LOAN AGREEMENT BETWEEN SOUTH CAROLINA JOBS-ECONOMIC DEVELOPMENT AUTHORITY

Development Agreement

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CORE MOLDING TECHNOLOGIES | SOUTH CAROLINA JOBS-ECONOMIC DEVELOPMENT AUTHORITY | CORE MATERIALS CORPORATION

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Title: LOAN AGREEMENT BETWEEN SOUTH CAROLINA JOBS-ECONOMIC DEVELOPMENT AUTHORITY
Governing Law: South Carolina Date: 3/30/2004
Industry: Fabricated Plastic and Rubber Sector: Basic Materials

LOAN AGREEMENT

BETWEEN

SOUTH CAROLINA JOBS-ECONOMIC DEVELOPMENT AUTHORITY
, Parties: core molding technologies , south carolina jobs-economic development authority , core materials corporation

<PAGE>

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

================================================================================

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TABLE OF CONTENTS

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<S> <C>

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

</TABLE>

<PAGE>

<TABLE>

<S> <C>

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

</TABLE>

EXHIBIT A - Form of Note

EXHIBIT B - Project Facilities

EXHIBIT C - Project Site

EXHIBIT D - Form of Disbursement Request

<PAGE>

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

<PAGE>

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.

<PAGE>

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.

<PAGE>

"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.

<PAGE>

"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-

<PAGE>

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:

<TABLE>

(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

and Tender Agent The Huntington National Bank

The Huntington Center, HC 1112

41 South High Street

Columbus, Ohio 43215

Attention: Corporate Trust Department

</TABLE>

<PAGE>

<TABLE>

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

</TABLE>

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.

<PAGE>

"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

<PAGE>

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.

<PAGE>

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)

<PAGE>

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.

<PAGE>

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

<PAGE>

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.

<PAGE>

(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.

<PAGE>

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.

dates and amounts of all Capital Expenditures made from the

Issue Date through and including the

<PAGE>

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)

<PAGE>

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

<PAGE>

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.

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

<PAGE>

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

<PAGE>

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,

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

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