occurred and, as a result thereof, the principal of and any premium on all Bonds then outstanding, and interest accrued thereon, shall have been declared to be immediately due and payable pursuant to Section 10.02 of the Indenture, the unpaid principal amount of and any premium and accrued interest on this Note shall also be due and payable on the date on which the principal of and premium and interest on the Bonds shall have been declared due and

payable; provided that the annulment of a declaration of acceleration with respect to the Bonds shall also constitute an annulment of any corresponding declaration with respect to this Note.

IN WITNESS WHEREOF, the Borrower has caused this Note to be executed in its name by its duly authorized officers as of May __, 1998.

CORE MATERIALS CORPORATION

By: ___________________________
Its: ______________________

APPENDIX I

A. Definitions

As used herein and in the Note, the following terms shall have the following meanings:

"Applicable Rate" means, from the date hereof through and including, May 12, 1998, 4.38% per annum, and thereafter, for each Weekly Rate Period and so long as there is not a Semi-Annual Rate or Long-Term Rate, the Weekly Rate established therefor, computed on the basis of a 365 or 366-day year, as applicable, and, during a Semi-Annual Rate Period or Long-Term Rate Period, the Semi-Annual Rate or the Long-Term Rate, respectively, computed on the basis of a 360-day year, consisting of twelve-30 day months.

"Bank" means initially, KeyBank National Association, and its successors and assigns in its capacity as issuer of a Credit Facility and in the event an Alternate Credit Facility is outstanding, the issuer of the Alternate Credit Facility.

"Business Day" means any day of the year other than (i) a Saturday or Sunday, (ii) any day on which banks located in either Cleveland, Ohio, or the principal corporate trust office of the Trustee is located are required or authorized by law to remain closed, or (iii) any day on which the New York Stock Exchange is closed.

"Conversion Date" means the first date any Conversion becomes effective.

"Interest Payment Date" means (a) while the Bonds bear interest at the Weekly Rate, the first Wednesday of each January, April, July and October, and (b) while the Bonds bear interest at the Semi-Annual Rate or the Long-Term Rate, April 1 and October 1 of each year. The first Interest Payment Date shall be the Interest Payment Date in July, 1998. In any case, the final Interest Payment Date shall be the maturity date of the Bonds.

"Interest Period" means for all Bonds the period from and including each Interest Payment Date to and including the day next preceding the next Interest Payment Date. The first Interest Period for the Bonds shall begin on (and include) the date of the initial delivery of the Bonds. The final Interest Period shall end on the maturity (or redemption) date for each Bond.

"Interest Rate Mode" means the Weekly Rate, the Semi-Annual Rate or the Long- Term Rate.

"Long-Term Rate" means the Interest Rate Mode for the Bonds in which the interest rate on the Bonds is determined in accordance with Section 2.02(c)(iii) of the Indenture.

App. I-1

Long-Term Rate Period" means any period beginning on, and including, the Conversion Date to the Long-Term Rate and ending on, and including, the day preceding the Interest Payment Date selected by the Borrower and each period of the same duration (or as close as possible) ending on an Interest Payment Date thereafter until the earliest of the day preceding the change to a different Long-Term Rate Period, the Conversion to a different Interest Rate Mode or the maturity of the Bonds.

"Purchase Date" means (a) if the Interest Rate Mode is the Weekly Rate, any Business Day as set forth in Section 3.01(a)(i), Section 3.01(a)(iii) and Section 3.01(a)(iv) of the Indenture, respectively, (b) if the Interest Rate Mode is the Semi-Annual Rate, any Interest Payment Date, (c) if the Interest Rate Mode is the Long-Term Rate, the final Interest Payment Date for each Long-Term Rate Period, and (d) each day that Bonds are subject to mandatory purchase pursuant to Section 3.01(b) of the Indenture.

"Rate Period" means any period during which a single interest rate is in effect for a Bond.

"Remarketing Agent" means Key Capital Markets, Inc. and its successors as provided in Section 12.01 of the Indenture. "Principal Office" of the Remarketing Agent means the office designated as such in writing to the Borrower, the Trustee and the Tender Agent.

"Semi-Annual Rate" means the Interest Rate Mode for the Bonds in which the interest rate on the Bonds is determined in accordance with Section 2.02(c)(ii) of the Indenture.

"Semi-Annual Rate Period" means any period beginning on, and including, the Conversion Date to the Semi-Annual Rate and ending on, and including, the day preceding the next Interest Payment Date thereafter and each successive six (6) month period thereafter until the day preceding Conversion to a different Interest Rate Mode or the maturity of the Bonds.

"Weekly Rate" means the Interest Rate for the Bonds in which the interest rate on the Bonds is determined weekly in accordance with Section 2.02(c)(i) of the Indenture.

"Weekly Rate Period" means the period beginning on, and including, the date of issuance of the Bonds, and ending on, and including, the next Tuesday and thereafter the period beginning on, and including, any Wednesday and ending on, and including, the next Tuesday.

B. Interest Rate Provisions

Words and terms used in this Part B as defined words and terms and not otherwise defined in this Note or Appendix I thereto shall have the meanings assigned to them in the Indenture.

(1) Interest Rates on the Bonds. The Bonds shall bear interest at the Weekly Rate for the period from their original issuance date until converted to a different Interest Rate Mode. The first Interest Payment Date shall be the Interest Payment Date in July, 1998.

App. I-2

During each Interest Period for each Interest Rate Mode, the interest rate for the Bonds shall be determined in accordance with Section 2.02(c) of the Indenture and shall be payable on the Interest Payment Date for such Interest Period; provided that the interest rate borne by the Bonds shall not exceed the lesser of (i) fifteen percent (15%) per annum or (ii) so long as the Bonds are entitled to the benefits of a Credit Facility, the maximum interest rate with respect to the Bonds specified in the Credit Facility. Interest on the Bonds at the interest rate or rates for the Weekly Rate shall be computed upon the basis of a 365 or 366-day year, as applicable, for the actual number of days elapsed. Interest on the Bonds at the interest rate or rates for the SemiAnnual Rate and the Long-Term Rate shall be computed upon the basis of a 360-day year, consisting of twelve 30-day months. Each Bond shall bear interest on overdue principal and, to the extent permitted by law, on overdue interest at the Default Rate computed from the date of the Default or Event of Default.

(2) Interest Rate Modes. Interest Rates on the Bonds shall be determined as follows:

(i) If the Interest Rate Mode for the Bonds is the Weekly Rate, the interest rate on the Bonds for a particular Weekly Rate Period shall be the rate established by the Remarketing Agent no later than 3:00 p.m. (Cleveland, Ohio time) on the Tuesday preceding the Weekly Rate Period (or the day preceding the Conversion of the Interest Rate Mode to the Weekly Rate), or, if such day is not a Business Day, on the next succeeding Business Day, as the minimum rate of interest necessary, in the judgment of the Remarketing Agent, to enable the Remarketing Agent to sell the Bonds on such Business Day at a price equal to the principal amount thereof, plus accrued interest, if any, thereon.

(ii) If the Interest Rate Mode for the Bonds is the Semi-Annual Rate, the interest rate on the Bonds for a particular Semi-Annual Rate Period shall be the rate established by the Remarketing Agent no later than 3:00 p.m. (Cleveland, Ohio time) on the 10th Business Day next preceding the first day of such Semi-Annual Rate Period as the minimum rate of interest necessary, in the judgment of the Remarketing Agent, to enable the Remarketing Agent to sell the Bonds on such first day at a price equal to the principal amount thereof.

(iii) If the Interest Rate Mode for the Bonds is the Long-Term Rate, the interest rate on the Bonds for a particular Long-Term Rate Period shall be the rate established by the Remarketing Agent not later than the 15th Business Day preceding the first day of such Long-Term Rate Period as the minimum rate of interest necessary, in the judgment of the Remarketing Agent, to enable the Remarketing Agent to sell the Bonds on such first day at a price equal to the principal amount thereof.

(iv) The Remarketing Agent shall provide the Trustee, the Borrower and the Tender Agent with Immediate Notice of all interest rates.

App. I-3

(v) If for any reason the interest rate on a Bond is not determined by the Remarketing Agent pursuant to (i), (ii) or (iii) above, the interest rate for such Bond for the next succeeding Rate Period shall be the interest rate in effect for such Bond for the preceding Rate Period.

(3) Long-Term Rate Periods.

(i) Selection of Long-Term Rate Period. The Long-Term Rate Period shall be established by the Borrower in the notice given pursuant to Section 2.02(e) of the Indenture (the first such Long-Term Rate Period commencing on the Conversion Date for the Bonds to a Long-Term Rate) and thereafter each successive Long-Term Rate Period shall be the same as that so established by the Borrower until a different Long- Term Rate Period is specified by the Borrower in accordance with Section 2.02 of the Indenture or until the occurrence of a Conversion Date. Each Long-Term Rate Period shall be one year or more in duration and shall end on the day next preceding an Interest Payment Date; provided that if the first Long-Term Rate Period commences on a Conversion Date other than a April 1 and October 1, such first Long-Term Rate Period shall be of a duration as close as possible to (but not in excess of) such Long-Term Rate Period and shall terminate on a day preceding an Interest Payment Date; and further provided that no Long-Term Rate Period shall extend beyond the maturity date of the Bonds.

(ii) Change of Long-Term Rate Period. The Borrower may change from one Long-Term Rate Period to another Long-Term Rate Period on any Business Day on which the Bonds are subject to optional redemption pursuant to Section 8.01(b) of the Indenture by notifying the Trustee, the Issuer, the Credit Facility Issuer, the Tender Agent and the Remarketing Agent at least 4 Business Days prior to the 30th day prior to the proposed effective date of the change. Such notice shall specify the last day of the next Long-Term Rate Period which shall be the earlier of the day before the maturity date of the Bonds or the day immediately preceding a April 1 or October 1 and which is one year or more after the effective date and, if such change is conditional, the interest rate limitations. Any such notice shall be accompanied by an opinion of Counsel stating that such change is authorized by the Indenture and, if the change is from a Long- Term Rate Period of one year to a Long-Term Rate Period of more than one year, an opinion of nationally recognized bond counsel that such change will not affect the exclusion from gross income for federal income tax purposes of the interest on the Bonds. Any change by the Borrower of the Long-Term Rate Period may be made conditional on the interest rate being within certain limits established by the Borrower. The Remarketing Agent shall establish what would be the interest rate for the proposed Long-Term Rate Period in accordance with Section 2.02(c) of the Indenture. If the interest rate established by the Remarketing Agent is not within the limits established, then the change in the Long-Term Rate Period may be cancelled by the Borrower, in which case the Borrower's notice of the proposed change shall be of no effect and the Bonds shall not be subject to any mandatory purchase pursuant to
Section 3.01(b) of the Indenture. Notice of such cancellation shall be promptly given to all Bondholders.

App. I-4

(iii) Notice of Long-Term Rate Period. The Trustee shall notify the Bondholders of any change in the Long-Term Rate Period pursuant to Section 2.02(d)(ii) of the Indenture by first class mail, postage prepaid, at least 30 but not more than 60 days before the effective date of such change. The notice will state:

(A) whether the change in the Long-Term Rate Period is conditional and, if conditional, the interest rate limitations set by the Borrower,

(B) that the interest rate for the new Long-Term Rate Period will be determined by the Remarketing Agent not later than the 15th Business Day preceding the first day of the new Long-Term Rate Period, and

(C) the effective date of and the end of the new Long-Term Rate Period.

Any notice provided under Section 2.02(d)(iii) of the Indenture shall be for informational purposes only and shall not waive or otherwise affect the mandatory purchase of the Bonds at the end of any Long-Term Rate Period as set forth in Section 3.01(b) of the Indenture.

App. I-5

(4) Conversion of Interest Rate.

(i) Conversion Directed by the Borrower. The Interest Rate Mode for the Bonds is subject to Conversion to a different Interest Rate Mode from time to time in whole (and not in part) by the Borrower, such right to be exercised by notifying the Trustee, the Credit Facility Issuer, the Tender Agent and the Remarketing Agent at least 4 Business Days prior to the 30th day prior to the effective date of such proposed Conversion. Such notice shall specify (A) the effective date, (B) the proposed Interest Rate Mode, (C) if the Conversion is to the Long-Term Rate, the end of the Long-Term Rate Period and (D) if such Conversion is conditional, the interest rate limitations. The notice must be accompanied by (i) an opinion of Counsel stating that the Conversion is authorized by the Indenture and, if the Conversion is from a Rate Period of one year or less to a Rate Period of more than one year or from a Rate Period of more than one year to a Rate Period of one year or less, an opinion of nationally recognized bond counsel that such Conversion will not affect the exclusion from gross income for federal income tax purposes of the interest on the Bonds, and (ii) if the stated amount of the Credit Facility, if any, to be held by the Trustee after such Conversion is increased over that of the then current Credit Facility an opinion of reputable bankruptcy counsel stating that payments of principal and interest on the Bonds from funds drawn on such Credit Facility will not constitute avoidable preferences with respect to the bankruptcy of the Borrower under the Bankruptcy Code. Any Conversion by the Borrower of the Interest Rate Mode to the Long-Term Rate may be made conditional on the initial interest rate determined for such Interest Rate Mode being within certain limits established by the Borrower. The Remarketing Agent shall establish what would be the interest rate for the proposed Interest Rate Mode in accordance with Section 2.02(c) of the Indenture. If the interest rate established by the Remarketing Agent is not within the limits established, then such Conversion may be cancelled by the Borrower, in which case, the Borrower's notice of Conversion shall be of no effect and the Bonds shall not be subject to any mandatory purchase pursuant to Section 3.01(b) of the Indenture. Notice of such cancellation shall be given promptly to all Bondholders.

(ii) Limitations. Any Conversion of the Interest Rate Mode for the Bonds pursuant to paragraph (i) above must comply with the following:

(A) the Conversion Date must be an Interest Payment Date which is a date on which the Bonds are subject to optional redemption pursuant to Section 8.01(a), (b) or (c) of the Indenture;

(B) the Conversion Date must be a Business Day; and

(C) the Credit Facility, if any, to be held by the Trustee must cover accrued interest for the Bonds for 110 days, if the Conversion is to the Weekly Rate, or for 195 days, if the Conversion is to the Semi-Annual Rate or the Long-Term Rate. If a Credit Facility will not support the Bonds after the Conversion Date, the Borrower may only convert the Interest Rate Mode for the

App. I-6

Bond to a Long-Term Rate Period which Long-Term Rate Period shall expire on the maturity date of the Bonds.

(iii) Notice to Bondholders of Conversion of Interest Rate. The Trustee shall notify the Bondholders of each Conversion by first class mail, postage prepaid, at least 15 days (30 days in the case of Conversion from or to the Long-Term Rate) but not more than 60 days before the Conversion Date. The notice will state:

(A) that the Interest Rate Mode will be converted and what the new Interest Rate Mode will be;

(B) the Conversion Date;

(C) if the Conversion is to the Long-Term Rate, whether the conversion is conditional and, if conditional, the interest rate limitations set by the Borrower; and

(D) that the Bonds will be subject to mandatory purchase on the Conversion Date in accordance with
Section 3.01(b).

If the Conversion is to the Long-Term Rate, the notice will also state the information required by Section 2.02(d)(iii) of the Indenture.

(iv) Cancellation of Conversion of Interest Rate Mode. Notwithstanding any provision of Section 2.02 of the Indenture, the Interest Rate Mode shall not be converted if (A) the Remarketing Agent has not determined the initial interest rate for the new Interest Rate Mode in accordance with Section 2.02 of the Indenture or (B) the Trustee shall receive written notice prior to such Conversion that either of the opinions required under Section 2.02(e)(i) of the Indenture has been rescinded. If the Trustee shall have sent any notice to the Bondholders regarding a Conversion of the Interest Rate Mode under Section 2.02(e)(iii) of the Indenture, the Trustee shall promptly notify all Bondholders of such rescission and the cancellation of any mandatory purchase pursuant to Section 3.01(b) of the Indenture.

