LOAN AGREEMENT

                                 --------------



         This agreement is made effective December 3, 1997, between Core

Materials Corporation, a Delaware corporation ("Borrower"), and KeyBank,

National Association, a national banking association ("Lender").



                             BACKGROUND INFORMATION

                             ----------------------



                  A. Borrower has applied to Lender for the Loan (deemed in

ss.l, below).



                  B. Lender has approved Borrower's application for the Loan by

the commitment letter dated August 28, 1997, as amended (the "Loan Commitment"),

and Lender is willing to make the Loan available to Borrower but only on the

terms and subject to the conditions set forth in this agreement and the Loan

Documents (defined in ss.2, below).



                  C. Pursuant to the Loan Commitment, Lender is providing three

other credit facilities to Borrower in the form of (i) a $12,000,000

sale/leaseback equipment financing facility (the "Sale/Leaseback"); (ii) a

$5,500,000 equipment lease (the "Operating Lease"); and (iii) a standby letter

of credit (the "Letter of Credit") to be issued on behalf of Borrower to support

the issuance of "Industrial Development Revenue Bonds" (the "Bonds") by Borrower

in the approximate amount of $7,500,000. The documents executed by Borrower in

connection with the Sale/Leaseback and the Operating Lease, including without

limitation the Master Equipment Lease Agreements between Borrower and Lender,

are sometimes hereafter collectively referred to as the "Lease Documents."



                  D. It is presently anticipated that the Letter of Credit will

be issued during the first calendar quarter of 1998. The Borrower's obligations

relating to the issuance of the Letter of Credit shall be evidenced by a

Reimbursement Agreement between Borrower and Lender and such other documents as

Lender may require (collectively, the "Letter of Credit Documents"), which shall

be executed on or before the date of issuance of the Letter of Credit.



                             STATEMENT OF AGREEMENT

                             ----------------------



                  Borrower and Lender acknowledge the accuracy of the foregoing

Background Information and agree as follows:





                  SECTION.l. LOAN; USE OF LOAN PROCEEDS. On the terms and

subject to the conditions set forth in this agreement and the Loan Documents (as

defined below), Lender shall provide to Borrower and Borrower shall accept from

Lender a $7,500,000 revolving loan (the "Loan"). Borrower shall use the proceeds

of the Loan to refinance Borrower's existing debt, to finance Borrower's new

facility in Gaffney, South Carolina, for working capital, to pay the Fee

(defined in ss.5, below), and to pay Lender's Costs (defined in ss.6, below).



                  SECTION 2. EVIDENCE OF INDEBTEDNESS AND SECURITY FOR THE

LOANS. The Loan shall be evidenced by a Revolving Variable Rate Promissory Note

(the "Note"), a copy of which is attached to this agreement as Exhibit A and

incorporated into this agreement by reference.



         The Note, including all extensions, renewals, amendments, modifications

and replacements thereof, along with all of Borrower's obligations under this

agreement and the other Loan Documents (defined below), shall be secured by:



                  (a) a first priority security interest in all business assets

         of Borrower, including without limitation all inventory, equipment,

         materials, receivables, instruments, mortgage-backed securities and

         other tangible and intangible property, excepting the property leased

         by Borrower as set forth on Schedule l attached hereto ("Leased

         Property"), (collectively the "Assets");



                  (b) first priority mortgage liens upon the real and personal

         property of Borrower located at: (i) 800 Manor Park Drive, Columbus,

         Ohio (the "Ohio Property"); and (ii) 24 Commerce Drive, Gaffney, South

         Carolina





{PAGE}



         (the "South Carolina Property"), such Properties being hereafter

         sometimes referred to individually as a "Property" and collectively as

         the "Properties;" and



                  (c) UCC-1 Financing Statements to perfect Lender's security

         interest in the Collateral (the "UCC Financing Statements") which will

         be filed with the following:



                           (1)      Ohio Secretary of State

                           (2)      Franklin County, Ohio Recorder, Real Estate

                                    Records

                           (3)      Franklin County, Ohio Recorder, Personal

                                    Property Records

                           (4)      South Carolina Secretary of State

                           (5)      Cherokee County, South Carolina Recorder,

                                    Real Estate Records

                           (6)      Cherokee County, South Carolina, Personal

                                    Property Records



         The security interest described in (a) shall be in the form of a

Security Agreement between Borrower and Lender (the "Security Agreement") and

the mortgage liens described in (b) shall be in the form of an Open-End

Mortgage, Assignment of Rents and Leases and Security Agreement from Borrower to

Lender covering the Properties (the "Mortgages"). The Note, Security Agreement,

Mortgages, and UCC Financing Statements shall be referred to collectively as the

"Loan Documents." The Assets and the Properties shall hereinafter be referred to

collectively as the "Collateral."



         SECTION 3. RATE OF INTEREST; TERMS OF PAYMENTS: LATE CHARGES;

PREPAYMENT CHARGES; AND DEFAULT. The rate of interest, terms of payment, late

charges, prepayment charges, and default rates for the Loan shall be those set

forth in the Note.



         SECTION 4. TERM OF LOAN. The principal balance of the Note and accrued

interest thereon shall be due and payable in accordance with the Note and the

entire unpaid principal balance of the Note and all accrued interest thereon

shall be due and payable on or before the "Maturity Date" as set forth in the

Note.



         SECTION 5. FEES. At the closing of the Loan (the "Closing"), Borrower

shall pay to Lender a loan fee of $10,000 (the "Fee"). Borrower is also paying

(a) a $25,000 fee in connection with the Sale/Leaseback at the time of its

execution and (b) an origination fee of $20,000, the first annual fee equal to

1% of the face amount of the letter of credit, and an investment banking fee of

$75,000 at the time of the issuance of the Letter of Credit.



                  Borrower shall also pay to Lender a fee in connection with the

Loan equal to one-eighth of one-percent per annum of the unused portion of such

Loan during the previous calendar quarter, commencing in the first quarter of

1998, which fee shall be due within fifteen days after receipt of an invoice

from Lender.



         SECTION 6. COSTS AND EXPENSES. In addition to the payment of the Fee,

Borrower shall pay or reimburse Lender, as applicable, for all of Lender's

reasonable out-of-pocket costs and expenses relating to, or incidental with, the

Loan, including without limitation recording and filing fees, title examination

and insurance costs, escrow fees, appraiser's fees, engineer's fees,

environmental audit fees, inspection fees, surveyor's fees, costs and expenses

relating to administration of the Loan, Lender's attorneys' fees (including

costs and expenses) whether incurred before or after the Closing (collectively,

"Lender's Costs").



         SECTION 7. DEPOSITORY REQUIREMENTS. While any sums advanced under the

Loan remain outstanding, Borrower shall maintain its primary depository/cash

management relationship with Lender.



         SECTION 8. REPRESENTATIONS, WARRANTIES, AND AFFIRMATIVE COVENANTS.

Except as specifically set forth on Schedule 2 attached hereto (Exceptions to

Representations and Warranties), Borrower represents, warrants, and covenants,

as applicable, that all of the following statements are true and correct as of

the date of this agreement and shall continue to be true and correct until such

time as the Notes are paid in full and all of Borrower's obligations under this

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