App. I-7

EXHIBIT B

PROJECT FACILITIES

An approximately 110,900 square foot steel frame precast concrete building together with certain of the machinery and equipment to be installed therein including without limitation the following:

EXHIBIT C

PROJECT SITE

LEGAL DESCRIPTION

ALL THAT CERTAIN PIECE, PARCEL OR TRACT OF LAND, LYING AND BEING IN THE CITY OF GAFFNEY, COUNTY OF CHEROKEE, BEING SHOWN AND DELINEATED ON A PLAT OF 20.75 ACRES PREPARED FOR CORE MATERIALS CORPORATION, BY PROFESSIONAL SURVEYING AND ENGINEERING SERVICES, DATED SEPTEMBER 4, 1997, AND RECORDED IN THE OFFICE OF THE CLERK OF COURT FOR CHEROKEE COUNTY IN PLAT BOOK B114 AT PAGE 1 (THE "REFERENCED PLAT"), AND BEING MORE FULLY DESCRIBED AS FOLLOWS:

BEGINNING AT AN EXISTING IRON PIN ON THE EASTERN RIGHT-OF-WAY OF COMMERCE DRIVE, SAID PIN BEING THE NORTHWESTERNMOST CORNER OF THE LANDS OF THE PHOENIX FINISHING CORPORATION AS SHOWN ON DEED OF RECORD AT DEED BOOK 12-W AT PAGE 52, AS RECORDED IN THE OFFICE OF THE CLERK OF COURT FOR CHEROKEE COUNTY, SOUTH CAROLINA, AND SAID PIN ALSO BEING THE SOUTHWESTERNMOST CORNER OF TRACT E AS SHOWN ON A PLAT OF MEADOWCREEK INDUSTRIAL PARK RECORDED AT PLAT BOOK 13-B AT PAGE 106. RUNNING THENCE, WITH THE EASTERN RIGHT-OF-WAY OF COMMERCE DRIVE, A CURVE TO THE LEFT HAVING A RADIUS OF 584.54' AND AN ARC LENGTH OF 418.54' AND SUBTENDED BY A CHORD OF N 25(DEGREE)28'06" W FOR A DISTANCE OF 409.66' TO A NEW IRON; THENCE, WITH SAID RIGHT-OF-WAY, N 45(DEGREE)58'49" W FOR A DISTANCE OF 148.68' TO A NEW IRON; THENCE, WITH THE RIGHT-OF-WAY, A CURVE TO THE RIGHT HAVING A RADIUS OF 1363.42' AND AN ARC LENGTH OF 192.60', AND SUBTENDED BY A CHORD OF N 41(DEGREE)56'00" W FOR A DISTANCE OF 192.44' TO A NEW IRON; THENCE, WITH SAID RIGHT-OF- WAY, N 37(DEGREE)53'11" W FOR A DISTANCE OF 75.09' TO A NEW IRON; THENCE, LEAVING THE RIGHT- OF-WAY, N 79(DEGREE)55'32" E FOR A DISTANCE OF 703.44' TO AN EXISTING IRON; THENCE N 80(DEGREE)05'14" E FOR A DISTANCE OF 596.84' TO AN EXISTING IRON; THENCE N 80(DEGREE)01'11" E FOR A DISTANCE OF 227.06' TO AN EXISTING IRON; THENCE S 21(DEGREE)45'57" W FOR A DISTANCE OF 64.10' TO AN EXISTING IRON; THENCE S 04(DEGREE)16'24" W FOR A DISTANCE OF 225.65' TO AN EXISTING IRON; THENCE S 16(DEGREE)45'59" W FOR A DISTANCE OF 247.90' TO AN EXISTING IRON; THENCE S 15(DEGREE)28'32" E FOR A DISTANCE OF 238.40' TO AN EXISTING IRON; THENCE S 08(DEGREE)03'56" E FOR A DISTANCE OF 44.68' TO AN EXISTING IRON, SAID IRON BEING THE NORTHEASTERN CORNER OF THE LANDS OF THE PHOENIX FINISHING CORPORATION, S 81(DEGREE)47'34" W FOR A DISTANCE OF 1014.54' TO THE POINT AND PLACE OF BEGINNING.

DERIVATION: DEED FROM GILBERT PROPERTIES, INC. TO CORE MATERIALS CORPORATION, DATED SEPTEMBER 12, 1997 AND RECORDED SEPTEMBER 12, 1997 IN THE OFFICE OF THE CLERK OF COURT OF CHEROKEE COUNTY IN DEED BOOK 16-L AT PAGE 187.

ASSESSOR'S TAX MAP NO.: 116-00-00-049.005

EXHIBIT D

FORM OF DISBURSEMENT REQUEST

STATEMENT NO. ______ REQUESTING DISBURSEMENT OF FUNDS
FROM PROJECT FUND PURSUANT TO SECTION 3.4 OF THE
LOAN AGREEMENT DATED AS OF APRIL 1, 1998 BETWEEN
SOUTH CAROLINA JOBS-ECONOMIC DEVELOPMENT AUTHORITY
AND CORE MATERIALS CORPORATION

Pursuant to Section 3.4 of the Loan Agreement (the "Agreement") between the South Carolina Jobs-Economic Development Authority (the "Issuer"), and Core Materials Corporation (the "Borrower") dated as of April 1, 1998, the undersigned Designated Representative hereby requests and authorizes The Huntington National Bank, as trustee (the "Trustee"), as depository of the Project Fund created by the Indenture and defined in the Agreement, to pay to the Borrower or to the person(s) listed on the Disbursement Schedule hereto out of the moneys deposited in the Project Fund the aggregate sum of $___________ to pay such person(s) or to reimburse the Borrower in full, as indicated in the Disbursement Schedule, for the advances, payments and expenditures made by it in connection with the items listed in the Disbursement Schedule.

In connection with the foregoing request and authorization, the undersigned hereby certifies that:

(a) Each item for which disbursement is requested hereunder is properly payable out of the Project Fund in accordance with the terms and conditions of the Agreement and the Reimbursement Agreement and none of those items has formed the basis for any disbursement heretofore made from said Project Fund.

(b) Each such item is or was necessary in connection with the construction, furnishing, equipment or improvement of the Project, as defined in the Agreement.

(c) Each item for which disbursement is requested hereunder, and the cost for each such item, is as described in the information statement filed by the Issuer in connection with the issuance of the Bonds (as defined in the Agreement), as required by Section 149(e) of the Code; provided that if any such item is not as described in that information statement, attached hereto is a computation evidencing that the average reasonably expected economic life of the facilities which have been and will be paid for with moneys in the Project Fund is not less than 5/6ths of the average maturity of the Bonds.

(d) This statement and all exhibits hereto, including the Disbursement Schedule, shall be conclusive evidence of the facts and statements set forth herein and shall constitute full warrant, protection and authority to the Trustee for its actions taken pursuant hereto.

(e) This statement constitutes the approval of the Borrower of each disbursement hereby requested and authorized.

Pursuant to Section 3.4 of the               ___________________________________
Agreement the foregoing                      Designated Representative
disbursement request is hereby
approved:

KEYBANK NATIONAL ASSOCIATION, as issuer
of the Credit Facility

By: _____________________________

Title: __________________________

Dated: __________________________

DISBURSEMENT SCHEDULE

TO STATEMENT NO. __________ REQUESTING AND AUTHORIZING DISBURSEMENT OF FUNDS FROM PROJECT FUND PURSUANT TO SECTION 3.4 OF THE LOAN AGREEMENT DATED AS OF APRIL 1, 1998 BETWEEN THE SOUTH CAROLINA JOBS- ECONOMIC DEVELOPMENT AUTHORITY AND CORE MATERIALS CORPORATION

EXHIBIT 10(h)

REIMBURSEMENT AGREEMENT

by and between

CORE MATERIALS CORPORATION

and

KEYBANK NATIONAL ASSOCIATION

DATED AS OF APRIL 1, 1998

REIMBURSEMENT AGREEMENT

This REIMBURSEMENT AGREEMENT ("Agreement"), dated as of the 1st day of April, 1998, is by and between CORE MATERIALS CORPORATION, a Delaware corporation (the "Borrower"), and KEYBANK NATIONAL ASSOCIATION, a national banking association (the "Bank").

WHEREAS, in order to provide financing for the costs of acquiring, constructing, equipping and improving an industrial building, to be located at 24 Commerce Drive, Meadow Creek Industrial Part Tract "E", Gaffney, South Carolina (the "South Carolina Premises") (the building located on the South Carolina Premises and the improvements to such building and other portions of the Premises to be constructed are herein referred to as the "Project"), the South Carolina Jobs-Economic Development Authority (the "Issuer") proposes to issue its Multi-Mode Variable Rate Industrial Development Revenue Bonds, Series 1998 (Core Materials Corporation Project), in the aggregate principal amount of Seven Million Five Hundred Thousand Dollars ($7,500,000) (the "Bonds") under the terms and conditions more fully set forth in the Trust Indenture dated as of April 1, 1998 (the "Indenture"), by and between the Issuer and The Huntington National Bank, Columbus, Ohio, as Trustee; and

WHEREAS, to enhance the marketability of the Bonds the Borrower has applied to the Bank for the issuance of a letter of credit (the "Letter of Credit") in favor of the Trustee in an amount not to exceed a maximum stated amount of Seven Million Seven Hundred Twenty-Six Thousand Twenty-Eight Dollars ($7,726,028.00) to secure the payment of the principal of and accrued interest on the Bonds; and

WHEREAS, it is the purpose of this Agreement to set forth the Bank's commitment to issue the Letter of Credit and the Borrower's agreement to reimburse the Bank for any and all payments made by the Bank pursuant to the Letter of Credit.

NOW THEREFORE, in consideration of the mutual agreements made herein and other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto agree as follows:

SECTION ONE

DEFINITIONS

SECTION 1.1. TERMS DEFINED. As used in this Agreement, the following terms have the following respective meanings. Any accounting term used but not specifically defined herein shall be construed in accordance with GAAP. The definition of each agreement, document, and instrument set forth in this Section 1.1 shall be deemed to mean and include such agreement, document, or instrument as amended, restated, or modified from time to time:

"BANK OBLIGATION" shall mean an amount equal to the aggregate outstanding liability of the Bank from time to time under the Letter of Credit.

"BANK" shall mean KeyBank National Association, its successors and assigns.

"BOND DOCUMENTS" shall mean, collectively the Indenture, the Loan Agreement and any other document executed by the Borrower in connection with the issuance of the Bonds (other than the Credit Documents).

"BOND PLEDGE AGREEMENT" shall mean the Bond Pledge Agreement, dated as of April 1, 1998, among the Borrower, the Bank, and the Trustee.

"BONDS" shall mean the Issuer's $7,500,000 Multi-Mode Variable Rate Industrial Development Revenue Bonds, Series 1998 (Core Materials Corporation Project) issued pursuant to the Indenture.

"BORROWER" shall mean, Core Materials Corporation, a Delaware corporation.

"BUSINESS DAY" shall mean any day of the year other than (i) a Saturday or Sunday, (ii) any day on which banks located in either Cleveland, Ohio, or the principal corporate trust office of the Trustee is located are required or authorized by law to remain closed, or (iii) any day on which the New York Stock Exchange is closed.

"COMPLETION DATE" shall mean March 31, 1999.

"CREDIT DOCUMENTS" shall mean, collectively, this Reimbursement Agreement, the Mortgages, the Security Agreement, the Bond Pledge Agreement and the Letter of Credit Note.

"DATE OF ISSUANCE" shall mean the date of issuance of the Letter of Credit.

"EBITDA" shall mean, for any period, (A) the sum of the amounts for such period of (1) net income, (2) interest expense, (3) charges for federal, state, local and foreign income taxes, (4) depreciation and amortization expense, and (5) extraordinary losses (and any unusual losses arising outside the ordinary course of business not included in extraordinary losses determined in accordance with GAAP) minus (b) the sum of the amounts for such period of (1) extraordinary gains (and any unusual gains arising outside the ordinary course of business not included in extraordinary gains determined in accordance with GAAP) and (2) to the extent not deducted

from total interest expense, any net payments received during such period under interest rate contracts and any interest income received in respect of cash investments.

"ENVIRONMENTAL LAW" shall mean any federal, state, or local statute, law, ordinance, code, rule, regulation, order or decree regulating, relating to, or imposing liability upon a Person in connection with the use, release or disposal of any hazardous, toxic or dangerous substance, waste or material.

"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as the same may from time to time be amended or supplemented, and all regulations thereunder.

"EVENT OF DEFAULT" shall have the meaning assigned thereto in Section 8 hereof.

"EXPIRATION DATE" shall mean April 17, 2003, unless extended by the Bank in writing pursuant to Section 2.5.

"FEE CALCULATION AMOUNT" shall have the meaning set forth in Section 2.2(b).

"FUNDED DEBT" shall mean, at a particular date, the Indebtedness of the Borrower for money borrowed, whether secured or unsecured, having a final maturity (or which by the term thereof is renewable or extendible at the option of the obligor for a period ending) more than one year after the date of creation thereof.

"GAAP" shall mean generally accepted accounting principles as then in effect, which shall include the official interpretations thereof by the Financial Accounting Standards Board, consistently applied.

"IMPROVEMENTS" shall mean the leasehold improvements to be constructed in and to the Project and financed, in part, by the proceeds of the Bonds.

"INDEBTEDNESS" shall mean, at a particular date, the liabilities of Borrower, as determined in accordance with GAAP, consistently applied, including, without limitation, all indebtedness for money borrowed or for the deferred purchase price of property and lease obligations of the Borrower which have been, or which in accordance with Statement of Financial Accounting Standards No. 13, as from time to time amended, should be, capitalized.

"INDENTURE" shall mean the Trust Indenture, dated as of April 1, 1998, between the Issuer and the Trustee.

"INDENTURE DEFAULT" shall mean an Event of Default under and pursuant to the Indenture.

"INTEREST COMMITMENT" shall have the meaning set forth in the Letter of Credit.

"INTEREST DRAWING" shall have the meaning set forth in the Letter of Credit.

"INTEREST PORTION" shall have the meaning set forth in the Letter of Credit.

"ISSUER" shall mean the South Carolina Jobs-Economic Development Authority, a public body politic and corporate and an agency of the State of South Carolina.

"LETTER OF CREDIT" shall mean the Letter of Credit to be issued by the Bank on the Closing Date pursuant to this Agreement, such Letter of Credit to be substantially in the form of Exhibit B attached hereto.

"LETTER OF CREDIT COMMITMENT" shall have the meaning set forth in the Letter of Credit.

"LETTER OF CREDIT FEE" shall have the meaning set forth in Section 2.2(b) of this Agreement.

"LETTER OF CREDIT NOTE" shall mean the promissory note from the Borrower to the Bank in the form attached hereto as Exhibit A evidencing the Borrower's obligations to make payment to the Bank under this Agreement for amounts drawn under the Letter of Credit.

"LOAN AGREEMENT" shall mean the Loan Agreement, dated as of April 1, 1998, between the Issuer and the Borrower.

"LOANS" shall mean any loans or other credit facilities by the Bank in favor of the Borrower including but not limited to (a) loans or credit of any type extended to the Borrower by the Bank, including the loan evidenced by the Variable Rate Loan, the Sale/Leaseback, and the Operating Lease, and any other loans of indebtedness of Borrower to the Bank as may now exist of hereafter arise; (b) the creation of debt by the Bank's payment of or agreement to pay money to Borrower or to a third party for the account of Borrower; (c) the creation of a debt by a credit to an account with the Bank upon which Borrower is entitled to draw immediately; (d) the forbearance of debt arising from a loan; and (e) the creation of debt by execution of installment loans or lease agreements for vehicles or equipment between Borrower and the Bank.

"MAXIMUM SENIOR FUNDED DEBT TO EBITDA RATIO" shall man the (A) sum of the commitment amount of the Variable Rate Loan ($7,500,000 as of the date hereof), the total Sale/Leaseback Obligations, the outstanding principal amount of the Bonds and any other permitted debt (other than the Subordinated Debt) divided by (B) EBITDA.

"MINIMUM FIXED CHARGE COVERAGE RATIO" shall mean the sum of EBITDA and rent (lease) expense, including without limitation rent payments in connection with the Sale/Leaseback and the Operating Lease, for a given period, divided by the sum of (A) interest expense (which shall not include interest on the Subordinated Debt which is deferred and not paid), (B) rent (lease) expense, including without limitation rent payments in connection with the Sale/Leaseback and Operating Lease, (C) principal payments on the Subordinated Debt, the Bonds and any other permitted debt, and (D) Unfunded Capital Expenditures in the amounts disclosed by Borrower in its financial statements, for such period.

"MINIMUM DEBT SERVICE COVERAGE RATIO" shall mean the sum of EBITDA and rent (lease) expense, including without limitation rent payments in connection with the Sale/Leaseback and the Operating Lease, for a given period, divided by the sum of (A) interest expense (which

shall not include interest on the Subordinated Debt which is deferred and not paid, (B) rent (lease) expense, including without limitation rent payments in connection with the Sale/Leaseback and Operating Lease, and (C) principal payments on the Subordinated Debt, the Bonds and any other permitted debt, for such period.

"MORTGAGES" shall mean, collectively, the Open-End Mortgage, Assignment of Rents and Leases and Security Agreement, dated as of May 7, 1998, given by the Borrower to the Bank, and filed for record with the County Recorder, Franklin County, Ohio on May 7, 1998, and the Open-End Mortgage, Assignment of Rents and Leases and Security Agreement dated, as of December 3, 1997, given by the Borrower to the Bank, and filed for record with the Clerk of Court, Cherokee County, South Carolina on December 19, 1997, at Volume 543, Page 303, as amended and supplemented by the Supplemental Open-End Mortgage, Assignment of Rents and Leases and Security Agreement, dated as of May 7, 1998.

"OBLIGATIONS" shall mean all liabilities and obligations of any kind, direct or indirect, owing by the Borrower or any one of them, to the Bank, whether arising under this Agreement or any other Credit Documents, whether absolute or contingent, now existing or hereafter arising, including without limitation, letter of credit reimbursement obligations, interest, fees, Related Expenses and Guaranteed Obligations (as defined in Section 10.4 herein).

"OHIO PREMISES" shall mean the Borrower's building located at 800 Manor Park Drive, Columbus, Ohio.

"OPERATING LEASE" shall mean the Equipment Lease, to be entered into by and between the Bank and the Borrower, in an aggregate amount of $5,500,000.

"PERMITTED ENCUMBRANCES" shall mean, as of any particular time, (a) liens for ad valorem taxes and special assessments not then delinquent, (b) this Agreement, the Mortgages, Bond Pledge Agreement, the Security Agreement and any security interest or other lien created thereby, (c) such minor defects, irregularities, encumbrances and clouds on title as normally exist with respect to property similar in character to the Pledged Collateral and as do not, in a written certificate of an officer of the Borrower, interfere with or impair the use or value of the property affected thereby, (d) any security interest granted from time to time to the Bank, and (e) any items set forth on Exhibit C attached hereto.

"PERSON" means any natural person, corporation (which shall be deemed to include business trust), association, partnership, political entity, or political subdivision thereof.

"PLAN" shall mean any plan defined in Section 4021(a) of ERISA in respect of which Borrower is an "employer" or a "substantial employer" as defined in Section 3(5) and 4001(a)(2) of ERISA, respectively.

"PLEDGED COLLATERAL" shall mean the collateral in which the Borrower has given the Bank a security interest pursuant to the Mortgages, Security Agreement and/or the Bond Pledge Agreement.

"PREMISES" shall mean, collectively, the Ohio Premises and the South Carolina Premises.

"PRIME RATE" shall mean that interest rate established from time to time by the Bank as Bank's Prime Rate, whether or not such rate is publicly announced. The Prime Rate may not be the lowest rate charged by the Bank for commercial or other extensions of credit.

"PRINCIPAL COMMITMENT" shall have the meaning set forth in the Letter of Credit.

"PRINCIPAL DRAWING" shall have the meaning set forth in the Letter of Credit.

"PRINCIPAL PORTION" shall have the meaning set forth in the Letter of Credit.

"PROHIBITED TRANSACTION" shall mean any prohibited transaction as that term is defined for purposes of ERISA.

"PROJECT" shall mean the Project as defined in the recitals hereof.

"PURCHASER" shall mean the original purchaser or purchasers of the Bonds.

"REMARKETING AGENT" shall mean, initially, Key Capital Markets, Inc.

"REMARKETING COMMITMENT" shall have the meaning set forth in the Letter of Credit.

"REMARKETING DRAWING" shall have the meaning set forth in the Letter of Credit.

"REMARKETING PORTION" shall have the meaning set forth in the Letter of Credit.

"REPORTABLE EVENT" shall mean any reportable event as that term is defined in ERISA.

"SALE/LEASEBACK" shall mean the Sale/Leaseback Equipment Financing Facility, entered into as of December 3, 1997, by and between the Borrower and the Bank in the aggregate amount of $12,000,000.

"SECURITY AGREEMENT" shall mean the Security Agreement dated as of December 3, 1997 by the Borrower to the Bank.

"SOUTH CAROLINA PREMISES" shall mean the South Carolina Premises as defined in the recitals hereto.

"STATED AMOUNT" shall have the meaning set forth in the Letter of Credit.

"SUBORDINATED DEBT" shall mean the amount of outstanding principal and interest owed by Borrower to Navistar International Transportation Corp., a Delaware Corporation, at any given point in time.

"TRUSTEE" means The Huntington National Bank, Columbus, Ohio, or any successor Trustee under the Indenture.

"UNFUNDED CAPITAL EXPENDITURES" shall mean any capital expenditure made for which no long-term funding source is specifically available.

"VARIABLE RATE LOAN" shall mean the $7,500,000 revolving loan from the Bank in favor of the Borrower, as evidenced by the Variable Rate Promissory Note and the Loan Agreement, each entered into as of December 3, 1997.

SECTION TWO

ISSUANCE OF LETTER OF CREDIT

SECTION 2.1. ISSUANCE OF LETTER OF CREDIT. Subject to the terms and conditions hereof, the Bank agrees to execute and deliver the Letter of Credit. The obligations of the Bank under the Letter of Credit shall be absolute and irrevocable and shall be performed strictly in accordance with the terms of the Letter of Credit and this Agreement. All payments made under the Letter of Credit shall be made with the Bank's funds.

SECTION 2.2. FEES AND REIMBURSEMENT FOR LETTER OF CREDIT

(a) The Borrower hereby agrees to pay to the Bank:

(i) Before 2:00 p.m., Cleveland, Ohio time, on each date that any amount is drawn under the Letter of Credit pursuant to a Principal Drawing, an Interest Drawing and/or a Remarketing Drawing, each as defined in the Letter of Credit, a sum equal to the amount drawn under the Letter of Credit, plus (x) interest accrued, if any, on the amount so drawn under the Letter of Credit as determined pursuant to clause
(iii) of this subsection (a) of this Section 2.2, plus (y) any and all charges and expenses which the Bank may pay or incur relative to such drawing under the Letter of Credit, plus (z) a fee in the amount of Two Hundred Dollars ($200) for each Principal Drawing, Remarketing Drawing, or Interest Drawing under the Letter of Credit; provided, however, that in the event there is a Remarketing Drawing and the Bonds purchased pursuant to such drawing are unable to be remarketed by the Remarketing Agent for a period of thirty (30) consecutive days, then such Remarketing Drawing shall be paid on the Expiration Date (unless the date of such payment is accelerated pursuant to Section 8.2). Notwithstanding the foregoing, in such event, the principal and interest payments on such Bonds shall remain unaltered, and the Borrower shall pay such amounts as and when due and payable under such Bonds.

(ii) Upon each transfer of the Letter of Credit in accordance with its terms and as a condition thereto, a sum in such amount as shall be reasonably necessary to cover the costs and expenses to the Bank incurred in connection with such transfer;

(iii) On demand interest on any and all amounts not paid by the Borrower when due under any section of this Agreement from the date such amounts become due until payment in full, such interest at a rate per annum equal to the Prime Rate;

(iv) On demand, reasonable costs, fees and expenses incurred by the Bank in connection with the issuance or sale of the Bonds or issuance of the Letter of Credit or the preparation or execution of any documents or opinions related thereto, which may include but not be limited to legal, documentation, search and recording fees;

(v) On demand, any and all reasonable expenses incurred by the Bank in enforcing any of its rights under the Credit Documents;

(vi) On or prior to the Closing Date, a one-time origination fee in the amount of $20,000.

(b) The Borrower hereby agrees to pay to the Bank a commitment fee (the "Letter of Credit Fee") equal to an amount calculated at the rate (the "LOC Fee Rate") of one percent (1%) per annum (using a 360-day year and 30-day month, but calculated on the number of actual days elapsed) of the maximum "Fee Calculation Amount" as hereinafter defined, available on each date of payment of the Letter of Credit Fee. The Letter of Credit Fee shall be payable in annual installments in advance on the Closing Date and thereafter on each anniversary date of the first day of the month in which the Closing Date occurred; provided, however, that upon the Date of Issuance of the Letter of Credit, the Borrower shall pay an installment of the Letter of Credit Fee for the period from the Date of Issuance to and including March 31, 1999. The "Fee Calculation Amount" shall be the maximum amount then available to be drawn under the Letter of Credit with respect to the Principal Commitment plus, (ii) the maximum amount then available to be drawn under the Letter of Credit with respect to the Interest Commitment. If the Letter of Credit is terminated prior to the Expiration Date, the Letter of Credit Fee shall be refunded to the Borrower for any calendar quarter that the Letter of Credit will not be outstanding provided that the Borrower returns or causes to be returned the Letter of Credit to the Bank prior to the start of such calendar quarter.

(c) If any change in any law or regulation or in the interpretation thereof by any court or administrative or governmental authority charged with the administration thereof shall impose, modify or deem applicable any reserve, special deposit or similar requirement which would increase or decrease the Bank's costs (i) generally upon the issuance or maintenance of letters of credit by the Bank, (ii) specifically in respect of this Agreement or the Letter of Credit, or (iii) in respect of any capital adequacy requirement (including, without limitation, a requirement which affects the manner in which the Bank allocates capital resources to its commitments), and the result of such an increase or decrease in costs as described

in clause (i), (ii), or (iii) above shall be to increase or decrease the costs to the Bank of issuing or maintaining the Letter of Credit (which increase or decrease in costs shall be the result of the Bank's reasonable allocation, of the aggregate of such cost increases or decreases resulting from such events), then, (x) within thirty (30) days of the Bank's obtaining knowledge of such change in law, regulations or interpretation thereof, the Bank shall so notify the Borrower and (y) immediately upon receipt of such notice from the Bank, accompanied by a certificate as to such increased or decreased cost, the Borrower shall pay or receive a refund as of the effective date of such change or interpretation all additional amounts which are necessary to compensate the Bank or the Borrower for such increased or decreased cost incurred by the Bank.

(d) The Borrower's obligations to make payments to the Bank under this Section 2.2 shall be deemed satisfied to the extent of payments made by the Trustee to the Bank from funds on deposit with and held by the Trustee pursuant to the Indenture.

SECTION 2.3. BORROWER'S OBLIGATIONS UNCONDITIONAL. The payment obligations of the Borrower under this Agreement shall be absolute, unconditional and irrevocable and shall be satisfied strictly in accordance with the terms of this Agreement, under all circumstances whatsoever, including, without limitation, the following circumstances:

(a) Any lack of validity or enforceability of the Credit Documents, the Bond Documents or any other agreement or instrument relating thereto;

(b) Any amendment or waiver of or any consent to departure from the terms of the Letter of Credit, the Credit Documents, the Bond Documents or any other agreement or instrument relating thereto;

(c) The existence of any claim, setoff, defense or right which the Borrower may have at any time against any beneficiary or any transferee of the Letter of Credit (or any persons or entities for whom any such beneficiary or any such transferee may be acting), the Bank, or any other person or entity, whether in connection with this Agreement, the transactions contemplated by the Credit Documents, the Bond Documents, or any unrelated transaction;

(d) Any statement or any other document presented under the Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect whatsoever; or

(e) Payment by the Bank under the Letter of Credit against presentation of a request which on its face appears to be in accordance with the terms of the Letter of Credit.

SECTION 2.4. PAYMENTS. All payments by the Borrower hereunder to the Bank shall be made in lawful currency of the United States and in immediately available funds to the main office of the Bank at 127 Public Square, Cleveland, Ohio 44114.

SECTION 2.5. LETTER OF CREDIT EXTENSION. The Bank may in writing, effective on each April 1, extend the Expiration Date of the Letter of Credit for an additional one-year period; provided, however, that such extension shall be, in each instance, made in the sole discretion of the Bank and the Bank may at any time, upon written notice delivered to Borrower and Trustee, elect not to extend the Expiration Date. The Bank shall notify Borrower and Trustee of its decision of whether the Expiration Date shall be extended no later than thirty
(30) days prior to April 1 of each year, provided that the failure of Bank to deliver such notice, or to deliver any notice, shall mean that Bank has elected not to extend the Expiration Date. If the Bank extends the Expiration Date, it shall do so in the form of an amendment to the Letter of Credit, which it shall promptly deliver to Trustee.

SECTION THREE

REPRESENTATIONS AND WARRANTIES

The Borrower expressly represents and warrants that:

SECTION 3.1. EXISTENCE AND LEGAL AUTHORITY. The Borrower is a Delaware corporation duly incorporated and validly existing and in good standing under the laws of the State of Delaware and has all requisite power and authority to own its property and to carry on its business as now being conducted, to enter into the Credit Documents to which it is a party and the other agreements referred to herein and transactions contemplated thereby, and to carry out the provisions and conditions of such Credit Documents to which it is a party. The Borrower is duly qualified to do business and is in full force and effect or is in good standing in every jurisdiction where the failure to so qualify would have a material adverse effect on the business of Borrower, including Ohio and South Carolina.

SECTION 3.2. DUE EXECUTION AND DELIVERY. The Borrower has full power, authority and legal right to incur the obligations provided for in, and to execute and deliver and to perform and observe the terms and provisions of, the Credit Documents to which it is a party, and each of them has been duly executed and delivered by Borrower and authorized, by all required action, and Borrower has obtained all requisite consents to the transactions contemplated thereby under any instrument to which it is a party, and the Credit Documents constitute the legal, valid and binding obligations of Borrower enforceable against Borrower in accordance with their respective terms, except as the enforceability thereof may be limited by applicable bankruptcy, insolvency or other similar laws affecting creditors' rights generally.

SECTION 3.3. NO BREACH OF OTHER INSTRUMENTS. Neither the execution and delivery of the Credit Documents, nor the compliance by the Borrower with the terms and conditions of the Credit Documents, nor the consummation of the transactions contemplated thereby, will conflict with or result in a breach of the Certificate of Incorporation or Bylaws of the Borrower, or any

charter or other corporate restriction, other restriction or law, regulation, rule or order of any governmental body or agency to which the Borrower is now a party or is subject.

SECTION 3.4. GOVERNMENT AUTHORIZATION. Except for Federal and state securities laws with respect to the sale of the Bonds, no consent, approval, authorization or order of any court or governmental agency or body is required which if not obtained would have a material adverse effect on such transaction for the consummation by the Borrower of the transactions contemplated by the Credit Documents.

SECTION 3.5. PLEDGED COLLATERAL. The Borrower has good fee simple title to the Premises, free and clear of all liens, pledges, mortgages, security interests, charges, claims and other encumbrances, except the Permitted Encumbrances. Upon proper filing with the appropriate authorities, the Mortgages, the Security Agreement and the Bond Pledge Agreement have created or will create, as appropriate, a valid and prior perfected security interest and lien in favor of the Bank, subject to no other liens or encumbrances arising by, through or under the Borrower or any other Person, except for Permitted Encumbrances or as otherwise provided in the Bond Documents.

SECTION 3.6. ABSENCE OF DEFAULTS, ETC. The Borrower is not (i) in default under any indenture or material contract or material agreement to which it is a party or by which it is bound, (ii) in violation of its Certificate of Incorporation or Bylaws, (iii) in default with respect to any order, writ, injunction or decree of any court, or (iv) in default under any order or license of any federal or state governmental department, which default or violation in any of the aforesaid cases materially and adversely affects its business or property. There exists no condition, event or act which constitutes, or after notice or lapse of time or both would constitute, an Event of Default.

SECTION 3.7. INDEBTEDNESS OF BORROWER. The Borrower does not have outstanding on the date hereof, any Indebtedness for borrowed money, except for such Indebtedness reflected on the financial statements referred to in Section 3.8 hereof.

SECTION 3.8. FINANCIAL CONDITION. The Borrower has furnished to the Bank true and correct financial statements reviewed by a certified public accountant as of the end of the Borrower's fiscal year which ended December 31, 1997 which financial statements present fairly each Borrower's financial condition at such date, and there has been no material adverse change in Borrower's financial condition since that date.

SECTION 3.9. NO ADVERSE CHANGE. Subsequent to the date of the financial statements referred to in Section 3.8 hereof, the Borrower has not incurred any liabilities or obligations, direct or contingent, not in the ordinary course of business and there has not been any increase in the aggregate amount of Funded Debt of the Borrower, or any change in the business, properties or condition, financial or otherwise, of the Borrower, except for changes arising in the ordinary course of business or in connection with the issuance and sale of the Bonds or as may be otherwise disclosed in writing to the Bank prior to the date hereof.

SECTION 3.10. TAXES. The Borrower has filed all tax returns which are to be filed and has paid, or has made adequate provision for the payment of, all taxes which have or may become due

pursuant to said returns or to assessments received by them. The provisions for taxes reflected in the most recent balance sheet referred to in Section 3.8 are believed adequate to cover any and all accrued and unpaid taxes for which the Borrower is liable for the period ended on the date of such balance sheet and all prior periods. The Borrower does not know of any material deficiency assessment or proposed material deficiency assessment of taxes against the Borrower, except as may be otherwise disclosed in writing to the Bank prior to the date hereof.

SECTION 3.11. LITIGATION. Prior to the date hereof, there are no actions, suits or proceedings pending, or to the actual knowledge of the Borrower, threatened against or affecting the Borrower or property of the Borrower in any court, or before or by any federal, state or municipal or other governmental department, commission, board, bureau, agency or other instrumentality, domestic or foreign, which could result in any materially adverse change in the business, property or assets, or in the condition, financial or otherwise, of Borrower, except for actions, suits or proceedings of a character normally incident to the kind of business conducted by Borrower, none of which, either individually or in the aggregate, if adversely determined, would materially impair Borrower's right or ability to carry on its business substantially as now conducted or materially adversely affect the financial position or operations of Borrower.

SECTION 3.12. OWNERSHIP OF PROPERTY. Except for Permitted Encumbrances or as otherwise permitted in the Mortgages, the Security Agreement or this Agreement, the Borrower has good and marketable fee title to its real properties in accordance with the laws of the jurisdiction where located, and good and marketable title to substantially all its other property and assets, subject, however, in the case of real property, to title defects and restrictions which do not materially interfere with the operations conducted thereon by Borrower; provided, further, however, that the parties acknowledge that in connection with a fee in lieu of taxes arrangement with Cherokee County, South Carolina, the Borrower may, at some future date, transfer its title to the South Carolina Premises, subject to the Mortgage related thereto, and its other property and assets located therein. Except for Permitted Encumbrances, the real property and all other property and assets of the Borrower are free from any liens or encumbrance securing Indebtedness and from any other liens, encumbrances, charges or security interests of any kind. Each lease, if any, to which the Borrower is a party is in full force and effect, and no material default on the part of the Borrower to its knowledge, any other party thereto exists.

SECTION 3.13. ENVIRONMENTAL MATTERS. The Borrower is in compliance with all Environmental Laws and all applicable federal, state and local health and safety laws, regulations, ordinances or rules, except to the extent that any non-compliance will not, in the aggregate, have a materially adverse effect on the Borrower or the ability of the Borrower to fulfill its obligations under this Agreement, the Mortgages or the Letter of Credit Note.

SECTION 3.14. MORTGAGES AND SECURITY AGREEMENT. The Borrower hereby acknowledges that the Obligations owing by the Borrower to the Bank hereunder are "other indebtedness" to the Bank as contemplated by Section 2(d) of the Security Agreement and Section iv of each of the Mortgages.

SECTION FOUR

CLOSING CONDITIONS

The obligation of the Bank to issue the Letter of Credit on the Closing Date shall be subject to the following conditions precedent:

SECTION 4.1. EXECUTION AND DELIVERY OF THE CREDIT DOCUMENTS AND THE BOND DOCUMENTS. With respect to issuance of the Letter of Credit, the Borrower shall have delivered to the Bank fully executed copies of each of the Credit Documents, and the Trustee and the Borrower shall have duly executed and delivered the Bond Documents.

SECTION 4.2. ISSUANCE AND SALE OF THE BONDS. The Bonds shall have been duly issued and sold to the Purchaser pursuant to the Bond Documents.

SECTION 4.3. REPRESENTATIONS AND WARRANTIES TRUE AS OF CLOSING AND NO EVENT OF DEFAULT. The representations and warranties contained in this Agreement and the other Credit Documents shall be true in all material respects on the Closing Date with the same effect as though made on and as of that date and no condition, event or act shall have occurred which constitutes an Event of Default or, with notice or lapse of time, or both, would constitute an Event of Default.

SECTION 4.4. OPINION OF BORROWER'S COUNSEL. The Bank shall have received from counsel to the Borrower, on behalf of the Bank, an opinion with respect to (i) the matters described in Sections 3.1, 3.2, and 3.4 of this Agreement, (ii) the matters described in Sections 3.3, 3.6 and 3.11 of this Agreement, to such counsel's knowledge and belief after inquiry and (iii) such other matters incident to the transactions contemplated hereby as the Bank may reasonably request.

SECTION 4.5. OPINION OF COUNSEL. Bank shall have received from Bond Counsel, an opinion with regard to the tax-exempt status of the Bonds and the absence of any securities registration requirements with respect to the Bonds under the Securities Act of 1933, as amended. Bank shall have received from its counsel, an opinion with regard to the absence of any securities registration requirements with respect to the Letter of Credit under the Securities Act of 1933, as amended.

SECTION 4.6. PROCEEDINGS SATISFACTORY. All proceedings taken in connection with the execution and delivery of this Reimbursement Agreement and the other Credit Documents shall be reasonably satisfactory to the Bank and the Bank shall have received copies of such certificates, documents and papers as reasonably requested in connection therewith, all in form and substance satisfactory to the Bank.

SECTION FIVE

DISBURSEMENTS FROM PROJECT FUND

The Borrower shall not request or receive any disbursement of funds from the Project Fund unless and until the Bank shall have approved such disbursement in writing and all of the following conditions shall be true with respect to each such disbursement:

SECTION 5.1. EXECUTION AND DELIVERY OF MISCELLANEOUS DOCUMENTS. The Borrower shall have delivered to the Bank:

(a) Evidence that the Premises are not located in a special flood hazard area as identified by HUD;

(b) Certificates of insurance and evidence of payment of premiums therefor with respect to the insurance required by the Bank with respect to the Premises as set forth in Section 6.2 below, including, but not limited to, general liability insurance and hazard insurance, and flood insurance if applicable;

(c) A current certified survey of the Premises prepared by a registered surveyor satisfactory to the Bank, and containing on the face thereof the completed certificate of the surveyor in the form of the surveyor's certificate required by the Bank, dated a date satisfactory to the Bank, and in compliance with the Minimum Standard Detail Requirements for ALTA/ASCM Class A land title surveys, as adopted by the American Land Title Association and American Congress on Surveying and Mapping in 1992;

(d) A current Phase I environmental audit of the Premises satisfactory to the Bank in its sole discretion prepared by an environmental consultant satisfactory to the Bank;

(e) A Commitment to issue an ALTA Loan Policy of Title Insurance issued by the Title Company in the amount of the Letter of Credit (i) insuring that the Mortgages, as of their respective time of filing for record, are liens upon the Premises, and that the title to the Premises is free, clear and unencumbered, subject only to the Permitted Encumbrances; (ii) insuring the priority of the Mortgages over mechanics or materialmen's liens; (iii) obligating the Title Company to affirmatively insure that access to Premises is by a dedicated and accepted public right-of-way; and (iv) including such endorsements and affirmative insurance as may be reasonably required by the Bank, including, but not limited to, the so-called "Pending Disbursement Endorsement" and "Revolving Credit Endorsement";

(f) Evidence satisfactory to the Bank that the Project, when completed, and the Premises, and the proposed and actual use thereof, does and/or will comply with all applicable laws, statutes, codes, ordinances, rules and regulations, including, but not limited to, zoning and Environmental Laws, of all governmental authorities having jurisdiction over the same, and that there is no action or proceeding pending (or any time for an appeal of any decision rendered) before any court, quasi-judicial body or administrative agency at the Date of Issuance relating to the validity of this Reimbursement Agreement on the transactions contemplated hereby or the proposed or actual use or operation of the Premises; and

(g) A written appraisal (the "Appraisal") satisfactory to the Bank in all respects, prepared by an appraiser selected and directly engaged by the Bank pursuant to an engagement letter issued by the Bank, the cost of which Appraisal will be charged to the Borrower, and which Appraisal shall be prepared in accordance with the Uniform Standards of Professional Appraisal Practice applicable to Federally Related Transactions as set out in Appendix A to the real estate appraisal regulations adopted by the Office of the Comptroller of the Currency pursuant to the Financial Institutions Reform, Recovery and Enforcement Act of 1989 ("FIRREA") (Sub-part C of 12 C.F.R. 34) and which Appraisal shall be updated, at the reasonable cost of the Borrower, upon the occurrence of an Event of Default under any of the Credit Documents.

SECTION 5.2. BANK'S INSPECTOR'S CERTIFICATE. Prior to each disbursement an inspector selected by the Bank shall inspect the property to verify that the request for disbursement accurately indicates the amount of construction completed to said date. The Bank shall have received a certificate from such inspector certifying (i) that the construction of the Project theretofore completed, if any, has been performed substantially in accordance with the Plans and Specifications; (ii) that the quality of construction of the Project theretofore completed is in accordance with generally accepted standards in the construction industry for the cost of the construction of the Project; (iii) that the undisbursed portion of the Project Fund together with other monies to be provided by Borrower are adequate to complete the construction and equipping of the Project pursuant to the Plans and Specifications by the Completion Date; and (iv) that it is reasonable to expect that the completion of the Project will occur on or before the Completion Date. It is understood and agreed that the Bank shall not be liable for any reason as a result of such inspections, the parties hereby agreeing that the inspections are solely for the benefit of the Bank.

SECTION 5.3. NO LIENS. The Bank shall have received evidence satisfactory to the Bank that since the last preceding disbursement from the Project Fund there has been no change in the state of title to the Premises, together with an endorsement to the Title Policy insuring the priority of the Mortgages against mechanic's and materialmen's liens arising by reason of unpaid labor and materials supplied in connection with the construction and development of the Project. The Borrower shall pay the cost of each title update required by the Bank from the Title Company in connection with each request for approval of disbursement and each endorsement to the Title Policy.

SECTION 5.4. REQUEST FOR APPROVAL OF DISBURSEMENT. Not later than ten
(10) business days before the date on which the Borrower desires a disbursement from the Project Fund, the Borrower shall submit to the Bank (i) a written request for approval of the disbursement from the Project Fund; (ii) a certification of the Borrower that, among other things, the Borrower has paid or actually incurred the costs for which the request is being made; (iii) a revised Project Budget showing the balance of each category of Project costs; and (iv) a requisition using AIA Form G702 and/or G703 if the draw is used for construction or such other form as the Bank may request, accompanied by a cost breakdown, the accuracy of which shall be verified by the Bank's Inspector.

SECTION 5.5. TIMING. The Borrower will submit draw requests not more often than once a month. Each disbursement shall not be more than 95% of the value of work-in-place and

the balance will be paid upon completion based on requirements set forth below. Retainage will be held on a subcontract by subcontract basis, and released in connection with a particular subcontract provided all work thereunder has been completed to the satisfaction of the Bank and its inspector and a mechanic's lien waiver has been received from the subcontractor for all their work done on the property. There are no retainage requirements for "soft costs" on the project. "Soft costs" are defined as expenses which have no mechanic's lien rights on the subject security (this does not include the contingency line item under the general contractor's agreement).

SECTION 5.6. SUPPORTING DOCUMENTATION. The Borrower shall furnish the Title Company with all evidence, lien waivers, or affidavits required at the time of each disbursement to insure that all bills then due and payable for labor and materials used in constructing the Improvements and all bills due and payable to contractors, subcontractors, laborers, and materialmen have been paid in full, except those bills to be paid with the proceeds of such disbursement, and except for retainages.

SECTION 5.7. MATERIAL DAMAGE. Notwithstanding any provision of this Reimbursement Agreement to the contrary, if the Project shall have suffered any material damage or destruction prior to any disbursement from the Project Fund, such damaged or destroyed portion shall be restored or replaced in a manner acceptable to the Bank without cost to the Bank prior to the approval by the Bank of any further disbursement from the Project Fund; provided that if such damage or destruction shall occur during the construction period for the Improvements, the Borrower may use any insurance proceeds to rebuild or repair the Project.

SECTION 5.8. OTHER DISBURSEMENT APPROVAL CONDITIONS. The Bank shall not be obligated to approve any disbursement from the Project Fund if, at the time of a proposed disbursement, (i) an Event of Default or an event which, with the passage of time or service of notice, or both, would be an Event of Default under any of the Credit Documents has occurred, or (ii) any representation or warranty made by the Borrower in any of the Credit Documents proves to be untrue in any material respect, or (iii) the Bank determines, at any time, that the Project will not be approved by the appropriate governmental regulatory authorities.

SECTION 5.9. PERMITS. The Borrower shall have delivered to the Bank building, zoning, and other required permits covering construction of the Project together with evidence satisfactory to the Bank that all approvals required with respect to the South Carolina Premises from third parties or any governmental or quasi-governmental authorities have been obtained or, in the case of approvals relating to the operation of the Project which cannot be obtained until completion of construction, evidence satisfactory to the Bank that such approvals are obtainable. Such evidence shall include copies of all letters of grant or approval of all zoning changes and other site plan approvals and subdivision approvals, all variances of zoning regulations affecting the height, bulk, location or configuration of the Project and the South Carolina Premises (or satisfactory opinion of counsel that the same are not required), and all approvals or variances relating to parking or loading areas (both on-street and off-street) and all appurtenant easements required by governmental authorities with respect to the South Carolina Premises;

SECTION 5.10. UTILITIES. The Borrower shall have delivered to the Bank evidence satisfactory to the Bank that (i) the South Carolina Premises has available to it adequate water,

gas and electrical supply, storm and sanitary sewage facilities, other required public utilities, and means of access between the South Carolina Premises and public highways; and (ii) that all such facilities comply with all applicable laws, rules and regulations, and all necessary easements to provide such utility service to the South Carolina Premises have been obtained;

SECTION 5.11. BORROWER'S AFFIDAVIT. The Borrower shall have delivered to the Bank the affidavit of the Borrower affirming (among other things) as of the date of each draw, (i) that all costs for labor and material for the construction and equipping of all improvements comprising any part of the Project furnished to the date of Borrower's affidavit have been paid in full (in accordance with Section 5.6 above), and (ii) that no bankruptcy or other insolvency proceedings have been instituted by or against the Borrower.

SECTION SIX

COVENANTS

The Borrower covenants and agrees that, from the date of this Agreement and until the obligations of the Borrower to the Bank hereunder are satisfied in full, it will comply with the following provisions:

SECTION 6.1. ACCOUNTING; FINANCIAL STATEMENTS AND OTHER INFORMATION. The Borrower will maintain, a standard system of accounting, established and administered in accordance with GAAP consistently followed throughout the periods involved, and will set aside on its books, for each fiscal year, the proper amounts for depreciation, obsolescence, amortization, bad debts, current and deferred taxes, and other purposes as shall be required by GAAP. The Borrower will deliver to the Bank or cause to be delivered to the Bank:

(a) Monthly internally prepared financial statements for Borrower certified as being true, accurate and complete by an officer of the Borrower, not later than fifty (50) days after the expiration of each month;

(b) As soon as practicable after the end of each fiscal year, and in any event within ninety-five (95) days thereafter, the audited annual financial statements of Borrower, including the balance sheets, as at the end of such fiscal year, together with related statements of income and retained earnings (or accumulated deficit) and statement of cash flows for such fiscal year, setting forth in comparative form the corresponding figures as at the end of or for the previous fiscal year, all in reasonable detail and in accordance with GAAP, prepared by a certified public accountant reflected by the Borrower and acceptable to Bank;

(c) quarterly and annual covenant compliance certificates for Borrower certified as being true, accurate, and complete by of officer of the Borrower, relating to those covenants describe in Section 6.10, below, not later than fifty (50) days after the expiration of each fiscal quarter and ninety-five (95) days after expiration of each fiscal year, as applicable, of the Borrower;

(d) With reasonable promptness, such other data and information as from time to time may be reasonably requested by the Bank.

SECTION 6.2. INSURANCE AND MAINTENANCE OF PROPERTIES AND BUSINESS. The Borrower will maintain, with financially sound and reputable insurers, insurance to protect its properties and business against losses or damages of the kind customarily insured against by corporations of established favorable reputation engaged in the same or a similar business and similarly situated, including, but not limited to, (a) adequate fire and extended coverage insurance in amounts and issued by insurers acceptable to the Bank, (b) necessary workers' compensation insurance, (c) adequate public liability and professional liability insurance, and (d) such other insurance as may be required by law or as may be reasonably required in writing by the Bank. The Borrower will, upon request, furnish to the Bank a schedule of all insurance carried by it, setting forth in detail the amount and type of such insurance. The Borrower will maintain, in good repair, working order and condition, all properties used or useful in the businesses of the Borrower.

SECTION 6.3. PAYMENT OF INDEBTEDNESS AND TAXES. The Borrower will pay
(a) all of its Indebtedness (not required to be subordinated hereunder) and other obligations in accordance with normal terms or any applicable grace periods and (b) all taxes, assessments, and other governmental charges levied upon any of its respective properties or assets or in respect of its respective franchises, business, income, or profits before the same become delinquent, provided, that, (unless any material item or property would be lost, forfeited, or materially damaged as a result thereof) Borrower's failure to pay any such tax, assessment or charge shall not be a default if Borrower pays the same within thirty (30) days after Borrower becomes aware that the same is overdue or if it is being diligently contested in good faith by Borrower and, if such contested charges, together with all interest and penalties thereon, exceeds $250,000, if Bank is notified in advance of such contest and receives adequate reserve or other appropriate security (including without limitation demonstrated financial capacity of borrower to pay same) reasonably accept to the Bank to protect the Bank against any loss therefrom.

SECTION 6.4. LITIGATION; ADVERSE CHANGES. The Borrower will promptly notify the Bank in writing of (a) any event which, if existing at the date hereof, would require a material qualification of the representations and warranties set forth in Section 3.11 and (b) any material adverse change in the condition, business, or prospects, financial or otherwise, of the Borrower.

SECTION 6.5. NOTICE OF DEFAULT. The Borrower will promptly notify the Bank of (a) any Event of Default or event which with the passage of time or service of notice or both would constitute an Event of Default hereunder and (b) any demands made upon the Borrower by any Person for the acceleration and immediate payment of any material Indebtedness owed to such Person.

SECTION 6.6. INSPECTION. The Borrower will make available for inspection by duly authorized representatives of the Bank, its books, records, and properties, and will furnish the Bank such information regarding its respective business affairs and financial condition within a reasonable time after written request therefor.

SECTION 6.7. ENVIRONMENTAL MATTERS. The Borrower:

(a) Shall comply in all material respects with all Environmental Laws.

(b) Shall deliver promptly to the Bank (i) immediately upon receipt, copies of any correspondence, notice, pleading, citation, indictment, complaint, order, decree, or other documents from any source asserting or alleging a circumstance or condition which requires or may require a cleanup, removal, remedial action, or other response by or on the part of the Borrower under Environmental Laws or which seeks criminal or punitive penalties from the Borrower for an alleged violation of Environmental Law, and (ii) copies of any documents submitted by such Borrower in response to any items listed in
(i) above.

SECTION 6.8. PAYMENT SCHEDULE OF BONDS. The Borrower shall cause the principal amount of the Bonds to be repaid not later than the scheduled quarterly payments as indicated on Exhibit D attached hereto and made a part hereof.

SECTION 6.9. EXISTENCE; BUSINESS. The Borrower will cause to be done all things reasonably necessary to preserve and keep in full force and effect its existence and rights, to conduct its business in a prudent manner, to maintain in full force and effect, and renew from time to time, its franchises, permits, licenses, patents, and trademarks that are necessary to operate its business. The Borrower will comply in all material respects with all valid laws and regulations now in effect or hereafter promulgated by any properly constituted governmental authority having jurisdiction; provided, however, Borrower shall not be required to comply with any law or regulation which it is contesting in good faith by appropriate proceedings as long as either the effect of such law or regulation is stayed pending the resolution of such proceedings or the effect of not complying with such law or regulation is not to jeopardize any franchise, license, permit, patent, or trademark necessary to conduct such Borrower's business.

SECTION 6.10. FINANCIAL COVENANTS.

(a) Maximum Senior Funded Debt to EBITDA Ratio. The Borrower shall not permit the Maximum Senior Funded Debt to EBITDA Ratio to exceed 4.0:1.0 as determined at the end of each fiscal quarter, commencing December 31, 1998, calculated for the four quarters then ended.

(b) Minimum Fixed Charge Coverage Ratio. The Borrower shall not permit the Minimum Fixed Charge Coverage Ratio to be less than 1.1:1.0 as determined at the end of each fiscal quarter, commencing December 31, 1999, calculated for the four quarters then ended.

(c) Minimum Debt Service Coverage Ratio. The Borrower shall not permit the Minimum Debt Service Coverage Ratio to be less than 1.5:1.0 as determined at the end of each fiscal quarter, commencing June 30, 1998, for two fiscal quarters then ended; September 30, 1998, for the three fiscal quarters then ended;

December 31, 1998, and each fiscal quarter thereafter, for the four fiscal quarters then ended.

(d) Unfunded Capital Expenditures. The Borrower shall not incur Unfunded Capital Expenditures in excess of $5,500,000 during the fiscal year ending December 31, 1998.

SECTION 6.11. PLEDGE OF CASH OR INVESTMENT SECURITIES. Notwithstanding anything to the contrary herein or in any Credit Document or any other document, instrument or agreement, the Borrower's obligations hereunder and under the Letter of Credit Note to reimburse the Bank for draws made under the Letter of Credit with respect to the Bonds (the "Reimbursement Obligations") shall not be secured by the FNMA Security (as defined in the Security Agreement), nor shall the Bank require, as security for the Reimbursement Obligations, any pledge of cash or investment type securities, coupled with covenants or arrangements which would restrict the transfer of such cash or investment type securities in the ordinary course of business, unless, prior to pledging such cash or securities to the Bank coupled with such restrictive covenants or arrangements, the Borrower delivers to the Trustee an opinion of nationally recognized bond counsel to the effect that such pledge will not adversely affect the exclusion of the interest on the Bonds from gross income for federal income tax purposes.

SECTION 6.12. NAVISTAR SUBORDINATION. The Borrower shall obtain a written instrument wherein Navistar International Transportation Corp. ("Navistar") subordinates the debt owed to Navistar by the Borrower to the Borrower's obligations to the Bank hereunder and under the Letter of Credit Note. Such subordination instrument shall be in form and substance satisfactory to the Bank.

SECTION SEVEN

NEGATIVE COVENANTS

The Borrower further covenants and agrees that, from the date of this Agreement and until the obligations of the Borrower to the Bank hereunder are satisfied in full, the Borrower will, unless the Bank shall otherwise consent or agree, comply with the following provisions:

SECTION 7.1. USE OF COLLATERAL.

(a) Except for Cherokee County, South Carolina, which will possibly hold title to the Premises solely for the purposes of providing the Borrower with the benefits of a fee in lieu of tax program, the Borrower covenants that it will not sell, assign, convey, hypothecate, lease, or sublease, or attempt to sell, assign, convey, hypothecate, lease or sublease, all or any part of the Premises, or any legal or equitable interest therein or cease using all or any part of the Premises without the prior written consent of the Bank. If the Bank consents to a change of ownership of all or any part of the Premises, the Bank may, without notice to the Borrower, deal with such successor or successors in interest of the Borrower with reference to the Mortgages and the Loans in the same manner as with the Borrower, may forbear to sue, or may extend time for payment under or the performance of any of the Loans without discharging or in any way affecting the liability of the Borrower under the Mortgages or the Loans, or may make such other arrangements with such successor or successors in interest regarding the performance of the

Loans as the Bank in its judgment shall consider necessary or advisable without releasing or discharging the Borrower from any obligations or liabilities which the Borrower may have relating to the Loans.

(b) Except in connection with the ordinary and usual course of its business, the Borrower shall not sell, assign, pledge or otherwise transfer or encumber any Collateral (as defined in the Security Agreement).

SECTION 7.2. MORTGAGES, SECURITY INTERESTS, AND LIENS. The Borrower hereby covenants that it will not:

(a) allow the entry of any material judgment or lien against the Borrower which is not satisfied, discharged or bonded-off, or any collection action relating to such judgment or lien is not stayed so as to prevent the issuance of a certificate of judgment against the Borrower, within ten (10) days after the date of entry of such judgment or lien;

(b) cause or permit any liens or encumbrances to effect or attach to any of its properties and assets, whether now owned or hereafter acquired, without the prior written consent of the Bank, except for purchase money liens for assets purchased by the Borrower after the Closing.

SECTION 7.3. MERGERS; CONSOLIDATION. The Borrower will not dissolve, reorganize or undergo any change in its corporate structure without the prior written consent of the Bank.

SECTION 7.4. BOND DOCUMENTS. The Borrower will not enter into an amendment of the Bond Documents, without the prior written consent of the Bank.

SECTION EIGHT

EVENTS OF DEFAULT

SECTION 8.1. EVENTS OF DEFAULT. The occurrence of any one or more of the following events shall constitute an Event of Default under this Agreement:

(a) Subject to any applicable notice, right to cure, and grace period provisions, the Borrower fails to make or cause to be made any payment to the Bank required to be made pursuant to the terms of the Credit Documents or any Loan, or

(b) If any representation or warranty made herein by the Borrower, in any other written statement, certificate, report, or financial statement at any time furnished by or for the Borrower in connection herewith or any Loan, proves to be incorrect in any material respect when made, or

(c) If the Borrower fails to perform or observe any other provision, covenant, or agreement contained in this Agreement or in any other of the Credit Documents or

in any of the Loans, and such failure remains unremedied for fifteen (15) calendar days after the Bank shall have given written notice thereof to the Borrower, or

(d) An Indenture Default shall have occurred under the Indenture, or

(e) Any change in the financial condition of the Borrower which, in the reasonable opinion of the Bank, materially and adversely affects the Bank's security position with respect to the Collateral;

(f) If the Borrower (i) is adjudicated a debtor or insolvent, or ceases, is unable, or admits in writing its inability to pay its debts as they mature, or makes an assignment for the benefit of creditors, (ii) applies for, or consents to, the appointment of any receiver, trustee, or similar officer for it or for all or any substantial part of its property, or any such receiver, trustee, or similar officer is appointed without the application or consent of the Borrower, (iii) institutes, or consents to the institution of, by petition, application, or otherwise, any bankruptcy reorganization, arrangement, readjustment of debt, dissolution, liquidation, or similar proceeding relating to it under the laws of any jurisdiction, (iv) has any such proceeding described in clause
(iii) instituted against it which remains thereafter undismissed for a period of twenty-five (25) days or (v) has any judgment, writ, warrant of attachment or execution or similar process is issued or levied against a substantial part of its property and such judgment, writ, or similar process is not released, vacated, or fully bonded within ninety (90) days after its issue or levy.

(i) If an event of default occurs under either of the Mortgages or the Loans.

SECTION 8.2. NO WAIVER; REMEDIES. If an Event of Default occurs, the Bank may exercise any and all remedies, legal or equitable on behalf of the Bank, to collect the amounts due from the Borrower pursuant to this Agreement, and, in its sole discretion, may instruct the Trustee to redeem the Bonds. Upon receipt by the Trustee of such instructions from the Bank, the Bonds shall be redeemed pursuant to the Indenture. No failure on the part of the Bank to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right or remedy. The remedies herein provided are cumulative and not exclusive of any remedies provided by law or equity.

SECTION NINE

TRANSFER, REDUCTION OR TERMINATION OF LETTER OF CREDIT

SECTION 9.1. TRANSFER OF LETTER OF CREDIT; REDUCTION OF STATED AMOUNT AND TERMINATION OF LETTER OF CREDIT AND RELATED MATTERS.

(a) The Letter of Credit may be transferred in accordance with the provisions set forth therein.

(b) If the Borrower shall be entitled to a credit against the principal amount of the Bonds prior to maturity (the "Credit") pursuant to an optional redemption of a portion of the Bonds or to the purchase of Bonds in the open market and cancellation of such Bonds in accordance with the provisions of the Indenture, and such amounts have been paid by or on behalf of the Borrower other than by the Bank, the Borrower shall have the right at any time thereafter to reduce permanently, without penalty or premium, the Stated Amount in the manner set forth below. The Stated Amount and the Remarketing Portion will be reduced by an amount equal to the sum of the following corresponding reductions in the Principal Portion, the Remarketing Portion, and the Interest Portion:
(a) the Principal Portion and the Remarketing Portion will be reduced by an amount equal to the amount of such Credit; and
(b) the Interest Portion will be reduced by an amount equal to one hundred ten (110) days' interest on the amount of such Credit at the rate of ten percent (10%) per annum (calculated on the basis of a 365-day year; 366 days in a leap year). The aforementioned reduction will occur not less than three (3) Business Days' after written notice to the Bank, accompanied by the original Letter of Credit and the written certificate of the Trustee and the Borrower stating that the Borrower is entitled to such Credit and designating the amount of such Credit and the date upon which such credit shall become effective (which shall be a Business Day).

(c) If the Stated Amount shall be reduced pursuant to paragraph
(b) hereof, and the Bank shall have received from the Trustee the outstanding Letter of Credit then, in substitution for the then outstanding Letter of Credit, a substitute irrevocable letter of credit, shall be issued dated such date, for an amount equal to the amount to which the Stated Amount shall have been so reduced (also less the amount of any drawings upon the Letter of Credit which have not been reinstated under paragraph (d) hereof) but otherwise having terms identical to the then outstanding Letter of Credit.

(d) The obligation of the Bank to honor Interest Drawings, under the Letter of Credit, up to the amount of the Interest Portion, (as same may have been reduced pursuant to subsection
(b) of this Section 9.1), will be automatically reinstated unless, before the end of five (5) days after the date of an Interest Drawing, the Bank shall deliver to the Trustee and the Borrower a certificate in the form of Schedule 4 to the Letter of Credit, appropriately completed, stating that the Bank is not reinstating the amount paid pursuant to such Interest Drawing. Failure to deliver such certificate within the time stated shall be deemed to mean the amounts drawn have been reinstated in full, but shall not be deemed an admission that the Bank has in fact been reimbursed by the Borrower. Notwithstanding the Bank's delivery of a certificate providing that the automatic reinstatement has not occurred, the Bank may thereafter present a new certificate reinstating the amount of such drawing as a part of the available Stated Amount Letter of Credit Commitment.

(e) The Bank shall reinstate amounts drawn under the Letter of Credit pursuant to a Remarketing Drawing upon receipt by the Bank of money (other than draws under the Letter of Credit) then held by the Trustee and designed to reimburse the Bank for all or a portion of the amounts drawn pertaining to said Remarketing Drawing with respect to the Principal Portion for Bonds tendered for purchase to and remarketed by the Remarketing Agent.

The Letter of Credit shall terminate automatically on the earliest of
(i) the payment by the Bank to the Trustee of the final drawing available to be made under the Letter of Credit; (ii) receipt by the Bank of the Letter of Credit and a certificate in the form of Schedule 7 signed by an officer of the Trustee and an authorized representative of Borrower stating that no Bonds remain outstanding; (iii) receipt by the Bank of the Letter of Credit and a certificate in the form of Schedule 8 to the Letter of Credit signed by an officer of the Trustee and an authorized representative of Borrower; or (iv) the stated Expiration Date. Notwithstanding the foregoing, the Expiration Date may be extended as of April 1 of each year at the Bank's option pursuant to Section 2.5 hereof.

SECTION TEN

MISCELLANEOUS

SECTION 10.1. LIABILITY OF THE BANK. Between the Borrower and the Bank, the Borrower assumes all risks of the acts or omissions of the Trustee and any transferee of the Letter of Credit with respect to its use of the Letter of Credit or its proceeds. Neither the Bank nor any of its officers or directors shall be liable or responsible for: (a) the use which may be made of the Letter of Credit or any of the proceeds thereof, or for any acts or omissions of the Trustee and any transferee in connection therewith; (b) the validity, sufficiency or genuineness of documents, inaccuracy of any of the statements or representations contained therein or of any endorsement(s) thereon, even if such documents should in fact prove to be in any or all respects invalid, insufficient, fraudulent or forged; (c) payment by the Bank against presentation of documents which do not strictly comply with the terms of the Letter of Credit, including any failure of any documents to bear any reference or adequate reference to the Letter of Credit; or (d) any other circumstances whatsoever in making or failing to make payment under the Letter of Credit, except the Borrower shall have a claim against the Bank, and the Bank shall be liable to the Borrower, to the extent, but only to the extent of any direct, as opposed to consequential, damages suffered by the Borrower which the Borrower proves were caused by (i) the Bank's willful misconduct or gross negligence in honoring a draft under the Letter of Credit, or (ii) the Bank's willful failure to pay under the Letter of Credit after presentation to it by the Trustee (or a successor trustee under the Indenture to whom the Letter of Credit has been transferred in accordance with its terms) of a sight draft and certificate strictly complying with the terms and conditions of the Letter of Credit. In furtherance and not in limitation of the foregoing, the Bank may accept documents that appear on their face to be in order, and may assume the genuineness and rightfulness of any signature thereon, without responsibility for further investigation, regardless of any notice or information to the contrary unless actually received by the Bank; provided, that if the Bank shall receive written notification from both the Trustee and the Borrower that documents conforming to the terms of the Letter of Credit to be presented to the

Bank are not to be honored, the Bank agrees that it will not honor such documents and the Borrower shall indemnify and hold the Bank harmless from such failure to honor.

SECTION 10.2. RIGHT TO SET-OFF. Upon the occurrence of any Event of Default hereunder, the Bank shall have the right to setoff against all obligations of the Borrower to the Bank hereunder, whether matured or unmatured, all amounts owed to the Borrower by the Bank, whether or not then due and payable, and all other funds or property of the Borrower on deposit with or otherwise held in the custody of the Bank or any of its affiliates, all without notice to or demand on the Borrower, such notice and demand being hereby waived.

SECTION 10.3. ADDITIONAL COLLATERAL. As additional security for this Agreement, the Borrower agrees that in the event that the Trustee shall, after the occurrence of a continuing Event of Default hereunder and acceleration of the indebtedness evidenced hereby, draw upon the Letter of Credit, the Bank shall be and become the assignee of all rights and interests of the Borrower and the Trustee. The Borrower does hereby consent to such assignment, and does agree to execute any and all such documents, instruments and certificates in connection therewith as the Bank shall deem appropriate.

SECTION 10.4. NOTICES. All notices, requests, consents and other communications hereunder shall be in writing and shall be deemed to have been made when delivered, or mailed first-class postage prepaid, or sent by wire, telex, telecopier or similar electronic means of communication or delivered to a telegraph office for transmission, addressed to the appropriate address set forth below,

if to the Bank, at:

KeyBank National Association
127 Public Square
Cleveland, Ohio 44114

Attention: International Department Fax Number: 216/689-3683

and a copy to:

Roger D. Campbell
KeyBank National Association Commercial Banking Division 88 East Broad Street
Columbus, Ohio 43215
Telecopy No: (614) 460-3469

or at such other address as may have been furnished for such purpose to the Borrower by the Bank in writing; or

if to the Borrower, at:

Core Materials Corporation
800 Manor Park Drive
P.O. Box 28183
Columbus, Ohio 43228

Attention: Mr. Kevin L. Barnett Telecopy No: (614) 870-4028

with a copy to:

Vorys, Sater, Seymour and Pease LLP 52 East Gay Street
Columbus, Ohio 43216-1008 Attention: Phil Johnston, Esq.

Telecopy No: (614) 464-6350

or at such other address as may have been furnished for such purpose to the Bank by the Borrower in writing.

SECTION 10.5. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All agreements, representations and warranties contained in the Credit Documents shall survive the execution and delivery of this Agreement, any investigation at any time made by or on behalf of the Bank and the issuance and acceptance of the Letter of Credit. All statements contained in any certificates or other instruments delivered by the Borrower pursuant hereto shall constitute representations and warranties by the Borrower under this Agreement.

SECTION 10.6. PAYMENTS ON HOLIDAYS. Whenever any payment to be made pursuant to this Agreement shall be stated to be due on a public holiday in the State of Ohio, Saturday or Sunday, such payment may be made on the next succeeding business day and such extension of time shall in such case be included in computing interest, if any, in connection with such payment.

SECTION 10.7. COMPUTATION OF INTEREST. Except as otherwise provided, all computations of interest with respect to the Letter of Credit or the Letter of Credit Note hereunder shall be made on the basis of a three hundred sixty-five (365) day year.

SECTION 10.8. ENTIRE AGREEMENT. The Credit Documents and the Letter of Credit embody the entire agreement and understanding among the parties hereto and supersede all prior agreements and understandings relating to the subject matter hereof.

SECTION 10.9. PARTIES IN INTEREST. All the terms and provisions of this Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective successors and assigns of the parties hereto and, in particular, shall inure to the benefit of and be enforceable by the holder or holders at any time of the Letter of Credit Note.

SECTION 10.10. EXPENSES. The Borrower agrees, regardless of whether or not the Bonds are eventually issued and sold and regardless of whether or not the transactions contemplated hereby shall be consummated, to pay all reasonable expenses (accompanied by a detailed itemization) incurred by the Bank incident to such transactions in the preparation of documentation relating thereto, including all reasonable fees and disbursement of the counsel (whether special outside counsel or attorneys in its Law Group) of the Bank, for services to the Bank. The Borrower further agrees to pay all like expenses (accompanied by a detailed itemization) incurred by the Bank in connection with any amendments of or waivers or consents requested by the Borrower under or with respect to the Credit Documents.

SECTION 10.11. COUNTERPARTS. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument and any of the parties hereto may execute this Agreement by signing any such counterpart.

SECTION 10.12. OHIO CONTRACT. This Agreement shall be construed and enforced in accordance with and be governed by the laws of the State of Ohio.

IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as of the date first above written.

CORE MATERIALS CORPORATION

By: /s/ KEVIN L. Barnett
    --------------------------------
Its:  Vice President, Secretary,
Treasurer and Chief Financial Officer

KEYBANK NATIONAL ASSOCIATION

By: /s/ ROGER T. CAMPBELL
    ----------------------------
Its:  Senior Vice President

EXHIBIT A

LETTER OF CREDIT
NOTE

$7,726,028.00 Dated: May 7, 1998

FOR VALUE RECEIVED, on the Expiration Date (as defined in the Agreement hereinafter described), or sooner as hereinafter provided, the undersigned, CORE MATERIALS CORPORATION, a Delaware corporation (the "Borrower"), promises to pay to the order of KEYBANK NATIONAL ASSOCIATION (herein called the "Bank"), the lesser of (a) the face amount of a certain Letter of Credit No. S98/95374 issued by the Bank on May 7, 1998, in the amount of Seven Million Seven Hundred Twenty-Six Thousand Twenty-Eight Dollars ($7,726,028.00) (the "Letter of Credit"), or (b) the unpaid balance of all draws theretofore made under the Letter of Credit, as shown on the ledger or other record of the Bank.

Prior to maturity, the Borrower shall repay the principal amount of this Note when and as provided in Section 2.2(a)(i) of the Agreement (hereafter described).

The Borrower agrees to pay to the Bank interest on the unpaid principal balance hereof at a rate per annum equal to the Prime Rate. The interest rate hereon will change immediately upon a change in the Prime Rate. Interest hereon shall be payable monthly on the first day of each calendar month in each year, commencing on the first such day after the date hereof, and at maturity, or on demand, if earlier. For any payment of principal and/or interest not paid when due (taking into account any grace periods), except a Remarketing Drawing (as defined in the Agreement), the Borrower shall pay a late charge of an amount equal to the greater of twenty-five dollars ($25) or two percent (2%) of the amount of the payment. In addition, if this Note is not fully paid as to principal and interest at maturity (by acceleration or otherwise) the entire unpaid balance shall thereafter bear interest at a rate per annum equal to the Prime Rate, which rate shall be immediately and correspondingly adjusted with each change in the Prime Rate. Interest and late fees shall be calculated using a 365-day year. The Prime Rate is defined as that interest rate established from time to time by the Bank as the Bank's Prime Rate, whether or not such rate is publicly announced. The Prime Rate may not be the lowest interest rate charged by the Bank for commercial or other extensions of credit. At no time shall the interest rate hereon exceed the maximum permitted by law.

This Note is executed and delivered to the Bank pursuant to the terms and conditions of a Reimbursement Agreement of even date herewith (the "Agreement") by and between the Borrower and the Bank to which reference is made for a statement of the rights, duties and obligations of the parties and the security for this Note, but neither this reference to the Agreement or any provision thereof shall affect or impair the absolute and unconditional obligation of the Borrower to pay the principal of, and interest and late fees, if any, on this Note when due. This Note is the Letter of Credit Note described in the Agreement.

Payment of the principal of, and interest on, this Note shall be made in lawful money of the United States of America, at any office of the Bank, or at such other place as the Bank or any subsequent holder hereof shall have designed to the Borrower in writing. The term "the Bank" as used in this Note shall include in its meaning any subsequent holder of this Note.

The Borrower waives demand, presentment for payment, notice of dishonor, protest and notice of protest, and diligence in the collection and bringing suit and agrees to the application of any bank balance as payment or part payment of this Note, or as an offset thereto, and that the Bank may extend the time for payment, accept partial payment, take security therefor, or exchange or release any collateral, without discharging or releasing the Borrower.

This Note is executed at __________________.

Borrower, to the extent permitted by law, waives any right to have a jury participate in resolving any dispute, whether sounding in contract, tort, or otherwise, between Bank and Borrower arising out of, in connection with, related to, or incidental to the relationship established between the Borrower and the Bank in connection with this Note or any other agreement, instrument or document executed or delivered in connection therewith or the transactions related thereto.

CORE MATERIALS CORPORATION

BY:______________________________
ITS: VICE PRESIDENT, SECRETARY,
TREASURER AND CHIEF
FINANCIAL OFFICER

KEYBANK Irrevocable Transferable Letter of Credit No. S98/95374

EXHIBIT "B"

KEYBANK NATIONAL ASSOCIATION
127 Public Square
Cleveland, Ohio 44114-1306

Date: May 7, 1998

Beneficiary:                                                  Applicant:

The Huntington National Bank, Trustee                         Core Materials Corporation
41 South High Street, HC 1112                                 800 Manor Park Drive
Columbus, Ohio  43215                                         Columbus, Ohio  43228
Attention:  Corporate Trust Department

                                                              AMOUNT:             USD $7,726,028.00
                                                              EXPIRATION DATE:    April 17, 2003

Dear Sirs:

You, as Trustee under the Trust Indenture, dated as of April 1, 1998 (the "Indenture"), between you and the South Carolina Jobs-Economic Development Authority (the "Issuer") pursuant to which Seven Million Five Hundred Thousand Dollars ($7,500,000) in aggregate principal amount of South Carolina Jobs-Economic Development Authority Multi-Mode Variable Rate Industrial Development Revenue Bonds, Series 1998 (Core Materials Corporation Project) (the "Bonds") are being issued by the Issuer, are hereby irrevocably authorized to draw on KeyBank National Association pursuant to this Irrevocable Letter of Credit, for the account of Core Materials Corporation, a Delaware corporation (the "Borrower"), available by one or more of your drafts at sight, upon the terms and conditions hereinafter set forth, an amount (subject to reinstatement as hereinafter set forth) not exceeding Seven Million Seven Hundred Twenty-Six Thousand Twenty-Eight Dollars ($7,726,028.00) (the "Letter of Credit Commitment") of which (a) an amount not exceeding Seven Million Five Hundred Thousand Dollars ($7,500,000.00) may be drawn to pay the principal amount of the Bonds as and when the same become due at maturity or by acceleration or by redemption (the "Principal Commitment"); or (b) an amount not exceeding Two Hundred Twenty Six Thousand Twenty-Eight Dollars ($226,028.00) (the "Interest Commitment") may be drawn with respect to the payment of up to 110 days' interest at a rate per annum of ten percent (10%) (using a 365 day divisor) (the "Maximum Rate") to pay interest on the Bonds when due; or (c) an amount not exceeding Seven Million Seven Hundred Twenty-Six Thousand Twenty-Eight Dollars ($7,726,028.00) may be drawn to pay (i) the purchase price or a portion of the purchase price equal to the principal amount of any Bonds tendered for purchase by the Holders thereof, to the extent remarketing proceeds are not available for such purpose to pay the portion of the purchase price of any Bonds tendered for purchase by the Holders thereof and (ii) up to 110 days' interest at a rate per annum equal to the Maximum Rate for interest accrued, if any, on such Bonds to the extent remarketing proceeds are not available for such purpose (together, the "Remarketing Commitment"), in each instance effective immediately and expiring at the close of business on April 17, 2003, as such date may be extended pursuant to the terms of the Reimbursement Agreement (the "Expiration Date").

Funds under this Letter of Credit are available to you against your executed sight draft(s) drawn on us, stating on their face: "Drawn under KeyBank National Association Irrevocable Transferable Letter of Credit No. S98/95374 and accompanied by: (A) if the drawing is being made with respect to the payment of principal on the Bonds, whether due at maturity, upon mandatory or optional redemption or upon acceleration (a "Principal Drawing"), a certificate signed by you in the form of Schedule 1 attached hereto appropriately completed, (B) if the drawing is being made with respect to a payment of interest on the Bonds when due (an "Interest Drawing"), a certificate signed by you in the form of Schedule 2 hereto appropriately completed and (c) if a drawing is being made

KEYBANK Irrevocable Transferable Letter of Credit No. S98/95374

to pay the principal amount of and accrued interest on any Bonds tendered for purchase by the Holders thereof, to the extent remarketing proceeds are not available for such purpose (a "Remarketing Drawing") a certificate signed by you in the form of Schedule 3 hereto appropriately completed. Presentation of such draft(s) and certificate(s) shall be made at our Main Office, 127 Public Square, Cleveland, Ohio 44114-1306, Attention: Manager, International Department, or at any other office of ours in the City of Cleveland, Ohio which may be designated by us by written notice delivered to you. We hereby agree that all drafts drawn under and in compliance with the terms of this Letter of Credit and presented before 11:00 a.m. (Cleveland, Ohio time) on a Business Day will be duly honored by us within one Business Day after delivery of the draft(s) and certificate(s); provided, however, if a drawing is presented to pay the purchase price of Bonds which have not been remarketed by the Remarketing Agent and if conforming drawing documentation is presented at or prior to 11:00 a.m. (Cleveland, Ohio time) on a Business Day, payments shall be made to you on such Business Day. If requested by you, payment under this Letter of Credit may be made by wire transfer of federal funds to your account at the Federal Reserve Bank of Cleveland, or by deposit of immediately available funds into a designated account that you maintain with us. As used herein, "Business Day" shall mean any day of the year other than (i) a Saturday or Sunday, (ii) a day on which commercial banks located in New York, New York, or the city or cities in which are located the corporate trust offices of the Trustee and the Tender Agent and our office at which demands for payment under this Letter of Credit are to be presented are authorized by law to close or (iii) any day on which the New York Stock Exchange is closed.

Drawings hereunder shall not exceed the Letter of Credit Commitment, as the Letter of Credit Commitment may be reduced or reinstated pursuant hereto, and, except as hereinafter provided, each drawing honored by us shall pro tanto reduce the amount available under this Letter of Credit.

We will reinstate amounts drawn hereunder pursuant to a Remarketing Drawing hereunder, as to the Principal Commitment and the Interest Commitment, upon receipt by us of money (other than drawn under this Letter of Credit) then held by the Trustee and designated to reimburse us for all or a portion of the amounts drawn hereunder pertaining to such Remarketing Drawing with respect to the Principal Commitment and the Interest Commitment for the principal portion of and accrued interest on Bonds tendered for purchase to and remarketed by the Remarketing Agent.

In connection with any Interest Drawing if you shall not have received from us within five (5) days from the date of any demand for payment a written notice from us in the form of the certificate attached hereto as Schedule 4 appropriately completed indicating we are not reinstating amounts paid under such Interest Drawing or the full amount as existed prior to such drawing of the Interest Commitment then the full amount of the Interest Commitment will be automatically reinstated. Failure to deliver to you such certificate within the time stated shall be deemed to mean the interest amount drawn has been reinstated in full to the amount as existed prior to such drawing, but shall not be deemed to be an admission that the Bank has in fact been reimbursed by the Borrower. Upon presentation by you of any Principal Drawing, the amount of this Letter of Credit and the amounts available to be drawn by you by any subsequent Principal Drawing, shall be automatically decreased by an amount equal to the amount of such Principal Drawing. If the Borrower shall be entitled to a credit against the principal amount of the Bonds prior to maturity (the "Credit") pursuant to an optional redemption of a portion of the Bonds or to the purchase of Bonds in the open market and cancellation thereof in accordance with the provisions of the Indenture or the Loan Agreement, and such amounts have been paid by or on behalf of the Borrower other than by us, the Borrower shall have the right at any time thereafter to reduce permanently, without penalty or premium, the Letter of Credit Commitment in the manner set forth below. The Letter of Credit Commitment will be reduced by an amount equal to the sum of the following corresponding reductions in the Principal Commitment and the Interest Commitment: (i) the Principal Commitment will be reduced to an amount equal to the amount of such Credit, and (ii) the Interest Commitment will be reduced to an amount equal to one hundred ten (110) days' interest at the Maximum Rate (using a 365-day divisor) on the Bonds remaining outstanding. The reduction in the Letter of Credit Commitment pursuant to such Credit will occur not less than three (3) Business Days after written notice to us, accompanied by this Letter of Credit and your written certificate in the form of Schedule 5 attached hereto stating that the Borrower are entitled to such reduction and designating the

amount of such Credit and the date of

-----------------------------------           ----------------------------------
Authorized Signature                            Authorized Signature

KEYBANK Irrevocable Transferable Letter of Credit No. S98/95374

the Business Day upon which such reduction shall become effective. Upon such presentation we will either reissue this Letter of Credit in the maximum amount available hereunder or otherwise amend this Letter of Credit to reflect such maximum amount then available.

Only you, as Trustee, may make a drawing under this Letter of Credit. Upon the payment to you or your account of the amount specified in a sight draft drawn hereunder, we shall be fully discharged on our obligation under this Letter of Credit with respect to such sight draft, and we shall not thereafter be obligated to make any further payments under this Letter of Credit in respect of such sight draft to you or to any other person who may have made to you or who makes to you a demand for payment of principal of or interest on any of the Bonds.

This Letter of Credit shall be governed by the International Chamber of Commerce Uniform Customs and Practice for Documentary Credits, Publication No.
500 (1993 Revision), (and including any amendments, modifications, or revisions thereof) and the laws of the State of Ohio. Communications with respect to this Letter of Credit shall be in writing and shall be addressed to KeyBank National Association, 127 Public Square, Cleveland, Ohio 44114-1306, Attention:
International Department specifically referring thereon to KeyBank National Association Irrevocable Transferable Letter of Credit No. S98/95374.

This Letter of Credit is transferable in its entirety (but not in part) to any transferee who has succeeded you as Trustee under the Indenture and such transferred Letter of Credit may be successively transferred to any Successor Trustee or Co-Trustee thereunder, but may not be assigned, transferred or conveyed under any other circumstance. Transfer of the amount available under this Letter of Credit to such transferee shall be effected by the presentation to us of this Letter of Credit accompanied by the transfer fee in the amount of $500.00 and the transfer form in the form attached hereto as Schedule 6 and, unless this Letter of Credit is so presented to us, we shall have no obligation hereunder to any transferee. Upon such transfer, we will either reissue this Letter of Credit in the maximum amount then available hereunder or otherwise amend this Letter of Credit to reflect such maximum amount then available.

Upon the earliest of (i) the honoring by us of the final drawing available to be made hereunder, (ii) our receipt of this outstanding Letter of Credit and a written certificate signed by your officer and an authorized representative of the Borrower in the form of Schedule 7 hereto appropriately completed, stating that: (a) no Bonds are Outstanding within the meaning of the Indenture; and (b) such officer and representative are duly authorized to sign such certificate on behalf of you and the Borrower, (iii) our receipt of this Letter of Credit and a written certificate signed by your officer and an authorized representative of the Borrower in the form of Schedule 8 hereto appropriately completed, stating that: (a) an Alternate Credit Facility has been accepted by you and is in effect; and (b) such officer and representative are duly authorized to sign such certificate on behalf of you and the Borrower, or
(iv) the Expiration Date, this Letter of Credit shall automatically terminate and be delivered to us for cancellation.

This Letter of Credit sets forth in full our undertaking, and such undertaking shall not in any way be modified, amended, amplified or limited by reference to any document, instrument or agreement referred to herein (including, without limitation, the Bonds or the Reimbursement Agreement), except only the certificates and the sight draft(s) referred to herein; and any such reference shall not be deemed to incorporate herein by reference any document, instrument or agreement except for such certificate(s) and such sight draft(s).

KEYBANK Irrevocable Transferable Letter of Credit No. S98/95374

SCHEDULE 1

CERTIFICATE FOR THE PAYMENT OF PRINCIPAL
OF SOUTH CAROLINA JOBS-ECONOMIC DEVELOPMENT AUTHORITY
MULTI-MODE VARIABLE RATE INDUSTRIAL DEVELOPMENT
REVENUE BONDS, SERIES 1998
(CORE MATERIALS CORPORATION PROJECT)

(THE "BONDS")

The undersigned, a duly authorized signer of The Huntington National Bank, as Trustee (the "Trustee"), hereby certifies to KeyBank National Association (the "Bank"), with reference to Irrevocable Transferable Letter of Credit No. S98/95374 (the "Letter of Credit" and other capitalized terms used herein and not defined shall have their respective meanings as set forth in the Letter of Credit) issued by the Bank in favor of the Trustee, that:

1. The Trustee is the Trustee under the Indenture for the holders of the Bonds.

2. The Trustee is making a drawing under the Letter of Credit with respect to the payment of principal of the Bonds.

3. The amount of principal of the Bonds which will be due and payable on _______________________, is $_____________________.

4. The amount of the sight draft accompanying this Certificate ($___________________), together with the aggregate of all prior payments made pursuant to Principal Drawings under this Letter of Credit for the payment of the Bonds, does not exceed $__________________

5. The amount of the sight draft accompanying this Certificate was computed in accordance with the terms and conditions of the Letter of Credit, the Bonds and the Indenture.

IN WITNESS WHEREOF, the Trustee has executed and delivered this Certificate as of the ______ day of _________________________, _____.

THE HUNTINGTON NATIONAL BANK,
AS TRUSTEE

By:_________________________________________
(Name and Title)

KEYBANK Irrevocable Transferable Letter of Credit No. S98/95374

SCHEDULE 2

CERTIFICATE FOR THE PAYMENT OF INTEREST
OF SOUTH CAROLINA JOBS-ECONOMIC DEVELOPMENT AUTHORITY
MULTI-MODE VARIABLE RATE INDUSTRIAL DEVELOPMENT
REVENUE BONDS, SERIES 1998
(CORE MATERIALS CORPORATION PROJECT)

(THE "BONDS")

The undersigned, a duly authorized signer of The Huntington National Bank, Trustee (the "Trustee"), hereby certifies to KeyBank National Association (the "Bank"), with reference to Irrevocable Transferable Letter of Credit No. S98/95374 (the "Letter of Credit" and other capitalized terms used herein and not defined shall have their respective meanings as set forth in the Letter of Credit) issued by the Bank in favor of the Trustee, that:

1. The Trustee is the Trustee under the Indenture for the holders of the Bonds.

2. The Trustee is making a drawing under the Letter of Credit with respect to a payment of interest accrued on the Bonds on or prior to their stated maturity date.

3. The amount of interest on the Bonds which will be due and payable on __________________, 19___ is $___________________________.

4. The amount of the sight draft accompanying this Certificate ($________________) does not exceed the amount available on the date hereof to be drawn under the Letter of Credit in respect of the payment of interest accrued on the Bonds on or prior to their stated maturity date.

5. The amount of the sight draft accompanying this Certificate was computed in accordance with the terms and conditions of the Letter of Credit, the Bonds and the Indenture.

IN WITNESS WHEREOF, the Trustee has executed and delivered this Certificate as of the ______ day of ________________________, ______.

                                    By:_________________________________________
                                                 (Name and Title)

________________________________          ______________________________________
Authorized Signature                         Authorized Signature

KEYBANK Irrevocable Transferable Letter of Credit No. S98/95374

SCHEDULE 3

CERTIFICATE FOR THE PAYMENT OF PURCHASE PRICE IN REMARKETING
OF SOUTH CAROLINA JOBS-ECONOMIC DEVELOPMENT AUTHORITY
MULTI-MODE VARIABLE RATE INDUSTRIAL DEVELOPMENT
REVENUE BONDS, SERIES 1998
(CORE MATERIALS CORPORATION PROJECT)

(THE "BONDS")

The undersigned, a duly authorized signer of The Huntington National Bank, as Trustee (the "Trustee"), hereby certifies to KeyBank National Association (the "Bank") with reference to KeyBank National Association Irrevocable Transferable Letter of Credit No. S98/95374 (the "Letter of Credit" and other capitalized terms used herein and not defined shall have their respective meanings as set forth in the Letter of Credit) issued by the Bank in favor of the Trustee that:

The Trustee is the Trustee under the Indenture for the holders of the Bonds. The total amount of Bonds outstanding (as defined in the Indenture) is $___________________.

The Trustee is making a drawing under the Letter of Credit at the written request of the Remarketing Agent (as defined in the Indenture), to pay, pursuant to the terms of the Indenture, the purchase price equal to the principal amount of those Bonds which the Remarketing Agent has been unable to remarket following this tender pursuant to the Indenture.

The Trustee: (a) is delivering or causing to be delivered to the Bank, or its designated agent, a principal amount of the Bonds, registered in the name of the Borrower as pledgor and the Bank as pledgee, equal to the amount of the draft accompanying this Certificate; (b) acknowledges the pledge by the Borrower to the Bank of the Bonds delivered pursuant to subparagraph (a) and; (c) agrees that all payments of principal, premium, if any, and interest made on such Bonds shall be made to the Bank, so long as the Bank is the pledgee of such Bonds.

The principal amount of the Bonds delivered to the Remarketing Agent which the Remarketing Agent has been unable to remarket is $_________________. The amount of interest upon such Bonds which has accrued but is unpaid is $___________________. The amount of the draft accompanying this Certificate does not exceed such amount due as the purchase price of the Bonds and interest accrued thereon.

Upon receipt by the Trustee of the amount demanded hereby, (a) the Trustee will deliver it to Bond holders only for the purpose of payment of the purchase price of the Bonds referenced in the second paragraph hereof, (b) no portion of it shall be applied by the Trustee for any other purpose, and (c) no portion of it shall be commingled with other funds held by the Trustee. This drawing is made in accordance with the provisions of the Indenture and the Letter of Credit.

The amount of the draw accompanying this Certificate was computed in accordance with the terms and conditions of the Bonds and the Indenture.

IN WITNESS WHEREOF, the Trustee has executed and delivered this certificate as of the _______ day of _______________________, ________.

                                     By:________________________________________
                                                   (Name and Title)

_____________________________             ______________________________________
Authorized Signature                          Authorized Signature

KEYBANK Irrevocable Transferable Letter of Credit No. S98/95374

SCHEDULE 4

CERTIFICATE OF NONREINSTATEMENT

KEYBANK NATIONAL ASSOCIATION
127 Public Square
Cleveland, Ohio 44114-1306

Date:___________________

KeyBank National Association Irrevocable

Transferable Letter of Credit No. S98/95374

The Huntington National Bank
41 South High Street, HC 1112
Columbus, Ohio 43215
Attention: Corporate Trust Department

Gentlemen:

With regard to the above mentioned Letter of Credit, be advised that in accordance with the terms of the Letter of Credit, the amount of $_______________ which was the subject of the __________________, ____ Interest Drawing by you under the Letter of Credit is not being reinstated under the Letter of Credit.

Except as herein expressly set forth, all other terms and conditions of the Letter of Credit remain unchanged.

Very truly yours,

KEYBANK NATIONAL ASSOCIATION

                                      By:_______________________________________

_____________________________              _____________________________________
Authorized Signature                          Authorized Signature

KEYBANK Irrevocable Transferable Letter of Credit No. S98/95374

SCHEDULE 5

CERTIFICATE AS TO REDUCTION
OF LETTER OF CREDIT COMMITMENT

KeyBank National Association
127 Public Square
Cleveland, Ohio 44114-1306

Attention: International Department

RE: KeyBank National Association Irrevocable Transferable Letter of Credit No. S98/95374

Gentlemen:

The undersigned, a duly authorized signer of The Huntington National Bank, as Trustee (the "Trustee"), and a duly authorized representative of CORE MATERIALS CORPORATION (the "Borrower"), hereby certify to KeyBank National Association with reference to KeyBank National Association Irrevocable Transferable Letter of Credit No. S98/95374 (the "Letter of Credit" and other capitalized terms used herein and not defined shall have their respective meanings as set forth in the Letter of Credit) issued by KeyBank National Association in favor of the Trustee that:

A. The Trustee is the Trustee under the Indenture for the holders of the Bonds.

B. The Borrower is entitled to a reduction in the Letter of Credit Commitment. The Letter of Credit Commitment shall be reduced, effective as of ______________________, as follows:

1. The Principal Commitment shall be reduced to $___________________.

2. The Interest Commitment shall be reduced to $____________________.

3. The Remarketing Commitment shall be reduced to $________________.

C. The undersigned officer and representative are duly authorized to sign this certificate on behalf of the Trustee and on behalf of the Borrower respectively.

_________.

TRUSTEE:                               THE HUNTINGTON NATIONAL BANK,
                                       as Trustee

                                       By:______________________________________

                                       Title:___________________________________

BORROWER:                              CORE MATERIALS CORPORATION

                                       By:______________________________________

                                       Title:  Authorized Representative

______________________________            _____________________________________
Authorized Signature                          Authorized Signature

KEYBANK Irrevocable Transferable Letter of Credit No. S98/95374

SCHEDULE 6

CERTIFICATE OF TRANSFER

KeyBank National Association
127 Public Square
Cleveland, Ohio 44114-1306

Attention: International Department

Date:_________________, 1998

RE: KeyBank National Association Irrevocable Transferable Letter of Credit No. S98/95374

Gentlemen:

For value received, the undersigned beneficiary hereby irrevocably transfers to the following (the "Transferee"):

(Name of Transferee)

(Address)

all rights of the undersigned beneficiary to draw under the above Letter of Credit in its entirety.

By this transfer, all rights of the undersigned beneficiary in the Letter of Credit are transferred to the Transferee and the Transferee shall have the sole rights as beneficiary thereof, including sole rights relating to any amendments of the Letter of Credit, whether increases in the amount to be drawn thereunder, extensions of the Expiration Date thereof, or other amendments, and whether such amendments now exist or are made after the date hereof. All amendments of the Letter of Credit are to be advised direct to the Transferee without necessity of any consent of or notice to the undersigned beneficiary. The undersigned hereby certifies that the Transferee has become successor Trustee under the Trust Indenture dated as of April 1, 1998, between the undersigned and the South Carolina Jobs-Economic Development Authority (the "Issuer") relating to the Issuer's $7,500,000 Multi-Mode Variable Rate Industrial Development Revenue Bonds, Series 1998 (Core Materials Corporation Project) and has accepted such appointment in writing.

                                         Very truly yours,

SIGNATURE AUTHENTICATED                  THE HUNTINGTON NATIONAL BANK, Trustee

___________________________________      By:____________________________________
(Authorized Officer)                                  (Bank)

___________________________________
(Authorized Signature)

___________________________________        _____________________________________
Authorized Signature                          Authorized Signature

Attention:        International Department

         RE:      KeyBank National Association
                  Irrevocable Transferable Letter of Credit No. S98/95374

Gentlemen:

The undersigned, a duly authorized signer of The Huntington National Bank, as Trustee (the "Trustee"), and _________________, duly authorized representative of Core Materials Corporation (the "Borrower"), hereby certify to KeyBank National Association with reference to KeyBank National Association Irrevocable Transferable Letter of Credit No. S98/95374 (the "Letter of Credit" and other capitalized terms used herein and not defined shall have their respective meanings as set forth in the Letter of Credit) issued by KeyBank National Association in favor of the Trustee that:

1. The Trustee is the Trustee under the Indenture for the holders of the Bonds.

2. No Bonds are Outstanding within the meaning of the Indenture.

3. The undersigned officers and representatives are duly authorized to sign this certificate on behalf of the Trustee and on behalf of the Borrower respectively.

KEYBANK Irrevocable Transferable Letter of Credit No. S98/95374

IN WITNESS WHEREOF, the Trustee and the Borrower have executed and delivered this Certificate as of the ______ day of ________________________, _______.

THE HUNTINGTON NATIONAL BANK, TRUSTEE

By:__________________________________________
(Name and Title)

                                   By:__________________________________________

                                   Title:  Authorized Representative

___________________________________       ______________________________________
Authorized Signature                          Authorized Signature

KEYBANK Irrevocable Transferable Letter of Credit No. S98/95374

SCHEDULE 8

CERTIFICATE OF ACCEPTANCE OF ALTERNATE
LETTER OF CREDIT

KeyBank National Association
127 Public Square
Cleveland, Ohio 44114-1306

Attention: International Department

RE: KeyBank National Association Irrevocable Transferable Letter of Credit No. S98/95374

Gentlemen:

The undersigned, a duly authorized signer of The Huntington National Bank, Trustee (the "Trustee"), and _____________________, a duly authorized representative of Core Materials Corporation (the "Borrower"), hereby certify to KeyBank National Association with reference to KeyBank National Association Irrevocable Transferable Letter of Credit No. S98/95374 (the "Letter of Credit" and other capitalized terms used herein and not defined shall have their respective meanings as set forth in the Letter of Credit) issued by KeyBank National Association in favor of the Trustee that:

1. The Trustee is the Trustee under the Indenture for the holders of the Bonds.

2. An alternate Letter of Credit in substitution for the Letter of Credit has been accepted by the Trustee.

3. The undersigned officer and representative are duly authorized to sign this certificate on behalf of the Trustee and on behalf of the Borrower, respectively.

KEYBANK Irrevocable Transferable Letter of Credit No. S98/95374

IN WITNESS WHEREOF, the Trustee and the Borrower have executed and delivered this certificate as of the ______ day of _____________________, ______.

THE HUNTINGTON NATIONAL BANK, TRUSTEE

By:_________________________________________
(Name and Title)

CORE MATERIALS CORPORATION

By:_________________________________________

Title: Authorized Representative

EXHIBIT C -- PERMITTED ENCUMBRANCES

Permitted Encumbrances for South Carolina Premises

1. Taxes and assessment for the year 1998, and subsequent years, which are a lien not yet due and payable.

2. Any taxes assessed under the rollback provision of ss. 12-43-220 (D-4) South Carolina Code of Laws 1976, as amended.

3. Right-of-way to Board of Public Works of Gaffney, South Carolina, dated June 30, 1951 and recorded in the Office of the Clerk of Court for Cherokee County in Deed Book 3U at page 375.

4. Right-of-way Agreement from W. B. Camp & Sons, Inc. to Board of Public Works of Gaffney, South Carolina, dated August 16, 1951 and recorded September 4, 1951 in the Office of the Clerk of Court for Cherokee County in Deed Book 3Y at page 212.

5. Right-of-way for oil and natural gas pipeline from W. B. Camp & Sons, Inc. to Gaffney Pipeline Company, dated August 15, 1951 and recorded October 17, 1951 in the Office of the Clerk of Court for Cherokee County in Deed Book 3U at page 420.

6. Easement and right-of-way for transmission line from W. B. Camp & Sons, Inc. to Duke Power Company, dated March 6, 1950 and recorded April 15, 1950 in the Office of the Clerk of Court for Cherokee County in Deed Book 3S at page 260.

7. Power line easement from J. Victor Cole to Duke Power Company, dated June 24, 1958 and recorded in the Office of the Clerk of Court for Cherokee County in Deed Book 4W at page 10.

8. Power line easement from J. Victor Cole to Duke Power Company dated February 21, 1950 and recorded April 15, 1950 in the Office of the Clerk of Court for Cherokee County in Deed Book 3S at page 262.

9. Right-of-way from Gilbert Properties, Inc. to the Board of Public Works of the City of Gaffney, S.C., dated June 23, 1988 and recorded June 27, 1988 in the Office of the Clerk of Court for Cherokee County in Deed Book 12V at page 867.

10. Right-of-way from Gilbert Properties, Inc. to the Board of Public Works of the City of Gaffney, S.C., dated June 23, 1988 and recorded June 27, 1988 in the Office of the Clerk of Court for Cherokee County in Deed Book 12V at 870.

11. Covenants, conditions, easements and restrictions contained in Declaration of Restrictive Covenants, Conditions and Easements upon Meadowcreek Industrial Community recorded on October 14, 1987 in the Office of the Clerk of Court for Cherokee County in Deed Book 12R at page 384; and amended by Amendment to Declaration of Restrictive

Covenants, Conditions and Easements upon Meadowcreek Industrial Community recorded on February 10, 1988 in the aforesaid office in Deed Book 12T at page 683.

12. Matters of survey as shown on the Referenced Plat, specifically, the following:

a. Reserved 10' utility easement;
b. gas line;
c. temporary power lines
d. power poles

Permitted Encumbrances for Ohio Premises

1. The premises are subject to building setback lines, platted easements and restrictions as shown on the recorded Dedication of Manor Park Drive of record in Plat Book 48, page 49, Recorder's office, Franklin County, Ohio.

2. The premises are subject to restrictions contained in the deed from Manor Real Estate Company to Realty International Inc., dated March 5, 1973, filed April 19, 1973, and recorded in Deed Book 3326, page 384, Recorder's Office, Franklin County, Ohio.

3. The premises are subject to an easement from International Harvester Company to Columbus Southern Power Company dated July 27, 1992, filed August 19, 1992, and recorded in Official Record Volume 20134, page 5-03, Recorder's Office, Franklin County, Ohio.

4. The premises are subject to a Deed easement from Navistar International Transportation Corporation to the City of Columbus, Ohio dated May 31, 1988, filed June 10, 1988, and recorded in Official Record Volume 11731, page B-03, Recorder's Office, Franklin County, Ohio.

5. The premises are subject to an easement from Realty International, Inc. to Columbus and Southern Ohio Electric Company dated November 12, 1973, filed November 20, 1973, and recorded in Deed Book 3382, page 241, Recorder's Office, Franklin County, Ohio.

6. The premises are subject to an easement from Rockwell International Corporation to Columbus and Southern Ohio Electric Company dated May 29, 1974, filed June 18, 1974 and recorded in Deed Book 3417, page 276, Recorder's Office, Franklin County, Ohio.

7 The premises are subject to an encroachment of a chain link fence encroaching onto the adjoining parcel to the north a maximum distance of 2.8 feet, and asphalt pavement encroaching onto the adjoining parcel to the north a maximum distance of 1.2 feet as reflected on the survey prepared by Robert A. Darner of Bock & Clark, dated November 8, 1996.

8. Real estate taxes not yet due and payable.

9. Zoning and building laws and ordinances.

10. Lease with GE Capital; Term Commencement Date: October 1, 1991; Basic Term 113 months; Property: Wemhoner Press SN #20079, GMF Robotic Unloader SN #91403132.

11. Lease with GE Capital (formerly New England Merchants Leasing Corporation -- NEMLC); Term Commencement Date: January 1, 1989; Lease Term 10 years; Property: 2,500 ton Williams-White Molding Press, SN #4594, 3,000 ton Williams-White Molding Press, SN#4595.

=====================================================================================================================
       PAYMENT DUE DATE                                            PAYMENT DUE DATE
   INTEREST PAYMENT DATE IN          PRINCIPAL AMOUNT          INTEREST PAYMENT DATE IN         PRINCIPAL AMOUNT
=====================================================================================================================
           July 1998                    $ 65,000                     January 2006                   120,000
----------------------------------------------------------------------------------------------------------------------
         October 1998                     65,000                      April 2006                    120,000
----------------------------------------------------------------------------------------------------------------------
         January 1999                     70,000                      July 2006                     125,000
----------------------------------------------------------------------------------------------------------------------
          April 1999                      70,000                     October 2006                   125,000
----------------------------------------------------------------------------------------------------------------------
           July 1999                      70,000                     January 2007                   130,000
----------------------------------------------------------------------------------------------------------------------
         October 1999                     75,000                      April 2007                    130,000
----------------------------------------------------------------------------------------------------------------------
         January 2000                     75,000                      July 2007                     135,000
----------------------------------------------------------------------------------------------------------------------
          April 2000                      75,000                     October 2007                   135,000
----------------------------------------------------------------------------------------------------------------------
           July 2000                      75,000                     January 2008                   140,000
----------------------------------------------------------------------------------------------------------------------
         October 2000                     80,000                      April 2008                    145,000
----------------------------------------------------------------------------------------------------------------------
         January 2001                     80,000                      July 2008                     145,000
----------------------------------------------------------------------------------------------------------------------
          April 2001                      80,000                     October 2008                   150,000
----------------------------------------------------------------------------------------------------------------------
           July 2001                      85,000                     January 2009                   150,000
----------------------------------------------------------------------------------------------------------------------
         October 2001                     85,000                      April 2009                    155,000
----------------------------------------------------------------------------------------------------------------------
         January 2002                     85,000                      July 2009                     155,000
----------------------------------------------------------------------------------------------------------------------
          April 2002                      90,000                     October 2009                   160,000
----------------------------------------------------------------------------------------------------------------------
           July 2002                      90,000                     January 2010                   165,000
----------------------------------------------------------------------------------------------------------------------
         October 2002                     90,000                      April 2010                    165,000
----------------------------------------------------------------------------------------------------------------------
         January 2003                     95,000                      July 2010                     170,000
----------------------------------------------------------------------------------------------------------------------
          April 2003                      95,000                     October 2010                   175,000
----------------------------------------------------------------------------------------------------------------------
           July 2003                     100,000                     January 2011                   175,000
----------------------------------------------------------------------------------------------------------------------
         October 2003                    100,000                      April 2011                    180,000
----------------------------------------------------------------------------------------------------------------------
         January 2004                    100,000                      July 2011                     185,000
----------------------------------------------------------------------------------------------------------------------
          April 2004                     105,000                     October 2011                   190,000
----------------------------------------------------------------------------------------------------------------------
           July 2004                     105,000                     January 2012                   190,000
----------------------------------------------------------------------------------------------------------------------
         October 2004                    110,000                      April 2012                    195,000
----------------------------------------------------------------------------------------------------------------------
         January 2005                    110,000                      July 2012                     200,000
----------------------------------------------------------------------------------------------------------------------
          April 2005                     110,000                     October 2012                   205,000
----------------------------------------------------------------------------------------------------------------------
           July 2005                     115,000                     January 2013                   210,000
----------------------------------------------------------------------------------------------------------------------
         October 2005                    115,000                      April 2013                    210,000
=====================================================================================================================

EXHIBIT 10(j)

KEYBANK NATIONAL ASSOCIATION

CONFIRMATION

Date: June 9, 1998

To: Core Materials Corporation
Kevin Barnett

From: KeyBank National Association

The purpose of this letter agreement is to set forth the terms and conditions of the Swap Transaction entered into between KeyBank National Association ("Key") and Core Materials Corporation ("Counterparty") on the Trade Date specified below (the "Swap Transaction"). This letter agreement constitutes a "Confirmation" as referred to in the Swap Agreement Specified below.

1. The definitions and provisions contained in the 1991 ISDA Definitions (as published by the International Swap Dealers Association, Inc.) (the "Definitions") are incorporated into this Confirmation.

If you and we are parties to a Master Agreement that sets forth the general terms and conditions applicable to Swap Transactions between us (a "Swap Agreement"), this confirmation supplements, forms a part of, and is subject to, such Swap Agreement. If you and we are not yet parties to a Swap Agreement, this Confirmation will supplement, form a part of, and be subject to, a Swap Agreement upon its execution and delivery by you and us. All provisions contained or incorporated by reference in such Swap Agreement shall govern this Confirmation except as expressly modified below. In the event of any inconsistency between this Confirmation and the Definitions or the Swap Agreement, this Confirmation will govern. In addition, if a Swap Agreement has not been executed, this Confirmation will itself evidence a complete binding agreement between you and us as to the terms and conditions of the Swap Transaction to which this Confirmation relates.

This Confirmation will be governed by and construed in accordance with the laws of the State of New York, without reference to choice of law doctrine, provided that this provision will be superseded by any choice of law provision in the Swap Agreement.

Notional Amount:                           $7,500,000 amortizing per attached
                                           Schedule A

Trade Date:                                June 9, 1998

Effective Date:                            June 11, 1998

Termination Date:                          April 1, 2013

Fixed Amounts:

       Fixed Rate Payer:                   Counterparty

       Fixed Rate Payer
       Payment Dates:                      January 1, April 1, July 1 and
                                           October 1 of each year commencing
                                           with July 1, 1998 through and
                                           including the Termination Date,
                                           subject to adjustment in accordance
                                           with the Following Business Day
                                           Convention.

       Fixed Rate:                         4.89%

       Fixed Rate Day
       Count Fraction:                     Actual/365

Floating Amounts:

       Floating Rate Payer:                Key

       Floating Rate Payer
       Payment                             Dates: January 1, April 1, July 1 and
                                           October 1 of each year commencing
                                           with July 1, 1998 through and
                                           including the Termination Date,
                                           subject to adjustment in accordance
                                           with the Following Business Day
                                           Convention.

       Floating Rate for
       initial Calculation
       Period:                             TBD

       Floating Rate Option:               76% of USD-CP-H.15

       Designated Maturity:                30 day

       Spread:                             None

       Floating Rate Day
       Count Fraction:                     Actual/365

       Reset Dates:                        Daily, Unweighted Average

Calculation Agent:                         KeyBank National Association

Payment Instructions:                      Core Materials Corporation at KeyBank

Please confirm the foregoing correctly sets forth the terms of our Agreement by executing the copy of this Confirmation enclosed for that purpose and returning it to us.

Very truly yours,

KEYBANK NATIONAL ASSOCIATION

                                              By: /s/ Michelle Loschiavo
                                                 ------------------------

Accepted and Confirmed as
of the Trade Date:

CORE MATERIALS CORPORATION

By: /s/ Kevin L. Barnett
   ----------------------

  Period                    Period
Start Date                 End Date               Notional            Amortization
----------                 --------               --------            ------------
11-Jun-98                  1-Jul-98             $ 7,500,000             $  65,000
 1-Jul-98                  1-Oct-98             $ 7,435,000             $  65,000
 1-Oct-98                  1-Jan-99             $ 7,370,000             $  70,000
 1-Jan-99                  1-Apr-99             $ 7,300,000             $  70,000
 1-Apr-99                  1-Jul-99             $ 7,230,000             $  70,000
 1-Jul-99                  1-Oct-99             $ 7,160,000             $  75,000
 1-Oct-99                  1-Jan-00             $ 7,085,000             $  75,000
 1-Jan-00                  1-Apr-00             $ 7,010,000             $  75,000
 1-Apr-00                  1-Jul-00             $ 6,935,000             $  75,000
 1-Jul-00                  1-Oct-00             $ 6,860,000             $  80,000
 1-Oct-00                  1-Jan-01             $ 6,780,000             $  80,000
 1-Jan-01                  1-Apr-01             $ 6,700,000             $  80,000
 1-Apr-01                  1-Jul-01             $ 6,620,000             $  85,000
 1-Jul-01                  1-Oct-01             $ 6,535,000             $  85,000
 1-Oct-01                  1-Jan-02             $ 6,450,000             $  85,000
 1-Jan-02                  1-Apr-02             $ 6,365,000             $  90,000
 1-Apr-02                  1-Jul-02             $ 6,275,000             $  90,000
 1-Jul-02                  1-Oct-02             $ 6,185,000             $  90,000
 1-Oct-02                  1-Jan-03             $ 6,095,000             $  95,000
 1-Jan-03                  1-Apr-03             $ 6,000,000             $  95,000
 1-Apr-03                  1-Jul-03             $ 5,905,000             $ 100,000
 1-Jul-03                  1-Oct-03             $ 5,805,000             $ 100,000
 1-Oct-03                  1-Jan-04             $ 5,705,000             $ 100,000
 1-Jan-04                  1-Apr-04             $ 5,605,000             $ 105,000
 1-Apr-04                  1-Jul-04             $ 5,500,000             $ 105,000
 1-Jul-04                  1-Oct-04             $ 5,395,000             $ 110,000
 1-Oct-04                  1-Jan-05             $ 5,285,000             $ 110,000
 1-Jan-05                  1-Apr-05             $ 5,175,000             $ 110,000
 1-Apr-05                  1-Jul-05             $ 5,065,000             $ 115,000
 1-Jul-05                  1-Oct-05             $ 4,950,000             $ 115,000
 1-Oct-05                  1-Jan-06             $ 4,835,000             $ 120,000
 1-Jan-06                  1-Apr-06             $ 4,715,000             $ 120,000
 1-Apr-06                  1-Jul-06             $ 4,595,000             $ 125,000
 1-Jul-06                  1-Oct-06             $ 4,470,000             $ 125,000
 1-Oct-06                  1-Jan-07             $ 4,345,000             $ 130,000
 1-Jan-07                  1-Apr-07             $ 4,215,000             $ 130,000
 1-Apr-07                  1-Jul-07             $ 4,085,000             $ 135,000

  Period                    Period
Start Date                 End Date               Notional              Amortization
----------                 --------             ------------            ------------
 1-Jul-07                  1-Oct-07             $  3,950,000             $  135,000
 1-Oct-07                  1-Jan-08             $  3,815,000             $  140,000
 1-Jan-08                  1-Apr-08             $  3,675,000             $  145,000
 1-Apr-08                  1-Jul-08             $  3,530,000             $  145,000
 1-Jul-08                  1-Oct-08             $  3,385,000             $  150,000
 1-Oct-08                  1-Jan-09             $  3,235,000             $  150,000
 1-Jan-09                  1-Apr-09             $  3,085,000             $  155,000
 1-Apr-09                  1-Jul-09             $  2,930,000             $  155,000
 1-Jul-09                  1-Oct-09             $  2,775,000             $  160,000
 1-Oct-09                  1-Jan-10             $  2,615,000             $  165,000
 1-Jan-10                  1-Apr-10             $  2,450,000             $  165,000
 1-Apr-10                  1-Jul-10             $  2,285,000             $  170,000
 1-Jul-10                  1-Oct-10             $  2,115,000             $  175,000
 1-Oct-10                  1-Jan-11             $  1,940,000             $  175,000
 1-Jan-11                  1-Apr-11             $  1,765,000             $  180,000
 1-Apr-11                  1-Jul-11             $  1,585,000             $  185,000
 1-Jul-11                  1-Oct-11             $  1,400,000             $  190,000
 1-Oct-11                  1-Jan-12             $  1,210,000             $  190,000
 1-Jan-12                  1-Apr-12             $  1,020,000             $  195,000
 1-Apr-12                  1-Jul-12             $    825,000             $  200,000
 1-Jul-12                  1-Oct-12             $    625,000             $  205,000
 1-Oct-12                  1-Jan-13             $    420,000             $  210,000
 1-Jan-13                  1-Apr-13             $    210,000             $  210,000